"Exploring the Supply Chain of the Pfizer/BioNTech and Moderna COVID-19 vaccines"

From the blog of Jonas Neubert:

Sections of this post were co-authored by Cornelia Scheitz. Last updated on January 24, 2021.

Bert Hubert’s excellent and widely shared article about Reverse Engineering the source code of the Pfizer-BioNTech SARS-CoV-2 Vaccine is all it took to turn hundreds of software engineers and other Silicon Valley types into armchair vaccine experts overnight! Jokes aside, the article explains the 4284 base pair long mRNA inside the Pfizer-BioNTech’s COVID-19 vaccine for those who are more familiar with software than molecular biology.

Bert’s article is primarily about the biology of the vaccine, how it relates to the virus and how it works in the human body, but there’s this one sentence about vaccine production:

At the very beginning of the vaccine production process, someone uploaded this code to a DNA printer (yes), which then converted the bytes on disk to actual DNA molecules.

Next to it is a picture of a CodexDNA BioXP device that is advertised as producing “custom DNA fragments of up to 7,000 base pairs”. Could this be the next distributed manufacturing revolution? This time with DNA printers making COVID-19 vaccines in our garages instead of 3D printers and plastic widgets?

I’ll start with the bad news: Nobody will be making an mRNA vaccine in their garage any time soon.

The following text is a collection of notes I wrote down while exploring the process for manufacturing and distributing the two new vaccines that have appeared all over the news and in more and more people’s arms over the recent weeks. I started reading about mRNA but quickly found myself on tangents about glass vials and temperature tracking devices.

This text was written over a week worth of evenings in early January 2021. It covers the two vaccines currently authorized for distribution in the United States where I live: One by Pfizer-BioNTech and one by Moderna. Several other mRNA based COVID-19 vaccines are in various stages of clinical trials and are likely similar to those covered here in some ways and different in others.

It is unlikely that I got everything right. Corrections and suggestions are welcome, please email jn@jonasneubert.com.

Ingredients List

The list of ingredients, or “bill of materials” in engineering parlance, is a good starting point for understanding the supply chain of any product. The ingredient lists for both Pfizer-BioNTech and Moderna’s vaccines are public and have been widely reported.

The Pfizer-BioNTech vaccine is also known under its code name “BNT162b2”, it’s registered trademark “Comirnaty”, and its international non-proprietary name “Tozinameran”. The list of ingredients can be found in information material available on the various country-specific product websites on www.cvdvaccine.com or government websites like that of the UK’s MHRA. There’s also a Wikipedia page.

The Moderna vaccine is also known as “mRNA-1273”, but appears to lack a brand name other than “Moderna COVID-19 vaccine” which is what it says on the product label. The list of ingredients can be found on the EUA factsheet on Moderna’s website, or in these FDA meeting notes. It, too, has a Wikipedia entry.

The two vaccines share some ingredients but not all. The following table is my attempt to sort the available information and compare the two.

	Pfizer-BioNTech	Moderna
Active Ingredient
Comirnaty mRNA	✔
mRNA-1273 mRNA		✔
Lipids
Cholesterol	✔	✔
1,2-distearoyl-sn-glycero-3-phosphocholine (DSPC)	✔	✔
((4-hydroxybutyl)azanediyl)bis(hexane-6,1-diyl)bis(2- hexyldecanoate) (ALC-3015)	✔
2-[(polyethylene glycol)-2000]-N,N-ditetradecylacetamide (ALC-0159)	✔
Lipid SM-102		✔
1,2-dimyristoyl-rac-glycero-3-methoxypolyethylene glycol-2000 (PEG2000-DMG)		✔
Buffer
potassium chloride	✔
monobasic potassium phosphate	✔
sodium chloride	✔
basic sodium phosphate dihydrate	✔
tromethamine (tris(hydroxymethyl)aminomethane)		✔
tromethamine hydrochloride		✔
acetic acid		✔
sodium acetate		✔
water	✔	✔
Other
sucrose	✔	✔

In addition to what’s in the vaccine vial, Pfizer-BioNTech needs to be diluted with sodium chloride shortly before use (more about that below). The Moderna vaccine does not seem to require such a “DIY assembly” step.

Now that we know all the ingredients, let’s go shopping.

Disclaimer: Please don’t perform chemistry or create pharmaceuticals unless you have the appropriate safety training and equipment. I include links to online shops below, but note that they sell “for research use only” and will verify your affiliation with a research organization before taking your business.

mRNA 

To make RNA, you start by making DNA....

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easy peasy

"Just about every nation has secret missile platforms hidden in shipping containers"

From Sofrep, November 2019:

Every developed nation with a sizeable military is faced with an ongoing challenge: developing ways to maintain an offensive or defensive edge in a world full of rapidly advancing technologies and ever-aware covert intelligence efforts.

While the Cold War was in many ways a battle of economic investment and technological wit, the global arms race going on in today’s digital world is producing new (and sometimes terrifying) weapons aimed at swaying the balance of power on the geopolitical stage at just as fast a rate.

However, not all new weapons leverage cutting edge technology — in fact, some of the most versatile and troubling new systems are based on a combination of tried and true tech, which has been around for some time, and good old fashioned tomfoolery. Such is the case with “containerized” weapon systems.

At their simplest, “containerized” weapon systems are really nothing more than weapons built to carry everything they need to function inside a standard shipping container. At their most complex, they combine state of the art tech with existing weapons to create powerful hidden systems. “Containerized” tech is nothing new — many nations including Russia, Israel, China, and the United States have had various “containerized” weapons in their stockpile for years now. But what’s troubling about these systems isn’t their technology, but rather their use potential.

The most obvious and valuable use for containerized weapon systems would be enhancing the offensive or defensive capabilities of a large vehicle or static location. Ships with large decks like the Marine Corps‘ amphibious assault vessels or the Navy’s massive carriers could see their on-board suite of weapons bolstered by shipping containers delivered easily by using existing infrastructure. Those weapons could then be deployed, used, and redeployed elsewhere when needed.

However, a secondary and more nefarious use for containerized weapons could be the concealment of missile systems in port cities around the world. China, as an example, has such a massive export enterprise and it’s not at all uncommon for countless container ships carrying thousands of containers from China to be parked in American ports each day. It isn’t logistically feasible to visually inspect each and every container immediately, this leaves the opportunity for containers to be mislabeled intentionally, and potentially create an environment ripe for storing offensive weapons right on American shores....

