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News round-up, March 17, 2023 by GERMÁN & CO

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German Toro Ghio's picture
CEO, Germán & Co

Germán José Manuel Toro Ghio, son of Germán Alfonso and Jenny Isabel Cristina, became a citizen of planet Earth in the cold dawn of Sunday, May 11, 1958, in Santiago, capital of southern Chile....

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The beauty of that African princess called Andromeda, transformed into a galaxy (or vice versa), did not wait, as the legend says, for four thousand years to devour our tiny planet Earth. Andromeda is the daughter of the king of Ethiopia, Cepheus, and his wife, Cassiopeia. This time, Poseidon sent the sea monster Cetus on a mysterious mission to ravage the strange and controversial beauty of the Nord Stream in the depths of the Baltic Sea in September last year.

The article published today (March 17, 2023) by The Wall Street Journal on the Mystery of Andromeda discusses the possible perpetrators of the NORD STREAM gas pipeline explosion last year. In this complex tenor, on November 3, 2022, the TASS news agency published an article in which the president of Serbia, Mr. Aleksandar Vucic, expressed the following position:

 

"No politician in the world is unaware of who committed the sabotage in the Baltic, but we all play dumb and keep silent so as not to harm the interests of our countries." Hypocrisy is everywhere.

For its part, in a Reuters article posted September 27, 2022, the European Commission President Ursula von der Leyen asserts:

"Spoke to (Danish Prime Minister Mette) Frederiksen on the sabotage action against Nordstream," von der Leyen said on Twitter, adding it was paramount now to investigate the incidents to get full clarity on the "events and why." "Any deliberate disruption of active European energy infrastructure is unacceptable and will lead to the strongest possible response,”.

In addition, all this is happening in an adverse economic situation initially caused by the SARC-COV-2 virus; Russia's invasion of Ukraine has exacerbated this financial setback since February 2022, which has hurt the fossil fuel market, specifically causing a drought on the stable and safe purchase of natural gas from the Tsarist domain. 

Now, the bitter question is:

"Whoever blew up this crucial European energy infrastructure (undoubtedly polemic in its conception), it may be important to know who did it." But we will never know whether this attack has deepened the battered economy of Europeans struggling to pay for their essential needs.


Most read…

Morning Bid: Shock and awe - or mayday?

A look at the day ahead in U.S. and global markets from Mike Dolan

    REUTERS

"Every politician knows who blew up Nord Stream, but hypocritically keeps quiet," says Vucic. "The Andromeda Mystery".

Earlier, Nord Stream AG reported unprecedented damage that occurred on September 26 on three strings of the Nord Stream and Nord Stream 2 offshore gas pipelines.

    TASS, BELGRADE 

Who Blew Up Nord Stream? Investigators Focus on Six Mysterious Passengers on a Yacht

A boat rented in Germany sailed close to the spots in the Baltic Sea where explosions sabotaged the gas pipeline from Russia

    THE WALL STREET JOURNAL

'The US attacks Chinese balloons and electronics, but its archenemy is still TikTok'

Washington has given American teenagers' favorite app an ultimatum: Either its Chinese owner, ByteDance, relinquishes control or it is banned from the United States.

    LE MONDE BY PHILIPPE ESCANDE,  PUBLISHED ON MARCH 17, 2023

Banking rout fuels U.S. oil hedging, as investors seek to limit losses

Investors in the oil market, including oil producers, have rushed to purchase put options to predict and hedge against downward price movement. According to two market sources, several hedge funds have short positions on options to predict further price declines.

    REUTERS BY STEPHANIE KELLY AND ARATHY SOMASEKHAR

“We’re living in a volatile world…

it’s easy to get distracted by things like changeable commodity prices or a shortage of solar panels. But this wouldn’t be true to our purpose – we can’t allow ourselves to lose sight of our end goal; said Andres Gluski, CEO of energy and utility AES Corp


    REUTERS GRAPHIC

Morning Bid: Shock and awe - or mayday?

A look at the day ahead in U.S. and global markets from Mike Dolan

Reuters

Markets are struggling with whether to be relieved by the sheer scale of Thursday's U.S. bank rescue or be terrified by it.

Slightly punch drunk from a week of withering bank runs, stock price plunges, emergency bank bailouts and then a hefty European Central Bank interest rate rise into the mix, an eerie calm descended over world markets first thing Friday.

But there was little confidence the rising financial stress would dissipate quickly from here.

