Thursday, November 21, 2019

Shipping on Northern Sea Route up 63 percent, Putin Smiles

The story thus far:

March 2018
Russian navy’s Arctic patrol vessels suffer delays of 3-4 years
President Putin almost looks upon the Arctic as his pet project, a really large pet project but his, and the fact the government budget can't come up with the loot to pay for the ships is an intriguing insight into Russia's true financial state. I guess even the Autocrat of all the Russias President of Russia has limits.

May 2018
"It’s an order from the Kremlin: shipping on Northern Sea Route to reach 80 million tons by 2024"

Oct. 2018   
"New state commission takes on Putin’s big plan for the Arctic"

January 2019 
Ministry hints Putin’s Arctic ambitions are not realistic

And the latest chapter from the Barent's Observer

Goods volumes on the Russian Arctic route reaches 26 million tons.  
Russia’s development of the Arctic shipping route proceeds ahead of schedule. According to Rosatom, the state nuclear power company, shipping by 15th November exceeded 26 million tons.
That is an increase of more than 63 percent from the same period last year.

Shipping on the remote route could reach 30 million tons by the end of the year. In 2018, goods volumes totaled about 20 million tons.

The Northern Sea Route includes the waters between the archipelago of Novaya Zemlya and the Bering Strait, a distance of about 5,600 km. It offers shippers a significantly shorter route Europe and Asia than through the Suez Canal.

It is new Russian industrial projects in the Arctic that is behind the growth. The lion’s share of current shipments is LNG from Novatek’s natural gas installations in the Yamal Peninsula and oil from Gazprom Neft’s Novy Port project.

Meanwhile, transit shipments remain low. According to Rosatom, ships in the period brought 205,000 tons of goods across the route. A key part of it was shipped by Chinese shipping company COSCO....MORE

Back to the "Autocrat of all the Russias" post, here's the outro:

...North Korea's Kim Jong-Il had fifty-something titles including "Glorious General, Who Descended From Heaven" and "Dear Leader, Who is a Perfect Incarnation of the Appearance that a Leader Should Have," but I think the later Tsars  had him beat in number if not in poetry, as noted elsewhere:

"By the Grace of God, We, NN, Emperor and Autocrat of All the Russias, Moscow, Kiev, Vladimir, Novgorod; Tsar of Kazan, Tsar of Astrakhan, Tsar of Poland, Tsar of Siberia, Tsar of Chersonese Taurian, Tsar of Georgia; Lord of Pskov and Grand Prince of Smolensk, Lithuania, Volhynia, Podolia, Finland; Prince of Estland,....."
It goes on and on listing the territories and actually ends with:
"...hereditary Sovereign and Ruler of the Circassian and Mountain Princes and of others; Sovereign of Turkestan, Heir of Norway, Duke of Schleswig-Holstein, Stormarn, Dietmarsen, Oldenburg, and so forth, and so forth, and so forth."
In future I'll just go with 'Putin' and avoid the temptation to do the Autocrat of All the Russias thing.

Shipping/Refining: Shell Traders Post $1 Billion Profit in Fuel Oil Market Ahead of January 1 Low-Sulfur Rules

Someone's taking advantage of the opportunity.
From Bloomberg via gCaptain, November 15:

Shell Traders Post $1 Billion Profit in Fuel Oil Market Ahead of IMO 2020
Royal Dutch Shell Plc has made $1 billion from trading fuel oil this year, making it one of the standout winners from rules designed to make the shipping industry greener.
Shell said last month that it made substantial money in fuel-oil trading in the third quarter, but the company didn’t disclose the size of the profits. Shell traders celebrated hitting the $1 billion mark so far, likely the biggest by any one company in fuel oil this year, by ringing a bell on the company’s trading floor in London earlier this month, people familiar with the matter said.
Shell declined to comment.

The fuel-oil market has been shaken this year by the so-called IMO 2020 new regulations that ban the use of high-sulfur fuel oil, known as HSFO, to power ships. The rules are aimed at combating human health conditions such as asthma and environmental damage including acid rain. Prices are collapsing because the global shipping fleet, which burns more than 3% of the world’s oil, will instead have to consume very low sulfur fuel-oil, or VLSFO.

Although better known for its oil fields, refineries and pump stations, Shell runs an in-house trading business that’s larger than the better-known independent oil traders like Vitol Group, Glencore Plc and Trafigura Group, handling 13 million barrels of oil equivalent per day. The company describes itself as “one of the largest and most experienced energy merchants in the world” with major trading floors in Houston, London, Dubai, Rotterdam and Singapore....

The British company that became 40% of Royal Dutch Shell Group was Shell Transport and Trading.
We haveve mentioned the company's corporate structure a few times, usually while wearing the academic hat and lecturing on the misuse of the word "arbitrage":
"Even the old Royal Dutch and Shell Transport trade was not an arb, 
just a fairly good pair trade."
And we've had a few posts on the IMO 2000 oil/refining trade. Here's one from June 2018:
Shipping: The New Low Sulpher Rules Will Have A Huge Impact On the Oil Business (shipping and world economy too)

And one from October 2019:
Shipping/Refining: Ahead of the 2020 Low-Sulfur Rules The Diesel – Crude Spread Blows Out (FRO)

And a few in-between:
August 25
Shipping Magnate John Fredriksen Goes ‘All-In’ With IMO 2020 Wager (FRO)
August 21
Shipping/Trucking: "Diesel prices will spike due to IMO 2020: Fitch"
August 6
Shipping/Refining: "Is A Diesel Crunch Coming?"
July 12
Shipping: First Signs of 2020 Low-Sulpher Rules Starting to Rock the Oil Market
Have I mentioned the IMO 2020.... oh who am I kidding, fascination became idée fixe some time ago.
July 8
Shipping: 2020 Low Sulphur Rules Less Than 6-Months Away - There's A Trade For That

And previously on this aspect of the big change:
Rich Rewards Await Top Oil Refiners as Ships Make Low Sulphur Switch Fuel
Top Norwegian Oil Analyst Quitting DNB to Pursue 2020 Low Sulphur Fuel Rule Riches 
Oil/Shipping: "Where will all the residual fuel go after ships barred from using it?"
Shipping’s 2020 Low Sulphur Fuel Regulation to Hit Airlines
"Shipping: 2020 Low Sulfur Fuel Requirements Will Disrupt Oil/Refined Markets Up to Five Years".  Shipping: First Signs of 2020 Low-Sulpher Rules Starting to Rock the Oil Market

"Bad news: 'Unblockable' web trackers emerge. Good news: Firefox with uBlock Origin can stop it. Chrome, not so much"

From the site that uses the word "boffins" more than the rest of the internet combined, The Register:

Ad-tech arms race continues: DNS system exploited to silently follow folks around the web
Developers working on open-source ad-blocker uBlock Origin have uncovered a mechanism for tracking web browsers around the internet that defies today's blocking techniques.

