How Many Countries Are Actually Capable Of Space Travel?

By ZeroHedge - Jul 19, 2022, 

• Only 11 state-sponsored space travel programs are active in the world today. 
• Asian rocket programs are actually among the oldest active programs in the world.
• South Korea shares the ambition to (re)land on the moon with the United States, Russia, India, Japan, China, the United Arab Emirates and Turkey.

South Korea last month joined the quite exclusive club of countries that have the capability of launching space rockets using homegrown technology.

Rocket Nuri, officially named the Korea Space Launch Vehicle-II, successfully took off from Goheung in Southern Korea on June 21 carrying smaller satellites as well as a 1.3 tons dummy one, demonstrating the ability to payload satellites above the one-ton mark.

According to the Korean Herald, only seven countries in the world have ever developed this capability. According to Statista research, only 13 countries and the European Space Agency have historically developed space-going rockets.

You will find more infographics at Statista

Only 11 of these programs are active today, including the Russian and Ukrainian programs which are continuations of the former Soviet space program – the first to ever launch a rocket into Earth’s orbit. European programs in the UK and France have ended and countries in the region have been collaborating on the ESA program since 1979.

Asian rocket programs are actually among the oldest active programs in the world, with the Chinese and Japanese programs hailing back to 1970 and the Indian one to 1980.

South Korea shares the ambition to (re)land on the moon with the United States, Russia, India, Japan, China, the United Arab Emirates and Turkey.

By Zerohedge.com

Codelco, unions to launch safety talks after worker deaths

Reuters | July 21, 2022 | 

Workers at Codelco’s El Teniente mine in central Chile. Image courtesy of Codelco.

Chile’s state-owned miner Codelco and its employee unions agreed to safety talks via a newly-created committee after two workers died this month in accidents, a union leader said on Thursday.


The company, the world’s top copper producer, announced on Wednesday a halt to construction projects after reporting the death of a worker at its Chuqui Subterranea project, which followed another fatal accident earlier this month.

“We’ve proposed to start a process, more than just an audit, and decided to create an ad-hoc committee,” said Amador Pantoja, president of the FTC Copper Workers Federation, which represents all company unions.

Pantoja said the joint committee’s safety talks will begin next week focusing on project development and company operations, pointing to a “large number” of accidents.

Investigations into the cause of the fatal accidents are ongoing. Mining regulator Sernageomin signaled this week that it found some safety standard irregularities.

Pantoja faulted the lack of explanations from company management regarding the root causes of the accidents, and suggested that cost-cutting might be a factor.

“We’ve stopped doing things because of worries over costs,” he said. “Today we’re working with minimal crews.”

In recent years, the state-run miner has focused on reducing costs while also executing multi-million dollar investments aimed at maintaining production levels.

Pantoja complained that over the past four years, workers have not been sufficiently included in key safety discussions, something the new committee aims to correct.

“We feel this is really affecting us and you can see the consequences of this lack of dialogue,” he said.

(By Fabian Cambero and David Alire Garcia; Editing by Marguerita Choy)

Portuguese community files legal action against Savannah Resources
Reuters | July 22, 2022 | 

The Mina do Barroso mine could become the first European supplier of spodumene, a lithium-bearing mineral. (Image courtesy of Savannah Resources.)

A community group in a lithium-rich area of northern Portugal said on Friday it had filed a legal suit against a subsidiary of London-based mining company Savannah Resources for alleged encroachment on communal land.


In a statement, a group – the Local Community of Common Land of Covas do Barroso – accused Savannah Resources’ subsidiary Savannah Lithium of alleged “improper appropriation” of land assigned to the community for farming or hunting use near its Mina do Barroso project 145 km northeast of the city of Porto.

Savannah Resources did not immediately reply to a Reuters request for comment.

Portugal is Europe’s biggest lithium producer but its miners sell almost exclusively to the ceramics industry and are only now preparing to produce the higher-grade lithium that is in demand globally for use in electric cars and electronic devices.

The southern European nation, which has 60,000 tonnes of known lithium reserves, is central to Europe’s bid to secure more of the battery value chain and cut reliance on imports.

But projects in Portugal, such as Savannah’s, face strong opposition from environmentalists and local communities who are demanding stronger regulation and more transparency.

Much of the land thought to contain lithium in Portugal is classified as common land whose use is determined by local associations.

The Barroso community group claims Savannah Lithium, which already mines feldspar, quartz, and pegmatite in the area, broke the law by buying land based on topographical surveys it ordered that “in no way correspond to well-known (common land) limits established generations ago”.

“We were forced to resort to legal action when faced with (land purchase) deals based on records that … do not correspond to the truth,” it said, calling for those purchases to be declared annulled and void.

Savannah submitted an environmental impact assessment for an open-pit mine to Portuguese regulator APA in May 2020 and received preliminary approval a year later but said last month a “political process” was delaying its plans.

Earlier this month, Savannah’s chief executive David Archer stepped down on the same day APA told the company to complete an additional environmental licensing process for Barroso.

(By Catarina Demony; Editing by Aislinn Laing and David Evans)

Peru indigenous communities say no progress in talks with Las Bambas copper mine

Reuters | July 21, 2022 |

A 2021 meeting with farming communities protesting MMG’s Las Bambas copper mine in Peru. (Reference image by Peru’s Presidency of the Ministers’ Council, Flickr).

A group of indigenous Peruvian communities that have been protesting MMG Ltd’s Las Bambas copper mine said on Thursday there has been no progress after a full month of talks, risking the end of a precarious truce.


“In my community, there is no progress,” said Romualdo Ochoa, the President of the Huancuire community, which is opposing a planned expansion by Las Bambas into its territory. “This is disappointing.”

