Tuesday, May 31, 2022

Oil: "Iraq approaches French entities on supplying more crude to Europe "

 From S&P Global Commodities, May 31:

SOMO sees opportunity to replace Urals in Europe
But Indian, Chinese contracts still key, official says
Iraqi export capacity constrained by Gulf infrastructure

Iraq's state oil marketer SOMO has approached French traders about the possibility of supplying Europe with crude, its director general said May 31, as the EU seeks to implement a ban on Russian seaborne imports.

SOMO still aims to maintain its key supply contracts with Indian and Chinese state customers, who have signed long-term contracts, and Iraq cannot afford to lose those clients, Alaa al-Yasiri told the Iraqi parliament's oil, gas and natural resources committee, according to a statement from the legislative body.

Iraq is targeting refineries globally to process its crude, Yasiri said, which would provide OPEC's second biggest producer with opportunity to benefit from Europe's search for alternative supplies from Russia, the largest source of the bloc's oil.

Europe received 15% of Iraq's crude exports in 2021, or 439,000 b/d, according to commodity intelligence company Kpler.

More recent volumes were slightly lower, with 390,000 b/d in May, or 12% of Iraqi exports....


Ag Futures—USDA Weekly Crop Progress Report: When Normal Equals Bearish

The big three crops saw their prices crumble: July corn down 23-6; soybeans down 49-0 and wheat down 70-0.

From AgWeb:

Corn and Soybean Planting Progress Hit Average Pace

After a historically slow start, corn and soybean planting progress have both reached average paces.
As of May 29, U.S. corn planting sits at 86% complete, according to USDA. That’s up from 72% planted a week ago and in line with the five-year average of 87% planted by late May.

Corn Planting Progress

Now only four states are behind average in terms of corn planting pace. Those include:

  • North Dakota: 27%
  • Minnesota: 10% behind
  • Pennsylvania: 10% behind
  • Colorado: 2% behind


 Crop Progress Report home

Speaking of ESG: "BlackRock faces shaming for increasing its stake in Glencore after pledging to ditch coal producers" (BLK; GLEN.L)

Following on "How Rotten Is ESG World? The Raid On Deutsche Bank".

Via ThisIsMoney, May 2:

Blackrock has been slammed after increasing its stake in Glencore despite a previous pledge to scale down investment in coal producers.

Two years ago, Blackrock chief executive, Larry Fink, promised to put sustainability at the heart of investment decisions at the world’s largest asset manager.

His firm highlighted coal producers as a concern because they are ‘carbon intensive, becoming less and less economically viable, and highly exposed to regulation because of environmental impacts’.

But Glencore’s company records show that Blackrock’s holding has grown by more than 300million shares since January 2020.

This is an increase in value of £1.5billion given the latest share price, prompting calls of climate hypocrisy.

Blackrock now holds more than 1billion shares in Glencore, around 8 per cent, worth £5billion. That makes it the second-biggest shareholder. Only Glencore’s former chief, Ivan Glasenberg, now has a larger holding.

Glencore is a major global player in coal with 26 mines in Australia, Colombia and South Africa. In 2020, Blackrock said it would reduce assets in firms that generate more than 25 per cent of their revenues from coal....


How Rotten Is ESG World? The Raid On Deutsche Bank

From FT Alphaville:

Aggregate ESG confusion
The latest Deutsche raid highlights what a mess this has become
It’s tempting to sigh “it’s always Deutsche” on news that 50 German police earlier today raided DB and its asset management unit DWS over greenwashing claims. The reality is that the whole ESG edifice is a mess.  
Here’s Bloomberg’s scoop on the raids:
DWS has been facing the allegations since its former chief sustainability officer, Desiree Fixler, went public with them in August, prompting regulatory probes in the US and Germany. While DWS has denied the claims, the raid adds to a list of regulatory and legal issues for Deutsche Bank Chief Executive Officer Christian Sewing just as he emerges from a successful turnround of the lender. DWS shares fell as much as 4.6% on the news and Deutsche Bank declined as much as 2.3%. Among other things, Fixler has said that DWS’s claims that hundreds of billions of its assets under management were “ESG integrated” were misleading because the label didn’t translate into meaningful action by relevant fund managers. DWS has since stopped using the label.

In a statement DWS said: “We have continuously co-operated fully with all relevant regulators and authorities on this matter and will continue to do so.” Of course, DB has some form when it comes to regulatory infractions, but if it is guilty of unlawful greenwashing then there are likely a lot of investment groups that should feel uneasy. 

The problem is that ESG — as a whole, and each of the E, S and G individually — is an unholy mess of subjective assessments based on patchy arbitrary data that allows anyone to say they are ESG compliant....


Possibly also of interest:
The great thing about ESG is that the definitions are so vague it can be practically anything you want it to be.

This is one of the reasons the largest of the asset gatherers, the BlackRock's of the world, and the indexers, the S&P's, are so attracted to those three little letters, they want to be the arbiters of what can carry the imprimatur.

It's also a very au courant product to sell.
That was October 2020. There are many more.

Kansas City Fed: "Assessing the Case for Retail CBDCs: Central Banks’ Considerations"

From the Federal Reserve Bank of Kansas City, May 26:

Many central banks around the world have been researching, experimenting, or developing central bank digital currencies (CBDCs). Although central banks in several emerging markets and developing economies have implemented or plan to implement a general-purpose, or retail, CBDC to promote financial inclusion and improve their payment systems, central banks in many advanced economies have not yet found a compelling case for a retail CBDC.

In recent years, interest in central bank digital currencies (CBDCs) has been increasing around the globe. Although only a few central banks have thus far implemented a retail CBDC, many banks have been assessing the need within their economies. According to the Bank for International Settlements, the share of central banks that have been researching, experimenting, or developing CBDCs grew from about 70 percent in 2018 to over 85 percent in 2020 (Boar and Wehrli 2021). The vast majority of these banks have focused on retail (or general-purpose) CBDCs.[1]

In this Briefing, we examine what motivations, if any, central banks have identified for retail CBDCs. In general, we find that central banks in emerging markets and developing economies (EMDEs), such as China, Mexico, and Nigeria, tend to be more enthusiastic about retail CBDCs and have clearer motivations for their issuance relative to central banks in advanced economies, such as Canada, Japan, and Singapore.[2] Indeed, several central banks in EMDEs have made progress in developing or implementing a retail CBDC; in contrast, many central banks in advanced economies have only undertaken technical research on a retail CBDC, and most have not developed plans to implement one.

Retail CBDCs in emerging markets and developing economies (EMDEs)

Central banks in many EMDEs view a retail CBDC as a viable solution to problems in their economies and payment systems. Table 1 shows that central banks in seven EMDEs have implemented or plan to implement a retail CBDC: the Bahamas, China, the Eastern Caribbean Currency Union (ECCU), India, Jamaica, Mexico, and Nigeria.

Table 1: Retail CBDC implementation and motivation by central banks in seven EMDEs

Note: Motivations are listed in the order they are given in the respective central banks’ papers, speeches, or press releases.

Sources: Central Bank of The Bahamas (2019), People’s Bank of China (2021), Eastern Caribbean Central Bank (2021), Shankar (2021), Bank of Jamaica (2021), Rodríguez (2022), and Central Bank of Nigeria (2021).

