Peter Zeihan (him again) spoke at Iowa’s Swine Day on the topic of Agriculture at the End of the World:
At lot of this is Zeihan’s polished Greatest Hits presentation (Deglobalization, the need to stop Russia in Ukriane to prevent a future conflict with NATO that would go nuclear, China’s demographic crash, the cult of personality/isolation of Xi Jinping, China’s absurd never-ending Flu Manchu lockdowns, etc.), but here are some highlights of specific agriculture topics:
Russia isn’t just destroying population centers in Ukraine, it’s deliberately targeting Ukraine’s agricultural infrastructure, including grain silos.
Odessa is not a normal city. It is at the mouth of the Nipur river, which is kind of their equivalent of the Mississippi, and it is also their manufacturing center. It’s a cultural hub. It’s a financial center. It is New York and Houston and St. Louis and Chicago and New Orleans all in one. And if the Russians succeed in capturing it, that is the end of Ukraine as a modern economic entity. Right now Odessa is under blockade. They can’t export anything. This has been the source of 95 of their exports to this point.
China’s pork industry got hit hard by swine flu three years ago, and they’re probably getting hit by it now.
They’re trying to regrow the swine industry with subsidies, but that’s just resulted in “Two million people who have no idea what they’re doing” buying the wrong kinds of feed.”
“If they don’t have pork, all they’ve got left is rice. Rice is the most phosphate input intensive crop.”
“The Chinese have traditionally been the world’s largest producer and exporter of phosphate, ’cause it’s a food security issue. Well they’ve stopped all exports until further notice. So we’ve lost potash because of the Ukraine War. We’ve lost phosphate because of Chinese mismanagement.”
Skipping over the oil stuff, but Texas is sitting pretty because it’s easier and quicker to bring shale oil production online.
Did I already mention that Zeihan says Russia is probably going to lose Siberian well use because if they can’t ship it off, it freezes in the permafrost?
“We’re not looking at a recession, we’re looking at an energy-induced depression that’s already affecting multiple continents. But not here…The baseline here are pretty good.”
The effect of reduced fertilizer supply to the rest of the world? “This is famine. We will have it again in the fourth quarter of this year…a half a billion to a billion people will suffer malnutrition.”
If you stop growing wheat on marginal land due to fertilizer shortage, you start growing it on your better land, and your export output collapses.
“The volume of internationally traded agricultural commodities is in the early stages of collapse.”
The Brazilian Serato is heavily dependent on external inputs from abroad. We, on the other hand, get the overwhelming majority of our fertilizer inputs nationally and from Canada.
“There is no Brazilian agricultural sector without Russian involvement. And Russian involvement is going away. It’s the world’s largest source of soy exports. And without global soy exports, there is not a global pork industry. Except here. And if we’re being nice, Canada too.”
Argentina will probably do fine as well.
“Your mid case scenario should be inflation of nine to 15% for at least the next five years.”
“You are looking at the fastest expansion in farm incomes, per person, and per acre that we have ever seen in this country’s history, and it will last for at least the remainder of this decade.”
I think Zeihan has a tendency to overstate the case sometimes, but he’s more right than wrong…
Lebanon has seized a ship loaded with barley and wheat flour while it determines whether the cargo may have been stolen from Ukraine, said Public Prosecutor Ghassan Oueidat.
The Ukrainian Embassy in Beirut said the vessel was loaded at Feodosia in the Russian-occupied peninsula of Crimea, and that the commodities originated from Zaporizhzhia, Mykolaiv and Kherson in southeastern Ukraine.
The embassy accused Russia of stealing more than 500,000 tons during its occupation of the three regions. While Russia denies stealing grain, it has publicly touted the resumption of grain shipments from occupied ports.
Grain shipments from Crimea have surged since Russia’s invasion of Ukraine in February, which analysts say indicates Ukrainian grain is being exported. Exports from Crimea are sanctioned by the European Union and the U.S..
The cargo ship Laodicea arrived at Tripoli in northern Lebanon on July 27, according to ship-tracking data monitored by Bloomberg. It will be held while Lebanon carries out an investigation into the cargo’s origin, Oueidat told Bloomberg.
Supposedly the seizure is limited to 72 hours. We’ll see.
The ship’s registered owner is Syria Mar Shipping Ltd., according to European database Equasis. Syria Mar Shipping Ltd. wasn’t immediately available to comment. Both the company and the ship were sanctioned by the U.S. in 2015 for their association with the Syrian government of President Bashar Assad.
Syria, of course, is a neighbor that has repeatedly interfered with Lebanon through its terrorist proxy/political party Hezbollah, though current Lebanese President Michel Aoun usually counts Hezbollah as a parliamentary ally. (Summarizing the weird twists and turns of Lebanon’s ever-shifting multi-confessional political landscape is way beyond the scope of this article, though if you’re really interested, reading Michael Totten’s The Road to Fatima Gate might help.) The fact that Lebanon, a small and broke country, is willing to defy both Russia and Syria, speaks to how unified much of the world is against Russia’s invasion of Ukraine, and how little such countries fear Russia’s wrath these days.
Indeed, the “broke” part may be the deciding factor here, as Lebanon is seeking a $3 billion bailout from the IMF (which is demanding enactment of serious reforms before handing the money over), and the big backers of the IMF are all firmly on Ukraine’s side.
If counties like Lebanon (somewhere around the 100th largest economy in the world) are willing to seize illicit Russian cargo, then the opportunities for Russia to financial benefit from its illegal occupation of Ukraine would seem to be thin.
The Biden Recession picks up downhill speed, liberals are spending $160 million to seize control of elections, Biden wants to starve your children until you accept transgenderism, and another Soros-backed DA gets the heave-ho from voters. It’s the Friday LinkSwarm!
GDP shrunk by .9% in Q2, making the Biden recession official, no matter how much Biden Administration officials and their Democratic Media Complex toadies attempt to spin it otherwise.
Two big money liberal operations, ready to spend $80 million each, are trying to determine who controls elections and how in the years ahead.
“The overall objective of the political left is to change the way you conduct overall elections,” Jason Snead, executive director of the Honest Elections Project, which advocates clean elections, told The Daily Signal.
One of the two liberal groups, Run for Something, is a political action committee founded by a former Hillary Clinton campaign staffer. In the spring, Run for Something established its Clerk Work project with the goal of electing clerks, election supervisors, registrars, recorders, and other local officials charged with running elections.
The PAC says it will promote thousands of election administrators in the years ahead. But for 2022, it reports endorsing 11 candidates competing in races in California, Colorado, Illinois, Missouri, Nevada, North Carolina, and Tennessee.
