>>> TradeGate Pre-Market Indications

DAX:
  • No major mover.
  • NOTE: Continental, Bayer, Vonovia, BASF and Mercedes trade ex-dividend.
MDAX:
  • Commerzbank (CBK TH) -1.2%
  • Thyssenkrupp (TKA TH) -1.2%
  • Lanxess (LXS TH) -1.6%
  • Software AG (SOW TH) -1.8%
  • Telefonica Deutschland (O2D TH) -2.4%
SDAX:
  • PVA TePla (TPE TH) +3.2%
  • LPKF (LPK TH) +2%
  • Cewe Stiftung (CWC TH) +0.8%
  • Stabilus (STM TH) +0.7%
    • Stabilus 2Q Adjusted Ebit Beats Estimates
  • Deutz (DEZ TH) +0.5%
  • SAF-Holland SE (SFQ TH) -1.9%
  • 1&1 (DRI TH) -2.4%
  • GFT (GFT TH) -2.6%
  • Nordex (NDX1 TH) -3.1%
    • Vestas Cuts Outlook as Russia Exit Adds to Supply Chain Woes
  • Adler Group (ADJ TH) -39%
    • Adler Says Auditor KPMG Won’t Vouch for Its Annual Results (1)

WSJ Opinion : Debt Can Be a Killer

Debt Can Be a Killer
Elon Musk is leveraging his Twitter shares to buy even more shares.

Andy Kessler

The arrest last week of the founder of the investment firm Archegos, charged with securities fraud, is a great reminder of hidden debt. In March 2021, Archegos was overleveraged, allegedly hiding its debt from Wall Street firms as it used funky “total-return swaps” to manipulate stock prices. The inevitable collapse destroyed $100 billion in stock value. (Archegos’s lawyers have denied the allegations.) Separately, supply-chain financier Greensill used what Fitch described as a “hidden debt loophole” and collapsed around the same time.
Are there more of these out there? I ask because we’re in the most dangerous part of the economic cycle. Interest rates are rising to combat inflation, and there could be all sorts of leverage we don’t know about. There always is. A slowdown (and especially a recession) would expose these hidden horrors. In 2018 this column argued that “in downturns, equity hurts but debt kills.” We’re about to find out if that’s still true.
More than $850 billion in credit-card debt and $800 billion in margin debt are high but off their peaks, and at least they are known amounts. It’s always hidden debt that comes back to bite when things fall apart. In June 1929, banks had $82 in deposits for each dollar in cash on hand. Bank runs followed. The 2008-09 financial crisis resulted from mispriced collateralized loans and weird derivatives on the balance sheets of Lehman Brothers, Bear Stearns and many others. Citibank used “structured investment vehicles” loaded with mortgages and who knows what else essentially to hide $100 billion in debt by keeping it off its balance sheet.
Now debt is fashionable again. Tesla’s last proxy statement shows Elon Musk owning 73 million options and 170 million shares, of which more than 88 million were “pledged as collateral to secure certain personal indebtedness.” Even assuming a 20% loan-to-value ratio, that’s a lot of personal indebtedness. In the pending Twitter deal, Morgan Stanley is providing a $12.5 billion margin loan against another 62 million of his Tesla shares.
Tesla sold around a million cars in 2021 and was worth $1 trillion last week at the time of the Twitter deal. Ford Motor Co. sold almost four million vehicles world-wide in 2021 and is currently worth just under $60 billion. I’d rather have Tesla’s business than Ford’s, but perhaps Tesla’s valuation is a tad fluffy. Netflix stock has fallen 72% in six months. Carvana is down 84% since August. Valuations are fleeting, and we aren’t even in a recession. Now may not be the time to borrow against Tesla shares.
There are reports that Mr. Musk may take out a loan against his current 9.2% stake in Twitter. Yes, borrowing against Twitter to buy more Twitter. Why does that sound familiar? Oh yes, MicroStrategy. Michael Saylor, a bitcoin evangelist and CEO of the Tysons, Va., software company, has the company buying gobs of the cryptocurrency. It recently took out a $205 million loan, backed by its bitcoin holdings, to buy even more bitcoin, for a current total of 128,687 worth $5 billion. In March Mr. Saylor tweeted, “Give me a lever long enough and #bitcoin on which to place it, and I shall move the world.” He doesn’t say in which direction. Note that MicroStrategy’s company value is worth less than its bitcoin.
The latest crypto craze is decentralized finance, the ability to do peer-to-peer transactions, bypassing centralized banks, Wall Street and governments. YouTube is filled with videos with titles like “Using the Power of DeFi to Leverage Any Asset.” There is even a lending-and-borrowing platform named DeFi Prime. Sounds safe, but so did buying Las Vegas condos with leverage in 2007.
One DeFi effort named Terra is amazingly offering 20% returns on deposits to fund a blockchain platform that uses an “algorithmic stablecoin” that maintains a $1 price. To do this, there is a fluctuating (but backed by nothing) cryptocurrency named Luna that is created or destroyed to buy or sell the TerraUSD stablecoin as needed to keep it stable. More than 20 years ago, Enron created and issued shares to cover losses in heavily indebted Special Purpose Vehicles until losses became so large that the scheme collapsed. Terra’s CEO, Do Kwon, told Bloomberg that high returns on deposits aren’t a problem; they are like high commercial banking rates in many Asian countries in the 1990s. Someone might remind him how that ended: with bad debt and giant currency crises in 1997 and 1998.
How much debt is in cryptoworld? No one really knows, but I wouldn’t want to be in its way if it begins to snowball during a downturn.
Even scarier is the $13.4 trillion of dollar debt owed by non-U.S. borrowers, according to the Bank for International Settlements. That’s doubled since 2010. Maybe that’s overstated because of hedging, but that’s a lot of dollar denominated debt outstanding. Each time the Federal Reserve raises interest rates to battle inflation, the dollar strengthens against other currencies, making dollar debt more expensive to service. Will this all blow up? I’ve seen it happen a few times. Each time, debt kills.

