Tuesday, October 26, 2021

Platts' "Commodity Tracker: 5 charts to watch this week"

 From S&P Global Platts, October 25:

Our editors are keeping an eye on oil refining cracks ahead of winter, as well as potential demand from Asia as COVID-19-related restrictions ease. Tesla's change in battery chemistry and the International Maritime Organization's long-term emissions reduction goals are also in focus.

....2. Demand shift in focus as Tesla announces change in battery chemistry

Battery metals prices

What's happening? Tesla announced that it will shift to lithium-iron-phosphate (LFP) battery chemistry for all its standard range vehicles globally. The electric vehicle maker already employs LFP in its standard range Model 3 in China, but the rest of its portfolio is powered by batteries featuring a nickel-rich chemistry known as nickel-aluminum-oxide (NCA). Nickel-rich chemistries require lithium hydroxide instead of carbonate because the first can operate at much higher temperatures. They also provide longer driving ranges. Carbonate-based LFP is cheaper and safer, and does not use nickel or cobalt.

What's next? Shifts in battery chemistry choices imply demand changes for battery metals. Tesla's announcement is supportive of lithium carbonate—once seen by many industry participants as doomed to lose relevance as carmakers favor lithium hydroxide. Battery-grade nickel supply is expected to be very tight in the coming years, while there are also concerns over the ethnical sourcing of cobalt. It will be crucial to watch the prices of these two key battery metals amid a potential shift in demand.....

....MUCH MORE

Although we were following Elon as Iron Man closer than most, see, if interested, October 20's ""Tesla will only use iron-based batteries for standard model EVs" (TSLA)" for some of the prior posts;  just as/maybe more interesting was something Platts put together on lithium last May:

"Lithium prices diverge and defy expectations as new EV trends unfold"
A very smart discussion of the ins-and-outs of Li.

From S&P Global Platts, May 19:

Evolving choices around EV battery composition have altered price dynamics in the lithium market, with the two main forms, hydroxide and carbonate, now moving independently to each other, reflecting different use cases and trading patterns.

Traditionally lithium hydroxide was produced from lithium carbonate, resulting in a high degree of price correlation between the two chemicals in the market. When Australia's spodumene capacity increased after new projects came online in 2018, the spodumene production route for lithium hydroxide became dominant. The increased Australian production, which altered supply routes, combined with a slower than anticipated growth in global EV sales and changes in Chinese policy, have combined to boost demand and liquidity in the lithium carbonate market, altering the price relationship between the products.

A key driver for lithium chemical demand and prices is the changing fortunes of different battery compositions. Lithium iron phosphate (LFP) chemistry has always been cheaper versus nickel manganese cobalt oxide (NCM) and lithium nickel cobalt aluminum oxide (NCA), which require expensive nickel and cobalt. LFP is also considered safer – as less prone to thermal runaways, thanks to the absence of nickel—but the trade-off has been lower range.

Chemistry choices

This last characteristic has been a sticking point: since one of the major barriers to mass adoption has been "range anxiety", LFP was considered by many industry participants to be a lower priority in the upcoming EV boom. It was frequently associated with low-end city cars in China, as well as electric buses or electric bikes and energy storage systems (ESS), but was seen as playing a minor role within the wider EV revolution.

This started to change with the gradual removal of Chinese EV subsidies, which lowered the incentives for local automakers to target only long-range EVs and increased the pressure to reduce costs.

The cost of an LFP battery is about Yuan 0.08/Wh, which is around Yuan0.15/Wh-Yuan0.21/Wh cheaper compared to ternary cathode materials (NCM), corresponding to a cost reduction of 65%-72%, according to ICC Sino.

Moreover, improvements on the pack design, through the cell-to-pack approach, allowed a bigger portion of the battery pack to be filled with cells which significantly increased energy density. Tesla's Model 3 Standard Range produced in the Shanghai factory featuring LFP batteries supplied by CATL have around 450 km driving range; BYD's Han model, using the so-called Blade Battery (LFP, cell-to-pack) reportedly has a 605 km range.

These are comparable to the driving ranges of cars with NCM 5:2:3 batteries at a much smaller cost. BYD, which is China's largest seller of electric vehicles and ranks only behind of Tesla globally, recently announced it will scrap its NCM technology and employ only LFP going forward. 

Characteristics and contracts

Although many agree that hydroxide will be a major lithium chemical in the future, there is a consensus that carbonate still represents the majority of the market at the moment. In addition to its predominance in volume, carbonate is also easier to handle and has a longer shelf life. These characteristics allow carbonate to be more frequently traded in the spot market than hydroxide.

The biggest hydroxide buyers are battery makers in Japan and South Korea who are inherently more prone to signing long-term contracts because of the nature of hydroxide and the necessary focus on specifications....

....MUCH MORE

Now, if you will excuse me I will explore the energy intensity of roasting spodumene vs. other extraction methods. (it's pretty energy intensive, to effect the phase transformation from α-spodumene to β-spodumene you have to crank the oven up to 1050°C, then acid wash it, then roast it again at 200°C. Season to taste and wow your guests)

Norway's Natural Gas Production: An Embarrassment Of Riches

Via WorldOil, October 26:

Norway comes out ahead as European gas prices surge

Europe’s energy crisis and a spike in natural gas prices are proving to be a boon for Norway, delivering a flood of revenue for the country that’s already one of the world’s richest.

Norway, with huge oil and gas fields, saw exports hit an all-time high for a third straight month in September, with natural gas sales jumping seven-fold from a year earlier. The bounty is the result of both a bounce in energy demand after pandemic restrictions were eased, coupled with a surge in prices.

Norway Wins
The country, which accounts for 25% of European Union natural gas imports, is reaping the financial benefits of a crisis that’s squeezed households and businesses across much of the region, forcing governments to promise aid to help with bills.

State-owned Equinor ASA, which publishes third-quarter results Wednesday, is set to be a winner of the energy crisis. Of the energy giant’s total production, about 35% is gas sold in Europe. Net income was probably $2.3 billion, more than six times the year-earlier figure.

The flood of cash - higher than had been anticipated - is setting Norway apart from other countries worried about bloated debt levels in the wake of stimulus spending during Covid lockdowns. It means the state can cut the amount it needs to tap from its sovereign wealth fund, the world’s biggest at $1.4 trillion.

Norway’s new government, formed after elections in mid-September, plans to continue to develop the country’s lucrative oil and gas fields. According to the previous administration, fuel revenue is expected to surge 72% to 184 billion kroner ($18.8 billion) this year, 30 billion kroner higher than estimated at the start of the year. It’s seen hitting 277 billion kroner in 2022.

“There are very high gas prices right now and gas is an important part of our exports,” Norway’s minister for petroleum and energy, Marte Mjos Persen, said in a telephone interview. “We know how important our oil and gas revenues and oil wealth are for welfare development.” 

The Big Winner
Europe’s supply squeeze may not ease for some time. Gas-storage sites in the EU are at their lowest seasonal level in at least a decade, and the World Bank’s latest Commodity Markets Outlook forecasts that energy prices will remain elevated into 2022....

....MUCH MORE

As noted in the introduction to a 2017 post "Which oil exporters are most desperate for higher prices?":

All of them?

An interesting piece but I fear the authors underestimate the risk of Norway exploding into anarchy with the whole Janteloven (Law of Jante) thing being exposed as simply a 20th century construct while the trading/raiding blood bubbles just below the surface.
Or not. Who knows?

