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Is Emerging Markets Debt Well Positioned ?

Despite softer economic conditions globally, emerging markets (EM) credit fundamentals remain supportive—and while we see some pockets of weakness, especially…

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Despite softer economic conditions globally, emerging markets (EM) credit fundamentals remain supportive—and while we see some pockets of weakness, especially among energy- and food-importing countries, overall we believe EM debt is well positioned to withstand a period of weaker global growth.

You can read more about our economic outlook in our last blog post, Emerging Markets Debt: Clearer Skies Ahead? In terms of strategic opportunities, we favor high-yield issuers over high-grade issuers and remain strategically overweight in higher-yielding frontier markets, where we believe investors are overcompensated for credit risk and volatility.

We continue to see scope for fundamental differentiation among countries. We prefer high-yield commodity-exporting countries, especially in the energy space. We also remain cautious about countries that depend on food and energy imports and countries with negative political dynamics that create institutional risks. We also prefer countries with easier access to financing, especially those that have strong relationships with multilateral and bilateral lenders.

We continue to see opportunities in select distressed debt positions, where we believe bond prices do not reflect realistic assumptions for default risk and recovery values. We also see selective opportunities in EM corporate credit, where we believe a combination of differentiated fundamental drivers, favorable supply technical conditions, and attractive absolute valuations could continue to provide ample investment opportunities.

Given near-term growth concerns and intermittent primary markets, we are focusing on issuers with low refinancing needs and robust balance sheets. In Latin America, our positions are diversified across oil and gas; technology, media, and telecommunications (TMT); utilities; and financials. In Central and Eastern Europe, the Middle East, and Africa (EMEA), our positions are diversified across financials; oil and gas; metals and mining; and real estate. In Asia, our positions are diversified across oil and gas; financials; industrials; metals and mining; utilities; and real estate.

Our highest-conviction overweight and underweight positions are shown in the table below.



High-Beta Bucket

In the high-beta bucket, our largest overweight positions are in Egypt, Argentina, and Angola, and our largest underweight positions are in Turkey, Honduras, and Papua New Guinea.

Egypt (overweight): We believe external financing needs will be met with support from partners in the Middle East and the International Monetary Fund (IMF). Critically, we believe the recent currency adjustments will, moving forward, reduce imbalances and support increased financial inflows.

Argentina (overweight): Overall, we remain bearish about Argentine fundamentals, although we believe sovereign bonds are priced below eventual recovery value, providing potential value. We favor bonds on the curve with stronger indenture protections. We remain overweight via higher-quality provincial issuers. We have also purchased credit default swap (CDS) protection (net) to hedge against a default by the Argentine government.

Angola (overweight): We believe in Angola’s prudent policies. The exchange rate flexibility demonstrated in the past quarter cements our view.

Turkey (underweight): Imbalances and unsustainable policies continue to erode the country’s creditworthiness. We believe political uncertainty is likely to remain elevated in coming months given the prospect of elections. Our exposure remains concentrated in long-dated, low-price cash bonds, with our exposure in spread-duration terms closer to neutral.

Honduras (underweight): We do not believe that valuations properly reflect fundamentals. Although Honduras has the capacity to service its debt, fundamentals have been declining. The electricity sector, in particular, has been mismanaged, which has created fiscal challenges. The new government has threatened repudiation of its debt obligations, which gives us some concerns about Honduras’s willingness to pay. Given valuations and the small chance of debt repudiation, we believe there is better value elsewhere.

Papua New Guinea (underweight): A low foreign-exchange (FX) reserves base and a weak fiscal position lead us to avoid the country, although the debt maturity profile is well spaced out (mostly to bilaterally lenders).

Medium-Beta Bucket

In the medium-beta bucket, our largest overweight positions are in Cote d’Ivoire, Mexico, and Romania, and our largest underweight positions are in Oman, Jamaica, and Jordan.

Cote d’Ivoire (overweight): We find attractive valuations in long-dated euro-denominated bonds and believe fundamentals remain relatively supportive.

