Friday 10 February 2023

A World Falling Apart?

 Baltic Dry Index. 592 -11              Brent Crude 84.08

Spot Gold 1860                   US 2 Year Yield 4.48 +0.03

Coronavirus Cases 02/04/20 World 1,000,000

Deaths 53,103

Coronavirus Cases 10/02/23 World 677,088,951

Deaths 6,778,927

The world has a way of undermining complex plans. This is particularly true in fast moving environments. A fast moving environment can evolve more quickly than a complex plan can be adapted to it. By the time you have adapted, the target has changed.

Carl von Clausewitz.

Nothing this Friday looks good.

Stocks are wobbly again.

The disaster in Turkey and Syria seems never ending. More layoffs in the tech sector. FTX takes off the kid gloves. The Adani scandal keeps on growing. Yet another Nickel scandal surfaces.

NATO keeps pressing for WW3 with Russia.

Oh well, maybe Superbowl 57 can provide a lift on Sunday. How well did FTX Superbowl 56 work out?


Asia-Pacific markets mixed as China’s inflation ticks up: Live updates

UPDATED THU, FEB 9 2023 11:29 PM EST

Asia-Pacific markets traded mixed on Friday, following moves on Wall Street as China’s inflation data came in lower than expected.

Consumer prices in the nation rose 2.1% in January compared to a year ago. The Shanghai Composite fell 0.46% and the Shenzhen Component shed 0.83%.

Hong Kong’s Hang Seng index also shed 1.78%, dragged down by technology stocks. The Hang Seng Tech index led losses in the region as it slid 3.92%.

In Australia, the S&P/ASX 200 fell 0.69% as investors digested the Reserve Bank of Australia’s statement on monetary policy indicating further hikes ahead. Earlier this week, the central bank raised its benchmark interest rates by 25 basis points to 3.25%.

The Nikkei 225 rose 0.32% while the Topix gained 0.22%. The Kospi in South Korea fell 0.75% and the Kosdaq also inched 1.43% lower.

In corporate earnings, Taiwan Semiconductor Manufacturing Company, or TSMC, will release its monthly sales report later in the day. Japan’s HondaShiseido and Olympus will also report quarterly results.

Overnight in the U.S., stocks closed lower Thursday. All three major indexes hit session lows in the final hour of trading — after giving up earlier gains as concerns over the Federal Reserve’s future moves on monetary policy offset excitement around the latest batch of corporate earnings.

Asia markets: Reserve Bank of Australia, China inflation, K-pop, Bank of Japan (cnbc.com)

Yahoo to lay off more than 20% of staff

Feb 9 (Reuters) - Yahoo said on Thursday it plans to lay off more than 20% of its total workforce as part of a major restructuring of its ad tech division.

The cuts will impact nearly 50% of Yahoo's ad tech employees by the end of this year, including nearly 1,000 employees this week, the company said.

Yahoo, which is owned by private equity firm Apollo Global Management (APO.N) since a $5 billion buyout in 2021, added that the move would enable the company to narrow its focus and investment on its flagship ad business called DSP, or demand-side platform.

This comes as many advertisers have pared back their marketing budgets in response to record-high inflation rates and continued uncertainty about a recession.

A raft of U.S. companies from Goldman Sachs Group Inc (GS.N) to Alphabet Inc (GOOGL.O) have also laid off thousands this year to ride out a demand downturn wrought by high inflation and rising interest rates.

Axios first reported the news of the layoffs at Yahoo.

Yahoo to lay off more than 20% of staff | Reuters

In other news.

Anger grows in Turkey as earthquake death toll passes 20,000 and rescue hopes dwindle

ADIYAMAN, Turkey — As the temperatures plunged, anger was growing in Turkey over the government’s response to two massive earthquakes earlier this week.

On Thursday, the number of those killed by the tremors in Turkey and neighboring Syria passed 20,000.

With their homes destroyed, thousands spent a freezing Wednesday night amid the debris in streets of Adiyaman, huddled around small fires and with little shelter. Electricity and water were nonexistent in the southern city.

Fearful of another earthquake, some chose to stay out in the open, avoiding buildings that appeared intact and choosing instead to brave the sub-zero temperatures.

---- Others said they were furious at what they said was a slow response from the government, and said that rescue teams had arrived in the city with the wrong equipment to dig through the rubble. NBC News could not independently confirm this assertion.

“Nobody was here to help us, I have complaints about all the authorities here,” said Nursen Guler on Wednesday, adding that she had one son in the hospital and another who was still trapped under rubble.