Large U.S. banks injected $30 billion in deposits into failing First Republic Bank (FRC.N) on Thursday, swooping in to rescue the lender caught up in a widening crisis triggered by the collapse of two other mid-size U.S. lenders this week.

Marshalled by U.S. Treasury Secretary Janet Yellen, Federal Reserve chief Jerome Powell and JPMorgan boss Jamie Dimon, the rescue involved the largest U.S. banks - JPMorgan (JPM.N), Citigroup (C.N), Bank of America (BAC.N), Wells Fargo (WFC.N), Goldman Sachs (GS.N) and Morgan Stanley (MS.N).

But worryingly, First Republic's shares - which have lost more than 70% in 10 days - continue to fall and were down another 15% again in pre-market trading.

The move came the same day as Switzerland's central bank was forced to shore up the country's second biggest lender Credit Suisse (CSGN.S) by offering it $54 billion of emergency liquidity as the battered bank has been ensnared by the anxiety surrounding the U.S. bank shock.

But Credit Suisse shares resumed their decline again on Friday too, dropping over 3% first thing even as European bank stocks (.SX7E) clawed back about 1% as Wall St futures hovered little changed following Thursday's relief rally. The VIX (.VIX) volatility index remained off the week's highs but stuck at 23.

Fed data showed the extent of the panic over the past week and how it potentially compromises its monetary policy tightening and balance sheet reduction as it prepares to deliver what futures markets now assume will be another quarter-point rate hike next week - even if the last of the cycle.

    REUTERS GRAPHIC

    REUTERS GRAPHIC

Banks took an all-time high $152.9 billion from the Fed's traditional lender-of-last resort facility known as the discount window as of Wednesday, while also taking $11.9 billion in loans from the Fed's newly created Bank Term Lending Program. The discount window jump crashed through a prior record of $112 billion during the banking collapse of 2008.

Not unlike the Bank of England's government bond market intervention last Autumn, the move bamboozles the Fed's quantitative tightening program of balance sheet reduction.

After peaking at just shy of $9 trillion last summer, overall bond holdings had fallen to $8.39 trillion on March 8, before moving up to nearly $8.7 trillion on Wednesday - the highest since November.

Markets are caught in the uncertainty of what happens next.

Having pushed higher amid all the rescue attempts on Thursday, 2-year U.S. Treasury yields clung to 4% on Friday -- still down almost a percentage point from where they were little over a week ago. What's more, 75 basis points of Fed rate cuts are still priced between a peak of 5% in May to yearend.

The dollar was slightly lower.

On top of all the policy head fakes and emergency moves, China's central bank said on Friday it would cut the amount of cash that banks must hold as reserves for the first time this year to release liquidity and support the economy.

Key developments that may provide direction to U.S. markets later on Friday:

    Reuters Graphic

    Reuters Graphic

    Image: Germán & Co

"Every politician knows who blew up Nord Stream, but hypocritically keeps quiet," says Vucic. "The Andromeda Mystery".

Earlier, Nord Stream AG reported unprecedented damage that occurred on September 26 on three strings of the Nord Stream and Nord Stream 2 offshore gas pipelines.

BELGRADE, November 3. /TASS/. Every politician in the world knows who committed sabotage in the Baltic Sea against the Nord Stream and Nord Stream 2 gas pipelines, but everyone hypocritically stays silent, Serbian President Aleksandar Vucic told the media on Thursday.

The Serbian leader recalled that his country had accumulated 667 million cubic meters of gas in gas storage facilities.

"No politician in the world is ignorant of who committed sabotage in the Baltic, but we all pretend to be imbeciles and keep silent so as not to harm the interests of our countries. Hypocrisy is everywhere. Even if this happens to the Balkan Stream (Turk Stream - TASS), we would somehow survive. The people can stay calm," Vucic said.

Earlier, Nord Stream AG reported unprecedented damage that occurred on September 26 on three strings of the Nord Stream and Nord Stream 2 offshore gas pipelines. One leak was detected at Nord Stream 2 near the Danish island of Bornholm. Two more were spotted on Nord Stream. Later, Swedish seismologists said that they had registered two explosions on the gas pipelines’ routes. The head of the European Commission, Ursula von der Leyen, classified those incidents as sabotage, saying that any deliberate violation of European energy infrastructure was unacceptable and would entail the most decisive response.

Russian President Vladimir Putin said that the results of the survey indicated the gas pipelines incident was an obvious terrorist attack. The Russian leader blamed the situation on the West, which, he said, "actually set about destroying the pan-European energy infrastructure.".