Although policy goals for a retail CBDC vary by country, Table 1 shows a few common motivations include promoting financial inclusion; enhancing payment system efficiency, competition, security, or resiliency; and improving cross-border payments. These motivations are consistent with unique challenges of EMDEs relative to advanced economies. In EMDEs, many consumers lack access to financial services, rely heavily on cash, and tend not to use electronic payment systems, which are often less developed....


The reminder that this had flashed across the screen:

Autonomous Vehicles: "[John] Deere's New Visioning Technology Aims for Fully Autonomous Cropping Fleet by 2030" (DE)

 From DTN Progressive Farmer, May 27:

Deere Building Autonomous System

John Deere has purchased visioning technology properties from AI-startup Light. Light was founded in 2013 and its computer visioning platform is to become an important piece in Deere's expanding fleet of autonomous vehicles.

Currently, Deere is producing the 8R autonomous tractor/TruSet-enabled chisel plow system. It operates with six pairs of stereo cameras -- the eyes -- mounted front and back on the machine, which allow the tractor to perform driverless duties within defined field boundaries. The cameras are the basic sensor that allow the tractor to see what's happening.

Deere has plans for much more. In its Leaps Unlocked Analyst Day on May 26 in Des Moines, Iowa, Deere revealed plans to produce by 2030 the machinery/technology pieces of what will become a complete, full-season-capable autonomous cropping package. That includes spring and fall tillage, planting, spraying and harvesting systems.

Although Deere was vague on the exact autonomous configurations it will produce, one presenter did point to a need for autonomous grain carts and autonomous spraying systems fitted with See & Spray, the technology that allows a Deere sprayer to treat growing crops for individual weeds. The autonomous package, or packages may be configured for corn and soybeans, but also for high value crops, such as grapes, fruits and nuts.

Deere isn't saying much about the intellectual properties acquisition from Light (it did not purchase Light), only that the technology will help "make perception better." There are a couple of published technology pieces with more detail.

The Robot Report said Deere will add Light's Clarity platform to its autonomous tractors....


"How The EU Plan To Ban Russian Oil Could Cause Stagflation"

Brent $119.57 down $2.10; WTI $118.91 up $3.04.

From OilPrice, May 30:

  • Stagflation, a government’s worst nightmare, is the combination of high inflation, high unemployment, and slow or negative economic growth.
  • Several analysts and economists are downplaying the threat of stagflation due to relatively low levels of inflation and confidence that inflation is temporary.
  • In reality, the EU’s plan to ban Russian oil just as demand is set to climb could cause an economic shock that would cause an economic situation not seen since the 1980s.

The war in Ukraine has highlighted the depth of global connectivity and interdependence, exposed the energy security of Europe, and put the post-Pandemic economic recovery in doubt. However, one of its most important contributions has been to accelerate the post-Covid legacy that is rising inflation. Rocketing energy prices and reports of multiple countries facing a cost-of-living crisis are becoming increasingly difficult to ignore. The real question of the day, however, is centered around whether or not are we heading for stagflation, a policymaker's worst nightmare. And when it comes to the question of stagflation, there are few factors as important as the EU’s plan to ban Russian oil.

Stagflationary fears are gaining ground, with more than 70 percent of investors expecting an "economic storm". Even the Treasury Secretary, Janet Yellen, used the term in one of her comments. It should be made clear that there are technically no strict parameters for exactly what stagflation is. There are people, such as New York Times journalist Paul Krugman, who believe that while inflation is a big problem, we are unlikely to see a return to the 1980s. If, when one talks of stagnation, they mean that inflation will persist along with a moderate rise in unemployment, we might be headed towards stagflation, but that isn’t a 1980s-level of stagflation. 

The above argument focuses largely on inflation expectations. In 1979 - 80 the inflation rate was 9 percent, and it wasn’t until the subsequent oil price shock that the whole situation was exacerbated. The Fed had to raise interest rates into double digit territory, culminating at 20 percent, which was followed by a recession. Inflation did fall, but unemployment increased, and in 1982 it still stood at a whopping 9.7 percent (it stands at 3.6 percent today).

But such a scenario seems unlikely today. Krugman compares today with the economic situation of 2008 when there was also a recession and unemployment. However, the only difference was that inflation did not persist for as long as it did in the 1980s. This is corroborated by a recent survey released by the Federal Reserve bank of New York that shows consumer expectations regarding inflation spiking in the shorter and near term but subsiding after three years at 3 percent. If this continues to hold true, which will only be possible if there isn’t any new shock to the global economy, then Krugman’s thesis will hold true....


Monday, May 30, 2022

"Brent Tops $122 After EU Agrees On "Partial" Ban Of Russian Oil"

Brent $122.40; WTI $118.0

From ZeroHedge:

After days of leaks, late on Sunday Bloomberg confirmed that European Union leaders agreed to pursue a partial ban on Russian oil, setting the stage the way for a sixth package of sanctions to punish Russia and its president, Vladimir Putin, for the invasion of Ukraine...

... with some member states reportedly already pushing for a seventh EU sanctions package... although considering that Russian oil exports have hit record highs ever since the Ukraine war erupted, one wonders if this round of "sanctions" will be just as worthless as all the previous ones.

The sanctions - as previewed last week - would ban the purchase of crude oil and petroleum products from Russia delivered to member states by sea but include a temporary exemption for pipeline crude (at the insistence of Hungary and German), European Council President Charles Michel said late Monday during a summit in Brussels.

“This immediately covers more than 2/3 of oil imports from Russia, cutting a huge source of financing for its war machine,” Michel said in a tweet. “Maximum pressure on Russia to end the war.”

Of course, that's just propaganda for the idiot masses: as we have shown previously, it is thanks to Europe's laughable "sanctions", that Russian oil revenues have soared by 50%, hitting a record high, and sending Russia's current account to all time highs.

Officials and diplomats still have to agree on the technical details and the sanctions must be formally adopted by all 27 nations. As we reported previously, Hungary, which will continue to receive Russian oil via pipeline, had been blocking an embargo for the past month as it sought assurances its energy supplies wouldn’t be disrupted....


There Is A New World's Fastest Supercomputer (maybe) NVDA

From the measurement geeks at Top500, May 30:

Highlights - June 2022

This is the 59th edition of the TOP500.

The 59th edition of the TOP500 revealed the Frontier system to be the first true exascale machine with an HPL score of 1.102 Exaflop/s.

We have a new No 1, the Frontier system at the Oak Ridge National Laboratory (ORNL), Tennessee, USA. Frontier brings the pole position back to the USA after it was held for 2 years by the Fugaku system at RIKEN Center for Computational Science (R-CCS) in Kobe, Japan. The Frontier system is currently being integrated and tested at ORNL. It has a peak performance of 1.6 ExaFlop/s and has achieved so far, an HPL benchmark score of 1.102 Eflop/s. On the HPL-AI benchmark, which measure performance for mixed precision calculation, Frontier already demonstrated 6.86 Exaflops!

