After the US economy plum

bed a technical recession in the first half on the back of a trade and inventory drag in Q1 and Q2 respectively, which pushed GDP negative in H1 but which was never recognized by the NBER, moments ago the BEA reported its final estimate of Q3 GDP which came in even hotter than previously expected, rising at a 3.240% rate, above the 2.930% estimated one month ago and well above the 2.57% initial estimate reported in October, mostly on the back of another upward revision in personal consumption.

The update from the “second” estimate reflected upward revisions to consumer spending, which rose 2.3% in Q3 up from 1.7% in the previous estimate and up from 2.0% in Q2, as well as upward revisions to business investment, and state and local government that were partly offset by downward revisions to inventory investment and exports.

Here is the breakdown:

• Personal consumption contributed 1.54% to the 3.240% GDP bottom line, up from 1.18% in the 2nd estimate and up from 0.97% in the 1st Q3 GDP estimate
• Fixed investment subtracted 0.62% in Q3, a smaller reduction than the -0.74% in the second estimate
• The change in private inventories however took off a bigger chunk, subtracting -1.19% from the final Q3 GDP, up from -0.97% previously.
• Net trade added 2.86% to the bottom-line GDP print (1.65% to exports, 1.19% imports), slightly below the 2.93% in the second estimate.
• Finally, government consumption added 0.65% to the bottom line print, up from 0.53% seen in last month’s revision.

Looking at the bigger picture, the third-quarter increase in real GDP reflected increases in exports, consumer spending, business investment, and government spending that were partly offset by decreases in housing investment and inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.

• The increase in exports reflected both goods (led by industrial supplies and materials, “other” goods, and nonautomotive capital goods) and services (led by “other” business services and travel
• The increase in consumer spending reflected an increase in services (led by health care and “other” services) that was partly offset by a decrease in goods (led by motor vehicles and parts as well as food and beverages).  
• The increase in business investment reflected increases in equipment and intellectual property products that were partly offset by a decrease in structures.   
• The increase in government spending reflected increases in state and local as well as federal (both defense and nondefense spending).  
• The decrease in housing investment was led by new single-family housing construction and brokers’ commissions.  
• The decrease in private inventory investment was led by retail trade (mainly clothing and accessory stores, other general merchandise stores, and “other” retailers). 
• The decrease in imports reflected a decrease in goods (led by consumer goods) and services (led by transport)

Strong GDP also meant higher inflation, and the GDP price index was revised up from 4.3% to 4.4% in Q3 (also higher than the 4.3% estimate), if below the 9.0% prior quarter. Core PCE Q/Q rose 4.7% in 3Q, also higher than the 4.6% in the previous estimate and 4.6% consensus estimate for the final print.

Today’s release includes estimates of GDP by industry, or value added—a measure of an industry’s contribution to GDP. Private services-producing industries increased 4.9 percent, government increased 0.6 percent, and private goods-producing industries decreased 1.3 percent. Overall, 16 of 22 industry groups contributed to the third-quarter increase in real GDP.

• The increase in private services-producing industries primarily reflected increases in information (led by data processing, internet publishing, and other information services); professional, scientific, and technical services; and real estate and rental and leasing (led by real estate). Partly offsetting these increases were decreases in utilities as well as finance and insurance (led by Federal Reserve banks, credit intermediation, and related activities).  
• The increase in government reflected an increase in state and local government that was partly offset by a decrease in federal government.  
• The decrease in private goods-producing industries primarily reflected a decrease in construction that was partly offset by an increase in mining

Russia has blasted Ukrainian President Zelensky’s Wednesday visit to Washington and appearance before Congress, calling it a “Hollywood-style trip” that’s meant keep the fires of “proxy war” against Russia burning. 

“The Hollywood-style trip to Washington by the head of the Kiev regime has confirmed that the administration’s conciliatory statements about the lack of intention to start a confrontation with Russia are just empty words,” Russian ambassador to the US, Anatoly Antonov, said in fresh statements.

“What was essentially announced to applause and sarcastic smirks, was the need to continue the ‘proxy war’ against our country. Until a complete victory over us,” he added. 