WSJ : China’s Economy Appears to Be Stalling, Threatening to Drag Down Global Gr

China’s Economy Appears to Be Stalling, Threatening to Drag Down Global Growth
While a traditional recession remains unlikely, economists see worrisome signs of a slowdown
Covid-19 lockdowns in Shanghai have added pressure to supply-chain issues. ALY SONG/REUTERS

Throttled by Beijing’s zero-tolerance approach to Covid-19, China’s economy is facing a spell of slower growth. Economists are toying with the term “recession” to describe it.

A recession commonly means two straight quarters of contraction, and that remains unlikely for China, many economists say. The country has many ways to ensure it posts stronger growth than the U.S. and Europe this year, including the ability to unleash heavy government spending.

But economists say that underlying conditions, worsened by Covid lockdowns in Shanghai and elsewhere, are starting to feel more akin to a recession—something China hasn’t experienced in decades.

Millions of new graduates are struggling to find a job. Business confidence has fallen. Imports have plummeted and nervous Chinese are socking away more savings.

On Saturday, purchasing manager indexes released by China’s government showed contractions in factory and service-sector activity for a second straight month in April. They fell to their lowest levels since the pandemic began in 2020.

Cement production in mid-April was less than 40% of full capacity. Shipments of smartphones dropped 18% from a year earlier in the first quarter. Excavator sales within China were down 61% in April compared with the previous year.

China’s challenges go beyond the latest lockdowns. The fallout from the war in Ukraine has pushed up costs for Chinese businesses and contributed to fading overseas demand for their exports.Regulatory crackdowns have hit high-growth sectors such as technology and education. Real estate, a primary driver of the nation’s economy, went into free fall last year as developers buckled under heavy debts and home sales slumped.

Any sustained slowdown in China will be felt globally, depriving the world economy of one of its most dependable engines when inflation and war are raising recession fears in the U.S. and Europe this year. The U.S. economy shrank at a 1.4% annual rate in the first quarter, data released last week showed.

China was projected to account for a quarter of global economic growth in the five years through 2026, according to data released by the International Monetary Fund last year.

Commodity-exporting countries like Brazil that count on Chinese demand for products such as iron ore and other metals could see demand wane. Exporters of components and machinery to China, such as Taiwan, South Korea and Japan, have already reported weaker sales after lockdowns shut Chinese factories.

Ford Motor Co. said vehicle sales in China dropped by 19% in the first quarter from a year earlier. Dallas-based chip maker Texas Instruments Inc. cut its revenue forecast for the second quarter due to reduced demand related to Covid restrictions in China.

A loosening of China’s “zero Covid” lockdowns, which have crippled cross-country supply chains and kept consumers at home as Omicron has spread this year, would likely spark a partial recovery. Caseloads in Shanghai, the worst-affected city, have fallen in recent days, though a handful of cases in Beijing have led to new restrictions there.

Unlike in 2020, when China’s economy snapped back quickly from its first bout with the pandemic, the country’s additional problems mean there’s lessening hope of a major resurgence later this year.

Li Haitao, a manager with Zhejiang Taotao Vehicles Co., based in the eastern Zhejiang province, said that Covid lockdowns have made it harder to get supplies and keep workers on site. He has also seen a 40% decline in orders for his firm’s electric scooters and dirt bikes compared with last year, due to slowing demand in Western economies. Higher prices for raw materials such as copper, steel and aluminum are eating into profit margins.

The company has cut one working day a week for each staff member, resulting in a salary cut of about a fifth for each employee, said Mr. Li.

Surveyed unemployment in China’s 31 largest cities has surpassed the level it hit when Wuhan was locked down in 2020. Youth unemployment is now 16%, according to official data.

“It’s too hard for young people to find a job nowadays,” said Jessica Fan, a project manager for an internet company in China. The country’s technology giants have laid off employees en masse since Beijing launched a sweeping crackdown on them last year to ensure they followed government dictates more closely. Ms. Fan said that every time her team advertises a new position, résumés land in her mailbox “like snowfall” for weeks.

More than 10 million college students are due to graduate this year, a record for China, but a gauge of vacancies compiled by the China Institute for Employment Research at Renmin University of China and job search website Zhaopin suggests there aren’t nearly enough jobs for them all.

About a third of China’s 290 million migrant laborers haven’t returned to their cities of employment since the Lunar New Year in February amid the Covid restrictions. The number of people employed at small- and medium-size businesses has shrunk by around 30%, according to research firm J Capital Research, based on interviews with Chinese labor agencies.

Chinese stocks suffered their worst selloff in more than two years last Monday, though they recovered somewhat later in the week. A slide in China’s yuan currency rekindled memories of a heady drop in 2015 that unnerved global markets.

China’s economy is “in the worst shape in the past 30 years,” said Weijian Shan, chairman and chief executive of PAG, a Hong Kong-based private-equity firm that manages about $50 billion, in a video for investors reviewed by The Wall Street Journal.

“I also think the public discontent in China is at the highest point in the past 30 years,” added Mr. Shan, who attributed China’s current crisis to policy decisions, though he said that his firm remains confident in the long term in China’s growth and market potential. His comments were first reported by the Financial Times.

Weaker demand in China could have one positive: somewhat reduced inflation pressure for the world, if it consumes less oil and other imported goods.

Many economists say any upsides could be offset by the inflationary impact of Covid-related disruptions to China’s supply chains, which are crimping its ability to supply the world with manufactured goods. If that continues, it could contribute to the much-feared combination of anemic growth and high inflation known as stagflation.

That’s especially true for parts of Asia which trade heavily with China, contributing to a “stagflationary outlook” for the region, said Anne-Marie Gulde-Wolf, an official at the International Monetary Fund, at a conference on April 25.

In April, the IMF cut China’s full-year growth forecast to 4.4% from 4.8% earlier this year, and well below the government’s target of around 5.5% for 2022. Barclays said on April 29 that it believes China’s full-year GDP growth could dip below 4% if lockdowns extend into the second half of this year.

