Million Passengers Stranded As Austrian Rail Strike Begins

Million Passengers Stranded As Austrian Rail Strike Begins

Austrian rail traffic froze Monday, impacting critical transit routes between Europe’s east and west, as workers held a 24-hour strike over pay disputes. 

According to Reuters, the labor action has disrupted 8,000 connections and left more than a million passengers stranded. 

“The railway union vida is on strike today from 00:00 to 24:00. For this reason, no trains can run all day throughout Austria and across borders,” the country’s federal railway system, OeBB, wrote on its website. 

The labor action was last-minute after pay negotiations broke down between the rail workers’ union and OeBB. The union demanded a 400 Euro increase due to the cost-of-living-crisis in the EU for the 50,000 rail workers. They were offered 208 euros plus a one-time payment of 1000 euros. 

“Wedged between eight countries including Italy, Germany, Switzerland, Hungary, and the Czech Republic, Austria is an important hub for European rail travel,” Reuters noted. 

“I don’t want to rule out the possibility of irregularities on one train or the other, but in general I expect that we will be back to serving our customers with the usual quality as of Tuesday,” OeBB chief Andreas Matthae told local radio broadcaster ORF. 

The strike is malicious as it disrupts critical EU rail networks. Though not surprising due to the EU’s worst inflation crisis in a generation thanks to backfiring sanctions against Russia. 

Tyler Durden
Mon, 11/28/2022 – 08:40

via ZeroHedge News Tyler Durden

New Twitter Sign-Ups Hit All-Time Record Despite Cancel Campaign

New Twitter Sign-Ups Hit All-Time Record Despite Cancel Campaign

Authored by Jonathan Turley,

Since Elon Musk bought Twitter with a pledge to restore free speech protections, the media and political establishment have maintained an unrelenting campaign to use pressure from corporations and foreign governments to force him to restore censorship policies. Reporters have covered seemingly every celebrity declaring that they are leaving the site or even selling their Teslas in protest. As companies joined the boycott, commentators gleefully announced the “death,” “collapse,” and “demise” of the social media company with some mocking Musk’s endangerment of billions for free speech. New figures, however, appear to show that the public is solidly with Musk on the free speech issue. New signups at Twitter are at an all-time high with two million new signups per day.

As these companies and activists demand censorship, customers are signing up in mass to embrace the greater diversity of viewpoints and expression at the company. While companies are yielding to demands from the left that they cut off ad revenue until Musk restores censorship, users are flocking to the site.

The over two million new sign-ups per day represent a 66% increase over the same time frame last year, according to figures released by Musk.

Of course, it has long been known that the public wants more, not less, free speech. It is the political establishment that is struggling to retain control over speech on social media at any cost. Facebook even tried a massive commercial campaign to convince the public to embrace censorship.

President Joe Biden has led calls for censorship on social media, which have been largely heeded by companies like Facebook and Twitter. Biden is accusing Twitter of “spewing lies all across the world” by seeking to reduce one of the largest censorship systems in history. 

President Biden has previously accused social media companies of “killing people” by refusing to impose robust censorship over a wide range of subjects. Many of those banned or censored were doctors with opposing views on the data and the science related to the pandemic.

Some of those doctors were the co-authors of the Great Barrington Declaration, which advocated for a more focused Covid response that targeted the most vulnerable population rather than widespread lockdowns and mandates. Many are now questioning the efficacy and cost of the massive lockdown as well as the real value of masks or the rejection of natural immunities as an alternative to vaccination.  Likewise, those who alleged that the virus may have begun in a lab in China were widely denounced and the views barred from being uttered on social media platforms. It was later learned that a number of leading experts raised this theory with Fauci and others early in the pandemic.

We are now seeing increasing evidence of back channels used by government and political figures to maintain a censorship system by surrogate in the social media companies and foreign allies.

President Biden however, has denounced Musk as a guy who “goes out and buys an outfit that spews lies all across the world.” He then claimed “There are no editors anymore. There are no editors anymore.”

The President the added:

“How do people know the truth? What do they — how do they make — make a distinction between fact and fiction? There’s so much — so much going on. And we’re in the middle of this.”

Indeed, perish the thought that citizens might be left to pursue the truth on their own without the government or surrogates in the media framing it for them. How could we possibly “know the truth” without our social media overlords?

Apparently, millions each day are signing up to do precisely that.

As for Musk, he is predicting one billion users in a year. What a nightmare for many in Washington . . . one billion people discussing contemporary issues freely  . . . without “editors” telling them what “the truth is.”

Tyler Durden
Mon, 11/28/2022 – 08:22

via ZeroHedge News Tyler Durden

Futures Slide, Commodities Tumble On Chinese Covid Protests

Futures Slide, Commodities Tumble On Chinese Covid Protests

US stock futures, and the entire risk complex tumbled on Monday amid growing concerns that China’s economic reopening will not only be a disaster but will also be accompanied by violence following protests against Covid restrictions over the weekend. The entire risk complex was sharply lower, with S&P 500 futures down 0.7% as of 7:30 a.m. ET, trading just around 4,000 having dropped as much as 1% earlier, while Nasdaq 100 futures fell 0.9%. Crude crashed to $74, the lowest price since December 2021, while Asian stocks and the yuan plunged. Cryptos also slumped while the dollar and Treasuries ceded earlier gains that were fueled by investors’ dash to safety; the 10Y was last trading at 3.67%.  

Among individual movers in premarket trading, Apple fell as much as 1.3% following a report that the turmoil at a key Chinese factory could lead to a production shortfall of close to 6 million iPhone Pro units this year. Cryptocurrency-exposed stocks declined, mirroring a fall in the price of Bitcoin. Bank stocks were also lower, putting them on track to snap a five-session winning streak. In corporate news, C.S. Venkatakrishnan, CEO at Barclays, has a form of lymphoma and will undergo treatment for several months. A survey of finance workers has found that some employees are ignoring return-to-work mandates, the latest sign of the challenges firms face in encouraging staff back to the office. Here are the other notable premarket movers:

  • Chinese shares listed in the US declined in premarket trading, with major internet stocks bearing the brunt of a selloff triggered by nationwide protests against Beijing’s Covid Zero policies. Alibaba Group fell 1.5%, slipped 2%; shares of electric car makers Nio and Li Auto also declined.
  • Talkspace shares surge 50% following a report in Israeli newspaper Calcalist that telehealth company American Well is in talks to buy the online therapy platform for ~$1.50 per share, representing a 150% premium to its last closing price.
  • Univar shares jump 11% as analysts say that Brenntag’s plans to acquire its US rival raise questions about the size of any deal and potential implications for an equity raise by the German chemicals distributor.
  • Cryptocurrency-exposed stocks decline, mirroring a fall in the price of Bitcoin, as worries over unrest in China and the country’s reopening weigh on risky assets. Coinbase -2.2%, Riot Blockchain -2.3%, Marathon Digital -2.2%
  • Keep an eye on Macau-exposed gaming stocks like Wynn Resorts, Las Vegas Sands (LVS US), Melco Resorts (MLCO US) and MGM Resorts (MGM US) as Wynn Macau and MGM China climbed in Hong Kong, leading gains among six Macau casino operators that were awarded new licenses to continue running their businesses in the gambling hub.
  • Beyond Meat drops 2.9% and Tyson falls 2.1% as both stocks were cut to underweight from equal-weight at Barclays. which says that the majority of protein companies are facing a difficult outlook.
  • Activision Blizzard shares gained 1.3% after being upgraded to overweight from equal-weight at Wells Fargo. The video game developer is undervalued regardless of the outcome of the Microsoft merger deal, the broker says
  • Watch shares in online retailers like, Etsy, Shopify, EBay as analysts say that promotions during the Black Friday weekend were higher than last year. The discounts prompt a focus on any impact to retailers’ margins, though some are hoping that the promotions will have been enough to lure in shoppers and help boost sales.
  • Keep an eye on Williams-Sonoma shares as Morgan Stanley downgrades the home furnishings retailer to underweight from equal-weight, saying that earnings revisions could turn “sharply negative” in 2023.
  • Watch Live Nation as its stock was raised to buy from neutral at Citi, with analyst Jason Bazinet saying the risk-reward on the ticket-selling platform is now “more reasonable.”

As reported last night, global investor sentiment was hammered after news of the worsening protests affecting cities including Shanghai and Beijing. The latest developments contrast with reports earlier this month that China was toning down its Covid Zero curbs, which had sparked a rally in equities. Modest customer traffic and heavy discounting by American retailers on Black Friday also added to the downbeat tone.

“This latest wave of China’s pandemic could disturb global supply chains again, as did the previous wave earlier this year — that could be inflationary,” analysts at Yardeni Research wrote in a note. “The recent stock market rally on hopes that the government will ease Covid restrictions is running out of steam.”

Coming off weekly gains amid bets that the Federal Reserve will scale back interest rate hikes, US stock indexes are looking to cap their second straight month of gains, paring this year’s selloff on concerns over tighter monetary policy and the possibility of a recession. Echoing Michael Wilson’s call, Deutsche Bank strategists said they also expect the bear market rally to continue into the first quarter of 2023, but that the risk of an economic contraction will hammer equities in the third quarter. Goldman strategists Christian Mueller-Glissmann and Cecilia Mariotti also said US stocks are in for a wild ride next year as they don’t yet reflect the possibility of a recession.

Oil tumbled to the lowest level since December as a wave of unrest in China punished risk assets and clouded the outlook for energy demand, adding to the stresses in an already-volatile global crude market

In Europe, the Stoxx 50 dropped 0.7%, the UK’s FTSE 100 outperforming peers, dropping 0.3%; Stoxx 600 lags, dropping 0.9%. Energy, real estate and retailers are the worst performing sectors. European energy stocks led declines in Stoxx 600 index on Monday as oil slid to the lowest level since December amid growing protests in China against Covid restrictions, with investors worrying about economic activity and demand for raw materials. The Stoxx Energy sub-index fell 1.8% as of 8:38 a.m. in London, though is still up almost 26% year to date. Here are the biggest European movers:

  • Elior rises as much as 6.7% as Bryan Garnier says a deal where it increases its share capital in exchange for the control of Derichebourg’s multi-services division will boost the French catering company’s earnings-per-share numbers.
  • AB-InBev shares rise as much as 4.5%, outperforming the Stoxx 600 Food, Beverage & Tobacco index (-0.3%), after JPMorgan downgraded the company to overweight.
  • Jet2 Plc rises as much as 4.6% after Stifel raises its price target on expectations that the carrier will “keep delivering profitable market share gains, whatever the economic weather.”
  • Leonardo advances in Milan, as much as 2.8%, after the companies said late on Friday that the Brazilian Army chose the Centauro II armored vehicle made by Iveco and Oto Melara as “top of the list” within a procurement process.
  • Brenntag shares drop as much as 10.6%, the most intraday since November 2015, after analysts said that plans to acquire US rival Univar raise questions about the size of any deal and potential implications for an equity raise by the German chemicals distributor.
  • Persimmon shares fall as much as 4.1% as UBS cuts the UK homebuilder to sell from neutral, saying the group is “losing its mojo.”
  • Evotec drops as much as 3.8% after RBC cut its price target for the German pharmaceutical firm, citing the risk of the company missing its guidance for 2022 Ebitda.
  • Aryzta shares fall as much as 3.3%. ZKB notes volume growth slowed somewhat more than expected even as the baker made a strong start to the new financial year as it performs well in the inflationary environment.
  • The building materials sector will be a “stockpicker’s dream” in 2023, Exane BNP says in a note downgrading its ratings on Kingspan, Rockwool and Travis Perkins.

Earlier in the session, Asian stocks fell as growing protests in China over pandemic restrictions and an advance in the dollar hurt demand for risk assets. The MSCI Asia Pacific Index declined as much as 1.7% before paring losses by more than half. Gauges in Hong Kong briefly tumbled more than 4% as citizens in major Chinese cities took to the streets to express anger over Covid curbs, complicating the path to reopening.  Adding to pressures on regional shares, the dollar advanced earlier in the session amid worries about growth in the Chinese economy. Equity benchmarks in South Korea and Taiwan fell more than 1%, with the latter also hurt by the ruling party’s resounding defeat in island-wide local elections. 

“The government, in order to survive, must crack down on any protests,” and this creates a lot of uncertainty, emerging markets investor Mark Mobius told Bloomberg Television, referring to developments in China. But “you can’t go much lower than we already are — maybe a 5% or 10%” correction in China stocks is likely, he added. Gauges in China and Hong Kong pared losses during afternoon trading as some bets emerged that the social unrest may accelerate an exit from Covid Zero restrictions.  Monday’s declines trimmed the Asian stock benchmark’s November gain to about 12%, but it’s still poised for its best month since 2009. In terms of catalysts, traders are looking ahead to Federal Reserve Chair Jerome Powell’s speech Wednesday for clues about the central bank’s next policy decision.

Japanese equities also fell amid a broad selloff in the region as unrest in China damped investor sentiment. The Topix Index fell 0.7% to 2,004.31 as of market close Tokyo time, while the Nikkei declined 0.4% to 28,162.83. Toyota Motor Corp. contributed the most to the Topix Index decline, decreasing 1%. Out of 2,164 stocks in the index, 663 rose and 1,417 fell, while 84 were unchanged. “Protests against the Covid Zero policy have two sides,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute. “If the protests spread further it will be a negative factor, but if the policy changes, it will become a positive factor.”