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Vicious Cycles Theses on a Philosophy of News (The News Is Not Real)

 From Harpers Magazine

This is what I feared, that she would speak about the news . . . about how her father always said that the news exists so it can disappear, this is the point of news, whatever story, wherever it is happening. We depend on the news to disappear . . .—Don DeLillo, “Hammer and Sickle”

What a story. What a fucking story.—Dean Baquet, on the election of Donald Trump

*****

a circular conversation

What is the news? That which is new. But everything is new: a flower blooms; a man hugs his daughter, not for the first time, but for the first time this time . . . That which is important and new. Important in what sense? In being consequential. And this has been measured? What? The relationship between what is covered in the news and what is consequential. Not measured. Why? Its consequence is ensured. Ensured. . . ? It’s in the news. But then who makes it news? Editors. Editors dictate consequence? Not entirely. Not entirely? It matters what people read and watch—you can’t bore them. Then boredom decides? Boredom and a sense of what’s important. But what is important? What’s in the news.

i.

In his 1962 book The Image, Daniel J. Boorstin explains, “There was a time when the reader of an unexciting newspaper would remark, ‘How dull is the world today!’ Nowadays he says, ‘What a dull newspaper!’ ” The first American paper, Benjamin Harris’s Publick Occurrences Both Forreign and Domestick, committed to appearing only once a month—or “oftener ‘if any Glut of Occurrences happen.’ ” Clearly, things have changed. “We need not be theologians,” writes Boorstin, “to see that we have shifted responsibility for making the world interesting from God to the newspaperman.” The chief tool in this new labor is the pseudo-event.

What is a pseudo-event? They are everywhere; we hardly notice. Some familiar examples: the speech, the rally, the press conference, the briefing, the ribbon cutting, the political announcement, the political response, the interview, the profile, the televised debate, the televised argument, the televised shouting match, the televised roundup of other televised events, the official expression of outrage, remorse, righteousness, fear, sanctimony, jingoism, smarm, or folksiness. The talking point is its handmaiden. News analysis is a second-order pseudo-event, not an event per se but the dissection of pseudo-events: that is, theater criticism. It is not that pseudo-events are always uninteresting or meaningless but that they are always not news. They only exist to be reported on. To supply a format. To make up for the non-glut of occurrences. Take away the pseudo-event and what is left to fill the news?

ii.

To meet our demand for newness and stimulation, we refashioned public life as a ritual sequence of pseudo-events. This transformed politics from an industry of policy and legislation into an industry of emotion and entertainment. If the news covered only the proposal and passage of specific legislation—or the proposal and enactment of specific policy—we would have little news, and audience interest would quickly fade. But the work of politicians might become the work of governing. As things are, the job of politicians is to feed the emotional-entertainment industry that we call “news,” which is accomplished by grandstanding and self-promotion. Reporters and pundits cover politics by analyzing how politicians succeed and fail as spokespeople and media figures. Interest shifts, by turns, to how the game is played, how the media fits into this game, and, eventually, how journalists do their jobs. The news today, properly understood, is about the careers of politicians and journalists. It is career drama.

iii.

Television news aims to alert you to problems. In life, when someone alerts you to a problem, the problem’s meaning takes shape within an implicit context, answering: (1) How important is this problem? (2) Where does it fit into the rest of my life? (3) What should I do about it? News shows cannot answer these questions because their format and their content are at odds. Their content says, “This is very important,” but their format says: (1) No more important than the next segment; (2) In a time slot; (3) Keep watching. If you are a teacher or a car mechanic or a doctor, your job is not simply to identify a problem but to connect people to a solution. The news media doesn’t do this. It believes it does—insofar as its audience members vote—but hundreds of hours spent consuming news in a given year put to the service of one vote in one election is a terrible use of any person’s time. Consider what all these people, with all these hours, might otherwise accomplish. Consider that most viewers would vote similarly, and not necessarily less well, with much less information. The principal effect of TV news is to create engagement through distress. News shows cannot connect viewers to meaningful actions they might take in their own lives to relieve this distress because these actions would mean ceasing to watch TV. And this is the goal to which all others will be sacrificed: to keep you watching.

iv.

Entertainment is the supra-ideology of all discourse on television. No matter what is depicted or from what point of view, the overarching presumption is that it is there for our amusement and pleasure. That is why even on news shows which provide us daily with fragments of tragedy and barbarism, we are urged by the newscasters to “join them tomorrow.” What for? One would think that several minutes of murder and mayhem would suffice as material for a month of sleepless nights. We accept the newscasters’ invitation because we know that the “news” is not to be taken seriously, that it is all in fun, so to say.

—Neil Postman

Analyses of the news tend to focus on how the internet has changed things, and there is no doubt that the intrusions of Facebook’s news feed and Google News, online aggregation and free content, real-time reporting, YouTube, blogging, podcasting, and Twitter have roiled and remade the news business. But the crisis in news as an industry is not the same as the crisis in news as a cultural institution. The latter took root long before we connected online. It is for this reason, because so much media today represents the continuation, even the culmination, of trends that originated in the late Seventies and early Eighties, that writers such as Neil Postman remain relevant. They saw that the news was moving in two directions even then: toward entertainment and away from the local reality of people’s lives. For all the intervening technological change, entertainment on TV remains the dominant modality of all twenty-first-century news.

And while the news may not feel like fun, it is fun in the sense that it is stimulating without demanding effort—that doing anything else would require more energy and commitment, even turning off the TV. Watching television leaves no meaningful residue of knowledge or skill. When I visited Amsterdam many years ago, kids staying at the hostels liked to tour the Heineken brewery for an afternoon. They wanted to do something “cultural,” an activity that justified having traveled to the Netherlands, but really they wanted to drink beer. This is the logic of all infotainment, all TV and most internet news: it soothes the mind’s demand for constructive activity while delivering entertainment—a sugary drink sold on its vitamin content. Prestige TV works the same way: by convincing people that they are engaging with art. Make no mistake—well-wrought entertainment can require as much talent as art to create, but that alone does not make it art. Likewise, not all experiences of information are the same, since more or less passive forms of learning involve us differently. What distinguishes art (or knowledge) from entertainment (or infotainment) is that art asks something of its audience, and that its form serves the artwork, and not the other way around. Until the news can say, “We have no show (or paper) today because there is nothing of significance to concern you,” the news will build its monument to truth on a lie.

v.

