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Week Ahead – Earnings season a highlight

US It will be a busy week filled with the first look at Q4 GDP, corporate earnings, and US debt ceiling gridlock. There is a lot of risk on the table and…




It will be a busy week filled with the first look at Q4 GDP, corporate earnings, and US debt ceiling gridlock. There is a lot of risk on the table and a key focal point for many will be the modest growth we will see alongside a plethora of data points that are signalling recession warnings. Traders will want to see if the contraction manufacturing and service PMI readings we saw in December show any improvement this month.  

Wall Street is also fixating on what will happen with debt ceiling talks. Special measures are being used and that should stave off default until June 5th, but flare-ups will most likely happen along the way.   

Earnings season shifts away from the banks and now focuses on broader parts of the economy.  Key earnings include results from Tesla, Chevron, the airlines, Lockheed Martin, Visa, American Express, 3m Abbott Labs, JNJ, GE, IBM, and Colgate-Palmolive.  


The flash PMIs early in the week will be of keen interest as investors continue to assess how much trouble the economy is in. A relatively mild winter to date has boosted the bloc’s economic prospects as gas prices have fallen considerably. This isn’t expected to be reflected in the PMIs though, with the prospect of much higher interest rates and a tougher global economic environment continuing to weigh. It will be interesting to see if there is any improvement as a result of this and China’s growth prospects.

Regardless, markets expect the ECB to hike by another 150 basis points over the coming meetings and officials have been keen to ensure investors don’t become complacent on that. I expect more commentary along those lines next week.


While the PMIs would typically be the standout release next week, investors may have more of an eye on the PPI inflation data for signs of inflationary pressures subsiding. The CPI data in December declined for a second month but remains far too high, above 10%. We’ll need to see much greater signs of those pressures abating before the Bank of England can become more comfortable.


The only economic release of note is the PPI data. That aside, the focus will remain on the war in Ukraine. 

South Africa

The SARB is expected to raise interest rates by another 50 basis points on Thursday, taking the repo rate to 7.5%, although they could opt for only 25. Inflation has been heading in the right direction since peaking in the summer and could be back within the 3-6% target range before long. Investors will be looking for signs on whether the tightening cycle is now at or near an end. 


The CBRT left the repo rate unchanged at 9% in January after opting to pause the easing cycle late last year. The quarterly inflation report may offer insight into whether rates will fall again and when but that aside, I’m not sure it will contain much of note given the logic adopted to justify cutting interest rates over the last couple of years.


Trade data is the only notable release next week. 


This Saturday is Chinese New Year’s Eve, followed by the Spring Festival. The New Year atmosphere which generally extends until at least the end of January may further stimulate domestic consumption and investment in China. The billions of trips made during the Chinese New Year could bring the second wave of Covid-19 to largely unaffected rural areas and smaller cities. Given that the general population will have a higher level of immunity, the economic impact of a second outbreak should be less in areas that have already withstood the main wave of evacuations.


No major data or central bank appearances are expected. 

Australia & New Zealand

China’s full reopening since the beginning of January this year and its renewed focus on ‘economic development’ will benefit economic growth in Australia and New Zealand. The largest potential upside from reopening itself sits within the services sector given China is the largest consumer of Australian tourism and education exports.  

Australia recently released its CPI for November at an annual rate of 7.3%, in line with expectations but higher than the previous value of 6.9%, indicating that Australia’s inflation level may still not have peaked. 

The RBA’s CPI for December will be released on Thursday, as well as its revised CPI average quarterly rate for the fourth quarter. New Zealand’s CPI for the fourth quarter will offer clues on whether sustainable disinflation is underway. 


The Bank of Japan monetary policy decision saw them defer any major decisions until at least Governor Kuroda’s last meeting in March, barring any surprises in the interim. Following that, the summary of opinions on Wednesday could be of interest, as will the December minutes, released Monday. Despite being outdated now, it will provide perspective on the decision to unexpectedly tweak its yield curve control band.  

Next week also focuses on the Japan PMI readings, leading index, and Tokyo’s CPI. 


The release of the December inflation will be followed closely.  MAS sees core inflation averaging 3.5%–4.5% this year. 