The IMF’s forecast, if accurate, would be the worst year for China’s growth since 1990 aside from 2020, when it was 2.2%.


Lengthy bouts of weak growth or falling economic output are rare in China. Until 2020, it hadn’t reported a single quarter of contraction since 1992, the earliest year for which quarterly data is available.

Ting Lu, chief China economist at Nomura in Hong Kong, said he’s forecasting a small quarter-to-quarter contraction in China in the second quarter. He said if the government doesn’t modify its pandemic strategy, there’s a chance of another fall in output in the third quarter, though he added that he expects aggressive government action to mitigate that risk.

Craig Botham, chief China economist at Pantheon Macroeconomics in London, said he thinks China already experienced a fall in output in the first three months of the year on a quarter-to-quarter basis, despite official statistics showing growth of 1.3% on the same measure.

His own estimates of changes in China’s gross domestic product, which draw on official data but adjust for inflation in a different way, point to a quarter-on-quarter contraction of 1.8% in the first quarter on an annualized basis. He expects a bigger fall in output, of 2.5%, in the April to June quarter.

Many economists say China is at risk of a growth recession, a term used to describe a spell of weak expansion when the economy isn’t close to its full potential and isn’t creating many new jobs.

Such a situation is reminiscent of the jobless recoveries of the U.S. and other advanced economies after the 2008-09 financial crisis. It isn’t a label commonly stuck on China, which averaged 7.7% GDP growth in the decade through 2019.

“There’s clearly a risk of a standard type of growth recession,” said Jonathan Ashworth, China economist at Fathom Consulting in London.

Chinese officials are pledging to get the economy back on track, without abandoning their tough Covid-control policies.

President Xi Jinping, who is angling to stay in power for a third term at an important party conclave later this year, has called for an all out campaign to rev up growth through more infrastructure spending. Beijing has frowned on such outlays in recent years because of fears they could exacerbate China’s debt problems.

Other plans under consideration include coupons for shoppers to lift consumption and steps to rein in regulatory campaigns against the technology and real-estate industries that have slowed their growth.

The policy response from the government and central bank has disappointed many economists so far. The People’s Bank of China has trimmed banks’ reserve requirements but kept interest rates steady since January, fearful of pushing investors into looking for better returns elsewhere.

Many economists are skeptical that traditional stimulus policies will work in any case due to Covid lockdowns. Some question whether China needs much more infrastructure—and how the government will fire up construction projects while sticking with its zero-tolerance approach to Covid.

“You’ve still got the problem of actually getting the shovels in the ground if all the shovels are locked in a shed somewhere,” said Mr. Botham, of Pantheon Macroeconomics.

A real-estate agent in Guangzhou, who asked to be identified by only his surname, Mr. Du, said he has been looking for a job since November.

The 28-year-old said he used to sell properties for real-estate developers, including the beleaguered property giant Evergrande Group, which has defaulted on its international bonds.

Mr. Du said he is skeptical the market will recover soon. “For many people, their whole life’s savings is just enough for buying a house,” he said. “Now that they may stop working anytime due to lockdowns, they won’t easily put their money down.”

FT : Surge of investment into carbon credits creates boom time for brokers

Surge of investment into carbon credits creates boom time for brokers
Resellers operating in opaque and unregulated market accused of cashing in at expense of environmental causes

When a prospective buyer approached a group that restores Myanmar’s endangered mangroves about purchasing the credits used by companies to offset their carbon emissions, they were told the tokens had sold out.

The carbon credits could be bought via a reseller but at a big mark-up — $30 each compared with $15 quoted by Worldview International Foundation, the conservationist. The price was almost three times what the reseller agreed to pay WIF for the credits in the first place.

Carbon credits have exploded in the past 18 months, as corporate buyers have looked to burnish their environmental credentials. Mark Carney, UN climate envoy, told the recent COP26 summit that offset schemes could result in “$150bn going to . . . the world’s emerging and developing economies”.

But the market is opaque and unregulated, with resellers in the form of middlemen brokers accused of cashing in at the expense of environmental causes.

“Offset projects are usually touted as having both emissions reductions and development benefits for poorer communities,” said Kamal Kapadia, co-founder of Terra.do, a climate educator. “But if we can’t trace who the money is actually going to and how much is getting siphoned off along the way, the development and poverty alleviation claims seem suspect.”

Each credit represents a tonne of carbon permanently avoided or removed from the atmosphere. The idea, which took hold in the early 2000s, is that the cash generated goes into climate projects, often in the developing world.

As the market can be difficult to navigate, buyers often go through middlemen who help them identify and purchase the credits. With brokers often reluctant to disclose pricing structures, however, it can be difficult to track how much buyer money actually goes towards reducing emissions.

Laura Martin, professor at the Williams College Center for Environmental Studies, said there was “shockingly little data” about how the estimated $1bn that went into carbon offsets last year was spent.

As brokers were “working to make the process ‘frictionless’”, buyers were “unlikely to question where that money goes . . . [and] how it’s spent”, she said, adding: “Who benefits financially from carbon offsetting?”

There is nothing illegal in what the brokers are doing. They insist they are important for connecting buyers with sellers, who may have no marketing experience. Others say they help get offset projects off the ground — which can be an expensive and lengthy process — by offering financing and expertise.

Mike Korchinsky, founder of Wildlife Works, a forest project developer, agreed brokers were important, particularly in the early days when demand was limited and prices were low. “It was about trying to attract a reseller that could make your project attractive,” he said.

But some developers question whether the brokers offer value for money. One east Africa-based developer said some brokers applied big mark-ups for “not a lot of value”, describing the middlemen as “absolutely extractive”.

Andrew Dreaneen, head of alternatives at asset manager Schroders, said the amounts of money that went to developers was “completely non-standardised”. Information on where the cash went was “difficult to get . . . there’s a need for increased transparency”.

Typically, developers either get a percentage of the price the broker sells the credits for, or a fixed amount per credit regardless of the sale price.