A method to block this so-called unblockable tracker has been developed by the team, though it only works in Firefox, leaving Chrome and possibly other browsers susceptible. This fix is now available to uBlock Origin users.

The tracker relies on DNS queries to get past browser defenses, so some form of domain-name look-up filtering could thwart this snooping. As far as netizens armed with just their browser and a regular old content-blocker plugin are concerned, this tracker can sneak by unnoticed. It can be potentially used by advertising and analytics networks to fingerprint netizens as they browse through the web, and silently build up profiles of their interests and keep count of pages they visit.

And, interestingly enough, it's seemingly a result of an arms race between browser makers and ad-tech outfits as they battle over first and third-party cookies.

Ooh, la la
Here's where it all began: in a GitHub issue earlier this month, a developer who goes by the name Aeris online, said that French newspaper website uses a tracker crafted by French marketing analytics outfit Eulerian "that seems to be unblockable."....

Here's a quick search of The Register for boffins.
It shows 5591 hits, I'd have thought it was more. Maybe it's not more than the rest of the internet but they sure are trying to keep the word alive.

LNG: Singapore Gas Importer Cancels Tanker Load Due To Oversupply

Following the EIA storage report December futures are down 0.016 at 2.543, the January's are off 0.022 to 2.589. There is a lot of gas around.
We'll be back with the storage numbers after the more granular Weekly Update is released this afternoon.  
And as an example of the excess of supply, from Reuters, November 19:

Pavilion cancels U.S. LNG cargo loading as market faces oversupply
Singaporean gas importer and marketer Pavilion Energy has taken the unusual step of cancelling the loading of a liquefied natural gas (LNG) cargo from the United States, but has agreed to pay for it, several industry sources told Reuters.

The global LNG market is awash with new supply amid slowing demand in key countries such as China and Japan, leaving some traders with cargoes they have bought but are unable to resell.
“Pavilion Energy evaluated scheduling and other commercial matters, then took the decision not to lift the cargo in full coordination with the supplier,” a spokeswoman for the company, which is owned by Singapore’s sovereign wealth fund Temasek Holdings [TEM.UL], told Reuters on Tuesday.
She declined to provide further details of the LNG cargo, which industry sources said Pavilion was supposed to load from the Cameron LNG plant in Louisiana in the United States in November.
Pavilion has a long-term supply deal with Japan’s Mitsubishi Corp to buy LNG from the Cameron plant, which is operated by Sempra Energy.

A Mitsubishi Corp spokesman declined to comment....

This event pounds home a point we've been making for a few months now, here's the October 19 iteration:

EIA Natural Gas Weekly Update, October 17, 2019 
LNG has become more of a factor in the Thursday storage numbers, to the point that the timing of just one or two ships will change the injection/withdrawal numbers.
It makes life interesting....

And a few more in: "The U.S. Just Doubled Its Natural Gas Exports"

Automation: "Fortescue’s Autonomous Truck Fleet Hits One Billion Tonnes Hauled"

As noted in the intro to February's "You Want Autonomous Vehicles? The Mining Industry Is Already Going to Level 5

Fortescue Metals Group’s fleet of autonomous haul trucks in the Pilbara has surpassed the one billion tonne milestone of material moved, covering 33.5 million kilometres in the process.

The company claims there has been “no forced redundancies” as the autonomous truck program has expanded since it was launched in 2012.

Fortescue first deployed Caterpillar’s autonomous haulage technology (AHS) at the Solomon Hub operations, making it the first company in the world to do so on a commercial scale.
The company has since added a fleet to the Chichester Hub, with a total of 137 autonomous trucks now in operation.

Fortescue will convert a further 175 trucks to autonomous technology by mid-next year and become the world’s first iron ore company to have a fully autonomous haulage operation.
Chief executive officer Elizabeth Gaines described the milestone as “significant” for Fortescue....MORE
Fortescue joins Rio Tinto who passed the tonnage hauled mark in January 2018.

Via International Mining
Rio Tinto’s autonomous haul trucks hit one billion tonne milestone

Rio Tinto's Australian Autonomous Train Is Being Called The "World's Largest Robot" (RIO)
Mining Technologies For the Mines of the Future

German Auto Parts Maker Continental To Cut 5000 Jobs Citing Transition to Electric Mobility

From FreightWaves:
Continental AG, the German auto parts giant, has announced that it will phase out over 5,000 jobs across various production plants in Germany, the U.S. and Italy, citing several reasons including the industry’s accelerated transition to electric mobility and the profitability of autonomous and connected driving.

The organizational restructuring will affect manufacturing plants in Roding, Limbach-Oberfrohna and Babenhausen in Germany, Virginia in the U.S., and Pisa, Italy. Though the confirmation came on Nov. 20, the plans to close manufacturing plants – and therefore the employees at those facilities – had been discussed in its supervisory board meeting on Sept. 25.

This apart, Continental’s supervisory board will convene again with the local works council in Rubí, Spain, to discuss the future prospects of the location’s manufacturing plant. The plant primarily produces analogy displays and controls, and currently employs 760 people.

Continental will shut down its business in hydraulic components for gasoline and diesel engines in the coming years, which is in line with its Transformation 2019-29 program that was established to bolster the company’s long-term prospects in the auto market....MUCH MORE

Wednesday, November 20, 2019

Private Equity Owned Bumble Bee Tuna Prepping for Bankruptcy

We now go a bit down market, from the Swiss ski resorts and superyachts in the post immediately below, to canned tuna.
From SeafoodSource, November 18:

Bumble Bee to file for bankruptcy this week, Wall Street Journal reports 
The Wall Street Journal reported on Friday, 15 November that Bumble Bee Foods will file a chapter 11 bankruptcy petition in the coming days.

Concurrent with the chapter 11 filing, London, U.K.-based private equity firm Lion Capital will put Bumble Bee up for sale, the WSJ reported, citing anonymous sources “familiar with the matter.”
Neither Lion Capital nor Bumble Bee responded to requests from the WSJ for comment.
Bumble Bee has struggled financially since it was penalized USD 25 million (EUR 22.8 million) for its part in a price-fixing scheme.

Lion Capital purchased Bumble Bee Foods from Centre Partners in 2010 for USD 980 million (EUR 886 million). It sought to sell Bumble Bee to Thai Union, the owner of the Chicken of the Sea tuna brand, for USD 1.5 billion (EUR 1.3 billion) in 2014 but the sale was nixed after U.S. authorities discovered evidence of price-fixing amongst the two companies and rival StarKist. Former Bumble Bee CEO is currently on trial for his own alleged role in the conspiracy.