Mexico (overweight): Our overweight is largely in the state-owned energy company Pemex, which offers one of the largest spreads over its sovereign, and we believe could benefit from the high likelihood of support from the sovereign.

Romania (overweight): We see improving fundamentals and strong relative valuations. We continue to prefer euro-denominated issues over U.S.-dollar-denominated bonds but continue to look for value in U.S.-dollar-denominated bonds in the new-issue market.

Oman (underweight): Oman has been a strong reform story over the past couple of years, but we believe this story is now fairly priced in. The country still has a high dependency on oil, whose prices are vulnerable to slowing global growth.

Jamaica (underweight): Jamaica has continued to implement an impressive fiscal consolidation agenda, even following the pandemic. Despite kicking the debt-to-GDP target can down the road due to pandemic impacts, fiscal discipline has resulted in continued fundamental improvement. However, we believe market expectations are too high and high dollar prices on many Jamaican bonds lead us to believe there is more efficient allocation of capital elsewhere.

Jordan (underweight): Valuations look stretched on a relative basis given the weak outlook for growth, high levels of debt, and need for further improvement in the fiscal dynamics.

Low-Beta Bucket

In the low-beta bucket, our largest overweight positions are in Bermuda, Indonesia, and India, and our largest underweight positions are in Malaysia, Uruguay, and Chile.

Bermuda (overweight): We favor the country’s valuations and fundamentals relative to other low-beta sovereigns. Bermuda has similar valuations to Peru and Chile, but a stronger fundamental trajectory because there is less institutional uncertainty in Bermuda.

Indonesia (overweight): Indonesia has experienced improved terms of trade and structural reforms. Its economic fundamentals have strengthened in recent years through credible policymaking and prudent fiscal policies. The country has attracted foreign direct investment inflows, and our positioning aims to capture opportunities from green projects and value-chain developments in the country.

India (overweight): India has strong fundamentals. It is relatively insulated from external demand compared to other low-beta sovereigns, with resilient domestic demand supporting economic growth. Credit growth remains robust, and we expect inflation to moderate and slow the pace of central bank rate hikes.

Malaysia (underweight): We see unappealing valuations, typically in the longer-duration sovereign and quasi-sovereign bonds.

Uruguay (underweight): Fundamentals remain strong, but bonds have compressed materially since the COVID-19 pandemic, and we believe this offers limited potential spread tightening.

Chile (underweight): Valuations are tight and the political trajectory is uncertain. After the failed approval of a new constitution, we believe institutional uncertainty lingers and there are more attractive markets in which to invest.

Marco Ruijer, CFA, is a portfolio manager on William Blair’s emerging markets debt team.

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Government

Three Years To Slow The Spread: COVID Hysteria & The Creation Of A Never-Ending Crisis

Three Years To Slow The Spread: COVID Hysteria & The Creation Of A Never-Ending Crisis

Authored by Jordan Schachtel via ‘The Dossier’…

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March 21, 2023

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Three Years To Slow The Spread: COVID Hysteria & The Creation Of A Never-Ending Crisis

Authored by Jordan Schachtel via 'The Dossier' Substack,

Last Thursday marked the three year anniversary of the infamous “15 Days To Slow The Spread” campaign.

By March 16, yours truly was already pretty fed up with both the governmental and societal “response” to what was being baselessly categorized as the worst pandemic in 100 years, despite zero statistical data supporting such a serious claim.

I was living in the Washington, D.C. Beltway at the time, and it was pretty much impossible to find a like-minded person within 50 miles who also wasn’t taking the bait. After I read about the news coming out of Wuhan in January, I spent much of the next couple weeks catching up to speed and reading about what a modern pandemic response was supposed to look like.

What surprised me most was that none of “the measures” were mentioned, and that these designated “experts” were nothing more than failed mathematicians, government doctors, and college professors who were more interested in policy via shoddy academic forecasting than observing reality.