India's Rice Crop: An Embarrassment of Riches

Via Hellenic Shipping News, October 27: 

India’s Record Rice Crop Brings Problem Of Plenty For Farmers Juggling Protest

Farmers in India are gathering in the largest rice crop in history, which promises record exports, while making sure to keep up their longest-running protest, set to turn a year old next month.

The sit-in against controversial agriculture reforms is taking place in the capital, miles away from the five acres (2 hectares) of lush green rice paddies tended by Sukrampal Beniwal in his village of Munak, in the northern state of Haryana.

“We’ll not budge until the government rolls back the laws,” he said, referring to three measures the farmers, demonstrating by the tens of thousands in New Delhi, say will threaten their livelihoods.

Farmers in the breadbasket state have joined hands to bring in the mammoth crop and make sure that every time a group sets off to harvest rice, a similar number leave to join the protest on the outskirts of New Delhi, Beniwal said.

“Because of our camaraderie, we have quite successfully dealt with the two competing challenges: managing the protest against legislation and harvesting a big crop,” he added.

Introduced in September last year, the legislation deregulates the agriculture sector, letting farmers sell produce to buyers beyond government-regulated wholesale markets, where growers are assured of a minimum price.

While small farmers say the changes make them vulnerable to competition from big business, and threaten the eventual loss of price support, the government says the reforms will bring them new prospects and better prices.

Yet, with global food prices near decade highs after a surge of 30% in rates for cereals over the past year, India’s problem of plenty also offers a dazzling opportunity.

The new harvest will boost exports to help the South Asian nation cement its status as the dominant supplier of the world’s most critical grain, traders say.

“Indian prices are very attractive at a time when demand is rather strong from many buyers, including China and a clutch of countries in Africa,” said Aditya Garg, a leading exporter of the grain.

“In fact, for non-basmati rice, many Indian exporters have received orders from a lot of new buyers in Egypt, Sudan, Tanzania and Iran.”....

....MUCH MORE

If interested see also September 16's: Ag Commodities/Shipping: "India may corner nearly half of global rice trade as exports soar to record"

"SoftBank in talks to sell French robotics business to Germany's United Robotics -sources"

 From Reuters, October 22/24:

SoftBank Group Corp is in talks to sell the Paris-based robotics business behind its Pepper android to Germany's United Robotics Group, according to sources and documents reviewed by Reuters, scaling back a business it once touted as a major growth driver.

The talks are ongoing and plans could change, said two sources familiar with the matter, who declined to be named as they are not permitted to speak to the media. It is not clear whether SoftBank will retain a stake in the business, nor how much the deal would be worth.

Reuters reported in June that SoftBank had stopped production of Pepper and slashed jobs at its robotics business globally. Roughly half of 330 staff positions were cut in France, where operations date back to the 2012 acquisition of start-up Aldebaran, which custom-designed Pepper for SoftBank.

Additional staff have quit because of low morale, forcing SoftBank to advertise positions to fill core functions, according to the sources and a review of job postings.

United Robotics has offices in Germany and Austria, according to its website. Recently departed SoftBank staff in areas such as sales have been hired by the company, according to the sources.

SoftBank, which is riven by a culture divide between its European workforce and Japanese managers, has a dwindling stock of aging Pepper units and components approaching obsolescence, Reuters reported previously....

....MUCH MORE

Sounds like a mess. Pepper, we hardly knew ye.

Although, thanks to FT Alphaville's editor we have a great pic o'Pepper:

https://pbs.twimg.com/media/BE6q3hDCAAAt5pr.jpg

Awwww.
Or not.
My reaction at the time:
Anthropomorphic/biomimetic robots creep me out.
There, I said it.
Spot the Dog is even worse.

Buying Warehouses In Europe and China

It was rather lonely in 2019 when we were pitching warehouses and cold storage facilities but by December 2020 we were posting stuff like:

Real Estate: "Logistics market is hot, but is a bubble forming?"
It's always nice to see a sector you've been babbling about for a couple years finally referred to as a bubble.

Today's stories come first, from SupplyChainDive, October 15:

Lineage Logistics adds 790K pallet positions with latest acquisition 

Dive Brief:

  • Lineage Logistics strengthened its presence in Europe on Oct. 7 by completing the acquisition of a Netherlands-based cold storage company, Kloosterboer, according to a press release.
  • The acquisition adds 6.4 million cubic meters of capacity and 790,000 pallet positions. Kloosterboer also provides freight forwarding, customs brokerage, container handling and intermodal transport, according to the announcement.
  • The completion of Lineage Logistics' latest purchase adds to its portfolio of services and cold storage footprint. Lineage has been expanding through M&A, including a dozen transactions in Europe last year.

Dive Insight:

Demand for cold storage was heightened during the pandemic, whether it was for COVID-19 vaccines or fresh and frozen food. Lineage Logistics' latest acquision expands its services, adds geographical capacity and places the company in a position to provide more cold storage capacity for shippers at a time the industry is experiencing high demand.....

....MUCH MORE

And from Mingtiandi (Asian real estate intelligence) October 12:

CapitaLand’s CLCT Buys Four Mainland Warehouses From Quadreal for $260M

Singapore-listed CapitaLand China Trust Management (CLCT) has acquired four warehouse assets across key cities in China for RMB 1.68 billion ($260 million) as the company makes its first venture into the region’s logistics market in line with CapitaLand Group’s growing emphasis on expanding its exposure to the new economy sector.

CLCT told the Singapore stock exchange on Monday that it has agreed to acquire four logistics hubs in the mainland cities of Shanghai, Kunshan, Wuhan and Chengdu with a combined gross floor area of 265,259 square metres (2.86 million square feet).

“We are pleased to mark CLCT’s entry into China’s burgeoning logistics sector with a quality portfolio of logistics assets, in an investment that is aligned with China’s plans for a domestic consumption-driven, higher-value and service-led economy,” said CLCT chief executive Tan Tze Wooi. “The acquisition will enable CLCT to tap China’s strong demand for logistics properties, which is supported by conducive government policies and boosted by an accelerated growth in e-commerce.”

The vendor is identified in the stock announcement as QR Asia Logistics Master Holdco II Pte Ltd, a Singapore firm, which Quadreal Property Group representatives confirmed as a joint venture led by their firm. The real estate investment division of the British Columbia Investment Management Corporation had reportedly acquired three of the properties from LaSalle Investment Management, with the Shanghai asset coming from mainland fund manager CITIC Capital....

....MUCH MORE, it's a pretty deep dive.

Not kidding about pitching warehouses and cold storage.
Our interest was oftentimes even more niche, the cold storage sector of warehousing:

December 10
Where water turns to snow: S.Korean ultra-cold warehouse prepares to store Pfizer's vaccine
November 10
Robot Company With Attached Grocery, Ocado, Unveils Two Robot Acquisitions
Related:
Warehousing Logistics: "Lille-based Exotec raises €77.1 million to support the international expansion of its warehouse robotics solutions"
French Robot Logistics Startup Scallog Secures New Funds
"In 2012 Jeff Bezos scooped up warehouse automation firm Kiva. Everyone else is still trying to catch up" (AMZN)

October 8
Logistics: Maersk Is Pretty Cool
June 2020

Logistics: Top 20 U.S. Warehouse Owners
June 2020
"Warehouse space crunch will tighten as 'lean' supply chains fatten up"
April 27, 2020
The UK Food Situation Is Going to Get Interesting
From Reuters:
World's biggest cold storage supplier could reach full UK capacity in three weeks.....
April 22
Shipping: "Global container shipments set to fall 30% in next few months" (warehouses are full)
April 16
Understanding the Oddities of the Food Supply Chain Caused By the Response To Covid-19
April 4
Supergrocer: "Inside the Story of How H-E-B Planned for the Pandemic"

*****
June 3, 2019
Logistics: Big Money For Warehouses, Looking at Cold Storage.

...This next bit brings back some memories. My second stock to double was a cold storage company, actually a dairy with a cold storage operation that was valued at about one-quarter of comparables. I started chipping away at the float and before I got anywhere near enough stock, the management, who knew full well the value of the operation, did an LBO and took it private at 2x market and ended up generating cash-on-cash returns (for themselves) of around 40% per annum for a decade or so.
Bastards. 