Who Blew Up Nord Stream? Investigators Focus on Six Mysterious Passengers on a Yacht

A boat rented in Germany sailed close to the spots in the Baltic Sea where explosions sabotaged the gas pipeline from Russia

    THE WALL STREET JOURNAL

ROSTOCK, Germany—The small marina on the edge of this north German city is a popular summertime spot for recreational sailors. German intelligence believes it was also the jumping-off point for the sabotage of the Nord Stream gas pipelines, an assault on Europe’s civilian energy infrastructure unprecedented since World War II.

On Sept. 6, a small group set out from Rostock aboard a rented yacht, the Andromeda, a slender 50-foot-long, single-masted sloop, ostensibly on a pleasure cruise around Baltic Sea ports. Within two weeks, the group returned the boat and disappeared.

Not long after, on Sept. 26, a series of underwater explosions, powerful enough to register with seismologic measuring stations, tore apart three of the four main Nord Stream pipes, built to carry natural gas from Russia to Germany.

Hundreds of investigators from Germany, Sweden and Denmark, with the help of the U.S.and other Western allies, mobilized to figure out who was behind the attack. Submarines surveyed the crime scene. Intelligence agencies scoured communications intercepts. Police sought witnesses.

Six months on, the mystery persists as investigators and analysts puzzle over who had the means, motive and opportunity to commit the crime.

Initial suspicions in many European capitals focused on Russia, which denied any involvement. Analysts speculated that only a state with a sophisticated military would have been able to carry out such a complicated, underwater attack.

Investigators now, however, are focused on the Andromeda and the six people it carried. German officials who have been briefed on the probe said they were told some of the people who rented the yacht were Ukrainian. Others had Bulgarian passports since determined to be forgeries, they said.

On Friday, German legislators who oversee the country’s intelligence agencies were briefed on the latest findings and admonished to keep them secret.

“The thesis that this must have been a state-sponsored action has seemingly collapsed,” said Ralf Stegner, one of the lawmakers. “It seems that we now know that it could have been a group of people who were not acting on behalf of a state.”

The focus on the boat crystallized in December. After combing through boat-rental records all along the Baltic Sea coast, investigators zeroed in on the Andromeda, according to officials familiar with the probe.”

Last week, Germany’s general prosecutor said investigators in late January searched a boat they believed was connected to the blasts. Government officials said traces of explosives were found inside, leading them to believe the vessel could have carried at least some of the explosives used.

A representative of Mola Yachting GmbH, the yacht’s owner, said the boat searched was the Andromeda. The man declined to be named or to comment further. Prosecutors have said the company’s employees aren’t suspected of wrongdoing.

Investigators have established that the rental fee for the Andromeda was paid by a Polish-registered company, according to German officials. The officials said investigators believe the company is controlled by Ukrainian owners.

At least some of the six people on the suspected sabotage team boarded the Andromeda in Rostock’s Hohe Düne harbor, which caters to upscale tourists and hosts international yachting events. The Yachthafenresidenz Hohe Düne hotel there boasts luxurious rooms and bars with picture windows overlooking the waterfront.

From there, the Andromeda traveled to the Yachthafen Hafendorf in Wiek on the island of Rügen, a far more discreet harbor off the beaten track, with no camera surveillance at night, according to René Redmann, the harbor master.

Mr. Redmann said his staff had checked in the boat and he had handed over the harbor logs to investigators. He said that his staff hadn’t registered the crew’s nationalities and that it wasn’t unusual for Eastern European tourists to pass through Wiek.

“We really have a lot of coming and going of charter guests with bigger ships,” he said, adding that he became suspicious about the visitors only when investigators reached out to him in January.

German investigators believe that it was in quiet, out-of-the-way Wiek that the suspected saboteurs loaded explosives—ferried to the port in a white van—and additional operatives onto the Andromeda, according to a German official briefed on the investigation.

After Wiek, the Andromeda sailed to the busier Danish port of Christiansø, farther north. The island is Denmark’s easternmost settlement, located an hour by boat from the larger island of Bornholm. Christiansø is home to a 17th-century fortress, one production facility—a tiny herring pickling company—and 98 residents, most of whom live along the pier, where throngs of boats dock every summer.

