It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Most documented cyberattacks against individual vessels have historically been executed by jamming and spoofing navigation signals. However, vessels are increasingly threatened by a wider range of attacks, to include ransomware. Recently, 1000 shipping vessels were affected when DNV’s ShipManager software system was hit by a cyberattack. Luckily many vessels maintained their offline functionalities which reduced disruption, but this attack demonstrated the potential widespread reach of cyberattacks against vessels. In addition, there are potentially large financial gains to be made from attacks against vessels. Following the blockage of the Suez Canal by a 400-meter-long containership in 2021 and the ensuing disruption to global trade and financial markets, criminal hackers discovered that they could take advantage of the stock market changes associated with a grounded vessel to profit. Therefore, there are potential benefits for attackers of attacking a vessel.
One way of compromising a vessel is through phishing emails. Phishing emails are a form of social engineering which encourage crewmembers to click on insecure links and unknowingly download harmful content onto their computer. The emails appear legitimate and links are disguised as secure and genuine. They may well be personalized to that particular crew or ship, using information derived from open sources, such as social media. Phishing emails play a key role for many types of maritime cyberattacks, which rely on placing malicious software on target computers, including ransomware attacks.
Writing these emails has typically been a manual exercise. However, a newly released AI tool is changing that.
ChatGPT is a novel tool developed by OpenAI with many linguistic skills, including explaining quantum physics and writing poetry on command. ChatGPT was not designed for criminals, and in fact has internal barriers to prevent it from creating malicious material when directly ordered to. However, attackers have found a way around this. AI can be a force multiplier for attackers, especially when using social engineering techniques. In particular, the AI chatbot produces persuasive phishing emails when prompted.
There are many benefits for attackers who utilise ChatGPT. For instance, it writes in good American English, helping attackers to disguise any typical differentiators between legitimate and illegitimate emails, such as typos or unique formats. Indeed, it has many different ways of responding to a single prompt, making emails individual and authentic looking.
ChatGPT can create a convincing and emotionally manipulative phishing email, according to prompts provided by the user:
ChatGPT will also happily include a malicious link as an attachment:
So how real is the threat?
Before the latest version of ChatGPT was released, one research paper revealed analysis of over 50,000 emails sent to users in over 100 countries as part of its phishing training workflow. Professional red teamers had a 4.2 percent click rate, compared to ChatGPT’s 2.9 percent. In some countries, including Sweden, the AI chatbot’s click rate was higher. Furthermore, a survey of 1,500 IT decision makers across North America, UK and Australia revealed that 53 percent are concerned specifically by the threat of more believable phishing emails and 51 percent expect a ChatGPT supported cyber attack within the next year. Darktrace also commissioned a survey, with Censuswide, reporting that 73 percent of UK employees are concerned by hackers’ use of generative AI to create indistinguishable scam emails. Further research reveals that ChatGPT is already manipulating people to bypass security requirements, after an AI successfully asked a TaskRabbit worker to solve a captcha for them, due to a vision impairment.
The threat of phishing emails is further indicated by a recent study by Darktrace, which revealed a 135 percent increase in “novel social engineering attacks,” including increased text volume, punctuation, and sentence length with no links or attachments, in 2023 in correspondence with the spread of ChatGPT. It also revealed that the overall volume of malicious email campaigns has dropped and been replaced with more linguistically complex emails.
It is evident then that people are legitimately concerned by the ability of ChatGPT to send convincing phishing emails, and this threat has been highlighted by national and regional authorities. Europol has released a warning regarding the use of ChatGPT for creating highly convincing and realistic text. The UK’s NCSC has also warned of LLM’s use to write convincing phishing emails.
What does this mean for the maritime industry?
ChatGPT has near encyclopedic knowledge, which can easily be used to find useful maritime-specific information, such as the names of vessels or IMO regulations, in order to make emails more convincing:
The threat posed to maritime by ChatGPT is substantial, especially because the rewards could be significant for the hacker. Shipping is a global industry, and disruption could be deeply costly. Vessels with networks that have been taken down due to a cyberattack cannot deliver essential commodities on which industries rely, like raw materials. A hacking event could even result in a grounding on a main trade route, with wider financial implications. As a result, increased security measures - like staff training - are required in order to raise awareness of the threats posed by clicking on malicious links.
The Invisible Pollutants Harming the Ocean - And Us
A barrel of DDT-laced waste off the coast of Catalina Island (David Valentine / UC Santa Barbara)
In the chilly gloom of the Californian seabed, thousands of barrels ooze a banned chemical. Some date back to the 1940s when the first was dumped off the coast. In March this year, researchers found that the chemical, DDT, has barely broken down, remaining as toxic as it was 80 years ago.
DDT (dichlorodiphenyltrichloroethane) is an insecticide that was widely used in agriculture until being banned – in the United States in 1972 and globally in 2001 – due to concerns about health impacts on wildlife and people. Its dense chemical bonds can resist degradation for decades.
Researchers now worry that dredging or storms could cause this polluted stretch of seafloor off the Los Angeles coast to release toxic plumes, threatening sea life and those who eat it.
Plastic gets the limelight when it comes to ocean pollution, but chemicals pose “a major threat, one that we’re probably consistently underestimating,” says Alex Rogers, a marine ecologist at the University of Oxford, and science director with REV Ocean, a research non-profit working on solutions to ocean challenges. The problem goes far beyond legacy pollutants like those barrels of DDT. Today, around 350,000 synthetic chemicals are widely used in manufacturing. They are embedded in our everyday lives in pharmaceuticals, cosmetics, cleaning products, electrical goods, textiles, furniture and other products. Ninety-five percent of all manufactured items now contain synthetic chemicals of some kind.
Their diverse applications have revolutionised our lives, but they can also endanger marine life and indeed ecosystems. Reaching the sea by a variety of routes, whether dishwashing liquid down the drain, oily wastewater dumped by tankers at sea, or even chemical-infused toilet paper, their presence and potential impacts are far-reaching. Synthetic chemicals have now been found in the remote Arctic and deep ocean trenches. Research by the EU suggests that 75% of the north-east Atlantic, 87% of the Mediterranean, and 96% of the Baltic Sea is contaminated with synthetic substances and heavy metals.
