Friday, January 31, 2020

"Divine Medicine: A Natural History of Beer"

"Well, I woke up this morning and I got myself a beer
Well, I woke up this morning and I got myself a beer
The future's uncertain and the end is always near."
Roadhouse Blues, The Doors
From Inference Review:
In the beginning was beer. Well, not quite at the beginning: there was no beer at the Big Bang. Curiously, though, as Rob DeSalle and Ian Tattersall point out in A Natural History of Beer, the main components of beer—ethanol and water—are found in the vast clouds swirling around the center of the Milky Way in sufficient quantity to produce 100 octillion liters of the stuff, though only at a very disappointing 0.001 proof. On earth, beer-like substances have long existed whenever grains, nectar, or fruits have spontaneously fermented. Chimps and other mammals in the wild have been observed getting sloshed on naturally occurring alcohol, which strongly suggests that very early humans did so too. Whatever the precise date of the first tipple, beer is a truly venerable article, coeval with human civilization and, of course, with some pretty uncivilized behavior as well. DeSalle and Tattersall tell its story with enormous erudition and panache.

The earliest evidence of beer consumption is from a Chinese village around 9,000 BCE, whose pottery yielded chemical traces of a kind of rice beer. There are hints of beer’s existence in the Fertile Crescent as early as 11,000 BCE, but nothing definite, although the fact that barley was cultivated and stored as early as 10,000 BCE means that evidence for very early beer consumption will probably turn up, especially as the biological sciences increasingly become part of archaeology. For now, however, beer’s earliest appearance in Middle Eastern history comes courtesy not of biochemistry or archaeology but of literature. In the celebrated third-millennium Sumerian epic Gilgamesh, the wild man Enkidu is domesticated by eating bread and beer. “This is what men eat and drink,” his discoverer assures him. After seven jugs of beer, the poem tells us, “he was suddenly joyful, and sang aloud.”1

Being portable as well as potable—often more potable than water, since it was boiled at one stage of brewing—beer was one of the earliest currencies, used by temple bureaucracies to pay craftsmen, workmen, and suppliers. We even know how much the laborers who built the Giza pyramids were paid: three allotments of beer per day, totaling four liters. Because Egyptian beer was thicker, sweeter, and more nutritious than most later versions—it was made from crumbled barley bread and sprouted grains and flavored with dates and honey—and because it was often drunk before it was completely fermented, and therefore probably contained appreciable quantities of brewer’s yeast, one of the most nutritious substances known, DeSalle and Tattersall conjecture that “beer was the lubricant that made the astonishing feat of pyramid-building possible.”2 Not all Egyptians considered beer an unmitigated blessing, though. A training manual for scribes warned: “Beer, it scareth men from thee, it sendeth thy soul to perdition.” An advice collection called The Wisdom of Ani echoed this warning: “Take not upon thyself to drink a jug of beer. Thou speakest, and an unintelligible utterance issueth from thy mouth.”3

Beer remained a provincial drink during the Roman Empire. Aristocrats and officials drank wine, which suggests that the Greeks, whom the Roman upper classes copied in most things, did not drink beer either. There was, however, a long and unbroken northern European tradition of brewing, dating from around 2,500 BCE. The church disapproved at first, but there was no separating the northerners from their beer. Soon monasteries, which received tithes from peasant harvests, were using their surplus grain to brew beer. In fact, as DeSalle and Tattersall note, the world’s oldest continuously operating brewing site is in a former monastery, the Weihenstephan Abbey in Bavaria.

Another possible sign of divine favor in this period was the discovery of hops around the ninth century. Beer had long been flavored with herbs and fruit, but no combination had produced universal satisfaction. The seed cones of the hops plant, Humulus lupulus, had various uses in medieval medicine but proved an ideal addition to beer, imparting a bracing bitterness and also acting as a preservative. The latter was important: it allowed beer to travel, making a wider market possible and spurring competition and innovation.

A beer’s bitterness can be measured, it turns out, by a formidably difficult-sounding process involving the isomerization of humulone, an alpha acid of the hops, and then measuring the isohumulone level with a spectrometer. Bitterness levels range from 20 to 2,600 IBUs (International Bitterness Units), though it is probably impossible for most people to distinguish levels over 150 IBUs. As a reward, perhaps, to the reader for working through the details of bitterness measurement, DeSalle and Tattersall reproduce a list of beers with their IBU rankings and their droll monikers: Struise Black Damnation, Dogfish Head Hoo Lawd, Triggerfish the Kraken, Flying Monkeys Alpha Fornication, and so on.4 ....

Meanwhile In China: Masks Are In Short Supply

Do masks work?
Dunno but here's the story from
People are making coronavirus masks out of fruit, bras, water cooler bottles and even sanitary pads
Resourceful Chinese citizens are fashioning coronavirus masks out of water bottles, fruit, sanitary pads and even bras as supplies dry up....

...Here are some of the best DIY efforts.
An elderly man sports and orange peel and string mask at Beijing airport. Picture: Weibo
An elderly man sports and orange peel and string mask at Beijing airport. 
Picture: WeiboSource:Supplied

This man has done an excellent job with a half a melon and a pair of shoelaces. Picture: Weibo
This man has done an excellent job with a half a melon and a pair of shoelaces. 
Picture: WeiboSource:Supplied

Children sport water cooler bottles over their heads at Beijing Picture: Getty Images
Children sport water cooler bottles over their heads at Beijing 
Picture: Getty ImagesSource:Supplied

A man shops at a Chinese supermarket. Picture: Weibo
A man shops at a Chinese supermarket. 
Picture: WeiboSource:Supplied
This family weren’t taking any chances, opting for the full body plastic bag coverings. Picture: Supplied
This family weren’t taking any chances, opting for the full body plastic bag coverings. 
Picture: SuppliedSource:Supplied


News Corp also has pics of people wearing bras but if we are going to go that route we might as well have Paul Krugman modeling a winner at the Ig Nobel Prizes:

Well, Another Year's Ig Nobel Prize Awards Are In The Can and the Winners Are...
"The Ig Nobel awards are arguably the highlight of the scientific calendar.
.... And speaking of Econ, here's Nobel Laureate Paul Krugman at 2009's ceremony wearing a bra as an emergency facemask:
Ig Nobel Prize Winner Dr. Elena Bodnar demonstrates her invention 
assisted by Nobel laureates Wolfgang Ketterle (left), Orhan Pamuk, and
 Paul Krugman (right). Photo credit: Alexey Eliseev, 2009 Ig Nobel Ceremony

And here he is as part of the largest group of Laureates to remove a sword from someone's throat:....

The Return of the Night Train to Europe

My luck, I'd try the Deutsche Bahn service and trip over Greta® in the corridor on the way to breakfast, causing an international incident when all I wanted was an omelette.
From Wired, November 11, 2019:

Five years ago, sleeper trains were on the way out. Now they're seen as the future of short-haul travel between cities
Silent countryside and sleeping towns slip by in the dark outside the window, as the train thump-thumps its way over the tracks. Tucked into their bunk beds, tourists sleep off the bottles of beer from the dining car as business travellers run through their presentations one last time before drifting off into dreams of PowerPoint slides. As dawn light leaks through along the edge of the window blinds, the train rumbles into Stockholm, Amsterdam or Vienna, where passengers disembark in the centre of the city, perfectly refreshed and with a full day ahead of them.

Such is the promise and romance of sleeper trains, but five years ago that image was set to fade into the past, with night journeys a relic of a bygone era. In 2014, Deutsche Bahn ended its City Night Line routes that connected Paris to Berlin and the rest of Germany; in 2016, France dismantled its network of night trains inside and outside its borders; and in 2013, and Spain halted its Elipsos route between Paris and Barcelona and Madrid. And in Italy, sleeper train services were being reduced. At the time, much of the blame for bringing night services to the brink was pinned on competition from budget airlines offering faster connections at much lower prices, leaving struggling rail operators unable to make the economics work on seemingly niche services.

