Sunday, June 19, 2022

Emmanuel Macron loses majority

French Parliament elections: 149 projected seats for Mélenchon's NUPES 

Jun 19,2022

French President Emmanuel Macron and his allies have lost their absolute majority in the National Assembly and with it control of the reform agenda, a crushing outcome for the newly re-elected president.

Initial projections showed Mr Macron’s centrist Ensemble! alliance was set to end up with the most seats in Sunday’s election, followed by the left-wing Nupes bloc – headed by the hard left veteran Jean-Luc Melenchon.

But Mr Macron and his allies will fall well short of the absolute majority they need to control parliament. Ministers and close aides acknowledged that, saying they would have to reach out to others beyond their alliance to govern France.

Newly re-elected French President Emmanuel Macron is set to lose his party’s absolute majority in the nation’s National Assembly as the first round of exit polls are published Projections from four separate pollsters indicate France may be heading towards a hung parliament. The French President’s centrist ‘Ensemble!’ alliance will still likely retain the most seats, followed closely by the country’s left-wing...

Finance Minister Bruno Le Maire called the outcome a “democratic shock” and said they would reach out to all pro-Europeans to help govern the country.

“The rout of the presidential party is complete and there is no clear majority in sight,” Mr Melenchon told cheering supporters.

United behind him, left-wing parties were on course to triple their score from the last legislative election, in 2017. But they failed to secure the outright win Mr Melenchon had hoped for.

If confirmed, a hung parliament would open up a period of political uncertainty that would require a degree of power-sharing among parties not experienced in France in recent decades. Other possible outcomes include political paralysis and even possibly repeat elections.

Rachida Dati, from the conservative Les Republicains, called the result “a bitter failure” for Mr Macron and said he should name a new prime minister.

There is no set script in France for how things will unfold as Mr Macron and Ensemble seek to find a way forward to avoid paralysis.

“There are moderates on the benches, on the right, on the left. There are moderate Socialists and there are people on the right who, perhaps, on legislation, will be on our side,” government spokeswoman Olivia Gregoire said.

In April, Mr Macron, 44, became the first French president in two decades to win a second term. But he presides over a deeply disenchanted and divided country where support for populist parties on the right and left has surged.

His ability to pursue further reform of the euro zone’s second biggest economy will hinge on his ability to rally moderates outside of his alliance on the right and left behind his legislative agenda.

Forecasts by pollster Ifop, OpinionWay, Elabe and Ipsos showed Mr Macron’s Ensemble alliance winning 210-240 seats and Nupes securing 149-188.

The former head of the National Assembly, Richard Ferrand, and Health Minister Brigitte Bourguignon lost their seats, in two major defeats for Mr Macron’s camp.

In another significant change for French politics, Marine Le Pen’s far-right party could score a ten-fold increase of its MPs, and win as much as close to 100 seats, the initial projections showed – its biggest number on record.

The Les Republicains party and its allies could also get as much as 100, potentially making them kingmakers, as their platform is more compatible with Mr Macron’s than any other group.


FRANCE 24 English
Jun 19, 2022
Getting into the nitty gritty of the left-wing NUPES (New Popular Union) and its 149 seats, according to Ipsos-Sopra Steria estimates...
Jean-Luc Mélenchon's La France Insoumise ("France Unbowed" or LFI) is at 86 seats
Ecologists are set to take 28 seats
The Socialist Party is poised for 22 seats
And the French Communist Party 13 seats
The left had only 60 seats in the last legislature, and LFI alone only 17, so this does count as a good night for Mélenchon's side, even short of the majority and the far-leftists designs on becoming France's next prime minister.
France 24 Cole Stangler tells us more.


French elections—neoliberal Macron to lose majority
Jean-Luc Melenchon’s left wing coalition Nupes will be the main opposition in the French parliament

Campaigning for Nupes candidate Rachel Keke (centre in black top)
 (Picture: @LayanJulien on Twitter)

France’s neoliberal president Emmanuel Macron took a shattering blow in Sunday’s elections as he was projected to lose his majority in parliament by a big margin. Needing 289 seats, polling organisations expected him to win just 234.

Five years ago Macron’s party and its allies had 356 seats. The decline is a damning verdict on his failures during the pandemic, his rule for the rich and his savage assaults on the Yellow Vests. And his lack of action over the cost of living crisis. Macron’s top two lieutenants in the parliament both lost.

Jean-Luc Melenchon’s New Popular Ecological and Social Union (Nupes) was predicted to take 142 seats, and be the main opposition. Its notable victories included Rachel Keke, a hotel cleaner and leading figure in the Ibis hotel strike in Batignolles.

“We are the ones who live in deprived areas and do key jobs,” she said. “We are the ones who are held in contempt and are exploited. So let us defend ourselves in parliament.” Keke defeated Macron’s former sports minister Roxana Maracineanu in a constituency in the suburbs of Paris.

Nupes’ manifesto called for lowering the retirement age to 60 and freezing the prices of essential goods. It promised investing “massively” in renewable energy and reintroducing a wealth tax that Macron removed. Its success is a very welcome sign of the enthusiasm for a left alternative.

But it wasn’t all good news. The fascist Marine Le Pen’s National Rally party (RN) was projected to win 9o seats. That smashed its previous high of 35 seats—and that was back in the 1980s under Jean Marie Le Pen when there was a much more proportional system. The fascists are a continuing danger who have gained from Macron’s racism and Islamophobia.

It’s more urgent than ever to strengthen united front activity against them. This cannot be postponed or forgotten because Nupes did well.

But for the media to declare the fascists the “big winners” ignores the left’s gains.

Stripped of a majority in parliament, Macron will rely on his allies to the right. That will include the traditional conservatives—expected to grab 75 seats—and even Le Pen’s fascists in some parliamentary votes.

