Category: zerohedge

Goldman Sachs made an unfortunate revelation deep in the bowels of its 10Q  filed Friday: Nearly all of the storied investment bank’s blockbuster Q2 profits – driven by a surge in trading revenue – would be erased by legal costs associated with a settlement with the  Malaysian government over the 1MDB scandal, Goldman’s biggest legal imbroglio since the financial crisis.

Goldman recently agreed to pay $3.9 billion to the Malaysian government to settle the case once and for all…at least, in Malaysia.

The bank boosted litigation reserves by $2.01 billion after striking the above-mentioned deal with Malaysian prosecutors over the bank’s role in helping to enable a corrupt PM to use a sovereign wealth fund as his personal piggy bank. The additional provision cut the firm’s Q2 profit – published 3 weeks ago on July 15 – by 85%.

Here’ the excerpt from Goldman’s 10-Q, found under the heading “Note 28”:

On July 24, 2020, the firm announced that it has reached an agreement in principle, subject to the execution of definitive documentation, with the Government of Malaysia to resolve all the criminal and regulatory proceedings in Malaysia involving the firm, including the Malaysian Criminal Proceedings and the MSC’s notices to show cause.

The agreement in principle would involve the payment to the Government of Malaysia of $2.5 billion and a guarantee that the Government of Malaysia receives at least $1.4 billion in assets and proceeds from assets seized by governmental authorities around the world related to 1MDB. In connection with the guarantee, the firm performed a valuation analysis on the relevant assets and believes based on that analysis that the guarantee does not present a significant risk exposure to the firm.

In light of this agreement in principle, subsequent to the firm’s issuance of its earnings release filed as an exhibit to the Form 8-K dated July 15, 2020 (Form 8-K), the firm recorded an additional provision for litigation and regulatory proceedings of $2.01 billion for the second quarter of 2020, increasing the net provisions to $2.96 billion for the second quarter of 2020.

Here’s a table from the finding:

Nestled even deeper in the 10-Q, Goldman includes a whole section entitled “1MDB-Related Matters” that recounts the history of the investigation involving Malaysian and American authorities, and regulators around the world, while also recounting the details of the ill-fated bond-offerings where the bank raised $6.5 billion for the Malaysian slush fund, which was later mostly stolen by former PM Najib Razak and his banker, Jho Low, who is now an international fugitive reportedly enjoying the protection of the PRC.

The firm has received subpoenas and requests for documents and information from various governmental and regulatory bodies and self-regulatory organizations as part of investigations and reviews relating to financing transactions and other matters involving 1MDB. Subsidiaries of the firm acted as arrangers or purchasers of approximately $6.5 billion of debt securities of 1MDB.

On November 1, 2018, the U.S. Department of Justice (DOJ) unsealed a criminal information and guilty plea by Tim Leissner, a former participating managing director of the firm, and an indictment against Ng Chong Hwa, a former managing director of the firm, and Low Taek Jho. Leissner pleaded guilty to a two-count criminal information charging him with conspiring to launder money and conspiring to violate the U.S. Foreign Corrupt Practices Act’s (FCPA) anti-bribery and internal accounting controls provisions. Low and Ng were charged in a three-count indictment with conspiring to launder money and conspiring to violate the FCPA’s anti-bribery provisions. On August 28, 2018, Leissner’s guilty plea was accepted by the U.S. District Court for the Eastern District of New York and Leissner was adjudicated guilty on both counts. Ng was also charged in this indictment with conspiring to violate the FCPA’s internal accounting controls provisions. The charging documents state, among other things, that Leissner and Ng participated in a conspiracy to misappropriate proceeds of the 1MDB offerings for themselves and to pay bribes to various government officials to obtain and retain 1MDB business for the firm. The plea and charging documents indicate that Leissner and Ng knowingly and willfully circumvented the firm’s system of internal accounting controls, in part by repeatedly lying to control personnel and internal committees that reviewed these offerings. The indictment of Ng and Low alleges that the firm’s system of internal accounting controls could be easily circumvented and that the firm’s business culture, particularly in Southeast Asia, at times prioritized consummation of deals ahead of the proper operation of its compliance functions. On May 6, 2019, Ng pleaded not guilty to the DOJ’s criminal charges. On February 4, 2020, the FRB disclosed that Andrea Vella, a former participating managing director whom the DOJ had previously referred to as an unindicted co-conspirator, had agreed, without admitting or denying the FRB’s allegations, to a consent order that prohibited him from participating in the banking industry. No other penalties were imposed by the consent order.

On December 17, 2018, the Attorney General of Malaysia filed criminal charges in Malaysia against GSI, as the arranger of three offerings of debt securities of 1MDB, aggregating approximately $6.5 billion in principal amount, for alleged disclosure deficiencies in the offering documents relating to, among other things, the use of proceeds for the debt securities, as well as against Goldman Sachs (Asia) LLC (GS Asia) and Goldman Sachs (Singapore) PTE (GS Singapore). Criminal charges have also been filed against Leissner, Low, Ng and Jasmine Loo Ai Swan. In a related press release, the Attorney General of Malaysia indicated that prosecutors in Malaysia will seek criminal fines against the accused in excess of $2.7 billion plus the $600 million of fees received in connection with the debt offerings. On August 9, 2019, the Attorney General of Malaysia announced that criminal charges had also been filed against seventeen current and former directors of GSI, GS Asia and GS Singapore (together with the criminal charges against GSI, GS Asia and GS Singapore, the Malaysian Criminal Proceedings).
The Malaysia Securities Commission (MSC) issued notices to show cause against Goldman Sachs (Malaysia) Sdn Bhd (GS Malaysia) in December 2018 and March 2019 that (i) allege possible violations of Malaysian securities laws and (ii) indicate that the MSC is considering whether to revoke GS Malaysia’s license to conduct corporate finance and fund management activities in Malaysia.

On July 24, 2020, the firm announced that it has reached an agreement in principle, subject to the execution of definitive documentation, with the Government of Malaysia to resolve all the criminal and regulatory proceedings in Malaysia involving the firm, including the Malaysian Criminal Proceedings and the MSC’s notices to show cause. The agreement in principle would involve the payment to the Government of Malaysia of $2.5 billion and a guarantee that the Government of Malaysia receives at least $1.4 billion in assets and proceeds from assets seized by governmental authorities around the world related to 1MDB. In addition, the Government of Malaysia agreed to withdraw the Malaysian Criminal Proceedings and agreed that no further charges would be brought against Group Inc., its affiliates and subsidiaries, or any of their directors and officers (excluding Leissner and Ng) related to 1MDB.

