Friday, June 30, 2023

Agricultural Commodities—USDA Releases Acreage and Grain Stocks Reports: Corn: Sinks, Soybeans: Soar

 From DTN Progressive Farmer, June 30:

This article was originally posted at 11:08 a.m. CDT on Friday, June 30, and updated again at 11:17 a.m. and 11:20 a.m. It was last updated with additional information at 11:20 a.m. CDT on Friday, June 30.


OMAHA (DTN) -- USDA on Friday released its Acreage and June 1 Grain Stocks reports.

USDA said farmers planted 94.1 million acres of corn, above the range of pre-report expectations. It's up 6% from last year, and above USDA's March Prospective Planting report estimate of 92 million acres. It's the third highest corn planting since 1944.

On soybeans, acreage is pegged at 83.5 million acres, 5% lower than last year. It's also below the range of pre-report estimates....


Corn futures down 22.25 (+4.25%) at 501.25

Soybeans up 78.00 (+5.70%) at 1445.75

Inflation: BEA PCE Deflator, Headline Up 3.8%, Core Up 4.6%

 From the Bureau of Economic Analysis, June 30:

Personal Income and Outlays, May 2023

Personal income increased $91.2 billion (0.4 percent at a monthly rate) in May, according to estimates released today by the Bureau of Economic Analysis (table 3 and table 5). Disposable personal income (DPI), personal income less personal current taxes, increased $86.7 billion (0.4 percent) and personal consumption expenditures (PCE) increased $18.9 billion (0.1 percent).

The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.3 percent (table 9). Real DPI increased 0.3 percent in May and real PCE decreased by less than 0.1 percent; goods decreased 0.4 percent and services increased 0.2 percent (tables 5 and 7)

Jan. Feb. Mar. Apr. May
Percent change from preceding month
Personal income:  
     Current dollars 0.7 0.4 0.4 0.3 0.4
Disposable personal income:  
     Current dollars 2.3 0.6 0.5 0.3 0.4
     Chained (2012) dollars 1.7 0.3 0.3 -0.1 0.3
Personal consumption expenditures (PCE):  
     Current dollars 1.9 0.3 0.1 0.6 0.1
     Chained (2012) dollars 1.3 0.0 0.0 0.2 0.0
Price indexes:  
     PCE 0.6 0.3 0.1 0.4 0.1
     PCE, excluding food and energy 0.5 0.3 0.3 0.4 0.3
Price indexes: Percent change from month one year ago
     PCE 5.4 5.0  4.2 4.3 3.8
     PCE, excluding food and energy 4.7 4.7  4.6 4.7 4.6


From the preceding month, the PCE price index for May increased 0.1 percent (table 9). Prices for goods decreased 0.1 percent and prices for services increased 0.3 percent. Food prices increased 0.1 percent and energy prices decreased 3.9 percent. Excluding food and energy, the PCE price index increased 0.3 percent. Detailed monthly PCE price indexes can be found on Table 2.4.4U.

From the same month one year ago, the PCE price index for May increased 3.8 percent (table 11). Prices for goods increased 1.1 percent and prices for services increased 5.3 percent. Food prices increased 5.8 percent and energy prices decreased 13.4 percent. Excluding food and energy, the PCE price index increased 4.6 percent from one year ago.

Real PCE

The decrease of less than 0.1 percent in real PCE in May reflected a decrease of 0.4 percent in spending on goods that was partly offset by an increase of 0.2 percent in spending on services (table 7). Within goods, the largest contributor to the decrease was spending on new motor vehicles and parts (led by new light trucks). Within services, the largest contributors to the increase were “other” services (led by international travel) and spending on transportation services (led by public transportation). Detailed information on monthly real PCE spending can be found on Table 2.4.6U....

"Canada Bread pleads guilty in bread price-fixing scandal, will pay record $50-million fine"

"People of the same trade seldom meet together, even for merriment and diversion, but 
the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.
It is impossible indeed to prevent such meetings, by any law which either could be executed, 
or would be consistent with liberty and justice. 
But though the law cannot hinder people of the same trade from sometimes assembling together, 
it ought to do nothing to facilitate such assemblies; much less to render them necessary."
The Wealth of Nations, Book I, Chapter X.

From Canada's The Star, June 21:

The plea agreement is the first to come out of the Competition Bureau’s seven-year investigation into one of Canada’s largest price fixing scandals.

Canada Bread has admitted to colluding with rival Weston Foods to set Canadian bread prices, marking a major development in the Competition Bureau’s seven-year investigation into one of the largest price-fixing scandals in the country’s history.

The plea agreement from Canada’s largest producer and distributor of fresh bread and bakery products includes a record $50-million fine for co-ordinating price hikes with Weston Foods in 2007 and in 2010-11.

At those times, Canada Bread was controlled by Maple Leaf Foods, itself controlled by the McCain family, while Weston Foods was a division of George Weston, the owner of Canada’s biggest grocer, Loblaw Companies, and controlled by the Weston family. Both bakers have since been sold to new owners.

“Effectively, this was a fraud on the public,” Justice Maureen Forestell of the Ontario Superior Court of Justice in Toronto wrote in a decision on Wednesday approving the $50-million sentence, which was jointly proposed.

“The offences had a far-reaching and long-standing impact on the victims,” Forestell wrote. “Bread is a dietary staple for many and these offences affected millions of consumers.”
It’s the first plea agreement to come out of the Competition Bureau’s seven-year investigation into allegations that some of the country’s largest commercial bakers and grocers fixed the price bread for years....


The investigation took seven years? In old-timey France the people would have been on their eighth or ninth riot:

From an October 14 post:

...If you've never studied mid/late 18th century French economic history it  can be summarized as:

Food got expensive.

There were riots. 

(oh, and Necker)

Pericles Press: France - The Economic History

—Chronology of Economic Events


Riots over prices in Le Havre and Nantes.
Riots in Rheims.
Government efforts to deal with shortages lead to popular rumors of a 'famine pact' among the nobility to starve the people.
May 10 - Louis XVI ascends to throne of France.
Poor harvest in the fall.
April 27-May - "Flour War"
Bread prices in Paris increase by over 50%..
Rioting starts at Beaumont-sur-Oise, spreads to Paris..
Hundreds arrested, two executed, before order is restored.
June 11 - Coronation of Louis XVI.
October 22 - Necker appointed Director of the Treasury.
Necker begins financing money for American War of Independence through governmental loans, rather than taxes. System will raise 520 million livres by May 1781.

