Monday, April 6, 2020

Norwegian Seafood Exports Continue To Trend Up

I'd have expected larger growth in tonnage with the collapse of the krone but maybe that will happen this month.
The increse in NOK value is more a function of currency moves than anything else.
From PoAndPo Agrifish, April 4:

Norway exported 213,000 tonnes of seafood worth NOK 9.6 billion in March.
This is an increase of NOK 392 million, or 4 per cent, compared with March 2019.
Topics: Norwegian seafood export

In the first quarter, 664,000 tonnes of seafood were exported, worth NOK 28.6 billion.

The value of Norwegian seafood exports has increased by NOK 2.9 billion, or 11 per cent, against the same period last year.

85,800 tonnes of salmon were valued at NOK 6.1 billion in March.

This is an increase in volume of 4 per cent, while export value increased by NOK 103 million, or 2 per cent, compared with March last year.

In the first quarter, 252,000 tonnes of salmon were exported, worth NOK 18.5 billion.

This is an increase in volume of 2 per cent, while the value has increased by NOK 1.8 billion, or 11 per cent....
....MUCH MORE, a lot of information

Hydrogen: China's Hebei Province Approves 8.75 billion yuan ($1.23 billion) In Projects

From Reuters via India's Economic Times, April 3:
China's Hebei approves $1.2 bln hydrogen production and consumption projects
Hebei, China's industrial hub, approved 43 hydrogen projects for production, equipment manufacturing, filling station and fuel cells, totalling 8.75 billion yuan ($1.23 billion), according to a statement from its provincial planner.

Home to a quarter of China's steelmaking capacity, Hebei has been seeking to upgrade its industrial structure by turning to less-polluted and higher-value-added sectors including equipment manufacturing for metro and wind turbine.

"We will support Zhangjiakou to take the opportunity of hosting the 2022 Winter Olympics to lead the hydrogen development," the Hebei Development and Reform Commision said in its statement.

Zhangjiakou aims to become the hydrogen capital in China, reaching annual hydrogen production capacity of 21,000 tonnes by 2021 and 50,000 tonnes by 2035.

Twenty-one of the total 43 hydrogen-related projects that Hebei government has approved will be located in Zhangjiakou....MORE

Shipping: Cancelled Sailings Could Add Up To $23 Billion In Lost Revenue

Oh boy.
From The LoadStar:

Carriers could find the cost of blanked sailings adding up to $23 billion
The container shipping industry could lose as much as $23bn this year from reduced demand in the wake of the coronavirus pandemic.

Demand for unitised shipping services is set to nosedive as a result of the economic devastation wrought by large swathes of the world forced into social lockdowns.

Research today from liner analyst SeaIntelligence Consulting reports that the best carriers can hope for this year would be a 10% decline in container volumes, compared with 2019.

SeaIntelligence Consulting chief executive Alan Murphy added: “In this case, their profits would decline by $6bn, compared with 2019, and cause the main carriers combined to lose $800m in 2020.

“In the worst case, carriers will see freight rates decline to the same degree experienced during the financial crisis in 2009. In this case, the main carriers will collectively lose a staggering $23bn.”....

Despite Governor Cuomo's Optimism Science Blogger Not Hopeful For Hydroxychloroquine

First up, the transcript from today's press conference via Rev Transcription Service:
....Gov. Andrew Cuomo: (21:10)

Speaker 1: (21:11)
How is the drug trial of a hydroxychlorine and chlorine going?

Gov. Andrew Cuomo: (21:21)
We’ve allowed usage of the hydroxychloroquine with the Azithromycin packs … pack in hospitals. At their discretion. The federal government is going to increase the supply to New York pharmacies. We had a 14 day limit on how much you could buy because so many people were trying to buy it. If the federal government increases the supply to New York, which they say they’re going to do, then we could lift the 14 day limit. There are a lot of people who are relying on this, who were relying on it, people with lupus, et cetera. The tests in the hospital, they won’t say that they are … there too shorter period of time to get a scientific report. Hospital administrators, doctors want to give, have a significant data set before they give a formal opinion. Anecdotally, you’ll get suggestions that it has been effective, but we don’t have any official data yet from a hospital or a quote unquote, “Study.” Which will take weeks if not months before you get an official study.

Gov. Andrew Cuomo: (22:44)
Is that a fair statement?

Speaker 2: (22:46)
So, promising, but not conclusive, it sounds like.

Gov. Andrew Cuomo: (22:49)
On which?

Speaker 2: (22:50)
On that that type of treatment in hospitals.

Gov. Andrew Cuomo: (22:53)
Yeah. There has been anecdotal evidence that it is promising. That’s why we’re going ahead. Doctors have to prescribe, but there are some people who have preexisting conditions where it doesn’t work or they’re taking medication that’s not consistent with this treatment. But, anecdotally it’s been positive. We’ll have a full test once they have a large enough sample and data set, Jesse. But, anecdotally it’s been positive. And if we get an additional supply we can, which the federal government says they’re going to send, I’m going to mention it to the president actually when I call him this afternoon, with the comfort, I’m going to make a note right now, if they increase the supply, we can lift the 14 day limit ban....MORE
Also available at CNN:
Aired April 6, 2020 - 12:30   ET

And from the In The Pipeline blog at the journal Science:

Hydroxychloroquine Update For April 6
By Derek Lowe 6 April, 2020
There’s a lot of news to catch up on, and to keep things straight I’ll divide the hydroxychloroquine part out into this post, and cover others in the next one. My previous reviews of the clinical data in this area are here.
First up is this study from France. It’s another very small one, and all the usual warnings apply because of that. It’s from a team at the University of Paris and Saint-Louis Hospital there, and they evaluated 11 consecutive patients admitted there with the same course of treatment as the Marseilles group first reported (hydroxychloroquine 600mg/day and azithromycin, 500mg the first day and 250 mg/day thereafter). The mean age of their patients was 58.7 years, and (notably) 8 of the 11 had significant comorbidities (two obese, 5 with various forms of cancer, one with HIV). That’s a tough population, and unfortunately, the HCQ/AZ combination did nothing. One patient died (and two others went on to the ICU) and of the ten remaining, 8 were still positive for the virus by nasal swab on days 5/6 after treatment. One patient had to discontinue therapy on day 4 because of QT prolongation, a known side effect of hydroxychloroquine that can lead to fatal heart arrhythmia.
So while this is a small study and not a perfect match, it provides no evidence to show that the HCQ/AZ combination had any benefit at all. While we’re on the subject of QT prolongation, there’s this preprint from a medical team at NYU that was also treating patients with the same combination of drugs. In 84 patients, they found notable QT prolongation in about 30% of them, and another 11% were to a level (>500 milliseconds) that put them at a high risk for arrhythmia. This group’s mean age was 63, 74% male. No cancer patients in this group, but 65% did have hypertension and 20% were diabetic (which from many reports is actually a reasonable look at the patients most likely to progress to severe disease). The strongest predictor of dangerous QT numbers was the development of renal trouble while on the drug combination.

