Tuesday, November 24, 2020

Since The U.S. Election The Oil & Gas Exploration and Production Companies In the S&P 500 Have Seen Their Stocks Rise 42.6% (XOP)

That's based on the SPDR S&P Oil & Gas Exploration & Production ETF and compares with a 7.9% gain in the S&P itself.

https://charts2.finviz.com/chart.ashx?t=XOP&ty=c&ta=1&p=d&s=l

Over the same time period the Invesco Solar ETF (TAN) is up 20.0%

This makes marketing problematic for RIA's and fund managers who pitch both ESG and value investing as the E&P stocks were about as deep value as the market offered.

Don't even get me started on the poor confused souls who tout both low-cost passive investing and the inherently active ESG area. They are often reduced to incoherence and might be better off with a forthright "Just give me your money".


As to ourselves re: ESG, we lean toward a variation on John Wesley's Sermon 50, The Use of Money (1744) which contains the admonition:

"Earn all you can, Save all you can, Give all you can" 

"There Are No Short Sellers Left"

 Uh oh.

The lack of shorts doesn't itself mean the market is going down but it does mean that should something exogenous trigger selling, the decline will not be cushioned by traders closing their shorts with a buy order.

Here's an example: On June 6, 2008 oil staged it's largest dollar gain in history. Goldman had their pension and endowment customers loaded up with fancy prop products based off long positions in the Goldman Sachs Commodity Index, an index even more heavily skewed to oil then than it is now. The GS megaphones were pitching $200 per barrel for WTI.

As retold in a June 2, 2009 post looking back to the previous summer:

...After talking to some folks who had been mauled [cute -ed] I decided that the short-sellers had just given up. It is no fun to be selling into the buying of Goldman and their long-only index clients, CalPERS, the universiy endowments et al.
So they said to hell with it. Oil continued to rise for another 35 days before peaking on July 11.
On July 29 I had this comment at Environmental Capital:

Mike @ 4:13,
Two separate thoughts in that first post.
As best as I’ve can tell approx. 40% of the move from $80 to $147 (25-28 bucks) came from “speculation”. I use quote marks because of the terminology problems most of the talking heads have when the subject is commodities. Speculators in commodity parlance take the other side of a hedgers trade, thus performing a societal good.
The problem was, until last week, the shorts had been beaten up so bad by the relentless flow of “investor” money that were out of the game. The $10.75 uptick on June 6 was their capitulation.
They covered and said screw it.
.
I personally don’t see any reason to allow the “investors” in markets for consumables. If they want an inflation hedge, let them run gold to a bazillion per ounce....

The decline was from that July 11, 2008 top-tick of  $147.27 to its December 2008 low of $32.40 for the front month contract and $30.28 spot. That's what can happen when there are no shorts to slow the decline.

Enough history, on to Upfina, Nov 24, 2020:

Short sellers protect the market which sounds weird because many blame them for weakness. The reality is shorts mainly go after weak companies that have fundamental flaws. It’s not the messenger’s fault the flaws exist. Of course, some short on valuation, but those are trades that don’t get talked about as much. The ones that are discussed are the ones that cause stocks to crater. It’s healthier if the flaws are pointed out earlier by shorts rather than later when the problem becomes enormous. Obviously, shorts are trying to make a profit, but calling out bad practices makes a market heathier just like a controlled forest fire makes the forest healthier even though it is a painful process....



....MUCH MORE

Creighton University's Rural Mainstreet Index Retreats for First Time Since April: Bankers Expect 3.1% Decline in Holiday Sales

 From Creighton's Heider College of Business:

November Survey Results at a Glance:

  • Moving below growth neutral, the overall index fell for the first time since April of this year.
  • For the first time since 2013, Creighton’s survey recorded back-to-back increases in monthly farmland prices.
  • Compared to 2019, bankers expect 2020 retail sales to be down by 3.1%.
  • Approximately, 54.8 % anticipate a reduction from 2019, and 16.1% project an upturn from last year’s holiday sales.
  • The November loan volume reported record lows as the index fell to its lowest since the initiation of the survey in 2006.
  • Bankers project 9.2% of grain farmers will experience negative cash flows for 2021, down from 12.4% expected from the November 2019 survey.

OMAHA, Neb. (Nov. 19, 2020) - For the first time since April of this year, the Creighton University Rural Mainstreet Index (RMI) declined. According to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy, the index fell to its lowest level since August of this year.

Overall: The overall index for November sank below growth neutral to 46.8 from October’s 53.2. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

“Recent improvements in agriculture commodity prices, federal farm support payments, and Federal Reserve’s record low interest rates have underpinned the Rural Mainstreet Economy. Still, only 6.5% of bankers reported economic improvements from October, while 12.9% detailed economic pullbacks for the month,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University's Heider College of Business.

Farming and ranching: For a second straight month, the farmland-price index advanced above growth neutral. The November reading jumped to 55.0 from October’s 50.6. This is first time since 2013 that Creighton’s survey has recorded back-to-back above growth neutral readings in farmland prices.

The November farm equipment-sales index increased to 42.9, its highest level since December 2013, and up from 37.9 in October. However, this marks the 86th straight month the reading has remained below growth neutral 50.0.

Banking: Bankers reported record low loan volumes for November. The November loan volume index fell to its lowest since the initiation of the survey in 2006. The lending index slumped to 25.8 from October’s 46.8. The checking-deposit index soared to 87.1, a record high, from 66.1 in October, while the index for certificates of deposit, and other savings instruments rose to 46.8 from 38.7 in October.

This month bankers were asked to project the share of grain farmers likely to experience negative cash flow for 2021. Bankers expect 9.2% of grain farmers’ cash expenses to exceed cash revenue. This is an improvement from 2019 when bankers projected 12.4% of farmers to experience negative cash flows for 2020....

....MUCH MORE

El Niño/Southern Oscillation: Decisive Shift From La Niña To ENSO Neutral By 2021 North Atlantic Hurricane Season

 Meaning that insurers/reinsurers putting through premium increases based on 2020 may be looking at superior underwriting profitability next year.

Of course there are a myriad of other factors, and one that bears watching is the tendency over the last two years of tropical cyclones to intensify as they approach landfall.

For a first pass look at what we might see in 2021 here's Columbia University/IRI's chart of the various models:

IRI ENSO Forecast
IRI/CPC ENSO Predictions Plume
Published: November 19, 2020
Note on interpreting model forecasts

The following graph and table show forecasts made by dynamical and statistical models for SST in the Nino 3.4 region for nine overlapping 3-month periods. Note that the expected skills of the models, based on historical performance, are not equal to one another. The skills also generally decrease as the lead time increases. Thirdly, forecasts made at some times of the year generally have higher skill than forecasts made at other times of the year--namely, they are better when made between June and December than when they are made between February and May. Differences among the forecasts of the models reflect both differences in model design, and actual uncertainty in the forecast of the possible future SST scenario.....MUCH MORE


Monday, November 23, 2020

Whatever Happened To 3D Printing? Relativity Space Closes a $500 Million Series D To 3D Print Rockets

Additive manufacturing of metal: very important. We learned that during the great 3D bubble of 2012 with Sweden's Arcam:

Despite my concern about the share price the company itself is a little gem, one of the leaders in 3D metalworking as opposed to the plastic tchotchkes that you get out of a MakerBot.
And not just any kind of metalworking either, this is bleeding edge. 

The company was purchased by General Electric after a $10 to $175 run.