....MORE(we haven't even gotten to 1789 and those years yet)

Capital Markets: "Market Continues to Converge With Fed's Forward Guidance"

 From Marc to Market:

Overview:  A key development in recent days has been the market's convergence with the Federal Reserve's forward guidance regarding scope for two quarter-point hikes in the second half. The US two-yield is up about six basis points today, extending yesterday's 15 bp increase. It is approaching 5%. The Fed funds futures strip implies one hike has been fully priced in and about a third of the next one. The dollar has risen against all the G10 currencies this week but the Norwegian krone. It is mixed today (+/- ~0.20%) ahead of US data, and especially the PCE deflator. The weakness in China's PMI and Japan's industrial output contrasts with the string of stronger than expected US economic data.

Asia Pacific equities were mixed, while Europe's Stoxx 600 is advancing for the fourth consecutive session, which snapped a six-day down draft that ended on Monday. US index futures enjoy a firmer bias. Among the large bourses, the S&P 500 is up nearly 7% this quarter compared with less than 1% gain of the Stoxx 600. The Nikkei leads with a nearly 18.4% surge. China's CSI 300 is off a little more than 5%. Europe's 10-year yields are mostly 2-3 bp firmer, but the Gilt yield has jumped seven basis points bringing the Q2 increase to more than 90 bp. The 10-year US Treasury yield is up five basis points near 3.89%, a 34 bp rise this quarter. Gold recovered from the first dip below $1900 in three months but stalled near $1910 and is now below $1905. August WTI is firm and reached a new high for the week near $70.75. It is up about 1.5% this week after falling almost 4% last week. For the quarter, it is off almost 7% after falling nearly 5% in Q1....


Thursday, June 29, 2023

"The Astor penthouse might have London’s best private rooftop view"

From Spear's Magazine, April 26:

It's the £35 million 'jewel in the crown' of Westminster's new development, 9 Millbank

The world of super-prime London is awash with penthouses – gilded top-floor residences standing tall over a canopy of greyer, more mundane architecture.

Yet few homes possess a private roof-terrace view close to the Thames’ glittering waters and replete with London landmarks stretching across all four corners of the city.

At The Astor, from luxury developer St Edward, one lucky UHNW family will soon be sunbathing on a rooftop directly under the iconic facade of Big Ben, right in time for summer.

That is, once they fork out a cool £35 million for the three-bedroom pad.


"Shadow reserves — how China hides trillions of dollars of hard currency"

So there I was, wondering about the paucity of posts and tweets from's Izabella Kaminska, ready to send up the Bat Signal (before thinking "wait, no bats, covid", there goes that franchise) when lo and behold, her Twitter feed points us to Alea who points us to this. 
Brad Setser at The China Project, June 29:
China has a lot of foreign exchange reserves that do not show up in the official books of the People’s Bank of China. Those funds have been hidden in the state banks, and largely escaped scrutiny.

China is so big that how it manages its economy and currency matters enormously to the world. Yet over time the way it manages its currency and its foreign exchange reserves has become much less transparent – creating new kinds of risks for the global economy.

From 2002 to 2012, China’s central bank was active in the currency market almost every day — usually buying dollars to keep China’s currency from rising, and to make sure China’s exports stayed cheap.

During this period, China’s foreign exchange reserves steadily increased. So did China’s holdings of Treasuries and the bonds issued by Freddie Mac and Fannie Mae— the two major types of “Agency” bonds that are implicitly backed by the U.S. federal government Economists worried that China’s intervention in the currency market was keeping trade unbalanced; foreign policy gurus worried that China might sell bonds in a moment of geopolitical tension, turning a security crisis into a financial crisis.

But a funny thing happened sometime over the last ten years: China’s reserves stopped rising. Sure, the number reported by the foreign exchange authorities bounces around a bit, as the market value of China’s long-term bonds and euros sambas with global markets. But the foreign exchange reserves reported by the central bank (the People’s Bank of China or PBoC), which accounts for its reserves on its balance sheet at their historical purchase price, has been constant.

The stability of China’s reported reserves is a real puzzle. Despite all the talk of deglobalization, China’s export surplus is actually at an all time high. China’s true current account surplus is likely larger than the $400 billion that China now officially reports. And currency traders know that China’s currency bounces around a lot less than other big currencies — the yuan doesn’t act like a currency that is tightly pegged to the dollar anymore, but it doesn’t act like a freely floating currency either.

So what is going on?

Just as China has “shadow banks” — financial institutions that act like banks and take the kind of risks that a bank might normally take but aren’t regulated like banks — China has might be called “shadow reserves.” Not everything that China does in the market now shows up in the PBoC’s balance sheet....


"The Terror of Threes in the Heavens and on Earth"

From the New York Times

Physicists have long explored how phenomena in groups of three can sow chaos. A new three-body problem, they warn, could lead to not only global races for new armaments but also thermonuclear war.

Isaac Newton was baffled. He was already famous for discovering how gravity holds the universe together and for using that knowledge to predict the movements of celestial bodies, such as the moon’s path around the Earth. Now, by taking the sun’s gravitational tugs into account, he sought to improve his lunar predictions. Instead, it made them worse.

The setback, Newton’s friend Edmond Halley reported, “made his head ache, and kept him awake so often, that he would think of it no more.” Newton felt his defeat so keenly that he recalled it more than once in his old age.

Today it’s called the three-body problem. Famous in science and science fiction for orbital perturbations and chaotic phenomena, it’s recently become a concern of atomic experts and military planners. As Beijing rapidly expands its nuclear arsenal, they warn that the world of atomic superpowers is about to escalate to three from two. The outcome, they add, compared with the Moscow-Washington standoff, now 70 years old, could represent a dangerous new kind of unthinkable.

The looming era could encourage “states to resort to nuclear weapons in a crisis,” Andrew F. Krepinevich Jr., a senior fellow at the Center for a New American Security, recently warned. He cited the natural instabilities observed by physicists and astronomers as a portent.

Experts say the tripolar age could put human survival at risk. But they also cite a number of three-body lessons from nature — starting with Newton’s — that illuminate the issue and suggest possible ways forward. So far, however, no answer stands out. The world’s nuclear thinkers are finding the knotty topic to be as intractable as it was for Newton.

“We have a conceptual problem,” said Ernest J. Moniz, a physicist who as the secretary of energy in the Obama administration oversaw the U.S. nuclear arsenal. “We’ve got to change the traditional approach of equalizing weapons or strategic delivery systems, but how to do that is still unclear.”

France A. Córdova, an astrophysicist and past director of the National Science Foundation, said the study of three-body phenomena in the natural sciences could nonetheless help reveal the military risks. “Things are changing very rapidly,” she said. “Anything that helps in understanding that is great.”