During Zelensky’s some 30-minute long speech before Congress, which was frequently interrupted by spontaneous standing rounds of applause from US lawmakers, the Ukrainian leader vowed “absolute victory” to be accomplished “with” the United States – in provocative words given while VP Kamala Harris and outgoing House Speaker Nancy Pelosi were just over his shoulder. 

Antonov further blasted the “manic idea of defeating the Russians on the battlefield” in reacting to the speech, also condemning Biden’s newly announced pledge to send Patriot missiles. The Russian ambassador warned that any crew, even if directly from the US or NATO, found manning the Patriot batteries and systems becomes a fair target on the battlefield. 

He additionally claimed that throughout the conflict Moscow has tried to “appeal to common sense at all levels,” but blamed the West for upping its supply of longer range missiles and more advanced arms which is leading to escalation and thus future consequences “impossible to even imagine.”

But Zelensky’s address to Congress and “the American people”, which marked a very rare opportunity for a foreign leader, was peppered throughout with phrases like “Only victory!” Near the end of the address he also quoted from Franklin D. Roosevelt’s famous “Day of Infamy” speech.

“The American people in their righteous might will win through to absolute victory,” Zelensky said while quoting FDR, and he followed by pledging that Ukraine too will achieve “absolute victory.” 

Caught up w/ the Ukrainian diaspora delegation on their way into the Capitol to cheer for Zelensky
They told me $45 billion wasn’t enough, neo-Nazis do not exist in Ukraine and the banning of the Russian wing of the Orthodox Church & oppo parties was justified bc “martial law” pic.twitter.com/pFE2wmWaH9

— Max Blumenthal (@MaxBlumenthal) December 22, 2022

As Zelensky arrived in Washington Wednesday, the Kremlin had signaled the trip to the US and meeting with Biden at the White House now means there’s no chance of peace with Kiev.

“The supply of weapons continues and the range of supplied weapons is expanding. All of this, of course, leads to an aggravation of the conflict. This does not bode well for Ukraine,” Kremlin spokesman Dmitry Peskov had said.

Authored by Rystad Energy via OilPrice.com,

• Europe’s renewable energy industry is booming.

• If Europe is to remain a leader in renewable energy, the region will have to invest more into its grid.

• Grid bottlenecks could derail Europe’s green energy boom. 

Europe’s energy transition ambitions face several challenges, but a major impediment to bringing new renewable power online is insufficient grid capacity. Rystad Energy’s current base case forecast has Europe adding as much as 530 gigawatts (GW) of solar PV and onshore and offshore wind between 2022 and 2030, more than 66 GW per year on average. Furthermore, the share of solar and wind combined as a share of total installed capacity surpassed 10% in 2010 and more than tripled in 2021, reaching 34%, according to Rystad Energy research.

Growth is not expected to slow down anytime soon, as European countries are planning huge additions of renewables over the next few years. If Europe is to remain a leader in the energy transition, a huge amount of grid capacity will need to be developed, both to integrate new generation capacity into respective countries’ power mixes and to better connect European countries so that electricity can flow in the most optimal way.

The staggering amount of new solar and wind capacity expected to come online in Europe in the coming years means that grid interconnectivity will be the bottleneck to both the more efficient use of energy sources as well as overall slower decarbonization of the power sector as more fossil fuels need to be used to compensate. Historically, this has been much less of an issue as Europe’s power system has been dominated by four large sources – coal, gas, nuclear and hydropower – all with varying degrees of dispatchability but none considered intermittent.

With the pace of renewable energy development substantially exceeding the speed of grid upgrades and expansion projects in parts of Europe, policymakers and the power sector will need to carefully examine if a country’s development plans for new generation capacity match its development plans for both internal and cross-border transmission capacity. The timelines for new projects are very long and some countries in Europe are already curtailing renewable power that could be used elsewhere – for instance, Germany curtailed about 10.2 terawatt-hours (TWh) of wind power in 2017, the highest of any European country to date. The yearly average is around 5% of variable renewable energy curtailed, highlighting how bottlenecks are already an issue.