We also have a new No. 3, the LUMI system at EuroHPC/CSC in Finland, and the largest system in Europe. The third newcomer to the top 10 is at No. 10, the Adastra system at GENCI-CINES in France.

All 3 new systems in the top 10 are based on the latest HPE Cray EX235a architecture, which combines 3rd Gen AMD EPYC™ CPUs optimized for HPC and AI with AMD Instinct™ 250X accelerators, and Slingshot interconnects.

Here is a summary of the system at the Top10:

  • Frontier is the new No. 1 system in the TOP500. This HPE Cray EX system is the first US system with a peak performance exceeding one ExaFlop/s. It is currently being integrated and tested at the ORNL in Tennessee, USA, where it will be operated by the Department of Energy (DOE). It currently has achieved 1.102 Exaflop/s using 8,730,112 cores. The new HPE Cray EX architecture combines 3rd Gen AMD EPYC™ CPUs optimized for HPC and AI with AMD Instinct™ 250X accelerators and Slingshot-11 interconnect.
  • Fugaku, now the No. 2 system, is installed at the RIKEN Center for Computational Science (R-CCS) in Kobe, Japan. It has 7,630,848 cores which allowed it to achieve an HPL benchmark score of 442 Pflop/s. This puts it 3x ahead of the No. 3 system in the list. 
  • The new LUMI system, another HPE Cray EX system installed at EuroHPC center at CSC in Finland, is the new No. 3 with a performance of 151.9 Pflop/s just ahead of No 4. The European High-Performance Computing Joint Undertaking (EuroHPC JU) is pooling European resources to develop top-of-the-range Exascale supercomputers for processing big data. One of the pan-European pre-Exascale supercomputers, LUMI, is in CSC's data center in Kajaani, Finland.
  • Summit, an IBM-built system at ORNL in Tennessee, USA, is now listed at the No. 4 spot worldwide with a performance of 148.8 Pflop/s on the HPL benchmark which is used to rank the TOP500 list. Summit has 4,356 nodes, each housing two Power9 CPUs with 22 cores and six NVIDIA Tesla V100 GPUs, each with 80 streaming multiprocessors (SM). The nodes are linked together with a Mellanox dual-rail EDR InfiniBand network.
  • Sierra, a system at the Lawrence Livermore National Laboratory, CA, USA, is at No. 5. Its architecture is very similar to the #4 systems Summit. It is built with 4,320 nodes with two Power9 CPUs and four NVIDIA Tesla V100 GPUs. Sierra achieved 94.6 Pflop/s.


Two European (LUMI and France's Adastra), two Chinese and Japan's Fugaku  add diversity to the U.S. national laboratories machines with NVIDIA's Selene being the only corporate machine in the top10. Germany and Italy have machines in the 11th and 12th fastest positions with Microsoft's Azure in the 13th spot. Here are the first 100 fastest.

The highlights press release (above) takes pains to point out how deeply NVDA accelerators have penetrated supercomputer architecture: 

Highlights from the List

A total of 170 systems on the list are using accelerator/co-processor technology, up from 151 six months ago. 84 of these use NVIDIA Volta chips, 54 use NVIDIA Ampere, and 8 systems with NVIDIA Pascal....

And here is the "maybe", from DataCenterDynamics, May 30:

Oak Ridge's exascale 'Frontier' system named world's most powerful supercomputer on Top500
But may still be behind a secret Chinese supercomputer

"Shortage of contrast dye for medical scans leads to rationing, delayed procedures."

From United Press International (also on blogroll at right):

U.S. hospitals are running low on contrast dye injected into patients undergoing enhanced X-rays, CT scans and MRIs.

The fluid, which makes the routine but potentially life-saving scans readable, helps doctors identify clots in the heart and brain. The shortage is expected to last until at least June 30, the American Hospital Association (AHA) says. 

It's a result of COVID-19 pandemic-related factory closures in Shanghai, China, where most of the world's supply is made, according to CBS News.

GE Healthcare is the main U.S. supplier of contrast fluid, called Omnipaque....


 There are a few bugs in the whole offshoring/globalization plan.

USDA Updates Forecasts For Food Price Inflation For The Balance Of The Year: Yikes

From the U.S. Department of Agriculture, May 25:

Summary Findings
Food Price Outlook, 2022

This page summarizes the May 2022 forecasts, which incorporate the April 2022 Consumer Price Index and Producer Price Index numbers.

See Changes in Food Price Indexes, 2019 through 2022 for data files.

Consumer Price Index for Food (not seasonally adjusted)

The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, increased by 0.6 percent from March 2022 to April 2022 before seasonal adjustment, up 8.3 percent from April 2021. The CPI for all food increased 1.0 percent from March 2022 to April 2022, and food prices were 9.4 percent higher than in April 2021.

The level of food price inflation varies depending on whether the food was purchased for consumption away from home or at home:

  • The food-away-from-home (restaurant purchases) CPI increased 0.6 percent in April 2022 and was 7.2 percent higher than April 2021; and
  • The food-at-home (grocery store or supermarket food purchases) CPI increased 1.3 percent from March 2022 to April 2022 and was 10.8 percent higher than April 2021.
Food price increases are expected to be above the increases observed in 2020 and 2021. In 2022, food-at-home prices are predicted to increase between 7.0 and 8.0 percent, and food-away-from-home prices are predicted to increase between 6.0 and 7.0 percent. Price increases for food away from home are expected to exceed historical averages and the inflation rate in 2021.....
.... Prices for the category of meats increased by 0.7 percent between March 2022 and April 2022. Wholesale pork prices, along with port congestion, contributed to a 0.9-percent increase in retail pork prices in April 2022. Prices for other meats had the largest increase within the “meats” category—2.2 percent—in April 2022. In 2022, pork prices are predicted to increase between 6.0 and 7.0 percent and other meat prices are predicted to increase between 9.0 and 10.0 percent. The aggregate categories of meats, poultry, and fish are predicted to increase between 7.0 and 8.0 percent, and meats are predicted to increase between 6.5 and 7.5 percent in 2022.

An ongoing outbreak of highly pathogenic avian influenza has reduced the U.S. egg-layer flock and drove a 10.3 percent increase in retail egg prices in April 2022. Retail poultry prices have been high, with historically low stocks of frozen chicken (also called “cold storage”). The ongoing highly pathogenic avian influenza outbreak has also contributed to increasing poultry prices as over 38 million birds have been affected. The disease prevalence also impacts international demand for U.S. poultry. Price impacts of the outbreak will be monitored closely. Poultry prices are now predicted to increase between 8.5 and 9.5 percent, and egg prices are predicted to increase between 19.5 and 20.5 percent.

Fish and seafood prices rose by 0.9 percent in April 2022, climbing to 11.9 percent above April 2021 prices. Fish and seafood prices are now predicted to increase between 7.0 and 8.0 percent....


Emphasis in original

"The Great Borrower/Lender Mismatch(es)"

From Bond Economics (also on blogroll at right), May 30:

The structure of financial markets is influenced by imbalances between how lenders would like to lend, and borrowers would like to borrow. The economist community often refers to “maturity transformation,” but this formulation is too vague to be useful. Instead, we need to look at a few axes of disagreement.