Security-minded hawks want to expand the American arsenal in response to China’s nuclear rise and the threat of Beijing’s closing ranks with Moscow. Doves see a window for three-body downsizing. They want to break the problem into smaller and more manageable parts. For instance, they argue that Washington should deal with the two superpowers independently and seek diplomatic bonds that reinforce two-body stability....


"2023 is the summer of Barbie"

From Morning Brew, June 27:

Kris Jenner works hard, but Barbie’s marketing team works harder.

On Monday, Airbnb listed a real-life Barbie Malibu Dreamhouse hosted by “Ken.” It’s only available for two one-night stays, but if you’re lucky enough to score one of them, it won’t cost you a dime: “Ken’s thing is beach, not math,” according to a press release.

The Dreamhouse rental is yet another viral marketing stunt for the upcoming Barbie movie, which has cemented itself as the cultural event of the summer. A promotional effort that began in the spring with a selfie generator and a beguiling trailer (what exactly is the plot?) has ballooned to include seemingly infinite partnerships and even a themed boat cruise in Boston, proving that Kris Jenner works hard, but Barbie’s marketing team works harder.

In fact, the hype around the movie has inspired a whole new wave of interior design:

  • It’s leading more adults to decorate their homes in Barbiecore, “a palette made up primarily of hot pink, and similarly bold rosy hues like fuchsia and magenta,” the NYT reported.
  • According to the Times, searches for “Barbie aesthetic bedroom” on Pinterest jumped 1,135% from May 2022 to May 2023.

The pink fuzz is generating ear-piercing buzz

With every brand under the Malibu sun trying to get in on the Barbie action, Barbiecore is proving to be more than just a color palette. Mattel, the company that launched Barbie in 1959, and its 100+ brand collaborators, are seeing opportunity in seemingly every consumer category:

  • For gamers…Xbox is making a Barbie-themed console.
  • For style influencers…Aldo is collaborating with Barbie on pink shoes and accessories....



New York Fed: The Federal Reserve and Barbie
Here Comes Artificial Intelligence Barbie
The Promise of 3D Printing, Fulfilled: Open source 3D printed medieval armor for your Barbie doll
"Limited Edition Andy Warhol Barbie Hits the Shelves"
From artnet:

The Andy Warhol Foundation and toy manufacturer Mattel collaborated to create the doll. Photo: InStyle
The Andy Warhol Foundation and toy manufacturer Mattel collaborated to create the doll.
Photo: via InStyle

And another repost, this time featuring the detective work of Messy, Nessy Chic:

Huh, Apparently The Barbie Doll Began Life As a High-end German Call Girl Named Lilli

Barbie Adds Tall, Curvy and Petite Body Types to its Doll Line
It's about time.
As Mattel rolls out some additions to the Barbie line-up, three new body types, "tall, curvy and petite" along with seven skin tones, 22 eye colors and 24 hairstyles--collectors are calling their banks to confirm their credit lines-- here's some backstory from Messy Nessy Chic:

Meet Lilli, the High-end German Call Girl who became America’s Iconic Barbie Doll

So it turns out Barbie’s original design was based on a German adult gag-gift escort doll named Lilli. That’s right, she wasn’t a dentist or a surgeon, an Olympian gymnast, a pet stylist or an ambassador for world peace. And she certainly wasn’t a toy for little girls…

Lilli on display at the Barbie Museum in Prague

Unbeknownst to most, Barbie actually started out life in the late 1940s as a German cartoon character created by artist Reinhard Beuthien for the Hamburg-based tabloid, Bild-Zeitung. The comic strip character was known as “Bild Lilli”, a post-war gold-digging buxom broad who got by in life seducing wealthy male suitors....
...She was famously quick-witted and known to talk back when it came to male authority. In one cartoon, Lilli is warned by a policeman for illegally wearing a bikini out on the sidewalk. Lilli responds, “Oh, and in your opinion, what part should I take off?”....


Please don't judge me.

"On Point: The Wagner Revolt Leaves Losers Worldwide"

Solid analysis plus Condottieri ref's, I'm sold.*

From Austin Bay's Strategy Page, June 28:

A suspect deal between Russian President Vladimir Putin and mercenary commander Yevgeny Prigozhin ended the short-lived but stunning Wagner Revolt.

Revolt it was. The Wagner force took Rostov, a major city and the site of the Russian Army's headquarters for the Ukraine War. A Wagner flying column with tanks and mechanized infantry rolled toward Moscow. Wagner forces fought at least two heavy skirmishes with Russian Army units and shot down a half-dozen helicopters and a couple of fixed-wing aircraft. That's real combat, not a Potemkin faux-revolt.

Putin angrily called Prigozhin a traitor. Prigozhin clearly launched an attack on the Russian state.

Prigozhin has made several claims. Since January he's criticized Defense Ministry warfighting decisions, bluntly arguing the war is run by corrupt incompetents. The Kremlin's recent decision to disband his mercenary organization outraged him. On June 10 Wagner fighters were told to sign government military contracts by July 1. Prigozhin also claimed his move was a response to an attack (presumably by the Russian Army) that killed over 30 Wagner fighters. "We started our march because of an injustice," he said in an audio statement. The Wall Street Journal reports he intended to seize senior Defense Ministry leaders traveling in southern Russia. When intelligence services exposed the plot, he attacked.

Prigozhin has done well for a brutal thug and a caterer. He casts himself and his men as Russian patriots fighting for Russia in Ukraine, Syria and Africa. He definitely has many Russian admirers.

With the plot exposed, it appears Prigozhin gambled his bold act would ignite a mass revolt. That's grandiose to the point of delusion.....

....I distrust mercenary organizations. In August 2000 I recorded an NPR Morning Edition commentary expressing skepticism about the UN's proposal to hire mercenary peacekeepers. In the 14th century, Italian Condottieri (contractors) mercenary companies often disregarded the contracts with city-states and took power to themselves. Wagner has done that in the Central African Republic....

If interested see June 23's "Machiavelli on Mercenaries". 

Logistics: "Teamsters warn of 'imminent' UPS strike affecting 'nearly all Americans'"

 From United Press International, June 28, 9:54 PM:

The International Brotherhood of Teamsters warned Wednesday that a nationwide UPS strike is "imminent" after the powerful union walked away from the bargaining table.

The Teamsters said in a statement that the union, the largest in the United States, has given UPS one week to "act responsibly" and provide a better economic proposal for 340,000 full- and part-time workers.... 

.... "With a deadline of Friday to return a last, best, and final offer, UPS risks putting itself on strike by August 1 and causing devastating disruptions to the supply chain in the U.S. and other parts of the world," the union said....


