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Oil Can Push Higher As Cushing Stockpiles Collapse

Oil Can Push Higher As Cushing Stockpiles Collapse

Crude prices will likely get a fresh boost this week, as stockpiles at the key US storage hub in Cushing, Oklahoma, risk collapsing to the lowest level (aka “tank-bottoms”) in almost a decade.

Such a move would embolden those aiming for a return of $100 oil by year-end.

Cushing storage tanks

Cushing matters. Being the delivery point for the WTI futures contract, the rise and fall of the holdings is among the market’s most closely followed trends. So far in 3Q, inventories have slumped by ~47% to 22.9m barrels. That’s the lowest since July 2022 and that’s not far away from the 2014 lows.

If that comes to pass, it’d highlight the scramble for near-term supplies as the global market tightens up.

Estimates come on Tuesday, followed by the official print the next day.

Russia: The United States Is At War Against Us

Russia: The United States Is At War Against Us

Russian Foreign Minister Sergey Lavrov in fresh statements made to reporters has said the Untied States in waging war against Russia through the Ukraine proxy war.

Lavrov in the Russian-language comments described that Washington is not only transferring some $100 billion in military aid to Kiev, but is actually controlling its decision-making. He further said this is in order to try and inflict a “strategic defeat” on Russia.

The top Russian diplomat was speaking on the sidelines of the Eastern Economic Forum on Sunday morning. “No matter what it says, it [the US] controls this war, it supplies weapons, munition, intelligence information, data from satellites, it is pursuing a war against us,” he said, according to a translation.

“While what is going on is that Ukraine has been prepared, has long been prepared for inflicting strategic defeat to Russia using its hands and its bodies,” Lavrov emphasized.

He in prior comments Friday had said the US is also waging a global effort to isolate Moscow, and that this was the intent of the recent Saudi-hosted Ukraine peace summit.

“There is a real plot around the topic of the so-called (peace) negotiations, as well as attempts to turn everything upside down through pseudo diplomacy,” he said Friday. He explained:

“The West has been saying for months that this ‘peace formula’ is the only basis for negotiations. It starts from innocent topics … and then comes to the purpose for which it was concocted – inflicting a strategic defeat on Russia, to restore the borders of Ukraine as they were in 1991, court-martial the Russian leadership, force Russia to pay reparations, and then ‘mercifully’ agree to sign a peace agreement.”

…click on the above link to read the rest…

Xi, Putin Hail First BRICS Expansion In Over A Decade As Gulf Oil Powers Join

Xi, Putin Hail First BRICS Expansion In Over A Decade As Gulf Oil Powers Join

At a moment China and Russia have envisioned the future of BRICS as fundamentally an anti-Western bloc of developing nations, the Gulf oil powers Saudi Arabia and the United Arab Emirates have been formally invited to become members, which marks the bloc’s first expansion in over a decade.

“The membership will take effect from the first of January, 2024,” South African President Cyril Ramaphosa said, adding that additionally Argentina, Egypt, Ethiopia and Iran will be added to the fold next year.

Brics pool photo, via NY Times

China’s President Xi Jinping hailed the rare expansion, beyond the current large economies of China, Russia, Brazil India, China and South Africa as “historic”. He said it will “inject new impetus into the BRICS cooperation mechanism and further strengthen the power of world peace and development.”

President Putin too congratulated the soon to be newest members, saying in a video message, “I would like to congratulate the new members who will work in a full-scale format next year.”

“And I would like to assure all our colleagues that we will continue the work that we started today on expanding the influence of BRICS in the world,” the Russian leader added. Indian Prime Minister Narendra Modi also hailed the expansion which he said will strengthen the bloc.

Saudi Foreign Minister Prince Faisal bin Farhan’s statement said, “the special, strategic relations with the BRICS nations promotes common principles, most importantly the firm belief in the principle of respect for sovereignty, independence and non-interference in internal affairs.”

He vowed in words before the BRICS conference on Thursday that the kingdom will be a “secure and reliable energy provider,” and noted that total bilateral trade between Riyadh and BRICS countries exceeded $160 billion in 2022, the Saudi foreign minister said.