The structure of banks to a certain extent bridge these mismatches, which explains why they are the centre of financial markets. However, non-bank financial instruments can be structured to bridge the gap. It is therefore that there is a continual blurring between bank and non-bank finance as they attempt to move into each other's turf. It is also unsurprising that the so-called “crypto community” has ended up re-inventing the structures of traditional finance, since even internet money faces the same economic forces.

The Mismatches

Borrowers generally want the following.

  • Borrow at as low an interest rate as possible.

  • Long borrowing maturity, with an option to pay back early.

  • Some borrowers are quite willing to take on large loans and not worry about the consequences of default. (This is not universal, in the decades after the Great Depression financial institutions worked to decrease debt aversion among the public.)

Lenders are more varied, with a division by lending horizon....


Review: Blas & Farchy's "The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources"

I'm guessing that our readers have indeed heard of these companies and could list them in revenue order, but this is still a nice little overview of the book.

From The National Interest, April 24:

Who Really Owns the World? Meet the Merchants of Power You’ve Never Heard Of

Javier Blas and Jack Farchy’s The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources offers a probing look at one of the most overlooked sectors in modern global markets and geopolitics.

Javier Blas and Jack Farchy, The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources (Oxford: Oxford University Press). 416 pp., $29.95.

WHEN I was an undergraduate studying at Georgetown University, I used to listen to Al Jazeera English’s (AJE) coverage of global events—the Arab Spring was still in full swing at the time, and AJE’s reporting was second to none. On a May afternoon in 2011, one particular segment on Kamahl Santamaria’s show, Counting the Cost, stood out. Kamahl introduced a company that I had never heard of before: Glencore.

The company is a commodity trader—a business that focuses on the buying and selling of physical commodities, like grain, oil, copper, and so on. Most would dismiss this as relatively inconsequential; buying and selling commodities is one of the oldest kinds of trade in the world. What made Glencore stand out, Kamahl emphasized, was that “when one company has this much influence, through its size, and some say even its practices, then there is a concern.” He laid out the numbers: at the time, Glencore controlled 3 percent of the world’s oil market, 50 percent of the global copper market, 60 percent of zinc, and 9 percent of the world’s grain. “Think about the effect that would have on food prices,” Kamahl cautions, “the absolute basics for so many people around the world.” If controlling the food supply of entire nations isn’t a significant form of power, then what is?

Glencore, and other commodity traders like it, are the focus of The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources, a recent and rather instructional book by journalists Javier Blas and Jack Farchy. Blas and Farchy’s thesis is straightforward: far from being ordinary merchants, commodity traders are key players in the contemporary international economy—actors whose “control over the flow of the world’s strategic resources has also made them powerful political actors.” Yet despite wielding this immense wealth, influence, and structural power, this industry remains a relatively unknown force to most people—even fewer know its history, evolution, adaption to changing markets and technology, and modus operandi.

Drawing on over a hundred interviews with current and retired commodity traders, Blas and Farchy deliver an informed and eye-opening dive into the field of commodity trading—a world of swashbuckling merchant-adventurers, African dictators, Swiss bankers, and the suave yet ruthless empire-builders who may yet hold the future of global geopolitics in their hands. 

THE WORLD for Sale opens up at the twilight of the Second World War, when an age of peace, combined with ruined cities and nations needing rebuilding, opened the door to a hitherto unprecedented bonanza for raw materials. The reader is introduced to the pioneers of the modern commodity trading business: the Hamburg-born Theodor Weisser, who crossed the Soviet border (despite having been a former Soviet war prisoner) seeking a deal to export Communist diesel and oil to the West; American John H. MacMillan, who went from learning the family grain business (Cargill) on the floor of the Minneapolis Chamber of Commerce to unleashing America’s grain upon the world, including to the Communist Bloc; and Ludwig Jesselson, who fled to America from Nazi Germany’s genocidal campaign against Jews and went from trading scrap in New York to being the veritable founding father of a dynasty of commodity trading companies—including Glencore—that exists to this day. These three men created the business model and professional culture that has guided the commodity traders over the past eighty-plus years.

The reader is taken on a whirlwind tour of significant events in the industry. For instance, the Great Grain Robbery—probably the first time that both governments and the public at large were exposed to the importance of the commodity trading business—is retold in delicious detail. Suffering from crop shortfalls in 1971–2, the USSR dispatched Nikolai Belousov—the head of the Soviet grain trading agency—to the West with a single mission: secure a food supply. Belousov met with John MacMillan’s successor at Cargill and negotiated an agreement to buy 2 million tons of grain over the next year. Blas and Farchy succinctly summarize the mood: “It seemed, at the time, like a good deal all round.”....


For more on the Great Grain Robbery we have last November's "That Time The CIA Completely Missed A Soviet Crop Failure And Allowed The Sovs To Buy American Wheat On The Cheap." Which was referenced in March's "Did The CIA Foresee The Effect On Wheat Markets Of The Russia Invasion And The Effect Of Sanctions?."

And traders in general

I'm still trying to figure out why the ICE didn't get sued for bailing out Al Gore, Goldman Sachs and President Obama's pal Richard Sandor by way of their $604 million purchase of Climate Exchange, PLC..

Looking at the Sotheby's New York sales, mentioned a week ago, I actually thought, for a split-second, that this painting had something to do with Goldman Sachs:


Instead it is Lot 23, Picasso's Femme nue couchée, which was hammered down for 67,541,000 USD

Memorial Day, 2022

Fort Snelling National Cemetary, Frank Glick, 2011
"...that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion--that we here highly resolve that these dead shall not have died in vain, that this nation under God shall have a new birth of freedom, and that government of the people, by the people, for the people shall not perish from the earth." 
—Abraham Lincoln at Gettysburg, November 19, 1863

Sunday, May 29, 2022

EU: We Must Continue To Buy Russian Oil To Prevent Russia From Selling It Elsewhere

Via The Fly:



What's The Ocean Worth: Putting A Price On Natural Assets

There is a movement afoot to commoditize the commons. 
Here's more from Nautil.us, May 11:

Putting a price tag on the ocean might just save it.

A few years ago, Ralph Chami, a financial economist with the International Monetary Fund (IMF), was on a boat in Mexico’s Sea of Cortez with researchers studying blue whales. He knew nothing about the whales—only that seeing them in the wild was on his “bucket list”—but the moment Chami saw his first blue whale surface next to their boat, he felt everything change. The whale was a female, and she was massive, 110 or 120 feet long, with a mouth large enough to fit an elephant. One flick of her fin would have thrown Chami and the researchers into the sea. But she was feeding next to their small boat peacefully. For Chami, the experience epitomized all that he had missed about the wider world from the years spent in conference rooms and behind computer screens and he struggled to contain his emotions.

At night, Chami listened to the researchers talk about the astonishing amount of carbon the world’s great whale populations capture. Why, Chami wondered, was this information not more widely known? The problem, he thought, was that scientists were speaking a language that the people with the money and power to help protect our shrinking whale populations did not understand. That realization set Chami on a new path, helping translate the value of living whales and entire ecosystems into dollars and cents as a way to incentivize their protection. In 2019, he and several colleagues published their findings on the economic value of the world’s great whales in IMF’s flagship magazine, Finance & Development. After accounting for all the services a great whale provides, such as the 33 tons of carbon dioxide its body captures over its lifespan of—on average—60 years, the tourism dollars generated by whale-watching, and the nutrients it disperses that make fish more abundant, the number Chami arrived at was $2 million per whale.

