FT : Deep-sea mining is key to making transition to clean energy, says Loke

Deep-sea mining is key to making transition to clean energy, says Loke
Norwegian owner of UK Seabed Resources says backing from Europe needed in the face of Chinese dominance

Europe must be prepared to support deep-sea mining if it is to secure metals crucial to making the transition to clean energy, the new Norwegian owner of British industry hopeful UK Seabed Resources has warned.

Hans Olav Hide, chair of Norway’s Loke Marine Minerals, said the controversial practice could help the UK and EU compete in the face of China’s dominance of battery metal supply chains.

“Marine minerals are a very clear response to the geopolitical scene,” Hide said, referring to western governments’ focus on energy security since Russia’s invasion of Ukraine. “People are realising we need to get away from . . . China covering everything.”

“If you build a battery factory you will get funding” from governments, he told the Financial Times. “But if you ask where it will get minerals from, it will be from China or Russia.”

Advocates of deep sea mining say it could play a crucial role in meeting the huge increase in demand for energy transition metals at a time when land-based projects face lengthy waits to gain permits and growing opposition from local communities.

Critics, however, warn the practice poses a serious threat to marine ecosystems and biodiversity, with potentially far-reaching implications.

Global rules to allow deep-sea mining have yet to be approved but companies in various jurisdictions have obtained exploration licences from the UN-backed International Seabed Authority.

The ISA this week debated whether to give the green light to the extraction of manganese, nickel, copper and cobalt from potato-sized nodules up to 5,000 metres beneath the ocean surface.

Hide’s appeal for Europe to secure minerals from the seabed comes days after the EU released the Critical Raw Materials Act aimed at bolstering the bloc’s security of supply.

Demand for commodities such as copper, lithium and rare earths are set to boom because of their use in vital technologies and infrastructure to decarbonise the global economy such as electric cars, renewable power and upgrades to the grid.

The EU has warned for years that the bloc’s reliance on imports of critical raw materials could expose it to supply squeezes from China and threaten its goal to reach net zero emissions by 2050. Most of the world’s cobalt is refined in China, as are all of the rare earths used in magnet production for electric vehicles and wind turbines, it said last month.

Mining companies must obtain the backing of ISA member states in order to obtain exploration licences. The UK, France, India, Russia and China are among countries that have given such backing.

Loke, based in Norway’s oil capital Stavanger, is backed by companies including Norwegian defence contractor Kongsberg Grupper, UK offshore engineer Technip FMC and Norwegian shipping group Wilhelmsen.

It bought UK Seabed Resources from US defence group Lockheed Martin in March for an undisclosed sum. UKSR’s assets include two licences in the Pacific Ocean’s Clarion-Clipperton Zone, the largest known deposit of battery metals.

Loke plans to make an investment decision on mining in the Pacific in 2027 but faces an uphill battle to build a supply chain and client base if it goes ahead.

Commodities group Glencore and Danish shipping company Maersk have both invested in The Metals Company, a Canadian start-up with exploration licences in the CCZ. But big potential consumers including Tesla and BMW have said they will not touch metals mined from the sea because of environmental concerns.

Nick Popovic, co-head of copper and zinc trading at Glencore, told the FT Commodity Summit last month that even when environmental concerns were put aside, economic uncertainties over deep-sea mining made it a difficult investment proposition.

“The problem with deep-sea mining is that it’s so early in the game that without any meaningful examples, I would personally struggle to assess it,” he said.

FT : Lithium shortages threaten Europe’s electric car transition

Lithium shortages threaten Europe’s electric car transition
Without homegrown supply of key battery component, Europe could struggle to compete with China

Europe’s transition to electric cars is under threat because of persisting shortages of lithium, the key battery component that will power the vehicles of the future.

EU plans to ban sales of new petrol and diesel cars by 2035 mean demand for lithium is set to surge fivefold by 2030 to 550,000 tonnes per year — more than double the 200,000 tonnes the region will be able to produce, according to Benchmark Mineral Intelligence.

“The whole global market is still set to be in a deficit by the end of the decade,” said Daisy Jennings-Gray, analyst at Benchmark Mineral Intelligence.

“Europe will probably sit in a tight position in terms of availability and cannot afford any delays to domestic projects [to extract the metal].”

The supply problem has been highlighted by the world’s largest lithium producer Albemarle, which has sidelined plans to extract lithium in Europe after failing to find a commercially viable site.

“The resources we are aware of in Europe are not high quality and relatively small,” the group’s chief financial officer Scott Tozier told the Financial Times.


The projected lithium deficit in a market already suffering global shortages and high prices of $62,000 per tonne — more than five times the average cost of production despite a recent drop — may prove existential for European carmakers.

Without a homegrown supply of the battery gold, Europe’s auto groups could find it difficult to compete with China, which is rapidly expanding its electric car industry and making inroads into the European market.

A sign of China’s dominance in the field is that it controls 60 per cent of global lithium processing, which turns a concentrate produced from brine or ore into lithium chemical compounds such as carbonate or hydroxide that are used in car batteries.

Francis Wedin, chief executive of Australian-listed Vulcan Energy Resources, one of the few companies trying to extract lithium in Europe, said the region’s car industry would not be able to electrify its future fleet without its own lithium.