When you think you are doing something serious but you are doing something trivial and fun, you grow to believe that serious things are effortless and enjoyable. You are experiencing a format, while believing you are experiencing a content. The content suggests you are learning about truth, when you are really learning how to feel. You are learning how you should feel in the presence of certain information. These feelings go on to determine your expectations and worldview.

The formal message of the news is simultaneously the vital importance and utter triviality of everything that is happening. For weeks leading up to the 2018 midterm elections, the media covered the “migrant caravan” as the central story of the moment. Journalists understood that its salience as a crisis had been manufactured, and they devoted pages and segments and podcasts to debunking this salience, to exposing it as, in effect, a peripheral real event being turned into a central pseudo-event. These debunkings of course contributed to the critical mass of coverage, until the story, or nonstory, took up significant space in our minds: in our idea of the world “out there.” Then the election took place; the migrant caravan had served its purpose as an object of media attention, and it disappeared. Presumably it did not disappear from the face of the earth, but to judge by the sole connection it had to most people who attended it—its life as a news item—it might as well have.

Which was the truth: That it was news, and it did belong in our minds? Or that it was an irrelevant sideshow? What we can say for certain is that this question was not decided in the real world of human necessity but in the virtual world of the news. The caravan story may be notable for how precipitously it disappeared, but the same uncertainty hangs over every news story: What space does this deserve in the limited sphere of our awareness? Since media attention rarely solves the problems it fixates on, in time the news must move on, letting every story vanish like the caravan—even wars.

The raw matter and proportions of the world “out there” take shape in our minds in relation to the imperatives of an industry. This proportionality, rather than fact or truth, decides the image of the world we construct: what Jean Baudrillard calls a “hyperreality,” the inseparable amalgam of the virtual and the real. The news narrativizes the world, but distortedly, according to the proclivities of its format, and so the story the news tells is always at heart the story of news: the story of curating what we recognize as news.

vi.

Is it a problem that our mental representation of the world is the product of a for-profit entertainment industry? Yes. Our government, for instance, cannot be dully competent if what we demand of it is that it isn’t boring. (After the first day of open testimony in the impeachment hearings, NBC News noted that the witnesses “testified to President Trump’s scheme, but lacked the pizzazz necessary to capture public attention.”) Journalists often rightly claim that the engaged polity should focus more on state and local politics, but people follow national politics for the same reason journalists and pundits do: because it’s interesting.....

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A Heads-Up To The Gamestop, AMC etc. Crowd: They Are Going to Change The Rules On You

Market structure is the most important and least understood factor in the entire short-squeeze game.

And if you don't understand every dependent clause and every comma versus period in the rules and regs you are in for a shock.

That's what the homely little story in "Discord has shut down the /r/WallStreetBets server (GME)" is all about.

Previously: 

"Most Shorted Names Soar After WallStreetBets Reopens"

"Most Shorted Names Soar After WallStreetBets Reopens"

 From ZeroHedge:

Update 745pm ET: And just like that, 1 hour after reddit locked down its notorious r/WallStreetBets forum, it has returned, and not only that but the chaos over recent events just assured that tomorrow it will have a record day in new members.

The forum's return came shortly after another notorious daytrader, Dave Portnoy vowed revenge for the downing of the portal, and in addition to revealing that he owns $1MM of AMC and NOK and may buy more, said that tomorrow would be the biggest day yet....

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Earlier:
Discord has shut down the /r/WallStreetBets server (GME)

Discord has shut down the /r/WallStreetBets server (GME)

Never, ever forget where ultimate power lies.

Discord has provided the following statement on removing the /r/WallStreetBets server and its owner pic.twitter.com/LuxSInggpP

— Rod Breslau (@Slasher) January 27, 2021

From a 2017 post: 

Some Thoughts on Futures, Exchanges and Real Power

Apropos of not much I found myself thinking of Bunker Hunt, the Chicago Board of Trade, the Comex and this little tale from 2010's "'Wheat prices ease after Russia predicts stable exports" and '...Speculators ‘Hunt What’s Moving'":

....Should prices see $8.50 the opportunities on the short side would almost be a lock.

I say almost because the serious money in commodities can pretty much get prices to where they want them, at least for short periods.

When the Billionaire Hunt brothers were attempting to corner the silver market in January 1980 the head of one of the world's largest grain traders said "Those boys don't know what deep pockets are".

The "commercials" had been shorting into the Hunt bros. buying and the grain trader was at the top of the "commercial" heap.

On January 21 the COMEX went "liquidation only".

On January 22 the CBOT went "liquidation only".

On Tuesday the 22nd silver closed at $34, down 27% from its close the previous Friday.

The Hunt's still had enormous paper profits but any attempt to book them would smash the markets even further.

Prices declined to $17 by March, down 66% from the January high and the Hunt's were receiving calls of $60 Million per day in variation margin. On March 27 the price dropped from $21.62 to $10.80 and one of their brokers, Bache was in violation of net capital requirements and another, Merrill Lynch was on the brink.

As the attorneys got involved over the next few years, oil prices headed south, destroying the value of Daddy's creation (and the brother's piggybank) Placid Oil.

Bunker Hunt filed for bankruptcy in September 1988 as did his brother and Placid.

At the time the grain trader said "Those boys don't know what deep pockets are" it is probable that the various branches of the Hunt families comprised the wealthiest "family" in America.

That's why I say "almost" a lock.

Shortwave Radio: The FCC Has Advised That It Is Illegal To Use Your SW or Citizens Band Radio In Furtherance of a Crime

 Which I suppose includes conspiracy and soon, conspiracy theories about conspiracies.

From The American Radio Relay League (founded 1914):

FCC Issues Enforcement Advisory: Radio Users Reminded Not to Use Radios in Crimes

01/17/2021

The FCC has released an Enforcement Advisory for licensees and operators across radio services.

[Complete text of FCC Enforcement Advisory follows.]