There are a couple of other things that need to be noted. One is that hydroxychloroquine itself actually lowers the activity of the innate immune system; that’s why people take it for lupus and for rheumatoid arthritis. Many people are saying that perhaps it will work best if taken early in the course of infection, but this effect (which is mediated through TLR receptors) should be kept in mind. Another potentially important point is raised in this preprint – which, it has to be said, is not human data but mouse toxicology. But with that in mind, the authors report what looks like a bad interaction in that species between HCQ and metformin. And by “bad”, I mean about 30% mortality. If this translates at all to humans, it could be bad news, because (as mentioned above) diabetics look like a high-risk group and many patients may well have been taking metformin when they present at the hospital. We need more information on this. An investigational drug combination that showed this effect in mice would not move forward in the normal course of things.

Finally, I would like to point out this preprint from a multi-country team (Denmark, Netherlands, UK) which goes back over the original Marseilles report and reanalyzes its statistics. The problems that many noted with that paper show up in detail here, and the lessons that you take from it can vary a great deal depending on the details that were not well reported or characterized:....
....MORE, and as usual the comments run the gamut from insightful to snarky. 

Programming Note: We'll Be Doing A Quick Victory Lap Tomorrow, April 7, If You Want To Get Your Shorts On

Hubris, very dangerous.

After the close on March 20th we posted "It's Time To Buy Some Stocks" and left it hanging at the top of the blog that night and all day Saturday the 21st as I went fundraising.
The earliest you could have acted was Sunday evening as the futures gapped down to what has been the to-date lows:
DJIA 18,213.65 currently 22,262.14 up 1,209.61 on the day (+5.75%)
S&P 500 2,191.86 currently 2,626.55 up 137.90 (+5.54%)
You have been warned.

How Morgan Stanley Called the Exact Moment of The Broker/Dealer's Peak (MS; XBD)

Goldfinger Co-Star Honor Blackman Has Died

Goldfinger consistently ranks in the top five of the 24 films with Rotten Tomatoes giving it a #1 and as Timeout New York (#2) puts it:
...Theme song: It simply doesn’t get any better than Shirley Bassey’s window-rattling tribute to the “man with the Midas touch,” punctuated by those slinky horn blasts.
The Bond girl: Honor Blackman’s rough-and-tumble romantic interest made a good match for Connery’s Bond and had a name that launched a thousand playground jokes: Pussy Galore.
The killer moment: Strapped to the laser table: “Do you expect me to talk?” “No, Mr. Bond, I expect you to die!”
From the BBC:

James Bond actress Honor Blackman dies aged 94
Honor Blackman, the British actress who played Pussy Galore in the James Bond film Goldfinger, has died at the age of 94.

In a statement, her family said she died peacefully of natural causes at home in Lewes, East Sussex.
Blackman was also known for playing Cathy Gale in the 1960s TV series The Avengers opposite Patrick Macnee.

The pair had a novelty hit with 1964's Kinky Boots, which reached the Top 10 in 1990.
Her other roles included Hera in Jason and the Argonauts and Laura West in 1990s TV series The Upper Hand....

She was very, very good.
A couple other sites IMDb: #1, Guardian #2.

And since we're going down Memory Lane, from America's Finest News Source:

Can Anyone Truly Be Said To ‘Own’ The Complete James Bond Collection?
While out shopping for a friend’s birthday gift last weekend, I came upon an item I certainly wouldn’t mind having for myself—a DVD box set containing all 23 official James Bond films. As a huge 007 fan, I was amazed, and I got to thinking how great it would be to own every installment in the series. But then a difficult question occurred to me: Can it ever be said that anyone truly “owns” the complete James Bond collection?

What would that even mean, anyway?

As much as I wanted to exchange money for the compilation of digitally remastered, widescreen motion pictures and declare it my property, I found it impossible to look upon the set without asking myself, “Who am I to exert any rights of ownership over the fearless exploits, memorable one-liners, and sexual conquests of the world’s most cunning secret agent? Could possessing a mere receipt for such a transaction confer upon me ‘every pulse-pounding Bond moment from Connery to Craig,’ as the box proclaimed?”

Surely if I took home every Bond masterwork, from Dr. No up to Skyfall, I would at most be borrowing these great pieces of cinema. It would be patently absurd to believe that paying $199.99 for this deluxe, one-of-a-kind collector’s edition would make the heart-stopping Golden Gate Bridge climax of A View To A Kill “mine.” Yes, I could technically hold each one of those appealingly packaged DVDs in my hands, but no reasonable person would contend that their iconic protagonist, their ingenious villains, or the wildly inventive gadgets from the mind of Q—including the ski pole rifle from The Spy Who Loved Me and Octopussy’s TV watch—belonged to me.
In reality, we each carry our own complete James Bond collection within us.
No, the legacy of Goldfinger, of Thunderball, of Quantum Of Solace must be a shared cultural inheritance. The claim of a single individual over the unforgettable gun barrel title sequence—let alone the entire franchise—has no merit. So long as you and I both cultivate an appreciation for 007’s vast repertoires of quick comebacks and daring feats, then each of us has an equal right to them. One might even argue that the James Bond cinematic catalogue belongs to all of us—all who love the cocksure swagger and the impeccable style of that iconic MI6 agent with a license to kill.

Unfortunately, such a position is deeply problematic.
In reality, we each carry our own complete James Bond collection within us....

Followup: Organized Crime In the Time Of Corona, II

In last Tuesday's "Organized Crime In The Time Of Corona" I made a couple statements without links and was challenged on them over the weekend. From the top:
A couple days ago the New York Post had a story that I didn't understand, "How coronavirus cripples the New York Mafia" so we didn't link.
This though, this I understand.
Crooks from the lowliest mugger to the top of the corrupt government heap in Africa (and elsewhere) are opportunistic. Amazingly so. They see and act on criminal opportunities that regular people are simply blind to.
I was asked why I highlighted "Africa".
This December 2019 Reuters story probably had something to do with it:
Angola retrieves more than $5 bln in stolen assets amid crackdown on graft
That's one country.
And those are just the recoveries.
I mean it does happen everywhere (hence "elsewhere"). I could have chosen the Socialist Paradise of Venezuela where the country's richest citizen ($4.2 billion net worth) is Maria Gabriela Chavez.
Thank you daddy.