Søren Thiim Andersen, the administrator of Christiansø, said he received a request from Danish police in December asking for any records of boats that had entered the main harbor between Sept. 16 and Sept. 18, a little over a week before the pipelines blew up. The police returned in January to look at data from a machine on the harbor on which visitors register their boats, and to interview a few local residents.

At the request of the police, Mr. Andersen said, he wrote a post on a Facebook page for the island’s residents, asking for photographs or video footage of the port from those three days. Three residents sent photos they had taken of the port area during those days.

The port master on the isolated island, John Anker Nielsen, said he was working on the days the Andromeda docked there, but he hadn’t noticed anything or anyone suspicious.

Among the questions facing investigators is whether six people and a boat the size of the Andromeda would be able to carry out such a major act of sabotage, which would have meant moving large amounts of explosives and diving gear and required the expertise of underwater demolition experts. And whether they might have been just one part of a broader operation.

Achim Schlöffel, a German extreme diver who runs a diving school and helps companies protect vessels and underwater installations from sabotage, said explosives could have been planted by a group of well-trained technical divers accustomed to working at such depths—around 80 meters—assuming they had several days to do so.

Six divers, he said, could have lowered the explosives in several dives using commercially available equipment such as underwater scooters or propulsion vehicles, airlifting bags and buoys, and a portable sonar.

“I know dozens of professional divers who would be up to the task,” Mr. Schlöffel said.

Cmdr. Jens Wenzel Kristoffersen of the Danish navy disagreed, and dismissed the idea of a small team working from a sailboat as “a James Bond scenario.”

He said that while it’s possible for divers to reach the pipeline with good training, staying down for a prolonged period while maneuvering explosives is more challenging. He said the operation would most likely have required a professional military unit skilled in underwater demolition.

The question of how the operation was conducted feeds directly into the bigger, and far more politically sensitive, question of who ordered it. A smaller operation using commercially available equipment would considerably expand the circle of potential culprits.

Authorities haven’t publicly disclosed any information about the identities of the six suspects aboard the Andromeda; their identities are the focus of the ongoing investigation.

Between June and July 2022, months before the Nord Stream attack, the Central Intelligence Agency sent a warning to its German counterpart, the BND, and other European services that a group might be preparing an attack on the pipeline, according to intelligence officials familiar with the notification. The warning included information about three Ukrainian nationals who were trying to rent ships in countries bordering the Baltic Sea, including Sweden, these officials said.

In October, shortly after the blasts, senior U.S. security officials visiting Berlin mentioned the possibility that Ukraine might have been behind the attack, according to a German official who spoke with them at the time. U.S. officials now say private Ukrainian actors could have organized and financed the bombings without the knowledge of the Ukrainian government.

Ukraine officials, including President Volodomyr Zelensky, have denied any involvement in the Nord Stream sabotage, saying the accusation played into Russia’s hands.

Any direct involvement by Kyiv would be damaging for the unity of the Western alliance that is backing Ukraine’s war effort. Such a revelation would have a particularly negative impact on the government of German Chancellor Olaf Scholz, who discarded his nation’s pacifist stance to become the world’s third-largest supplier of weapons to Ukraine and one of its biggest financial backers, despite misgivings among German voters.

Germany’s defense minister, Boris Pistorius, warned last week that there is no clarity as to who was behind the attack, and that there is a possibility of a false-flag operation designed to blame Ukraine even if it had no involvement in the sabotage.

On Tuesday, Russian President Vladimir Putin dismissed any suggestion that Ukraine, or any pro-Ukrainian group, could have blown up the pipelines, and blamed the U.S., which has denied involvement.

He also said a Russian investigation found that there could be unexploded devices that remain attached to the pipelines.

“Apparently, several explosive devices were planted; some exploded, but some didn’t. It’s not clear why,” Mr. Putin told state television.

—Kim Mackrael and Georgi Kantchev contributed to this article.


    Image: Germán & Co by Shutterstock

'The US attacks Chinese balloons and electronics, but its archenemy is still TikTok'

Washington has given American teenagers' favorite app an ultimatum: Either its Chinese owner, ByteDance, relinquishes control or it is banned from the United States.

Le Monde by Philippe Escande, published on March 17, 2023

The United States may vigorously claim that its main concern is the war in Ukraine, but its obsession remains China. It attacks its balloons and its electronics, but its archenemy is still TikTok. Naturally so, as the most popular social media app in the world today among young people already has American teenagers in its grip. They now spend more time on the Chinese app than on YouTube, Instagram or Facebook.

