Wednesday, May 27, 2020

Huzzah! The Meat Shortage Has Ended (now there's a lack of demand)

From Bloomberg, May 21:

US meat squeeze eases on plant revival, slack in demand 
The squeeze on U.S. meat is easing. Wholesale prices are falling as slaughterhouses recover from Covid-19 related shutdowns and traders brace for lower demand than usual over the Memorial Day holiday.

Enough workers returned to American slaughterhouses that pork and beef plants through Wednesday were operating at 85% and 81%, respectively, of year-ago levels. That’s a rebound from late in April, when production of each meat fell by more than 30%.

While the uptick means more product will be available to grocers, the pandemic remains an issue for the unofficial start of summer grilling season with limitations on group gatherings still intact.
“It’s prime time for grilling and social events and you’re not seeing the meat features that you typically do,” Don Roose, president of U.S. Commodities in Iowa, said by phone. “So it’s disappointing from a demand standpoint.”

Wholesale beef prices have declined six straight days, dropping 15% from a record of $475.39, the biggest such drop since 2011, U.S. Department of Agriculture data showed Wednesday.
Pork prices climbed for the first time in four days but are still 18% below a five-year high of $121.66 per 100 pounds. Tuesday’s decline of 9% was the largest drop since 2017.
Grocers, weeks ago, facing smaller supplies and higher prices for red-meat started hawking other proteins including turkey, seafood and plant-based meat while consumers also pushed back against higher prices. “We’re looking at sticker shock,” Roose said....

I always appreciate when chartmeisters supply arrows for we, the directionally challenged.
On the other hand I was a bit leery about the "U.S. Meat Squeeze" headline.

If interested here are some of our posts on strange Bloomberg headlines.

Whoosh...There Goes Beyond Meat (BYND)

No news, just a quick follow-up.
The stock is down $10.33 (7.77%) at $122.54.

BYND Beyond Meat, Inc. daily Stock Chart
May 20 
"Beyond Meat Gets a New Fan Who Says the Stock Can Rise 24%" (BYND)
And if governments begin mandating you eat their stuff, even higher.
(I'm just crabby because it was looking like a breakdown a couple days ago)
May 18
Questions Americans Want Answered: Will The Bump In Beyond Meat's Sales Continue? (BYND)
May 14
Thinking Of Saying Goodbye To Beyond Meat (BYND)  
Dear BYND, it's not you, it's me.
A bearish engulfing day yesterday followed by an uninspiring pre-market move higher today:

"Hydrogen Primed For Key Role in World’s Greenest Stimulus Plan"

"Hi, do you have a moment to learn about the potential of hydrogen and/or ammonia?"
Bear via Cottage Life
Caption idea by way of the incomparable Paul Bronks
We've been banging this drum* so long I feel I have to at least try to keep patient, yet wary, reader amused.
From Bloomberg, May 26:

Europe is betting on emissions-free electricity for big industry in its economic recovery package, drafting measures to scale up the production of hydrogen.
The world’s most climate-ambitious stimulus package to be unveiled on Wednesday is poised to earmark tens of billions of euros for hydrogen technology as well as infrastructure for clean energy.
European Commission President Ursula Von Der Leyen is set to build her coronavirus economic rescue plan around the Green Deal that aims for climate neutrality by 2050.

Hydrogen is emerging as a fuel of the future in a growing number of European countries, including the Netherlands, Germany and Portugal. The region is well positioned for it thanks to its natural gas infrastructure, which can be used to transport hydrogen. The European Union’s growing renewable energy output could also be used for emission-free production of the fuel.

“The goal of net-zero emissions in 2050 implies basically a full decarbonization of the economy,” Noe van Hulst, the hydrogen envoy for the Dutch government, said in an interview. “Clean hydrogen is an indispensable climate-neutral energy carrier, in addition to green electricity.”
The EU economic package will include a proposal for the bloc’s next trillion-euro budget for the years 2021-2027 and a “recovery instrument” of at least half-a-trillion euros designed to cushion the economic blow from the coronavirus outbreak.

It’s poised to be greener than most national bailouts, with many of the biggest member states stopping short of attaching sustainability conditions to public aid despite encouragement from the commission.
The EU proposal will be subject to unanimous approval by the EU’s 27 governments. With varying national interests, the strength of industries and the extent of reliance on fossil fuels, member states are set for negotiations that could take months to conclude.

Hydrogen currently accounts for less than 1% of Europe’s energy consumption and is mainly used as feedstock in the chemical sector. When burned, hydrogen leaves only water vapor and can produce ultra-high temperatures needed in industrial processes.

The catch is the cost. Most of the hydrogen used as fuel is derived by splitting it off from molecules of natural gas, which requires a good deal of energy and also produces carbon dioxide.
What’s changing is the development of electrolysis, the process of sending an electric current through water to split hydrogen atoms from oxygen. And if the electricity comes from renewables, the hydrogen is made without any greenhouse gases. Industrial gas maker Air Liquide SA, steelmaker ThyssenKrupp AG and the oil major Royal Dutch Shell Plc have some of the highest profile demonstration projects.

EU member states are already advancing plans and eying partnerships on hydrogen. The Netherlands has a production target of 500 megawatts of electrolysis capacity by 2025 and is planning to scale it up to 3,000-4,000 megawatts by 2030....
*For example, last night: 

"Student Housing, One of the Most Hyped Asset Classes, Runs Out of Students"

Just as every generation thinks that they are the ones who discovered sex, so every real estate cycle produces its can't miss deals and promoters. [no idea who to credit on the sex line, probably some Cro-Magnon parent]
Just a year ago the only thing more talked-about in the R.E. biz was WeWork.
From Wolf Street, May 24: 

Here’s the story of two student housing REITs in the UK that crashed.
Wolf here: In recent years, student housing, a subcategory of Commercial Real Estate, became one of the hottest asset classes in the US, in the UK, and elsewhere. Big money piled in. Wall Street raked in the fees by securitizing the mortgages into commercial mortgage-backed securities (CMBS). Large firms spun off their portfolios of student housing buildings into publicly traded REITs. The article below is about two of those REITs in the UK, but the issues are the same in the US. This asset class is risky even in good times because students are not stable renters. Last fall, long before Covid-19 showed up, delinquencies and special servicing rates on US student housing CMBS already spiked. The pandemic has now been heaped on top of it.

By Nick Corbishley, for WOLF STREET:
When it comes to over-priced acquisitions at peak hype, there is no worse time than just before a financial crisis. The UK’s largest student housing real estate investment trust (REIT) Unite Group fell into that trap. In November 2019, it spent £1.4 billion to buy up privately-owned student housing provider Liberty Living Group plc, from the Canada Pension Plan Investment Board. In the process, it more than doubled its net debt, from £856 million to £1.88 billion. The day after the deal was sealed, Unite’s CEO said the enlarged group would “be well positioned to meet the growing need for affordable, high quality student accommodation in university towns and cities where demand is strong.”