China “will prioritise supply for its own industry”, he said. Without its own access to lithium, European carmakers would “not survive competition” from the country, he added.

Although US-based Albemarle, which supplies a fifth of the world’s lithium, plans to build a European refinery for the metal by the end of the decade, carmakers need alternatives now.

That has prompted some leading European car groups to gamble on a handful of local projects, where success is far from assured because of the complicated extraction processes.

One involves Perth-based Vulcan, which is promising to extract lithium out of German brine using geothermal power.


Opel-maker Stellantis last year became the first carmaker to invest in a lithium miner when it paid €50mn in return for equity in Vulcan. Renault and Volkswagen have, much like Stellantis, also made binding orders for Vulcan’s expected supply of lithium.

Another risky project involves French mining group Imerys, which aims to extract lithium from rocks underneath a kaolin mine, opened by the country’s ceramics industry in the 19th century.

Vulcan hopes to produce 24,000 tonnes annually two years after starting production in 2025 while Imerys is planning to start producing 34,000 tonnes of battery-grade lithium chemicals a year from 2028.

Combined, this is enough to supply roughly 1.2mn small electric vehicle batteries a year, according to the companies’ calculations.

But this is a long way short of expected demand for electric cars, which is likely to match or exceed current sales volumes with 11.3mn new cars registered in Europe in 2022, according to German trade group VDA.

This also assumes the success of the Vulcan and Imerys ventures.

“The projects carry an inherent risk as we are daring production processes that nobody has done before,” admitted Alessandro Dazza, chief executive of Imerys, as he highlighted the need for government support.

In addition, there is a danger the ventures will end up costing far more than rival projects.

Vulcan needs to put down nearly twice as much money upfront than many of its rivals, as it must build geothermal plants before it can start the extraction process.

Its method involves pumping up hot lithium-rich brines from underground wells. The heat from the brine creates geothermal energy that can be used to extract the lithium, as well as heat nearby communities, reducing its carbon footprint.

Its capital expenditure exceeds $30,000 per tonne of production capacity compared with an average of $17,300 for just over 50 of the world’s leading lithium projects, according to S&P Global and Scotiabank.

Analysts at S&P say the higher cost for some projects is because they involve on-site processing of the material to the high grade needed for batteries, which Vulcan hopes to do.

Vulcan also argues that its production costs, once the plant is built, will be unusually low with operational expenses estimated at €4,000-€4,500 per tonne.

That claim, however, has been met with some investor scepticism. Nearly 7 per cent of Vulcan’s shares on the Australian Securities Exchange have been shorted — a bet on the share price falling.

The company has also pushed back the timeline for its first production by a year to 2025, which is not an uncommon fate with the average lithium project being delayed by three years against original expectations, according to Canaccord Genuity.

The EU is aware of the problems. Its Critical Raw Materials Act aims to shore up its EV supply chain by sourcing more battery metals such as lithium, cobalt and nickel domestically.

But executives say financial support from governments is needed to get domestic lithium supply off the ground.

Europe also needs to address bureaucratic hurdles, such as arduous procedures for processing permits, as well as political and local resistance to mining.

It can take years for some mining companies to get their environmental permits once all the studies have been submitted. The EU wants to impose a 24-month deadline to address this.

Rio Tinto’s Jadar project in Serbia, which would have created one of the world’s largest lithium mines, was one of the casualties of the system. Its exploration and development licences were revoked ahead of elections last year because of environmental concerns and political opposition.

But even without permitting delays, analysts say the challenges ahead for Europe in meeting lithium needs are enormous, particularly when compared with the US that has put vast resources behind disentangling its critical mineral supply chains from China.

“It’s a one-two punch for the extractive sector in Europe of a lack of money going in at the early stage of exploration and a much more difficult permitting environment than Africa, Australia and Canada,” said Kevin Murphy, analyst at S&P Global Commodities.

“In the near term, Europe will be heavily reliant on outside resources to supply their industry.”

Credit Suisse braced for backlash over UBS rescue at shareholder meeting

Credit Suisse braced for backlash over UBS rescue at shareholder meeting
First in-person AGM for four years will be the bank’s last as an independent company following takeover

Credit Suisse is bracing for a tumultuous annual shareholder meeting on Tuesday, when protesters are expected to vent their anger at the implosion of one of Switzerland’s historic financial institutions.

The meeting will take place at a 15,000-capacity ice hockey stadium in the Zurich suburb of Oerlikon. It will be the bank’s first in-person AGM for four years and its last as an independent company after 167 years at the centre of the Swiss economy.

The board is expected to bear the brunt of investors’ anger over the bank’s rescue two weeks ago by its rival UBS. Shareholders of both banks were denied a vote on the $3.25bn takeover thanks to emergency measures taken by the Swiss government to rush the deal through.

There is fear among Credit Suisse executives that the event could attract more vehement protests from Swiss citizens, who are outraged by the bank’s rapid decline and litany of recent scandals.

More than three-quarters of Swiss voters want the combined mega bank to be split up by new legislation, according to opinion polls.

