Opinion

Trump’s coup continues. It will soon enter its fourth phase


Robert Reich
Sun, 20 August 2023 

Photograph: José Luis Magaña/AP

Trump’s attempted coup against the US continues. We are now in phase three.

Phase one was his refusal to concede the loss of the 2020 election and his big lie that the election was “stolen” from him, without any basis in fact.

Related: Trump’s indictment can’t solve the real threat: our undemocratic electoral system | Lawrence Douglas


Trump’s actions in phase one were not illegal, but they were immoral. They violated the norms that every president before Trump had dutifully followed.

Phase two was his plot to overturn the result of the 2020 election.

Phase two was hatched even before election day. On 31 October 2020, Trump’s confidant Steve Bannon told associates that Trump planned to declare that he won and claim Joe Biden’s expected victory fraudulent. Audio footage recently available shows that two days before the election, Trump’s lieutenant Roger Stone was already planning for alternative slates of electors.

Then came Trump’s efforts to strong-arm election officials in swing states to alter votes, persuade the vice-president Mike Pence to reject the certification of electors, get the justice department to find fraud in the election process, come up with slates of fake electors, persuade Republican members of Congress to reject the certification, defame and intimidate poll workers and invite supporters to Washington on the day of the certification – which led inexorably to the violent attack on the US Capitol on 6 January 2021.

Phase two was illegal. It violated both statutory laws and the US constitution. Trump is only now starting to be held accountable for these violations, in federal court in Washington and in state court in Georgia.

Phase three is his current attempt to discredit and undermine the criminal justice system that is seeking to hold him accountable for phase two.

Trump is smearing presiding judges, excoriating prosecutors and harassing and intimidating potential witnesses and jurors.

He’s telling another big lie: that prosecutors, grand juries, judges, potential jurors and witnesses who are prepared to try him are corrupt and partisan – engaged in a plot to prevent him from being re-elected. Like his original big lie, this one has no basis in fact.

Trump’s efforts in phase three are illegal. By publicly threatening people who are or will soon be participating in his trials, he is violating the explicit terms of his release pending trial, which prohibited him from engaging in harassment or intimidation.

In seeking to silence or intimidate judges, prosecutors, potential jurors and witnesses, Trump is attempting to obstruct justice.

Whether Trump is held accountable for phase three of his attempted coup will be up to the judges and prosecutors now engaged in trying to hold him accountable for phase two.

Which brings us to what is likely to be phase four of his attempted coup – his campaign for re-election.

As his trials approach in the months ahead, Trump is likely to escalate his lies that the election system and the criminal justice system are both rigged against him, and therefore, against his supporters.

It is too early to know what additional illegal or unconstitutional means he will employ in phase four, but there is no reason to believe Trump will treat the upcoming election any more respectfully than he treated the 2020 election or has treated efforts to hold him accountable for what he did then.

Notwithstanding Trump’s ongoing attempted coup, the most recent New York Times/Siena poll shows Trump in a dead heat with Biden for the presidency. Last week’s Quinnipiac poll also shows Trump and Biden in a virtual tie.

Polls are fallible, of course, and the election is 15 months away. But the closeness of the race should be of concern, especially given that Trump has now been indicted for seeking to overturn the 2020 election.

Trump’s attempted coup continues. Since before the 2020 election, he has been engaged in a concerted attempt to undermine the institutions of the US government.

Everyone who cares about American democracy should be prepared for phase four.

Robert Reich, a former US secretary of labor, is professor of public policy at the University of California, Berkeley, and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com

Fed-up women players call out Rugby Australia 'inequality'

AFP
Sun, 20 August 2023 

The Australian women's rugby team are fed-up with inquality in the game (Saeed KHAN)

Australia's women's rugby team have slammed Rugby Australia over inequality and lack of investment in the game, highlighting the different treatment afforded to the men's team, the Wallabies.

In a coordinated move, almost every current women's Test player posted the same statement on social media late Sunday demanding that the governing body address their concerns.

Their anger appears to have been triggered by wives and girlfriends of Wallabies players being flown to Sydney to "say goodbye" to the men's team last week as they departed for the World Cup in France.