The firm has received multiple demands, beginning in November 2018, from alleged shareholders under Section 220 of the Delaware General Corporation Law for books and records relating to, among other things, the firm’s involvement with 1MDB and the firm’s compliance procedures. On December 13, 2019, an alleged shareholder filed a lawsuit in the Court of Chancery of the State of Delaware seeking books and records relating to, among other things, the firm’s involvement with 1MDB and the firm’s compliance procedures. The parties have agreed to stay proceedings pending resolution of the books and records demand.

On February 19, 2019, a purported shareholder derivative action relating to 1MDB was filed in the U.S. District Court for the Southern District of New York against Group Inc. and the directors at the time and a former chairman and chief executive officer of the firm. The amended complaint filed on July 12, 2019, which seeks unspecified damages, disgorgement and injunctive relief, alleges breaches of fiduciary duties, including in connection with alleged insider trading by certain current and former directors, unjust enrichment and violations of the anti-fraud provisions of the Exchange Act, including in connection with Group Inc.’s common stock repurchases and solicitation of proxies. Defendants moved to dismiss this action on September 12, 2019.

Beginning in March 2019, the firm has also received demands from alleged shareholders to investigate and pursue claims against certain current and former directors and executive officers based on their oversight and public disclosures regarding 1MDB and related internal controls.

On November 21, 2018, a summons with notice was filed in New York Supreme Court, County of New York, by International Petroleum Investment Company, which guaranteed certain debt securities issued by 1MDB, and its subsidiary Aabar Investments PJS. The summons with notice makes unspecified claims relating to 1MDB and seeks unspecified compensatory and punitive damages and other relief against Group Inc., GSI, GS Asia, GS Singapore, GS Malaysia, Leissner, Ng, and Vella, as well as individuals (who are not current or former employees of the firm) previously associated with the plaintiffs.

On December 20, 2018, a putative securities class action lawsuit was filed in the U.S. District Court for the Southern District of New York against Group Inc. and certain former officers of the firm alleging violations of the anti-fraud provisions of the Exchange Act with respect to Group Inc.’s disclosures concerning 1MDB and seeking unspecified damages. The plaintiffs filed the second amended complaint on October 28, 2019, which the defendants moved to dismiss on January 9, 2020.

Unfortunately for Goldman, even after all of this, it still hasn’t put 1MDB to bed. Soon – perhaps before the end of the month – Goldman is expected to announce its final settlement with the DoJ. The big question: Will Goldman’s biggest scandal since the financial crisis yield an admission of guilt?

World stocks ended a four day rally overnight that pushed the MSCI World index to green for the year, after U.S. President Trump cranked up simmering tensions with China after late on Thursday has signed orders to ban Americans from transactions involving China’s ByteDance (TikTok’s parent) and WeChat (owned by Tencent), taking effect in 45 days. Furthermore, Trump’s Working Group on Financial Markets recommended that Chinese companies currently listed on US exchanges should be delisted if they do not become compliant with US accounting standards.

Tencent Holdings slumped 5% in Hong Kong after plunging as much as the 10% limit earlier.

Trump’s decision to take aim at WeChat, the world’s most-used messaging app, has the potential to upend the international businesses of companies from Apple Inc. to Walmart Inc.

“The executive orders leveled on TikTok and the scrutiny over WeChat has opened up a most unwelcome can of worms,” said Stephen Innes, chief global markets strategist at AxiCorp. This could “be more of a signal than anything else, especially front-running the China trade talks” expected later this month, he said.

S&P futures pared some of their Thursday gains after the ES continued to print new post-COVID highs in late US trade on Thursday; the Emini hit a high of just shy of 3350, ahead of its ATH just beneath 3400.

MSCI’s index of world stocks fell 0.2% on Friday after up four consecutive days of gains. It was less than 3% away from a late February peak, and had just turned green on the year on Thursday.  European stocks opened lower, with major indexes down between 0.2% to 0.4% in early trading, although they largely brushed off Asia’s tech-led slump. The Eurostoxx 600 is little changed as gains in telecoms and media are offset by weaker autos and oil & gas names. FTSE MIB and IBEX underperform.

Chinese stocks led losers in Asia and the yuan slumped after Trump issued the executive orders, noting that his admin was stepping up efforts to purge “untrusted” Chinese apps from U.S. digital networks and called TikTok and WeChat “significant threats.” “The U.S. pressure on China’s tech sector appears likely to continue in the presidential elections, injecting volatility in the sector and opening the door to escalatory retaliation,” UBS strategists said.

In addition to the TikTok crackdown, Trump confirmed he has signed proclamation re-imposing aluminium tariffs on Canada, to which Canada has said it would retaliate. However, as NewsSquawk notes, the measures appear more symbolic/political for now than part of a broader economic concern.

Meanwhile, concerns remain that lawmakers won’t be able to resolve differences over a new U.S. relief package. The White House and congressional Democrats are up against a self-imposed Friday deadline to strike a deal. Markets will also be closely watching details from the monthly U.S. jobs report today (full preview here), which is expected to show a steep slowdown in hiring during July.

In rates, there is a modest bull-flattening bias in Treasuries, 2s unch. At 11.5bps, 10s -2bps at 52bps and 30s -3bps at 117bps; the strength was made in futures overnight amid the escalating Sino-US tensions.

In FX, the dollar strengthened, while gold retreated for the first time in six days. The subdued risk tone has seen the Dollar Index reclaim the 93 handle after the late risk rally on Thursday kept it away, seeing cyclical currencies and EMFX on the defensive. Turkey’s lira slumped to a record low against the dollar even after the central bank spent billions to to prop it up, although a late burst pushed the battered currency to unchanged.

Sterling fell after a post-BOE advance on Thursday, as traders take stock of officials distancing themselves from negative rates and an optimistic view of the U.K’s economic recovery. The Australian currency weakened after dovish remarks from the Reserve Bank and the escalation of the U.S.-China row weighed on the currency. The New Zealand dollar followed suit, seeing the biggest losses in the G-10. The Norwegian krone follow oil and gold prices lower, although a mid-week spike in the commodities helped make the currency see the biggest weekly gains among its peers against the greenback.

In commodities, crude futures have been moving slightly lower through Europe, although by no means significant, with oil demand more sheltered from the US-China tech battle. Gold and silver have faded some of their record gains, with silver dropping modestly after rising just shy of $30 late on Thursday.