And from TechStartups, November 23:

Relativity Space raises $0.5 billion in Series D funding to 3D print an entire space rocket and build the largest metal 3D printers in the world

We first covered Relativity Space back in 2018 after the Los Angeles-based orbital launch startup raised $35 million in funding. A lot has changed since then. Relativity Space (Relativity) is disrupting 60 years of aerospace tradition by creating an entirely new process to build and fly rockets. Its 3-D print technology enables rockets to be built and flown in days instead of years. Its 3-D printed rocket contains 100 times fewer parts than the conventional rockets.

Relativity deploys and resupplies satellite constellations, is the first company to 3D print an entire rocket, and build the largest metal 3D printers in the world. Its new process to build and fly rockets is redefining how we access to space to connect our planet.

Today, Relativity announced it closed a $500 million Series D equity funding round to accelerate its planned initiatives, including its factory of the future, launch vehicle development, and 3D printing technologies as it builds toward humanity’s multi-planetary future.

The round, which further validates Relativity’s sector-leading momentum across commercial execution, technical milestones, and talent growth, was led by Tiger Global Management with participation from new investors Fidelity Management & Research Company LLC, Baillie Gifford, ICONIQ Capital, General Catalyst, XN, Senator Investment Group, and Elad Gil. Existing investors participating in the round include BOND, Tribe Capital, K5 Global, 3L, Playground Global, Mark Cuban, Spencer Rascoff, and Allen & Company LLC, among others....

....MUCH MORE

 

"An heiress, a judge and a job: France's Sarkozy goes on trial for corruption"

This has got to be hurting Chancellor Merkel, she and the little guy were close. See below for some early twenty-teens coverage.

From Reuters:

Former French president Nicolas Sarkozy goes on trial on Monday accused of trying to bribe a judge and of influence-peddling, one of several criminal investigations that threaten to cast an ignominious pall over his decades-long political career.

Prosecutors allege Sarkozy offered to secure a plum job in Monaco for judge Gilbert Azibert in return for confidential information about an inquiry into claims that Sarkozy had accepted illegal payments from L’Oreal heiress Liliane Bettencourt for his 2007 presidential campaign.

Sarkozy, who led France from 2007-2012 and has remained influential among conservatives, has denied any wrongdoing in all the investigations against him and fought vigorously to have the cases dismissed.

Investigators had from 2013 been wiretapping conversations between Sarkozy and his lawyer Thierry Herzog as they delved into allegations of Libyan financing in Sarkozy’s 2007 campaign.

As they did, they learned that Sarkozy and his lawyer were communicating using mobile phones registered under false names. Sarkozy’s phone was registered to a Paul Bismuth....

....MUCH MORE

So sad. 
Merkozy Memories


http://tee2i.org/sites/tee2i.org/files/merkozy-300x258.jpg
Memories, light the corners of my mind 
Misty watercolor memories of the way we were.
http://images.csmonitor.com/csmarchives/2011/12/EUROCRISIS.JPG?alias=standard_600x400
 
Scattered pictures of the smiles we left behind  
Smiles we give to one another
For the way we were
https://world.time.com/wp-content/uploads/sites/17/2012/02/a138341974.jpg?w=480&h=320&crop=1

Memories, may be beautiful and yet  
What's too painful to remember 
We simply choose to forget
Angela Merkel and Nicolas Sarkozy

 Mutti attempted to fly in to be by his side but when the customs agent asked "Occupation?" and she answered "Non, just a day trip" it all went downhill.
(I am so sorry and apologize to our German readers but there aren't many opportunities to tell this very old joke, it probably dates back to Adenauer and de Gaulle and coach said when you see the shot, take it)
 
As a possible peace offering here's a 2011 post that put the German on top:
 
Don't email, I know about Herr Professor Doktor Sauer and Carla Bruni, Just roll with me on this.
Europe has not been the same since the HRE folded its tent in 1806 after Napolean beat Francis II and forced him to abdicate on August 6.
Now 205 years to the day later....
I'm sorry, I can't continue.

The HR Emperor was the German top dog and that's not how I want to refer to Angela.
On the other hand as I mentioned in 2008's "European Politicians Think They are Rulers; Need Energy Wasting Palace":
..the EU rulers (alas, they think of themselves as rulers, not servants of the people) are masters of the "Camel's nose under the tent" school of government. They know that if they told the populace the truth they might be treated rougher than Louis XVI was.

When MEP's dream, are they Capetian or Carolingian?
Capetian, methinks.

I've always liked the Carolingians better,
they seemed more human-

Charles II, the Bald
Louis II, the Stammerer
Charles, the Fat
Charles III, the Simple
Along the lines of the Brit's Aethelred II, the Unready
(my fav. royal nickname)

Anyhoo, from the Economic Times (India):...
Sarkozy, as President of the Republic, is already co-Prince of Andorra, he could take on any of the Carolingian nicknames although he may shy away from the name of the founder of the dynasty, Pippen the Short.*

Here's the story that I blame for this ramble:

Sarkozy and Merkel Stress Commitment to Sweet Bailout Moves
PARIS—French President Nicolas Sarkozy and German Chancellor Angela Merkel moved to reassure jittery investors Sunday, reaffirming their commitment to measures recently agreed by European leaders to quell the euro-zone debt crisis as financial markets continued to bet that the region's debt woes could ensnare some of its largest economies.

In a joint statement, the leaders of the euro zone's two biggest economies stressed the importance of the French and German parliaments approving by the end of September the new measures aimed at boosting the scope of the euro zone's current rescue fund, together with a second bailout package for Greece.

The Franco-German statement came as finance ministers of the Group of Seven major industrialized nations planned to hold a telephone conference late Sunday, while the European Central Bank was holding a video emergency conference. Both were aimed at quelling the crisis surrounding the euro zone, which in recent days has increasingly engulfed Italy and Spain, the currency area's third- and fourth-biggest economies....MORE 
Sweet wasn't in the WSJ version but my rather fevered brain kept inserting it and picturing the two of them dancing 'til dawn.

*See: "How Nicolas Sarkozy can walk tall"

And don't get me started on whether or not it would be a morganatic marriage.

Shipping: Container Industry Swings From Forecasted $23bn loss to a $14bn profit

Speaking of doomsday dodged.

From Splash 24/7, November 23:

Container shipping has gone from doomsday to payday in the space of a few months. Sea-Intelligence has revised for the fourth time this year its EBIT profit forecast for the liner industry as carrier results for Q3 trickle in.

Having initially predicted significant red ink for the container shipping pack at the start of the pandemic in April, the Danish consultancy is now forecasting the liner industry will chalk up a $14bn profit this year, marking one of the greatest turnaround in fortunes in the 64-year history of containerisation.

Back in April, when many countries entered lockdown Sea-Intelligence’s worst case scenario was for liners to register a combined $23bn loss.

In fairness to the consultancy, most business sectors – not just shipping – have failed to get profit projections correct during the pandemic....MORE

And In Other News, Nabisco Has Constructed A Doomsday Vault For Oreos

From c|net, October 23:

Oreo stashed its cookies in an asteroid-proof doomsday vault

The cookies are prepared for the extremely slim chance the "Election Day asteroid" reaches Earth's atmosphere.

Oreo, maker of the legendary chocolate-and-creme sandwich cookies, may be overreacting a little. 

Asteroid 2018 VP1 is scheduled to graze Earth on Nov. 2, the day before the US elections. It has a real but exceedingly slim (0.41%) possibility of entering our planet's atmosphere, at which point it would harmlessly disintegrate. But Oreo isn't taking any chances. The company has built a concrete doomsday vault in Norway to house its cookies....