FCC ENFORCEMENT ADVISORY

DA 21-73

Released:  January 17, 2021

WARNING:  AMATEUR AND PERSONAL RADIO SERVICES LICENSEES AND OPERATORS MAY NOT USE RADIO EQUIPMENT TO COMMIT OR FACILITATE CRIMINAL ACTS

The Enforcement Bureau (Bureau) of the Federal Communications Commission issues this Enforcement Advisory to remind licensees in the Amateur Radio Service, as well as licensees and operators in the Personal Radio Services, that the Commission prohibits the use of radios in those services to commit or facilitate criminal acts.

The Bureau has become aware of discussions on social media platforms suggesting that certain radio services regulated by the Commission may be an alternative to social media platforms for groups to communicate and coordinate future activities.  The Bureau recognizes that these services can be used for a wide range of permitted purposes, including speech that is protected under the First Amendment of the U.S. Constitution.  Amateur and Personal Radio Services, however, may not be used to commit or facilitate crimes.

Specifically, the Bureau reminds amateur licensees that they are prohibited from transmitting “communications intended to facilitate a criminal act” or “messages encoded for the purpose of obscuring their meaning.” 47 CFR § 97.113(a)(4).

Likewise, individuals operating radios in the Personal Radio Services, a category that includes Citizens Band radios, Family Radio Service walkie-talkies, and General Mobile Radio Service, are prohibited from using those radios “in connection with any activity which is against Federal, State or local law.” 47 CFR § 95.333(a).

Individuals using radios in the Amateur or Personal Radio Services in this manner may be subject to severe penalties, including significant fines, seizure of the offending equipment, and, in some cases, criminal prosecution. 47 U.S.C. §§ 401, 501, 503, 510.....

Upfina Is Looking For Higher Oil Prices In The Second Half Of 2021

As a reminder, fuel is a major input into agricultural prices, which are already elevated.

From Upfina, January 25:

This Is Why Oil Is Set To Rise In 2H 2021

Seasonally adjusted jobless claims in the week of January 16^th fell from 926,000 to 900,000. Further good news is last week’s reading was revised down from 965,000. Therefore, we had a 65,000 decline from the original reading last week. We probably have about 4 to 6 weeks of data that stays slightly below 1 million before rapid improvement starts.

Non-seasonally adjusted jobless claims cratered 151,000 to 961,000 which puts them much closer to seasonally adjusted claims. As we predicted last week, PUAs skyrocketed. They increased 139,000 to 424,000. We’d argue this isn’t bad news because this is just people getting the help they needed. A few states shut out people who needed help. Within the next few weeks, PUAs should correlate with NSA claims again.

🇺🇸Initial #unemployment claims fell back modestly in w-e Jan 16, but they remain alarmingly elevated.

Regular claims:
🛑900k (SA): ⬇️26k
🛑961k (NSA): ⬇️151k

PUA claims (NSA):
🛑424k: ⬆️139k

🚨Still very high 1.4 million **new** jobless benefits claimants! pic.twitter.com/0bHsAgF3mP

— Gregory Daco (@GregDaco) January 21, 2021

The total number of people on all benefits programs fell from 18.4 million to 15.9 million in the week of January 2^nd. That decline only occurred because some pandemic benefits temporarily lapped. In the next 2 weeks, this total will rise. Continued claims in the week of January 9^th fell from 5.181 million to 5.054 million which is a new cycle low. That would be a solid number if it wasn’t for the people on pandemic benefits. Instead, the labor market would be in disastrous shape if it wasn’t for help from the government. That should change within the next 2-3 months.

Real Time Population Survey

The real time population survey shows the employment rate for those ages 18-64 stayed at 68.6% in the week of January 10^th to the 16^th. The prime age labor force participation rate fell 4 tenths to 77.4%. The prime age unemployment rate fell 0.7% to 11.4% which is almost double the U-3 rate. Prime age workweek fell 0.1 hours to 25.5 hours....

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WTI futures $52.81 up 20 cents. 

Reminder: Things Can Always Get Worse

 From the Twitter feed of Karoun Demirjian, one of the WaPo's national security reporters:

didn’t see this particular pandemic twist coming https://t.co/KlSxmoJPqB

— Karoun Demirjian (@karoun) January 27, 2021

 

I'm starting to think China is just messing with us at this point.

It Might Be Time To Take A Breather On Unprofitable Hydrogen Companies

This thought was triggered by a press release:

Jericho Expands Energy Portfolio with Agreement for the Acquisition of Hydrogen Technology

TULSA, Okla. and VANCOUVER, British Columbia, Jan. 22, 2021 (GLOBE NEWSWIRE) -- Jericho Oil Corporation (“Jericho”) (TSX-V: JCO; OTC PINK: JROOF) is pleased to announce that it is has entered into an agreement for the acquisition of all the assets of Hydrogen Technologies Inc. (“HTI”). HTI holds robust intellectual property for a breakthrough high-temperature Dynamic Combustion Chamber (“DCC”) boiler that enables zero-emissions hydrogen to generate heat, hot-water, high-temperature steam, and Combined Heat & Power (“CHP”) through a closed-loop process. The closing of the acquisition remains subject to the approval of the TSX Venture Exchange and also the approval of the shareholders of HTI.

HTI’s patented zero emissions DCC boiler system aims to decarbonize the nearly $30 billion global commercial and industrial heating industry while providing best-in-class energy efficiencies.....

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Now Jericho Oil may be a fine company run by fine people, your affiant knoweth naught, but the stock action has all the signs of being a Vancouver Pumpty-Dumpty of the bad old days: trading from a dime - 15¢ (CDN) for most of 2020 and then approaching verticallity on December 13, 2020. 60¢ (CDN) last on the common.

All of which brought to mind a vignette last seen in 2015's "SEC Suspends Trading in 128 Dormant Shell Companies".

 Way back in 2008 I recited some of the history:

Chameleons on the Pink Sheets

On April 22 I was rambling about Planktos and penny stock deals:

...A classic history would be a Vancouver "junior resource" company in 1979, after the collapse of the oil and gold markets became a solar deal in '81 , an Aloe Vera deal to the yuppies mid '80's, a biotech in '86 ("we're the next Amgen"or "A cure for AIDS"), then on to neutraceuticals or spas, Indian casinos, software, then the great "i", "e-" and ".com" gold rush. Someday I'll get around to checking if some lunatic scammer actually went with "e-iTrade.com".