All of these figures have to be set against a turnout of just 46 percent. More than half of potential voters are so disillusioned by the system that they didn’t vote, even in a very high-profile election.

In the run-up to the vote, Macron tried to witch hunt Nupes as dangerous and anti-democratic. It wasn’t so long ago that Macron and his allies were busy embracing Melenchon’s supporters. They needed their votes to defeat Le Pen in the April presidential run-off.

Bus, as the France24 channel says, “Two months on, the ruling party has singled out the veteran leftist and his fledgling coalition as the new threat to the Republic. In the words of Macron’s former education minister Jean-Michel Blanquer, Nupes is an extreme ‘just as dangerous as Le Pen’s far right’.” This desperate slur didn’t work

Nupes is made up of five parties including Melenchon’s France Unbowed (LFI) and the Labour-type Socialist Party, the Communists and the Greens.

The combined vote for these forces a week ago was similar to 2017. But together they made a breakthrough—but at the price of involving more pro-business elements such as the Socialist Party. The French Greens are also far from radical.

To hold Nupes together, LFI dropped measures such as the establishment of a commission on police violence, a ban on redundancies in large companies and nationalisation of banks. But Nupes’ success gave a massive momentum to the left with vibrant campaigns between last week’s election and Sunday’s vote.

French politics is polarising and entering even more stormy times where the key battles will be in the streets and the workplaces. The key issue now is whether those who voted left—and those who abstained—can be mobilised to push back the bosses and the government assaults. An early test will come when Macron seeks to attack pensions.

After most of the results were in, Melenchon said, “My message tonight, once again, is a message of combat. A message to the younger generation, the one that most strongly wants to break with this world. You have a magnificent combat tool—Nupes.” But the battles against low pay, inequality, racism, fascism and for people’s rights have to be taken up outside the parliamentary institutions. Struggle from below, not electoral manoeuvres, will determine the outcome.

  
REPLAY - Mélenchon: "Tonight's result marks above all Macron's defeat" 

FRANCE 24 English
Jun 19, 2022
The result of France's lower house elections are a "totally unexpected and unseen" situation, Jean-Luc Melenchon told supporters of his left-wing NUPES alliance on Sunday night, adding that his camp had succeeded in his goal to deprive President Emmanuel Macron of a parliamentary majority.

Analysis: French left pulls off election gamble, but unity going forward not so easy

By John Irish and Layli Foroudi

Summary
Left wing alliance more than triples 2017 seats
Alliance has divisions over Europe, nuclear energy
Majority sees chance to get moderate left support


PARIS, June 19 (Reuters) - France's new left-wing bloc is set to become the largest opposition force in parliament, but staying united will present an early test as President Emmanuel Macron's majority seeks allies on the moderate left to push through his reform agenda.

Macron was on course to lose his absolute majority in the National Assembly after projections pointed to a hung parliament that would see the leftist Nupes alliance winning 175 to 200 seats, almost tripling the score of its combined parties in 2017.
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The bloc brings together the hard-left La France Insoumise (LFI), the Socialist Party, the Greens and Communists for the first time in 20 years - under the helm of the eurosceptic far-left veteran Jean-Luc Melenchon.

It campaigned to lower the retirement age from 62 to 60, raise the minimum wage and cap prices on essential products. But within the alliance there are major differences, from Europe to nuclear energy and policing, that were put aside for campaigning but which will be targeted by opponents.

"The rout of the presidential party is complete and no clear majority is in sight," Melenchon told his cheering supporters. "It is the failure of Macronism and the moral failure of those who lecture us."

Clementine Autain, one of his top lieutenants, said the results were a vindication of the left's strategy.

"This is a gathering of the forces for a social and ecological transformation on the basis of a profound change of society," she said.

Beyond the triumphalism, the question now is whether the alliance can hold. Melenchon's LFI party, which is projected to win about 90 lawmakers, slightly fewer than forecast in opinion polls, will want to lead the left in parliament.

But with the Socialists and Greens able to create their own parliamentary groups, it is not a given that they would support LFI on all issues when opposing the majority.

INTERNAL DIVIDES

Senior Macron officials were on Sunday already trying to drive a wedge through the different factions of the Nupes alliance, accusing LFI of being a party of the extremes and an unconstructive force in parliament over the last five years.

"How many times did you join the National Front in parliament?" Justice Minister Eric Dupont-Moretti asked LFI stalwart Manuel Bompard on France 2 television. "The extremes join each other."

Corinne Narassiguin from the Socialist Party, which has given France two presidents since World War Two and been a driving force for European integration, said time would tell if the alliance would survive or had just been an electoral machine.

"Like in other coalition groups in Europe, we will agree on points and have points of difference," she told Reuters. "It is an experiment, it is the first time that we’ve had a group elected as an inter-group and it is our responsibility to voters (to keep it together)."

In a sign of how the ruling majority may act in the coming days, government spokesperson Olivia Gregoire offered an olive branch to some opponents.

"On the right and left, there are moderates, Socialist moderates ... there are people who on some draft legislation they will be beside us," she told France 2. "It's an open hand to all those who want to make the country move forward."
UK government ‘inflaming tensions’ over rail dispute, says TUC

Railway staff will strike on Tuesday, Thursday and Saturday with a 24-hour walkout also planned on the London Underground


Waterloo Station in central London. Services on more than half of the UK's rail network may be suspended next week during three days of rail strikes. 
EPA

Soraya Ebrahimi
Jun 19, 2022

As strikes on the railways and London Underground from Tuesday look set to cause widespread travel disruption, union leaders have accused the UK government of “inflaming” tensions over the dispute.

There will be cancellations and heavily reduced services from Tuesday as workers stage the biggest strike in the industry for more than 30 years in a row over pay, jobs and conditions.