Credit Suisse withdrew two votes from its AGM agenda last week, saying they were no longer necessary because of the takeover. The first was a vote on whether members of the board should be absolved of legal responsibility for the 2022 financial year. The second was on whether executives should receive a special SFr30.1mn bonus for completing the five-year restructuring that started last year.

Proxy advisers ISS, Glass Lewis and Ethos Foundation had recommended shareholders vote against the so-called “discharge” vote, which is common in Swiss AGMs, as well as the bonus.

The Norwegian sovereign wealth fund, which is a top 10 independent shareholder in the bank, announced on Friday that in addition to voting against discharging the board and for the special bonus, it would also vote against the majority of directors.

Norges Bank Investment Management said it would vote against chair Axel Lehmann, along with longstanding directors Iris Bohnet, Christian Gellerstad, Shan Li, Seraina Macia, Richard Meddings and Ana Pessora.

“Shareholders should have the right to seek changes to the board when it does not act in their best interest,” Norges said.

“We will . . . take into consideration unsatisfactory financial and strategic performance, mismanaged risk-taking, unacceptable treatment of stakeholders or undesired environmental or social outcomes from company operations.”

Glass Lewis had recommended shareholders vote against Lehmann due to the lack of information the board provided over conflicts of interest regarding an agreement Credit Suisse had in place to transfer much of the investment bank to former director Michael Klein.

The proxy adviser also raised conflict of interest concerns surrounding director Blythe Masters, who acted as an adviser to Apollo Global Management while Credit Suisse was negotiating with the US private equity group over the sale of its securitised products business.

Glass Lewis recommended shareholders vote against board member Mirko Bianchi for his role as chair of the audit committee after flaws were identified in the bank’s internal controls.

Only registered shareholders and members of the media will be able to attend the meeting. Attendees will have to show identification and pass through security.

Lehmann and chief executive Ulrich Körner will address the audience and then invite questions from the floor, a process that is expected to take several hours as shareholders vent their frustration.

UBS’s own AGM, which will take place on Wednesday at the 12,400-seater St Jakobshalle arena in Basel, is expected to be a less raucous affair.

Proxy advisers have not recommended investors vote against meaningful parts of UBS’s meeting agenda and shareholders have so far been comfortable with the potential upside of the Credit Suisse takeover, despite being denied a say on it.

UBS shares have risen more than 10 per cent since the deal was announced.

FT : China’s top lenders tout limited exposure to western banking crisis

China’s top lenders tout limited exposure to western banking crisis
Beijing’s biggest banks encouraged by stress tests against US and European risk

China’s biggest banks say they have escaped unscathed from the financial crisis in the US and Europe, following the collapse of Silicon Valley Bank and Credit Suisse.

China’s top lenders — Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of China — have all reported there was no direct damage to their books from last month’s emergency rescue of Credit Suisse by UBS and failures in the US banking sector.

“Even from an indirect or spillover effect perspective, the impact [to China’s banking sector] is very limited,” said Ji Zhihong, vice-president of the country’s second-largest bank CCB at a briefing last week, when all the main banks reported strong earnings.

China’s banks and other financial institutions are still reporting to regulators the results of stress-testing against what they see as a potential minefield of new risks that includes exposure to European and regional US banks. According to staff carrying out the tests, only limited exposure has been found.

The scrutiny highlights lingering market concerns over Chinese banks’ cash management and liquidity against the backdrop of growing geopolitical tension and financial system turbulence.

Zhang Yi, vice-president of Bank of China, which has the largest amount of foreign exposure, said that while his bank had not been hit by the crisis, it still planned to adjust offshore assets and deposits.

“No matter what the reasons were for the problematic foreign institutions, it eventually results in stress and runs on deposits . . . we’ll make sure that maturity and pricing between assets and deposits has no big mismatch,” he said.

The biggest lesson for China’s financial system planners and regulators is not to “create the environment” that puts banks into a similar position as SVB and Credit Suisse, said Chen Long, co-founder of Beijing-based research company Plenum.

“The radical change of monetary policy is a very bad idea. If you have to raise interest rates by 300 [basis points] in a year, that is definitely going to cause a lot of strain on the banking system. Some banks, if they are well managed, have ways to prepare. But not everyone is well managed.”

ICBC, the world’s biggest bank, reported net profit of Rmb360bn ($52bn) for 2022, up 3.5 per cent on the prior year. The other top banks reported similarly robust — or better — profit growth.

The net interest margin, a key gauge of bank profitability, remained steady or eased slightly for the top banks, suggesting resilience in their credit books.

The results came despite subdued economic growth in China and during an unprecedented downturn and high levels of corporate debt in the property sector, a major driver of the economy.

The banking crisis has dented China’s faith in the wisdom of regulators in Europe and the US. Chinese regulators had been following measures such as requiring banks to set up “living wills” after bankruptcy or takeover events.

“The framework of regulating banks globally now looks insufficient at least,” Chen said.

“The irony is that the Swiss are viewed as leaders in how to regulate banks. Then Credit Suisse, the [country’s] second-largest bank failed,” he added.

Despite better than expected financial results, China’s top lenders each warned of persistent risks, stemming mostly from the property sector.