But such closures weren’t the end of sleeper trains. The past few years have seen a renaissance in overnight rail travel. Austria’s train operator ÖBB bought up Deutsche Bahn’s stock and took over the routes, making it the largest night-train operator in Europe — a smart move that’s seen ÖBB’s night train services more than double from 700,000 passengers annually to 1.5 million. Swiss operator SBB says night train traffic is up 25 per cent from the beginning of this year alone. And in the UK, GWR last year revealed renovations to the sleeper trains it runs to Cornwall, adding cocktail bars and surfboards, while the Caledonian Sleeper between London, Edinburgh, Glasgow and Aberdeen has been revamped with £150 million investment in new trains, that while not perfect – to say the least, initial journeys were hit by severe delays caused by engine troubles, with staff threatening to strike over “appalling conditions” including faulty toilets – have at least sparked a renewed interest in overnight rail travel.
Why the turnaround? One answer could be that guilt over the environmental impact of air travel is piling up – we now have the concept of “flight shame”, or as the Swedes put it, flygskam. Mark Smith, the train expert behind rail journey website The Man in Seat 61, says that back when he started in 2001, site visitors said they wanted to travel via train because they were afraid to fly or medically restricted from doing so, or just really liked trains. “Now what they say is two things, in one breath: they’re fed up with the experience of airports and flying, and they want to cut their carbon footprint,” he says. That shift has been happening for several years, he adds, but Greta Thunberg has really brought it to a head.
In response, German politicians are discussing ways to discourage short-haul flights via fuel taxes, while this summer French MPs proposed an idea to cut flights where trains could be used instead, and added a tax to all international air travel – despite cutting the very means, night trains, that would help them achieve those goals. While Swiss operator SBB says it’s unclear as yet how much of its growing business comes from sustainability considerations, customer surveys reveal such concerns are becoming increasingly important. “The train is the most climate-friendly and energy-efficient means of transport — besides your bicycle,” says company spokesman Oli Dischoe. “A train trip in Switzerland causes 27 times less CO2 emissions than a car trip on a comparable route.”
In terms of emissions, trains are more efficient than flying, but exactly how much more beneficial depends on the network infrastructure and fuel used. Countries that still use diesel — and that includes the UK’s sleeper trains — aren’t as good as electric trains, which are in wider use across Europe; that said, a diesel train journey still produces 84 per cent less carbon than an equivalent flight. But electric trains are only as good as the local energy mix. France has plenty of nuclear energy, while Dutch trains are entirely powered by wind energy. There are other factors to consider, such as how full a train is or the carbon emitted to build infrastructure, though of course that infrastructure is already in place, so making good use of it makes sense. 

“In a country like Sweden, where almost all electricity is green and nearly all rail tracks are electrified, resulting in its trains being virtually zero-carbon, making the switch towards train travel is a far more climate-friendly option,” says Tomer Shalit, CEO and co-founder of ClimateView, a carbon data analysis startup who has given up air travel for trains when getting around his homeland. His journey from Umeå, in Sweden’s north east, to the southern capital Stockholm takes nine hours. “The train departs at 21:00 and arrives at 06:00 in both directions,” he says. “I have an annual season ticket for the train and, based on the number of journeys that I’ve made during the year, I have already saved around 30 per cent in cost."
And that's the other reason behind the resurgence of night trains: they never should have been shut down in the first place. Back in 2015, Deutsche Bahn said it was shuttering the City Night Line routes because passenger numbers had fallen by a quarter, causing losses of millions of euros.
But only a few years on, ÖBB has helped shift to profit off the back of those same routes, says Smith. “They’ve made it work,” he says. “A shortage of passengers wasn’t the problem. Germany’s City Night Line trains were running full and passenger numbers were increasing. It was the economics, and the will to make those economics work.”....

Shipping: Baltic Dry Index In Freefall As Cost To Move Bulk Cargo Plummets

ZeroHedge headlines the coronavirus with the BDI decline (as did Bloomberg*) although it's not really true, the index has been heading south for months.
That said, the coronavirus is causing some interesting logistics pricing. CBS is reporting there's a Hong Kong to New York flight for $186.00, if you don't mind the 6 hour layover in Wuhan.

Back to bulk cargo. From ZeroHedge: 

Virus Shock Crashes Baltic Dry, Sparks China Hard-Landing Fears
The Baltic Exchange's main sea freight index plunged on Friday, with rates for capsize vessels hitting a record low as an economic shock could be developing in China as two-thirds of its economy has been shut down because of the coronavirus outbreak.

The Baltic Dry Index, which tracks rates for capesize, panamax and supramax vessels, ferry dry bulk commodities across the world slipped 11 points, or about 2.2%, to 487, the lowest level since April 2016, reported Reuters.

The Baltic index has plunged 10.5% this week as coronavirus cases in China soared, and factories and cities in some of the largest industrial hubs in the world ground to a halt. This in itself is producing an economic shock, first seen in industrial metals and energy prices plummeting in the last several weeks.

The capesize index has fallen by more than 99% this week, the sharpest drop on record as demand for large-sized bulk carriers and tankers typically above 150,000 deadweight tonnage, comes to an abrupt stop.

The panamax index declined 3.5% on Friday, down 14% on the week.
The supramax index lost 4 points to 524 on Friday.

We've noted that the "frontloading" effect ahead of tariff deadlines ended in late 3Q19 when the first signs of a trade resolution emerged between the U.S. and China.

In the last four months, the Baltic index has crashed the most since 2008 and has confirmed our slowbalisation thoughts.....MORE
gCaptain had the Reuters piece yesterday:
Baltic Dry Index Falls to Over 3-Year Low
but we thought it more important to share the story of the farmers in India trying to scare off the monkeys stealing their crops.

Back to gCaptain,
*Here's the Bloomberg story, January 31:
Coronavirus Hammers Bulk Shipping

And another Reuters story, January 30:
Capesize Rates Slump to All-Time Low

The Diminishing Marginal Productivity of Debt in the U.S.

Also known as "Bang-for-the-buck".
Last year it took $1.41 of stimulus to generate $1.00 of GDP growth.
Although that is better than the $2.33:1.00 ratio back in Q2 2012 when we posted this bit:
The Real Problem With Stimulus
I've mentioned a few times that Keynes was all about the countercyclical thing.
In the U.S. we have devolved to perma-stimulus, every dollar of deficit spending being stimulus, and have no plans to ever stop. Anyone who argues that stimulus isn't stimulus unless it is labeled stimulus is being sillier than I felt when I typed this sentence.
Deficit spending is stimulus whether you call it ARRA, sweet, sweet Biden love or Democracy's flaw.
but the ratio is awful considering the U.S. has not seen a recession in over 10 years.

The Biden reference is to the fact the former Vice-President was overseer of the ARRA stimulus in 2009 - 10 and the Recovery Summer in 2010.

From Wolf Street:
US GDP Rose by $850 Billion in 2019 as US National Debt Surged by $1.2 Trillion. Debt-to-GDP Ratio Hit 108%  
Dream of 3% economic growth remained a dream despite surge in government borrowing and spending.
The dreams of 3%-plus economic growth in the US remained dreams in 2019, despite tax cuts and ballooning federal government spending, which are a stimulus. But the resulting budget deficit caused the gross national debt to balloon far faster than GDP grew.

In the fourth quarter, the economy as measured by inflation-adjusted “real” GDP grew at an annual rate of 2.1% from the third quarter. This brought the total growth of real GDP for all of 2019 to 2.3%, which is the average annual GDP growth since 2012:
This is according to the first estimate by the Bureau of Economic Analysis, released today, based on incomplete data. As more data accumulates, the BEA revises the estimates. The next revision will be released on February 27. These revisions are often minor, but sometimes they’re whoppers, completely changing the economic picture, as they did for Q4 2018, when the initial estimate of GDP growth was a hot 3.1%, which was subsequently crushed down to a frigid 1.1%.