Members of the Rail, Maritime and Transport union (RMT) at public body Network Rail and 13 train operators will strike on Tuesday, Thursday and Saturday, with only about one in five trains running and disruption to services on days following the action.

READ MORE

The RMT and Unite are also staging a 24-hour walkout on London Underground which will cause disruption to services.

The union body TUC is calling on the government to adopt a positive role in the dispute, saying it was “inflaming tensions” with comments such as threatening to “revoke” workers’ legal rights.

The TUC said rail workers in Wales have reached agreements with operators on pay and job protections, while in Scotland there are “meaningful negotiations” taking place.

The TUC said ministers in Westminster were insisting on imposing cuts and planning to change the law so that employers can draft in agency workers in during industrial action.

“The government has the power to help end this dispute, but rather than working in good faith to find a negotiated settlement, ministers are inflaming tensions and trying to pitch worker against worker,” TUC general secretary Frances O’Grady said.

Ms O’Grady said no one takes strike action lightly but that rail staff have been left with “no other option”.

“Many rail staff who will be hit hardest — such as caterers and cleaners — are on low and average earnings. It’s insulting to ask them to take yet another real-terms pay cut when rail companies took £500 million ($611m) in profits during the pandemic.


“If these cuts go ahead, thousands of safety-critical and frontline jobs will be lost, with train services at risk, too.

“We need a better vision for the future of rail than commuters packed on unsafe trains like sardines,” she said.


Picture taken with permission from the Twitter feed of Diego Garcia Rodriguez of queues to enter security at London's Gatwick Airport on Tuesday. 
PA

“Strikes should always be the last resort, not the first, so it is hugely disappointing and premature that the RMT is going ahead with industrial action,” a Department for Transport representative.

“The government committed £16 billion — or £600 per household — to keep our railways running throughout the pandemic while ensuring not a single worker lost their job.

“The railway is still on life support, with passenger numbers 25 per cent down and anything that drives away even more of them risks killing services and jobs.


“Train travel for millions more people is now a choice, not a necessity. Strikes stop our customers choosing rail and they might never return.”
Commuters face travel disruption as London Underground goes on strike — video

Commuters face travel chaos as London Underground goes on strike

Transport Secretary Grant Shapps said the RMT had been “gunning” for industrial action for weeks and accused it of “punishing” millions of “innocent people” who will be affected by the strikes.

“Of course, it is a reality that if we can’t get these railways modernised, if we can’t get the kind of efficiency that will mean that they can work on behalf of the travelling public, then of course it is jeopardising the future of the railway itself,” he told the Sophy Ridge on Sunday programme on Sky.

A representative of the Rail Delivery Group industry body said it was aware of the cost-of-living pressures being felt by workers and their families.

“Every business wants to support their staff and the railway is no exception.

“But, as an industry we have to change our ways of working and improve productivity to help pay our own way — the alternatives of asking taxpayers to shoulder the burden or passengers to pay higher fares when they too are feeling the pinch simply isn’t fair,” the representative said.

The strikes will affect a number of events including the Glastonbury music and arts festival in western England, and London concerts by Elton John and the Rolling Stones, as well as school exams.

Updated: June 19, 2022

UPDATE 1-British minister condemns rail strikes as 'huge mistake'



Sun, June 19, 2022
By Elizabeth Piper

LONDON, June 19 (Reuters) - British transport secretary Grant Shapps has condemned planned rail strikes as a "huge mistake" that will stop people attending hospital appointments, sitting school exams or getting to work.

The action this week comes as British airports experience chaotic delays and last-minute cancellations and as many Britons also face a huge backlog at the office which processes passports.

It also highlights pressures on British households, which are experiencing the biggest cost-of-living squeeze since the 1950s, with rail workers saying they are facing cuts in the value of their pay at a time when inflation is spiralling.

Responding to criticism that the government should step in to try to force an agreement and prevent a strike, Shapps said on Sunday it was for the employers to negotiate with their workers.

"I think this is a huge mistake, unfortunately the unions ... have been gunning for this strike throughout," Shapps told Sky News. "It is disastrous, and it's no way to behave on the railway."

More than 50,000 rail workers will strike on June 21, 23 and 25 in a dispute over pay freezes and job cuts in what the Rail, Maritime and Transport Workers (RMT) union has billed the biggest industrial action in the sector in more than 30 years.

Mick Lynch, general secretary of the RMT, said his union was just looking for a pay rise that reflects the cost of living, but said train operators were making offers "nowhere near that" and he feared thousands would lose their jobs.

The main opposition Labour Party said the government should get involved in the negotiations to try to find a solution.

"This is a government that in 2019 came to power on a promise to level up," Labour's policy chief on tackling regional inequalities, Lisa Nandy, said, referring to a stated objective to reduce regional economic imbalances.

"Instead, what they have presided over is absolute chaos, chaos at the ports, chaos on the railways, chaos at airports, chaos everywhere you go, and that is because this is a government that is not doing its job." (Reporting by Elizabeth Piper; Editing by Louise Heavens and David Holmes)
Thyssenkrupp: now not a good time for hydrogen IPO

Christoph Steitz and Tom Käckenhoff
Fri, June 17, 2022

A logo of Thyssenkrupp AG is pictured at the company's headquarters in Essen


By Christoph Steitz and Tom Käckenhoff

FRANKFURT (Reuters) - Germany's Thyssenkrupp said on Friday it would not pursue an initial public offering (IPO) of its hydrogen division Nucera for now, amid a volatile market that has already delayed numerous listings.

Shares in the steel-to-submarines maker turned negative and fell as much as 2.8% on the news, first reported by Reuters.

The announcement comes as several companies across Europe, including artificial limb maker Ottobock, have pulled the plug on planned flotations, citing market turbulence in the wake of Russia's invasion of Ukraine.