At CCB, the non-performing loan ratio for property nearly doubled year on year. China’s real estate sector has been rocked by a series of developer bond and loan defaults, as stringent debt control on the real estate sector choked the industry’s liquidity lines.

“The property sector will take time to recover, so the hangover on asset quality will last for a while,” said Liu Jiandong, chief risk officer at the Bank of China.

>>> Barron’s Weekend Summary:

Barron’s Weekend Summary:

Cover Story:
For months now, Congress, the White House, the US military, foreign governments, and a range of other institutions have been warning about the risks posed by TikTok. TikTok CEO Shou Zi Chew recently spent five hours testifying before an extremely hostile House Committee on Energy and Commerce. In the opening minutes, Rep. Cathy McMorris Rodgers (R., Wash.) declared TikTok to be “a tool to manipulate America,” asserting it “should be banned.” For TikTok, it was all downhill from there. Critics like Rodgers think the person with the most power at TikTok is Chinese President Xi Jinping. If you believe TikTok is a tool for China to spy on Americans and distribute propaganda, then details about the ownership and management structure don’t really matter. But those details are of keen interest to investors—and so is the potential fallout if the app is actually banned. TikTok is a unit of ByteDance, a China-based internet conglomerate and the world’s most valuable privately held venture-backed company with an estimated valuation of $225B.

Interview:
-This week, Barron’s features Cheryl Mickel, who oversees money markets, short-term taxable bonds, and stable value for T. Rowe Price’s fixed-income group, She looks for opportunities amid the chaos—even in the short-term debt of banks. Mickel is one of Barron’s 100 Most Influential Women in US. Whether the recent troubles among U.S. regional banks and some European giants will become a widespread crisis has yet to be determined, says Mickel, who heads T. Rowe Price’s U.S. Taxable Low Duration Group, overseeing more than $100 billion in assets. But rather than hunker down, Mickel’s team is searching for opportunities to lock in higher yields.

Tech Trader:
Lyft has been a terrible stock, losing almost 90% of its value since its March 2019 initial public offering. While the ride-sharing company’s financial results have rebounded from a pandemic-era swoon, it continues to lose ground to rival Uber. To stanch the bleeding, Lyft’s board this past week made a dramatic management change, conceding that Lyft needs a new plan: CEO Logan Green and President John Zimmer, who founded Lyft 16 years ago will step down in the weeks ahead. To replace them, the board made a surprising choice: Lyft director David Risher, who while having impressive credentials, hasn’t played a significant role at a for-profit business in more than two decades. He spent the early part of his career at Microsoft, then joined Amazon in 1996 as employee No. 37. Amazon founder Jeff Bezos put him in charge of expanding the e-commerce business beyond books. Risher left Amazon in 2002.

The Trader:
-The debt ceiling has been forgotten amid the banking turmoil, but it’s still there and could cause a chaos situation of its own. The US federal government hit its self-imposed debt limit of just under $31.4T in January, and Congress appears to be barreling toward a protracted fight over lifting it in the coming months—or else risk a disastrous first-ever US default. Markets have taken notice, but they don’t appear overly concerned just yet. A high-stakes standoff over raising the debt ceiling in 2011 resulted in credit-rating firm Standard & Poor’s downgrading the US sovereign debt rating. That wasn’t without cost. The yield premium on U.S. Treasuries has consistently been one to two percentage points higher relative to German bunds since 2011 compared with before the downgrade, notes Richard Bernstein, chief investment officer of Richard Bernstein Advisors.
-Another earnings season is just around the corner and it could help the market decide if it wants to head higher—or retest its 2022 lows. Analysts predict that S&P 500SPX +1.44% earnings per share will decline 4.6% in the first quarter of 2023 compared with a year earlier, according to Refinitiv. That would follow a 3.2% year-over-year decline in the fourth quarter. Revenue is forecast to continue growing—by 1.7% as of the latest consensus estimate from Refinitiv—but high inflation and a tight labor market are pushing costs up faster than firms can raise prices.

Features:
-Elon Musk is right to call for a six-month pause on all “training” of AI systems more powerful than OpenAI’s cutting-edge GPT-4. A breather, at least in theory, would allow the industry to develop shared guardrails for this fast-evolving technology.
Musk may have personal reasons to take a swipe at OpenAI, which he helped start in 2015 (more on that in a moment). But more important than Musk’s individual opinion is that of the other 1,800 or so tech experts—some of them current and former executives at AI startups—who also signed an open letter published this week calling for the six-month pause. Given the known and unknown risks that smart technologists associate with “generative” AI, the industry should err on the side of caution.
-A ban on TikTok would accentuate the current generational divide and disproportionately hurt GenZ viewers, who are, by far, the largest contingent of users. According to 2023 data from Insider Intelligence, 46% of TikTok users are in Gen Z, which the researchers define as people born from 1997 to 2012. They’re trailed by millennials, who make up 34% of users, Gen X (12%), and baby boomers (7%). That’s a shift from other social-media apps: Millennials are the biggest users of Instagram, Facebook, and YouTube. A little more than half of Gen Z adults say they oppose a nationwide TikTok ban, according to a survey from public-opinion research firm SocialSphere. In contrast, 34% of millennials shared that view, SocialSphere found. That survey didn’t include older generations, but in a national poll by CBS News/YouGov, 61% of respondents supported a ban.