“Europe’s increasingly connected power grid is one of the first globally to take on substantial amounts of renewable and intermittent power. Moving power around the continent to minimize the use of carbon-emitting fuels will only be possible if the grid is upgraded. This will not be simple, quick, or cheap, but it will reduce greenhouse gas emissions and increase energy security. The race is now on to see if grid upgrades can match the staggering levels of new renewables set to come online in the next decade,” says Fabian Rønningen, senior analyst, power markets at Rystad Energy.

Europe’s grid will need to connect northern winds and southern sunshine

The existing capacity base and future capacity will be spread unequally between European countries, with the likes of the North Sea emerging as another European energy hub with hundreds of GW of capacity planned to come online in the coming decades. For a future energy system, in which Europe’s energy sources are utilized optimally, both policymakers and industry will have to think differently about grid development, compared to the status quo. Most of the new capacity that will come online in Europe in the coming decades will be solar and wind, with such resources varying significantly across the continent. Southern parts of Europe have better solar conditions than the north, while wind resources are highest in the northern and eastern regions of the continent, as well as all coastal and offshore areas. This means that Europe’s future energy system could have a much higher degree of electricity flows between countries than we see today, despite Europe already being considered well interconnected.

Case study: Spain  

Spain has emerged as one of the European leaders when it comes to both solar and wind development, and currently has one of the largest renewables pipelines in Europe. Spain has the most economic solar potential of the large European countries due to its sizeable landmass and high yearly solar irradiation, while it has also been a pioneer in the European wind industry. Furthermore, due to its relatively weak coupling to the rest of continental Europe, Spain provides an excellent example of how internal European grid bottlenecks could hamper Europe’s energy transition.

Although grid development within Spain is expected to grow rapidly over the coming decade, only three high-voltage interconnectors to France are currently planned, two of which are not expected to come online before 2027. This is just one example of potential bottlenecks Europe could face over the next decade, as hundreds of GW of solar and wind power come online, while the development of supporting grid infrastructure lags, especially cross-border interconnections. Policymakers need to ascertain whether grid development plans are in line with ambitious renewable energy targets to ensure transmission capacity does not constrain the energy transition.

Installed capacity from renewable energy sources in Spain will more than double by 2030 in Rystad Energy’s current base case forecast. While installed capacity from non-renewable energy sources will drop from 54 GW in 2022 to 34 GW by 2030, capacity from renewable energy sources will grow from 64 GW to 151 GW. Solar will drive most of the growth in renewables, primarily driven by developments in central Spain. Expansion plans for transformer capacity are set to keep up with these ambitious growth targets in installed capacity. Spain’s transmission system operator (TSO), Red Electrica, has mapped out detailed plans for upgrades and expansions to its transmission network. Towards the end of this decade, these plans could see transformer capacity grow by more than 220% compared to 2022 levels. Although these upgrades to the network are planned across Spain, most capacity looks set to be added in southern and central Spain, particularly in communities such as Andalucia and Castilla y Leon (Figure 4). These are also the regions where most of the planned solar and wind capacity will come online in the next few years.

The last time a high-voltage interconnector between Spain and France went operational was in 2015. In subsequent years, the countries acknowledged the mutual benefits of further integrating their power grids by projecting three other high-voltage direct current connectors across their shared border. One of the projects is a 400-kilometer link that will run between the Cubnezais substation (near Bordeaux, France) and the Gatika substation (near Bilbao, Spain), known as the Bay of Biscay project. The interconnector will mainly be laid subsea in the Atlantic Ocean with the rest buried underground, and will be the first submarine interconnector between Spain and France. The project has total transmission capacity of 2 GW and will lift total interconnection capacity between the two countries to 5 GW. The project is currently expected to be completed by 2027. Additionally, the countries are investing in reinforcements to existing interconnectors.

