Watch Out Lithuania: Poland Is Militarizing Faster Than Any Nation In Europe

And they seem pleased with their new Polish-Korean main-battle-tank joint venture.

Personally I don't care what happens to Lithuania, some day I'll explain why, but for now it really does seem Poland is getting ready for something and as we've said previously, getting the band back together is not outside the realm of possibility.

(though Victoria Nuland has expressed a desire for regime change in Belarus, Lithuania seems easier)

First up, a map we used a couple weeks before the Russian invasion:

The Polish Commonwealth in 1635 in red: 

note: trying to figure-out where Kiev and Smolensk are on this map to double-check this isn't post-the-1667 Treaty of Andrusovo. I think we're good.

This is a machine translation of Forsal.pl, July 28: 

The head of the Ministry of National Defense: Polish land forces will be in the strongest European member of NATO

We want the Polish land forces to be the strongest in Europe when it comes to the North Atlantic Alliance, and we will do that, said Deputy Prime Minister, head of the Ministry of National Defense, Mariusz Błaszczak. He added that cooperation with South Korea is strategic.

Mariusz Błaszczak approved on Wednesday contracts for South Korean weapons for the Polish army . These are light FA-50 fighters, K2 tanks and K9 self-propelled howitzers.

On Thursday, the head of the Ministry of National Defense on the First Program of Polish Radio recalled that American Abrams tanks will be delivered to Poland in a slightly older version, and in the newest version - in two years. "We strive to change our entire armored fleet. We strive to ensure that the Polish land forces are the strongest in Europe, the strongest when it comes to the North Atlantic Alliance, of course, and we will do it. copies (of Korean K2 tanks) will be used by the Polish Army this year, "said the minister.

He emphasized that the first examples of the K2 Black Panther tanks will be produced in Korea, and the next ones will be produced in Poland - from 2026 or earlier. Asked whether a new factory would be built as a result, he replied that "all options are acceptable". "This is a task facing the Polish Armaments Group" - he stressed....

....MUCH MORE

Original link:

https://forsal.pl/swiat/bezpieczenstwo/artykuly/8500370,blaszczak-polskie-sily-ladowe-europejski-czlonek-nato.html

UNESCO Wants You To Know: Events Are NOT Secretly Manipulated Behind The Scenes By Powerful Forces With Negative Intent

Mandy Rice-Davies anyone?

From the United Nations Educational, Scientific and Cultural Organization:

(click to enlarge)

That's from the new European Commission/UNESCO #ThinkBeforeSharing campaign.

There are ten infographics in ten languages along with ten stamps. Collect the whole set!

Mandy Rice-Davies was a former model and showgirl known for her role in the Profumo affair.
When informed by the prosecuting attorney that Lord Astor disputed her version of events and denied having an affair she responded:

"Well, he would, wouldn't he?"

We are keepers of the M.R-D flame.

For British politicians of a certain age [often referred to as octo or nona-genarians -ed] the scandal surrounding Secretary of State for War John Profumo's affair with the alleged mistress of a Russian spy was highlighted by the testimony of Miss Rice-Davies, a friend of the alleged mistress, Christine Keeler.

From Wikipedia:

While giving evidence at the trial of Stephen Ward, charged with living off the immoral earnings of Keeler and Rice-Davies, the latter made a famous riposte. When the prosecuting counsel pointed out that Lord Astor denied an affair or having even met her, she replied, "Well, he would, wouldn't he?"

We've tried to keep the phrase alive, using it about once per year. One of my favorite usages:

Lord McIntosh of Haringey:  My Lords, I am proud of many things that this Government have done. I pause to anticipate the interjection—"He would say that, wouldn't he?"...

Lords Hansard text for 6 Feb 2002

The Heat Wave Of 1896 And The Rise Of Teddy Roosevelt

From National Public Radio, August 11, 2010:

...Prologue
"The Heated Term"
On August 15, 1896, while preparing to depart for a three-week vacation out west, Theodore Roosevelt wrote to his sister Anna, whom he called his Darling Bye. "We've had two excitements in New York the past week; the heated term, and Bryan's big meeting," he wrote. "The heated term was the worst and most fatal we have ever known. The death-rate trebled until it approached the ratio of a cholera epidemic; the horses died by the hundreds, so that it was impossible to remove their carcasses, and they added a genuine flavor of pestilence, and we had to distribute hundred of tons of ice from the station-houses to the people of the poorer precincts." Roosevelt, then 37 and president of New York's Board of Police Commissioners, was describing one of the most historic weeks in the city's history....