European Trader:
-Rolls Royce stock is revving up. But it’s not the Rolls Royce you might be thinking about. The company doesn’t actually make cars anymore—that unit has been a subsidiary of Germany’s BMW since 2003. Rolls-Royce largely makes turbofan engines for aerospace use. Its biggest rivals are General Electric and Pratt & Whitney. Not Bentley. Shares of Rolls-Royce Holdings have jumped this year under new Chief Executive Officer Tufan Erginbilgic on hopes he will turn things around after years of underperformance. Rolls-Royce’s underlying profit rose more than 50% in 2022. The company gets the bulk of its income from servicing aircraft engines, and it says that engine flight hours, a key metric, will continue to increase this year. It expects flight hours to reach as much as 90% of the prepandemic levels of 2019 this year. They were at just 65% of that in 2022.

Emerging Markets:
-The technology sector has been moving out of China on a phenomenon that’s being described as techxodus. Potential beneficiaries of the China techxodus stretch from Mexico to Poland, Malaysia and Vietnam. Potential losers are global consumers, who may have to pay more for their gadgets as humming Chinese supply chains, built up over two decades, fragment. “Companies have experienced significant margin improvement from being in China,” Mehdi says. “They’ll have to find other ways to take the cost out.”
US restrictions on advanced semiconductors for China, which ratcheted up last October, are one driver of the search for alternatives, but not the only one. Chinese labor costs have climbed 40% since 2010. Russia’s invasion of Ukraine, and the mass exit of foreign companies there, pushed investors to contemplate a repeat with China and Taiwan.

Commodities:
-As of March 30, the S&P GSCI, a benchmark for investments in the commodity markets, fell more than 7% for the first quarter. “Risk aversion, triggered by persistent rate hikes, coupled with idiosyncratic risks such as warmer-than-normal weather conditions, have resulted in synchronous downsides and created weakness” in commodities, says Hakan Kaya, senior portfolio manager of the Neuberger Berman Commodity Strategy NBCM exchange-traded fund.
Energy fell the most, with the S&P GSCI Energy index down 12% quarter to date. Natural-gas prices on the New York Mercantile Exchange lost 53% in the first three months of the year. Newcastle coal futures on ICE Futures Europe declined over 56%, after prices more than doubled last year. U.S. and global benchmark crude futures trade more than 7% lower for the quarter.

Streetwise:
-This week, Jack Hough has some good news: The banking crisis has shifted from panic to unease, “overnight deposit runs suddenly seem so early March. Thanks to quick policy action, small banks are leaking vital cash to industry giants and money-market funds in a much more orderly way.” Moreover, Hough observes that peak debt-ceiling danger is still distant and he looks for some opportunities to invest ‘risk capital,’ noting that stocks are just the thing for that pointing out some bargains. Savita Subramanian, a stock strategist at BofA Securities, reckons that the index is priced for 7% average yearly returns over the next decade. Near term, she calls 5% returns on cash “a compelling alternative.” But surely, says Hough, stockpickers can find individual good deals highlighting Walmart, Philip Morris International, which got analyst upgrades this past week, while Amazon will host an investor day that starts Tuesday.

>>> Weekend Papers Summary

Weekend Papers Summary

NEW YORK TIMES
-Trump Prepares to Surrender as New York Braces for Protests. Former President Trump is likely to answer charges before a judge on Tuesday, with the Secret Service in tow. His lawyer said he would not take a plea deal.The case, which could drag on for months and whose outcome is far from clear, is likely to test the country’s institutions and the rule of law.
-Biden’s Response to Trump’s Indictment? 4 Ways to Say No Comment. President Biden believes that presidents should not comment on pending legal matters. He also does not want to be baited into a reaction.
-Trump is likely to be arraigned on Tuesday. The charges against Donald J. Trump will be formally unsealed when he is arraigned. He is the first former U.S. president to be a criminal defendant, and his indictment puts the legal and political systems in uncharted territory.
-How did Alvin Bragg resurrect the case against Donald Trump? A year ago, the investigation into the former president appeared from the outside to be over. But a series of crucial turning points led to this week’s indictment.
-Storms kill at Least four people as tornadoes tear through Midwest and South. Tornadoes in Arkansas injured at least 30 people. A person was killed and at least 28 others hospitalized after a roof collapsed at a theater in Illinois.
President Biden surveyed the damage from a tornado that killed 26 in a small town in Mississippi last week.
-How a Trump-era rollback mattered for Silicon Valley Bank’s Demise.
An under-the-radar change to the way regional banks are supervised may have helped the bank’s rapidly growing risks to go unresolved.
-Why did Schwab, a Financial Giant, suffer in the regional banks panic? Like Silicon Valley Bank, the company holds billions in bonds that have declined in value. But it has access to billions in cash, if needed, analysts say, and is much more diversified.
-Fox news suffers major setback in defamation case. A judge said the suit would go to trial, for a jury to weigh whether the network knowingly spread false claims about Dominion Voting Systems, and to determine any damages.
-Bracing for Fights Ahead, Russia and Ukraine step up recruitment. After a winter of intense battles and heavy losses in Ukraine’s east, both Russia and Ukraine are taking steps to replenish their depleted forces.
-Analysis: espionage charge complicates effort to free detained reporter. The Biden administration recently secured the release of two Americans convicted in Russia, but even fabricated charges of spying can raise the stakes. Because of a bad facial recognition match, Randal Reid spent nearly a week in jail, falsely accused of stealing purses in a state he had never even visited.
-A Judge has temporarily blocked a Tennessee Law That Restricts Drag Performances
A federal judge held the law hours before it was to take effect, saying there were legitimate questions about whether it violated the First Amendment.
-An Israeli police officer has fatally shot and Arab outside Holy Site in Jerusalem. Officers killed the man early Saturday outside the Aqsa Mosque compound, known to Jews as the Temple Mount, and risking tensions during Ramadan.
-Man Guilty in Hate-Crime Killing of Asian Immigrant Sentenced to 22 Years. Jarrod Powell pleaded guilty to attacking Yao Pan Ma on an East Harlem street because the victim was of Asian descent.