Local election clerks generally are empowered to interpret and enforce state election regulations. They often have discretion on matters such as whether to count absentee ballots that come in after Election Day, how strictly to enforce voter ID or signature-matching requirements, and how closely poll watchers may monitor the ballot counting on Election Day.
According to the National Conference of State Legislatures, county-level election officials are elected in 22 states. In 10 states, elected officials appoint members to a local board of elections. Another 18 states divide election administration duties between two or more offices.
In any case, donating to specific candidates to oversee elections could directly or indirectly affect who holds these positions.
Some practices of local election administrators also could be guided by another $80 million effort by the U.S. Alliance for Election Excellence, a coalition of mostly left-leaning organizations financed in part by Big Tech executives to train local officials in running elections.
Snead and other critics say they see parallels between Run for Something and efforts to elect liberal prosecutors financed by liberal hedge fund manager George Soros. They also see strong similarities between the U.S. Alliance for Election Excellence and Facebook founder and CEO Mark Zuckerberg’s election administration grants in the 2020 election cycle.
“What we shouldn’t lose track of is they are playing the long game,” Snead said. “They are going to look for every possible way to impact elections, and they can make substantial changes in the long run through this kind of program that they wouldn’t have been able to make in 2020.”
When Soros-backed socialist son of convicted terrorists Chesa Boudin was recalled as San Francisco DA, the writing was on the wall. “Decarceration” is a disaster for everyone . . . except criminals.
Now another Soros-backed “decarceration” state’s attorney has lost her reelection bid. It’s not clear if the multiple crimes for which Marilyn Mosby has been charged are the impetus for Baltimore’s voters deciding it’s time to move on or if it’s the shocking crime rates in the city as a result of her radical anti-law and order agenda. Maybe both.
Mosby rose to national attention in the wake of the Freddie Gray riots and for her hyper-politicized botching of the prosecution in those cases.
Fox News reports:
Baltimore State’s Attorney Marilyn Mosby lost her reelection bid to defense attorney Ivan Bates in the Democratic primary after she was indicted by a grand jury on federal charges alleging that she used coronavirus hardship as a reason to take money out of her city retirement account.
The Associated Press called the race in favor of Ivan Bates, a defense attorney, on Friday night. Bates is a former prosecutor in Baltimore who served from 1996 to 2002 before becoming a defense attorney.
Mosby, a Democrat, directed her office to stop prosecuting offenses such as drug possession, prostitution, urinating in public, and more during the coronavirus pandemic in an attempt to stop the virus from spreading in jails and prisons.
In May, the Biden administration announced that any school that participates in the federal school lunch program (which is run by the U.S. Department of Agriculture’s Food and Nutrition Service) must allow students to use bathrooms, locker rooms, and showers and play on the sports teams aligning with their gender identity if they want access to funds for the program — effectively holding money meant for ensuring student nutrition in exchange for compliance on radical leftist gender ideology.
Now, twenty-two Republican attorneys general are fighting back by suing the U.S. Department of Agriculture over that new guidance.
“We all know the Biden administration is dead-set on imposing an extreme left-wing agenda on Americans nationwide,” Indiana Attorney General Todd Rokita said. “But they’ve reached a new level of shamelessness with this ploy of holding up food assistance for low-income kids unless schools do the Left’s bidding.”
According to the Washington Times, nearly 30 million students take advantage of the National School Lunch Program at about 100,000 public and non-profit private schools and residential childcare institutions. The Biden administration policy was seen as a direct assault on the 18 states with existing laws barring male athletes from participating in female sports.
The lawsuit argues that the Biden administration (again) violated the Administrative Procedures Act by issuing regulations without going through the rulemaking process and that Bostock v. Clayton, the 2020 Supreme Court’s 2020 decision on employment discrimination, doesn’t apply to Title IX as the Biden administration claimed when they announced the guidance.
“This case is, yet again, about a federal agency trying to change law, which is Congress’ exclusive prerogative,” Tennessee Attorney General Herbert H. Slatery III said. “The USDA simply does not have that authority. We have successfully challenged the Biden Administration’s other attempts to rewrite law and we will challenge this as well.”
Remember the bank runs in China story after all those bank accounts in Hunan were frozen? I’ve been looking for signs of wider contagion amidst the Chinese banking sector, and mostly haven’t seen it. But I have seen a lot of other cracks appear in China’s overall economic system, so here’s a roundup.
One reaction to the frozen accounts: “Chinese Bank Run Turns Violent After Angry Crowd Storms Bank of China Branch Over Frozen Deposits.”
A large crowd of angry Chinese bank depositors faced off with police Sunday in the city of Zhengzhou, and many were injured as they were taken away, amid the freezing of their deposits by some rural-based banks.
The banks froze millions of dollars worth of deposits in April, telling customers they were upgrading their internal systems. The banks have not issued any communication on the matter since, depositors said.
According to Chinese media the frozen deposits across the various local banks could be worth up to $1.5 billion and authorities are investigating the three banks.
On Sunday, about 1,000 people gathered outside the Zhengzhou branch of China’s central bank on Sunday to demand action; they held up banners and chanted slogans on the wide steps of the entrance to a branch of China’s central bank in the city of Zhengzhou in Henan province, about 620 kilometers (380 miles) southwest of Beijing.
China’s communist government reacted to the protests with their usual tact and understanding:
But it looks like some of them will finally get some money back:
(Plus more on the property slump.)
The official line on the Hunan account freeze: “Henan police said in a statement on July 10 that further investigations showed that, since 2011, a criminal group led by a suspect named Lu Yi had gradually taken control of several rural banks, through companies including the Henan New Wealth Group, to illegally transfer out funds. The police said they had arrested more suspects and seized more assets involved in the case.” I have no doubt the aforementioned were probably guilty, but I bet a whole lot more bank officials, regulators, and CCP officials (to the extent that those are separate groups and not mostly-overlapping Venn circles) were in on the scheme, plus a whole bunch more in dozens of other schemes that siphoned off depositor money into various pockets and a host of entirely different schemes. As I’ve said before, it’s smoke and mirrors all the way down.
Another thing driving unrest: “Rotten tail buildings,” that is residential buildings on which all construction is stopped, but for which those with mortgages for individual units are still expected to pay for:
A rapidly increasing number of “disgruntled Chinese homebuyers” are refusing to pay mortgages for unfinished construction projects, exacerbating the country’s real estate woes and stoking fears that the crisis will spread to the wider financial system as countless mortgages default.
According to researcher China Real Estate Information, homebuyers have stopped mortgage payments on at least 100 projects in more than 50 cities as of Wednesday, up from 58 projects on Tuesday and only 28 on Monday, according to Jefferies Financial Group Inc. analysts including Shujin Chen.
And that was over a week ago.
