Month: January 2023

Freeport LNG, the second largest US liquefied natural gas exporter, reported Tuesday afternoon to the Federal Energy Regulatory Commission (FERC) that it has “successfully and safely progressed the cooldown of the Loop 1 transfer piping and reinstatement of BOG management.” 

Freeport LNG asked FERC for approval to begin “(1) the nitrogen cooldown of the LNG rundown piping system and (2) the introduction of hydrocarbons to Unit 13 (Train 3) for LNG train commissioning and cooldown.” They also asked for a response from the federal energy agency by tomorrow. 

Combing through Freeport’s letter to FERC, Houston-based energy firm Criterion Research told clients, “the key part of this request is that it would allow Freeport to begin flowing natural gas into the pretreatment facility and then permit the initial production of LNG to flow into LNG Tanks 1 and 2 onsite.”

Freeport also said that “subsequent approvals will be necessary to commence Loop 1 LNG circulation and ship loading to Dock 1, as well as the transition of Unit 13 into full, commercial operations.”

The next steps for Freeport LNG will be to (1) secure approval from the FERC to begin feed gas flow & initial liquefaction operations, (2) complete that startup, and (3) request subsequent approval to commence LNG circulation and ship loading to Dock 1 #natgas #ongt #LNG #enelyst pic.twitter.com/SShFMhfSMw

— Criterion Research (@PipelineFlows) January 31, 2023

Natural gas flows to the LNG terminal increased today, much larger than in the previous weeks. 

Even with the prospects of a partial restart at the second largest US terminal, NatGas prices have slid to 20-month lows due to unseasonably warm weather, increased production, and an abundance of supply. 

As of Tuesday afternoon, NatGas prices have yet to bounce even on this news and reports of colder air pouring into the Lower 48.

Authored by Steve Watson via Summit News,

Cosmetics company NYX Professional Makeup has received backlash on social media after featuring ads for a lipstick with bearded men.

The company appears to be finding out that going woke eventually equates to going broke, as respondents accused them of “erasing women” with the ads for Smooth Whip lip cream.

In an Instagram post, the company wrote the caption “[itsmechrxs] making us whip out our Smooth Whip in Pom Pom REAL quick. #nyxcosmetics #nyxprofessionalmakeup #crueltyfree.”

 

 

 

 

View this post on Instagram

 

 

 

 

 

 

 

 

 

 

 

A post shared by NYX Professional Makeup (@nyxcosmetics)

And this prompted a number of responses on social media…

NYX Cosmetics used a bearded man to advertise their lipstick and women are pissed.

Get woke, go broke. pic.twitter.com/IUIyGzRWvq

— Sara Gonzales (@SaraGonzalesTX) January 30, 2023

“Apparently you don’t need us as your customer base any longer. I’ll leave [your] product like you left me Tired of being marginalized!!!!!!” one women replied.

Another responded “Not attractive at all… Doesn’t make me want to run out and buy your products EVER.”

“…DOESNT matter what year it is dude. Men are men and women are women stop trying to erase us,” another women asserted.

“You need to wake up. Stand up for your right as a woman,” another added, claiming “This is another example of men wanting to still be in control.”

“I’m so turned off by these ads with men wearing lipstick,” another person wrote.

“Not good for your company using a man what are you thinking boycotting,” another commented, while someone else bluntly responded “men should not wear makeup. This is gross.”

Another woman responded “I’m not so much disgusted but confused, why just put a picture with a man wearing lipstick and not a woman too? How does this ad make me want to buy [your] product when I can’t relate to it … I get makeup is for everyone so why not?”

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The International Monetary Fund published its latest World Economic Outlook on Monday, painting a slightly less gloomy picture than three and a half months ago, as inflation appears to have peaked in 2022, consumer spending remains robust and the energy crisis following Russia’s invasion of Ukraine has been less severe than initially feared.

But, as Statista’s Felix Richter notes, that’s not to say the outlook is rosy, as the global economy still faces major headwinds.

However, the IMF predicts the slowdown to be less pronounced than previously anticipated.

Global growth is now expected to fall from 3.4 percent in 2022 to 2.9 percent this year, before rebounding to 3.1 percent in 2024.

The 2023 growth projection is up from an October estimate of 2.7 percent, as the IMF sees far fewer countries facing recession this year and does no longer anticipates a global downturn.

You will find more infographics at Statista

One of the reasons behind the cautiously optimistic outlook is the latest downward trend in inflation, which suggests that inflation may have peaked in 2022.

The IMF predicts global inflation to cool to 6.6 percent in 2023 and 4.3 percent in 2024, which is still above pre-pandemic levels of about 3.5 percent, but significantly lower than the 8.8 percent observed in 2022.

