Authored by Dorothy Li via The Epoch Times (emphasis ours),

Michael Bloomberg, chair of the Pentagon’s advisory panel, apologized to attendees at an economic forum hosted by his company after former UK Prime Minister Boris Johnson’s speech that singled out the communist Chinese regime.

Bloomberg issued the apology on Nov. 17 at the Bloomberg New Economy Forum hosted by his corporation in partnership with the Singapore government.

“Some may have been insulted or offended last night by parts of the speaker’s remarks referencing certain countries and their duly elected leaders,” Reuters reported Bloomberg said.

“Those were his thoughts and his thoughts alone, not cleared in advance by anyone or shared with me personally,” Bloomberg told the conference, referring to Johnson’s remarks.

“To those of you who were upset and concerned by what the speaker said, you have my apologies,” he added.

According to the version released by Johnson’s spokesperson, the former prime minister described China and Russia as “two former communist tyrannies” to the gathering of business leaders, academics, and government officials from dozens of countries.

“Let’s look at Russia and China. The two former communist tyrannies in which power has once again been concentrated in the hands of a single rule, two monocultural states that have been traditionally hostile to immigration and that are becoming increasingly nationalist in their attitudes,” Johnson said, according to his spokesman.

Johnson said China and Russia “are willing to show a candid disregard for the rule of international law, and two countries that in the last year have demonstrated the immense limitations of their political systems by the disastrous mistakes they have made.”

The spokesperson said Johnson’s criticism was only against the Chinese authorities, not the country or Chinese people.

The Epoch Times reached out to Bloomberg LP for comment.

Bloomberg, founder of Bloomberg LP, the parent of Bloomberg News, didn’t specify whether his apologies were for the Chinese people or the communist regime.

The billionaire has previously landed in the headlines for defending the Chinese Communist Party (CCP). In 2019, the entrepreneur said the party’s top leader Xi Jinping “is not a dictator.”

“The Communist Party wants to stay in power in China, and they listen to the public … Xi Jinping is not a dictator. He has to satisfy his constituents, or he’s not going to survive,” Bloomberg said in a television interview with Firing Line in September 2019.

Bloomberg was asked several times about his comment when he ran for U.S. president in 2020, and the former New York mayor avoided pinning the label of “dictator” on Xi.

Xi has become the country’s most powerful leader since the first ruler Mao Zedong. Last month, Xi secured a record-breaking third term in office and installed allies in the Party’s top decision-making body during the 20th National Congress, further tightening his grip over the party and the country.

In the opening remarks at the conference last Thursday, Bloomberg praised China’s vice chairman Wang Qishan, who attended via video link, as a “troubleshooter” and “problem solver.” The billionaire noted he met Wang almost two decades ago, when Bloomberg served as mayor of New York and Wang was mayor of Beijing.

Bloomberg’s apology raised concern among activists who pointed to his position in the U.S. Department of Defense.

Read more here…

While spending time with family and friends at Thanksgiving remains important for many Americans, the cost of that indulgence has never been higher, up a stunning 20% from last year to $64.05 for the classic feast.

The cost for the classic meal was the most affordable in the South – $58.42, followed by the Northeast – $64.02, Midwest – $64.26 and West – $71.37.

“General inflation slashing the purchasing power of consumers is a significant factor contributing to the increase in average cost of this year’s Thanksgiving dinner,” said AFBF Chief Economist Roger Cryan.

“Farmers are working hard to meet growing demands for food – both here in the U.S. and globally – while facing rising prices for fuel, fertilizer and other inputs,” said Cryan.

Over the past two years, the grocery bill for a traditional Thanksgiving dinner has risen by 36.6%. All these changes are illustrated in the following chart from PoliticalCalculations blog:

In the chart, we’ve ranked the cost of the individual items and groupings used by the Farm Bureau for their traditional turkey dinner menu from high to low according to their 2021 cost as you read from left to right. We’ve also tallied the cumulative cost of the meal, with the totals for each shown on the far right side of the chart.

Ranking the data this way lets us see that the increase in the cost of turkey is once again responsible for most of the year-over-year increase in the cost of the meal. Here we see the cost of a 16-pound bird rose by 20.7% to $28.96 in 2022. This single item alone accounts for over 46% of the year-over-year increase in the total cost for the meal. Since 2020, the cost of turkey has increased by $9.57, making up 56% of the realized increase in Thanksgiving dinner ingredient costs over that time.