"You told us flying anything beyond economy was too costly. Then you flew the Wallabies business class on a trip shorter than ours," they said.

"You continually say we don't have enough resources and yet we all saw the World Cup send off for the Wallabies."

No expense has been spared for Eddie Jones's under-performing men's team ahead of the World Cup, with training camps and a trip to northern Australia before their departure.

The women's team, the Wallaroos, are employed part-time and also took exception at the number of assistants given to Jones, with the former England coach accumulating an 11-strong backroom team.

They also criticised Rugby Australia's decision this year to recruit rugby league star Joseph Suaalii on reported Aus$5 million (US$3.2 million) contract.

"You told us full-time contracts were in the pipeline, that there wasn't enough money to keep the men in the game, let alone us. Then you paid $5 million for an NRL player," they said.

"You said our program would go professional, and our coach would be full-time. How many coaches has Eddie taken to the World Cup?

"We've seen the impact that women's sport has had on the Australian sporting landscape, thanks to the @matildas," they added, referring to the groundswell of support for the Australian football team at the just-completed Women's World Cup.

"It's time for the chairman, board, and CEO to prioritise the future of Australian women's rugby and allocate adequate resources. It's time to acknowledge that we are not promoted equally, even on a free platform.

"The future of our games hangs in the balance. It's your move, Rugby Australia."

Rugby Australia had no immediate comment.

But in February, Rugby Australia announced it would begin contracting Wallaroos players on a part-time basis in the first step of what it said was a staged increase in investment over the next five years.

mp/arb/dh

Israeli embassy officials attempted to influence UK court cases, documents suggest


Haroon Siddique Legal affairs correspondent
Sun, 20 August 2023 

Photograph: Martin Pope/Getty Images

Israeli embassy officials in London attempted to get the attorney general’s office to intervene in UK court cases relating to the prosecution of protesters, documents seen by the Guardian suggest.

The papers, obtained through a freedom of information (FoI) request by Palestine Action, indicate that embassy officials pressed for the director general of the attorney general’s office (AGO), Douglas Wilson, to interfere into cases related to protests on UK soil.

Although the documents are heavily redacted and so do not show the specifics of what the Israeli officials requested, an email sent by Wilson to embassy representatives after a meeting states: “As we noted … the CPS [Crown Prosecution Service] makes its prosecution decisions and manages its casework independently. The law officers are unable to intervene on an individual case or comment on issues related to active proceedings.”

The meeting’s minutes similarly refer to Wilson “noting the operational independence of the CPS and the sensitivities of engaging with them on individual cases”.

Wilson’s email, from May last year, also informed the officials about royal assent of the controversial Police, Crime, Courts and Sentencing Act, which introduced onerous restrictions on protest, and the attorney general’s referral of the Colston statue protest case to the court of appeal. The referral led to judges deciding that protesters accused of “significant” criminal damage could not rely on human rights protections when on trial, further restricting the right to protest.

Responding to the FoI request, the AGO justified the redactions, saying disclosure “would be likely to prejudice the UK’s relations with Israel”.

Palestine Action is an activist group that primarily targets the UK factories of Israeli weapons manufacturer Elbit Systems.

After the Colston court of appeal decision, Palestine Action activists have, like environmental protesters, been convicted in cases similar to those they had been acquitted for in the past with human rights defences.

Palestine Action’s lawyer, Lydia Dagostino, the director of Kellys solicitors, said: “The disclosure raises a number of questions, not least whether this meeting was about the direct action group Palestine Action. There clearly needs to be further investigations as to the extent to which there’s been any attempt by any representatives from the Israeli embassy to influence cases involving activists.”

In February this year, there was correspondence between embassy officials and Wilson about private arrests in the UK for alleged war crimes. Again, the details of the Israeli request were redacted, but in the past British courts have issued warrants for high-ranking Israeli officials, including Tzipi Livni, who was issued with a warrant in 2009.

In response, Wilson explained how the procedures around issuing of private arrest warrants have been tightened, with the director of public prosecutions’ consent now required. He also advised that it was possible to apply to the Foreign, Commonwealth and Development Office for “special mission immunity”, a rarely used status, previously granted to Livni, which confers immunity from prosecution for “a temporary mission, representing a state”.