“Economic growth proved surprisingly resilient in the third quarter of last year, with strong labor markets, robust household consumption and business investment, and better-than-expected adaptation to the energy crisis in Europe,” Pierre-Olivier Gourinchas, the IMF’s chief economist, wrote in a blog post released along with the report.

“Inflation, too, showed improvement, with overall measures now decreasing in most countries—even if core inflation, which excludes more volatile energy and food prices, has yet to peak in many countries.”

The risks to the latest outlook remain tilted to the downside, the IMF notes, as the war in Ukraine could further escalate, inflation continues to require tight monetary policies and China’s recovery from Covid-19 disruptions remains fragile. On the plus side, strong labor markets and solid wage growth could bolster consumer demand, while easing supply chain disruptions could help cool inflation and limit the need for more monetary tightening.

In conclusion, Gourinchas calls for multilateral cooperation to counter “the forces of geoeconomic fragmentation”.

“This time around, the global economic outlook hasn’t worsened,” he writes. “That’s good news, but not enough. The road back to a full recovery, with sustainable growth, stable prices, and progress for all, is only starting.”

However, just because the ‘trend’ has shifted doesn’t mean it’s mission accomplished…

That looks an awful lot like Central Bankers’ nemesis remains – global stagflation curb stomps the dovish hopes.

Authored by Jonathan Turley via jonathanturley.org,

Mark Houck, 48, was acquitted yesterday in a high-profile prosecution by the Biden Administration under the Freedom of Access to Clinic Entrances (FACE) Act.  Houck was accused of pushing a Planned Parenthood escort during a clash outside an abortion clinic. It is a rare victory for Houck and the Thomas More Society (which represented Houck) under the act. Houck insisted that he was trying to protect his twelve-year-old son in the encounters with Love. There is also an interesting wrinkle in the jury deliberations.

The FACE Act prohibits “violent, threatening, damaging, and obstructive conduct intended to injure, intimidate, or interfere with the right to seek, obtain, or provide reproductive health services.”

The Biden Administration alleged that Houck “forcefully shoved” Bruce Love, a 72-year-old volunteer at a Philadelphia Planned Parenthood on Oct. 13, 2021. The trial explored two different encounters with Love.

In the first encounter, Houck was across the street on a sidewalk counseling two women who had left the Planned Parenthood clinic. Love followed the women. The Justice Department says that Houck elbowed Love because he was a clinic escort. Houck testified that Love startled him and made contact with him, causing him to say “What are you doing?” and hip-check him out of reflex.

Houck testified that he told Love to “Stay away from my son” and “Don’t come near us” when Love approached them on the sidewalk after the first incident.

His son, Houck Jr. also testified and said that Love stood close to him as he taunted his father saying “You’re hurting women. You don’t care about women.” He then said Love said the same to him and added “Your dad’s a bad person. Your dad’s harassing women.” He said that he moved away from Love out of fear.

It was a highly contested account, but the Biden Administration decided to prosecute and later went to Houck’s home to arrest him. The arrest drew criticism after a large number of FBI agents descended on the home.

What was interesting is that the jury previously declared itself deadlocked and was sent home on Friday. However, a juror was then reportedly replaced by an alternate juror on Monday afternoon. They then quickly reached an acquittal. It is not clear if the deadlock was due to that one juror, but a consensus that formed during that day.

It is not uncommon for jurors to overcome a deadlock, particularly after an Allen charge. Named after the United States Supreme Court case Allen v. United States (1896) where it was first used, it is called the “dynamite charge” to break deadlocks. It is unpopular with most defense attorneys because it encourages the majority to work to convince the minority — often breaking down the resistance of holdouts.

It is not clear if the jury simply overcame its divisions after a weekend break or whether the replaced juror was a holdout.

The acquittal in a FACE Act case is relatively rare given the “cut-and-dry” language of the law.

We recently discussed an English case that showed its own efforts against pro-life protesters when a woman was arrested for praying near a clinic.

Authored by Meteorologist Paul Dorian of Arcfield Weather, 

Overview

Punxsutawney Phil will make his annual prediction on the prospects for an early spring this Thursday, February 2nd, and my guess is that he will see his shadow indicating six more weeks of winter. At least, that is what I would recommend to my fellow Pennsylvania prognosticator. There are processes unfolding in the upper part of the atmosphere over the polar region of the northern hemisphere that suggest there may very well be additional cold air outbreaks for much of the nation as we head through February and into March. In fact, a brutally cold air mass is headed to the Northeast US for Friday into Saturday with zero degrees on the table in New York City.

One part of the country that may not be vulnerable to cold air outbreaks in coming weeks is the Southeast US and, in particular, the state of Florida where a persistent upper-level ridge may keep it warm right into spring training season. In addition to the prospects for more cold, the overall weather pattern should remain quite active as well across the nation with numerous rain/snow/ice events on the way. Even the state of California – which has experienced a break in the action for the past ten days or so – will see a stormier pattern return to the region in early February; especially, the northern half.