During the summer of 1896, a 10-day heat wave killed nearly 1,500 people, many of them tenement-dwellers, across New York City. Many thousands of people were crammed into tenements on the Lower East Side, with no air conditioning, little circulating air and no running water. Families were packed together -- with five to six people sharing a single room. Extra space on the floor was rented out to single men -- many of whom worked six days a week doing manual labor out in the sun.

"It was so densely packed that most people couldn't even live inside the tenement itself," says Ed Kohn, a professor of American history at Bilkent University in Ankara, Turkey. "The streets in front of tenements, and the rooftops and the fire escapes were ... filled with people all of the time because there was no room for everybody to fit inside."
Kohn is the author of Hot Time in the Old Town, which chronicles the fatal heat wave.

"This was 10 days [with temperatures reaching] 90 degrees at street level and 90 percent humidity, with temperatures not even dropping at night," Kohn says. "No wind -- so at night there was absolutely no relief whatsoever."

At the time, there was a citywide ban on sleeping in New York City's public parks. Kohn says one of the simplest things the city could have done was lift the ban -- giving people a place to sleep away from their squalid tenements, which might have prevented many of the deaths.

"They took to the rooftops, and they took to the fire escapes, trying to catch a breath of fresh air," he says. "Inevitably, somebody would fall asleep or get drunk, roll off the top of a five-story tenement, crash into the courtyard below and be killed. You'd have children who would go to sleep on fire escapes and fall off and break their legs or be killed. People [tried] to go down to the piers on the East River and sleep there, out in the open -- and would roll into the river and drown."....

...MUCH MORE, including audio, transcript, extended excerpt.

"All That Is Solid Melts into Inflation"

This is rather highfalutin stuff, important but maybe less so than the concrete fact that inflation grinds down the middle and working classes into serfdom or debt-slavery.

Although the headlines each month are about the CPI and the PPI and the PCE deflator we also make a point to have a separate post on 'real personal income' and the reality behind those numbers is just horrific. Here's the April version: "War on the Working Class: Real Wages Collapsing"

Now back to highfalutin. From Finanz und Wirtschaft, July 11:

History is replete with examples of high inflation driving systemic breakdowns. By breeding uncertainty, inflation can easily destroy large, complex political entities. A column by Harold James.

«The US and the UK have the highest inflation rates in the G7, and they also both enacted massive central-bank-assisted fiscal-stimulus packages in response to the COVID-19 shock.» 

Rich Western industrialized countries appear to be caught in a time loop, with unexpectedly higher inflation bringing back not just memories of the 1970s but also that era’s policy debates and the political insecurities. Is inflation always and everywhere a monetary phenomenon, as Milton Friedman insisted? Or is it a consequence of fiscal over-extension – or simply a symptom of a more general democratic malfunctioning?

The debates of the 1970s were not just about technical matters of macroeconomic management. They also raised doubts about the sustainability and legitimacy of the Western model of democracy. The world was beset by geopolitical instability, and the United Nations General Assembly endorsed calls for a New International Economic Order. And now that many of the same old political and geopolitical issues are heating up again, inflation is a thermometer. As more money chases fewer goods, prices rise – the economy becomes feverish.

During periods of monetary innovation, however, it becomes harder to tell what money even is. No one would dispute the fact that monetary innovation has been proceeding at a breakneck pace over the past decade. But it is worth remembering that the 1970s also featured a financial revolution, one that blurred previously hard distinctions between money and non-money. This was partly a consequence of inflation, which prompted bank customers to flee from non-interest-bearing checking accounts to alternatives such as certificates of deposit or accounts in non-traditional banks.

Connection between fiscal and monetary policy
Friedman was contemptuous of all the conservative voters and politicians who thought that fiscal policy was to blame for inflation. But his disdain was misplaced, because there was indeed a connection between fiscal and monetary policy: high government deficits had been financed through the central bank. In both the United States and the United Kingdom, the treasury and the central bank had come to be seen as a unified «macroeconomic executive.» Regarding themselves as globally dominant powers, both countries aimed to use their monetary sovereignty to secure advantages at the expense of the rest of the world.

