Tag: politics

Big Oil’s green-bashing stokes backlash as campaigners hit out at ‘talking points from the 1970s’

Post By Oil and Gas , , , , , , , ,

Saudi Aramco President & CEO Amin Nasser speaks during the CERAWeek oil summit in Houston, Texas, on March 18, 2024.

Mark Felix | Afp | Getty Images

Top oil executives have been sharply criticized for pushing back against the viability of the clean energy transition at a U.S. conference, with campaigners denouncing an industry claim that the shift away from fossil fuels is “visibly failing on most fronts.”

Speaking during a panel interview on Monday at the annual CERAWeek energy conference in Houston, Texas, Saudi Aramco chief executive Amin Nasser said that a transition strategy reset was “urgently needed.”

The CEO of the world’s largest energy company proposed that policymakers abandon the “fantasy” of phasing out oil and gas and instead “adequately” invest in fossil fuels to reflect growing demand. Aramco and Saudi ministry officials have previously advocated for ongoing investment in hydrocarbons to avoid energy shortages until renewables can fully meet global energy demands.

Nasser’s comments drew applause from the audience at CERAWeek — an annual energy conference by S&P Global that’s known as the “industry’s Super Bowl.”

Other oil and gas executives at the event echoed Nasser’s views, but spoke less directly about the state of the energy transition.

Shell CEO Wael Sawan said government bureaucracy in Europe was slowing the necessary development of clean energy, according to Reuters. Separately, Exxon Mobil CEO Darren Woods on Monday said that demand for petroleum products is “still very, very healthy.”

“So, I think one of the things the policy to date and a lot of the narrative has been very focused on is the supply side of the equation and hasn’t addressed the demand side of the equation. And the impact that price has on demand,” Woods told CNBC’s “Squawk on the Street.”

“At the same time, the cost of converting and moving to a lower-carbon society, if that cost is too high for consumers to bear, they won’t pay. And we’ve seen that play itself out in Europe, with some of the farm protests and the yellow vest protests a year or so ago,” he added.

Campaigners have hit out at the oil industry’s claims this week.

“The fossil fuel industry continues to make distorted claims about our energy future,” Jeff Ordower, North America director at 350.org — a U.S.-based group focused on the global energy transition — said in a statement on Tuesday.

“They work night and day to torpedo a transition to renewable energy and then have the audacity to critique the slowness of the transition itself,” Ordower said. “CERAWeek should highlight a global vision toward a clean and equitable future, and instead, we get talking points from the 1970s.”

Aramco, Exxon Mobil and Shell were not immediately available to comment when contacted by CNBC on Wednesday.

IEA vs. OPEC

The International Energy Agency has previously said it expects global oil, gas and coal demand to peak by 2030 — a forecast that Aramco’s Nasser rejected at CERAWeek. The energy watchdog said in October last year that the transition to clean energy is not only happening, but is “unstoppable.”

“It’s not a question of ‘if’, it’s just a matter of ‘how soon’ – and the sooner the better for all of us,” IEA Executive Director Fatih Birol said in a statement.

The oil-producing Organization of the Petroleum Exporting Countries, which disagrees with the IEA on its outlook for oil demand growth, said earlier this month that it still expects relatively strong growth in global oil demand for both 2024 and 2025.

Participants are seen at the Innovation Agora of the CERAWeek in Houston, Texas, the United States, on March 18, 2024. CERAWeek, known as a superbowl forum in the global energy industry, kicked off Monday in Houston of the U.S. state of Texas, with topics covering the entire energy spectrum but themed on multidimensional energy transition in four fields: markets, climate, technology and geopolitics.

Xinhua News Agency | Xinhua News Agency | Getty Images

Policymakers have also renewed their focus on energy supply security in the wake of Russia’s full-scale invasion of Ukraine and the Israel-Hamas war.

It is in this context that oil and gas executives have repeatedly sought to fend off climate criticism, claiming that Big Oil is not to blame for the climate crisis and warning that it won’t be possible to keep everyone happy in the shift away from fossil fuels.

The burning of fossil fuels such as coal, oil and gas is the chief driver of the climate crisis.

“It’s no surprise to see misleading claims like this coming at CERAWeek, because fossil fuel companies are the biggest cause of the climate crisis, and their continued political influence is the biggest obstacle to solving it,” David Tong, global industry campaign manager at advocacy group Oil Change International, told CNBC via email.

“Oil and gas companies are deliberately slowing and blocking a rapid fossil fuel phase-out with the types of dangerous distractions they are peddling this week in Houston,” Tong said.

‘There’s really no debate’

Some energy companies have scaled back their greenhouse gas reduction targets in recent months.

Activist investors have put pressure on fossil fuel companies to further align their emission reduction targets with the landmark 2015 Paris Agreement, while some have urged firms to scale back on green pledges and instead lean into their core oil and gas businesses.

“What we are seeing now is a desperate attempt from the oil and gas industry to stay relevant and to double down on their old business model despite knowing the products they’ve sold us for decades are responsible for the climate crisis,” Josh Eisenfeld, corporate accountability campaign manager at Earthworks, an environmental non-profit based in Washington D.C., told CNBC via email.

“They’ve failed to evolve their business into one that is compatible with what science tells us must be done to avoid a climate catastrophe. There’s really no debate — science has made it abundantly clear what needs to be done and paramount to that is a transition away from fossil fuels,” Eisenfeld said. “To think otherwise is delusional,” he added.

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#Big #Oils #greenbashing #stokes #backlash #campaigners #hit #talking #points #1970s

Lights, camera, election: Bollywood goes into poll mode

Post By Entertainment , , , , , , , , , , ,

A female police officer vowing to eliminate left-leaning liberals that support the rights of tribals on natural wealth, a fighter pilot eager to occupy Pakistan, and a news anchor desperate to put out the truth of the fire in Sabarmati Express at Godhra station in 2002. The images of aggressive nationalism, Islamophobia, and the ‘Red Scare’ are wafting into theatres to build public opinion against the political opponents of the ruling dispensation.