Background

The month of January is likely headed to a finish that will result in it turning out to be the 2nd or 3rd warmest on a nationwide basis compared to any in the last 40 years. This unusually warm month of January has been quite a contrast to December which featured some bitter cold air masses across the nation including one that arrived in the Mid-Atlantic region just in time for the Christmas Eve/Christmas weekend. Each of these past two months has been quite active with multiple storm systems impacting many parts of the country. In particular, the state of California was pummeled by ocean storms in the period from late December to around the third week of January. Looking ahead, one change in the upper atmosphere over the polar region of the Northern hemisphere suggests that cold air outbreaks can continue for much of the nation into February and the active weather pattern is likely to continue with multiple storms on the horizon bringing more rain, ice or snow.

The “stratospheric warming” phenomenon

One way to monitor the potential for wintertime Arctic air outbreaks into the central and eastern US is to track the temperature pattern in the stratosphere over the polar region of the Northern Hemisphere. The stratosphere is the second major layer of the atmosphere just above the troposphere and below the mesosphere. It occupies the region of atmosphere from about 12 to 50 km, although its lower boundary tends to be higher nearer the equator and lower nearer the poles. The stratosphere defines a layer in which temperatures rise with increasing altitude. At the top of the stratosphere, the thin air may attain temperatures close to 0°C. This rise in temperature is caused by the absorption of ultraviolet (UV) radiation from the sun by the ozone layer. Such a temperature profile creates very stable atmospheric conditions and the stratosphere lacks the air turbulence that is so prevalent in the troposphere. Consequently, the stratosphere is almost completely free of clouds or other forms of weather.

Sudden stratospheric warmings (SSWs) are among the most impressive dynamical events in the physical climate system. During the winter months in the polar stratosphere, temperatures are typically at or below minus 70°C. The cold temperatures are combined with strong westerly winds that form the southern boundary of the stratospheric polar vortex which plays a major role in determining how much Arctic air spills southward toward the mid-latitudes. This dominant structure is sometimes disrupted in some winters by being displaced, split apart or even reversed. Under these circumstances, the winds can decrease or change directions and the temperatures in the lower stratosphere can rise by more than 50°C in just a few days.

In response to the stratospheric warming (and associated layer expansion) at the high latitudes, the troposphere cools down dramatically (with layer contraction) at the high latitudes and pressure rises. This tropospheric cold air can then be more easily transported from the high latitudes to the middle latitudes given the “high-latitude blocking” that often sets up over places like Greenland and northeastern Canada. The entire process from the initial warming of the stratospheric at high latitudes to the cooling in the troposphere at middle latitudes can take several weeks to unfold. [For more information on the stratospheric warming phenomenon visit our “Meteorology 101” page for an extended video discussion on the topic].

Current stratospheric warming event 

During the middle part of January, the polar vortex normally positioned near or over the North Pole began to get “stretched out” and two separate warming areas began to show up aloft. By the last week of January, a significant area of warming developed at stratospheric levels over the Siberia region of the Northern Hemisphere and the polar vortex was displaced a bit away from its prior location. By the early part of February, this area of warming is expected to rotate to a position centered right near the North Pole and the polar vortex will become displaced and shrunk in size compared to the way it looked a few weeks ago. This stratospheric warming event is likely to result in the displacement of cold air masses from the high latitudes into the middle latitudes during February and perhaps even into March – delaying the start of spring in much of the nation. The one exception to this outlook may be the Southeast US and, in particular, the state of Florida which may enjoy warm weather from now right into the spring training season thanks in large part to the stubborn high pressure ridge aloft in that part of North America. 

Active pattern to continue with rain, ice and snow

In addition to the prospects for more cold air outbreaks across much of the nation, the overall weather pattern is likely to remain quite active in coming weeks. Upper-level high pressure ridging is likely to remain centered over the southwestern Atlantic/Southeast US – typical of La Nina winters – and this will present a natural temperature gradient with colder-than-normal air to be centered over the central US. This “battleground” region in between the ridge (mild) to the south and east and the upper-level low (cold) to the north and west has been and will continue to be a conduit for the movement of low pressure systems to move from the south-central states to the Northeast US. Out west, California has experienced a break in the action during the last ten days or so, but a stormier pattern is likely to return to the Golden State beginning early in February; especially, the northern half.

Let’s wait and see what Phil has to say.

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By Jan-Patrick Barnert and Sagarika Jaisinghani, Bloomberg Markets Live reporters and strategists

Tesla Inc.’s move to slash prices across the US and major European markets has triggered similar cuts across the electric-vehicle sector — with Ford Motor Co. being the latest to follow suit today [ZH: as we said would happen]

If other automakers and dealers match Tesla price cuts, core CPI could drop by more than 1% M/M

— zerohedge (@zerohedge) January 13, 2023

But the new trend goes well beyond the EV industry, and could quickly become the next big earnings headwind.