Tangible signs the company is in dire financial straits first came as part of the imposition of a reduced penalty in the criminal case for price-fixing, when the the U.S. DOJ agreed to lower the amount of the criminal fine to USD 25 million (EUR 22.8 million) to protect the company from insolvency.....

So it wasn't the millennial's lack of can openers?

Yesterday Undercurrent News reported that Bumble Bee had someone to start the bidding:

‘Stalking horse’ bidder lined up for Bumble Bee as part of likely bankruptcy filing
A “stalking horse” bidder, said to be an industry player, is lined up for Bumble Bee Foods if -- or when, according to some executives -- the company goes into US Chapter 11 bankruptcy protection, sources told Undercurrent News.

A Chapter 11 filing is seen as highly likely for the beleaguered shelf-stable seafood giant, driven by the lack of a settlement with the litigants in the civil lawsuits against the Lion Capital-owned company over its tuna price fixing, sources said. This comes as Chris Lischewski, the long-time CEO of Bumble Bee, is on trial in San Francisco, California for allegedly leading the price-fixing....

Now, about those can openers, from the Wall Street Journal, Dec. 2, 2018:

The Trouble With Tuna: ‘A Lot of Millennials Don’t Even Own Can Openers’
StarKist, Bumble Bee and Chicken of the Sea deal with slumping market amid competition from fresher options
As seen in "Fed Working Paper: "Are Millennials Different?" (and why 'news for millenials' plays never panned out)".

Luxury and Emotional Investments: "A Pair Trade In The Style Of Davos: Short Ski Chalets/Long Superyachts"

That was our headline back in 2016 for a story that juxtaposed an uptick in yacht sales against the Knight Frank annual ski property review as relayed by FT Alphaville:
"More concerning, note the analysts, is the declining appeal of ski resorts
'as a place to be seen' thing among the millennial generation as a whole."
It turns out it was a good trade.* Here's the latest on the short leg from FT Alphaville, November 20, 2019:
When coins outperform Verbier
FT Alphaville was perusing Knight Frank’s annual Prime Ski Property report and couldn’t help but look twice at the following infographic:
That’s the Knight Frank Prime Ski Property Index, up 1.4 per cent on the year, in the middle there. But way ahead of it on the left there come “coins” - up 12 per cent on the year....MUCH MORE
*Of course, as pointed out in the original post:
A note on engineering: The 'short chalet' leg acts more as a semivariance dampener than a true anti-correlated dirty hedge and would have to be constructed synthetically, which gives rise to all the collateral issues such trades are prone to, but depending on your correspondent gnome I'm sure you could get some kind of action down.  
And my favorite "In the style of", also from 2016:

Machine Learning: Google and Style Transfer
You knew we didn't post "Auto Mechanics In the Style of  Michelangelo--UPDATED" just because the pictures were pretty didn't you. Even though, as this example in the style of Rembrandt shows, the photographer nails it, from the book, to the lighting to the folds in the coveralls:
A bit of Rembrandt inspired garageiness:
No, it was so I could refer back to them.
And they were pretty.
In a manly sort of way. Very manly.

Moving right along, that is a type of style transfer, something that takes a very good eye for detail and almost virtuoso skill with the camera.

And it's something that computers are learning how to do, sans camera.

From Google's Research blog, Oct. 26, 2016....

Beijing asks Chinese students to leave Taiwan before presidential election: report

From the Taiwan News, November 10:

Message spreading among Chinese students and their parents
Beijing has reportedly asked Chinese students to leave Taiwan before the presidential and legislative elections scheduled for January 11, even though some students have said they would rather stay on the island to observe the voting process themselves.

A Chinese municipal government office that handles the affairs of local residents with children studying in Taiwan has announced that students are advised to return to China before January 11, according to a screenshot sent by a parent to Apple Daily on Saturday (Nov. 9). The message does not provide an explanation, but many believe it is meant to prevent Chinese students from staying in the country while the Taiwanese electorate casts its ballot for the next leader of the country.

Several students from different Chinese cities said they had received similar messages, the report said. As election day falls on the final week of classes for many universities in Taiwan, some Chinese students are now asking schools if they can take their final exams earlier, it added....MORE
Possibly related. from Reuters via Yahoo News, November 7:

Taiwan warns of possible attack if China's slowdown 'becomes serious'
Beijing could resort to military conflict with self-ruled Taiwan to divert domestic pressure if a slowdown in the world's second largest economy amid trade war threatens the legitimacy of the Chinese Communist Party, the island's foreign minister has said.

As Taiwan's presidential elections approach in January, China has stepped up a campaign to "reunify" with what it considers a wayward province, wooing away the island's few diplomatic allies and flying regular bomber patrols around it.

In an interview with Reuters, Taiwan's Foreign Minister Joseph Wu drew attention to China's slowing economy amid its bitter trade war with the United States.

"If the internal stability is a very serious issue, or economic slowdown has become a very serious issue for the top leaders to deal with, that is the occasion that we need to be very careful," Wu said on Wednesday.

"We need to prepare ourselves for the worst situation to come...military conflict."
China's economy, though still growing, is expected to slow to a near 30-year low this year, underscoring a stiff challenge for Beijing in stepping up stimulus to keep up growth that has been fundamental to the Communist Party's political legitimacy....MORE
Because Taiwan is incredibly well defended after years of thinking about this exact threat a frontal assault by China would be madness. Even after a decapitation attack to take out Taiwan's top leadership it would be a daunting task, especially since China's military hasn't been battle tested since the last time Vietnam fought them to a standstill.

The thinking among folks much smarter than I about this stuff is that China would want a "practice" war, maybe against Vietnam over the South China Sea before going after Taiwan.

In favor of this theory is the fact Vietnam no longer has the services of General Võ Nguyên Giáp, possibly the greatest general of the 20th century,  who defeated in turn, the French empire, the U.S.A. Cambodia and China in 1954, 1975, 1978 and 1979 respectively.

That last conflict was the result of China's invasion of Vietnam in an attempt to force Vietnam out of Cambodia which Vietnam had invaded in 1978, putting Pol Pot and the Kmer Rouge génocidaires out of business. It didn't work, Vietnam stayed in Cambodia until 1989.

The General died in 2013 age 102 having outlived everyone who went up against him.

On the other hand a coup of some sort has probably been planned by Beijing for years:
July 3, 2019
China to Narrow Chip Gap With Taiwan Invasion
Did I say invade? I meant trade.
I must have been thinking of China's Defense Minister last month saying "China must be and will be reunited". 
With the Taiwanese elections coming up it's probably as good a time as any for Beijing to make some sort of move. Probably not invasion though. China will want to test its military somewhere, our guess is Vietnam, before tackling Taiwan. So probably some sort of fifth column action, cyber, electrical grid etc. And the people to do it are already on the island, I mean if the Chinese could get one of their spies into Dianne Feinstein's office while she was Chair of the Senate Intelligence Committee (2009 - 2015), the guy was her San Francisco office manager, not, as reported, the chauffeur, if they could do that there is no doubt they have assets in Teipei.
So where was I?