As it seeks a third term, cinema halls are turning into rallying points for the ruling Bharatiya Janata Party (BJP) to help create the mahaul (political atmosphere) in its favour. The notification of election is yet to be made and parties and alliances are still being broken and forged but a section of the film industry has already declared its manifesto and is indulging in dog-whistle politics.

A far cry from the stated credo of inclusivity defined by sabka saath, sabka vikas and sabka vishwas, historical events, it seems, are being skewed to fit a particular communal narrative by dividing communities into monolithic groups of heroes and villains based on religious and ideological identity. The spaces and issues that are contested or have existed for years in a grey zone are being insidiously turned into a black-and-white contrast that suits a political narrative.

The chronology of the release dates tells a story. Since January, every other week we have a film that reflects the ruling dispensation’s thrust on a contentious issue, stated or otherwise. Hrithik Roshan’s Fighter took a shot at the promised Akhand Bharat while reimagining the Pulwama attack and the subsequent Balakot strike. Yami Gautam’s Article 370 explained the government’s vision of Naya Kashmir where peace is earned through the bullet and not negotiated through the back channel diplomacy. This week, Adah Sharma’s Bastar: The Naxal Story is holding left liberals, which the party leaders often describe as urban Naxals, to account for the Maoist insurgency.

A poster for ‘Bastar: The Naxal Story’

A poster for ‘Bastar: The Naxal Story’

This idea of finding the enemy within is taking another shape in the form of the upcoming film JNU whose provocative poster made it to social media this week where a reputed Central university’s name is mischievously expanded as Jahangir National University — a centre of education that promotes anti-national ideas, teases the poster. The university is being repeatedly used to get even with political opponents with hardly any creative filters.

Then, The Sabarmati Report will unravel in the first week of May when the political temperature is expected to be peaking. In a statement, the makers said that the film narrates a story of events that took place in The Sabarmati Express on the morning of February 27, 2002, near the Godhra railway station in Gujarat. Before that Razakar: The Silent Genocide of Hyderabad backed by a BJP politician and set against the blood-soaked backdrop of Hyderabad’s merger with India, is striking a disconcerting tone against a religion with its trailer.

Changing ecosystem

Apart from seeing controversial issues and events in a ‘new’ light, an attempt is being made to put one source of light against the other to provide ideological muscle to the claims. It started with Rajkumar Santoshi’s Gandhi Godse: Ek Yudh, where Gandhi was charged with appeasement and Godse had the last word.

It continued this year with Pankaj Tripathi’s Main Atal Hoon, a sanitised biopic of Atal Bihari Vajpayee, and is now ready to take the next level with Randeep Hooda’s Swatantra Veer Savarkar that seems keen on whitewashing the conflicted personality and legacy of a freedom fighter who wrote multiple mercy petitions to the colonial power and accepted a pension from those he once fought against. Unlike Gandhi, Savarkar believed in the power of cinema, and, ironically, decades after his death, the medium is being used to help him scale Gandhian stature.

Randeep Hooda in ‘Swatantra Veer Savarkar’

Randeep Hooda in ‘Swatantra Veer Savarkar’

There is a concerted effort to correct the ecosystem which the right-leaning influencers in the film industry say hasn’t changed as much as they wanted it to in the last ten years. They see it as an ideological shift and put it under the umbrella of freedom of speech, a counter view that was allegedly suppressed when film folks saw the world from the prism of bhaichara (brotherhood) or Ganga-Jamuni tehzeeb (syncretic culture), euphemisms for appeasement politics.

However, in the real world, the Prime Minister still takes G-20 leaders to pay floral tributes at the Gandhi Samadhi. The new ecosystem speaks with a forked tongue. Replying to an RTI query, the Home Ministry said it didn’t have any information about urban naxals or their activities.

We saw a similar but limited attempt without much box-office success before the 2019 polls as well but the new variants are a lot more technically polished and emotionally manipulative in putting the point across. Also, they are being headlined by competent actors such as Hrithik Roshan, Randeep Hooda, and Yami Gautam and are backed by producers for whom it is proving to be a safe proposition.

Investing in political narratives

As the industry means business, producers are investing in political narratives after seeing the box-office success of The Kashmir Files and The Kerala Story. They feel there is a mass that wants to see the dramatic representation of what is dog-whistled at political rallies and newsroom debates and give the crude WhatsApp chats a creative shape. For the foot soldier, the advantage is that ‘suitable’ portions make it to reels to roll over the facts over and over again.

For instance, the Indian government had described the surgical strikes after Pulwama as a ‘non-military pre-emptive strike’ but Fighter frames it clearly as revenge. The Central Board Of Film Certification, until recently was very careful about how the Prime Minister is portrayed on the screen, let a declamatory statement like “Show them who is daddy” go in his name in Fighter.

At another level, it shows the makers like politicians don’t want the Pulwama episode and the Balakot strike to go off public memory. In 2019, we had Uri: The Surgical Strike on the same operation by the same producer. The difference is while the movie threatened home invasion, Fighter talked of the possibility of ‘India Occupied Pakistan’. Telugu film Operation Valentine also milked the same events with lesser intensity and craft. Curiously, the creative fraternity, like the ruling party, is silent on the martyrs of Galwan so far.

It is not that this polarising cinematic discourse is going uncontested. Dissent is taking allegorical shapes to avoid censorship. Last year, it was very much present in the measured subversion of Pathaan and Jawan while Afwaah and Bheed measured the impact of disinformation. The surge in films around the 1971 war and Indian intelligence officers’ exploits in Pakistan ended up endorsing the view that India had a well-endowed chest before 2014 as well.

Ae Watan Mere Watan, a Karan Johar production, releasing on an OTT platform next week documents the sacrifices the youth made to win us free speech. Based on the life of Usha Mehta, the freedom fighter who ran the secret Congress Radio during the Quit India Movement to take the message of the incarcerated Congress leadership to the people, the film will see socialist leader Ram Manohar Lohia who has hardly been discussed in popular culture. Not to forget, Devashish Makhija’s Joram evocatively talks of the deliberate invisibilisation of tribals in the name of development and Kiran Rao’s Laapataa Ladies cleverly delivers a political punch on social hypocrisy by stimulating those who seek a ban on hijab to look within.

