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Crypto, trade & finance news with a grain of humor For contact – t.me/NickMMarket
Musk calls for disclosure of how US aid to Ukraine spent
"It would be nice if the public had at least some idea of how the funds are spent," Musk wrote on his Twitter.
He was reacting to the news that the United States was preparing to announce a new $1.3 billion package of military aid to Ukraine.
Musk's remarks came amid growing concerns about the lack of oversight over the tens of billions in funds and weapons pumped into Ukraine.
Earlier this week, US Treasury Secretary Janet Yellen said in India that funneling even more funds to Ukraine is somehow the "single best" way to help the global economy.
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Europe still cannot go without Russian gas, IEA warns
The European Union has sufficient gas reserves for the winter but could face a shortage next year if Russia cuts supplies further, Reuters reported, citing a fresh report by the International Energy Agency (IEA).
Despite Russia slashing gas deliveries this year, Europe has averted a severe shortage and started the winter with brimming gas storage tanks – thanks to EU emergency measures to fill storage and a lucky spell of mild weather.
Yet next year could be an even tougher test than the energy crisis that this year hiked fuel bills for European households and forced industries to temporarily shut down.
If Russia cuts the small share of gas it still supplies to Europe and China's gas demand rebounds from lockdown-induced lows, the EU could face a gas shortfall of 27 billion cubic meters (bcm) in 2023, the IEA said.
The IEA said the shortage could be averted through saving energy, renovating gas-guzzling buildings, replacing fossil fuel-based heating with heat pumps, as well as massively expanding renewable energy.
Will Europe get it all done before winter arrives?
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Japan to expand car export ban to Russia
Japan plans to ban exports of cars with engine capacity of more than 1.9 liters to Russia as part of a new package of sanctions, according to Japanese newspaper Yomiuri.
The ban may come into effect as early as August and will affect both new and used vehicles. Furthermore, a complete ban on exports of electric and hybrid cars to Russia is being considered.
Japan's decision follows similar restrictions adopted by the US and the EU in May and June, respectively. Earlier last April, Japan banned exports to Russia of cars worth over six million yen ($43,200).
In 2022 alone, used cars became one of the main items of all Japanese exports to Russia, with about 200,000 shipped worth $1.8 billion.
Now Tokyo has decided to give up all this money
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🇹🇷 Lira extends losses
The Turkish lira continued its losses against hard currencies, falling by 2.2% to 26.88 per US dollar as of 10:30 am in Istanbul.
The depreciation of the lira has thus amounted to more than 30% this year.
This is attributed to banks withdrawing support ahead of the central bank's interest rate-setting meeting on Thursday.
Türkiye's Monetary Policy Committee is expected to raise its policy rate to 18.25% from 15% for the second straight month, according to the median estimate in a Bloomberg survey.
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Yellen says China slowdown risks spillovers for US
A slowdown in China's economy risks causing ripple effects not only for the US but across the global economy, US Treasury Secretary Janet Yellen warned Monday on the sidelines of meetings with her counterparts from the Group of 20 economies in India.
"Many countries do depend on strong Chinese growth to promote growth in their own economies, particularly countries in Asia, and slow growth in China can have some negative spillovers for the United States," Yellen said .
That said, Yellen does not expect a recession in the US, which she believes is on a "good path" to bring inflation down without a major weakening in the labor market.
"Growth has slowed, but our labor market continues to be quite strong. I don’t expect a recession," US Treasury Secretary said.
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🇹🇷 Türkiye increases fuel tax to support budgetary needs
The gasoline tax in Türkiye was raised 200% while the diesel tax rose 350%. The changes had an instant impact, with fuel prices rising 20% overnight on Sunday, July 16.
The gasoline tax in Türkiye was raised to 7.52 liras (about $0.28) per liter from 2.52 liras ($0.09), while the diesel tax rose to 7.05 liras ($0.26) from 2.05 liras ($0.07).
Previously, a liter of gasoline cost 28.05 lira ($1.07) and diesel 26.32 lira (about $1.01). After the tax hike, they will be 34.08 lira ($1.30) and 32.04 lira ($1.22) respectively.
This was part of measures to boost revenues after a surge in spending related to the earthquakes and the elections held in May. Türkiye's budget deficit widened to 219.6 billion liras ($8.37 billion) in June, seven times the deficit a year earlier.