The remarks took place at a crucial meeting between Huancuire and five other neighboring communities with representatives from the mine and the Peruvian government.

Together, the six communities staged earlier this year the most significant protest in the history of Chinese-owned Las Bambas, forcing the mine to suspend operations for over a month.

The indigenous communities say Las Bambas has not fulfilled all of its commitments with them and also say that the company has failed to benefit them financially.

Las Bambas executive Ivo Zhao said at the meeting that the company is willing to continue the talks. “It is necessary to continue negotiating,” Zhao said.

In June the communities agreed to lift their protest, granting a 30-day truce that ends this week. But the communities suggested at the meeting that they might restart the protest in the next few days.

Las Bambas is one of the world’s largest copper mines, normally accounting for 2% of the world’s supply of the red metal. Peru is the world’s No. 2 copper producer and mining is a significant source of tax revenue.

The suspension of operations at Las Bambas, as well as a separate suspension at Southern Copper Corp’s Cuajone mine this year have weighed on the Peruvian economy, which is already under pressure to meet growth expectations due to falling commodity prices and worries about a worldwide recession.

(By Marcelo Rochabrun and Marco Aquino; Editing by Sandra Maler)

Domino's Pizza's delivery driver shortage

is so bad that 40% of stores are

'utilizing call centers'

Brian Sozzi

·Anchor, Editor-at-Large

Thu, July 21, 2022 

If you call a local Domino's Pizza (DPZ) to place an order, you may be routed to a call center.

Domino's says the practice has freed up workers to deliver pizzas amid a driver shortage that has plagued the company for well over a year.

Utilizing call centers "allows team members to focus on making and delivering pizzas without having to worry about answering phones, especially during the busiest times of the store," Domino's Pizza new CEO Russell Wiener told analysts on an earnings call Thursday. "At the end of the [second] quarter, around 40% of our U.S. stores were utilizing call centers in some capacity."

A pizza comes out of the oven at Domino's Pizza restaurant in Los Angeles, California, U.S. July 18, 2018. REUTERS/Lucy Nicholson

The effort, while clever, may be having a minimal impact in terms of addressing lost sales from the labor shortage. Domino's reported delivery sales crashed 11.7% in the second quarter versus a year ago.

The company's U.S. same-store sales fell 2.9%, a sharp reversal from a 3.5% increase during the same quarter last year. Same-store sales at company-operated U.S. stores dropped 9.2% while franchise-owned stores dropped 2.5%.

International sales also fell 2.2%, worse than the 13.9% gain a year earlier.

"The decline in the U.S. same-store sales in Q2 was driven by declining order counts, which continued to be pressured by the challenging staffing environment, which had certain operational impacts such as shortened store hours and customer service challenges in many stores, both company-owned and franchise," Weiner explained.

That sales weakness led Domino to miss analyst profit estimates for the quarter. Adjusted earnings came in at $2.82 per share, down 7% year over year and below estimates for $2.89 per share.

Domino's Pizza stock fell on the news and is down 27% year to date.

"Existing challenges persisted during the quarter (e.g., labor availability, especially for drivers, and food cost inflation)," Jon Tower, analyst at Citi, said in a note to clients, adding, "although new pain points arose during the quarter (international same-store sales slowdown, FX headwinds mounting), these new pressures should come as little surprise to investors."

Three Arrows Capital Founders Break Their Silence, Look to Move to Dubai: Report

Oliver Knight

Fri, July 22, 2022 

The founders of insolvent crypto hedge fund Three Arrows Capital (3AC), Su Zhu and Kyle Davies, have broken their silence in an interview with Bloomberg.

• The duo described the collapse as "regrettable," but denied claims that they pulled money from the fund before its collapse, according to the report.

• The collapse of 3AC, seemingly triggered by the fall of the Terra ecosystem, sent ripples in the crypto market. Investors are claiming that the defunct fund still owes them $2.8 billion. On Monday, a 1,157-page court filing revealed the extent of the hedge fund's debt following the implosion, with individual claims worth over $1 billion.

• The founders declined to say where they were, but one of the lawyers on the call said their ultimate destination is the United Arab Emirates (UAE), the report added.

• “Given that we had planned to move the business to Dubai, we have to go there soon to assess whether we move there as originally planned or if the future holds something different for us,” Zhu added.

• In the report, Zhu said that the reason for the fund's collapse was placing leveraged trades with hope that the crypto market would rebound to the upside. He compared 3AC's implosion to that of Celsius, a crypto lending firm that froze withdrawals and filed for bankruptcy after it failed to keep enough liquidity to honor customer redemptions.

• One of 3AC's largest positions that went sour was in the Terra ecosystem and its token LUNA, all of which effectively collapsed to zero in May. The pair insists that they are cooperating with authorities while trying to keep a low profile.

• “For Kyle and I, there’s so many crazy people in crypto that kind of made death threats or all this kind of noise,” Zhu said. “We feel that it’s just the interest for everyone if we can be physically secured and keep a low profile.”

• Three Arrows Capital did not immediately respond to CoinDesk's request for a comment.

Read more: Genesis Files $1.2B Claim Against Three Arrows Capital

3AC cofounders resurface after five weeks, deny allegations

Monika Ghosh  

Fri, July 22, 2022 

Three Arrows Capital (3AC) cofounders Su Zhu and Kyle Davies denied allegations by 3AC liquidators that they moved money out of the crypto hedge fund before its collapse.

See related article: 3AC founders moved money out of troubled hedge fund, allege liquidators

Fast facts

• Zhu and Davies claimed that they were forced into hiding due to death threats, but they have been “communicating with all relevant authorities,” contradicting the liquidators’ claims of non-cooperation, according to an interview given to Bloomberg.

