Saturday, November 30, 2019

"Norwegian DNB Bank Faces Money-Laundering Investigation over Namibia Fisheries Scandal"

Following up on November 18's "Bribery allegations over fishing rights rock Iceland and Namibia"
From Financial Crime Education:
Norwegian police are investigating DNB (DNB.OL), the country’s largest bank, to establish whether any laws were broken in its handling of payments from an Icelandic fisheries firm to Namibia, police and the bank said on Thursday.

The investigation follows a report by Iceland’s public broadcaster this month that said Icelandic fisheries group Samherji had made illicit payments worth millions of dollars to secure fishing quotas in Namibia.

Samherji and DNB have both denied wrongdoing.

The case has led to the arrest of Namibia’s former justice minister and cast a shadow over the country’s ruling party as it contests an election....MORE
The outro from that earlier post:
...Johannes Stefansson, a former company employee turned whistleblower, told Icelandic media he had approved the kickbacks with Samherji’s backing. The company habitually “does whatever it takes to get its hands on the natural resources of other nations”, Stefansson said....
Interesting mission statement:
"Here at Samherji our mission is to do whatever it takes to 
get our hands on the natural resources of other nations"

"Why the Search for Dark Matter Depends on Ancient Shipwrecks"

From The Atlantic, October 25:

Errant particles from everyday radioactive materials are a major obstacle for particle physicists. The solution? Lead from the bottom of the sea.
In 2017, Chamkaur Ghag, a physicist at University College London, got an email from a colleague in Spain with a tempting offer. The year before, an emeritus professor at Princeton  University, Frank Calaprice, had learned of old Spanish ships that had sunk off the New Jersey coast 400 or 500 years ago, while carrying a cargo of lead. Calaprice obtained a few samples of this lead and sent it off to Spain, where a lab buried within the Pyrenees tested its radioactivity. It was low: just what Aldo Ianni, the then-director of the Canfranc Underground Laboratory, was hoping for. Now that sunken lead was being offered to any physics laboratory willing to pay 20 euros per kilogram—a fairly high price—for it.

Lead is mined and refined all over the world, but that centuries-old lead, sitting in a shipwreck, has a rare quality. Having sat deep underwater since before the United States of America was born, its natural radioactivity has decayed to a point where it’s no longer spitting out particles. For particle physicists, that makes it exceptionally valuable.
“It’s sort of like gold dust,” Ghag says.

Forget plutonium: Plenty of everyday objects, from ceramics and glass to metals and bananas, are radioactive, to varying degrees. Should the particles from their decay hit the detectors of particle-physics experiments, they could give scientists false positives and dig potholes on the road to scientific discovery. Even the experiments themselves, built from all kinds of metals, have lightly radioactive components.

Just a few inches of lead can shield detectors from all kinds of rogue radiation, and one of the best ways to block sneaky, unwanted particles is to surround them with lead that itself is barely radioactive. The best source of such lead just so happens to be sunken ships, some of which have been corpses near coastal waters for as long as two millennia.
Particle-physics experiments look for the most fundamental building blocks of the cosmos, including dark matter, an as-yet unseen substance that acts like glue within and between galaxies. This ancient lead, then, is helping humanity unlock the secrets of the universe—but obtaining it often presents practical and ethical uncertainties.

Shipwrecked lead belongs to a class of items known as low-background materials, which have very low levels of intrinsic radioactivity. There is no agreed-upon standard for what constitutes a low-background material, but, based on the sensitivity to an experiment’s background radiation, it’s clear what level’s needed, says Alan Duffy, an astrophysicist at the Swinburne University of Technology. “If you’re building a Geiger counter, you need the Geiger counter to not pick up on itself,” he says.
Take steel: It’s an excellent shield from intruding vagabond particles—so much so that Fermilab, a particle-physics and accelerator laboratory in Illinois, has used tons of it in the past few decades to shield its own experiments, says Valerie Higgins, Fermilab’s historian and archivist. That steel frequently came from decommissioned warships, many of which existed around the time of, or served in, the Second World War or the Korean War, including the Astoria, the Roanoke, the Wasp, the Philippine Sea, and the Baltimore....
....MUCH MORE

"As LNG prices hit historical low, Russian government decides it will not fund new Arctic projects"

There's a lot of gas around.

From The Barents Observer, November 27:
Natural gas company Novatek might not get the state support it needs for new major infrastructure projects in the Arctic. 

The Russian Finance Ministry has not included any of Novatek’s much-desired projects in its 2020 budget bill.

The natural gas company has been pushing hard for the allocation of about 124 billion rubles (€1.75 billion) for the building of the Utrenneye LNG terminal in Gydan, as well as reloading terminals in Murmansk and Kamchatka.

But the company now appears to be snubbed by government. None of Novatek’s projects are granted funding by the 2020 state budget, newspaper Kommersant reports.

Pressure on Putin
The developments have made Novatek leader Leonid Mikhelson step up his lobbying in the Kremlin. In November, he again contacted President Vladimir Putin and warned that the lack of state funding could ultimately lead to delays in the Arctic LNG 2, the country’s biggest ever LNG project, Kommersant informs.

The Arctic LNG 2 is built in the Arctic peninsula of Gydan and will produce as much as 19,8 million tons of LNG per year. It is considered a crucially important project for President Putin, who aims for a boost in annual shipments on the Northern Sea Route to 80 million tons of goods by year 2025....MORE

Feral Cities

Following on last Saturday's "Mad Scientist Blog: 'Three Futurist Urban Scenarios'".

From the Naval War College Review via D.C.'s Institute of World Politics:
Naval War College Review, Autumn 2003, Vol. LVI, No. 4
Imagine a great metropolis covering hundreds of square miles. Once a vital component in a national economy, this sprawling urban environment is now a vast collection of blighted buildings, an immense petri dish of both ancient and new diseases, a territory where the rule of law has long been replaced by near anarchy in which the only security available is that which is attained through brute power.1 Such cities have been routinely imagined in apocalyptic movies and incertain science-fiction genres, where they are often portrayed as gigantic versions of T. S. Eliot’s Rat’s Alley.2 

Yet this city would still be globally connected. It would possess at least a modicum of commercial linkages, and some of its inhabitants would have access to the world’s most modern communication and computing technologies. It would, in effect, be a feral city. 