Meanwhile, only the price of cranberries fell compared to last year, dropping by 13.8%. Every other Thanksgiving dinner items increased in cost during 2022.

Among those items, a 1-pound veggie tray of carrots and celery registered the smallest year-over-year price increase of 7.3%. Every other item’s cost was up significantly, recording double-digit year-over-year price increases ranging from a low of 11.2% for sweet potatoes to a high of 69.4% for a 14-ounce package of cubed bread stuffing.

During the last ten years, the cost of a traditional Thanksgiving dinner held steady within a relatively narrow range between $46.90 (2020) and $50.11 (2015). Thanks to the cumulative effect of President Biden’s inflation, celebrating Thanksgiving with a traditional turkey dinner has never been more costly for Americans.

Of course, the Biden administration was quick to ascribe blame for this record surge in the cost of Americans’ most traditional meal.

A USDA memo this month said turkey prices will be higher because of this year’s outbreak of highly pathogenic avian influenza (HPAI), which led to the death of 8 million turkeys in 2022. But USDA also said “Russia’s war on Ukraine and drought across the United States” are other factors that are “pushing up the price of Thanksgiving staples.”

USDA told Fox News Digital that both the COVID pandemic and “Putin’s Price Hike” have boosted food prices around the world, and said Russia’s move against Ukraine cut off a “critical supply” of wheat, corn, barley and other grain. Russia’s war in Ukraine plus the pandemic have putt “pressure on food prices,” USDA said.

As a reminder, a year ago, the St.Louis Fed offered this little beauty of a tweet, suggesting Americans switch from Turkey to Tofurkey to save some cash…

As of the third quarter of 2021, a hearty Thanksgiving dinner serving of turkey costs $1.42.

A tofurkey (soybean) dinner serving with the same amount of calories costs $0.66 and provides almost twice as much protein.

Keep in mind that this plant-based meal would be almost 3 times larger by weight than the poultry-based meal and may either keep you at the dinner table longer or provide you with more leftovers.

Remind us again who was responsible for soaring poultry and soybean prices back then?

Spot the turkey…

Submitted by QTR’s Fringe Finance

To be honest, it’s kind of hard to try and entertain the innuendo and rumors that Democrats and the media are working to do damage control on behalf of Sam Bankman-Fried, the founder of now-bankrupt crypto exchange FTX, because the idea is just so reprehensible.

But they sure do keep giving us ammunition to make that suggestion, don’t they?

Bankman-Fried and House Financial Services Committee Chair Maxine Waters

Bankman-Fried – the second biggest donor to Democrats behind George Soros – has all but admitted that he squandered billions of dollars of other people’s money carelessly, writing “I fucked up” on Twitter in a mea culpa about two weeks ago, days after a run on his exchange exposed it to be a shell of what many perceived it to be.

Institutional investors in FTX have written their stakes in the firm to $0.

The $5 billion bank-run on FTX that started it all has many everyday crypto investors worried that their “investments” with FTX are total losses. For many, it was their life savings.

Since then, Bankman-Fried’s former company continues to be at the center of extremely shady circumstances. It has seen a “substantial amount” of its assets go missing in the days after its blowup.

The lawyer hired to oversee the liquidation of FTX, who also was in charge of the same task for Enron, has said “he’s never seen a company in worse shape than FTX.”

“I have over 40 years of legal and restructuring experience. I have been the chief restructuring officer or chief executive officer in several of the largest corporate failures in history. . . . Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”

Get 50% off: If you enjoy this article, would like to support my work, I would love to have you as a subscriber and can offer you 50% off for life: Get 50% off forever

To add insult to injury, Bankman-Fried has also admitted that his entire persona of being an altruist was a ruse, calling it a “dumb game we woke westerners play.”

Now widely accepted by the public and most in the financial industry to have committed a massive $30 billion fraud that has spawned innumerable comparisons to Madoff and Enron, it’s unclear to me what more of an admission of guilt is needed to extradite Bankman-Fried to the United States and place him under arrest.

I know I’m not the only one who can hear the drumbeat of potentially covering up for Bankman-Fried beating a little louder with every day that goes by and he isn’t shown being paraded off somewhere in handcuffs.

Instead, the only photo I have seen of Bankman-Fried since his firm’s blowup has been one of him meandering around a grocery store in the Bahamas.

For historical reference, Bernie Madoff was arrested on December 11, 2008.