That need, instead of growing, has all but vanished. Since March 11, all UK university campuses have been closed due to the virus outbreak. Most students have gone back home.

In late April, Unite Group informed investors that it had been inundated with cancellation requests since offering to waive rents for students who did not plan to occupy their rooms in the final term. Based on requests received up to that point, between 43,000 and 46,000 students would not pay rent this semester, the company said. The total number of vacated beds is the equivalent of 65% of Unite’s portfolio.

As a result, the company said it expected a fall in income from the 2019/20 academic year of 16-20% on a Group share basis, or £125 million, which it said was an improvement on its previous forecasts. But that was before Cambridge University’s bombshell announcement last Thursday that it was cancelling all face-to-face lectures for the entire 2020-2021 academic year, fueling speculation that many students will stay away next year too.

“Given that it is likely that social distancing will continue to be required, the university has decided there will be no face-to-face lectures during the next academic year,” the university said in a statement. “Lectures will continue to be made available online and it may be possible to host smaller teaching groups in person, as long as this conforms to social distancing requirements.”

Given Cambridge University’s import and influence, the move is likely to trigger a cascade of similar announcements from other higher education institutions. If that happens, student life in the UK is set to be a more insular experience for the foreseeable future, dealing a massive blow not only to students, professors, lecturers and other university staff but also to the businesses and communities that have come to depend on the income they generate....

Bringing to mind this bit, last seen in 2014's "George Goodman, aka Adam Smith, Has Died":
....Adam Smith noted it in the 'sixties bull market (The Money Game via Contravest, January 22, 2000):
There is one wonderful chapter where the consummate pragmatic speculator, the Great Winfield, is lamenting his performance problems in a wildly speculative bull market.
“My boy,” said the Great Winfield over the phone. “Our trouble is that we are too old for this market. The best players in this kind of a market have not passed their twenty-ninth birthdays. Come on over and I will show you my solution.”
So Adam Smith goes over and finds three new faces in the Great Winfield’s office. 
My solution to the current market,” the Great Winfield said. “Kids. This is a kids’ market. This is Billy the Kid, Johnny the Kid, and Sheldon the Kid.” The three Kids stood up without taking their eyes from the moving tape, shook hands, and called me “sir” respectfully.
“Aren’t they cute?” the Great Winfield asked. “Aren’t they fuzzy? Look at them, like teddy bears. It’s their market. I have taken them on for the duration.”
Winfield then describes how much money Billy the Kid is making in computer leasing stocks like Leasco Data Processing and Randolph Computer that he has heavily leveraged with bank borrowing....
And the really spooky bit, for me anyway, SHALE:
...Sheldon the Kid waved his hand for recognition.

“This one will really take you back,” said the Great Winfield. “Sheldon’s Western Oil Shale has gone from three to thirty.”

“Sir!” said Sheldon. “The Western United States is sitting on a pool of oil five times as big as all the known reserves in the world – shale oil. Technology is coming along fast. When it comes, Equity Oil can earn seven hundred and fifty dollars a share.

It’s selling at twenty-four dollars. The first commercial underground nuclear test is coming up. The possibilities are so big no one can comprehend them.”

“Shale oil! Shale oil!” said the Great Winfield. “Takes you way back, doesn’t it. I bet you can barely remember it.”

“The shale oil play,” I said dreaming. “My old MG TC. A blond girl, tan from the summer sun, in the Hamptons, beer on the beach, ‘Unchained Melody,’ the little bar in the Village.”

“See? See?” said the Great Winfield. “The flow of the seasons. Life begins again. It’s marvelous. It’s like having a son! My boys! My Kids!”

The Great Winfield had made his point. Memory can get in the way of such a jolly market, that malaise that comes with the instantly gone, flickering feeling of déjà vu. We have all been here before.

“The strength of my kids is that they are too young to remember anything bad, and they are making so much money they feel invincible,” said the Great Winfield.

“Now you know and I know that one day the orchestra will stop playing and the wind will rattle through the broken window panes, and the anticipation of this freezes us. All of these kids but one will be broke, and that one will be the multi-millionaire, the Arthur Rock of the new generation. There is always one, and maybe we will find him.”

Tuesday, May 26, 2020

BIMCO: Tanker shipping – Sky high freight rates replaced by reality of falling oil demand

From Singapore's Manifold Times, May 26:

Peter Sand, Chief Shipping Analyst at BIMCO, on Monday (25 May) published an update on the full impact of falling fuel demand worldwide on the shipping industry now that tensions in the trade war are being allayed:  
Geopolitical tensions have now eased, leaving freight rates to feel the full effects of the weak underlying market and falling demand. Tanker shipping looks set to be under pressure for the rest of the year.
Demand drivers and freight rates
The tanker shipping industry was once again caught in a whirlwind, as freight rates skyrocketed with little regard to the poor market fundamentals before the latter once again caught up with rates. Geopolitics continues to dominate the headlines when it comes to the tanker market, and developments in the supply of oil overshadow the steep drop in demand caused by the Covid-19 crisis. Floating storage has also increased primarily due to the mismatch between oil production and oil demand, tightening tonnage availability in the market and further supporting freight rates.
This drop in demand is illustrated by the collapse in oil products being supplied in the US: gasoline fell by 37.7% from 3 January to 3 April, a loss of 3.1 million barrels per day (bpd), but has since recovered some of that lost supply and, as of 15 May, stands at 6.8m bpd (down 16.5% from 3 January). The supply of jet fuel has fallen by 62.5% since the start of the year, standing at 0.6m bpd on 15 May (down from 1.6m bpd on 3 January).

April was certainly a month to remember, with the biggest oil-producing nations setting off a price war and flooding the market with millions of extra barrels each day – at the same time as demand was collapsing.

The OPEC+ (an expanded alliance of countries collaborating to control the world production of crude oil) production cut that was eventually agreed, and has now come into force is, however, still not enough to balance the oil market after lockdown measures around the world cut demand for all oil products.

The chartering spree from Saudi Arabia, as it prepared to flood the market with its cheap oil in April, led average Very Large Crude Carrier (VLCC) earnings to soar to USD 279,259 per day on 13 March, with rates staying high until the end of April. However, since then, as oil production has been cut and the reality of an oversaturated market hit home, rates have dropped to USD 42,547 per day on 22 May. Rates will continue to fall, as the global economy is unable to provide the demand needed to keep them elevated.
As is often the case, rates for the smaller crude oil tankers followed the paths of the VLCCs with Suezmax earnings peaking at USD 120,870 per day before falling to USD 30,992 on 22 May. Aframax earnings peaked later, reaching USD 83,921 per day on 24 April before falling to USD 26,959 per day on 22 May.....

Shipping: ABB and Hydrogene de France To Produce Fuel Cells To Power Oceangoing Vessels.