Hostilities escalated on Wednesday, March 15, when the company confirmed that the US government had given it an ultimatum: Either its Chinese owner, ByteDance, relinquishes control or it is banned from the US.

Tick tock, tick tock, the time bomb is ticking. The firm is reliving the nightmare of the Donald Trump years, when the former American president tried to bring the social network to heel, as he had done with the telecommunications specialist Huawei. It was a waste of time, as TikTok's popularity has only grown. Even more paradoxical is the fact that Chinese consumer companies have never enjoyed so much success on American soil.

During the last Super Bowl, the country's most important television audience moment of the year, it was the ad for the Temu app that attracted the most attention. In a few months, this Boston-based online shopping platform has become the most downloaded app on American smartphones. It is a subsidiary of Shanghai-based PDD Holdings, which already owns Pinduoduo, a popular online marketplace in China. Not to mention, of course, Shein, the "Chinese Zara," known for its cut-price fashion that is a hit all over the world and is considering an IPO on Wall Street.

Huge amounts of data

What this new generation of sellers has in common is that they target the general public without any intermediaries, have their products made in China on demand and ship directly from the factory. This strategy contrasts with that of Amazon and its giant warehouses around the world, but it works perfectly.

And to make US politicians' nightmares worse, it is worth mentioning that the prosperity of all these companies is based on a highly sophisticated analysis of consumer needs: huge amounts of data that potentially end up in computers in China. TikTok has offered to host its users' data only on American soil, but that's not enough. The US intends to curtail the appetites of Chinese sellers.


Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.


    A 3D printed oil pump jack is seen in front of displayed stock graph and "Oil Stocks" words in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

Banking rout fuels U.S. oil hedging, as investors seek to limit losses

Investors in the oil market, including oil producers, have rushed to purchase put options to predict and hedge against downward price movement. According to two market sources, several hedge funds have short positions on options to predict further price declines.

    REUTERS BY STEPHANIE KELLY AND ARATHY SOMASEKHAR

NEW YORK, March 16 (Reuters) - Oil producers, banks and hedge funds have increased purchases of put options to protect themselves from further losses, market sources said this week, as crude futures hit their lowest level since December 2021 on concern that the rout in the banking industry could trigger a global recession and cut fuel demand.

Oil futures have fallen over 8% since last Friday as the collapse of SVB Financial (SIVB.O) and peer Signature Bank (SBNY.O) prompted concerns of a wider banking crisis.

Credit Suisse (CSGN.S) on Thursday sought to shore up its liquidity and restore investor confidence by borrowing up to $54 billion from Switzerland's central bank. The Swiss lender is the first major global bank to be thrown an emergency lifeline since the 2008 financial crisis.

Investors in the oil market, including oil producers, have rushed to buy put options, used to either bet on or protect against downside movement. Some hedge funds had short positions on options, two market sources said, in a bet that prices will fall farther.

"There is a fear that if the global economy comes down we could be talking about oil going lower," Price Futures Group analyst Phil Flynn said. "Because (investors) don't know how this banking crisis is going to play out, they're trying to put a floor on risk."

Volume in puts for the U.S. crude futures contract for April delivery gained on Friday over 30% from the previous session to 30,594, CME Group data showed.

From Friday to Wednesday, volumes rose even further, climbing over 60% to 50,255 puts. There were about 36,394 call options, or bets on a higher price, bought on Wednesday in comparison.

For U.S. crude futures options open interest, the ratio of puts to calls is the highest since August 2022.

"Given the price action we are looking at, I would say you could see further increases in volatility just because the sentiment is so sour," said Rebecca Babin, senior energy trader at CIBC Private Wealth US.

A U.S. based trader said investors were reluctant to buy and hold due to the high volatility and was therefore focused on short term positions in the market.

"Shorting these levels could turn quickly on you," the trader added.

However, if oil prices fall further, buying put options to protect against the downside would become more expensive as demand goes up, though puts costs vary.

The discount of later-dated oil futures contracts to the front-month contract tightened on Wednesday, indicating that market participants were less confident in short-term demand.

That short-term uncertainty should buoy put buying, Price Futures Group's Flynn said.

The premium of U.S. crude's front-month contract to U.S. crude's price in half a year tightened to as little as 29 cents a barrel, the lowest since Feb. 7, Refinitiv Eikon data showed.

For international benchmark Brent crude futures, the front-month contract's premium to the contract in half a year tightened to $1.31 a barrel, the lowest since Jan. 31.


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