“There are no teams here, everyone is waiting for rescue teams,” she said.  

---- The government’s response was also questioned by people in several other cities where residents have also been forced to sleep in the open, in tents or in temporary accommodation.

“Where is the state? Where have they been for two days? We are begging them. Let us do it, we can get them out,” Sabiha Alinak told Reuters amid the rubble in the city of Malatya on Wednesday.

But the sheer scale of the disaster appeared to overwhelm authorities.

The first of Monday’s devastating quakes struck Turkey and neighboring Syria in the early hours, and registered at magnitude 7.8. It qualified as “major” on the official magnitude scale. Hours later, a second quake, registering at 7.6-magnitude, struck nearby.

More than 17,130 people have died in Turkey, according to the country’s disaster management agency. In Syria, over 3,000 people have been killed, according to officials there.

Osman Yıldırım, a civil engineer, said that after the last major earthquake hit Turkey in 1999, a torrent of new regulations were introduced to make buildings more resistant, but the government didn’t go far enough.

“This could have been prevented with the right steps starting 25 years ago,” said Yıldırım, 55, adding that unregistered construction work, corruption and poor enforcement of regulations had put people in danger.

“The government didn’t take necessary steps to minimize risks through urban planning, low rise buildings, construction codes, and strict control,” he said, adding that as a result “new buildings and old buildings collapsed.” 

More

Anger grows in Turkey as earthquake death toll passes 20,000 and rescue hopes dwindle (cnbc.com)

Finally, in corporate scandal news, today we are spoiled for choice.

Trafigura faces hit of up to $577mn over alleged nickel fraud

Commodities trader discovers shipments it had purchased did not contain the metal

February 9 2023.

Trafigura has alleged it has been the victim of a “systematic fraud” and faces a writedown in excess of half a billion dollars after discovering shipments of nickel that it purchased failed to contain the metal.

The commodity trader said in a statement on Thursday that it had recently discovered the alleged fraud and had begun legal action against a group of companies “connected to and apparently controlled” by Dubai-based metals trader Prateek Gupta, including TMT Metals and companies owned by UD Trading Group.

It added that a small proportion of containers purchased from these companies had been inspected since December and that they did not contain nickel. It added that the majority of the shipments were in transit and “awaiting further inspection”.

Privately held Trafigura, one of the world’s biggest commodity traders, has close relationships with dozens of banks that provide billions of dollars of financing that help underpin its daily operations.

An impairment charge of up to $577mn will be recorded in the first half of 2023 related to the alleged fraud, which Trafigura said involved “misrepresentation and presentation of a variety of false documentation” by the companies.


TMT Metals describes itself as a non-ferrous metals, minor metals and ferroalloys trading merchant. UD Trading Group’s website says its is part of UD group, which operates in metal trading, wind power generation and mining and has revenues in excess of $4.5bn and a presence in nine countries.

TMT Metals Holding lists Gupta, an Indian national and United Arab Emirates resident, as a director, according to UK Companies House records.


TMT Metals, Gupta and UD Trading did not immediately respond to requests for comment. No TMT Metals representative responded when the Financial Times on Thursday visited the shared office where its London business is based.

Nickel is the most highly valued base metal, rising 6 per cent on Thursday to more than $29,000 per tonne compared with roughly $9,000 for copper. Gupta’s companies and Trafigura traded about 25,000 tonnes of nickel but some of the cargoes were found to have held metal of far lower value than nickel, according to people familiar with the matter.

More

Trafigura faces hit of up to $577mn over alleged nickel fraud | Financial Times (ft.com)

FTX gets court approval to subpoena founder Bankman-Fried, other insiders

8 February 2023

Wed, 8 February 2023 at 8:59 pm GMT·2-min read

(Reuters) - Failed crypto firm FTX received court approval on Wednesday to issue subpoenas to its founder Sam Bankman-Fried and members of his family as part of the company's investigation into "misappropriated and stolen" funds.

FTX, a once-prominent crypto exchange, filed for bankruptcy protection in November amid allegations that Bankman-Fried used FTX customers' money to prop up the balance sheet of the FTX-affiliated hedge fund Alameda Research. FTX said that it needs more information from former insiders, including its indicted founder, to identify misspending that could be clawed back to repay FTX's customers.

U.S. Bankruptcy Judge John Dorsey, who is overseeing FTX's Chapter 11 proceedings, approved FTX's request to issue subpoenas to Bankman-Fried, his parents Barbara Fried and Joseph Bankman, his brother Gabriel Bankman-Fried, former FTX Chief Technology Officer Gary Wang, former Alameda Research CEO Caroline Ellison, and former FTX chief operating officer Constance Wang.