June 6, 2019
"It's About To Become A Hot Market For Cold Storage Facilities"—CBRE
March 30, 2020
"Coronavirus: Panic buying sparks surge in flexible storage demand"

If Klaus Schwab Won't Return My Calls, How Will I know When To Buy Oatly? (OTLY)

Oatly ticks all the boxes for food that Davos Man thinks the plebs should eat and in June, just after the IPO, it looked like what the Nazi submarine commanders called "The Happy Time" back in 1940:

https://api.wsj.net/api/kaavio/charts/big.chart?nosettings=1&symb=otly&uf=0&type=2&size=2&sid=209863793&style=320&freq=1&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=8&rand=1615190988&compidx=&ma=0&maval=9&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1

There was no way to lose.

Except:

Watch Out Oatly: "Oat Prices Hit Seven Year High" (OTLY)

 A quick hit from Trading Economics, July 21:

Oat prices surged above $4.5 a bushel in July, their highest level since April 2014, after the USDA cut US oat production outlook to lowest on record due to drought conditions. US harvest is estimated at 41.3 million bushels in 2021, the smallest since at least 1866, as hot and dry weather take a toll on food production....

....MORE

The stock came public at $17 in late May and ran to $29.00 on oat milk enthusiasm. $19.89 last up $0.44 (2.26%)

If interested see also CNBC July 15: 

Oatly short seller says stock worth less than $10 after accusing company of overstating revenue

And then, when their Ivermectin supplies were cut off following the Rolling Stone exposé, the unwashed hordes  switched to anything horse-related that might treat their Covid fever dreams: 

Covid-19: As The Peasants Attempt To Self-Medicate With Horse Food

The Price Of Oats Skyrockets


Sort of missed that one 

But I think there's still time to frontrun the next big equuscovidius trade:

https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2Ftse3.mm.bing.net%2Fth%3Fid%3DOIP.KjI7zXjouTnW7IJIXjRqtgHaE7%26pid%3DApi&f=1

And now, six weeks later the expected clamor-for-carrots has yet to materialize and in my enthusiasm I may have bought way too many. You wouldn't happen to know anyone in the market for a couple tons, would you?

In the meantime I'm going to keep on DM'ing Klaus on the oat milk situation.

China's Evergrande To Prioritize Electric Vehicles Over Property Development

So...sort of like the Titanic's* owner, the White Star Line, announcing a shift in focus to...what...low-income housing?

From Reuters, October 25:

Evergrande EV unit shares jump after chairman signals business shift

Shares in China Evergrande Group's electric vehicles (EV) unit <0708.HK> rose on Monday as the embattled property developer moved to prioritise the growth of its nascent EV business over its troubled core real estate operations.Evergrande (3333.HK) , reeling under more than $300 billion in liabilities, averted a costly default last week with a last-minute bond coupon payment, buying it more time to head off a looming debt crunch with its next major payment deadline on Friday.

An announcement by its chairman, Hui Ka Yan, reported by state media on Friday, that it would make its new electric vehicle venture its primary business, instead of property, within 10 years, cheered investors on Monday....

....MUCH MORE

*It too was just a little 'crash floe' problem.  

"The Chinese military is thinking about how to stealthily destroy enemy ports and just set off a big explosion to see how it might work"

That seems so complicated. 

Couldn't you just make the McKinseyite spawn of Marxist Gramscian Professor Joseph Buttigieg the Secretary of Transportation? 

I mean, that's the highest expression of Rudi Dutschke's Long March through the Institutions, and without all the loud booms from the explosions. 
They scare the dogs.

From Business Insider, October 26:

  • The Chinese military is looking at options for attacking an enemy port, Chinese media reported.
  • The PLA recently conducted its first test exploring port destruction with underwater explosives.
  • "If we can use stealthy ways, like underwater explosions, to destroy the ports, we can kill off the enemy's war potential," said a Chinese officer.

The Chinese military is thinking about how to stealthily destroy a naval port to cripple an adversary's capabilities and hinder its ability to fight, a People's Liberation Army Navy officer explained to state media after a recent explosive test that was reportedly meant to simulate an attack on a port.

The Chinese military, through a PLA Naval Research Academy institute, recently detonated underwater explosives at an unidentified port.

Sensors set up at important structural points gathered data on the damage the port sustained. Chinese media said the data "will provide scientific support to attack hostile ports in a real war."

The test was the first of its kind for the Chinese military, according to CCTV, a state-run broadcaster which aired its report on the testing over the weekend. Chinese media did not say when the test was carried out, only noting that it happened recently.

The recent test explored the impact that different weapons might have on an operational port in an actual conflict scenario. The explosion reportedly destroyed the testing terminal. 

Zhao Pengduo, who Chinese media identified as a captain and the deputy director of the Naval Port Demolition Test Program, highlighted the military's thinking behind the test in his interview with CCTV.

Zhao said that naval bases and ports are valuable targets because they are used to support logistics vessels that move munitions, fuel and other essential supplies to the frontlines of a fight.

He told Chinese media that "if we can use stealthy ways, like underwater explosions, to destroy the ports, we can kill off the enemy's war potential," according to a Global Times translation of his remarks....

....MUCH MORE 

Here's the Communist Party's outward-facing propaganda organ, Global Times with the article ref'd above:

Very related:
"China’s strategic investments in Europe: The case of maritime ports"
Shipping: "China Makes Waves, Seeking To Control World Shipping"
Keeping track of Chinese investment in other nation's ports could be a full-time job, and that is just one aspect of what they are doing. Good luck to the EU and MENA, they are going to need it....

I'm beginning to see a pattern here.*

*****
*Starting with the Bosporus/Dardanelles between the Black and Mediterranean Seas:
"China will buy Turkey on the cheap"
Why Turkey is Important

And the Panama Canal:
China Will Help Panama Secure the Canal Against Terrorists

and:
"Don't Fear China's Arctic Takeover"
And all of a sudden you have China on-site on three of the world's MAJOR shipping chokepoints and what could very well become the fourth at the Bering Straits.

Battery Metals and Rare Earths: The U.S. Will Use The Slightly Controversial Blanche DuBois Extraction Method

....It's just that, as we've seen over the last year, supply lines are fragile, a weak spot even without unfriendlies doing an interdiction.

Should someone actively attempt to halt transportation it would make the Ever Given snafu look like child's play. As just one example, China has been very active in extending their belt and road initiative in Panama, including a $1.4 billion bridge over the canal and rail and other infrastructure.

And that's just one potential flashpoint. The Chinese influence in Brazil, hitherto based on VALE and iron ore could potentially go exponential as Brazil expands/modernizes its shipping and rail infrastructure. And then there's Australia...and...
I suppose somebody should keep an eye on Morocco to note if the Chinese set up camp on the Straits of Gibraltar. 

Beyond Meat Cut To Underperform By Credit Suisse, Price Target $75 (BYND)

 The stock is down 82 cents at $95.09.