Economic data include the monthly employment report for July. Dish and Brookfield Renewable Partners are due to report earnings.

Market Snapshot

• S&P 500 futures down 0.5% to 3,327.50
• STOXX Europe 600 down 0.1% to 362.08
• MXAP down 0.6% to 168.82
• MXAPJ down 0.9% to 563.20
• Nikkei down 0.4% to 22,329.94
• Topix down 0.2% to 1,546.74
• Hang Seng Index down 1.6% to 24,531.62
• Shanghai Composite down 1% to 3,354.04
• Sensex down 0.05% to 38,007.48
• Australia S&P/ASX 200 down 0.6% to 6,004.84
• Kospi up 0.4% to 2,351.67
• German 10Y yield fell 0.6 bps to -0.537%
• Euro down 0.4% to $1.1829
• Brent Futures down 0.4% to $44.89/bbl
• Italian 10Y yield fell 4.1 bps to 0.806%
• Spanish 10Y yield fell 0.3 bps to 0.276%
• Brent futures down 0.8% to $44.74/bbl
• Gold spot down 0.1% to $2,060.74
• U.S. Dollar Index up 0.3% to 93.10

Top Overnight News from Bloomberg

• President Donald Trump signed a pair of executive orders prohibiting U.S. residents from doing business with the Chinese- owned TikTok and WeChat apps beginning 45 days from now, citing the national security risk of leaving Americans’ personal data exposed
• The Trump administration’s move to ban U.S. residents from doing business with Tencent Holdings Ltd.’s WeChat app erased $30 billion from the Internet giant’s market value and sent the yuan to its biggest slump in two weeks
• Hopes for a speedy economic rebound in large parts of Europe are holding ground as manufacturing starts to recover from pandemic lows. Industrial output in Germany rose at a faster-than-expected pace of 8.9% in June, and factory demand is also increasing. With France and Spain experiencing similar trends, signs are mounting that Europe’s initial bounce-back from the worst recession in living memory may be faster than anticipated
• OPEC’s second biggest producer Iraq made its strongest commitment yet to implement deep cuts in crude production after the country’s oil minister and his Saudi counterpart held a phone call Thursday. The country failed to meet its production-cut target in May and June

Asian equity markets failed to sustain the positive handover from Wall St where all major indices notched gains as tech resumed its outperformance and Apple continued to print fresh record highs to edge closer towards the USD 2tln market cap status, while sentiment stateside was also underpinned by lower jobless claims data and with COVID-sensitive sectors such as airlines, hotels and casinos supported in late trade after the US State Department lifted advisory against all international travel and returned to its previous system of country specific levels of travel advice. Nonetheless, the momentum faded in Asia with the region cautious heading into the latest Chinese trade data which later proved to be mostly better than expected and with US-China tensions stoked after US President Trump signed executive orders to ban transactions with TikTok’s parent ByteDance, as well as Tencent-owned WeChat in 45 days. ASX 200 (-0.6%) and Nikkei 225 (-0.4%) were both negative in which Australia’s mining names gave back some of their recent gains and as Japan digested earnings, with sentiment also dampened by concerns of a weaker consumer as although Household Spending in June rose by its fastest pace since data was made available in 2000, the actual decline in household spending for the April-June quarter of 9.8% Y/Y was the steepest contraction on record. Hang Seng (-1.8%) and Shanghai Comp. (-0.9%) conformed to the downbeat tone due to the US recent actions against TikTok and WeChat which saw Tencent shares slump over 7%, while US President’s Working Group on Financial Markets earlier recommended Chinese companies currently listed on US exchanges to be compliant with US accounting standards or be delisted. Finally, 10yr JGBs were relatively flat with minimal gains seen amid the risk averse tone and the BoJ present in the market for JPY 940bln of JGBs focused on 1yr-3yr and 5yr-10yr maturities.

Top Asian News

• Japan Looks to Scrap New Libor-Tied Lending Six Months Early
• China Official Reserves Rise to Highest Since July 2016

European stocks are modestly softer [Euro Stoxx 50 -0.3%] as the downbeat APAC performance seeps into the region after China lodged stern opposition to the US’ executive order on China’s TikTok and WeChat, alongside the State’s drone sale to Taiwan. Broader sectors are mixed with underperformance seen in the energy sector amid losses in the complex, whilst Telecoms remain firm as Deutsche Telekom (+2.8%) holds onto gains amid stellar numbers from T-Mobile (+5.5% pre-mkt) of which Deutsche Telekom owns 43.5%. The sectoral breakdown adds little meat to the bones and provides no clear risk bias, whilst the Travel & Leisure sector remain pressured amid fears of further additions to quarantine lists prompting travel cancellations. In terms of individual movers: BP (-2.6%) trades lower as sources stated that it is poised to sell a large chunk of its oil and gas assets even if crude prices rise; oil giants usually hold assets in the longer-term even if prices fall – with a view of bringing marginal production online contingent on improving market conditions. Rolls-Royce (-3.4%) is hit on the back of source reports that activist investor ValueAct has reportedly sold its entire 10.9% stake in the group since 2017. Finally, Hikma Pharmaceuticals (+9%) extended on gains after raising its FY20 generic revenue guidance alongside its operating margin, whilst the CEO later stated that the group entered a manufacturing deal for Gilead’s remdesivir treatment, potentially providing added impetus.

Top European News

• Standard Life Loses Top Spot Among U.K. Asset Managers
• SAS Makes Last-Ditch Bid to Secure Backing for Rescue Plan
• TP ICAP Says July Trading Activity ‘Materially Lower’ Than 2019

In FX, the Dollar continues to benefit from corrective and positional trade rather than any real fundamental shift in sentiment or direction, as consolidation and short covering persists pre-NFP and the showdown talks in Washington to resolve differences on the next relief bill. It’s debatable whether the monthly BLS report or fiscal deadline will be Friday’s headline-grabbing event, but for now the Buck has clawed back more lost ground against G10 peers and the index is holding between 93.227-92.759 parameters, above Thursday’s 92.495 new 2020 low.