According to Citi analysts, average selling prices of properties in nearby projects in 2022 were on average 15% lower than purchase costs in the past three years. Meanwhile, it’s only getting worse as China’s home prices fell for a ninth month in May, with June figures set for release Friday.
The crisis engulfing Chinese developers is reaching a new phase, with a debt selloff expanding to firms once deemed safe from the cash crunch, including investment-grade names such as Country Garden Holdings, the largest builder by sales.
The payment refusals, which come at a time when China’s economy is set to post what may be a negative GDP print due to the latest economic shutdown over Xi’s catastrophic zero covid policies, underscore how the storm engulfing China’s property sector is now affecting hundreds of thousands of average citizens, posing a threat to social stability ahead of a Communist Party Congress later this year. Chinese banks already grappling with challenges from liquidity stress among developers now also have to brace for homebuyer defaults.
As a result of the unprecedented push for a debt jubilee, shares of China’s banks extended their recent decline Thursday, with the CSI 300 Banks Index falling as much as 3.3% before closing down 2.2%. A Bloomberg Intelligence index of Chinese developer stocks slid as much as 2.7%, even though Chinese lenders were quick to try and dispel fears that the movement could crash the economy: according to Bank of Communications, its outstanding balance of overdue mortgage loans linked to housing projects with risks of delayed delivery is 99.8 million yuan, accounting for 0.0067% of its domestic housing mortgage balance. The bank added that its housing mortgage loan quality is stable and risks are controllable, the Shanghai-based lender says in an exchange filing. At the same time, Postal Savings Bank of China says its overdue mortgage loans linked to halted housing projects is 127m yuan, and risks are controllable. Of course, it’s not like Chinese banks would ever lie, now is it?
The Great Debt Jubilee is picking up speed: China’s homebuyer mortgage boycott, which prompted Beijing to scramble to avoid a potentially devastating crash in what is the world’s biggest asset is spreading, and according to Bloomberg, some suppliers to Chinese real estate developers are now also refusing to repay bank loans because of unpaid bills owed to them, a sign that the loan boycott that started with homebuyers is starting to spread.
In a jarring case study of what happens when a ponzi scheme goes into reverse, hundreds of contractors to the property industry complained that they can no longer afford to pay their own bills because developers including China Evergrande Group still owe them money, Caixin reported, citing a statement it received from a supplier Tuesday.
Similar to homebuyers who have taken a stand and refuse to pay for properties that remain uncompleted, one group of small businesses and suppliers circulated a letter online saying they will stop repaying debts after Evergrande’s cash crisis left them out of pocket.
“We decided to stop paying all loans and arrears, and advise our peers to decline any requests to be paid on credit or commercial bill,” the group said in the letter dated July 15, which was sent to the developer’s Hubei office. “Evergrande should be held responsible for any consequence that follows because of the chain reaction of the supply-chain crisis.”
As Bloomberg oh so perceptively puts it, “the payments protest is the latest sign of how a movement by homebuyers to boycott mortgages on unfinished homes in China is spreading to affect other sectors in the economy.”
Yes it is, and it’s also why Beijing should be freaking out (if it isn’t), because what is taking place in China is far worse than what took place in March 2020 when the global credit machinery ground to a halt, only back then it’s because there was no other option, now it’s a voluntary development and not even fears of reprisals from China’s ruthless, authoritarian, Lebron-beloved dictatorship is stopping millions of people from calling for a systemic boycott, one which can topple China’s entire $60 trillion financial system in moments.
Probably an overstatement, just because it takes a whole lot to overcome the inertia of the average Chinese citizen just wanting to keep their head down and not be the nail that sticks up.
Embattled Chinese real estate giant Evergrande is expected to deliver a preliminary restructuring plan this week, following the exit of two bosses.
The firm says its chief executive and finance head have resigned, after an internal probe found that they misused around $2bn (£1.7bn) in loans.
Chinese businessmen misusing funds? Try to contain your shock.
Evergrande has more than $300bn in liabilities and defaulted on its debts late last year.
The crisis has spooked traders who fear contagion in China’s property sector.
On Friday, Evergrande said it found that chief executive Xia Haijun and chief financial officer Pan Darong were involved in diverting 13.4bn yuan ($2bn; £1.7bn) in loans secured by its property services unit to the wider group.
The firm said in a filing to the Hong Kong Stock Exchange that Mr Xia and Mr Pan had resigned because of their “involvement in the arrangement of the pledges”.
Getting caught trying to cook the books even after it’s hit the fan. Classic Chinese management.
The U.S. Securities and Exchange Commission has started the process, compelled by a 2020 law, and investors have started to pay attention. So has China, which moved to potentially clear a big hurdle that stymied U.S. regulators for years.
1. Why does the U.S. want access to audits?
The 2002 Sarbanes-Oxley Act, enacted in the wake of the Enron Corp. accounting scandal, required that all public companies have their audits inspected by the U.S. Public Company Accounting Oversight Board. According to the SEC, more than 50 jurisdictions work with the board to allow the required inspections, while two historically have not: China and Hong Kong. The long-simmering issue morphed into a political one as tensions between Washington and Beijing ratcheted up during the administration of President Donald Trump. The Chinese chain Luckin Coffee Inc., which was listed on Nasdaq, was found to have intentionally fabricated a chunk of its 2019 revenue. The following year, in a rare bipartisan move, Congress moved to force action.
2. Where does it stand?
As required by the law, known as the Holding Foreign Companies Accountable Act or HFCAA, the SEC in March started publishing its “provisional list” of companies identified as running afoul of the requirements. While the move had long been telegraphed, the first batch of names fueled a sharp decline in U.S. shares of companies based in China and Hong Kong as it dashed hopes for some kind of compromise. In all, the PCAOB has said it’s blocked from reviewing the audits of more than 200 of those businesses. The companies say Chinese national security law prohibits them from turning over audit papers to U.S. regulators. SEC Chair Gary Gensler said in late March that the Chinese authorities faced “a hard set of choices.” Days later, China announced it would modify a 2009 rule that restricted the sharing of financial data by offshore-listed firms, potentially clearing one obstacle.
3. What is China changing?
The China Securities Regulatory Commission said the requirement that on-site inspections should be mainly conducted by Chinese regulatory agencies or rely on their inspection results would be removed. It said it would provide assistance for cooperation with foreign regulators. The CSRC said it’s rare in practice that companies need to provide documents containing confidential and sensitive information. However, if required during the auditing process, they must obtain approvals in accordance with related laws and regulations.
4. What’s the broader issue?
Critics say Chinese companies enjoy the trading privileges of a market economy — including access to U.S. stock exchanges — while receiving government support and operating in an opaque system. In addition to inspecting audits, the HFCAA requires foreign companies to disclose if they’re controlled by a government. The SEC is also demanding that investors receive more information about the structure and risks associated with shell companies — known as variable interest entities, or VIEs — that Chinese companies use to list shares in New York. Since July 2021, the SEC has refused to greenlight new listings. Gensler has said more than 250 companies already trading will face similar requirements.