Within days of continually hearing their yapping at White House pressers, It quickly became clear that the Deborah Birx’s and Anthony Fauci’s of the world were engaging in nothing more than a giant experiment. There was no an evidence-based approach to managing Covid whatsoever. These figures were leaning into the collective hysteria, and brandishing their credentials as Public Health Experts to demand top-down approaches to stamping out the WuFlu.

To put it bluntly, these longtime government bureaucrats had no idea what the f—k they were doing. Fauci and his cohorts were not established or reputable scientists, but authoritarians, charlatans, who had a decades-long track record of hackery and corruption. This Coronavirus Task Force did not have the collective intellect nor the wisdom to be making these broad brush decisions.

Back then, there were only literally a handful of people who attempted to raise awareness about the wave of tyranny, hysteria, and anti-science policies that were coming our way. There were so few of us back in March in 2020 that it was impossible to form any kind of significant structured resistance to the madness that was unfolding before us. These structures would later form, but not until the infrastructure for the highway to Covid hysteria hell had already been cemented.

Making matters worse was the reality that the vast majority of the population — friends, colleagues, peers and family included — agreed that dissenters were nothing more than reckless extremists, bioterrorists, Covid deniers, anti-science rabble rousers, and the like.

Yet we were right, and we had the evidence and data to prove it. There was no evidence to ever support such a heavy-handed series of government initiatives to “slow the spread.”

By March 16, 2020, data had already accumulated indicating that this contagion would be no more lethal than an influenza outbreak.

The February, 2020 outbreak on the Diamond Princess cruise ship provided a clear signal that the hysteria models provided by Bill Gates-funded and managed organizations were incredibly off base. Of the 3,711 people aboard the Diamond Princess, about 20% tested positive with Covid. The majority of those who tested positive had zero symptoms. By the time all passengers had disembarked from the vessel, there were 7 reported deaths on the ship, with the average age of this cohort being in the mid 80s, and it wasn’t even clear if these passengers died from or with Covid.

Despite the strange photos and videos coming out of Wuhan, China, there was no objective evidence of a once in a century disease approaching America’s shores, and the Diamond Princess outbreak made that clear.

Of course, it wasn’t the viral contagion that became the problem.

It was the hysteria contagion that brought out the worst qualities of much of the global ruling class, letting world leaders take off their proverbial masks in unison and reveal their true nature as power drunk madmen.

And even the more decent world leaders were swept up in the fear and mayhem, turning over the keys of government control to the supposed all-knowing Public Health Experts.

They quickly shuttered billions of lives and livelihoods, wreaking exponentially more havoc than a novel coronavirus ever could.

In the United States, 15 Days to Slow The Spread quickly became 30 Days To Slow The Spread. Somewhere along the way, the end date for “the measures” was removed from the equation entirely.

3 years later, there still isn’t an end date…

Anthony Fauci appeared on MSNBC Thursday morning and declared that Americans would need annual Covid boosters to compliment their Flu shots.

So much of the Covid hysteria era was driven by pseudoscience and outright nonsense, and yet, very few if any world leaders took it upon themselves to restore sanity in their domains. Now, unsurprisingly, so many elected officials who were complicit in this multi-billion person human tragedy won’t dare to reflect upon it.

In a 1775 letter from John Adams to his wife, Abigail, the American Founding Father wrote:

“Liberty once lost is lost forever. When the People once surrender their share in the Legislature, and their Right of defending the Limitations upon the Government, and of resisting every Encroachment upon them, they can never regain it.”

Covid hysteria and the 3 year anniversary of 15 Days To Slow The Spread serves as the beginning period of a permanent scar resulting from government power grabs and federal overreach.

While life is back to normal in most of the country, the Overton window of acceptable policy has slid even further in the direction of push-button tyranny. Hopefully, much of the world has awakened to the reality that most of the people in charge aren’t actually doing what’s best for their respective populations.

Tyler Durden Tue, 03/21/2023 - 18:05

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Spread & Containment

Honey, the 3D print–I mean, dessert–is ready!