“We’re in a situation where more and more of these chemicals are being produced,” Rogers says. When pharmaceuticals are included, the chemical industry is the world’s second largest manufacturing industry. As it continues churning out new varieties, scientists, campaigners and policymakers are asking with growing urgency: what exactly are these chemicals doing to the ocean – and to us?
Lack of data
We actually know little about the impacts of most chemical pollutants on marine life. Understanding has been hampered by their mind-boggling diversity, complex makeup and variable properties. The growing sophistication of consumer goods means individual products are often manufactured using dozens of synthetic chemicals, making ocean impacts even trickier to untangle.
An analysis in 2021 revealed that across some 130,000 studies on the ecological impacts of synthetics, just 65 chemicals dominated the literature. Furthermore, there’s no public information available on 120,000 of the 350,000 chemicals produced worldwide. These data gaps were mentioned in a 2022 report produced by Back to Blue, a joint initiative of the Economist and the Nippon Foundation. It was the first attempt to describe the scale of global ocean chemical pollution: “We had the realisation that we hadn’t missed the data. It’s just not there,” says Jessica Brown, co-author of the report, and head of engagement at Back to Blue. “We travelled to the UN Ocean Conference last June, and one of the things that really struck us was that very few people were talking about any kind of pollution other than plastic.”
The little we do know about chemical pollution suggests its threat is far bigger than we realise. Of particular concern are persistent organic pollutants. “POPs” cover a diversity of chemicals that include the likes of DDT and polychlorinated biphenyls (PCBs), a group of compounds used as lubricants and coolants in electrical equipment until, like DDT, they were regulated in most countries. But the problem is that these chemicals, along with all other POPs, share two traits: persistence, and a tendency to accumulate in fatty tissues.
In the ocean, they’re steadily “biomagnified” up the food chain. Rogers explains: “Many large predators are long-lived, and so as they’re continuously feeding on contaminated prey, they’re building up larger and larger concentrations of these toxic compounds in their own bodies.” These chemicals have been linked to cancers, fertility problems, and other conditions. In the blubber of Europe’s orca and bottlenose dolphins, PCBs have accumulated to such high levels that many animals have been left unable to breed, threatening the populations with extinction.
Dozens of POPs are now banned under the Stockholm Convention. But their persistence means that even long-banned chemicals like PCBs and DDT still circulate at “worrisome levels,” says John Stegeman, a marine toxicologist at the Woods Hole Oceanographic Institution. It’s the same problem with other POPs like per- and poly-fluoroalkyl substances (PFAS). Some PFAs were only banned under the convention in 2019. “So like PCBs they will be around for a long, long time,” Stegeman says.
By hitching a ride on highly buoyant rafts of plastic waste, POPs have now reached the far corners of the ocean. Meanwhile, the 14 million tons of plastic that flood the ocean every year may itself also be morphing into a significant source of chemical pollution. “We have been working on industrial chemical pollution, many of us for over 20 years now,” says Ninja Reineke, head of science at CHEM Trust, a UK–German charity campaigning for better chemicals regulations. “And then at some stage, plastic pollution became the hot topic. But many of the things we’ve been concerned about for years are actually plastic additives,” Reineke says. These include PFAS, phthalates (plasticisers), and bisphenol A (BPA), which are infused into plastics to, among other things, make them water-repellent, flexible and clear. Such chemicals are endocrine disruptors and have been found to affect reproduction in molluscs, crustaceans, insects, fish and amphibians, and development in crustaceans and amphibians. They leach out of ocean plastic as it degrades. “There’s a lot we don’t know about that, but, overall, plastics are also a matter of chemical pollution,” Stegeman adds.
The data on marine chemical pollutants is typically limited to the effects of certain chemicals on certain species. What they’re doing at ecosystem scales is generally unknown. An exception is synthetic nitrogen fertilisers. When washed off farmland into the sea, these nutrient-rich chemical mixtures can trigger algal blooms. When the algae dies, the bacteria that break it down consume most of the oxygen in the water column, choking out marine life. This causes die-offs of fish, dolphins and seals, leaving dead zones – some so large they can be seen from space. The recurring dead zone in the Gulf of Mexico, caused by nutrient pollution flowing out of the Mississippi River, spans about 10,000 square kilometres. It is thought to cost the US about $82 million a year in lost fisheries and tourism.
Human health
That taps into a big unknown: the human health impact of all this chemical pollution flushing into the sea. Global estimates show that pollution in general – including by chemicals – caused up to nine million premature deaths in 2019. Marine pollution mainly enters our bodies through seafood. As Stegeman points out, three billion or so people rely on marine species for protein.
Seafood may contain toxins from algal blooms, and potentially plastic-associated chemicals, according to a major recent report into the health impact of plastics. There’s also a risk of consuming mercury and PCBs that accumulate in fish. These chemicals can cause developmental problems in foetuses, and cardiovascular disease and dementia in adults, a recent literature review found. The review, co-authored by Stegeman, explored the connection between rising ocean pollution and human health. It also found that coal-burning is a major source of mercury pollution in the ocean, having been carried there by the wind. Marine chemical pollution may even enter our bodies if we inhale particles suspended in sea spray. “This is not just a story about the ocean but about us, because we are also exposed,” says Rogers.
The problem shows few signs of abating. The UN’s 2019 Global Chemical Outlook estimated that sales of synthetic chemicals will likely double by 2030. Unchecked production is fuelling increasingly unnecessary usage, Rogers believes. He recalls once seeing benzophenones – a chemical commonly found in sunscreens and known to kill young corals – in a body wash, there to prevent the coloured gel within from losing its hue in sunlight. “To me this is a really trivial use of a chemical which is potentially harmful.”
Scientists are also worried about the cocktail effect of thousands of volatile chemicals mixing in the sea, and how this stew will react in our warming and acidifying ocean. “This is an issue that the scientific community has to come to grips with in order to really appreciate the magnitude of potential harm,” Stegeman says. Meanwhile, production is moving to countries with less environmental regulation, increasing the chances that pollution will reach the sea.
A 2022 study argued that chemical production has in fact already crossed the safe planetary threshold. “The rate at which these pollutants are appearing in the environment far exceeds the capacity of governments to assess the risk, let alone control potential problems,” its authors wrote.
Who’s in charge?