Chips. For all their technological wizardry the Chinese are still having trouble making chips....

"Amazon’s roadmap for Alexa is scarier than anything Facebook or Twitter is doing"

From TheNextWeb:
Amazon has big plans for its virtual assistant. One day, perhaps sooner than you think, Alexa will take a proactive role in directing our lives. It’ll interpret our data, make decisions for us, and summon us when it has something to say.

Rohit Prasad, the scientist in charge of Alexa‘s development, recently gave MIT Technology Review’s Karen Hao one of the most terrifying interviews in modern journalism. We know how dangerous it is to let bad actors run amok with AI and our data – if you need a refresher, recall the Cambridge Analytica scandal.

That’s not to say Prasad is a bad actor or anything but a talented scientist. But he and the company he works for probably have access to more of our data than ten Facebooks and Twitters combined. And, to paraphrase Kanye West, no one person or company should have all that power.
Hao writes:
Speaking with MIT Technology Review, Rohit Prasad, Alexa’s head scientist, has now revealed further details about where Alexa is headed next. The crux of the plan is for the voice assistant to move from passive to proactive interactions. Rather than wait for and respond to requests, Alexa will anticipate what the user might want. The idea is to turn Alexa into an omnipresent companion that actively shapes and orchestrates your life. This will require Alexa to get to know you better than ever before.
The idea of Alexa being an omnipresent companion looking to orchestrate your life should probably alarm you. But, for now, the work Prasad and the Alexa team are doing isn’t scary on its own merit.
If you’re one of the eight or nine people on the planet who has never interacted with Alexa, you’re both missing out and not really missing out. Virtual assistants, today, are equal parts miraculously intuitive and frustratingly limited. 
With one interaction, you’ll say “Alexa, play some music” and the assistant will ‘randomly’ select a playlist that touches the depths of your soul, as if it knew better than you did what you needed to hear....

BlackRock: "Where do growth stocks go when the economy slows?"

The writer is head of BlackRock's Wealth Advisory.
From the BlackRock blog, November 12:
Growth stocks have outpaced the broad market for several years running. Can they continue their winning ways in an economic slowdown? Martin Small poses this question and more to veteran growth investor Lawrence Kemp.

Growth stocks have outperformed their value peers and the broad market in 2019, and have been on a strong run for the better part of the post-crisis period. Is the eventual slowing of economic momentum a death knell for growth stocks, or can they continue to deliver for investors? I recently sat down with Lawrence Kemp, head of BlackRock’s U.S. Growth equity team, to get his outlook.

Martin: Lawrence, growth has had a good run. What I hear most frequently is that it’s unsustainable, it’s a trade. What do you say to that?

Lawrence: It’s true that growth has done well for some time now, but we firmly believe growth stocks are not a “trade.” Growth has become a much more ubiquitous part of the market as companies across all industries implement technology to lower costs and gain market share.
What’s particularly exciting about growth investing today is that, for the first time, we’ve been in an economic environment without a traditional business cycle. What I mean by that is many of the things that may have boosted certain parts of the stock market in the past ― like inflation, interest rates, oil or commodity prices ― are unlikely to provide a meaningful tailwind for equities. And this means investors will seek out companies that prosper organically on their own, almost independent of the economic cycle. I think this will be a good sign for growth stocks overall, not only today but for years to come.
Martin: This isn’t your first rodeo. You’ve seen your share of economic and business cycles over your 32-year career. An expanding economy clearly has put some power behind growth stocks. What happens when economic activity slows? 

Lawrence: Let me first say that we do not expect a recession in the U.S. over the next 12 months. Despite elevated levels of market volatility and geopolitical risk, our base case is for a slower but steady economic backdrop in the U.S., benign inflation, and accommodative policy ― all of which can continue to provide a supportive environment for U.S. companies.

So we’re actually optimistic as active growth investors.

Martin: What fuels your optimism?

"Three Examples Of How Chaos Theory Affects Financial Markets"

"Bottom line: European banks are the Lake Victoria of the current rally in global 
financials and therefore also the source waters for the ongoing lift in value stocks."
From ZeroHedge, November 6:
Submitted by Nick Colas of DataTrek Research
Chaos Theory – the idea that a butterfly in Thailand could cause a US hurricane – can actually create positive outcomes as well as mayhem. Consider that European banks, German long-term bunds and the offshore yuan are essentially the butterflies making for pleasant investment conditions just now. All have turned sharply in the last 2 months after previous discounting disaster. And all have more room to run.

Chaos Theory gets a bum wrap, and I think the reason is bad branding. The most common explanation of the phenomenon is the classic “a butterfly flapping its wings in Thailand can cause a hurricane in the Gulf of Mexico”. Initial conditions, in other words, can have outsized effects in complex systems like weather patterns. Fair enough, but one usually associates Chaos Theory with bad outcomes like cyclones and stock market crashes.

What about when initial conditions push their way through to create unexpectedly good outcomes? That’s Chaos Theory as well, but no one talks about the mayhem created by a lovely day… Bad branding, that, or at least misleading packaging…

Turning to the current sunny spell in global risk markets, three examples of why Chaos Theory can work to investors’ benefit as well as harm.
Exhibit #1: European Bank Stocks:
  • In early August, the EURO STOXX Banks Index looked like it was about to implode. At 77, it had not been lower since the 1990s. We wrote about it, highlighting that several market bears thought the group was destined to go into chaotic (there’s that word again) free-fall.
  • But then the group found its footing as Eurozone long-term interest rates bottomed (more on that in a minute).
  • From August 15th to now, the index is up 20%. Disaster averted, at least for now.
  • The group’s move has lit a fire under global bank stocks. US large cap Financials are up 12% since mid August. Small caps are +8% and Japanese banks are +14%.
Here is a 5-year chart of the index to give you some historical perspective:
Bottom line: European banks are the Lake Victoria of the current rally in global financials and therefore also the source waters for the ongoing lift in value stocks.
Exhibit #2: German 30-year sovereign bonds:
  • Since the German government runs a balanced budget, long-term bunds are in perennial short supply relative to US Treasuries.
  • Along with that, the long duration of German 30-years makes this asset singularly twitchy to market sentiment about Eurozone economic growth.
  • At the end of August, when US-China trade talks were at their nadir, the market for 30-year bunds was signaling the real risk of a deep European recession. Yields got as low as -0.27%.
  • Now, the yield on 30-year bunds is positive again to the tune of 0.16%. Ok, not great but also not (quite) staring into the abyss. Treasuries have followed along, assuaging concerns created by a previously inverted yield curve.
Here is a 5-year yield chart for this paper:

Bottom line: the lift in long-term German yields since late August was the spark that reignited the global market’s animal spirits in September and October. Europe may be teetering on the edge of recession, but lessening US-China trade tensions may save it from falling into too deep a hole....