…click on the above link to read the rest…

Zelensky Threatens “Russia May Be Left Without Ships” Amid Emerging Battle At Sea

Zelensky Threatens “Russia May Be Left Without Ships” Amid Emerging Battle At Sea

Last week witnessed two major Ukrainian strikes on Russian ships at sea in merely two days, which resulted in severe damage to a warship (seen listing as it was towed to port), and damage to an oil tanker known to supply fuel to Russia’s military in Syria.

This emerging “battle at sea” also comes as Russia has stepped up major assaults of Ukrainian ports, including on the Black Sea and in the Danube, across from NATO member Romania.

The Olenegorsky Gornyak, a Russian Navy landing ship, tugged to shore – apparently listing – after it was attacked last Friday. via Reuters

Kiev and Washington have accused President Vladimir Putin of ‘weaponizing food’ – while the Kremlin has blamed Ukraine and its NATO backers for making Black Sea transit routes dangerous, given the sea drone attacks and release of sea mines.

In new statements, President Volodymyr Zelensky has signaled there will be more attacks on Russian ships to come, which is likely to see the conflict slide further toward “unlimited war” – where any and all targets, including civilian, are taken out.

Zelensky said in a fresh interview with the Latin American publication La Nacion that Ukraine forces will turn the ongoing blockade of Ukrainian ports back on Russia.

If Russia continues to dominate the Black Sea and block it with missiles, then Ukraine will do the same, which is a fair defense of our capabilities,” he said. And significantly, he added:

“If they continue to shoot, we don’t have many weapons, but if they continue to shoot, they may be left without ships until the end of the war. And this is what we want to show them.”

“Therefore, Ukraine will definitely respond to any attacks on the civilian population and grain corridors,” Zelensky emphasized.

…click on the above link to read the rest…

World Food Prices Jump Most In 18 Months

World Food Prices Jump Most In 18 Months

Global food prices increased the most in 1.5 years as trade disruptions from the El Nino weather phenomenon battered agricultural-producing countries, and Russia’s exit from a crucial UN-backed agriculture deal stoked supply concerns.

The Food and Agriculture Organization of the United Nations (FAO) reported Friday that the global food index, which tracks monthly changes in the international prices of globally-traded food commodities, averaged 123.9 in July, up 1.3% from the previous month.

The FAO Food Price Index’s July print was the largest monthly gain since March 2022.

FAO explained the FAO Vegetable Oil Price subcomponent of the index was responsible for the monthly increase:

The increase was driven by a sharp jump in the FAO Vegetable Oil Price Index, which rose 12.1 percent from June after seven months of consecutive declines. International sunflower oil prices rebounded by more than 15 percent in the month, due mostly to renewed uncertainties surrounding the exportable supplies after the Russian Federation’s decision to end implementation of the Black Sea Grain Initiative. World prices for palm, soy and rapeseed oils increased on concerns over output prospects in leading producing countries.

Also, the FAO All Rice Price Index increased 2.8% on the month and 19.7% on the year due to “India’s 20 July prohibition of non-parboiled Indica exports fostered expectations of greater sales in other origins, amplifying upward pressure already exerted on prices by seasonally tighter supplies and Asian purchases,” the report said.

This upward pressure on rice prices “raises substantial food security concerns for a large swathe of the world population, especially those that are most poor and who dedicate a larger share of their incomes to purchase food,” FAO warned.

We noted in April and in early May, “El Nino Watch Initiated As Ag-Industry In Crosshairs” and “Global Rice Shortage Looms, Set To Be The Biggest In Decades” as a disruptive El Nino weather pattern wreaks havoc on the world’s ag crops.

Rising food prices risk fueling social instability for the weakest emerging market economies.