Can regulation help curb the spread? Currently, aspects of global chemical pollution are covered by a patchwork of voluntary initiatives, agreements, national and state laws, and treaties. The Basel, Rotterdam and Stockholm conventions respectively control the dumping and the trade of hazardous wastes, and the production of certain chemical groups. Beyond these, there’s the European Union’s REACH legislation, which, significantly, puts the burden of responsibility on chemical companies to check their safety before use, instead of leaving researchers and governments scrambling to do damage control once these chemicals have been released into the wild.
“When REACH was created, there was this feeling that [chemical production] is just getting out of control. We don’t know enough about the uses, the properties even, and authorities shouldn’t have to chase that all the time,” says Reineke, whose organisation CHEM Trust has been advising on changes to the European law that would increase controls on endocrine-disrupting chemicals. They’re also pushing for substances with similar properties to be systematically regulated in groups, rather than banned one-by-one. Individual banning is a slow process that can lead to “regrettable substitution”, where a prohibited substance is simply replaced by a chemically similar version – “jumping from the frying pan into the fire” as Reineke puts it.
Another potential regulatory bright spot is the global plastics treaty currently being negotiated through the UN. When countries meet in May for the next stage of talks on what will go into the final treaty, one possibility on the agenda is reducing harmful additives and chemicals in plastics manufacturing. Promisingly, this legally binding treaty is likely to take a whole-lifecycle view of plastics and their environmental impact.
But the relatively slow pace of legislative change means there may be limits to what top–down regulation can achieve alone. “So much of the chemistry we’re working with was designed 40 to 50 years ago, when health, safety and environment weren’t part of the consideration,” says Joel Tickner, professor at the University of Massachusetts Lowell Centre for Sustainable Production. Changing this will require foundational shifts in how chemicals are manufactured, and innovation to create substitutes that don’t yet exist, he explains.
This is where industry could play a role in escaping the toxic chemical bind. Tickner founded the Green Chemistry & Commerce Council, a network of over 100 businesses working to develop chemicals that break down in the environment, for instance. In fact, safer alternatives already exist for many chemicals, according to Tickner; they just need routes into the market. “The renewable energy market – it’s taken subsidisation to do it. We’re going to have to subsidise the transition [to green chemistry].”
Curbing marine chemical pollution is a momentous problem that may ultimately require governments, industry and consumers to join forces. In the meantime, those barrels of DDT continue seeping on the Californian seafloor, a cautionary reminder of what awaits us if we don’t act. “People are making vast quantities of money knocking out stuff that’s causing long-term harm to our marine ecosystems. Some of these chemicals are actually a contributory factor to extinction risk,” Rogers says. “So, there’s a whole moral aspect to this.”
Emma Bryce is a freelance journalist who covers stories focused on the environment, conservation and climate change. You can tweet her at @EmmaSAanne and read more at www.emmabryce.com.
This article appears courtesy of China Dialogue Ocean and may be found in its original form here.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.
Turkey's undefeated Erdogan nears knife-edge vote
Dmitry ZAKS Sat, May 6, 2023 Erdogan unshackled religious restrictions, allowing veiled women to study and work
Turkish President Recep Tayyip Erdogan next Sunday puts his two-decade legacy on the line in a knife-edge vote against a powerful alliance built on anger over economic hardship and his authoritarian turn.
The 69-year-old has become one of Turkey's most important and divisive leaders since his Islamic-rooted party ended half a century of secular rule and launched an era of social transformation.
Turkey became a strategic player with a vibrant economy and a modern army of drones that shifted battlefields in wars stretching from Libya to Ukraine.
Erdogan's global stature soared when he helped stem Europe's migrant crisis in 2016 -- and then plunged when he unleashed a crackdown on dissent later that same year.
He enters one of the biggest elections of Turkey's modern era with his popularity weighed down by a crippling cost-of-living crisis and the social aftershocks of a February earthquake that claimed more than 50,000 lives.
The real possibility of defeat has seen Erdogan defiantly turn to sharply polarising themes that have given the polls a powder keg feel.
He accuses the West of funding his "pro-LGBT" rivals and portrays himself as a defender of conservative values against attacks by foreign "terrorists".
The increasingly febrile atmosphere prompted opposition leader Kemal Kilicdaroglu to ask supporters to stay home if they win.
"If we go out, there may be riots, armed people may take to the streets," the 74-year-old secular opposition leader warned.
- 'Political coup' -
The nation of 85 million appears as splintered as ever about whether Erdogan has done more harm than good in the only Muslim-majority country of the NATO defence bloc.
The entry of two minor candidates means that Erdogan and Kilicdaroglu will likely face each other again in a runoff on May 28.
But some of Erdogan's more hawkish ministers are sounding warnings about Western efforts to undermine Turkey's might through the polls.
The parliamentary and presidential polls will see Erdogan face a six-party alliance that crosses Turkey's vast political spectrum and includes some of his former allies.
Interior Minister Suleyman Soylu has repeatedly referred to US President Joe Biden's 2019 suggestion that Washington should embolden the opposition "to take on and defeat Erdogan".
"July 15 was their actual coup attempt," Soylu said of a failed 2016 military putsch that Erdogan blamed on a US-based Muslim preacher.
"And May 14 is their political coup attempt."
- Splintered society -
Erdogan continues to be lionised across more conservative swathes of Turkey for unshackling religious restrictions and bringing modern homes and jobs to millions of people through construction and state investment.
Turkey is now filled with hospitals and interconnected with airports and highways that stimulate trade and give the vast country a more inclusive feel.
He empowered conservative women by enabling them to stay veiled in school and in civil service -- a right that did not exist in the secular state created from the Ottoman Empire's ashes in 1923.
And he won early support from Turkey's long-repressed Kurdish minority by seeking a political solution to their armed struggle for an independent state.
But his equally passionate detractors point to a more ruthless streak that emerged with the violent clampdown on protests in 2013 -- and became even more apparent with sweeping purges he unleashed after the failed 2016 coup attempt.
Erdogan turned against the Kurds and jailed or stripped tens of thousands of people of their state jobs on oblique "terror" charges that sent chills through Turkish society.
Polls show younger voters who have no memories of the corruption and economic crises that ravaged Turkey before Erdogan's rise preferring Kilicdaroglu by a two-to-one margin. - Democratic traditions -
Erdogan's biggest problems started when he decided to defy the rules of economics by slashing interest rates to fight inflation in 2021.