Bucking the global trend, Indian stocks climbed to a new life-time high, with weaker crude oil prices and robust foreign purchases helping local shares to feature among top performers in major Asian markets. The S&P BSE Sensex advanced 0.3% to close at 62,504.80 in Mumbai, while the NSE Nifty 50 Index was higher by an equal measure. The Sensex gained for a fifth day, extending this year’s gains to more than 7% and overtaking a 6.6% jump in the Jakarta Stock Exchange Composite Index. The rally in local shares has come on the back of easing commodity prices, with Brent plunging almost 15% so far this month to its lowest since early January. Foreign investors have also turned buyers of Indian shares, purchasing local equities worth $3 billion so far in November. The surge of Indian stock indexes to new peaks is a function of multiple factors, such as resilient corporate earnings, robust tax collections and a dip in retail inflation, according to Pankaj Pandey, head of research at ICICIdirect. With a drop of about 20% in crude oil prices in the last fortnight, inflation could ease further going forward, said Pandey, who has a 12-month target of 20,000 for the Nifty index.

In FX, the Bloomberg Dollar Spot Index gave up an earlier gain as the yen rallied by more than 1% against the dollar to touch 137.50. The euro and the Swiss franc also outperformed the greenback, while Commodity currencies, led by the Australian dollar, were the worst Group-of-10 performers. 

In rates, Treasuries were narrowly mixed with the curve continuing to flatten, inverted by -80bp and pivoting around a little-changed 10-year yield, amid weakness in oil prices including YTD low for WTI crude futures. 10-year earlier declined as much as 5.9bp to lowest since Oct. 5 as WTI crude futures fell 3.5% on unrest in China; 5- and 3-year yields also declined to lowest levels since early October. Inverted 2s10s curve reached -81.1bp, a new cycle low; flattening trend has support from bigger-than-average index duration extension in month-end rebalancing. Most euro-zone 10-year yields are 3bp-8bp higher on the day. Italian government bonds underperformed bunds. European focus is on ECB speakers including President Christine Lagarde. Gilt curve bear-steepens with 2s10s narrowing 3.8bps. Bund and Treasury bear-flatten. Peripheral spreads are mixed to Germany; Italy widens, Spain widens and Portugal tightens.

In commodities, oil tumbled to the lowest level since December as a wave of unrest in China punished risk assets and clouded the outlook for energy demand, adding to the stresses in an already-volatile global crude market. WTI drifts 2.9% lower to trade near $74.05. Brent falls 3.1% near $81.06. Base metals are mixed; LME copper falls 0.3% while LME lead gains 0.6%. Spot gold rises roughly $6 to trade near $1,761/oz. BHP reached an accord with a union to avoid a strike at the Escondida mine in Chile. And W&T Offshore Inc. is among the most active resources stocks in premarket trading, falling 4%. Crude futures decline. Here’s a look at the news that may drive trading in North American resources stocks today:

  • West Texas Intermediate sank toward $74 a barrel following three weeks of losses, while Brent traded around $81. Protests over harsh anti-virus curbs erupted across the world’s largest crude importer over the weekend, including demonstrations in Beijing and Shanghai, spurring a broad sell-off in commodities as the week opened.
  • Commodities tumbled as China’s Covid outbreak worsened and a series of stunning street protests in cities across the nation threaten to derail economic activity and sap demand for energy, food and raw materials.
  • At least $25.7 billion of clean-energy factories are in the works, and the jobs they generate are winning over more Americans to solar, batteries and EVs.
  • Gold rose, erasing earlier declines, as traders weigh growing unrest in China over Covid restrictions and await key US economic data for its bearing on Federal Reserve policy.

Looking at today’s calendar, it is a relatively quiet day with just the Dallas Fed manufacturing survey on deck.

Market Wrap

  • S&P 500 futures down 0.7% to 4,004.75
  • MXAP down 0.6% to 153.18
  • MXAPJ down 1.1% to 488.71
  • Nikkei down 0.4% to 28,162.83
  • Topix down 0.7% to 2,004.31
  • Hang Seng Index down 1.6% to 17,297.94
  • Shanghai Composite down 0.7% to 3,078.55
  • Sensex up 0.4% to 62,571.65
  • Australia S&P/ASX 200 down 0.4% to 7,229.14
  • Kospi down 1.2% to 2,408.27
  • STOXX Europe 600 down 0.8% to 437.11
  • German 10Y yield little changed at 1.97%
  • Euro up 0.5% to $1.0450
  • Brent Futures down 2.9% to $81.23/bbl
  • Gold spot up 0.4% to $1,761.51
  • U.S. Dollar Index down 0.32% to 105.62

Top Asian News

  • Chair Jerome Powell is expected to this week cement expectations that the Federal Reserve will slow its pace of interest-rates increases next month, while reminding Americans that its fight against inflation will run into 2023
  • A sense of chaos and uncertainty swept through Chinese markets on Monday as growing protests against Covid curbs and a record number of infections complicated the nation’s path to reopening
  • The protests that erupted against China’s Covid Zero strategy represent one of the most significant challenges to Communist Party rule since the Tiananmen crisis more than 30 years ago. How Xi Jinping responds to it may end up being just as pivotal for the country’s future
  • Australia has a stronger probability of bringing its economy in for a “soft landing” than almost any other developed- world counterpart, Reserve Bank Governor Philip Lowe said, citing the nation’s still-contained wage growth
  • ECB Governing Council member Klaas Knot said risks to the outlook for consumer prices are still skewed to the upside, despite the euro area facing a recession
  • Egypt’s newly flexible currency is still too tame for a market that’s bracing for more disruption ahead
  • The Bank of Japan should conduct a review of policy under a new leadership from next year to make it more flexible, according to former board member Sayuri Shirai, who has been floated as a possible candidate for deputy governor

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mostly lower with risk appetite sapped by the ongoing COVID-related issues in China where a fresh record number of daily infections were reported and with public unrest brewing after hundreds of people protested throughout the weekend in several major cities including Beijing and Shanghai. ASX 200 was lower with energy leading the declines after oil prices slumped to YTD lows and with sentiment also mired by the surprise contraction in Australian Retail Sales. Nikkei 225 trickled closer towards the 28,000 level with some utility names hit after reports that Japan’s FTC will issue a record fine on three regional power companies for antitrust violations. Hang Seng and Shanghai Comp were pressured as the PBoC’s recent 25bps RRR cut was overshadowed by the COVID situation in China and with tech also hit after US FCC banned equipment authorisations for Chinese telecommunications and video surveillance equipment deemed to pose a threat to national security, although casino names outperformed after Macau renewed the licences of the six existing operators.