Why consider a whale—and the ocean environment it inhabits—as a service provider? It occurred to Chami that most of the benefits of biodiversity are “silent and invisible” to those making the decisions around the use of natural assets. But, if a living whale offered far greater value than a dead whale, bought and sold for its meat and blubber, Chami saw that it would be possible to value other living things—and even entire ecosystems. In 2019, he co-founded Blue Green Future to advocate for market values to nature’s regenerative services, from whales to seagrass meadows.

Of course, not all aspects of nature’s value can be captured by economic terms. Like life-insurance policies, markets can only account for aspects of nature that can be quantified monetarily. And just as the value of a person’s life amounts to much more than assets owned and income earned, simply pricing the benefits that nature provides fails to capture its less-tangible values—all that is transcendental and spiritual about our living planet.

Recently, I spoke to Chami and Dinah Nieburg, a psychologist, executive coach, and a co-founder of Blue Green Future, about how a “nature-based economy,” can save the world’s oceans, the limits of science-based conservation, and the risks and rewards of using markets to fight climate change and biodiversity loss.

To start, why do you feel it’s important to put a price on living things, be it an ecosystem or an individual animal?

Dinah Nieburg: If we are to survive as a species, we need to change our behavior from an extractive mindset to valuing and creating markets around the services of nature. We’re advocating that you can actually create a market for living ecosystems. It brings together the preservation of nature with income for local and indigenous people who can contribute to both the protection and regeneration of these living systems. Otherwise, we just continue to damage, extract, and kill our living systems.

Ralph Chami: The other way of looking at what we’re doing is we’re valuing a living and thriving nature. There are values for the ocean, but they’re all extractive. Meaning, if you catch and kill a whale for consumption it’s $40,000 to $80,000. So when people say, “oh you’re putting a price on nature,” I say no, you’re putting a price on nature. You’re putting a zero price on nature. I’m trying to tell you it’s not zero.

If you catch and kill a whale for consumption it’s $40,000 to $80,000.

Which brings us to the question, how much are the oceans worth? How would you go about valuing the ocean, especially since much of the ocean’s biodiversity, functioning, and deep-sea structures are yet to be discovered?

Nieburg: As with any of the ecosystem services, we start with the known science and create financial valuations from there. In the case of the open ocean, scientists know overall how much carbon is sequestered by the ocean, and since we have a carbon market for carbon sequestration, we can derive a ballpark figure on the services already provided by the open ocean. Additional “living systems” values of the open ocean will eventually be measured.

So, what is that ballpark figure?

Chami: The value of the ecosystem services of the open ocean is at least in the tens of trillions, if not more. For example, in carbon sequestration alone, starting from 1870 until now, the value of carbon captured at the bottom of the deep ocean is close to $30 trillion. Another example is seagrass. In a report submitted to UNEP/GRID-Arendal, we valued the carbon sequestration of global seagrass to be over $2.3 trillion....


As noted in another post: "What The Heck Is 'Spatial Finance'":

....The World Bank lists one of the behemoths of the green biz (fiscal 2019 revenue $249,933,507; gross assets $502,673,998; net assets $363,071,982) the World Wildlife Fund as a partner,

So skipping over there we see:

Nature and Spatial Finance
We have taken nature as the basis of all human economic activity for granted. The economy and the finance sector depend as well as impact nature. Financial decisions need to take these risks and opportunities into account. To date such assessments have been difficult. However, with the advance in geo-spatial and earth observation data combined with artificial intelligence and machine learning, new opportunities are rapidly developing to manage risk, opportunity and impact. This new and emerging field is called Spatial Finance.

Through the application of the WWF-SIGHT data and tool, WWF-UK has been developing case studies and engagement with the finance sector for a number of years. We now actively advocate for spatial finance approaches and tools to be rapidly provided by third party data providers and adopted by finance institutions....

 Ah, very innovative. And it is in the interstices between the average person's mental maps and the innovation where the real money will be made. 

Probably related:

Florida: Walt Disney's Dream

From the astoundingly comprehensive* The Original EPCOT website, an essay:

The Mouse that roared

On November 22,1963, Walt Disney and an entourage of his top executives flew from Tampa to Orlando searching for an East Coast Disneyland site. The night before they had checked into a Tampa hotel under assumed names to avoid tipping off the press and stirring up land speculation. Reports Walt had read on "Project Winter," as it was code-named, could take him only so far. Ever the artist, he needed to visualize the possibilities for himself.

Disney was close to selecting an expansion site after considering 13 locations in the eastern United States. An early favorite, Niagara Falls, was rejected because its winter cold would prevent the park's year-round operation. Walt wanted to avoid having a seasonal work force, fearing that carnival-type workers like those in existing amusement parks would corrupt the family atmosphere he sought to achieve. So the search turned to Florida with its natural advantages of sunshine and water.

As the plane circled south of Orlando, Walt looked down, saw the confluence of Interstate 4, then under construction, and Florida's Turnpike and exclaimed: "That's it!" What sold Disney were the roads crisscrossing beneath him which were needed to import tourists from afar to make their business plan work. Florida had fewer residents than the Los Angeles region surrounding Disneyland, yet Walt and his executives envisioned a giant pleasure palace ten times the size of Disneyland. It would not be a Florida theme park so much as an East Coast tourist spa, located in Florida.

From Orlando, the entourage flew west along the Gulf coast to New (|| Orleans, where the members disembarked for the night. During the cab ride to their hotel they learned from the radio that President Kennedy had been shot. It was a fateful day for the nation and, for entirely different reasons, for central Florida. Walt's "that's it" reaction started a chain of events that would transform sleepy Orlando into the world's most popular tourist destination.

If Walt practiced gut decision- making, his brother Roy and others on the Project Winter team were more methodical. Returning from the fig Florida flyover, they commissioned a "Central Florida Study" to compare Orlando and Ocala as potential theme park sites, dispatching William Lund to Florida from Economic Research Associates, the Disney site consultant.

Wanting complete secrecy to avoid triggering a real estate price run-up, they contacted the company's New York counsel, William Donovan, of the firm Donovan, Leisure, Newton, and Irvine. He was the same "Wild Bill" Donovan who directed the Office of Strategic Services (OSS), the predecessor of the CIA, during World War II. Donovan procured a business card, letterhead stationery, and a phone number identifying Lund as a member of the Burke & Burke law firm, located one floor beneath Donovan and Leisure at One Wall Street in New York.

Arriving in Orlando, the 33-year- old Lund called on two banks and was steered to Florida Ranch Lands, Inc. (FRL), a real estate agency, where he met on December 9,1963, with salesman David Nusbickel. He introduced himself as William Lund from Burke & Burke in New York and told Nusbickel that he represented a major investment trust wanting information on large tracts of land near the crossing of 1-4 and the Turnpike.

