Why Have Natural Gas Prices Stayed Low?

Commodity

Energy

Summary:

The past few weeks do show an overall likelihood of a continual, slow fall in natural gas prices.

The prices of natural gas futures have acted very strangely, increasing until the recent frigid temperatures hit the US, and then dropping until after the temperatures recovered. Since 60% of the houses in the US are heated using natural gas, a drop in natural gas reserves would be expected, and the prices would accordingly increase. Neither of those happened. There are several reasons, which we will look at in this commentary. First, here is a chart of natural gas front month futures, from January 2023 to the present.

Why Have Natural Gas Prices Stayed Low?_1

Figure 1: Price of US natural gas futures, front month

The increase in the price of natural gas futures since January 22 should be looked at as an expected recovery from the rapid drop in price that preceded it, rather than a reaction to the very cold temperatures. It should also be mentioned that the EIA reported that the natural gas reserves did drop last week, but entirely in line with the normal drop in reserves observed during these dates over the past nine years, as will be shown later.

Now, let’s dig into why this happened. We begin with the less obvious reason. This arctic blast was actually not as cold as previous ones, even if it felt just as bad. During the past month, only two monthly record lows were set across the entire continental US, because previous storms were colder. (Monthly lows are a better measure than daily, since the storms are not courteous enough to occur over the exact same dates.) And why is that? The arctic storms are generally getting less frigid because the Arctic air, in common with the rest of the global air, is getting warmer. In support of that assertion, consider the number of record daily high temperatures versus the number of record daily low temperatures during the past 365 days (as of Tuesday, 30 January), according to NOAA. In a stable temperature environment, you would expect those two numbers to be roughly equal; they are not. There have been 32,590 record highs and 15,175 record lows, indicating a bias toward warmer temperatures. An interesting and curious fact: The record low temperature over the continental states for the afternoon of Wednesday, January 17, 2024, was −22◦ F, set at Monticello, Kentucky. That is an indication that the atmosphere was highly chaotic.

The more obvious reason for the drop in natural gas prices is that the reserves of natural gas have behaved completely normally. Yes, they did drop during January, but the drop precisely mirrored the drop of the past nine years, as can be seen in the following graph.

Why Have Natural Gas Prices Stayed Low?_2

Figure 2: Amount of US natural gas stored, in billion cubic feet

This means that, despite the large amount of natural gas that would have been used for heating during the arctic weather, the amount of natural gas that was put into storage was enough to mimic the average decline in natural gas. Turning back to prices, the timing of the events indicate that the prices shown could not have been affected by Joe Biden’s decision to suspend approvals for applications to export LNG (liquid natural gas) pending review by the Department of Energy. It probably won’t have any effect, since the market knows that the Department of Energy has never given a negative review of a natural gas project.

The past few weeks do show an overall likelihood of a continual, slow fall in natural gas prices, accompanied by a slow increase in storage. The US has a gigantic amount of natural gas that is being tapped into now and can be retrieved rapidly if necessary.

Sources:fundamentalanalytics.com

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Owen Li

Stocks

Summary:

Chinese stocks have staged a nascent recovery from a $7 trillion rout, thanks to intensifying rescue efforts as authorities seek to prevent the market from slumping for a fourth straight year.

The benchmark CSI 300 Index has gained so far this week. The rebound came after a quickening drumbeat of policy support, which included replacing the market regulator and wider trading curbs as well as state buying of major bank stocks. News that regulators planned to brief President Xi Jinping on markets also fueled optimism.

Chinese leaders are under mounting pressure to act more resolutely to end a stock-market meltdown that risks undermining financial and social stability, at a time when the economy is mired in worsening housing woes and persistent deflationary pressures. Authorities also appear keen to prevent a weak market from further dampening already anemic consumption as China enters the Lunar New Year holiday week.

Here’s a list of measures that have either been announced or reported on to start the year as China seeks to aid the economy and calm investors.

Feb. 7:

In a surprise move after markets had closed for the day, Beijing replaced the head of its securities regulator. Wu Qing, a banking and regulation veteran who earned the reputation as “the broker butcher” when he led a crackdown on traders in the mid-2000s, is replacing Yi Huiman as chairman and party chief of the China Securities Regulatory Commission, according to the official Xinhua News Agency.

Feb. 6:

Funding Support for Developers

China’s financial regulator calls for further, prompt implementation of a financing coordination mechanism to support developers at a meeting, according to a statement.

Regulators Plan to Brief Xi

Regulators plan to brief President Xi Jinping on the market as soon as Tuesday, Bloomberg News reported. While it’s unclear whether any new support measures will come out of the Xi meeting, traders are hoping this time will be different.

Sovereign Wealth Fund Pledges Support

Central Huijin Investment Ltd., the unit that holds Chinese government stakes in big financial institutions, said it will buy more exchange-traded funds. The securities regulator vowed in a follow-up comment to maintain stable market operations, adding that authorities will continue to guide various institutional investors and funds to enter the market with greater efforts.

M&A and Restructuring Support

China will strongly support listed companies to enhance their investment value through mergers, acquisitions and restructuring, the China Securities Regulatory Commission said in a statement.

‘National Team’ Buying Shares

The so-called national team has bought roughly 70 billion yuan ($9.7 billion) of onshore Chinese shares in the past month, according to estimates by Goldman Sachs, adding that 200 billion yuan or ~0.8% of free float market capitalization is needed to stabilize the market.

The national team refers to a group of Chinese state funds tasked to support markets. Meantime, overseas investors, which may include offshore proxies for such state funds, bought another 1.7 billion yuan of mainland stocks via trading links with Hong Kong Wednesday, marking the seventh consecutive session of inflows.