The other point my interlocutor raised was regarding:
Now I understand the lack of action in gambling mentioned in the NYP article. And I understand the Mexican cartels running into logistical problems procuring their fentanyl  from China. Ditto for their methamphetamine precursors. But you have to assume they've already made adjustments. These people are adaptable, like a virus.
They are not sitting at home waiting for their government check. 
For that I'll cite the New York Post, March 28:
Coronavirus pandemic drives up price of heroin, meth and fentanyl

I once started to argue with one of my mentors and when he got tired of me yapping like a demented puppy he looked me in the eye and said "Don't dispute me."
Although that is not something I would ever say, I sometimes understand where he was coming from.
[I know, preposition, see Churchill et al.]

Finally regarding criminal creativity:
Coronavirus scammers use fake 'pop-up' COVID-19 testing sites to steal DNA, personal information in Kentucky 
State and local officials in Kentucky are warning against "pop-up" COVID-19 testing sites which offer quick results for cash.

A self-proclaimed medical marketing company set up makeshift testing sites outside various churches in Louisville with workers dressed head to toe in hazmat gear.

Metro Council President David James and Louisville advocates have been hunting down who they call fake COVID-19 testers, reported WDRB.

Local officials said the scammers are charging more than $200 a test and using people's DNA and personal information.

"It's really Medicaid fraud, is what it actually is. There is no reason that you should spend $240 dollars for a COVID test," James said. "And they're using the same gloves on Person A that they used on Person B, that they used on Person C."....MORE
Got that?
They are pocketing cash, they are collecting DNA for God knows what reason, they are gathering personal information and they may be submitting claims to Medicaid.
That's creative.

"The Fight Against COVID-19: “Bending the Curve” & Then What?"

Ours is not to reason why,
Ours is just to buy and buy.

From Wolf Street, April 4: 

Eradicate the virus — without a vaccine? Manage infection rates to let the population “build immunity through suffering” until a vaccine is available? How can we revive the economy without risking thousands of deaths in fresh outbreaks?

By Wisdom Seeker, a WOLF STREET Commenter with a physical sciences Ph.D., San Francisco Bay Area: 
I think we’re now at the turning point in the fight against COVID-19. Everyone’s now acting to stop the spread, and the early hot spots in Europe, North America, and Australia are seeing signs of progress, just as the Asian nations did earlier. There is a long road ahead, and we have to decide which route to take, but Western societies are showing they can handle this too. In this post I’m going to show updated versions of my three favorite graphs, which tell the story and lead to the single biggest public policy-making challenge many nations may face this decade.

Bending the Curve in California: Just-in-Time Deliverance?
The graph below shows confirmed cases in Los Angeles, the San Francisco Bay Area, and California as a whole, with South Korea and Italy as contrasting examples. The vertical axis is a log scale, so exponential growth shows up as a straight line. Data sourced from the Johns Hopkins database and the California state and individual county reports.

Los Angeles lost to the Bay Area on April 2 and became California’s new COVID-19 hot spot. Shelter in place has begun working for the Bay Area, but confirmed cases have still doubled in the past week. So on March 31, our local public health officials released what I call “Shelter-in-Place 2.0,” a tighter set of rules, to try to avoid the hospital-overload scenario which hit Wuhan, Milan, Madrid, and now New York. Face masks are also becoming trendy outside the home! Will the Bay Area get a “just-in-time deliverance”, or is the worst still yet to come?

Locally, Santa Clara County – the heart of Silicon Valley – reports 30% of ICU space in use by COVID patients, 38% used by other patients, and 32% available. So they can take a doubling in COVID ICU cases without overloading, and other Bay Area hospitals have headroom too....

Some Canines Just Aren't Cut Out To Be Service Dogs

Via Kim who comments elsewhere:
And Ryker the dog:
Here's a slightly longer version:

And a (slightly) more successful Ryker:

Pythagoras Does Social Distancing

Pythagoras does social distancing:

Don't know who the geometer (geomemeter?) is but a tip o'the Climateer cap to ya

The First Catastrophe Bond Rating Action Due to the Covid-19 Coronavirus Pandemic

I did not realize there were any of these things around. Truth be told I was looking to see if there was any early Atlantic hurricane season action.
From Artemis, April 3:

Swiss Re’s Vita Capital VI mortality bond on negative watch on Covid-19: S&P
The first catastrophe bond rating action due to the Covid-19 coronavirus pandemic is unsurprisingly related to one of the few mortality cat bonds left in the market, Swiss Re’s late 2015 Vita Capital VI Limited (Series 2015-1) transaction, which has been put on a negative watch by S&P Global Ratings.

The Vita Capital VI excess or extreme mortality cat bond deal provides its sponsor, global reinsurance player Swiss Re, with a fully collateralised and capital markets backed source of multi-year extreme mortality retrocession.

As a result, the Vita Capital VI mortality bonds are exposed to potential losses should deaths due to the coronavirus pandemic rise so significantly that they elevate the rate of mortality claims experienced by Swiss Re’s life reinsurance business.

The transaction saw a single $100 million tranche of notes issued that are exposed to extreme mortality events in Australia, the UK and Canada across a 5 year term that began in January 2016.
The mortality cat bond notes can be triggered by any extreme mortality event that raises an age and gender weighted reference mortality index above predefined trigger points.

The $100 million of Vita Capital VI notes launched to investors with an expected loss of 0.99% and paying them a 2.9% coupon and were rated ‘BB (sf)’ by S&P at the time of issuance.
Now, given the threat posed by the Covid-19 coronavirus pandemic, S&P has placed its ‘BB (sf)’ rating on the Class A notes issued by Vita Capital VI Ltd. on CreditWatch with negative implications.
“The notes could be at risk of triggering if the COVID-19 pandemic leads to a significant increase in deaths in either the U.K., Canada, or Australia,” S&P explained.

Adding, “The risk period ends on Dec. 31, 2020. We currently believe that there is such significant uncertainty around the total number of deaths caused by the pandemic in any of the three countries that it is difficult to determine the likelihood of a rating action at this stage.”

Interestingly, S&P specifically call out the UK government for its change in strategy in how it dealt with the coronavirus outbreak, referencing the initial push for a ‘herd immunity’ approach by the current leadership there....

The bean body counters will have to tell us if there is any excess mortality in Her Majesty's big (landmass) Commonwealth countries, to date it doesn't appear that there is.
In the UK the count is probably inching closer to the triggers.

Creighton Uni's March Mid-America Business Confidence Falls to Record Low: More Than One-Third of Manufacturers Switched to Domestic Vendors

Thinking about some of the ag names but not doing anything yet, we'll see how the month unfolds.
As always the key is the bottom of the cash-flow pyramid, prices realized at the farm gate for commodities and crops on which everything else, up to and including land prices are just a leveraged bet.
From Creighton University's Heider College of Business, April 1:
March survey highlights:
  • The Business Conditions Index plummeted below growth neutral for the month.
  • Almost two-thirds of supply managers reported that the coronavirus produced shipping problems to and from vendors.
  • Employment index fell to its lowest level in 10 years.
  • Business confidence plunged to a record low.
  • More than half, or 54.3% indicated that the virus had increased worker absences for the month.
  • More than one-third, or 34.2%, of manufacturers switched to a domestic vendor.
OMAHA, Neb. (April 1, 2020) – The March Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas, plummeted for the month reaching its lowest level since September 2016.