Amid large public protests, the governing Israeli coalition – the most anti-Arab in the country’s history – last month passed a law that limited the power of its judiciary to overturn laws. It is believed to have been – at least partly – motivated by a desire to shield the prime minister, Benjamin Netanyahu, from corruption charges.

An Israeli embassy spokesperson said it respected the independence of the British judicial system and “under no circumstances would interfere in UK legal proceedings”. They added: “As part of its ongoing work, the embassy of Israel raises awareness on severe attacks against entities related to Israel.

“Furthermore, it is the duty of the embassies of Israel around the world, including in the UK, to care for and provide assistance to Israelis wherever they are.”

UK
Menstruation isn't just a women's issue, say Lib Dems


Dominic Penna
Sun, 20 August 2023 

Sir Ed Davey's party says there are not enough free period products in schools - Jamie Lorriman

Menstruation is “not just a women’s issue”, Liberal Democrat activists have said in a motion chosen to be debated at their party conference next month.

Sir Ed Davey’s party will vote on a policy proposal that insists period poverty is an issue that affects “some trans and non-binary people” in addition to biological women.

An agenda published by the Liberal Democrats for their annual gathering in Bournemouth includes a motion on period poverty which is to be debated on Sept 23.

The document states: “Conference notes that… menstruation is not just a women’s issue, and also affects some trans and non-binary people.

“Conference believes that period products are a human right, not a luxury; nobody should experience period poverty; England’s current free period product provision is not fit for purpose; [and] it is in everyone’s interests for stigma around periods to be addressed.”

The motion proceeds to call on the Government to introduce a right for people to access a choice of free period products, place a duty on councils and schools to make period products freely available and introduce “comprehensive education on periods… to ensure an appreciation for the lived experience of menstruation”.

Motion is to call on Government to educate for all 'lived experiences of menstruation' - Getty /Jeff J Mitchell

A motion was tabled at the party’s spring conference in March which would have amended the party’s constitution to remove all references to self-ID and non-binary people.

However, this was ignored by grassroots activists who moved to ignore the motion entirely, with some members going as far as to urge their fellow members who hold gender-critical views to leave the party.

In a webpage on the Liberal Democrat website entitled ‘transphobia’, the party reiterates its support for people being able to self-identify as their preferred gender without a medical certificate.

“Trans people may describe themselves using one or more of a variety of terms. Trans people are not required to have undergone any medical or social transition to be considered trans,” it says.


Sir Ed, the Liberal Democrat leader, claimed during an interview in May that a woman can “quite clearly” have a penis, as he suggested any debate around transgender issues had already been settled by the Equality Act.

“The vast majority of people whose biological sex is a woman at birth, they feel they’re women,” Sir Ed told LBC’s Nick Ferrari.

“They feel their gender [is] the same at birth. But there’s this very small number of people who don’t feel like that, and the law has recognised them for over 20 years now.”

Earlier this year, the Labour-run Welsh Government was criticised after it failed to mention women once in the official announcement of its period poverty plan.

Mentions of women included in the 19-page plan were almost always caveated as “women, girls and people who menstruate” or “those who menstruate”.

The Liberal Democrats were contacted for comment.

Nude 'Tour de France' banned for public indecency on several of its stages


Unknown
Sun, 20 August 2023

Participants from the World Naked Bike Ride near Lyon in France

 - AFP/Olivier Chassignole

Seven stages of the so-called “nude Tour de France” were banned for public indecency in restrictions which climate activists said was “state intimidation”.

The cyclists are taking part in the World Naked Bike Ride, an annual event launched in 2004 in London and which last year crossed the capital without raising eyebrows. However, since the tour kicked off in Nantes, western France, on Aug 8, local authorities have prohibited seven stages by decree.

Those blocking the tour have cited the penal code that “equates nudism to sexual exhibitionism on the public causeway,” said François Feunteun, president of Le Mouvement Naturiste (The Nudism Movement), which is organising the ride. Public indecency is punishable by up to a year in prison and a €15,000 (£12,800) fine in France.

Undeterred participants

Undeterred, the bikers sought to press ahead with their tour to raise awareness for climate change, biodiversity and nudism. But at the start of one stage in Millau near Clermont-Ferrand, central France, police barred the nude peloton and arrested Mr Feunteun, 59.