5. How soon could Chinese companies be delisted?
Nothing is going to happen this year or even in 2023, which explains why markets initially took the possibility in their stride. Under the HFCAA, a company would be delisted only after three consecutive years of non-compliance with audit inspections. It could return by certifying that it had retained a registered public accounting firm approved by the SEC.
6. How many companies will be affected?
There’s not much discretion. If a company from China or Hong Kong trades in the U.S. and files an annual report, it will soon find itself on the SEC’s list simply because those have been identified as non-compliant jurisdictions. In the March interview, Gensler pointed out that the law focuses on non-compliant countries, rather than specific companies.
For that and other reasons, Beijing is looking to impose more controls to prevent capital flight.
What would a “China is screwed” roundup be like without a Peter Zeihan video?
“Demographically they’re in collapse…China’s not even going to survive this decade. They don’t even have the numbers to try…China doesn’t have the naval capacity to secure markets and resources….Xi Jinping has enacted a cult of personality that is tighter than anything that has existed through Chinese history. It’s gotten so tight that no one wants to bring him information about anything…This is how countries die.” Plus: China doesn’t know how to store grain.
The widely acclaimed globalization of the post-Cold War era is now running in reverse. A protracted slowdown in global trade has been reinforced by persistent pandemic-related supply-chain disruptions, ongoing pressures of the US-China trade war, and efforts to align cross-border economic ties with geostrategic alliances (“friend-shoring”). These developments tighten the noose on China, arguably the country that has been the greatest beneficiary of modern globalization.
Of the many metrics of globalization, including financial, information, and labor flows, the cross-border exchange of goods and services is most closely tied to economic growth. Largely for that reason, the slowdown in global trade, which commenced in the aftermath of the 2008-09 global financial crisis and intensified in the COVID-19 era, points to a sea change in globalization. While global exports went from 19% of world GDP in 1990 to a peak of 31% in 2008, in the thirteen years that followed (2009-21), global exports have averaged just 28.7% of world GDP. Had world exports expanded on a 6.4% trajectory – halfway between the blistering 9.4% pace of 1990-2008 and the subdued post-2008 rate of 3.3% – the export share of global GDP would have soared to 46% by 2021, far above the actual share of 29%.
China’s gains from the globalization of trade have been extraordinary. In the decade prior to China’s 2001 accession to the World Trade Organization, Chinese exports averaged just 2% of total world exports. By 2008, that share had risen nearly fourfold, to 7.5%. China had timed its WTO membership bid perfectly, just when the global trade cycle was on a major upswing. While the financial crisis took a brief toll on Chinese export momentum, the interruption was short-lived. By 2021, Chinese exports had surged to 12.7% of world exports, well above the pre-2008 peak.
China is unlikely to maintain this performance. Overall growth of global trade is slowing, and China’s slice of the trade pie is under mounting pressure.
The ongoing trade war with the United States is especially problematic. During the first phase of China’s export-led growth surge in the aftermath of WTO accession, the US was consistently China’s largest source of external demand. Largely due to former US President Donald Trump’s tariffs, that is no longer the case. By 2020, US imports of Chinese goods and services had fallen 19% below the peak levels of 2018. Despite rebounding sharply on the heels of the US economy’s post-pandemic snapback, in 2021, US imports from China remained 5% below the 2018 peak. Partial tariff rollbacks for selected consumer products, which President Joe Biden’s administration is apparently considering as an anti-inflation gambit, are unlikely to jump-start bilateral trade.
At the same time, enduring pandemic-related supply-chain disruptions are likely to take a sharp toll on China and the rest of the world.Over the six months ending in April, a “global supply chain pressures index” constructed by researchers at the Federal Reserve Bank of New York averaged 3.6, well above the 2.3 reading in the first 21 months following the February 2020 onset of pandemic-related lockdowns, and sharply higher than the “zero” reading associated with the absence of supply-chain disruptions.
This is a big deal for a world connected by supply chains. Global value chains accounted for more than 70% of the cumulative growth in overall global trade from 1993 to 2013, and China has enjoyed an outsize share of this GVC-enabled expansion. As supply-chain disruptions persist, exacerbated by China’s zero-COVID policies, pressures on Chinese and global economic activity are likely to remain intense.
Mounting geostrategic tensions are the wild card in deglobalization, especially their implications for China. “Friend-shoring” in effect turns Ricardo’s efficiency calculus of cross-border trade into an assessment of the security benefits that come from strategic alliances with like-minded countries. China’s new unlimited partnership with Russia looms especially relevant in this regard. With China edging closer to crossing the line by providing support to Russian military efforts in Ukraine, the US has recently moved to impose sanctions on five more Chinese companies through its so-called Entity List.
You’ve heard about the ghost cities. Did you hear about the failed ghost developments that were built as weird, cheap imitations of western structures?
Is Xi Jinping in danger from a coup?
No doubt I’ve missed many other examples of cracks in China’s economic edifice. Feel free to share them in the comments below.
Enough links have filtered into the semiconductor bucket to be worth doing a roundup. This one touches on China and the corruption of our political elites.
The congressional Democrats’ attempt to throw money at the problem is going nowhere fast.
The Biden administration is laser-focused on sending Ukraine billions of dollars in weapons, including the latest round of anti-ship systems, artillery rockets, and rounds of 105 mm ammo for howitzer cannons that it has entirely lost focus on reshoring efforts to boost semiconductor production Stateside.
Multiple manufacturers of semiconductor wafers have announced plans for new multi-billion dollar factories across the U.S. but are contingent on Congress allocating funds to aid in building facilities under the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act.
Congress passed the CHIPS Act in January 2021 as part of last year’s National Defense Authorization Act, which proposed $52 billion in funding for increasing the domestic capacity of chip production, though the House and Senate have come to a standstill over disagreements on certain parts of the bill that have sparked so much uncertainty among companies set to build new factories.
In a letter on June 15, dozens of technology executives from IBM, Intel, Microsoft, Analog Devices, Micron, Amazon, and Alphabet called on Congress to move quickly on the CHIPS Act. They wrote, “the rest of the world is not waiting for the U.S. to act,” and funding for new chip factories must be achieved immediately.
Taiwan’s GlobalWafers announced a new $5 billion factory in the U.S. on Monday, but contingent on subsidies from the federal government.
“This investment that they’re making is contingent upon Congress passing the CHIPS Act. The [GlobalWafers] CEO told me that herself, and they reiterated that today,” U.S. Commerce Secretary Gina Raimondo told CNBC, the same day GlobalWafers announced its development plan.