Overall index: After advancing above growth neutral 50.0 for three straight months, the Business Conditions Index, which ranges between 0 and 100, tumbled to 46.7 from February’s 52.8.
“According to Creighton’s March survey of regional manufacturing supply managers, covid-19 had a smaller impact on the manufacturing sector than other areas of the economy more directly tied to the consumer. I expect negative impacts for manufacturers to worsen in the next month since almost two-thirds of supply managers reported that the coronavirus produced shipping problems to and from vendors," said Ernie Goss, PhD, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business.  

Additionally, Goss said, “Creighton’s March survey showed that eight of 10 supply managers reported that the coronavirus had caused the cancellation of business meetings, and 54.3% indicated that the virus had produced worker absences for the month.” 

Several supply managers reported that the coronavirus had produced shipping delays which resulted in inventory depletions.

Employment:  The March employment index slumped to 34.7 from February’s already weak 46.4. One supply manager reported, “Recently, I laid off 10% of workforce in anticipation of further downturns.”
“Last Thursday, the U.S. Department of Labor reported the number of initial claims for unemployment insurance for the nine-state region rose to 272,540 from 16,628 the week before. This represents more than a 16-fold increase in initial claims compared to a lower 11-fold increase for the rest of the nation,” said Goss.

Wholesale Prices: The wholesale inflation gauge for the month indicated only modest wholesale inflationary pressures with a wholesale price index of 55.2, down from 61.3 in February.

Confidence: Looking ahead six months, economic optimism, as captured by the March Business Confidence Index, plunged to a record low 14.5 from February’s 51.4 and January’s 58.8.
Said one supply manager, “My answers (responses) are just a snapshot in time and might change tomorrow.”...

Sunday, April 5, 2020

Meanwhile in Sweden: Energy Minister's 'Russian Troll Attacks' Turn Out to Be 'Ordinary Swedish Grandmother'

From Sputnik:
Anders Ygeman's claims of an attack on his Facebook page by “Russian trolls” over the future of 5G networks were previously dismissed by the Russian Embassy as paranoia. In reality, the over 2,000 comments turned out to have a local explanation.
Swedish Minister of Energy and Digital Development Minister Anders Ygeman has accused Russia of “destabilising the Swedish 5G debate” and targeting him in a Facebook attack. However, Swedish national broadcaster SVT found no foreign clues, as the over 2,000-comment long thread turned out to have been originated by an “ordinary Swedish grandmother”....MORE
I miss Russia, Russia, Russia.

I saw today that Trump has been interviewed on Fox News 76 times but that he still trailed Michael Avenatti's 121 times on CNN and even Avenatti's 108 interviews on MSNBC.
Good times.

"Roller-coaster ride goes on for crude-tanker stocks" (FRO; TNK; EURN)

From American Shipper, April 3:
It was all setting up so nicely for crude-tanker stocks until those Trump tweets on Thursday morning …
Shares of companies that own very large crude carriers (VLCCs; tankers that carry 2 million barrels of crude) had been climbing steadily since early March, pulled upward by spot rates of over $200,000 per day and expectations for a spike in floating-storage contracts.
Then, like a roller coaster that rumbles over the top of the slope and gathers speed on the other side, the stocks came back down. 
At 10:30 a.m. Thursday, the U.S. president tweeted that Saudi Arabia and Russia would cut production by 10 million barrels per day (b/d), then: “Could be as high as 15 … GREAT news for everyone!”

Actually, not everyone. Reduced output equates to fewer VLCC cargoes and less future storage. Merely talking about production cuts can immediately incentivize tanker owners to accept lower rates.
Between the tweets and Friday’s closing bell, crude pricing rose 30% and VLCC stocks went in the opposite direction, despite the fact that VLCC spot rates still exceed $220,000 per day: DHT (NYSE: DHT) fell 22%, Frontline (NYSE: FRO) 21%, Euronav (NYSE: EURN) 16% and International Seaways (NYSE: INSW) 13%.

The wild trading on Thursday was way out of proportion to fundamentals, Evercore ISI analyst John Chappell said in an interview with FreightWaves on Friday.

“Everything was exacerbated by the computers [algorithmic trading] and the ETFs [exchange-traded funds]. Should oil really have been up by 47% at one point yesterday and tanker stocks down at one point by 25%? No. There was trading off of a headline and then a piling-on.”....

Do tell.

FRO Frontline Ltd. daily Stock Chart
TNK Teekay Tankers Ltd. daily Stock Chart
EURN Euronav NV daily Stock Chart
 (all via FinViz)

"Tanker Rates Double as Oil Contango Spreads"
"Saudi Arabia Tanker Power Play Could Backfire as Oil Demand Shrinks"
"Glencore Charters One of the World’s Biggest Tankers to Store Oil at Sea" (EURN)
"Oil’s big storage problem" (TNK; FRO; EURN) 

An Electric Flying Taxi That Addresses The Death Zone Problem

Our boilerplate (since '16!) introduction:
As the only analysts covering the nascent as-yet-theoretical autonomous electric flying taxi market we intend to be the the go-to source for all things autonomous electric flying taxi and/or theoretical....
And from New Atlas an electric vertical take-off/landing design that I might actually climb aboard:

Jaunt’s ROSA gyrodyne: The first eVTOL air taxi that actually looks safe!/format/webp/quality/90/?
This eVTOL air taxi design looks like a weird helicopter/plane hybrid, but it's the safest of all the eVTOL designs we've ever seen, and it has another killer advantage in that it requires no special certification. That's huge news in the emerging 3D commuting market, because it could make this thing much, much cheaper to get off the ground.

To understand why this thing is such a great idea, let's recap two of the main hurdles that every other eVTOL designer is facing: safety and certification. The safety issue seems huge to us, although many of the eVTOL manufacturers we speak to don't seem to see it as insurmountable. In a total failure scenario, all eVTOLs designed around multiple small rotors have a bit of an issue: they'll simply plummet to the ground.

You can solve this problem using a ballistic parachute that fires out and brings them down gently, but below a certain altitude, maybe 120 feet or so, these 'chutes don't have time to fully open and deploy, leaving these aircraft negotiating what we've been calling a "death zone" every time they take off and land. It's only for a short amount of time, but the consequences of total failure in this zone would be equally total, and just one such crash in the early days of air taxi services would undermine passengers' faith in the entire eVTOL sector.....MORE
I'm not sure I care for the "let our mums ride" line.
The Uber livery is also a bit of a turnoff but truth be told our first use of the intro was in Oct. 2016's "Uber to Challenge Airbus in the Autonomous Electric Flying Taxi Business".