In Q4 2019, the “real” GDP growth rate of 2.1% was essentially the same as over the prior two quarters, and below the average growth rate since 2012 of 2.3%:
On the positive side in Q4, imports of goods and services fell 8.7%, with goods imports alone dropping 11.6% (a decline in imports adds to GDP). But exports ticked up only 1.4% (an increase in exports adds to GDP).

Also pushing up GDP in a big way: federal government expenditures in Q4 rose at an annual rate of 3.6%. This brought the increase in federal government spending for the entire year 2019 to 3.5%. Defense spending surged 4.9% in 2019. Nondefense spending inched up only 1.6%. We’ll get to the debt that this federal government spending produced in a moment.

Growth was dragged down in Q4 by the sharp decline in gross private domestic investment of 6.1%, including a 10.1% drop in investment in structures and a 2.9% drop in investments in equipment.
Consumer spending (“personal consumption expenditures” adjusted for inflation), which accounts for 68% of GDP, grew at an annual rate of 1.8% in Q4. While this growth rate was down from Q3 (3.1%) and Q2 (4.6%), it was higher than in Q1 (1.1%) and in Q4 2018 (1.4%). For the year 2019, consumer spending, on this inflation-adjusted basis grew 2.6%, at the low end of the range of the past six years:....

If interested see also July 2016's "Izabella Kaminska and the Declining Efficiency of Debt: This is Getting Serious"

Trading: Deeply Disturbing Behavior From The Fly

There is a phenomena known as 'Terminal Lucidity' that can signal imminent death in the person exhibiting the T.L.
But first, three posts by The Fly this morning.
From iBank Coin: 

Fri Jan 31, 2020 8:36am EST
HAPPY FRIDAY: Coronavirus Is Getting Worse
I’ve been obsessing over bananas recently, in spite of the fact that I do not eat them. Low carbs and all, I don’t eat them. But did you know the varietal we eat today in America, the Cavendish, was considered to be a “junk banana” back in the day — mainly because it sucked?
The way I are across this fact is curious, after reading this passage from F. Scott Fitzgerald about the market crash....
Fri Jan 31, 2020 9:57am EST  
Markets Sink on Dreadful PMI Data
Do not take this lightly. The world is in lockdown mode due to the virus scare — which is definitely going to reduce growth. The Chicago PMI just posted the worst numbers since 2015.... 
Fri Jan 31, 2020 12:15pm EST
I had purchased TVIX earlier today and just sold it for +7.7%. I sold it because it’s a fucking bastard ETF and it always ruins me. It felt good to finally win one in that.
Things I am avoiding......
Rational, logical, well expressed.

From the Journal of Near-Death Experiences:

Terminal Lucidity in People with Mental Illness and Other Mental Disability: An Overview and Implications for Possible Explanatory Models 
Michael Nahm, Ph.D. Freiburg, Germany  
The (re-)emergence of normal or unusually enhanced mental abilities in dull, unconscious, or mentally ill patients shortly before death, including considerable elevation of mood and spiritual affectation, or the ability to speak in a previously unusual spiritualized and elated manner....
The Fly may be dying.

The Bitcoin Halvening: As Ms Kaminska Prepares to Send the Troops Into the Comments Section...

Meanwhile, at FT Alphaville:
Bitcoin’s “halvening” won’t boost its price 

I'm still waiting for Jemima Kelly to team up with Jamie Powell on "Mining Bitcoin With Your Tesla"
Hoo boy.

BlackRock: "The U.S. dollar and emerging market assets"

We aren't there yet.
Over the last three years there have been so many calls that "Now is the time for emerging markets" and "Now is the time for value stocks" and "Now is the time for small caps".
But it wasn't the time for any of that.
And it may take a sustained downturn in U.S. large-cap growth before it really is the time.

That said, here BlackRock's Mike Pyle, Global Chief Investment Strategist for BlackRock, January 30:
Mike shares our view on the U.S. dollar, and how it supports our preference for emerging market assets. 

Two broad forces drive the U.S. dollar’s moves: monetary policy differentials and risk appetite. We see the U.S. dollar stabilizing or somewhat weakening over the next six to 12 months due to shifting dynamics within each of the two forces. Most developed market (DM) central banks have gone on a pause from monetary policy actions and we still see some room for additional easing in EMs; easing trade tensions should underpin risk appetite, reducing “safe haven” demand for the dollar. Our currency view underpins our preference for local-currency EM debt and equities.
Global trade tensions weighed on global growth and kept investors on edge in 2019. This coincided with a rally in the dollar to near post-crisis highs, as the chart above shows. The dollar, a perceived safe-haven asset, typically attracts interest when geopolitical risks flare up. With the U.S. and China signing a limited “Phase 1” trade deal and a revised North America trade pact passing the U.S. Congress, we see global trade tensions going sideways in 2020. This should support overall risk sentiment – and reduce flight-to-safety demand for the dollar. As a sign of reduced bullish bets on the dollar, speculators had cut their net long position on the currency to the smallest in 19 months as of Jan. 14, according to Reuters calculations and data from the U.S. Commodity Futures Trading Commission....

Also at the BlackRock blog:

Jeff Shen Co-CIO of Active Equity and Co-Head of Systematic Active Equity (SAE) at BlackRock
What now for value stocks?

EIA Natural Gas Weekly Update

Following up on yesterday's "EIA Natural Gas Storage Report, January 30, 2019"
Have I mentioned....
Enough with that schtick, there's a lot of gas around.
New multi-year low print on the continuous contract.....
Front (March) futures  1.839  +0.010.

From the Energy Information Administration, Thursday afternoons:
for week ending January 29, 2020   |  Release date:  January 30, 2020
(For the week ending Wednesday, January 29, 2019)
  • Natural gas spot prices fell at most locations this report week (Wednesday, January 22 to Wednesday, January 29). The Henry Hub spot price rose from $1.89 per million British thermal units (MMBtu) last Wednesday to $1.92/MMBtu yesterday.
  • At the New York Mercantile Exchange (Nymex), the February 2020 contract expired yesterday at $1.877/MMBtu, down 3¢/MMBtu from last Wednesday. The March 2020 contract price decreased to $1.865/MMBtu, down 3¢/MMBtu from last Wednesday to yesterday. The price of the 12-month strip averaging March 2020 through February 2021 futures contracts declined 4¢/MMBtu to $2.177/MMBtu.
  • The net withdrawal from working gas totaled 201 billion cubic feet (Bcf) for the week ending January 24. Working natural gas stocks total 2,746 Bcf, which is 24% more than the year-ago level and 8% more than the five-year (2015–19) average for this week.
  • The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 14¢/MMBtu, averaging $4.76/MMBtu for the week ending January 29. The prices of natural gasoline, ethane, and propane fell by 5%, 5%, and 11%, respectively. The prices of isobutane and butane rose by 9% and 11%, respectively.
  • According to Baker Hughes, for the week ending Tuesday, January 21, the natural gas rig count decreased by 5 to 115. The number of oil-directed rigs rose by 3 to 676. The total rig count decreased by 2, and it now stands at 794.

Prices remain low at most locations amid unseasonably warm temperatures. This report week (Wednesday, January 22 to Wednesday, January 29), the Henry Hub spot price traded within a narrow range, rising 3¢ from a low of $1.89/MMBtu last Wednesday to $1.92/MMBtu yesterday. Temperatures were warmer-than-normal across the Lower 48 states, especially across the Northeast and Great Plains. At the Chicago Citygate, the price was unchanged from last Wednesday at $1.80/MMBtu.....
U.S. LNG exports increase week over week. Twenty-one liquefied natural gas (LNG) vessels (eight from Sabine Pass; four from Freeport; three from Corpus Christi; and two each from Cove Point, Elba Island, and Cameron) with a combined LNG-carrying capacity of 75 Bcf departed the United States between January 23 and January 30, according to shipping data compiled by Bloomberg.