The lira crashed and inflation hit an eye-popping 85 percent since his experiment began.
Millions lost their savings and fell into deep debt.
Polls show the economy worrying Turks more than any other issue -- a point not lost on Kilicdaroglu.
The retired civil servant pledges to restore economic order and bring in vast sums from Western investors who fled the chaos of Erdogan's more recent rule.
Kilicdaroglu's party will send out 300,000 monitors to Turkey's 50,000 polling stations to guarantee a fair outcome on election day.
A Western diplomatic source pointed to Turkey's strong tradition of respecting election results.
Erdogan's own supporters turned against him when the Turkish leader tried to annul the opposition's victory in 2019 mayoral elections in Istanbul.
But the source observed a note of worry among Erdogan's rank and file.
"For the first time, (ruling party) deputies are openly evoking the possibility of defeat," the source said.
bur-zak/pvh
We can't afford anything': Turkey's cost-of-living crisis threatens Erdogan's re-election
Mon, May 8, 2023 By Ali Kucukgocmen
ISTANBUL, May 8 (Reuters) - Istanbul barber Hakim Ekinci, a long-time supporter of Tayyip Erdogan, won't be voting for the president next Sunday, blaming his economic policies for eroding Turks' purchasing power and leaving many unable to afford even basic foodstuff.
Erdogan and his Islamist-rooted AK Party were able to maintain their voter base, made up mainly of lower-income, conservative Muslim Turks, thanks to strong economic growth in the first 10 years of his rule.
But a cost-of-living crisis sparked by Erdogan's unorthodox economic programme over the past 1-1/2 years has eroded his popularity, posing the biggest electoral challenge to his 20-year hold on power.
Some polls show Erdogan trailing his main opponent Kemal Kilicdaroglu ahead of Sunday's first round vote - although the gap has recently narrowed. The parliamentary race remains on a razor edge, with the opposition seen potentially clinching a narrow majority.
"We used to be able to buy three to four bags of groceries for 150-200 lira ($7.7-$10). My wife and I could hardly carry them. Now we can barely fill two bags," said Ekinci, 63, pausing to clip a customer's hair in his salon in Istanbul's Besiktas district.
"I'd say those responsible are the ones governing us. I think it is the wrong decisions they have taken. I used to be an AKP supporter but I'm not thinking of voting for them."
Ekinci's views are representative of millions of Turks, who have had to deal with runaway inflation for years. Food prices surged 54% year-on-year in April, with headline inflation dropping to 43.7% after peaking in October at 85.5%, the highest under Erdogan's rule.
Annual inflation has remained in double digits for nearly all of the five years since general elections in 2018. It began to surge after a currency crisis in late 2021, sparked by a series of interest rate cuts, in line with Erdogan's unorthodox views.
Ekinci said he began to question his support for the president and the AKP due to economic reasons shortly after the 2018 elections and made a definite decision not to vote for them after the currency crisis in 2021.
The Turkish lira lost 44% in 2021 and 30% in 2022. It has shed 76% under Erdogan's second term as president, marked by several currency crises due to unorthodox policies, geopolitical developments such as the Ukraine war and disputes between Ankara and Washington.
"The exchange rate is uncontrollable. We can't afford anything. Nothing they said has held, therefore they do not inspire any confidence," Ekinci said. WORDS AND ACTION
The barber works by himself after having to lay off his two staff and said he cannot secure any bank loans despite the rate cuts as authorities limit consumer loans to anchor inflation. His foreign currency loans also multiplied in lira terms as the currency fell.
But many AKP voters still believe only Erdogan can fix the economy, or blame other factors for its current state. Istanbul resident Halime Duman said people raising prices to make bigger profits were to blame for the soaring cost of living. "(Erdogan) can solve it with a flick of his wrist," she said, taking a break from shopping at a farmers' market in central Istanbul. The opposition, including Kilicdaroglu's opposition alliance, is all talk, in her opinion.
"They don't take action," she said.
Birol Baskan, an author and political analyst not affiliated with any party, said even "hardcore" Erdogan supporters don't deny that the economy is not doing as well as it did earlier in his rule.
"The reason why this party kept winning was because it delivered to voters certain material benefits. This is the first time that magic seems not to be working because of the economy, because of the high inflation (and) increasing cost of living."
"It badly hurt people's pocket and that's why I guess winning this election is no longer so assured."
'NOTHING BUT HUNGER'
Some voters are not confident that the opposition would immediately alleviate economic concerns either. Talat Gul, a marble mason, has never voted for the AKP or its allies. He currently sees "nothing but hunger" around him, but doubts things will quickly change for the better if the opposition wins.
"They have created in the last 21 years a Turkey that cannot be changed. It will take 20 years to recover, whoever comes to power. But I just want (Erdogan) to go," he said, walking around the farmers' market.
Ekinci, the barber, has yet to decide whom to vote for among the three candidates standing against Erdogan. "(Kilicdaroglu) may be an honest person... but they have not announced anything to convince me," he said.
"I want the dollar exchange rate to decline (after the elections). I want the price of petrol to fall. I want inflation to fall," Ekinci said.
"I want to go back to my life of five or six years ago. I want to be able to go on a picnic, travel abroad." ($1 = 19.4961 liras) (Reporting by Ali Kucukgocmen; Additional reporting by Jonathan Spicer and Birsen Altayli; Editing by Susan Fenton)
Bank Stocks Nearing a Crisis-Era Threshold Raises Warning Sign
Jessica Menton, Elena Popina and Bre Bradham Sun, May 7, 2023
(Bloomberg) -- The selloff in US bank shares is threatening to push them below a technical threshold that could signal more pain ahead for the broader stock market.
With the collapse of First Republic Bank worsening fears about the solvency of regional lenders, investors have pummeled financial stocks, leaving the S&P 500 financials index on the verge of falling back below its 2007 peak. For perspective, after the 2008 credit crash it took over a decade for that gauge to recover the ground it lost.
The financials index has been above the 2007 high since January 2021. If were to fall through that barrier now, it would be an ominous signal for the broader stock market, said hedge-fund manager Jim Roppel, founder of Roppel Capital Management.
Why? Because it could put further pressure on banks to conserve capital and cut back on lending, adding a drag to an economy already at risk of a recession after the Federal Reserve’s steep interest-rate increases over the past 14 months.