And relatedly:
Dec. 2019 
ICYMI: Chinese Autonomous Electric Taxi Co., EHang, Did Their U.S. IPO Last Week (EH)
Dec. 2019 
"Footage reveals hydrogen-powered 120mph 'drone' that’s a cross between an aircraft and SUV that its creators say will form a 'fleet' of flying taxis, cargo carriers and ambulances"
January 2019 
"Boeing's self-flying taxi completes its first flight" (BA)
December 2018
"Morgan Stanley says market for self-flying cars could rise to $1.5 trillion by 2040"
July 2018 
Rolls-Royce Presents Electric ‘Flying Taxi’ at Farnborough Airshow
February 2018
Airbus Tests Its Autonomous Flying Taxi
Nov. 2017
Sept. 2017
[Didn't happen]

Old School Logistics: CMA CGM Takes the Long Way Around

From The LoadStar:
According to this report in Splash247, shipping lines are pulling out a tactic last used in the dark days of the global financial crisis: sending Asia-North Europe vessels via the Cape of Good Hope rather than transit the Suez Canal. The strategy has two effects – it saves a $500,000 transit fee and the longer sailing time soaks up unwanted capacity. “Most of the cargo would simply take up storage space if it arrived, within its normal schedule, to its likely coronavirus locked-down destination.”
Also at The LoadStar:
Carriers cancel low-sulphur surcharges as fuel prices drop – along with demand

Shipping: "Ocean container volumes are about to fall off a cliff"

From FreightWaves, March 26:
The new market outlook of U.K.-based consultancy Maritime Strategies International (MSI) reads like a Stephen King novel geared toward container-line executives. It’s not exactly feel-good reading for cargo shippers either. Cheap freight rates are only attractive if they don’t trigger another Hanjin Shipping-style bankruptcy.

The near-term outlook for the container-ship industry has deteriorated rapidly following the spread of COVID-19 cases worldwide and subsequent efforts to limit the number of deaths and cases,” warned MSI in its monthly outlook released Thursday.

“There seems little doubt that containerized trade will shrink in 2020, with near-term rates of decline potentially approximating — or even exceeding — those seen during the financial crisis,” it said.

Mainline trades
In the mainline east-west trades (trans-Pacific, Asia-Europe), MSI sees “extraordinary downward pressure given a looming collapse in consumer spending in Europe and increasingly, North America.” It cited “near-unprecedented headwinds” for European imports, with the trans-Pacific to face the same shock as the Asia-Europe lane, but with a lag.

“While liftings data from March should remain reasonably positive, thereafter it will become a question of ‘how bad can it get?’” said MSI, which believes the full-year 2020 slump won’t be as severe as 2009’s but that the second quarter of 2020 could match financial-crisis-era lows.
The consultancy projects that the total volume in March-May will fall 17.8% year-on-year on the Asia-Europe route, 15% on the trans-Pacific (U.S. West Coast) route and 13% on the trans-Pacific (U.S. East Coast) route.

Non-mainline trades
“There is no trade that will escape the impact of the COVID 19 global recession,” stressed MSI, which noted that non-mainline trades are highly exposed due to capital flight from emerging markets, the surge in the value of the U.S. dollar and sliding commodity prices....MORE

Seamanship: Don't Be Ramming The Big Boat—Part II

Following up on yesterday's "Seamanship: Don't Be Ramming The Big Boat".
Here's another person's take on the Venezuelan Naval defeat:

There's also a bit of video but I really prefer Canocola's take on things
(yesterday's is pretty good as well)

This is just nuts.

U.N. "FAO Food Price Index fell further in March"

From the Food and Agriculture Organization, April 2:
Release date: 02/04/2020
» The FAO Food Price Index* (FFPI) averaged 172.2 points in March 2020, down 7.8 points (4.3 percent) from February, though still 4.6 points (2.7 percent) higher than in March 2019. The sharp decline in March marked the second month-on-month drop in the value of the FFPI, largely driven by COVID-19 pandemic-demand contractions. While the latest fall in prices was most pronounced for vegetable oils and sugar, the other sub-indices also registered lower values in March.
» The FAO Cereal Price Index averaged 164.6 points in March, down 3.2 points (1.9 percent) from February and now almost at the same level as in March 2019, as export prices of all the major cereals, except rice, fell for the second consecutive month. Wheat prices averaged lower in March compared to February despite worries over COVID-19, which boosted trade activity, especially by countries in North Africa, and the imposition of some export limitations, albeit small, by the Russian Federation. Large global supplies, combined with generally favourable crop prospects, kept international wheat prices under downward pressure.  Similarly, in coarse grain markets, international maize prices registered a further decline in March, pressured by not only large supplies but also much weaker demand especially from the biofuel sector stemming from a plunge in crude oil prices. By contrast, international rice prices extended their upward trend into a third straight month, reaching their highest level since June 2018, as Indica quotations were buoyed by stockpiling spurred by concerns over the COVID-19 pandemic and news of Viet Nam temporarily halting new export contracts to review its domestic supply situation and export policy.
» The FAO Vegetable Oil Price Index averaged 139.1 points in March, dropping by 19.0 points (or 12.0 percent) in one month and marking the lowest level since October 2019. The continued decline in March mainly stemmed from fresh falls in palm oil prices– for the second consecutive month – which was fuelled primarily by plunging crude mineral oil prices and rising uncertainties over the impact of the COVID-19 pandemic on global demand. Other oils followed the downward trend in palm oil. Soy and rapeseed oil prices were also affected by, respectively, higher than expected crushings in the United States of America and eroding demand for biodiesel in the EU.

»The FAO Dairy Price Index averaged 203.5 points in March, down 6.4 points (3.0 percent) from February, declining for the first time after registering continuous increases for four months. At this level, the Index is also down marginally from the corresponding period last year. In March, markets for milk powders were generally weaker, with skim milk powder (SMP) prices falling the most, followed by whole milk powder (WMP), cheese and butter. Global import demand for SMP and WMP dampened considerably, mainly due to disruptions in dairy supply chains with the imposition of containment measures to control the spread of Covid-19. Butter and cheese price quotations also eased in March, albeit moderately, due to weak import demand for spot supplies, notwithstanding seasonally limited export availabilities in Oceania. 

» The FAO Meat Price Index* averaged 176.0 points in March, down 1.0 points (0.6 percent) from February, falling for a third consecutive month, though still 11.6 points (7.0 percent) above its level in the corresponding month last year. In March, international quotations for ovine and bovine meats continued to fall, reflecting large export availabilities, especially in Oceania, as producers offloaded herd stocks earlier than anticipated, while imports eased in the face of logistic bottlenecks moving products overseas. By contrast, pig meat quotations rose due to overall market tightening, as internal and foreign demand surged, while logistical problems and restrictions on the movement of workers affected meat processing. Poultry meat quotations remained largely stable, as supplies were adequate to meet current import demand, although exports began to show signs of slowing....