New York, NY—March 21, 2023—Cooking devices that incorporate three-dimensional (3D) printers, lasers, or other software-driven processes may soon replace…

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March 21, 2023

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New York, NY—March 21, 2023—Cooking devices that incorporate three-dimensional (3D) printers, lasers, or other software-driven processes may soon replace conventional cooking appliances such as ovens, stovetops, and microwaves. But will people want to use a 3D printer–even one as beautifully designed as a high-end coffee maker–on their kitchen counters to calibrate the exact micro- and macro-nutrients they need to stay healthy? Will 3D food printing improve the ways we nourish ourselves? What sorts of hurdles will need to be overcome to commercialize such a technology? 

Credit: Jonathan Blutinger/Columbia Engineering

New York, NY—March 21, 2023—Cooking devices that incorporate three-dimensional (3D) printers, lasers, or other software-driven processes may soon replace conventional cooking appliances such as ovens, stovetops, and microwaves. But will people want to use a 3D printer–even one as beautifully designed as a high-end coffee maker–on their kitchen counters to calibrate the exact micro- and macro-nutrients they need to stay healthy? Will 3D food printing improve the ways we nourish ourselves? What sorts of hurdles will need to be overcome to commercialize such a technology? 

Columbia mechanical engineers are working to address these challenges in Professor Hod Lipson’s Creative Machines Lab. In a new Perspective article published today by npj Science of Food, lead author Jonathan Blutinger, a postdoctoral fellow in the lab, explores these questions and more, discussing with Professor Christen Cooper, Pace University Nutrition and Dietetics, the benefits and drawbacks of 3D-printed food technology, how 3D-printed food compares to the “normal” food we eat, and the future landscape of our kitchens. 

VIDEO: https://youtu.be/AhVfU71tb2k 

Food printing technology has existed since Lipson’s lab first introduced it in 2005, but to date the technology has been limited to a small number of uncooked ingredients, resulting in what many perceive as less than appetizing dishes. Blutinger’s team broke away from this limitation by printing a dish comprising seven ingredients, cooked in situ using a laser. For the paper, the researchers designed a 3D-printing system that constructs cheesecake from edible food inks — including peanut butter, Nutella, and strawberry jam. The authors note that precision printing of multi-layered food items could produce more customizable foods, improve food safety, and enable users to control the nutrient content of meals more easily. 

“Because 3D food printing is still a nascent technology, it needs an ecosystem of supporting industries such as food cartridge manufacturers, downloadable recipe files, and an environment in which to create and share these recipes. Its customizability makes it particularly practical for the plant-based meat market, where texture and flavor need to be carefully formulated to mimic real meats,” Blutinger said.

To demonstrate the potential of 3D food printing, the team tested various cheesecake designs, consisting of seven key ingredients: graham cracker, peanut butter, Nutella, banana puree, strawberry jam, cherry drizzle, and frosting. They found that the most successful design used a graham cracker as the foundational ingredient for each layer of the cake. Peanut butter and Nutella proved to be best used as supporting layers that formed “pools” to hold the softer ingredients: banana and jam. Multi-ingredient designs evolved into multi-tiered structures that followed similar principles to building architectures; more structural elements were needed to support softer substrates for a successful multi-ingredient layered print.

“We have an enormous problem with the low-nutrient value of processed foods,” Cooper said. “3D food printing will still turn out processed foods, but perhaps the silver lining will be, for some people, better control and tailoring of nutrition–personalized nutrition. It may also be useful in making food more appealing to those with swallowing disorders by mimicking the shapes of real foods with the pureed texture foods that these patients–millions in the U.S. alone–require.”

Laser cooking and 3D food printing could allow chefs to localize flavors and textures on a millimeter scale to create new food experiences. People with dietary restrictions, parents of young children, nursing home dieticians, and athletes alike could find these personalized techniques very useful and convenient in planning meals. And, because the system uses high-energy targeted light for high-resolution tailored heating, cooking could become more cost-effective and more sustainable. 

“The study also highlights that printed food dishes will likely require novel ingredient compositions and structures, due to the different way by which the food is ‘assembled,’ ” said Lipson. “Much work is still needed to collect data, model, and optimize these processes.”