From The Driven, April 13:

ABB moves step closer to megawatt-scale fuel cells for ships
Swiss-Swedish electronic manufacturing giant ABB has signed a Memorandum of Understanding with French hydrogen technologies specialist Hydrogène de France to jointly manufacture megawatt-scale hydrogen fuel cell systems for ocean-going vessels.

As industry and nations around the globe look for ways to transition to a more sustainable means of energy and power, the global shipping industry – accounting for 2.5% of the world’s total greenhouse gas emissions – is under increasing pressure to similarly transition to more sustainable power sources.
The UN’s International Maritime Organization, responsible for regulating global shipping, has set a global target to cut annual emissions by at least 50% by 2050 based on 2008 levels.
As such, shipping and technology companies are looking for ways to cut emissions for ocean-going vessels – a bigger task than simply sticking a battery into your hatchback.

Hydrogen – specifically green hydrogen, which is hydrogen made using renewable energy to power the hydrolysis process – is one of the most favoured options for transitioning the shipping sector to a more sustainable power sources, with hydrogen fuel cells converting its chemical energy into electricity through an electrochemical reaction.

Currently, hydrogen fuel cells are already capable of powering ships sailing short distances, as well as supporting the auxiliary energy requirements of larger ocean-going vessels....MORE
On May 21st ABB announced some smaller stuff:
ABB to enable world’s first hydrogen-powered river vessel

"China is testing a national digital currency — one piece in Xi’s bid for global influence"

The writer, Fred Kempe is the President and Chief Executive Officer of the Atlantic Council, about as wired-in, Davos style as you can get.
I have to get this out of my head. When we saw this on Monday:
I couldn't help wondering how Madame Peng would address concerns about here husband's influence on the WHO as she was out Goodwill Ambassadoring. I mean looking at her in the uniform: she appears, in a word, formidable.
But then I saw the picture below and it struck me: she IS formidable and I wouldn't put it past her to tell her Davos-style audiences "Oh don't mind Pooh Bear, he just talks tough."

Okay, enough with the family stuff, here's CNBC, May 23:
  • Chinese President Xi Jinping’s  move to impose new national security laws on Hong Kong  is just one of his many calculated wagers designed to leverage Covid-19′s disruptions for greater domestic control and global gain.
  • Most intriguing and least noticed, “China became the first major economy to conduct a real-world test of a national digital currency,” wrote Aditi Kumar and Eric Rosenbach this week in Foreign Affairs.
  • The impact of that move, over time, could have greater global impact than anything Beijing does in Hong Kong or even to Taiwan.
This is the way new eras unfold – gradually at first and then suddenly.

Chinese President Xi Jinping’s apparent rolling of the dice on Hong Kong ahead of this week’s National People’s Congress is just one of his many calculated wagers designed to leverage COVID-19′s disruptions for greater domestic control, regional influence and global gain.

China’s move to impose new national security laws on Hong Kong, the most serious threat yet to the city’s democratic self-governance and territorial autonomy, prompted a 5.6% decline in the Hang Sang Index (the worst one-day performance in five years).

Beyond that, the decision could ignite new Hong Kong pro-democracy protests, it should raise new concerns about Taiwan’s sovereignty, it will feed the growing deterioration of U.S.-Chinese relations, and it may contribute to anxiety among world democracies about what values a Chinese-led world order might reflect.

Seen in isolation, some analysts see the surprise Hong Kong move as reckless.
Put the decision beside other recent actions, however, and the pieces fit neatly together into President Xi’s long-standing strategic purpose: strengthening the party’s domestic hold, solidifying China’s regional power and expanding its international influence – all in a sharpening competition with the United States.

Those recent actions include, but aren’t limited to, new technology investments of an estimated 10 trillion yuan ($1.4 trillion) over six years to 2025, reports that China’s defense budget will grow by up to 9%, and its increased efforts to influence multilateral institutions as the Trump administration retreats, most recently through Beijing’s $2 billion contribution to the World Health Organization.
Most intriguing and least noticed, “China became the first major economy to conduct a real-world test of a national digital currency,” wrote Aditi Kumar and Eric Rosenbach this week in Foreign Affairs. They describe a pilot project in four large Chinese cities which the authors see as putting China years ahead of the United States in developing this “central component of a digital world economy.”

The impact of that move, over time, could have greater global impact than anything Beijing does in Hong Kong or even to Taiwan.

“U.S. policymakers are unprepared for the consequences,” Kumar and Rosenbach write. In general, digital currencies weaken the power of U.S. sanctions and the ability of U.S. officials to track illicit financial flows. More specifically, a digital yuan combined with China’s advanced electronic payment systems may provide a more effective platform for future influence than a fleet of aircraft carriers.

I argued in this space three weeks ago that President Xi and his Chinese Communist Party, by emerging as the first major world economy to end virus lockdowns and restore growth, were seizing a window of opportunity – one that could close as rapidly as it had opened.

“Great historical progress always happens after major disasters,” President Xi said recently at Xi’an Jiaotong University, telling professors and students of Chinese sacrifices of the past and the possibilities of the moment. “Our nation was steeled and grew through hardship and suffering.”...

With JP Morgan Up 7.10%, Bank of America Up 7.15% and Citigroup Up 9.23% On the Day, Let's Talk Cantillon Effect (JPM; BAC; C)

I know a lot of this stuff is junior high school material for many of our readers but talking about currency in the post immediately below got me thinking about money more broadly and I might have a shot at a sustainable business model for a pitchfork manufacturing business if gentle reader indulges me.
There are arguments whether Cantillon's observations only apply to a gold standard or also to fiat but we will leave that for another day.
First up, Matt Stoller at his BIG Newsletter last month
April 9
The Cantillon Effect: Why Wall Street Gets a Bailout and You Don't
Welcome to BIG, a newsletter about the politics of monopoly. If you’d like to sign up, you can do so here. Or just read on…
Today I’m going to try and explain why the Fed and Congress, while attempting to throw money at everyone, disproportionately tends to aid certain narrow financial actors. 

The Cantillon Effect
Three weeks ago, the government passed a giant multi-trillion dollar bailout. Supposedly, it was money for a host of stakeholders, including hospitals, states, Wall Street banks, big business, the unemployed, and small businesses. Today the Federal Reserve built on top of Congress’s framework, announcing yet another multi-trillion dollar set of facilities, on top of what it already put out, to help cities, states, small businesses, main street businesses, and so on and so forth.
So what has happened so far? This is today’s change in stock price of a real estate venture run by one of largest private equity funds in the world.
A thirty five percent jump in a day is… a lot. The reason the stock skyrocketed is because investors believe the new measures from the Federal Reserve will bailout the debt of this private equity fund. There’s a ‘monetary bazooka’ aimed at the economy. And yet there’s a puzzle. If there’s money for the entire economy, why is that normal people and small businesses can’t access unemployment insurance and lending programs? To put it another way, why is the money meant for everyone only showing up in the stock market?