Notes:
IBM doesn’t own any fabs any more, having sold them all to GlobalFoundries.
Intel runs a huge number of very profitable fabs (troubles with their sub-10nm process yields notwithstanding) and doesn’t need federal subsidies.
Microsoft doesn’t own any fabs and is deeply unlikely to build any; their flagship Xbox Series X uses a custom AMD Zen 2 fabbed by TSMC as its CPU.
Analog Devices is an Integrated Device Manufacturer that owns several fabs with pretty old technology; they don’t have any 300mm fabs. They closed a small fab in Milpitas they got from their acquisition of Linear Technology last year. Designing analog chips is its own black art, and not everything that applies to shrinking digital circuits applies to the analog realm.
Amazon has no fabs and probably won’t be building any, but they do have a chip design division to support Amazon Web Services, and recently designed a cloud computing chip. They work closely with AMD (fabbed at TSMC), Intel (own their own fabs) and Nvidia (another fabless design house that also gets their chips fabbed at TSMC).
Alphabet AKA Google has no fabs and probably won’t be building any, though they do have a lot of AI chip design work going on.
GlobalWafers isn’t a semiconductor manufacturer, it’s a silicon wafer manufacturer. Making such wafers (the substrates upon which semiconductor fabrication depends) has its own challenges, but they are several orders less difficult than cutting edge chip fabrication. Maybe I’m quite far out of the loop, but I’m deeply suspicious that GlobalWafers planned wafer plant in Sherman, Texas will cost $5 billion. That’s a relatively piddling sum for a new semiconductor fab, but extremely expensive for a wafer factory. This makes me suspect a subsidy grab is afoot.
So of the companies mentioned, Intel could suck up government funding to build a fab they were going to build anyway, I’m sure Analog Devices would build a fab with government money, but chances of them running an under 10nm process in said theoretical fab is extremely slim, none of the other mentioned copies are going to build a fab, and none of that government money is going to alleviate the main problem that the overwhelming majority of cutting edge chip designs have to flow through TSMC fabs in Taiwan. What will solve that problem is TSMC opening a state-of-the art fab in Arizona in 2024. No amount of U.S. taxpayer money will make that already-under-construction fab start producing chips any quicker.
$250 billion in taxpayer subsidies wouldn’t get you a single additional wafer start this year, and probably would accomplish little more than channeling money to politically connected firms and sticky pockets in a state (New York) that no one wants to build fabs in any more because of high costs, high taxes and union rule requirements.
So who expects to earn immediate gains from the taxpayers subsidizing semiconductors? Would you believe Nancy Pelosi?
I bet you would.
This past week it hit the terminal that House Speaker Pelosi was doing a little portfolio re-jiggering, including exercising $8 million of call options in Nvidia and selling Apple and Visa calls. The data was per CongressTrading.com and was reported on by Bloomberg.
The Nvidia LEAPS were bought June 3, 2021 with $100 strikes, set to expire June 17, 2022 and the position appeared to be disclosed on Thursday morning for the first time. $8 million trades seem a little odd for members of Congress to begin with, but who are we to judge?
But then, what did Speaker Pelosi do just hours after disclosing the trade, on Friday?
She threw her weight behind a stalled $50 billion CHIPS PLUS bill that “would provide $52 billion in funding for semiconductor manufacturing grants and investment tax credits for the chip industry.”
We tend to discuss leading-edge nodes and the most advanced chips made using them, but there are thousands of chip designs developed years ago that are made using what are now mature process technologies that are still widely employed by the industry. On the execution side of matters, those chips still do their jobs as perfectly as the day the first chip was fabbed which is why product manufacturers keep building more and more using them. But on the manufacturing side of matters there’s a hard bottleneck to further growth: all of the capacity for old nodes that will ever be built has been built – and they won’t be building any more.
Not strictly true. Remember, Bosch just finished building a 65nm fab.
As a result, TSMC has recently begun strongly encouraging its customers on its oldest (and least dense) nodes to migrate some of their mature designs to its 28 nm-class process technologies.
Nowadays TSMC earns around 25% of its revenue by making hundreds of millions of chips using 40 nm and larger nodes. For other foundries, the share of revenue earned on mature process technologies is higher: UMC gets 80% of its revenue on 40 nm higher nodes, whereas 81.4% of SMIC’s revenue come from outdated processes.
That’s because UMC has fallen woefully far behind TSMC, and no one trusts them because they let Chinese spies walk out the door with other company’s IP. SMIC is on Mainland China, sucks even more, and is trusted even less.
Mature nodes are cheap, have high yields, and offer sufficient performance for simplistic devices like power management ICs (PMICs). But the cheap wafer prices for these nodes comes from the fact that they were once, long ago, leading-edge nodes themselves, and that their construction costs were paid off by the high prices that a cutting-edge process can fetch. Which is to say that there isn’t the profitability (or even the equipment) to build new capacity for such old nodes.
This is why TSMC’s plan to expand production capacity for mature and specialized nodes by 50% is focused on 28nm-capable fabs. As the final (viable) generation of TSMC’s classic, pre-FinFET manufacturing processes, 28nm is being positioned as the new sweet spot for producing simple, low-cost chips. And, in an effort to consolidate production of these chips around fewer and more widely available/expandable production lines, TSMC would like to get customers using old nodes on to the 28nm generation.
“We are not currently [expanding capacity for] the 40 nm node” said Kevin Zhang, senior vice president of business development at TSMC. “You build a fab, fab will not come online [until] two year or three years from now. So, you really need to think about where the future product is going, not where the product is today.”
This video asks whether China can produce their own chips:
Obviously, they already produce some of their own chips, but the video covers most of the issues China has with fabbing more complex chips that I’ve already discussed here and here. They’re still dependent on the same three leading fab companies (TSMC, Intel and Samsung) everyone else is for sub 10nm feature chips, and are overwhelmingly dependent on both foreign talent and foreign semiconductor equipment manufacturers like ASML and Applied Materials.
Speaking of TSMC and Intel, India would really like them to build fabs there. The problem is, despite a whole lot of technical talent there, it doesn’t have a terribly large domestic electronics manufacturing base.
Daily Mail online carried a headline on the 8th of June: Healthy young people are dying suddenly and unexpectedly from a mysterious syndrome – as doctors seek answers through a new national register.
This is SADS – an acronym that stands for Sudden Adult Death Syndrome – and according to the Royal Australian College of GPs, it occurs most commonly in people under 40. This is properly scary; I don’t mind telling you. Healthy young people are going to their beds of an evening and not waking up ever again, or otherwise going about their everyday business and dropping dead, for no identifiable medical reason.