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#Lights #camera #election #Bollywood #poll #mode

Former hedge fund star says this is what will trigger the next bear market.

Post By Stock , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Much of Wall Street expects easing inflation, but an overshoot could dash hopes of a May rate cut, curtailing the S&P 500’s
SPX
waltz with 5,000, warn some.

Read: Arm’s frenzied stock rally continues as AI chase trumps valuation.

What might take this market down eventually? Our call of the day from former hedge-fund manager Russell Clark points to Japan, an island nation whose central bank is one of the last holdouts of loose monetary policy.

Note, Clark bailed on his perma bear RC Global Fund back in 2021 after wrongly betting against stocks for much of a decade. But he’s got a whole theory on why Japan matters so much.

In his substack post, Clark argues that the real bear-market trigger will come when the Bank of Japan ends quantitative easing. For starters, he argues we’re in a “pro-labor world” where a few things should be playing out: higher wages and lower jobless levels and interest rates higher than expected. Lining up with his expectations, real assets started to surge in late 2023 when the Fed started to go dovish, and the yield curve began to steepen.

From that point, not everything has been matching up so easily. He thought higher short-term rates would siphon off money from speculative assets, but then money flowed into cryptos like Tether and the Nasdaq recovered completely from a 2022 rout.

“I have been toying with the idea that semiconductors are a the new oil – and hence have become a strategic asset. This explains the surge in the Nasdaq and the Nikkei to a degree, but does not really explain tether or bitcoin very well,” he said.

So back to Japan and his not so popular explanation for why financial/speculative assets continue to trade so well.

“The Fed had high interest rates all through the 1990s, and dot-com bubble developed anyway. But during that time, the Bank of Japan only finally raised interest rates in 1999 and then the bubble burst,” he said.

He notes that when Japan began to tighten rates in late 2006, “everything started to unwind,” adding that the BOJ’s brief attempts [to] raise rates in 1996 could be blamed for the Asian Financial Crisis.

In Clark’s view, markets seem to have moved more with the Japan’s bank balance sheet than the Fed’s. The BOJ “invented” quantitative easing in the early 2000s, and the subprime crisis started not long after it removed that liquidity from the market in 2006, he notes.

“For really old investors, loose Japanese monetary policy also explained the bubble economy of the 1980s. BOJ Balance Sheet and S&P 500 have decent correlation in my book,” he said, offering the below chart:


Capital Flows and Asset Markets, Russell Clark.

Clark says that also helps explains why higher bond yields haven’t really hurt assets. “As JGB 10 yields have risen, the BOJ has committed to unlimited purchases to keep it below 1%,” he notes.

The two big takeaways here? “BOJ is the only central bank that matters…and that we need to get bearish the U.S. when the BOJ raises interest rates. Given the moves in bond markets and food inflation, this is a matter of time,” said Clark who says in light of his plans for a new fund, “a bear market would be extremely useful for me.” He’s watching the BOJ closely.

The markets

Pre-data, stock futures
ES00,
-0.41%

NQ00,
-0.80%
are down, while Treasury yields
BX:TMUBMUSD10Y

BX:TMUBMUSD02Y
hold steady. Oil
CL.1,
+0.79%
and gold
GC00,
+0.46%
are both higher. The Nikkei 225 index
JP:NIK
tapped 38,000 for the first time since 1990.

Key asset performance

 Last

 5d

 1m

 YTD

 1y
S&P 500

 5,021.84

 1.60%

 4.98%

 5.28%

 21.38%
Nasdaq Composite

 15,942.55

 2.21%

 6.48%

 6.20%

 34.06%
10 year Treasury

 4.181

 7.83

 11.45

 30.03

 42.81
Gold

 2,038.10

 -0.17%

 -0.75%

 -1.63%

 9.33%
Oil

 77.14

 5.96%

 6.02%

 8.15%

 -2.55%
Data: MarketWatch. Treasury yields change expressed in basis points

The buzz

Due at 8:30 a.m., January headline consumer prices are expected to dip to 2.9% for January, down from 3.4% in December and the lowest since March 2021. Monthly inflation is seen at 0.3%.

Biogen
BIIB,
+1.56%
stock is down on disappointing results and a slow launch for its Alzheimer’s treatment. A miss is also hitting Krispy Kreme
DNUT,
+1.99%,
Coca-Cola
KO,
+0.24%
is up on a revenue rise, with Hasbro
HAS,
+1.38%,
Molson Coors
TAP,
+3.12%
and Marriott
MAR,
+0.74%
still to come, followed by Airbnb
ABNB,
+4.20%,
Akamai
AKAM,
-0.13%
and MGM Resorts
MGM,
+0.60%
after the close. Hasbro stock is plunging on an earnings miss.

JetBlue
JBLU,
+2.19%
is surging after billionaire activist investor Carl Icahn disclosed a near 10% stake and said his firm is discussing possible board representation.

Tripadvisor stock
TRIP,
+3.04%
is up 10% after the travel-services platform said it was considering a possible sale.

In a first, Russia put Estonia’s prime minister on a “wanted” list. Meanwhile, the U.S. Senate approved aid for Ukraine, Israel and Taiwan.

Best of the web

Why chocolate lovers will pay more this Valentine’s Day than they have in years

A startup wants to harvest lithium from America’s biggest saltwater lake.

Online gambling transactions hit nearly 15,000 per second during the Super Bowl.

The chart

Deutsche Bank has taken a deep dive into the might of the Magnificent Seven, and why they will continue to matter for investors. One reason? Nearly 40% of the world still doesn’t have internet access as the bank’s chart shows:

Top tickers

These were the top-searched tickers on MarketWatch as of 6 a.m.

Ticker

 Security name
TSLA,
-2.81% 		Tesla
NVDA,
+0.16% 		Nvidia
ARM,
+29.30% 		Arm Holdings
PLTR,
+2.75% 		Palantir Technologies
NIO,
+2.53% 		Nio
AMC,
+4.11% 		AMC Entertainment
AAPL,
-0.90% 		Apple
AMZN,
-1.21% 		Amazon.com
MARA,
+14.19% 		Marathon Digital
TSM,
-1.99% 		NIO

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Check out On Watch by MarketWatch, a weekly podcast about the financial news we’re all watching – and how that’s affecting the economy and your wallet.