• NZD/EUR/CHF/CAD – The major victims of the Greenback’s ongoing recuperation, if not quite revival, as the Kiwi backs off from a test of resistance/offers into 0.6700 and the Euro fades into 1.1900 where 1.5 bn option expiries reside. Note also, the single currency has found ventures above the round number unsustainable and is now south of almost equally large expiry interest at 1.1850 (1.2 bn), with bids said to be underpinning around 1.1820-10 and a key Fib in close proximity (1.1823). Meanwhile, the Franc remains sub-0.9100 and straddling 1.0800 vs the Euro as SNB reserves data reveal a decline, and the Loonie has reversed further towards 1.3400 from recent 1.3250+ multi-month highs following the reintroduction of US tariffs on Canadian aluminium and impending like-for-like countermeasures. More immediately, the 2 NA nations go head-to-head on the jobs front with July data due simultaneously ahead of Canada’s Ivey PMIs.
• AUD/GBP – Also down vs their US counterpart, but clinging to or near big figure/psychological levels at 0.7200 and 1.3100 respectively, as the Aussie draws some underlying support from encouraging or arguably upbeat Chinese trade data and the Pound retains an element of post-BoE strength even though MPC member Ramsden leaves the door open for more stimulus in November should the need arise. For the record, no major reaction down under to the RBA’s SOMP or comments from Deputy Governor Ellis largely underlining latest policy meeting assessments and guidance.
• JPY – Still no big make or break for the Yen that is pivoting 105.50 after a late fixed related recoil yesterday and Japanese reserves showing a rise conducive with, but not conclusive, a degree of official intervention, albeit this time around 100 pips above the low 104.00 area.
• EM – Simply no respite for the Lira that has crashed to fresh all time depths against the Dollar and Euro for that matter, even though the CBRT has started withdrawing liquidity provisions and instructing banks to use the overnight lending facility at 9.75% ahead of a 50% reduction in primary dealer OMO limits as from Monday. Usd/Try paring back a tad from 7.3650 or so.      

In commodities, WTI and Brent front month futures drift lower in a correlated move with the equity markets as news-flow for the complex remains scarce ahead of the US jobs report. An earlier Saudi-Iraq statement did the rounds but provided no fresh substance – with the two nations reaffirming their commitment to the OPEC+ pact. WTI Sept resides around USD 41.50/bbl having had briefly dipped below the figure, whilst Brent Oct lost its 45/bbl-status after oscillating on either side of the figure in early hours. Elsewhere, spot gold is relatively uneventful and remains contained around the USD 2060/oz mark, as has been the case throughout the European morning, whilst spot silver sees more pronounced losses as price consolidate from yesterday’s outperformance.  In terms of base metals, Dalian iron ore prices retreated overnight following yesterday’s warning from the Dalian exchange around investing rationally amid the recent rally, whilst Shanghai copper saw losses as US-Sino tensions continue to ratchet.

US Event Calendar

• 8:30am: Change in Nonfarm Payrolls, est. 1.48m, prior 4.8m
  • Change in Private Payrolls, est. 1.18m, prior 4.77m
  • Average Hourly Earnings MoM, est. -0.5%, prior -1.2%
  • Average Hourly Earnings YoY, est. 4.2%, prior 5.0%
  • Average Weekly Hours All Employees, est. 34.4, prior 34.5
  • Unemployment Rate, est. 10.55%, prior 11.1%
  • Labor Force Participation Rate, est. 61.8%, prior 61.5%
  • Underemployment Rate, prior 18.0%
• 10am: Wholesale Inventories MoM, est. -2.0%, prior -2.0%; Wholesale Trade Sales MoM, prior 5.4%
• 3pm: Consumer Credit, est. $10.0b, prior $18.3b deficit

Update (1900ET): As TikTok lashes out at the Trump Administration, Tencent has been conspicuously quiet.

But CNBC reported a few moments ago, citing a domestic poll, that Chinese consumers would retaliate against Apple if WeChat is banned form its app store.

Some in China Could Ditch $AAPL if WeChat Banned from App Store – CNBC, Citing Poll

— *Walter Bloomberg (@DeItaOne) August 7, 2020

No surprises there.

Meanwhile, Tencent shares are getting absolutely hammered.

* * *

Maybe its is oft-professed fondness for “deals”, but for whatever reason, it seems President Trump is determined not only to see Microsoft buy TikTok, but to claim some sort of role (or reward) for the US government in bringing about the buyout. Last night, Trump issued yet another executive order targeting both TikTok owner ByteDance and Tencent-owned WeChat, another popular Chinese social media company.

In the order, Trump essentially formalized threats made a week ago by setting a time limit for barring both companies from the US. While the recourse for WeChat is less clear, the order was worded in a way that would allow TikTok to continue operating under the auspices of Microsoft. Perhaps this had something to do with the reports about Microsoft looking into buying TikTok’s entire global business (instead of just the US, Canada, Australia and New Zealand-facing business that MSFT claimed to be interested in on Sunday night.

Stocks slumped in Asia and Europe Friday morning, and US futures are pointing to a lower open, as Beijing’s insistence that the US would not be allowed to simply “steal” TikTok in a “smash & grab” deal probably led analysts to conclude that – whatever Trump’s intentions with the EO – it would likely complicate deal talks in the near term, as Trump just made Microsoft’s job of courting the national party that much more difficult.

In its own statement published Friday morning, TikTok said it was “shocked” by Trump’s EO, which was issued “without due process” (note: it tickles us to hear Chinese companies wax poetic about the importance of “due process”.)

TikTok added that it has sought to engage in “good faith” with the US government for more than a year, and has even expressed its willingness to sell the business to a US company. The company added that it would “pursue all remedies available in order to ensure that the rule of law is not discarded and that TikTok and its users are treated fairly”.

Read the full statement:

TikTok is a community full of creativity and passion, a home that brings joy to families and meaningful careers to creators. And we are building this platform for the long term. TikTok will be here for many years to come.

We are shocked by the recent Executive Order, which was issued without any due process. For nearly a year, we have sought to engage with the US government in good faith to provide a constructive solution to the concerns that have been expressed. What we encountered instead was that the Administration paid no attention to facts, dictated terms of an agreement without going through standard legal processes, and tried to insert itself into negotiations between private businesses.

We made clear our intentions to work with the appropriate officials to devise a solution to benefit our users, creators, partners, employees, and the broader community in the United States. There has been, and continues to be, no due process or adherence to the law. The text of the decision makes it plain that there has been a reliance on unnamed “reports” with no citations, fears that the app “may be” used for misinformation campaigns with no substantiation of such fears, and concerns about the collection of data that is industry standard for thousands of mobile apps around the world. We have made clear that TikTok has never shared user data with the Chinese government, nor censored content at its request. In fact, we make our moderation guidelines and algorithm source code available in our Transparency Center, which is a level of accountability no peer company has committed to. We even expressed our willingness to pursue a full sale of the US business to an American company.