Tuesday, November 19, 2019

Germany Dodged A Recession, So What's Next?

In early October BlackRock's Head of Macro Research,  Dr. Elga Bartsch thought Germany might see one more quarter of contraction before the bottom was in.
She seems to have a pretty good feel for this stuff, which is probably why BlackRock keeps her around but in this case she was a bit too pessimistic.

Here's NotaYesManEconomics afterr Germany reported GDP, November 14:

Germany escapes recession for now but what happens next?
This morning has brought the economics equivalent of a cliffhanger as we waiting to see if Germany was now in recession or had dodged it. The numbers were always going to be tight. so without further ado let me hand you over to Destatis.
WIESBADEN – In the third quarter of 2019, the price-adjusted gross domestic product in Germany increased by 0.1% on the second quarter of 2019, after adjustment for seasonal and calendar variations.
So Germany has avoided what has become called the technical definition of recession which is two quarters of contraction in a row. However there was a catch.
According to the most recent calculations, taking into account newly available statistical information, the GDP was down 0.2% in the second quarter of 2019, which is 0.1 percentage points more than first published.
So like the UK the German economy shrank by 0.2% in the second quarter which means that over the half-year the economy was 0.1% smaller. Putting it another way the economy was at 107.20 at the end of the first quarter and at 107.03 at the end of the third quarter.
Just to add to the statistical party the first quarter saw growth revised higher to 0.5% so we have a pattern similar to the UK just weaker. As to the detail for the latest quarter we are told this.
positive contributions in the third quarter of 2019 mainly came from consumption, according to provisional calculations. Compared with the second quarter of 2019, household final consumption expenditure increased, and so did government final consumption expenditure. Exports rose, while imports remained roughly at the level of the previous quarter. Also, gross fixed capital formation in construction was up on the previous quarter. Gross fixed capital formation in machinery and equipment, however, was lower than in the previous quarter.
As you can see it was consumption which did the job which was presumably driven by the employment figures which remain strong....MORE
Yes man or not, he seems gloomy looking ahead.
As does CityAM which had this a couple hours ago:

Celebrating Germany’s recession dodge? The data isn’t quite as solid as you think
Ardent Remainers had a rare bit of good news at the end of last week.
The latest statistics for the German economy showed that, contrary to expectations, it had not fallen into recession in the July-September period.

Economists have come to define a recession as a period when a country’s GDP falls for two quarters in succession. There is no firm scientific basis for this — it has simply emerged over time as a consensus among the members of the profession who follow these things.

A more decisive indicator is if the economy shrinks compared to the same quarter in the previous year. A cynic might say that the less stringent definition, a fall for just two successive quarters, gives economists more to write about, as such events are more frequent than year-on-year falls.
Still, the two-quarters fall is the definition commonly used. German GDP fell in the second quarter, April to June, but it rose — by all of 0.1 per cent — in the third quarter. A recession has been avoided, and Remainers were relieved by the demonstration (if weak) that the EU’s powerhouse economy was not in decline.

Not so fast. We should take economic statistics such as the growth of GDP with a firm pinch of salt, and remember that, outside of the financial markets, almost all economic data is estimated.
We cannot put the economy onto a set of scales and weigh it. Its size has to be estimated, using a wide range of basic information and assumptions. And that means that the numbers cannot be taken at face value.

For example, commentators noted that the fall in German GDP in the second quarter had been revised, from minus 0.1 per cent to minus 0.2 per cent. ...MORE
Europe really does need Germany to pull the train. Or France to step up.

Shipping: Drewry Says Spot Container Rates Rise As More Ships Are Idled

That's one thing the ship owners understand, curbing supply has an effect on prices.

Unfortunately for portfolio investors, the shipping companies, much like the mining companies, don't put this understanding into practice all that often and continue increasing supply in an attempt to gain market share.

Both industries have had a couple thousand years to observe the cycle but it still happens.
Maybe MSC can retire enough of their smaller, less efficient ships to offset the arrival of the 23,000 TEU behemoths that are joining their fleet. Ditto for CMA CGM and their 22,000 TEU newbuilds. Since they are privately held they are probably more cognizant of  the value of the capital at risk, sort of like investment banks back in the partnership days.

From World Maritime News:

Drewry: Box Spot Rates Rise amid More Idle Ships, Bunker Surcharges
The container spot freight market have rebounded amid a growing number of idle ships and new bunker surcharges, in what has been a mostly disappointing year for ocean carriers, according to shipping consultancy Drewry.
Drewry’s World Container Index, a composite of eight major East-West trades, in the past two weeks has swelled by USD 210 to return losses accumulated over the prior two months.

Since the mid-point of this year spot rates have been significantly down on the corresponding period in 2018. This is less a reflection on the current market and more to do with what happened last year, when the U.S.-China trade war super-charged freight rates. Therefore, spot rates in the second half of 2019 were virtually destined to look very weak in comparison to an artificially inflated market, Drewry explained.

“Today’s market is not in full bloom, but it certainly is not as bad as it initially appears. In our opinion the lower prices of the third quarter of 2019 were a consequence of a diminished trade-war multiplier and a return to the rate cutting tendencies by some carriers.”
“The current freight revival is unlikely to have come from an unexpected demand boom. Volumes were moribund in the third quarter peak season and judging by the continued heavy use of void sailings by carriers that situation hasn’t changed dramatically.”

Instead, it is changes on the supply side that are driving the upwards momentum. The idle fleet has skyrocketed with just over 1 million TEU, or 4.5% of the total cellular fleet, out of action as of the first week of November....

Arctic King Crabs Have Conquered The Barents Sea; May Head For the UK Next

They may be big but the British crabs are sociopathic gangsta wannabes:

From the Barents Observer:
Arctic crab invasion reaches new shores
The king crab. Photo: Atle Staalesen
They have conquered the Barents Sea and will continue to expand north- and southwards. King crabs might ultimately make it all the way to the coasts of the UK.

Before 1960, the fishermen that sailed in the Barents Sea knew little about crabs. Then, developments unfolded that ultimately altered marine life on the far northern sea bottom.

Soviet experiment
In fall 1960, Soviet marine biologist Yuri Orlov successfully moved nine female king crabs from Vladivostok to Murmansk. In the following ten years, another 3,000 crabs were moved the Kola Bay. Then, thousand more in the 1970s.

