And speaking of the Olympics ... is this as important as the medal count?
2/5
Japan is under a "state of emergency" and as Apple mobility shows, they are severely restricting their movements (the Olympics started July 23).
(Apple aggregates location data services for various areas)
3/5
Google also aggregates movement of their phones and they similarly show Tokyo businesses have essentially closed, mass transit is empty and even walks in the park are down since the opening ceremonies (July 23).
4/5
What did Tokyo get from the Olympics?
* $Billions spent on sports facilities that will rarely get used again
* massive disruption life and business, lost income
* no tourism
* A spike in delta variant cases that will last a while
The blowback will be big and profound.
5/5
Worth noting that former Prime Minister Abe was strutting around like a Peacock in front of the world at the closing ceremonies of the Rio games in 2016 celebrating that the next games would be in Tokyo.
He did not even attend the opening ceremonies last week.
nuff said
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Ten seafarers have now been killed in 13 attacks on merchant vessels since the Iran conflict erupted on February 28 — more than the 7 U.S. servicemen killed in the war.
The focal point is shifting: can the Strait of Hormuz be reopened? Is the Administration pivoting to that mission?
Every day without a visible path to reopening, the market will price in more risk.
A 10% increase in energy prices that persists for a year would push global inflation up by 40 basis points and slow economic growth by 0.1-0.2%, International Monetary Fund Managing Director Kristalina Georgieva said.
So, what price measures "persists for a year?"
🧵
2/5
As the table below shows, crude oil futures prices for delivery into 2027 are trading in extreme backwardation.
3/5
Below is the calendar spread between the first contract (now April) and the 6th contract (now September).
As the bottom panel shows, this spread is -25%, a record since the mid-1990s when the contract specifications were last changed.
Thoughts on market reaction to the Venezuela news.
tl:dr
The spigot in Venezuela waiting to be opened to flood the world with crude oil and lower its price has been broken for a while.
It will take several years to fix it.
2/5
Venezuela is a founding member of OPEC their official statistics show its production (blue) is down 71% from its 1998 peak.
Its sustainable capacity (max output in within 90 days and held for a year) is 1M barrels/day (orange).
Venezuela is at its maximum now.
3/5
Why the big production decline?
Socialist Hugo Chávez was elected in December 1998. He turned out to be a brutal dictator. Only to be replaced by an even more brutal dictator, Nicolás Maduro, when Chávez died in March 2013.