This Executive Order risks undermining global businesses’ trust in the United States’ commitment to the rule of law, which has served as a magnet for investment and spurred decades of American economic growth. And it sets a dangerous precedent for the concept of free expression and open markets. We will pursue all remedies available to us in order to ensure that the rule of law is not discarded and that our company and our users are treated fairly – if not by the Administration, then by the US courts.

We want the 100 million Americans who love our platform because it is your home for expression, entertainment, and connection to know: TikTok has never, and will never, waver in our commitment to you. We prioritize your safety, security, and the trust of our community – always. As TikTok users, creators, partners, and family, you have the right to express your opinions to your elected representatives, including the White House. You have the right to be heard.

As Trump ratchets up pressure for a deal (and further inserts himself into the deal talks, much to both companies chagrin), CNBC reminds us that Microsoft isn’t the only company reportedly “talking” to TikTok. There are at least three groups of potential investors, according to one CNBC source (we assume CNBC is referring to the VC group, Microsoft and (possibly) Facebook (though the company has vehemently denied interest in TikTok).

By adding another layer of pressure beyond what CFIUS was already applying, Trump is making these deal talks really interesting. Meanwhile, expect more whining from the teens about mean ol’ Trump trying to shut down their favorite “safe space”.

Thus far an official ongoing investigation by Lebanese authorities into the cause of Tuesday’s Beirut port blast, now considered the largest non-military munitions explosion in history, has dubbed it severe “negligence”. 

It’s now well known that over 2,500 tons of ammonium nitrate, an ultra-combustible chemical compound utilized in fertilizers and production of explosives, was allowed to sit at the port in a warehouse going back seven years. 

Specifically, President Michel Aoun identified that it was no less than 2,750 metric tons of ammonium nitrate that detonated as it was “stored unsafely” — though port officials reportedly attempted to warn the government for years that it must be moved. A number of port officials have been placed under house arrest pending the investigation.

Customs chief Badri Daher has told international media that his agency pleaded with Lebanese courts and high officials to order the chemical removed. Daher says the request for urgent removal was made six times to the judiciary over the years, all denied.

“This did not happen,” he said. The end result after the dangerous chemical — which is the same use in the deadly 1995 Oklahoma City bombing — was stored there since 2013 (also in undiluted form), was the most destructive blast in Lebanese history, killing over 135 people and injuring more than 5,000 – not to mention an estimated three billion dollars in damage.

“Legal documents, court correspondence and statements by public officials now trying to pass the buck shed light on the operations of the port, which has been dogged by allegations of widespread bribery and controlled in large measure by the militant Hezbollah group,” The Washington Post reports.

And the almost unbelievable story of how the explosive substance got there has emerged. It’s centered on a derelict and leaking vessel leased by a Russian businessman living in Cyprus. In 2013 the man identified as Igor Grechushkin, was paid $1 million to transport the high-density ammonium nitrate to the port of Beira in Mozambique. That’s when the ship, named the Rhosus, left the Black Sea port of Batumi, in Georgia.

But amid mutiny by an unpaid crew, a hole in the ship’s hull, and constant legal troubles, the ship never made it. Instead, it entered the port of Beirut where it was impounded by Lebanese authorities over severe safety issues, during which time the ammonium nitrate was transferred off, and the largely Ukrainian crew was prevented from disembarking, leading to a brief international crisis among countries as Kiev sought the safe return of its nationals.

Meanwhile, Igor Grechushkin – believed to still be living in Cyprus – reportedly simply abandoned the dangerously subpar vessel he leased, as well as its crew, never to be heard from again.

According to a damning legal briefing at the time:

“…the vessel was abandoned by her owners after charterers and cargo concern lost interest in the cargo. The vessel quickly ran out of stores, bunker and provisions.”

The ammonium nitrate was supposed to be auctioned off, but this never happened. Apparently exasperated customs and dock officials even suggested Lebanese farmers could simply spread it across their fields for a good crop yield. But not even this simple solution was heeded, nor proposals to give it to the Lebanese Army.

Via The Siberian Times: “The crew – eight Ukrainian and two Russian men – was forced to stay on board of the vessel while the owner Grechushkin declared himself bankrupt and ‘abandoned the ship’. Lebanese authorities agreed to let six out of ten sailors to leave the country, others were left stranded on the ship for almost a year. 

Instead the deadly substance languished at port, and the Rhosus sank in the harbor years later. The last crew members weren’t allowed to leave the ship and return home until August 2014. Grechushkin may have paid for their return tickets at that time.

WaPo relates: 

“Owing to the risks associated with retaining the Ammonium Nitrate on board the vessel, the port authorities discharged the cargo onto the port’s warehouses,” lawyers acting on behalf of creditors wrote in 2015. “The vessel and cargo remain to date in port awaiting auctioning and/or proper disposal,” it added.

And then later, more warnings, which apparently are in writing in legal documents:

“In view of the serious danger posed by keeping this shipment in the warehouses in an inappropriate climate,” Shafik Marei, the director of Lebanese customs, wrote in May 2016, “we repeat our request to demand the maritime agency to re-export the materials immediately.”

Astoundingly, even lawyers which had represented the effectively abandoned crew of the ship (which Ukrainian media at the time said were “hostages” of the Lebanese government) while it had been detained at port warned Lebanese government officials that the sensitive cargo was in danger “of sinking or blowing up at any moment”. 

Close view of the #BeirutExplosion pic.twitter.com/iLZR1ssOqN

— FAHAD🇱🇧 (@fabythoughts) August 5, 2020

Yet these series of warnings went unheeded for years amid a notoriously corrupt and inept Lebanese system.

Meanwhile, the fate of the man originally at the center of the saga, whose decision to simply abandon the leaky ammonium nitrate laden ship in the first place, remains somewhat of a mystery and is now largely being overlooked in international media reports. Strangely, it doesn’t even appear that Lebanese law enforcement is eager to talk to him just yet.

Cypriot media is saying Igor Grechushkin is not a Cypriot passport holder but is indeed residing in the EU country. Local authorities have indicated they are ready to bring him in for questioning, but they haven’t received a request from either Lebanese authorities or Interpol. Cypriot police spokesman Christos Andreou announced Thursday: “We have already contacted Interpol Beirut and expressed our readiness to provide them with any assistance they need, if and when our assistance is requested.”