• The cofounders, who are reportedly relocating to the United Arab Emirates from Singapore, said they suffered extensive losses from the “regrettable” collapse of 3AC.

• Zhu said: “We positioned ourselves for a kind of market that didn’t end up happening,” attributing the cause of the collapse to their optimism fueled by a multi-year bull market.

• Zhu acknowledged heavy losses with the collapse of Luna and said that the cofounders’ personal relationship with Terra founder Do Kwon may have blinded them to Terra’s vulnerabilities.

• 3AC also suffered deep losses when Grayscale Bitcoin Trust shares started trading at a discount to the price of Bitcoin.

• In court filings, 3AC liquidators alleged that Zhu and Davies made a down payment on a yacht while the fund was going down, but Zhu said the yacht was bought over a year ago and had “a full money trail,” rejecting allegations of living a luxurious life.

See related article: Three Arrows Capital files for Chapter 15 bankruptcy

Three Arrows Founders Break Silence Over Collapse of Crypto Hedge Fund

Joanna Ossinger, Muyao Shen and Yueqi Yang

Fri, July 22, 2022 

(Bloomberg) -- After five weeks in hiding, the disgraced founders of Three Arrows Capital spoke extensively about the spectacular implosion of their once high-flying hedge fund, saying their bungled crypto speculation unleashed cascading margin calls on loans that should never have been made.

Su Zhu and Kyle Davies, both 35, first became friends in high school. They built 3AC into a crypto-trading behemoth before its collapse bankrupted creditors and exacerbated a selloff that foisted steep losses on mom-and-pop owners of Bitcoin and other tokens. At times contrite and at times defensive, Davies and Zhu, speaking from an undisclosed location, described a systemic failure of risk management in which easy-flowing credit worsened the impact of wrong-way bets.

They acknowledged the collapse triggered widespread pain, but mostly talked around questions about the effect on others in the industry. Instead, they stressed they suffered deep losses while denying allegations they pulled money out of 3AC before it all blew up. “People may call us stupid. They may call us stupid or delusional. And, I’ll accept that. Maybe,” Zhu said. “But they’re gonna, you know, say that I absconded funds during the last period, where I actually put more of my personal money back in. That’s not true.”

Advisers in charge of liquidating the fund said in July 8 filings that Zhu and Davies hadn’t cooperated with them and that the founders’ whereabouts were unknown. Zhu said death threats had forced them into hiding. “That does not mean that we haven’t been communicating with all relevant authorities,” said Zhu in the telephone interview with Davies and two lawyers from Solitaire LLP. “We have been communicating with them from day one.”

The two declined to say where they were but one of the lawyers on the call said their ultimate destination is the United Arab Emirates, which has emerged as a hot spot for crypto.

In a wide-ranging interview, the former Credit Suisse traders detailed the events leading to their fund’s implosion, which itself set off a chain reaction that has cost institutions and small-time speculators billions of dollars.

“The whole situation is regrettable,” Davies said. “Many people lost a lot of money.”

Leveraged Bets Meet Crypto Winter

Creditors of the fund, recently registered in the British Virgin Islands, filed paperwork saying they’re owed more than $2.8 billion in unsecured claims. That figure is expected to rise significantly, court papers show. To date, liquidators overseeing the insolvency have gained control of assets worth at least $40 million.

Read more: Three Arrows Creditors Include Crypto Giants, Co-Founder’s Wife

Zhu and Davies, long among the most vociferous crypto bulls in an industry known for extremes, put on trades – turbocharged by leverage – that put 3AC at the center of a series of implosions that convulsed the crypto market as prices retreated this year from their highs last fall. “We positioned ourselves for a kind of market that didn’t end up happening,” Zhu said.

“We believed in everything to the fullest,” added Davies. “We had all of our, almost all of our assets in there. And then in the good times we did the best. And then in the bad times we lost the most.”

At the same time, they claim, they weren’t outliers. They describe a confluence of interrelated one-way bets and accommodative borrowing arrangements that all blew up at once, leading not just to their fund’s demise but to bankruptcy, distress and bailouts at firms like Celsius Network, Voyager Digital and BlockFi.

Read more: The Collapse of Three Arrows Capital Became a Crypto Contagion

“It’s not a surprise that Celsius, ourselves, these kind of firms, all have problems at the same time,” Zhu said. “We have our own capital, we have our own balance sheet, but then we also take in deposits from these lenders and then we generate yield on them. So if we’re in the business of taking in deposits and then generating yield, then that, you know, means we end up doing similar trades.”

Efforts by Zhu and Davies to deflect blame are a sharp contrast to the pair’s previously relentless campaign of cheer-leading cryptoassets and belittling critics. Nerves were raked anew this week by creditor claims that the founders put a down payment on a $50 million yacht before the fund went under, a claim Zhu said is part of a smear campaign.

The boat “was bought over a year ago and commissioned to be built and to be used in Europe,” Zhu said, adding the yacht “has a full money trail.” He rejected the perception that he enjoyed an extravagant lifestyle, noting that he biked to work and back every day and that his family “only has two homes in Singapore.”

“We were never seen in any clubs spending lots of money. We were never seen, you know, kind of driving Ferraris and Lamborghinis around,” Zhu said. “This kind of smearing of us, I feel, is just from a classic playbook of, you know, when this stuff happens, when funds blow up, then you know, these are kind of the headlines that people like to play.”

The Long Arm of Luna

Davies and Zhu acknowledged heavy losses related to trades in Luna and the now-defunct algorithmic stablecoin TerraUSD, saying they were caught by surprise at the speed of the collapse of these tokens.