The best anyone in the health professions can apparently do is describe it as mysterious, baffling even, that there are people under 40 dropping in their traces for no known cause. At the same time, around the world, there have been reports of many hundreds of sports men and women dying suddenly and unexpectedly in the past year – super fit individuals uniquely focused on their own health – keeling over dead, often on the field of play.
Here at home we have had updated information campaigns about how important it is to be aware of the incidence of heart attacks and strokes. It has been deemed appropriate to remind us as well that heart attacks are not unknown in children. It’s almost as if we’re not to be unduly alarmed by the sight of passers-by dropping to their knees and clutching at their chests. Elsewhere there is a poster campaign about a rise in the number of cases of shingles. The small print on the posters mentions shingles may strike people with lowered immune systems. Fancy that.
Deaths have been attributed by coroners to the Covid vaccines. The numbers are disputed, but people have died on account of the jabs. That much at least is undeniable. Around the world there are millions of cases of alleged adverse reactions to the jabs – lives severely compromised in some cases. I won’t get into the numbers, because those are always disputed too – but the facts remain. People are dying.
The elephant in the room here is the Covid-19 vaccines – and again I make no apology at all about banging on about this topic week after week. The push to move on, to leave all talk of Covid and pandemic behind us, is palpable and, I would say, downright sinister. I am nowhere near ready to move on – not while there is still so much we do not know, so much we are not allowed to say, think and ask.
We are told all about Covid 19 – and all manner of ways in which it might affect health long after a person has recovered from the initial infection. But as well as the pandemic, the other momentous arrival among us – indeed in just the past year and a half – is the biggest mass vaccination campaign in the history of the world – vaccination with products that had emergency approval, but in my opinion are experimental and for which no long-term data is available – on account of their being brand new and just out of the box.
Billions of people around the world have submitted to the procedure. In a coercive and bullying atmosphere created by politicians and the media, that was mandatory in feel, if not in fact, unknown and unknowable numbers of people did so simply to keep their jobs, to get on a plane and go on holiday or to a gig – and yet in the midst of one report after another of otherwise unexplained sudden deaths in the past 18 months or so, the only emergent variable, the only new thing in the world that we are not allowed to discuss, absolutely not allowed to discuss far less point accusatory fingers at, is the mass vaccination programme.
Again, I ask the question I posed at the top of this piece – are we stupid? Or are we just being treated as if we’re stupid? Which is it?
Sri Lanka was a product of that government following, you know, the the madness of [World Economic Forum] inspired policies: Net Zero, the stripping of fertilizers, and all the rest of it…wholesale strife, collapsing crops and all the rest of it. You would think in a sane world the politicians in each of the countries would respond to the people, but I suspect they won’t. We saw something similar in Canada with the trucker’s freedom convoys, but look what happened there. Obviously Justin Trudeau was was told to get a grip of that situation. He clamped down on it violently, arrested bank accounts and took away the funding for that movement.
Bit on Sri Lanka skipped.
I think what you’re looking at in The Netherlands, for example, is the deliberate dismantling of the land owning class. 85% percent of the of the land in The Netherlands is held by farmers, and has been for generations, and that’s an inconvenient situation for globalist leftist politicians who’ve got other ideas for the land, which is specifically to build houses to cope with the with the levels of immigration that are going on. They’ve empowered themselves the politicians to help themselves to 30 percent of the Dutch farmer’s land, and surprise, surprise! Just as I suspect you would or I would, if the government came into our homes and said they were taking 30% everything we had we owned and had worked for, the farmers have said no…It’s a blatant land grab.
It gets harder and harder to ignore the intent by by leftist globalist governments to return us to some form of feudalism. All these people like us owning property, owning homes, living lives independent of the state. You know what the intention is there, to take people’s independence away. Take away their property, take away the land, and if you control the farmland, you control the food. And if you control the food, you control the people. So you can plainly see what the agenda is.
One need not agree with every one of Oliver’s conclusions to agree that the pattern he deduces, of elites acting against the best interests of the countries they govern and the people they ostensibly serve, seems very real.
With Russia shutting down the NordStream gas pipeline for maintenance, Peter Zeihan wonders if the end of Germany’s vaunted economic engine is nigh.
Some takeaways:
NordStream has made Germany “horrendously” dependent on Russia for energy.
Russia is blackmailing Germany to stop supporting Ukraine.
“Four things that the Germans rely upon to be the economic powerhouse that they are:”
That cheap natural gas.
Their economic model it is based on access to large volumes of cheap Russian energy, both in terms of for electricity, and as industrial inputs to power the entire German manufacturing model. So that all by itself could kill the German system almost overnight. Well, not overnight, but within a year.
“The Germans rely on a large, robust, highly skilled workforce, but Germany has one of the fastest aging societies in the world…Germany will hit mass retirement this decade, and so the model was always in danger on demographic grounds.”
Third: “Access to central European labor all the way from Poland to Romania and even further east…but that’s going away too. Because just as the Germans are rapidly aging, the central Europeans are aging even more rapidly…the birth rate in all of these countries is actually lower than it is in Germany, so it’s every bit as terminal.”
Fourth, you need the global economic trading system that is now breaking down and America is backing away from.
His conclusion:
All of this put together suggests that the manufacturing model that has sustained Germany, that has provided the tax base, that has provided economic growth, that has made the population relatively happy with their situation, it’s gone. And it’s going to vanish within the next year. And a Europe that does not have a German motor at its heart is a Europe that all of a sudden needs to find a very very different way to function.
As with a lot of Zeihan’s observations, he has a lot of fundamentals right but his conclusions seem overstated. Germany has the resources to abandon their green delusions and restart coal and nuclear plants, assuming they have the political will. And the degree to which globalization is breaking down is the significant subtraction of China and Russia from it. There’s still a lot of U.S./EU trade to be had, even if it does get a bit more expensive. And Germany, so high up on the value-added foodchain, is well-position to survive.
The labor shortage is a trickier problem to solve, and probably was one of the main reasons Angela Merkel was so intent on raking in Islamic “refugees.” But maybe real refugees from the Russo-Ukrainian War might provide an opportunity. It would be pretty ironic if Ukrainians were to find their lebensraum in the bosom of Germany…
This is a catch-all post of various instances of Democrats acting badly I meant to include in the last few LinkSwarms and just didn’t manage to squeeze in.
On Wednesday, Reuters revealed that more than 5 million barrels of oil from the nation’s Strategic Petroleum Reserves were sent overseas as part of President Joe Biden’s latest release initiated in March.
Some of that oil went to India, some to the Netherlands, and some was sent to China where the president’s son has engaged in years of potentially criminal business activity embroiling the Biden White House in scandal since the 2020 campaign.