In the event, the US and UK ended up with higher inflation compared to most other industrialized countries, and this same distinction is apparent again in 2022. The US and the UK have the highest inflation rates in the G7, and they also both enacted massive central-bank-assisted fiscal-stimulus packages in response to the COVID-19 shock.

The UK is a particularly dramatic example of this. In the first financial year of COVID-19, the Bank of England bought up 99.5% of government debt – and over 100% the following year. Under these circumstances, it is not credible to argue that the central bank is independent.

Central banks not that independent
The same logic applies in the US, where policymakers’ biggest mistake was to pin their hopes on higher inflation being «transitory.» This lasted until November 2021, with the Biden administration pressuring the US Federal Reserve to keep monetary policies loose by delaying the nomination or renomination of Fed officials. This political intervention was as obvious as Richard Nixon’s efforts to pressure Fed Chair Arthur Burns in the 1970s....

....MUCH MORE

The writer, Harold James, is Professor of History and International Affairs at Princeton University. His latest at Finanz und Wirtschaft is dated today, August 2:

A Decade of «Whatever It Takes»

British Out In Solidarity With Dutch Farmers

From National Highways: Yorkshire:

Our Traffic Officers and @syptweet are en-route to the #M1 northbound between J34 (#Sheffield) and J35 due to a number of cows which have made their way onto the carriageway.

We've set speeds and lane closures to warn approaching traffic. pic.twitter.com/I59KuJEYxJ

— National Highways: Yorkshire (@HighwaysYORKS) August 1, 2022

THREAD

"Lithium Stocks: Livent Earnings Beat, But LTHM Is Flat; Albemarle On Deck" (LTHM; ALB)

From Investor's Business Daily, 05:10 PM ET 08/02/2022:

Lithium stocks aren't repeating their explosive reaction to Q1 earnings, which saw a huge jump in guidance to catch up to a surge in market prices for lithium. Earnings from Livent (LTHM) came in well above estimates after Tuesday's close, but LTHM stock was little changed. Albemarle (ALB) is set to report on Wednesday afternoon.

Huge earnings beats and raises stemmed from the companies recognizing that high lithium market weren't going away any time soon and, particularly for Albemarle, a restructuring of contract prices to more closely reflect market prices.

The Q1 reports, and a subsequent guidance hike from Albemarle on May 23 to reflect more contract renegotiations, saw LTHM stock hit an all-time peak, while ALB rallied to a six-month high.

Then doubt set in. Goldman Sachs went out on a limb, predicting that prices could crash by 70% over the next year as a lithium surplus emerges. But so far, lithium prices are holding strong, up more than 400% from a year ago, even as prices for some key EV materials such as nickel have fallen.

In a July 14 note, Deutsche Bank analyst David Begleiter predicted "another beat and raise" quarter for Albemarle and called for an ALB stock rally into earnings. That's played out, with ALB stock scoring 10% gains in each of the past two weeks to climb within striking distance of a cup-with-handle buy point.

So far, lithium producers are in the driver's seat as battery and EV makers jockey for supply. Livent will discuss a new supply agreement reached with General Motors, which will see Livent build out processing capacity in the U.S. That will be key for GM EVs to qualify for tax credits under the Democrats' revamped climate legislation.

Livent said in its earnings statement that GM will make an advance payment of $198 million this year. Auto manufacturers "are becoming more focused on securing reliable lithium supply to support their own aggressive electrification plans," Livent CEO Paul Graves said in the earnings statement....

....MUCH MORE

The sector is definitely drawing attention, with create-a-corps and former Canadian marijuana companies making all sorts of announcements. Here's a very fashion-forward press release: "Musk Metals to drill Elon lithium project, Quebec"  The company has made the less arduous pivot from gold to lithium (along with a couple name changes) and has a prime Vancouver address, 700 West Georgia Street. Apparently W. Pender Street is now considered déclassé.

Okay, snark over, here's the price action on the two largest producers:

 Albemarle :

and Sociedad Quimica y Minera:

Both charts from FinViz, also on blogroll at right. 

Zoltan Pozsar Says L-Shaped Recession Is Needed to Conquer Inflation

So 2 1/2% rates and no movement on the Fed balance sheet isn't going to be enough to cut 9.1% inflation?