Top Asian News

  • Hundreds of demonstrators conducted protests in cities including Beijing and Shanghai to express their discontent against China’s strict COVID measures, while the protests have so far lasted for 3 days, according to BBC and Reuters.
  • China’s Shenzhen announced to limit restaurants and other indoor venues to 50% occupancy and said new arrivals to the city will be barred from entering venues such as theatres and gyms for the first 3 days as part of COVID measures, while it also asked the public to work from home, according to Reuters.
  • Goldman Sachs said China could end its zero-COVID policy before April and earlier than widely expected with some chance of a “disorderly” exit, although it still sees a Q2 exit from zero-COVID as most likely with around a 60% chance.
  • Beijing has vowed to curb rapid increase in COVID cases, according to an official; Guangzhou is to resume public transportation in locked down areas, according to an official.
  • China is set to ease rules on developer bond state guarantees, according to Bloomberg.
  • US FCC banned equipment authorisations for Chinese telecommunications and video surveillance equipment deemed to pose a threat to national security, while the list of companies deemed to pose a threat includes Huawei, ZTE (763 HK) and Hytera Communications (002583 CH), according to Reuters.
  • US Space Force chief said the rapid progress of China’s military capabilities poses a growing risks to US superiority in outer space, according to Sky News Arabia and Reuters.
  • Taiwan’s ruling DPP conceded defeat in the key Taipei mayoral election and Taiwanese President Tsai resigned as chairwoman of the ruling party following poor local election results but rejected an offer from Premier Su Tseng-chang to resign. Furthermore, the Chinese government said that the local Taiwan elections showed the mainstream opinion on the island is for peace, stability and a good life, while it will keep working with Taiwan’s people to promote peaceful relations and firmly oppose Taiwan independence, according to Reuters.
  • South Korean Transport Ministry is to meet with the striking truckers’ union on Monday, according to an official cited by Reuters.

Cash bourses in Europe hold the downside bias seen across APAC stocks overnight which emanated from China reporting a record increase in COVID cases, whilst social unrest in the country made the headlines over the weekend; Euro Stoxx 50 -0.7%. European sectors are in a sea of red and portraying no overarching bias, although some of the defensive sectors are slightly more cushioned than most peers. In early European hours, the ES (-0.9%) gave up the 4,000 level while slight underperformance is present in the tech-laden NQ (-1.0%), as participants look for month-end flows ahead of the US jobs report at the end of the week. Apple (AAPL) is poised to lose 6mln iPhone Pros from the unrest at its Chinese plant, according to Bloomberg. Shipments of smartphones within China declined 4.6% Y/Y to 19.84mln handsets in Sept, according to CAICT.

Top European News

  • UK PM Sunak is facing a rebellion from the ruling Conservative party as they seek to force the government to drop the ban on new onshore windfarms, according to Bloomberg.
  • UK housing market stalled in October with house price growth slowing to its lowest quarterly level since February 2020 amid a disastrous mini-budget and the cost of living crisis, according to Reuters citing data from Zoopla.
  • All EU market participant will have to hold “active accounts” at EU clearing houses for “systemically important” financial products, via Reuters citing an EU draft document.
  • ECB’s Knot says underlying inflation trends are worrisome, risks to the inflation forecast are entirely tilted to the upside.
  • ECB’s Kazimir says there is a growing risk of a recession in the Eurozone, hikes will continue despite unfavourable economic developments.


  • Dollar downed as risk aversion favours Yen and others, while month end rebalancing models signal broad selling requirement, DXY under 200 DMA and 105.500, USD/JPY eyeing 137.50
  • Euro through near term resistance vs Buck around 1.0450 and 100 DMA against the Pound on RHS flow for Wednesday
  • Aussie underperforms after weaker than forecast final retail sales and in sympathy with the Yuan on more Chinese CVOID contagion; AUD/USD heavy on 0.6700 handle, USD/CNH probes 7.2500 before pullback
  • Loonie and Nokkie undermined by collapse in crude prices, as USD/CAD rebounds through 1.3400 and EUR/NOK beyond 10.3500
  • PBoC set USD/CNY mid-point at 7.1617 vs exp. 7.1695 (prev. 7.1339)

Fixed Income

  • Haven bid in bonds fades as Bunds retreat over 100 ticks from 141.42 Eurex peak, Gilts towards 107.00 after matching last Friday’s 107.66 high and T-note between 113-17/113-02+ parameters.
  • BTPs underperform within wide 120.26-118.87 extremes on domemstic supply grounds.


  • WTI and Brent Jan futures have been under pressure since the reopening of futures trading, with Brent beneath USD 82/bbl for the first time since January (80.61-83.93/bbl daily range) and WTI printing a YTD low (73.60-76.49/bbl range) after Chinese daily COVID infections rose by a fresh record
  • Spot gold has been gaining in tandem with the losses in the US Dollar with the yellow metal gaining above USD 1,750/oz but still under November’s high of around USD 1,786/oz.
  • Base metals are mixed, with the initial China-induced downside overnight somewhat trimmed/cancelled out by a slide in the USD, with 3M LME copper trading on either side of USD 8,000/t.
  • US Treasury Department is to issue a licence to allow Chevron to import Venezuelan crude oil to the US, while the licences will allow Chevron to take part in oil activities in Venezuela that were previously banned by the US and also permit them to send products to Venezuela needed to refine heavy crude into exportable grades. Furthermore, the licence is time-limited to 6 months and can be revoked if President Maduro does not negotiate in good faith or follow through on commitments, according to Reuters.
  • Iraq’s SOMO said the OPEC+ cut decision in October didn’t decrease Iraq’s crude exports and the decision to cut helps maintain market stability. Iraq also stated that it produces 11% of total OPEC+ output and noted that the upcoming meeting will take into account current market conditions, while it sees oil prices to range USD 85-95/bbl next year, according to Reuters. It was also reported that Iraq’s OPEC representative said the country will increase oil capacity by 150k-250k BPD by 2023 and that Iraq will add 1mln-1.5mln BPD of oil export capacity by 2025.
  • Kuwait’s KPIC shipped the first shipment of aviation jet fuel from the Al Zour refinery to UAE and Oman.
  • BP’s (BP/ LN) Rotterdam refinery is resuming some operations after being idle for a week amid a pay dispute with workers, according to Reuters.
  • Norway’s Gassco decreased the unplanned gas outage impact at fields delivering into Segal which was revised to a decline of 12.0 MCM/day from a decline of 14.9 MCM/day, according to Reuters.
  • UAE’s ADNOC is reportedly to cut 5% of December’s crude oil supply to some term-lifters in Asia, citing the operational tolerance clause, via Reuters citing sources; but, will provide full contractual volumes for January.