The following day, Nusbickel took Lund to see three contiguous land parcels southwest of Orlando: the 12,440-acre Demetree tract, owned by Bill and Jack Demetree; the Bay Lake tract, owned by ten investors; and land east of the Demetree tract owned by Wilson and Carroll Hamrick. Lund spent a third day in Ocala before flying - through New York - back to California....


From the essay, A Commodified Utopia:

.....Originally called ‘Progress City,’ Disney eventually named this new urban construct EPCOT, the Experimental Prototype Community of Tomorrow. As described in the film, EPCOT would be an ever-evolving showcase of modern technology:

It will be a community of tomorrow that will never be completed, but will always be introducing and testing and demonstrating new materials and systems. And EPCOT will always be a showcase to the world for the ingenuity and imagination of American free enterprise.[7]

For Disney, the consummate businessman and innovator, planning techniques like urban renewal and political reform paled in comparison to the combined power of technology and efficiency enabled by modern capitalism.

Disney felt that the corporation and not traditional government could best create jobs, prevent poverty, improve education, and provide for the common good. In fact, he believed that a corporate structure should replace democracy itself in EPCOT. Disney’s utopia would have no popular government, but would be managed by those who knew best, the Disney Company and its corporate partners:

It will be a planned, controlled community, a showcase for American industry and research, schools, cultural and educational opportunities. In EPCOT there will be no slum areas because we won’t let them develop. There will be no landowners and therefore no voting control. People will rent houses instead of buying them….[8]

These were strong words indeed for an American history buff oft-praised for his audio-animatronic versions of U.S. Presidents.[9] But as many critics have insisted, and as will be discussed below, the foundation of all Disney developments in Florida has been the elevation of corporate control over democratic rule.

Physically, EPCOT would be a radial garden city of 20,000 residents.[10] The outermost of the city’s three rings would be low-density residential; the middle ring would contain churches, schools, parks, and cultural institutions. A round, 50-acre business district would comprise the city center. In order to maintain perfect weather conditions year-round, this center would be domed and climate-controlled. The focal-point would be a Corbusier-inspired hotel skyscraper that would rise through the dome for all to see. The downtown transportation system would be highly rational, with various modes, both traditional and modern, clearly delineated. There would be “electric People Movers on elevated tracks; surface streets given over to pedestrians; one underground level for monorails and more People Movers; a second underground level for cars; and a third underground level for trucks.”[11]

As to who would live in EPCOT, Walt was somewhat explicit: “There will be no retirees. Everyone must be employed. One of our requirements is that people who live in EPCOT must keep it alive.”[12] This proposition seems counterintuitive for a man well into his sixties, whose business partner and older brother (Roy O. Disney) was considering retirement. But it does fit with EPCOT’s grounding in capitalism and industry: a city designed to ‘showcase American free enterprise’ should, by this logic, be filled with those who would work and produce. It should also be noted that Walt had spent his entire career providing and marketing entertainment to the American nuclear family. The middle class family was his focal point, and he designed a city just for them.....


Real Estate: "Disney’s Former CEO, Michael Eisner, Lists Malibu Compound For $225 Million"

From Homes of the Rich:

LOCATION: 33550 Pacific Coast Highway, Malibu, California


BEDROOMS & BATHROOMS: 16 bedrooms & 22 bathrooms

PRICE: $225,000,000

This incredible 4+ acre beachfront compound is located at 33550 Pacific Coast Highway in Malibu, California. It is owned by Michael Eisner, who is the former chairman and CEO of The Walt Disney Company.

It was built in 2002 and is comprised of 9 structures. It was designed by Robert A. M. Stern and was inspired by old estates in Provence, Tuscany and Spain. It features approximately 25,025 square feet of living space with 16 bedrooms & 22 bathrooms. There is a main house, guest houses, gym, office, beach cottage, courtyards, gardens, pool and more! There is an underground tunnel from the pool that leads to a large movie theater and a separate elevator that takes you to the beach.


....MUCH MORE, including listing.

More On The Problems Exposed By The Feds Reverse Repo Facility

Following on "This Is Ridiculous: The Fed's Reverse Repo Facility Has Topped $2 Trillion Dollars" is an excerpt from one of the most interesting links of the past couple years, first posted in October 2021:

"The Central Bankers’ Long Covid: An Incurable Condition"

....In the meantime, ordinary people are caught in a suffocating double bind. If credit needs to be made available to businesses, Central Banks must keep a lid on inflation, which they can do only… by draining credit! Runaway inflation can be avoided only by containing the disruptive effects of excessive money creation; that is, by bringing work-based societies to their knees. Most of us end up squashed between price inflation of essential goods, and deflationary liquidity drainage via loss of income and erosion of savings. And in a stagnant economy with inflation off the chart, each suppressed business transaction is channeled into financial assets.

A tool preventing liquidity from reaching the real economy is the Federal Reserve’s Overnight Reverse Repo facility (RRP). While continuing to flood financial markets with freshly printed money, thanks to reverse repos the Fed mops up any excess of that very cash it pumps into Wall Street. Effectively, a zero-sum game of give and take: at night, financial operators deposit their excess liquidity with the Federal Reserve, which delivers as collateral the same Treasuries and Mortgage-Backed Securities it drains from the market during the day as part of its QE purchases. In August 2021, the Fed’s usage of RRP topped $1 trillion, which led the Federal Open Market Committee (FOMC) to double the RRP limit to $160 billion, starting from 23 September 2021.

Here, then, is the elephant in the room: how will the Fed’s taper square with reverse repos of this astronomical magnitude? Is the much-anticipated reduction of monetary stimulus even possible with a global financial bubble fuelled by zero-interest-rate leveraging and structural borrowing? But, at the same time, how can central bankers continue to expand their balance sheet, when the double whammy of stagnation and rising inflation (stagflation) is just around the corner?....

That was seven months ago.

Here's the rest of the story.

This Is Ridiculous: The Fed's Reverse Repo Facility Has Topped $2 Trillion Dollars

From Bloomberg via Yahoo Finance, May 23:

Fed Facility Tops $2 Trillion as Investors Scramble to Park Cash

The amount of money parked at a major Federal Reserve facility climbed to yet another all-time high, surpassing the $2 trillion milestone for the first time, as investors struggled to find places to invest their cash in the short term.

Money-market funds continue piling into the Fed’s overnight reverse repurchase agreement facility, even as the monetary authority raises interest rates and plans to start unwinding its mammoth balance sheet next month, moves intended to tighten financial conditions and drain the amount of excess liquidity in the financial system. Yet there’s still an imbalance in the Treasury-bill market that as of late has been exacerbated by robust tax collections in the US, and as a result the so-called RRP facility remains a haven for money markets with very few investment options.

Even Jamie Dimon, JPMorgan Chase & Co.’s chief executive officer, said at the firm’s investor day Monday that the Fed almost has to do so-called quantitative tightening since there is too much liquidity out there.

On Monday, 94 participants placed a total of $2.045 trillion at the RRP facility, in which counterparties can put cash with the central bank. The previous record, set on Friday, was $1.988 trillion.

“Treasury is still decreasing bill supply and that seems to be driving the market firmly into the arms of the RRP facility as the only place of refuge,” said Gennadiy Goldberg, a senior US interest rates strategist at TD Securities. “The big implication is that with RRP usage remaining high, QT will drain reserves from the system rather quickly at the start of runoff.”....