Admittedly, the very term “feral city” is both provocative and controversial. Yet this description has been chosen advisedly. The feral city may be a phenomenon that never takes place, yet its emergence should not be dismissed as impossible. The phrase also suggests, at least faintly, the nature of what may become one of the more difficult security challenges of the new century.

Over the past decade or so a great deal of scholarlyattention has been paid to the phenomenon of failing states.3 Nor has this pursuit been undertaken solely by the academic community. Government leaders and military commanders as well as directors of nongovernmental organizations and intergovernmental bodies have attempted to deal with faltering, failing, and failed states. Involvement by the United States in such matters has run the gamut from expressions of concern to cautious humanitarian assistance to full-fledged military intervention. 

In contrast, however, there has been a significant lack of concern for the potential emergence of failed cities. This is somewhat surprising, as the feral city may prove as common a feature of the global landscape of the first decade of the twenty-first century as the faltering, failing, or failed state was in the last decade of the twentieth. 

While it may be premature to suggest that a truly feral city—with the possible exception of Mogadishu—can be found anywhere on the globe today, indicators point to a day, not so distant, when such examples will be easily found. This article first seeks to define a feral city. It then describes such a city’s attributes and suggests why the issue is worth international attention. A possible methodology to identify cities that have the potential to become feral will then be presented. Finally, the potential impact of feral cities on the U.S. military, and the U.S. Navy specifically, will be discussed. 

DEFINITION AND ATTRIBUTES 
The putative “feral city” is (or would be) a metropolis with a population of more than a million people in a state the government of which has lost the ability to maintain the rule of law within the city’s boundaries yet remains a functioning actor in the greater international system.4 In a feral city social services are all but nonexistent, and the vast majority of the city’s occupants have no access to even the most basic health or security assistance. There is no social safety net. Human security is for the most part a matter of individual initiative. Yet a feral city does not descend into complete, random chaos. Some elements, be they criminals, armed resistance groups, clans,tribes, or neighborhood associations, exert various degrees of control over portions of the city. Intercity, city-state, and even international commercial transactions occur, but corruption, avarice, and violence are their hallmarks. 

A feral city experiences massive levels of disease and creates enough pollution to qualify as an international environmental disaster zone. Most feral cities would suffer from massive urban hypertrophy, covering vast expanses of land. The city’s structures range from once-great buildings symbolic of state power to the meanest shantytowns and slums. Yet even under these conditions, these cities continue to grow, and the majority of occupants do not voluntarily leave.5 

Feral cities would exert an almost magnetic influence on terrorist organizations. Such megalopolises will provide exceptionally safe havens for armed resistance groups, especially those having cultural affinity with at least one sizable segment of the city’s population. The efficacy and portability of the most modern computing and communication systems allow the activities of a worldwide terrorist, criminal, or predatory and corrupt commercial network to be coordinated and directed with equipment easily obtained on the open market and packed into a minivan. 

The vast size of a feral city, with its buildings, other structures, and subterranean spaces, would offer nearly perfect protection from overhead sensors, whether satellites or unmanned aerial vehicles. The city’s population represents for such entities a ready source of recruits and a built-in intelligence network. Collecting human intelligence against them in this environment is likely to be a daunting task. Should the city contain airport or seaport facilities, such an organization would be able to import and export a variety of items. 

The feral city environment will actually make it easier for an armed resistance group that does not already have connections with criminal organizations to make them. The linkage between such groups, once thought to be rather unlikely, is now so commonplace as to elicit no comment. 

WHAT’S NEW?
But is not much of this true of certain troubled urban areas of today and of the past? It is certainly true that cities have long bred diseases. Criminal gangs have often held sway over vast stretches of urban landscape and slums; “projects” and shantytowns have long been part of the cityscape. Nor is urban pollution anything new—London was environmentally toxic in the 1960s. 

So what is different about “feral cities”? 
The most notable difference is that where the police forces of the state have sometimes opted not to enforce the rule of law in certain urban localities, in a feral city these forces will not be able to do so. Should the feral city be of special importance—for example, a major seaport or airport—the state might find it easier to negotiate power and profit-sharing arrangements with city power centers to ensure that facilities important to state survival continue to operate. For a weak state government, the ability of the feral city to resist the police forces of the state may make such negotiations the only option. 

In some countries, especially those facing massive development challenges, even the military would be unequal to imposing legal order on a feral city. In other, more developed states it might be possible to use military force to subdue a feral city, but the cost would be extremely high, and the operation would be more likely to leave behind a field of rubble than a reclaimed and functioning population center....
....MUCH MORE

"Orwell Versus Huxley"

From Delancey Place:
...Today's encore selection -- from Amusing Ourselves to Death: Public Discourse in the Age of Show Business by Neil Postman. 
The first half of the 20th century saw two competing visions of the future from British authors George Orwell (1903-1950) and Aldous Huxley (1894-1963). Though it came 17 years later, Orwell's dystopian novel 1984 is better known; however, Huxley's Brave New World has proven more relevant. Written in the shadow of Hitler, Mussolini and Stalin, 1984 shows a world ruled by an oligarchical dictatorship with perpetual war, pervasive government surveillance and incessant public mind control. Set in 2540 AD, Brave New World was published in 1932 and began as a parody of H. G. Wells' optimistic and utopian novel Men Like Gods. Neil Postman contrasted the two visions in the foreword to his 1985 classic Amusing Ourselves to Death:

"We were keeping our eye on 1984. When the year came and [Orwell's] prophecy didn't, thoughtful Americans sang softly in praise of themselves. The roots of liberal democracy had held. Wherever else the terror had happened, we, at least, had not been visited by Orwellian nightmares. But we had forgotten that alongside Orwell's dark vision, there was another -- slightly older, slightly less well known, equally chilling: Aldous Huxley's Brave New World.

"Contrary to common belief even among the educated, Huxley and Orwell did not prophesy the same thing. Orwell warns that we will be overcome by an externally imposed oppression. But in Huxley's vision, no Big Brother is required to deprive people of their autonomy, maturity and history. As he saw it, people will come to love their oppression, to adore the technologies that undo their capacities to think.