Restricting Sales

China is tightening trading restrictions on domestic institutional investors as well as some offshore units as authorities fight to stem a deepening stock rout, according to people familiar with the matter.

Officials this week imposed caps on some brokerages’ cross-border total return swaps with clients, limiting a channel that can be used by China-based investors to short Hong Kong stocks, said the people, asking not to be identified discussing a private matter. At the same time, some Chinese brokers that use the channel to buy mainland shares for their offshore units were told not to reduce their positions, the people said.

Feb. 5:

Monetary Stimulus

Beijing added about 1 trillion yuan into markets Monday with the previously announced cut to banks’ reserve requirement ratio taking effect. That has helped keep cash ample, with money markets showing few signs of stress.

Regulators Check in With Listed Firms

China’s regulatory officials visited listed companies in 20 provinces and municipalities from Jan. 29-Feb. 4, according to a statement from China Securities Regulatory Commission. Regulators are accelerating their process to solve issues raised by listed companies on taxation policy, financing, land, imports and exports, as well as intellectual property right protection.

Help for Home Builders

Cash-strapped Chinese property developers said a range of their housing projects have been listed as eligible for funding under the latest program to support the ailing sector. The flurry of activity comes just three weeks after Beijing urged local authorities to draft a list of projects eligible for funding. Policymakers want risk-averse banks to step up lending to the real estate sector, which saw credit growth slow to the weakest in more than a year last quarter, undermining developers’ ability to complete homes.

Promise to Deal with Margin Call Risks

China stock traders are unwinding their margin debt rapidly, underscoring how a prolonged selloff may be leading to some forced share liquidation. In response, the securities regulator said it will guide brokerages to adjust their margin call levels and maintain “flexible” liquidation lines in an effort to reduce pressure from forced selling of pledged shares.

Feb. 4:

Regulator Vows to Prevent ‘Abnormal Fluctuations’

The China Securities Regulatory Commission vowed on Sunday to prevent abnormal fluctuations, saying it would guide more medium- and long-term funds into the market and crack down on illegal activities including malicious short selling and insider trading.

Feb. 1:

PBOC Supports Housing and Infrastructure

The People’s Bank of China provided 150 billion yuan worth of low-cost funds for lending to housing and infrastructure projects last month, stepping up support for the economy.

Share Buybacks

Firms listed in mainland China and Hong Kong spent 14 billion yuan and HK$21 billion ($2.6 billion) repurchasing shares last month, respectively, each marking a record since 2021 when Bloomberg began compiling the data.

Jan. 28: Securities Lending Restriction

Securities regulators said they will halt the lending of certain shares for short selling, the latest attempt to put a floor under the stock market rout. Strategic investors, which typically refers to holders with restricted shares, won’t be allowed to lend out the stock during agreed lock-up periods.

Jan. 27: Real Estate Easing

Guangzhou, one of China’s biggest cities, further loosened home-buying curbs in a bid to stem falling prices. Beijing, Shanghai and Shenzhen have lowered down-payment requirements since November.

Jan. 26: Aid for Developers

The Ministry of Housing and Urban-Rural Development said it will provide a list of housing projects eligible for funding support by the end of the month, the latest attempt to boost lending for real estate to slow the sector’s slump.

The same day, the National Financial Regulatory Administration urged banks to support requests by qualified developers including extending existing loans and adjusting repayment arrangements.

Jan. 24: RRR Cut, Property Loans, More

People’s Bank of China Governor Pan Gongsheng said the central bank will lower the reserve requirement ratio — the amount of cash lenders must keep in reserve — by 0.5 percentage points on Feb. 5 to release 1 trillion yuan ($139 billion) in long-term liquidity to the market. The announcement, coming after official data showed the nation’s economy was still grappling with major challenges, marked the biggest RRR cut since 2021.

Hours later, regulators unveiled more measures, including broadening the use of commercial property loans for developers to help them repay other debt.

The same day, authorities in China and Hong Kong announced steps to deepen financial ties, including facilitating real estate purchases and expanding a program that allows for personal investments in the Greater Bay Area, a region of 70 million people that includes Hong Kong and megacities in the southern mainland such as Shenzhen and Guangzhou.

Jan. 23: Stock Rescue Package

Policymakers are considering using about 2 trillion yuan, mainly from the offshore accounts of Chinese state-owned enterprises, as part of a stabilization fund to buy shares onshore through the Hong Kong exchange link, Bloomberg reported. They have also earmarked at least 300 billion yuan of local funds to invest in onshore shares through China Securities Finance Corp. or Central Huijin Investment Ltd. A day earlier, Premier Li Qiang asked authorities to take more “forceful” measures to stabilize the stock market and investor confidence. His request came after the CSI 300 Index touched a five-year low.

Jan. 19: Signs of State Buying

The aggregate turnover in some of the country’s top exchange-traded funds — commonly watched for signs of state-led buying — reached the third-largest weekly total ever. It was the most since July 2015, when the so-called “national team” tried to offset selling momentum amid an epic bubble bursting.

Jan. 16: Special Bonds

China is considering 1 trillion yuan of new debt issuance under a so-called special sovereign bond plan, Bloomberg News reported. The proposal discussed by senior policymakers would involve the sale of ultra-long sovereign bonds to fund projects related to food, energy, supply chains and urbanization.

Jan. 5: Rental Housing

The PBOC and the NFRA published guidelines on financial support for the development of the market for rental housing. That included a policy to encourage banks to provide loans for developers, industrial zones, certain rural organizations and companies to build new homes for long-term renting or renovating existing facilities for that purpose.