From The Street, October 26:

Beyond Meat Stock Off; Credit Suisse Cuts Market-Share Outlook
Beyond Meat's 'revenue miss in Q3 reinforces our view' that the company 'is reaching market saturation faster than expected,' Credit Suisse says.

Beyond  (BYND) - Get Beyond Meat, Inc. Report Meat shares fell Tuesday after Credit Suisse downgraded the plant-based meat company to underperform from neutral and slashed its price target to $75 from $123.

Credit Suisse analyst Robert Moskow was disappointed by Beyond Meat’s sales forecast last week.

“The revenue miss in the third quarter ($106 million guidance versus [previous] guidance of $120 million to $140 million) reinforces our view that Beyond Meat is reaching market saturation faster than expected and will miss its internal growth targets,” he wrote in a commentary cited by CNBC.

“The meat alternatives category still has potential upside for the next several years, but we are lowering our long-term forecasts for Beyond’s sales and market share.”....

....MORE

The market for faux meat is already saturated?

We'll just have to mandate the stuff.

October 22: 

"EU in talks with China to avoid 'catastrophic' magnesium crunch"

From Mining.com, October 22:

European leaders, worried about the effect a global shortage of magnesium will have on the European Union’s industrial recovery from the pandemic, have open talks with China, which supplies the block with about 95% of the silvery-white metal used to make aluminum.

Local companies, including Norway’s Norsk Hydro, have stopped producing magnesium because they were unable to compete with lower costs at Chinese producers.

That would not have been a problem should Beijing not have recently ordered roughly 35 of its 50 magnesium smelters to close until the end of the year to conserve power supplies. This means current European inventories will be exhausted by the end of November, Germany’s association of metals producers WVM warned on Tuesday.

https://www.mining.com/wp-content/uploads/2021/10/380293971-1.jpg

Magnesium is used for a range of products, especially aluminum alloys, which are used in several auto-parts from gearboxes and steering columns to seat frames and fuel tank covers. 

German Chancellor Angela Merkel and Czech Prime Minister Andrej Babiš, leaders of the continent’s top automaking countries — raised the issue on Thursday during an EU leaders’ summit. The European Commission followed suit by opening a dialogue with China. 

“We are raising this issue with our Chinese counterparts in order to address immediate shortages and are assessing long-term solutions to tackle this strategic dependency,” a Commission spokesperson acknowledged in an email to Reuters. 

As the metal is difficult to store — it starts to oxidize after three months — global stocks could run critically low before the end of the year if Beijing doesn’t restart production in the next few weeks. 

“This issue, if not resolved, threatens thousands of businesses across Europe, their entire supply chains and the millions of jobs that rely on them,” a dozen industry groups, including metal producers, auto suppliers and the packaging sector said in a joint statement Friday

“The consequences would be catastrophic,” they said. 

Record prices....

....MUCH MORE

Creighton University: "Farm Exports Boost Rural Mainstreet Economy: 8 of 10 Bankers Report Farmers in Solid Cash Position"

From Creighton's Heider College of Business, October 21:

October Survey Results at a Glance:

  • Overall index moved above growth neutral for the 11th straight month indicating healthy growth for the region.
  • Almost one-third of bankers reported congestion at transportation hubs represented the greatest challenge to farmers.
  • More than 8 of 10 bank CEOs reported farmers in their area were in solid cash position.
  • Farmland prices continue to accelerate at a very strong pace.
  • Economic confidence declined for a fourth straight month.
  • Agriculture exports continue to boost commodity prices and farm income in the region. 

OMAHA, Neb. (Oct. 21, 2021) – For the 11th straight month, the Creighton University Rural Mainstreet Index (RMI) remained above growth neutral, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Overall: The region’s overall reading for October rose to 66.1 from September’s healthy 62.5. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

“Solid grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy. USDA data show that 2021 year-to-date agriculture exports are more than 25.4% above that for the same period in 2020. This has been an important factor supporting the Rural Mainstreet economy,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

“More than eight of 10 bankers expect, if implemented, the stepped-up basis portion of President Biden’s $3.5 trillion bill before Congress to have a negative impact on the Rural Mainstreet economy,” said Goss.

Farming and ranching: The region’s farmland price index slid to a very strong 81.5 from September’s record high 85.2. October’s reading represented the 14th straight month that the index has moved above growth neutral.

The October farm equipment-sales index slipped to a strong 64.8 from 66.0 in September. Readings over the last several months represent the strongest consistent growth since 2012.

Bank CEOs indicated that congestion at domestic transportation hubs represented the greatest supply chain disruption for farmers.

Banking: The October loan volume index fell to 53.6 from September’s 58.9. The checking-deposit index advanced to 66.1 from September’s 58.8, while the index for certificates of deposit, and other savings instruments slumped to 32.1 from a weak 37.5 in September.

More than eight of 10, or 82.1%, of bankers indicated farmers in their area were in solid cash position with little need for borrowing. The remaining 17.9% of bankers reported farmer cash positions little changed from past years.

However, Steve Simon, CEO of South Story Bank in Slater-Huxley, Iowa said, “Year-end borrowing as farmers look to pre-pay rising input costs.”....

.... MUCH MORE

That last line "pre-pay rising input costs" is a classic response to inflation. It is also a survival mechanism:
Input prices going up means one of two things for next year: 1) either output prices also go up or 2) farmers go broke (and then output prices go up)
—from the introduction to October 21's "Nitrogen Fertilizer Trends: Urea Price Climbs 26% Since Mid-September, a $147-Per-Ton Jump (CF)"

Capital Markets: "Strong Earnings and Easing of (Some) Political Tensions Bolster Sentiment"

 From Marc to Market:

Overview: Helped by new record highs in the S&P 500 and Dow Industrials, constructive earnings, and an easing of political tensions, risk appetites are robust today. The MSCI Asia Pacific Index recouped yesterday's losses plus more as the large equity markets in the region, but China and Hong Kong rose, led by a more than 1% gain in Tokyo. European shares are rallying, and the Stoxx 600 is posting gains for the ninth session in the last 11 and is at its best level since early September. US futures are extending yesterday's gains. European and US benchmark yields are softer. The US 10-year is slipping below and little changed near 1.62%. It had probed the 1.70% area at the end of last week. It has not been below 1.60% for a week. European yields are mostly 1-3 bp lower. The dollar is narrowly mixed. Sterling and the dollar bloc are trading with a firmer bias, while the yen and Swiss franc are underperforming. After a rapprochement to the latest drama, the Turkish lira rallied 1.5% today to lead the emerging market currencies higher. Poland, Hungary, and the Philippine peso are seeing minor losses. Gold is recording a lower high for the second consecutive session but is holding above $1800. A break could spur a test on the 200-day moving average around $1793. December WTI, which poked above $85 a barrel yesterday, has come back softer today in the roughly $83.00-$84.15 range. Note that EU ministers are meeting today to discuss how to balance efforts to cushion the blow of high energy prices with the efforts to address climate change and reduce carbon use. Copper prices are weaker as they slip for the fifth time in the past seven sessions. The CRB Index made a new multi-year high yesterday.

Asia Pacific
China's Vice Premier Liu He and US Treasury Secretary Yellen held their second call in four months yesterday.
China said the call was "pragmatic, candid, and constructive." Still, it seems that Bloomberg's assessment that the overall US-China relationship has improved since Biden and Xi held a phone call last month seems like a stretch. There was a successful "prisoner exchange," but there is little else concrete that one can point to, and no date has been set for the so-called virtual summit, which seems like a fancy way to say a phone call in this Covid era, between the two leaders.