On Thursday, the Washington Free Beacon published new details about the Chinese oil shipments from the U.S. emergency reserves that Biden promised were tapped to “ease the pain that families are feeling” in the United States from high energy prices.
“The Biden administration sold roughly one million barrels from the Strategic Petroleum Reserve to a Chinese state-controlled gas giant that continues to purchase Russian oil, a move the Energy Department said would ‘support American consumers’ and combat ‘Putin’s price hike,’” the Beacon’s Collin Anderson reported. “Biden’s Energy Department in April announced the sale of 950,000 Strategic Petroleum Reserve barrels to Unipec, the trading arm of the China Petrochemical Corporation. That company, which is commonly known as Sinopec, is wholly owned by the Chinese government.”
Sinopec is also tied to Hunter Biden, whose private equity firm, BHR Partners, bought a $1.7 billion stake in the company seven years ago.
Hunter Biden’s lawyer told the New York Times in November that the president’s son, “no longer holds any interest, directly or indirectly, in either BHR or Skaneateles.”
According to the Washington Examiner, however, Hunter Biden remained listed as a part-owner of the firm as late as March.
“Business records from China’s National Credit Information Publicity System accessed Tuesday continue to identify Skaneateles as a 10% owner in BHR, and Washington, D.C., business records continue to list Biden as the only beneficial owner of Skaneateles,” the paper reported. “The White House has routinely deflected questions about Biden’s business dealings to his attorneys, who have remained largely mum.”
“It’s possible that China’s business registry hasn’t yet been updated to reflect a potential transfer or sale of Skaneateles’s 10% stake in BHR to another party,” the Examiner added.
Meanwhile, Biden’s Energy Department has refused compliance with requests under the Freedom of Information Act probing the administration’s improper use of the nation’s strategic oil reserves maintained for emergencies. Last week, the Functional Government Initiative, a nonprofit government watchdog, filed a lawsuit to compel records concerning administration officials’ decision to tap the oil reserves in the absence of a sudden disruption in supply such as a hurricane or cyberattack.
I would say it’s quite revealing how quickly Democrats resorted to racist slurs against Justice Clarence Thomas following the overturning of Roe vs. Wade, but not really. They’ve long shown they are racist against any minority that refuses to toe the leftist line.
Twitter has been a cesspool of liberals calling Justice Thomas endless racist slurs … and of course, Twitter does nothing. Samuel Jackson called him ‘Uncle Clarence,’ and several people reported him and said they were told by Twitter it was not against the rules to call him that slur.
Why has Clarence Thomas become the target of so much flak following the Supreme Court’s overturning of Roe v Wade? It’s because he’s black. It’s because, as someone with black skin, he is not meant to hold conservative views on issues like abortion. In the eyes of the furious woke agitators who are haranguing Thomas even more than they are the other Roe-sceptical justices, he has not only made a bad legal decision – he has also betrayed his race. His sin is twofold: he has undermined the right to abortion and he has failed in his racial duty to nod unquestioningly along to every ‘progressive’ idea. He’s a racial transgressor, a bad black man, and therefore he must be reprimanded even more severely than the white folk on the Supreme Court. Ladies and gentlemen, behold the scourge of woke racism.
We have just witnessed one of the clearest examples yet of identity politics crossing the line into flagrant, undeniable racism. No sooner had it been announced that the Supreme Court was ditching Roe v Wade than so-called progressives were gunning for Thomas. They’ve never liked Thomas, who has been serving on the Supreme Court since 1991. Sure, he might be just the second African American to sit on the court, but for the identitarian elites he’s the wrong kind of African American, so his historic achievement doesn’t count. He’s Catholic – ‘decidedly and unapologetically Catholic’, as he says – and he’s not down with abortion or same-sex marriage. ‘Wait, I thought all blacks were BLM-supporting, pro-trans, sassy progressives like the ones I know from Twitter?’, you can almost hear the upper-middle-class left say. Thomas doesn’t compute for them. To paraphrase Biden, ‘He ain’t black!’.
And so it was inevitable he would get it in the neck following the fall of Roe. Vile racial hatred has been hurled his way since the ruling. Angry woke Twitter has even used the N-word. Thomas is ‘just another dumb field nigger’, said one tweeter. Another called him a ‘nigger slave’ to his white ‘nutcase’ wife. He’s a ‘coon-ass motherfucker’, apparently. And of course he’s an Uncle Tom. Or ‘Uncle Clarence’, as Samuel L Jackson called him. As a result, ‘Uncle Clarence’ trended online for hours. Welcome to the twisted moral universe of Silicon Valley, where you can be banned for life for saying ‘he’ about someone with a penis but you can happily surf a wave of retweets for using racial slurs about high-ranking black men.
For some reason that I really can’t fathom, the progressive left is escalating its hounding of conservative Supreme Court Justices. If they’re trying to turn off normal Americans, they’re doing a great job. If they’re trying to intimidate or coerce SCOTUS, they are failing miserably. But radicals gotta radical.
Justice Brett Kavanaugh already was the target of an attempted assassination. But the hounding and targeting of him continue.
Politico reports that Justice Kavanaugh was escorted by his security team out the back door of a DC restaurant because leftists were “protesting” outside.
On Wednesday night, D.C. protesters targeting the conservative Supreme Court justices who signed onto the Dobbs decision overturning the constitutional right to abortion got a tip that Justice BRETT KAVANAUGH was dining at Morton’s downtown D.C. location. Protesters soon showed up out front, called the manager to tell him to kick Kavanaugh out and later tweeted that the justice was forced to exit through the rear of the restaurant.
In a rare move, Supreme Court Marshal Gail Curley has sent letters to Maryland Gov. Larry Hogan, Montgomery County Executive Marc Elrich, and Virginia Gov. Glenn Youngkin demanding that authorities put an end to picketing and “threatening activity” outside the homes of SCOTUS justices.
The letter seeks to use state laws to achieve what the Justice Department has clearly rejected under federal law. If the letter prompts arrests, we could see a major free speech challenge in the courts. The timing of the letter, however, is particularly interesting and may reflect a recognition of the limits of the federal law.
Snip.
Under a federal law, 18 U.S.C. 1507, any individual who “pickets or parades” with the “intent of interfering with, obstructing, or impeding the administration of justice, or with the intent of influencing any judge, juror, witness, or court officer” near a U.S. court or “near a building or residence occupied or used by such judge, juror, witness, or court officer” will be fined or “imprisoned not more than one year, or both.”
The Hunter Biden shenanigans, though illegal, immoral and infuriating, is just more of the foreign graft rakeoff that Joe Biden and other high ranking Democrats have been pulling off for years. But the radical unhinged attacks on the Supreme Court after Dobbs v. Jackson Women’s Health Organization overturned the Democratic Party’s most Holy of Holies shows that the new pitch of derangement Democrats showed after Donald Trump’s unexpected election was not a temporary aberration.