The next group of parasites were the "homeland security" companies, then land deals. The "resource" scams never went away and became more prominent in 2002 after gold had moved off its $252 bear market low. We're in the Green boom (happy Earth day by the way) now, who knows what's next....

Today in EuroInvestor:

...The recently re-named Homeland Security Network, Inc. (Pink Sheets:HYSN), doing business as Global Ecology Corporation (GEC) announced today that it has received their initial order from its soil remediation project in Juarez, Mexico. The total value of the purchase orders, involving several of the partnership’s soil-based products, is $2 million with delivery to begin this June....

See also:

Junior Gold Miners Consider Cashing Out, Pursuing Medicinal Marijuana Opportunities

Peak Oil Stalwart to Shutter Forum/News Site, Persue Career as Astrologer" 

"Kawasaki Heavy Industries Aims to Replicate LNG Supply Chain with Hydrogen"

One of the world's major shipyards going head on at the chicken-and-egg problem (supply first or demand first?) presented by infrastructure buildout.

Via MarineLink:

Japan's Kawasaki Heavy Industries is aiming to replicate its success as a major liquefied natural gas (LNG) tanker producer with hydrogen, a key element that may help decarbonize industries and aid the global energy transition.

A A$500 million ($385 million) pilot project, led by Kawasaki and backed by the Japanese and Australian governments, plans to ship its first cargo of liquefied hydrogen from Australia to Japan this spring, which the firm hopes will mark the dawn of a new clean energy era.

"We want to prove the possibilities of shipping mass volumes of hydrogen to be used in Japan and elsewhere in Asia, just like LNG," Motohiko Nishimura, Kawasaki's vice executive officer, told Reuters last Friday.

Hydrogen, long used as rocket fuel, is mostly extracted from natural gas or coal. It is mainly utilized in oil refining and to produce ammonia for fertilizers but future demand is expected to come from broader segments including transport, building and power generation.

Kawasaki has the wind at its back, as hydrogen has become the green fuel of choice among many governments and businesses who are betting big that the universe's most abundant element can help fight climate change.

Japan's government unveiled an ambitious goal in December to boost its annual hydrogen demand to 3 million tonnes by 2030, from about 2 million tonnes now, and 20 million tonnes by 2050.

Kawasaki aims to build 80 hydrogen carriers to import 9 million tonnes of the fuel a year by 2050, after building 2 commercial-scale ships to import 225,000 tonnes by 2030. It's targeting overall hydrogen-related sales of 120 billion yen ($1.16 billion) in 2030 and 300 billion yen in 2040.

"We are considering beefing up our goals to reflect the government's new targets," Nishimura said.

This spring, Kawasaki will transport 75 tonnes of hydrogen, extracted from brown coal and liquefied in Australia's Victoria state, enough to fill the tanks of 15,000 fuel cell vehicles.

By freezing hydrogen gas to minus 253 Celsius -- lower than LNG's minus 162 C -- the cargo can be compressed to one-800th of its gaseous volume....

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"New Undersea Cables Could Become a Flashpoint in the Arctic"

 From the Jamestown Foundation's Eurasia Daily Monitor, January 26:

Russian efforts to control the Northern Sea Route and to secure exclusive access to the local seabed, from which it hopes to pump oil and natural gas as well as mine coal and other minerals for export, have been attracting increasing attention for years (see EDM, September 3, 2019, October 20, 2020, November 9, 2020). But these issues particularly gained in prominence in recent months. First of all, global climate change has lengthened the navigation season in the north and made access to the mineral wealth there far easier. Second, those ongoing climactic shifts are making it more likely that either the United Nations will soon approve or Russia may act unilaterally to make vast claims to an economic exclusion zone in the Arctic Ocean (Newizv.ru, November 9, 2020).

Such matters will undoubtedly draw even more attention later this year, when Moscow assumes the chairmanship of the Arctic Council, the international body where the competing interests of the Arctic powers and others with an interest in the region are often thrashed out. But one aspect of Moscow’s regional policy has garnered little notice so far, even though it may soon become a flashpoint in relations among the Arctic countries: namely, Russia is backing the laying of an extensive network of fiber optic cables to service its own northern reaches and also, as one commentator claims, to promote international cooperation. For better or worse, however, such cables and related undersea electronic networks and sensor technology widely expected to accompany this initiative are likely to trigger a new round of competition between Russia, on the one hand, and the West and China, on the other.

In two new articles, Regnum commentator Vladimir Stanulevich argues that this undersea project will represent “a second Northern Sea Route, a fiber optic cable one” that will not only benefit Russians living and working along the northern reaches of the country “but interest the entire Arctic” (Regnum, December 21, 2020 and January 22, 2021). Not surprisingly, he stresses the importance of a fiber optic cable under the Arctic Ocean for Russians in the High North, pointing out that “ ‘the big three’ Russian cable operators have refused to extend a line from Novy Urengoy to Norilsk,” because there are too few potential customers, the distances are enormous and the costs high. But as regional leaders like Sakha’s Aysen Nikolayev posit, internet connectivity in the High North is critical for distance learning, media distribution, banking, and government services as well as for the promotion of the digitalization of economic activity there.

Given that Russian firms are not willing to spend the money and the Russian government does not currently have sufficient funds, Stanulevich continues, the obvious answer is to seek foreign investors. And at least in a preliminary way, they have been found with a consortium of companies (mostly from Scandinavia and Japan with one Russian member) called Arctic Connect. This corporate grouping plans to lay a 14,000-kilometer fiber optic cable along the Northeast Passage (of which the Northern Sea Route is a main part), from Finland to Japan. The project is estimated to cost $800 million to $1.2 billion and will offer data speeds of up to 200 terabytes per second, making it a key communications link between Asia and Europe. The consortium has agreed to build 11 branch lines to connect the central trunk cable with northern areas of Siberia and the Russian Far East. Those extra links are something Moscow will likely have to pay for, but compensating Arctic Connect to do this work will still cost the Russian government far less than attempting to lay any line itself across that territory, where the melting of the permafrost is making such projects vastly more difficult and expensive....

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Previously:

"A several thousand kilometer long fiber optic cable is to be laid along the Russian Arctic coast as part of the Armed Forces’ building of a new closed internet."
Trans-Arctic undersea cable attracts Norwegian and Japanese partners

Chaos In Delhi as Farmers March

 If the Indian farmers' despair over their situation gets much deeper all hell could break loose. Between the almost legendary suicide rate and the Modi government's apparent lack of understanding of the core issues the farmers are close to going on strike and though such an action would be self-immolateing it would also raise one hell of a problem for the rest of the country. Long lentils and guar.