The reason is because money has to travel through institutions, and right now, the institutions for the powerful function well, and those for the rest of us are rickety and broken. So money gets to the rich first. Eventually, some money will get to the rest of us, but in the interim period before that money fully circulates, the wealthy can use their access to money to buy up physical or financial assets.
An 18th century French banker and philosopher named Richard Cantillon noticed an early version of this phenomenon in a book he wrote called ‘An Essay on Economic Theory.’ His basic theory was that who benefits when the state prints a bunch of money is based on the institutional setup of that state. In the 18th century, this meant that the closer you were to the king and the wealthy, the more you benefitted, and the further away you were, the more you were harmed. Money, in other words, is not neutral. This general observation, that money printing has distributional consequences that operate through the price system, is known as the “Cantillon Effect.”

In Cantillon’s day, the basis of money was gold, so he wrote about what happened when a nation-state discovered a gold mine in its territory. Increasing the amount of gold in the realm would not just increase price levels, he observed, but would change who had wealth and he didn’t. As he put it, “doubling the quantity of money in a state, the prices of products and merchandise are not always doubled. The river, which runs and winds about in its bed, will not flow with double the speed when the amount of water is doubled.”

Cantillon went on to discuss how money would flow, basically noting that rich people near the mine would spend it on 18th century luxuries like servants and meat pies, prompting a general rise in prices. Eventually the money would get out to the populace, but until it did, working people would have to pay higher prices without access to the new money that mine owners had. So there would be inflation, with uneven distribution of purchasing power.
There’s also a China angle. Cantillon noted that a kingdom discovering gold would in the long-run erode its own manufacturing base, that the non-neutrality of money also had geopolitical consequences.

Here’s how he put it:...

And from some Austrians (real Austrians: Jasomirgottstrasse 3/12, 1010 Vienna):
Austrian Economics Center 

The Cantillon Effect and Populism
Monetary policy and everything concerning it has to be one of the most interesting topics out there. With monetary economics, there are quite a few interesting concepts which come with it. One is the so-called Cantillon effect.

Richard Cantillon was an economist in the 18th century who mainly wrote about money and how it circles around the economy.

The so-called Cantillon effect describes the uneven expansion of the amount of money. If a central bank pumps more money into the economy, the resulting increase in prices does not happen evenly. The Austrian economist Friedrich August von Hayek compared this monetary expansion with honey. If you pour honey into a cup, it won’t spread out evenly. It will clump in the middle of the cup first before spreading out.....
.... This theory doesn’t imply that money creation is always biased towards the powerful, only that how money travels matter. There is no inherent money neutrality, such neutrality must be constructed by institutional arrangements. Much of the New Deal in the 1930s and 1940s was designed to build alternative channels for lending so that small business, industry and individuals could have access to money as quickly as big banks.....

There are currently no pure-play pitchfork manufacturers and it has been a long-cherished dream (since 2008!) to fill the void and/or live up to my junior high school personal file description: the instigator was....

"King Dollar Be Could Double Topping..."

Mr. Kimble's headline continues "...Commodities Would Benefit If It Does!" but he is using a shorthand for "Would benefit in dollar terms" because if the dollar is weakening some other currency elsewhere is strengthening and hence commodities in those terms are getting cheaper, what's your numéraire?
From Kimble Charting Solutions, May 26:
The U.S. Dollar has been a pillar of strength for the past 12-years, at it created higher lows starting in 2008, near the 70 level. Since these lows, it has rallied nearly 50%.
The 102 level was resistance for nearly 13-years (1987 to 2000) until an upside breakout took place....

Spot DXY 99.0510 down 0.8120 (-0.81%)

The FT In London May Have Bad News For Democrats In The U.S.

Actually not-so-much the FT but Bryce de Londres.
And he is more the layer of the foundation than even the messenger, so don't shoot him.
First up, and this is important, from Markets Now, May 26:
....Here’s Exane BNP Paribas to set out the argument in favour:
The recession has likely ended…
Our high frequency indicators are turning higher. In Europe, toll traffic, high street footfall, electricity usage and restaurant & AIRBNB bookings have started normalising. In the US, driving and housing activity has recovered, with nascent improvements in SME, restaurant and bar spending. And in China, car and housing sales have normalised, while hotel bookings remain subdued.
We study the experiences of countries with lighter lockdowns and find that industrial activity could return surprisingly quickly. However, the recovery in consumer spending is likely to be more nuanced. Spending on Handsets, Cars and Housing goods/ materials is likely to be the first to normalise. Spending in Restaurants, Flights and Holidays will undoubtedly take longer to recover.
Earnings could be back at 2019 levels quicker than we feared…
... driven by 1) early signs from high frequency indicators; 2) our work suggesting that fiscal stimulus (CARES, EU Green package etc) eventually flows back to corporate profits; and 3) the easiest financial conditions ever seen during a recession. The risk here is another wave of lockdowns. But so far, EU countries that have eased restrictions haven’t seen a spike in cases.
Investors have been reluctant to play the recovery trade
Cyclicals vs defensives has been flat since the lows. However with the next batch of data likely to hint towards sequential improvement, perhaps this hesitance might change. We think Cap Goods, Construction, Mining, Semis and Autos are likely to see a quicker normalisation in earnings.
The upshot here is that driving volumes have normalised in the US, China and early un-lockdowners like Germany and Austria. Online spending has thundered back from March lows, housing activity’s been recovering in most places, China’s coal consumption’s back on trend and in Germany there’s improvement in olde-worlde metrics like high street footfall. Yet equities have been dead money for a month:
Exane uses Oxford Uni’s lockdown stringency tracker to guess at recovery times from here, using Sweden as the benchmark. It’s all stewed into charts like these, for driving, industrial production and both types of retail:

".... We probably don’t need to highlight the extremely obvious risk factor....."


I repeat, do not shoot Bryce, he's only the messenger.
If you are going to take potshots, aim your blunderbuss toward Boston and Harvard's Jason Furman.

From Politico:

The general election scenario that Democrats are dreading
In early April, Jason Furman, a top economist in the Obama administration and now a professor at Harvard, was speaking via Zoom to a large bipartisan group of top officials from both parties. The economy had just been shut down, unemployment was spiking and some policymakers were predicting an era worse than the Great Depression. The economic carnage seemed likely to doom President Donald Trump’s chances at reelection.

Furman, tapped to give the opening presentation, looked into his screen of poorly lit boxes of frightened wonks and made a startling claim.

“We are about to see the best economic data we’ve seen in the history of this country,” he said.
The former Cabinet secretaries and Federal Reserve chairs in the Zoom boxes were confused, though some of the Republicans may have been newly relieved and some of the Democrats suddenly concerned.