The net withdrawal from storage totaled 201 Bcf for the week ending January 24, compared with the five-year (2015–19) average net withdrawal of 143 Bcf and last year's net withdrawal of 171 Bcf during the same week. Working natural gas stocks totaled 2,746 Bcf, which is 193 Bcf more than the five-year average and 524 Bcf more than last year at this time.

According to The Desk survey of natural gas analysts, estimates of the weekly net change to working natural gas stocks ranged from a net withdrawal of 180 Bcf to 225 Bcf, with a median estimate of 202 Bcf.....

Mean Temperature Anomaly (F) 7-Day Mean ending Jan 23, 2020 

Capital Markets: "Stocks Finishing on Poor Note, while the Dollar and Bonds Firm"

From Marc to Market:
Overview: It was as if the World Health Organization's recognition of that the new coronavirus is an international health emergency was the catalyst that the markets needed. US equities recovered smartly and managed to close higher on the session. However, the coattails were short, and follow-through buying of US shares fizzled. In the Asia Pacific, Japan, Taiwan, and Australian equities firmed, while disappointing data weighed on European equities. The Dow Jones Stoxx 600 is off about 2.5% this week, its largest decline in October. The S&P 500 is trading about 0.5% lower. Benchmark 10-year yields are edging lower. The US 10-year is holding below 1.60% for the second consecutive session, and the 30-year is just above 2.0%. The dollar is mostly higher, with sterling resisting the tug as the UK is prepared to leave the EU tonight. Emerging market currencies are also heavy, as risk is mostly shunned. The JP Morgan Emerging Market Currency Index is off 1.25% this week, the most since last August. Gold is firm, and near $1580 is up a little more than 0.5% on the week. Oil is steady to firmer today, but March WTI is down 3.25% this week, its fourth consecutive weekly loss, and is holding just above key support near $52

Asia Pacific
The World Health Organization declared a global health emergency, which is a cue for more national and international action and resources.
At the same time, it opined that restrictions on travel and trade were unnecessary now, though it does not clear than any actual curbs have been rescinded. WHO officials also praised China national leaders for their aggressive response, which included building a new hospital in 10 days. However, it appears local officials may have been slow to respond initially.

China's official PMI did not show the stress of the coronavirus but did indicate the manufacturing sector was vulnerable before the health crisis. The January manufacturing PMI slipped to 50.0 from 50.2. The non-manufacturing sector performed better, rising to 54.1 from 53.5. The composite eased to 53.0 from 53.4. The officially extended Lunar New Year holiday ends February 2, but provinces and cities that account for around 2/3 of the country's GDP will remain shut for about another week.

Japan's retail sales disappointed, but the industrial output jumped 1.3%, its first increase in three months. December retail sales rose by 0.2% compared with expectations for nearer a 1% gain. Recall that retail sales plummeted in October (sales tax increase and typhoon) and surged 4.5% in November. The rise in industrial production featured a strong rise in equipment that produces flat panel displays. Nevertheless, industrial output fell about 4% in Q4 and will drag GDP lower. Japanese unemployment was steady ay 2.2%, a 27-year low. Separately, South Korea also reported better than expected industrial output figures for December. The 3.5% jump was the most in three years. Expectations for less than a 1% increase. The data is consistent with an uptick in the region before the coronavirus struck....

Thursday, January 30, 2020

"India’s economy: how the world’s fastest growing nation went off the rails"

Well for one thing you have the damn monkeys trying to steal all the food.
From The Conversation, January 13:
India celebrates the traditional harvest festivals of Bihu, Pongal, Makara Sankranti and Lohri across different states in the second week of January. The festivities have become lavish in recent years as the economy has enjoyed high growth rates. But change is in the air.

India’s GDP was growing at between 7% and 8% for the past few years, the fastest rate in the world. But in the last year it has been decelerating markedly: the growth rate slumped to 4.5% in the third quarter of 2019, the slowest in six years.

The IMF, World Bank and OECD all sounded the alarm in October after the Reserve Bank of India trimmed the country’s projected growth rate to 6.1% for 2019-20. This was on the back of a sharp decline in private consumption and weakening growth in industry and services. Despite numerous cuts to interest rates in 2019, the central bank again cut its forecast in December, this time to 5%. So what is going wrong, and where does India go from here?

Economic woes
A host of factors have contributed to India’s economic malaise. When Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) party was originally elected to run the country in 2014, it inherited a weak banking and finance sector saddled with too much bad debt and serious problems with fraud. This had made lending more difficult and triggered declines in consumer spending, business investment and exports.

The government has made reforms such as providing the banks with extra capital, introducing new bankruptcy rules to give extra protection to lenders, and consolidating the state-owned institutions that dominate the sector. Nonetheless, the banks remain fragile, amid a perception that the reforms have not been aggressive enough.

India’s economy
In the face of this problem, much of the demand for credit has been picked up by the so-called non-banking financial corporations. They are now responsible for about a fifth of all lending in the country, but they have been through turbulent times themselves lately, having become over-extended and due to problems with their funding model. This has made it harder for people to get loans for vehicles and mortgages. One knock-on effect has been a slump in the residential property market. Once again, the government has stepped in to recapitalise these institutions....

Meanwhile in India Villagers Dress up as Bears to Scare Off More Than 2,000 Monkeys

As noted in a November 2019 post on farmer travails:
The simians in particular are a problem because they eat pretty much everything their human cousins do....

And from Gulf News, January 29:
India: Village residents dress up as bears to chase away monkeys
The villagers pooled in money and bought three bear costumes 
Shahjahanpur, Uttar Pradesh: Using bears to shoo away monkeys may seem to be an odd idea but residents of Sikandarpur village in the district, apparently, had no choice.
With over 2,000 monkeys creating a ruckus and disturbing life in the village and forest officials turning a blind eye to the issue, the villagers decided to solve the problem on their own.
Two of the residents, dressed up as bears, began moving around the village to scare away the monkeys.

Village head Ram Lalit Verma, told local reporters, "We have now started taking turns in wearing the bear costume and roaming around the village. It was a relative who had told me about the idea and it is actually working."...MORE
Meanwhile In India: Painting The Dog With Tiger Stripes to Scare the Monkeys

That November post also had some other links

Farmers Around The World Complain, It's What They Do: However, In India...
.... "Vineyard-Raiding Baboons Favor Pinot Noir"
What a bunch of wine snob poseurs.
Merlot is just fine, especially if it's dolled up as Chateau Petrus.
Berry Bros. & Rudd is running a special case price, "Buy 6 and save £2667.37".
A Romanée Conti (pinot noir) will cost you double or triple. BB&R is price on request.
Either way, possibly more than the average baboon has in petty cash.

In other monkey news:
"How scientists taught monkeys the concept of money. Not long after, the first prostitute monkey appeared"

Singapore Startup Hopes to Hook Diners With Lab-Grown Shrimp

Still a bit pricey though.
From Reuters:
Shiok Meats, a Singapore-based start-up whose name means very good in local slang, aims to become the first company in the world to bring shrimp grown in a laboratory to diners’ plates.

Demand for meat substitutes is booming, as consumer concerns about health, animal welfare and the environment grow. Plant-based meat alternatives, popularized by Beyond Meat Inc and Impossible Foods, increasingly feature on supermarket shelves and restaurant menus.

But so-called clean meat, which is genuine meat grown from cells outside the animal, is still at a nascent stage.