From Bloomberg, August 2:

• Fed may have to hike to 5% or 6% as inflation now structural
• Economic war has broken out and wars are inflationary: Poszar

The US economy may need to undergo a deeper and longer recession than investors currently anticipate before inflation can be brought under control, according to Zoltan Pozsar of Credit Suisse Group AG.

Markets expect the surge in consumer prices will soon peak and central banks will become less hawkish, but there’s a high risk that global cost pressures will remain elevated, Pozsar, global head of short-term interest-rate strategy at Credit Suisse in New York, wrote in a client note.

The world is being wracked by an economic war that’s undermining the deflationary relationships that have prevailed in recent decades where Russia and China supplied cheap goods and services to more developed nations such as the US and those in Europe, he said.

“War is inflationary,” Pozsar wrote. “Think of the economic war as a fight between the consumer-driven West, where the level of demand has been maximized, and the production-driven East, where the level of supply has been maximized to serve the needs of the West.” That pattern held “until East-West relations soured, and supply snapped back,” he said.

The result is that inflation is now a structural problem, rather than a cyclical one. Supply disruptions have arisen from the changes in Russia and China, along with tighter labor markets due to immigration restrictions and a reduction in mobility caused by the coronavirus pandemic, Pozsar said. There’s now a risk the Federal Reserve under Chair Jerome Powell has to raise interest rates to 5% or 6% and keep them there to create a substantial and sustained reduction of aggregate demand to match the tighter supply profile, he said....

....MUCH MORE

For What It's Worth: Dutch Farmer Protests Continue (plus cannibalism)

They really do see the actions of Prime Minister Rutte's government as threatening their very existence.

From Radio Genova who seem to be giving Investment Hulk a run-for-his-money in the "Weekends are made for mayhem category":

Mayor of Almelo wants to cancel the mural "no farmers, no food", but the citizens are opposed en masse and shield with their bodies. The majority of the Dutch support the farmers' protest. pic.twitter.com/umyTtpXqp7

— RadioGenova (@RadioGenova) August 1, 2022

Mark Rutte's police brutality towards peaceful Dutch farmers in Almelo. pic.twitter.com/3l1irAR99P

— RadioGenova (@RadioGenova) August 1, 2022

And completely unrelated, today I learned that the last time a European leader was killed and eaten by his subjects was in the Netherlands. From Dutch Review:

That time the Dutch ate their prime minister

We're coming up on the 350th anniversary of that event of August 20, 1672. 

Uber Posts First Positive Quarterly Cash Flow Ever

And we haven't even gotten to the autonomous electric flying taxis yet.

From CityAM:

Uber appeared to defy inflationary woes as the ride-hailing posted a positive quarterly cash flow for the first time.

Reporting its second quarter results, the US firm smashed analyst expectations of $263.2m with generated free cash flow of $382m.

“Last quarter I challenged our team to meet our profitability commitments even faster than planned—and they delivered,” said Uber CEO Dara Khosrowshahi in a statement....

....MUCH MORE

Iran Says Its Ballistic Missiles Have the Capability Of “Turning New York Into Hellish Ruins”

After Mayor de Blasio that may not be the threat the Mullahs Ayatollahs think it is.

From Iran International, July 30:

Iran Ready To Build Nukes If Attacked: IRGC-Linked Social Media

Two Telegram channels with links to IRGC have suggested that Iran may build nuclear warheads “in the shortest possible time” if attacked by the US or Israel. 

Bisimchi Media (Radioman Media) Telegram channel on Saturday published a short video entitled “When Will Iran’s Sleeping Nuclear Warheads Awaken” in which it said the Islamic Republic will begin building nuclear bombs in the shortest possible time “if the US or the Zionist regime make any stupid mistakes.” 

The video also says that uranium enrichment in secret underground facilities of Fordow, near Qom, has brought Iran to the threshold of nuclear breakout and joining the nuclear powers’ club and stresses that transforming the country’s “peaceful nuclear program to a nuclear weapons program” is possible in a very short time. 

Israeli has repeatedly threatened in recent months to use all means at its disposal to prevent Iran from becoming a nuclear threat, and has said its armed forces are preparing for action if necessary. “The nuclear facilities of Fordow have been built deep under mountains of Iran and are protected against trench-busting bombs and even nuclear explosion… all infrastructures required for nuclear breakout have been prepared in it,” the video said while adding that the facilities at Natanz may be highly vulnerable to a possible attack by Western powers and Israel but Fordow will immediately assume war footing and begin the nuclear breakout project within a short time if Natanz comes under missile attack. 