The Rise Of Totalitarianism: Banks Denying Services Based On Political Views

The Rise Of Totalitarianism: Banks Denying Services Based On Political Views

Then British Brexit Party leader Nigel Farage speaks during a visit at Dover harbour, in Dover, Britain, on Aug. 12, 2020. (Matthew Childs/Reuters)

When the Berlin Wall fell, I naively supposed that freedom was now secure, that never again would the spectre of totalitarianism return to Europe. I failed to take into account what I should have known, that the thirst for power is at least as great as that for freedom. Freedom and power are forever locked into a kind of Manichaean struggle, as are good and evil, and the thirst for power is perfectly capable of making an instrument of supposed good causes.

History doesn’t repeat itself, at least not in precisely the same way. The new totalitarianism doesn’t resort to thugs in the street and the midnight knock on the door. It’s somewhat more subtle than that, but nonetheless ruthless and dangerous for all its subtlety.

In Britain, a well-known politician, Nigel Farage, has had his bank account closed by a bank called Coutts that specializes in rich clients. It’s owned by the much larger National Westminster Bank, whose largest single shareholder by far, since the banking crisis of 2008, is the British government.

Mr. Farage is a well-known figure, the scourge of the Euro-federalists, and probably more responsible than any other single person for the referendum vote in 2016 for Britain to leave the European Union. Like most public figures with both strong opinions and a strong personality, Mr. Farage is both widely admired and widely detested. If you ask someone about him, he’s unlikely to answer, “On the one hand, on the other …”

…click on the above link to read the rest…

Understanding The Global Supply Of Water

Understanding The Global Supply Of Water

As the world’s population and its agricultural needs have grown, so too has the demand for water, putting the world’s supply of water under the microscope.

A century ago, freshwater consumption was six times lower than in modern times. This increase in demand and usage has resulted in rising stress on freshwater resources and further depletion of reservoirs.

Visual Capitalist’s Freny Fernandez introduces this graphic by Chesca Kirkland – using insights from Our World in Data – to break down water supply and also withdrawals per capita. The latter measures the quantity of water taken from both groundwater and freshwater sources for agricultural, industrial, or domestic use.

How Much Water Do We Have?

Many people know that more than 70% of the Earth’s surface is water. That’s 326 million trillion gallons of water, yet humanity still faces a tight supply. Why is that?

It’s because 97% of this water is saline and unfit for consumption. Of the remaining 3% of freshwater, about two-thirds are locked away in the form of snow, glaciers, and polar ice caps. Meanwhile, just under a third of freshwater is found in fast-depleting groundwater resources.

That leaves just 1% of global freshwater as “easily” sourced supply from rainfall as well as freshwater reservoirs including rivers and lakes.

Per Capita Water Withdrawals

Any look at a world map of rivers and lakes will reveal that fresh water distribution is highly uneven across different regions of the world.

Yet developed and developing countries alike require a lot of water for both commercial and personal use. Agriculture use alone accounts for an estimated 70% of the world’s available freshwater.

Below we can see how water withdrawals per capita have grown over the past decades, using the latest available data from each.

…click on the above link to read the rest…

The Fact-Check Racket Finally Unravels

The Fact-Check Racket Finally Unravels

Before the COVID lockdowns, social media companies had started contracting with new third-parties organizations called fact-checkers to assist in “content creation.” Getting a pass meant the post or story was amplified but getting dinged for inaccuracy meant that the post would be throttled or deleted.

For a while we believed it but certain revelations changed that. We came to realize that the posts labeled false were typically contrary to regime narratives. And a close look at the supposed refutation revealed that many points were very much in dispute. The companies developed a talent for seeming to reveal something false that was actually still debatable and interesting to consider. In most cases, what was declared false was still under consideration.

As time went on, the attempts to censor became more brazen and obvious. Then the Twitter files and other FOIAs generated proof of what many suspected all along. These entities were funded either directly or indirectly by government or by other dark-money sources as quid pro quos for other relationships they had cultivated with interested parties.

In other words, they were not some independent, science-based entities at all but rather hit squads with a hard political agenda. What was actually happening here was a form of censorship laundering. Government wants to censor but cannot so it turns to the social-media company to do the dirty work. To make this hand-in-glove racket less obvious, the companies would outsource to a fact-checking organization, making the lines of control even more blurry.