Economic Calendar

Saturday, Jan. 21

Economic Events

US Treasury Secretary Janet Yellen visits Senegal, Zambia, and South Africa

Sunday, Jan. 22

Economic Events

Germany Chancellor Scholz and French President Macron hold a joint news conference after a Franco-German cabinet meeting in Paris

Italian PM Meloni visits Algiers

Monday, Jan. 23

Economic Data/Events

US Conference Board leading index

Euro area consumer confidence

EU foreign ministers meeting in Brussels

Russian Foreign Minister Lavrov is expected to travel to South Africa’s Pandor

ECB’s Panetta speaks in the European Parliament

ECB President Lagarde makes a speech at the Deutsche Boerse annual reception

Bank of Japan releases minutes of its December meeting

Tuesday, Jan. 24

Economic Data/Events

US flash PMIs; Richmond Fed Manufacturing

Australia Judo Bank PMI, business confidence

Chile PPI

European flash PMIs: Eurozone, Germany, UK, and France

Japan PMIs, department store sales

Mexico international reserves, bi-weekly CPI

New Zealand performance services index

Thailand trade

South Africa leading indicator

ECB’s Knot speaks at the Future of the Financial Sector conference in Frankfurt

German Foreign Minister Baerbock addresses the Council of Europe in Strasbourg

SNB’s Vice Chairman Schlegel speaks in Zurich

Earnings from Danaher, General Electric, Intuitive Surgical, Johnson & Johnson, Lockheed Martin, Microsoft, Raytheon Technologies, Texas Instruments, 3M, Union Pacific, and Verizon  

Wednesday, Jan. 25

Economic Data/Events

US MBA mortgage applications, Philadelphia Fed non-manufacturing activity

Australia CPI, leading index

Canada rate decision: Expected to raise rates by 25bps to 4.50%

Germany IFO business climate

Japan leading index

Mexico economic activity IGAE  

New Zealand CPI, credit card spending

Russia PPI, weekly CPI

Singapore CPI

Thailand rate decision: Expected to raise rates by 25bps to 1.50%

The Republican National Committee winter meeting is held

Nordic economic outlook published by Finland’s Nordea Bank

Germany’s Economy Ministry publishes its annual report with updated forecasts

BOJ announces the outright purchase amount of government securities

Earnings from Abbott Laboratories, ASML Holding, AT&T, Boeing, IBM, and Tesla

Thursday, Jan. 26

Economic Data/Events

US Q4 GDP, new home sales, initial jobless claims, goods trade balance, US durable goods, wholesale inventories, retail inventories

Canada CFIB business barometer

Japan PPI services, machine tool orders

Mexico unemployment rate

Russia gold, forex reserves

Singapore industrial production

South Africa rate decision: Expected to raise rates by 50bps to 7.50%

New Zealand releases financial statements for the five months to Nov. 30

BOJ releases summary of opinions from January meeting

Earnings from American Airlines, Blackstone, Comcast, Intel, LVMH Moet Hennessy Louis Vuitton, Mastercard, SAP, Southwest Airlines, and Visa

Friday, Jan. 27

Economic Data/Events

US personal income/spending, University of Michigan consumer sentiment, pending home sales

Australia PPI, export/import price index

Japan Tokyo CPI

Mexico trade balance

New Zealand business confidence

Singapore home prices

South Korea business survey

Thailand foreign reserves, forward contracts

Spain GDP

Earnings from American Express, Chevron, and HCA Healthcare

Sovereign Rating Updates

Denmark (Fitch)

Greece (Fitch)

Hungary (S&P)

Netherlands (Moody’s)

Portugal (DBRS)

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As We Sell Off Our Strategic Oil Reserves, Ponder This

As We Sell Off Our Strategic Oil Reserves, Ponder This

Authored by Bruce Wilds via Advancing Time blog,

One of Biden’s answers to combating…



As We Sell Off Our Strategic Oil Reserves, Ponder This

Authored by Bruce Wilds via Advancing Time blog,

One of Biden's answers to combating higher gas prices has been to tap into America's oil reserves. While I was never a fan of the U.S. Strategic Petroleum Reserve (SPR) program, it does have a place in our toolbox of weapons. We can use the reserve to keep the country running if outside oil supplies are cut off. Still, considering how out of touch with reality Washington has become, we can only imagine the insane types of services it would deem essential next time an oil shortage occurs.