More than two dozen firms are testing lab-grown fish, beef and chicken, hoping to break into an unproven segment of the alternative meat market, which Barclays estimates could be worth $140 billion by 2029....

The Great Svalbard Bank Robbery of 2018

If Norway's Slow TV special on Svalbard, 24 hours per day for nine days starting tomorrow at 18:00 should prove too soporific we do have something a bit crazier.
In a February 2019 post on Svalbard snow crabs I mentioned in passing:
Finally, one of the better stories to come out of Svalbard last year—not counting the sweepstakes prize of a weekend with Martha Stewart at the seed vault—was the guy who robbed the bank for some Christmas money.

From, December 21:
BREAKING: Man arrested after armed robbery at bank; believed to be first bank robbery in Longyearbyen’s history
One of the reasons people don't rob the bank is that Svalbard is an archipelago. ~600 miles to the Norwegian mainland at Tromsø, ~800 miles to the North Pole.
But in December 2018 a guy did rob the bank and here's the story.

From Outside Online, January 13, 2020:

The Bizarre Bank Robbery That Shook an Arctic Town
As one of the northernmost settlements on earth, the Norwegian hamlet of Longyearbyen has become a magnet for adventurous souls looking to start a new life. But when an unsettling crime happened, it brought home a harsh reality: in the modern world, trouble always finds you.
Maksim Popov needed a gun.

It was late fall 2018, and the single, unemployed 29-year-old was descending into darkness. He was living in Volgograd, the large industrial city in southwestern Russia where he’d grown up, and as he later explained, he’d become desperate, even hopeless. It’s not clear what caused his downturn or if he’d sought help, but at some point he decided he wanted to shoot himself. To get a firearm legally in Russia required a psychiatric evaluation, which is presumably why Popov found himself online, reading about a remote outpost in the Arctic that’s popular with Russian tourists and is also one of the easiest places on the planet to rent a gun: Longyearbyen.

The tiny town of some 2,200 residents is among the northernmost settlements in the world, situated about 800 miles from the North Pole on the island of Spitsbergen, in the isolated Norwegian archipelago of Svalbard. Nestled at the end of a mountainous valley where it meets the shore of a small fjord, Longyearbyen was for centuries an icy base for whalers and trappers. Beginning in the early 1900s, it became a lonely coal-mining community populated by Norwegians and Russians, closed to visitors because of the limited infrastructure.

But after the Svalbard airport opened just outside town in 1975, Longyearbyen emerged as a tourist destination, and today some 150,000 travelers come each year by plane and cruise ship. Russians have been especially interested in seeing the archipelago, with their numbers jumping 500 percent since 2016. Many venture into the frozen wilderness on snowmobiles or dogsled tours. Others visit the most famous structure in the Arctic: the Global Seed Vault. Built inside a mountain, the so-called Doomsday Vault opened in 2008 and stores nearly a million samples of plant seeds, so that crops might be restored following a global catastrophe.

Then there are the polar bears: at least 2,000 of them live in the region, and the local tourism board likes to claim that they outnumber the residents. A number of outfitters run expedition cruises to observe the animals safely from the water. On the edges of Longyearbyen, warning signs dot the snowy plains: “Gjelder hele Svalbard” (“All Over Svalbard”), they proclaim below an illustration of a polar bear silhouette. People are required to carry a rifle for protection when leaving town, and tourists frequently walk the streets with guns slung over their shoulders, though they are supposed to be unloaded in town. The grocery store, city hall, bank, and other establishments post no-rifles signs outside and provide lockers in their foyers for storing weapons. If a visitor is at least 18 years old, renting a rifle for protection from bears requires only the completion of a simple permit application and the ability to remain sober long enough to visit either of the sporting-goods stores in town that supply firearms.

For Popov, it seemed like the perfect place to end his life....

Back to Slow TV, here's one of the project managers, Thomas Hellum:
«We believe everyone in one or another way has a dream-relationship to Svalbard».
Well there you go.

Germany: Food Prices May Be Too Low

I am not sure I am reading this correctly.
I know there was a British politician who suggested raising food prices, both to combat obesity and to reduce the expected post-Brexit food trade deficit. I just assumed he was nuts but raising prices seems to be what is being discussed here as well.
From PoAndPo Agrifish:

Germany: Chancellery invites Aldi and Lidl to meetings about cheap prices
The Chancellery has invited to a top meeting on cheap food prices.
According to the CDU politicians, the meeting will take place on February 3.

According to a report, the retail groups Edeka, Aldi Nord, and Lidl are also invited.

They confirm to the Süddeutsche Zeitung that they have received an invitation.

"It's like David against Goliath when farmers negotiate with the trade," said Klöckner.

Retailers complain that consumers no longer want to pay, but are themselves setting ever lower prices.

In the end, the producer, who is left with less and less, bathed it....MORE

S&P Global Platts: "Commodity Tracker: 6 charts to watch this week"

Here are two of the six areas covered this week:

....4. US corn exports to pick up pace as S American supplies dwindle

US corn export trend
What’s happening? US corn exports to Japan and South Korea in 2019 fell significantly year on year on the back of increased competition from Brazil and Argentina. Japan and South Korea are the two largest buyers of US corn after Mexico. In 2019, US corn exports to Japan and South Korea were seen down 27% and 72%, respectively. Overall exports from the US also declined 40% in 2019 from 2018 levels. Both Brazil and Argentina exported corn at a record pace in 2019 following a bumper harvest and competitive prices. US corn exports particularly declined after June 2019 when Brazilian supplies started arriving in the market. A delay in the US harvest further slowed down its exports.

What’s next? Corn exports from the US are likely to pick up pace in 2020, as supplies from Brazil and Argentina are nearly tapped out. So far in January, the daily pace of Brazilian corn exports has slowed down sharply to 96,000 mt from 208,000 mt in December 2019. Corn prices in the South American countries have also firmed up recently, allowing US corn supplies to compete in the market.

5. Bearish outlook for EU gas as pipeline, LNG flows set to stay high

TTF summer 20 price

What’s happening? European gas prices for delivery this summer have tanked since the end of 2018, and are currently trading at Eur10.50/MWh at the Dutch TTF hub. Demand for storage injections this summer is likely to be weak given the expectation of a significant storage overhang at the end of this winter. S&P Global Platts Analytics is forecasting the TTF Q3 price could fall to close to Eur7/MWh.

What’s next? Last summer, Equinor deferred significant Norwegian gas production from its swing Troll and Oseberg fields due to low prices, but it may not be possible to defer additional volumes this summer even with the low prices. With Russia pumping high levels of gas to Europe under its “volume over value” strategy, the continuing glut of LNG, high stocks and Norway not curtailing as much as last year, the bearish outlook for the summer is set to continue....


EIA Natural Gas Storage Report, January 30, 2019

Have I mentioned....
Enough with that schtick, there's a lot of gas around.
New multi-year low print on the continuous contract.

First up, the expectations via FX Empire:
...Today’s EIA Weekly Storage report, due to be released at 15:30 GMT, is expected to show a draw of about 197 Bcf.
Last year the EIA recorded a 171 Bcf withdrawal for the similar week, while the five-year average is a pull of 143 Bcf.

Last week, the EIA reported a net 92 Bcf withdrawal for the week-ended January 17, which left stocks at 2,947 Bcf, 23.2% above year-ago levels and 9.3% higher than the five-year average.