  • Russian Defence Ministry said nine Russian prisoners of war were released as part of a prisoner exchange with Ukraine on Saturday, according to Reuters citing Russian news agencies.
  • Energoatom President said there have been signs in recent weeks that Russians may be preparing to leave the Zaporizhzhia nuclear power plant, according to Pravda.
  • UK military intelligence said Russia is likely removing nuclear warheads from ageing nuclear cruise missiles and firing unarmed munitions at Ukraine which highlights a depletion in its stock of missiles, according to Reuters.
  • UK PM Sunak said Britain will stand with Ukraine for as long as needed and will maintain or increase military aid to Ukraine next year, while he also stated that Britain needs to stand up to competitors ‘not with grand rhetoric but with robust pragmatism’, according to Reuters.
  • Senior Ukrainian government sources inform Mapl+ that Moscow is “ready to withdraw some heavy equipment such as tanks and artillery”, according to Mail’s Franey. In the context of the Zaporizhzhia plant
  • North Korean leader Kim ordered to promote officials and scientists responsible for nuclear forces and said that building the nuclear force is the most important cause, while their ultimate goal is to possess the world’s most powerful strategic force. Kim added that recent ICBM launches demonstrated their firm resolution and decisive ability to build the world’s strongest army, while its new ICBM clearly proved that North Korea is a full-fledged nuclear power and can withstand the supremacy of the US. Furthermore, Kim said scientists have made a ‘wonderful leap forward’ in technology for mounting nuclear warheads on ballistic missiles and should continue to expand and strengthen the nuclear deterrent at an extraordinary pace, according to KCNA.

US Event Calendar

  • 10:30: Nov. Dallas Fed Manf. Activity, est. -22.0, prior -19.4

Central Banks

  • 12:00: Fed’s Williams Speaks to the Economic Club of New York
  • 12:00: Fed’s Bullard Takes Part in MarketWatch Live Event

DB’s Jim Reid concludes the overnight wrap

As we start a new week that will introduce us to December, the big story over the weekend has been the unrest in China around the handling of Covid restrictions with multiple protests and demonstrations reported across the country on mainstream and social media. This seems to be the most serious of President Xi’s decade long tenure. In terms of Covid-19 cases, the ongoing outbreak remains elevated as the nation reported a record high of 40,052 local cases on Sunday up from 39,506 a day earlier.

The story is dominating Asian markets this morning. As I type, the Hang Seng (1.98%) is leading losses with the CSI (-1.58%) and the Shanghai Composite (1.03%) also sliding. Elsewhere, the KOSPI (-0.95%) and the Nikkei (-0.52%) are also weak. Outside of Asia, DM stock futures are also soft with contracts on the S&P 500 (-0.65%), the NASDAQ 100 (-0.83%) and the DAX (-0.50%) all lower. Meanwhile, 10yr USTs yields (-5.16 bps) have moved sharply lower for an overnight session trading at 3.63% with the 2s10s curve further inverting to -80.37 bps as we go to press. Elsewhere, oil prices are also lower in early Asian trade with Brent Crude (-2.79%) t $81.30/bbl and WTI (-2.95%) $74.02/bbl as demand fears from China are back in focus.

Over in the US, initial Black Friday weekend retail sales numbers are coming through. For example Adobe have said that Americans spent a record $9.12 billion online this Black Friday. The $9.12 billion figure is up 2.3% from previous year’s $8.92 billion and $9.03 billion in 2020. Clearly with inflation running between 7-9% this year that could be seen as a spending recession depending on how you want to spin it. Today is the usually very busy Cyber Monday so we’ll see what that brings.

Looking forward to the week now, it’s a big few days for US employment data, building to a crescendo with payrolls on Friday. We’ll also get the latest PCE inflation reading and the ISM manufacturing print.

Elsewhere, European CPI releases will also be front and centre as inflation and recession risks in the currency bloc weigh on the ECB. In Asia, all eyes will be on China’s PMIs and several key economic activity indicators from Japan. We will also hear from a number of key central bank officials, including Fed Chair Powell and ECB President Lagarde.

Going through the highlights in more detail and there’s only one place to start, and that is with payrolls. This will be the last one before the FOMC on December 13-14th. Our US economists expect a +200k print in November, down from +261k in October, and the unemployment rate to tick back down to 3.6%. Earnings are forecast to grow +0.3%, decelerating from October’s +0.4%.

Prior to Friday we have the latest JOLTS report and ADP reports on Wednesday. In terms of the former, it’s long been our favoured measure of labour market tightness but it’s always a month behind other measures so as we approach a turning point in the labour market it might be tough to use it as a lead indicator. Our economists are focused on the micro of the report and recent evidence of less labour market tightness has been a little less evident under the surface given various sector mismatches. See their report here “Why the JOLTS data are not as encouraging as they appear” for more on that.

Rounding off the important labour market clues, tomorrow’s Conference Board’s confidence measure on Tuesday will include the jobs-plentiful / jobs hard-to-get differential, which has historically been highly correlated with the unemployment rate. Our economists highlight that after peaking at 47.1 in March, consumer views on the labour market have cooled a bit with the differential falling to 32.5 in October. While the October level is still very healthy and in line with the near-recordlow unemployment rate, we need to see how quickly this now deteriorates for clues on the turn in the labour market.

Within Thursday’s personal income (DB at Unch. vs. +0.4% last month) and consumption (DB at +0.7% vs. +0.6%) report the latest reading on the core PCE deflator will be a big release for Fed expectations. Given what we know from the CPI and PPI data earlier this month, our economists expect core PCE inflation to come in at 0.2% (vs. 0.5% previously). If their forecast is correct, the year-over-year rate will begin to fall, dropping a tenth to 5.0%. While only a small decrease in the yearover-year rate’s September peak, this would be the fourth lowest monthly core PCE print since the beginning of 2021, so it may help cement 50bps over 75bps in two weeks’ time.

Business activity-related indicators due out include the manufacturing ISM index on Thursday. Our US economists expect the indicator to slip into contractionary territory (49.8 vs 50.2 in October) for the first time since the Covid depths in May 2020. The day before, we get the Chicago PMI (DB forecast 47.3 vs 45.2 in October) and the advance goods trade balance (DB forecast -$91.0bn vs -$92.2bn in September).