The financial system long ago crossed the line into outright collective fantasy and the problem with fantasies of this magnitude is that should reality intrude, the shock is going to be so jarring that the political repercussions will be as dystopian as anything that can be imagined.

Saturday, May 28, 2022

"Strippers say a recession is guaranteed because the strip clubs are suddenly empty "

From The Independent's Indy100:

Some strippers on Twitter said they think recession is guaranteed - because the strip clubs are suddenly empty.

On Thursday (9 May), a woman who goes by @botticellibimbo on the platform said the following about the clubs: "The strip club is sadly a leading indicator, and I can promise y'all we r in a recession, lmao."

"Me getting stock alerts just to decide whether it's worth it to go to work," she further wrote in a subsequent tweet....



The Party That Never Ends: "Fyre Festival’s Billy McFarland mulls over ways to pay $26 million to victims while in halfway house"

He was given early release from prison due to the covid pandemic. Because, of course.

From the New York Post:

Billy McFarland, the fraudster behind the ill-fated Fyre Festival, is out of prison but he’s far from home free in his halfway house.

McFarland was sprung from prison this spring after serving less than four years of a six-year sentence in connection with his 2017 Caribbean retreat fiasco....


Much of the history has been lost although fragments of tweets from the well-to-do young Blink-182 fans survive:

Many people mentioned the feral dogs, either silently eyeing the festival-goers or howling in the moonlight.

This was also nice:

And afterwards:
Scam the Scammer: "Wannabe socialite swindler may have bilked Fyre Festival fraudster"

and the gourmet cuisine memorialized in "With The Second Anniversary Of Fyre Festival Fast Approaching: The Lego Fyre Festival Set".

Or "Hulu and Netflix could face subpoenas over their dueling Fyre Festival documentaries"
Because of course.

Maybe "Fyre Festival Lives On In The Hearts Of Those Who Believe: British Adventurers Edition"

We had seven or eight posts teed up in the queue but many of the tweets were deleted, especially from the 400 or so influencers ( Ja Rule et al.) who touted the deal.

Maybe they could chip in on the $26 mil.


Via Sal the Agorist:

Sal doesn't mention that Mrs. Gomez was actually handcuffed by the police and had to figure  out a way out of the cuffs before she could break away, scale the fence, find the kids and escort them to safety.

Sal the Agorist Twitter home (caution, independent thinker)

"Babble hypothesis shows key factor to becoming a leader"

It is with some reluctance that I share this knowledge.

From Big Think:

Research shows that those who spend more time speaking tend to emerge as the leaders of groups, regardless of their intelligence

  • A new study proposes the "babble hypothesis" of becoming a group leader.
  • Researchers show that intelligence is not the most important factor in leadership.
  • Those who talk the most tend to emerge as group leaders. 

If you want to become a leader, start yammering. It doesn’t even necessarily matter what you say. New research shows that groups without a leader can find one if somebody starts talking a lot.

This phenomenon, described by the “babble hypothesis” of leadership, depends neither on group member intelligence nor personality. Leaders emerge based on the quantity of speaking, not quality.

Researcher Neil G. MacLaren, lead author of the study published in The Leadership Quarterly, believes his team’s work may improve how groups are organized and how individuals within them are trained and evaluated.

“It turns out that early attempts to assess leadership quality were found to be highly confounded with a simple quantity: the amount of time that group members spoke during a discussion,” shared MacLaren, who is a research fellow at Binghamton University.

While we tend to think of leaders as people who share important ideas, leadership may boil down to whoever “babbles” the most. Understanding the connection between how much people speak and how they become perceived as leaders is key to growing our knowledge of group dynamics.

The power of babble...


Hangin' With Klaus: Izabella Kaminska Is Interviewed For A Job At The WEF

From The Blind Spot (BANNED in Canada!), May 24:

That time I met Klaus Schwab in my gym kit

As the rescheduled “summer” Davos gets going this week, what everybody outside of the financial commentariat space wants to know is: is the World Economic Forum (WEF) really an elitist conspiracy trying to take over the world or more like an out-of-touch modern-day Versailles with delusions of grandeur?

And does Davos even matter anymore? Or should we ignore it?

To answer those questions, I thought I would recount a few personal stories that possibly offer some insight into how “the Forum” (as they prefer to be called) operates.

Because the truth, I think, is that both sides of the Davos perception spectrum — from elite conspiracy to unquestionable force for good — are equally worthy of critique and defence.

The truth is out there, as they say. But as is often the case, it is nuanced.

The biggest part of that truth I suspect is that both the gathering and the respective backlash are something of a naturally occurring phenomena — a force of nature that if piqued would always re-generate in some other form elsewhere.

This is down to the way the Davos system has evolved over time, and the way it has generated FOMO on the part of non-attendees, especially within the media.

For me the best Davos would be the one where Klaus Schwab interviewed Joe Rogan for three hours. I’d pay to watch that. Wouldn’t you?

The media context

I first encountered the world of Davos while working at CNBC Europe as a producer in the years before the global financial crisis.

The annual meeting was, as might be expected, a scheduling highlight for the broadcaster, with the TV crew routinely given prime position in the meeting’s media enclave. (And they continue to do so to this day.) The broadcasting formula was also a reliable win win. Bag a prominent statesman, CEO or pundit, put him in front of a beautiful snowy backdrop with Maria Bartiromo or Geoff Cutmore, and watch the magic happen.

What was there not to like?

The weirdness at the heart of the set-up occurred behind the scenes and not necessarily even in Davos.

Being chosen by your media organisation to participate as part of the Davos crew became an incredibly important form of internal career recognition. It implied you were at the top of your game. A bit like being picked to be class captain or prom queen — a clear signal to all your other peers that you were being anointed for success....


"Fertilizer Prices Drop 30% Following Demand Destruction"

Three more declines of that magnitude and we're back to 2019 prices.


From Bloomberg via Yahoo Finance, May 27:

Fertilizer prices that had hit records are now plunging as buyers reel from sticker shock, but that doesn’t mean the market squeeze is over.

The June spot price in Tampa, Florida for the nitrogen fertilizer ammonia settled at $1,000 per metric ton, a drop of 30% from May’s $1,425 per metric ton, according to Green Markets, a Bloomberg company. Even with the drop, however, prices for ammonia are still 87% higher than a year ago, and supply chain issues continue to wreak havoc on global markets.

Demand destruction is part of the decline. Places like Southeast Asia are seeing buyers unwilling to pay the record high prices for ammonia that were posted in April and May, said Green Markets analyst Alexis Maxwell. It also reflects the declining cost of ammonia production as European natural gas prices fell in the second quarter, she said....


China Hates, and May Kill, Elon Musk's Starlink Satellite Constellation

From Eurasian Times, May 26:

Tracking China’s Hypersonic Missiles – After Moscow, Beijing Threatens To Neutralize America’s ‘Greatest Wartime Asset’

Chinese military researchers are reportedly working on methods to disrupt or eliminate SpaceX’s Starlink satellites if they threaten national security.