"Mt. Fuji eruption could cripple Tokyo with massive amount of ash: disaster simulation"

Time to update the autotrade algos.
Machine readable keywords: Fuji. Fuji. Fuji
And not apples.

From The Mainichi:
TOKYO -- A major eruption of Mount Fuji could cripple the Tokyo metropolitan area in just a few hours with up to 490 million cubic meters of volcanic ash, some 10 times the amount of waste generated by the 2011 Great East Japan Earthquake and tsunami, a simulation announced on March 31 by a working group of the government's Central Disaster Management Council has shown.
【Related】Mt. Fuji eruption could leave up to 10 cms of ash in central Tokyo, severely damage economy【Related】Mt. Fuji eruption could leave up to 10 cms of ash in central Tokyo, severely damage economy 
【Related】Water from lake near Mt. Fuji may be flowing into ponds 6 km away
【Related】Mt. Fuji had possible simultaneous eruptions in past: researchers 
Depending on the direction of the wind, the ash could bring railway services to a halt over a wide area of the capital sphere, including Tokyo and Kanagawa Prefecture, and also cause power cuts and cut off water supplies, throwing society into disarray.

The simulation was conducted to determine the effect of ash on railway services and lifelines such as electricity. The government is set to begin considering ways to handle such an event alongside relevant ministries and agencies. In its simulation, the Central Disaster Management Council envisaged an eruption on the scale of the 1707 Hoei eruption of Mount Fuji, producing a large amount of ash that would continue to fall for 15 days.

Researchers estimated the effects that different heights of volcanic ash would have, based on similar eruptions that have occurred in the past in Japan and overseas. Because the areas that would get affected by falling ash would differ depending on the direction of the wind, the council separated its simulation into three scenarios: 
(1) with the wind blowing strongly from the west, like during the Hoei eruption; (2) with a strong west-southwest wind directly hitting Tokyo, having a major effect on the capital; and (3) with comparatively large changes in the wind, which could also cause damage on the western side of Mount Fuji. 
The council also mapped the effects of such damage over time with and without rain....MORE


If the market starts the week as troubled as it looked Friday evening this may come in handy.

There are three basic approaches. In order of ease of use they are: to use an edged surface under the diaphragm - chair, countertop - use a flat surface, floor, or use your fists as you would on another person.
From the National Foundation of Swallowing Disorders:
[NFOSD note: This article is for informational purposes only and should not be used as a substitute for consultation with and expert training by an appropriate health care professional. Also, an Internet search on “self Heimlich maneuver” will result in additional articles and videos on this topic.]
self Heimlich 10_7_09We read in newspapers or online every day about someone’s heroism in administering the Heimlich maneuver to someone choking on food.

But suppose that other person were not present? What then? Would they simply choke to death? If that person were YOU, what would you do?

If you can’t speak, breathe, or cough, do the Heimlich maneuver — on yourself.

Try not to panic. If you have an emergency contact device, trigger it immediately. Then carry out the “self-Heimlich maneuver” without further delay.

Stand against a sink, countertop, desk, or sturdy chair.  Press your upper belly firmly against its upper edge, grasping its sides with both hands. Thrust yourself forward vigorously, bending slightly at the waist. Repeat as needed.

If a desk or other suitable structure is not available, use your own wrapped fist to carry out the abdominal thrusts....MORE

Using a chair of countertop:

Using the floor:

note: this is not a prostration, penitential or otherwise. This is a full-on fútbol flop.

WikiHow has more on the fist method.

Now we wait for the futures to open.

And remember, give it everything you've got. This is what you've practiced for. This is your moment to shine!

Robert J. Shiller: "The Two Pandemics"

As readers who have been with us for a while know, we are fans of 'ol Doc Shiller.
From Project Syndicate, March 31:

Predicting the stock market at a time like this is hard. To do so well, we would have to predict the direct effects on the economy of the COVID-19 pandemic, as well as all the real and psychological effects of the pandemic of financial anxiety. The two are different, but inseparable.
NEW HAVEN – We are feeling the anxiety effects of not one pandemic but two. First, there is the COVID-19 pandemic, which makes us anxious because we, or people we love, anywhere in the world, might soon become gravely ill and even die. And, second, there is a pandemic of anxiety about the economic consequences of the first.

These two pandemics are interrelated, but are not the same phenomenon. In the second pandemic, stories of fear have gone so viral that we often think of them constantly. The stock market has been dropping like a rock, apparently in response to stories of COVID-19 depleting our lifetime saving unless we take some action. But, unlike COVID-19 itself, the source of our anxiety is that we are unsure what action to take.It is not good news when two pandemics are at work simultaneously. One can feed the other. Business closures, soaring unemployment, and loss of income fuel financial anxiety, which may, in turn, deter people, desperate for work, from taking adequate precautions against the spread of the disease.Moreover, it is not good news when two contagions are, indeed, global pandemics. When a drop in demand is confined to one country, the loss is partially spread abroad, while demand for the country’s exports is not diminished much. But this time, that natural safety valve won’t work, because the recession threatens nearly all countries.Many people seem to assume that the financial anxiety is nothing more than a direct byproduct of the COVID-19 crisis – a perfectly logical reaction to the disease pandemic. But anxiety is not perfectly logical. The pandemic of financial anxiety, spreading through panicked reaction to price drops and changing narratives, has a life of its own.The effects financial anxiety has on the stock market may be mediated by a phenomenon that psychologist Paul Slovic of the University of Oregon and his colleagues call the “affect heuristic.” When people are emotionally upset because of a tragic event, they react with fear even in circumstances where there is no reason to fear.

In a joint paper with William Goetzmann and Dasol Kim, we found that nearby earthquakes affect people’s judgment of the probability of a 1929- or 1987-size stock-market crash. If there was a substantial earthquake centering within 30 miles (48 kilometers) within the previous 30 days, respondents’ assessment of the probability of a crash was significantly higher. That is the affect heuristic at work.It might make more sense to expect a stock-market drop from a disease epidemic than from a recent earthquake, but maybe not a crash of the magnitude seen recently. If it were widely believed that a treatment could limit the intensity of the COVID-19 pandemic to a matter of months, or even that the pandemic would last a year or two, that would suggest that the stock-market risk is not so great for a long-term investor. One could buy, hold, and wait it out.But a contagion of financial anxiety works differently than a contagion of disease. It is fueled in part by people noticing others’ lack of confidence, reflected in price declines, and others’ emotional reaction to the declines.

A negative bubble in the stock market occurs when people see prices falling, and, trying to discover why, start amplifying stories that explain the decline. Then, prices fall on subsequent days, and again and again. ...