“What we failed to realize was that Luna was capable of falling to effective zero in a matter of days and that this would catalyze a credit squeeze across the industry that would put significant pressure on all of our illiquid positions,” Zhu said.

In retrospect, Zhu said, the firm may have been too close to Terra’s founder, Do Kwon.

“We began to know Do Kwon on a personal basis as he moved to Singapore. And we just felt like the project was going to do very big things, and had already done very big things,” he said in describing the firm’s miscalculations. “If we could have seen that, you know, that this was now like, potentially like attackable in some ways, and that it had grown too, you know, too big, too fast.”

“It was very much like a LTCM moment for us, like a Long Term Capital moment,” Zhu said. “We had different types of trades that we all thought were good, and other people also had these trades,” Zhu said. “And then they kind of all got super marked down, super fast.”

Read more: ‘Everything Broke’: Terra Goes From DeFi Darling to Death Spiral

One of those trades involved an Ethereum-linked token called staked ETH, or stETH -- designed to be a tradable proxy for Ether and widely used in decentralized finance. While every stETH is meant to be redeemable for one Ether once long-awaited upgrades of the Ethereum blockchain take effect, the turmoil sparked by Terra’s collapse caused its market value to fall below that level. This, in turn -- in Zhu’s telling -- caused other investors to put on trades that could benefit from the widening gap.

“Because Luna just happened, it, it was very much a contagion where people were like, OK, are there people who are also leveraged long staked Ether versus Ether who will get liquidated as the market goes down?” Zhu said. “So the whole industry kind of effectively hunted these positions, thinking that, you know, that because it could be hunted essentially.”

Read more: Flows of Ether Offshoot Reveal Terra’s Ripple Effect on Crypto

Still, the fund was able to continue borrowing from large digital-asset lenders and wealthy investors -- until, that is, they blew themselves up.

After Luna’s implosion, Zhu said lenders were “comfortable” with 3AC’s financial situation, and that they allowed them to keep trading as “as if nothing was wrong.” As courts filings have now revealed, many of these loans had required only a very small amount of collateral.

“So I just think that, you know, throughout that period, we continued to do business as usual. But then yeah, after that day, when, you know, Bitcoin went from $30,000 to $20,000, you know, that, that was extremely painful for us. And that was in, that ended up being kind of the nail in the coffin.”

Zhu said that “if we were more on our game, we would’ve seen that the credit market itself can be a cycle and that, you know, we may not be able to access additional credit at the time that we need it. If, if it kind of, you know, it hits the fan.”

Locked in to GBTC

Another bullish trade that came back to bite 3AC was through the Grayscale Bitcoin Trust, or GBTC. The closed-end fund allows people who can’t or don’t want to hold Bitcoin directly to instead buy shares in a fund that invests in them. For a while, GBTC was one of the few US-regulated crypto products, so it had the market to itself. It was so popular that its shares traded at a persistent premium to the value of the Bitcoin it held on the secondary market.

Grayscale allowed big investors like 3AC to purchase shares directly by giving Bitcoin to the trust. These GBTC holders could then sell the shares to the secondary market. That premium meant any sales could net an attractive profit for the big investors. At the time of its last filing at the end of 2020, 3AC’s was the largest holder of GBTC, with a position then worth $1 billion.

The strategy had a snag, though: The shares bought directly from Grayscale were locked up for six months at a time. And starting in early 2021, that restriction became a problem. GBTC’s price slipped from a premium into a discount—a share was worth less than the Bitcoin backing it—as it faced stiffer competition from similar products. As the months went on, the discount got wider and wider and the so-called GBTC arbitrage trade no longer worked – especially hurting investors that used leverage to try to enhance returns.

In Zhu and Davies’ telling, it was partly their own success that helped propel both GBTC and the herd mentality around the trade.

“We managed to do it at the right window when it was a very big profit,” Zhu said. “And then like others copied us into that trade later on and then lost not just the money, but also went into negative. Because everyone did it, then the trust went to discount and then it went to a far bigger discount than anyone thought possible.”

No Risk-Free Returns

In response to questions about what went wrong at the firm, Zhu cited overconfidence born of a multiyear bull market that infused not just him and Davies but nearly all of the industry’s credit infrastructure, where lenders saw their values swell by virtue of financing firms like his.

“There was always an understanding of what they were getting themselves into -- this was a risky firm,” Zhu said. “For us, if you go to our website, we’ve always had massive disclaimers about crypto risk. We’ve never once pitched ourselves as risk-free, like a simple yield.”

When crypto markets first started buckling in May, “we met all margin calls,” he said. “And, and so people understood that there was a risk involved.”

Moreover, lenders to the firm “benefited immensely when we were doing well, because as we were doing well, they could say, look, I make $200 million a year from Three Arrows’ financing business, give me a 10x multiple on that,” he said. “And now my own company’s worth $2 billion more. All these kinds of things. And so, like the risk departments were very relaxed about like the kind of risks that we were taking.”

So where from here? For now, the two co-founders are now transiting into Dubai. Zhu’s main hope is to get a calm, and orderly liquidation for their complex book of private assets.

“For Kyle and I, there’s so many crazy people in crypto that kind of made death threats or all this kind of noise,” Zhu said. “We feel that it’s just the interest for everyone if we can be physically secured and keep a low profile.”

“Given that we had planned to move the business to Dubai, we have to go there soon to assess whether we move there as originally planned or if the future holds something different for us,” Zhu added. “For now, things are very fluid and the main emphasis is on aiding the recovery process for creditors.”