Thyssenkrupp said an IPO still remained the preferred solution to grow Nucera, a 66-34 joint venture with Italy's De Nora, itself an IPO candidate.

"Considering the current stock market environment, Thyssenkrupp has decided to refrain from an IPO of Thyssenkrupp Nucera at this point in time," Thyssenkrupp said in a statement.

Thyssenkrupp had aimed to make a decision on whether to go ahead with stock market listing of Nucera, which plans and engineers electrolysers to produce hydrogen, in the first half of 2022.

It said earlier this year it was targeting proceeds of up to 600 million euros ($631 million) by selling new shares in a possible IPO of Nucera in 2022, betting on the $130 billion hydrogen sector it supplies.

"An IPO remains the preferred option to benefit from the growth prospects of the business as one of the global technology leaders for green hydrogen plant solutions," Thyssenkrupp said.

($1 = 0.9506 euros)

(Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Paul Carrel and Mark Potter)
Qantas, Airbus to invest up to $200 million to develop Australian sustainable aviation fuel industry

Jamie Freed
Sun, June 19, 2022

Airbus A350-1000 test plane arrives at Sydney Airport

DOHA (Reuters) -Qantas Airways and Airbus said on Sunday they would invest up to $200 million to accelerate the development of a sustainable aviation fuels (SAF) industry in Australia to help meet the airline's goal of lowering carbon emissions.

The agreement, announced on the sidelines of global airline industry body IATA's annual meeting in Doha, is in line with Qantas' target of using 10% SAF in its fuel mix by 2030 and comes after it placed a multi-billion dollar order for Airbus narrowbody and widebody planes last month.

The global airline industry, aiming to reach net zero emissions by 2050, is relying on SAF usage to rise from around 100 million litres (26 million gallons) a year in 2021 to at least 449 billion litres a year within three decades, a mammoth and costly undertaking.

Qantas is sourcing SAF in London and Los Angeles but not in Australia.

"The problem is there is no sustainable aviation fuel industry in Australia and we would like to buy this in scale," Qantas Chief Executive Alan Joyce told reporters. "We think the way to do that is to put our money where our mouth is."


The investment, which includes A$50 million ($35 million) of funding previously committed by Qantas, could go to a mix of start-up firms and more established operators and could include equity investments, Joyce said.

The funding will be split between Qantas and Airbus with a smaller contribution from Raytheon Technologies-owned engine maker Pratt & Whitney, he added. Qantas has ordered Pratt & Whitney engines for its new Airbus narrowbody fleet.

Airbus chief executive Guillaume Faury said the deal with Qantas was "unique" due to its recent plane order and Australia's isolated location and was not expected to be replicated with other airlines.

The SAF investment partnership will last for an initial five years with an option to extend, the companies said.

Joyce said he hoped it would encourage the Australian government to improve the policy framework and help fund the development of a local SAF industry.

He said Qantas had held promising initial talks with the new centre-left government elected last month.

($1 = 1.4430 Australian dollars)

(Reporting by Jamie Freed in Doha; Editing by William Mallard and Louise Heavens)
BUT IS IT CARBON FREE
Steel Could Soar As The World Transitions To Renewable Energy

Editor OilPrice.com
Sat, June 18, 2022

Steel has a vital role in boosting the UK’s energy infrastructure and help power the transition to a greener economy, argued Severfield chief executive Alan Dunsmore.

The steel boss told City A.M. that the main opportunity in a market defined by challenging headwinds such as inflation and supply chain disruption was in the growth of domestic infrastructure.

He said: “I think the main opportunity is around infrastructure growth and investment, and the transition to green economy, and the investment that will drive. There are a lot of options there in terms of power and infrastructure – particularly nuclear power.”

Severfield is the UK’s largest steel contractor, trading on the London Stock Exchange, and is hoping to benefit from Prime Minister Boris Johnson’s ‘big new bet’ on nuclear.

The government is pushing for the greenlight of eight new reactors by the end of the decade – with Sizewell C receiving its backing for public funds yesterday as part of the government’s new funding model.

Earlier this year, Downing Street unveiled its supply security strategy – targeting a ramp-up in nuclear power generation from 7GW to 24GW over the next three decades – alongside a wider expansion in domestic energy production following Russia’s invasion of Ukraine.

Steel is a key component in the construction of nuclear power plants, and is also used in the production of wind turbines, solar panels, and hydrogen power alongside the North Sea oil and gas exploration and drilling.

Dunsmore concluded: “The green agenda could drive the long-term sustainability and viability of steel, as the product is endlessly recyclable.”

Commenting on current challenges in the industry, he also said the sector has been used to headwinds to navigate over the past five to six years since the UK voted to leave the European Union.

Severfield has sought to reduce its exposure to challenges over the past eight years by expanding its options for producing both raw steel and constructed steel – to ensure it is not overly dependent on anyone supplier.

He explained: “We’ve spent a lot of time just broadening and diversifying our supply options and making sure that we can react to whatever happens,”

Severfield revels in record order book as demand rebounds from pandemic

Dunsmore was speaking with City A.M. following the release of Severfield’s full-year results, which revealed strong revenues and profits powered by a record order book.

Revenues had risen 11 per cent to £403.6m, while underlying profit had also increased 11 per cent to £27.1m, with the company raising its total dividend seven per cent to 3.1p per share.

The firm has navigated the choppy waters of the pandemic, the energy crisis, and Russia’s invasion of Ukraine thanks to a rebounding appetite in construction – enjoying a record UK and Europe order book totaling £486m – up from £393m in November.

Its orders includes a film studio, an industrial centre and the upcoming new stadium for Everton Football Club.