“You can’t have a bull market if bank stocks are falling,” said Roppel, who’s a long-term bull but currently is mostly in cash with the rest in defensive plays like gold and gold miners. “It’s like if an Olympic athlete had cinder blocks around their legs.”
Wild Week
Concerns about the stability of the banking system contributed to a tempestuous week as investors aggressively bet against the stocks. While the share prices rebounded on Friday amid speculation the selling was overdone, many remained down steeply, with Western Alliance Bancorp sinking 27% last week and PacWest Bancorp plunging 43%.
Individual investors — who were some of the market’s most reliable dip buyers in 2020 and 2021 — scooped up some bank stocks amid the rout. In the week through Wednesday, they were net buyers in shares of Bank of America Corp., Truist Financial Corp. and SoFi Technologies Inc., data compiled by JPMorgan Chase & Co.’s Peng Cheng show.
But there’s continuing concern on Wall Street that the ongoing turmoil among regional banks could fuel a tightening in lending. In fact, traders are betting that the toll could be so great that they stepped up wagers that the Fed — which just signaled that Wednesday’s rate hike may be its last — will start easing monetary policy as soon as July to stimulate the economy.
Even so, Nancy Tengler, chief investment officer of Laffer Tengler Investments, said it’s too soon to wade back into shares of beaten up banks. Instead, she’s been focused on technology and consumer-related stocks that would benefit from a drop in interest rates, though her firm added shares PNC Financial Services Group Inc. after it delivered strong profit growth and growing deposits.
“It’s not smart to chase some of these other bank stocks,” Tengler said. “You have to let the falling knife fall.”
Friday’s stock-market rebound was fueled by the stronger-than-expected monthly jobs report for April, which tempered fears of a recession. Still, while the 1.9% rally in the S&P wiped out most of last week’s decline in the broad benchmark, the financial stocks in the index lost 2.7% over the five sessions.
Scott Colyer, chief executive at Advisors Asset Management, said the S&P 500 would have to slump to 3,600 or lower for him to become more optimistic about stocks, as valuations remain pricey. It closed at about 4,136 Friday.
“We have to see have financials leading the way for the stock market to be in a sustainable uptrend — but that’s not what’s happening,” Colyer cautioned. “Don’t pick up nickels and dimes in front of a steam roller.”
There's a record $5.3 trillion is cash on the sidelines as investors get more bearish on stocks. Here's why that could mean big gains ahead.
Matthew Fox Sun, May 7, 2023 A trader works at the New York Stock Exchange NYSE in New York, the United States, on March 9, 2022.Michael Nagle/Xinhua via Getty
Investors can't stop piling up cash, with assets in money market funds ballooning to a record $5.3 trillion.
The surge in cash comes amid a combo of high interest rates and depressed investor sentiment towards the stock market.
But that massive pile of cash could be the fuel needed to drive the next bull market rally.
Investors are hoarding cash at record levels and there's no sign of the trend reversing amid high interest rates and depressed investor sentiment towards the stock market.
Money market fund assets have ballooned to a record $5.3 trillion, with inflows surging by $588 billion over the past ten weeks, according to a recent note from Bank of America.
That surge in cash held by investors came amid a flight-to-safety sparked by the regional banking crisis, in which three banks with combined assets of nearly $550 billion collapsed over a two-month period.
The recent fund flow surge into money market funds eclipsed the $500 billion fund inflows seen after the Lehman Brothers collapse in 2008, and was about half that of the $1.2 trillion that flooded money market funds during the onset of the COVID-19 pandemic.
In AAII's most recent investor sentiment survey, which asks investors where they think the stock market will be in six months, bearish responses surged to 45% over the past week, which is a historically high reading for the 30+ year-old survey. The historical average for bearish responses is 31%.
Meanwhile, only 24% of respondents were bullish on stocks, which suggests that most investors are struggling to find a good reason to invest their money into equities amid the heightened uncertainty tied to the ongoing banking crisis.
"This raises too many tail risk issues including credit tightening, commercial real estate and wide economic implications," Lee said. And yet, Lee still sees a balanced risk/reward setup for the stock market as the banking sector shows signs of stabilizing and earnings results hold up better-than-expected.
And if ongoing developments in the banking sector, economy, and stock market turn better-than-expected, then there's a massive $5.3 trillion pile of cash that could act as fuel to drive the next bull market in stocks. That's because, according to Lee, much of the cash that's been built up over the past couple of years was withdrawn from the stock market.
"Retail liquidations of S&P 500 and Nasdaq stocks exceeds [retail's] purchases since 2019," Lee told Insider on Friday, referencing data from Goldman Sachs.
"I think stocks are flat vs. [a] year ago and sentiment far worse and there is way more cash on [the] sidelines. So there is definitely [a] flows story that could unfold," Lee said. Lee set his 2023 year-end price target at 4,750, about 15% higher than current levels.
If that massive cash pile starts to unwind, investors have few options on where to put it, and the stock market is likely a top choice.
Bank of America
Mystery Chinese spacecraft returns to Earth after 276 days
Sun, May 7, 2023
BEIJING (Reuters) - An experimental Chinese spacecraft returned to Earth on Monday after staying in orbit for 276 days, China's state media reported, completing a landmark mission to test the country's reusable space technologies.
The uncrewed spacecraft returned to the Jiuquan launch centre in northwest China on Monday as scheduled, according to state media.
No details were given on what the spacecraft was, what technologies were tested, how high it flew, and where its orbits had taken it since its launch in early August 2022. Images of the craft have also yet to be released to the public.
The test marks an "important" breakthrough in China's research into reusable spacecraft technology that will provide a more convenient and inexpensive way to mount future space missions, state media reported.
In 2021, what may have been a similar spacecraft flew to the edge of space and returned to Earth on the same day in a mission that was also kept largely under wraps. It landed on Earth "horizontally," according to China's main space contractor at the time.
Commentators on Chinese social media have speculated that Beijing has been developing a spacecraft like the U.S. Air Force's X-37B, an autonomous spaceplane that can remain in orbit for years.
The uncrewed and reusable X-37B returned to Earth in November last year in its sixth and latest mission, after more than 900 days in orbit.
(Reporting by Ryan Woo. Editing by Gerry Doyle)
Analysis-Battle for China's electric SUV market heats up at home and abroad
Sun, May 7, 2023
SHANGHAI (Reuters) - China is ground zero for the price war in electric vehicles and the battleground is shifting to SUV-styled EVs, the largest segment of the market, dominated by Tesla Inc and BYD.