As for Davies, “I have a feeling my next year is planned for me,” he said.

From $10 billion to zero: How a crypto hedge fund collapsed and dragged many investors down with it

 TUE, JUL 12 2022
MacKenzie Sigalos@KENZIESIGALOS

KEY POINTS
The bankruptcy filing from Three Arrows Capital (3AC) triggered a downward spiral that wrapped in many crypto investors.

The hedge fund failed to meet margin calls from its lenders.

“3AC was supposed to be the adult in the room,” said Nik Bhatia, professor of finance and business economics at the University of Southern California.

WATCH NOW VIDEO 9:02   Bitcoin dips, Saylor dubs ether a security, and what caused crypto’s crash: CNBC Crypto World

As recently as March, Three Arrows Capital managed about $10 billion in assets, making it one of the most prominent crypto hedge funds in the world.

Now the firm, also known as 3AC, is headed to bankruptcy court after the plunge in cryptocurrency prices and a particularly risky trading strategy combined to wipe out its assets and leave it unable to repay lenders.

The chain of pain may just be beginning. 3AC had a lengthy list of counterparties, or companies that had their money wrapped up in the firm’s ability to at least stay afloat. With the crypto market down by more than $1 trillion since April, led by the slide in bitcoin and ethereum, investors with concentrated bets on firms like 3AC are suffering the consequences.

Crypto exchange Blockchain.com reportedly faces a $270 million hit on loans to 3AC. Meanwhile, digital asset brokerage Voyager Digital filed for Chapter 11 bankruptcy protection after 3AC couldn’t pay back the roughly $670 million it had borrowed from the company. U.S.-based crypto lenders Genesis and BlockFi, crypto derivatives platform BitMEX and crypto exchange FTX are also being hit with losses.

“Credit is being destroyed and withdrawn, underwriting standards are being tightened, solvency is being tested, so everyone is withdrawing liquidity from crypto lenders,” said Nic Carter, a partner at Castle Island Ventures, which focuses on blockchain investments.

Three Arrows’ strategy involved borrowing money from across the industry and then turning around and investing that capital in other, often nascent, crypto projects. The firm had been around for a decade, which helped give founders Zhu Su and Kyle Davies a measure of credibility in an industry populated by newbies. Zhu also co-hosted a popular podcast on crypto.

“3AC was supposed to be the adult in the room,” said Nik Bhatia, a professor of finance and business economics at the University of Southern California.

Court documents reviewed by CNBC show that lawyers representing 3AC’s creditors claim that Zhu and Davies have not yet begun to cooperate with them “in any meaningful manner.” The filing also alleges that the liquidation process hasn’t started, meaning there’s no cash to pay back the company’s lenders.

Zhu and Davies didn’t immediately respond to requests for comment.

Tracing the falling dominoes


The fall of Three Arrows Capital can be traced to the collapse in May of terraUSD (UST), which had been one of the most popular U.S. dollar-pegged stablecoin projects.

The stability of UST relied on a complex set of code, with very little hard cash to back up the arrangement, despite the promise that it would keep its value regardless of the volatility in the broader crypto market. Investors were incentivized — on an accompanying lending platform called Anchor — with 20% annual yield on their UST holdings, a rate many analysts said was unsustainable.

“The risk asset correction coupled with less liquidity have exposed projects that promised high unsustainable APRs, resulting in their collapse, such as UST,” said Alkesh Shah, global crypto and digital asset strategist at Bank of America.

Panic selling associated with the fall of UST, and its sister token luna, cost investors $60 billion.

“The terraUSD and luna collapse is ground zero,” said USC’s Bhatia, who published a book last year on digital currencies titled “Layered Money.” He described the meltdown as the first domino to fall in a “long, nightmarish chain of leverage and fraud.”

3AC told the Wall Street Journal it had invested $200 million in luna. Other industry reports said the fund’s exposure was around $560 million. Whatever the loss, that investment was rendered virtually worthless when the stablecoin project failed.

WATCH NOW VIDEO 08:18
How a $60 billion crypto collapse got regulators worried


UST’s implosion rocked confidence in the sector and accelerated the slide in cryptocurrencies already underway as part of a broader pullback from risk.

3AC’s lenders asked for some of their cash back in a flood of margin calls, but the money wasn’t there. Many of the firm’s counterparties were, in turn, unable to meet demands from their investors, including retail holders who had been promised annual returns of 20%.

“Not only were they not hedging anything, but they also evaporated billions in creditors’ funds,” said Bhatia.

Peter Smith, the CEO of Blockchain.com said last week, in a letter to shareholders viewed by CoinDesk, that his company’s exchange “remains liquid, solvent and our customers will not be impacted.” But investors have heard that kind of sentiment before — Voyager said the same thing days before it filed for bankruptcy.

Bhatia said the cascade hits any player in the market with significant exposure to a deteriorating asset and liquidity crunch. And crypto comes with so few consumer protections that retail investors have no idea what, if anything, they’ll end up owning.

Customers of Voyager Digital recently received an email indicating that it would be a while before they could access the crypto held in their accounts. CEO Stephen Ehrlich said on Twitter that after the company goes through bankruptcy proceedings, customers with crypto in their account would potentially receive a sort of grab bag of stuff.

That could include a combination of the crypto they held, common shares in the reorganized Voyager, Voyager tokens and whatever proceeds they’re able to get from 3AC. Voyager investors told CNBC they don’t see much reason for optimism.