The video report also suggests that Iran’s ballistic missiles have the capability of “turning New York into hellish ruins”, citing Iran’s space program, which has so far been mostly a failure....

....MUCH MORE

But, but John Kerry gave them so much money. 

Which brings to mind the thoughts of a now disreputable English writer:

Dane-geld  

A.D. 980-1016

IT IS always a temptation to an armed and agile nation
    To call upon a neighbour and to say: —
"We invaded you last night — we are quite prepared to fight,
    Unless you pay us cash to go away."

And that is called asking for Dane-geld,
    And the people who ask it explain
That you've only to pay 'em the Dane-geld
    And then you'll get rid of the Dane!

It is always a temptation for a rich and lazy nation,
    To puff and look important and to say: —
"Though we know we should defeat you,
we have not the time to meet you.
    We will therefore pay you cash to go away."

And that is called paying the Dane-geld;
    But we've proved it again and again,
That if once you have paid him the Dane-geld
    You never get rid of the Dane.

It is wrong to put temptation in the path of any nation,
    For fear they should succumb and go astray;
So when you are requested to pay up or be molested,
    You will find it better policy to say: —

"We never pay any-one Dane-geld,
    No matter how trifling the cost;
For the end of that game is oppression and shame,
    And the nation that plays it is lost!"

—Rudyard Kipling, 1911

Capital Markets: "Aussie Hit with Profit-Taking after RBA Hikes 50 bp"

From Marc to Market:

Overview: Speaker Pelosi's visit to Taiwan has added to the risk-off mood of the capital markets today. Most of the large Asia Pacific equities sold off, with Australia and India notable exceptions. Europe's Stoxx 600 is off for the second consecutive session, and by the most (~0.60%) since mid-July. US futures are also weaker. Benchmark 10-year rates are lower. The 10-year Treasury is off a couple of basis points to below 2.55%, while European yields are mostly 5-6 bp lower, though Italy is lagging. The dollar is trading higher against all the majors but the Japanese yen, where the squeeze continued. The greenback traded at two-month lows near JPY130.40. The Australian dollar has been hit by profit-taking after the central bank hiked 50 bp. Most emerging market currencies are lower too. The Mexican peso's 0.4% decline leads the way.

Gold reached $1780, its best level in nearly a month. It is the fifth consecutive advancing session. After falling 4.8% yesterday, September WTI remains trapped near the lows, mostly below $94.00. US natgaser is off a little more than 2% to offset the gains of the past two sessions. Europe’s benchmark is up 3.5% after a 2.5% gain yesterday. Iron ore is slipping lower for the third declining session. Copper’s six-session advance ended yesterday with a loss of less than 1%. It is off around the same amount today. September wheat is off 2.2%, a little more than it has shed in the past two sessions....

....The US has been haranguing OPEC+ to boost output. OPEC+ holds a video conference tomorrow to set the new production caps after today's technical meeting. Yet, as is well appreciated now, the cartel's output is well below the production limits. In fact, it is estimated to be around 2.8 mln barrels a day below their collective target. However, based on seaborne shipments, Saudi Arabia appears to have boost its exports last month to the most since April 2020. The estimated 7.5 mln barrels per day is almost a million more than it shipped in June. Shipments to China and India appear to have increased while shipments to the US and Japan may have fallen....

....MUCH MORE

"No holidays for Ukraine: Financial needs increase"

The EU has to either go all-in or call a halt to what they are currently doing.

This halfway stuff does not work for anyone but the arms merchants and is just plain evil in terms of lives lost and livelihoods ruined. As the BSD's used to say: "Go big or go home."

From EurActiv, July 29:

As the war in Ukraine drags on and the country’s economic outlook worsens, the state’s financial needs become more acute. Meanwhile, the EU dithers on delivering more macro-financial assistance and organising funding for reconstruction.

Wars are costly. The Ukrainian state is currently financing its defence against military aggression while tax income plummets due to the collapse of the economy.

Estimates from earlier this year predicted that the Ukrainian economy might contract by anything between 35% and 50% this year, with the IMF projecting that the Ukrainian government will need around $5 billion per month to keep going.

Consumers and businesses become more cautious

And this number is growing as the war continues.

