Happy shareholders/ PR BS at work

Europe’s biggest oil companies reported record profits for the first quarter of the year. That has put them in the crosshairs of politicians, many of whom advocate windfall taxes on a bounty which they deem indecent at a time of economic pain. That would harm the planet, energy firms retort: we are recycling our extra cash into low-carbon projects.

Not quite. European majors are indeed refraining from splashing out on fossil fuel. Rather than going into low-carbon ventures, however, the bulk of their enormous profits is being handed to investors. BP, for example, has allocated 60% of its surplus cash this year to buying back shares. The sums that they are investing in green projects remain puny. Shell aims to spend $3bn on low-carbon investments in 2022—out of a capital-spending budget of $23bn-27bn. Last year BP spent less than 10% of its budget on green ventures. Hardly a taxing amount.

The world in Brief (Economist)

What has God against Christians on Wall Street and those who trust them?

Bill Hwang and Cathie Woods profess their Christian faith very publicly.

Bill Hwang, founder of collapsed family office Archegos Capital Management, was recently arrested by US authorities and charged with racketeering, fraud and market manipulation.

But to be fair to God, how did Wall Street’s so-called risk controls allow it to lend billions of dollars to the alleged fraudster? God made Wall Street too greedy?

Archegos defaulted last year, causing banks including Credit Suisse, Deutsche Bank, Morgan Stanley and Nomura Holdings to lose more than $10bn. Hwang is likely to have been wiped out financially.

It’s a surprise thar the banks were dealing with him because he had gotten into trouble with the SEC. He settled with the SEC.

Cathie Wood’s flagship ARK Innovation ETF has (I think) given up all the outperformance it once enjoyed against the S&P 500 Index.

Wood’s strategy of picking stocks involved in “disruptive innovation” is a victim of the tech meltdown as investors flee high-priced growth shares because of rising interest rates and high inflation.  She specialised in companies with negative cashflows that need the grace of equity or debt investors to stay alive.

She and those retail investors who followed her prioritised growth over cash flows, confident that cash flows would emerge in time. If you think these investors are dumb, think Amazon and Tesla.

God helped her by making retail investors greedy.

Singaporean dancer portrays Queen Elizabeth II

Who better to portray Queen Elizabeth II than a 22-year-old Singaporean dancer? On June 5th Janice Ho will play the future monarch as a young princess, dancing with a 21-foot-tall dragon puppet, in an elaborate pageant in central London to mark the climax of the platinum jubilee celebrations. Ms Ho was selected for the role, say the organisers, to reflect the “make-up of Britain and London today”.

Economist’s World in Brief

“Tax fatter cats not us fat cats”

Fat cat thinking

 the boss of one of the UK’s biggest investors in renewables said his profits from renewable energy generation were in the low hundreds of millions for a whole year, compared to the £7bn made by Shell and the £5bn made by BP in the first three months of this year alone.

https://www.bbc.com/news/business-61566083

and so his investments shouldn’t be taxed for “the extraordinary profits” made from producing electricity.

Since the fat cat said this, a windfall tax on North Sea oil and gas companies (Think Shell and BP) which could raise £5bn this year has been announced. But the renewal energy sector is not yet in the clear. They could be taxed as part of a planned shakedown to get £3bn-£4bn from “the extraordinary profits” of electricity generators.

ESG: “We charge you more for lower returns”

But first, what ESG really means.

Not the very wokeish: Environment, Social and Governance.

ESG funds marketed themselves as “save the world and get rich”. They invested in tech stocks and not energy stocks. Now energy stocks are outperforming and tech stocks are dogs with fleas on them. NASDAQ is in a bear market.

ESG now means Energy Shortage Guaranteed?

Seriously, ESG fund managers are calling for disclaimers on ‘climate-friendly’ products: clients should be warned that explicitly ‘green’ investments can have lower returns

“We want you to be aware that we charge you more for lower returns” is the message. ESG funds can charge higher fees hence fund managers love to market them.

European govts doing the most to tackle energy bills

Notice that they are all reducing VAT/ energy taxes. No-one is planning to raise GST ie VAT to protect the reserves.

https://www.bbc.com/news/61522123

Cost-of-living crisis

We, like Europe and the rest of the world ex US and China face a cost-of-living crisis: the pandemic and the war in Ukraine have driven up the price of commodities. In many poorer emerging markets, food crises and even famines could occur.