FTX said in court papers filed Wednesday that most of the subpoena targets had begun cooperating with its investigation. FTX said that it is still in discussions with Ellison and that Sam Bankman-Fried "remains non-responsive."

Ellison and Gary Wang have pleaded guilty to fraud charges for their role in the collapse of FTX and Alameda. Bankman-Fried has pleaded not guilty, and is scheduled to face trial in federal court in Manhattan in October.

The subpoenas focus on questionable spending by FTX insiders. That includes $16.7 million spent on Bahamian real estate by Bankman-Fried's parents and a Washington, D.C., headquarters building purchased by Guarding Against Pandemics, an advocacy organization founded by the Bankman-Fried brothers.

FTX is also seeking information about political donations. In addition to donations by Sam Bankman-Fried, his mother founded a political action committee called Mind the Gap, which makes recommendations to a network of political donors.

More

FTX gets court approval to subpoena founder Bankman-Fried, other insiders (yahoo.com)

FTX's new boss says security was so weak that founders could 'download half a billion dollars' of crypto without detection

Feb 7, 2023, 12:14 PM

FTX's weak security meant its cofounders — who have both been charged with fraud — could easily have stolen hundreds of millions of dollars' worth of crypto, the bankrupt firm's new CEO said in court testimony.

John J. Ray III, who was drafted in to oversee FTX after its collapse and previously handled Enron's liquidation, made the comments at the Delaware bankruptcy court Monday.

"Literally one of the founders could come into this environment, download half a billion dollars' worth of wallets onto a thumb drive, and walk off with them," he said in a recording of the hearing reviewed by Insider. "And there'd be no accounting for that whatsoever."

Ray said FTX crypto wallets have now been moved into "cold storage," adding that the crypto firm previously had "hot wallets in a system where multiple people had access to passwords."

"Where we are today is pretty satisfying," he added.

Then-CEO Bankman Fried resigned his position, and FTX filed for bankruptcy protection in the US on November 11. FTX lawyers later said the company ran out of assets partly because executives had a $65 billion line of credit to draw on customers' funds.

More

New FTX CEO Says Security so Bad Execs Could Have Stolen $500M (businessinsider.com)

Norway wealth fund has sold its stakes in Adani companies

OSLO, Feb 9 (Reuters) - Norway's sovereign wealth fund has sold its stakes in three Adani Group companies worth just over $200 million since the start of the year, the world's largest stock investor said on Thursday.

The $1.35 trillion fund at the end of 2022 held stakes in Adani Total Gas (ADAG.NS), Adani Ports & Special Economic Zone (APSE.NS) and Adani Green Energy (ADNA.NS).

"Since year-end, we have further reduced in Adani companies. We have no exposure left," Christopher Wright, the fund's head of ESG risk monitoring, told a news conference.

"We have monitored Adani for many years (on ESG) issues, many on their handling of environmental risks," he said.

Adani's seven main Indian-listed stocks have plunged by some $110 billion after a scathing Jan. 24 report by U.S. short seller Hindenburg Research accused the conglomerate of improper use of offshore tax havens and stock manipulation.

The Adani Group has denied any wrongdoing.

More

Norway wealth fund has sold its stakes in Adani companies | Reuters


MSCI to cut weighting of four Adani firms in wake of Hindenburg report

Feb 10 (Reuters) - Index provider MSCI said it will cut the weightings of four Adani Group companies, including flagship firm Adani Enterprises (ADEL.NS), in its indexes after reassessing the number of shares that are freely traded.

The move comes in the wake of a Jan. 24 report by U.S. short seller Hindenburg Research that has accused the Indian conglomerate of stock manipulation and improper use of offshore tax havens that obscure the extent of stock ownership of Adani family members in group firms. The group has denied any wrongdoing.

The Hindenburg report has plunged the group, led by billionaire Gautam Adani, into crisis, wiping some $110 billion off the value of the group's main seven listed firms.

In addition to Adani Enterprises - the group's coal-miner-cum-incubator for new projects, MSCI said it plans to cut the weightings for Adani Total Gas (ADAG.NS) - a venture with France's TotalEnergies (TTEF.PA) and Adani Transmission (ADAI.NS), a power transmission company.

It will also reduce the weighting of ACC (ACC.NS), a major Indian cement company the Adani Group acquired from Holcim last year and which is not one of the group's main seven listed firms.