At the end of last week, the Reserve Bank of Australia intervened for the first time in more than six months to defend its 10 bp target of the April 2024 bond. The yield reached 19 bp before the central bank stepped in and bought A$1 bln of the bond. The yield is still above the target, and the market seems inclined to test the RBA's resolve. The swaps market is pricing in about 40 bp of tightening in a year. Governor Lowe argues that until inflation is sustainably in the 2%-3%, which he does not anticipate until 2024. Australia reports Q3 CPI first thing tomorrow in Canberra. The headline is expected to have increased by 0.8% in the quarter, the same pace as Q2. The year-over-year rate is likely to moderate to 3.1% from 3.8%. The trimmed mean and weighted mean measures may tick up but will likely remain below 2%. The RBA meets next Tuesday morning in Australia....

....MUCH MORE

Monday, October 25, 2021

Woodside To Spend Over $745 Million On Hydrogen, Ammonia Plant

From Reuters, October 25:

Woodside Petroleum will invest more than A$1 billion ($746 million) to build a carbon-neutral hydrogen and ammonia production facility in Western Australia, the state government said on Monday.

“The first phase of the facility, dubbed H2Perth, will include more than A$1 billion in capital expenditure,” the state’s premier, Mark McGowan, and other ministers said in a joint statement.

Woodside said at full capacity the project would produce up to 1,500 tonnes a day, or 547,500 tonnes a year, of hydrogen for export, in the form of ammonia and liquid hydrogen. It aims to begin construction in 2024, subject to commercial and regulatory approvals.

Woodside declined to comment on the cost.

Western Australia is racing against Australia’s other major coal and gas exporting states to build a hydrogen industry as the world looks to cut planet-warming carbon emissions.

The state said it would support Woodside by leasing industrial land for the project in Kwinana, south of Perth, to the company, Australia’s biggest independent gas producer. The location is close to gas, power, water and port infrastructure.

“These advantages will make a huge difference to cost of supply and schedule and help H2Perth deliver competitively priced hydrogen to customers,” Woodside CEO Meg O’Neill said in a statement.

Earlier this month top coal exporting state New South Wales said it would offer A$3 billion in incentives to attract hydrogen projects, while neighbouring Queensland state announced backing for the world’s largest electrolyser manufacturing plant....

....MUCH MORE

"The top money maker at Deutsche Bank reaps billions from Singapore"

 Via Yahoo Finance, Singapore, October 21:

To find the biggest money maker at the rarely-money-making Deutsche Bank AG, you need to travel 6,370 miles from Frankfurt to the 18th floor of a glass office tower overlooking the green waters of Marina Bay in Singapore.

There, Chetankumar Shah, a low-profile and publicity-shy banker in his early 50s, runs a team that oversees complex financing for clients ranging from Asian tycoons to an Indonesian conglomerate, while trading the distressed debt of companies including an Israeli shipping firm.

Shah may not be a household name on Wall Street, but his global financing and credit trading group pulls in an estimated 3 billion euros (US$3.5 billion) annually, accounting for about a third of revenue for the entire investment-banking division, people familiar with the matter said. After working alongside former fixed-income veterans like Sajid Javid — now a British lawmaker — and SoftBank Group Corp.’s Rajeev Misra, Shah now heads a unit that’s the top money generator for the investment bank most quarters, the people said, declining to be identified as the details aren’t public.

His importance underscores how even after years of trying to retreat from volatile businesses, Deutsche Bank hasn't been able to pull away from activities that pose risks if markets turn. Chief Executive Officer Christian Sewing is targeting revenue growth after a relentless cost-cutting drive, returning to credit-default swaps and possibly base metals trading. The firm's primary regulator has already expressed concern about risks it’s taking in leveraged loans — a familiar refrain for a bank whose recent stumbles led to the highest legal bills of any European lender, resulting in losses for five of the last six years.

Under Shah’s leadership, Deutsche Bank has cemented its role as one of the world’s biggest credit traders. His global empire includes the distressed-debt trading business that has long been a strength of Germany’s biggest bank, along with a lending unit that's served as a growth area after many Wall Street rivals pulled back in the wake of the financial crisis.

“He was one of the pioneers that helped us create the markets business virtually from scratch,” said Anshu Jain, the former Deutsche Bank co-CEO who worked with Shah for more than a decade and is now president of Cantor Fitzgerald LP. “Chetan has a multi-decade track record of very good risk management.’’

Amid all the recent turmoil at the bank that led to a string of executive departures, including Jain and former CEOs John Cryan and Juergen Fitschen, Shah has been a constant. He’s outlasted six CEOs during his 15-plus years on the credit team, working as head or co-head for the last six years.

Despite the billions his team brings in, Shah avoids the limelight from his nondescript corner office in the heart of Singapore’s financial district. He declined to comment or be photographed for this story. A vegetarian teetotaler who loves cricket, Shah doesn’t even have a LinkedIn profile. He remains an “enigma” even to one banker who has worked alongside him for a decade....

....MUCH MORE

I was not aware of Mr. Shah and would like to meet him.
The 180° opposite of our composite portrait of a financial fraudster: all flash and splash cash.
And if they have a stripper pole in the office....run. 
I would be willing to bet Mr. Shah does not own a stripper pole.

"QE2 is Now Dubai’s Hottest New Nightclub. Yes, That QE2"

Good to see the old gal has found a happy home.*

From gCaptain:

The historic ocean liner Queen Elizabeth 2 has embarked on a new life as home to Dubai’s hottest, and literally largest, nightclub. Yes, that Queen Elizabeth 2.

The new nightclub, called Float Dubai, opened over the weekend onboard the retired British liner-turned-floating hotel located at Dubai’s Port Rashid.

The club is touted as the world’s largest floating nightclub, capable of hosting 1,000 club-goers on the ship’s famous upper deck with the iconic Dubai skyline as its backdrop.

The British ocean liner QE2 was operated by Cunard Line from 1969 to 2008, the majority of which as spent as the company’s flagship liner. Four years after Cunard’s Queen Mary 2 entered service, Cunard sold QE2 to Dubai World, which had plans to turn the ship into a floating hotel. The 2008 financial crisis derailed those plans and, for short time, the liner even appeared destined for a scrapyard....

....MORE

*Meanwhile the QE2 in London said "One does not feel old...."

"Hamburg Is at the Heart of Germany's Growing Dilemma Over China"

From Bloomberg, October 23:

COSCO Shipping occupies a prime waterfront location in Hamburg. The Chinese marine transportation giant’s European headquarters sit between a historic red-brick warehouse complex and the glass and steel of the redeveloped harbor area. The company is about to expand its presence after striking a deal last month to acquire a stake in a container terminal.

For a city that markets itself as China’s gateway to Europe, the agreement is a step toward becoming a go-to hub for COSCO’s vast cargo shipments. But away from the business of trade that Hamburg has thrived on for centuries, the tighter embrace of China is stirring concerns.

The dilemma is whether such economic ties now leave Hamburg exposed to the vagaries of great power politics as tensions between the U.S. and China spill into global supply chains. Its status as Germany’s biggest port also puts it at the heart of a broader debate over the country’s role as Europe’s political heavyweight and the world’s No. 3 exporter.

Five years ago, many companies wanted to be part of China’s Belt and Road infrastructure and investment initiative, despite issues over reciprocal market access. Now there’s more hesitation, said Doris Hillger, head of the foreign trade department at Hamburg Chamber of Commerce.