In Europe, the November CPI reports from across the Eurozone on TuesdayWednesday will be among the key data this week. As a reminder, the bloc-wide measure is now at 10.6%, the highest ever, in a sharp contrast to the US where the latest CPI (7.7%) is more than a percentage point below its recent peak (9.1%). With few indicators pointing to a significant slowdown in price increases for Europe, this week’s print may keep up the pressure on the ECB to fight inflation despite growth concerns. In fact, as our European economists point out in their review of central bank’s monetary policy accounts (link here) released this week, contrary to markets’ initial perception, there was little dovishness in last meeting’s message. The team is calling for a +50bps hike in December but acknowledging upside risks, especially if this week’s prints come in above expectations.

We will also get the PPI and consumer spending for France, the PPI and the manufacturing PMI from Italy, as well as confidence indicators for the Eurozone throughout the week.

Over in Asia, all eyes will be on November PMIs from China on Wednesday and Thursday, with the Bloomberg consensus pointing to an unchanged manufacturing PMI on Wednesday (49.2) and a slight drop in the Caixin PMI on Thursday (48.9 vs 49.2). See the day-by-day week ahead for the full diary of events this week.

Recapping last week now, developments over the holiday-shortened week skewed towards impending recession fears, which drove global sovereign yield curves flatter but equities held up well. We had rising Covid cases and renewed restrictions in China, renewed fears over the energy supply to Europe (European natural gas futures climbed +8.30% over the week), contractionary PMIs across the developed world, while Fed staff noted in minutes to the November meeting that a recession was now likely pretty much their base case for next year.

Sovereign 2s10s curves flattened across the US, Germany, and the UK. 2yr Treasury yields were -8.0bps lower (-2.5bps Friday), while 10yr yields fell -15.1bps (-1.5bps Friday), with the curve ending the week at -78bps, its most inverted since the early 1980s. In Germany, 2yr Bunds increased +9.0bps (+8.3bps Friday) while 10yr yields fell -4.0bps (+12.4bps Friday). And in the UK 2yr Gilts climbed +11.4bps (+8.4bps Friday) in contrast to 10yr Gilts which fell -11.7bps (+8.5bps Friday).

The growth fears stoked a renewed bout of central bank pivot optimism, which buoyed equities over the week. The S&P 500 increased +1.53% (-0.03% Friday), the STOXX 600 was up +1.71% (-0.05% Friday), and the DAX lagged, climbing just +0.76% (-0.02% Friday). The biggest underperformers were Chinese equities following a surge in Covid cases which drove renewed lockdown measures. The NASDAQ Golden Dragon index fell -5.96% in response (-3.28% Friday).

Tyler Durden
Mon, 11/28/2022 – 08:07

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Watch: Fauci Blames Trump For China’s COVID Cover Up

Watch: Fauci Blames Trump For China’s COVID Cover Up

Authored by Steve Watson via Summit News,

The overlord of science Anthony Fauci blamed President Trump Sunday for China’s continued obfuscation of the origins of COVID, claiming that it was Trump’s “anti-China approach” that encouraged the Communist state to be non-cooperative.

Now that he has retired, Anthony Fauci is devoting even more time to his favourite hobby, appearing on the news, shilling for China, and telling people to get booster shots.

In his latest appearance on CBS’ Face The Nation, Fauci declared “What happens is that if you look at the anti-China approach, that clearly the Trump administration had right from the very beginning, and the accusatory nature, the Chinese are going to flinch back and say, Oh, I’m sorry, we’re not going to talk to you about it, which is not correct. They should be.”

“I think that horse is out of the barn, and they’re very suspicious of anybody trying to accuse them,” Fauci continued, adding “We need to have an open dialogue with their scientists and our scientists, keep the politics out of it. And let the scientists- because these are scientists that we’ve known for decades, and we’ve collaborated with them.”


He also blamed Republicans for politicising COVID and claimed he has “never been” political:

Fauci also claimed that China often “acts secretive” even “when there’s nothing at all to hide,” citing the SARS-CoV-1 outbreak in the early 2000s as one example.

That would be the outbreak that China tried to underplay and cover up then.

CBS host Margaret Brennan asked Fauci if he “agrees with that word cover-up?” to which he responded “I don’t know what that means.”

“I’m not sure what they’re talking about. I mean, if cover-up is not allowing people to come in and look at all the data, that’s not a cover, that’s not being transparent,” he further stated.

In a separate interview on NBC, Fauci repeated the claim that China always acts secretive and weird… nothing new to see here.

“Even when there’s nothing to hide they act in a suspicious, non-transparent way just probably because they don’t want to make it look like there’s a blame,” Fauci proclaimed.

During both interviews, Fauci shilled for more booster vaccines, claiming that multiple shots every year will be needed, and we are still in a pandemic.

And don’t forget to test everyone before dinner…

He also said he “doesn’t know” if schools will shut down again:

Finally Fauci, bragged that now the Republicans don’t have control over the Senate, an investigation of him led by Rand Paul is “not going to happen.”

Meanwhile, over at ABC, the latest Biden COVID minion Ashish Jha was asked “what do you do?” in response to the fact that “People aren’t listening” when being told by Fauci and others to get booster shots.

As we noted last week, Jha says he really believes that “God gave you two arms” so you can be injected with both the COVID booster and the Flu shot.

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Tyler Durden
Mon, 11/28/2022 – 07:45

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Apple Shares Fall On 6 Million iPhone Pro Deficit Following Unrest At China Factory

Apple Shares Fall On 6 Million iPhone Pro Deficit Following Unrest At China Factory

Apple shares fell nearly 2% in US premarket trading Monday on news that unrest at the world’s largest iPhone factory in central China could result in a production shortfall of iPhone Pro units this year, according to Bloomberg, citing a person familiar with assembly operations. 

The person said Apple’s manufacturing partner Foxconn Technology Group’s factory in Zhengzhou, could wind up with a 6 million iPhone Pro production shortfall by the end of the year, adding the situation remains fluid and lost production numbers could change. 

A lot will depend on how fast Foxconn can hire new workers and revive full capacity on assembly lines after weeks of unrest at the plant over Covid restrictions and disputes about pay. Thousands of workers were given $1,400 to leave the plant last week, a move by Foxconn to quell the unrest. Still, the Covid situation in China is worsening, and lockdowns in the weeks ahead could create even more production woes. 

News of Apple facing a 6 million iPhone deficit sent shares lower this morning, down nearly 2% as of 0630 ET. 

Bloomberg’s breakdown of Apple’s supply chain shows Foxconn (otherwise known as Hon Hai Precision Industry Co., Ltd.) is a top supplier. Any manufacturing disruption in China could leave AT&T, Best Buy, and Verizon stores without iPhones.  