Sometime within the last several months, the whole racket seems to have unraveled. I rarely see the fact-checks cited at all. Or maybe they are cited ironically: what is declared false came to be seen as a badge of honor, a confirmation of core truth. That might seem crazy but these are the times in which we live. Nothing is as it seems.

…click on the above link to read the rest…

Endgame: US Federal Debt Interest Payments About To Hit $1 Trillion

Endgame: US Federal Debt Interest Payments About To Hit $1 Trillion

There was a shocking number in today’s latest monthly US Budget Deficit report. No, it wasn’t that US government outlays unexpectedly soared 15% to $646 billion in June, up almost $100 billion from a year ago…

… while tax receipts slumped 9.2% from $461 billion to $418 billion, resulting in a TTM government receipt drop of over 7.3%, the biggest since June 2020 when the US was reeling from the covid lockdown recession; in fact never have before tax receipts suffered such a big drop without the US entering a recession.

Needless to say, surging government outlays coupled with shrinking tax revenues meant that in June, the US budget deficit nearly tripled from $89 billion a year ago to $228 billion, far greater than the consensus estimate of $175 billion. One can only imagine which Ukrainian billionaire oligarch’s money laundering bank account is currently enjoying the benefits of that unexpected incremental $50 billion US deficit hole: we know for a fact that the FBI will never get to the bottom of that one, since they can’t even figure out who dumped a bunch of blow inside the White House – the most protected and surveilled structure in the entire world.

And with the monthly deficits coming in higher than expected and also far higher than a year ago, it is also not at all surprising that the cumulative deficit 9 months into the fiscal year is already the 3rd highest on record, surpassed only by the crisis years of 2020 and 2021: at $1.393 trillion, the fiscal 2022 YTD deficit is already up 170% compared to the same period last year.

Again, while sad, none of the above numbers are surprising: they merely confirm that the US is on an ever faster-track to fiscal death, but not before the Fed is forced to monetize the debt once again…

…click on the above link to read the rest…

‘Britcoin’ “Will Change Everything”, Analyst Warns

‘Britcoin’ “Will Change Everything”, Analyst Warns

A Bank of England (BoE) digital pound will be a “complete restructure” of the current financial system and can give the government more control on how people use their money, a financial analyst warns.

Some 130 countries are exploring a central bank digital currency (CBDC), according to the Atlantic Council.

The Bank of England (BoE) and the Treasury are currently considering feedback on how to lay the groundwork for a digital pound, nicknamed “Britcoin” by Prime Minister Rishi Sunak when he was chancellor.

A decision is yet to be made on whether or not to launch a digital pound. But if the plan goes ahead, it could be issued in just a few years’ time to complement physical cash.

Arguing against a retail CBDC, writer and financial analyst Susie Violet Ward said to NTD’s “British Thought Leaders” programme that a centrally controlled digital currency could lead to the curtailing of freedom, and that citizens have not been given enough information to enable robust debate.

If Britcoin is launched, it will be issued by the BoE and backed by the Treasury. Private firms, such as Fintech companies or banks, are expected to provide customers with digital wallets—computer or phone apps that are needed to manage transactions of the digital currency.

Unlike decentralised cryptocurrencies such as bitcoin, the digital pound won’t offer anonymity, which provides privacy but on the downside can also be exploited by criminals.

The infrastructure would also be programmable, enabling app providers to offer extra functions such as budgeting tools.

Ms. Ward said it could mean “they could tell you where to spend your money, what to spend it on, and potentially, if it expires.”

…click on the above link to read the rest…

Judge Bars Biden Officials, Agencies From Contacting Social Media Companies

Judge Bars Biden Officials, Agencies From Contacting Social Media Companies

In an order fittingly issued on Independence Day, a federal judge in Louisiana has forbidden multiple federal agencies and named officials from having any contact with social media companies with the intent to moderate content.  