Sadly, some of these reserves found their way into the export market and ended up in China. We now have proof that the President's son Hunter had a Chinese Communist Party member as his assistant while dealing with the Chinese. Apparently, he played a role in the shipping of American natural gas to China in 2017. It seems the Biden family was promising business associates that they would be rewarded once Biden became president. Biden's actions could be viewed as those of a traitor or at least disqualify him from being President.

The following information was contained in a letter from House Oversight Committee ranking member James Comer, R-Ky. to Treasury Secretary Janet Yellen dated Sept. 20. 

"The President has not only misled the American public about his past foreign business transactions, but he also failed to disclose that he played a critical role in arranging a business deal to sell American natural resources to the Chinese while planning to run for President.”

Joe Biden, Comer said, was a business partner in the arrangement and had office space to work on the deal, and a firm he managed received millions from his Chinese partners ahead of the anticipated venture. While part of what Comer stated had previously been reported in the news, the letter, cited whistleblower testimonies, as well as emails, a corporate PowerPoint presentation, and a screenshot of encrypted messages. These as well as  bank documents that committee Republicans obtained suggest Biden’s knowledge and involvement in the plan dated back to at least 2017.

The big point here is;

  • The Strategic Petroleum Reserve, which was established in 1975 due to the 1973 oil embargo, is now at its lowest level since December 1983.

In December 1975, with memories of gas lines fresh on the minds of Americans following the 1973 OPEC oil embargo, Congress established the Strategic Petroleum Reserve (SPR). It was designed “to reduce the impact of severe energy supply interruptions.” What are the implications of depleting the SPR and is it still important?

The U.S. government began to fill the reserve and it hit its high point in 2010 at around 726.6 million barrels. Since December 1984, this is the first time the level has been lower than 450 million barrels. Draining the SPR has been a powerful tool for the administration in its effort to tame the price of gasoline. It also signaled a "new era" of intervention on the part of the White House. 

This brings front-and-center questions concerning the motivation of those behind this action. One of the implications of Biden's war on high oil prices is that it has short-circuited the fossil investment/supply development process.  Capital expenditures among the five largest oil and gas companies have fallen as the price of oil has come under fire. The current under-investment in this sector is one of the reasons oil prices are likely to take a big jump in a few years. Production from existing wells is expected to rapidly fall.

The Supply Of Oil Is Far More Constant And Inelastic Than Demand

It is important to remember when it comes to oil, the supply is far more constant and inelastic than the demand. This means that it takes time and investment to bring new wells online while demand can rapidly change. This happened during the pandemic when countries locked down and told their populations and told them to stay at home. This resulted in the price of oil temporarily going negative because there was nowhere to store it.

Draining oil from the strategic reserve is a short-sighted and dangerous choice that will impact America's energy security at times of global uncertainty. In an effort to halt inflationary forces, Biden released a huge amount of crude oil from the SPR to artificially suppress fuel prices ahead of the midterm elections. 

To date, Biden has dumped more SPR on the market than all previous presidents combined reducing the reserves to levels not seen since the early 1980s. In spite of how I feel about the inefficiencies of this program, it does serve a vital role. It is difficult to underestimate the importance of a country's ability to rapidly increase its domestic flow of oil. This defensive action protects its economy and adds to its resilience. 

Biden's actions have put the whole country at risk. Critics of his policy pointed out the Strategic Petroleum Reserve was designed for use in an emergency not as a tool to manipulate elections. Another one of Biden's goals may be to bring about higher oil prices to reduce its use and accelerate the use of high-cost green energy.

Either way, Biden's war on oil has not made America's energy policies more efficient or the country stronger.

Tyler Durden Sat, 03/25/2023 - 18:30

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The Disinformation-Industrial Complex Vs Domestic Terror

The Disinformation-Industrial Complex Vs Domestic Terror

Authored by Ben Weingarten via,

Combating disinformation…



The Disinformation-Industrial Complex Vs Domestic Terror

Authored by Ben Weingarten via,

Combating disinformation has been elevated to a national security imperative under the Biden administration, as codified in its first-of-its-kind National Strategy for Countering Domestic Terrorism, published in June 2021.  

That document calls for confronting long-term contributors to domestic terrorism.

In connection therewith, it cites as a key priority “addressing the extreme polarization, fueled by a crisis of disinformation and misinformation often channeled through social media platforms, which can tear Americans apart and lead some to violence.” 