Sources:Bloomberg

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Kevin Du

Summary:

President Recep Tayyip Erdogan is eyeing economic revival by turning the country back toward conventional policies and partnership with the West. A red trolley with people on a street walking around.

Turkish President Recep Tayyip Erdogan, reelected in May 2023 to a third five-year term, has decided to adopt more conventional economic policies to reduce inflation and right the suffering economy in the Middle Eastern nation of 85 million people. He has the political capital to sustain the shakeup. Not only did Mr. Erdogan win with 52 percent of the vote, but the People’s Alliance – a coalition led by his Justice and Development Party (AKP) – also won a parliamentary majority.

First, as part of the overhaul, the president appointed a new economics team that includes Cevdet Yilmaz as vice president, Hafize Gaye Erkan as central bank governor and Mehmet Simsek as treasury and finance minister. Ms. Erkan, however, recently resigned and Fatih Karahan, the new appointee, is expected to continue with the same policies.

The new team has a difficult task in restoring investor and consumer confidence. Inflation in the nation is expected to average 66 percent throughout 2024, according to a September forecast by the Economic Policy Research Institute of Turkey (TEPAV). That is one of the highest rates in the world, fueled by unconventional preelection central bank policies of low interest rates. The government’s target inflation rate is 36 percent by year’s end. Mr. Simsek – who is popular among foreign investors – and the rest of the economic team quickly adopted orthodox economic policies.

Turkey returned to the dollar bond market in November 2023 to finance debt, securing $2.5 billion in the first deal. Since the May 2023 elections, the Turkish central bank has hiked interest rates from 8.5 percent to 45 percent. The results have not slowed inflation yet, but expectations are that they will work eventually: In mid-January, Moody’s Investors Service upgraded the country’s outlook to positive from stable, citing a “decisive change” in economic policy. Some experts expect inflation to moderate despite a recent 49 percent hike in the minimum wage.

Second, President Erdogan has reiterated that joining the European Union is Turkey’s strategic priority, a declaration greeted with incredulity by its European partners. Yet it has become the new motto in Ankara simply because the return to rational economic policies will require an accompanying return by Turkey to the West in its foreign policy orientation.

Third, President Erdogan has started talking about the need for a new civilian, democratic constitution based on domestic consensus, a switch from the normally contentious Turkish politics. Post-Election Turkey Returns to Economic Orthodoxy_1

Post-Election Turkey Returns to Economic Orthodoxy_1

How the era of irrational economics began and why it ended

It all started after the Islamic State siege of Kobane in northern Syria in 2015, in which 120 civilians were killed. Until the Kobane massacre, Turkey was part and parcel of an alliance that included the United States against Syrian President Bashar al-Assad. After Kobane, Turkey’s allies broke from Ankara and established a new headquarters in Syria with the YPG, Kurdish fighters aligned with the U.S. Turkey considers the YPG to be terrorists, indistinguishable from the Kurdish PKK, which the West officially labels as a terrorist organization.

The rupture turned Turkey into a foreign policy spoiler from the West’s perspective, not just in Syria, but also throughout the Eastern Mediterranean. The establishment in 2019 of the East Mediterranean Gas Forum, a multinational grouping that excluded Turkey, made matters worse.

A salient feature of the Turkish economy is a savings deficit that requires Turkey to rely on U.S. dollar markets to finance its current account deficits. But former U.S. President Donald Trump’s threat to destroy Turkey’s economy, if it took unspecified “off-limits’’ actions in Syria, fueled Ankara’s fears, prompting the country to cut its ties with dollar markets. That step required eliminating credit-swap lines with London and bringing Turkish gold back home.

The era of irrational economic policies had begun and extended to the foreign policy realm, given the developments in Syria. The circumstances prompted NATO member Turkey to fall out of step with the West and go its own way.

As legitimate as the grievances may have been, it led to harmful government economic policies that Turkey is still trying to undo today. A nation in chronic need of financing cannot decouple from U.S. dollar markets. Russia, China or the Gulf states are no substitute for orderly Western markets. Post-Election Turkey Returns to Economic Orthodoxy_2

Post-Election Turkey Returns to Economic Orthodoxy_2

Turkey knows better

Turkey was one of the first developing countries to design and implement financial liberalization measures in the 1980s, when the nature of fund flows between countries started to change. The transfer of funds had previously been government-to-government before the 1980s but then shifted to market-based transactions. Recognizing the sea change, Turkey was one of the first to establish and liberalize its financial markets among developing countries. That meant it had not only developed orderly government debt instruments and a stock market but also opened its financial markets to foreign participation and allowed for the convertibility of the Turkish lira.

The harm from the unorthodox economic policies in recent years became visible even before the May 2023 elections. Coupled with election dynamics, the country saw a rapid rise in inflation and a swift deterioration in both the current account and budget deficits. Today’s policy turn is simply one of necessity to stabilize the Turkish economy.

Turkey’s robust economic potential

Turkey is an industrialized country with a diversified manufacturing base and a nominal gross domestic product that topped $1.1 trillion in 2023, ranking 17th among nations. Its economic transformation is mostly due to close relations with the EU. About 95 percent of Turkish exports are manufacturing products and around 53 percent of them go to G7 countries. Close cooperation with the West has turned the sleepy agrarian country of the 1960s into a dynamic industrialized country in the 2020s.

A balance of payments crisis in an industry-based economy is more detrimental than a balance of payments crisis in a resource-based economy, like Argentina. In Turkey’s case, the country’s earning capacity requires it to have hard currency at the beginning of the production cycle, so it can pay for imports. The failure to procure imports or repay debts can lead to massive unemployment and rampant inflation in a country such as Turkey.