WATCH: Voyager Digital files for bankruptcy amid crypto lender solvency crisis

Singapore's crypto aspirations shaken by Three Arrows collapse

By Alun John and Chen Lin - Jul 12

© Reuters/Darren Whiteside

 A view of the Monetary Authority of Singapore's headquarters in Singapore

HONG KONG/SINGAPORE (Reuters) - Singapore's ambitious cryptocurrency sector, by some measures Asia-Pacific's largest, faces an uncertain future after the recent collapse of crypto fund Three Arrows Capital, a high-profile casualty of the global digital currency downturn.

Crypto players in Southeast Asia's financial hub are bracing for further bankruptcies and legal tussles, and expect that regulators at the Monetary Authority of Singapore (MAS), whose welcoming approach helped to attract firms from China, India and elsewhere, may become less accommodating.


© Reuters/EDGAR SUFILE PHOTO:

 A representation of the virtual cryptocurrency Bitcoin

"After recent events it appears likely that the MAS will get tougher on crypto and digital assets," said Hoi Tak Leung, a senior technology sector lawyer at Ashurst.


Investment in Singapore's crypto and blockchain companies surged to $1.48 billion in 2021, according to KPMG, ten times the previous year and nearly half the Asia Pacific total for 2021.

Regulators at the MAS have said they hope to encourage crypto-related services, a sharp contrast with China's ban, a crypto tax in India that has crippled trading, and incoming rules in Hong Kong restricting crypto investing to professionals.

Over 150 crypto companies applied for a new crypto payments licence from the MAS in 2020, although so far only a handful have received one.

But the picture has grown murky with the collapse of Three Arrows Capital (3AC), which began liquidation proceedings in the British Virgin Islands on June 27, court filings showed, after the global downturn in digital currencies left it unable to meet hundreds of millions of dollars in obligations.

3AC did not respond to a request for comment, and its liquidators told a U.S. bankruptcy court they cannot locate the fund's founders, Kyle Davies and Zhu Su.

The ripple effects of 3AC's collapse - and the subsequent market turmoil - have been swift and severe. Singapore-based crypto lending and trading platform Vauld said last week that it would suspend withdrawals, and the following day a rival crypto lender said it planned to acquire the company.

Another fund, Mirana, is suing 3AC in Singapore over a loan agreement, local media reported, citing court filings which are not available publicly. Mirana did not reply to requests for comment.

In the United States, crypto lender Voyager Digital filed for bankruptcy last week, days after 3AC defaulted on a crypto loan worth $650 million it was owed, while crypto exchanges Genesis and Blockchain.com have also disclosed losses on their dealings with 3AC.

Rose Kehoe, managing director in Kroll's restructuring practice in Singapore, said in the coming weeks she expects crypto-related businesses facing liquidity issues to use Singapore's mechanisms for court protection of companies in restructuring.

"We will continue to see crypto markets globally being impacted by the contagion effect of recent market events, including in Singapore, a major cryptocurrency hub," she said.

Sector players are also wary of how Singapore's regulators may react.

"If Singapore decides to take a more hawkish approach towards crypto businesses in future, other countries in (Southeast Asia) could follow suit," said Jeff Mei, chief marketing officer at ChainUp, a Singapore crypto company.

"(This) could open a gap for Hong Kong to step into the arena more meaningfully."

MAS did not comment on the matter, but on June 30 it issued a rare public reprimand to 3AC for breaching fund rules, and added it was investigating the company on potential further breaches.

"I think (MAS) wanted to send a signal to the industry to say, '3AC was already on our watch list'," said Hagen Rooke, a Singapore-based partner at law firm Reed Smith. He said that such misdemeanours would normally be handled with a private wrap on the knuckles.

"The question is whether the MAS is going to become even more draconian in its approach to the crypto industry," he added, identifying new rules around crypto borrowing and lending as one likely regulatory focus.

(Reporting by Alun John in Hong Kong and Chen Lin in Singapore; Editing by Edmund Klamann)

GOOD NEWS

Halliburton Warns Significant Frack Growth May Be Impossible This Year


Editor OilPrice.com
Thu, July 21, 2022 

Fracking, or hydraulic fracturing, is an oil extraction technique that involves high-pressure water blended with sand and chemicals, forced into underground rocks known as shale to capture oil and gas. The process was revolutionized by horizontal drilling in the 1980s and 2000s, transforming America into the world's largest oil producer overnight.

American shale drillers have shown how quickly they can boost oil production over the years. But after several years of divestment and decarbonization, the days of fracking roaring back to life are over.

Halliburton Co.'s CEO Jeff Miller confirmed this to analysts during a conference call Tuesday. He said the oilfield equipment market is so tight that oil explorers are already discussing 2023 projects.

Miller said oil companies don't have enough fracking equipment for newly leased wells this year. He said diesel-powered and electric equipment are in short supply, "making it almost impossible to add incremental capacity this year."
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This development is another setback for the Biden administration's efforts to increase US oil production to ease the worst inflation in forty years ahead of the midterm elections in November.

A similar message was conveyed by Exxon Mobil, whose CEO said that global oil markets might remain tight for another three to five years primarily because of a lack of investment since the pandemic began.

Chief executive Darren Woods said it'll take time for oil firms to "catch up" on the investments needed to ensure enough supply.

Related: Saudi Arabia’s Ability To Pump More Oil “Limited”

Back to the shale patch, where even if exploration companies were to obtain fracking equipment for drilling new or existing wells, the frack sand used to blast through shale rocks is in short supply across Texas.

Russell Hardy, the CEO of the world's largest independent oil merchant, Vitol, also believes oil prices will remain high because the market can't see where additional supply is coming from to balance demand.

Meanwhile, Brent oil prices rose to $106 on Tuesday after President Biden returned from Saudi Arabia without an agreement on increasing output from OPEC+.