When it comes to the use of France-Spain interconnectors, power has mainly flowed into Spain. Spain has been a substantial net importer of French electricity every year since 2016, with 12.4 TWh of net yearly imports at peak in 2017. This year will show a significant change with Spain a net exporter to France every month in 2022 except for February, amid a large shortfall in French nuclear generation. From 2016 to 2022, Spain was a large net importer of cheap French nuclear power, while in 2022 Spain had the flexibility to increase mainly gas-fired power generation to support French consumers amid the energy crisis. This further highlights the benefits of increased interconnectivity for both countries. Furthermore, Spain is currently one of the largest generators of renewable power in Europe and has an impressive pipeline of renewable energy projects, while a substantial proportion of electricity exported to France so far in 2022 has been solar and wind.

Unlike Spain, France has not planned to increase the share of renewable energy sources in its power mix to the same extent. The situation with nuclear power in France is expected to improve in 2023, which will also benefit Spain. With more interconnectors between France and Spain, the two can rely on each other during periods when their power production is low. Given the abundant renewable energy power that will be produced in Spain, France will then be able to import clean, renewable energy when the sun shines and the wind blows. On the other hand, Spain will be able to import stable and dispatchable energy from France’s nuclear reactors to fill the intermittency gaps when the weather is less favorable. In other words, expanding high-voltage connections between the two power grids will benefit both countries and the wider European region.

This begs the question: is enough interconnector capacity being developed in Spain and France compared to the pace of renewable installations? The timelines of the interconnector projects are very long, as shown by the Bay of Biscay project, which is expected to take 10 years from initial consultations started in 2017 until it is expected online in 2027. As an illustration, 5 GW of transmission capacity will be able to interchange roughly 40 TWh per year if used at very high utilization factors – a substantial amount, but relatively small compared to total power demand in both countries. Both countries’ power demand is also expected to increase rapidly after 2025, as the electrification of their economies continues. Furthermore, the Spain-France example is just one of many. Many of the same questions will arise in other parts of Europe, especially as the North Sea is emerging as another European energy hub with hundreds of gigawatts of capacity planned to come online in the coming decades. Therefore, both policymakers and the power sector should carefully examine if a country’s development plans for new generation capacity match with its development plans for both internal and cross-border transmission capacity. The timelines for new projects are very long and Europe simply cannot afford grid bottlenecks halting its energy transition plans.

Authored by Yanis Varoufakis via Project Syndicate,

After the 2008 financial crash, the European Union only papered over the internal North-South conflict that emerged, and the war in Ukraine has produced a new East-West divide. Once peace arrives, both fault lines will only grow deeper, uglier, and impossible to ignore.

This is not a polemic about whether Russia can be trusted to respect any future peace treaty with Ukraine. Nor is it a commentary on the merits of ending the war by diplomatic means. It is, rather, a reflection on the latest European paradox: While peace in Ukraine would help stem Europe’s economic hemorrhaging, the moment any peace process begins, the European Union will be divided by an internal East-West fault line, which is bound to reawaken the EU’s earlier North-South conflict.

A credible peace process will require difficult negotiations involving the world’s great powers. Who will represent Europe at that high table? It is hard to imagine Polish, Scandinavian, and Baltic leaders ceding that role to their French or German counterparts.

In the EU’s eastern and northeastern flanks, French President Emmanuel Macron is considered a Putin appeaser ready to impose on Ukrainians a reprehensible (to them) land-for-peace agenda. Likewise, setting aside Germany’s long-term reliance on Russian energy, Chancellor Olaf Scholz’s standing as a torchbearer of Europe’s collective interest has been damaged further by his €200 billion ($212 billion) fiscal defense of German industry – the type of tax-funded protective shield which Germany vetoed at the EU level.

Meanwhile, French and German elites pour scorn on the idea that the EU might be represented in any peace process by the likes of Kaja Kallas, Estonia’s Prime Minister, or Sanna Marin, her Finnish counterpart. “The moral crusades of the Ukraine war maximalists are fashionable now but they will hinder, not help, any peace process,” was how a German official put it to me.

So, the question remains: Who will represent the EU in any future peace process?

Had the EU seized upon the massive banking-cum-debt crisis of the post-2008 era to democratize its institutions, Europe might now be credibly represented by its president and foreign minister. Alas, as things stand, European citizens and national leaders would cringe at the thought of being represented by Charles Michel, the EU Council President, and Josep Borrell, the EU foreign policy supremo. Macron and Scholz, alongside almost every other European president or prime minister, would surely object.