Kristalina Georgieva, the head of the IMF, encouraged governments to subsidise food and energy to help the poor cope with rising costs, something that will never happen here.

Whatever, PAP millionaire ministers die die want to raise GST? Chicken prices going up.

US and China have different problems.

The US problem is containing inflation in a booming economy. Rising US interest rates could cause a recession. China’s problem is fighting Covid and consequences of its zero covid policy: a slowing economy.

The difference between Californians and Sinkies

A megadrought means Nevada, Arizona and California have all stepped up efforts to limit water consumption.

But when California’s governor Gavin Newsom asked residents in March to cut their water usage by 15% compared with 2020 levels, consumption across the state increased by nearly 20% instead.

Will never happen here. One reason why the millionaire PAP ministers won’t be able to have anything close to Silicon Valley here.

Who is right about China?

Richemont’s chairman Johann Rupert on Friday us cautious

on an aggressive recovery in Richemont’s China sales, suggesting any bounce would not be “triple digit” as domestic growth will be lower and people will be fearful of losing their jobs. That’s at odds with rivals like Tiffany owner LVMH and Britain’s Burberry, which indicated they expect a strong recovery of Chinese demand after lockdowns in cities including Shanghai and Beijing are lifted.

https://www.reuters.com/article/us-global-finance-breakingviews-idDEKCN2N60X9

Rochemont unlike its rivals, focuses on watches and jewelry. LMVH and Burberry on clothes and other fashion goods.

A family and club tradition: loyalty and success

Last night, AC Milan won their 19th Serie A title albeit the first in 11 years, and midfielder Daniel Maldini (20 years old) followed in the footsteps of his father Paolo Maldini, who won seven league titles with Milan, and grandfather Cesare Maldini with four.

The three of them have only ever played for Milan.

China’s evolving zero Covid policy

Being a resident in the capital has its privileges

Officials in Beijing are employing increasingly tough isolation tactics to try to stamp out a Covid-19 outbreak to avoid the no-one-leaves-home lockdown that has shut down Shanghai. 

with gradually tightening curbs in China’s capital – most recently suspending taxi services in some virus-hit districts – rumours swirled on Thursday that it was headed for lockdown, something Beijing has avoided during the entire pandemic.

…

Authorities there have already banned dine-in services at restaurants, closed some malls, entertainment and tourist venues, suspended sections of its bus and subway systems and imposed lockdowns on some residential buildings.

https://www.reuters.com/world/china/shanghai-hunts-down-covid-cases-beijing-curbs-taxi-services-2022-05-12/

Another bucking bronco day

The S&P 500 fell as much as 2.3% dragging the index down more than 20 % from its January high, the common definition of a bear market. 

But it closed up 0.01%, down 18.7% from its record peak in early January.

Worse than NASDAQ bear market

Among the most dramatic downturns has been in the world of crypto-currencies. Investors in crypto are used to great swings of fortunes, so perhaps they won’t worry too much.

On May 13, Luna, the sister token of controversial stablecoin* TerraUSD (UST), plunged to $0 marking a collapse of the cryptocurrency that was worth more than US$100 ($139).

The sell-off came after the US$18 billion algorithmic stablecoin TerraUSD lost its peg to the USD, wiping out the price of its support coin Luna which has now lost almost 99% of its value, according to a report by Forbes.

Further complications also emerged as the Terra blockchain which underpins UST and Luna stopped processing transactions twice in less than 24 hours, according to a report by CNBC.

*Stablecoin,

  a type of cryptocurrency that is pegged to another currency, sometimes a conventional one like the dollar. These are part of the plumbing of the crypto system: they act as a bridge between conventional banks, where people use dollars, and the “on-blockchain” world, where people use crypto. It is stablecoins’ interaction with traditional finance that has led regulators to fret about the impact they could have on financial stability.

https://www.economist.com/finance-and-economics/2022/05/12/the-crypto-infrastructure-cracks?utm_campaign=r.the-economist-today&utm_medium=email.internal-newsletter.np&utm_source=salesforce-marketing-cloud&utm_term=5/15/2022&utm_id=1167954

Gentle reminder on markets R recessions

That towering figure of finance and economics, Paul Samuelson, in1966 joked that the stock market had predicted nine of the past five recessions.