"The message is that it is OPEC+ that makes the oil supply decision, and the cartel isn't remotely interested in what Biden is trying to achieve," said Naeem Aslam, the chief market analyst at Avatrade.

Neither US shale nor OPEC+ appears to be increasing output in the immediate future for their own respective reasons, indicating tight crude supplies will keep energy prices elevated and inflation high.

All the Biden administration can hope for now is a recession to curb consumer demand to rebalance markets.

By Zerohedge.com

China’s $1.2 Trillion Wealth Fund Reorganizes Key Investment Arm

CHINESE CAPITALI$M IS FINANCIAL IMPERIALISM

Bloomberg News
Wed, July 20, 2022 



(Bloomberg) -- China’s sovereign wealth fund is merging a unit overseeing billions of dollars in private equity and infrastructure investments into its main operations, according to people familiar with the matter, seeking to boost efficiency after a talent exodus and as offshore investing grows more complex.

China Investment Corp., which oversees $1.2 trillion in assets, recently combined the operations of CIC Capital with its main overseas investment business, the people said, asking not to be named because the matter is private. The consolidation partly unwinds the Beijing-based fund’s 2015 decision to create the unit as its direct investment arm to boost long-term returns and help Chinese companies expand abroad.

While the functions of CIC Capital’s teams are little changed, the new structure is another step in streamlining operations. The sovereign wealth fund last year restructured how it decides on international investments, setting up two new committees in place of bodies at units CIC Capital and CIC International that had overlapping responsibilities.

CIC didn’t reply to an emailed request seeking comment.

CIC Capital has been a key part of Chairman Peng Chun’s effort to raise direct and alternative investments to 50% of the sovereign wealth fund’s overseas portfolio, a goal he has months left to achieve under a five-year plan that runs till 2022.

The unit’s main business departments, which look after private equity and infrastructure investments, have now been renamed and re-aligned alongside departments operating in the same areas at the wider company, the people said. The middle and back-office functions have also been renamed or combined.

CIC Capital committed $19.5 billion of investments in four years through 2019, according to its annual reports. Its key deals include Tank & Rast, which provides services like gas stations on German motorways, and Turkey’s container terminal Kumport.

The unit has seen an exodus of senior investment professionals, especially after dealmaking became more difficult in the US and the pandemic curbed travel. At least nine senior managers have departed in recent years, including Executive Vice President Zhang Qing, who left in early 2019, and Winston Ma Wenyan, a managing director and former head of the Toronto office, who quit in 2018.

CIC has received little fresh capital from the government in the past decade as the nation’s foreign exchange reserves halted their years-long surge. The company has also disclosed little progress after saying in 2017 it was considering bond sales to boost funds at CIC Capital to as much as $100 billion.

Direct and alternative investments at the sovereign fund expanded by about 0.8 percentage point to 43% as of end of 2020, reversing a decline of almost 2 percentage points in 2019, according to its 2020 annual report, the latest.

Before the revamps, CIC’s overseas investments were handled by CIC International and CIC Capital, with each unit executing and managing investments approved by their own investment committees. Now both units’ departments collectively handle and manage investments along business lines, guided by two committees overseeing public assets and non-public assets.

Here are some of the recent changes made:

CIC Capital’s Investment Department Two has been renamed Private Equity Investment Department Two; the business in charge of infrastructure holdings, Investment Department One, is now Real Asset Investment Department Two, the people said.


CIC’s private equity department has become Private Equity Investment Department One, while the real estate department is now Real Asset Investment Department One, the people said.

Capital Outflows From China Sovereign Bonds Just Hit $30 Billion

Bloomberg News
Fri, July 22, 2022 






(Bloomberg) -- China’s bond market is becoming the locus for global capital outflows and there are signs the government is growing concerned about the $30 billion exodus as it delays data and seeks to manage investor expectations.

Foreign funds offloaded 55.9 billion yuan ($8.3 billion) of the nation’s debt in June, a fifth month of net sales that swelled the total outflows this year to 200 billion yuan. That’s an abrupt reversal for a market that had seen global participation grow every year since 2014, when Bloomberg started compiling data based on official figures.

In one way, the outflows aren’t surprising as they come after aggressive Federal Reserve rate hikes caused the premium offered by China’s bond yields over Treasuries to become a discount. Yet, the exodus is a concern given it’s taking place at a sensitive time before a key leadership summit this year, and coincides with an escalating economic and property-market crisis.

China’s officials have downplayed the outflows, insisting the country is still an important destination for cross-border bond investments.

“Fluctuations in bond flows are very common in both developed and emerging markets, while the volatility seen in China is relatively low,” Chunying Wang, a spokeswoman for the State Administration of Foreign Exchange, told reporters on Friday. Index-tracking funds and global central-bank allocations are helping to stabilize the situation, especially as the latter account for over half the total of Chinese debt held by overseas investors, she said.

The publication of the June bond figures by China Central Depository & Clearing Co. took place about a week later than in previous months. Interbank-bond-market figures released by the central bank’s Shanghai head office on Friday were also delayed, as they are typically sent out in the first half of each month. In May, China’s bond-trading platform for foreign investors quietly stopped providing data on its transactions.

Foreign investors still held 2.32 trillion yuan of Chinese debt at the end of June, well above the 221 billion yuan they owned in 2014. The opening up of China’s capital markets and the inclusion of the nation’s debt in more global bond indexes has attracted central banks and global investors eager to tap its higher yields.

“The bulk of the remaining foreign holdings of Chinese fixed-income assets reflects reserve manager, sovereign wealth fund and index tracking demand,” said Lemon Zhang, a strategist at Barclays Plc in Singapore. Looking ahead, large inflows are unlikely as investors aren’t optimistic on duration or China’s currency, while higher global yields provide alternatives, she said.