From the Press Trust of India, January 26:

Chaos in Delhi as farmers' tractor parade turns violence, protesters storm Red Fort

New Delhi, Jan 26 (PTI) A tractor march meant to highlight farmers' demands dissolved into anarchy on the streets of the national capital on Tuesday, as hordes of rampaging protesters broke through barriers, fought with police, overturned vehicles and delivered a national insult -- hoisting a religious flag from the rampart of Red Fort, a privilege reserved for India's tricolour.

Tens of thousands of protesters clashed with police in multiple places, leading to chaos in well known landmarks of Delhi and suburbs, amid waves of violence that ebbed and flowed through the day, leaving the farmers' two-month peaceful movement in tatters.

In a Republic Day like no other, farmers atop tractors, on motorcycles and some on horses, broke barricades to enter the city at least two hours before they were supposed to start the tractor march at noon sanctioned by authorities. Steel and concrete barriers were broken and trailer trucks overturned as pitched battles broke out in several parts of the city.

Eclipsing the traditional show of military might at Rajpath, the farmers' tractor parade that was supposed to be peaceful led to virtual anarchy on the streets and unprecedented scenes the most perhaps being the sight of protesters clambering up the flagpole at the Red Fort, the centrepiece of India's Independence Day celebrations, to hoist the Nishaan Sahib', the Sikh religious flag.

Farmer leaders, who have been spearheading the protest at the national capital's border points to demand a repeal of the farm laws, distanced themselves from the protests that had taken such an unseemly turn and threatened to shift public sympathy from their movement.

The Samyukta Kisan Morcha, an umbrella body of 41 farmer unions, alleged that some "antisocial elements" infiltrated their otherwise peaceful movement.

The union also condemned and regretted the "undesirable" and "unacceptable" events as the parade turned violent after several groups of farmers deviated from the pre-decided route for the march.

"We have always held that peace is our biggest strength, and that any violation would hurt the movement

"We dissociate ourselves from all such elements that have violated our discipline. We appeal strongly to everyone to stick to the route and norms of the parade, and not indulge in any violent action or anything that taints national symbols and dignity. We appeal to everyone to desist from any such acts, it added.

"We are trying to get a full picture of all the events with regard to the several parades that were planned today and will share a full statement soon. Our information is that apart from some regrettable violations, the parades are underway peacefully as per plan," it said in a statement.

As the sun set, sporadic incidents of violence continued and restless crowds roamed the streets in many places. Some groups of farmers began the journey to their respective sit-in sites at Tikri, Singhu and Ghazipur, but thousands stayed on.

At the Red Fort, the Mughal era monument from the ramparts of which the prime minister addresses the nation on Independence Day, thousands of farmer stormed the ramparts and returned towards the evening, according to some reports. The protesters, many of them young, vocal and aggressive, were removed from the premises....

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"Frances Fox Piven on the Importance of Social Movements Being ‘Unruly’"

From In These Times:

The game is rigged against American workers. What if the only way to win — to increase their power relative employers — was to break the rules?

In The Importance of Being Unruly, Frances Fox Piven tells the story of the US labor movement. She focuses on the role of massive disruption, troublemaking, and upheaval in creating big changes for US workers — higher wages, a voice at work, and a more economically equal society. The catch is that although aggressive mass strikes led to unions (which are good for workers), unions don’t lead to mass strikes (which is bad for workers).

Piven is a professor of political science and sociology at the Graduate Center, City University of New York. For six decades, her work has inspired both radical social movements and new research agendas in the academy. Throughout this time, no scholar has done more to describe the ways that mass disruption, social unrest, and non-cooperation with elites can change the world. This work has earned her innumerable accolades, but perhaps none more distinguished than when the conservative pundit Glenn Beck dubbed her ​“an enemy of the Constitution” and one of the ​“nine most dangerous people in the world.”

Piven’s body of scholarship is an assessment of how power works. But rather than argue that people form mass institutions to confront the one percent, she suggests that many groups exercise power by withholding their contributions to society. For example, workers strike.

Picket lines outside of fast food restaurants, Chicago public schools, or, most recently, Verizon company headquarters, hide a dramatic historic trend: strikes have all but disappeared in the United States. Throughout the 1970s, an average of almost 300 large-scale work stoppages happened every year. In 2015 there were twelve.

Have unions failed to heed lessons from their own history? Strikes are risky, potentially divisive among the rank and file, often draw public condemnation, and can damage the union as an organization. But if workers fail to use their most potent weapon it may prove to be far more disastrous in the long run.

The Importance of Being Unruly ITT from JAMIE MCCALLUM on Vimeo.

Previously on the FFP channel: 

Serious Politics: So What Is Frances Fox Piven Thinking About These Days?

Frances Fox Piven On President Trump: "Throw Sand In the Gears of Everything"

Richard Cloward and Frances Fox Piven: "The Weight of the Poor: A Strategy to End Poverty"

"The EU just approved mealworms for human consumption. Will Ÿnsect take the bait?"

 No. No to worms.

Maybe termites, if the hydrogen biofactory experiments don't work out. Crunchy.

And yes to gratuitous umlauts.

From AgFunder News, January 14:

On Wednesday, the European Food Safety Authority (EFSA) announced its approval of mealworms for human consumption. The ruling opens the gateway for the growing startup industry around insect protein to tap into a new market.

The EFSA conducted a safety assessment to determine whether there are any risks associated with letting people eat mealworms. The favorable assessment still needs to be confirmed by the European Commission’s Health Directorate General, which will give the final authorization for market approval in the EU.

Nevertheless, this makes mealworms the first bug to receive a positive safety evaluation for human consumption in the world, according to French insect farming startup Ÿnsect – though the EFSA decision doesn’t necessarily make the EU a trailblazer.

“In Asian countries, people already eat insects, but they are not under a ‘novel food’ type of regulation,” Ÿnsect CEO Antoine Hubert tells AFN.

Vietnam’s Cricket One, for example, is making burger patties out of crickets, which it breeds and raises using “highly autonomous,” efficiency-focused technologies. It closed a pre-Series A funding in November 2020.