There were also recent increases in value-added tax (VAT) by 2 percentage points and corporate tax to 25% from the current 20%.
While the tax hikes are aimed at combating the budget deficit, they are also contributing to inflation. Monthly inflation may reach double digits in July, and the impact of the tax hike will also be felt in August.
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🇨🇳 China's Q2 GDP growth falls short of expectations
China reported that its gross domestic product (GDP) grew by 6.3% in Q2 compared to the same period last year, falling short of expectations. The unemployment rate among young people, aged 16 to 24, reached a record high of 21.3% in June.
The 6.3% GDP print for the second quarter marked a 0.8% pace of growth from the first quarter, slower than the 2.2% quarter-on-quarter pace recorded in the first three months of the year.
The urban unemployment rate for June stood at 5.2%. After lifting measures against COVID-19 in December, China initially experienced an economic rebound. However, this recovery has tapered off, with the real estate sector struggling to recover and exports declining due to weaker global demand.
Within China, weak consumer demand has led to flat prices in June.
The bright spot in the economic recovery has been domestic travel. Urban residents more than doubled their tourism spending in the first half of the year from a year earlier, to 1.98 trillion yuan ($280 billion).
Beijing said last week it would extend measures to support real estate. Also broad support for exports was announced. The country also extended tax breaks on the purchase of electric cars.
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Credit Suisse inquiry to keep files secret for 50 years
A parliamentary investigation into the collapse of Credit Suisse will keep its files closed for as long as 50 years, according to a parliamentary committee document.
The investigation committee will thus hand over its materials to the Swiss Federal Archives only after half a century, ostensibly to ensure high levels of confidentiality of the investigation, which generated huge public interest.
The investigation focused on the activities of the Swiss government, financial regulator and central bank in the run up to the emergency takeover of Credit Suisse by UBS in March.
The Swiss parliament declined to comment.
Six months to three years in prison and fines are possible for violating the confidentiality of this inquiry.
Stay subscribed to the channel, there will be a long post about this in 2073, honest!
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Erdogan says grain deal 'gone into history'
The grain deal has "gone into history," Turkish President Recep Tayyip Erdoğan told reporters after the Kremlin said the grain deal was effectively halted.
Erdogan added that Ankara had made efforts to save the grain deal until the last moment. The Turkish foreign minister will soon discuss the issue with his Russian counterpart Sergey Lavrov.
Erdoğan said he will also shortly hold talks with Russian President Vladimir Putin, whom he called his friend and whom he said wants to see the grain corridor functioning.
Meanwhile, Ukrainian media report that the terrorist attack on the Crimean bridge could have been done using British underwater autonomous robot REMUS 600 with an extra load of explosives while Ukrainian drones and hydrocycles were making a diversionary strike.
Brits are doing a fine job of splitting up Moscow and Ankara
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🔥 Kremlin: Grain deal is being halted
"Actually, the Black Sea agreements expired today. As the President of the Russian Federation mentioned earlier, the deadline was July 17. Unfortunately, the part concerning Russia in this Black Sea agreement has not been fulfilled yet. Therefore, it's is being terminated," said Kremlin's spokesperson Dmitry Peskov.
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Italy plans to create mechanism for paying for local goods in rubles
The Italian-Russian Chamber of Commerce (CCIR) plans to create a system that will allow Russian firms to buy Italian goods allowed for import into Russia, Prime reported citing CCIR head Ferdinando Pelazzo.
There are currently difficulties with the exchange of goods between Italy and Russia, even for those that are not subject to sanctions, according to him.
"We want to create a system that would allow a Russian buyer to pay in rubles to us, and we from our account in a third country could then transfer this money to Italy," Pelazzo said.
He added that this would require negotiating with banks, finding a third country and establishing relations with the central bank of that state.
Pelazzo noted that the goal of the initiative is not to allow illegal transactions, but to facilitate trade in permitted categories of goods.
"There are issues left that require a couple of months. These are negotiations with banks... I think the whole process will take a few months," Pelazzo concluded.
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EU and ECB fail to agree on how to use profits from Russian assets to rebuild Ukraine
The European Union sparred with the European Central Bank over plans to use profits from over €200 billion ($217 billion) in frozen Russian central bank assets to rebuild Ukraine, Bloomberg reported, citing its sources.