Why hasn’t this happened? So far a few scant details have emerged via a Russia-based English language publication called The Siberian Times. It’s also included what it says is the first photograph to have emerged of Grechushkin.

First pictures emerge of a Russian man whose ammonium nitrate cargo detonated in the port of Beirut. The 2,750 tonnes cargo of Khabarovsk-born businessman Igor Grechushkin was detained in Lebanon in 2013 https://t.co/hbu1VJgres pic.twitter.com/yQZqzcBIya

— The Siberian Times (@siberian_times) August 5, 2020

The publication reports the following details:

‘The owner of the ship Igor Grechushkin effectively abandoned the ship and the remaining crew.’

‘He is not providing us with money, he completely deprived us of all means of communication.

‘He told us that he went bankrupt and while I don’t believe him, the most important thing is that he gave up on both the people and the cargo’, wrote captain Boris Prokoshev back in June 2014 in a desperate plea to international organisations, diplomats, authorities of Ukraine and the authorities of the port of Beirut to release them. 

Igor Grechushkin is reported to be still residing in Cyprus with his wife.

The Daily Mail has since republished the photographs of Grechushkin and his wife, writing that the Russian businessman “currently lives in Cyprus with wife Irina – has been accused of abandoning his ship in Beirut loaded with the lethal load.”

Given that Lebanese officials are now decrying a “crime against humanity” in having stored the deadly cargo at the port in the first place, one would think Grechushkin would at least be subject of investigation along with whatever top Lebanese officials willfully ignored the ticking time bomb in their midst.

Putting a face to some of the very real economic impact from the coronavirus are European funds that suffered a combined 706.4 billion euros in trading losses ($835 billion USD) over the first half of 2020, according to Refinitiv Lipper data released Wednesday and reported on by Reuters.

Like many other industries, the pandemic had its way with European funds – specifically in March, when global markets plunged, prompting massive interventions from Central Banks. 

Assets managed by the European fund industry saw both losses and first quarter outflows, falling to 11.2 trillion euros on June 30 from 12.3 trillion euros on December 31. 

Detlef Glow, Lipper Head of EMEA Research at Refinitiv, said: “The coronavirus pandemic hit the European fund industry with declining markets and estimated net outflows of 125.9 billion euros in the first quarter of 2020.”

He continued: “This trend reversed over the course of the second quarter as central banks and governments around the globe started quantitative easing programs and economic relief packages to cushion the economic drawdowns caused by the spread of the coronavirus and the lockdowns of economies around the globe.”

The industry recovered with inflows of 123 billion euros for the first half of the year after respective Central Banks stepped in to steady the market. The European fund market still saw a net addition of funds over the same period of time, as well. 942 funds were launched, 390 merged and 531 liquidated during the period. 

Mutual funds added 105.6 billion euros in assets with bond funds emerging as the best-selling asset type. ETFs added 17.4 billion euros. Money market funds were the best selling, bringing in 152.5 billion euros.

Equity funds saw the highest amount of liquidations. So much for buying and holding…

Authored by Egon von Greyerz via GoldSwitzerland.com,

“Gold has no role in portfolio of wealthy clients” said the chief investment officer of Goldman Sachs’ private wealth management in the week that gold in US dollars went up by over $100 and made a new high of $1,984.

Many found this statement puzzling as another Goldman department previously has told clients not to sell anything gold.

The CIO went on to say: “Our view is that gold is only appropriate if you have a very strong view that the US dollar is going to be rebased. We don’t have that view.”

THE IMPLODING DOLLAR

So here we have a dollar that has lost 85% against gold in this century and 40% since 2018. How can the CIO of the mighty GS say that the dollar is not being rebased. History certainly tells us that she is not telling the truth. Or does she believe that the dollar won’t go down in coming years. As CIO she can clearly see what everyone is seeing namely that the prospects for the dollar are doomed with what is happening in the US economy causing surging deficits and unlimited money printing.

The truth clearly lies elsewhere. No asset manager is interested in protecting their clients’ assets by investing in the ultimate form of wealth preservation which of course is physical gold. The reason is very simple. Goldman’s private wealth management like all other asset managers are not interested in holding physical gold for their clients for the simple reason that the bank can’t earn sufficient revenue on just holding client gold. Instead they want to put expensive proprietary products and their own managed funds into client portfolios and also buy and sell shares regularly to churn commissions.

No bank, managing client portfolios, tells their clients that in the last 20 years gold has outperformed all major asset classes including stocks. The Dow for example has lost 70% against gold since 1999 (excluding dividends).

Instead asset managers stick to their conventional portfolios of stocks, bonds and some alternative assets. The Dow – Gold ratio is now 13 on its way to at least 1 to 1 as in 1980 and probably 0.5 to 1 as I discussed in last week’s article.

100 TRILLION GOLD IN WEIMAR REPUBLIC

What 0.5 to 1 Dow-Gold ratio means in price is impossible to say today. It could be $20,000 gold and 10,000 Dow. It could also be $50,000 gold and 25,000 Dow. And if hyperinflation takes hold, which I think is very likely, we could see $100 billion gold. At that point I would expect the ratio to collapse in line with most stocks and be substantially below 0.5 to 1. Gold at $100 billion might sound sensational but remember that the world has seen a lot higher gold in fiat money.

In the Weimar Republic in 1923 gold reached Marks 100 trillion.

But measuring the gold price in worthless paper money obviously serves no purpose. 100 trillion marks might sound like a lot of money. Well, it is if you have to pay it in actual paper money. But the problem is that paper money at that point has lost its useful function. Today paper money is gradually being abolished. In Sweden for example, no one carries or pays with paper money. Even for small amounts like a loaf of bread, a credit card is used.

AS PAPER MONEY DIES

Abolishing paper money has been a planned process by governments and central banks. Firstly it makes bank runs impossible. The banks will simply just turn off the ATMs. They can obviously also stop electronic transfers. The most important aspect of electronic money is the Big Brother is Watching Syndrome. Now the state has total electronic control of the citizens money not just from a tax point of view but the state can decide to block individual accounts or to charge fines or taxes without the permission of the account holder.

As regards hyperinflation, it is only a matter of time before inflation picks up as the frantic printing accelerates further in line with the collapsing economy. The current explosion of the Fed balance sheet combined with surging government debt will increase money supply exponentially. This will also lead to the dollar decline accelerating.