The four companies had a combined 0.4% weighting in the MSCI emerging markets index as of Jan. 30. The changes come into effect on March 1.

Adani Group did not immediately respond to a request for comment from Reuters on Friday.

Hindenburg founder Nathan Anderson tweeted on Thursday when MSCI flagged the changes, that his firm viewed the decisions as a "validation of our findings".

Adani Enterprises dropped 1.6% in Friday morning trade while Adani Transmission and Adani Total Gas slid 5%, down by its daily limit. Shares in ACC were down 1%.

More

MSCI to cut weighting of four Adani firms in wake of Hindenburg report | Reuters

Global Inflation/Stagflation/Recession Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.

Exclusive: JPMorgan CEO says too early to declare victory against inflation

MIAMI, Feb 8 (Reuters) - The chief executive of JPMorgan Chase & Co. (JPM.N), the biggest U.S. bank, cautioned against declaring victory against inflation too early, warning the Federal Reserve could raise interest rates above the 5% mark if higher prices ended up "sticky."

Dimon's warning came after Federal Reserve officials said more rate rises are on the cards, although none were ready to suggest that January's hot jobs report could push them back to a more aggressive monetary policy stance.

In reference to inflation, Dimon said "people should take a deep breath on this one before they declare victory because a month’s number looked good."

"It’s perfectly reasonable for the Fed to go to 5% and wait a while," Dimon said.

But if inflation comes down to 3.5% or 4% and stays there, "you may have to go higher than 5% and that could affect short rates, longer rates," he said.

From a peak of nearly 7% in June, the Fed's preferred measure of inflation stood at 5% in December - well above its 2% target but heading steadily downward.

In a wide-ranging interview with Reuters, Jamie Dimon warned stricter regulation of credit card fees could prompt lenders to extend less credit. He also said he planned to visit China, saying it was important to maintain relations there.

Dimon also said a default on U.S. debt - a prospect the country faces unless its debt ceiling is raised - would be potentially "catastrophic."

"We cannot have a default," Dimon said. It could cause permanent damage to America and "could destroy its future," he said.

More

Exclusive: JPMorgan CEO says too early to declare victory against inflation | Reuters

Covid-19 Corner

This section will continue until it becomes unneeded.

With Covid-19 starting to become only endemic, this section is close to coming to its end.

A Crucial Group of Covid Drugs Has Stopped Working

A key tool in the early pandemic response, monoclonal antibodies are now ineffective against new variants. Immunocompromised patients are especially at risk.

FEB 8, 2023 7:00 AM

IN MARCH 2020, as a mysterious respiratory virus was sweeping the globe, researchers at Vanderbilt University Medical Center in Tennessee tracked down some of the first known Covid-19 patients in North America and asked them for blood samples. 

Doctors shipped vials of the blood to Nashville, where the Vanderbilt team got to work analyzing it for proteins called antibodies, which the immune system generates when it’s exposed to a virus or other foreign substance. In particular, the Vanderbilt team was looking for neutralizing antibodies—those capable of binding to the SARS-CoV-2 virus and preventing it from entering cells and causing infection.

They isolated hundreds of antibodies and, by the end of April 2020, identified two particularly potent ones that became the basis of Evusheld, a preventive drug for people with weakened immune systems who don’t respond well to the Covid-19 vaccines. Made up of two lab-made antibodies, Evusheld mimics natural ones that fight infection. But the latest coronavirus variants can evade the drug. On January 26, the US Food and Drug Administration (FDA) pulled Evusheld from the market, saying that it’s unlikely to work against more than 90 percent of the Covid-19 variants currently circulating in the United States.

“We had been seeing the data,” says Robert Carnahan, associate director of the Vanderbilt Vaccine Center. “We had already mourned the loss of Evusheld and knew it was just a matter of time.” It was the last remaining antibody drug designed to fight Covid-19. 

Antibody drugs—also known as monoclonal antibodies—have been an important weapon against the virus. Meant to boost the immune system, these drugs have shown they can keep high-risk patients out of the hospital. Over the past two years, the FDA authorized a handful of them for the treatment of mild to moderate Covid-19, while Evusheld was meant as a prophylaxis. (Evusheld is given as an injection; others are a one-time infusion.) But one by one, all of them faltered as the virus mutated. 

More

A Crucial Group of Covid Drugs Has Stopped Working | WIRED

NY Times Coronavirus Vaccine Tracker. https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html

Regulatory Focus COVID-19 vaccine tracker. https://www.raps.org/news-and-articles/news-articles/2020/3/covid-19-vaccine-tracker

Some other useful Covid links.

