President Joe Biden’s administration is reportedly rewriting its National Security Strategy, which the White House is required to send to Congress annually, to account for the lessons of the war in Ukraine. One issue that this document will have to grapple with outside its traditional focus on statecraft and diplomacy: food. The conflict in Ukraine has put the geopolitics of food in the headlines, because Russian President Vladimir Putin has used hunger as a weapon against Kyiv and much of the world. Putin is giving an object lesson in how geopolitical insecurity can cause food insecurity — which can then make a whole raft of problems worse across the globe. A recent report by the United Nations’ Food and Agriculture Organization makes for grim reading. The number of undernourished people in the world rose by perhaps 150 million between 2019 and 2021, due principally to the Covid-19 pandemic. In 2020, moderate or severe food insecurity increased by roughly as much as in the previous five years combined. Nearly 3.1 billion people were unable to afford a healthy diet; by some estimates, the number of people on the verge of starvation has multiplied tenfold since 2019. “This year’s report should dispel any lingering doubts that the world is moving backwards” in the fight against hunger, the FAO concluded. Now the war in Ukraine has compounded the problem. A Russian blockade has trapped Ukrainian grain that typically feeds millions of people around the world, hitting developing regions such as the Middle East and Africa particularly hard. Western sanctions have made it harder for global customers to buy Russian fertilizer. Higher costs for energy and shipping are also pushing up food prices. The World Food Program estimates that in 2022 an additional 47 million people may fall into acute food insecurity — meaning that they can’t get enough food to live a healthy, productive life. In Somalia, Yemen, Sudan and other countries, deaths due to hunger are rising as scarce aid dollars are redirected to Ukraine. Don’t count on the pain passing quickly: It could become more severe if a long conflict disrupts progressive Ukrainian harvests. Famine, the economist Amartya Sen argued, is a product of political pathologies. Make no mistake: Putin is using hunger to serve his political ends. Russia aims to isolate Ukraine from its international supporters by generating waves of global turmoil that will eventually make Kyiv’s backers tire of the fight. Russian diplomats may be pretending to participate constructively in negotiations to reopen Black Sea commerce. Yet Putin has no interest in seeing those talks succeed, because that would deprive him of one of his most potent forms of leverage. Don’t underestimate the global fallout. Intense hunger in the Middle East and North Africa could generate refugee flows that would further upset Europe’s politics and exacerbate its internal divisions. Food shortages can cause a rush into overburdened cities, create misery that extremist groups exploit, and otherwise precipitate violence and instability. Secretary of State Antony Blinken, for example, has blamed Russian policy for exacerbating the food shortages that caused the fall of Sri Lanka’s government. Putin’s strategy could eventually succeed, causing Kyiv’s less-committed supporters to call for Ukrainian concessions. It could also fail catastrophically, provoking Washington and other Western countries to break Putin’s Black Sea blockade by force. Or it could simply produce more political and strategic turbulence in a world that was hardly steady before.
US composite PMI at 27-month low in August
United States Flash PMI Composite Output Index in August stood at 45.0, staying in the contraction territory, S&P Global revealed in its report released on Tuesday. The figure was the lowest in the past 27 months. In addition, Flash US Services Business Activity Index was also at a 27-month low in August, with the reading landing at 44.1. Manufacturing PMI in the country reached 51.3, the lowest in 25 months. “August flash PMI data signalled further disconcerting signs for the health of the US private sector. Demand conditions were dampened again, sparked by the impact of interest rate hikes and strong inflationary pressures on customer spending, which weighed on activity,” Senior Economist at S&P Global Sian Jones commented, adding that “excluding the period between March and May 2020, the fall in total output was the steepest seen since the series began nearly 13 years ago.” NN: What would you call this, I call it further proof of the spreading recession.
Germany’s gas storage filled more than 80% – GIE
Gas Infrastructure Europe (GIE) said on Tuesday that Germany has so far managed to fill more than 80% of its natural gas storage capacity, surpassing its target of 75% for September this year. The target for October 1 is to fill at least 85% of its gas storage capacity, while by November 1 it aims to have its storage capacity filled up to 95%. Germany is adopting its three-stage energy plan to reduce its dependence on Russian gas. The latest news follows a recent comment by German Minister for Economy and Climate Robert Habeck, who anticipated the country will not need to use drastic economic measures to fight the situation during winter. NN: So how did Germany pull off this miracle… Buy importing the shit out of gas from the US. American gas stocks are only 50% filled in preparation for winter. 25% behind where they were this time last year…… Its going to be a long cold winter,
US natural gas rises over 2%, highest since 2008
US natural gas futures rose more than 2% on Tuesday, reaching $10 for the first time since 2008 amid continued concerns over supply disruption due to the Ukraine crisis and the global economic outlook. In its latest report, the Energy Information Administration (EIA) said gas stocks were 296 billion cubic feet (bcf) lower and 367 bcf below the 5-year average of 2,886 bcf. Previously, Gazprom PJSCs announced that flow through the Nord Stream pipeline would be suspended from August 31 to September 2 due to scheduled maintenance work. This move adds pressure to European prices and threatens to create an economic disruption with world implications. US natural gas futures for delivery in September rose 2.87% to sell for $9.9630 per million British thermal units at 4:03 am ET. NN: what many people fail to grasp that all fossil fuels are joined together at the hip.. If oil and natural gas are in short supply in Europe they are in short supply in the US. The main reason is energy products are readily shipped all over the world. And supplies will gravitate to the market paying the most. Driving the prices will rise as you have seen the past year for everyone…….