Okay, long suffering reader also knows: It is very, very dangerous when analysts venture into seismology, with Joe Granville being the poster child. See:
Long-time bear joins bulls: Controversial Joe Granville says Dow could rise 800 points
I didn't realize he was still alive. There was a time when he moved markets, then he started predicting earthquakes. Then he called the crash of 2000 within 24 hours of it's March 10 Nasdaq peak of 5048. After the MW piece are a story, a stub and a bit of history.....
That was posted on  August 7, 2008, not a good time to be going bullish.
If interested see also "Joe Granville Predicts Another Earthquake: 'Dow Jones INDU to 8000'"
That was  January 24, 2012 so ditto on the timing, this time going bearish.

Also, from the New York Times:
NOTES ON PEOPLE; As a Seismologist, He's a Good Stock Analyst

And another guy who went that way:
November 2017
Jason Zweig: "Can Fund Manager Bill Miller Use Earthquakes to Predict the Market?"

The U.N. Would Like A Global Tax of 10% of World GDP To Address Coronavirus

It's a moving (and declining) target but a rough estimate of Global World Product in 2019 was $87 trillion nominal; $142 trillion PPP.
Here's the letter from Secretary-General of the UN, António Guterres:

"The recovery from the COVID-19 crisis must lead to a different economy"
31 March 2020
The world is facing an unprecedented test.  And this is the moment of truth.
Hundreds of thousands of people are falling seriously ill from COVID-19, and the disease is spreading exponentially in many places,

Societies are in turmoil and economies are in a nose-dive.

The International Monetary Fund has reassessed the prospect for growth for 2020 and 2021, declaring that we have entered a recession – as bad as or worse than in 2009.

We must respond decisively, innovatively and together to suppress the spread of the virus and address the socio-economic devastation that COVID-19 is causing in all regions.

The magnitude of the response must match the scale of the crisis -- large-scale, coordinated and comprehensive, with country and international responses being guided by the World Health Organization.

And it must be multilateral, with countries showing solidarity to the most vulnerable communities and nations.

The message of the report we are issuing today is clear: shared responsibility and global solidarity in response to the impacts of COVID-19.
It is a call to action.
We must see countries not only united to beat the virus but also to tackle its profound consequences.
First, for an immediate coordinated health response to suppress transmission and end the pandemic....MUCH MORE

The Communiqué (okay, press release) 4 page PDF:
 Launch of report on socio-economic impacts of COVID-19:
United Nations Secretary-General launches plan to address the potentially devastating socio-economic impacts of COVID-19 
Establishes global fund to support low- and middle-income countries

NEW YORK, 31 MARCH 2020—The new coronavirus disease (COVID-19) is attacking societies at their core, claiming lives and people’s livelihoods. The potential longer-term effects on the global economy and those of individual countries are dire.

In a new report, Shared responsibility, global solidarity: Responding to the socio-economic impacts of COVID-19, the United Nations Secretary-General calls on everyone to act together to address this impact and lessen the blow to people.

The report describes the speed and scale of the outbreak, the severity of cases, and the societal and economic disruption of COVID-19, which has so far claimed the lives of 33 257 people, with 697 244 confirmed cases in 204 countries, areas and territories1.
“COVID-19 is the greatest test that we have faced together since the formation of the United Nations,” said António Guterres, Secretary-General of the United Nations. “This human crisis demands coordinated, decisive, inclusive and innovative policy action from the world’s leading economies – and maximum financial and technical support for the poorest and most vulnerable people and countries.”

The report comes after the IMF has announced that the world has entered into a recession as bad or worse than in 2009. The report calls for a large-scale, coordinated and comprehensive multilateral response amounting to at least 10 percent of global GDP....MUCH MORE

And the report:

Shared Responsibility, Global Solidarity: Responding to the socio-economic impacts of COVID-19
(26 page PDF)

Page 1:
....A large-scale, coordinated and comprehensive multilateral response amounting to at least 10 per cent of global GDP is needed now more than ever. This crisis is truly global. It is in everyone’s interest to ensure that developing countries have the best chance of managing this crisis, or COVID-19 will risk becoming a long-lasting brake on economic recovery.
HT the plan had been released: Finanz Nachrichten, April 1.

Saturday, April 4, 2020

"Coronavirus pandemic spurs a chocolate and frozen pizza sales boom in America: Nestle USA CEO"

That's it, time to dust off the diabetes/retinopathy/dialysis/prosthetics portfolio.
From Yahoo Finance:
The cupboard isn’t just stocked up with Spam as Hormel’s CEO recently told Yahoo Finance, but another comfort food — good old-fashioned chocolate bars, baking ingredients and frozen pizzas.

“I think as you look across all of the categories, we are seeing really big increases,” Nestle USA Chairman and CEO Steve Presley said on Yahoo Finance’s The First Trade. Nestle not only makes candy bars, but also Toll House baking products and DiGiorno frozen pizza. “We have such a broad portfolio in the U.S. we see spikes across all of our businesses really with the exception being the out of home business obviously.”

Presley says Nestle’s data shows a “real surge” in people baking right now, likely as they are unable to go out to eat (or go much of anywhere).

The hard data supports the upbeat claims.
Total U.S. food and beverage sales surged 50.8% year-over-year for the week ended March 22, according to data from IRI. The three categories that drove the biggest early sales increases in March include packaged foods (up 32% year-over-year), frozen foods (up 27%) and dairy (up 26%)....MORE
Earlier today: 

And previously:
I've mentioned the guy who pitched me on kidney dialysis company DaVita back in 2002; and some of the trades implied in Izabella Kaminska's 2016 - 2017 posts on sugar and even earlier: From our Oct. 2, 2012 post "Buffett Bets on the Boomers: End Stage Renal Disease (BRK.B; DVA)":
Around ten years ago a sharp young analyst gave me his five-minute kidneys and dialysis pitch. It made quite an impression on me, I remember it to this day. Unfortunately for him and his firm we were just coming off the Dotbomb crash and everything looked really cheap so I filed the idea under "stuff I'll get to".
Davita is up seven-fold since that day, $103.44 at the close. Fresenius, the largest in the industry is up ten-bagger in ten years, no lost decade there..
CDC Report: 100 Million Americans Either Diabetic or On Their Way
There's an opportunity in here, somewhere. The direct costs of healthcare for diabetics has to be five grand a year per. That gives us a half-trillion dollar market to address. Plus, who really wants a countryside full of blind amputees on dialysis?
Labor Markets: "Rural America Needs Triage"
Some concepts, profound in their simplicity, that policymakers will have to internalize before the human toll of current economics—whether fast suicides by firearms or hanging or slow suicides by opioids, self-medicating with carbohydrates and booze leading to epidemic levels of obesity, cirrhosis and diabetes, from first generation poverty leading to  multi-generational epigenetic DNA methylation of genes linked to depression—the policy wonks have to get the basics down first.