The facility produces most of the iPhone 14 Pro and Pro Max devices, Apple’s most in-demand devices this year. However, sales for the premium iPhones have rapidly cooled, and Bloomberg reported earlier this month that Apple lowered overall production targets to 87 million devices or fewer, compared with a target of 90 million units earlier. 

“It demonstrates that everyone, even Apple, is susceptible to supply-chain constraints in China due to Covid,” said Anshel Sag of Moor Insights & Strategy.

Morgan Stanley analysts recently estimated the iPhone Pro model shortfall would be around 6 million, but such a forecast was made before the unrest at the plant. 

Tyler Durden
Mon, 11/28/2022 – 07:20

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Why Russell Clark Thinks It’s Time To Short 30Y Treasuries

Why Russell Clark Thinks It’s Time To Short 30Y Treasuries

By Russel Clark of the Capital Flows and Asset Markets, formerly CEO of Horseman Global,

Shorting long dated bonds has been a great trade. But the view, and the positioning that I am seeing is suggesting that most investors think that trade is done.

If anything, I would say long bonds has become a conviction trade for many investors.

TLT US is a liquid ETF that buys long dated treasuries. Typically, the net shares outstanding (shares outstanding less short interest) in this fund follows share price performance. Not in 2022. In 2022 investors have been buying TLT all the way down.

I find this enthusiasm hard to understand. US CPI is back at levels last seen in the 1970s, when the US 30-year treasury yielded north of 8%.

The reason that people are getting bullish bonds I believe is that the yield curve has inverted. And every time that has happened, you have a recession, and you want to get out of equities and into bonds.

Very oddly, Japanese long dated bond yields continue to trade poorly. For as long as I have been in markets, the JGB market has acted as a very good lead on US bond markets. Not only has it been prescient in leading the US bond yields lower from 1999 onwards, in 2020 the JGB market was also prescient in signalling the future US treasury sell off.

What does the JGB market see that the US doesn’t? When I think about the Federal Reserve politically, the one type of inflation that they have to react to is food inflation. Food inflation is a very regressive tax, and is the one type of inflation that has proven track record of getting people on the streets.

Since 1980, food commodity prices have generally moved with raw industrial commodities. That is, if you could create and industrial recession (i.e. raise interest rates), that would be enough to get food prices to fall. And as most farmers will tell you, fuel costs are the biggest cost for most farm (fertilizer tends to follow natural gas prices).

And here is the problem. China is now the world’s biggest importer of food, and it has much higher prices than the US. Pork, which is the most consumed meat in China, is now 3 times more expensive than the US market, and has recently doubled in price. As Japan is also a large importer of pork, perhaps this was the reason the JGB market sold off before the US.

While pork and African Swine Fever (ASF) gets all the attention, China has also very quietly become a large importer of beef. Monthly data from the US shows how imports rose during ASF but have never really fallen off. These numbers understate Chinese demand for beef. On a global basis, China imports more beef than the rest of the world on a net basis (US and EU are both large importers and exporters).

Again, China beef prices are at a premium to US prices.

In essence, I am saying that China is exporting food inflation to the rest of the world, and I don’t see that ending at the moment. JGBs seem to agree – and when I look at the index value of US Food CPI on a log basis, I keep thinking that is says interest rates are going higher not lower. I have used log basis so you can see the inflection in food prices is close to what was seen in the early 1970s.

Tyler Durden
Mon, 11/28/2022 – 06:55

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With Congressional Gridlock, Americans Get a National Breather

Democrat and Republican mascots on boxing gloves

As a result of the midterm elections Republicans locked in a small-but-controlling majority in the House of Representatives, while Democrats retained a bare margin in the Senate. Why Americans were so turned-off by Democrats, but refrained from handing Republicans the overwhelming win they expected, will be a matter for self-reflection on each side of the aisle (Magic 8 Ball predicts: both will double-down on being wrong). But the election results stand as an expression of overwhelming lack of confidence in the major parties, with a resulting breather for the country resulting from the split decision’s ensuing, and quite welcome, gridlock.

“The GOP takeover of the House will give Republicans the power to block efforts by Democrats to approve new regulations or taxes on the fossil-fuel industry, private-equity funds, tobacco makers and drug manufacturers,” The Wall Street Journal‘s Brody Mullins and John D. McKinnon noted last week. “What’s more, with President Biden in the White House and Democrats holding the slimmest of majorities in the Senate, Washington overall isn’t expected to do much for the next two years.”

That’s good news for Americans baffled by Democrats’ insistence on treating the U.S. economy as something between a laboratory experiment and a toy train set, with lawmakers indulging their whims through serial rounds of life-altering policy moves. “The hurdle for Democrats was high with 76 percent in ABC News exit poll results rating the economy negatively,” the news network reported of exit polls. “Just 44 percent approved of Biden’s work in office, among the lowest midterm presidential approval ratings in 40 years.” Those disappointed voters will get a respite.

“With Republicans set to take control of the House and Biden’s Democrats maintaining a razor-thin edge in the Senate, the president must now find a way to work with GOP lawmakers to get things done,” Kate Davidson commented for Politico. “Rather than driving the economic policy agenda on Capitol Hill, Biden will be along for the ride—forced to grapple with issues that Republicans care about, or else settle for gridlock.”

But as the GOP’s slim majority in the House demonstrates, Republicans didn’t exactly convince the country that they were the cavalry riding to the rescue. Their main selling point seems to have been that they weren’t Democrats, and that was just enough to gain a few congressional seats. Voters were almost as leery of the opposition party as they were of the one in power.

“Abortion was one factor,” ABC News found in the same exit polling that saw Democrats floundering on economics. The majority of Americans are broadly pro-choice, and those who strongly care about the issue voted for Democrats. In the wake of the Dobbs decision, some Republicans‘ emphasis on abortion restrictions hurt them, especially with younger voters, despite pre-election backpedaling.

Republicans’ emphasis on election denialism and former president Donald Trump also did damage. “Voters by 61-35 percent said Biden was legitimately elected,” said ABC News. They didn’t want to revisit an over-and-done election, especially on behalf of a former White House resident every bit as unpopular as the current guy. Notably, Republicans who left the past in the past and avoided ballot-box grievances to campaign on policies did well, such as Joe Lombardo, who flipped the Nevada governor’s office by focusing on the economy, crime, and school choice.

But, in many cases, voters had unpalatable options. They responded by splitting the difference and leaving the federal government divided between feuding factions so that neither can get much done.

That’s not to say that Americans held a national meeting and decided to steer a middle course between brands of incompetent craziness. Frankly, Zoom couldn’t handle the traffic. In fact, lots of Americans join in the lunacy, endorsing terrible economic fantasies, bizarre conspiracy theories, and a deep-seated and even violent loathing of those who embrace competing brands of political cultiness. Americans are nuts, but, fortunately, they balance each other out by breaking along fairly even lines in their madness. The result is an unintentional crowd-sourced moderation that prevents the worst excesses of either major political faction, at least on a national scale.