Demand for Chinese bonds has waned in recent months as US 10-year yields surged above 3%, while similar-maturity yields in China remained stuck in a range of 2.7% to 2.85% due to the People’s Bank of China’s accommodative monetary policy.

“Bond inflows are unlikely to make a strong comeback due to the narrowed nominal yield differentials,” said Frances Cheung, rates strategist at Oversea-Chinese Banking Corp. in Singapore. “The argument that Chinese government bonds are more resilient in the face of rising yields may also be weakening, as further increases in global yields may be seen as smaller than we observed in previous months.”

There are other signs of concerns about capital outflows too. Chinese regulatory officials have recently been ordered to exercise greater caution when it comes to reviewing new overseas spending and investment plans due to concern higher US interest rates will increase capital outflows, people familiar with the matter said this month.

The share of overseas investors’ holdings in China’s sovereign bonds dropped below 10% at the end of June for the first time since January 2021. Foreign funds also sold a net 90 million yuan of local government debt and 35.47 billion yuan of policy bank notes last month, the ChinaBond data also showed.

(Updates to add strategist comment in eighth par

China’s Credit Market Rocked by More Debt Delays, Plunging Bonds

Wei Zhou and Dorothy Ma
Thu, July 21, 2022


(Bloomberg) -- China’s credit market is now showing stress on an almost daily basis, as a worsening property crisis shatters assumptions about safe borrowers and even Chinese investors turn against troubled debtors.

The country’s junk dollar bonds were on the brink of record lows Thursday, as a state-backed developer sought payment delays on $1.6 billion of dollar notes. In other signs of stress, the debt of a private builder deemed healthy just months ago sank, while creditors spurned a restructuring plan by the parent of BMW AG’s China partner.

Taken together, the incidents point to a credit market in a new phase of turmoil as stress spreads from cash-starved private developers to those with government backing and companies outside the housing sector. Chinese investors pushing back on debt reprieves or unfavorable restructuring plans also suggest dwindling confidence in Beijing’s ability to pull off a fast economic turnaround.

“Sentiment in China’s high-yield market deteriorated on China South City’s surprising extension,” said Ting Meng, senior Asia credit strategist at Australia & New Zealand Banking Group Ltd. “It will be very challenging for developers in the second half as we’re not seeing the real estate sector bottom yet. Even if the industry bottoms, the recovery of HY bonds will be time consuming and painful.”

The day began with China South City Holdings Ltd. proposing changes to its dollar bonds, including extending maturities and paying principal in installments. A slide in the securities -- which were near par just two months ago after a bailout -- has rattled investors who had bet its state links would help insulate it.

Prices of Chinese high-yield dollar notes, a market dominated by developers, have neared record lows this week. While prices of some property notes edged up Thursday on short covering, the absolute levels remain in distressed territory.

The selloff has engulfed even investment-grade peers including China Vanke Co. Another builder previously seen as relatively safe, Country Garden Holdings Co., had trading of one of its yuan bonds briefly suspended Thursday after the security fell 22% to 54 yuan. China’s top-performing mutual fund this year is among a growing list of investors cutting exposure, with major developers like Vanke and Seazen Holdings Co. dropping out of its top ten holdings.

China Bad-Debt Firm Sells Local Bond as Property Bailout Planned

There was some relief later in the day.

The nation’s banking and insurance watchdog pledged that regulators will work with local authorities to ensure delivery of property projects, which have stalled as developers run out of cash.

It’s asking banks to facilitate completion of real estate projects, while China Vanke was also able to sell 3 billion yuan ($444 million) of debt at 3%, the middle of an indicative range. Bonds of Country Garden also jumped.

Repayment risks in China Inc. have spread to unprecedented levels. China South City, which focuses on commercial projects in sectors like logistics, had warned that if the so-called consent solicitation isn’t successful, it might not be able to repay principal or interest on its dollar bonds and that might lead to an event of default.

If the proposed amendments become effective, a Shenzhen entity which in May bought a 29% stake in China South City would enter a type of credit protection called a keepwell deed involving all the dollar bonds. That seemed to be enough to boost the price of the bonds maturing next year at least 8.7 cents, set for the largest gain in months.

But broader concerns persist, as the still deeply distressed price levels reflect. The builder suffered a record drop in the August dollar bond earlier this week, highlighting investor worries about imminent debt deadlines at property firms. Numerous developers this year have sought extensions on local and offshore bond payments.

“Despite property sales improving, developers are finding it difficult to secure financing and continue construction, prompting reports of homebuyers refusing to make mortgage payments,” Goldman Sachs Group Inc. analysts wrote in a risk report. “We believe further policy changes are needed to improve confidence and ensure the issues around mortgage repayments is addressed.”

As the rout in credit markets intensifies, China’s local investors, who have until recently been remarkably receptive to distressed firms’ attempts to delay bond repayments or reorganize debt, are getting impatient.

Brilliance Auto Group Holdings Co., parent of German automaker BMW’s China joint-venture partner, failed to get approval from some creditors on its restructuring plan. The state-run company entered a court-led restructuring in late 2020 after defaulting on some 6.5 billion yuan of obligations.

The creditor revolt came on the heels of bondholders’ rejection of China Evergrande Group’s proposal earlier this month to extend a yuan note, a rare move that may result in a landmark onshore default. The developer, which remains at the epicenter of the property debt crisis, has already suffered dollar bond delinquencies and aims to unveil a preliminary overhaul plan by the end of July.

WITH CHINESE CHARACTERISTICS