THE FINANCIAL TIMES
-Minutes after Donald Trump released a statement on Thursday night calling a Manhattan grand jury’s vote to indict him on criminal charges “political persecution” and a “witch-hunt”, Republican Florida governor Ron DeSantis leapt to the former president’s defense.
-Two years on from the January 6 Capitol riots, and following a familiar call to arms from former president Donald Trump, it was widely feared that crowds of his supporters might swarm the streets of New York to protest his indictment by the Manhattan district attorney.
But by Friday afternoon, the anticipated hordes were conspicuously absent.
-Fox will have to go to trial to defend its coverage of the 2020 US presidential election, a judge ruled on Friday, denying the cable network’s attempt to prevent a $1.6B defamation case brought by voting machine maker Dominion from being decided by a jury.
-This week, just as China’s entrepreneurs were beginning to look like an endangered species, one of the most powerful regulators abruptly changed its tune. From now on, decreed the Cyberspace Administration of China, the “legitimate rights” of the corporate class would be respected. No one would be allowed to bad mouth the country’s bosses anymore.
-The rapid increase in interest rates exposed cracks in how some banks have managed their balance sheets. Three lenders have collapsed, a fourth is still on the ropes. Billions have been wiped off the market valuation of banking stocks. The crisis has big implications for US regional banks and their investors. Perceptions of risk have shifted sharply. Tougher regulation and lower profitability seem inevitable. Beyond this, US interest rate policy may now follow a gentler, slower trajectory.
-German industrial group ThyssenKrupp has revived plans to sell its submarine and maritime systems unit, a move likely to face scrutiny from politicians and government officials as Berlin seeks to boost its defense manufacturing. The decision was announced by employee representatives on Friday in an email to workers seen by the Financial Times. Employee representatives make up half of Thyssenkrupp’s supervisory board.
-Worried about a sharp deceleration of growth caused by tight Covid restrictions last year, President Xi Jinping has launched a charm offensive to convince domestic and foreign capital that the world’s second-largest economy is reopening for business.
-Sanna Marin has deftly handled the Covid-19 pandemic, Russia’s full-scale invasion of Ukraine and Finland’s bid to join NATO. Despite those achievements, the prime minister is struggling to shake off her two rightwing rivals in parliamentary elections on Sunday. “Sanna Marin has two different images, said Hanna Wass, vice-dean of the University of Helsinki. “Internationally, she’s a superstar. In Finland, she’s more of a polarizing figure.”
-Italy’s privacy watchdog has temporarily banned the popular artificial intelligence service ChatGPT made by Microsoft-backed OpenAI, as policymakers across the world seek to respond to the rise of AI products.
The nation’s data protection authority on Friday said it would block access to the chatbot in Italy, while it examines the US company’s collection of personal information during a recent cyber security breach among other issues.
-On Friday evening, Virgin Orbit appeared to be teetering on the brink. Its shares had crashed after an emotional Hart told staff on Thursday evening that the company had “ceased operations for the foreseeable future”.
Last-ditch talks were still under way with potential investors, said several people with knowledge of the situation, but even they were increasingly gloomy. If the discussions fail, Virgin Orbit could file for Chapter 11 bankruptcy early next week, they said.
-A decade and a half later and Kelleher is once again centre stage in a banking crisis — this time as chair of UBS, the Swiss lender that agreed to rescue its fierce rival Credit Suisse two weeks ago. The 65-year-old, who prefers to operate in the shadows, has been thrust into the spotlight after orchestrating the first ever union of two global systemically important financial institutions. UBS’s $3.25B rescue of Credit Suisse will create the world’s fourth-largest bank — with 120,000 staff and $5tn of assets under management — and by far the most important financial institution in Switzerland.
-The chair of UniCredit applauded the Italian bank’s shareholders for cutting “through the noise” and backing a remuneration package that could push chief executive Andrea Orcel’s pay to €9.75M. UniCredit’s remuneration policy won the backing of 70% of the investors who attended the bank’s virtual annual meeting on Friday, ending months of controversy over the proposed pay deal.