“Any deepening of interaction with China is from the start viewed more or less critically,” Hillger said in an interview at her office this month. “And that’s what makes it very difficult for businesses, but also for business locations such as a port city like Hamburg.”

How to handle that delicate balance of interests will confront Germany’s incoming government from the get go. The likely next chancellor, Olaf Scholz, is a Hamburg native and was the city-state’s mayor from 2011 until 2018, when he took up the post of finance minister in Angela Merkel’s federal government. Total Germany-China trade had burgeoned to more than $200 billion by 2019, half of it passing through Hamburg.

Scholz has credentials as a China enthusiast. He met with President Xi Jinping in 2017 when the Chinese leader attended the Group of 20 summit in Hamburg. As finance minister, he issued a personal invitation to Vice Premier Liu He to attend a Europe-China forum known as the Hamburg Summit in November 2018. Scholz visited China in early 2019, when he was chided by the Sueddeutsche Zeitung newspaper for not bringing up human rights.

But Scholz has maintained a strategic ambiguity on what China policy might look like under his leadership of Europe’s biggest economy. His Social Democratic Party’s election program barely mentioned China, and foreign policy hardly featured in the campaign.

With the Biden administration pressing Europe to align more clearly with the U.S. in its standoff with Beijing, Scholz will come under immediate pressure to show his hand on what Secretary of State Antony Blinken has called the world’s “greatest geopolitical test.”

“The name Scholz hardly rings a bell to the Chinese public,” China’s state-run Global Times newspaper said in an article the day after the SPD won the election on Sept. 26, adding that he’s been “reticent about his blueprint on China policy.” It added, though, that “Chinese observers said Scholz shares abundant connections with China, and the new government will be more likely than others to continue Merkel’s policy.”....

....MUCH MORE

Related: 

In Case You Missed It: "NYSE’s new investment vehicle—‘natural asset companies’—will tap into ESG fever"

They're talking owning ecosystems and "ecosystem services".

From Fortune, September 14:

America’s most iconic stock exchange wants to bridge the gap between nature and the concrete jungle that is Wall Street.

With investors now closely scrutinizing the environmental, social, and governance or ESG credentials of companies, the New York Stock Exchange on Tuesday unveiled a partnership two years in the making with Intrinsic Exchange Group to open up investment opportunities in what IEG calls “nature’s economy.”

“There haven’t historically been mechanisms to encourage the capital formation necessary to preserve and restore the natural assets that ultimately underpin the ability for there to be life on Earth,” NYSE COO Michael Blaugrund told Fortune. 

So, the Big Board is helping create one. 

The NYSE has developed a new kind of listing vehicle that will be called a natural asset company, or NAC. Using NACs, governments, farmers, and other owners of natural assets will be able to form a specialized corporation that holds the rights to the ecosystem services produced on a given chunk of land, services like carbon sequestration or clean water. Then the company will tap the U.S. public markets by way of the NYSE like any other entity would. The difference is that instead of using the capital raised to shore up a balance sheet, fund M&A, or buy back stock down the road, NACs will use the funds to help preserve a rain forest or undertake other conservation efforts, like changing a farm’s conventional agricultural production practices to regenerative methods.

In return, investors will get access to a new form of sustainable investment—a space that has enthralled the likes of BlackRock CEO Larry Fink over the past several years even though there remain big, unanswered questions about it. A 2020 report from the U.S. SIF Foundation, a nonprofit that advocates for the adoption of sustainable investing, found that one out of every three dollars under professional management in the U.S. at the end of 2019 was managed with a sustainable investment strategy....

....MUCH MORE

We'll be back when I figure-out the longs and shorts of commodifying ecosystems and "ecosystem services".

"Tesla/Hertz: supercharged" (TSLA; HTZZ)

Our admonition in the first of today's Tesla posts still stands but here is Jamie Powell at FT Alphaville with some of the negative considerations surrounding the second of today's announcements:

This just in from Bloomberg: 

Hertz Global Holdings Inc., barely four months out of bankruptcy, placed an order for 100,000 Teslas in the first step of an ambitious plan to electrify its rental-car fleet, according to people with knowledge of the matter. 

It’s the single-largest purchase ever for electric vehicles and represents about $4.2 billion of revenue for Tesla Inc., according to the people, who asked not to be identified because the information is private. While car-rental companies typically demand big discounts from automakers, the size of the order implies that Hertz is paying close to list prices. 

Great scoop! Now, you might be wondering what the market has made of it. After all, the reborn Hertz has a market capitalisation of almost $12bn, or $21bn if you include debt, so this one order represents a third of its entire equity value. Or, double the $1.8bn it had in cash and cash equivalents at last count at the end of June. 

Quite an undertaking then, particularly given Tesla has a reputation for making cars that consumers love, until they have to get them serviced. Don’t take our word for it.....

....MUCH MORE

The reader reactions to Jamie's post should be fun, he seems to be preparing:

We will probably go back to Alphaville two or three times for the comments.

In the meantime, for some reason this story brings to mind a completely unrelated FT headline from October 2020:
Vatican used charity funds to buy Hertz credit derivatives
I should maybe see if I can find out how the Pope is positioned on this latest news, the naked credit default swaps worked out pretty well.

(psst, don't short TSLA) "Tesla Rockets To Record Highs On 100,000 Vehicle Order From Hertz, $1600 Bull-Case Price Target From Morgan Stanley"

As I try to remember how to work a slide rule (dad, what's a slide rule?) to figure the price equivalent on the pre-split stock here is ZeroHedge:

Tesla shares are rocketing to all time highs in the pre-market session this morning on news of Hertz reportedly buying 100,000 of their vehicles, in addition to an upgrade from Morgan Stanley that came over the weekend. 

Shares were already bumping higher on the MS upgrade when the Hertz headlines hit the wire around 0730EST, sending shares to the $950 level.

https://cms.zerohedge.com/s3/files/inline-images/tsla%20tsla.png?itok=owCyiMuu

[5-minute bars]

Even though Hertz is just about four months out of bankruptcy, it is implementing an "ambitious" plan to electrify its fleet, beginning with plans to buy 100,000 Teslas, Bloomberg reported Monday morning.

The order marks the "single-largest purchase ever for electric vehicles" and will equate to about $4.2 billion in revenue for Tesla, sources told Bloomberg. 

The order will be delivered over the next 14 months and Model 3 vehicles will be available to rent at most Hertz locations starting in November, the report says.

Hertz is also going to be building its own charging infrastructure, in addition to allowing customers to have access to Tesla's Supercharger network. 

Hertz is planning on electrifying "almost all" of its half a million cars and trucks worldwide. The order marks about 10% of Tesla's total production capacity for a year and may also prevent competitors from making similar purchases from the automaker. 

The plan is "ambitious" enough for people to have doubts right off the bat....

....MUCH MORE

Let's see, take the $953 pre-market top-tick, move this thing to the left, squint to see the line and that's $4765 on the old stock. It came public at $20.

And for just about that entire time we've been saying "Don't short Tesla".

Not because of any deep insight into the technology, though we're better than the average analyst in an autodidactic sort of way, or because we know what's inside Elon Musk's head but rather, because we've been following the stock on the blog since before the IPO and realized, almost out of the gate, that this was a cult stock. And cult stocks can destroy short sellers.

Here's a repost from January 2020 (the FinViz chart is set to update the last twelve months, daily): 

I Know We Have A General "Don't Short Tesla" Rule But Man.... (TSLA)

....the darn thing is approaching verticality.

The stock is up $39.86 (+8.34%) at $518.01.