Meanwhile at FreightWaves: 

Teamsters demand UPS present last, best, final offer by Friday
Ultimatum moves up offer deadline by several days

....“The largest single-employer strike in American history now appears inevitable,” said Teamsters General President Sean M. O’Brien.... 

Questions Americans Want Answered: "Is the Army’s New Tactical Bra Ready for Deployment?" (and what about the radioactive cockroaches)

From The New Yorker, June 19:

It’s fire-resistant but not bulletproof, and was developed with help from eighteen thousand female soldiers.

Last summer, with the momentousness of a gender-reveal party and the exuberance of a ticker-tape parade, the United States Army announced its first combat-ready bra to the world. They called it the Army Tactical Brassiere (a.k.a. the A.T.B.). Conceived four years ago, the garment is still being tinkered with, but one day it will be a wardrobe staple for all women in the Army. David Accetta, the chief public-affairs officer for the research division developing the undergarment, the DEVCOM Soldier Center (“DEVCOM” stands for U.S. Army Combat Capabilities Development Command), told Army Times that, if the brassiere is officially approved by the Army Uniform Board, “we would see that as a win for female soldiers.” Ashley Cushon, the project engineer of the team working on the item, assured me that it would “reduce the cognitive burden on the wearer.” And a military Web site reported that the A.T.B. would improve “overall soldier performance and lethality.” Gadzooks! Yes, it’s flame-resistant, but what else can it do? Shoot bullets? Hypnotize the enemy? Turn its wearer invisible?

I decided that I needed to try on The Bra. Full disclosure: there is no undergarment in the world that would gird my loins enough to prepare me for combat. I shy away from quarrels; I am afraid of bear spray. Clothes and gear, however, are another story, and, surprisingly, we owe many of the things that we wear and use every day to the military: beanies, cargo pants, T-shirts, trenchcoats, and aviator glasses—and can we agree that sanitary napkins count as gear? Duct tape, Cheetos, and Silly Putty all have military origins.

At ten hundred hours, on a cold morning in March, I arrived at the seventy-eight-acre Soldier System Center, a military installation in Natick, Massachusetts, west of Boston, to meet The Bra. At the first of two security gates, I was greeted by Accetta. (Tip: If you can’t arrange for a vetted Trusted Traveler escort, as I did, you’ll need to bring two I.D.s. Your draft record or your Defense Biometric Identification will work.) Accetta and I trudged down Upper Entrance Lane, past yellow plastic crash barriers plastered with such aphorisms as “People First” and “Winning Matters,” until we reached Building 4, MacArthur Hall, C.C.D.C. (a.k.a. DEVCOM) Soldier Center. (Accetta said, “I’m convinced there’s an acronym generator at D.O.D.”) Whoever names these organizations must get paid by the word.

The original purpose of DEVCOM Soldier Center, which was founded as the Quartermaster Research Facility, in 1949, was to update equipment that had proved tragically inadequate during the Second World War. For instance, the tents. They might have fared fine if the war had taken place in Santa Barbara, California, in May, indoors. In the muggy South Pacific jungle, though, the fabric succumbed to mildew and disintegrated after two weeks. Soldiers wearing uninsulated boots when they invaded the Aleutian Islands sustained more injuries from trench foot and exposure than they did from enemy fire.

The Soldier Center’s purview these days includes not just textiles and uniforms but shelters, airdrop systems, weaponry, and food. Projects have included a uniform that can change color and one that would enable troops to leap over twenty-foot walls; a courage pill; an “instant chapel,” which can be parachuted into war zones and which contains camouflage-patterned Jewish prayer shawls and compasses that point toward Mecca; a prototype for a protein bar (but doused with kerosene to insure that a soldier would eat it only in an emergency); and, as part of a pest-control experiment in 1974, irradiated cockroaches, which (whoops) escaped from garbage bags in the town dump and invaded homes—a screwup that required six months of repeated DDT and chlordane spraying to fix.

Today, the Soldier Center’s labs are more Willy Wonka-ish than ever. There are two climate chambers—one designated Tropics, the other Arctic—which can re-create just about any environment on earth in order to test products and the responses of human beings. Want to have your vitals monitored while you cycle on a stationary bike with forty-m.p.h. winds gusting your way, at temperatures of up to a hundred and sixty-five degrees Fahrenheit? You can do it here. Copper mannequins equipped with more than a hundred sensors are used to test hopefully protective garments, to see how soldiers would weather flash-fire scenarios similar to those resulting from an I.E.D. And, in Building 36, the Combat Feeding Division food-research people are concocting an assortment of meals in tubes—caffeinated chocolate pudding and truffle macaroni and cheese—to be consumed through straws jutting from ports in helmets. Each M.R.E.—meal ready-to-eat—is topped off with xylitol-enriched chewing gum to replace teeth brushing.

But lunch could wait (it’ll remain edible for three years)....


The writer is Patricia Marx, here is some of her other stuff at The New Yorker.

"Netherlands talking to three suppliers to build new nuclear power plants"

 From Reuters via Yahoo Finance, June 29:

The Netherlands is talking to "three potential and interested suppliers" to build two new nuclear power plants, Energy Minister Rob Jetten said on Thursday in a letter to parliament.

It concerns the American company Westinghouse, the French state-owned company EDF and South Korea's KHNP....


June 27: "Swedish Government Wants More Nuclear Power as Opposition Eases".

One more and we'll have a trend. 

Chips: "Nvidia Leads, Habana Challenges on MLPerf GPT-3 Benchmark" (NVDA; INTC)

From EE Times, June 26:

The latest round of MLPerf training benchmarks includes GPT-3, the model ChatGPT is based on, for the first time. The GPT-3 training crown was claimed by cloud provider CoreWeave using more than 3,000 Nvidia H100 GPUs. What’s more surprising is that there were no entries from previous training submitters Google, Graphcore and others, or other competitors like AMD. It was left to Intel’s Habana Labs to be the only challenger to Nvidia on GPT-3 with its Gaudi2 accelerator.

CoreWeave used 3,584 Nvidia HGX-H100s to train a representative portion of GPT-3 in 10.94 minutes (this is the biggest number of GPUs the cloud provider could make available at one time, and is not the full size of its cluster). A portion of GPT-3 is used for the benchmark since it would be impractical to insist submitters train the entirety of GPT-3, which could take months and cost millions of dollars. Submitters instead train an already partially-trained GPT-3 from a particular checkpoint until it converges to a certain accuracy. The portion used is about 0.4% of the total training workload for GPT-3; based on CoreWeave’s 10.94 minutes score, 3,584 GPUs would take almost two days to train the whole thing.