“It is my impression that the needs will increase,” adviser to President Zelenskyy’s office and former economy minister Tymofiy Mylovanov told EURACTIV.

According to him, people and businesses have started to realise that the war might drag on for many more months. “Everybody becomes much more careful about their funds, people are spending less, firms are cutting more jobs, and savings are starting to run out,” he said.

Just this week, the Ukrainian state energy company Naftogaz became the first Ukrainian state entity to default on bond payments since the start of the invasion.

In May, the EU Commission proposed macro-financial aid for Ukraine to the tune of €9 billion and set up a platform for the reconstruction of the country.

However, by the end of July, EU member states could only agree on €1 billion in assistance: a sum that covers the Ukrainian needs for about a week.

The first billion can be paid out because 70% of the subsidised loans for Ukraine are backed by the EU budget. However, the EU budget is now at its limits and cannot be used to also back the other €8 billion.

“The exceptional feature of this macro-financial assistance stems from the specific war circumstances in Ukraine, which call for a provisioning rate under the Union budget of 70%, as opposed to a traditional rate of 9%,” a Commission spokesperson told EURACTIV earlier this month.

Thus, member states will have to chip in with substantial guarantees for the rest of the money. According to the EU Commission, it is working to find a solution to fund the rest of the originally proposed €9 billion “as soon as possible”.

EURACTIV understands that there is disunity among member states about whether this money should be paid out in loans or grants. While most EU member states want to provide the rest of the money in loans, the German government would prefer the assistance to come in form of grants because it fears that the German constitutional court might rule against providing the macro-financial assistance in loans.

Will Ukraine have to monetise the deficit?

For Ukraine, meanwhile, the lack of funding is becoming an issue. At the top of the priority list for spending is the military, alongside shelters for displaced people to be safe and warm during the winter....

....MUCH MORE

Goldman's Head Of Commodities Research On Oil Investing

From Maximum Driller, last month:

https://t.co/QlNNqpuAdk

— Maximum Driller (@DevoutDriller) July 3, 2022

And via Maximum Driller:

Wow! Just wow! Some of the European LNG cargoes have been bought via a Singapore entity that belongs to Gazprom.

LNG was meant for India supply, but lucrative EU rates meant, Gazprom Singapore diverted it to EU, paid penalty to Indians and still made millions of $$$ #OOTT #Gas https://t.co/7XWyfOin27

— Energy Blogger (@energy_blogger) August 1, 2022

"China going quiet on LNG hides risk that may upend global market"

What are they up to? [totally unrelated to this story] Methane clathrates off Okinawa?

From Energy Voice, July 27:

At a time when natural gas buyers are fighting over every last molecule, China — the world’s top importer — is noticeably quiet.

In stark contrast to rivals across the region, China’s liquefied natural gas (LNG) importers aren’t procuring additional shipments for winter, gambling that the nation’s Covid Zero policy will continue to temper demand, said traders. A global supply crunch has made LNG very expensive, and traders don’t want to pay if the fuel won’t be needed.

It’s a risky bet that could quickly backfire if the weather turns unusually cold or China’s economy rebounds, upending a global gas market that’s already reeling from supply cuts from Russia and outages at key LNG export facilities.

A sudden rebound in Chinese demand for gas would force importers back into the cutthroat competition to procure LNG, exacerbating a worldwide shortage and sending prices — already at a seasonal high — to stratospheric levels.

It’s “an anomaly” for Chinese companies not to be buying LNG supplies on the spot market as winter purchases head into full swing, said Toby Copson, global head of trading and advisory at Trident LNG. “It means China isn’t stressed about supply – what they have available via gas pipeline and their domestic coal production seems to be sufficient for the time being.”

That comfort level led to a roughly 20% drop in LNG imports for the first six months of the year. China became the world’s top LNG importer in 2021, but is expected to lose the title this year.

China’s inactivity on LNG is providing opportunities for other buyers in Asia and Europe to shore up their gas inventories. Chinese firms are actually reselling spare LNG to energy-starved importers in Europe....

....MUCH MORE

There are methane seeps in the Okinawa Trough which probably indicate that at depth there are methane clathrates (hydrates), "ice that burns" and because of the location the resource could become very contentious. If it exists in commercial quantities.