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#hedge #fund #star #trigger #bear #market

Taiwan’s presidential election: Who are the candidates in the high-stakes vote?

Post By World , , , , , ,

Voters in Taiwan choose their new president on Saturday in a high-stakes election that carries huge geopolitical relevance. With the threat of a Chinese invasion looming larger than ever, the self-governing island’s upcoming vote is capturing global attention. FRANCE 24 takes a look at the three candidates vying for Taiwan’s top job.  

Taiwanese voters head to the polls on January 13 to pick a new leader who will set the tone for future relations with China and the US – a choice with far-reaching consequences amid escalating tensions between the island and the mainland.  

After eight years of governance by the pro-independence Democratic Progressive Party (DPP), Beijing has increasingly hardened its stance against Taipei – from cutting diplomatic contact to expanding military drills in the Taiwan Strait.  

Warning against the DPP’s continued rule, deemed as “separatist” and “incompatible” with cross-strait peace, China has ramped up pressure ahead of what it called a “peace and war” election by flying balloons over the island while doubling down on the rhetoric that the country’s “reunification” with Taiwan is inevitable.  

Barred from running again after two consecutive terms in office, incumbent President Tsai Ing-wen is due to step down at the end of her mandate in May.   

Presidents in Taiwan are directly elected by a simple majority every four years.  

Looking to succeed Tsai is current Vice President Lai Ching-te, who is tipped to win the election with an average 36 percent of the vote, according to the latest polls before a 10-day blackout period.  

DPP successor  

Known by his English name as William Lai, the 64-year-old also serves as the chairman of the DPP.    

Previously describing himself as a “pragmatic worker for Taiwanese independence”, Lai is a staunch defender of Taiwan’s self-governing status.

The stance, also held by Tsai, has angered China, which asserts that the island is part of its territory.  

Lai previously worked as a physician before engaging in politics by becoming a legislator in 1998, a position he held for more than a decade.   

Lai Ching-te, Taiwan’s vice president and the ruling Democratic Progressive Party’s (DPP) presidential candidate gestures at an election campaign event in Taipei City, Taiwan January 3, 2024. © Ann Wang, Reuters

He was then elected mayor of Tainan, a city in southern Taiwan, in 2010.  

In 2017, Lai joined Tsai’s government after he was appointed premier and held the position until 2019 when he paired with Tsai as she ran for her second term in office.   

Lai was sworn in as vice president in 2020 when Tsai won the presidential election.  

Labelled a separatist by Beijing, the frontrunner in Taiwan’s upcoming race has promised to stick to Tsai’s policy of maintaining the status quo, which avoids open declarations of independence while rejecting China’s sovereignty claims.  

Lai on Tuesday said he hopes for a reopening of dialogue between China and Taiwan following almost eight years of Beijing’s near-complete refusal to communicate with leaders of the self-governing island.

But he also pledged to build up the island’s military defence, indicating that he harbours no illusions.  

“[If Lai wins], he will carry on Tsai’s China approach: any dialogue with Beijing must be held with mutual respect and on an equal basis,” said Chang Chun-hao, professor of political science at Tunghai University in Taiwan.  

“The bottom line remains Taiwan’s sovereignty which they [Lai and the DPP] seek to guarantee by rejecting the 1992 consensus,” Chang said.   

(Editor’s note: the 1992 consensus refers to a tacit understanding between the Kuomintang (KMT) – which governed Taiwan at the time – and the Chinese Communist Party that both sides of the Taiwan Strait acknowledge that there is “one China”, with each side having its own interpretation of what “China” means.)

KMT hopeful  

Pitted against Lai is Hou Yu-ih, the mayor of New Taipei City, a municipality located on the outskirts of Taipei.  

The 66-year-old, whom opinion polls credit with around 30 percent of the vote, is the candidate for Taiwan’s main opposition party – the Kuomintang (KMT), a conservative and Beijing-friendly party that ruled Taiwan for over 50 years.  

A former police chief hailing from central Taiwan, Hou was elected mayor in 2018 and then again in 2022 in a landslide vote.   

Hou Yu-ih, a candidate for Taiwan's presidency from the main opposition party Kuomintang (KMT), gestures to his supporters at a campaign event in New Taipei City, Taiwan January 5, 2024.
Hou Yu-ih, a candidate for Taiwan’s presidency from the main opposition party Kuomintang (KMT), gestures to his supporters at a campaign event in New Taipei City, Taiwan January 5, 2024. © Ann Wang, Reuters

Despite lacking experience in foreign policy and cross-strait relations, Hou, who comes from a working-class background, boasts an everyman persona that the KMT hopes will appeal to a wider range of voters.   

While Hou opposes Taiwan independence, he also rejects Beijing’s “one country, two systems” model, which was applied to Hong Kong and Macau when they were returned to China in the late 1990s and is still in force today.   

“But contrary to Lai and the DPP, who openly identify China as a menace to Taiwan, Hou and the KMT ultimately accepts the ‘One China Principle’ – even though they avoid stating whether the Republic of China (Taiwan’s official name) or the People’s Republic of China is the real China,” said Chen Fang-yu, assistant professor of political science at Soochow University in Taiwan.  

During his campaign, Hou has called for a reopening of dialogue with China, starting with “low-level and stable” exchanges in academia.

The outsider  

The third man in the race is former Taipei mayor Ko Wen-Je, who has framed the upcoming election as a choice between “new politics” and “old forces”. 

Representing the Taiwan People’s Party that he founded in 2019, Ko is considered by many as an outsider, as he entered politics less than a decade ago.  

A former surgeon, Ko was elected to office in 2014 as an independent candidate with the support of the DPP.  

He has since distanced himself from the ruling party as well as the KMT, after an effort to team up with Hou fell through last November.  

Ko Wen-je, Taiwan People's Party (TPP) presidential candidate makes a speech on stage during a campaign ahead of the election in Hsinchu, Taiwan December 23, 2023.
Ko Wen-je, Taiwan People’s Party (TPP) presidential candidate makes a speech on stage during a campaign ahead of the election in Hsinchu, Taiwan December 23, 2023. © Ann Wang, Reuters

Ko casts himself as a “third way” technocrat who provides voters with a middle ground on issues with China – an approach he has described as seeking a more “moderate and rational path”.  