“Through the magical mechanism of mass voting, Americans express a persistent impulse toward divided government,” marvels David Von Drehle at the Washington Post. “Are we, by some wonderfully stable group-mind, protecting ourselves from politics gone wild? Knowing how closely divided we are, our atomized wisdom adds up vote by vote to a hobble for both parties—binds them in an endless three-legged race, rather than risk winner-take-all.”

The resulting gridlock isn’t intentional, and it’s certainly not coordinated. It’s also not stable—a percentage point or two in either direction, even a few redrawn congressional seats, and we’ll easily be back to dominance by one horrible faction over us all. Then its leaders will inevitably insist they’ve been handed a mandate to inflict their ideological fever dreams on the helpless public.

The gridlock also isn’t total. The increasingly autocratic nature of the presidency allows enormous room for the nation’s chief executive to act unilaterally. Through executive orders and memoranda, presidents enact policy changes that should go through Congress (if they’re permissible at all) in a manner befitting elective monarchs. The only real check on that power is the willingness of the courts to remind the country that, while rule-by-decree is a form of government, it’s not one permitted by the Constitution.

But Congress, at least, is very limited by partisan divisions in what it can do.

Interestingly, Americans claim they don’t like gridlock and want a Congress that gets things done. “A slim majority of Americans are worried that the midterm elections will result in divided government and gridlock,” Axios/Ipsos pollsters noted in October. The problem, of course, is that what Americans want done doesn’t all come off the same menu; what roughly half of them favor enrages the other half. The resulting unhappiness is a large part of why, after the recent midterms, Democrats will no longer control both houses of Congress along with the presidency.

So, gridlock, with all of its faults and instability, is what we have, and we should be thankful for that. A hobbled Congress isn’t a policy, it’s certainly not a solution, and it’s not sustainable for the long term. But gridlock can give us a bit of a national breather, and that may be the best we can hope for from a destructive political system and a divided electorate.

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‘Zombie’ Virus Reanimated After 50,000 Years In Siberian Permafrost

‘Zombie’ Virus Reanimated After 50,000 Years In Siberian Permafrost

French researchers have reanimated over a dozen prehistoric viruses which have been trapped deep within the Siberian permafrost for nearly 50 million years, according to a pre-print study.

After obtaining seven ancient permafrost samples, scientists from the French National Centre for Scientific Research were able to document 13 never-before-seen viruses that had been lying dormant in the ice, Science Alert reports.

The same researchers found a 30,000-year-old virus in 2014 which was trapped in permafrost. Notably, it was still able to infect organisms. Now, they’ve beaten their own record with a find that’s 48,500 years old, which they named Pandoravirus yedoma, according to Science Alert.

The scientists, who called these “zombie viruses” a public health threat, pointed to global warming as an ongoing risk that could result in the release of deadly pathogens from long ago.

“Due to climate warming, irreversibly thawing permafrost is releasing organic matter frozen for up to a million years, most of which decomposes into carbon dioxide and methane, further enhancing the greenhouse effect,” the authors wrote. “Part of this organic matter also consists of revived cellular microbes (prokaryotes, unicellular eukaryotes) as well as viruses that remained dormant since prehistorical times.

As Global News notes,

Some of these “zombie viruses” could potentially be dangerous to humans, the authors warn. And, in fact, thawing permafrost has already claimed human lives.

In 2016, one child died and dozens of people were hospitalized after an anthrax outbreak in Siberia. Officials believe the outbreak started because a heat wave thawed the permafrost and unearthed a reindeer carcass infected with anthrax decades ago. About 2,300 reindeer died in the outbreak.

The revived viruses belong to the following sub-types;  pandoravirus, cedratvirus, megavirus, pacmanvirus and pithovirus – and are considered “giant” because they are large and easy to spot using light microscopy.

Beware of rotting Siberian bears.

Tyler Durden
Mon, 11/28/2022 – 06:30

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Pressure Builds On Biden For Ukraine Weapons Tracking & Oversight

Pressure Builds On Biden For Ukraine Weapons Tracking & Oversight

Pressure has continued building for the Biden administration and Pentagon to provide stricter oversight and accounting for the massive military assistance and weaponry sent overseas to Ukraine, at a moment total defense aid is about to hit the $20 billion mark

GOP leaders have warned the Biden administration to expect greater restrictions and oversight during the next Congress. This as the kind of enthusiastic support for the Ukrainians among the broader American public seen in the opening months of the war appears to have turned to frustration at the spectacle of open-ended amounts of taxpayer funds being poured into a conflict which has no end in sight…

Despite the State Department and Pentagon recently presenting plans to ensure greater oversight, Republicans who will soon enjoy a slim majority in Congress are readying to press for more, reports The Washington Post.

“Yet the reckoning could begin before the Republican takeover. A series of provisions on offer in the House-passed version of this year’s annual defense authorization bill would require a web of overlapping reports from the Pentagon and the inspectors general who police transfers of articles of war, plus the establishment of a task force to design and implement enhanced tracking measures,” The Washington Post writes. 

Among the most dangerous and ambitious of these efforts so far was reveled weeks ago. American troops are said to be performing “inspections” of US weapon caches on the ground in Ukraine, but significantly away from frontline fighting. There have already been several inspections overseen by a US Defense attache and a US Office of Defense Cooperation team based out of the Ukrainian capital. 

Yet as the new Washington Post reporting details, a growing number of Democrats are joining skeptical Republicans

“The taxpayers deserve to know that investment is going where its intended to go,” Rep. Jason Crow (D-Colo.), a veteran-turned-lawmaker, said in an interview.

Crow led an effort in the House Armed Services Committee to include in the defense bill instructions to the Defense Department Inspector General to review, audit, investigate and otherwise inspect the Pentagon’s efforts to support Ukraine. He called the directive “necessary,” even if he does not count himself among the critics insinuating the Defense Department and the Ukrainians have failed to take the matter seriously enough.

AFP/Getty Images

Recently there have even been documented instances of large amounts of US weaponry falling into the hands of Russian forces. And perhaps even more alarming is that Western-provided arms are ending up on the black market, and even make their way outside the country to criminal gangs, as the government of Finland recently admitted

“We’re not playing a mission of perfection here. This is a brutal, large-scale land war — house to house, street to street, trench to trench. There will be things lost,” Rep. Crow said further. “We’re not trying to prevent every single piece from falling into the hands of the Russians, but we want to make sure it’s not happening at a large scale.”

Tyler Durden
Mon, 11/28/2022 – 05:45

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