"What Orwell feared were those who would ban books. What Huxley feared was that there would be no reason to ban a book, for there would be no one who wanted to read one. Orwell feared those who would deprive us of information. Huxley feared those who would give us so much that we would be reduced to passivity and egoism. Orwell feared that the truth would be concealed from us. Huxley feared the truth would be drowned in a sea of irrelevance....MORE 

Electricity Production: "China Is Driving The Continued GROWTH Of The Global Coal Fleet"

From Global Energy Monitor via EndCoal:

Out of Step
EXECUTIVE SUMMARY 
The year 2018 marked a milestone: for the first time since China’s coal-building boom began in the 1980s, the coal fleet outside of China shrank. From January 2018 to June 2019, countries outside of China decreased their total coal power capacity by 8.1 gigawatts (GW), due to steady retirements and an ongoing decline in the commissioning of new coal plants.1 Yet over the same period China increased its coal fleet by 42.9 GW, and as a result the global coal fleet overall grew by 34.9 GW (Figure 1). 

As more countries turn away from coal and retire their plants, China’s continued pursuit of coal is increasingly out of step with the rest of the world, and is now effectively driving the ongoing expansion of the global coal fleet.China’s recent growth is due to a brief but massive spree of project permitting that occurred from September 2014 to March 2016, a period when the central government delegated permitting to provincial authorities who had strong incentives to approve and build coal plants to hit province-level economic targets. 

The permitting spree brought a cohort of 245 GW of new projects nearly equivalent to the U.S. coal fleet (254 GW) into the developmental pipeline, inflating what was already an overbuilt coal power fleet, with the average running hours for China’s coal plants hovering around 50% since 2015. Today, 147.7 GW of coal plants are either under active construction or under suspension and likely to be revived—an amount nearly equal to the existing coal power capacity of the European Union (150 GW).

Given the amount of capacity under development, China’s central government looks ready to increase—perhaps significantly—its 1,100 GW coal power cap, as set by its 13th Five-Year Plan (FYP 2016–2020). Coal and power industry groups are proposing the central government increase total coal power capacity by 20 to 40% to between 1,200 and 1,400 GW as part of China’s 2035 infrastructure plan. 

The 2035 infrastructure plan is expected to be released next year, and the 14th FYP in 2021.The continued growth of China’s coal fleet and consideration of plans to significantly raise the nation’s coal power cap show that while the country is often hailed as a clean energy leader, the momentum of coal power expansion has yet to be halted. In July 2018, Global Energy Monitor (GEM) noted the central government was either unable or unwilling to slow the development of new coal plants permitted by provincial authorities in 2014–16. While the central government had issued measures slowing or stopping development on hundreds of coal plants in 2017, GEM found in 2018 that over a third of the restricted capacity had advanced in development or commissioning. Those trends have since continued, with about half of the capacity now moving forward in development.

Yet while the central government has allowed most of the plants from the permitting boom to continue into construction and commissioning, it has also introduced measures that have significantly slowed the rate of new coal proposals and permits since the boom, with only 8.5 GW of newly proposed coal power capacity and 2.6 GW permitted for construction over the past year. However, the country’s proposal to increase total coal power capacity by up to 1,400 GW suggests these measures are at risk of being weakened or reversed.....
....MUCH MORE ( 17 page PDF) 

Credit Suisse says investors should buy Virgin Galactic because of its 'near-term monopoly' in commercial space tourism" (SPCE)

From Business Insider, November 21:
  • Credit Suisse is recommending investors buy shares in the newly public space tourism company Virgin Galactic.
  • The firm's analysts initiated coverage of the company on Thursday with and "outperform" rating, citing its "near-term monopoly" in the commercial space industry.
  • Virgin Galactic entered the public markets in late October through a merger with Social Capital Hedosophia, a venture capital firm run by Chamath Palihapitiya.
Investors should buy newly public Virgin Galactic because of its "near-term monopoly" in the budding space tourism industry, Credit Suisse analyst wrote in a note to clients on Thursday.

"Our bullish view reflects the near-term monopoly SPCE offers in an industry (commercial space tourism) where public investment opportunities are scarce," the firm wrote. "We view this as a classic tech-driven high demand, low supply story with high barriers to entry."

Credit Suisse initiated coverage of Virgin Galactic with an "outperform rating and $12.43 price target. That figure represents around a 39% premium from where shares traded on Thursday afternoon.
The lack of current offerings for space tourism enables "sticky pricing," as well as the potential for price discrimination, the analysts found. That dynamic - in combination with low-operating costs thanks to the firm already having invested in the required infrastructure - creates strong economics for its business model.

"With no near-term competition, growth should be fueled by expanding supply," the analysts wrote....
....MORE

The aptly named Vertical Partners concurs:
Virgin Galactic is a 'one-of-a-kind opportunity' to invest in space tourism: Vertical Research

"The race to mine the moon is taking off — even though no one’s sure if it’s possible"

From The Hustle:
A California-based company called OffWorld, whose ultimate goal is to enable “human expansion beyond our home planet,” is preparing for the initial phase of its extraterrestrial plans: mining the moon with a fleet of autonomous robots.

The company, which boasts a 26-person team according to Digital Trends, is one of several companies with sky-high ambitions.

The moon-mining industry has already begun to take off thanks to moonshot investments, but the industry still faces an interesting problem…

No one knows if the moon is even minableScientists and entrepreneurs disagree on how prevalent minable resources are, how useful they could be, and how expensive it would be to commercially mine them.
Most plans focus on mining 3 main materials:
  • Water, which could be converted to rocket fuel 
  • Helium-3, which could power nuclear fusion reactors
  • Rare earth minerals, which could be used in manufacturing
But scientists are skeptical about the feasibility of moon mining
According to NASA, plans for space mining are “still guesswork.” “There could be enough helium-3 to power the earth for 10,000 years,” the Washington Post reported. “Or there might not be enough to ever make commercial mining profitable, even if the entire lunar surface were being mined.”

A planetary geologist also points out that “most of the Moon’s… valuable metals are… essentially impossible to access,” and no one has yet developed a cost-effective way to transport any of those resources back to earth.