Bloomberg analysts are predicting a 197 Bcf withdrawal. A Wall Street Journal surveyed forecasts a 195 Bcf withdrawal. Reuters analysts are looking for a 195 Bcf pull. Finally, Natural Gas Intelligence experts are calling for a withdrawal of 210 Bcf....
From the EIA:
Weekly Natural Gas Storage Report
for week ending January 24, 2020 | Released: January 30, 2020 at 10:30 a.m. 
Working gas in storage was 2,746 Bcf as of Friday, January 24, 2020, according to EIA estimates. This represents a net decrease of 201 Bcf from the previous week. Stocks were 524 Bcf higher than last year at this time and 193 Bcf above the five-year average of 2,553 Bcf. At 2,746 Bcf, total working gas is within the five-year historical range....MUCH MORE 
As mentioned, gas in storage is now above the 5-year average and is in fact approaching the 5-year maximum for this time of year.
Finally, from the CME:

1.82 down 0.045 after hitting 1.815

Chartology: Oil

Following up on January 26's ""Why The Coronavirus Is A Real Threat To Oil Markets"":
Both Brent and WTI have gotten rocked since General  Soleimani was killed and World War III did not erupt:

And our usual knee-jerk reaction would be to wait for a counter-trend rally somewhere in this vicinity.
The problem with trading the chart is the lack of transparency on exactly what is going on in China.
I mean there is more than there was during the SARS and Bird Flu outbreaks, simply because of cell phones (but also because satellite coverage has gotten much cheaper) but we still don't have answers.
Charles Hugh Smith at his Of Two Minds blog has thought through some of the queries:....

Well, oil did indeed put on a little rally, for all of two days, from that exact spot:

And is now making another up move as I type, with the front March contract having double-bottomed at the day's low of $51.92 and jumping over 1% in the last hour.

So what does it all mean?
"Nobody knows anything"
—William Goldman 

You don't have to be a market playa every minute of the day.
Sometimes it's best to just take your marbles and retire to the sidelines for a bit.

Shipping: How to Park the Boat

Following up on yesterday's "Shipping: How To Drive a Boat" I should offer a word of explanation on the terminology.
One of my mentors, probably the best equity trader I've ever met, joined the U.S. Navy at age 17 and rose through the ranks to Commander and captain of his own destroyer, a very rare accomplishment.
But he wasn't good at the nomenclature. He would talk about "driving the boat" and when he put a couple dents in the destroyer while trying to "park the boat" the Admirals thought it might be better for everyone if he left the service.

He should have used this boat driver's technique: drop the anchor while upwind of the target and slide right in, easy-peasy.

From gCaptain:

Watch: Wild Docking in Norway
Check out this wild video out of northern Norway showing an expedition cruise ship docking during strong winds.....MUCH MORE

Shipping: Chile's CSAV Now Largest Shareholder In Germany's Hapag-Lloyd

From The LoadStar, January 29:
Chilean shipping company CSAV has become the largest single shareholder in Germany’s Hapag-Lloyd, overtaking Klaus Michael Kuehne’s investment fund.

This month, the Chilean company, which became a large, but minority, shareholder in Hapag-Lloyd following the 2015 takeover of CSAV’s container shipping assets, boosted its stake from 27.8% to 30% after acquiring shares from Qatar Holdings, reducing its stake from 14.5% to 12.3%, according to Alphaliner.

CSAV general manager Oscar Hasbun described the purchase as “a new example of our long-term commitment to Hapag-Lloyd and our confidence in stability that the company has given the shareholders’ pact that we have with Kuehne Maritime and the city of Hamburg.”

The shares cost CSAV around US$330m and was accompanied by the company’s decision to exit the car-carrying ro-ro business, which it said had “historically represented less than 1% of the total assets of CSAV....MORE

Wednesday, January 29, 2020

M/V Wilhelm Gustloff Sinks, 9300 Dead

The biggest maritime disaster in history.
January 30, 1945
As an introduction here's Deutsche-Welle five years ago
Over 9,000 people died in the Baltic Sea on January 30, 1945, in an attempt to evade the Red Army. The Wilhelm Gustloff was the largest shipwreck in history, but little is known about the catastrophe seven decades on.

At around 9 p.m. on January 30, 1945, Adolf Hitler was speaking to the German people. In the packed dining hall of the luxury liner "Wilhelm Gustloff," as in most of the rest of the country, a radio was broadcasting Hitler's address, but the thousands of refugees from Pomerania and East and West Prussia who had struggled onto the ship weren't listening to the Führer now.

They wanted one thing - to be rescued. Only very few, 1,252 to be precise, made it off the steamer alive, of the well over 10,000 - mostly women and children, but also navy sailors. The ship had been hit by three Soviet torpedoes within an hour; the temperature outside was minus 18 degrees Celsius.
The solace offered by the Wilhelm Gustloff was enormous for the passengers who boarded the ship at Gotenhafen. Hundreds of thousands of German civilians had wanted to embark on ship in the port near Gdansk, in what is today Poland. The Red Army was on their heels and their thoughts were of Nemmersdorf. It was the first village in German territory reached by the Soviets and there were already rumors circulating of the draconic revenge on the part of the Soviets for German war crimes. Only the navy could rescue them now.

Nazi cruise liner turned rescue ship
At 208 meters (680 feet), the Gustloff wasn't the largest ship used to transport wounded soldiers and civilians. But it was by far the most well known. It was the Nazis' luxury liner, christened by none other than Hitler in 1937. Its name came from a killed Nazi officer, and it was initially reserved for high-ranking National Socialists to take vacations in the Mediterranean or along the western Norwegian coastline. By the end of the war, however, the ship had taken on an entirely different role - for its last journey.

The civilian escape via the Baltic Sea belongs to one the most impressive chapters in German WWII military history. Historians have estimated that around 2.5 million people were rescued by ship out of the German eastern zones. A comprehensive study has been published about the operation titled "Rescue Mission Baltic Sea 1944/1945: One of Humanity's Great Deeds." One of the main German officers credited with the success of the operation is Admiral Karl Dönitz, who would succeed Hitler as chancellor following the Führer's suicide in a Berlin bunker at the close of the war.

The tragic end of the Gustloff, just one of dozens of ships used in the Baltic rescue operation, wasn't inevitable, experts have contended, singling out three fatal decisions as responsible for the disaster. Firstly, there was no convoy to offer protection, and since the ship carrying some 1,000 soldiers was intended to reach Kiel as quickly as possible, there was also no flank protection.

A small torpedo boat was all the protection the ship was given. Sea mines were feared along the Baltic coast, so the planned route was to traverse the open sea. Finally, since the Gustloff hadn't been used in over four years, Captain Wilhelm Peterson only dared a speed of 12 knots, instead of the possible 15.

These three factors contributed to what would become a death sentence for most of the ship's passengers. If the ship were escorted by a convoy, been provided flank protection, and traveled at a faster speed, experts have said the Soviet submarine S-13 would never have been able to hit the Wilhelm Gustloff with its torpedoes....MORE
Over half the victims were children.
The air temperature at the time was 0° F. (-17.7°C)

The Wilhelm Gustloff Museum has an amazing amount of information and ephemera on the ship and its last voyage

Argunners has a narrative that includes some detail on rescue attempts:

....The following is documentation of the rescue attempts by German ships, warships as well as civilian. Note: there are various different accounts however the list beneath is generally accepted as being most accurate.
  1. Escorting the Wilhelm Gustloff, was the Torpedo boat “Lowe”. She continued to send long range mayday messages since the Gustloff was on emergency power and her wireless range was just 2000 meters. The KMS Lowe was able to rescue 472 passengers.
  2. KMS Torpedo boat T-36 was able to save 564 souls.
  3. 3 German mine sweepers were able to pull 179 people to safety.  
  4. The KMS Heavy Cruiser Admiral Hipper arrived to lend assistance but had to sail due to the threat of submarines.
  5. KMS Patrol Boat VP-1703 arrived on the scene 7 hours after the sinking, locating a life boat with frozen bodies in it, miraculously heard the faint cries and rescued an infant.
  6. Freighters Gottingen and Gotenland arrived much too late and were only able to pluck frozen bodies out of the sea.
Some facts related to the sinking of MV Wilhelm Gustloff
  • Number of Refugees & crew at the time of her last voyage: 10,600
  • Date and time of sinking: January 30, 1945 at 2226 hours
  • Air temperature at time of loss: 0 F. (-17.7°C)
  • Loss of Life: 9,343 – 9,400 dead {of these 9,400, circa 5,000-6,000 were children}
  • Due to the current (January 30th, 1945) situation and condition of the country, there was no reporting of the sinking of the Wilhelm Gustloff to German citizens.
A bad bad night on the Baltic.