EcoAct, a climate consultancy and intermediary, told a prospective buyer that “typically 85-95 per cent” of the money paid for credits “goes to the project owner”, according to emails provided to the Financial Times by Unearthed, a Greenpeace-affiliated publication, and Source Material, a non-profit investigative group.

EcoAct offered the prospective buyer carbon offsets from forestry projects in Peru, Brazil, Kenya and the UK for £15 to £25 each. But Michael Greene, who developed the Brazilian project, said he had sold the credits to EcoAct the year before for a fixed price of $2.75 each.

EcoAct said these figures were “misleading” and “the suggestion of large and unfair margins at the expense of project developers is false. Factors influencing price, market dynamics and services provided should also be taken into account,” the company said.

Myclimate, the non-profit reseller in the WIF example, said it took a risk by agreeing in 2018 to an upfront and fixed price for the credits. Its higher sale price, from 2020, covered marketing and administrative expenses, and factored in the potential cost of having to source alternatives in the event of problems, it said.

The group pointed out that 80 per cent of the revenues it received from credit sales went into a fund used to buy offsets and help develop projects.

South Pole, another broker, also has a fund designed to support new projects. Renat Heuberge, co-founder, said his group was better able to support projects than direct investors, who would demand higher returns. South Pole said it typically retained 10 to 20 per cent of the credit sale price.

Market participants generally agree on the utility of brokers, or at least some sort of carbon credit exchange. But they say more transparency is needed to help redress the imbalance of power between developers and brokers.

A handful of resellers such as Cool Effect have opted to publish details of the cuts they take on deals, while some developers, emboldened by rising prices, have begun demanding better terms.

Jo Anderson, director of developer Carbon Tanzania, said it was imperative that communities were “fairly compensated for the work they do to protect our global ecosystems”. He added: “Transparency is enormously important for carbon finance to work effectively.”

>>> What to look at today - 2nd of May 2022

Stocks fell Monday as high inflation, tightening monetary policy and China’s Covid lockdowns deepened concerns about the economic outlook. Equities dropped in Japan, Australia and South Korea. S&P 500 and Nasdaq 100 futures stabilized after U.S. shares in April posted one of their worst monthly declines since the pandemic roiled markets in 2020.  The stock slide, rising bond yields and dollar strength are tightening financial conditions ahead of looming U.S., U.K. and Australian interest-rate hikes.  Treasuries held a Friday tumble, while bonds in Australia and New Zealand retreated. A dollar gaugewas around the highest level since 2020. The offshore yuan weakened in the wake of data signaling a sharp contraction in Chinese economic activity amid idled factories and snarled supply chains.  
The Federal Reserve is expected to raise rates by 50 basis points Wednesday, the largest increase since 2000. The question is how high it needs to go to get runaway inflation under control -- and whether the aggressive tightening cycle that lies ahead will trigger a recession. Price pressures are being stoked by the elevated cost of commodities ranging from fuel to food, in part due to disruptions from Russia’s war in Ukraine.  Those challenges could intensify: the European Union is set to propose a ban on Russian oil by the end of the year, with restrictions on imports introduced gradually until then, according to people familiar with the matter. Crude oil dipped but remained closed to $104 a barrel. Markets in China and Hong Kong are shut for holidays. Beijing will close gyms and cinemas over the Labor Day break and Shanghai will keep mobility curbs in place despite falling Covid cases.  Chinese officials last week promised to scale up economic stimulus, which provided some respite for sentiment before Friday’s Wall Street slide.

Nikkei +0.26% Hang Seng Closed CSI Closed Shanghai Closed Shenzen Closed

Eur$ 1.0518 CNH 6.6812 CNY 6.6085 JPY 130.37 GBP 1.2548 CHF 0.9743 RUB 70.8160 TRY 14.8600 WTI$ 103.71 -0.95% Gold 1886.58 -0.55% BTC 39,000 +1.80% ETH 2,859.52 +1.60%

S&P +0.59% Nasdaq +0.79% EuroStoxx -1.58% FTSE Closed Dax -1.35% SMI -0.90%

Macro :
- *EINHORN’S GREENLIGHT CAPITAL DEFIES APRIL ROUT WITH 10.6% GAIN
- Bonds Are Suddenly Getting Love From Investors Hedging Recession
- CHINA APRIL MANUFACTURING PMI AT 47.4; EST. 47.3
- Ukraine Latest: Sanctions Can End When Russia Goes, Germany Says

Keep an eye on :
- ADJ GY : Adler Directors Offer Resignation After Disclaimer Opinion
- ADJ GY : Adler Posts $1.24 Billion Loss in Report Auditor Won’t Endorse
- ADJ GY : Landlord Vonovia Says Sale of Stake in Rival Adler Is an Option
- AIR FP : Qantas to Order Over 150 Airbus Aircraft, West Australian Says
- MT NA : ArcelorMittal successfully tests use of green hydrogen at Canadian plant
- BAYN GY : Bayer Shareholders Oppose Compensation Report at Annual Meeting
- COFB BB : Cofinimmo 1Q Operating Profit Misses Estimates
- CSGN SW : Credit Suisse Sued Over Alleged Dealings With Russian Oligarchs
- DOF NO : DOF, DOF Subsea Get Further Extension of Standstill Arrangements
- DBK GY : Glass Lewis for Abstaining on Deutsche Bank Management AGM Vote
- EVK GY : Evonik to Sell Assets That Make Up More Than 10% of Revenue: WAZ
- ISP IM : Italian Banks Can Weather Ukraine Fallout, Central Bank Says
- LEO GY : Leoni Prelim 1Q Adjusted Ebit Loss About EU17M
- LEO SS : MGM Resorts International to Buy LeoVegas for SEK61 Per Share
- DRLCO DC : Maersk Drilling Awarded More Three-Well Contract W/ Aker BP
- RATOB SS : Ratos 1Q Loss per Share SEK0.66 Vs. Loss/Shr SEK0.010 Y/y
- SALM NO : Salmar Says Conditions for Completing NTS Offer Are Fulfilled
- SIX2 GY : Sixt Sees Temporary Disruption on Some Ops After Cyberattack
- STM GY : Stabilus 2Q Adjusted Ebit Beats Estimates
- TUI1 GY : TUI Gets 1.3 Million Holiday Bookings in April, Reuters Says
- VWS DC : Vestas Cuts FY Revenue Forecast
- VOW GY : VW Picks Qualcomm for Automated Driving Chips From 2026: HB
- WEIR LN : Weir 1Q Orders Ex-FX up 15% Y/Y, 1% Q/Q