Entrepreneurs, though, are still bullish on moon mining“The Moon is Earth’s 8th continent,” writes moon-mining startup Moon Express. “Like the Earth, the Moon has been enriched with vast resources. Unlike the Earth, these resources are largely on or near the lunar surface, relatively accessible.”....
.... MORE

Predictable You: Halley's Actuarial Tables

From Cabinet Magazine:
Dahlia S. Cambers
On actuarial tables
http://www.cabinetmagazine.org/issues/15/cabinet_015_cambers_dahlia_s_001.jpg
An estimate of the degrees of mortality of mankind drawn from curious tables of the births and 
funerals at the city of Breslaw with an attempt to ascertain the price of annuities upon lives (1693).
This life-table, originally published by Edmund Halley with his An estimate of the degrees of mortality of mankind drawn from curious tables of the births and funerals at the city of Breslaw with an attempt to ascertain the price of annuities upon lives (1693), is a founding document of life insurance, the business of applying laws of probability to the value of human lives. The chart reads in vertical columns from left to right: In the upper-left corner, for instance, Halley writes that 1000 people (of about 1100 live births) survive to the age of 1; 855 people to the age of 2; 798 to the age of 3; and so on.

When Halley published his life table, the concept of life annuities was not new. Since the Romans in fact, lives had been insured, usually on a one-year basis, payable by one lump sum, regardless of the age or health of the insured. Such annuities didn’t become profitable however, until it became possible to statistically determine a norm expectation of mortality and charge investors accordingly.
Although local parishes had long noted their dead, the ravages of the plague in the early 17th century prompted the city of London to follow suit. The results of this effort, weekly tabulations of deaths and christenings printed and distributed to the public beginning in 1604, were called the Bills of Mortality. In 1664, John Graunt, a merchant of notions who pursued actuarial science in his free time, decided to plumb the Bills for more information, admitting to a certain pleasure “in deducing so many abstruse, and unexpected inferences out of these poor despised Bills of Mortality.”

Graunt was aware that the records were selective—the age of death was not recorded, Catholics and Dissenters were excluded altogether—and also, contained a margin of error because the cause of death was not certified by medical diagnosis. Nonetheless, he felt confident using the data to extrapolate larger conclusions. Supplementing and qualifying the figures with his own observations (for instance, he suspected syphilis to be more common than the records indicated, so he concluded that a percentage of the persons reportedly dying of “ulcers and sores” were actually victims of venereal disease; he hypothesized the number of “teeming” [fertile] women to be double the number of annual births), Graunt’s groundbreaking Natural and political observations made upon the bills of mortality crudely determined an annual mortality rate and pioneered the methodology of statistical sampling. Graunt’s goal, however, was neither of these, but to determine the population of London. This he set at 384,000, probably a fairly accurate number, according to contemporary historians. Commonly believed at the time to be 1 or 2 million, Graunt’s low estimate provoked more controversy than his revolutionary methodology.

Halley, famous astronomer and the comet’s namesake, was acquainted with Graunt’s work when he serendipitously discovered that due to an assiduous pastor, the small town of Breslaw in eastern Germany possessed meticulous records of the town’s births and deaths for the years 1687–1691. Moreover, Halley observed, the “Confluence of Strangers is but small,” at Breslaw, suggesting a data set more stable than London’s Bills of Mortality. Using the statistics of Breslaw to calculate the probability of death at different ages, Halley was able to determine correspondingly appropriate annuity rates....
 ....MORE

Shipping: Arctic Coal for India

Back to India for a moment. From the BBC, November 29:

Russia's Taymyr plan: Arctic coal for India risks pollution
Natural riches come in two conflicting types in Russia's Arctic north: valuable minerals and spectacular wildlife.
But sadly for many threatened species, the decline in Arctic sea ice has created a new economic opportunity for Russia in their remote habitat.

In a decree last year President Vladimir Putin ordered Russian firms to boost cargo traffic on the Northern Sea Route to an annual 80m tonnes by 2024.
Ambitious energy co-operation deals were signed with India in Vladivostok, in Russia's far east, in October.

One centres on a big open-cast coal mining project in the Taymyr Peninsula, in the far north of central Siberia.
The area is rich in high-quality coking coal (anthracite), used to make steel and aluminium.
Dharmendra Pradhan, India's Minister of Petroleum and Natural Gas, said: "We are the second largest coal importer in the world, and we intend to achieve production of 3m tonnes of steel per year by 2030, so we need to increase coal supplies."....
....MUCH MORE, the Beeb really went heavy on the graphics for this story.

The Barents Observer has quite a few posts on Russian coal.
Recently:
November 1
Russia finds market for its vast reserves of Arctic coal
August 23
Gloom in horizon as Russia announces it will boost digging of coal 
And a deep dive on August 1
Big blow to Arctic environment as Russian coal company advances into protected tundra

Friday, November 29, 2019

"The market system was born in Iraq and Syria, not invented by Adam Smith"

At times this site, HumanProgress, is so over-the-top optimistic a place that it moves Pollyanna and Doctor Pangloss toward the morose-despondent-suicidal end of the spectrum.

From HumanProgress,16 May 2018:

Markets Are as Old as Civilization
What is capitalism? According to our modern understanding, capitalism is a relatively new idea, and the intellectual foundations for a free market model can be traced to the 18th century philosopher Adam Smith. However, this narrative about the development of free markets is fundamentally flawed.

Far from being a recent innovation, enterprises, banks, advanced commercial practices and free markets evolved some 4,000 years ago in the countries we today know as Iraq and Syria. A better understanding of the story of capitalism is needed; since it shows us how important markets have been for human progress as well as how universal the link between development and market policy is across different societies.

Over time, archaeologists have uncovered and translated a great deal of tablets left from ancient civilisations. Many of the tablets from Babylonia and Assyria, in contemporary Iraq and Syria, are receipts of economic ventures. They show that private profit-seeking merchants, rather sophisticated investment ventures and market price setting were common in these civilisations. Astronomical diaries written some 2,500 years ago show how market prices changed on a monthly, or even weekly, basis in Babylonia.