European Commission Vice President Valdis Dombrovskis countered ECB President Christine Lagarde's warning that moves against the sanctioned holdings could threaten the eurozone's financial stability and liquidity of the common currency.
Yet the Commission pushed back against the ECB's arguments, saying that any risk occurred – and was assessed – when Russian assets were initially blocked in February 2022, and that none of those worries had materialized so far.
Nonetheless, ECB chief Lagarde noted that a possible windfall tax on frozen Russian assets could undermine the euro and lead to a re-think among reserve holders. She added that the amount at stake was far greater than the few billions the move would generate for Ukraine.
The dispute between the European Commission and the ECB has also now divided EU member states, sources said.
Russia's frozen assets are expected to generate about €3 billion in windfall profits or even more. Over half the assets are in cash and deposits, while a substantial amount of the remainder is in securities that will transform to cash as they mature in the next two to three years.
Many of the funds are in Belgium at settlement giant Euroclear, where they generated nearly €750 million by 1Q2023.
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🔥 Ruble is main currency in paying for Russian exports
The share of the ruble is the main one in settlements for Russian exports with the countries of Asia (36.3%), Europe (49.8%), the Caribbean (50.5%) and Oceania (47.2%), RBC reported citing previously closed statistics of the Bank of Russia.
Yet with America and Africa, the situation is quite the opposite so far, as the share of the Russian currency there is 17.6% and 24.2%, respectively.
The ruble is also slightly ahead of other currencies in import payments with European countries, where its share is 50.1%, while the share of currencies of unfriendly countries is 45.9%. In other regions, the share of Russian currency in import settlements is not so high.
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One of US goals is to reduce world's population, now official
"When we invest in clean energy and electric vehicles and reduce population, more of our children can breathe clean air and drink clean water," Vice President Kamala Harris told a crowd at Coppin State University in Baltimore, Maryland in a speech centered on the Inflation Reduction Act.
Not even conspiracy theorists are needed for the Biden-Harris pair, they reveal everything publicly.
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🇷🇺🇮🇷 Russian-Iranian grain trade picks up pace
Iran's grain imports from Russia have risen sharply this year amid ongoing sanctions against both countries.
Iran's customs authorities said the country imported about 740,000 tons of grain from Russia in 2Q2023. That is about 1.5 times more than in the same period last year and 2.5 times more than in 2021.
Following the terrorist attack on the Crimean Bridge, Russia announced Monday that it was halting an agreement to export grain from Ukraine via the Black Sea. Moscow also claims that Western sanctions were still preventing exports of its agricultural products and other goods even despite the grain deal.
As a result, Russia has increased trade with Iran by taking advantage of a direct trade route via the Caspian Sea.
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Elon Musk to create unbiased AI with his new venture
Billionaire and near-fighter Elon Musk has founded a new venture called xAI that he says is aimed at redefining the AI landscape, prioritizing transparent truth over political correctness.
The Tesla and Twitter CEO spoke about his ambitious AI startup on Twitter Spaces, promising to create a company that values the honesty of its AI models over perceived bias.
Musk emphasized the need to create AI that isn't afraid to share its "beliefs," even if they venture into "controversial" terrain.
"I do think there is a significant danger in training AI to be politically correct. Or in other words, training AI basically to not say what it actually thinks is true," he said.
This stance is in stark contrast to other AI companies, which have been repeatedly accused of dumbing down their bots to avoid controversial topics and having a left-leaning political bias.
We'll soon find out if humanity is now opening Pandora's box or not
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Is there deflation in China?
Fears are growing that China's economy is on the brink of deflation amid disappointing economic data.
"We need to see broad and persistent price pressure before we can declare deflation," said Hong Hao, Grow Investment Group’s chief economist.
"This is happening in the upstream sectors and it normally takes two to four quarters to pass down."
"I think we are on the verge of deflation. Now it’s the time to act to stem the deflationary pressure," he added.
On the other hand, last week the People's Bank of China abandoned the deflation thesis.
"At this time there is no deflation, and there will be no risk of deflation in the second half of the year," Liu Guoqiang, deputy governor of the PBOC, told reporters. He pointed to factors such as China’s economic recovery and growth in money supply.