NY POST
-Former President Donald Trump is facing at least one felony charge of falsifying business records in the indictment handed down by a Manhattan grand jury over an alleged hush money payment to Stormy Daniels, sources told The Post on Friday. The charge of falsifying business records in the first degree is a class E felony, the lowest level felony, and it is the top charge in the indictment secured by Manhattan District Attorney Alvin Bragg’s office. f convicted on the felony count, Trump, 76, faces up to four years in jail. He could also receive probation and no jail time.
-Google parent Alphabet is slashing more of its lavish employee perks as the tech giant scrambles to cut costs and keep pace in the ongoing race to develop advanced artificial intelligence. The company will close some of its “micro-kitchens” that were stocked with free drinks and snacks and shutter cafeterias with lower foot traffic as part of the efficiency drive, according to a memo signed by Google CFO Ruth Porat and other top executives. Google will also trim its spending on company-provided equipment such as personal laptops, with top brass making “changes to what’s available and how often it’s replaced,” according to the memo.

FT : China escalates tech battle with review of US chipmaker Micron

China escalates tech battle with review of US chipmaker Micron
Beijing launches national security probe in retaliation against Washington’s curbs on semiconductor access

China launched a review into US chip manufacturer Micron Technology on “national security” grounds, as Beijing retaliates against Washington’s increasing curbs on Chinese access to semiconductor technology.

In a statement released late on Friday, the Cyberspace Administration of China said it would review imports of Micron’s products in order to maintain national security, ensure the security of its information infrastructure and prevent risks caused by product problems.

Nasdaq-listed Micron Technology is America’s largest maker of memory chips. Its shares fell 4 per cent in the US following the announcement.

The semiconductor industry is at the heart of economic decoupling between the world’s two superpowers. In October last year, Washington introduced expansive chip export controls in an effort to slow China’s progress in artificial intelligence and super computers. Since then, the Netherlands and Japan joined the US in imposing more restrictions.

The CAC announcement late on Friday marks a retaliatory move from Beijing and adds to the challenges facing businesses caught between the two countries.

The Biden administration has intensified economic pressure on China, with a special committee in Washington adding to bipartisan scrutiny on US businesses operating in the mainland. In response, companies in China are exploring how to diversify their supply chains.

In September last year, Micron announced it would receive around $320mn in subsidies from the Japanese government to expand co-operation with the US.

Despite China adopting a more conciliatory tone to business as it reopens from years of isolation during the pandemic, there are signs there could be more retaliation in response to Washington’s restrictions.

Last week, top US business leaders including Apple chief Tim Cook largely kept a low profile at the China Development Forum, an annual opportunity for them to meet top officials in Beijing.

The Netherlands and Japan in January reached a deal with the US regarding semiconductor exports, with the latter unveiling restrictions on 23 types of equipment on Friday. The deal is designed to cut off China’s access to advanced chips that could be used in sophisticated weaponry and machines.

Tan Jian, the Chinese ambassador to the Netherlands, last month warned of “consequences” if the country went ahead with export curbs.

In its quarterly report published in March, Micron said that “the Chinese government may restrict us from participating in the China market or may prevent us from competing effectively with Chinese companies”.

It also warned over the risk of losing access to rare earth materials that are mainly produced in China.

“Constrained supply of rare earth elements, minerals, and metals may restrict our ability to manufacture certain of our products and make it difficult or impossible to compete with other semiconductor memory manufacturers who are able to obtain sufficient quantities of these materials from China,” the company said.

In a statement provided to Bloomberg following the announcement of the investigation, Micron said it was communicating with the Chinese regulator and co-operating fully.

>>> US Close Dow +1,26% S&P +1,44% Nasdaq +1,74% Russell +1,93%

Closing Stock Market Summary

The stock market closed out this final session of Q1 with sizable gains. The main indices moved up right out of the gate and spent most of the day inching higher. A sharp upside move in the late afternoon had the S&P 500 close above the 4,100 level.

The positive disposition today followed some relatively pleasing inflation data this morning. Briefly, the PCE Price Index slowed to 5.0% yr/yr in February from 5.3% in January while the core-PCE Price Index, the Fed's preferred inflation gauge, dipped to 4.6% from 4.7%. The direction of these moves is a welcomed development, but the pace at which these indices are decelerating leaves a bit to be desired.

Investors were also reacting to the Michigan Consumer Sentiment survey for March, which showed that year-ahead inflation expectations slowed to 3.6% from 3.8% in the preliminary reading and 4.1% in the final February reading.

Strength from the mega cap space had an outsized influence on index level performance today and throughout Q1. The Vanguard Mega Cap Growth ETF (MGK) rose 1.8% versus a 1.5% gain in the Invesco S&P 500 Equal Weight ETF (RSP) and a 1.4% gain in the market-cap weighted S&P 500. The MGK rose 18.9% this quarter versus a 2.4% gain in the RSP. 

All 11 S&P 500 sectors closed with gains led by consumer discretionary (+2.6%), real estate (+2.2%), and communication services (+2.1%). Meanwhile, the energy (+0.6%) and utilities (+0.8%) sectors fell to the bottom of the pack. Notably, the energy and utilities sectors were among the worst performers this quarter with losses of 5.6% and 4.0%, respectively. The financial sector was another top laggard this quarter, falling 6.1%.