“In France, when you want to talk about the serious risks the planet is facing, you get treated like an ecoterrorist and sexual delinquent,” he said.

Mr Feunteun criticised his arrest as a form of “state intimidation” and a blatant attempt to dissuade the 15 or so participants from continuing.

“In London, they brought together 5,000 people without any problem. And it’s been the same in all the democratic countries of the world,” he told Le Figaro, the French newspaper, adding that he intends to file for legal action. “The only bans have been in dictatorships and very religious countries.”

Citi Buys $160 Million of Russian Aluminum Others Won’t Touch

Archie Hunter
Fri, August 18, 2023 at 10:08 AM MDT·3 min read


(Bloomberg) -- Citigroup Inc. has bought about $160 million of Russian aluminum from the London Metal Exchange, something many banks have refused to touch since the invasion of Ukraine.

The US bank was behind requests to deliver about 75,000 tons of aluminum out of warehouses in Gwangyang, South Korea, that were reported by the LME on Friday, according to people familiar with the matter, who asked not to be identified discussing a private matter. The metal was originally produced by Russia’s United Co. Rusal International PJSC, they said.

There are no blanket sanctions that outlaw trading in Russian aluminum, but it has nonetheless become a politically charged subject in the metals industry following Russia’s invasion of Ukraine last year. The US in February announced a 200% tariff on imports of Russian aluminum, saying the Russian aluminum industry had “played a major role in supplying Russia with weapons and ammunition used in the war.”

Some buyers and traders of aluminum, which is used across the construction, packaging and transportation industries, have sought to avoid supplies from Russia, either on ethical grounds or because it has become much harder to organize logistics and financing. And many banks have refused to trade or finance Russian metals since the war began.

Citi itself had been avoiding metal produced by Rusal until recently, according to the people. Alongside competitors like Goldman Sachs Group Inc. and JPMorgan Chase & Co., Citi is one of a handful of banks that plays a significant role in industrial metals markets.

It’s not clear what Citi intends to do with the metal, or whether it made the trade on its own or is working on behalf of a client. Aluminum contracts for immediate delivery have recently been trading at the widest discount to later-dated contracts in 15 years, creating an opportunity for traders or banks to earn a guaranteed return by buying and storing metal.

Citi declined to comment.

The role of Russian aluminum on the LME has been the subject of a furious lobbying campaign, with US and European producers arguing that a glut of unsold Rusal metal is distorting prices. Last year, the exchange considered banning new deliveries of Russian metal but ultimately decided not to.

Since then, Russian aluminum has made up an ever-larger proportion of the exchange’s inventories, accounting for 81% of live stocks at the end of July. Producers including Alcoa Corp. and Norsk Hydro ASA have recently called on the LME to reconsider the issue.

Some of the banks which continue to trade Russian metal draw the distinction between metal bought directly from Russian producers and metal bought via the London Metal Exchange. The latter case, they argue, does not involve any financing of Russian entities since payment is made to the LME’s clearinghouse.

Citi’s purchase will bolster the exchange’s argument that Russian aluminum continues to flow out of its warehouses and therefore should still be allowed to be listed on the LME.

“We closely monitor the levels and flow of Russian metal through our physical network, reflecting the behaviors of our underlying market users,” a spokesperson for the exchange said on Friday. “We note that all metals of Russian origin continue to be consumed by a broad section of the market, and we will remain vigilant in respect of this matter.”

--With assistance from Jack Farchy.

Bloomberg Businessweek

The $1 trillion of high yield debt that's piled up in the last 5 years is about to have a 'day of reckoning,' Bank of America says


Jennifer Sor
Fri, August 18, 2023 at 5:05 PM MDT·2 min read

DON EMMERT/AFP/Getty Images

There's around $1 trillion of private debt that's headed for potential trouble, Bank of America warned.


Most of that debt has been created by below-investment grade companies through high yield loans or bonds.


Around $400 billion assets are considered to be in "pre-distress," while $150 billion assets are "deeply distressed."

There's a mountain of high-yield debt that could be at risk, according to Bank of America.