However, untangling a web of irrational policy measures requires care. Hard currency demands could skyrocket overnight, given the weakened state of the lira, which is trading at record lows against the dollar. Gradualism would deliver fewer shocks, but fuel the risk that impatience grows among the people and the political elite as new municipal elections approach in March 2024. Post-Election Turkey Returns to Economic Orthodoxy_3

Post-Election Turkey Returns to Economic Orthodoxy_3

Scenarios

More likely: Erdogan sticks to economic orthodoxy, EU, new constitution

Turkey has municipal elections coming up in March 2024. President Erdogan’s AKP lost the 2019 municipal elections, most notably in big cities like Istanbul, Ankara and Antalya. If their objective is to start a rapid economic recovery in the lead-up to March balloting, especially in urban areas, then the administration is running out of time for the new, gradual economic policy framework. If these steps create a sense of positive economic expectations, such as lower inflation, they may work.

Keeping the EU as Turkey’s strategic priority could also boost positive economic expectations. The sooner that Western partners start engaging with Turkey, the higher the expectations will become.

As for a new constitution, it could be part of President Erdogan’s attempt to find new coalition partners in a parliament that will remain until the next presidential election in 2028. Implementing policy shifts made since the 2023 election may require new allies in an expanded coalition in parliament. A debate over a new civilian constitution may quickly bring new partners together, probably right after the local elections.

Less likely: Erdogan tries to stay in office past 2028

The debate over a new constitution might also be a way for Mr. Erdogan to extend his presidency. The president’s final constitutional term ends after the 2028 elections, so perhaps he will seek a new term with a new constitution. Such a power grab would, however, unite the otherwise disparate opposition. If it were up to voters in metropolitan areas, Mr. Erdogan would not be Turkey’s president today. Thus, he probably will not risk manufacturing ways to hold on to power.

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Thomas

Economic

Summary:

Asset inflation cycles have become the modern-day form of inflation.

In the last twenty-five years, asset price cycles have become more dominant in business cycle analysis, and in doing so, asset inflation cycles have become the modern-day form of inflation. Their importance has become so critical that they have become an explicit part of monetary policy via its new tool, quantitative purchases, whose primary purpose is to increase asset prices/values. With the Federal Reserve now a key player, do asset price cycles still exhibit similar boom and bust patterns as was the case in the past? Or can monetary policy permanently elevate asset prices above and beyond economic and financial fundamentals?

Asset Price Cycles

Several theories help to explain why asset price cycles have become more significant and more volatile over the past twenty-five years.

First, monetary policymakers changed its operating framework in the mid-to-late 1990s, just before the asset price tech bubble. Policymakers abandoned the money supply and credit anchors and started to track real official interest (i.e., Fed Funds level less consumer price index). That created an informal price-targeting policy regime, which years later became formal and removed a policy framework that responded to financial conditions and imbalances that could trigger future inflation or economic problems. Ever since the change in its framework, policymakers have refused to use official rates to dampen speculative and significant asset price cycles.

Second, in the late 1990s, BLS removed the house price signal (i.e., it stopped surveying owner homes for the rent calculation) from its measure of consumer price inflation. That change further broke the link between real estate and consumer price inflation and changed the correlation between real estate and equity prices to positive from negative. So, real and financial asset price cycles became mutually inclusive, which was the opposite of what was usually the case in previous cycles.

Third, globalization (i.e., the ability to import cheap goods) played a role in the US inflation cycle as it helped dampen goods price inflation. With monetary policy shifted exclusively to reported inflation and less to financial conditions, tame consumer price inflation contributed to investors speculating, and often winning that monetary policy will remain easy regardless of asset inflation.

Asset price cycles do not generate public outcry as general inflation cycles, even though history shows they can be equally destructive and destabilizing. That could be because asset price upswings can generate substantial wealth gains while general inflation penalizes everyone. Yet, policymakers have a mandate for financial stability, so they must stand up against the crowd even if it's politically unpopular.

Asset price imbalances or bubbles are hard to detect in real-time and can last long. Yet, one can gain perspective by comparing current market valuations of real and financial assets to past periods of boom and bust.

During the tech bubble, the market value of the real estate and equities on household balance sheets to nominal GDP spiked to a record 2.5 times, falling back to below two during the bust (see chart). The housing bubble helped fuel a more significant spike in market valuations to roughly three times GDP, and again, history repeated itself, as it often does in finance, with market valuation falling back to below two.

The Fed's QE 1 program helped asset prices recover ground lost during the Great Financial Recession, and QE 2 has pushed asset values to GDP to a new record high. Based on Q4 changes in asset prices and GDP, the ratio is estimated at 3.5, just shy of the record high at the end of 2021. If history were to repeat itself, it would take a 35% to 40% decline in both real estate and equity values to match the fall in the Asset/GDP ratio following the tech and housing bubbles. That is not a forecast but an illustration of how far current valuation have deviated from trend. Liquid assets correct sooner and more sharply than real assets so the equity and real estate declines, if they do occur, would not be proportional.

Can monetary policy permanently increase the nominal values of real and financial assets with its new policy tool (QE)? Monetary policy can make things look better and last longer, and QE has done that. But to permanently increase the earnings power and asset valuations is not something monetary policy can do. Every excessive asset and non-asset price cycle in history eventually broke for one reason or another. The current cycle should be no different.