On December 11, 2008, financier Bernard Madoff is arrested at his New York City apartment and charged with masterminding a long-running Ponzi scheme later estimated to involve around $65 billion, making it one of the biggest investment frauds in Wall Street history.

His arrest came two days after he admitted to his brother that he was running a fraud.

“On December 3, he told longtime assistant Frank DiPascali, who had overseen the fraudulent advisory business, that he was finished. On December 9, he told his brother Peter about the fraud.”

Between the beginning of December and his arrest on the 11th, he also confessed to his sons, who “turned him in”.

This means, at the maximum, it was 11 days between Madoff being “turned in” and being arrested.

For reference, FTX collapsed around November 8, 2022 and Binance turned down the company’s bailout on November 9, 2022. Bankman-Fried admitted to “fucking up” on November 10, 2022 and FTX filed for bankruptcy on November 11, 2022, which means it has already been 11 days since the bankruptcy filing – and nearly 2 weeks since the firm’s collapse.

In the interim, instead of Bankman-Fried being brought to justice in the United States, we find out that “members of the House are requesting testimonies from Bankman-Fried, top executives from FTX and Alameda at a hearing in December.”

“The fall of FTX has posed tremendous harm to over one million users, many of whom were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear within a matter of seconds.

Unfortunately, this event is just one out of many examples of cryptocurrency platforms that have collapsed just this past year. That’s why it is with great urgency that I, along with my colleague ranking member McHenry, announce the Committee’s intention to hold a hearing to investigate the collapse of FTX.”

Rep. Maxine Waters

Not at a criminal court – at a congressional hearing. Not anytime soon – in December.

In the interim, we are being treated to a cushy response from the media, who has hailed Bankman-Fried as anything other than a criminal. The New York Times wrote a widely criticized puff piece on Bankman-Fried 3 days after FTX filed for bankruptcy.

The Washington Post’s take was that he was a pandemic fighter:

For a party that seems to absolutely loathe billionaires, Democrats and their friends in the media sure are taking it soft on Bankman-Fried.

Key democrats also took it soft on Theranos founder and former billionaire Elizabeth Holmes. After she drove an $8 billion fraud into the ground and was found guilty in a court of law, Democrat Cory Booker even wrote a letter pleading for a light sentence for her. Try to keep your lunch down while reading this:

Now, what do these two frauds have in common?

—

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The White House has unveiled another $400 million in defense aid to Ukraine, which is also to include urgently needed generators as the national energy grid has been severely degraded by Russian airstrikes, leaving at least 10 million people without power. 

This brings military aid committed thus far to more than $19 billion in weapons. Secretary of State Antony Blinken announced Wednesday in a statement, “Pursuant to a delegation of authority from the President, today I am authorizing our twenty-sixth drawdown of U.S. arms and equipment for Ukraine since August 2021. This $400 million drawdown includes additional arms, munitions, and air defense equipment from U.S. Department of Defense inventories.” 

“This drawdown will bring the total U.S. military assistance for Ukraine to an unprecedented level of approximately $19.7 billion, since the beginning of the Administration,” the statement continued.

Blinken underscored that the US coordinated the new aid with partner nations, “including the £50 million in air defense systems offered by UK Prime Minister Sunak,” according to the State Dept. readout.

Meanwhile, there remain growing concerns over the US and Western partners greatly depleting their own stockpiles, as The Independent observes: 

The continued push of weapons to Kyiv is raising questions about how long the U.S. and partner nations can continue to sustain the fight without an impact to military readiness. Many European nations have already expressed that they have pushed forward all the excess they can afford to send.

The White House push for more defense aid comes as the administration grows nervous about GOP objections. “The flow of weapons comes as the Biden administrations seeks to pass an additional $37 billion in military and humanitarian aid for Ukraine during the post-election session of Congress, before Republicans take over control of the House in January,” The Independent writes.

The Pentagon has lately emphasized it is prioritizing getting the Ukrainians ready for the harsh winter months. There’s also a push to keep providing advanced anti-air systems to protect against attacks on the electricity stations and facilities…

Defense Secretary Lloyd Austin says the 2 NASAMS air-defense systems provided to Ukraine by the US have “a 100% success rate” against Russian missiles thus far. Delivery was this month. (Remarks from the start of another meeting of Ukraine’s partners to source arms for the war.) pic.twitter.com/rhIgXIRzIk

— Andrew deGrandpré (@adegrandpre) November 16, 2022

Currently an estimated half the national electricity grid has been degraded or destroyed due to repeat waves of Russian airstrikes. Parts of the capital on Wednesday were even said to lack water, which emergency services are working hard to restore.