The company has kept its outlook of £31m in pre-tax profits next year unchanged, with £397m of its hefty order book deliverable in the next 12 months.

Severfield’s expansion into India has also gathered pace, with its order book growing to £158m, reflecting strong underlying demand for structural steel in India

The company has also revealed the successful completion of a new £50m revolving credit facility maturing in December 2026.

Its performance is a bright spot for a troubled industry, with steel rival GFG Alliance’s legal sojourn suffering another setback last week after Sanjeev Gupta failed in his last-ditch attempt to get a winding-up order thrown out after Credit Suisse.

The Swiss investment group started insolvency hearings against the group’s companies last month.

This follows the collapse of Greensill Capital last year – one of GFG Alliance’s biggest backers.

Meanwhile, Business Secretary Kwasi Kwarteng has also been weighing up the possibility of cutting the steel industry out of network charges to help ease the pain of spiraling energy prices.

Harry Philips, investment analyst Peel Hunt, has maintained the investment group’s ‘Buy’ stance, with a target price of 100p.

He said: “Severfield has an evolving strategy that will enable it to be more readily aligned with growth – it has been already but it will become clearer to see; it has developed a good track record with infill acquisitions so more would be a plus; and India is on the cusp of making a significant step forward on the profit line that can accelerate value or partial realization – the latter aspect is simply not reflected in the share price. “

Shares are up to five percent in the company on the FTSE AIM-All Share following today’s results, with the firm trading at 63p per share.
Credit Suisse pays up to redeem A1 bond, sends 'message to the market'

Fri, June 17, 2022,

 Logo of Credit Suisse is seen in Zurich

LONDON (Reuters) - Scandal-hit lender Credit Suisse has opted to tap investors for a pricier dollar bond in order to repay a $1.5 billion capital-boosting issue, a measure investors say was necessary to avoid raising concern over its ability to pay debt.

Credit Suisse's bond issue raised $1.65 billion at a 9.75% interest rate, according to an IFR pricing sheet on Friday. A source familiar with the matter confirmed the details to Reuters.

The bond sold this week, like the one it refinances, is a so-called Additional Tier 1 issue - a type of contingent convertible (CoCo) bond. Deemed to be the most risky debt banks can issue, CoCos are designed to be perpetual in nature, though banks can repay them after a specified period.

It is standard practice for banks to redeem or "call" AT1 instruments at the first opportunity but past exceptions -- notably Deutsche Bank in 2020 - imply Credit Suisse could have done the same, instead of opting to issue another bond at a higher price.

Its new bond pays 9.75%, considerably above the 7.125% interest rate on the previous high-trigger convertible issue.

Some investors said, however, that choosing not to redeem the bond risked raising concerns that the bank might be unable to repay debt as it weathers a turbulent period.

 "The position that CS has been in the headlines over the last year or 18 months, they probably couldn't afford this to go wrong," Dillon Lancaster, portfolio manager at TwentyFour Asset Management, said. "I think the first decision was to do it and I think that's a good one made by management in terms of being bondholder-friendly. And the second one was having the ability to do it, to get the book for the new deal to (refinance) the old deal."

Lancaster estimated that had the original bond not been called, its coupon would have reset at around 8.55%, meaning the new deal cost Credit Suisse roughly 120 basis points more than sticking with the old one.

Devised in the wake of the 2008 financial crisis, AT1 securities aim to bolster a bank's capital buffers and aim to ensure that investors, rather than taxpayers, would be on the hook if a bank ran into financial difficulties.

But while a bank can opt not to call the bond, Deutsche Bank's 2020 decision not to redeem its $1.25 billion in AT1 bond sparked market turmoil.

It followed a similar move in 2019 by Santander.

Filippo Alloatti, head of financials at Federated Hermes Limited, welcomed the decision to redeem the debt calling, saying "it helps Credit Suisse credit spreads to be perceived as a good corporate citizen".

Credit Suisse shares closed 2% higher on Friday following the news, while rival UBS' shares were down.

Credit Suisse also said that redeeming the outstanding instruments helped it to simplify its AT1 capital portfolio. All its AT1 bonds will now be structured to be written off should capital fall below a certain threshold, as opposed to being converted into equity, as was case with the bond now being redeemed.

Some argue too that borrowing costs are likely to increase in coming months as central banks raise interest rates.

Finally, for the bank battered by a string of scandals and profit hits, (the new issuance) was an opportunity to send "a message to the market," one person familiar with the situation told Reuters.

"That Credit Suisse can raise an AT1 for size...and get investors buying Credit Suisse paper."

(Reporting by Brenna Hughes Neghaiwi and Oliver Hirt in Zurich; additional reporting by Yoruk Bahceli in London), editing by Sujata Rao and Louise Heavens)
Bloomberg Businessweek: Ethereum mining is about to disappear, miners are not happy

CoinYuppie • 2022-06-17 10:23 • Ethereum News

The shift from “Proof of Work” to “Proof of Stake” will drastically reduce power consumption and allow some expensive technology to find new uses.



Mikel-Angelo Chalfoun, an ethereum miner, stores his graphics cards in a warehouse in Dubai.

The Ethereum mining community is a diverse group, both geographically and demographically. A 28-year-old translator in Ukraine runs some computing hardware on his balcony to earn cryptocurrency so he can buy clothes and other necessities. In Argentina, a retiree used her gaming computer to double her monthly pension. A college student in Canada has dug up enough money to buy a BMW motorcycle and a modified 2006 Dodge Charger SRT – and pay for gas every month.

Even many outside the blockchain world know that the collapse of the cryptocurrency market has made the past few months quite painful for anyone whose financial situation is tied to a currency. The price of ethereum is down about 70% this year as of June 15. At the same time, a little-known factor (a tectonic shift known as the Ethereum “merger”) will end Ethereum mining entirely, cutting off the income of as many as 1 million people. “It would be a huge economic blow, almost completely depriving the original miners of a good source of income,” the Ukrainian translator said. (He asked to remain anonymous for fear of being robbed.)