"Study: LNG as Marine Fuel not Such a Cool Choice?"

We disagree with the conclusions but are posting for future reference.

From World Maritime News:

Although liquefied natural gas (LNG) contains 25 pct less carbon per unit of energy than conventional marine fuels, its use might not reduce greenhouse gas (GHG) emissions on a life-cycle basis, according to a study published by the International Council on Clean Transportation (ICCT).
The study explained that LNG being mostly methane, is a potent greenhouse gas (GHG) that traps 86 times more heat in the atmosphere than the same amount of CO2 over a 20-year time period.
“If even a small amount of methane escapes anywhere along the process of extracting it from the earth and burning it in an engine, using LNG could emit more life-cycle GHGs than conventional fuels,” the paper said.
The study compares the life-cycle GHG emissions from LNG, including upstream emissions from leakage during extraction, processing, and transport and downstream emissions from combustion and unburned methane, to those of heavy fuel oil, very low sulfur fuel oil, and marine gas oil (MGO).
It evaluated the climate impacts using 100-year and 20-year global warming potentials (GWPs).
“Over a 100-year time frame, the maximum life-cycle GHG benefit of LNG is a 15% reduction compared with MGO, and this is only if ships use a high-pressure injection dual fuel (HPDF) engine and upstream methane emissions are well-controlled. However, the latter might prove difficult as more LNG production shifts to shale gas, and given recent evidence that upstream methane leakage could be higher than previously expected. Additionally, only 90 of the more than 750 LNG-fueled ships in service or on order use HPDF engines.

“Using a 20-year GWP, which better reflects the urgency of reducing GHGs to meet the climate goals of the International Maritime Organization (IMO), and factoring in higher upstream emissions for all systems and crankcase emissions for low-pressure systems, there is no climate benefit from using LNG, regardless of the engine technology. HPDF engines using LNG emitted 4% more life-cycle GHG emissions than if they used MGO.”
The authors of the study also claims that the most popular LNG marine engine—low-pressure dual fuel (LPDF), medium-speed, four-stroke—was also the leakiest....MUCH MORE, including critiques.

Dogbert the Doomsday Pundit

From Dilbert:

 - Dilbert by Scott Adams

Is this why the homeless are gathering in California?

We like Dogbert. This one was dated December 3, 2011, some things never change.
One more:
December 13, 2008

 - Dilbert by Scott Adams

Belt and Road: "Kazakhstan suspends all transport links with China over virus"

From Reuters:
Kazakhstan is suspending all passenger travel to and from neighbouring China, the Kazakh government said on Wednesday, as an outbreak of a new coronavirus spread.

The government has also suspended the issue of visas to Chinese citizens, it said in a statement.
Buses to and from China have already been halted, trains will stop on Feb. 1 and all flights will be suspended from Feb. 3, the government said.

Kazakhstan has registered no cases of the new virus, but it has isolated dozens of people with respiratory infection symptoms on their return from China and is carrying out additional tests....

"Why Vanguard's Chief Economist Is Long-Term Bullish" (hint: Productivity)

From ThinkAdvisor, January, 27:
Vanguard found a way to measure the pace of innovation, and the news is good, Joe Davis says.
The near-term outlook for the global economy and most developed markets is moderate at best, but both look stronger in the longer term, according to Joe Davis, global chief economist at Vanguard and head of its Investment Strategy Group. 
The reason: productivity growth. It will expand through the global sharing of ideas and collaboration, said Davis, who spoke at the Inside ETFs conference underway in Hollywood, Florida.

This is not just wishful thinking on Davis’ part. Economist Paul Romer was awarded a Nobel Prize for his theory of the Economics of Ideas, which focuses on the snowball effect of ideas, especially in technology, leading to stronger growth.
Davis, along with the rest of Vanguard’s global economics team, studied more than 2 billion records from over 33,000 research publications across 1,000 industries in search of a leading indicator for innovation, tracing every idea from its beginning, where and who they came from, and screening for the most influential ones. 
What they found was what he calls the “Leading Idea Multiplier” to measure how many additional ideas each good idea generates, leading to innovations five to seven years in the future. 

The multiplier was 40:1 in 1980, nearly doubled in the 1990s, reached about 200 in 2003 and stayed there for years, suggesting the slower growth or “new normal” that has prevailed for about a dozen years. But in the past 18 months it has soared to 400, suggesting that contrary to conventional wisdom “globalization is actually accelerating” and will eventually lead to increased innovation, like the innovation seen in telecom and technology in the 1990s, said Davis.....MORE
Readers who have been with us for a while know the areas that should prove most fertile.
Follow the jump if you don't recall.
(it was a whole series of posts in 2009 - 2011 so you'd be excused if other stuff, like living your life, took precedence) 

The Problem With Vaccine Development: "More effective vaccine for African swine fever developed"

It takes time.
Labs around the world have been working on this for a year and only now are they getting close to something that works
From PoAndPo Agrifish:
A vaccine against African swine fever, that appears to be far more effective than previously developed vaccines, has been developed by US Government and academic investigators.
The research appears in the Journal of Virology, a publication of the American Society for Microbiology....
Here's the story at Technology Networks: "Vaccine for African Swine Fever Virus Shows Promise"

And on Coronavirus, STAT January 24:
How fast can biotech come up with a vaccine for the latest outbreak?

Capital Markets: "Escaped from a Crocodile’s Mouth, Entered a Tiger’s Mouth"

From Marc to Market:
Overview: This colorful Malay saying captures the spirit of the animal spirits. Narrowly escaping an escalation of a trade war between the world's two largest economies, the outbreak of a deadly virus has spurred moves, especially the sell-off in stocks and rally in bonds, for which many investors seemed ill-prepared. Even though the virus contagion has not peaked, the recovery in US equities yesterday points to a break the fear and anxiety. Most Asia Pacific equity markets pared recent losses, though Hong Kong re-opening for the first time, played some catch-up, and the Hang Seng fell 2.8%. European bourses are also stabilizing, and the Dow Jones Stoxx 600 is up about 0.3% in late morning turnover, led by healthcare and materials. US stocks are firm in Europe after the S&P 500 held the support we identified near 3235, the (38.2%) retracement of the leg-up from the December 3 low. Bonds remain bid. The benchmark 10-year yields are mostly 2-4 bp lower today, which leaves the US yields hovering above 1.6%. Of note, Italy's generic 10-year yield reached over 1.25% a couple weeks ago amid political worries, is now near 86 bp, the lowest since before Christmas. Meanwhile, the dollar remains firm against most major and emerging market currencies. The yen continues to outperform, suggesting that the risk-off fears continue to linger despite the equity market stabilization. The price of oil snapped a five-day drop yesterday and is extending the recovery today, helped perhaps by the unexpectedly large drop API's estimate of US inventories (-4.27 mln barrels) and talk of OPEC+ extending curbs. Gold ended a four-day advance yesterday, shedding almost 1%, but has returned bid today.

Asia Pacific
The confirmed cases of the new coronavirus have surpassed China's official estimate of the SARS virus.
Travel restrictions and output cuts continue to broaden. At first, it seems services were more vulnerable than production, but now it seems clearer than manufacturing will also be depressed, and supply chains remain vulnerable. It appears the disruption will last through at least next week and possibly the first week in February and extends to international companies operating in China. Starbucks, for example, has announced extended closures of more than half of its branches on the mainland. Japan's Toyota also shuttered local production. China is to report the January PMI tomorrow before markets reopen.