“Ko remains very ambiguous on the subject of cross-strait relations … while he criticises the KMT’s aims of closer ties, he himself would probably welcome more dialogue and cooperation [with China],” Chang said.  

With his greater focus on domestic concerns such as unemployment and housing, Ko has garnered large support among younger generations who view him as an alternative to both the DPP and the KMT. 

Despite his popularity among younger voters, Ko trailed the other two presidential candidates in the polls, which predicted him averaging only 24 percent of the vote.  

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#Taiwans #presidential #election #candidates #highstakes #vote

We can tackle climate change, jobs, growth and global trade. Here’s what’s stopping us

Post By Stock , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

“We must leave behind established modes of thinking and seek creative workable solutions.”

Another tumultuous year has confirmed that the global economy is at a turning point. We face four big challenges: the climate transition; the good-jobs problem; an economic-development crisis, and the search for a newer, healthier form of globalization.

To address each, we must leave behind established modes of thinking and seek creative workable solutions, while recognizing that these efforts will be necessarily uncoordinated and experimental.

Climate change is the most daunting challenge, and the one that has been overlooked the longest — at great cost. If we are to avoid condemning humanity to a dystopian future, we must act fast to decarbonize the global economy. We have long known that we must wean ourselves from fossil fuels, develop green alternatives and shore up our defenses against the lasting environmental damage that past inaction has already caused. However, it has become clear that little of this is likely to be achieved through global cooperation or economists’ favored policies.

Instead, individual countries will forge ahead with their own green agendas, implementing policies that best account for their specific political constraints, as the United States, China and the European Union have been doing. The result will be a hodge-podge of emission caps, tax incentives, research and development support, and green industrial policies with little global coherence and occasional costs for other countries. Messy though it may be, an uncoordinated push for climate action may be the best we can realistically hope for.

“Inequality, the erosion of the middle class, and labor-market polarization have caused significant damage to our social environment. ”

But our physical environment is not the only threat we face. Inequality, the erosion of the middle class, and labor-market polarization have caused equally significant damage to our social environment. The consequences are now widely evident. Economic, regional, and cultural gaps within countries are widening, and liberal democracy (and the values that support it) appears to be in decline, reflecting rising support for xenophobic, authoritarian populists and the growing backlash against scientific and technical expertise.

Social transfers and the welfare state can help, but what is most needed is an increase in the supply of good jobs for the less-educated workers who have lost access to them. We need more productive, well-remunerated employment opportunities that can provide dignity and social recognition for those without a college degree. Expanding the supply of such jobs will require not only more investment in education and more robust defense of workers’ rights, but also a new brand of industrial policies for services, where the bulk of future employment will be created.

The disappearance of manufacturing jobs over time reflects both greater automation and stronger global competition. Developing countries have not been immune to either factor. Many have experienced “premature de-industrialization”: their absorption of workers into formal, productive manufacturing firms is now very limited, which means they are precluded from pursuing the kind of export-oriented development strategy that has been so effective in East Asia and a few other countries. Together with the climate challenge, this crisis of growth strategies in low-income countries calls for an entirely new development model.

“Governments will have to experiment, combining investment in the green transition with productivity enhancements in labor-absorbing services.”

As in the advanced economies, services will be low- and middle-income countries’ main source of employment creation. But most services in these economies are dominated by very small, informal enterprises — often sole proprietorships — and there are essentially no ready-made models of service-led development to emulate. Governments will have to experiment, combining investment in the green transition with productivity enhancements in labor-absorbing services.

Finally, globalization itself must be reinvented. The post-1990 hyper-globalization model has been overtaken by the rise of U.S.-China geopolitical competition, and by the higher priority placed on domestic social, economic, public-health, and environmental concerns. No longer fit for purpose, globalization as we know it will have to be replaced by a new understanding that rebalances national needs and the requirements of a healthy global economy that facilitates international trade and long-term foreign investment.

Most likely, the new globalization model will be less intrusive, acknowledging the needs of all countries (not just major powers) that want greater policy flexibility to address domestic challenges and national-security imperatives. One possibility is that the U.S. or China will take an overly expansive view of its security needs, seeking global primacy (in the U.S. case) or regional domination (China). The result would be a “weaponization” of economic interdependence and significant economic decoupling, with trade and investment treated as a zero-sum game.

“The biggest gift major powers can give to the world economy is to manage their own domestic economies well.”

But there could also be a more favorable scenario in which both powers keep their geopolitical ambitions in check, recognizing that their competing economic goals are better served through accommodation and cooperation. This scenario might serve the global economy well, even if — or perhaps because — it falls short of hyper-globalization. As the Bretton Woods era showed, a significant expansion of global trade and investment is compatible with a thin model of globalization, wherein countries retain considerable policy autonomy with which to foster social cohesion and economic growth at home. The biggest gift major powers can give to the world economy is to manage their own domestic economies well.

All these challenges call for new ideas and frameworks. We do not need to throw conventional economics out the window. But to remain relevant, economists must learn to apply the tools of their trade to the objectives and constraints of the day. They will have to be open to experimentation, and sympathetic if governments engage in actions that do not conform to the playbooks of the past.

Dani Rodrik, professor of international political economy at Harvard Kennedy School, is president of the International Economic Association and the author of Straight Talk on Trade: Ideas for a Sane World Economy (Princeton University Press, 2017).

This commentary was published with the permission of Project Syndicate — Confronting Our Four Biggest Economic Challenges

More: Biden administration’s antitrust victories are much-needed wins for consumers

Also read: ‘Dr. Doom’ Nouriel Roubini: ‘Worst-case scenarios appear to be the least likely.’ For now.

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These Middle East flashpoints could trigger regional conflict that impacts oil prices

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Why investors should be wary of New Year ‘head fakes’ for this hot asset class

Post By Stock , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

The first trading day of the New Year looks set to challenge the Santa Rally theory, with Dow futures down over 200 points as bond yields surge. An Apple downgrade may not have helped investor confidence.