Treasuries saw an uptick in buying interest following this morning's data releases. The 2-yr note yield settled the session down five basis points to 4.06% and the 10-yr note yield fell six basis points to 3.49%.

  • Nasdaq Composite: +16.8% YTD
  • S&P 500: +7.0% YTD
  • S&P Midcap 400: +3.4% YTD
  • Russell 2000: +2.3% YTD
  • Dow Jones Industrial Average: +0.4% YTD

Reviewing today's economic data:

  • February Personal Income 0.3% (consensus 0.3%); Prior 0.6%; February Personal Spending 0.2% vs consensus of 0.3%; Prior was revised to 2.0% from 1.8%; February PCE Prices 0.3% ( consensus 0.4%); Prior 0.6%; February PCE Prices - Core 0.3% ( consensus 0.4%); Prior was revised to 0.5% from 0.6%
    • The key takeaway from the report is that it only showed a slight deceleration in the yr/yr PCE and core-PCE price indices, which gives the Fed an argument to continue hiking rates.
  • March Chicago PMI 43.8 (consensus 42.5); Prior 43.6
  • March Univ. of Michigan Consumer Sentiment - Final 62.0 ( consensus 63.4); Prior 63.4
    • The key takeaway from the report is that the failure of Silicon Valley Bank had a limited impact on sentiment, which had already been pressured by growing concerns about a potential recession. On a positive side, year-ahead inflation expectations receded to 3.6% from 4.1% in February.

Looking ahead to Monday, market participants will receive the following economic data:

  • 9:45 a.m. ET: March IHS Markit Manufacturing PMI - Final (prior 49.3)
  • 10:00 a.m. ET: February Construction Spending (consensus 0.0%; prior -0.1%) and March ISM Manufacturing Index ( consensus 47.5%; prior 47.7%)

(ZH) "Unprecedented" Chinese Genetic Experiment May Lead To Army Of Radiation-Re

"Unprecedented" Chinese Genetic Experiment May Lead To Army Of Radiation-Resistant Super Soldiers

Reports out of China continue to confirm that scientists there are still seeking to push through barriers with Frankenstein-like experimentation on genes with an eye toward the manipulation of human DNA - any and all ethical considerations be damned. What could go wrong?
The Hong-based South China Morning Post has a doozy of a headline out this week based on a breakthrough announcement by a team of scientists linked to the Chinese military, working in Beijing: "Chinese team behind extreme animal gene experiment says it may lead to super soldiers who survive nuclear fallout."
The project was first unveiled in the Chinese-language journal, Military Medical Sciences, and has been gaining more and more media attention and interest within the scientific community, but is also raising serious ethical quandaries, despite the experiment being defended by its overseers as "totally legal".
Science Photo Library via Getty Images: Colored scanning electron micrograph (SEM) of a "water bear," or tardigrade.
According to details, the military scientists say they've successfully "inserted a gene from the microscopic water bear into human embryonic stem cells and significantly increased these cells’ resistance to radiation."
"They said success in this unprecedented experiment could lead to super-tough soldiers who could survive nuclear fallout," SCMP writes. The initiative involved the experimental introduction into human DNA (utilizing embryonic cells) of a key gene found the water bear. The gene in question gives the microscopic creature rare resistance to radiation and other extreme environmental effects.
Scientists have long considered that water bears, also known as tardigrades, may hold genetic secrets which could one day be key to human survival and longevity. The eight-legged tiny animal which is smaller than a millimeter in length, has been described as follows:
Tardigrades are tiny, cute and virtually indestructible. The microscopic animals are able to survive in a pot of boiling water, at the bottom of a deep-sea trench or even in the cold, dark vacuum of space. In August, an Israeli spacecraft carrying tardigrades as part of a scientific experiment crashed on the moon, and scientists believe they may have survived.
Having isolated the Tardigrade's gene capable of producing shieldlike proteins which can protect against radiation and other harms, the Chinese team said it "found a way to introduce this gene into human DNA using CRISPR/Cas9, a gene-editing tool now available in most bio-labs," according to the SCMP review of the experiment.
"In their laboratory experiment, nearly 90 per cent of the human embryonic cells carrying the water bear gene survived a lethal exposure to X-ray radiation, according to the team led by professor Yue Wen with the radiation biotechnology laboratory at the Academy of Military Sciences, Beijing," the report continues.
Image source: Tass
But the team acknowledges some huge 'unknowns'...
Adding an alien gene from the water bear into human embryonic cells could lead to harmful mutations, or even kill the cells because of the genetic gap between the two species, a risk Yue’s team was aware of, according to their paper.
The shielding proteins are "unique to the water bears. The immunity response after cross-species expression is unknown, and it can lead to some safety issues", they wrote.
They envision possible future application of their genetic manipulation technique centered on water bear experiments in cases related to treating acute radiation sickness for first-responders, military personnel, or anyone near a nuclear fallout zone. They also foresee the era of the future 'super soldier' and genetically altered humans capable of surviving nuclear apocalypse.