“Everyone looked puzzled and thought I had misspoken,” Furman said in an interview. Instead of forecasting a prolonged Depression-level economic catastrophe, Furman laid out a detailed case for why the months preceding the November election could offer Trump the chance to brag — truthfully — about the most explosive monthly employment numbers and gross domestic product growth ever.
Since the Zoom call, Furman has been making the same case to anyone who will listen, especially the close-knit network of Democratic wonks who have traversed the Clinton and Obama administrations together, including top members of the Biden campaign.

Furman’s counterintuitive pitch has caused some Democrats, especially Obama alumni, around Washington to panic. “This is my big worry,” said a former Obama White House official who is still close to the former president. Asked about the level of concern among top party officials, he said, “It’s high — high, high, high, high.”

And top policy officials on the Biden campaign are preparing for a fall economic debate that might look very different than the one predicted at the start of the pandemic in March. “They are very much aware of this,” said an informal adviser.

Furman’s case begins with the premise that the 2020 pandemic-triggered economic collapse is categorically different than the Great Depression or the Great Recession, which both had slow, grinding recoveries.

Instead, he believes, the way to think about the current economic drop-off, at least in the first two phases, is more like what happens to a thriving economy during and after a natural disaster: a quick and steep decline in economic activity followed by a quick and steep rebound. 

The Covid-19 recession started with a sudden shuttering of many businesses, a nationwide decline in consumption and massive increase in unemployment. But starting around April 15, when economic reopening started to spread but the overall numbers still looked grim, Furman noticed some data that pointed to the kind of recovery that economists often see after a hurricane or industrywide catastrophe like the Gulf of Mexico oil spill....
....Furman noted that there is one major obvious caveat: “If there’s a second wave of the virus and a really serious set of lockdowns, I wouldn’t expect to see this. But I think the most likely case is the one I just laid out.”....

As for how to bet:
It looks like we're going to have a second wave.
And perhaps Ruth Bader Ginsburg has to get deathly ill to mobilize the base.
And a market crash.
Hurricane season looks to be above average.
Maybe Iran is convinced it might help to shoot at something.

"Hydroxychloroquine trials for COVID-19 suspended by WHO"

No word if the safety concerns mean the drug will be stricken from the WHO Model Lists of Essential Medicines.
I wouldn't want to be the person who has to break the news to the malaria patients or the folks afflicted by lupus and other inflammatory autoimmune diseases: "Ummm...sorry bub, we've been prescribing a dangerous drug for the last 65 years."

From c|net, May 25:
The controversial anti-malaria drug was one of four experimental treatments being investigated by the organization.
The World Health Organization announced Monday it is pausing clinical trials using the controversial malaria drug, hydroxychloroquine, to treat patients with COVID-19. The drug has been the subject of intense scrutiny after it was championed by the likes of Elon Musk and US President Donald Trump.
"The executive group has implemented a temporary pause of the hydroxychloroquine arm within the Solidarity trial while the safety data is reviewed by the data safety monitoring board," said Tedros Adhanom Ghebreyesus, WHO director-general, during a press briefing. 

The Solidarity trial is the WHO's global investigation into four experimental treatments for COVID-19. It includes remdesivir, lopinavir, interferon beta-1a and hydroxychloroquine. Ghebreyesus confirmed investigations into the other treatments are continuing and notes hydroxychloroquine is "accepted as generally safe in patients with autoimmune diseases and malaria." 

"The decision to temporally halt the Solidarity trial for Hydroxychloroquine and to review the safety data in patients that underwent this trial is expected and logical," says Gaetan Burgio, geneticist at the Australian National University. "This will enable the researchers to determine whether it is safe to continue this very large clinical trial on over 60 countries and 3,500 patients."...

BlackRock: "Why technology is proving surprisingly defensive"

From the BlackRock blog:

Russ highlights the surprising resilience of technology stocks this year.
The last time I wrote about technology stocks the world looked very different. In mid-February the market was at an all-time high, unemployment was at a 50-year low and investors were starting to contemplate a Sanders Presidency.

Despite all that has happened, tech stocks are up for the year. This compares to a -9% return for the S&P 500 and a meltdown in most cyclical sectors. While the future shape and speed of the recovery is still very much in doubt, I still believe tech and tech-related names can lead the market, particularly if volatility returns. Here is an update on the three reasons I gave back in February and why they’re still valid today.

1. Earnings and cash flow remain resilient.
Previously I highlighted that tech valuations were justified based on exceptional profitability. While tech earnings have been hit along with everyone else, they are holding up remarkably well (see Chart 1). This is not surprising. Although the lockdown is crushing spending, tech continues to dominate wallet share, both for individuals and companies. A recent Fortune 500 CEO poll found that 75% of companies plan to increase technology spending.
2. Central banks have pulled out all the stops.
As discussed back in February, rising liquidity has historically favored technology shares. The virus and lock-down have led to the fastest contraction since the Great Depression, and central banks have responded in a rapid and unprecedented manner.  One metric – growth in major central bank balance sheets plus emerging market ex-China reserves – is growing at nearly 17% year-over-year, the fastest pace since 2012. In the past, much of this newly created money finds its way into financial markets and has disproportionately benefited technology shares.

3. If there is a winner in this crisis, it is technology.
Many of the business and broader societal changes demanded by the virus accelerate existing trends: internet commerce, cloud computing, gaming, streaming and remote communication. One example: retail e-commerce spending is up nearly 60% year-over-year. While some of this is temporary and should reverse as the crisis fades, many of these trends will remain long after COVID 19 has been defeated....

If interested see also Sunday's:
"A Market Of Just 5 Stocks": Earnings Season Confirmed "Winner-Take-All" Phenomenon Is Accelerating

Insurance Trade Groups: "Pandemics simply are not insurable risk..."

Way back in 2013 we were writing about the "temporary (2002)" Terrorism Risk Insurance Act. (TRIA)
And as recently as three weeks ago.

From Artemis, May 22:
Association’s propose federal program for “uninsurable” pandemic risk
U.S. insurance and reinsurance industry associations have launched a proposal for a industry-backed pandemic risk backstop, called the Business Continuity Protection Program (BCPP) as an alternative to the legislative proposal for a Pandemic Risk Insurance Act (PRIA) reinsurance backstop.

The National Association of Mutual Insurance Companies (NAMIC), the American Property Casualty Insurance Association (APCIA), and the Independent Insurance Agents & Brokers of America, Inc. said that the “industry-backed Business Continuity Protection Program (BCPP) would provide revenue replacement assistance for payroll, employee benefits, and operating expenses following a presidential viral emergency declaration.”
“Pandemics simply are not insurable risks; they are too widespread, too severe, and too unpredictable for the insurance industry to underwrite,” explained Charles Chamness, NAMIC’s president and CEO. “As we’ve seen in the past few months, pandemics are a national problem, and we need a national solution. NAMIC, APCIA, and the Big ‘I’ had one goal in mind in developing the BCPP – crafting a solution that would provide meaningful support for employees, businesses, and the economy as a whole.”