Historians have found considerable evidence for market economy being an ancient Middle Eastern innovation. Dutch historians Robartus Johannes van der Spek and Kees Mandamakers wrote already in 2002: “That market mechanisms played their part in the Babylonian economy seems now to be unquestionable.”

This shouldn’t come as a surprise. Given how prosperous the ancient Middle Eastern civilisations were and how important they were for human progress, it should come as no surprise that they were the birthplace of enterprise and market economy. Egypt on the other hand relied more on central planning, and predictably stagnated.

Free markets, in different forms, also seem to have formed in the three other cradles of human civilisation – India, China and Mesoamerica. Since ancient times China has fluctuated between free market policies and statist control. The periods of free markets are those in which China has prospered.

Again, this shouldn’t be a surprise since many of our most important inventions have originated in China. Only during recent centuries, when Europe has developed and embraced modern capitalism, have European civilisations become the dominant force for growth and technology in the world. Before then this role fell to the Middle East, China and India – the market economies of the world. Around a thousand years ago the concept of Sreni, the first known proto-corporation, evolved in India.

It seems that the cradles of human civilisation all developed a market economy, in more or less evolved form. This even goes for Mesoamerica, where the Aztecs and Mayan economies had aspects of the free market. This is worth keeping in mind. If one believes the modern narrative that capitalism is a fairly new European invention, then other models have existed in human history that gave rise to the spectacular development seen in ancient Eastern civilisations such as Babylonia, Persia, China, Phoenicia and Asia minor (modern day Turkey). Yet, in truth, the periods of prosperity in these regions were the same in which market economy was adopted. So it turns out, the link between markets and prosperity is quite universal.....
....MUCH MORE

"Wary of China, Germany plans rapid state intervention to protect key industries"

Well duh.
First up, Reuters, November 29:
Germany set out plans on Friday to create a government committee to step in quickly to protect companies against foreign takeovers, a sign of concern about China and others acquiring its technology.

The finalised industrial strategy outlined by Economy Minister Peter Altmaier is also intended to prevent the erosion of Germany’s manufacturing base, on which much of its wealth is built.
The new standing committee would, as a last resort, have powers to take stakes in German companies that produce sensitive or security relevant technologies.

The government stakes, which would be acquired by state development bank KfW, would be held temporarily. This can already be done in some cases under German law, but Altmaier said the process was too slow....MUCH MORE
Way back in 2012 we mentioned this, when China made a move on one of the world's premier crane manufacturers:
The Invisible Hand Touches Germany in No-no Place: China Grabs Putzmeister

Six years later I felt bad about that headline and tried to explain myself in the introduction to:
"Sizing up Chinese Investments in Europe
Germany in particular is very sensitive about this. And if the target of Chinese affection is one of the family-owned Mittelstand companies, well, I get to channel the tabloids with headlines such as 2012's "The Invisible Hand Touches Germany in No-no Place: China Grabs Putzmeister"
Ahem.....
*****
The German concern for their small and medium sized enterprises goes back quite a ways. Here's an old-timey pic via Wikipedia:

https://upload.wikimedia.org/wikipedia/commons/f/fb/Mittelstand.jpg
Representation of the supporting
role of the Mittelstand in Walter Wilhelms
„Mission des Mittelstandes“ (Mission of the Mittelstand, 1925)

Without the Mittelstand you are without Germany's export engine and without exports (and with Mutti's recent comments on free speech, yikes!) you are left with a Teutonic Belarus.
But without the charm.

If interested see also: "China’s strategic investments in Europe: The case of maritime ports"

"India: Four Centuries of Underdevelopment" (and Governor Carney, they'd still like their $45 trillion back)

From Global Financial Data:
The Global Financial Database has more equity history for India than for any other country.  The British East India Co. was founded on December 31, 1600, preceding the founding of the Dutch East India Co. by one year.  Originally, shares were issued for specific ventures to India, but in 1657, joint stock shares were issued and these shares continued to trade in London until the company was dissolved in 1874 and the British government took over ownership of the company. The East India Co. paid a consistent 10.5% dividend from 1793 until the company’s dissolution in 1874.  From the late seventeenth century until the early eighteenth century, 95% of Asian imports into Britain come from Mughal India and consisted mainly of cottons and spices produced in India.\
The decline of Mughal India in the first half of the eighteenth century led to the rise of the British East India Co. which took over India from the Mughal Empire after its victory in the Battle of Plessey in 1757.  During the 1800s, the manufacture of textiles moved from India to Britain as the Industrial Revolution enabled Britain to produce the textiles it had formerly imported from India.

During the 1850s, British investment in India boomed, establishing railroads, canals, shipping companies and utilities that were essential not only for the development of the Indian economy, but to enforce Britain’s control over the colony. Merchants in Manchester and London supported building railroads that linked India’s main ports to the interior to bring cotton and other goods to the rest of the world. However, these railroads did not prove profitable, and the British government had to guarantee the 5% dividends the India railroads paid.

In the 1860s, investment in India spread to other sectors.  Banks, tea companies, telegraph companies and gold mines were the most popular investments in India.  The civil war in the United States led to an increase in demand for cotton causing a bubble in equity markets which burst when the American civil war ended. Although cotton and clothing represented a large portion of India’s production, most of these companies used local capital rather than British funds.

Traders dealt in securities in Calcutta in 1830, trading shares of the East India Co. Twenty-Two stockbrokers met under banyan trees in front of Bombay’s Town Hall in 1855 to trade shares.  Premchand Roychand was a native Indian who became a stock broker in 1849 and was a founding member of The Native Share and Stock Brokers Association which later became the Bombay Stock Exchange.

Roychand had earned his fortune when the American Civil War drove the price of cotton up.  This led to a speculative bubble in 1864 in which Back Bay Reclamation stock rose from 5,000 rupees to 50,000 rupees.  Money made from cotton was redirected into the stock market, and new companies were floated to unsuspecting speculators. The number of companies traded in Bombay grew from 10 in 1855 to 62 in 1862 and over 100 by 1864. The market crashed in May 1865 when the American Civil War ended and Back Bay Reclamation stock fell from 50,000 Rupees to 2,000.  Bank of Bombay stock fell from 2,850 rupees to 87. Hundreds of time bargains matured on July 1, 1865 and many speculators were wiped out.