>>> Europe : Brokers Upgrades & Downgrades -2nd of May 2022

>>> Up
* Aker BioMarine ASA Raised to Buy at Arctic Securities
* Lancashire Raised to Add at Numis; PT 505 pence
* SBB Raised to Neutral at Goldman; PT 34 kronor

>>> Down
* Tal Education ADRs Cut to Market Perform at CICC; PT $4.10
* Tokmanni Cut to Hold at Handelsbanken

>>> Initiation
* Genmab Rated New Market Perform at Cowen; PT 2,554 kroner

>>> Call

FT : Qantas signs Airbus order for world’s longest direct flights from Australia

Qantas signs Airbus order for world’s longest direct flights from Australia
Airline acquires 12 aircraft to operate 20-hour flights to London and New York by 2025

Australian airline Qantas Airways has ordered a dozen aircraft to offer customers some of the world’s longest passenger flights from Sydney to London and New York by 2025, as pandemic restrictions in the region are lifted and international travel rebounds.

The Australian airline will offer nonstop flights between Australia and Europe and the US after acquiring 12 Airbus A350-1000 aircraft from the European plane maker, the biggest order in its history when combined with an upgrade of its domestic fleet.

The upgrade, called Project Sunrise, is expected to cost between A$3bn and A$3.5bn (US$2bn-2.5bn) and underlines renewed confidence that tourism and business travel are set to rebound after Australia reopened its borders to international travellers in February.

New Zealand, which took an even stricter approach to managing the pandemic, opened its borders to most tourists and business travellers this week, leading Wellington to declare that the country was “back on the map”.

The 101-year-old airline was weeks away from bankruptcy in 2020, according to the company, and even turned to selling pyjamas to generate revenue as it grounded its planes.

Qantas said the pandemic had delayed Project Sunrise by a year but argued that demand for nonstop flights has been proven following the success of the Perth-to-London direct service that it launched in 2018.

The new planes will allow the airline to operate similar services out of its two central hubs of Sydney and Melbourne with flights lasting more than 19 hours. The wide-bodied planes will be 25 per cent more fuel efficient than older long-haul planes, the company said.

“It’s the last frontier and the final fix for the tyranny of distance that has traditionally challenged travel to Australia,” said Alan Joyce, Qantas chief executive, about the routes.

Joyce said that the first Project Sunrise flights would be to New York and London but that the Airbus order could allow direct flights to other destinations including Paris and Frankfurt.

The airline has prioritised its premium segment for the new services, with 40 per cent of the cabin devoted to higher-spending customers.

The planes will carry fewer passengers than existing long-haul flights operated out of Australia and offer more legroom and as well as a “wellbeing zone” on the plane for customers on the long flights to stretch.

That is a scaled-back offering compared with 2018, when Qantas unveiled Project Sunrise and suggested the aircraft could include gyms, bunk beds for children and workstations.

The push to offer nonstop flights out of Australia follows a tough period for the airline industry over the Easter holiday, when thinly-staffed airports led to customers queueing for hours to pass through security.

Joyce was widely criticised after blaming passengers for the chaotic scenes, arguing that travellers were not “match fit” and had forgotten to remove laptops and aerosol sprays when clearing security.

Qantas shares gained 4 per cent and hit a six-month high following the Project Sunrise announcement. The airline also released a positive trading statement that showed better than expected earnings before interest, tax, depreciation and amortisation for the second half of the year of between A$450mn and A$550mn and net debt of A$4.5bn, lower than had been forecast.

Matt Ryan, an analyst with Australian investment bank Barrenjoey, said that Qantas had proved that domestic flights had recovered to strengthen confidence in the airline’s growth prospects. “Demand is strong across the board,” he said.