Nvidia graph - H100 versus Gaudi2, Xeon

Nvidia’s graph shows per-accelerator performance for its H100 versus Intel Xeon CPUs and 
Habana Labs Gaudi2 (normalized to H100 result—taller is better). (Source: Nvidia)
Nvidia H100s were used for the bulk of the GPT-3 submissions. This is the leading hardware for AI training on the market. Its software includes Nvidia’s Transformer Engine, designed specifically to speed up training and inference of networks based on the same architecture as GPT-3, by lowering precision to FP8 to improve throughput wherever possible....


The U.S. Has High-Speed Rail

It's not as fast as the trains in France, and about the same speed as Japan's Tokyo - Osaka run, but it is quicker than California's.*

From ConstructionDive, June 22:

Brightline’s $5B Orlando high-speed rail extension complete 

Dive Brief:

  • Private passenger railroad company Brightline celebrated the completion of its $5 billion, 170-mile Orlando-to-South Florida high-speed rail extension on Wednesday, built by five different contractors. Brightline is the first private entity to deliver an intercity rail system in the U.S. in more than a century, the company claims.
  •  The new line runs from the recently-built South Terminal at the Orlando International Airport to West Palm Beach, Florida, according to a Palo Alto, California-based Brightline press release. It will connect to its existing line between Miami and West Palm Beach, which has carried passengers since 2018.
  •  Brightline divided work on the Orlando extension into four zones, and the project included constructing a $100 million vehicle maintenance facility, tenant buildout of the Orlando station at Orlando Airport, 56 bridges, three new underpasses and upgrades to 156 railroad crossings.

Dive Insight:
Brightline’s Orlando expansion broke ground in June 2019, one year after operations began in South Florida between its Miami, Fort Lauderdale and West Palm Beach stations. Despite the COVID-19 pandemic and supply chain shortages, the opening was only slightly delayed from its original 2022 date, according to the release....

Brightline expects to start construction on their Los Angeles - Las Vegas train this year. 
....The company‌ ‌pulled out in 2011. “There were so many things that went wrong,” Mr. McNamara said. “SNCF was very angry. They told the state they were leaving for North Africa, which was less politically dysfunctional. They went to Morocco and helped them build a rail system.”

    Morocco’s bullet train started service in 2018.....

There you have it, North Africa is less politically corrupt than California. Just amazing.... 
And a couple dozen more. I apparently have a fascination for train disasters, just not of the Gare Montparnasse variety:

Media: Disney-Owned "National Geographic magazine has laid off the last of its staff writers"

From CNN, June 28:

National Geographic, the iconic yellow framed magazine that has chronicled the natural world for more than 100 years, laid off its last remaining staff writers this week, multiple departing staffers said.

It was unclear how many staffers were cut during the latest round of layoffs at the magazine, but the move comes as parent company Walt Disney Co. has slashed thousands of staffers across its divisions this year.

National Geographic, which had more than 1.7 million subscribers at the end of 2022, will continue to publish monthly issues, a magazine spokesperson told CNN in a statement on Wednesday.

“Staffing changes will not change our ability to do this work, but rather give us more flexibility to tell different stories and meet our audiences where they are across our many platforms,” the spokesperson said. “Any insinuation that the recent changes will negatively impact the magazine, or the quality of our storytelling, is simply incorrect.”

News of the layoffs was reported on Twitter Tuesday when departing magazine staff writers began to circulate the news....



Capital Markets: "PBOC Fixes Dollar Lower, but It Recovers Against the Yuan, Riksbank Hikes and Market Yawns"

From Marc Chandler at Bannockburn Global Forex:

Overview: The US dollar is narrowly mixed against the G10 currencies. Stronger than expected Australian retail sales helped steady the currency after the soft inflation data took it down. Sterling has also steadied after it suffered its largest loss yesterday (~0.9%) in over a month. Sweden's 25 bp rate hike has not given the krona much of a lift. Central European currencies lead the emerging market currencies higher, while the PBOC set the dollar's reference rate lower than expected. Still the yuan is softer.

Equities in Asia were mixed, but the Europe's Stoxx 600 is posting gains for the third consecutive session. US large banks passed the Fed's stress test, and some good earnings news is helping US index futures post modest gains. Benchmark 10-year bonds yields are mostly 4-6 bp higher in Europe and the US 10-year Treasury yield is about five basis points higher near 3.76%. Gold remains softer and testing the $1900 area, which it has not traded below since mid-March. August WTI recovered from almost $67 yesterday to test $70 today where is has stalled.

Asia Pacific...


Wednesday, June 28, 2023

"China rushes to market with next-gen solar cell"

From Asia Times, June 21:

Gaining ground in global race to raise PSC cell efficiency, some Chinese firms have started production to secure a first mover edge 

Chinese scientists have successfully boosted the efficiency of a new generation solar cell to 28% in a race with foreign rivals who achieved the result in December 2018 and have since pushed that level to 33.2% in April this year.

Not waiting for solar perfection, some Chinese firms, including a company established by China’s leading researcher, already have gone into production of perovskite and silicon tandem solar cells (PSC). 

This so-called third-generation solar cell is said to be able to convert 50-75% more sunlight into electricity than the traditional silicon photovoltaic (PV) cell.

The product is also 95% cheaper than the silicon solar cell as its key raw material is methylammonium lead iodide, making it a potential great option for countries that want to switch to solar power to meet their carbon neutrality targets.

Tan Hairen, a professor at Nanjing University’s College of Engineering and Applied Sciences, and his team announced their PSC technology “breakthroughs” in an article published by Nature, a London-based weekly scientific journal, on June 8....


Our last post on perovskite, May 12, 2023, was a rather odd story:

First Solar Buys European Solar Firm. First Solar (the acquirer) Jumps 25% (FSLR)

Dammit, dammit, dammit.*

Here's today's news from pv-magazine:

First Solar acquires perovskite specialist Evolar

First Solar has agreed to pay $38 million to buy Swedish manufacturing startup Evolar AB, as it seeks to expand development of high-efficiency tandem PV tech.

....First Solar said it is buying Swedish manufacturer Evolar AB in a bid to accelerate its efforts to develop tandem PV technology. The U.S. solar module maker will initially pay around $38 million, but it might later pay an additional $42 million, subject to certain technical milestones being achieved in the future.

First Solar said in a statement on Friday that the acquisition will accelerate the development of next generation PV technology, including high-efficiency tandem devices. It aims to integrate Evolar’s know-how with its existing research and development streams, intellectual property portfolio, and expertise in developing and commercially scaling thin-film PV.....