Still, some economists are pointing to other indicators.
Macquarie economists Larry Hu and Yuxiao Zhang characterized the condition in China as disinflation – a temporary slowdown of rising prices – rather than deflation, which refers to a more serious problem where there’s a persistent decrease in prices over time.
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Saudi Arabia to buy Turkish drones
Saudi Arabia agreed on Tuesday to buy Turkish drones. It was one of several lucrative contracts President Erdoğan has negotiated for Türkiye's struggling economy.
The two countries have also signed several memorandums of understanding in various sectors including energy, real estate and direct investment, according to Saudi Press Agency (SPA).
Saudi Arabia will purchase the drones "to improve the combat readiness of the kingdom's armed forces and enhance its defense and production capabilities," Defense Minister Prince Khalid bin Salman said in a tweet.
SPA did not provide details on the value of the deal.
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Russians buy housing in Turkey en masse
Russians bought the most houses in Türkiye among foreigners, according to Turkish Statistical Institute. In June, Russian nationals bought 733 houses.
Russians are followed by Iranian citizens with 333 house sales, Iraqi citizens with 175 house sales and Ukrainian citizens with 168 house sales.
Overall, Türkiye's home sales in June decreased by 44.4% year-on-year to 83,636 compared to the same month of the previous year.
Istanbul accounted for the largest share with 16.2% or 13,578 home sales.
Earlier, Türkiye's Interior Ministry said it was suspending the issuance of new residence permits to foreigners in 10 districts of Istanbul.
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Oil trading lower after China data
Oil prices eased for the second straight session in early trading on Monday after China reported a smaller-than-expected Q2 gross domestic product (GDP) growth.
West Texas Intermediate crude for delivery in August fell 0.45% to $74.6 a barrel, while September Brent crude, the global benchmark, was down 0.40% to $79.1 a barrel.
The drop came after China reported that the country's GDP advanced just 6.3% in Q2, below the forecast of 7.3%. The lower-than-expected rise adds to concerns that demand from the world's top importer will remain moderate, pushing prices higher.
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🇭🇰 Hong Kong Stock Exchange shut down due to typhoon
Hong Kong canceled trading in the city’s $5.2 trillion stock market on Monday because of typhoon Talim.
Due to this Hong Kong stock markets have suspended trading and court hearings have also been postponed.
Emergency response to heavy rain has begun in Fujian province, with rain and thunderstorms expected to persist for a long time.
About six typhoons hit Hong Kong each year, usually between June and October, but only a fraction of them cause market and school closures.
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🌾 Consequences of no grain deal
Suspending the Black Sea Grain Iniative will mostly hurt Ukraine, the EU and Türkiye and will trigger a price hike, experts said.
Extending the grain deal was more favorable not for Russia, but for Ukraine and European speculators, who sell Ukrainian grain not to Africa, but to Europe.
However, with the grain deal halted, the most affected will be Ukraine and its agrarians, as well as European countries.
European agrarians have already faced the flood of cheap Ukrainian grain that caused substantial financial losses. Without the Black Sea grain corridor, the situation on the continent will aggravate even more.
Among importing countries, Türkiye, Middle Eastern countries and China are also estimated to be impacted.
Furthermore, grain prices will rise again, according to Máximo Torero, chief economist of the Food and Agriculture Organization of the UN.
Global food prices are also expected to surge, which are now 23% below the record level of March 2022, according to UN data as of early July.
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📈 Wheat prices UP after grain deal suspension
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🔥 Crimean Bridge Attack: What Do We Know So Far?
‼️ SOME OF THE VIDEOS MAY BE DISTURBING
- The attack on the Crimean Bridge was carried out by a seadrone and was planned and executed by the Security Service and Military Fleet of Ukraine.
- Two civilians, in a car crossing the bridge into Crimea, lost their lives. Their young daughter survived the incident and is currently receiving medical treatment.
- As a result of the attack, the bridge has been temporarily closed to cars, although train services are still operating.
- Dmitry Medvedev, the vice chair of Russia's security council, has labeled the attack as a terrorist act, urging for retaliation and targeting of Ukrainian political leaders.
- The Ukrainian side asserts that the attack is a demonstration of their intention to reclaim Crimea.