(ZH) Food Shortages In Six Months – The Globalists Are Telling Us What Happens N

Food Shortages In Six Months – The Globalists Are Telling Us What Happens Next

In mid 2007 the Bank for International Settlements (The central bank of central banks) released a statement predicting an impending “Great Depression” caused by a credit market implosion. That same year the International Monetary Fund also published warnings of “subprime woes” leading to wider economic strife. I started writing alternative economic analysis only a year earlier in 2006 and I immediately thought it was strange that these massive globalist institutions with far reaching influence on the financial world were suddenly starting to sound a lot like those of us in the liberty movement.
This was 16 years ago, so many people reading this might not even remember, but in 2007 the alternative media had already been warning about an impending deflationary crash in US markets and housing for some time. And, not surprisingly, the mainstream media was always there to deny all of our concerns as “doom mongering” and “conspiracy theory.” Less than a year later the first companies awash in derivatives began to announce they were on the verge of bankruptcy and everything tanked.
The media response? They made two very bizarre claims simultaneously: “No one could have seen it coming” and “We saw this coming a mile away.” Mainstream journalists scrambled to position themselves as the soothsayers of the day as if they said all along that the crash was imminent, yet, there were only a handful of people who actually did call it and none of them were in the MSM. Also ignored was the fact that the BIS and IMF had published their own “predictions” well before the crash; the media pretended as if they did not exist.
In the alternative media we watch the statements and open admissions of the globalists VERY carefully because they are not in the business of threat analysis; rather, they are in the business of threat synthesis. That is to say, if something goes very wrong in the world economically, central bankers and money elites with aspirations of a single centralized economic authority for the world are ALWAYS found to have a hand in that disaster.
For some reason, they like to tell us what they are about to do before they do it.
The idea that globalists artificially create economic collapse events will of course be criticized as “conspiracy theory,” but it is a FACT. For more information on the reality of deliberate financial sabotage and the “order out of chaos” ideology of globalists please read my articles ‘Fed One Meeting Away From Creating A Doomsday Sinkhole’ and ‘What Is The Great Reset And What Do The Globalists Actually Want?’
The Great Reset agenda proposed by WEF head Klaus Schwab is just one example of the many discussions hidden in plain sight by globalists concerning their plans to use economic and social decline as an “opportunity” to quickly establish a new one world system based on socialism and technocracy.
The primary problem with discerning what the globalists are planning is not in uncovering secret agendas – They tend to openly discuss their agendas if you know where to look. No, the problem is in separating the admissions from the disinformation, the lies from the truth. This requires matching up globalist white papers and statements to the facts and evidence at hand in the real world.
Let’s look specifically at the food shortage problem in detail…
Food Shortages In Six Months
A week ago there was a torrent of press releases from global institutions all mentioning the same exact same concern: Food shortages within the next 3 to 6 months. These statements line up very closely with my own estimates, as I have been warning regularly about impending dangers of inflation leading to food rationing and supply chain disruptions.
The IMF, the BIS, World Bank, The UN, the Rockefeller Foundation, the World Economic Forum, Bank of America and even Biden himself are all predicting a major food crisis in the near term, and it is not a coincidence that the policies of these very institutions and the actions of puppet politicians that work with them are causing the crisis they are now predicting. That is to say, it’s easy to predict a disaster when you created the disaster.
The claim is that Russia’s invasion of Ukraine is the primary cause, but this is a distraction from the real issue. Yes, sanctions against Russia will eventually lead to less food supply, but the globalists and the media are purposely ignoring the bigger threat, which is currency devaluation and price inflation created by central banks pumping out tens of trillions of dollars in stimulus packages to prop up “too big to fail” corporate partners.
In 2020 alone, the Fed created over $6 trillion from nothing and air dropped it into the economy through covid welfare programs. Add that to the many trillions of dollars that the Fed has printed since the credit crash in 2008 – It has been a nonstop dollar destruction party and now the public is starting to feel the consequences. Lucky for the central bankers that covid struck and Russia invaded Ukraine, because now they can deflect all the blame for the inflationary calamity they have engineered onto the pandemic and onto Putin.
Inflation hit 40 year highs in the US well before Russia invaded Ukraine, but let’s consider the ramifications of that war and how it affects the food supply.
The Russian invasion certainly disrupts Ukrainian grain production, which makes up around 11% of the total world wheat market. Russia also maintains a 17% share and together these two nations feed a large swath of third world nations and parts of Europe with 30% of wheat and barley exports, 19% of corn exports, 23% of canola exports, and 78% of sunflower exports.
It is the sanctions on Russia that are a problem well beyond Ukraine, however, as Russia also produces around 20% of global ammonia and 20% of global potash supplies. These are key ingredients to fertilizers used in large scale industrial farming. Farmers are estimating an overall price spike of around 10% in food markets, but I believe this is very conservative. I am already seeing overall price increases of at least 20% from six months ago, and I expect there to be another 30% in price hikes before this year is over. In other words, we are looking at 50% in average increases in 2022.
Official government inflation data and CPI cannot be trusted. Double whatever numbers they give and you will be much closer to the truth. The inflation rate used by Shadowstats.com, calculated using methods once applied by the US government in the 1980s before they “adjusted” their models to hide the data, supports my position so far.
The expectation among US agricultural experts is that China will fill the void where Russian supplies disappear, but it’s a mistake to make this assumption.
Something Weird Is Going On In China
China’s crackdown on covid infections has reached levels so bizarre I have to ask the question: Are their lockdowns really about covid, or are they hiding something else?
The death rate of covid in China is impossible to calculate accurately because they have never released proper data that can be confirmed. However, almost everywhere else in the world we see a median infection fatality rate of 0.27% for covid; meaning, over 99.7% of people in the world on average have nothing to fear in terms of dying from the virus. But in China, the CCP is acting as if they are dealing with the Black Plague. Why?
Lockdowns have resulted in food shortages across the country as supply chains become strained and manufacturing remains shut in many cases. The story many westerners are not hearing much about, though, is the fact that Chinese exports have essentially been frozen. This is very important so I think it needs emphasis – Over 1 IN 5 container ships IN THE WORLD are now backed up in Chinese ports due to their covid lockdowns. This is incredible.
Why would China do this over a virus we all know is not dangerous to the vast majority of people? Why institute the worst lockdown in the country so far and starve their own people when the majority of Western governments have now given up on their pandemic fear mongering and the forced vaccination agenda?
I would suggest the possibility that China might already be engaging in an economic war that many Americans and Europeans don’t even realize is going on. This may be a beta test for a shut down of exports to the US and Europe, or it is an incremental shutdown that is meant to become permanent. The bottleneck on trade may also be a precursor to a Chinese invasion of Taiwan.
Taiwan is actually more dependent and intertwined with China’s economy than many people know. China is the biggest buyer of Taiwan’s exports and those exports account for 10% of Taiwan’s GDP. Taiwan has hundreds of thousands of workers and businessmen that travel regularly to China to work, another economic factor that is now strained by lockdowns. Furthermore, Taiwan has multiple corporations that operate their factories on mainland China, all of which could be closed due to covid lockdowns.
All I’m saying is, if I was China planning on invading Taiwan in the near future, I might consider using covid as a cover for damaging their economy first and disrupting their export model. Communists see the population as a utility that can be sacrificed if necessary, and China is perfectly willing to cause short term suffering to their people if it means long term gains for the party. Beyond that, if I was going to engage in economic warfare with the west covertly, what better way than to tie up 20% of the world’s cargo ships and disrupt supply chains in the name of protecting the country form a “pandemic?”
The bottom line? Don’t rely on China to fill export needs for fertilizer ingredients or anything else as sanctions on Russia continue.
Inflation vs. Supply vs. Control
It’s not just globalist organizations talking about incoming food shortages; the CEO of international food corporation Goya has also recently warned we are on the precipice of a food crisis. As I have noted in the past, inflation leads to government price controls, price controls lead to lack of production incentives (profits), lack of profits leads to loss of production, loss of production leads to shortages, and shortages lead to government rationing (control over all large food sources).
As we have seen with almost every authoritarian regime in modern history, control over the food supply is key to controlling the population. It is only surpassed as a strategic concern by control over energy (which we will also see shortages of soon as Europe sanctions Russian oil and gas and starts eating up supplies from other exporters). The food issue hits closest to home because we can see the effects immediately on our wallets and on our families. There is nothing worse for many parents than the prospect of their children going hungry.
The mainstream media is once again ignoring any potential economic threat, specifically they are denying the notion of food shortages as something to be worried about. I say, why listen to a group of people that are always wrong on these types of events? If anything, I would at least take the words of the globalists seriously when it comes to economic collapse; they benefit the most from such disasters after all, and they also have the most influence when it comes to triggering crisis.
Preparedness today costs nothing tomorrow. Lack of preparedness today costs EVERYTHING tomorrow. The choice for anyone with a brain is simple – Get prepared for the end of affordable and easily available food before this year is out.