The market, crowded with more than 90 models, is about to get even tighter with at least 20 new models of both Chinese and foreign brands launched in April, squeezing pricing and margins at home and driving exports, analysts and executives said.
EV makers in China have followed Tesla's bold price cuts by lowering prices for their own electric SUVs, cannabalising sales of internal combustion engine (ICE) vehicles as the price gap between the technologies narrows, analysts said.
The trend will spread abroad with growing exports of China-made electric SUVs.
"We're going to see a lot of Chinese exports because of the ultra-competitive market in China. It's actually going to be a pressure release valve," said Tu Le, founder of Beijing-based advisory firm Sino Auto Insights.
The market for SUVs has boomed in China over the past decade and now represents almost 40% of all cars sold, with 400 SUV models of all fuel types.
Almost as many China-made SUVs were sold in 2022 as cars of any type in Europe last year, or more than 11 million.
The popularity of electric SUVs has exploded since Tesla delivered its domestically-produced Model Y two years ago in China, making it one of the fastest-growing segments in the world's largest auto market.
Both domestic and foreign brands were represented among the new models rolled out at the Shanghai Auto Show in April.
Legacy automakers Volkswagen, BMW and Toyota are counting on new electric SUVs to bolster China sales.
Made-in-China EV startups Xpeng and Nio have six SUV models and the EV-only brands launched by Chinese state-owned car companies, such as GAC's Aion are also pushing all-electric SUVs.
They will compete with 93 existing electric SUV models in a market that saw 1.5 million sales in 2022, with the top 10 brands making up 84%, a Reuters analysis of data from China Association of Automobile Manufacturers (CAAM) shows.
There were 76 electric SUVs in 2020 before Tesla started producing Model Ys in China, with average annual sales amounting to just 3,000 units.
Despite recent minor price hikes, Tesla's Model Y is still 20% cheaper in China than in early October, when the U.S. automaker grappled with rising inventory.
DISCOUNT WAR
Xpeng, Leapmotor and others have fired back with their own discounts, while BYD offered a discount of $1,000 on its market-leading Song Plus SUV, or about 4% off.
Those refusing to slash prices on existing models to protect brand value have instead chosen to offer lower-than-expected starting prices for new models, along with longer driving ranges and greater autonomous driving features.
For example, Geely's premium EV brand Zeekr priced its new compact crossover Zeekr X from $27,500, 28% cheaper than Model Y and almost the same price as Honda's CR-V, first-quarter sales of which slumped 56%.
Mitsubishi Motors also said last week it had suspended for three months production of its Outlander SUV in China.
The reality is "brutal" for legacy foreign brands targeting the mass market with small SUVs priced below $40,000, such as Ford, said Le of Sino Auto Insights.
Ford's chief executive, Jim Farley, acknowledged the intense market competition for two-row, SUV-styled EVs as a factor driving China's car export boom.
"That's why they're going big on Europe. Europe is a premium export market. They're all going there," Farley said in April after a trip to China.
Ford will also restructure its China operations to turn one of its joint ventures into an export hub for low-cost commercial electric and combustion vehicles, Farley said last week.
General Motors, which saw profit from China tumble by almost a fourth in the most recent quarter, needs new EVs to be a success in order to rebuild its market share in China, but the pressure is intense.
"China has 100 vehicle brands vying for sales and a 50% capacity utilization rate," Chief Executive Mary Barra said.
Tesla and Renault have already been exporting their China-made electric SUVs to Europe on a large scale. Tesla will begin shipping Model Y crossovers from its Shanghai plant to Canada, its first exports to North America, Reuters reported.
Chinese automakers have their own plans to grow electric SUV sales to Europe.
Zeekr said it would bring the Zeekr X to western Europe while exports of BYD's Atto 3 SUV more than doubled in the first quarter as it started taking orders there.
"The styling of it (Atto 3) is in keeping with the higher driving position, the good space," said Mark Blundell, BYD's head of marketing in Britain.
"We just feel it's a good start point for us in the UK."
($1=6.9000 Chinese yuan renminbi)
(Reporting by Zhang Yan and Brenda Goh in Shanghai; Additional reporting by Nick Carey in London; Editing by Ben Klayman and Clarence Fernandez)
Iran hangs 2 in rare blasphemy case as executions surge JON GAMBRELL Mon, May 8, 2023
DUBAI, United Arab Emirates (AP) — Iran hanged two men Monday convicted of blasphemy, authorities said, carrying out rare death sentences for the crime as executions surge across the Islamic Republic following months of unrest.
Iran remains one of the world's top executioners, having put to death at least 203 prisoners since the start of this year alone, according to the Oslo-based group Iran Human Rights. But carrying out executions for blasphemy remains rare, as previous cases saw the sentences reduced by authorities.
The two men executed, Yousef Mehrad and Sadrollah Fazeli Zare, died at Arak Prison in central Iran. They had been arrested in May 2020, accused of being involved in a channel on the Telegram message app called “Critique of Superstition and Religion,” according to the U.S. Commission on International Religious Freedom. Both men faced months of solitary confinement and could not contact their families, the commission said.
The Mizan news agency of Iran's judiciary confirmed the executions, describing the two men as having insulted Islam's Prophet Muhammad and promoted atheism. Mizan also accused them of burning a Quran, Islam's holy book, though it wasn't clear whether the men allegedly did that or such imagery was shared in the Telegram channel.
Mahmood Amiry-Moghaddam, who leads Iran Human Rights, decried the executions as exposing the “medieval nature” of Iran's theocracy.
“The international community must show with its reaction that executions for expressing an opinion is intolerable,” he said in a statement. “The refusal of the international community to react decisively is a green light for the Iranian government and all their like-minded people around the world.”
It wasn't immediately clear when Iran carried out its last execution for blasphemy. Other countries in the Middle East, like Saudi Arabia, also allow for death sentences to be imposed for blasphemy.
The streak of executions, including members of ethnic minority groups in Iran, comes as monthslong protests over the September death of 22-year-old Mahsa Amini after her arrest by the country's morality police have cooled. Already, at least four people charged over alleged crimes from the demonstrations have been put to death. The protests, which reportedly saw over 500 people killed and 19,000 others arrested, marked one of the biggest challenges to Iran’s theocracy since the 1979 Islamic Revolution.