The bank estimated around $1 trillion of high yield debt has been accumulated by companies over the past five years, which has largely been created by below-investment grade corporations. Around 25% consists of below-investment grade firms issuing risky high-yield bonds, while 35% consisted of broadly syndicated loans taken out by below-investment grade companies, the bank said. The remaining 40% was classified as private debt.

Furthermore, around half of that that debt faces some risk of potentially defaulting, which could spell trouble for markets.

"$1 trln in new leveraged credit last five years faces its day of reckoning," Bank of America strategist Yuri Seliger said in a note on Friday. "Roughly half of this money is in currently well-performing capital structures, while the other half is now in various stages of stress," he later added.

Around $400 billion of debt, for instance, is trading at rates over 6% – a range the bank classifies as "pre-distress," since refinancing those debt assets could yield a coupon rate of 10% or higher. Another $150 billion of debt is considered to be "deeply-distressed," since refinancing is no longer an option.

Other experts have warned of the dangers of mounting private and public debt levels in the US, particularly as markets exit an era of ultra-low interest rates and head into a new higher-for-longer rates regime.

US central bankers have raised real interest rates in the economy 525 basis-points to tame runaway inflation, which has significantly raised the cost of borrowing. Meanwhile, corporate defaults are surging, with total defaults in 2023 already surpassing last year's total, according to Moody's Investors Service.

Up to $1 trillion of corporate debt could be at risk of default if the US tips into a full-blown recession, Bank of America previously predicted, though strategists no longer see a recession as likely this year.

Read the original article on Business Insider

Bond Traders Bet Next Ecuador President Can Stave Off Default

Maria Elena Vizcaino and Zijia Song
Sat, August 19, 2023


(Bloomberg) -- As Ecuadorians prepare to vote for a president Sunday amid its most violent election cycle in memory, investors are betting an unexpected rally in the country’s battered bonds isn’t finished.

The assassination of presidential candidate Fernando Villavicencio and a shocking rise in crime has made security and stability a focus of the election. That’s raised the chances a conservative, market-friendly candidate will at least make it to a second round in October, and reduces the odds of an outright win by a leftist ally of former President Rafael Correa.

Ecuador’s dollar bonds, in turn, jumped to their highest levels in a month, returning an average of 9% since the murder — compared to a loss of 1.9% across emerging market government bonds. Strategists from Citigroup Inc., JPMorgan Chase & Co. and EMFI Group are among those to recommend buying the debt.

“There could be more upside to the bonds from current prices if a market-friendly candidate makes it to the second round,” said Jared Lou, a money manager at William Blair in New York, who holds the debt. “Recent events highlight the deteriorating security situation in Ecuador.”

The violence adds to political chaos unleashed earlier this year when lawmakers mounted a campaign to impeach President Guillermo Lasso, who responded by dissolving congress, triggering snap elections. A second-round will be held in October if no candidate gets an absolute majority Sunday — or at least 40% of valid votes with a 10 percentage point lead over the runner-up.

In large part, the trade in Ecuador bonds is a bet that whoever wins the presidency will be able to stave off default in the 18 months they will be in office — serving out the remainder of Lasso’s term.

The next large payments on the country’s $15.5 billion of sovereign bonds come due in 2025, the same year the next election will be held. Defaulting would be costly for any party looking to stay in power, said Mauro Favini, a senior portfolio manager at Vanguard, which holds the debt.

“I don’t think any government can govern under default and stay in default and pretend to be a successful economy,” said Favini. “It’s a very shortsighted strategy.”


Still, the country — which has defaulted 11 times since its history — remains highly distressed.

Investors demand an extra 17.5 percentage points of yield to hold Ecuador’s dollar debt, on average, over similar US Treasuries. And the market for credit-default swaps — a type of insurance against default — suggests a 91% chance the government will start missing payments within five years.

“Based on fundamentals it is cheap,” said Ricardo Penfold, a managing director at Seaport, “but that is trumped by politics and their serial defaulters status.”

Even after their recent rally, Ecuador’s bonds have handed investors losses of around 18% this year, the worst performer among emerging markets, according to a Bloomberg index. Fitch Ratings slashed the country’s credit score deeper into junk Wednesday, saying reforms to address Ecuador’s financing challenges won’t go through in the 18-month presidential term.