Now perovskite  is going to be a big deal, but it's not yet. And the idea of somehow combining FSLR's current low-cost, low-efficiency cadmium telluride approach with the ultra-high efficiencies that are already being achieved with perovskite in the lab are potentially very profitable but... methinks today's stock action looks more like some shorts covering in fear of the unknown rather than new-position buyers sitting down and doing a discounted cash analysis that results in a "By George, this company is worth  25.49% more than it was yesterday. ($229.88 up $46.69)
*We got rid of our proprietary "What's on T.V. Timing Model":

So, Why Were the NGO's and the Transnational Orgs. Making Noise About Burundi A Couple Years Ago? (RBW: LON)

We have an early warning system that can sometimes point to where the (geographical) action might show up and in 2016 and 2017 Burundi came into focus.
The early warning system's technique can also be used to hint at mergers and acquisitions but had a rather significant flaw as noted in a 2014 post:
WARNING: Our proprietary "What's on TV" buyout model (backtested to February) has proven skill in identifying one of the parties to an acquisition however THE COMPANY WE IDENTIFY ALMOST ALWAYS TURNS OUT TO BE THE ACQUIRER, NOT THE ACQUIREE. 

As far as directional bets are concerned, this is not all that helpful.
And getting away from directional, it is our experience that truth-in-advertising for the pair trade risk arbitrage dark arts would put the emphasis on the risk part of the term rather than the arbitrage.

Anyway....where was I? Ah, early warning. Here are a couple of our Burundi posts....

By-the-bye, First Solar has come back a bit, $184.22 at the close today.

"Who has the Oil Price Advantage: the Saudi Prince or the Speculators?"

From Neue Zürcher Zeitung's, June 20:

Oil bears, beware. Prices are still determined by the physical market (not the futures market) and by the supply side (not the demand side). And China might well surprise on the upside.

Deutsche Version

Oil traders seem to be ignoring Saudi Arabia’s oil production cuts. Oil prices haven’t been surging in reaction to Riyadh’s recent output tightening. For months now, OPEC+, under Riyadh’s leadership, has been maintaining upside pressure on prices with successive announcements of supply reduction.

At the beginning of June, the Gulf monarchy pledged another cut for July, bringing its production to the lowest level in a decade. What has been the impact of those cuts? After the June announcement, Brent futures briefly jumped before falling back to exactly where they were a week earlier. After the decision in April to cut production, prices were back where they were after less than a month. Crude oil prices (Brent) have been steadily going down for a year now.

Many negative factors
One key element is that the market seems to believe that these bullish cuts will be largely offset by bigger bearish forces. Indeed, the fear of slowing Chinese demand is now rising, despite mixed macro signals from Beijing. The high Chinese oil inventories are another bearish factor, although they are going down as we speak. In addition, the fact that Russia has seen its oil shipments soar this year, despite Western sanctions, tilts the risk towards higher supplies while global demand is slowing. Inside OPEC+, Russia has diverging interests: in the face of Western sanctions, it has had to grant China and India considerable price discounts on its oil.

These factors combined explain why Saudi Arabia is now a bit lonely in its fight for oil price increases.... 


Previously from this author, Myret Zaki:
"Are Financial Attacks the Modern Economic Wars?"

And as noted in our March 26 post "ECB warns that shadow banking could trigger next financial crisis":

....Raising the question: How exposed to the shadow bankers was Credit Suisse? And who else has big exposure?

On the first question, Myret Zaki, who has looked at shadow banking a few times, seems to think the answer is "A fair amount.":

L’arbre Credit Suisse cache la forêt du «shadow banking»

And a few years ago: 

And a few days ago:

The Cost of Ignoring the Shadow Banking System

The Guy Who Invented The Lithium-Ion Battery Died On Sunday But He Had Another Idea

From IEEE Spectrum, June 26:

Goodenough’s Glass Battery Keeps Getting Better?
A prototype solid-state battery based on lithium and glass faces controversy over claims that its capacity increases over time

UPDATED 26 JUNE 2023: According to the University of Texas at Austin and The New York Times, John Bannister Goodenough died yesterday at an assisted-living facility in Austin at the age of 100. (He passed away a month shy of his 101st birthday.) The centenarian Nobel Laureate had for decades earned accolades and recognition in his field as one of the inventors of the now-ubiquitous lithium-ion battery. At the time of the following interview (and indeed at the time of a previous Spectruminterview with the legendary engineer in 2017), his latest work was still being unveiled concerning a glass-based electrolyte that might make great strides in lithium ions’ problems of both energy density limitations and thermal runaway problems. To this day, the conclusions of these papers are broadly considered—as witness an investigation this year by a Japanese team this year into the reaction mechanisms in the glass battery’s chemistry alongside a critical investigation of, among other technologies, the new Goodenough battery (often associated with Goodenough’s co-author Maria Helena Braga of the University of Porto in Portugal) in the journal Nature Communications in January. IEEE Spectrum extends its condolences to Dr. Goodenough’s family, friends, and his many colleagues, acolytes, graduate students, and admirers around the world.
IEEE Spectrum

Story from 30 May 2019 follows:

Is there such a thing as a battery whose capacity to store energy increases with age? One respected team of researchers say they have developed just such a technology. Controversy surrounds their claims, however, in part because thermodynamics might seem to demand that a battery only deteriorates over many charge-discharge cycles.

The researchers have a response for that critique and continue to publish peer-reviewed papers about this work. If such claims came from almost any other lab, they might be ignored and shunned by the broader community of battery researchers, the same way physicists turn their noses up at anything that smacks of a perpetual motion machine.

But this lab belongs to one of the most celebrated battery pioneers today—and one of the inventors of the lithium-ion battery itself. John Goodenough, who at 96 continues to research and publish like scientists one-third his age, last year joined with three co-authors in publishing a paper that grabbed headlines. (Spectrum had profiled him and his battery technology the year before, following an initial announcement about his group’s new glass battery.)

Goodenough and collaborators claimed they’d developed a non-flammable lithium battery (whose electrolyte was based on a glass powder) that had twice the energy density of traditional lithium-ion batteries. They also published a graph that showed an increase in capacity over more than 300 charge-discharge cycles. (This increase, however, pales in comparison to the cell’s at least 23,000-cycle lifespan.)....


Our 2019 post on the glass battery (note similarity in headlines. here at Climateer Investing we recycle!):

As the President of his University said:

“John’s legacy as a brilliant scientist is immeasurable —
his discoveries improved the lives of billions of people around the world,” 

Why Elon Musk Went to Italy

From 19fortyfive, June 18:

Twitter CEO Elon Musk met Italian Prime Minister Giorgia Meloni on Thursday during his trip to Italy. The two reportedly discussed Italy’s low birthrates as well as the potential dangers of Artificial Intelligence (AI). Here’s a look at what the SpaceX founder and Italian leader talked about and why it matters.