DOLLAR FALL AND MONEY SUPPLY

The dollar index peaked at 103 in March this year and has since then fallen 10% to 93 today. As the dollar continues to decline, US inflation will pick up. So far the official US inflation rate is just above zero. Anyone buying food or paying insurance for example knows that this is not a true figure. But the real reason why inflation is low in spite of the major increase in money supply is the low velocity of money.

All the money printed is not reaching the consumer but instead staying with banks and other major institutions to shore up their balance sheets. Very little reaches the real economy.

The graph below shows the rise in the US Money Zero Maturity stock – MZM. This is the broadest measure of liquid money. It was $4.3 trillion in 2000 and is now $21 trillion. Only since March 2020 it has increased by a massive $4 trillion.

If we then look at the velocity of MZM we see how it reached 3.5 in 1981 when inflation was high and interest rates reached 20%. Today the velocity has collapsed to an all time low of 0.9. So what we are seeing is that the money printed is not spent but used to prevent the financial system from collapsing.

AS THE DOLLAR FALLS VELOCITY OF MONEY WILL PICK UP

As the dollar falls and velocity of money increases, we will see inflation increasing rapidly. Higher inflation will lead to higher interest rates. I experienced this in the UK in the 1970s when inflation was in the mid to high teens for many years. My first mortgage was at 21% in 1974.

Central banks are today managing to artificially suppress interest rates and in the short term defy the laws of supply and demand. High demand for credit should in a free market lead to high interest rates and thus taper demand for credit. But in a world controlled and manipulated by central banks, the laws of nature are temporarily set aside. This leads to false markets and false prices.

The likely course of events in the next few years are as follows:

THE NIGHTMARE SCENARIO

• Accelerating deficits and debts

• Falling dollar and other currencies

• Unlimited money printing to save banks, and failing financial system

• More printing to save failing companies

• Ever higher subsidies for furloughed and unemployed

• Universal Basic Income (UBI) introduced in most Western nations

• UBI means that everyone is paid a basic wage whether they work or not

• This will lead to ever fewer people working

• Higher unemployment means more printing

• More printing leads to more currency debasement

• This leads to higher velocity of money higher inflation

• Central banks lose control of rates as long end of bond market sells off

• High long rates push short rates up

• Rates reach 5% then quickly 10% and on to 15-20% at least

• At 10% rates interest cost on global debt of $275 trillion would be $27t

• $27t is 34% of global GDP – totally unsustainable

• So much more money printing required

• Bad debts surge leading to defaults, sovereign, corporate and private

• Unemployment escalates leading to more UBI and more money printing

• Banks start falling including the $1.5 to $2 quadrillion derivatives market

• Money printing reaches $ quadrillions leading to hyperinflation

• The financial system collapses together with major parts of industry and society

• Social unrest, civil wars, cyber wars and major conflict will be rampant

• Political systems fail as governments lose control leading to anarchy

THE WORLD WAKES UP TO THE FACT THAT IT IS BANKRUPT

Obviously governments and central banks will desperately try to introduce resets, new digital currencies, do a bit of hocus pocus with debt to pretend it has disappeared. The US might even revalue its alleged stock of 8,000 tonnes of gold. But their bluff will be called. The effects of any measure governments take will only be temporary as the world realises that it really is bankrupt.

I sincerely hope that all the above is really a nightmare in the form of a dream and will never take place. Because if it does, the world is back to the Dark Ages or the Dark Years are here as I wrote about in 2009 and revisited in 2018.

THE WORLD GOES BACKWARD 100 YEARS

If the world retraces a century of evolution or more, it is clearly in for at least 50 years of very hard times. But except for the initial shock and readjustment, life will go on for most people but at a different level. Obviously living standards will decline substantially. So will security.

MANY OF LIFE’S TREASURES ARE FREE

The positive aspect is that moral and ethical values will return with family and friends becoming the kernel of society again. And many of the best and free things in life will still be there such as nature, books, music, good conversation, close friendships etc. With the lack of many of the superficial material values, we will appreciate the real value of the new simple life even though it will seem a lot harder initially.

What I have outlined above is not a forecast but a potential scenario which I sincerely hope won’t come to pass but the risk is certainly there.

GOLD WILL ASSUME ITS CRISIS ROLE

Gold and silver are now in the acceleration phase of a secular bull market. As always, there will be corrections on the way to much higher levels.

In a period of such severe crisis which I outline above, gold will obviously assume the role it always has, namely as money and the only money which will maintain its purchasing power and act as insurance and wealth preservation. But remember, it must be physical and stored outside the banking system in a very safe place and jurisdiction.

At that point it will be meaningless to measure gold in worthless dollars or euros. Instead, think of gold in ounces or grammes and purchasing power terms.

A second coronavirus wave is quickly emerging in Europe. Spanish officials are set to reimpose lockdowns in part of the country as virus cases surge. 

A town of 32,000 people in northwestern Spain will begin lockdown Friday amid a local surge in coronavirus cases.

The senior health official in the Basque country reported 338 news cases in the region on Thursday. Authorities in the northwestern Castile and León region are quarantining Aranda de Duero after 103 new COVID-19 cases emerged there. Contact tracers have reported five active clusters.

New cases have risen steadily in Spain since a more than three-month lockdown ended on June 21, reaching 1,772 new infections reported on Wednesday. A total of more than 28,000 people in Spain have died since the pandemic began, the eighth highest total in the world. –AP News

The one-week moving average of new COVID-19 cases in Europe shows Spain is becoming the epicenter once again. 

Investors are derisking Spanish stocks as cases surge. We noted this, earlier in the week, in a piece titled: “Spanish Stocks Break Support As Virus Concerns Reemerge.” 

And there goes the V-shaped economic recovery in Spain, and probably the rest of Europe. 

Authored by Paul Joseph Watson via Summit News,

Denmark’s immigration minister has admitted that his country’s integration policy is a “fiasco,” noting that just 17 per cent of Syrian women are in work 5 years after moving to the country.

Mattias Tesfaye, himself the son of an Ethiopian immigrant father, drew attention to the statistic which is featured in a new integration report that reveals less than half of Syrian men have found employment after the same time period of being in Denmark.

“Unfortunately, we cannot afford to be surprised. When we pursue the same integration policy, then we also get the same results,” said Tesfaye, noting that immigrants from countries such as Thailand, the Philippines, and China do far better than Middle Eastern migrants.