Blutinger added, “And, with more emphasis on food safety following the COVID-19 pandemic, food prepared with less human handling could lower the risk of foodborne illness and disease transmission. This seems like a win-win concept for all of us.”

About the Study

Journal: npj Science of Food

The paper is titled “THE FUTURE OF SOFTWARE-CONTROLLED COOKING.”

Authors of the paper are: Jonathan David Blutinger 1, Christen Cupples Cooper2 , Shravan Karthik1 , Alissa Tsai 1 , Noà Samarelli1 , Erika Storvick1 , Gabriel Seymour1 , Elise Liu1 , Yorán Meijers1,3 and Hod Lipson1
1 Department of Mechanical Engineering, Columbia Engineering
2 Department of Nutrition and Dietetics, Pace University
3 Department of Food Technology, Wageningen University, Netherlands.

The study was supported by NSF AI Institute for Dynamical Systems, grant 2112085, and by a grant from the Redefine Meat Ltd.

The authors declare no financial or other conflicts of interest. 

###

LINKS:

Paper: https://www.nature.com/articles/s41538-023-00182-6
DOI: 10.1038/s41538-023-00182-6

VIDEO: https://youtu.be/AhVfU71tb2k 

PROJECT WEBSITE: 
https://www.creativemachineslab.com/laser-cooking.html
https://www.creativemachineslab.com/digital-food.html

###

Columbia Engineering

Since 1864, the Fu Foundation School of Engineering and Applied Science at Columbia University has been a resource to the world for major advances in human progress. Today, Columbia Engineering is the top engineering school in the Ivy League and New York City. As a nexus for high-impact research, the school convenes more than 250 faculty members and more than 6,000 undergraduate and graduate students from around the globe to push the frontiers of knowledge and solve humanity’s most pressing problems

###

 

Journal

npj Science of Food

DOI

10.1038/s41538-023-00182-6

Article Title

The future of software-controlled cooking

Article Publication Date

21-Mar-2023

COI Statement

The authors declare no financial or other conflicts of interest.

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International

“An Extraordinary Change”: Labor Data Reveals Shocking Drop In Workplace Attendance Following Vax Campaign

"An Extraordinary Change": Labor Data Reveals Shocking Drop In Workplace Attendance Following Vax Campaign

Last we heard from former Blackrock…

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7 hours ago

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March 21, 2023

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"An Extraordinary Change": Labor Data Reveals Shocking Drop In Workplace Attendance Following Vax Campaign

Last we heard from former Blackrock portfolio manager Ed Dowd and his deep-dive partners at Phinance Technologies, the rate of Serious Adverse Events reported during Covid-19 vaccine trials closely tracked a spike in disabilities reported following the vaccine's official rollout.

In their latest analysis, Dowd and crew use data from the Bureau of Labor Statistcs (BLS) to reveal a shocking spike in both employee absence and lost worktime rates, which they believe is due to vaccines - either from primary vaccine injuries, or because of weakened immune systems due to the jab, and not long covid caused by the virus itself.

Via Phinance Technologies

"It’s not a stretch to conclude from this data that the vaccines are causing death, disabilities & injuries due to a degradation of individuals' immune system," Dowd says. "The rate of change is not explained by the long Covid trope. Ask yourself where is funding for such studies?"

For those who want to dive right in to the analysis, follow the below links:

Part 1 - Overview of the Data

Part 2 - Analysis of Absence rates

Part 3 - Analysis of Lost Worktime rates

For the cliffs notes version, Dowd has dropped the following Twitter thread summarizing their analysis:

And for those who fell asleep in statistics class;

As one commenter notes, data from the UK reveals that firms are coming under increased pressure due to rising staff sickness, particularly among those over the age of 50. 

More to come next week...

Dowd explained his views how he reacted to the pandemic to Tucker Carlson. Now he, and his partners, spend their time poring through data to shine a light on harsh realities.

Tyler Durden Tue, 03/21/2023 - 12:00

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