TSLA Tesla, Inc. daily Stock Chart

We have a few hundred posts on Tesla, going back to before the IPO including some thoughts* on shorting TSLA.
Some links after the jump.
From TechCrunch:
Tesla surges past $500 on back of analyst upgrade, China momentum
Today in regular trading, shares of American electric car manufacturer Tesla surged past the $500 mark.

Tesla, perhaps the most famous electric vehicle company in the world, has had a tumultuous last 12 months on the public markets. The company’s shares have traded as low as $176.99 in the past 52 weeks, and, as has high as $507.50 today.

The company is worth $507.28 per share at the moment, valuing Tesla at $91.38 billion according to Google Finance. As is often pointed out, Tesla is worth more than Ford and General Motors combined. In a slightly more exotic formulation, Tesla is worth just under 64 times as much as Aston Martin.

What’s going on?
Why is Telsa surging? We presume that it’s not the latest from Musk, that “Teslas will soon talk and make fart noises,” according to CNBC. (At least we hope not.)

Instead, an investor upgrade this morning could be the key reason for the company’s gains today. As IBD points out, the new target from Oppenheimer is over $600 per share.

That’s today’s runup explained. The morning’s rally, however, is tied to the company’s rising growing operations in China and global delivery figures....MUCH MORE
We've violated the 'Don't short Tesla' rule a half-dozen times and fortunately escaped with tactical profits but the thing is, in bull markets it is just so dangerous to make valuation shorts. Even shorting outright frauds can kill you if you don't have staying power and/or a friendly banker who won't pull your credit lines at the worst possible moment.
Some previous posts on this topic:
 *April 1, 2013 
Why We Don't Short Tesla: The stock is up 16% On The Day (TSLA)

April 22, 2013 
Tesla Motors Trades At All-Time High (TSLA)
 

The stock is at $49.75, up 4%, after trading as high as $50.19.
The thing to remember with all-time highs is there is no overhead supply, no shareholders thinking "As soon as I get to breakeven I'm getting out"....
August 2015
Short Selling and The Information Embedded In The Cost To Borrow Stock (TSLA)

August 2016
...For the longest time we had a Don't Short Tesla policy because it showed signs of being a cult stock and cult stocks can kill shorts. Plus it can be very hard to locate stock and very expensive to borrow when you do,
From an August 2015 post:

Morgan Stanley Gives a $465 Target For Tesla, Stock Jumps 5%...
We've publicly shorted Tesla twice on the blog, both times worked out because nothing like this happened during the holding period.
For the most part this April 2013 headline is operative "Why We Don't Short Tesla: The stock is up 16% On The Day (TSLA)". That was at $44.00, up $6.11.
Recently $255.30 up $12.15.
Morgan Stanley was one of the firms that sold the recent half-billion stock offering....
However, after the SolarCity deal and Elon's purchase of SCTY debt (on top of his SpaceX buying SCTY debt) I'm more open to betting against the company, at least tactically if not to zero.
Remember, your mileage may vary, close cover before striking etc.

June 2017

"Einhorn Compares GM to Apple and Explains Why He’s Short Tesla" (TSLA; GM)
...It is just so dangerous to put valuation (as compared to fraud) shorts on in a bull market.
We have had a general rule, "Don't short Tesla" virtually since the IPO, that we've violated on three occasions, fortunately profitable but it is tough to tell if it was worth the risk.
Finally, if you do short, don't be this guy (no, seriously, don't be this guy):

 

*That was posted to YouTube Aug 23, 2013.

Risk: As the Atmospheric River and Bomb Cyclone Pound the West Coast "The ARkStorm Scenario Could Flood California's Central Valley like a Bathtub and Cost $725 Billion"

 First up, from the Washington Post via MSN October 24:

Amid an exceptional drought that has wrought havoc on California for years, a Level 5 out of 5 atmospheric river is soaking the region, dumping double-digit rainfall totals and up to six feet of mountain snow. This heavy precipitation will help ease the drought but produce dangerous mudslides and debris flows in areas recently devastated by fires. 

https://img-s-msn-com.akamaized.net/tenant/amp/entityid/AAPTkuZ.img?h=920&w=1119&m=6&q=60&o=f&l=f

The American GFS model simulates the moisture associated with an atmospheric river blasting into California on Sunday. (WeatherBell)

Atmospheric rivers are long, narrow swaths of exceptionally moist air, sometimes sourced from the tropics, that can produce excessive amounts of precipitation.

“It will be a wild 24 to 36 hours across northern California as we will see an extreme and possible historic atmospheric river push through the region,” wrote the National Weather Service in Sacramento, calling it a “dangerous, high-impact weather system.”

Flash flood watches are up for most of Central and Northern California, blanketing some of the same areas that went upward of six months without a stitch of measurable rain. Sacramento recorded its first 0.01 inches of rain last week since March 19, capping off a record-setting 222 days without precipitation. Now it is bracing for more than half a foot of rain and flooding. 

Through early evening local time Sunday, Sacramento had received more than 4 inches of rain, topping its Oct. 24 daily record. To its west, more than 6 inches of rain had fallen in Santa Rosa, where flash flooding was occurring.

Between 3 and 4 inches were reported in San Francisco and Oakland, which clocked wind gusts up to 60 mph. Around 160,000 customers were without power in California, mostly around the Bay Area due to the combination of wind and rain.

The drenching rain prompted flood advisories in much of the Bay Area, with numerous reports of high water.

Rainfall totals in Marin County just north of San Francisco had surpassed a foot in some areas.

The National Weather Service declared rare “high risk” of excessive rainfall for parts of Northern California, referring to the potential for “life-threatening flash floods and mudslides.” The threat is maximized over burn scars left by wildfires since 2018.

Strong, gusty winds will pervade even outside of thunderstorms, particularly in the mountains, where extreme snowfall is expected. Parts of the Sierra Nevada will measure snow by the foot, while wind gusts over 100 mph have been clocked on some peaks.....

....MUCH MORE

And why did we go to the Bezos blog for the story when we usually could not care less what they say except as an indicator of what story the D.C. powers-that-be-want told?

It is an homage to a line the Wapo's Joel Aschenbach wrote in 2008 (i.e. pre-Bezos ownership):

"...When in doubt, go with the most hysterical headline.
(Rule one of blogging is that the End Of The World will be good for page views.)"

He also tipped us to the US Geological Survey's ARKStorm Scenario in 2011

The ARkStorm Scenario Could Flood California's Central Valley like a Bathtub and Cost $725 Billion

From the U.S. Geological Survey:
Thumbnail of and link to report PDF (41.6 MB) The U.S. Geological Survey, Multi Hazards Demonstration Project (MHDP) uses hazards science to improve resiliency of communities to natural disasters including earthquakes, tsunamis, wildfires, landslides, floods and coastal erosion. The project engages emergency planners, businesses, universities, government agencies, and others in preparing for major natural disasters. The project also helps to set research goals and provides decision-making information for loss reduction and improved resiliency. The first public product of the MHDP was the ShakeOut Earthquake Scenario published in May 2008. This detailed depiction of a hypothetical magnitude 7.8 earthquake on the San Andreas Fault in southern California served as the centerpiece of the largest earthquake drill in United States history, involving over 5,000 emergency responders and the participation of over 5.5 million citizens.