The animals found comfortable living and few competitors in their new northern habitat. They quickly multiplied.
«It turned out that the invader crab became significantly bigger and more fertile than its ancestor,» Orlov said in an interview in 2016.

Big advance
According to the retired marine researcher, the king crab will continue to spread, and could ultimately reach as far south as the UK, and then even the Gibraltar. But it will take time, probably more than 100 years, he says....MUCH MORE

"Retail Rout Dings Dow, Bond Yields Tumble To 2-Week Lows"

Following up on this morning's "Equities: How's My Driving?".
Big gains for China overnight with hyper-beta ChiNext soaring...

"Company backed by Bill Gates claims solar breakthrough, looks to replace fossil fuels in industrial plants"

Always temper enthusiasm with knowlege of the difficulties in scaling up, especially when the word 'breakthrough' is used. That said, good on Gates for actually putting the money down on this and a half-dozen other approaches.

From Seattle's own GeekWire:
A solar energy tech company founded by serial entrepreneur and inventor Bill Gross — and backed by investors including Microsoft co-founder Bill Gates — says it has developed a way to create concentrated solar energy at temperatures hot enough to replace fossil fuels in industrial processes that contribute significantly to global carbon emissions.

It works by using cutting-edge computer vision technology to align a large array of mirrors to reflect sunlight to a precise target. The process creates immense heat, exceeding 1,000 degrees Celsius (1,832 Fahrenheit), that can replace traditional fuels such as coal, gas and oil in the production of materials such as cement, steel and petrochemicals.

The Los Angeles-based company, Heliogen, said on Tuesday morning that it achieved the high-temperature milestone at its commercial facility in Lancaster, Calif.
It described the innovation as a “major step towards solving climate change” that could dramatically reduce greenhouse gas emissions from industrial processes. Such processes are thought to account for one-fifth of the world’s carbon emissions.

Gates invested an undisclosed sum in the company as part of an earlier funding round, when it was known as Edisun. It’s one of many initiatives that Gates is pursuing in renewable and alternative forms of energy, from the $1 billion Breakthrough Energy Ventures fund to the pursuit of next-generation nuclear power through his company TerraPower.

“These materials are everywhere in our lives but we don’t have any proven breakthroughs that will give us affordable, zero-carbon versions of them,” Gates said in a Heliogen news release. “If we’re going to get to zero carbon emissions overall, we have a lot of inventing to do. I’m pleased to have been an early backer of Bill Gross’s novel solar concentration technology. Its capacity to achieve the high temperatures required for these processes is a promising development in the quest to one day replace fossil fuel.”

In addition, Heliogen said it believes its technology is on track to ultimately produce temperatures up to 1,500 degrees Celsius, hot enough to split carbon dioxide and water to make hydrogen and other fossil-free fuels....MUCH MORE

"...The battle for China's meatless market" (BYND)

Following on "Our Meatless Future: How The $1.8T Global Meat Market Gets Disrupted"" here are two pieces from Reuters:

Beyond Meat vs Zhenmeat: The battle for China's meatless market
U.S. plant-based “meat” makers targeting China like Impossible Foods and Beyond Meat Inc will need to battle homegrown rivals which are developing local favorites such as dumplings and mooncakes to nab a share of the lucrative market. 

China’s meat substitute industry has seen a surge in interest in recent months, with startups, traditional food businesses and investors betting trend-loving Chinese consumers will take to plant-based protein like their U.S. counterparts.

A devastating pig disease and bruising Sino-U.S. trade war that have combined to push up meat prices are also playing a role.

Among the new players are names like Zhenmeat and Starfield, while long-time plant-based companies including Whole Perfect Food are rolling out new products.

Ham producer Jinzi Ham saw its share price soar 50% in a week after it announced in October it would start selling meat made out of plant protein that it developed with Danisco (China) Investment, a unit of U.S. firm DuPont....MUCH MORE
Factbox: Who is doing what in China's plant-based meat business 

Ag Prices: "Disaster Avoided? Reviewing the 2019 Grain Ending Stocks Situation"

There were so many moving parts in play this year that just keeping track of things was difficult, much less forecasting.
From the wet, cold spring weather to the trade disputes to the swine fever crushing soybean demand [crushing: bean complex joke] the interplay of factors that pop-out a single end result, price, was really almost mind-boggling.

Talk about your complex-chaotic system, politics, overlaid on your complex-chaotic system, weather, overlaid on your complex-chaotic system, markets and I'm sure a few ag econ and market folks were left in the fetal position, drooling in the corner of the office.

From Agricultural Economic Insights, November 18:
Grain markets in 2019 had a familiar feel – a late June rally that faded as concerns about the U.S. corn and soybean crops subsided (see futures prices for corn here, soybeans here). This was especially frustrating for producers hoping for a substantial price improvement after spring planting challenges and record prevented planting acreage.
Given Mother Nature’s best efforts to implement a supply management plan, it’s worth stepping back and considering how much grain outlook conditions changes in 2019. This week’s post reviews how projections of grain production and ending stocks changed throughout 2019. 

Figure 1 shows the U.S. corn ending stocks to use ratio since 2000. Additionally, the graph includes the projection from the USDA’s May WASDE Outlook (in orange). The May WASDE represents the early spring forecast – before the widespread planting challenges were evident.

Currently, U.S. corn ending stocks are 13.7% of usage. While stocks are projected to be the lowest in four years, they remain above the 20-year average (13.1%). Furthermore, they remain above the sub-10% level observed when corn prices soared. While the corn stock situation has improved in recent years, conditions remain on the high side.

Stepping back a bit, keep in mind that the USDA’s May projection was much bleaker. With corn stocks to use ratio at nearly 17%, corn stocks had a very real possibility of turning higher in 2019, especially if yields came in above-trend. Additionally, the spring outlook was for corn stocks at the 4th highest level in 20 years.
For a longer-term look at grain stocks, see our earlier post.
corn 2019 grain ending stocks. ag economic insights. ag trends.
Figure 1. U.S. Corn Ending Stocks to Use, 2000/2001 to 2019/2020. Includes May 2019 Projection for 2019/2020 
(in orange). Data Source: USDA PSD (Nov 2019).
While the story for soybeans is similar to that of corn, the magnitude is much more dramatic (Figure 2). In May, the USDA projected soybean ending stocks would exceed 23% of use, the highest level in 20 years, and slightly above 2018 levels....

Equities: How's My Driving?

All the while being aware of the human tendency toward the Rock Man Syndrome.*

September 30 
Equities: "Financials Are About To Do Something They Haven't Done In Nearly 18 Months" (XLF; KBE)
The 10 - year is currently yielding 1.697 % +0.024, so looking for rates to back up to (and through) 1.90% is a bit of a contrary bet but if it happens bankers (and longs) will be happy.... 