China must acquire the capability to track, monitor, and, if required, kill all Starlink satellites in orbit around the Earth, reported SCMP, citing a study published last month.  

The study states: “A combination of soft and hard kill methods should be adopted to make some Starlink satellites lose their functions and destroy the constellation’s operating system.”

SpaceX operates the Starlink satellite constellation system. It currently employs over 2,400 low-earth orbit satellites capable of providing high-speed internet anywhere globally.

The system has been credited with providing the internet to some of the world’s most remote areas. Elon Musk, the CEO, intends to deploy as many as 30,000 satellites over the next decade.

The US Department of Defense has also inked a deal with SpaceX to use the Starlink platform for military purposes. This agreement includes creating sensors for tracking hypersonic missiles, which China already has in its arsenal.

As a result, China is concerned about the security threats that SpaceX could pose to its national security, as EurAsian Times had earlier reported.

Ren Yuanzhen, a researcher with the PLA’s Strategic Support Force’s Beijing Institute of Tracking and Telecommunications, led the study. Several renowned scientists from China’s defense industry were among the co-authors. 

The report also proposes additional monitoring capabilities that would enable China to monitor data sent between Starlink satellites, potentially enhancing Beijing’s intelligence collecting capabilities....


Friday, May 27, 2022

WaPo: "Ukrainian volunteer fighters in the east feel abandoned"

This was known six weeks ago.

It's the artillery. It either kills the Ukrainian troops or it drives them insane. Very few severely wounded by artillery.

To compensate for the Russian tactics—which are not quite WWII's Operation Bagration where the Katyusha rockets ("Stalin's Organ.") were out in front of the artillery which were lined up wheel-to-wheel to destroy anything between 2 and 20 miles—but still overwhelming, the Ukrainian soldiers are literally back to trench warfare, where all you can do is duck your head and pray that today is not your last day on earth.

It's WWI all over again. And the doctors, one of whom supplied the lack-of-severe-wounds factoid, are seeing shell shock cases like this poor bastard, just as the doctors at the Battle of the Somme did 106 years ago:


This was true six weeks ago, I wonder why the Post is publishing the story now?

From the Washington Post, May 26:

DRUZHKIVKA, Ukraine — Stuck in their trenches, the Ukrainian volunteers lived off a potato per day as Russian forces pounded them with artillery and Grad rockets on a key eastern front line. Outnumbered, untrained and clutching only light weapons, the men prayed for the barrage to end — and for their own tanks to stop targeting the Russians.  

“They [Russians] already know where we are, and when the Ukrainian tank shoots from our side it gives away our position,” said Serhi Lapko, their company commander, recalling the recent battle. “And they start firing back with everything — Grads, mortars.

“And you just pray to survive.”

Ukrainian leaders have projected and nurtured a public image of military invulnerability — of their volunteer and professional forces triumphantly standing up to the Russian onslaught. Videos of assaults on Russian tanks or positions are posted daily on social media. Artists are creating patriotic posters, billboards and T-shirts. The postal service even released stamps commemorating the sinking of a Russian warship in the Black Sea.

Ukrainian forces have succeeded in thwarting Russian efforts to seize Kyiv and Kharkiv and have scored battlefield victories in the east. But the experience of Lapko and his group of volunteers offers a rare and more realistic portrait of the conflict and Ukraine’s struggle to halt the Russian advance in parts of Donbas. Ukraine, like Russia, has provided scant information about deaths, injuries or losses of military equipment. But after three months of war, this company of 120 men is down to 54 because of deaths, injuries and desertions. 

The volunteers were civilians before Russia invaded on Feb. 24, and they never expected to be dispatched to one of the most dangerous front lines in eastern Ukraine. They quickly found themselves in the crosshairs of war, feeling abandoned by their military superiors and struggling to survive.

“Our command takes no responsibility,” Lapko said. “They only take credit for our achievements. They give us no support.”

When they could take it no longer, Lapko and his top lieutenant, Vitaliy Khrus, retreated with members of their company this week to a hotel away from the front. There, both men spoke to The Washington Post on the record, knowing they could face a court-martial and time in military prison.

“If I speak for myself, I’m not a battlefield commander,” he added. “But the guys will stand by me, and I will stand by them till the end.”

The volunteers’ battalion commander, Ihor Kisileichuk, did not respond to calls or written questions from The Post in time for publication, but he sent a terse message late Thursday saying: “Without this commander, the unit protects our land,” in an apparent reference to Lapko. A Ukrainian military spokesman declined immediate comment, saying it would take “days” to provide a response.

“War breaks people down,” said Serhiy Haidai, head of the regional war administration in Luhansk province, acknowledging many volunteers were not properly trained because Ukrainian authorities did not expect Russia to invade. But he maintained that all soldiers are taken care of: “They have enough medical supplies and food. The only thing is there are people that aren’t ready to fight.”

But Lapko and Khrus’s concerns were echoed recently by a platoon of the 115th Brigade 3rd Battalion, based nearby in the besieged city of Severodonetsk. In a video uploaded to Telegram on May 24, and confirmed as authentic by an aide to Haidai, volunteers said they will no longer fight because they lacked proper weapons, rear support and military leadership.

“We are being sent to certain death,” said a volunteer, reading from a prepared script, adding that a similar video was filmed by members of the 115th Brigade 1st Battalion. “We are not alone like this, we are many.”

Ukraine’s military rebutted the volunteers’ claims in their own video posted online, saying the “deserters” had everything they needed to fight: “They thought they came for a vacation,” one service member said. “That’s why they left their positions.”

Hours after The Post interviewed Lapko and Khrus, members of Ukraine’s military security service arrived at their hotel and detained some of their men, accusing them of desertion.

The men contend that they were the ones who were deserted.

Waiting to die
Before the invasion, Lapko was a driller of oil and gas wells. Khrus bought and sold power tools. Both lived in the western city of Uzhhorod and joined the territorial defense forces, a civilian militia that sprung up after the invasion.

Lapko, built like a wrestler, was made a company commander in the 5th Separate Rifle Battalion, in charge of 120 men. The similarly burly Khrus became a platoon commander under Lapko. All of their comrades were from western Ukraine. They were handed AK-47 rifles and given training that lasted less than a half-hour.

“We shot 30 bullets and then they said, ‘You can’t get more; too expensive,’ ” Lapko said....


Again, why now? The Washington Post and the New York Times are the Party Organs for the State Department, the CIA and the military. Someone very high up in the Establishment wants this story out there. And this story, from May 20: 

Whoa: There Appears To Be A New U.S. Plan For Ukraine

And another story that Izabella Kaminska flagged: 

Kissinger turns 99 today and unlike the much younger U.S. President is not known for randomly wandering off into stories of Corn-Pop this or hairy legs that or....

well, you know. 

From the investing point of view all I can say is to repeat the outro from May 22's Ukraine: "Italy Circulates 4-Point Peace Plan":

President Zelensky has done some bluster and bluff and Poland's President Duda wouldn't like it but if the U.S. and the rest of NATO say take the deal. Ukraine won't have much choice.

If interested see also Friday's: "Whoa: There Appears To Be A New U.S. Plan For Ukraine"

Tight stops on equity shorts and hydrocarbon longs.