Meeting of the Minds: Musk and Meloni
Musk has said on several occasions that he believes the greatest challenge facing humanity is underpopulation. He raised this concern with Meloni during their Thursday meeting in Rome – and that matters because Italy has experienced a plummeting birthrate since the 2008 financial crisis and currently has a fertility rate of 1.24 births per woman.

In 2020 Italy experienced the lowest amount of births since it was unified into a nation state in 1861. In April of this year Musk warned that “Italy is disappearing!” and said that having kids should be “celebrated” and policies put in place to favor larger families.

The Tesla chief also spoke to Italy’s Foreign Affairs Minister Antonio Tajani about how to move forward in the automotive industry and aerospace, with Tajani saying Italy is “ready to collaborate on the challenges of our time such as cybersecurity.”

Elon’s Euro Trip
Musk stopped in Rome as part of a short European tour planned to help him decide where to build his next Tesla manufactuirng plant. After his time in Rome, Musk spoke Friday in Paris at the Viva Tech conference and met with French President Emmanuel Macron.....


Media: For The Second Time This Month OPEC Pulls Credentials For Bloomberg, Reuters And The WSJ

Maybe the reporters need a pool?

From Bloomberg, June 28:

OPEC Shuts Bloomberg, Reuters and WSJ Out of Oil Conference
    No reason for the decision was given by OPEC secretariat
    It’s the second time OPEC bars journalists in a month 

OPEC has canceled accreditation for reporters from three major news organizations to cover a conference in Vienna that will feature the head of BP Plc and the European Union’s top energy official.

“We are very concerned by the prospect of OPEC excluding certain journalists, including from Bloomberg, from next week’s seminar,” Bloomberg News said in a statement. “For the sake of market transparency, we strongly advocate for OPEC to allow journalists from relevant global news outlets to attend.”

Reuters and the Wall Street Journal have also had their accreditations withdrawn, according to people familiar with the situation. Reuters and the WSJ had no immediate comment.
The Organization of Petroleum Exporting Countries, which together with allies in the wider OPEC+ coalition sets oil production policy for 23 countries, is gathering for a seminar at the state-owned Hofburg palace in Vienna on July 5-6.

It’s the second time that OPEC has excluded the journalists from its meetings in about a month. In May, the group decided against inviting reporters from Bloomberg, Reuters and the Wall Street Journal to a policy meeting on June 3-4, even as other reporters were allowed to attend. The group defended its decision at the time, without explaining it.

“This is our house,” Secretary General Haitham Al Ghais said at a news conference after that meeting....


Well, there is that but still...actually, OPEC sort of has the journos over a barrel, so to speak.

"French Riviera Mansion of Long-Dead Russian Tycoon Put on Block"

In the past I would have joked that this would make an excellent Airbnb but after seeing the trouble coming for Airbnb property owners in the post immediately below, I'll hold off.

From Bloomberg via MSN June 27:

A century-old chateau on the French Riviera that was previously owned by a Russian oligarch is finally on the market after years of legal wrangling. It could fetch more than $100 million.    

The Chateau de la Garoupe on Cap d’Antibes is being sold by France’s agency for seized and confiscated goods, known as Agrasc. Visits are scheduled for September and final offers due Oct. 6, according to an outline of the auction process and description of the sprawling mansion and grounds.

The estate located in one of the country’s most exclusive playgrounds for the rich and famous was owned by Boris Berezovsky, a fervent critic of Russian President Vladimir Putin who died in the UK a decade ago. The sale follows a protracted court battle in France with Berezovsky’s creditors including billionaire Roman Abramovich and Russian airline Aeroflot PJSC over ownership. It was confiscated by the French state in 2015 as part of a separate money-laundering suit.  

Berezovsky, one of Russia’s first and best-known oligarchs, bought the chateau in the 1990s, paving the way for an influx of his wealthy countrymen to the area. Now, Russian ownership of luxury assets is under scrutiny globally following Putin’s decision to invade Ukraine....

....MUCH MORE Be it ever so humble, there's no place like home

Here's the offering brochure with interior and exterior pics:

Château de la Garoupe  

From the Call for Bids:

General information on the Call for Bids
Chemin des Contrebandiers and Chemin de la Croé.

Object of the call for bids
The FRENCH STATE represented by the Agency for the Management and Recovery of Seized and Confiscated Assets (l’Agence de Gestion et de Recouvrement des Avoirs Saisis et Confisqués - AGRASC) (hereinafter referred to as the Owner), is disposing of a property located in ANTIBES (06600), Chemindes Contrebandiers and Chemin de la Croé (hereinafter referred to as the Property).

Brief description of the Property

A property located in ANTIBES (06600), Chemin des Contrebandiers and Chemin de la Croé, composed of:
- a mansion called "Château de la Garoupe", consisting of a basement level, a ground floor and a first floor with an attic space, with a total floor area of approximately 1300 m²,
- five other buildings used as annexes or living quarters, some of which are in poor condition, with a total constructed area of more than 630 m²,
- a landscaped park of about ten (10) hectares including a swimming pool, a jacuzzi and a tennis court, The precise plot of land of the Property which will be about 10 hectares 36 ares and 00 centiares, shall be established before the signature of the notarial Deed of Sale, by means of subdivisions resulting from a survey document established from the parcels currently appearing in the land register, namely:

Section N° Location Surface
CD 133 CHE DES CONTREBANDIERS 00 ha 10 a 50 ca
CD 136 CHE DES CONTREBANDIERS 10 ha 39 a 00 ca

Why Airbnb Owners Are About to Sell Their Rental Properties

From re:venture Consulting, June 23:

Many Airbnb owners will soon be forced to sell their properties, resulting in a housing bust that could be on par with the 2008 Subprime Crisis in some cities.

Why Airbnb owners are about to Sell

These Airbnb owners are getting ready to sell because of "Airbnb bust", a downturn in the short-term rental market that started in the second half of 2022, with Airbnb operators in some cities facing a 50% decline in revenue. These declining revenues are the result of a slowdown in post-pandemic travel demand to go along with a massive increase in Airbnb supply, trends which are now causing many Airbnb operators to lose money on their rental.

I believe these losses will cause a wave of distressed selling from Airbnb operators in 2023 and 2024, particularly in cities where:

1) revenue has crashed the most, and

2) Airbnb supply increased the most

If you're a homebuyer or real estate investor it's important to understand the exposure your city and neighborhood has to the Airbnb crash, particularly the timing and depth of the downturn. Because when it all shakes out, I believe that there will be some great buying opportunities for homebuyers and investors across the real estate spectrum.