The BCPP proposal would provide protection against widespread economic shutdowns due to a future pandemic and is federally backed in preference to PRIA which requires industry financial support.

“A TRIA-like program, with an industry financial role, does not square with the fundamental notion that pandemics are not insurable risks. The risks are too fundamentally different in nature and scope,” the association’s said.

“We need a sustainable solution that provides simplicity, certainty, and immediate relief to impacted businesses,” David Sampson, APCIA’s president and CEO said. “The BCPP is designed to bolster the country’s economic resilience through timely and efficient financial protection and payroll support in the event of a future public health emergency. We look forward to continued dialogue with the business community to meet their needs in this vitally important public policy discussion.”
The model would see businesses able to purchase a level of revenue replacement assistance through state-regulated insurance entities that voluntarily participate in the BCPP.
The association say the BCPP would provide “simple, immediate relief for employers that are directed to close.”....

Related, Sunday's Insurance Oh-Oh: "French court orders insurer to pay restaurant’s business interruption losses from coronavirus".

September 2013 
Terrorism, Insurance, and Corporate Welfare

July 2014
It's Time to Stop Subsidizing Warren Buffett and the Rest of the Insurance Gang (BRK; TRV; ALL; CB)
We're not intending to call out just Mr. Buffett's heavyweight property/casualty and reinsurance operations but rather the whole herd of porkers feeding at this particular trough.

It's just that since his comments at the 2002 annual meeting that the odds of a nuclear attack on Manhattan were "inevitable" by 2052, Buffett has carried water for the whole industry.
Page 9 of the BRK 2002 Annual Report has some more of his thoughts. It's all about the money.

Because the "temporary" 'Terrorism Risk Insurance Act' backstop is in place, the insurers and reinsurers are able to sell product that has brought in at least $40 Billion in profits in the last thirteen years.
(premiums paid with no claims pretty much drops straight to the profit line)

I understand the New York Congressional delegation, from Schumer down to the newest Rep. being all for the reauthorization, it's a pretty sweet deal if you can get the rest of the country to subsidize your real estate market but be forthright and say you're in favor of corporate welfare.

One last point. A nuke in NYC causes at least a $Trillion in damage and I'm guessing the insurers haven't squirreled-away that $40 Bil so they'll be able to meet their obligations when the time comes or as capacity to do more risk-management-good-works.

What I'm saying is, just be honest: the government will end up paying anyway so there's no reason to hand out $3 billion a year while we wait for the "inevitable". And at his core, Warren is an insurance salesman from Omaha....
May 6, 2020 
Re/Insurance: "Berkshire Hathaway will write pandemic cover 'at the right price', Buffett says" (BRK)
As with terrorism insurance Warren would rather that governments take the risks,* the downside is just so huge.
And combining the two threats, terrorism and pandemic, considering how awful things have gotten in New York with the Coronavirus you have to ask what would be the result of a concerted bio-terrorism attack?
From "Two Factoids On The Covid-19 Situation In New York York City", way back on March 27
...And the troubling news.
Through Thursday at 5pm there have been 4720 hospitalizations.
Bad enough on its own but when combined with the reports of hospitals being overwhelmed you have to ask, what if something really, really big happened?

New York is one of the top two or three terrorism targets in the United States. How would the system respond if there were say 25,000 bioterrorism or biochemical terrorism victims in one day?
Or even 10,000?
You'd have thought that of all the places on earth that would have been prepared it would have been New York City, but no.
4700 hospitalizations seems so quaint with New York deaths over 25,000 40 days later. ...
And many more, just a laugh-a-minute here in our little corner of the internet.

"Fear is Still on Holiday"

From Marc to Market:
Overview: The heightened tensions between the US and China sapped risk-appetites before the weekend, but appear to be missing in action today. Equity markets have rebounded strongly. Nearly all the equity markets in the Asia Pacific region rose (India was a laggard) led by an almost 3% rally in Australia, which was seen as particularly vulnerable to the Sino-American fissure. The Nikkei is approaching its 200-day moving average as it reached the best level since March 5. Europe's Dow Jones Stoxx 600 is up around 1% after a 1.5% gain yesterday. It is at its best level since March 10. The S&P 500 is set to gap sharply higher, above 3000, and its 200-day moving average for the first time since March 5. Benchmark 10-year bond yields are mostly firmer (US ~70 bp), but peripheral yields in Europe are softer, which is also consistent with the risk-on mood. Germany sold a two-year bond today with a yield of minus 66 bp and saw the strongest bid-cover in 13 years. The dollar is heavy. Among the majors, the Antipodean and Norwegian krone lead the way. The yen is least favored and is struggling to gain in the softer dollar environment. Emerging market currencies are higher, led by more than 1% gains by the Mexican peso, South African rand, and Polish zloty. Gold is consolidating at softer levels (~$1725-$1735), while oil prices continue to recover. July WTI is probing the recent highs around $34 a barrel.

Asia Pacific
The risk-on mood has not been sparked by any sign of a thaw in the US-Chinese tensions.
Indeed, the PBOC set the dollar's reference rate against the yuan a little higher than the bank models suggested (CNY7.1293 vs. CNY7.1277). It was the second successive fix that was the highest since 2008. Still, the yuan snapped a three-day decline and rose less than 0.1%.

Legislation that makes it easier to crack down on dissent pressured Hong Kong, where the stock market fell more than 5.5% before the weekend, and forward points for the Hong Kong dollar exploded. The Hang Seng stabilized yesterday and gained more than 1.8% today. The 3-month and 12-month forward points are more than double what they were a week ago, but have eased from the extreme readings before the weekend. The situation is far from resolved despite the market moves.

The focus in Japan is on the government's second supplementary budget for nearly JPY1 trillion. It could be approved by the Cabinet as early as tomorrow and would nearly double the government's efforts. Japan is lifting the national state of emergency....

Monday, May 25, 2020

"Mining Billionaire Gets Help From Ex-Spies in Bitter Legal Fight" (VALE)

No, silly, not Steele and Deripaska these guys are even worse.*
From Bloomberg via Yahoo Finance, May 22:

Black Cube, the private intelligence agency run by former Israeli spies, spent months setting up companies around the world. Offices, websites and employees were painstakingly put in place -- all part of a sting targeting former executives at Brazilian mining giant Vale SA.
The Black Cube operation, made public in a court filing Thursday and described by people familiar with it, represents the latest escalation in a bitter fight between Vale and mining billionaire Beny Steinmetz.

What started in Guinea as a partnership in one of the world’s richest mineral deposits has devolved into a globe-spanning dispute that sheds light on how fortunes can be made and lost in the world of African mining.