Crude prices rise on supply concerns
Crude oil prices rose as concerns over supply stirred the market stability on Tuesday, following Tehran’s claims that Washington is delaying efforts to revive the Joint Comprehensive Plan of Action (JCPOA). Meanwhile, the allegations were refuted by the United States, noting that the apparent flexibility of Iran in negotiations had brought the deal closer than it had been two weeks earlier. West Texas Intermediate (WTI) for settlements in October gained 1.56% going for $91.93 per barrel at 3:48 am ET. At the same time, Brent for the same month’s deliveries advanced by 1.05%, selling at $97.51 per barrel. NN: I do not care how much demand falling, Iran oil is coming to save the day… Its nothing more then blue sky before the elections they are TRYING to blow up your ass… How stupid is the public.. they get the Build Back Better lefty climate bill and name it the Inflation Fighting Act and people swallow it hook, line and sinker. I remember when Nixon tried the same shit with the Whip Inflation Now Act,…… Including a button you could wear:
It was instituted at a 5% inflation rate back then. If we use the same measurements on today’s (they changed the measurement bases to fuck social security recipients out of their inflation benefits increase they were due) inflation its over 10%…… And its getting worse..
Saudi Minister Says OPEC+ Could Cut Production At Any Time
- Prince Abdulaziz bin Salman prepared the market for a new round of production cuts.
- The Prince described the markets as being in a state of “schizophrenia”.
- Prince Abdulaziz: “Spare capacity is severely limited and the risk of severe disruptions remains high,”.
Citing “disconnect” in the oil futures market, Saudi Energy Minister Prince Abdulaziz bin Salman dangled the threat of potential OPEC+ production cuts that could come at any time. In an interview with Bloomberg on Monday, the Saudi energy minister said that “extreme volatility” was “undermining the market’s essential function of efficient price discovery”, in turn rendering it impossible for physical users to manage the costs of hedging or navigate the inherent risk. “This vicious circle is amplified by the flow of unsubstantiated stories about demand destruction, recurring news about the return of large volumes of supply, and ambiguity and uncertainty about the potential impacts of price caps, embargoes, and sanctions,” the Prince told Bloomberg.
Without sufficient liquidity, he said, there is a high level of disconnect, which means the “markets can’t reflect the realities of the physical fundamentals in a meaningful way…”.
The Prince described the markets as being in a state of “schizophrenia” and creating a “yo-yo” market that has lent a false sense of security. “Spare capacity is severely limited and the risk of severe disruptions remains high,” he said. The energy minister insisted that OPEC+ is “stronger and more cohesive than ever”, but also indicated that the expanded cartel could cut output at any time “and in different forms”. The minister’s comments come as the cartel begins work on a new agreement for post-2022 and the nature of the interview suggests that OPEC+ plans to view any new agreements through the prism of the current market volatility, which the Saudis appear to view as having been hijacked and disconnected from true fundamentals. The energy minister’s warning comes shortly after reports that OPEC+ members produced 2.9 million bpd below their production target in July. NN: OPEC has CUT production even after the arm bumping US president the beggar and chief went to Saudi Arabia to gravel in the sand begging for more oil….. he got less! Fucking insanity. All he has to do is issue the permits and unleash the American oil industry,,,, But the Liberal Lefties will never do that. All Europe has to do is approve the meditation gas pipeline from the proven huge natural gas reserve from Egypt to Cyprus. Like in the US the liberal lefties take the position of stopping the pipeline so Europe will be forced into alternative grenniewinnie projects that are not ready for prime time. Look at the destruction their stupid energy fantasies are causing. They really do no care….
Stocks Heading Toward Worst Selloff Since June: Markets Wrap
The Dow Jones Industrial Average index dropped over 650 points on Monday after recent remarks by Federal Reserve officials sparked concerns about the possibility that the United States economy may end up in a recession due to strong monetary tightening measures. The Dow Jones plummeted 1.90% or 640 points, pulled down by Intel, Salesforce and Disney, all of which lost over 3%. The Nasdaq 100 was 2.53% down and the S&P 500 plunged 2.10% at 2:07 pm ET. The euro was 1.07% lower against the dollar to go for 0.99325 at the same time. NN: Do not let them shit you. The US is in a embedded inflation crises. And it will drive the FED to repeatedly raise rates AND withdraw the 10 trillion dollars in stimulus it pumped into the economy. Inflation is a bubble, the stock market is a bubble, corporate debt markets are a bubble and real estate is a bubble. You can call the FED your bubble popper… They will do this kicking and screaming the whole way!