He wasn’t wrong.

Why yesterday’s fall in NY matters

Last night, the S&P 500 fell 4% (165.17 points) to 3,923.68.

Target and Walmart are proving “old economy” shares can crash on bad news, just like tech stocks. 

FT’s Lex

Fear is everywhere.

Tech: “Double, double toil and trouble; Fire burn and cauldron bubble.”

 Or “Bubble Bubble, Toil, and Trouble” to misquote Shakespeare.

Following another bad day for tech stocks, after a couple of good days, I tot these might interest.

Recession? What recession?

Persistently high inflation across many economies continues to spread gloom. Stagflation is happening, recession may follow. On Sunday, Lloyd Blankfein, the senior chairman of Wall Street investment banking giant Goldman Sachs, said there is a “very, very high risk” of recession in the US, the world’s biggest economy.

Markets are (were?) reflecting that anxiety. Last month and this month have been downbeat for investors. Among the most dramatic downturns has been in the world of crypto-currencies.

But analysts at JPMorgan suggest that global equity markets had priced in too much recession risk, saying stocks “stand to recover if a recession doesn’t come through, given already substantial multiple derating, reduced positioning and downbeat sentiment”.

Last Friday, T Rowe portfolio manager David Giroux said “Markets are pricing in a very high probability of a very bad event playing out; if it doesn’t, some of those cyclical stocks will massively re-rate higher, and if it does happen they’ve already priced a lot of that in.” and “If you wait for certainty to return, for the all-clear, you’re going to be buying things that are already up 30 per cent.”

Charts from the latest of the Economist published last Friday.

And

Is China already in a recession?

Figures released on Monday show that lockdowns to enable President Xi Jinping’s zero-Covid strategy are hurting economic activity.

Industrial production, the motor that drove China out of the initial Covid shock in early 2020, dropped 2.9% in April. The expectations were of a slight increase.

Meanwhile, retail sales, the country’s main gauge of consumer activity, fell 11.1% year on year, compared with forecasts of a 6.6% fall from a Bloomberg poll of economists.

China’s jobless rate rose to 6.1% in April, the highest level since the 6.2% peak seen in the early part of the Covid-19 pandemic in February 2020.

Here’s a chart based on pre-Monday data:

Markets were unhappy.

Politics German style

How consensus politics or governing from the centre works.

On Sunday residents in North Rhine-Westphalia, Germany’s most populous state, went to the polls. 

In a televised debate on Thursday the candidates of the Social Democrats and the Christian Democrats vying to be the state prime minister were both unable to identify whether passages from their respective election manifestos were theirs or their opponent’s.

For the record, the CDU “won” the election, but the SDU could still lead a coalition govt if the Greens team up with them, rather than the CDU.

Why China is doubling down on its zero-covid policy?

China is struggling to end its latest outbreak of more than 500,000 cases of covid-19

In a paper published this week in Nature Medicine, Chinese scientists and their foreign colleagues model the alternatives. Dropping all lockdown restrictions would quickly lead to 1.6m deaths, and at the peak of the wave China would need 16 times more intensive-care beds than it currently has.

The world in brief (Economist)

1.6m deaths is more than the deaths in the US, the hegemon China considers is decadent but is envious of, and wants to dethrone.

But the Ang Moh advice on how to avoid these deaths means following the Western practice of vaccinating the elderly and probably even importing Western drugs.

More realistic is a combination of vaccines and treatments. That, according to the scientists, could be sufficient to prevent the crush at hospitals. Treating all symptomatic cases with the most effective antiviral drugs would make the biggest difference. But huge amounts of the drugs must be procured. Vaccinating over-60s would also make a significant, though smaller, difference. Closing schools and workplaces, and other curbs on group activity, are much less effective—they only delay the problem in the same way that the zero-covid policy does.

The world in brief (Economist)

How N Korea handles Covid

North Korea fired three ballistic missiles into the sea off its coast, according to Japan and South Korea. More unusually, after going the duration of the pandemic without reporting a case of covid-19, North Korean state media announced the country’s first infections. The ruling party blamed the outbreak on the “carelessness, laxity, irresponsibility and incompetence” of those responsible for keeping the virus out of the country.