....MORE

The Oreo vault is a little south of the seed vault which is at 78°14'17.40" N 15°26'50.05" E.

https://designyoutrust.com/wp-content/uploads/2020/10/0-23.jpg

"UK’s Richest Man Partners With Hyundai To Make Hydrogen Happen"

For some reason this story was getting play in Indian media.

So, from Bloomberg via Live Mint, November 23:

  • Ratcliffe’s Ineos Group will explore opportunities to produce and supply hydrogen to Hyundai
  • Makers of cars and chemicals are finding common ground in their pursuit of hydrogen projects

Jim Ratcliffe, Britain’s richest man, is joining forces with Hyundai Motor Co. in a bid to give hydrogen fuel cell vehicles the boost they need to become more mainstream.

Ratcliffe’s Ineos Group will explore opportunities to produce and supply hydrogen to Hyundai, which has been making fuel cell vehicles in low volumes since 2013. Ratcliffe may also use Hyundai’s fuel cell system in the Grenadier, the Land Rover-like sport utility vehicle Ineos plans to bring to market next year.

Makers of cars and chemicals are finding common ground in their pursuit of hydrogen projects. Targets are being set globally to phase out the combustion engine and decarbonize industrial production. Ineos, which makes 300,000 tons of hydrogen annually, could play an instrumental role in helping set up the infrastructure Hyundai needs for models like the Nexo SUV to catch on in Europe.

“There’s verbiage and there’s getting on and doing stuff," Ineos Chief Technology Officer Peter Williams said in an interview. “We would like to do something of serious scale in the next five years."

For Ratcliffe, 68, helping to kick-start the hydrogen economy would open up more attractive uses for his company’s output of the gas, a byproduct from the electrolysis of brine to make chlorine. Ineos currently uses it for fuel and desulfurization at refineries. It also has underground gas-storage caverns that could be employed for hydrogen....

....MORE 

It's Complicated: "How the Race for a COVID-19 Vaccine Jeopardizes East Coast Shorebirds"

 From Audubon Magazine, November 20:

Vaccine production requires the blood of horseshoe crabs, whose eggs are a vital food source for several species, including Red Knots. A synthetic replacement for the blood exists, but the United States is stuck in the past. 

In the past few weeks, a couple of updates from the pharmaceutical industry provided some highly anticipated good news about the COVID-19 pandemic. First, on November 9, the drug company Pfizer announced that it had seen exceptional results in early clinical trials of a potential COVID-19 vaccine. The vaccine candidate, which Pfizer developed with the German company BioNTech, has proven effective in 95 percent of trial participants, with no significant safety concerns. And on November 16, Moderna announced that its own vaccine candidate had achieved 94.5 percent efficacy in early trials.

Both vaccines have the potential to be crucial tools for fighting COVID-19, which has so far killed more than a quarter of a million Americans and is poised to kill thousands more with U.S. infection rates currently on the rise. But while they could save millions of human lives, Pfizer’s and Moderna’s vaccines may end up having consequences few people realize; the surge in vaccine production and testing could affect migrating shorebirds, especially the threatened rufa Red Knot. That’s because both the birds and the pharmaceutical companies depend on the same animal: the horseshoe crabs of the Delaware Bay. Horseshoe crab eggs are vital fuel during the Red Knots’ annual 9,000-mile migration from Tierra del Fuego, at the southern tip of South America, to the Canadian Arctic every spring. For the drugmakers, horseshoe crab blood is a vital component in vaccine production.

As things currently stand in the United States, producing vaccines and other treatments that need to be injected into the bloodstream requires sticking needles into the hearts of horseshoe crabs and draining them of around a third of their blood, which is the only natural source of limulus amebocyte lysate, or LAL. Pharmaceutical companies use LAL to test their injectables for a bacterial contaminant called endotoxin, which can be deadly if even minuscule quantities make their way into the bloodstream. In a normal year, pharmaceutical companies conduct an estimated 70 million endotoxin tests. 2020, however, is by no means a normal year. “There are so many vaccines and therapies in development all at once for COVID-19,” says Jay Bolden, senior consultant biologist at the pharmaceutical company Eli Lilly. “I don’t see how it wouldn’t lead to an increase in the need for endotoxin testing.”...

....MUCH MORE

"For Asia’s super-rich, Singapore family offices keep the wealth churning – but Hong Kong wants a piece of the pie too"

From the South China Morning Post, November 21:

James Dyson and the couple behind hotpot chain Haidilao are among those who have set up units in the city state to safeguard their family fortunes

Hong Kong also aims to become a hub for family offices, eyeing the almost US$2 trillion in wealth set to change hands in Asia over the next decade

Singapore is popularly known as an Asian financial hub where companies set up regional headquarters and rich individuals park their wealth. In recent years, it has also been attracting another sort of investment through a vehicle that is just gaining popularity in the region: corporate entities called family offices that moneyed families use to structure the way they invest and preserve their riches.
 
From 2017 to 2019, the number of family offices in Singapore grew by five times as the region got wealthier. Some of these offices were set up by Singaporean families who want to manage their assets better, but many were set up by foreign millionaires and billionaires lured by the city state’s financial reputation, its tax incentives, and the safe environment with a stellar education system it offers their children.

There are about 200 single-family offices in Singapore, according to a written answer to a parliamentary question in October. Tharman Shanmugaratnam, minister in charge of the Monetary Authority of Singapore, estimated that these 200 offices manage a staggering US$20 billion in total.

Hong Kong has also been rolling out the red carpet for wealthy families to set up such offices. The Securities and Futures Commission issued the first licensing guidelines for the industry in September and, in two months, 50 family offices had signed up for licences. Five major family offices have also come together to set up a guild called the Family Office Association of Hong Kong to represent the industry’s interests.

Family offices are attracted to Singapore because of Asia’s growth potential, and they see the city state as a gateway to the region, said Lee Woon Shiu, the regional head of the wealth planning, family office and insurance solutions department at DBS Private Bank.
 
“Family offices putting their money to work in Singapore are looking for investment opportunities across Asean – not just in regional financial markets and real estate, but also in opportunities with local business owners from business lines that are similar to theirs,” Lee said.
 
And Asia’s wealth is growing. In a June report, Boston Consulting Group said its modelling suggested that wealth across Asia excluding Japan would grow at between 5.1 and 7.4 per cent annually over the next five years, and overtake western Europe as the second-wealthiest region in the world by 2022.

Family offices are common in Europe and the United States, where some rich, established families trace their wealth back more than 10 generations, but they are new to Asia, where family wealth usually only reaches back a few generations. A report by DBS and the Economist Intelligence Unit released on November 19 noted that of the billionaires in China today, 95 per cent are self-made and acquired their wealth within the past two or three decades....

....MUCH MORE

 The single-family family offices, whether licensed as such or not, are running a lot more than $20 billion.

Meanwhile In Philadelphia: Fifteen Mobsters Indicted On Racketeering, Other Charges

From the U.S. Department of Justice:

U.S. Attorney’s Office
Eastern District of Pennsylvania
FOR IMMEDIATE RELEASE
Monday, November 23, 2020
 
Fifteen Members and Associates of the Philadelphia Mafia Indicted on Federal Racketeering and Related Charges

PHILADELPHIA – United States Attorney William M. McSwain announced that a Superseding Indictment was unsealed today against 15 defendants, including alleged members and associates of the South Philadelphia and Southern New Jersey-based criminal organization La Cosa Nostra (LCN), known as the “mafia” or the “mob.” The Superseding Indictment charges various crimes including racketeering conspiracy, illegal gambling, loansharking, extortion, and drug trafficking.