Companies that until now have defended their profitability from surging cost inflation by charging more are finding that they have less power to do so as price growth starts to cool. Indeed, many are now starting to lower prices at a time when expenses remain inflated, putting their profit margins under strain.

The list of firms showing signs of earnings stress is growing. Ford and Chinese electric-vehicle maker Xpeng Inc. have both followed Tesla’s lead on price, while apparel makers Lululemon Athletica Inc. and Hennes & Mauritz AB served notice of the impact on margins as they marked down goods to help manage bulging inventory just as expenses are soaring.

Elsewhere, video-games makers including Ubisoft Entertainment SA are offering discounts to counter weak consumer demand, an issue that’s also a thorn in the side of appliance maker Electrolux AB.

“Falling inflation is going to be a significant headwind for profit margins given the sequencing of costs falling later than end price,” said Michael Wilson, a strategist at Morgan Stanley who was top-ranked in last year’s Institutional Investor survey. Investors should be careful what they wish for as peaking inflation is “very negative for profitability.”

The growing pressure on profit margins presents a potential hurdle to the equities rally of the last four months. While investors have been fretting over rising interest rates, peak inflation and a possible recession, they’ve at least been able to count on robust company earnings as a reason to stay invested. Now that leg of support appears to be crumbling.

According to data compiled by Bloomberg, earnings per share estimates for the S&P 500 have fallen since peaking in June 2022, while revenue projections have flatlined. With about 125 index members having reported so far this results season, sales are beating estimates by the smallest percentage since data going back to the fourth quarter of 2020, the data show.

For JPMorgan Chase & Co. macro strategists led by Dubravko Lakos-Bujas, 2023 corporate guidance “should be less optimistic relative to current estimates.” Lower pricing power, demand destruction, wage pressures and higher interest expenses stand to push margins lower, they say.

Kasper Elmgreen, Amundi SA’s head of equities, warns that “profit margins have to come down,” pointing to a reversal in once helpful factors such as tax, interest rates and inflation.

“The resilience last year was about consumers that had strong savings,” Elmgreen said. “Now you’re starting to get worried and confidence indicators are collapsing. Real incomes are under pressure. And that’s going to manifest itself in consumption.”

Chinese electric vehicle maker Xpeng has pushed back its profit goal until 2025, after having previously aimed to break even by late 2023 or early 2024.

The technology sector faces a particularly tough time. Companies from Amazon.com Inc. to Alphabet Inc.’s Google have recently laid off staff after years of growth. The sector announced 97,171 job cuts in 2022, up 649% compared with the previous year, according to consulting firm Challenger, Gray & Christmas Inc.

Reducing costs can only go so far before companies start hitting their own margins, said Karim Chedid, head of investment strategy for iShares EMEA at BlackRock Inc.

“The drivers of company profits last year are not going to be repeated this year,” Chedid said. “And they’re going to find it difficult to defend margins again.”

Over the past decade, we extensively covered a bizarre surge in banker suicides, pointing out the various conspiracy theories linking various high-level bank executives and inside scandals at the very highest levels across financial institutions, and no bank had more high profile suicides than Deutsche Bank.

Then, shortly after the mid-2010s, news of bankers taking their lives gradually faded away, perhaps in no small part because much of nascent fraud moved from Wall Street and to various startups/silicone valley/crypto.

That benign trend, however, may be bout to reverse again: according to Bloomberg, an unnamed banker (we expect his name to emerge within a few hours) working at London’s office of Perella Weinberg Partners died by suicide in the days after the firm’s UK headquarters were searched as part of a German investigation into insider trading. Citing sources, Bloomberg notes that the deceased banker was one of the suspects in the probe.

“We are incredibly saddened by the tragic loss of our colleague and extend our heartfelt condolences to the family, loved ones and friends,” a spokesperson for Perella Weinberg said in an emailed statement. “We are focused on supporting our colleagues at this very difficult time.”

On Jan 25, the Perella Weinberg UK office was searched by officials as part of an investigation by Frankfurt prosecutors. They were looking into allegations that a London-based employee at Perella Weinberg disclosed information on planned takeovers that other suspects then traded on, Bloomberg reported previously.

Raids were also conducted in Frankfurt, Munich and the wider area of the Bavarian capital, as well as in Austria. Prosecutors said last week that they’d made an arrest as part of an investigation into five German suspects since November 2021 over allegations they used insider information about takeovers that took place between 2017 and 2021.

The suspects were able to earn a “two digit million” euro amount by trading on the information, according to a joint statement from the investigators and Germany’s financial regulator Bafin.

“As we confirmed last week, we are assisting with an investigation by German law enforcement authorities and the firm is not the subject of any investigation,” a Perella Weinberg spokesperson told Bloomberg.