Policymakers are debating when to reduce official rates because general inflation has slowed. Reducing official rates would be a significant policy mistake because of the price imbalance in the asset markets. Instead, policymakers should comprehensively review their policies because the economy's performance, evident with the strong job and wage gains in January, says the total stance of monetary policy remains too easy. In doing the review policymakers will learn that their new tool of quantitative purchases offsets a significant chunk of their official rate policy. In the current climate, it makes more sense to accelerate the reduction of the Fed's balance sheet than to lower official rates.

Sources:Haver analytics

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Samantha Luan

Summary:

A probe that spared President Joe Biden from criminal charges paradoxically dealt him a threatening political blow.

Special counsel Robert Hur’s report released Thursday on Biden’s handling of classified documents effectively ended the matter. But his assertions that Biden was elderly and forgetful ignited a political firestorm that cut directly to the heart of the president’s chief vulnerability in the 2024 election.

The White House knew it had a huge political problem on its hands.

After hours of Republican claims that the report showed he wasn’t capable of serving as president, Biden appeared at a hastily scheduled news conference Thursday evening, apparently seeking to turn the page on what turned into a disastrous day.

“I know what the hell I am doing,” Biden fumed in the Diplomatic Room of the White House, as he defended his faculties and bristled with anger. Biden also pointed out that Hur’s report drew distinctions between his handling of classified material and Donald Trump’s allegedly criminal and obstructive conduct on the same issue over which the ex-president faces a future criminal trial.

Biden appeared fired up and passionate. But at the same time, his angry demeanor and an event which appeared to quickly spin out of his control, with reporters shouting questions as he struggled to interrupt, may have ended up exacerbating the very questions about his age that it was meant to dispel.

When CNN’s MJ Lee pointed out that many voters have questions about his age, Biden pointed his finger and forcibly said, “That’s your judgment.”

The press event also raised new questions about his sharpness in a week in which he has twice confused the names of a serving and recent European leader with those with whom he interacted in the 1980s. At one point in his Thursday night appearance, Biden was referring to the president of Egypt in a comment about the Middle East crisis but mistakenly said “the president of Mexico.” This is the kind of mistake any overworked politician might make. And even when he was much younger, Biden had a reputation as a gaffe machine and for verbal slips. But in the context of Biden’s declaration that his “memory is fine” his political liability over his age and coming as it did during an event meant to demonstrate vitality and accurate recall, it was an unwelcome trip-up to say the least.

An emotional moment

There was also a poignant moment where palpable grief came to the surface when the president condemned Hur for suggesting that in an interview he struggled to remember the date of his beloved son Beau’s death. It’s hard to think of a more painful thing for Biden to have to read since he remains deeply affected by his son’s passing from brain cancer in 2015. “How the hell dare he raise that?” Biden asked, before breaking off, apparently close to tears.

Overall, Biden left an impression of a president who feels he’s been deeply wronged, is bitter about the way he is covered by the media and treated by Republicans and still believes deeply he is the best option to beat Trump in November — an opponent that he views as an anti-democratic anathema to everything America stands for. The president’s defenders often get frustrated when the political conversation is dominated by Biden’s age – rather than Trump’s repeated challenges to the rule of law.

But at the same time, his age and acuity really do matter to voters and he is under increasing pressure to address this and demonstrate his capacity as the general election approaches. Sure, Biden’s likely Republican opponent is a twice-impeached 77-year-old with a volcanic temperament who is facing 91 charges and tried to thwart US democracy three years ago. But Biden is the President now, and despite the preferred framing of his campaign that 2024 is a direct comparison between him and Trump, he will be judged on his own record and capability to serve as commander-in-chief for a full four years, especially as Vice President Kamala Harris has her own questions to answer about her experience, popularity and suitability to serve in the Oval Office.

In a CNN/SSRS poll published in November, only 25% of Americans believed Biden had the stamina and sharpness to serve effectively, while 53% said Trump did. In another CNN poll last week, 46% of Democrats were concerned about Biden’s age.

This is a delicate issue that has not been fully tackled either by the White House or the Biden campaign and is often rationalized away by Democrats and in Washington in a way that does not fully reflect the depth of feeling about it in the nation as a whole. The fact that Biden delivered his remarks on Thursday night shows that his team now recognizes the president has a significant liability in this area but his performance also suggests that he’s yet to fully work out how to put voters at ease.

A painful issue

Age and the question of diminished capacities as a person heads into their twilight years is a deeply painful and sensitive one. It’s something that many families have to wrestle with and so understand intuitively, a factor that may be reflected in public opinion on the matter as it relates to the election.

Many of the attacks on Biden by Republicans certainly reek of ageism and come across as cruel. As Biden knows however, politics is a nasty, personal business. In mitigation, he has kept up a rigorous schedule on the campaign trail in recent weeks traveling coast-to-coast and last year conducted several grueling foreign trips that would have tired a much younger man. But the pressures of the presidency are unrelenting and offer little time for true mental relief. This is underscored by the fact that Biden is for example dealing with two wars in Ukraine and Gaza that constantly threaten to spill out of control and embroil the world in a much wider conflict.

Biden’s fans may also have a case that he’s being unfairly compared with Trump. The ex-president — despite a few recent glaring gaffes himself — notably mixing up his GOP rival Nikki Haley with ex-House Speaker Nancy Pelosi — has not had the same scrutiny over age even though he’d be into his 80s by the end of his own second term if he wins in November.

Trump’s often nonsensical remarks, verbal gaffes and frequently unhinged demeanor are often cited by Democrats and raise questions about his age and capacity. But Trump’s manic energy tends to dampen such questions among his supporters, although there are arguably great red flags about his fitness for office raised by his four looming criminal trials and his open autocratic tendencies and vows to use a second term to enact personal “retribution” against his political enemies.