This week will bring the minutes of the Federal Reserve’s last meeting and important December jobs data.

“Data that comes in too hot will kill the idea of rate cuts starting as soon as March, and data that comes in too cold will kill the idea of a soft landing. It means Goldilocks must return from her Christmas trip to Aruba and appear this week,” says Michael Kramer, founder of Mott Capital Management.

Read: A stock investor’s guide to the first trading days of 2024

Onto our call of the day from MacroTourist blogger Kevin Muir, who sees a rally in small-cap stocks as one big theme for the coming year, though investors should beware of getting in too soon.

In a post, Muir draws on a 2021 observation from Raoul Paul, co-founder and CEO of Real Vision financial media platform, who posted on Twitter now X, at the time about the perils of piling into “head fakes” or new ideas in January.

Paul noted how hedge funds and asset managers start the new year with a clean investment slate, but then two weeks later start moving into so-called consensus Wall Street year-ahead trades. And once the rest of the investment world gets in, the trend reverses or corrects, and those managers get back to flat or have to start over.

Muir says given the Fed’s pivot away from monetary tightening at the end of 2023, small-caps will end up as stock leaders this year. A bull on that asset class, he flagged his readers to buy in early November and December.

After a tough year, the Russell 2000
RUT
rallied late in 2023 as it became clearer that Fed interest rate increases, particularly hard on smaller companies, were drawing to a close.

As per this Russell 2000 chart, Muir says he did get the timing right on that bullish call:

However, Muir says he’s concerned that the rally was mainly from “hedge fund covering,” and not a solid signal that the bear market for those stocks has ended.

One reason, he notes was that the stocks blasting higher at the end of 2023 were the most heavily shorted — he offers the Goldman Sach’s most-shorted index chart here:

MacroTourist

The chart is evidence of how hedge funds that got caught out when the Fed surprisingly guided toward interest rate cuts at the December meeting. Within a few hours of the Fed announcement, the Most-Short index had rallied 15%. But along with that, the ARKK Innovation ETF
ARKK
also shot higher, a red flag for Muir.

That short index is tightly correlated to ARKK and the Russell 2000 small-cap index, he said.

So says it’s possible the small-cap push was “just a hedge fund short-covering rally that will sag back down now that the buying has flamed out.” And based on Raoul Paul’s theory, it makes sense that hedge funds and other investors may be piling into the asset class.

Muir says he stands by his view that small-caps are cheap and deserving of gains. “However, if this small-cap rally is for real, then it can’t be led by crap. We can’t have the GS Rolling Most-Short leading the charge. We need quality small-cap stocks to rally,” he said.

So the correlation between broader small-cap indexes and the most-shorted index (also tightly correlated with ARKK) will have to break down.

“As a proxy for this index, and a hedge against my small-cap long position, I am shorting ARKK. So far, the short covering drove all these smaller capitalized stocks higher, but my bet is that an actual small-cap bull market will see much better differentiation, and that new small-cap leadership will emerge (and it won’t be ARKK),” he says.

The markets

U.S. stock index futures
ES00,
-0.67%

YM00,
-0.26%

NQ00,
-1.19%
are falling sharply as Treasury yields
BX:TMUBMUSD10Y

BX:TMUBMUSD02Y
climb. Gold
GC00,
+0.32%
is up, and oil
CL.1,
+0.14%
is up 2% after Iran sent warships to the Red Sea after the U.S. Navy sank some Houthi militia-backed boats. The Hang Seng
HK:HSI
fell 1.5% after weak China factory activity.

Key asset performance

 Last

 5d

 1m

 YTD

 1y
S&P 500

 4,769.83

 0.32%

 3.81%

 24.23%

 24.23%
Nasdaq Composite

 15,011.35

 0.12%

 4.94%

 43.42%

 43.42%
10 year Treasury

 3.933

 3.28

 -24.22

 5.23

 18.77
Gold

 2,082.50

 0.87%

 1.67%

 0.52%

 13.79%
Oil

 72.78

 -0.97%

 -0.70%

 2.03%

 -9.60%
Data: MarketWatch. Treasury yields change expressed in basis points.

The buzz

U.S. nonfarm payroll data for December is due Friday, with the Institute for Supply Management’s manufacturing report and minutes of the Dec. 12-13 Fed meeting both on Wednesday. Construction spending is due at 10 a.m. on Tuesday.

Read: Health of U.S. labor market looms large on markets’ radar this coming week

Apple
AAPL,
-2.97%
is down 2% in premarket after Barclays’ analysts cut the iPhone maker to underweight from equal weight, on signs of weak iPhone 15 and other hardware sales.

Voyager Therapeutics stock
VYGR,
+29.74%
is up 32% after the biotech announced a licensing deal with Novartis unit Novartis Pharma
NOVN,
+0.99%.

Joyy
YY,
-14.65%
is off 11% after Baidu
BIDU,
-3.40%
cancelled a $3.6 billion offer for the Singapore-based live-streaming platform.

Bitcoin
BTCUSD,
+4.23%
is at $45,447, a high not seen since April 2022, on ETF approval hopes.

Tesla
TSLA,
-0.55%
said it delivered 484,507 EVs in the fourth quarter, producing 494,989. Deliveries grew 83% to 1.81 million for 2023 as a whole. Tesla shares are slipping. Meanwhile, China’s BYD
002594,
-2.73%
sold 3.02 million electric vehicles in 2023, eclipsing Tesla a second-straight year.

Japan’s western coast was hit by several heavy earthquakes on New Year’s Day, leaving at least 30 people dead and more quakes could come. A collision between a Japan coast guard plane and a Japan Airlines flight that caught fire on the runway on Tuesday resulted in the deaths of five people.