Johns Hopkins Coronavirus resource centre

https://coronavirus.jhu.edu/map.html

Centers for Disease Control Coronavirus

https://www.cdc.gov/coronavirus/2019-ncov/index.html

The Spectator Covid-19 data tracker (UK)

https://data.spectator.co.uk/city/national

Technology Update.

With events happening fast in the development of solar power and graphene, among other things, I’ve added this section. Updates as they get reported.

Today, something a little different. How the CIA/US Navy blew up the Nord Stream pipelines.

Silly me, I thought that Washington had outsourced it to the UK Royal Navy rather than, as it is alleged, the Norwegian Royal Navy.  Where will Russia retaliate, when and against what?

Has WW3 already started?

Russia calls for international probe into Nord Stream blasts after blogger report

MOSCOW, Feb 9 (Reuters) - A blog by a U.S. investigative journalist alleging the United States was behind the explosions that ruptured the Nord Stream gas pipelines should become the basis for an international investigation, Russia's top lawmaker said on Thursday.

The White House on Wednesday dismissed the report, published by U.S. investigative journalist Seymour Hersh, which said an attack on the pipelines was carried out last September at the direction of U.S. President Joe Biden.

"The published facts should become the basis for an international investigation, bringing Biden and his accomplices to justice," Vyacheslav Volodin, the chairman of the Russian State Duma, said.

Volodin said the United States should pay "compensation to countries affected by the terrorist attack."

Moscow, without providing evidence, has repeatedly said the West was behind the explosions affecting the Nord Stream 1 and 2 pipelines last September - multibillion-dollar infrastructure projects that carried Russian gas to Germany under the Baltic Sea.

Investigators from Sweden and Denmark - in whose exclusive economic zones the explosions occurred - have said the ruptures were a result of sabotage, but have not said who they believe was responsible.

President Vladimir Putin has accused "Anglo-Saxon" powers of blowing up the Nord Stream pipelines, a Kremlin-designed project to circumvent Ukraine in exporting its gas directly to Germany and further to Europe.

Russia's foreign ministry said on Wednesday the United States had questions to answer over its role in explosions on the undersea Nord Stream gas pipelines last year.

Russia calls for international probe into Nord Stream blasts after blogger report | Reuters

Nord Stream Sabotage Was CIA, US Navy Covert Op: Seymour Hersh Bombshell Prompts White House Response

WEDNESDAY, FEB 08, 2023 - 05:32 PM

Famed journalist and Pulitzer prize winner Seymour Hersh, who for decades was a star reporter writing for The New York Times and New Yorker, on Wednesday published a new bombshell as his first Substack post, prompting a quick White House response

After conducting his own investigation into who sabotaged the Nord Stream pipelines via a series of underwater blasts on Sept. 26, Hersh has concluded the United States blew up the Russia-to-Germany natural gas pipeline as part of a covert operation under the guise of the BALTOPS 22 NATO exercise.

Hersh, relying on unnamed national security sources, describes months of discussions and back-and-forth involving the Biden White House, CIA, and Pentagon. The report says planning was in the works all the way back to December 2021, with a special task force formed under the aegis of US National Security Advisor Jake Sullivan.

"The Navy proposed using a newly commissioned submarine to assault the pipeline directly. The Air Force discussed dropping bombs with delayed fuses that could be set off remotely. The CIA argued that whatever was done, it would have to be covert. Everyone involved understood the stakes," the report, entitled How America Took Out The Nord Stream Pipeline reads.

"The Biden Administration was doing everything possible to avoid leaks as the planning took place late in 2021 and into the first months of 2022," it continues.

As momentum gained to proceed with a covert sabotage attack, "Over the next few weeks, members of the CIA’s working group began to craft a plan for a covert operation that would use deep-sea divers to trigger an explosion along the pipeline," Hersh writes.

More

Nord Stream Sabotage Was CIA, US Navy Covert Op: Seymour Hersh Bombshell Prompts White House Response | ZeroHedge

Another weekend and how long before Europe runs out of diesel? How long before Russia retaliates for the US Navy attack on the Nord Stream pipelines? How long before Nato’s de facto war on Russia expands into nuclear war? Have a great weekend everyone. The answer to those question’s might be much closer than we think.

No one starts a war--or rather, no one in his sense ought to do so--without first being clear in his mind what he intends to achieve by the war and how he intends to conduct it.

Carl von Clausewitz.

 

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