This document summarizes the next major public project for MHDP, a winter storm scenario called ARkStorm (for Atmospheric River 1,000). Experts have designed a large, scientifically realistic meteorological event followed by an examination of the secondary hazards (for example, landslides and flooding), physical damages to the built environment, and social and economic consequences. The hypothetical storm depicted here would strike the U.S. West Coast and be similar to the intense California winter storms of 1861 and 1862 that left the central valley of California impassible. The storm is estimated to produce precipitation that in many places exceeds levels only experienced on average once every 500 to 1,000 years.

Extensive flooding results. In many cases flooding overwhelms the state’s flood-protection system, which is typically designed to resist 100- to 200-year runoffs. The Central Valley experiences hypothetical flooding 300 miles long and 20 or more miles wide. Serious flooding also occurs in Orange County, Los Angeles County, San Diego, the San Francisco Bay area, and other coastal communities. Windspeeds in some places reach 125 miles per hour, hurricane-force winds. Across wider areas of the state, winds reach 60 miles per hour. Hundreds of landslides damage roads, highways, and homes. Property damage exceeds $300 billion, most from flooding. Demand surge (an increase in labor rates and other repair costs after major natural disasters) could increase property losses by 20 percent. Agricultural losses and other costs to repair lifelines, dewater (drain) flooded islands, and repair damage from landslides, brings the total direct property loss to nearly $400 billion, of which $20 to $30 billion would be recoverable through public and commercial insurance. Power, water, sewer, and other lifelines experience damage that takes weeks or months to restore. Flooding evacuation could involve 1.5 million residents in the inland region and delta counties. Business interruption costs reach $325 billion in addition to the $400 billion property repair costs, meaning that an ARkStorm could cost on the order of $725 billion, which is nearly 3 times the loss deemed to be realistic by the ShakeOut authors for a severe southern California earthquake, an event with roughly the same annual occurrence probability....MUCH MORE, including three PDF's
HT:  the WaPo's Joel Achenbach* who, writing at Slate, says:
The Century of Disasters
Meltdowns. Floods. Tornadoes. Oil spills. Grid crashes. Why more and more things seem to be going wrong, and what we can do about it.

This will be the century of disasters.

In the same way that the 20th century was the century of world wars, genocide, and grinding ideological conflict, the 21st will be the century of natural disasters and technological crises and unholy combinations of the two. It'll be the century when the things that we count on to go right will, for whatever reason, go wrong.
Late last month, as the Mississippi River rose in what is destined to be the worst flood in decades, and as the residents of Alabama and other states rummaged through the debris of a historic tornado outbreak, physicists at a meeting in Anaheim, Calif., had a discussion about the dangers posed by the sun.

Solar flares, scientists believe, are a disaster waiting to happen. Thus one of the sessions at the American Physical Society's annual meeting was devoted to discussing the hazard of electromagnetic pulses (EMPs) caused by solar flares or terrorist attacks. Such pulses could fry transformers and knock out the electrical grid over much of the nation. Last year the Oak Ridge National Laboratory released a study saying the damage might take years to fix and cost trillions of dollars.

But maybe even that's not the disaster people should be worrying about....MORE

And some history:

In 1861 - '62 it rained for 45 days and the state capitol had to be temporarily relocated to San Francisco because Sacramento looked like this:

https://cdn.vox-cdn.com/thumbor/i8iUt3EfdTUnR3DUZaLCpaWYWJg=/0x0:378x450/920x0/filters:focal(0x0:378x450):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/7800123/sac1.jpg

Leland Stanford went to his gubernatorial swearing-in in a rowboat just before everyone headed downriver to S.F.

Sunday, October 24, 2021

How Did I Miss This? "Iraqi protester 'unleashes' lion to scare off police dogs"

It's from 2019 but still, if someone had told me I think I'd remember.

I'm not sure how to say "check and mate" in Iraqi Arabic. Or Farsi or Kurdish for that matter.

From Beijing's China Global Television Network, November 18, 2019:

A young Iraqi man "unleashed" a lion to scare away police dogs meant to contain protesters who are taking part in the biggest wave of nationwide anti-government demonstrations in nearly two decades.

Amid reports that Iraqi security forces would be using dogs to curb down the weeks-long demonstrations, the unnamed young protester adopted a rather unique countermeasure by bringing his pet lion to reportedly take on the canine unit of the forces.

Photos and video showing the man walking the fearsome beast, draped in Iraqi national flag, on the streets of his hometown in Iraq's Babel Province, south of Baghdad, went viral on social media....

....MORE, including pics, video. 

I have to say, they lion looks good wearing the flag, much more dignified than a German Shepherd sporting a bandana.

gCaptain Has Some Thought On The Mess At U.S. Ports

 And they are not all happy thoughts.

Might as well start with October 15's "Biden Appoints US Maritime Administrator With Zero Shipping Experience During Worst Shipping Crisis In Decades":

by Captain John Konrad (gCaptain) The FAA is headed by a pilot, NASA is headed by an astronaut, the US Marine Corps is headed by a Marine but for the fourth time in a row, and during the worst shipping crisis of the century, the US Department of Transportation, has appointed someone to the US Maritime Administration (MARAD) who is not a captain and has no commercial shipping experience.

Yesterday afternoon, President Biden announced his intention to nominate Rear Admiral Ann Phillips, US Navy (Retired), as the next US Maritime Administrator, a position that has been vacant since Rear Admiral Mark Buzby stepped down following the insurrection at the U.S. Capitol in January.

Phillips is a highly decorated Navy leader with a long list of accomplishments and is highly respected by everyone gCaptain has interviewed. She was head of the Navy’s Climate Change Task Force and is a highly sought after consultant on climate security issues. She holds an MBA. She was chairman of a local government Sea Level Rise Preparedness and Resilience project. She once captained a Navy warship. The appointment looks great on paper except for one kinda big problem. This is not a warship position. It’s a commercial shipping appointment and she has zero experience aboard any commercial ships. She does not even have experience leading navy military sealift ships.....

....MUCH MORE

Skipping ahead to October 21, it's Bloomberg via gCaptain, "Clock Ticking as Biden Tackles Supply Chain Crisis With Few Tools":

U.S. ports are full of goods, U.S. yards and warehouses are full of goods, hardly anyone wants to drive a truck to pick up and deliver those goods and those who do sit waiting in lines, often unpaid. 

And Americans continue to buy more stuff from abroad than ever.

A supply-chain crunch that stretches from overseas manufacturers into American ports and retail stores threatens the U.S. holiday shopping season. President Joe Biden and his administration have been working for months to smooth out bottlenecks, but his power to influence what is almost entirely a private-sector problem is limited.

While Republicans point to the supply chain as further evidence the president is mismanaging the economy, the issues are deep-rooted. Overwhelming volume generated by record, pandemic-induced consumer demand is swamping a system that was already creaking under the weight of high demand, low investment, labor shortages and regulatory battles. 

It now costs as much as $25,000 to import a 40-foot container from Asia, up from less than $2,000 two years ago. Here’s where the supply chain is under stress in the U.S., what its executives, workers and experts say Biden could do about it, and what he’s actually doing....

....MUCH MORE

And October 24, again Bloomberg via gCaptain:

Effective Immediately And Set To Last For 90 days, Long Beach Eases Container Rules

Officials in Long Beach, California, relaxed restrictions on storing shipping containers in a bid to ease a bottleneck that’s left nearly 80 vessels waiting offshore to enter the biggest U.S. gateway for ocean freight.

The city manager, in a statement late Friday, said the temporary zoning rule, effective immediately and set to last for 90 days, will allow stacks of four containers high compared with long-time limit of two. The note posted online cited a “a national emergency related to the supply and distribution of imported goods arriving in our nations ports.”....  

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