The stock brokers moved to Dalal (Brokers’) Street in 1874. The Bombay Stock Exchange was founded on July 9, 1875 as the Native Share and Stock Brokers Association and was the first stock exchange established in Asia. The Calcutta Stock Exchange incorporated in 1908. Stock exchanges opened up throughout India in the twentieth century. Nineteen former stock exchanges have closed in India since 2000. Today, most trading in Indian stocks takes place on either the Bombay Stock Exchange or the National Stock Exchange, founded in 1992.  Both have a market cap of over $2 trillion....
....MUCH MORE 

Back in August I mentioned the $45 Tril. in passing:

"In Unprecedented, Shocking Proposal, BOE's Mark Carney Urges Replacing Dollar With Libra-Like Reserve Currency"
Dear Governor Carney,
India would like their $45 trillion back and based on the responses to informal queries, would prefer it in dollars rather than a libra-like reserve currency.
Yr. pal,
Climateer
Thinking that would be enough to get the ball rolling but apparently not.
I even included a handy link to the study the figure is based on:
How Britain stole $45 trillion from India
— Al Jazeera, December 19, 2018

Now, with Mr. Carney's imminent departure from the Bank of England it is probably time to get moving on it.
If interested, here is more of the backstory.

And to be fair India did get the English language and law so maybe shave a couple trillion off the tab.

"Why Q4 GDP Growth Tracking Estimates Are Spiking"

We try to check in with the Atlanta Fed's GDP Now and the New York Fed's Nowcast a couple times per month and were going to comment on the uptick but here's Upfina to do it better backwards and in heels.*
Atlanta in particular caught the fevah:
...The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2019 is 1.7 percent on November 27, up from 0.4 percent on November 19....
From Upfina November 27:
The S&P 500 is now up 25.28% year to date, making this the best year since 2013. The VIX fell 0.33 to 11.54 which is the lowest reading in a year. The VIX has been below 15 for 32 straight trading sessions. As of Tuesday’s close the 14 day RSI was at 74.4. Anything above 70 means the market is overbought. The MSCI all country world index hit a new record high on Monday because of the rally in US stocks. It’s up 0.25% from its January 2018 high. That’s a sideways correction with volatility added in late 2018. The S&P 500 is no longer stuck in a horizontal correction as it is up 9.3% since its January 2018 peak. Its impressive that this has been the best year for stocks in six years. It’s even more impressive that the one year total return of the U.S. 60/40 portfolio is the highest since 1998. Even though the long bond has rallied in 2019 as it forecasts lower nominal growth, stocks have outperformed....
*****
... Q4 GDP Trackers To Increase
The latest advanced indicators data are boosting Q4 GDP estimates which have been very weak recently. Specifically, wholesale inventories were up 0.2% monthly in October after falling 0.7%. The September report originally showed a 0.3% decline. The retail inventories report showed 0.3% growth which was up from 0.2% growth (originally showed 0.3% growth). The international trade in goods report showed the trade deficit in October fell from $70.55 billion to $66.53 billion. Exports fell 0.7% and imports fell 2.4%. You don’t want to see trade falling if you’re looking for a strong economy, but purely in terms of GDP, it’s good to see imports falling more than exports.
The next update the GDP tracking estimates will give will be higher or has been higher if it has been revised already. On Wednesday the Atlanta Fed Nowcast was revised to show 1.7% GDP growth instead of 0.4% growth. Net exports went from hurting growth by 0.39% to helping it by 0.2%. This section partially explains this update and why the other trackers will go/have gone up as well. Trade boosted the Oxford Economics Q4 GDP growth tracker by 0.2% to 1.4%.
The top chart below shows the monthly trade contribution to GDP growth compared to the Atlanta Fed’s Nowcast estimate. The October reading shows trade helping GDP growth significantly, while the Nowcast expected a negative impact (before this latest update). The rest of the quarter might not continue at this pace, which means the Nowcast might swing from being too negative, to too positive as it only reacts to data....MORE
Today's New York Fed number wasn't as exuberant:
  • The New York Fed Staff Nowcast stands at 0.8% for 2019:Q4.
  • News from this week's data releases increased the nowcast for 2019:Q4 by 0.1 percentage point.
but we've found the Nowcast tends to lag the GDP Now figure and is more restrained, with the Atlanta and New York guesses converging after the end of the quarter.

Here's our last visit, November 18:
New York Fed Lowers Q4 GDP Growth Forecast to 0.39%

*the quote about (sometimes mis-attributed to) Ginger Roger.
The actual source was a Frank and Ernest cartoon:


"The Case of Sergei Magnitsky: Questions Cloud Story Behind U.S. Sanctions"

Back in March 8's "Death in Monaco" we intro'd with:
I have a suspicion we will be hearing more about Mr. Safra and Russia and some of his non-Russian associates as 2019 unfolds.
Whether or not that comes to pass this is a good story well told....
Although it is cutting it a bit close on the '2019' time frame, here is one of Mr. Safra's associates.
And as noted in the introduction to 2018's "The /Other/ Russia Story":
I've been meaning to tell some of the story of the "S" boys: Summers, Steyer and Shleifer, in serial form but here Mr. Warsh sketches an overview that I couldn't match.
No one who was investing in Russia during that time-period has clean hands, no one, including Mr. Browder who hit the newswires earlier today....
From Der Spiegel, a major piece:

November 26, 2019
The story of Sergei Magnitsky has come to symbolize the brutal persecution of whistleblowers in Russia. Ten years after his death, inconsistencies in Magnitsky's story suggest he may not have been the hero many people -- and Western governments -- believed him to be.
There's a tombstone in northeastern Moscow that bears the portrait of a man with a friendly yet somewhat uneasy smile. His name is Sergei Leonidovich Magnitsky. He was born in April 1972 in Odessa, Ukraine, and died in November 2009 in Moscow. To this day, 10 years after the fact, the circumstances of his death in a Russian pretrial detention facility remain unclear. 