The defendants charged in the seven-count Superseding Indictment are Steven Mazzone, aka “Stevie,” age 56; Domenic Grande, aka “Dom,” aka “Mr. Hopkins,” aka “Mr. Brown,” aka “Dom14,” age 41; Joseph Servidio, aka “Joey Electric,” age 60; Salvatore Mazzone, aka “Sonny,” age 55; Joseph Malone, age 70; Louis Barretta, aka “Louie Sheep,” age 56; Victor DeLuca, aka “Big Vic,” age 56; Kenneth Arabia, aka “Kenny,” age 67; Daniel Castelli, aka “Danny,” aka “Cozzy,” aka “Butch,” aka “Harry,” age 67; Carl Chianese, age 81; Anthony Gifoli, aka “Tony Meatballs,” age 73; John Romeo, age 58; Daniel Malatesta, age 75; Daniel Bucceroni, age 66; and John Michael Payne, age 34.

....MUCH MORE

HT: NJ.com

"World's biggest manufacturer of surgical gloves will close over half of its factories after a surge in coronavirus cases among workers"

 And Bryce Elder can't get back to work soon enough for my tastes.*

From AFP via Yahoo Finance:

World's top surgical glove maker shuts factories due to coronavirus

A Malaysian company that is the world's biggest manufacturer of surgical gloves will close over half of its factories after a surge in coronavirus cases among workers, authorities said Monday.

Top Glove has seen a huge jump in demand since the start of the pandemic as countries scrambled to stock up on protective equipment, pushing up both its profits and share price.

But there has been a cluster of virus outbreaks among Top Glove employees -- many of whom are low-paid migrant workers -- at factories in an industrial area near the capital, Kuala Lumpur....

....MUCH MORE

*For all things Malaysian and/or latex, March 2020's:  

Attention Hoarders: "Condom shortage looms after coronavirus lockdown shuts world's top producer"

Thanks to FT Alphaville's Bryce Elder we were able to bring up in a casual conversation the Malaysian latex glove situation:
So, Did You Buy Your Malaysian Latex Glove Stocks Last Week?
...Following up on January 22's "FT Alphaville's Bryce Elder Is a Genius: Pandemic Coronavirus Edition".
From FT Alphaville's Markets Not Live column, January 27:
....To the wider market, and Wuhan’s got us all in check. Nearly everything (except the Malaysian latex glove sector) is down after the advance of the coronavirus, or 2019-nCoV, failed to slow through an extended Chinese New Year. The outbreak has reached “a grave and complicated stage”, Beijing officials said at a presser on Sunday. Most worryingly the virus appears to be contagious during the incubation period, when there are no visible symptoms, which means the Sars comparisons we’ve been using over the past few weeks may be optimistic.
To which our interlocutor, a Malaysian gentleman of Chinese extraction responded, also casually, yet proudly:
"Malaysia is also home to the largest condom manufacturer in the world."
Which prompted first the quick-on-the-uptake "Saaaay" reaction and then the placement of an order that (hopefully) may have raised some eyebrows at our favorite purveyor.
And today's story from Reuters:....

Real Estate: "These are the biggest malls landlords ready to hand over to CMBS lenders"

 From The Real Deal, November 23:

Top 10 includes properties owned by Brookfield, Simon and Westfield

As shopping centers across the country continue to struggle with a new surge in infections and lockdowns, the expiry of forbearance agreements, and secular headwinds that predated the pandemic, a growing number of mall owners are ready to hand back the keys to their lenders.

This trend has been particularly notable in the commercial mortgage-backed securities sector, where non-recourse loans are the norm and the costs of letting lenders clean up a mess are less severe.

A list of properties recently published by Trepp, based on the firm’s analysis of special servicer commentary, helps pinpoint some of the biggest CMBS loans that borrowers are ready to give up on.

Negotiations between borrowers and special servicers are a fluid process, and Trepp notes that “the data is changing everyday” and may reflect “judgment calls” and “negotiation tactics.” But a look at the largest loans on the list does still provide a sense of where mall owners are feeling the most pain.

In particular, landlords so far appear more willing to give up on malls in secondary markets. Among the top 10 properties, the largest metropolitan area represented is Philadelphia, the eighth-largest in the United States.

The country’s largest mall owners are all well-represented in the data. Brookfield Property Partners owns four of the top five; Simon Property Group has three of the top ten; and Unibail-Rodamco-Westfield accounts for two more. CBL Properties, which filed for bankruptcy this month, rounds out the top 10.

These are the 10 largest CMBS-financed properties that have a high likelihood of going back to their lenders, ranked by the total initial balance of all loan pieces. (Square footage and tenant data from Trepp does not always reflect anchors that own their own space.)

1) Park Place Mall | Tucson, AZ | $199 million | Brookfield
Size: 478,000 square feet
Top tenants: Century Theatres (73,000 square feet), Total Wine & More (27,000 square feet), H&M (19,000 square feet)
What the servicer says: “Borrower has now indicated that they will no longer support the property with additional infusions of equity. … Have retained counsel to dual-track foreclosure and loan restructure strategies.”

2) Mall St. Matthews | Louisville, KY | $187 million | Brookfield
Size: 670,000 square feet
Top tenants: JCPenney (166,000 square feet), Dave & Buster’s (65,000 square feet), Cinemark Theater (42,000 square feet)
What the servicer says: “Borrower was unable to pay off the Loan on the Maturity Date [in June]. The Special Servicer is currently in discussion with the Borrower on a potential workout and/or deed-in-lieu.”....

....MUCH MORE

BigLaw ( Latham & Watkins) Discusses ESG Investing For ERISA Fiduciaries Under Recent DoL Rulings

You can just see the lawsuits coming. In fact a bright young specialist could probably make a career out of a single case. As we've retailed elsewhere, the lawsuit in Dickens Bleak House, "Jarndyce v Jarndyce" went on for so long that no one remembered what it was about but even that can't compare with the apparent world record which ended in 1966 having been filed in 1205.
Judgement was for the plaintiff.
Now that's commitment to the case.

From Columbia Law School's Blue Sky blog, November 23: 

Latham & Watkins Discusses Department of Labor Rule on ESG Investing

On October 30, 2020, the US Department of Labor (DOL) published Financial Factors in Selecting Plan Investments (the Rule) and a related Fact Sheet, a codification of the spirit, if not the exact words, of a controversial proposal issued by the DOL in June 2020 (the Proposal). The Rule adopts amendments to certain provisions of the “investment duties” regulation under Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA), and requires fiduciaries of pension plans (and other benefit plans covered by ERISA) to choose investments “based solely on pecuniary factors” relevant to a particular investment. The net effect is to restrict plan fiduciaries from making investment decisions guided by goals or policies other than achieving the highest possible return for investors. Non-financial goals would ostensibly include any environmental, social, or governance (ESG) factors that many investors consider important to their investment decision-making.