These days, the Democratic Party seems less a political party than a criminal graft conspiracy married to a crazed social justice cult enraged by any setbacks to its grandiose plans or any questioning of their delusional status as anointed saviors of designated victims.
As reality crashes through their swaddling cocooned delusions and limitless self-regard, expect the derangement to get worse.
The U.S. Army on Tuesday selected General Dynamics Land Systems to build a light tank meant to improve mobility, protection and direct-fire capabilities for Infantry Brigade Combat Teams.
The production deal is a key step forward for Army Futures Command, which has promised faster and more successful modernization programs through a competitive prototyping approach.
GDLS will deliver 26 vehicles initially, but the contract allows the Army to buy 70 more over the course of low-rate initial production for a total of $1.14 billion, according to the Army.
At least eight of the 12 prototypes used during competitive evaluation will be retrofitted to be fielded to the force, service officials in charge of the competition said.
The first production vehicles are expected to be delivered in just under 19 months. The first unit will receive a battalion’s worth of MPF systems — 42 vehicles — by the fourth quarter of fiscal 2025. The Army plans to enter full-rate production in calendar year 2025, according to GDLS.
It uses 105mm main gun (the same caliber used in the first iteration of the M1 Abrams) and weighs 35 tons.
The German company said the Panther KF51 (KF is short for Kettenfahrzeug, or tracked vehicle; the number indicates it falls into the 50-ton plus class) “is destined to be a game changer on the battlefields of the future.” It sets “new standards” in “lethality, protection, reconnaissance, networking and mobility,” the company boasted in a statement.
Jan-Phillipp Weisswange, Rheinmetall’s assistant head of public relations, told Breaking Defense that the vehicle was designed on the company’s own funds and not in response to a client’s request. Weisswange said the tank was not designed as a candidate for the Franco-German Main Ground Combat System (MGCS) project, launched in 2012 to replace the Leopard 2 and Leclerc main battle tanks, but rather for an export market.
Still, those two systems could provide a sense of where Rheinmetall could target potential sales. Users of the Leopard 2 are Austria, Canada, Chile, Denmark, Finland, Greece, Hungary, Indonesia, Netherlands, Norway, Poland, Portugal, Qatar, Singapore, Spain, Sweden, Switzerland, Turkey, while the Leclerc is used by Jordan and the UAE.
The Panther’s chassis uses components of the Leopard 2 hull, but the turret is entirely new. According to the company, the 59-ton vehicle has a maximum operating range of about 500 kms (310 miles).
The main armament is the Rheinmetall 130mm cannon, designed for the MGCS project’s Future Gun System (FGS). The FGS is automatically loaded from two revolver-type magazines which each hold 10 rounds of insensitive munition-compliant ammunition. According to the company, the FGS “enables a 50% longer kill range to be achieved [than 120mm] with an unrivalled rate of fire due to the autoloader performance.” It can fire kinetic energy rounds as well as programable airburst ammunition and practice rounds.
There’s also a integrated drone launcher option. Here’s a short video on the tank, showing the location of the autoloader in the rear turret bustle:
Speaking of Germany, they’re evidently blocked Spain’s sale of used Leopard 2 tanks to Ukraine. (I have a skeleton post full of videos (some from this guy) about Germany announcing that it was thinking of sending heavy weapons to Ukraine, then dragging its feet with bureaucratic paperwork to actually do anything. It’s a strange, frustrating topic someone with more experience than myself in the arcane practice of Germany bureaucracy should research…)
The Economist published a thumbsucker on the future of the tank. It covers some familiar ground, including covering Russian failures during the opening phases of the Russo-Ukrainian War. Also includes a scrolling web-graphic thingee covering parts of modern tanks.
Russia on Sunday defaulted on its foreign debt for the first time since 1918 after the grace period on its $100 million payment expired, according to reports.
The $100 million interest payment deadline due to be met by the Kremlin had initially been set to May 27 but a 30-day grace period was triggered after investors failed to receive coupon payments due on both dollar and euro-denominated bonds.
Russia said that it had sent the money to Euroclear Bank SA, a bank that would then distribute the payment to investors.
But that payments allegedly got stuck there amid increased sanctions from the West on Moscow, according to Bloomberg, meaning creditors did not receive it.
Euroclear told the BBC that it adheres to all sanctions.
The last time Russia defaulted on its foreign debt was in 1918 when the new communist leader Vladimir Lenin refused to pay the outstanding debts of the Russian Empire during the Bolshevik Revolution.
Peter Zeihan explains what this means for the international financial order:
Is there any sign of Russia’s economy cratering from the sanctions? Not yet:
NATO formally invited Sweden and Finland to join the alliance Wednesday at a summit in Madrid, Spain, in the midst of security concerns due to the Russia-Ukraine war.
The announcement comes after Turkish president Recep Tayyip Erdogan lifted his veto after a weeks-long stalemate over the negotiations. The decision will now rely on final ratification from all 30 member states.
“The accession of Finland and Sweden will make them safer, NATO stronger, and the Euro-Atlantic area more secure. The security of Finland and Sweden is of direct importance to the Alliance, including during the accession process,” NATO said in a statement.
NATO Secretary General Jens Stoltenberg called the decision “historic,” and thanked the leaders for their agreement.
Turkey signed a memorandum with Finland and Sweden on Tuesday confirming Erdogan would support the nomination of the two Nordic countries into the alliance.
Remember that tangling with the Finns has not been a source of happiness for Russia. The Soviet Union may have gained some territory in the Winter War and the Continuation War, but the Finns tore them a new asshole in the process. For the entirety of post-World War II, the Soviet Union and Russia have relied on a neutral Finland (“Finlandization”) to secure their northernmost flank. With Finland joining NATO, they no longer have that luxury.
The Finns have a fair amount of German equipment (including Leopard 2 tanks) and American aircraft (including having F-35s on order). I imagine integrating their forces into the NATO command structure should be quite feasible.
Speaking of countries that Russia has not had much joy tangling with, Sweden has invaded Russia more than once.
Though Swedish armed forces are relatively small, they have, if anything, even more German tech, and their native-built Stridsvagn 122 tank is based on the Leopard 2. Their Archer mobile artillery system is arguably the best in the world.
Oh, and both Sweden and Finland have several nuclear power plants each. Both could develop nuclear weapons in fairly short order if they had to. And any Russian moves against the Baltic states would probably be enough to push them into doing it, Nonproliferation Treaty be damned.
Getting Finland and Sweden to join up with NATO is has a high probability of being a historical blunder that outweighs any Ukrainian territorial gains Russia might end up with.