Hur’s report rebuked Biden for willfully retaining classified information, including top secret documents after he left the vice presidency. But he said no charges were called for because there was insufficient evidence of willful intent to prove guilt without reasonable doubt. He also also drew a distinction between Biden’s handling of classified material after documents were found at his home, his garage and in an office that he used and Trump’s hoarding of classified material at his Mar-a-Lago resort. Biden cooperated with his probe while Trump is alleged to have done the opposite, according to a criminal indictment that also accuses him of obstruction.

The facts show that there are huge differences in the cases of Biden and Trump — even if the nuance will be blurred in the heat of a campaign as GOP leaders complain of double standards in the justice system.

But the GOP’s real opening came when Hur suggested that Biden would come across to a jury as a sympathetic, well-meaning elderly man “with a poor memory.” Hur suggested that he had frequent memory lapses during his interviews with investigators, including not being able to recall when Beau died or exactly when Biden was vice president. The special counsel also said the president could not remember details of a debate over Afghanistan that appeared very important to him.

Biden’s lawyers lashed out at such details as inappropriate. Biden’s allies suggested that as Hur was appointed as a district attorney in Maryland by Trump he may have a political ax to grind.

Many of the Republican attacks on Biden were biting. Florida Sen. Marco Rubio suggested on Twitter for instance that he was suffering from dementia.

North Carolina Republican Sen. Thom Tillis was kinder but his comments over Biden’s age were also cutting. “I’m not one who gets personal. But when it’s so profound, that you have a prosecutor take note of it, I think it’s something to pay attention to,” Tillis said. “I’m not trying to take a cheap shot. … Let’s say that was the CEO of a company. What would their board of directors be asking for this evening?”

The reality of an unprecedented election

Democrats moved quickly to dismiss concerns about Biden.

“In my interactions with the president, which I have regularly, I’ve not experienced anything like that,” said Arizona Sen. Mark Kelly. “When I came back from Ukraine the last time, I spent a good amount of time with him on the phone, talking about Ukraine and the details, and he was sharp.”

But the fact Democrats even have to address this, points to Biden’s big political problem.

And the entire situation is replete with irony.

Biden acted aggressively Thursday to try to prevent a report that lifted the threat of criminal prosecution from him but already appears to have damaged him politically because of questions about his age. Trump meanwhile is facing four criminal trials that paradoxically appear to have benefitted him politically — at least with his deeply loyal base which has bought into his claims that he’s a victim of political persecution.

That may not seem fair. But for Biden, it comes with being an incumbent president in his 80s who is facing genuine questions from the public about his capacity to serve.

This also reflects the sometimes warped reality of politics in the age of Trump and an unprecedented election between two elderly likely opponents in November, each of whom have served an Oval Office term and have defied the efforts of a younger generation to succeed them.

Source：CNN politics

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Samantha Luan

Economic

Energy

Summary:

India is expected to be the largest driver of global oil demand growth between 2023 and 2030, narrowly taking the lead from top importer China, the International Energy Agency (IEA) said on Wednesday.

The world's third-largest oil importer and consumer is on track to post an oil demand increase of almost 1.2 million barrels per day (bpd) between 2023 and 2030, accounting for more than one-third of the projected 3.2 million bpd of global increases in the period, the IEA said in a report released at the India Energy Week in Goa.

The agency forecast India's demand would reach 6.6 million bpd in 2030, up from 5.5 million bpd in 2023.

"India will become the largest source of global oil demand growth between now and 2030, while growth in developed economies and China initially slows and then subsequently goes into reverse in our outlook," it added.

The single largest basis of India's oil consumption will be diesel fuel, accounting for almost half of the rise in the nation's demand and more than one-sixth of total global oil demand growth through to 2030, the IEA said.

Jet fuel is poised to grow 5.9% annually on average but this will be from a low base compared with other countries, it added.

"In the case of India, compared with China or other parts of the world, the Indian economy still continues to need more transport fuels so we expect India will continue to grow in transportation fuels. So that's something different from countries like China," Keisuke Sadamori, the IEA's director of energy markets and security, said on the sidelines of the conference.

Still, the electrification of India's vehicle fleet will lead to a more muted 0.7% annual growth average through 2030 for gasoline, the IEA said. New electric vehicles and energy efficiency improvements in India will avoid 480,000 bpd of extra oil demand from now to 2030, it added.

To meet this demand, India is expected to add 1 million bpd of new refining capacity over the seven-year period and this will increase its crude imports further to 5.8 million bpd by 2030, the IEA said.

"India is moving to the right path in terms of adding large additional refining capacities," Prasad Panicker, chairman of Indian refiner Nayara Energy said at the conference.

He added that Indian gasoline demand will not peak for "at least the next 20-25 years".

G Krishnakumar, the chairman of state run refiner Bharat Petroleum Corp, said that petrochemical demand for the company will also be a factor in India's oil consumption increase, as demand growth for petrochemicals is "directly proportional to the gross domestic product of the country."

An executive from India's top refiner Indian Oil Corp said on Tuesday at the conference that growth in all oil product sales are expected to rise in the fiscal year to March 2025.

The IEA report estimated India's oil inventories were at 243 million barrels, with 26 million barrels held at strategic petroleum reserves sites while the rest are industry stocks.

"This equates to 66 days of net imports, based on IEA methodology. Indian oil import requirements will rise rapidly toward 2030 and beyond," the IEA said in the report.

Article Source： zawya

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Alex

Summary:

About 128 million voters were registered to vote in national and state elections amid political and economic challenges.

Pakistan is counting votes in a general election marred by violence by armed groups and a suspension of mobile phone services. More than 128 million people were registered to elect representatives of the National Assembly and the nation’s four provincial legislatures.