As surging Chinese demand for raw materials spurred a race for assets in Africa, Steinmetz acquired the rights to an iron-ore project known as Simandou in 2008. Vale bought a 51% stake about a year later. Then a new president in Guinea seized the asset back after a corruption probe -- and Vale is pursuing Steinmetz for compensation.

While Steinmetz has always denied wrongdoing, he says in the filing that Vale suspected all along that his original acquisition of the assets could have been problematic. Vale has said in court documents it didn’t know.

Steinmetz says the sting operation -- detailed in court filings that include a declaration from one of Black Cube’s founders and transcripts of conversations with former Vale executives -- showed the Brazilian company was suspicious before it signed the deal. That undermines Vale’s claim to compensation, he argues.
A spokesman for Vale, which was awarded $2 billion in a London arbitration last year that it is still trying to collect, declined to comment.

“This report just confirmed what we were saying from day one. Vale knew everything, there was no surprise for them. Now we have the full proof of that. I was happy to see that, because until now we were fighting and no one believed us,” Steinmetz said in an interview with Bloomberg News this week.

For almost a decade, Steinmetz has faced legal challenges and probes over how he obtained the rights to the deposit in Guinea. The Guinean government withdrew charges of corruption against him after a seven-year dispute. He denies any wrongdoing.
Last year the London Court of International Arbitration found that Steinmetz’s BSG Resources Ltd. made fraudulent representations to Vale when it sold the mine stake. Steinmetz’s appeal was thrown out.

The court ordered BSGR to pay the Brazilian company $2 billion for its losses in the joint venture. To collect the cash it is owed under that order, Vale has sought to freeze Steinmetz’s assets and is asking a U.S. judge to help it secure evidence about investments he and others allegedly made in New York real estate.

‘Nose Closed’
In a conversation with Black Cube’s undercover operatives -- according to a transcript filed with the court documents -- former Vale executive Jose Carlos Martins said he’d had suspicions about the deal. While he recommended Vale go ahead with the purchase, “I’m proposing it with my nose closed because I smell something wrong,” he said, according to the transcript.

Martins, who spent almost a decade running the company’s iron ore business, didn’t respond to requests for comment.
In the transcript, Martins compared the deal to a beautiful woman with a sexually-transmitted disease....

Okay, that last bit sounds like Steele.
Seriously though when the Wall Street Journal is writing stories like:
Black Cube: The Bumbling Spies of the 'Private Mossad'
It's almost as bad as the residents of the Retired Spook's Home making fun of Peter Strozk:
"Peter and Lisa sitting in a tree, T-E-X-T-I-N-G..."
[Now Strozk was a pretty big deal,  He was Chief of the Counterespionage Section of the FBI.
He was also the #2 of the entire FBI Counterintelligence Division.

And he left 50,000 text messages with his paramour, DOJ and FBI attorney Lisa Page, laying around.
50,000 mash notes to sweetie-pie.
Right there, in the phone, and on a server, where any junior-grade investigator could find them. Or worse.

His wife found them] 

Previously on Steinmetz and VALE:
Mining Kingpin Beny Steinmetz Loses Effort To Overturn $2bn (£1.6bn) Arbitration Judgement

Dear China, Please Don't Tug On Uncle Sam's Beard, It's Not A Good Time

Or as the philosopher put it:
"Diplomacy is the art of saying 'Nice doggie' until you can find a rock."
—Will Rogers

pronounced 'rawk'.
From The Honolulu Advertiser, May 18:

Navy sends subs to sea as message to China
The Pacific Fleet Submarine Force took the unusual step this month of announcing that all of its forward-deployed subs were simultaneously conducting “contingency response operations” at sea in the Western Pacific — downplaying the notion that Navy forces have been hampered by COVID-19.
The sub force said the missions were mounted in support of the Pentagon’s “free and open Indo- Pacific” policy aimed at countering China’s expansionism in the South China Sea.

At least seven submarines, and likely more — including all four Guam- based attack submarines, the San Diego-based USS Alexandria and multiple Hawaii-based vessels — are part of the effort.
The action also highlights the Pentagon’s desire to be flexible and unpredictable in “great power” competition with China and Russia.

“Our operations are a demonstration of our willingness to defend our interests and freedoms under international law,” Rear Adm. Blake Converse, Pacific sub force commander, who is based at Pearl Harbor, said in a May 8 release.

Attack submarines maintain an outsize stealth capability to sink ships with torpedoes, fire Tomahawk cruise missiles and conduct covert surveillance while keeping adversaries guessing their location....

The Advertiser said "unusual". It's actually unheard of. 
Literally (submarines don't usually give you a heads-up)
And the Navy put out a press release:

Story Number: NNS200511-08Release Date: 5/11/2020 9:16:00 AM
From Submarine Force, U.S. Pacific Fleet Public Affairs 
Pacific Fleet Submarines: Lethal, Agile, Underway
PEARL HARBOR, Hawaii (NNS) -- The U.S. Pacific Fleet submarine force currently has every one of its forward-deployed submarines conducting contingency response operations at sea in the Western Pacific, in support of a free and open Indo-Pacific region amidst the pandemic caused by the Coronavirus.

The Navy’s submarine force has unique access to a critical undersea domain.  The ability to rapidly deploy is a key component to the Pacific Fleet’s ability to respond to crisis and conflict throughout the Indo-Pacific region.  While underway, the submarines are conducting combat readiness training and employing undersea warfare capabilities in support of a wide-range of missions.

“Our submarine force has proven time and again they are ready to operate anytime, anywhere,” said commander, Submarine Force, U.S. Pacific Fleet Rear Adm. Blake Converse. “The Pacific Fleet submarine force remains lethal, agile and ready to fight tonight.”

U.S. Navy operations in the region are aimed at underpinning the peace and stability that has enabled the Indo-Pacific region to develop and prosper for more than seven decades.
“Our operations are a demonstration of our willingness to defend our interests and freedoms under international law,” Converse said....MORE 
And just to make things interesting maybe the U.S. could rent a couple of those super-quiet little Swedish subs: 

Putin Wants to Haul More Fish Along the Northern Sea Route

I'm not sure what the Russians are up to with this but I'm pretty sure that it's not because moving our finny friends thousands of miles by ship suddenly got more economical. And especially not if they use the ancient nuclear-powered container ship pictured in the story.
As noted in one of last years posts (they are multiple) on the topic:
September 11, 2019
"Norway Would Like To Know If Russia Plans To Make More Salmon Hauling Trips With Their Nuclear Container Ship":
....If only there was some sort of land based transportation mode that could make the trip, something that crossed Siberia, Trans-Siberian if you will, that was comprised of individual cars that could be hooked up in train.  And get the damn salmon to Moscow in days not weeks.