Bitcoin and Ethereum, the two largest cryptocurrency networks by market capitalization, both use a procedure known as “proof of work” to record transactions, in which so-called miners use computer resources to solve difficult mathematical problems, converting transactions Blocks are added to the public ledger. Miners receive payment in cryptocurrency as a reward. Bitcoin mining, which usually involves specialized equipment, has been industrialized; as mining has moved to data centers, the participation of ordinary people has largely been eliminated. But Ethereum mining relies on the kind of graphics card found in a typical gaming computer, and many ordinary people can still do it.

Proof-of-work is just a competition to make a computer work hard, which means it uses a lot of energy. The environmental damage it causes is a major criticism of cryptocurrencies by environmentalists. Since the inception of Ethereum, its developers have been preparing to move to an alternative model known as proof-of-stake. Under this system, people would reserve or “stake” a certain amount of ether, the cryptocurrency of the ethereum blockchain, to win rewards for running software that correctly batches transactions into new blocks and checks The work of other validators. Proof of stake can reduce the power consumption of the Ethereum network by about 99%. It would also put miners out of work, which is a major blow given the capital investment to build the business. According to Bitpro Consulting, ethereum miners have already spent about $15 billion on graphics processing units (GPUs), not including ancillary costs such as wiring and transformers.

Prices of Selected Used Graphics Processing Units for Sale on eBay

Average for the previous week??



The ethereum merger is expected to take place in August, although no official date has been given. It has been pushed back many times, and many miners hope this will happen again. “I don’t think they’ll be able to get it done anytime soon,” said Aydin Kilic, chief operating officer of ethereum industrial miner Hive. But others associated with ethereum see a merger as inevitable. “The odds of not happening this year are very low (from 1% to 10%),” said Tim Becco, a computer scientist who coordinates ethereum developers. What I’d like to avoid is someone buys a GPU for mining today, but merges it in Happening this summer, it will make it almost worthless.”

Despite this, miners are actually expanding their operations. GPU prices have more than halved since the start of the year, leading to a surge in purchases. According to data from tracker Etherscan, Ethereum’s hashrate, a measure of the mining power that powers the network, has nearly doubled in the last year. Even with the current depressed cryptocurrency prices, mining Ethereum is more profitable than backing any other major coin, including Bitcoin. “I guess people are trying to get as much as possible before it’s over,” said Slava Karpenko, chief technology officer at 2Miners. The organization helps small miners pool their resources to support Ethereum. The group’s active user count has climbed 70 percent since November, to about 120,000, he said.

However, recovering costs has become more difficult due to the fall in the price of ether. Mike Lam, a 38-year-old engineer from Ontario who has been mining for a year, only made about $5,000 worth of cryptocurrency on his initial $30,000 investment in hardware; he also paid about $650 each. monthly electricity bill. Aaron Petzold, 24, a recent college student who mines ether at his parents’ house in Wisconsin, said he has four months to recoup his investment of more than $28,000. “I want to keep mining until it’s over,” he said. “It’s a big uncertainty. No one really knows what’s going to happen. There’s a lot of people who think I’m obsessed.”



The ethereum merger will likely settle after August.

Miners don’t get nothing. After the merger, their mining rigs will remain powerful computing devices that can be used elsewhere, and some are planning to mine other coins or find other uses for those rigs. After the merger, Petzold is considering using his device as a piece of hardware for digital video production, primarily responsible for rendering, which requires a lot of computing resources. “There are other uses for these cards,” he said. “You can turn it into a render farm, and you can do different machine learning options. They’re just not going to be as profitable as mining.”

Canadian mining pool operator Flexpool is looking to add more tokens for its members to mine and plans to deploy its developers to program other cryptocurrency projects, said a director who asked not to be named for fear of being robbed: “It’s like a company Typewriter companies. When nobody buys typewriters anymore, so you have to use the capital you make on typewriters to move to other businesses.”

Others, like Ivan Zhang, 35, and Karol Przybytkowski, 36, plan to sell their stable of graphics cards and use their facilities in upstate New York to host other miners’ gear for a fee. But GPU prices are expected to drop further as many ethereum miners are likely to rush to sell immediately after the merger. Bitpro plans to stop buying graphics cards within a few weeks, and its CEO Mark D’Aria said: “My view is that no matter how much we pay today, we’re going to make a lot less after this event. We’re just going to sit there and watch Let that happen and pick up the pieces.”

Some miners hope to do better by moving to mining other GPU-requiring coins like Ethereum Classic or Ravencoin. The more miners flocking to any coin, the harder it will be to make a profit. But cryptocurrency breeds optimists, and miners are building for what their business will be a reason to survive. Mikel-Angelo Chalfoun, 30, pays $9,000 a year for a warehouse in Dubai to house and power his 76 graphics cards. He said he would be able to compete with miners at a higher cost. “No matter how cheap crypto gets, no matter how harsh crypto winter gets, I’m fine, I’ll never mine at a loss,” he said.

Other miners just feel betrayed. Canadian engineer Lin said: “They need miners until they merge! It’s a little weird. Ethereum needs us miners until they deprecate us.” (He runs 50 graphics cards in his basement)


Posted by: CoinYuppie,Reprinted with attribution 
WILD WILD WEST
FTX Agrees to Acquire Canadian Trading Platform Bitvo as It Eyes Regional Expansion


Oliver Knight
Fri, June 17, 2022


Cryptocurrency exchange FTX has entered an agreement to acquire Alberta-based trading platform Bitvo, in a deal that will be completed in the third quarter of 2022 subject to regulatory approval, according to a press release issued on Friday.