The preliminary injunction arises from a suit filed by the states of Missouri and Louisiana, along with individuals that include two leading critics of the Covid-19 lockdown regime — Harvard’s Martin Kulldorff and Stanford’s Jay Bhattacharya — and Jim Hoft, who owns the right-wing website Gateway Pundit.

“If the allegations made by plaintiffs are true, the present case arguably involves the most massive attack against free speech in United States’ history,” wrote US District Judge Terry A. Doughty. “The plaintiffs are likely to succeed on the merits in establishing that the government has used its power to silence the opposition.”

The dozens of people and agencies bound by the injunction include President Biden, White House Press Secretary Karine Jean-Pierre, the Food and Drug Administration, Centers for Disease Control, the Treasury Department, State Department, the US Election Assistance Commission, the FBI and entire Justice Department, and the Department of Health and Human Services.

Bhattacharya and Kulldorff, who are among the originators of the Great Barrington Declaration that denounced the lockdown regime, have been victims of social media censorship. For example, the pair says their censorship-triggering statements included assertions that “thinking everyone must be vaccinated is scientifically flawed,” questioning the value of masks, and stating that natural immunity is stronger than vaccine immunity.

While the case is dominated by Covid-19 censorship, it also encompasses the Justice Department’s efforts to suppress reporting about Hunter Biden’s “laptop from hell” in the run-up to the 2020 election. Doughty gave credence to that accusation.

…click on the above link to read the rest…

OPEC+ Discussing 1 Million Bpd Output Cut

OPEC+ Discussing 1 Million Bpd Output Cut

Oil prices were trading up on Friday afternoon as shorts got a little nervous heading into the OPEC+ weekend, with new rumors circulating about the group’s discussions about another 1 million bpd in production cuts.

The OPEC+ group is scheduled for three separate meetings beginning this weekend and concluding on June 4.

While the general sentiment has been that the group will keep the status quo as far as production targets are concerned. But Saudi Arabia’s Energy Minister has made boisterous threats against oil’s speculators in the runup to the meeting, saying that shorts will be “ouching”.

On Thursday, Reuters suggested that the OPEC+ group would be unlikely to deepen its production targets at the meeting this weekend.

But late on Friday, Reuters suggested that OPEC+ was indeed discussing an additional output cut of around 1 million barrels “among possible options” for the meeting on June 4.

“Everything is on the table,” Iran’s OPEC Governor Amir Zamaninia told reporters in the Austrian capital.

Crude oil prices were already trading up ahead of the meeting, but increased even more in the afternoon hours, bringing Brent crude to $76.32 at 4:20 p.m., a $2.06 per barrel increase on the day. WTI was trading at $71.90 per barrel at that time.

A supply reduction of as much as 1 million barrels a day is the most likely outcome, according to RBC’s Chief Commodities Strategist Helima Croft.

“We think that the continued macro worries and soured sentiment will lead the group to make another downward adjustment,” she said in a note.

But Saudi Arabia appears to still be in control of OPEC+, and The Kingdom could decide to make good on his threats to punish short sellers for their speculative trades that fly in the face of market fundamentals.

…click on the above link to read the rest…

State Farm Halts Home Insurance Sales In California

State Farm Halts Home Insurance Sales In California

Faltering California took another economic hit on Friday, as America’s largest personal lines insurer said it would immediately stop selling new home insurance policies in the state. California is the largest property and casualty insurance market in the country.

State Farm attributed the decision to three factors: “historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.” Reinsurance is a method of transferring some of an insurer’s risk to other insurers.

Existing policies will stay in effect — for now. There’s always the possibility that, if things keep deteriorating, State Farm could decide to “non-renew” current policy-holders. That’s what AIG did last year, sending thousands of high-end homeowners scrambling to find new coverage.

The announcement’s timing — on a Friday afternoon heading into a long holiday weekend — seemed intended to minimize publicity. In statement, State Farm said it “will cease accepting new applications including all business and personal lines property and casualty insurance, effective May 27, 2023. This decision does not impact personal auto insurance.” The halt seems to include renters insurance, though the announcement wasn’t explicit on that count.