Most-Likely Scenarios

For investors, a best-case scenario in the first round would be a strong showing by right-wing candidate Jan Topic. He’s seen as the biggest contender for Correa’s hand-picked candidate Luisa Gonzalez, who polls have showed leading the race. It’s also the most likely outcome as Topic’s focus on security has helped him advance in the polls since Villavicencio’s death.

A runoff vote between her and center-right candidate Otto Sonnenholzner or Christian Zurita — the former journalist who’s replacing Villavicencio — would also be welcomed by the market. Investors would fret a runoff between Gonzalez and Indigenous leader Yaku Perez.

“The person who wins this election doesn’t actually matter that much,” said Sarah Glendon, an analyst at Columbia Threadneedle in New York. “They’re not in office long enough to get very much done.”

The composition of congress, where all seats are up for grabs, will be key for the next administration, Glendon said. On top of that, money managers will monitor for a referendum that, if approved, could lead to a 12% drop in the country’s oil output, Fitch estimates.

“The saving grace, at least for the short term, is the technical picture,” Citigroup strategists led by Dirk Willer wrote in a report. “The country maintains a decent fiscal standing and debt payments remain relatively low until 2025, which suggests a restructuring could be avoided in the near term.”

--With assistance from Stephan Kueffner.

Most Read from Bloomberg Businessweek

Net-Zero Goals Won’t Slow Down Oil Exploration

Editor OilPrice.com
Sat, August 19, 2023 

Underinvestment in oil and gas exploration has been a scarecrow for energy security for several years now.

Various industry executives, most notably perhaps those from the Middle East oil kingdoms, have warned that unless investment in new exploration rebounds, energy security will be compromised on a global scale.

Wood Mackenzie recently had some good news for these executives: investment in new oil and gas exploration is recovering and is set to average $22 billion annually over the next four years. Despite the billions being channeled into the transition away from hydrocarbons.

At the same time, there is a connection between the transition and the rebound in new exploration spending in oil and gas. That connection has to do with the new demands that the transition has created for exploration and production companies – pressure to focus on assets with a low emissions profile, for instance, and stricter environmental requirements that would make some discoveries unviable.

“While this rebound might surprise some, it must be seen in context. Exploration went through a boom during 2006-2014 and spend peaked at US$79 billion (in 2023 terms),” Julie Wilson, Wood Mac’s director of global exploration research, said.

“But in the prior six years, the average was US$27 billion per year in 2023 terms. While spending will increase, it won’t return to anywhere close to past highs and there will likely be a ceiling on the increase.”

Related: Recycling Breakthrough Makes Plastic Waste A High Value Commodity

In other words, as the recovery in spending is taking place amid a double-down on the transition, it will be constrained by that transition. Yet it is taking place despite the constraints, which is quite telling. Because the calls to end the hydrocarbons industry have only been growing louder since the start of the year.

Indeed, one campaign group dubbed Oil Change International slammed the Inflation Reduction Act as being “one of the biggest handouts to the fossil fuel industry in US history.

According to that group, “With tens of billions dollars in giveaways for the oil and gas industry, provisions expanding fossil fuel leasing, and incentives for dangerous and unproven technologies designed to keep the fossil fuel industry in business like Carbon Capture and Storage (CCS), hydrogen, and Direct Air Capture (DAC), this law will not accomplish what we need to have a livable future.”

Indeed, the IRA has money allocated for carbon capture and storage tech. It also has a lot more money to be spent on wind, solar, EVs, and charging infrastructure, and so does the EU. The West is definitely going all in on the energy transition, despite all the challenges that have emerged recently.

If spending oil new oil and gas exploration is taking place in this context, then there must be a very good reason for it, and that reason is not the record profits oil and gas companies made last year. They are part of the reason but not the whole of it. The whole of it is energy security.

The gas squeeze that pushed European prices sky-high last year reminded a lot of people embracing the transition that it does not really enhance energy security. It could, at some point, but that would take time, a lot more money and solving several major problems with wind, solar, and EVs. Right now, however, the only sources of energy that do provide energy security are the hydrocarbon sort.