In 2022, Iran executed at least 582 people, up from 333 people in 2021, according to Iran Human Rights. Amnesty International's most-recent report on executions put Iran as the world's second-largest executioner, behind only China, where thousands are believed to be put to death a year.
Mehdi Hasan Torches Republicans By Naming The Only Thing They Really Stand For
Another Day, Another Mass Shooting
Ed Mazza Mon, May 8, 2023
MSNBC’s Mehdi Hasan said it’s time to call the Republican Party what it really is as lawmakers on the right reject any attempt at gun control amid a wave of mass shootings.
“In America in 2023 there have been more mass shootings than there have been days,” he said on his show on Sunday evening, citing statistics from the Gun Violence Archive. “This is how we live now.”
Hasan systemically dismantled the usual right-wing talking points after mass shootings, including the notion that nothing can be done.
“They’re lying to you,” he said. “This isn’t about mental health, which every other country has problems with. It isn’t drugs, which every other country struggles with. It isn’t computer games, which every other country has. It’s the guns. It’s obviously the guns.”
He said it’s high time to place the blame where it belongs: On Republicans.
“Let’s stop saying ‘Congress must act’ and start saying ‘the Republican Party must act’,” he said. “Let’s stop treating the GOP as the party of law and order and treat them, more accurately, as the party of gun violence, of school shootings, of mall massacres.”
He called for a ban an assault weapons:
Hasan also ripped into another common GOP talking point after each mass shooting: the notion that the answer is in “thoughts and prayers” or that God has to provide the solution:
Former Army officer and witness to Texas mall shooting who calls himself a 'gun lover' says mental health isn't the problem: 'We need more gun control'
Katie Balevic Sun, May 7, 2023 Emergency personnel work the scene of a shooting at Allen Premium Outlets on May 6, 2023 in Allen, Texas.
Stewart F. House/Getty Images
Former Army officer who rushed to scene of mass shooting in Allen, Texas says US needs gun control.
Steven Spainhouer said he's a "gun lover" but that "this is going to keep happening" without stricter laws.
He added that it was a gun, not mental health issues, that "killed these people."
A witness to the deadly mass shooting at a Texas mall on Saturday said he's a "gun lover." Then he called for more gun control.
Steven Spainhouer, who said he is both a former police officer and a former Army officer, rushed to the scene of the shooting on Saturday, arriving even before emergency responders.
"When you get hit with an automatic weapon fire at close range, there is no opportunity for survival," Spainhouer told MSNBC. "I don't know what the gunman's problem was, but it wasn't mental health that killed these people. It was an automatic rifle with bullets."
A gunman opened fire inside Allen Premium Outlets on Saturday, killing eight people and injuring seven others before a police officer who happened to be nearby shot and killed him. Police have not yet identified the gunman or his motivations.
In a statement calling for stricter gun regulations, President Joe Biden said the gunman used an "AR-15 style assault weapon."
The shooting in a town north of Dallas came about a week after five people were killed in a shooting in Cleveland, a Texas town north of Houston.
Politicians resistant to guncontrol have blamed the prevalence and severity of American mass shootings on mental health – despite reports that only a small portion of violence is tied to mental illnesses.
"I'm a gun lover. I have guns. I'm a former police officer. I'm a former Army officer. But these M-4s, AR-15s, they've got to get off the streets, or this is going to keep happening," Spainhouer said on Sunday. "We've got to stop that at some point."
"All the politicians are going to make statements. They're going to offer prayers and condolences," Spainhouer said. "Prayers and condolences won't bring these people back. We need some action in our legislatures at the federal and state level for better gun control. And I'm saying that as someone who loves guns."
Climate change is bad for everyone. But this is where it's expected to be worst in the US.
Dinah Voyles Pulver, USA TODAY Sun, May 7, 2023
If you’re thinking about a long-term real estate investment or shopping for a place to settle down for 20 or 30 years, you might be wondering which cities or states could fare better than others in a changing climate.
The impacts vary widely over time and space, so it’s difficult to make a definitive ranking that says “buy here, not there,” but a growing body of evidence helps highlight some general trends.
USA TODAY looked at data from First Street and Moody’s Analytics – two organizations examining future climate risk – to see what areas of the country are most at risk from these climate impacts over the next 30 years.
Insurers and mortgage companies are asking the same kinds of questions, Kamins said. Banks are being asked to “stress test their portfolios in preparation for the impact of climate change.”
While locations with the greatest risks seem obvious – think Florida – others might surprise you.
Here's your guide to what, when and where you can expect climate change impacts to be the worst in the U.S.
Climate change will have uneven impacts on the U.S. in coming decades. Some areas may experience more heat, more flooding, more extreme storms, or more intense wildfires – or all of the above.
The U.S. won’t see any locations underwater or wiped off the map over the next 30 years, Kamins said, but access to fresh water and insurance premiums will become bigger challenges.
“Every year it becomes increasingly crystal clear, just the amount of risk that we face, whether it’s increasingly severe natural disasters or droughts and heat risk,” he said. “In some cases it’s creating renewed momentum or brand new momentum for governments and businesses that hadn’t been thinking seriously about the impact of climate change before.”
East Coast: Wind, flooding and sea level rise stack the deck against many counties and states, especially Florida and the Carolinas, Kamins said. Bustling economies and distance to the beach still attract people in droves, but at some point the tide literally will turn against communities along beaches and coastal rivers.
Southwest: Heat and fire bring increasing risks, particularly in Arizona, he said, even without factoring in the perils of a dwindling water supply.
Interior: Intense heat may affect these states the most in runaway warming scenarios, Mann said. Sudden downpours with unprecedented rain also are occurring more often, even though these states aren’t in hurricane-prone coastal areas. One study he co-authored showed some of the greatest risk of heat stress could be in urban areas in the Pacific Northwest and Great Lakes.
Idaho to Minnesota: A swath of states across the northern U.S. look better than most, with less-pronounced risks, Kamins said. Recent statistics on an influx of newcomers to Idaho and its burgeoning tech hub in Boise show people may be figuring that out. He expects Montana may be the next frontier within 10-20 years.