The optimistic view in Brussels is that, despite its lack of legitimate envoys and military weakness, the EU will carry considerable weight in any negotiations because it is the economic powerhouse that will pay for Ukraine’s reconstruction and be the arbiter of any process by which Ukraine joins the EU single market, customs union, or even the EU itself. But is such optimism justified?

The EU will undoubtedly pay huge sums and orchestrate any postwar Ukraine accession process. But there is no reason to think this will guarantee the EU an influential role during the peace process. In fact, there are good reasons to think that the EU’s role as the main funder of Ukraine’s reconstruction will divide and weaken the Union more than even the crisis a decade ago.

The EU’s own European Investment Bank estimates the cost of Ukraine’s reconstruction to be around €1 trillion – the amount of the EU’s budget over the 2021-27 period and 40% higher than its post-pandemic recovery fund, NextGenerationEU. Already hamstrung by its domestic €200 billion plan to shore up Germany’s collapsing industrial model, and the €100 billion Scholz has earmarked for defense spending, Germany lacks the fiscal space to provide even a fraction of that sum.

If Germany can’t pay, it is clear that the other EU member states can’t, either. The only way to pay for Ukraine would be for the EU to issue common debt, retracing the painful steps that led to the recovery fund’s creation in 2020.

Pressed to deliver the cash, the EU might well go down that path, only to find it leads to vicious acrimony. True, EU leaders agreed on common debt during the pandemic. But inflation was negative at the time, and all EU members were facing an economic implosion as lockdowns killed demand across Europe. Once peace prevails in Ukraine, they will need to agree to even more common debt to fund Ukraine’s reconstruction at a time when interest rates have quadrupled, inflation is rampant, and the economic benefits to EU members are bound to be grossly uneven.

Spain will question the fairness of shared debt when German companies get the lion’s share of Ukraine’s reconstruction business. Poland will protest loudly when Germany and Italy announce that, with peace restored, they will be buying energy from Russia again. Hungary will sell its acquiescence to any Ukraine fund dearly, demanding even more exemptions from the EU’s rule-of-law and transparency conditionalities. In the midst of this bedlam, the old North-South (or Calvinist-Catholic) divide, on the merits of fiscal union, will return with a vengeance.

Germany already fears that France will insist on permanent, and fairly regular, issuance of common debt, which the German political class will resist, and not only because the German Constitutional Court has already ruled against the idea. The deeper reason is that the fiscal union France seems to favor would require German conglomerates to abandon a practice that is in their DNA: accumulating US assets that they purchase on the back of the large net exports to America made possible by stagnant German wages and underpriced natural gas.

So, unless President Joe Biden’s Inflation Reduction Act changes Germany’s mindset by raising a protectionist barrier around the United States that kills off German net exports to America, any negotiations to end the Ukraine war are bound to aggravate the EU’s East-West divide – and then reignite the old North-South divide.  

None of this should be surprising. After the 2008 financial crash, the EU only papered over the North-South fault line that emerged. The war in Ukraine inevitably produced a new East-West fault line. Once peace arrives, both fault lines will only grow deeper, uglier, and impossible to ignore.

Lumber peaked at $1,336 per thousand board feet in late February but has settled at around $380 this week, representing a dramatic 72% decline in prices, primarily due to elevated mortgage rates, slowing housing activity, waning builder confidence, and overall mounting macroeconomic headwinds. 

The plunge in lumber prices is no surprise as builder confidence for newly-built single-family homes posted its 12th consecutive month of declines in December, according to the National Association of Home Builders. Confidence is at its lowest reading since mid-2012.

Besides dismal homebuilder sentiment, housing starts and building permits for November also showed deterioration in the housing industry. The number of housing starts (SAAR) is at the lowest since June 2020. 

Forward-looking housing Permits are down over 22% YoY – the most significant drop since 2009 (with single-family permits -29.7% YoY and multi-family down 10.7%)…

Single-family building permits will likely move lower as homebuilder expectations for future sales are at decade lows..