Inflation has been taking a harsh toll on insurers, who are pressing regulators to approve rate hikes to compensate for rising claim costs. Earlier this month, for example, San Antonio-based USAA posted the first ever annual loss in its 100-year history — a $1.3 billion setback.

In California, insurers have also been contending with high wildfire risks, and many have curtailed coverage in wildfire-prone regions, or clamped down on homes that lack certain fire-thwarting characteristics, which range from building materials to clearing space between the structure and surrounding trees.

State Farm diplomatically acknowledged the California government’s efforts to make the state a viable place for property insurers to operate in, but implied their efforts to date have been insufficient:

…click on the above link to read the rest…

Thai Rice Crop In Crosshairs Of El Nino As Farmers Are Warned About Water Shortages

Thai Rice Crop In Crosshairs Of El Nino As Farmers Are Warned About Water Shortages

A disruptive El Nino pattern might impact rice production in Thailand, the world’s second-biggest exporter of the grain that feeds half the world’s population.

Bangkok Post reported farmers are being asked by the Office of the National Water Resources “to grow only one rice crop this coming season as rainfall will be below average because of the El Nino weather pattern.”

Surasee Kittimonthon, the ONWR secretary-general, said the rainy season, which usually begins in late May, will be delayed with periods of intermittent rain in June.

Kittimonthon said ONWR had devised a plan for increased water preservation within the country’s reservoir system.

“We can provide water to farmers for the first rice crop, starting in the rainy season.

“But for the second or third crops, we would like farmers’ cooperation to grow other plants that need less water to help limit the water shortage,” he said.

Rice production requires substantial amounts of water and relies heavily on irrigation systems and sufficient rainfall. It’s an early warning sign of how El Nino is set to wreak havoc on the global food system this year.

We told readers last month the weather-altering phenomenon had a high probability of forming. We said, “If El Niño does form, it could result in heavy rainfall and heatwaves in specific regions across the globe, potentially causing disruptions in the agricultural industry.”

And days ago, we informed readers about record-breaking heatwaves in Asia and Europe in a note titled “Is El Nino Supercharging Heatwave Across Asia?” 

Separately, earlier this month, Fitch Solutions published a report that forecasts this year’s global rice production will log its biggest shortfall in two decades.  

…click on the above link to read the rest…

Global Rice Shortage Looms, Set To Be The Biggest In Decades

Global Rice Shortage Looms, Set To Be The Biggest In Decades

Rice is the primary food source for over half of the global population, especially in emerging markets, where it plays a crucial role in feeding people. Last year, we highlighted the potential for a severe global rice shortage. A new report reveals that rice production this year could be at its lowest in decades.

A report by Fitch Solutions forecasts this year’s global rice production will log its biggest shortfall in two decades. The deficit will be a major headache for countries relying on grain imports.

“At the global level, the most evident impact of the global rice deficit has been, and still is, decade-high rice prices,” Fitch Solutions’ commodities analyst Charles Hart told CNBC

Sliding rice production in China, the US, and Europe is already causing grain prices to increase for 3.5 billion people, particularly in the Asia-Pacific region — this region of the world accounts for 90% of the world’s rice consumption.

“Given that rice is the staple food commodity across multiple markets in Asia, prices are a major determinant of food price inflation and food security, particularly for the poorest households,” Hart said.

Hart said this year’s global shortfall would be around 8.7 million tons, the largest global rice deficit since 2003/2004 of 18.6 million.

As a result of tightening global supplies, rough rice futures trading on the CBoT recently peaked at $18 per cwt, the highest level since September 2008. Cwt is a unit of measurement for certain commodities such as rice.

CNBC provides a breakdown of why rice supplies are strained.

There’s a short supply of rice as a result of the ongoing war in Ukraine, as well as bad weather in rice-producing economies like China and Pakistan.

In the second half of last year, swaths of farmland in the world’s largest rice producer China were plagued by heavy summer monsoon rains and floods.

…click on the above link to read the rest…

Olduvai IV: Courage
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Olduvai II: Exodus
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