October 18
The Broader Market Is Setting Up For A Move Higher
...More next week.
Dow Industrial          26,838.49 -187.39(-0.69%)
Dow Transportation  10,504.22  +8.04 (+0.08%)
S&P                            2,991.96  -5.99 (-0.20%)

The DJIA closed down 250 that Friday and traded a bit lower the following Monday before reversing even as the broader market caught fire.

October 21 
"Boeing Drags Down Dow, Short-Squeeze Sends Small Caps Soaring"

October 22 
Chartology: Consumer Discretionary Is Taking On Some Leadership Attributes
Just as we said about the transportation stocks on Friday, you don't see this type of action going into a recession:...

October 30 
Fed Rate Cut: Analysts React
Equities will be going higher into year-end.
And of course, take that, and the opinions below with a few grains of salt....


There was one hiccup on November 5:
San Francisco Fed Head: "SF Fed's Daly: No more rate cuts unless there's a 'material change'"
...We are still quite bullish, sticking with the S&P 500 target of 3300 that we've been touting for the last three years but think the recent-going-on-three-week old rally might be getting tired....
....And fair warning: I'm thinking of doing a 19-day retrospective and victory dance tomorrow which should put an end to any more upside for the nonce....
Where boredom set in and/or confidence wavered but I did not do the victory dance, thus allowing the market room for more non-hubristic upside.

November 12 
"Is The Entire Yield Curve Wrong?"
The 10-year yield got as high as 1.9710 on November 7 and made a post from September 30 look prescient:...
...Banks and longs are indeed happy with the KBW Bank Index leading the broader market and outperforming by a very big margin. Since October 2 the BKX is up 14.4% versus 6.2% for the Dow Jones Industrials and 6.9% for the S&P 500.

So what now for the broader market?
Higher by year-end, probably enough turbulence between now and then to shake loose some stock from ma & pa investor.  
*The Rock Man Syndrome comes from a close reading of Harry Nilsson's The Point!:
...The Rock Man said, "Say, babe, there ain't nothing pointless about this gig. The thing is you see what you want to see and you hear what you want to hear. You dig? Did you ever see Paris?"
"Did you ever see New Delhi?"
"Well, that's it. You see what you want to see and you hear what you want to hear." 
And with that the Rock Man fell soundly asleep...
Double ditto.

And just a heads-up: The 10-year yield peaked on November 7 and the bank index (BKX) topped out the next day.
The broader indexes have chugged higher, but without that impetus.

"Our Meatless Future: How The $1.8T Global Meat Market Gets Disrupted"

From CB Insights:
Will a meatless food industry featuring lab-grown meat, seafood substitutes, and insect protein be the future of food? Food giants from Tyson to Cargill are working to navigate a future where protein isn't dominated by traditional animal sources. 

At the moment, meat is still king.
By some estimates, 30% of the calories consumed globally by humans come from meat products, including beef, chicken, and pork. The global meat market is worth $1.8T, according to CB Insights’ Industry Analyst Consensus.

Americans consumed a near-record 220 pounds of red meat and poultry per capita in 2018 — in 1960, that figure was just 167 pounds, according to the USDA.
Also in 2018, USDA figures showed domestic production of meat hit a record high of more than 100B pounds. That translates to a staggering number of animals grown for food: around 30M beef cows in the US and 20M+ pigs in Iowa alone.

To meet this skyrocketing demand, the meat industry has evolved into a complex global business that involves farms and feed lots, as well as meat middle-men, like processing and storage centers, transportation and logistics, slaughterhouses, and more.

Together, the 6 largest meat companies represent $60B in market capitalization — as of the beginning of the year — with the largest, Hormel, boasting a $23B valuation.
meat producer market cap
The industry has seen massive consolidation, as companies like Hormel and Brazil-based JBS have grown bigger and bigger through the acquisition of new meat brands and products.
Since 2014, Hormel has spent around $3B on acquisitions, including Applegate, Fontanini Italian Meats and Sausages, Ceratti, and Columbus Manufacturing.

One of the biggest deals in this space was pork producer WH Group’s 2013 acquisition of US-based Smithfield Foods, which owns brands such as Armour and Farmland. At the time of the deal, Smithfield was valued at $7.1B.

Despite high-profile deals in the sector, the industrial meat industry faces a rising tide of challenges related to business, ethical, and environmental concerns.
Meanwhile, startups using technology to engineer meat in labs or manufacture it from plant-based products are rising in popularity. In 2019, one of the world’s biggest alternative protein brands, Beyond Meat, the manufacturer of the plant-based Beyond Burger, went public at a valuation of almost $1.5B.

Shortly after, Burger King released the Impossible Whopper — a meatless variant of its most well-known product. The Impossible Whopper replaces beef with plant-based meat manufactured by Impossible Foods, a Redwood City-based company that has raised more than $700M in disclosed equity funding. The company was given a valuation of $2B at its last funding round.
In addition to offering new products, these alternative protein startups have the potential to upend the meat production process.

Going forward, the meat value chain could be simplified dramatically, as “clean meat” labs could take the place of farms, feed lots, and slaughterhouses.
Especially vulnerable to these changes are food companies like Tyson, Pilgrim’s, and Sanderson Farms, which rely on animal meat products for 80% or more of their revenue, as seen below.
Using CB Insights data, we dug into some of the major trends in the growing meatless industry, from startups to watch to key investors to future trends & challenges.

Table of contents

Startups innovating across the meatless ecosystem

Startups are disrupting the meat production value chain through the development of high-tech protein products, threatening established players like Tyson.
Meat substitute startups are not only competing with prepared and frozen meats, but are also creating alternative snacks (such as Beyond the Shoreline‘s kelp jerky).

While the environmental benefits of lab-grown meat are potentially dramatic, meatless products are still significantly more expensive on a per-pound basis than animal alternatives.....

"University of Miami Money-Laundering Expert Charged With Money Laundering"

From the Miami New Times:
For years, Bruce M. Bagley has taught in the University of Miami's International Studies program. He's one of the nation's foremost experts on money laundering in Latin America.
That might be because, at least according to the FBI, he's been helping to launder money out of Latin America. Today federal prosecutors in Manhattan charged Bagley with laundering nearly $3 million in dirty money out of Venezuela between November 2017 and October 2018. Bloomberg first reported on the charges this afternoon.
"Bruce Bagley, a college professor and author of the book Drug Trafficking, Organized Crime, and Violence in the Americas Today, allegedly opened bank accounts for the express purpose of laundering money for corrupt foreign nationals," U.S. Attorney Geoffrey S. Berman said today in a media release. "Moreover, the funds Bagley was allegedly laundering were the proceeds of bribery and corruption, stolen from the citizens of Venezuela. Today's charges of money laundering and conspiracy should serve as an object lesson for Bruce Bagley, who now faces a potential tenure in federal prison.”...