Daily briefing Economist

North Korea confirmed its first death from Covid-19 on Friday, with state media adding that tens of thousands more are experiencing fever symptoms.187,000 people with a fever were being “isolated and treated”.

Six people died after suffering a fever with one testing positive for Omicron, state media reported.

Why Mamas are IT talents

Bengaluru has nearly 70 engineering colleges. More than 55% of Indians on LinkedIn, a professional social network, boast technical skills, such as those needed for programming. Only Germans are technically savvier, and merely by a whisker; for Americans and Britons the share is around 42%. “Where else can you quickly hire a few thousand engineers?” marvels Shailesh Lakhani, a colleague of Mr Anand’s at Sequoia India.

https://www.economist.com/business/can-silicon-valley-still-dominate-global-innovation/21808708

Remember

 “Quantity has a quality all its own.”

Joseph Stalin

And Indian IT talents are cheaper to hire than S’poreans.

And we have the reason why Indian IT graduates are FTs in the eies of our Millionaire ministers, and employers here.

What a wild roller coaster ride/ SEA and iFast also like that?

A wild roller coaster ride or a bucking bronco ride: choose the analogy. And on stationary bike. Peloton was valued at US$8.1bn when it went public in September 2019 and its market capitalisation almost reached US$50bn in late-2020 before sinking below US$4bn on Tuesday. It fell further on Wednesday.

Vomit inducing stock.

Will SEA and iFast deflate like Peloton?

SEA closed last night at US$57.11. Before its ride up to US$372.70 in November 2021 on 13 March 2020 it was “only” at US$44.51.

iFast was at S$0.78 on 20 March 2020. In late Oct last year, it peaked at S$10.10. It closed at S$4.82 yesterday. Unlike SEA, it’s profitable. It even pays dividends.

Why our millionaire ministers deserve their salaries?

This year, NASDAQ in bear market (more than -20%) and S&P in correction (more than -15%). HK and China have been in bear markets since last year.

STI up 3% this year. And if palm oil keeps on flying, and Covid is under control in the region, expect the tourists from Indonesia and M’sia to come in.

Oil

Oil price because of weak Chinese economic numbers.

This reminded me that recently, the International Energy Agency cut its global oil demand forecast from 99.7mn barrels a day this year to 99.4mn, but it said the market would avoid a “sharp” deficit as emergency reserves and slower demand from China offset lower production from Russia.

Chinese smarter than Mamas?

Or do Indians feel entitled?

China’s independent refiners have been buying Russian oil at steep discounts as western companies and Chinese state-owned traders have shied away FT reports.

But the Indians who buy Russian oil are the state-owned entities, int’l media reports.

Maybe the Indian govt thinks that being anti-China, and being a democracy that persecutes Muslims, will give it a free pass from the West?

Why PM talking about recession

As all these result in slower growth, we already have stagflation, something our PM-in-waiting said may happen. It already is.

Fed most probably will not be able to engineer a soft landing, where there’s lowish growth and inflation. So there’ll be a recession which will solve the problem of inflation.

And PM and his millionaire ministers want GST to go up?

BS that data informs decision making

“At the moment, bad data is bad and good data is also bad,” says a fund manager quoted by the FT. The person was saying market sentiment was generally bearish.

This leads me to remember this gem from either the FT or Economist

Monetary policymakers everywhere are promising that their decisions will be “data-dependent”, but how they interpret incoming data is what matters.

This in turn reminds me that our technocratic millionaire ministers interpret data and other facts from the perspective of Hard Truths.

What do Mamas, Russians and Indons have in common?

Their data on deaths from Covid is BS.

The truth

KFC/ Pizza Express: Conditions in China worse now than the initial outbreak in 2020

Further to Omicron is making fools of Xi and the CCP, Yum China, which owns the KFC and Pizza Express brands in China, warned the hit from the latest Covid lockdowns has been “much more severe” than the initial outbreak in 2020. It said it expected an operating loss in the second quarter as sales decline and margins are squeezed.

Starbucks and Coca-Cola also say sales are falling in China. So do ang moh sellers of luxury goods that rich Chinese like to buy.