Maybe put 'em on a boat in Petropavlovsk and sail them across the Sea of Okhotsk to Sovetskaya Gavan, whose harbormasters are (reputedly) eminently bribable and will speed your multi-modal perishables on their way west to wind up in some fat mafioso's belly. Ditto for Vladivostok but you'll need to wave a bit more cash to get anyone's attention.
And from the Barents Observer, May 21:
Putin instructs more fish freight via Northern Sea Route
"Okay, let’s work it out," the Russian President said after discussing how to transport more seafood from the Far East with the help of Rosatom’s nuclear-powered container carrier.
It was in a meeting on agriculture and food industry, chaired by Putin via a video link from outside Moscow, the question on how to boost deliveries of fish from the Far East to the European part of Russia came up.

One-third of all-Russian catch are from Kamchatka and deliveries to the markets in the most populated parts of Russia, nine-time zones to the west, are challenging for the Russian railways that lack refrigerated carriers.

The acting governor of the Kamchatka Territory, Vladimir Solodov, said his region’s fish enterprises ship seafood to Vladivostok for further deliveries to Moscow, but the serious shortage of transport capacity delays the transport and makes it more expensive. Especially during peak season from July to September when most of the salmon are caught.

“In our opinion, the solution could be to more actively using the Northern Sea Route to deliver fish to the central regions of Russia,” acting governor Solodov said according to the transcripts from the video-linked meeting.

He estimates that some 50-60 thousand tons of Pacific salmon could be shipped along the Northern Sea Route. In the longer run, the amount could be brought up to 250-300 thousand tons.
The words of the governor were music for Vladimir Putin’s ears. The Russian President has made it a national priority to reach at least 80 million tons of annual goods via the Northern Sea Route already by the year 2024. Last year, 31,5 million tons were shipped on the route.

Two times faster 
Sailing fish directly from Petropavlovsk-Kamchatsky via the Arctic and around Scandinavia to St. Petersburg is two times faster than sailing it to Vladivostok for reloading to the Trans-Siberian railway, governor Solodov informed....

Ha, so they address the overland option!
Not buying their explanation. Another of last year's posts:
November 11, 2019 
Russian Plan For Second Salmon Hauling Voyage With Their Nuclear-Powered Container Ship Cancelled
Ya think?
They were transporting fish on a nuclear powered ship.
The long way. (vs land transport):
Seriously what are the Russians up to with this?
I'm starting to think this is some sort of Bond-villain caper, with the propeller story just a ruse to cover for the fine-tuning of the under-hull submarine docking chamber.
Or something.

Maybe it's related to the submarine disaster last July that killed 14 high ranking officers (captains and commanders).
We had quite a few links to that Russian oddity:....

Here's another one:
September 3, 2019
"The Nuclear Powered Container Ship Sevmorput Is Going to Haul Salmon Along the Northern Sea Route (and Norway and Denmark)"

This is an odd story. First off the Sevmorput is old. It went into service in 1988.
Secondly, although I haven't asked about the costs, you would have to assume a nuclear cargo ship would have to carry some high value cargo to pay the freight, so to speak.

Last March the ship was carrying construction materials and equipment from Archangel to Novatek's LNG 2 project off the Ob river and we were going to do a post on this oddball ship and its five day trip.
That at least made sense: high-value cargo short distance, entirely within Russian waters....

Meanwhile In India: 'Boarding Flight is Like Checking into ICU'

From New Delhi's News18:
Many took to Twitter to share snaps from inside the flights and pointed out that this will be the 'new normal'....


And another flight, this one returning expats from Singapore:
The comments are interesting, many would like an outbound flight to Canada.

And Business Traveller notes repatriation from Australia, folks just want to get home:

Air India
As a part of India’s massive repatriation drive, Vande Bharat Mission, Air India has announced to operate repatriation flights from Australia.
The Indian High Commission in Canberra says, “Government of India has decided to facilitate the return of stranded Indian nationals from Australia in a phased manner.”

"How a small candy company became Warren Buffett’s ‘dream’ investment "

They did their research for this piece.

From The Hustle:
The story of See’s Candies reminds us that a company’s true value can’t always be quantified on a balance sheet — and that, sometimes, consistency and quality can trump rapid growth.
If investing were a video game, you might suspect Warren Buffett of using some kind of cheat code.
His holding company, Berkshire Hathaway, boasts a portfolio that is worth $240B+ and controls $700B in assets. He owns companies in dozens of industries, ranging from insurance (Geico) to underwear (Fruit of the Loom), and holds sizeable stakes in some of the country’s biggest corporations:
  • 925m shares of Bank of America
  • 400m shares of Coca-Cola
  • 325m shares of Kraft Heinz
  • 323m shares of Wells Fargo
  • 245m shares of Apple
But Buffett’s favorite investment isn’t on any Fortune 500 list — it’s a small candy chain that he bought 47 years ago.
With ~$430m in annual sales (2018), See’s Candy represents less than 0.2% of Berkshire Hathaway’s holdings. Yet, Buffett has called the 99-year-old chocolate chain his “prototype of a dream business.” He frequently brings up the company in interviews and even keeps a box of the candymaker’s peanut brittle on hand at annual shareholder meetings. 
In an era that prizes metrics and hockey-stick growth, the story of See’s reminds us that a company’s true value can’t always be quantified on a balance sheet.

The little chocolatier that could
Mary See’s journey to chocolate stardom began in the backwoods of Ontario, Canada.
Born in 1854, Mary married at 20, had 3 children, and settled into a domestic but industrious life co-managing a hotel with her husband. Over the decades, she spent countless hours in the kitchen inventing and perfecting her own candy recipes.
When her son, Charles, relocated to California in 1919, Mary — by then, a 65-year-old widow — decided to join him.
Mary See (far left) with Charles See (far right) and family in 1920s California 
(via “See’s Famous Old Time Candies: A Sweet Story;” See’s Candies)
A druggist by trade, Charles had lost his chain of pharmacies to a forest fire and, for a brief time, worked as a confections salesman. In Los Angeles, he decided to focus on the highest-quality product he could think of: His mother’s homemade chocolates.

In November of 1921, Mary and Charles opened their first See’s Candies shop, offering a variety of chocolates made with fresh ingredients.

From the beginning, See’s chose to build a brand around small-batch quality. It invested in the highest-caliber ingredients (California almonds, Ozarkian walnuts, African chocolate), put Mary’s face on the cover of every $0.85 box, and adopted the slogan “Quality without compromise.” By the 1920s, See’s had expanded to 12 shops.

“The superiority of [Mary’s] product,” wrote one Hollywood newspaper, “is the sole reason for her fame and fortune.”....
....MUCH MORE, the good stuff. Not kidding, this is first rate.

See also:
Living La Vida Cocoa: Warren Buffett, Berkshire Hathaway and the Chocolate Wars (BRK.A; BRK.B; CBY; KFT; HSY)

And dozens more but few compare with The Hustle.

Maybe this one as well because it's mainly Warren:
Berkshire Hathaway 2007 Annual Report and Warren Buffet's 2007 Letter to Shareholders (BRK.A)
So that makes two.