States that may face more climate change risk sooner
Texas - Its sheer size and geography means Texas has a lot of risk. First Street's data shows some of its counties are at great risk of wildfire, some face higher potential losses from tropical cyclone winds and some have greater flood risks. The Lone Star State leads the nation in billion-dollar disasters, according to information from the National Oceanic and Atmospheric Administration. It averages 5.3 such events a year, double the number it experienced in the previous 20, even adjusted for inflation.
Florida – 8,346 miles of shoreline, surrounded on three sides by water. Need we say more? Rising sea levels and extreme rainfall fueled by warming oceans, with the potential for more intense hurricanes while more people crowd into densely populated areas, increase the risks. Florida has the most top spots on First Street's list of counties that could see the biggest increases in the number of days with the very warmest temperatures they experience today.
California - Over the past three years, the state has seen its largest wildfire season in history, its worst drought in 1,200 years and a string of record-setting atmospheric rivers. Golden State residents need no reminder of the risks they face, but First Street’s data shows some California counties high on its lists for most extreme fire risk and some cities with the greatest percentage of residential properties at risk of flooding. Which states did Moody's Analytics find face the greatest physical risks?
When it comes to weather-related events, hurricanes are literally the heavy hitters when accounting for acute physical risk. Climate change already is cranking up the rain in some tropical storms and hurricanes and could be slowing them down over land but that research is still underway, scientists say. Floods and wildfires also figured into Kamins’ assessment of physical risks. Here’s his list:
Florida
Louisiana
South Carolina
North Carolina
Delaware
Rhode Island
New Jersey
Virginia
Massachusetts
Connecticut
Other locations suffer from change happening over time rather than in single headline-grabbing events. Think the creep of rising sea levels or warmer nights and higher average temperatures.
San Francisco faces above average risk across these categories and more, and is the nation’s most exposed large city, Kamins said.
Brown pelicans fly in front of the San Francisco skyline on August 17, 2018 in San Francisco, California.
It's one of those urban areas where residents aren’t used to temperature extremes and many homes don't have air conditioning, he said. In a world where temperatures rise 5-10 degrees, unlike Floridians, San Francisco residents are ill-equipped for dealing with heat and it could be economically damaging.
Other cities with more gradually increasing risk on the Moody’s Analytics list are:
Southeastern metropolitan areas are particularly risky because they’re experiencing rising sea levels and higher temperatures, in addition to a parade of cyclones that could be growing more intense, according to Kamins’ study. The top 10:
Jacksonville, NC
New Bern, NC
Myrtle Beach, SC
Wilmington, NC
Greenville, NC
Charleston, SC
Punta Gorda, FL
Deltona, FL
San Juan, PR
Palm Bay, FL
Goldsboro, NC Billion dollar disaster data helps point to states already paying the price as the climate changes.
At least 37 states suffered twice the number of billion dollar disasters this century than during the previous 20-years.
Tornado activity appears to be expanding in the Mid-South, with more frequent outbreaks, and a USA TODAY investigation showed extreme rainfall events are occurring more often along the Mississippi River Valley. Scientists say both trends may be linked to the warming Gulf of Mexico.
But it’s not just weather events causing the disaster toll to rise, NOAA said. More extreme weather events take a greater toll when population and development increase in vulnerable areas.
Billion dollar disaster events per year since 2001 (More than 3):
Texas - 5.3
Illinois - 3.9
Georgia - 3.7
Oklahoma - 3.6
Missouri - 3.5
North Carolina - 3.4
Alabama - 3.3
Tennessee - 3.3
Virginia - 3.2
Kansas - 3.1
Mississippi - 3.1
More than 300% increase in billion dollar disaster events per year since 2000:
Arizona - 500%
Wyoming - 450%
Utah - 400%
New Mexico - 367%
Nevada - 335%
Nebraska - 320%
Colorado - 300%
Wisconsin - 300%
When considering future scenarios, it’s important to note much remains within the world’s control, Mann said.
With substantial action to hold warming below 3 degrees F, "we can limit the worsening of extreme weather events," although sea level increases would already be locked in, he said. A lack of action would mean “impacts in the interior of our continent could be every bit as bad.”
Brutal Heat Continues to Grip Asia in Warning for the World Jasmine Ng Mon, May 8, 2023
(Bloomberg) -- Asia remains in the grip of a blistering heat wave, chiming with predictions from climate scientists that 2023 could be the world’s hottest year.
In an ominous sign ahead of the northern hemisphere summer, an emerging El Nino weather pattern is pushing the mercury to unprecedented levels in southern parts of the continent.
Vietnam reported its highest ever temperature of 44.2C over the weekend, triggering power shortage warnings, while Laos also likely broke records. The Philippines cut classroom hours after the heat index reached the “danger” zone, reflecting the potentially deadly combination of heat and humidity.
The scorching temperatures follow a pattern of increasing extreme weather in recent years that’s sending the world into uncharted territory. The sweltering conditions are testing the ability of governments to protect public health and also to prevent major disruptions to agriculture and power generation in economies that are still recovering from the ravages of Covid-19.
El Nino — characterized by warmer ocean temperatures across the Pacific — has far-reaching impacts on weather patterns around the world. It could bring relief to drought-parched areas of Argentina and the southern US, while blanketing parts of Asia and Australia with hotter, drier conditions. Coffee, sugar, palm oil and cocoa crops would be especially vulnerable.
Temperatures in Thailand remained above 40C in many northern and central regions over much of last week, pushing power demand to a fresh peak. A group of businesses and banks have asked the government to prepare an action plan to deal with a potential drought that they say might last for three years.
Rainfall in Malaysia may be as much as 40% lower in some areas, which could put palm oil production at risk in one of the world’s biggest producers of the commodity. Authorities are closely monitoring the return of forest fires and air pollution. An El Nino in 2015 caused a particularly bad episode of haze that was one of the worst environmental disasters in Southeast Asia.
Elsewhere in Asia, scorching temperatures have also roasted parts of China, India and Bangladesh over the past few weeks. Yunnan province, a major aluminum hub in southwest China, suffered its worst drought in a decade last month. India is on alert for more heat waves following soaring temperatures in April that prompted school closures in some states and caused at least 11 people to die of heat stroke after attending an event.
--With assistance from Thomas Kutty Abraham, Nguyen Kieu Giang, Manolo Serapio Jr. and Anuradha Raghu.