There are two versions of what happened to Magnitsky. The more well-known version has all the makings of a conspiracy thriller. It's been repeated in thousands of articles, TV interviews and in parliamentary hearings. In this version of the story, the man from the Moscow cemetery fought nobly against a corrupt system and was murdered for it.

The other version is more complicated. In it, nobody is a hero.

The first version has had geopolitical implications. In 2012, the United States passed the Magnitsky Act, which imposed sanctions against Russian officials who were believed to have played a role in his death. The measure was signed into law by then-President Barack Obama after receiving a broad bipartisan majority. Back then, if there was one thing that politicians on both sides of the aisle could agree on, it was their opposition to a nefarious Russian state. In 2017, Congress passed the Global Magnitsky Act, which enabled the U.S. to impose sanctions against Russia for human rights violations worldwide.

The facilitator behind these pieces of legislation is Bill Browder, Magnitsky's former boss in Moscow. "When he was put to the ultimate test, he became the ultimate hero," Browder says of Magnitsky. Browder was born in the U.S.. For years, his company, Hermitage Capital Management, was one of the largest foreign investors in Russia. At the time, Browder was an advocate for Russian President Vladimir Putin in the West. That is, until he was prohibited from entering Russia in 2005.

Public Enemy No. 1
Today, Browder refers to himself as "Putin's No. 1 Enemy." From his office in London's Finsbury district, Browder coordinates a campaign he calls "Justice for Sergei Magnitsky." His goal is to get other countries to impose sanctions against Russia for what happened to his former employee. So far, four other countries have followed the U.S.' lead. For now, Browder is concentrating on Europe. He has spoken to politicians in Norway, Sweden and France. He came to Berlin in May and spoke with the chairman of the Committee on Foreign Affairs in Germany's federal parliament, the Bundestag. He also had an appointment at the Chancellery.

Browder tells a gripping story of how Magnitsky, the whistleblower, is believed to have died. This narrative is his ticket into the political sphere. It's why he's received by members of parliament, diplomats and human rights activists alike, often with open arms. They support his push for more legislation because they see it as setting an important precedent: Corrupt regimes all over the world that are violating their citizens' rights must be held accountable and made to suffer consequences in the form of entry bans and frozen accounts as laid out by the Global Magnitsky Act. The law makes it more difficult, if only slightly, for autocrats to sneer at and ignore human rights.

But there's another version of the Magnitsky saga, one that is more contradictory than Browder's telling and more difficult to summarize. The legal documents that underpin it fill dozens of binders, not only in Moscow, but also in London and New York. After sifting through thousands of pages, one might begin to wonder: Did the perfidious conspiracy to murder Magnitsky ever really take place? Or is Browder a charlatan whose story the West was too eager to believe? The certainty surrounding the Magnitsky affair becomes muddled in the documents, particularly the clear division between good and evil. The Russian authorities' take is questionable, but so is everyone else's -- including Bill Browder's.

The cases raises uncomfortable questions for the West. In Europe and the U.S., critics of Russia often argue from a position of moral superiority. But with the Magnitsky sanctions, it could be that the activist Browder used a noble cause to manipulate Western governments.

One thing that stays the same no matter which version is told, is this: Magnitsky is dead and he was the victim of a terrible injustice.....
....MUCH MORE

Natural Gas: Collapse In Futures Prices Continues

Following up on Wednesday's "EIA Natural Gas Storage Report: November 27, 2019" and Tuesday's "Natural Gas: 'There's something wrong with our bloody ships today, Chatfield'".

The front (January) futures are down another 0.108 at 2.393:

https://www.tradingview.com/x/1CjVNjV5/

Can you imagine an equivalent 3 - 4% drop in equities? The chyrons would be screaming "Dow down 1100, we're all going to die"

Programming note: the EIA will not be publishing the Natural Gas Weekly Update, they return to their regular schedule on December 5.
Here's some earlier commentary from FX Empire before today's action got into waterfall decline mode: 

Natural Gas Price Fundamental Daily Forecast – Dramatic Sell-Off Resumes
Not only are the weather patterns changing, but the country is also split with winter storms on the western United States and milder temperatures elsewhere. Earlier in the week, weather models were supportive with rising expectations for a cold December. Then the models shifted to milder before trending warmer.

Natural gas futures are under pressure early Friday, continuing the sell-off that began on November 25 at $2.743. The early selling pressure was strong enough to take out the August 5 bottom at $2.475. This was the last low before a massive short-covering rally drove the market to $2.978 on September 17.

At 02:19 GMT, January natural gas futures are trading $2.474, down $0.005 or -0.20%.
Not only are the weather patterns changing, but the country is also split with winter storms on the western United States and milder temperatures elsewhere. Earlier in the week, weather models were supportive with rising expectations for a cold December. Then the models shifted to milder before trending warmer.

As far as the spot prices are concerned, storms and cold in the western United States helped lift December prices across the nation, but January prices fell by an average of 2 cents, and the balance of winter slipped 1 penny. Could this be an indication of a mild winter ahead?

West Coast versus Rest of the Country...
....MORE 

See also Nov. 18's:
"A Warm Winter Would Be 'Catastrophic' For Natural Gas"

And:
LNG: Singapore Gas Importer Cancels Tanker Load Due To Oversupply
Following the EIA storage report December futures are down 0.016 at 2.543, the January's are off 0.022 to 2.589. There is a lot of gas around.
We'll be back with the storage numbers after the more granular Weekly Update is released this afternoon.
And as an example of the excess of supply, from Reuters, November 19...

Hurricane Watch: Nope, No Hurricanes

After the posts on Black Friday and the ARKstorm Scenario I was feeling a bit down-in-the-dumps so I thought of visiting The Telegraph's International Business Editor, Ambrose Evans-Pritchard, whose writing I once described as a "continuum that ranges from morose to suicidal."
He always cheers me up, in a "There but for the Grace of God go I" sort of way but, upon reflection, thought Eeyore might be even better for our purpose:
"It's snowing still," said Eeyore gloomily.
"So it is."
"And freezing."
"Is it?"
"Yes," said Eeyore. "However," he said, brightening up a little, "we haven't had an earthquake lately."
The House at Pooh Corner
And now the weather.
From the New Orleans Times-Picayune:
No storms expected to form during last week of Atlantic hurricane season 
The official hurricane season ends tomorrow.
Here's a look back at 2019 from the Palm Beach Post:

2019 hurricane season: 4 storms made landfall, with 1 paralyzing horror
The 2019 hurricane season was remarkable for its dichotomy with most storms either massive powerhouses or weaklings.
The 2019 hurricane season ended above average for the fourth year in a row with an abundance of fleeting systems gone in a blink and one paralyzing horror.