The Rule

Despite an overwhelming number of opposing comments submitted in the 30-day comment period after the Proposal was issued, the DOL quickly finalized the Rule substantially as it was proposed. The Rule preamble largely dismisses the materiality of ESG factors in investment decisions, and adopts the controversial idea that consideration of ESG factors are somehow at odds with financial factors and fiduciary responsibilities of plan sponsors. But rather than mandate a heightened standard of care for non-pecuniary factors in investment decisions, the DOL chose to prohibit them outright, providing that plan fiduciaries must select investments and investment courses of action based solely on financial considerations relevant to the risk-adjusted economic value of a particular investment or investment course of action. The Rule pivots on two ERISA duties imputed to fiduciaries:

  • Fiduciary Duty of Prudence: Under the Rule, a fiduciary is required to perform a financial analysis of reasonably available alternative investment options, and make decisions solely on the basis of risk of monetary loss and opportunity for monetary gain, diversification, liquidity, and projected returns. Only when a comparison among these factors yields no discernible difference in investment decision can non-pecuniary factors be considered, and then only to the extent that they are consistent with investors’ financial interests. Fiduciaries, however, are encouraged by the DOL to decide tiebreakers using their best judgment based on pecuniary factors alone. Fiduciaries that choose funds with higher fees, lower historic or projected returns, or greater risk, regardless of any other objectives or factors, would therefore violate the Rule.
  • Fiduciary Duty of Loyalty: The Rule language focuses on whether an investment factor is considered pecuniary or nonpecuniary, with pecuniary being defined as any factor that a fiduciary determines will have a material effect on risk and return based on an investment’s time horizons. A fiduciary has a duty of loyalty to investors to determine an investment course of action solely on the basis of pecuniary factors, and may not subordinate the financial interests of participants to non-financial objectives. Fiduciaries that choose funds using non-pecuniary objectives would therefore violate the Rule.

Key Differences From the Proposal

The Rule differs from the Proposal in a number of ways:....

....MUCH MORE

Back to Dickens  and the lawsuit in Bleak House via Law and Politics Book Review on LawCourts.org:

"...Innumerable children have been born into the cause; innumerable young people have married into it; innumerable old people have died out of it. Scores of persons have deliriously found themselves made parties in Jarndyce and Jarndyce, without knowing how or why; whole families have inherited legendary hatreds with the suit. 
The little plaintiff or defendant, who was promised a new rocking-horse when Jarndyce and Jarndyce should be settled, has grown up, possessed himself of a real horse, and trotted away into the other world. 
Fair wards of court have faded into mothers and grandmothers; a long procession of Chancellors has come in and gone out; the legion of bills in the suit have been transformed into mere bills of mortality; there are not three Jarndyces left upon the earth perhaps, since old Tom Jarndyce in despair blew his brains out at a coffee-house in Chancery Lane..."

Except For The Existential Dread And The Sense of Impending Doom Occasioned By The Very Premise.....Investment Idea Of The Month

 Presenting the first (and possibly quintessential) addition to the proprietary Zeitgeist Portfolio.

From the New York Times, November 20:
 
TikTok Mansions Are Publicly Traded Now
Time to learn about reverse takeovers, kids!

A business trying to make money off mansions full of TikTok influencers has gone public on the stock market through an unusual deal. It involves a former Chinese health care company, and if that sounds confusing, well, we can explain.

Social media entrepreneurs have rushed to find ways to make money from stars on popular platforms like TikTok. West of Hudson Group, for one, operates a network of content houses where many prominent young influencers live.

Houses like these function as management companies, taking a percentage of revenue from the creators living in them. The influencers often don’t pay rent, but produce content for brands and promote products as a form of in-kind rent.

Dozens of influencer houses have arrived in the Los Angeles area over the last year, and the companies that run them have been searching for sustainable business models. Going public, though, is a new strategy.

West of Hudson was acquired this week by Tongji Healthcare Group, an entity in Las Vegas that was incorporated by a Chinese hospital in 2006 but had no assets at the end of 2019.

The deal was a reverse takeover, in which a private company (in this case, West of Hudson) is acquired by an already-public one (Tongji Healthcare) but ends up in control. The deal closed on Wednesday.

There were more maneuvers behind the scenes. Before the reverse merger, Tongji itself was acquired by the investors who control West of Hudson, a New Jersey real estate operator named Amir Ben-Yohanan and his business partners.

What it all adds up to is that the combined company, which has applied to be renamed Clubhouse Media Group, is now listed on the so-called pink sheets market, where tiny public and often speculative companies trade. On Friday, Tongji’s stock closed at $2.30, 38 percent below its August high....

Financials aside, companies associated with social media trends are proving attractive among new, young investors. Zach, a 12-year-old investor who has established a following on YouTube and Twitter, is one of many young people who have gotten into stock trading, largely by watching YouTube videos. “There’s a lot more young people in the stock market than people think,” he said.

....MUCH MORE, so much more

Sunday, November 22, 2020

"Cat and mouse on the high seas: on the trail of China's vast squid fleet"

No, not some Sino-Goldman chimera/joint venture.

From the Guardian, October 21, 2020:

Huge foreign fleets gather 400 miles off South America’s Pacific coast attracted by giant squid. Peru’s coastguard must defend its territorial waters amid rising tension

The ocean is as black as chipped obsidian, yet whichever way you look dozens of bright lights illuminate the water and the night sky. Nearly 400 nautical miles from the South American mainland, the crew of a Peruvian coastguard ship count more than 30 Chinese squid boats lighting up the sea like a city at night.

Some of the boats shine luminous green, others glow blinding white like an alien spacecraft in a movie. Rigged along each side of the ships, incandescent lamps attract giant squid near the surface, where they can be hauled from the ocean by long metal arms jutting over the water.

The coastguard cutter Río Cañete drifts within 100 metres of a squid jigger, and the men on each boat gaze at each other across the water. The Chinese fishermen work in silence; the crew of the Peruvian boat is also hushed – none of them has witnessed such a scene before.

“This is just part of a considerable fleet off our coastal waters,” says Commander Eduardo Atkins, looking out from the bridge of the 55-metre patrol boat.

“They’ve always been off our coasts, from Ecuador to Argentina, [but ] this time there’s been more media attention and the public feel affected. Our job is to dissuade them from entering our maritime domain.”

The Guardian recently joined the Peruvian coastguard on a four-day patrol into international waters which came amid growing tension over the presence of the huge Chinese fleet off the coast of South America – some of the richest fishing grounds in the world.

More than 250 Chinese ships were first detected in July as they skirted territorial waters off the Galápagos Islands, stirring outrage in Ecuador and raising global concern about the practices of the world’s largest distant-water fishing fleet.

Hawkeye 360, a radio frequency data analytics firm, reported that boats were “going dark” by switching off their AIS satellite tracking and entering the islands’ exclusive economic zone.

“We found multiple examples of maritime radio frequency activity that is within the Galápagos exclusive economic zone adjacent to the Chinese fleet,” said HawkEye 360’s CEO, John Serafini.

“These signals don’t align with any AIS tracking. Although the activity could represent legitimate vessels, at the very least it is suspicious behaviour,” he said.

The hunt for Han Feng 806

Earlier that day, the Río Cañete heaved and shuddered through the machine-grey waves as a coastguard officer read out ships’ names from the radar scanner. Commander Atkins steered the cutter south-west directly towards the cluster of Chinese vessels....

....MUCH MORE

"Makers of grow-your-own human steaks say meal kit is not ‘technically’ cannibalism"

 Following up on October 30's (2017) "Questions America Wants Answered: Is Eating Lab Grown Human Flesh Cannibalism?" (we're nothing if not tenacious).

From the New York Post, November 20, 2020:

https://nypost.com/wp-content/uploads/sites/2/2020/11/ouroboros-steaks.jpg?quality=90&strip=all&w=618&h=410&crop=1
 Ouroboros Steak by Andrew Pelling, Orkan Talhan and Grace Knight on display during the 
"Beazley Designs Of The Year 2020" photocall at Design Museum in London, England

The saying “You are what you eat” may soon become a lot more literal.