Although diners in other parts of the world may not be particularly thrilled about the idea of eating insects, the ingredient has gained a lot of traction in the livestock feed and pet food space. Touting the ability to produce protein more efficiently with fewer resources and less acreage, some see the tiny critters as having a very large role in the world’s future protein needs.

Among them is Ÿnsect, which extended its Series C raise to $372 million in October 2020, and claims to be the highest-funded insect farming startup in the game....

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Previously on Ÿnsect:  

French Insect Farming Startup Ÿnsect Raised $372 Million In A Series C Round

Why Are We Seeing Venture Capital For French Insect Enterprises?

On bugs in general:

The World Economic Forum May Be Backing-Off Of The Whole "Okay Plebs, Eat Your Bugs and Weeds" Pitch

In November it was the weeds: "World Economic Forum: "5 reasons we need to start nurturing – and eating – weeds" (plus some thoughts on The Great Reset)" while previous trial balloons pitched bugs: "A psychologist explains why we find some food disgusting - and why it matters".

And on umlauts, possibly more that you thought you wanted to know: 

Now the Important Stuff: How to Name Your Hedge Fund

Umlauts.
It is hard to go wrong if your name contains umlauts, diaeresis, or other diacritics.*

With the widespread adoption of Artificial Intelligence for just about every purpose—"Mäÿönnäisë, now with AI", etc. (note liberal use of diacritics, don't they just 'pop' on the page?)— it is time to update 2014's "The Hedge Fund Name Generator", which used a simple algo:....

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Capital Markets: "Subdued Activity as New Incentives Awaited"

 From Marc to Market:

Overview: After rallying strongly to start the year, Asia Pacific equities, led by the high-flying Hang Seng, sold-off, led by Tencent. Most markets in the region were off at least 1%. Australia and India escaped the profit-taking due to holidays. Europe's Dow Jones Stoxx 600 is faring better and looks poised to snap a two-day fall, led by materials, financials, information technology, and consumer staples. US shares are trading a little heavier. The US earnings season picks up today, with Microsoft, J&J, Texas Instruments, AMD, 3M, and GE, among others. The US 10-year yield, which the consensus expected to push above 1.20%, slipped below 1.03% yesterday, its lowest level in nearly three weeks. It is hovering below 1.05% in the European morning. Yesterday's decline dragged Asia-Pacific yields lower, but core European yields have come back firmer, though Italy's 10-year yield extended yesterday's drop despite the seemingly political uncertainty. The dollar is trading higher, with the Scandias and Antipodeans bearing the brunt. The yen, euro, and Canadian dollar are slightly softer. Emerging market currencies are mixed. Even though most of the freely accessible emerging market currencies are lower, the JP Morgan Emerging Market Currency Index is trading to snap a three-day decline. Gold is trading slightly off but remains within the range seen before the weekend (~$1837.50-$1871). March WTI is firm near three-day highs a little above $53 a barrel.

Asia Pacific
MSCI is dropping more Chinese companies from its China All-Share Index to be in line with US edicts. This entails excluding China National Chemical, China Nuclear Power, China Shipbuilding Industries, among others. This drives homes an element of American soft power, and one in which the Biden administration is in no hurry to change.

China's President Xi complained about the US without naming it in his speech at the World Economic Forum. While he brandished multilateralism as a cudgel to hit the US, while he was quite unwilling to apply it to China's behavior in its own neighborhood. It discourages countries from seeking remedy for disputes in international forums and insists on bilateral negotiations where its power can be brought to bear. Xi had nothing to say about its unilateral trade disruptions with Australia, Canada, or in the past, Japan. Separately, reports suggest Germany is considering sending a naval frigate into the region for a series of port-of-calls in South Korea, Australia, and through the disputed waters of the South China Sea.

South Korea reported Q4 20 GDP expanded by 1.1%. While it was slower than Q3 growth of 2.1%, it was better than the 0.9% median estimate in the Bloomberg survey. The year-over-year contraction of 1.4% was also a little less than expected and could be among the least in the OECD. The preliminary data suggests the strength of its exports helped offset the weakness in domestic demand. China is its number one export market (~25%), and the US is the second-largest (~12%). Vietnam is the third-largest South Korean export market (~~8%)....

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"The rise of intangibles and the demise of accounting"

Next to the "Who can put a value on a human life" pitch for biotechs and pharma my favorite rationale is "The accounting doesn't present a fair picture of the value" in these 'software is eating the world' stocks.

In drawdowns you find out just how much or how little GAAP matters.

 From Tanay's Newsletter, Dec. 21, 2020:

One of the big shifts in the economy has been the rise of intangible assets such as software, data, customer franchises and so on, which now make up a bulk of enterprise value. 

While the world has changed, accounting standards have not, which in my view has made income statements and balance sheets less relevant.

Today I’ll cover this rise of intangibles and how it has made accounting less relevant. 

The rise of intangibles

Back in the day, a majority of most companies value stemmed from tangible assets. These were things like plants, machinery, raw materials and so on, which were then transformed into finished products and sold and thereby converted into revenue.

These assets sat on balance sheet, and so the balance sheet was a good representation of the assets that a company had amassed at any given point in time.

In today’s age, especially with technology companies, “intangible” assets have taken center stage and are the key driver of company value. Think intellectual property such as patents and trademarks, software and data, customer franchises and even goodwill and brands.

As the chart below shows, intangible assets have gone from making up 14% of the S&Ps enterprise value in 1975 to now representing over 84%!

Today, for most of the largest companies the majority of their value comes from intangible assets. Is this trend going to continue? The answer is a resounding yes. 

As the graph below shows, investment in intangibles crossed the investment in tangible assets in the mid 90s. Since then, the investment in intangibles and the delta has continued to increase.

Source: Wall Street Journal

Accounting’s Job To Be Done

So how does this impact Accounting? First, let’s quickly touch on what the goal of accounting is.

John Collison described the jobs to be done of accounting in his podcast with Patrick O’Shaughnessy as below:

We're actually trying to do a number of different jobs with accounting. 

We're trying to figure out how much profit we are in so we know how much tax we have to pay. That's one job we have. We're also trying to help the business run itself. We're trying to broad a view of the business managers so that we can determine whether we need to invest in new machinery to be more efficient or something like that. We're also trying to solve for the needs of creditors, where people want to be able to evaluate the business and understand, really to enough money to pay off its debt. And then we're also separately, importantly, trying to solve for the needs of equity holders, where they're trying to understand what are the long-term cash flows for this business going to be. 