The results will appear below as soon as they are available.

Keep reading

list of 4 items

list 1 of 4

Pakistan election 2024: By the numbers

list 2 of 4

Pakistan election 2024: How the voting works

list 3 of 4

‘Guerilla campaign’: How Imran Khan is fighting Pakistan election from jail

list 4 of 4

Pakistan’s election: Can the next government bring economic stability?

end of list

How voting works in Pakistan

Each voter can cast two votes — one for the National Assembly and the other for the provincial assembly.

The National Assembly comprises 336 seats – 266 to be decided through direct voting, while 60 seats are reserved for women and 10 for minorities which are allotted on the basis of 5 percent proportional representation in the federal parliament.

A party or a coalition will need 134 seats to form the government.

Pakistan elections 2024_2

Breakdown of national seats

Based on the results of the national census conducted in 2023, the constituencies went through a delimitation process. The boundaries of many constituencies were altered and the number of seats was reduced from 272 to 266.

Punjab: 141 seats
Sindh: 61 seats
Khyber Pakhtunkhwa: 45 seats
Balochistan: 16 seats
Islamabad Capital Territory: 3 seats

Pakistan elections 2024_3

Who are the leading candidates to be Pakistan’s next prime minister?

A crackdown on the biggest opposition party, Pakistan Tehreek-e-Insaf (PTI), and its leader, former Prime Minister Imran Khan, fuelled concerns that the polls would not be free and fair. Here are the country’s major parties:

Pakistan Muslim League-Nawaz (PMLN)

Nawaz Sharif, a three-time prime minister, returned to Pakistan after four years – in late 2023 – to assume the role of the head of the party. Several corruption cases that had led to his dismissal as prime minister in 2017 have since been dropped. Shehbaz Sharif, his younger brother, has also briefly been prime minister in an alliance with key opposition parties to remove Khan as prime minister in April 2022. If the PMLN forms a government, it is unclear which brother might become PM, but Nawaz will likely hold the strings either way.

Seats won in 2018: 64
Seats won in 2013: 126

Pakistan Peoples Party (PPP)

Bilawal Bhutto Zardari is the scion of the Bhutto dynasty. He will be leading his party after having served as foreign minister for a short period after Khan’s removal as PM in 2022. One of the youngest mainstream politicians, his campaign pays attention to climate change, gender equity in the economy, and striving for civility among parties. His grandfather Zulfikar Ali Bhutto and mother Benazir Bhutto ruled the country as prime ministers, and his father Asif Ali Zardari was Pakistan’s president from 2008 to 2013.

Seats won in 2018: 43
Seats won in 2013: 34

Pakistan Tehreek-e-Insaf (PTI)

Cricketer-turned-politician Imran Khan is the leader of the opposition PTI party. He is currently in jail in cases related to corruption and leaking state secrets. He led protests against the country’s powerful military after his removal from office in 2022. His conviction in a corruption case resulted in him being disqualified as a candidate. His party has ruled Khyber Pakhtunkhwa for the past decade, and the country’s most influential province, Punjab, for most of the past five years.

Seats won in 2018: 116
Seats won in 2013: 28

Pakistan elections 2024_4

Article Source： ALJAZEERA_ENG

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Owen Li

Stocks

Chinese stocks have staged a nascent recovery from a $7 trillion rout, thanks to intensifying rescue efforts as authorities seek to prevent the market from slumping for a fourth straight year.

Here’s a list of measures that have either been announced or reported on to start the year as China seeks to aid the economy and calm investors.

Feb. 7:

Feb. 6:

Funding Support for Developers

China’s financial regulator calls for further, prompt implementation of a financing coordination mechanism to support developers at a meeting, according to a statement.

Regulators Plan to Brief Xi

Sovereign Wealth Fund Pledges Support

M&A and Restructuring Support

China will strongly support listed companies to enhance their investment value through mergers, acquisitions and restructuring, the China Securities Regulatory Commission said in a statement.

‘National Team’ Buying Shares

Restricting Sales

Feb. 5:

Monetary Stimulus

Regulators Check in With Listed Firms

Help for Home Builders

Promise to Deal with Margin Call Risks

Feb. 4:

Regulator Vows to Prevent ‘Abnormal Fluctuations’

Feb. 1:

PBOC Supports Housing and Infrastructure

The People’s Bank of China provided 150 billion yuan worth of low-cost funds for lending to housing and infrastructure projects last month, stepping up support for the economy.

Share Buybacks

Jan. 28: Securities Lending Restriction

Jan. 27: Real Estate Easing

Guangzhou, one of China’s biggest cities, further loosened home-buying curbs in a bid to stem falling prices. Beijing, Shanghai and Shenzhen have lowered down-payment requirements since November.

Jan. 26: Aid for Developers

The same day, the National Financial Regulatory Administration urged banks to support requests by qualified developers including extending existing loans and adjusting repayment arrangements.

Jan. 24: RRR Cut, Property Loans, More

Hours later, regulators unveiled more measures, including broadening the use of commercial property loans for developers to help them repay other debt.

Jan. 23: Stock Rescue Package

Jan. 19: Signs of State Buying

Jan. 16: Special Bonds

Jan. 5: Rental Housing

Sources:Bloomberg

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Kevin Du

How the era of irrational economics began and why it ended

Turkey knows better

Turkey’s robust economic potential

Scenarios

More likely: Erdogan sticks to economic orthodoxy, EU, new constitution

Keeping the EU as Turkey’s strategic priority could also boost positive economic expectations. The sooner that Western partners start engaging with Turkey, the higher the expectations will become.