TechCrunch : Sequoia’s Shaun Maguire on competition and conviction in crypto ven

Sequoia’s Shaun Maguire on competition and conviction in crypto venture — ‘A lot of VCs… are going to pull back’

As crypto continues its wild rise, storied venture firm Sequoia is not just competing with the a16z’s of the world but with a rising crop of crypto native venture funds that are seeing their assets balloon and their influence upend the traditional venture hierarchies. In a conversation on TechCrunch’s new web3 podcast Chain Reaction, Sequoia crypto partner Shaun Maguire talked about the firm’s commitment to the sector, regulatory challenges and what plenty of crypto investors still don’t understand.

Earlier this year, Sequoia announced a $500 to $600 million sub-fund dedicated exclusively to buying up cryptocurrencies. The firm has made a number of equity investments in crypto startups over the years including Fireblocks and FTX, but while Andreessen Horowitz was early to commit to a dedicated crypto fund in 2018, Sequoia has continued made its equity investments through its general funds.
While the crypto industry continues to mint new unicorn startups, the rapid cooling of public market tech stocks has threatened to stall growth in the emerging category, which has still proven awfully susceptible to macro conditions. In our conversation, Maguire emphasized his belief that plenty of other funds dipping their toes into crypto “are going to pull back” when the market grows less frothy, but he believes that Sequoia has already committed to a lengthy relationship with the sector — “we have permanent intentions.”
“Sequoia is very deliberate with everything we do and we spend huge amounts of time debating every strategy change, everything, we debate every seed investment to sometimes excruciating detail, but it helps us make really good decisions and make decisions as a team rather than as individuals,” Maguire tells us. “When we make a decision to do something, it doesn’t happen unless the whole team is behind the decision. So that’s what you’ve seen get unleashed with crypto over the last 18 months, we went from it being some people with really, strong positive views, to the whole firm being completely behind it.”

The crypto category has dealt with plenty of skeptics, some in the venture capital community, who believe that the sector’s benefits are being oversold and that the web3 promise of decentralization is just smoke and mirrors.

“I am an absolute crypto maxi, but I think there are a lot of things that are misunderstood by the masses today,” Maguire said. “Decentralization is not a silver bullet that just solves all problems and is better for everything. You know for the vast majority of compute, you want it to be centralized. For a lot of decision making, centralization can be better for certain types of decisions.”
Maguire said that more important than decentralization for its own sake, is the ability of users to “be able to leave with their identity and data,” an effort which should protect consumers from platform overreach. While decentralization allows for a certain type of consumer protections, Maguire still contends that the rulebook of traditional investor protections shouldn’t be thrown out.
“One of the tensions I have in my head is that I think people sometimes forget that a lot of the consumer protections put in place by US law were won out of hard-fought lessons over like a century. And there’s a lot of wisdom in there,” Maguire says. “In some ways, one way to view what’s happening in crypto right now is it’s almost like throwing all the old rules out and starting with a blank canvas.. I think what we’re seeing is a lot of the crypto community is actually coming back in 90% of the situations and realizing that, ‘Oh, actually, the way things were done in the past was actually pretty good and got there for an optimal reason,’ But 10% is like radically different and… you can kind of meaningfully improve the whole system by getting some of those things right.”

Business Of Fashion : Luxury Seizes the Vacation Dressing Boom

Luxury Seizes the Vacation Dressing Boom
Camille Miceli’s Pucci debut on the island of Capri reflects the industry’s growing focus on resortwear — and resort retail — as consumers return to pre-pandemic lifestyles.
Camille Miceli's Pucci experience on the island of Capri shows how the industry's expansion into resortwear—and resort retail—is accelerating.

By
02 May 2022
BoF PROFESSIONAL

KEY INSIGHTS
  • Luxury players are betting big on vacation dressing this year as international travel looks set to rebound
  • Vacation lines target high net-worth clients, but they also provide an avenue to stay relevant with more aspirational, younger consumers
  • Retailers also see an opportunity to engage wealthy consumers while they travel, opening pop-ups and stores in resort hotspots like Capri and Saint Tropez

CAPRI — To mark her first collection for Italian luxury brand Pucci, creative director Camille Miceli axed the traditional runway show and took a different route: she organised a holiday.
The former Louis Vuitton accessories designer partnered with German e-tailer MyTheresa to stage a three-day experience on the idyllic island of Capri, bringing together a mix of industry figures, influencers and top clients to live la dolce vita — Pucci style. That meant zipping around on speed boats, seafood risotto and champagne cocktails on the beach, and serenades by a traditional folk band; starting the day with morning yoga and singing along to classic tunes like Volare into the night.
Meanwhile, the house’s kaleidoscopic prints could be spotted all around the isle: on table clothes at the local bar; adorning the interiors of speed boats at the harbour; on seats of the island’s funicular cable car. It was Instagram catnip that assured an online splash for a brand that previously struggled to gain traction on social media.
“You don’t relate to seasons, you don’t relate to fashion shows, you relate to a spirit of mind,” Miceli said. “I wanted to emphasise even more the lifestyle — the Pucci lifestyle. It’s about a smile that it gives you when you look at the clothes and you look at the collection.”