A “DIY meal kit” for growing steaks made from human cells was recently nominated for “design of the year” by the London-based Design Museum.

Named the Ouroboros Steak after the circular symbol of a snake eating itself tail-first, the hypothetical kit would come with everything one needs to use their own cells to grow miniature human meat steaks.

“People think that eating oneself is cannibalism, which technically this is not,” Grace Knight, one of the designers, told Dezeen magazine.....

....MUCH MORE

Previously in Cannibal Studies:

News You Can Use: "In a Heated Negotiation? Try Eating Like Your Opponent"
I initially misread the headline as "Try eating your opponent" an error I ascribe to the current political climate and the memory of Alferd Packer, Colorado's most famous cannibal, about whom the sentencing judge said:

"Stand up yah voracious man-eatin' sonofabitch and receive yir sintince. When yah came to Hinsdale County, there was siven Dimmycrats. But you, yah et five of 'em, goddam yah. I sintince yah t' be hanged by th' neck ontil yer dead, dead, dead, as a warnin' ag'in reducin' th' Dimmycratic populayshun of this county. Packer, you Republican cannibal, I would sintince ya ta hell but the statutes forbid it."
This is not the first time Alferd has graced our pages. He was an endnote to 2015's "Trapped In the Snow With That Brother-In-Law Who Won't Stop Talking? Consider the Cannibal Lifestyle" where we pointed out the University of Colorado-Boulder student center was home to the Alferd Packer Restaurant & Grill.

Prior to that he showed up in a 2007 post on global warming:
UFO science key to halting climate change: former Canadian defense minister
Anyhoo, here's the headline story, our second of the day from ChicagoBoothReview...

Trapped In the Snow With That Brother-In-Law Who Won't Stop Talking? Consider the Cannibal Lifestyle

"Bite Me: An evolutionary case for cannibalism

"Ghost Ship Filled With Cannibal Rats Could Crash Into British Coast" (oh, and the rats are diseased)

Maersk: Oh Dear

 I could find no redeeming characteristics in this video, no wit, talent, effects, humor, nothing.

So my first though was: "I should share this on the blog!"

From Maersk's YouTube channel, where it has garnered  539 👍 (upvotes) versus 1.6K 👎 (down),

By way of well known Flâneur/boulevardier, David Keohane:


When not strolling (riding) the streets of the city Mr. Keohane also writes for the Financial Times.

His most recent piece:

The head of France’s CMA CGM says authorities are concerned a rebound in rates threatens Chinese exports

"France's CMA CGM sees strong end to year amid shipping recovery"

 From Reuters and gCaptain, November 20:

Container shipping group CMA CGM said on Friday shipping activity remained strong in the final quarter of 2020 after a rebound from initial coronavirus-related disruption boosted the French company’s third-quarter profits.

CMA CGM, the world’s fourth-largest container shipping line, said its EBITDA margin rose to 21.0% in the third quarter from 17.2% in the previous quarter and 13.3% in the year-earlier period.

Brisk shipping activity should allow CMA CGM to increase the EBITDA margin further in the final quarter, it said.

Like market leader Maersk, which this week raised its full-year earnings target, CMA CGM has pointed to strong shipments for e-commerce as the coronavirus pandemic shifts consumer demand online.

“During the fourth quarter, maritime activity is more sustained than during the third quarter due to the ongoing increase in volumes,” CMA CGM said....

....MUCH MORE

Saturday, November 21, 2020

"A Week After Matt Yglesias’s Departure, Ezra Klein Announces He’s Also Leaving Vox"

 Back in the day (2015) NBC Universal invested $200 million at a $1 billion valuation. If memory serves, that brought total funding to over $300 millions, cash.

From Washingtonian, November 20:

Only one of the news site's founders remains. 

Vox co-founder Ezra Klein and editor-in-chief Lauren Williams are leaving the news site, announced Melissa Bell, publisher of Vox Media, on Friday. The news comes just a week after another co-founder, Matthew Yglesias, announced his departure, citing a desire to reclaim “an independent voice.”

Without Klein and Yglesias, Bell will be the last of the Vox co-founders left at the outlet. Williams started at Vox as a managing editor a few months after the site’s 2014 launch.

In January, Klein will head to the New York Times, where he’ll write a reported policy column for the opinion section, and host a podcast. His current Vox podcast, “The Ezra Klein Show,” will come to an end. Williams is leaving in February to start a nonprofit called Capital B, focused on creating civic journalism tailored to Black communities.

Yglesias, meanwhile, is already onto his next gig, writing a Substack newsletter called “Slow Boring.” ....MORE

Related, this morning's "The Substackerati"

And from 2018: 

Media: "BuzzFeed CEO Jonah Peretti’s increasing pessimism and why it matters"

....All these companies raised so much money and that is part of the problem.
Two of the most cogent expositions of  the challenges facing new media came from Talking Points Memo, in November 2017 and April 2018:

Is Venture Capital Destroying Online Journalism?
I don't know but having spent some time trying to front run Sand Hill Road and understand things like Uber I have to say this is an interesting insight.

From Talking Points Memo, November 17:....

"China Signals Judicial 'Reform,' Crackdown on Peaceful Dissent in Hong Kong"

 I had expected that Radio Free Asia and U.S. Agency for Global Media (USAGM) would have figured out a way to punch holes in the Great Firewall of China, akin to what Radio Free Europe did, but not using radio as the primary tech. But no.

So the least we can do, and I mean least, is let the folks in Hong Kong know we're paying attention.

From RFA, November 17:

The ruling Chinese Communist Party (CCP) has signaled a further clampdown on dissent in Hong Kong, with a public denunciation of a pro-democracy group and apparent plans to make changes to the city's judiciary.

Zhang Xiaoming, deputy director of the Hong Kong and Macao Affairs Office under China's State Council, vowed that "anti-China" disruptive elements would be driven out of public life.

In a speech to an online conference, Zhang called on Hong Kong to start putting "patriotism before the core values of democracy, freedom, and human rights advocated by Hong Kong society."

"It is only natural to demand that those who govern Hong Kong must be patriots," Zhang said, adding: "Those who oppose China in order to create chaos in Hong Kong need to get out."

Current affairs commentator Johnny Lau said the term "patriot" was vague enough to enable its use at the whim of the authorities.

"He is using this very vague concept of patriotism to regulate and bind political actors in the future," Lau told RFA. "The definition of who is a patriot is pretty vague, and can just be defined by the government."....

....MUCH MORE

Vague laws, capriciously enforced, that's the totalitarian way.


Neofeudalism: An Overview

 From the Los Angeles Review of Books, May 12, 2020:

Neofeudalism: The End of Capitalism?

IN CAPITAL IS DEAD, McKenzie Wark asks: What if we’re not in capitalism anymore but something worse? The question is provocative, sacrilegious, unsettling as it forces anti-capitalists to confront an unacknowledged attachment to capitalism. Communism was supposed to come after capitalism and it’s not here, so doesn’t that mean we are still in capitalism? Left unquestioned, this assumption hinders political analysis. If we’ve rejected strict historical determinism, we should be able to consider the possibility that capitalism has mutated into something qualitatively different. Wark’s question invites a thought experiment: what tendencies in the present indicate that capitalism is transforming itself into something worse?