Media literacy specifically is seen as integral to this effort. The strategy adds that: “the Department of Homeland Security and others are either currently funding and implementing or planning evidence–based digital programming, including enhancing media literacy and critical thinking skills, as a mechanism for strengthening user resilience to disinformation and misinformation online for domestic audiences.” 

Previously, the Senate Intelligence Committee suggested, in its report on “Russian Active Measures Campaigns and Interference in the 2016 Election” that a “public initiative—propelled by Federal funding but led in large part by state and local education institutions—focused on building media literacy from an early age would help build long-term resilience to foreign manipulation of our democracy.” 

In June 2022, Democrat Senator Amy Klobuchar introduced the Digital Citizenship and Media Literacy Act, which – citing the Senate Intelligence Committee’s report – would fund a media literacy grant program for state and local education agencies, among other entities. 

NAMLE and Media Literacy Now, both recipients of State Department largesse, endorsed the bill. 

Acknowledging explicitly the link between this federal counter-disinformation push, and the media literacy education push, Media Literacy Now wrote in its latest annual report that ... 

... the federal government is paying greater attention to the national security consequences of media illiteracy.

The Department of Homeland Security is offering grants to organizations to improve media literacy education in communities across the country. Meanwhile, the Department of Defense is incorporating media literacy into standard troop training, and the State Department is funding media literacy efforts abroad.

These trends are important for advocates to be aware of as potential sources of funding as well as for supporting arguments around integrating media literacy into K-12 classrooms. 

When presented with notable examples of narratives corporate media promoted around Trump-Russia collusion, and COVID-19, to justify this counter-disinformation campaign, Media Literacy Now president Erin McNeill said: “These examples are disappointing.”

The antidote, in her view is, “media literacy education because it helps people not only recognize the bias in their news sources and seek out other sources, but also to demand and support better-quality journalism.” (Emphasis McNeill’s)

Tyler Durden Sat, 03/25/2023 - 17:30

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G7 Vs BRICS – Off To The Races

G7 Vs BRICS – Off To The Races

Authored by Scott Ritter via,

An economist digging below the surface of an IMF report has…



G7 Vs BRICS - Off To The Races

Authored by Scott Ritter via,

An economist digging below the surface of an IMF report has found something that should shock the Western bloc out of any false confidence in its unsurpassed global economic clout...

G7 leaders meeting on June 28, 2022, at Schloss Elmau in Krün, Germany. (White House/Adam Schultz)

Last summer, the Group of 7 (G7), a self-anointed forum of nations that view themselves as the most influential economies in the world, gathered at Schloss Elmau, near Garmisch-Partenkirchen, Germany, to hold their annual meeting. Their focus was punishing Russia through additional sanctions, further arming of Ukraine and the containment of China.

At the same time, China hosted, through video conference, a gathering of the BRICS economic forum. Comprised of Brazil, Russia, India, China and South Africa, this collection of nations relegated to the status of so-called developing economies focused on strengthening economic bonds, international economic development and how to address what they collectively deemed the counter-productive policies of the G7.

In early 2020, Russian Deputy Foreign Minister Sergei Ryabkov had predicted that, based upon purchasing power parity, or PPP, calculations projected by the International Monetary Fund, BRICS would overtake the G7 sometime later that year in terms of percentage of the global total.

(A nation’s gross domestic product at purchasing power parity, or PPP, exchange rates is the sum value of all goods and services produced in the country valued at prices prevailing in the United States and is a more accurate reflection of comparative economic strength than simple GDP calculations.)

Then the pandemic hit and the global economic reset that followed made the IMF projections moot. The world became singularly focused on recovering from the pandemic and, later, managing the fallout from the West’s massive sanctioning of Russia following that nation’s invasion of Ukraine in February 2022.

The G7 failed to heed the economic challenge from BRICS, and instead focused on solidifying its defense of the “rules based international order” that had become the mantra of the administration of U.S. President Joe Biden.


Since the Russian invasion of Ukraine, an ideological divide that has gripped the world, with one side (led by the G7) condemning the invasion and seeking to punish Russia economically, and the other (led by BRICS) taking a more nuanced stance by neither supporting the Russian action nor joining in on the sanctions. This has created a intellectual vacuum when it comes to assessing the true state of play in global economic affairs.