Miceli's collection focuses around six different prints from the Pucci archives. “They all have to work together. They all have to mix together,” she said. (Business of Fashion)
The trip exemplified Miceli and parent company LVMH’s vision to re-energise the house by leveraging its roots as a vacation label for fashionable jet-setters, just in time for a post-pandemic vacation surge expected this summer.
“We realised that Pucci was, first of all, a resort concept,” said Sidney Toledano, chief executive of LMVH Fashion Group. “The big names [like Dior] are also looking for the resort, for the beach concept. It’s a big opportunity.”
Pucci isn’t the only luxury player betting big on vacation dressing this season: Dior and Chanel are rolling out more beachside pop-ups in markets including Montenegro and Turkey. Matchesfashion is about to kick off what it calls a “Grand Tour of Italy,” staging activations in Florence, Naples and Ischia as part of a partnership with Pellicano Hotels Group.
The moves come as international travel appears ready to finally bounce back from the pandemic, with consumers in key regions like the US gearing up for their first mask-free summer vacations since 2019. Swimwear sales are set to surpass pre-pandemic levels to hit $22.1 billion in 2022, according to Euromonitor, suggesting shopping for vacation is ready to come back bigger than ever.
“Vacation dressing’s resurgence … is now at a fever pitch, with fewer restrictions around travel than has been allowed since pre-pandemic times,” said Kayla Marci, analyst at market intelligence firm Edited. “Both fashion and luxury retailers have adjusted their assortments to embrace a long-awaited return to normality.”
Resortwear was already becoming a key category for luxury retailers before the pandemic. Shoppers increasingly sought outfits to enhance their travel experience — and how it looked to social media followers back home — with each photo-op representing a bankable opportunity for brands.
For many companies, what started as seasonal marketing interventions quickly turned into a significant business. Just look at Loewe’s Paula’s Ibiza line: what began as a capsule collaboration between the Spanish luxury house and an iconic Balearic boutique back in 2017 has now flourished into a fully-fledged sub-label, spanning ready-to-wear, accessories, and even perfume. In 2019, Loewe acquired the Paula’s Ibiza trademark and archives, allowing creative director Jonathan Anderson to continue to build out the line as a brand within a brand.
Big names like Chanel and Dior bolstered their vacation offerings with dedicated capsule collections, while multi-brand retailers moved beyond bikinis and coverups to sell head-to-toe poolside ensembles. Today, holiday dressing assortments at the likes of Mytheresa and Matchesfashion include items like €280 Zimmermann beach towels, €450 raffia visors from Valentino and Gabriela Hearst, and €1,150 Saint Laurent beach bags.

“It’s really a very popular purchasing occasion,” said Paolo De Cesare, chief executive at Matchesfashion. “Going to a new place and meeting new people and going to new hotels — there’s nothing like this that sparks the idea of updating your wardrobe.”
Matchesfashion is about to kick off its “Grand Tour of Italy,” curated by Marie-Louise Scio and Robert Rabensteiner. (Matchesfashion)
It helps that vacation lines and beachwear items tend to be more accessibly priced than luxury houses’ usual handbags or ready-to-wear lines. A raffia basket bag from Chloé costs about €550, much less than the French house’s classic leather styles that command a price tag of nearly €2,000.
Luxury brands offer these items as a way for high net-worth clients to accessorise their holidays. But they also provide an avenue to stay relevant with more aspirational, younger consumers at a time when prices for their flagship bags are headed skyward.
Consumers see value in the way printed summer dresses and designer basket bags can easily translate from the beach to summer in the city. “[Shoppers] may be buying for the purpose of vacation, they still want to be sure they will use these items again once they return back to their everyday routine,” said NPD analyst Maria Rugolo.
For many consumers, summer 2022 has already started. At Net-a-Porter, the retailer says it is already seeing success selling wicker bags from Loewe, Saint Laurent and Chloé as well as straw hats from Gucci and Valentino. It’s betting hot new drops like Louisa Bellou’s “Sex Wax” swimsuit, Dior sunglasses and exclusive swim pieces from Alaïa will keep shoppers spending as summer rolls on.
Last month, MyTheresa added a special “vacation” shopping tab to its homepage. In April, sales of the women’s vacation category have tripled compared with 2019 levels, according to chief executive Michael Kliger.
“There’s pent up demand,” he said, noting that this is the first season since 2019 when many Americans were willing to venture to Europe again. Brands like Zimmermann, Loewe and Valentino are particularly popular, he said. “It is just much more than beach and swimwear. It’s the full accessorisation … And so we try to offer the basket, the sandals, the sunglasses.”
Brands also see an opportunity to engage wealthy consumers while they travel, marketing special beach collections to a captive audience of resort-goers who have plenty of time to browse — and buy.

Chanel's seasonal boutique in Saint-Tropez. (Marina Denisova)
Chanel just reopened its seasonal boutiques for its Coco Beach collection in Saint Tropez, Capri and Marbella. Dior, meanwhile, is expanding the reach of its Dioriviera beach collection, launching pop-ups in new locations like Bali, Montenegro, and New York’s Montauk.
This weekend in Capri, Pucci’s guests weren’t just posting their Chandon spritzes and beachside selfies online, they were buying too: Shoppers crammed into the brand’s boutique on Via Camerelle to purchase vibrant silk shirts, towering metallic wedges, and chunky pescare bangles inspired by the new brand logo, where two fishes intertwine to form a letter P.
“It’s perfect timing,” Mytheresa’s Kilger said of Pucci’s reboot, “because [after lockdowns] it is so much nowadays about going on vacation, having a party, enjoying life. And the DNA of the brand is very much joy.”