Best of the web

This year, resolve to pack a ‘go bag’ to be ready for the next disaster: Here’s what to put in it

Why Suze Orman never goes out to dinner

Topless massages, cage fights and private flights: CEO mishaps of 2023

The chart

More on small-cap caution from Chris Kimble at See It Market. He points out that investors may be getting greedy as some big resistance levels approach for the Russell 2000:


See It Market

Top tickers

These were the top-searched tickers on MarketWatch as of 6 a.m.:

Ticker

 Security name
TSLA,
-0.55% 		Tesla
MARA,
+7.47% 		Marathon Digital Holdings
NIO,
-5.79% 		Nio
NVDA,
-3.27% 		Nvidia
GME,
-1.14% 		GameStop
AAPL,
-2.97% 		Apple
AMC,
 		AMC Entertainment
COIN,
-2.62% 		Coinbase GLobal
MULN,
-4.69% 		Mullen Automotive
RIOT,
+5.69% 		Riot Platforms

Random reads

New Year’s Eve in a Japanese cat bar.

Woman sues Hershey for $5 million over a faceless Reeses pumpkin.

Viral Burger King worker buys first home after crowdsourcing.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

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Macron accused of doing far-right’s bidding with passage of stricter immigration law

Post By World , , , , , , , , ,

French President Emmanuel Macron is under renewed fire after urging his minority government to vote for a strengthened immigration bill that was endorsed by the far right. The late Tuesday vote, which divided Macron’s coalition MPs and prompted his health minister to resign a day later, was heralded by far-right leader Marine Le Pen as an “ideological victory” upon its passage. 

In a speech following his April 2022 re-election, Emmanuel Macron was well aware he owed his victory to left-leaning voters who considered him the lesser of two evils as he faced off a challenge from Marine Le Pen. “I know that many of our compatriots voted for me not to support the ideas I represent but to block those of the far right,” he acknowledged.

Less than two years later, Macron is facing criticism that he betrayed those same constituents by aligning with the far right after his minority government helped pass an immigration law that was heavily influenced by the right-wing Les Républicains party and supported by the far-right National Rally.

Soon after it was passed, the law was heralded by far-right National Rally leader Marine Le Pen who proclaimed an “ideological victory”.

Macron and members of his government rejected that assessment in a round of interviews on Wednesday.  

Prime Minister Élisabeth Borne told France Inter she felt a “sense of duty fulfilled” after the adoption of the immigration law. Faced with strong criticism from the left, NGOs and even within her own government, Borne insisted that the law “respects our values”.

‘Préférence Nationale’

The immigration law includes several measures inspired by the National Rally’s policy platform. For example, access to certain social benefits will be conditional on a longer period of legal residence in France.

What’s more, sanctions against companies employing undocumented workers will be stepped up.

Measures like these and others concern critics who say the Macron government has accepted policies affiliated with an ideology of “préférence nationale” – policies that legitimise discrimination against foreign nationals in favour of French citizens concerning access to employment, housing and social protections.

“This law does not encompass the entirety or even the majority of Marine Le Pen’s presidential programme, but some of her policies – especially regarding national preference – certainly made the cut even if the law does not go as far as the National Rally wants,” said Jean-Yves Camus, a specialist on the far right and the director of the Observatoire des Radicalités Politiques.

“It’s an exaggeration to talk about an extreme-right text – I would call it instead a ‘hard-right’ text – but we are still opening the door to national preference. We are not fully there, but the door is ajar,” says Caroline Janvier, an MP from Macron’s Renaissance party who voted against the immigration law on Tuesday. 

‘Kiss of death’

It is precisely the addition of national preference policies that tipped the vote on Tuesday night.

Until the mid-afternoon, representatives from the National Rally repeatedly stated they would not endorse the bill, deeming it impossible to approve a text that grants undocumented workers legal status. But seeing the possibility of a strategic victory on the issue of national preference, Le Pen reversed course.

“One can rejoice in an ideological victory … national preference is now inscribed in law, meaning the French will have an advantage over foreigners in accessing certain social benefits,” Le Pen said on Tuesday.

Janvier described Le Pen’s endorsement as the “kiss of death” – a “political move” to make Macron’s government look complicit with the far right in the eyes of left-leaning constituents.

National Rally members were not the only ones pleased by Tuesday’s vote. “There was a kind of jubilation among MPs from Les Républicains over having chipped away at a taboo: that of equality between French and foreigners,” said Camus. “For them, this means that the cultural hegemony of the left has begun to crumble. Beyond the immigration issue, a moral taboo has been broken.”

But Camus said the party’s hopes of luring away far-right supporters are likely in vain. “Les Républicains continue to pursue a strategy of undermining the National Rally by hijacking their policy platform. The only problem is that this strategy doesn’t work. The National Rally continues to rise in the polls,” he said.

Jean-Marie Le Pen, Marine Le Pen’s father and the founder of National Rally predecessor the National Front, may have said it best: “Voters always prefer the original to the copy.” 

Victory by ‘background noise’

Macron could have prevented this shift by choosing, in the face of Les Républicains demands, to withdraw the bill and start from scratch. But he deemed it preferable to go through with the vote, even if it meant dividing his coalition.

In total, 27 MPs in the government’s coalition voted against the bill that passed while 32 abstained. Health Minister Aurélien Rousseau resigned from his role in protest the following day.

Borne insisted on France Inter on Wednesday that “there is no crisis in the coalition” while government spokesperson Olivier Véran said that same day there was “no ministerial rebellion”.

Macron defended his decision in an interview with the “C à Vous” TV programme on Wednesday evening. “It is a shield that we needed,” he said, adding that the law “will allow us to fight against what nourishes the National Rally party” – namely immigration fears.

Read moreFiercely contested immigration law is a ‘shield that we needed’, Macron says

Whatever the case, the lines are no longer the same as 20 years ago, Camus said. “With this law, we have accepted the far-right vision of immigration as a danger.”

He said the National Rally’s success is due to persistent “background noise”: “This law would not have been approved without half a century of emphasis on national preference and the idea that immigration is a burden, that we pay a price for it or that it is a factor in criminality.”

To offset the right’s most extreme measures, the Macron government appears to be adopting a novel strategy: to accept Les Républicains’ demands, knowing full well that some of them will be invalidated by the Constitutional Council, the country’s highest constitutional court.

The president submitted the immigration bill to the high court on Wednesday to “decide on its conformity in whole or in part with the Constitution”, Véran announced. Borne has also suggested that some of the bill’s measures are unconstitutional and that the text would likely “evolve”.