Superiority of the Beijing model of governance: what superiority? LOL

Double confirm: Lawrence Wong is BS King

In early 2018, I wrote that he would become PM (after Heng) because he was full of BS:

Lawrence Wong is a throw smoke specialist, good enough to be PM after Heng’s one term in that post. You heard these predictions here first.

Lawrence Wong: a PM-in-waiting

OL, OK, I was more polite then.

When I read u/m

In his speech, Mr Wong said that progressive social and economic policies could “uplift everyone” regardless of race, language, religion and social background. He added that his own life is an example of this.

He shared that he had come from an ordinary heartland family in Marine Parade and he went to a PAP Community Foundation Kindergarten, Haig Boys’ Primary School, Tanjong Katong Secondary and then to Victoria Junior College — schools that were all near his home. 

“Remember a decade ago, (Deputy Prime Minister Heng Swee Keat) said ‘every school is a good school’… That to me was not a slogan; it was a lived experience,” he said. 

“So I can tell you from personal experience that we must continue to ensure every school remains a good school, for I have experienced first-hand the benefits of inclusion and equal opportunities.”

https://www.todayonline.com/singapore/pap-4g-team-social-compact-lawrence-wong-1887876

, it double confirmed that he is the NS King of Kings among the 4Gs, where there’s no shortage of BS kings and queens.

None of these schools are really your typical “neighborhood schools”. His primary and secondary schools had (and still have) long traditions of excellence.

That’s not all. His primary school was one of the better primary schools in the area. And during his time Tanjong Katong Secondary was almost an elite school.

VJC in his time was a newbie but it had very high entrance standards. Today, it’s just outside elite status.

Rodeo time on Wall Street

On Wall St, the S&P 500 index closed 0.6% higher, having dropped as much as 1.7% earlier in the afternoon.

Related post: Why Wall St is a cowboy town and Cowboys riding the S&P and NASDAQ broncos

And GST still going up? / Li Hongyi for PM

Die, die GST must go up even after our Leader say this?

Outlook for post-Covid recovery clouded, recession could hit ‘within next 2 years’: PM Lee

The outlook for Singapore’s post-pandemic recovery has clouded and the risks have grown considerably, particularly due to the impact of Russia’s invasion of Ukraine

Due to the increase in energy prices, Singapore will be set back about S$8 billion a year

Government support schemes may help ease hardships, but in the long term, “this does not really solve our problem”, Prime Minister Lee Hsien Loong said

https://www.todayonline.com/singapore/pm-lee-hsien-loong-may-day-rally-2022-1887846

We are on autopilot? And 1970s technology? No AI? WTF?

Li Hongyi for PM so that we can have AI technology for autopilot govt.

Seriously, if we have autopilot government, do we need to pay ministers millions of dollars? Juz asking.

Macronit

No fan of Napoleon IV aka French President Emmanuel Macron.

The UK’s Sunday Express reports that HE has become a household name in Russia. It says a new verb -“macronit” – has entered Russian slang.

The paper explains that it can mean to talk endlessly without achieving anything. Another definition given is “to appear very worried about a certain situation, show this to everyone, but do nothing”.

Why do I call him Napoleon IV? Charles-Louis Napoléon Bonaparte (Napoleon’s nephew) was the youngest man to be France’s president, until Macron became the youngest man to be French president

Charles-Louis Napoléon Bonaparte became Napoleon III. He reformed France for the better but on the international stage he was a walking disaster. His end came when he started a war with the Prussians that the French lost badly.

Macron is trying to reform the French economy and make France Great Again on the international stage.

Good use of blockchain

Almost as fast as Shanghai’s residents post videos on how things really are in the city (bad, really bad), the censors take the posts down.

But blockchain is riding to the rescue:

One tool that netizens have deployed to document their experiences is the blockchain. Because the technology uses decentralised servers, there is no one company that can be leaned on to delete content. And activity is anonymous. “Shanghai Covid Memories” is a digital archive of disturbing moments. In one video a mother pleads with health workers to be allowed to take her sick two-year-old to hospital. The files are all saved (and available for sale) as non-fungible tokens on OpenSea, an NFT marketplace. So far none has been purchased. But the gallery is there for anyone to browse.

FT Daily Briefs last week

Wimin power

A large portion of private wealth is set to shift in the coming decade from the joint control of baby boomer couples into the sole charge of women, setting up a challenge for the historically male-oriented wealth management industry.

FT