Weaker housing conditions will persist into 2023 and are explicitly weighing on lumber demand, and thus lumber prices.

Lumber prices are expected to remain range bound between $400 and $200 until Jay Powell is forced to cut interest rates back to zero due to the recession and sparks the next housing craze. 

Framing, paneling, and plywood, types of lumber used to build a home, are well off their highs. Remember when plywood at Home Depot was fetching nearly $100 per sheet? 

If you waited for the lumber bubble to deflate — this might be the perfect time to buy. 

Authored by Tsvetana Paraskova via OilPrice.com,

The EU’s price cap on natural gas is an untested tool that may not work as intended to prevent gas price spikes for European households and businesses, the head of the European Union Agency for the Cooperation of Energy Regulators (ACER) told the Financial Times. 

The gas price cap is “a difficult creature. It’s unprecedented, it’s untested,” ACER’s director Christian Zinglersen told FT after the EU energy ministers agreed to set a cap on the benchmark EU gas price as of the middle of February 2023.    

Zinglersen also noted that he would be “reluctant to rely on this gas price cap” to protect EU consumers from price spikes. 

After months of negotiations, the EU finally agreed on Monday to set a price cap on natural gas to protect consumers from excessive price spikes and limit inflationary pressure and industrial damage to European economies.

On Monday, EU energy ministers reached a political agreement on a regulation that sets a so-called “market correction mechanism”, which would come into force on February 15, 2023.  

The market correction mechanism will be triggered if the month-ahead price on the Title Transfer Facility (TTF), Europe’s key benchmark, exceeds $191 (180 euros) per MWh for three working days, and the month-ahead TTF price is $37 (35 euros) higher than a reference price for LNG on global markets for the same three working days.

However, if risks to the security of supply occur, the European Commission will suspend the price cap rule, the EU agreed.  

The price cap could limit Europe’s capacity to continue to draw most of the global spot LNG supply, analysts say.

Some EU member states such as Germany and the Netherlands had reservations about a price cap, concerned that a market intervention and a ceiling on prices would take away Europe’s key advantage in attracting LNG supply—higher prices than in Asia. Germany agreed to back the price cap only after the EU also agreed to accelerate permitting rules for renewable energy projects, according to EU officials.    

U.S. scientists at the National Ignition Facility, part of the Lawrence Livermore National Laboratory (LLNL), announced a major breakthrough in nuclear fusion this week.

For the first time ever, scientists successfully produced more energy from a nuclear fusion experiment than the laser energy used to power it.

In the infographic below, Visual Capitalist’s Mark Belan and Bruno Venditti describe nuclear fusion and illustrate how this discovery may pave the future for a new form of clean and sustainable energy.

What is Nuclear Fusion?

Nuclear fusion powers the Sun and the stars, where immense forces compress and heat hydrogen plasma to about 100 million degrees Celsius. At this temperature, the lighter particles fuse into helium, releasing enormous amounts of energy.

Nuclear fusion is a fairly clean energy source as it does not produce harmful atmospheric emissions and only produces a small amount of short-lived radioactive waste.

Scientists have been trying to replicate it on Earth for almost 70 years, using isotopes of hydrogen—deuterium and tritium—to power fusion plants.

Since deuterium is found in seawater and tritium is attained through irradiating lithium (a common element used in batteries), the accessibility of these isotopes means that fusion could become a major source of energy in the future.

The amount of deuterium present in one liter of water, for example, could produce as much fusion energy as the combustion of 300 liters of oil.

However, the real challenge is ensuring fusion power plants generate more energy than they consume.

The Challenge of Fusion Ignition

Fusion ignition is the term for a fusion reaction that becomes self-sustaining, in which the reaction creates more energy than it uses up. Up until now, scientists were only able to break even.

The National Ignition Facility used a special setup called inertial confinement fusion that involves bombarding a tiny pellet of hydrogen plasma with lasers to achieve fusion ignition.