Over the past decade, “neofeudalism” has emerged to name tendencies associated with extreme inequality, generalized precarity, monopoly power, and changes at the level of the state. Drawing from libertarian economist Tyler Cowen’s emphasis on the permanence of extreme inequality in the global, automated economy, the conservative geographer Joel Kotkin envisions the US future as mass serfdom. A property-less underclass will survive by servicing the needs of high earners as personal assistants, trainers, child-minders, cooks, cleaners, et cetera. The only way to avoid this neofeudal nightmare is by subsidizing and deregulating the high-employment industries that make the American lifestyle of suburban home ownership and the open road possible — construction and real estate; oil, gas, and automobiles; and corporate agribusiness. Unlike the specter of serfdom haunting Friedrich Hayek’s attack on socialism, Kotkin locates the adversary within capitalism. High tech, finance, and globalization are creating “a new social order that in some ways more closely resembles feudal structure — with its often unassailable barriers to mobility — than the chaotic emergence of industrial capitalism.” In this libertarian/conservative imaginary, feudalism occupies the place of the enemy formerly held by communism. The threat of centralization and the threat to private property are the ideological elements that remain the same.

A number of technology commentators share the libertarian/conservative critique of technology’s role in contemporary feudalization even as they don’t embrace fossil fuels and suburbia. Already in 2010, in his influential book, You Are Not a Gadget, tech guru Jaron Lanier observed the emergence of peasants and lords of the internet. This theme has increased in prominence as a handful of tech companies have become ever richer and more extractive, turning their owners into billionaires on the basis of the cheap labor of their workers, the free labor of their users, and the tax breaks bestowed on them by cities desperate to attract jobs. Apple, Facebook, Microsoft, Amazon, and Alphabet (the parent company name for Google) together are worth more than most every country in the world (except the United States, China, Germany, and Japan). The economic scale and impact of these tech super giants, or, overlords, is greater than that of most so-called sovereign states. Evgeny Morozov describes their dominance as a “hyper-modern form of feudalism.”

Albert-László Barabási explained the processes underpinning such a neofeudalism in his analysis of the structure of complex networks, that is, networks characterized by free choice, growth, and preferential attachment. These are networks where people voluntarily make links or choices. The number of links per site grow over time, and people like things because others like them (the Netflix recommendation system, for instance, relies on this assumption). Link distribution in complex networks follows a power law where the most popular item generally has twice as many hits or links as the second most popular, which has twice as many as the third most and so on down to the insignificant differences between those in the long tail of the distribution curve. This winner-takes-all or winner-takes-most effect is the power law shape of the distribution. The one at the top has significantly more than the ones at the bottom. The shape the distribution takes is not a bell curve; it’s a long tail — a few billionaires, a billion precarious workers. The structure of complex networks invites inclusion: the more items in the network, the larger the rewards for those at the top. It also induces competition — for attention, resources, money, jobs — anything that is given a network form. And it leads to concentration. The result, then, of free choice, growth, and preferential attachment is hierarchy, power law distributions where those at the top have vastly more than those at the bottom.

Power law distributions are not inevitable. They can be stopped. But that takes political will and the institutional power to implement it. The neoliberal policies of the 20th century, however, strove to create conditions that would facilitate rather than thwart free choice, growth, and preferential attachment.

Quinn Slobodian’s Globalists: The End of Empire and the Birth of Neoliberalism documents the neoliberal strategy of undermining the authority of the nation-state over its economy in the interest of advancing global trade. Threatened by the organized demands of the newly postcolonial nations of the Global South for reparations, sovereignty over their own natural resources, stabilized commodity prices, and the regulation of transnational corporations, neoliberals in the 1970s sought to “circumvent the authority of national governments.” They advocated a multilevel approach to regulation, a competitive federalism that would let capital discipline governments while itself remaining immunized from democratic control. In the words of Hans Willgerodt, one of the neoliberals Slobodian studies, the new competitive federalism required the state to “share its sovereignty downward with federal structures and bind itself upward within an international legal community.”

Rather than focusing on the origins of neoliberalism, Albena Azmanova’s Capitalism on Edge demonstrates the ways neoliberalism in practice has led to a new precarity capitalism. Policies pushing deregulation and global free trade have had unexpected outcomes. The global market morphed from a system of “national economies integrated through trade agreements into transnational production networks.” Because of the unclear and uncertain contribution of these networks to national economies, maintaining the competitiveness of national economies has become “a top policy concern.” Competitiveness has replaced competition and growth as a state goal, leading states to prioritize not a level playing field and the dismantling of monopolies but “to aid specific economic actors — those who are best positioned to perform well in the global competition for profit.” Acknowledging how the private sector has always benefited from public funds, Azmanova emphasizes the novelty of a form of capitalism where “public authority handpicks the companies on which to bestow this privilege.” States don’t intervene to break up monopolies. They engender and award them....

....MUCH MORE

"The Substackerati"

 From the Columbia Journalism Review:

Did a newsletter company create a more equitable media system—or replicate the flaws of the old one?

The first week of March, Patrice Peck, a freelance journalist living in New York, started sanitizing everything. She went to Nitehawk, a dine-in movie theater, and brought Clorox to wipe down the little table by her seat, her drinking glass, the utensils. In those early days, she felt like she was the only one obsessing over the coronavirus. As the pandemic spread, she started exchanging updates with a friend via text message and calling her grandmother in Jamaica to discuss the situation there. Peck anticipated that Black people would be hit the hardest, and that this aspect of the story would not receive enough coverage. “It was just very obvious to me,” she said.

By April, shelter-in-place orders were in effect. Peck—who is thirty-three and stylish, lately with cat-eye glasses and short hair—was holed up in her apartment. She and her partner set up to work side by side, their laptops perched on the kitchen island; Peck scoured the internet for news as Black people in America began dying from covid-19, the disease caused by the coronavirus, at twice the rate of whites. “I wanted to write something that would be valuable to readers and informative and empowering, particularly to Black audiences,” she said. So she did what so many other independent journalists were doing—she started a Substack.

Substack, established in 2017 by three tech-and-media guys—Chris Best, Hamish McKenzie, and Jairaj Sethi—is a newsletter platform that allows writers and other creative types to distribute their work at tiered subscription rates. Newsletters go back at least as far as the Middle Ages, but these days, with full-time jobs at stable media companies evaporating—between the 2008 recession and 2019, newsroom employment dropped by 23 percent—Substack offers an appealing alternative. And, for many, it’s a viable source of income. In three years, Substack’s newsletters—covering almost every conceivable topic, from Australian Aboriginal rights to bread recipes to local Tennessee politics—have drawn more than two hundred fifty thousand paid subscribers. The top newsletter authors can earn six figures, an unheard-of amount for freelance journalists. Emily Atkin, who runs Heated, on the climate crisis, told me that her gross annual income surpassed $200,000—and among paid-readership Substacks, she’s ranked fifteenth. “I literally opened my first savings account,” she said.

Peck had been mulling the idea of starting a newsletter for a while. She began thinking seriously about Substack when she saw Beauty IRL, a newsletter by Darian Harvin. Like Peck, Harvin is a freelancer—it was “really a matter of time” until she was laid off from one media job or another, she figured—and she was using Substack as a place for surplus ideas. “I take some of my pitches and just write them for my newsletter,” Harvin said. “Publications are only paying me three hundred dollars per piece, so I thought, What would happen if I took some of them and grew my audience?” Her efforts were getting noticed; eventually, Substack gave her a $3,000 stipend and a $25,000 advance (in the latter arrangement, Substack takes 50 percent of her subscription fees until the advance is paid off, but if she doesn’t reach that number, Harvin won’t owe Substack the rest)....