As we discussed last night, Sam Bankman-Fried has now demonstrated that he is both a pathological liar and a sociopath, the kind who in “explaining” to his employees how he stole billions (over $4 billion according to new FTX CEO John J. Ray) from the now bankrupt FTX, an act which left it insolvent and without liquidity, called it “loans” which were “generally” not used for “large amounts of personal consumption” (just “small amounts” used for such trivial items as $40 million penthouses and private jets).

And the only reason we don’t officially call him a criminal just yet, is because he has not yet confirmed he used client money from his exchange to fund his personal hedge fund, an act which would cost any other individual decades in jail… but not prominent democrats like SBF or Jon Corzine, of course. Plus it’s the US legal system’s job to do that, not ours. Although we are growing increasingly skeptical this prominent Democratic donor will ever see the inside of a courtroom.

It’s not just us: with much of the entire world demanding to know how this corpulent 30-year-old still has not been thrown in prison, or at least charged with a variety of crimes, the NYT just confirmed to the entire world what a farce the one-time paper of record has become, and how it is willing to whore itself out for clicks – not to mention prominent Democrat donors – because moments after SBF tweeted that he will be speaking with Andrew Ross-Sorkin moderated NYT “summit” on Nov 30…

I’ll be speaking with @andrewrsorkin at the @dealbook summit next Wednesday (11/30). https://t.co/QocjPtCVvC

— SBF (@SBF_FTX) November 23, 2022

… Sorkin quickly confirmed as much.

A lot of folks have been asking if I would still be interviewing @SBF_FTX at the @nytimes @dealbook Summit on Nov 30…

The answer is yes. 👇

There are a lot of important questions to be asked and answered.

Nothing is off limits.

Looking forward to it… https://t.co/lShAqXLKGS

— Andrew Ross Sorkin (@andrewrsorkin) November 23, 2022

And so, instead of being under arrest, SBF will instead be treated like a luminary alongside other such other Democrat icons as Zelenskyy (who according to some may have been intimately familiar with FTX fund flows in the past year) and of course the woman who along with Ben Bernanke and Jerome Powell, made it all possible by blowing the biggest asset bubble of all time: Janet Yellen.

And while we are certain that the NYT – which we assume is done writing puff pieces on behalf of SBF after it became a laughing stock last week – would be quick to mercilessly cancel and expel from its “prestigious” conference anyone who had misgendered some post-op transsexual, it is willing to give this thieving pathological liar and sociopath a forum in which to profess his innocence to the entire world, and by association with other Democrat “celebrities” such as this one…

…  to boost his standing within a legal system that is clearly as much as joke as the venue that he will be sharing with the following individuals:

Here are all the other “top business and policy leaders” at the NYT whitewashing summit:

• Eric Adams, New York City mayor
• Ben Affleck, Artists Equity C.E.O.
• Sam Bankman-Fried, FTX founder
• Gerry Cardinale, RedBird Capital Partners founder, managing partner and C.I.O.
• Shou Chew, TikTok C.E.O.
• Larry Fink, BlackRock chairman and C.E.O.
• Reed Hastings, Netflix founder and co-C.E.O.
• Andy Jassy, Amazon president and C.E.O.
• Van Jones, CNN host, author and Dream.Org founder
• Scarlett Lewis, Jesse Lewis Choose Love Movement founder and mother of Sandy Hook shooting victim, Jesse
• Mike Pence, 48th vice president of the United States and author of “So Help Me God”
• Benjamin Netanyahu, former Prime Minister of Israel, current leader of the Likud party
• Priscilla Sims Brown, Amalgamated Bank president and C.E.O.
• Secretary Janet L. Yellen, U.S. Department of the Treasury
• President Volodymyr Zelensky of Ukraine
• Mark Zuckerberg, Meta founder, chairman and C.E.O.

The shocked, stunned and simply disgusted reactions are still coming in:

“SBF needs to go to jail!”

The New York Times: pic.twitter.com/ynSzdFdl0Q

— Dr. Parik Patel, BA, CFA, ACCA Esq. (@ParikPatelCFA) November 23, 2022

The @nytimes event right? Makes sense. 😂😂😂 https://t.co/mgMhc0YNrA

— Dave Portnoy (@stoolpresidente) November 23, 2022

I’ll be speaking with @SBF_FTX at the @dealbook summit next Wednesday (11/30) by hiding in one of the bathroom stalls and surprising him while he’s using the urinal.