LLNL’s experiment surpassed the fusion threshold by delivering 2.05 megajoules (MJ) of energy to the target, resulting in 3.15 MJ of fusion energy output, according to the U.S. Department of Energy.

Can Nuclear Fusion Energy Be Commercialized Soon?

In recent years, fusion technology has been attracting the attention of governments as well as private companies such as Chevron and Google. Bloomberg Intelligence estimates that the fusion market will eventually be worth $40 trillion.

Besides energy generation, fusion is expected to be used in other markets like space propulsion, marine propulsion, and medical and industrial heat.

However, according to the director of the Lawrence Livermore National Laboratory, Kim Budil, it will take “probably decades” before nuclear fusion energy is commercialized.

During the breakthrough announcement, she noted that it was necessary to produce “many many fusion ignition events per minute” as well as have a “robust system of drivers” before fusion can be commercialized successfully.

Authored by Thomas Brooke via Remix News,

German Defense Minister Christine Lambrecht said this week that the country would not be purchasing any more Puma tanks until they prove their reliability…

Not a single one of Germany’s 18 modernized Puma tanks intended for the NATO Rapid Reaction Force (NRF) were deemed fit for action during a recent military drill, according to reports by German news outlet Der Spiegel.

The Puma infantry fighting vehicles were expected to be used by NATO’s NRF, however their operation problems are the latest in a long line of failures affecting Germany’s military capabilities.

According to Army Inspector General Alfons Mais, “there was an unexpectedly high number of failures in the demanding exercise conditions. So far, the Puma combat vehicle has proven to be increasingly reliable in terms of operational readiness.”

General Ruprecht von Butler, commander of the 10th Armored Division, described the operational readiness of the Puma tanks as a lottery bet.

“Unfortunately, I have to express myself so harshly. It cannot be compared with the usual reliability of German ground vehicles,” he told the German publication.

The Puma infantry vehicles are notable for their high-quality armor but are understood to be particularly unreliable, meaning the German armed forces have been unable to replace all of its Marder tanks which date back to the 1970s with the updated vehicles.

Bundeswehr Inspector General Eberhard Zorn assured the Bundeswehr will rectify the problems and be ready to fulfill its obligations by Jan. 1.

On Monday, German Defense Minister Christine Lambrecht expressed her concern at the military’s latest operational readiness failure, and announced that the country will not be purchasing any more Puma infantry tanks until they have proven themselves to be reliable.

She confirmed reports that several of the vehicles had been rendered out of service during the recent military drill.

“The recent failures of the Puma infantry fighting vehicle are a major setback,” Lambrecht said, adding that she had ordered a full, detailed report on the matter by next week.

“Our troops must be able to rely on weapon systems being robust and stable even in combat,” she added, although continued to assure NATO partners that Germany could be relied upon to spearhead the alliance’s European joint task force (VJTF) which it is expected to lead in 2023.

It isn’t the first time this month that Germany’s military has come under scrutiny. A leaked classified report detailing the effectiveness of Germany’s armed forces revealed they are underfunded, under-resourced, and barely capable of fulfilling the country’s NATO obligations, this website previously reported.

Two weeks ago, when amid reports that the former CEO of Alameda Capital (which as a reminder was ground zero of the FTX implosion after it blew up $8 billion in FTX client funds on trades gone horribly wrong), Caroline Ellison, was spotted in New York just after retaining Clinton superlawyer, Jamie Gorelick of Wilmer Hale, which as readers may recall was the former No. 2 ranking member in the Clinton Justice Department, and in a recent interview, she referred to current AG Merrick Garland as her “wingman”, we asked if Caroline had rolled on Sam Bankman-Fried, who was also her former lover.

Fast forward to today when we just got confirmation that Caroline Ellison has fucked Bankman-Fried one final time by indeed rolling on him, and “turning states” in the criminal prosecution of the corpulent “Hairy Plotter“, who commingled and stole the client money in his FTX exchange to fund a series of terrible crypto bets at his personal hedge fund Alameda, fund tens of millions in donations to democrats and buy up prestigious real estate for himself and his “altruistic” progressive lawyer parents.