....MUCH MORE

2019 - 2020: "An Extraordinary Winter in the Polar North"

 From the American Geophysical Union's EOS, November 20:

An exceptionally strong stratospheric polar vortex coincided with a record-breaking Arctic Oscillation pattern and ozone destruction during the 2019–2020 winter season.

The winter of 2019–2020 in the Northern Hemisphere was one of extremes. The massive region of cold polar air encircled by stratospheric winds, known as the stratospheric polar vortex, was particularly strong, keeping the frigid air whirling above the polar region and leading to a very mild winter in many regions farther south. The strong polar vortex coincided with a record-breaking positive Arctic Oscillation circulation pattern and record low ozone levels in the Arctic that lasted into spring. In a review, published as part of an AGU special collection, Lawrence et al. outline the unique conditions that allowed this “truly extraordinary” winter season to arise.

The researchers compared the unusual 2019–2020 winter season with historical data and found that zonal (east-to-west) wind measures suggest it was the strongest polar vortex since the satellite era began roughly 4 decades ago. The strength of the polar vortex varies from year to year and depends on many factors. Atmospheric waves originating in the troposphere often propagate into the stratosphere, breaking up and weakening the westerly circulation of the polar vortex.

But atmospheric wave activity was relatively weak this year. The authors suggest that the combination of this weak activity and multiple downward wave-coupling events, in which atmospheric waves propagating upward were reflected back into the troposphere, helped to cool and strengthen the polar vortex....MORE

 A related paper, "Seasonal Forecasts of the Exceptional Northern Hemisphere Winter of 2020" is open access and worth a look should the reader's interests include forecasting.

Friday, November 20, 2020

"Was the Bank of Amsterdam the world’s first central bank?"

A very interesting post that elicited some interesting comments from the bankers among the commentariat. 

From Claire Jones writing at FT Alphaville, November 11:

The Bank of Amsterdam is to central banking history what Little Richard is to rock ‘n’ roll. While the public might like to think it was Elvis or the Fab Four that invented it, the purists know they merely popularised it. Google “what was the first central bank in the world” and you’ll get Sweden’s Riksbank, but — as we found out from a Bank for International Settlements paper out on Tuesday — an increasing number of academics think that this honour should go to the Dutch lender. The reason this matters is that economists at the BIS and elsewhere draw lessons from the Bank’s failure to come up with today’s policy conclusions. The main arguments in its latest paper, An early stablecoin? The Bank of Amsterdam and the governance of money, posits that stablecoins are not fit for purpose and that central banks need a strong fiscal authority behind them. Here’s how the BIS puts it:  
First, rigid stablecoins are poorly suited as the foundation for a modern monetary system…. ...In the case of the Bank of Amsterdam, it began life as a rigid stablecoin, but its public policy function at the heart of the financial system pushed it increasingly to taking on the role of lending (an elastic structure). Without the ability to lend, it could not have performed its central role in supporting the financial system and international trade as long as it did. Our second key lesson is that for a central bank to play its role, the fiscal backing of the sovereign and its fiscal sustainability are essential.... The ultimate backing for the value of money is the solvency of the public sector — ie central bank solvency subject to the flow constraints in its interaction with the government. The Bank of Amsterdam’s failure is a vivid lesson in how a central bank that loses public trust can push its luck too far, beyond the threshold for failure. 
We buy the first argument, we’re less sure about the reasoning that goes into the second. Here’s the back-story in brief. The Bank of Amsterdam was set up in 1609, almost 60 years before the Riksbank. It was fully owned by the city of Amsterdam and its coins fully backed by gold and silver. According to the paper the Bank’s strong performance over more than 170 years, including through times of turbulence, helped to solidify trust in it as an institution. This drew attention from the likes of Adam Smith, who mentioned the lender in his seminal work The Wealth of Nations. Here’s an excerpt:
At Amsterdam, however, no point of faith is better established than that for every guilder, circulated as bank money, there is a correspondent guilder in gold or silver to be found in the treasure of the bank. The city is guarantee that it should be so....

....MUCH MORE

U.S. "Navy Secretary Urges Creation Of New US '1st Fleet' To Deter China In Indian Ocean"

 A topic of abiding interest*

From ZeroHedge, November 20:

The US Secretary of the Navy has floated a controversial idea that could be a gamechanger in a region which China sees as its own sphere of influence.

Just ahead of the Biden administration's entering the White House in January, Navy Secretary Kenneth Braithwaite this week urged for the reactivation of the Navy's 1st Fleet in order to rapidly beef up American's maritime might in order to challenge the growing Chinese military machine

"We want to stand up a new numbered fleet. And we want to put that numbered fleet in the crossroads between the Indian and the Pacific oceans, and we’re really going to have an INDOPACOM footprint," Braithwaite said at the Naval Submarine League’s annual symposium this week.

Currently the Navy's 7th Fleet is responsible for covering a massive stretch of ocean from where it is based in Yokosuka, Japan. This includes the maritime expanse from waters corresponding to where the India-Pakistan border is, all the way to Hawaii.

The 7th Fleet has some 20,000 sailors under its immediate command operating anywhere from 50 to 70 ships and submarines, along with 150 Navy aircraft. As summarized in The Drive, a numbered fleet based possibly out of Singapore would make for a greater concentration of forces able to more rapidly and effectively respond to any conflict potentially involving China:

When the Navy shuttered 1st Fleet nearly 50 years ago, it established U.S. 3rd Fleet in its place. That fleet remains active today with its headquarters in San Diego, California. Decades later, the service further redrew its operational boundaries in the Pacific, limiting 3rd Fleet's responsibilities to naval activities in the Eastern Pacific, while expanding the role of U.S. 7th Fleet, which is forward-deployed in Japan, to cover more of the Western Pacific. The 7th Fleet is also presently responsible for overseeing operations in the Indian Ocean.

"We can't just rely on the 7th Fleet in Japan," Braithwaite said, and crucially added, "We have to look to our other allies and partners like Singapore, like India, and actually put a numbered fleet where it would be extremely relevant if, God forbid, we were to ever to get in any kind of a dust-up." ...

....MORE

*And if you are interested see also:
August 2020
India is Serious About Disengaging From China
July 2019
Energy key to luring India into US Indo-Pacific strategy
April 2018
Geostrategy: "In a remote corner of Sri Lanka, China built billions of dollars of high-end infrastructure that now sits virtually abandoned. Was that the plan all along?"
Dec. 2017
"The New Great Game moves from Asia-Pacific to Indo-Pacific"
November 2010
India Orders Firms to "Scour the Earth" for Energy Supplies as President Obama Heads Over

The Chinese approach works best if you have a blue water navy.
The Indian's currently have one aircraft carrier, the Viraat. Back in 2001 the Chinese bought a Soviet carrier from Ukraine for $20 mil. and said they were going to turn it into a, aahhh, casino, yeah that's the ticket. They've since started work on two more.
I have a hunch that American schoolkids today will be hearing a lot about the Indian Ocean before they graduate and might even be able to find it on a map.*
*I mean come on, just look at the land masses that border it:
Map of Indian Ocean
May 2012
Shadow War: We Told You the Indian Ocean Would Be Hot February 2014
Indian Ocean Geopolitics: China Goes to the Maldives
January 2015
"Is China Moving to Control the Indian Ocean?"
April 2015
"China’s Grand Plan for Pakistan’s Infrastructure"

Somehow related:
The Softer Side Of Clausewitz