And the reason I bring that up is people think of accounting and GAAP as these fundamentals that are etched into stone tablets. I mean, accounting standards are invented by us humans to give us a view of a business. And they're up to us to choose.

We can synthesize the overall JTBD of accounting as getting a better sense of the current state of the business and the ability to predict the future state (and cash flows of the business).

Intangibles and Accounting

So what’s the big deal about the rise of intangibles? The big deal is that the rise of intangibles has made accounting less relevant. 

A 40-year accounting rule, SFAS No. 2 1974, which came into existence essentially prior to technology as we know it, requires that R&D be expensed.

“This Statement establishes standards of financial accounting and reporting for research and development (R&D) costs. This Statement requires that R&D costs be charged to expense when incurred. It also requires a company to disclose in its financial statements the amount of R&D that it charges to expense.”

And it’s not just R&D - investments in other intangibles such as brand, goodwill, customer franchises, unique processes, etc get expensed immediately, rather than being capitalized (and so don’t show up as assets on balance sheets)

By expensing them immediately, we’re essentially saying that they have no value in the future. But in reality, this investment leads to the creation of an asset that has value in the future.

So back to our goal with accounting: It’s to better understand a business for which we often use the income statement and the balance sheet to ascertain profitability and ability to generate profit in the future. But with the rise of intangibles given today’s accounting standards, both the income statement and the balance sheet are losing relevance.

Take two companies O and N. O is an “Old Economy company”, which invests $10M in a factory with machinery to produce physical widgets which it sells. It believes that the factory has a useful life of 10 years, and so depreciates the value of the factory by $1M each year. So in year 1, the impact on earnings of this investment is $1M expense, and $9M sits on the balance sheet.

Now take company N which is a “New Economy company”. It invests $10M in R&D to create software. This software will continue to be useful in the future, but per GAAP accounting, it will expense all of the $10M this year. So in year 1, the impact on earnings of this investment is a $10M expense, and the balance sheet reflects nothing. In addition, let’s say they spend $10M to acquire recurring revenue customers. They will earn revenue from these customers for many years in the future, but many of the costs are expensed immediately. In addition, their customer base has grown which will lead to recurring revenue in the future doesn’t show up on their balance sheet.

Two things stand out from this toy example:

1. Earnings can basically become meaningless when companies are investing in growth. Companies are being penalized in that their expenses are not being matched to the revenues. While they will continue to earn revenue from a software or a customer in the future, the expense the cost to build it or acquire that customer immediately. This artificially deflates earnings.

2. The balance sheet isn’t really reflecting all the assets that a company has built up and so can also be somewhat meaningless because many key intangible assets that result in the creation of these intangible assets are not showing up on it.

Understanding the impact on earnings

Now that we’re done with our toy example, let’s look at a few big buckets of spend and understand the impact of treating intangibles this way. 

For simplicity, I’ll use a median SaaS company in this example, but it’s easy to see how the following apply to other industries such as pharma/biotech, tech, media or CPG....

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Perhaps though the world is finally ready for "Momentum Accounting & Triple Entry Bookkeeping" 

"China, Indonesia on a collision course at sea"

 From Asia Times, January 15:

Chinese research vessels, coast guard boats and underwater drones are making unwelcome incursions into Indonesian waters 

JAKARTA – Indonesia’s interception this week of a Chinese research ship, which had crossed the Java Sea without an activated transponder, and last month’s discovery of a suspected Sea Wing underwater drone off southern Sulawesi has presented Jakarta with a new set of issues in its uneasy relations with Beijing over maritime sovereignty.

On the evening Chinese Foreign Minister Wang Yi concluded an official visit to Jakarta, an Indonesian Coast Guard patrol ship shadowed the survey vessel Xiang Yang Hong 03 into the strategic Sunda Strait separating Java and Sumatra after it turned off its automated identification system (AIS) three times between January 8 and 12. 

Under provisions in the United Nations Convention on Law of the Sea (UNCLOS) recognized by most countries, Indonesia requires all ships transiting the world’s only archipelagic sea lanes to have functioning AIS and forbids them from carrying out oceanographic research.

In addition, foreign warships are permitted to conduct limited flight operations and submarines can remain submerged as long as they don’t stray more than 25 nautical miles on either side of their charted course through the three designated north-south lanes.

The Maritime Security Agency (BAKAMLA) said the Xiang Yang Hong 03 killed its transponder twice while passing through the Natuna islands at the southern end of the South China Sea and later in the Karimata Strait, northeast of the island of Belitung.

The Indonesian patrol craft KN Nipah Island did not attempt to close with and board the Chinese vessel because of bad weather, but they were told by radio that the AIS had been damaged. It was later escorted out of Indonesia’s Economic Exclusion Zone (EEZ).

The incident came only a fortnight after Indonesia announced the discovery of a so-called Sea Glider off South Sulawesi’s Selayar Island. Carrying a trailing antenna and with no identifying marks, it was the third found in Indonesian waters in the past year, although the previous finds were not made public.

One of the drones was recovered in the Natuna islands in March last year. Earlier this month another was found by fishermen north of the East Java port city of Surabaya near the approaches to the Lombok Strait separating Java and Bali....

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Probably unrelated at The Diplomat:

 Indonesia's Nuclear Dream, Revived?

"Lawyer for Florida man seen at Capitol riot with Pelosi’s lectern says photo a problem: ‘I’m not a magician'"

From Florida Politics:

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Yeah, that's gonna be a problem for Florida Man and his defense.

Huzzah! The Covid Hath Been Smited In California, Huzzah!

 From the Los Angeles Times, January 24:

Newsom cancels California's COVID-19 stay-at-home orders

Huzzah!

Update: NBC3 Television, Sacramento, January 25:

Gov. Newsom to hold COVID-19 briefing after state lifts regional stay-at-home orders

Huzzah!

Previously:

Huzzah! The Covid Hath Been Smited In D.C, and Detroit, Huzzah!
Huzzah! The Covid Hath Been Smited In Chicago, Huzzah!
Huzzah! The Covid Has Been Smited: Governors Cuomo And Walz Call For A Great Reopening, Huzzah