Bitvo, founded in 2018, is registered as a restricted dealer under the securities laws of all provinces and territories in Canada. It is also registered with FINTRAC, Canada's financial intelligence agency, as a money services business in the virtual asset service provider category.


“We are delighted to enter the Canadian marketplace and continue to expand FTX’s global reach," said FTX CEO Sam Bankman-Fried in a statement. "Our expansion into Canada is another step in proactively working with cryptocurrency regulators in different geographies across the globe.”

The Bitvo team is expected to be integrated with FTX's global workforce following the acquisition, with responsibilities across the Canadian market.

Bitvo CEO Pamela Draper added that "Canada has shown a growing interest in digital asset trading, and we’re thrilled to help provide entry into one of the leading regulated crypto asset trading platforms in the world to the Canadian cryptocurrency community."

Last June, rival exchange Binance pulled out of Ontario after several trading platforms failed to comply with the province's crypto regulations.

In October, Canada listed the Purpose Bitcoin ETF, which is billed as the world's first spot bitcoin ETF. It currently has $1 billion in assets under management.

Retail Traders Who Drove 

Meme Frenzy Bail Out in

Bear Market


Vildana Hajric and Peyton Fort

Fri, June 17, 2022

(Bloomberg) -- Stock traders who whipped up the meme craze that took Wall Street by storm last year are furiously rushing to the exits.

Roughly 50% of single-stock retail positions in the Nasdaq 100 and a quarter of those in the S&P 500 that had been accumulated since January 2019 have been sold, according to data from Goldman Sachs Group Inc. In another sign their exuberance has faded, call-option volumes have reversed about 70% of their increases from the start of 2019 to November 2021, when tech stocks and Bitcoin peaked.

“While historically retail investors have bought the dip, this time they haven’t,” wrote John Marshall, head of derivatives research at Goldman Sachs.

Wall Street had been obsessed with how at-home traders were behaving during the pandemic when it came to the market. The boredom-markets-hypothesis -- which postulated that many of those were stuck at home with little to do turned to stocks to fill their time and satisfy their boredom -- became just about settled science. Stocks only go up, the saying went at the time, with indexes notching impressive returns even as the pandemic raged.

Hordes of day traders flooded social-media forums like Reddit and Twitter and fed each other information and trading tips. Their collective efforts famously pushed up shares of GameStop Corp. and AMC Entertainment Holdings Inc., among others, dealing a blow to big-name short sellers who had bet against those stocks.

But the tides have turned and 2022 has offered only rough trading and much gut-wrenching volatility. The gumption among the retail crowd to buy the dip has come to a test, with the strategy not faring as well in a market that’s seen the S&P 500 lose more than 20% and the Nasdaq 100 drop 30% this year. In fact, a retail-investor behavior measure by TD Ameritrade shows they have been cutting exposure to equities all year.

“The way that they’re likely going to be trading going forward is likely selling dips as they try to protect any gains that they may have or reduce further losses,” said Eric Johnston, head of equity derivatives and cross asset at Cantor Fitzgerald. “We can no longer count on the individual investor to be a backstop for this market.”

All manner of investments have lost value in 2022. Among the retail crowd, tech and biotech have been heavily sold, according to Goldman. Meanwhile, a basket of retail-favored stocks tracked by the bank has lost more than 40% year to date, and another made up of companies most frequently mentioned on social-media forums is down roughly 50%. Crypto, another individual-investor favorite, has also been stuck in the gutter.

A key concern for economists, now that the Federal Reserve is working on cooling the economy and inflation, is how the consumer will bear it out. And while a debate rages over the central bank’s ability to engineer a softish landing or over-correct into a recession, even a mild one, consumers have already shown some signs of pulling back. Data this week showed retail sales in May unexpectedly declined for the first time in five months.

Charles Schwab surveyed over 1,000 of its retail clients in April and found that 57% of respondents have a bearish outlook on the U.S. stock market for the second quarter of 2022, an increase of 29% from the same time last year. The primary driver of the negative outlook is the higher cost of living, followed by geopolitical concerns, according to Schwab.

“Consumers are pulling back,” said Chris Gaffney, president of world markets at TIAA Bank. “We’re seeing most investors sit this out, which is probably smart, sitting out the volatility.”

Still, Goldman says retail investors are continuing to put money toward exchange-traded funds, especially and dividend-focused ones, which have seen more than $30 billion of inflows this year.

“There has been a regime shift from the old FAANG megatech names to more defensive, income plays,” said Jane Edmondson, CEO and founder of EQM Capital.

ONE OF THOSE MEME STONKS

AMC shareholders vote against 

CEO Adam Aron's $19 million 

pay package

2021 Milken Insitute Global Conference

(Reuters) - Shareholders of AMC Entertainment Holdings Inc voted against its proposed executive compensation including that of top boss Adam Aron at the company's annual shareholder meeting, the theater chain said on Friday.

The vote at the meeting on Thursday was advisory, which means the company is not obligated to make changes to the compensation plan, it said in a regulatory filing 

https://www.sec.gov/ix?doc=/Archives/edgar/data/1411579/000155837022010100/amc-20220616x8k.htm

In 2021, Aron collected a total of $18.9 million in remuneration, down by about 10% from a year earlier, according to a filing

 https://www.sec.gov/Archives/edgar/data/1411579/000110465922052849/tm223267-1_def14a.htm#tECPE

Aron's pay last year included about $11.4 million in stock awards and his base salary rose about 32% to $1.45 million.

AMC said in April that the CEO and the company's finance chief were given larger base salary hikes "in recognition of their extraordinary efforts to ensure the Company's survival" during the COVID-19 pandemic.