- Russian stocks plunged on the news, but now recovering.
- Meanwhile, today marks the decision day for the Grain Deal. Any predictions on whether it will be extended?
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Türkiye stops issuing residency permits to foreigners in some parts of Istanbul
Türkiye's Interior Ministry is halting the issuance of new residence permits to foreigners in 10 districts of Istanbul until further notice.
That said, the authorities denied the restrictions for foreigners apply to the whole megacity, as previously reported in the media.
There are currently 5.4 million foreigners living in Türkiye, of which 1.2 million live in Istanbul, accounting for 8% of the city's population. Of these, 535,025 are Syrian refugees.
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World could be left without orange juice
Orange juice concentrate is becoming scarce worldwide, with German fruit juice producers sounding the alarm and warning of at least a price hike.
"We are in the most difficult situation in the last 50 years," warned Klaus Heitlinger, managing director of the Association of the German Fruit Juice Industry (VdF). It is already becoming apparent that an acute shortage of concentrate will make it significantly more expensive.
This is all to blame for poor orange crops in recent years in Brazil – the world's largest producer of orange juice concentrate with a 90% market share.
Furthermore, in the US, hurricanes and the spread of the citrus greening disease have also led to a sharp decline in the crop. Yields in Spain and Mexico were also below average due to weather conditions, according to the association.
European producers are already expecting a steep increase in orange juice prices or even no orange juice on the market in the future.
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🇮🇳🇦🇪 India and UAE to ditch US dollar in trade
India and the United Arab Emirates agreed to use their respective local currencies for cross-border transactions instead of the US dollar, Bloomberg reported.
Indian Prime Minister Narendra Modi and UAE's President Sheikh Mohammed Bin Zayed Al Nahyan in Abu Dhabi have already signed two memorandums of understanding.
The pacts will help the countries build a framework for rupee-dirham transactions, along with interlinking payment and messaging systems, as well as their respective card switches, RuPay and UAESWITCH, allowing "mutual acceptance of domestic cards and processing of card transactions," the Reserve Bank of India said in a statement.
De-dollarization is in full swing!
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No ship with fertilizers left Russian ports under grain deal
Not a single ship carrying fertilizers has left Russian ports during the entire period of the Black Sea grain initiative, the Joint UN Coordination Centre said on Saturday, RIA reported.
"The agreement of 22 July 2022 allows the export of Russian fertilizers, including ammonia, but not a single ship with fertilizers has been dispatched under the initiative," the Centre said.
However, 1,003 ships carrying grain, or more than 32.8 million tons of cargo, left Ukrainian ports during the period of the initiative.
Yet the poorest and lower-middle-income countries received only 10% of corn and 40% of wheat from Ukrainian cargoes shipped under the grain deal, RIA reported citing a statement by the UN Coordination Centre. The rest of the shipments went to rich countries.
"Compared to the data for 2017-2021, the deal provided delivery to the poorest countries in the same proportions as previously in Ukraine's trade, but the proportions of relatively rich countries turned out to be higher," the Centre said.
Russian President Vladimir Putin told South African President Cyril Ramaphosa on Saturday that commitments to remove obstacles to Russian food and fertilizer exports had not been met.
Putin stressed in a telephone conversation that the main goal of the deal, namely grain supplies to countries in need, including on the African continent, has not been realized.
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🇩🇪🇨🇳 China criticizes Germany's call to reduce dependence on Chinese products
China on Friday criticized a German government call for reducing dependence on Chinese products, calling it a form of protectionism.
Foreign Ministry spokesman Wang Wenbin said a German government strategy for relations with China that points to a "systemic rivalry" went "against the trend of the times, and will only aggravate divisions in the world."
Germany's government released a 64-page document earlier Thursday that Chancellor OIaf Scholz referred to as a "comprehensive China strategy."
In introducing the strategy, Foreign Minister Annalena Baerbock said that "for Germany, China remains a partner, competitor and systemic rival, but the aspect of systemic rivalry has in recent years increasingly come to the fore."
The strategy noted that "whereas China's dependencies on Europe are constantly declining, Germany's dependencies on China have taken on greater significance in recent years."
Furthermore, the strategy stated that Germany would not be deterred from doing business with self-governed Taiwan, although it does not recognize it.
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