According to a Manhattan Federal prosecutor, two of FTX founder Sam Bankman-Fried’s closest associates have pleaded guilty to fraud and agreed to co-operate with US authorities investigating the collapse of the bankrupt cryptocurrency exchange. In other words, they took a plea deal to avoid even more prison time in exchange for serving SBF on a silver platter to the Feds.

Damian Williams, the US attorney for the Southern District of New York, announced the guilty pleas and criminal charges against Caroline Ellison and Zixiao “Gary” Wang, the low profile co-founder of FTX, in a short video statement. His office had brought eight charges against Bankman-Fried last week.

Statement of U.S. Attorney Damian Williams on U.S. v. Samuel Bankman-Fried, Caroline Ellison, and Gary Wang pic.twitter.com/u1y4cs3Koz

— US Attorney SDNY (@SDNYnews) December 22, 2022

Ellison pleaded guilty to seven counts, including wire and securities fraud and conspiracy to commit money laundering, which carry a maximum sentence of 110 years in prison, while Wang pleaded guilty to four counts of fraud, with a maximum 50-year sentence.

The documents said prosecutors would not oppose bail requests from both defendants under certain conditions, including posting a bond and handing in their travel documents, as they awaited formal sentencing.

Concurrently, the Securities and Exchange Commission and the Commodity Futures Trading Commission also filed civil lawsuits against the 28-year-old Ellison and 29-year-old Wang, accusing them of fraud.

“As part of their deception, we allege that Caroline Ellison and Sam Bankman-Fried schemed to manipulate the price of FTT, an exchange crypto security token that was integral to FTX, to prop up the value of their house of cards,” said SEC chair Gary Gensler. Furthermore, as CEO of the FTX trading affiliate, Ellison “used FTX’s customer assets to pay Alameda’s debts” and diverted billions of dollars of depositors’ money to the company to fill a hole caused by a crypto market crash in May, the SEC’s complaint alleges.

The CFTC said Wang had a hand in creating some of the algorithms that underpinned FTX, which allowed Alameda “to maintain an essentially unlimited line of credit” on the exchange, giving it an “unfair advantage” over regular depositors. “These critical code features and structural exceptions allowed Alameda to secretly and recklessly siphon FTX customer assets from the FTX platform.”

Both defendants are co-operating with the SEC, the agency said. The CFTC said they were not contesting their liability. Which means that SBF is looking at a lot of prison time, unless he too can throw someone even more important and powerful under the bus…

Sam better have someone much bigger to rat on or he is facing about 120 years in FPMITAP. Also, he better get someone to fix his prison cam https://t.co/Krw5u2psZD

— zerohedge (@zerohedge) December 22, 2022

… although if that is the case, he probably will be Epsteined within hours of arriving at MDC Brooklyn, singe MCC New York where Epstein “killed himself”, has been closed since August 2021 due to deteriorating conditions.

While Ellison’s superlawyers have yet to make a statement, a lawyer for Wang, Ilan Graff, said: “Gary has accepted responsibility for his actions and takes seriously his obligations as a co-operating witness.”

Last week, the DOJ filed charges against Bankman-Fried and accused him of orchestrating “one of the biggest financial frauds in American history” by misappropriating customer assets from FTX to Alameda Research. He was arrested in the Bahamas, where he lives. He is also facing parallel civil cases from the SEC and CFTC.

Williams reiterated his call for others who worked with Bankman-Fried to come forward. “If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it,” he said. “We are moving quickly and our patience is not eternal.” One of them is former Alameda CEO Sam Trabucco, best known for quietly bailing on Sam just as everyone was about to blow up and fleeing on his multi-million dollar new yacht.

Sorry for not saying an earlier, my internet was terrible because I was here pic.twitter.com/wnWcxeJVg9

— Sam Trabucco (@AlamedaTrabucco) September 8, 2022

The announcement from Williams comes just after a plane carrying Bankman-Fried took off from the Bahamas, where he waived his right to challenge extradition to the US. He is due to appear in a Manhattan court as soon as Thursday, where his bail request will be considered, although in light of Caroline’s plea, it is safe to say it won’t be granted.