Less likely: Erdogan tries to stay in office past 2028

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Thomas

Economic

Asset Price Cycles

Several theories help to explain why asset price cycles have become more significant and more volatile over the past twenty-five years.

Sources:Haver analytics

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Samantha Luan

A probe that spared President Joe Biden from criminal charges paradoxically dealt him a threatening political blow.

The White House knew it had a huge political problem on its hands.

When CNN’s MJ Lee pointed out that many voters have questions about his age, Biden pointed his finger and forcibly said, “That’s your judgment.”

An emotional moment

A painful issue

Biden’s lawyers lashed out at such details as inappropriate. Biden’s allies suggested that as Hur was appointed as a district attorney in Maryland by Trump he may have a political ax to grind.

Many of the Republican attacks on Biden were biting. Florida Sen. Marco Rubio suggested on Twitter for instance that he was suffering from dementia.

The reality of an unprecedented election

Democrats moved quickly to dismiss concerns about Biden.

But the fact Democrats even have to address this, points to Biden’s big political problem.

And the entire situation is replete with irony.

That may not seem fair. But for Biden, it comes with being an incumbent president in his 80s who is facing genuine questions from the public about his capacity to serve.

Source：CNN politics

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Samantha Luan

Economic

Energy

The agency forecast India's demand would reach 6.6 million bpd in 2030, up from 5.5 million bpd in 2023.

Jet fuel is poised to grow 5.9% annually on average but this will be from a low base compared with other countries, it added.

"India is moving to the right path in terms of adding large additional refining capacities," Prasad Panicker, chairman of Indian refiner Nayara Energy said at the conference.

He added that Indian gasoline demand will not peak for "at least the next 20-25 years".

An executive from India's top refiner Indian Oil Corp said on Tuesday at the conference that growth in all oil product sales are expected to rise in the fiscal year to March 2025.

The IEA report estimated India's oil inventories were at 243 million barrels, with 26 million barrels held at strategic petroleum reserves sites while the rest are industry stocks.

"This equates to 66 days of net imports, based on IEA methodology. Indian oil import requirements will rise rapidly toward 2030 and beyond," the IEA said in the report.

Article Source： zawya

Risk Warnings and Disclaimers

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Add to Favorites

Alex

The results will appear below as soon as they are available.

Keep reading

list of 4 items

list 1 of 4

Pakistan election 2024: By the numbers

list 2 of 4

Pakistan election 2024: How the voting works

list 3 of 4

‘Guerilla campaign’: How Imran Khan is fighting Pakistan election from jail

list 4 of 4

Pakistan’s election: Can the next government bring economic stability?

end of list

How voting works in Pakistan

Each voter can cast two votes — one for the National Assembly and the other for the provincial assembly.

A party or a coalition will need 134 seats to form the government.

Pakistan elections 2024_2

Breakdown of national seats

Punjab: 141 seats
Sindh: 61 seats
Khyber Pakhtunkhwa: 45 seats
Balochistan: 16 seats
Islamabad Capital Territory: 3 seats

Pakistan elections 2024_3

Who are the leading candidates to be Pakistan’s next prime minister?

Pakistan Muslim League-Nawaz (PMLN)

Seats won in 2018: 64
Seats won in 2013: 126

Pakistan Peoples Party (PPP)

Seats won in 2018: 43
Seats won in 2013: 34

Pakistan Tehreek-e-Insaf (PTI)

Seats won in 2018: 116
Seats won in 2013: 28

Pakistan elections 2024_4

Article Source： ALJAZEERA_ENG

Risk Warnings and Disclaimers

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Why Have Natural Gas Prices Stayed Low?

Figure 1: Price of US natural gas futures, front month

Figure 2: Amount of US natural gas stored, in billion cubic feet

Sources:fundamentalanalytics.com

Everything China’s Doing to Rescue Its Battered Stock Market

Share Buybacks

Sources:Bloomberg

Post-Election Turkey Returns to Economic Orthodoxy

How the era of irrational economics began and why it ended

Turkey knows better

Turkey’s robust economic potential

Scenarios

Asset Inflation Cycles: Modern-Day Form of Inflation

Asset Price Cycles

Sources:Haver analytics

Biden Tries to Lay to Rest Age Concerns, but May Have Exacerbated Them

An emotional moment

A painful issue

The reality of an unprecedented election

Source：CNN politics

India Will Be World's Biggest Oil Demand Growth Driver Through 2030？

Article Source： zawya

Pak­istan elec­tions 2024

How voting works in Pakistan

Breakdown of national seats

Who are the leading candidates to be Pakistan’s next prime minister?

Article Source： ALJAZEERA_ENG

Everything China’s Doing to Rescue Its Battered Stock Market

Share Buybacks

Sources:Bloomberg

Post-Election Turkey Returns to Economic Orthodoxy

How the era of irrational economics began and why it ended

Turkey knows better

Turkey’s robust economic potential

Scenarios

Asset Inflation Cycles: Modern-Day Form of Inflation

Asset Price Cycles

Sources:Haver analytics

Biden Tries to Lay to Rest Age Concerns, but May Have Exacerbated Them

An emotional moment

A painful issue

The reality of an unprecedented election

Source：CNN politics

India Will Be World's Biggest Oil Demand Growth Driver Through 2030？

Article Source： zawya

Pak­istan elec­tions 2024

How voting works in Pakistan

Breakdown of national seats

Who are the leading candidates to be Pakistan’s next prime minister?

Article Source： ALJAZEERA_ENG

Risk Disclosure

Pakistan elections 2024

Pakistan elections 2024