Euro back under parity, falls below $1
The euro retreated against the US dollar on Monday to a five-week low to $0.99941 at 10:00 am CET, continuing in this way a downtrend that started days ago after the publication of the minutes of the Federal Open Market Committee (FOMC) meeting. Market participants are reacting to the fact that Federal Reserve policymakers may continue to raise interest rates to cool inflation. Recently, Federal Reserve Bank of Kansas City President and Chief Executive Officer Esther George noted the central bank would be raising interest rates until it is clearly evident that inflation is on the way down. Major European stocks also opened the day with losses. NN: Euro is trading under the dollar… Its all about the coming energy crunch in Europe this winter….. As Europe gives up the greeneewinnee ghost and switch back on nasty fossil fuels this will reverse… Also the interest rate advantage the dollar has will change as the EC raises rates
You Just Witnessed a 7 Trillion dollar Stock Market Manipulation and it is FAILING!
(Bloomberg) — A sober warning for Wall Street and beyond: The Federal Reserve is still on a collision course with financial markets. Stocks and bonds are set to tumble once more even though inflation has likely peaked, according to the latest MLIV Pulse survey, as rate hikes reawaken the great 2022 selloff. Ahead of the Jackson Hole symposium later this week, 68% of respondents see the most destabilizing era of price pressures in decades eroding corporate margins and sending equities lower. A majority of the more than 900 contributors, who include strategists and day traders, reckon inflation has topped out. Still, a whopping 84% say it may take two years or longer for the Jerome Powell-led central bank to bring it down to the official long-term target of 2%.
In the meantime, American consumers will cut spending, and unemployment will climb over 4%. All these bearish sentiments underscore the deep skepticism held by investors in the face of an unexpected $7 trillion equity rebound of late. While stocks fell last week, S&P 500 has still trimmed its 2022 loss to 11% versus the 23% decline through its mid-June nadir. US futures have opened the week lower in Asia trading. “This is a bear-market trap,” Victoria Greene, founding partner at G Squared Private Wealth, said in an interview. “Inflation is the big, bad boogie man. Even if there really is a sustained decrease in inflation, it could take a while before prices actually come down significantly.”
The survey results spell trouble for dip buyers, who have re-emerged after the horrendous first half — driven by bets on a less-hawkish monetary tightening cycle while a slew of quant funds have shifted to a bullish positioning. In turn, shares around the world have clawed back some of the worst losses while the 10-year Treasury yield has fallen back to around 3% from the peak near 3.5% earlier this year. A fast pace of monetary tightening, and the resulting economic fallout, is the biggest risk for money managers all over the world, with interest rates a key driver of corporate valuations. The bad news, per survey participants, is that inflation will deliver a meaningful blow to margins, pushing stocks lower. While inflation’s effect on profit margins is very much an open question, the majority of MLIV readers appear closer to the bearish spectrum of a heated Wall Street debate on where stocks are headed. As elevated prices persist, consumers are likely to buy less during the next six months, a majority of respondents say. That’s in line with warnings from the world’s largest retailer, Walmart Inc., that soaring inflation is forcing shoppers to pay more for essentials at the expense of other discretionary items. A cutback in consumer spending would impose a clear drag on profits posted by S&P 500 companies, which are also grappling with higher wages, rising inventories and continued supply-chain problems in China. While the S&P 500’s margins peaked a year ago, the trough may not come until the fourth quarter, according to Bloomberg Intelligence. Consensus estimates for net-income margins have fallen about a half percentage point for both the third and fourth quarters since the start of this earnings season, with communication services, health care and consumer sectors among the weakest groups, BI data show. “It’s rare for the Fed to aggressively tighten policy without causing market volatility,” said John Cunnison, chief investment officer at Baker Boyer Bank. “Stocks aren’t wildly cheap right now, but they’re not as expensive as they were six months ago, especially growth companies.” NN: I saw trillion dollar buying from one investment bank after another….. Blew me away. I KNEW this rally back would fail and so said and so traded. The velocity of the buying and the volatility burnt my ass….. I never thought trillion dollar traders would be so stupid. Their loses has started and many players will be wiped out on this next wave down. Some of the dumbest trading by institutions i have ever seen. I got my ass handed to me. Their was just no way to get a handle on the numbers. No way of knowing how much they would commit and no way of trading without taking on huge risk on this biggest, sharpest rally back in the shortest period of time I have ever seen… It happens especially in great trades. We have now entered the next wave of the bear market and it i believe will give us new much lower lows in all stock market indices….
Habeck: Putin may tighten gas further
German Minister for Economy and Climate Robert Habeck said on Monday that it is likely that Russian President Vladimir Putin may further tighten gas supplies to Europe, while also adding that Berlin is ready and has good chances to endure this winter without drastic economic measures. The comment is somewhat in contrast with this politician’s recent claim Berlin must ‘swallow bitter medicine’ to swift to a new energy model. The news comes amid the latest Gazprom’s decision to stop its gas flow through Nord Stream 1 due to another maintenance work starting from August 31 until September 2, while Kiev referred to this decision as ‘exclusively political.‘ NN: Of course Russia is going to fuck Europe…. What did the EU expect to happen when they started the Russian sanctions war….. Russia 5 Europe 0