What questions should I ask him?

— davis 🐺🦊 (@basedkarbon) November 23, 2022

How did this dude steal billions of dollars and is now speaking at a summit as a free man?

Make it make sense.

— Chairman (@WSBChairman) November 23, 2022

let’s hop on a spaces right now.
Just me and you, 1 on 1.

— Bitcoin Archive 🗄🚀🌔 (@BTC_Archive) November 23, 2022

That CNBC, the NY Times and far-left extremist Andrew Sorkin would be protecting, apologizing for and promoting this guy is zero surprise. https://t.co/xhGh0gePV0

— John Tuld (@BradHuston) November 23, 2022

FTX SBF is scheduled to speak at a @nytimes business summit with Andrew Sorkin, after defrauding clients billions of dollars. More proof that paid off politicians grant you amnesty.

— TaraBull (@TaraBull808) November 23, 2022

SORKIN: “Internet trolls are scapegoating Sam, but we should celebrate entrepreneurs even when they fail. There’s nothing illegal about taking big risks.” https://t.co/mB9KkFsRdt pic.twitter.com/FKyTtdsfl9

— Bitcoin is Saving (@BitcoinIsSaving) November 23, 2022

My theory is that Andrew Sorkin is a sensible guy disgusted by the ruling class who tries to insult it by showing how bad it’s leading figures are. He’s surprised no one gets it but at least he makes a lot of money until that happens. https://t.co/ii9pGTz3R0

— P.C. Outsider (@PhilOutsider) November 23, 2022

PERFECT—ANDREW ROSS SORKIN IS MORE FULL OF SHIT THAN SAM IS. https://t.co/Y5PsRaRgVu

— INVESTMENT HULK (@INVESTMENTSHULK) November 23, 2022

“So, what’s your favorite color lol”

— litquidity (@litcapital) November 23, 2022

Damage control is in overdrive. We can’t be the only ones observing this? This is outrageous. https://t.co/OCTOMeOY3D

— Autism Capital 🧩 (@AutismCapital) November 23, 2022

“This can’t get any worse!”

Universe: “LOL, watch me!”

— Helin ULKER (@beautyofhelin) November 23, 2022

Hey @andrewrsorkin, can you also please invite AG Merrick Garland to the summit: we’d love to see him shake hands with SBF https://t.co/twLcOLQUtP

— zerohedge (@zerohedge) November 23, 2022

When SBF flies safely back to the Bahamas after attending the @dealbook summit pic.twitter.com/qgYCyQMlUA

— Ramp Capital (@RampCapitalLLC) November 23, 2022

While prevailing consensus was that the Fed didn’t really say anything unexpected, or anything that wasn’t already telegraphed both in the Nov 2 statement and subsequent Fed speak, Wall Street commentators agreed that “the statement overall comes across as dovish” as BBG Economics chief Anna Wong put it, With Integrity Asset Management’s Joe Gilbert adding that “it is constructive that Fed participants were becoming increasingly aware of the lagged impact of all the rate hikes this year. Generally, this is bullish for equities and fixed income because there is now a slight change in consensus at the Fed which means that significantly more rate hikes are now less likely.”

Wong added that “there’s widespread agreement within the committee to slow the pace of rate hikes soon, with only ‘a few’ preferring to wait until the policy stance is more clearly in restrictive territory. We think Powell belongs to this latter group.“

The market agrees with the dovish take and stocks have jumped to session highs while the market implied Fed Funds curve has dipped on the outer end,

Here are some of the initial reactions to the FOMC Minutes:

Chris Low, FHN Financial

“The two big headlines are most Fed officials favor slower tightening pace soon and various Fed officials see higher peak rates. Both of these confirm post-meeting press conference guidance from Powell.”

Interactive Brokers’ Chief Strategist Steve Sosnick:

“With pivot off the table, and with no pause coming yet, slower pacing seems to be enough for stock traders now.”

Lara Rhame of FS Investments:

“This rate-hike cycle has been “fast and furious” and the Fed has to slow down eventually. But the central bank can’t afford to let markets just rip higher.”