Australia reported slightly firmer than expected Q4 19 CPI. The net impact was to reinforce that the Reserve Bank of Australia will not cut rates when it meets on February 3. The derivative markets showed a nearly 85% chance of no change in policy at the end of last week, and the odds have moved close to 90%. The year-over-year rate edged up to 1.8% from 1.7%. Economists expected no change.It is the highest since Q4 18 when it also stood at 1.8%. It rose 0.7% on the quarter, instead of the 0.5% expected. The underlying measures increased by 0.4% in Q4 19. The drought and fires pushed up food prices. Fruit prices, for example, for 6.8%. Tradeable goods prices rose by 0.2%, while non-tradable goods rose 1%....MUCH MORE

Tuesday, January 28, 2020

French Startup ManoMano Raises €125 in Series E Round

This one wasn't even on the 10 French startups to watch list from a couple weeks ago.
From EU-Startups, January 28:

Paris-based ManoMano snaps up €125 million to build up its DIY marketplace
French startup ManoMano, a leading European online Marketplace for DIY, home improvement and gardening products, has announced snapping up €125 million Series E fundraising.
The round was led by Temasek, a global investment company headquartered in Singapore, with participation from General Atlantic, Eurazeo, Piton Capital and Bpifrance (through their Large Venture fund), and Kismet Holdings.

ManoMano, founded in 2013, aims to make your DIY, home improvement and gardening projects easier. Its online marketplace includes the best brands and products at competitive and reasonable prices. In addition, it give you tips and ideas for you to do your work from start to finish.

This new fundraising round increases the total funds raised over the past six years to €310 million. 

This will allow ManoMano to further deliver on its growth strategy, with the aim of becoming the European market leader in the DIY, home improvement and gardening space. The startup will continue its international expansion, as well as its tradition of customer-centric innovation with services like Mano Fulfilment, its category-specific logistics service, and Manodvisors, its community of experts and enthusiasts that support the company’s customers with their project and purchase decisions....MORE
Temasek is always woth paying attention to.$230+ billion portfolio, not flashy/splashy, they just make money.

IMO 2020 Low-Sulfur Rules May Result In More Black Carbon Emissions in the Arctic

This could be very not good.
Spreading black carbon on the polar ice caps was one of the geoengineering proposals during the Global Cooling scare of the 1970's. It's also one of the concerns associated with China's coal-fired power plants. (mostly soot, larger diameter than what emerges from VLSFO combustion)
The stuff lands on the ice and reduces the albedo. It also directly absorbs infrared.
Very not good.

From Arctic Today, January 24:

A new study finds IMO’s low-sulphur fuel mandate actually boosts dangerous black carbon emissions in the Arctic
Heavy fuel oil commonly used in shipping is bad for the Arctic. But a switch to low-sulphur fuel appears to be making the problem of black carbon even worse.
The International Maritime Organization has mandated the use of very low sulphur fuel oil (VLSFO) in marine shipping starting January 1, 2020. This regulation is part of IMO’s 2020 program aimed at reducing sulphur emissions from marine transport by 80 percent. In contrast to heavy fuel oil (HFO), which contains up to 3.5 percent sulphur, VLSFO may only contain 0.5 percent.

Less than a month into these rules, a new study funded by Germany and Finland, in cooperation with DNV GL and marine engine manufacturer MAN, indicates that the switch from sulphur-rich HFO to VLSFO may have unintended negative consequences as it can increase black carbon emission by up to 85 percent.

“The results clearly indicate that new blends of marine fuels with 0.5 percent sulphur content can contain a large percentage of aromatic compounds which have a direct impact on black carbon emissions,” the study concludes.

“If immediate action isn’t taken by the International Maritime Organization, the shipping industry’s use of low sulphur shipping fuels (VLSFO) — introduced to comply with the 2020 sulphur cap — will lead to a massive increase in black carbon emissions,” states Sian Prior, Lead Advisor to the Clean Arctic Alliance. 

Black carbon and the Arctic
A number of environmental organizations, including the WWF and Pacific Environment, have submitted briefs to the IMO urging it to implement new rules addressing the black carbon issue as soon as possible.

“This is an extremely urgent matter, especially for the Arctic as black carbon emissions occurring there have a disproportionately larger impact on Arctic warming. At a time when ship traffic in the Arctic is increasing, it is vital that immediate actions be taken,” affirms Jim Gamble, Arctic Program Director at Pacific Environment, an environmental organization....MUCH MORE
A report from Bellona in January 2019 mentioned soot from heavy fuel oil: "Russian port data show huge increases in Arctic shipping":
...But one toxic byproduct of all this activity is the soot produced by huge freighters steaming through the Arctic sea passage, many of which are operating on heavy fuel oil, or HFO, a carbon intensive and polluting energy source. Exhaust from this fuel coats Arctic ice in a blackish film, making it more vulnerable to withering solar radiation and contributing to the overall polar melt....
And the concerns go back years:

October 2007
NASA Examines Arctic Sea Ice Changes Leading to Record Low in 2007
...The findings appear in the latest issue of the Proceedings of the National Academy of Sciences. It is authored by Makiko Sato, James Hansen and others from NASA's Goddard Institute for Space Studies (GISS) and Columbia University, New York; Oleg Dubovik, Brent Holben and Mian Chin of NASA's Goddard Space Flight Center, Greenbelt, Md.; and Tica Novakov, Lawrence Berkeley National Laboratory, Berkeley, Calif.
New research from NASA scientists suggests emissions of black soot alter the way sunlight reflects off snow. According to a computer simulation, black soot may be responsible for 25 percent of observed global warming over the past century.

Soot in the higher latitudes of the Earth, where ice is more common, absorbs more of the sun's energy and warmth than an icy, white background. Dark-colored black carbon, or soot, absorbs sunlight, while lighter colored ice reflects sunlight.

Soot in areas with snow and ice may play an important role in climate change. Also, if snow- and ice-covered areas begin melting, the warming effect increases, as the soot becomes more concentrated on the snow surface. "This provides a positive feedback (i.e. warming); as glaciers and ice sheets melt, they tend to get even dirtier," said Dr. James Hansen, a researcher at NASA's Goddard Institute for Space Studies, New York. Source
From the BBC:
Soot 'makes global warming worse'
The effects of soot in changing the climate are more than most scientists acknowledge, two US researchers say
Shh. Don't want to piss the Chinese off.

China Soot Heating Pacific Ocean
There may be an unexpected sooty surcharge on all those cheap Chinese imports, say atmospheric scientists. The carbon soot from China is warming and polluting the atmosphere over the Pacific Ocean and all the way to North America, according to a new study. 
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"Some days we can definitely tell that the air has come from China," said Kim Holmen, research director of the Norwegian Polar Institute, at the station which has spectacular views over fjords, mountains and glaciers of Spitsbergen island....Source
Just for grins and giggle I included an early report on global warming's impact on the Arctic:
"It will without doubt have come to your Lordship's knowledge that a considerable change of climate, inexplicable at present to us, must have taken place in the Circumpolar Regions, by which the severity of the cold that has for centuries past enclosed the seas in the high northern latitudes in an impenetrable barrier of ice has been during the last two years, greatly abated.

(This) affords ample proof that new sources of warmth have been opened and give us leave to hope that the Arctic Seas may at this time be more accessible than they have been for centuries past, and that discoveries may now be made in them not only interesting to the advancement of science but also to the future intercourse of mankind and the commerce of distant nations."

—President of the Royal Society, London, to the Admiralty, 20th November, 1817
President of the Royal Society, Minutes of Council, Volume 8. pp.149-153, Royal Society, London.
20th November, 1817.