Transportation: "Warren Buffett’s Berkshire Hathaway sells part of Delta, Southwest airline stakes" (DAL; LUV; BRK)

Following up on March 13's:

"Warren Buffett: ‘I won’t be selling airline stocks’"
Warren, noooo....
Here's what Mr. Buffet  told Fortune magazine: in 1999
...Move on to failures of airlines. Here’s a list of 129 airlines that in the past 20 years filed for bankruptcy. Continental was smart enough to make that list twice. As of 1992, in fact--though the picture would have improved since then--the money that had been made since the dawn of aviation by all of this country’s airline companies was zero.

Absolutely zero.

I like to think that if I’d been at Kitty Hawk in 1903 when Orville Wright took off, I would have been farsighted enough, and public-spirited enough--I owed this to future capitalists--to shoot him down. I mean, Karl Marx couldn’t have done as much damage to capitalists as Orville did.
Mr. Buffett repeated the sentiment on the 2003 centenary of Orville's first flight.

Then in the 2007 Chairman's letter to the shareholders of Berkshire Hathaway....
I get emotional. Here's CNBC, April 4:
  • According to regulatory filings, Berkshire sold nearly 13 million Delta shares for about $314 million and roughly 2.3 million Southwest shares for about $74 million.
  • The sales were conducted on Wednesday and Thursday, the filings show.
  • Berkshire previously owned about 11.1% of Delta stock and 10.4% of Southwest stock, according to Refinitiv data.
  • No reasons for the sales were given.
 LUV Southwest Airlines Co. daily Stock Chart

Seamanship: Don't Be Ramming The Big Boat

From Commander Salamander who appears to be a simple seafaring man.
This is his blog descriptor:
Proactively “From the Sea”; an agent of change leveraging the littoral best practices for a paradigm breaking six-sigma best business case to synergize a consistent design in the global commons, rightsizing the core values supporting our mission statement via the 5-vector model through cultural diversity.
And this is his link:
Thursday, April 02, 2020
The Law of Gross Tonnage Applies
Am I a bad navalist if I can't stop laughing at this ... and cannot wait for the video?

Via Joseph Trevithick at The Drive;
The incident occurred in the early hours of Mar. 30, 2020, but Columbia Cruise Services only released an official statement on Apr. 1. The company, which is headquartered in Germany, said the RCGS Resolute was drifting just over 13 miles off the coast of Isla La Tortuga, a Venezuelan island situated some 60 miles off the country's northern coast, when ANBV Naiguatá, also known by its hull number GC-23, approached it. The Venezuelan Navy ship ordered the cruise ship to follow it to Puerto Moreno on Isla De Margarita, located to the east, accusing it of violating the country's territorial waters.
Engineering matters, math is hard, and the law of gross tonnage always applies.
The 403-foot-long Resolute, which is flagged in Portugal, reportedly had a gross tonnage of around 8,445 tons at the time. The ship was laid down in September 1990 and completed in June 1991. Intended for Antarctic cruises, it has a reinforced ice-capable hull.
The Naiguatá, which is just over 262 feet long, is a Guaicamacuto class offshore patrol vessel and displaces around 1,720 tons with a full load.
Good seamanship can be harder.
"While the Master was in contact with the head office [in Germany], gun shots were fired and, shortly thereafter, the navy vessel approached the starboard side at speed with an angle of 135° and purposely collided with the RCGS Resolute," the statement continued. "The navy vessel continued to ram the starboard bow in an apparent attempt to turn the ship’s head towards Venezuelan territorial waters."

Columbia Cruise Services does not say what kind of gun was fired or if it did any damage to the Resolute. The Naiguatá has a 76mm main gun in a turret forward of the main superstructure, as well as a pair of 20mm cannons and two .50 caliber machine guns. The crew would also have access to various small arms.

Whatever the case, the steel-hulled patrol ship suffered severe damage from repeatedly ramming the cruise ship, began to take on water, and ultimately sank.....MORE
From everything2 an explanation of the law:

The Law of Gross Tonnage is an accepted nautical convention that when a sea-going vessel has the right-of-way as established by the International Regulations for Preventing Collisions at Sea, 1972 (72 COLREGS), it should nonetheless give way when faced with a larger vessel. This law is regularly invoked in non-maritime situations, such as when a bicyclist with the right-of-way invokes the Law of Gross Tonnage to avoid the Sport Utility Vehicle (SUV) that is about to cut them off.
The heavier vessel always has the right-of-way. There is no explicit directive in maritime regulations or law for the the Law of Gross Tonnage other than it is common sense that giving way and being alive is usually better than forcing one's right-of-way and being dead.
Two ships sailing in a battle group are operating off the coast of Southern California near San Clemente Island in the Southern California Operations Area. First, Oliver Hazard Perry class Guided Missile Frigate USS RENTZ (FFG-46) weighing a svelte 4,100 tons is going 20 knots at heading 090 (due east). Second, conventionally powered Forrestal class Aircraft Carrier USS RANGER (CV-61; aka "Danger Ranger") weighing in at a pudgy 81,000 tons is sailing at 22 knots, heading 180 (due south). The two vessels are approaching on collision headings.
                     |       |   22 knots
                     |       |
                     | CV-61 |     |
                     |       |     |
                     | USS   |     \/
                     |RANGER |    180 (S)
                     |       |
                     |       |
                     |       |
                     |       |

FFG-46      |__> 

  ---> 090 (E)
   20 knots 

COLREGS Rule 15 states that "When two power-driven vessels are crossing so as to involve risk of collision, the vessel which has the other on her own starboard side shall keep out of the way and shall, if the circumstances of the case admit, avoid crossing ahead of the other vessel."
This would indicate the RANGER should take action to avoid RENTZ. In fact, COLREGS Rule 17 requires that RENTZ maintain current course and speed so as to allow RANGER to maneuver appropriately out of danger of collision.
However, the Officer of the Deck (OOD - i.e., the guy in charge of directing the ship's maneuvers) on RENTZ has had many previous encounters with RANGER and invokes the Law of Gross Tonnage to immediately relinquish right-of-way and turns starboard to course 190. The COLREGS allow this when it is apparent that the "give-way" vessel is not maneuvering as required.....MORE
We had an example of what can happen in these situations last week:

Good Luck, Bad Luck: Meet Violet Jessop
Violet was onboard the Royal Mail Ship Olympic in 1911 when it turned in front of the British cruiser Hawke which was equipped with a ramming bow to sink ships by.....ramming, if all else failed:
pic via Wikipedia
The Olympic made it back to port at Southampton. The Hawke almost capsized but also survived....MORE (Violet's story just gets better and better)
Despite being designed and engineered to ram (and sink) naval warships the Hawke (fortunately) could not overcome simple physics.

At the time the Olympic was the largest ship in the world.