Here's the neighborhood, the trough runs from Okinawa to Taiwan:

Japan's Responses In the Event Of A Chinese Attack On Taiwan
You can see Japan's quandary if you follow the islands down to Okinawa and beyond:

Asia Pacific Journal Japan Focus (more after the jump)....

*****

And naturally enough there is a complicating factor in the competing claims to the Senkaku islands:

For some backstory here is the source of the two maps, Asia Pacific Journal's:
Barren Senkaku Nationalism and China-Japan Conflict

Again, there is no evidence the methane is available in commercial quantities but it is one more reason that part of the world is worth keeping an eye on.

At The Intersection of the Ukrainian Diaspora and Big Boats: When Your Yacht Neets A Yacht

Combining the 'very, very largest yachts' comment in "Private Flying is Booming. But Parking Space for All Those Jets Is at Premium."
(European Commission exempts yachts up to 5000 gross tonnes from decarbonization regs)

With the Ukrainian diaspora comment in "Are Ukrainian Farmers an Endangered Species?".

(Ukraine has lost a lot of brainpower since 1991) 

We get this:

That is the catamaran yacht-support-vessel Nebula (68 m/224 ft) crew: 10; guests: 8 via Superyacht|Fan.

The boat it supports doesn't make the list of the 25 longest yachts (cut-off: 124.4 m) but at 99.95 m (327 ft) Moonrise is not tiny:

 

Again, via Superyacht|Fan, crew: 32; guests: 16

Both are owned by Ukrainian-American Jan Koum.

He co-founded and sold WhatsApp to Mark Zuckerberg.

Now (2022) his boat has a boat.

And Moonrise, at 3,900 GT, won't be bothered by those pesky EU carbon rules.

"What To Do When Paris Becomes A Ghost Town"

From Messy Nessy Chic, July 30:

If you’re not subscribed to the Messy Nessy Chic newsletter (hint hint), you may be wondering why we’ve gone a little quiet these past few weeks. The fact that the MNC HQ is based in Paris may give you a clue. You see, Parisians close up shop for August to chase the last rays of summer outside la capitale, turning the city into a veritable ghost town. Tourists and locals alike are left wondering where on earth they can find an open boulangerie, where they can shop, dine, and make merry while tumbleweeds roll down the Champs-Elysées…

....MUCH MORE

A random selection of previous visits with Vanessa and her crew:

• Picasso Pics For Sale, Cheap (chateau included)
• Ethanol: Now That's Hungover
• French History Messy Nessy Style: "Little Tuscany in the Heart of Paris"
• Huh, Apparently The Barbie Doll Began Life As a High-end German Call Girl Named Lilli
• Art Institute of Chicago Recreates Van Gogh's Bedroom, Puts it On Airbnb

And many, many more. But instead of our usual "search blog' box upper left spiel, here's the Messy Nessy home page.

If You Thought Market Leadership Was Concentrated In 1999....

That market was powered by the Nasdaq 100 and when those stocks cracked the entire equity universe collapsed. The subsequent decline:

On Friday March 10, 2000 the Nasdaq closed at 5048.62, it's all-time high.
On the following Monday the Naz was down 141 points. Tuesday, 200.
The index had begun a 30-month decline to it's September 24, 2002 intra-day low of 1,169.04,
down 77%.

If interested see December 2021's "Lest we forget, over five trading days in April 2000 the Nasdaq dropped 25%" for more detail.

This year, at least in terms of earnings, we are down to three stocks.

And it is not just those corporations but divisions within those corporations that are powering the entire edifice.

From TechCrunch, July 28:

The biggest story from Big Tech earnings is the sheer growth power of public cloud

When the Big 3 cloud infrastructure vendors – Amazon, Microsoft and Google – reported their earnings this week, it was clear that the cloud is helping keep their overall numbers up. But perhaps what was most surprising was that after years of sitting at 33% market share, AWS was up a tick to 34% in the second quarter, according to numbers from Synergy Research....

....MUCH MORE

In engineering it is known as a Single point of failure. And as the all-knowing one (Wikipedia) puts it:

A single point of failure (SPOF) is a part of a system that, if it fails, will stop the entire system from working.^[1] SPOFs are undesirable in any system with a goal of high availability or reliability, be it a business practice, software application, or other industrial system....

If the cloud stumbles, the big 3 companies stumble, meaning the Nasdaq 100 goes, meaning the broader Nasdaq fails, meaning the S&P 500 is kaput meaning...