But it’s a risky bet, according to Camus. “French people will have a hard time understanding that the law has been emptied of its substance,” he warned.

“This will inevitably benefit the National Rally and the idea, which is already beginning to take hold, that a ‘government of judges’ works against the interests of the country.”

This article was translated from the original in French.



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2024 energy outlook: What investors can expect from crude prices, and how to play it

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‘Contradictions of Macronism’: French government fights to save face after immigration bill debacle

Post By World , , , , , , , , , , , , ,

President Emmanuel Macron’s government vowed on Tuesday to press ahead with a controversial immigration bill, a day after its flagship reform was rejected by lawmakers in a humiliating setback. The political crisis has heaped further pressure on a government that has struggled to pass reforms without a parliamentary majority.

In a surprise move, the French National Assembly voted to back a motion rejecting a controversial immigration bill on Monday without even debating it. The motion, proposed by the Greens, gained support not only from left-wing representatives but also from members of the right-wing Les Républicains and the far-right National Rally. 

The government’s stunning defeat in parliament prompted opposition politicians to call for its dissolution. Jordan Bardella, the president of Marine Le Pen’s National Rally, told BFMTV on Tuesday he was “ready to serve as prime minister”.

The Élysée Palace, meanwhile, has moved fast to try and stop the political fallout. After an emergency ministerial meeting on Tuesday, government spokesperson Olivier Véran announced the formation of a special joint commission aimed at breaking the parliamentary gridlock “as fast as possible”’. The commission will be composed of seven representatives from both houses of parliament and will aim to return the bill to both chambers for a vote, Véran said. 

French government spokesperson Olivier Véran holds a press conference after a cabinet meeting at the presidential Élysée Palace in Paris, on December 12, 2023. © Ludovic Marin, AFP

After months of seeking to secure a majority in the National Assembly for his flagship policy, Interior Minister Gérald Darmanin had a lot riding on the legislation’s success. In response to the setback, Darmanin offered his resignation, which Macron rejected.  

Darmanin had actively courted the right for months in an attempt to secure a majority, accepting a substantial rewrite of the bill in the conservative-led Senate. However, the bill presented on Monday in the Assembly bore little resemblance to the one voted on in the Senate, much to the dismay of Les Républicains.

Speaking on TF1 on Monday after the vote, Darmanin acknowledged the defeat. “It is a failure, of course, because I want to provide resources for the police (…) and magistrates to combat undocumented immigration,” he said.

The limits of ‘en même temps’

Macron’s government has touted its proposed immigration law as a way to respond to voter concerns and prevent the far right from monopolising the immigration debate.  

“The president believes it is necessary to respond to what he sees as a public demand, given the multitude of events that have highlighted immigration issues in the news. This explains the government’s desire to show citizens that it takes the initiative and acts,” said Bruno Cautrès, a researcher at the Centre for Political Research at Sciences Po Paris (CEVIPOF).

However, Monday’s debacle in the National Assembly has exposed the limitations of the politics of “en même temps” (“at the same time”) – an approach pursued by Macron since 2017, combining policy solutions from both the right and the left wings of French politics.  

What was possible with an absolute majority during Macron’s first term is no longer feasible with a minority government.

According to a poll conducted by Odoxa, 72% of French citizens consider better control of immigration to be the bill’s most important objective. But the French are far from unified on how they want to resolve the system’s issues – mirroring deep divisions between left and right.

While the proposed law is widely perceived as right-leaning, it failed to satisfy both the right and far right, who reject providing work permits to undocumented workers. Simultaneously, it proved too repressive for the left, which opposes restrictions on family reunifications and the introduction of an annual debate on migration quotas.

Politicians are urging Macron’s government to choose a side instead of attempting to please everyone. Olivier Marleix, the head of Les Républicains in the lower house, told French television channel LCI that his party was “ready to vote” if the text is revised to the version voted through by the Senate.  

“We want the government to choose sides: either it’s a right-wing text or a left-wing text, but it can’t be both at the same time.”

Even Macron’s political movement, Renaissance, exhibited internal divisions over the bill. The left wing of Renaissance, led by Sacha Houlié, the chairman of the lower house commission that amended the bill, expressed dissatisfaction with concessions made by Darmanin to the right, particularly regarding the stripping of healthcare rights for undocumented migrants.

Read moreFrench doctors vow to ‘disobey’ bill stripping undocumented migrants of healthcare rights

 

“We have red lines. It would be irresponsible to go beyond our political DNA … The adoption of the text cannot come at the cost of a division within the majority,” said Houlié in an interview with French Financial daily Les Échos on Sunday.

“It is very difficult to achieve consensus on immigration, which generates a diversity of perspectives and a clear division between right and left,” said Cautres. “There have been many hesitations by the government over the months. The balance is too difficult to find because this is typically the kind of issue where the contradictions of ‘Macronism’ can surface.”  

Fallout for Darmanin – and his colleagues

A day after having his resignation declined, Darmanin seems to have bounced back, for now. On a visit to a police station in the southeastern suburbs of Paris, Darmanin said Tuesday that “whatever path we take”, he wanted “firm measures” to be put in place by the end of the year.

But his contortions throughout the process have left a lasting impression. After expressing satisfaction with the Senate’s version which bore little resemblance to the initial bill, Darmanin had enthusiastically welcomed the version the National Assembly commission extensively revised – prompting critics to describe him as fickle.  

On Tuesday, Les Républicains party chief Eric Ciotti said he would like to work with Prime Minister Élizabeth Borne on the immigration law moving forward, suggesting his party had lost faith in the interior minister.   

“How can we talk to someone (Darmanin) who constantly insults us? It is up to the prime minister to lead this discussion,” he told Europe 1.  

If the new special joint commission fails to reach a breakthrough, it will pose a significant challenge for Borne and her government. If she still intends to adopt the bill, she may find herself compelled to use Article 49.3 – a controversial provision in the French constitution that allows the executive to bypass the National Assembly to pass a law. 

Triggering Article 49.3 for the 21st time in only 18 months would raise the political stakes even higher, particularly after the administration’s controversial use of it in the spring to pass pension reform occasioned protests and disruptive strikes across France that garnered the world’s attention.

This article was adapted from the original in French.

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