After the decay of Sebastien this week, the final tropical cyclone tally stood at 18 named storms, including six hurricanes and three major hurricanes of Category 3 or higher. That’s compared to an average season of 12 named storms.

It was the first time since 2012′s Hurricane Sandy that a season spawned an “S” storm, and it broke a 2005 record for tropical storms that lived 24 hours or less with seven — a conspicuous landmark some scientists attribute to ever-better technology, allowing forecasters to see the guts of a storm like never before.

“I think it’s pretty remarkable,” said Florida International University associate meteorology professor Haiyan Jiang, about the number of pop-up systems this year. “There were so many storms and 40 percent were short-lived.”...MUCH MORE
There's a cyclone aimed at the Philippines that has the potential to develop to 300 kph winds and post-tropical cyclone Sebastien seems intent on hitting the British Isles but for the re-insurance and herverzekering crowds it's time to tally the wins and losses.

El Niño: "The ARkStorm Scenario Could Flood California's Central Valley Like a Bathtub and Cost $725 Billion"

This little bit of gloom is prompted by a tweet from meteorologist Ryan Maue:
First posted May, 2011:
From the U.S. Geological Survey:
Thumbnail of and link to report PDF (41.6 MB) The U.S. Geological Survey, Multi Hazards Demonstration Project (MHDP) uses hazards science to improve resiliency of communities to natural disasters including earthquakes, tsunamis, wildfires, landslides, floods and coastal erosion. The project engages emergency planners, businesses, universities, government agencies, and others in preparing for major natural disasters. The project also helps to set research goals and provides decision-making information for loss reduction and improved resiliency. The first public product of the MHDP was the ShakeOut Earthquake Scenario published in May 2008. This detailed depiction of a hypothetical magnitude 7.8 earthquake on the San Andreas Fault in southern California served as the centerpiece of the largest earthquake drill in United States history, involving over 5,000 emergency responders and the participation of over 5.5 million citizens.

This document summarizes the next major public project for MHDP, a winter storm scenario called ARkStorm (for Atmospheric River 1,000). Experts have designed a large, scientifically realistic meteorological event followed by an examination of the secondary hazards (for example, landslides and flooding), physical damages to the built environment, and social and economic consequences. The hypothetical storm depicted here would strike the U.S. West Coast and be similar to the intense California winter storms of 1861 and 1862 that left the central valley of California impassible. The storm is estimated to produce precipitation that in many places exceeds levels only experienced on average once every 500 to 1,000 years.

Extensive flooding results. In many cases flooding overwhelms the state’s flood-protection system, which is typically designed to resist 100- to 200-year runoffs. The Central Valley experiences hypothetical flooding 300 miles long and 20 or more miles wide. Serious flooding also occurs in Orange County, Los Angeles County, San Diego, the San Francisco Bay area, and other coastal communities. Windspeeds in some places reach 125 miles per hour, hurricane-force winds. Across wider areas of the state, winds reach 60 miles per hour. Hundreds of landslides damage roads, highways, and homes. Property damage exceeds $300 billion, most from flooding. Demand surge (an increase in labor rates and other repair costs after major natural disasters) could increase property losses by 20 percent. Agricultural losses and other costs to repair lifelines, dewater (drain) flooded islands, and repair damage from landslides, brings the total direct property loss to nearly $400 billion, of which $20 to $30 billion would be recoverable through public and commercial insurance. Power, water, sewer, and other lifelines experience damage that takes weeks or months to restore. Flooding evacuation could involve 1.5 million residents in the inland region and delta counties. Business interruption costs reach $325 billion in addition to the $400 billion property repair costs, meaning that an ARkStorm could cost on the order of $725 billion, which is nearly 3 times the loss deemed to be realistic by the ShakeOut authors for a severe southern California earthquake, an event with roughly the same annual occurrence probability....MUCH MORE, including three PDF's
HT:  the WaPo's Joel Achenbach* who, writing at Slate, says:
The Century of Disasters
Meltdowns. Floods. Tornadoes. Oil spills. Grid crashes. Why more and more things seem to be going wrong, and what we can do about it.

This will be the century of disasters.

In the same way that the 20th century was the century of world wars, genocide, and grinding ideological conflict, the 21st will be the century of natural disasters and technological crises and unholy combinations of the two. It'll be the century when the things that we count on to go right will, for whatever reason, go wrong.
Late last month, as the Mississippi River rose in what is destined to be the worst flood in decades, and as the residents of Alabama and other states rummaged through the debris of a historic tornado outbreak, physicists at a meeting in Anaheim, Calif., had a discussion about the dangers posed by the sun.

Solar flares, scientists believe, are a disaster waiting to happen. Thus one of the sessions at the American Physical Society's annual meeting was devoted to discussing the hazard of electromagnetic pulses (EMPs) caused by solar flares or terrorist attacks. Such pulses could fry transformers and knock out the electrical grid over much of the nation. Last year the Oak Ridge National Laboratory released a study saying the damage might take years to fix and cost trillions of dollars.

But maybe even that's not the disaster people should be worrying about....MORE
*Joel may just be putting his profound understanding of new media into practice:

...When in doubt, go with the most hysterical headline.
(Rule one of blogging is that the End Of The World will be good for page views.)

In 1861 - '62 it rained for 45 days and the state capitol had to be temporarily relocated to San Francisco because Sacramento looked like this:

https://cdn.vox-cdn.com/thumbor/i8iUt3EfdTUnR3DUZaLCpaWYWJg=/0x0:378x450/920x0/filters:focal(0x0:378x450):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/7800123/sac1.jpg

Leland Stanford went to his gubernatorial swearing-in in a rowboat just before everyone headed downriver to S.F.
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