Proxy advisers Institutional Shareholder Services (ISS) and Glass Lewis recommended that shareholders vote against the compensation plan, according to a report by Bloomberg News.

ISS and Glass Lewis did not immediately respond to Reuters' requests for comment.

The company's shareholders also voted to elect all the board nominees, including Aron.

After becoming one of the biggest victims of the pandemic, AMC is seeing a revival in business, driven by a steady stream of new releases such as "Doctor Strange and the Multiversity of Madness" and "Top Gun: Maverick"

Wells Fargo economist likens crypto collapse to the dot-com bust


Mark Vitner, senior economist for Wells Fargo, sees similarities between today's cryptocurrency collapse and the dot-com bust of more than 20 years ago.


By Mark Calvey – Senior Reporter, San Francisco Business Times
Jun 17, 2022


The collapse in bitcoin and other cryptocurrencies is raising the specter of a replay of the dot-com bust of more than two decades ago. That was an era of widespread pain, which could be playing out again.

As crypto lenders, hedge funds and individual investors face falling prices and margin calls, the pain could be felt in other parts of the financial universe, including the broader stock and real estate markets.


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“I liken what we’re seeing in crypto to both the dot-com crash and to an economic term called Gresham’s Law that says bad money chases out the good,” Mark Vitner, senior economist at Wells Fargo (NYSE: WFC), told me in a wide-ranging interview Friday morning.

“If you borrowed money to invest in crypto, or you borrowed money because you thought you were a lot richer than you were because crypto had appreciated, then you may be in a position where you have to sell something good to pay for something that now is bad,” Vitner said. “All the way up, people borrow against their best assets, so they tend to take on more and more risk.”

Crypto enthusiasts like to consider bitcoin to be a countercyclical store of value, much like gold. But Vitner isn’t buying it.

“I’m afraid that when it comes to crypto, we’re probably gonna see some carryover into the real estate market,” Vitner said. “We’re probably seeing some carryover to the stock market.”

It’s been an ugly week for crypto. Bitcoin and other cryptocurrencies have plunged, triggering margin calls. Some crypto "coins" have become essentially worthless. Celsius Network LLC, a large crypto lending platform, told customers it was pausing withdrawals, swaps and transfers due to extreme market conditions. Coinbase, once based in San Francisco before embracing a no-HQ strategy, will lay off 18% of its workforce, or about 1,100 workers.

On Friday, crypto hedge fund Three Arrows Capital hired advisers to consider its options after suffering heavy losses, the Wall Street Journal reported. The same day, Hong Kong-based crypto lender Babel Finance said it was suspending redemptions for all of its products, citing “unusual liquidity pressures.”

All that doesn’t bode well for crypto’s outlook, but it does provide more fodder for bitcoin’s critics.

"Currency has three purposes: to facilitate transactions, a store of value and a speculative component,” Vitner said. “Really, the only thing that bitcoin fulfills out of those three is the speculative component.

“Gold is probably a better store of value. It’s boring, but that’s what a store of value is,” Vitner added.

“I don’t know how much of a threat it is to the economy, but the parallels between crypto and the dot-com bust are kind of eerie,” Vitner said, pointing to the millions of dollars that dot-com startups paid in 2000 for Super Bowl ads, a move several crypto companies made this year.

In the dot-com bust that began after the stock market peaked in March 2000, dozens of startups met their demise. After the bust, no one wanted to be called a dot-com.

“I think the term 'cryptocurrency' will be retired," Vitner said.

Today’s speculation has been fueled in part by low interest rates that forced many investors to take on greater risk to achieve satisfactory returns. Those low rates are now just a memory as today’s startups in crypto, fintech and other sectors reconsider their spending.

In the wake of the dot-com bust, Bay Area venture capitalist John Doerr said, “Money that is priced irrationally, will be spent irrationally.”

Longtime Bay Area economist Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at U.C. Berkeley’s Haas School of Business, doesn’t share Vitner’s concern that crypto's collapse will spill into the real estate market. But asked whether crypto is a replay of the dot-com era, Rosen said: “There’s echoes of it. Cryptocurrency has the same feel to me personally.

“I thought it was not a sustainable boom,” Rosen said. "Cryptocurrency, honestly, felt like a Ponzi scheme to me. There is no inherent value in it whatsoever."


Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley


SAN FRANCISCO BUSINESS TIMES


Federal Reserve Board: Recent Market Turmoil Shows ‘Structural Fragilities’ of Crypto


Amitoj Singh 

Fri, June 17, 2022

Drew Angerer

The Federal Reserve Board has released its twice-yearly monetary policy report, noting that "recent strains experienced in markets for stablecoins…and other digital assets have highlighted the structural fragilities in that rapidly growing sector."

  • The report is a preview of Fed Chair Jerome Powell's testimony in Congress next week. Powell is expected to outline the Fed's plans to combat inflation. This week, Powell announced a 75-basis point rise in short-term interest rates, the largest increase in 28 years.

  • The report, which is submitted to the President of the Senate and the Speaker of the House of Representatives, elaborated on how "generally, stablecoins that are not backed by safe and sufficiently liquid assets and are not subject to appropriate regulatory standards create risks to investors and potentially to the financial system, including susceptibility to potentially destabilizing runs."

  • The TerraUSD stablecoin collapsed in dramatic fashion last month, functionally losing all of its value. The report pointed to the "concentrated nature" of the stablecoin sector in which Tether, USD Coin and Binance USD constituted more than 80 percent of the total market value, growing rapidly over the past year to more than $180 billion in March 2022.

  • According to the report, "these vulnerabilities may be exacerbated by a lack of transparency regarding the riskiness and liquidity of assets backing stablecoins."

  • The report added that the President’s Working Group on Financial Markets, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency have all made recommendations to address prudential risks posed by stablecoins.