“It is no longer a matter of ramping the transfers up and down. Or amending some points in immigration policy. It is about changing the requirements for newcomers who will begin their lives in Denmark,” said Tesfaye.

To tackle the issue, the Danish government will no longer offer newly arrived “refugees” social security benefits. Instead they will immediately have to find a job or be enrolled in a 37 hour a week integration program.

Noting that the policy must be based around the fact that some immigrants integrate better than others, Tesfaye vowed to send migrants back as soon as their home country was deemed to be safe.

“The new thing now is that we will also demand a return trip. Refugees must return home when there is peace in their home country. I hope that Syrians will be the first group where temporary residence really means temporary residence.”

Years prior to the 2015 influx of “refugees” from the Middle East, German Chancellor Angela Merkel admitted that the country’s attempts to create a multicultural society had “utterly failed.”

She then proceeded to open the floodgates to around 2 million migrants who headed to Europe.

Some of those migrants contributed to soaring violent crime and sexual assault rates, while terror attacks such as the Paris massacre were also directly connected to the open border policy.

*  *  *

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China has delivered six military drones to Serbia after the Balkan country moved to purchase them in a controversial deal a year ago which has put NATO on edge. 

Though Serbia has an official policy of military neutrality vis-a-vis NATO, there’s been increased cooperation over the past few years. However, both the Chinese drone acquirement and Present’s Aleksandar Vucic recently signaling he’d like to acquire the S-400 anti-air defense system from Russia has caused Washington to threaten sanctions.

The delivery makes Serbia the first European country in history to deploy Chinese combat drones and thus is raising eyebrows in Brussels, as Bloomberg underscores:

China’s actions are prodding the North Atlantic Treaty Organization to pivot to Asia, a potential sea change that’s roiling an alliance that was created to protect Europe against the Soviet Union and then Russia. China’s growing influence in the Balkans mirrors its push into other areas previously dominated by Russia. The Belt and Road enterprise already has made it a major player in Central Asian politics.

President Vucic said of the drones during a photo op after Belgrade took delivery: “They have a long range, they can shoot at targets from a distance of nine kilometers and record the terrain, objects of interest to Serbia deep within enemy territory,” according to Bloomberg.

The sale, as one US military magazine previously put it, “marks Beijing’s most significant foray into a continent where armed forces have traditionally relied on US and European weapon-makers.”

Last year the Serbian president signed several agreements with Beijing to expand the Belt and Road in the country. Under the agreement, China is expected to construct new power plants, lay transmission cables, and fiber optics, build new railways, and ports in the country. 

As Bloomberg concludes in its reporting, “It’s easy to see why China has NATO leaders rattled. As Belt and Road has expanded across the continent, China has snapped up strategic assets including ports, power utilities and robotics firms from the Mediterranean to the Baltic Sea.“

Authored by Venand Meliksetian via OilPrice.com,

Not so long ago the energy transition was primarily an idealistic concept driven by environmentalists and researchers. The most important impediment was the high costs of clean technologies. The drastically reduced price of PVs, for example, has ensured global attention for the solar industry.

A similar situation could enfold concerning emissions-free hydrogen production as China and the EU are getting ready to dominate the market.

Germany’s trauma 

The solar industry in Europe’s biggest economy, Germany, experienced a spectacular boom in the  mid-2000s. Renewables were high on Berlin’s agenda who supported businesses with generous subsidies. The success of these policies resulted in the strong presence of German companies on the global stage when a fifth of all photovoltaic cells was produced in the European country.

The situation changed, however, when China’s formidable industrial complex adopted Beijing’s strategy concerning the establishment of a domestic PV-sector. Since the mid-2000s, the Asian country has seen a remarkable rise. Several factors underpinned Beijing’s success: public support, a large domestic market, and a major industrial complex. The EU and Germany have learned from their mistakes and from China’s success, which is being emulated towards the hydrogen economy.

The EU’s strategy

Despite the Covid-19 crisis, Europe has seen a flurry of public sector announcements concerning the kick-starting of a hydrogen-based economy both from national and supranational institutions. The guiding principle is Europe’s current technological prowess and the realization that their dominant position could easily be hijacked again if the necessary policies are not enacted on time.

Germany’s government has ensured a prominent spot for its future hydrogen economy in the economic stimulus packages intended to mitigate the financial fallout of the current health crisis. At least €9 billion will go towards stimulating the development of hydrogen-related technologies. Also, as Germany took over the six-month EU Council Presidency on July 1, Economy Minister Peter Altmaier devoted a significant portion of his speech to green hydrogen.

Furthermore, the EU’s ‘Green Deal’ is partly dedicated to kickstarting a continental zero-emissions economy. The strategy contains a three-step plan that…

1. …starts with the implementation of green hydrogen production and consumption in industries such as steel, chemicals, and refineries by 2024.

2. In the second phase, facilities will be connected to create ‘hydrogen valleys’ by 2030.

3. In the last phase, the hotspot will be joined and a large European hydrogen infrastructure created.  

The EU hopes to produce 1 million tonnes from 6 GW of electrolysis capacity by 2024. By 2030, this should have grown towards 10 million tonnes from 40 GW capacity. Germany alone would contribute 5 GW by 2030. Other countries, such as the Netherlands, also intend to contribute and profit from the new hydrogen economy. The Dutch are uniquely positioned with access to the North Sea for the installment of wind turbines and an existing gas network that could be reused for export purposes.

China in the rearview mirror

The EU’s strong support for the hydrogen industry is a welcome change from the past. Currently, European companies such as Siemens and Thyssenkrupp deliver a considerable number of electrolysers. Chinese companies, however, are not far behind.

Although the EU is still leading the industry in terms of knowledge and production capacity, it cannot afford to let up. For starters, the Chinese have proven that they can implement industrial policies with ruthless efficiency and dominate the market. A clear disadvantage is that Beijing has not yet set a clear goal for an emissions-free society by 2050 as the EU has.  

According to a report by Cleantech Group, China’s electric vehicle strategy could be used as a warning sign to competitors. Two decades ago vehicle electrification became an industrial goal and national priority. Currently, Chinese companies lead in sales and production capacity. 

While the EU is warned to implement the right policies this time, the increasing competition is good news for consumers and the environment in general. The current attention for hydrogen remains a hype that needs to be translated into actual results. The situation is highly promising as public support remains strong and the installment of wind and solar power is gathering pace, which is a precondition for green hydrogen production.