So, without further ado, let's dive into the data.

(Note that when I refer to "Airbnb" in this article, I am referring to the broader short-term rental market, which includes listings found on Airbnb, VRBO,, and other travel sites.)....


HT: John Wake's Twitter feed

"Powell Ought to Pivot to Bond Sales"

The Federal Reserve Board has acted as if they are terrified by QT and they haven't really explained why. This is exemplified by their decision to simply let the MBS portfolio run off rather than selling into the market, a strategy that doesn't work for reasons we've looked at previously.*

Here's a first rate examination of the issues from The Institutional Risk Analyst (also on blogroll at right):

“All propaganda is lies, even when one is telling the truth,” George Orwell concluded after working for the British Broadcasting Company (1941-1943). “I don’t think this matters so long as one knows what one is doing, and why.”

Orwell's time as an editor at BBC followed a period working as a colonial policeman in Burma. "“In a time of deceit telling the truth is a revolutionary act,” he said years later. Chairman Powell and the Federal Open Market Committee need to accept that they cannot raise fed funds further without causing serious financial problems for banks and other institutions. Time for truth.

Readers of The Institutional Risk Analyst know our views on Fed interest rate moves, but last week’s market action really begs the question as to the credibility of FOMC policy. Until the Committee completes the circle and starts to actively sell mortgage backed securities (MBS), the markets simply don’t and won’t believe that Powell and the FOMC are serious about raising interest rates to fight inflation.

The big takeaway from last week’s FOMC meeting is confusion on the part of the Committee members and the markets about the direction of interest rates. Komal Sri-Kumar wrote last week:

“Credibility is a terrible thing to waste. I wrote in January about at least two instances when Powell either turned dovish when hit by a cratering stock market (December 2018), or persisted in forecasting “transitory” inflation to justify his vastly expansionary policies (2020 - 2022). Market’s belief that he is a soft touch when it comes to inflation reduction explains why equities have rallied despite his seemingly tough message at the press conference.”

Why does the Fed need to sell MBS from the system open market account (SOMA)? Because only by releasing that massive duration locked away inside the sterilized confines of SOMA back into the markets can the FOMC get long-term interest rates above 4%. Adjusted for option-adjusted duration, the Fed's $2 trillion MBS position is larger than its portfolio of Treasury debt. Ponder that Chair Powell. Selling bonds is also a tangible manifestation of FOMC policy, distinct and apart from the speculations of the media & economist chorus about the target for fed funds.

Finally, selling bonds and pausing further fed funds rate increases will not put additional pressure on banks and will actually increase asset returns. The FOMC should not mistake the current calm in the bank funding market for a solution to the illiquidity and losses created by raising short-term interest rates over 500bp in a year. The chart below shows bank deposits through the first week in June vs the Treasury General Account. Bank deposits fell $80 billion in a single week. Total runoff for the rest of 2023 could be more than half a trillion dollars even if the Fed does not raise the target rate for fed funds again.....

*If interested see:

It's a very big deal and The Institutional Risk Analyst piece is the best, most concise explanation of what to do that I have seen.

The Chips Are Down: Nvidia Could Take A $3 billion Hit From From New U.S. Chip Rules on China. (NVDA; AMD)

The headline goes on to say "Buy the Dip" which  may or may not be good advice depending on your time frame.

From Barron's June 28:

Nvidia is likely to be caught in the crossfire of new U.S. rules on exporting artificial intelligence chips to China. This could set it and other chip makers up for a multibillion-dollar hit amid escalating tensions in a critical technology Cold War.

Chip makers play a key role in developing the potentially transformational AI technology at the center of the recent market frenzy. On the downside that means companies like Nvidia (ticker: NVDA) are more vulnerable to geopolitical pressures—amid U.S. concerns over powerful AI in Chinese hands. But on the upside demand dynamics mean investors may not need to worry too much.

The Biden administration is considering fresh restrictions on selling chips used in AI to Chinese customers, part of final rules expanding measures announced last October, The Wall Street Journal reported, citing anonymous sources. It could see the Commerce Department move as soon as early July to stop shipments from Nvidia, Advanced Micro Devices (AMD), and others to China as well as other markets of concern without first obtaining a license, the report said....


After jumping  $12.44 (+3.06%) yesterday the stock is now down $15.20 (-3.63%) to $403.56 pre-market. AMD is down $3.20 (-2.90%).

"...Why the wind power industry has hit turbulence"

From Reuters, June 26: 

Problems in Siemens Energy's (ENR1n.DE) wind turbine division that could cost more than a billion euros ($1.09 billion) to fix have shaken investor confidence in the wider industry and last week prompted a sell-off in wind companies' shares.

Over the last two decades, the industry has grown fast, lowered technology costs to on a par or even cheaper than fossil fuels in some parts of the world and increased efficiency through bigger and bigger turbines.

According to the Statistical Review of World Energy report on Monday, global wind and solar power grew to a record share of 12% of power generation last year, surpassing nuclear.

The Global Wind Energy Council said earlier this year that a record 680 gigawatts (GW) of wind energy capacity is expected to be installed by 2027.

But the industry has had a tough few years.

The COVID-19 pandemic from 2020 led to lockdowns, decreased industrial activity and reduced global energy demand.

In the wind sector, as in other industries, restrictions on movement triggered supply chain disruption and delays in project construction.

Limits on the number of workers allowed on site and delays in components from China and elsewhere meant that some wind developers had to delay or even cancel projects.

Some firms also missed policy deadlines that meant that they lost out on government support or subsidies for which they previously qualified, the International Energy Agency said.

The war in Ukraine has also created logistics and supply chain issues, aggravated in some cases by the impact of sanctions.

Despite mounting pressure to combat climate change by moving to renewable sources, financing projects has been a challenge.

The war in Ukraine last year led to higher energy prices and this fuelled rises in inflation and interest rates.

But the expected revenues of those planning to build wind turbines have not risen in tandem. Many governments index the prices paid for wind energy, usually through auctions, which are often too low, analysts at Wood Mackenzie said.

The rise in commodity prices, such as steel, also increased the price of wind turbines by up to 40% over the last two years, industry body WindEurope said earlier this year.

Wind turbine manufacturers - unable to pass on higher costs to customers who placed orders two or three years ago - have tried to mitigate the impact of higher inflation and pressure on profit margins by raising prices....


Our thoughts, June 26:
Siemens Energy Shares Got Rocked On Friday As Wind Turbine Problems Persist
....We haven't had much to say about the wind business, either manufacturers or wind farm operators since their returns dropped below those offered by regulated utilities. If the U.S. offshore wind farms ever get started and then, if they can make any money we'll be back to them