So let's hope the cloud keeps working. Because if it doesn't we'll be singing my favorite song: "Happy Anniversary Mr. Market: Ten Years Ago Today..."

"The Day When Repo Rates Blew Out: Fed Recounts a Fiasco that Occurred as the FOMC Was Meeting, and How it Reacted"

Izabella Kaminska made a seemingly innocuous little retweet yesterday:

Liquidity is starting to deteriorate, and a great insight into this is the Repo market. Failures to deliver (Bonds used as collateral in Repurchase agreements) have been elevated and are up 22% on a WoW basis. This is a sign of liquidity event brewing. pic.twitter.com/AkzKu9rnCU

— Deer Point Macro (@deerpointmacro) July 30, 2022

Except that, as she and a few other folk understand, it's not innocuous at all.

And unbeknownst to her (or the other folks) it marks the start of Repo Week!

First up, from Wolf Street, October 9, 2019:

I wish I could have sat in that meeting, watching the bewildered faces of Fed officials as they got hourly updates on repo rates blowing out.

The FOMC meeting minutes released this afternoon – instead of being stuffed with mind-numbing language – were spiked with a practically riveting account of the repo fiasco as it was unfolding over September 17 and 18 while the FOMC was meeting.

The account lays out some reasons behind the repo fiasco, the Federal Reserve’s reaction to it, and the changes it implemented and is going to implement to prevent the repo fiasco from spiraling further out of control.

Deep trouble in the repo market that caused “volatility in unsecured rates” had already percolated into the minutes of the July 30-31 FOMC meeting. But apparently nothing had prepared Fed officials for what would happen in the repo market on September 16, the day before their meeting, and on September 17 and 18, as they were meeting: Repo rates blew out.

I wish I could have sat in that meeting, watching the bewildered faces of Fed officials, Fed staff, and other participants as they were getting hourly updates on where repo rates were at the moment.

Day 1 of the meeting: repo rates blew out, Fed responded with $75 billion repo. From the minutes:

“Money markets were stable over most of the period [since the last meeting], and the reduction in the interest on excess reserves (IOER) rate following the July FOMC meeting fully passed through to money market rates.

“However, money markets became highly volatile just before the September meeting, apparently spurred partly by large corporate tax payments and Treasury settlements, and remained so through the time of the meeting.

“In an environment of greater perceived uncertainty about potential outflows related to the corporate tax payment date, typical lenders in money markets were less willing to accommodate increased dealer demand for funding.

“Moreover, some banks maintained reserve levels significantly above those reported in the Senior Financial Officer Survey about their lowest comfortable level of reserves rather than lend in repo markets [and so they didn’t lend to the repo market].

“Money market mutual funds reportedly also held back some liquidity in order to cushion against potential outflows.

“Rates on overnight Treasury repurchase agreements rose to over 5 percent on September 16 and above 8 percent on September 17. Highly elevated repo rates passed through to rates in unsecured markets.”

“Federal Home Loan Banks reportedly scaled back their lending in the federal funds market in order to maintain some liquidity in anticipation of higher demand for advances from their members and to shift more of their overnight funding into repo.

“In this environment, the effective federal funds rate (EFFR) rose to the top of the target range on September 16.

“The following morning, in accordance with the FOMC’s directive to the Desk to foster conditions to maintain the EFFR in the target range, the Desk conducted overnight repurchase operations for up to $75 billion. After the operation, rates in secured and unsecured markets declined sharply. Rates in secured markets were trading around 2.5 percent after the operation.

“Market participants reportedly expected that additional temporary open market operations would be necessary both over subsequent days and around the end of the quarter. Many also reportedly expected another 5 basis point technical adjustment of the IOER rate.”

Day 2 of meeting: second repo, from later in the minutes:....

....MUCH MORE

Again, "Minutes of the Federal Open Market Committee, September 17–18, 2019".

There was an intriguing hypothesis floated at The Philosophical Salon that posits it was the situation underlying the repo blowout, rather than Covid, that led to the previously unthinkable shutdowns of entire economies:

Money, Money, Money: "A Self-Fulfilling Prophecy: Systemic Collapse and Pandemic Simulation"
Is this why we had lockdowns?  

And is it true that in Australian English the phrase "conspiracy theory" translates to "Next month's headlines"?