The transition advocates were not the only ones reminded of that fact of life. The oil and gas industry itself may have temporarily forgotten it and got a wake up call last year. So now, spending is on the rise. And the industry is tying it to achieving transition goals.

“Continued investments in oil and gas will be needed to make sure that the energy transition happens in a balanced way with a secure supply of affordable and increasingly lower-carbon energy. We will contribute to this balanced transition by focusing our investments on the most profitable and carbon-competitive projects,” Shell’s Integrated Gas and Upstream Director, Zoe Yujnovich, said last month.

Indeed, a fact not often voiced by the transition advocates, both in political circles and outside them, is the fact that the transition away from hydrocarbons depends strongly on those same hydrocarbons.

The raw materials for the transition equipment are produced using machines that run on hydrocarbon fuels. The equipment itself is produced using energy from hydrocarbons—think China, solar panels, and coal powered furnaces—and there are hydrocarbon ingredients in that equipment—think wind turbine blades and epoxy resins.

In other words, spending on new oil and gas exploration is rebounding because, first, demand trends have demonstrated quite clearly that the world’s thirst for hydrocarbons is not falling but rising and, second, because the energy transition away from hydrocarbons depends on them.

There could certainly be a ceiling somewhere in there as investors flock to new opportunities arising from governments’ transition efforts, shunning the bad reputation of oil and gas. Yet just how high this ceiling will be remains to be seen. Ultimately, energy security would always trump everything else, however noble it might be.

By Irina Slav for Oilprice.com

SpaceX Posts Q1 Profit, Abandons Bitcoin Holdings; Cryptocurrencies Crash

HARRISON MILLER
08/18/2023

New SpaceX financial documents reported by the Wall Street Journal provide a rare look into Elon Musk's private rocket company. Cryptocurrency prices swung wildly after the late Thursday report, which revealed SpaceX sold its bitcoin holdings.

SpaceX posted a Q1 2023 profit of $55 million on $1.5 billion in revenue after two years of major, but narrowing losses, the WSJ reported.

The Hawthorne, Calif.-based company recorded $5.2 billion in total expenses for 2022, increasing from $3.3 billion in 2021. Fiscal 2022 revenue doubled to $4.6 billion with a loss of $559 million, improved from a loss of $968 million the year prior.

SpaceX generated $2 billion in capital from issuing stock last year, up from $1.5 billion in 2021. The company is valued around $150 billion following an employee stock sale in June.

Property and equipment expenses totaled $5.4 billion during last year and 2021 with significant research and development costs.

Meanwhile, results benefited from several moves. The company executed price increases for Falcon rocket missions. SpaceX boosted its Starlink prices for U.S. residential subscribers in 2022. In April, SpaceX raised the price of Starlink services by 9% to $120 per month for residential customers where internet capacity is limited. Subscribers in locations with excess internet capacity received a price cut to $90 from $110.

The company launched a Falcon 9 rocket carrying 22 Starlink satellites on Wednesday and the Falcon 9 returned to earth that evening. The next SpaceX launch is scheduled for Aug. 21. The next mission in the company's collaboration with NASA is set to launch Aug. 25.

SpaceX Sells Bitcoin Holdings

SpaceX sold its bitcoin holdings after writing down the value by $373 million in 2021 and 2022, the WSJ reported. Tesla (TSLA) had sold 75% of its bitcoin holdings last year.

Meanwhile, bitcoin, ethereum and other cryptocurrency prices tumbled late Thursday, but it was unclear if the SpaceX report was the cause.

Crypto liquidations reached over $1 billion over the past 24 hours as of Friday morning, Coinglass data shows. The bitcoin drop below $28,500 caused "material volumes" of long-bitcoin orders being liquidated, combined with spot-selling ahead of order dates. That sparked the main sell-off, Decentral Park Capital trader Lewis Harland told CoinDesk.

Bitcoin price fell as low as $25,392.05 Thursday evening, hitting a two-month low. It's trading near $26,000 late Friday, down 6.6% over the past 24 hours. Bitcoin had already retreated from about $28,600 to $27,600 on Thursday before the SpaceX news, as a strong dollar and risk-off trading weigh on cryptocurrencies.