U.S. President Joe Biden in virtual call with G7 leaders and Ukrainian President Volodymyr Zelenskyy, Feb. 24. (White House/Adam Schultz)

It is now widely accepted that the U.S. and its G7 partners miscalculated both the impact sanctions would have on the Russian economy, as well as the blowback that would hit the West.

Angus King, the Independent senator from Maine, recently observed that he remembers

“when this started a year ago, all the talk was the sanctions are going to cripple Russia. They’re going to be just out of business and riots in the street absolutely hasn’t worked …[w]ere they the wrong sanctions? Were they not applied well? Did we underestimate the Russian capacity to circumvent them? Why have the sanctions regime not played a bigger part in this conflict?”

It should be noted that the IMF calculated that the Russian economy, as a result of these sanctions, would contract by at least 8 percent. The real number was 2 percent and the Russian economy — despite sanctions — is expected to grow in 2023 and beyond.

This kind of miscalculation has permeated Western thinking about the global economy and the respective roles played by the G7 and BRICS. In October 2022, the IMF published its annual World Economic Outlook (WEO), with a focus on traditional GDP calculations. Mainstream economic analysts, accordingly, were comforted that — despite the political challenge put forward by BRICS in the summer of 2022 — the IMF was calculating that the G7 still held strong as the leading global economic bloc.

In January 2023 the IMF published an update to the October 2022 WEO,  reinforcing the strong position of the G7.  According to Pierre-Olivier Gourinchas, the IMF’s chief economist, the “balance of risks to the outlook remains tilted to the downside but is less skewed toward adverse outcomes than in the October WEO.”

This positive hint prevented mainstream Western economic analysts from digging deeper into the data contained in the update. I can personally attest to the reluctance of conservative editors trying to draw current relevance from “old data.”

Fortunately, there are other economic analysts, such as Richard Dias of Acorn Macro Consulting, a self-described “boutique macroeconomic research firm employing a top-down approach to the analysis of the global economy and financial markets.”

Rather than accept the IMF’s rosy outlook as gospel, Dias did what analysts are supposed to do — dig through the data and extract relevant conclusions.

After rooting through the IMF’s World Economic Outlook Data Base, Dias conducted a comparative analysis of the percentage of global GDP adjusted for PPP between the G7 and BRICS, and made a surprising discovery: BRICS had surpassed the G7.

This was not a projection, but rather a statement of accomplished fact:

BRICS was responsible for 31.5 percent of the PPP-adjusted global GDP, while the G7 provided 30.7 percent.

Making matters worse for the G7, the trends projected showed that the gap between the two economic blocs would only widen going forward.

The reasons for this accelerated accumulation of global economic clout on the part of BRICS can be linked to three primary factors:

  • residual fallout from the Covid-19 pandemic,

  • blowback from the sanctioning of Russia by the G7 nations in the aftermath of the Russian invasion of Ukraine and a growing resentment among the developing economies of the world to G7 economic policies and

  • priorities which are perceived as being rooted more in post-colonial arrogance than a genuine desire to assist in helping nations grow their own economic potential. 

Growth Disparities

It is true that BRICS and G7 economic clout is heavily influenced by the economies of China and the U.S., respectively. But one cannot discount the relative economic trajectories of the other member states of these economic forums. While the economic outlook for most of the BRICS countries points to strong growth in the coming years, the G7 nations, in a large part because of the self-inflicted wound that is the current sanctioning of Russia, are seeing slow growth or, in the case of the U.K., negative growth, with little prospect of reversing this trend.

Moreover, while G7 membership remains static, BRICS is growing, with Argentina and Iran having submitted applications, and other major regional economic powers, such as Saudi Arabia, Turkey and Egypt, expressing an interest in joining. Making this potential expansion even more explosive is the recent Chinese diplomatic achievement in normalizing relations between Iran and Saudia Arabia.

Diminishing prospects for the continued global domination by the U.S. dollar, combined with the economic potential of the trans-Eurasian economic union being promoted by Russia and China, put the G7 and BRICS on opposing trajectories. BRICS should overtake the G7 in terms of actual GDP, and not just PPP, in the coming years.

But don’t hold your breath waiting for mainstream economic analysts to reach this conclusion. Thankfully, there are outliers such as Richard Dias and Acorn Macro Consulting who seek to find new meaning from old data. 

Tyler Durden Sat, 03/25/2023 - 07:00

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