Capital Markets: "Hong Kong Stocks Rally as Stand-Off Continues"

From Marc to Market, November 19:
Overview: The run-up in equities continues to be the dominant development in the capital markets. Although the Japanese and South Korean bourses fell, the rise in Australia, China, Hong Kong, and Taiwan underpin the MSCI Asia Pacific Index. The Hang Seng's gains (1.5% on top of yesterday's 1.3% rise) are notable as the situation on the ground remains intense and unresolved. European markets are higher, and the Dow Jones Stoxx 600 is at new four-year highs, while US shares are firmer in Europe, pointing to new record highs for the S&P 500. Debt markets are quiet. Asia Pacific yields slipped, while European rates are a little firmer, and the US 10-year is hovering around 1.82% yield. The foreign exchange market is subdued, and the dollar is largely confined to a +/- 0.15% band against the major currencies, while most of the freely accessible and liquid emerging market currencies are trading with an upside bias. Oil prices are little changed, and the January WTI contract is near the middle of its $56-$58 range. Gold has surrendered yesterday's gains after running into offers near last week's high (~$1475).

Asia Pacific
The Hong Kong political crisis is intense. The stand-off at the university continues.
The situation remains ominous. The escalation of violence and disruption cannot continue. The US has endorsed the call of the protesters for an independent inquiry into the unrest and has expressed concern about the use of unnecessary force, though it is largely silent about the violence in other countries that face social unrest such as Bolivia. The US Senate is seeking new export controls to ensure that goods that the Hong Kong policy or China could use to clamp down are blocked. Beijing is also critical of the Hong Kong High Court that nullified the face mask ban.

The minutes from the recent meeting of the Reserve Bank of Australia seemed to show it closer to a rate cut than may have been appreciated. It recognized that a case for a rate cut exists but chose to wait for more evidence that additional action is necessary. It has cut rates three times since June. Previously, the RBA seemed to emphasize the labor market's performance but now appears to be placing more weight on consumption. It recognized that the ongoing drought is depressing farm income. Although the RBA meets in early December, the derivatives market sees a cut in Q1 20 more likely. The Australian dollar was sold on the news but has recovered to little changed levels in the European morning.

Bank of Japan Governor Kuroda also held out the possibility of lower rates if necessary, but the signal is that fiscal policy may be the key lever going forward. We are concerned that between weak exports and the sales tax hike, the world's third-largest economy risks contraction and that the BOJ would be under some pressure to respond. Meanwhile, the lower chamber of the Diet approved the trade agreement with the US. The upper chamber is expected to ratify the deal by December 9 when the current session ends.

For more than a month now, the dollar has been confined to a JPY108-JPY109.50 range. After slipping to JPY108.45, the greenback has recovered toward JPY108.80 in uneventful turnover. There are options for $1 bln struck between JPY108.90 and JPY109.00 that expire today and another of expiring options for nearly $1.5 bln between JPY108.35 and JPY108.50. Before the weekend, the Australian dollar traded between $0.6785 and $0.6825, and it remains within that range so far this week. It was pushed lower on the RBA minutes initially but climbed steadily back to reach $0.6815 in the European morning. The recovery stretched the intraday technical readings suggesting the range will likely hold. The dollar rose to CNY7.03, its best level since November 5 and the 20-day moving average, but has drifted back toward CNY7.0225. Our bias is for additional yuan weakness....

Monday, November 18, 2019

"Logistics is a bitch, isn't it?"

Via MetaFilter:

ADVENTURERS:    We're here for your treasure!

DRAGONS:            Congrats! Here you go.

ADVENTURERS:    What... what is this?

DRAGON:              DragCoin. It's my new crypto. Gonna be worth millions, bro

ADVENTURERS:    Have you published the blockchain?

DRAGON:              HAHAHA listen to little Bill Gates here!

MANY MORE, Very, Very Good (plus your choice of delivery method)

Twitter | Threadreader

Did I mention they are very, very good?

ADVENTURERS:    We're here for your treasure!

DRAGONS:           Congrats. Here.

ADVENTURERS:    Um... this isn't as much as we...

DRAGONS:           You also get equity.


DRAGONS:            Equity

Go visit for the headliner.

Ningbo Containerized Freight Index Reports through November 15

From Hellenic Shipping News, November 18:
In the week ending Nov-15, Ningbo Containerized Freight Index (NCFI) issued by Ningbo Shipping Exchange (NBSE) quotes 690.2 points, slightly falling by 4.9% against last week. Meanwhile, six of the selected twenty-one routes maintain an upward trend while other fifteen have fallen. In addition, according to the freight indices of the primary ports along the Maritime Silk Road, six ports appear a constant rising tendency while other twelve are declining...MORE (2 page PDF)
Quick look by route:
Composite Index    690.22 vs 725.93 -4.92%
Europe                  550.59 vs 562.73 -2.16%
W. Mediterranean 517.03 vs 518.6 1 -0.30%
E. Mediterranean   462.77 vs 488.64 -5.29%

...MORE (1 page PDF)

Bribery allegations over fishing rights rock Iceland and Namibia

From The Guardian, November 15:

‘Fishrot files’ lead to head of Samherji fishing company and Namibian ministers stepping down
Two Namibian government ministers have resigned and the boss of Iceland’s biggest fishing company has stepped aside amid a spiralling scandal over alleged bribes paid to officials in the southern African country in exchange for trawling rights.

Þorsteinn Már Baldvinsson, the CEO of the Icelandic fishing firm Samherji, and Namibia’s fisheries and justice ministers, Bernhard Esau and Sacky Shanghala, are the first heads to roll following revelations this week of a vast corruption case.

Three thousand company documents released by WikiLeaks and investigations by the Icelandic magazine Stundin and the TV show Kveikur showed how Samherji had allegedly paid more than 1bn Icelandic króna (£6.2m) since 2012 to ensure access to the fishing quotas, transferring the proceeds from the catches, mainly of horse-mackerel, via a web of offshore firms to a shell company in the Marshall Islands.

The so-called Fishrot Files suggested Samherji had channelled about £54m to the tax haven in this way between 2011 and 2018, with some of the money reportedly passing through Norway’s largest bank, DNB, in which the Norwegian state holds a 34% stake.

Johannes Stefansson, a former company employee turned whistleblower, told Icelandic media he had approved the kickbacks with Samherji’s backing. The company habitually “does whatever it takes to get its hands on the natural resources of other nations”, Stefansson said....MORE
Interesting mission statement:

"Here at Samherji our mission is to do whatever it takes to 
get our hands on the natural resources of other nations"