On CRE🧵 CRE credit makes up more than 40% of some lenders’ loan books and the Fed is working with community and regional banks with concentrated exposures to commercial property. That includes coming up with a plan to work through expected losses, chairman Jerome Powell on 60 Minutes

While I am on a rant... let's talk about Venezuela

Latest headline last week:

US Looks to Ease Venezuela Sanctions, Enabling Chevron to Pump Oil First Venezuela produces about 700K bbd ..down from 3.5M at the height. This is tragic. That said, most of VZ oil is now going to China to pay down debts.

VERY short thread on UK energy market & why retail customer prices are exploding so much more than EU

How the UK electricity market is set up, is the major problem (it is different than the EU). It's a broken market model. 1/4 UK retail consumers get gas and electricity from suppliers who buy energy in the wholesale market and then sell it to the public. The idea was that you could choose your supplier and it was easy to switch between them if you could find a better deal.

Munich Municipal Law Library ..additions welcome for the most beautiful libraries on the planet Trinity Library, Dublin, Ireland

Here it comes>>

Long Beach container backlog crosses red line as delays mount

Long Beach just crossed a red line. The number of import containers sitting on Long Beach terminals for nine days or more is now higher than it was on Oct. 28, 2021
freightwaves.com/news/long-beac…
👇

https://twitter.com/chigrl/status/1539657331352412162

Port of Los Angeles Kicks Off Peak Season with Record June gcaptain.com/port-of-los-an…

Recession fears have been the overriding factor last couple of months. We have the Fed hiking into an already slowing economy. GDP NowCast is forecasting 0% growth for Q2 and we are already seeing signs of softness in the labor and housing markets. 1/n As many times as Powell says that he believes we can have a soft landing, the broader markets obviously do not believe him…..

Although, I think less Russian barrels will be taken off the market (if we include black/gray markets) than most think. We are still in a bit of a pickle. 1/4 Canada said they could supply the US w/ 200K bpd additionally. BUT they also said they do not want to increase production because that would not align with their climate goals. Also, they do not have much pipeline capacity to either coast to ship globally.

On banning US oil exports: This is certainly is the realm of things they *could*​ do. They also *could* enact Defense Production Act of 1950 to force the oil industry to produce more (which is easier said than done)

That said, I think at this juncture both are HIGHLY unlikely Both of these are the worst of all nuclear options.

(Export ban topic was actually brought up after a Nov. letter from the House that was sent to the Biden Administration. This topic was brought up at CERA WEEK and was met met with a huge backlash, led by COP CEO Ryan Lance)

Here is the flaw in the argument that high oil prices will push people toward EV's

1. The mining industry has the same lack of CAPEX problem over the last 7 years that oil does-creating a huge supply deficit

1/4 2. As demand increases for these vehicles, thus does the need for more of these metals

3. EV's require significantly more metal than ICE vehicles. For example an ICE vehicle requires 18-49 lbs of copper, whereas an EV requires 189 lbs -that does not even include the battery

Here are the problems with an Iranian deal
1. It has no support in Congress from either the Republicans or the Democrats - bipartisan issue
2. Judging from the last deal in 2015, it will probably take 4 months to get 500K barrels to market 1/3 3. There are currently 1.5M barrels off market due to Russia we don't know how/if how temporary this is and if this problem will grow
4. OPEC+ already can't produce , compliance is over 146%
5. in 4 months we hit high demand season ..we will need it
2/3

An interesting look at Norway with the highest EV adoption in Europe

Electric Vehicles made up the majority of new car sales in Norway in 2021 thelocal.no/20220104/evs-m… Here is the problem: The grid in Oslo was built from the 1950s – 1980s. Many of the lines and substations are old and need to be renewed. Power outages are becoming more regular.

SPR releases>>

Not surprising China wants favors from the US to help...weak move asking China

https://twitter.com/globaltimesnews/status/1463089343925350409

5M from India

I wrote that #India would only release a token amount if any, as they are rightly trying to build out their own SPR this week..no surprises here either >>

https://twitter.com/staunovo/status/1463090038330298369?t=v4MQnkjy5joUdNLoqnvDIQ&s=19

#CCP >> #China to outlaw all news outlets not funded by Communist Party
telegraph.co.uk/world-news/202… You want to know what is so crazy about this? The US is about two bills away from this insanity.

So hear me out here....

Everyone is worried about the commodity sector due to Evergrande fallout & what that means for new construction demand.
I get that.
However, as far as commodities are concerned. I propose an alternative view. 1/4 China's energy crisis has proven to be a weakness in Xi's priority for China to achieve energy security. Politically this is a disaster. 2/4

👇👇

https://twitter.com/flightradar24/status/1396443632954183681

https://twitter.com/franakviacorka/status/1396429666374782981?s=19

A brief, fun history on commodites
Sumer is thought to be the world’s oldest civilization that traded commodities somewhere between 4500 and 4000 BC The Amsterdam Stock Exchange in 1530 is often called the world’s first stock exchange. However, before it was a stock exchange, it operated as a market for the exchange (we know this from Tulip Mania)

Overnight Dec PMI's 🥶
Japan Manufacturing: ⬇️48.8 v 48.9
Japan Services: ⬆️50.6 v 50.3
Japan Composite: ↔️49.8 v 49.8

Australia Manufacturing: ⬇️49.4 v 49.9
Australia Services: ⬇️49.5 v 49.7
Australia: Composite: ⬇️49.4 v 49.7 EZ Manufacturing: ⬇️45.9 v 46.9
EZ Services: ⬆️52.4 v 51.9
EZ Composite: ↔️50.6

Germany Manufacturing: ⬇️44.6 v 45.2
Germany Services: ⬆️52.0 v 51.7
Germany Composite: ↔️49.4

France Manufacturing: ⬇️50.3 v 51.7
France Services: ⬆️52.4 v 52.2
France Composite: ⬇️52.0 v 52.1

TCP Petrochemical plant in Texas >>EXPLOSION, FIRE BURNING AT PORT NECHES PLANT EARLY WEDNESDAY
12newsnow.com/article/news/l… This site produces butadiene and raffinate. Combined production capacity for this facility is more than 900 million pounds per year. (both these chemicals are pretty nasty)

#Aramco >>Drone Strikes Spark Fires at Saudi #Oil Facilities

Attack on two Aramco facilities is the latest in a series targeting the kingdom’s oil assets
wsj.com/articles/drone… More on this (thread)

https://twitter.com/JavierBlas/status/1172768100430864385?s=19

5 part thread

Despite #ASF #China is still grain deficient and will need to rely on more and more imports to feed their people.

HIGHLY #RECCOREAD >>Propelled by U.S. Trade Talks, China Charts a Course to #Soybean Security
worldview.stratfor.com/article/propel… 1/5 In fact they have made recent deals with #Russia >>
China approves #wheat, #soy imports from Russia
reuters.com/article/us-usa… 2/5

Fun thread: commodities trading dates back to the Samaritans.. somewhere between 4500 and 4000 BCE Modern futures markets started in England in the 16th century (huge gap in time)