Doug Fincher, hedge fund manager of Ionic Capital Management:

“Amazed at the magnitude of tightening in credit spreads over the weeks since the CPI print. Curve is inverted, all kinds of risks (including recession) yet credit spreads tightened by 30% and signal all clear…. A slowdown is not a cut and many hurdles remain — like strong employment. It’s good, but a lot already priced in, I think, and many risks need to be solved for soft landing to play out.”

Childe-Freeman of Bloomberg Intelligence:

“The reference to slowing rate hikes will grab headlines. This will add to the bearish-dollar view for now, with $1.04 euro-dollar in sight again.”

Dan Suzuki, deputy chief investment officer at Richard Bernstein Advisors LLC.

“There isn’t much to glean from the minutes. From what I’ve seen, it’s exactly the same message we heard at the press conference: slower and possibly higher peak Fed funds rate. Any major reaction off of the minutes is probably an overreaction.”

Joe Gilbert, portfolio manager at Integrity Asset Management

“Keeping in mind that these minutes are before the October CPI print, it is constructive that Fed participants were becoming increasingly aware of the lagged impact of all the rate hikes this year. Generally, this is bullish for equities and fixed income because there is now a slight change in consensus at the Fed which means that significantly more rate hikes are now less likely.”

Anna Wong, head of Bloomberg Economics

“We think the statement overall comes across as dovish. There’s widespread agreement within the committee to slow the pace of rate hikes soon, with only ‘a few’ preferring to wait until the policy stance is more clearly in restrictive territory. We think Powell belongs to this latter group.”

US natural gas prices jumped Wednesday on a combination of thin holiday trading ahead of Thanksgiving, colder weather forecasts, and a bigger-than-expected draw in inventories. 

Futures in New York for December jumped as high as $7.60/mmbtu, or about 82 cents, on cooler forecasts, peaking around 0900 ET. Prices slid from the high but gained slightly after EIA reported a bigger-than-expected draw in inventories at 1030 ET.  As of 1400 ET, prices were up 59 cents to $7.37. 
 

“The United States has officially flipped over to withdrawal season as the cold set across the East and Midwest in the last week, driving gas burns higher and ramping industrial and residential plus commercial (ResComm) demand. The cold was coupled with weak production in Appalachia, but strong production in South Central and Canada helped meet that rising demand,” Houston-based energy firm Criterion Research said. 

They added: “The current weather outlook is setting up for another burst of cold in early December, which will stack on top of the partial return of Freeport LNG in mid-December. We likely roll into January and February with record-high LNG demand to help supply Europe, so if the US winter is colder than average, it sets up a very interesting March equations of state (EOS) storage picture.”

Month-ahead forecasts for the Lower 48 show what could possibly be a colder December than what the 30-year trend calls for. This would mean ResComm demand would spike due to increased heating demand and add to more significant declines in inventories. 

The flip has begun as the withdrawal season from NatGas storage is underway.

For this time of year, NatGas storage is around normal levels compared to a 25-year trend. But what can happen from here, as Criterion Research explained, is colder weather and LNG exports ramping up could draw down inventories down much quicker. 

Besides fundamentals, Dennis Kissler, senior vice president of Bok Financial Securities, told Bloomberg the move today was due to technical short covering as prices climbed above the 50-day and 100-day moving averages. 

Authored by Robert Rapier via OilPrice.com,

• The U.S. energy policy is clear about its intention to phase out fossil fuels.

• This has forced refiners to exercise caution in order to stay afloat. 

• It has also resulted in a loss of U.S. refining capacity. 

One of the under-reported factors behind the ongoing diesel shortage is the loss of U.S. refining capacity since the start of the Covid-19 pandemic. Today I will discuss the factors that led to this loss.

According to the Energy Information Administration (EIA), at the beginning of the pandemic U.S. refiners had 19.0 million barrels per day (BPD) of operable refining capacity (Source). This was the highest number ever reported by the EIA.

By December 2021, that number had fallen to 17.9 million BPD — a loss of 1.1 million BPD of capacity in less than two years.

Here is the thing many need help understanding about refining. It is a boom-and-bust business, and these refiners do not have crystal balls. It is widely reported when they make huge profits, but they also regularly endure huge losses.

U.S. energy policy has been clear about the intent to phase out fossil fuels. If you are a refiner forecasting billions in losses — and you require massive investments in order to keep your refinery operating safely and in compliance with the laws — you may very well simply make the decision to close down.

There are two excellent sources of information detailing which refineries closed, and why they closed. The first is the EIA.

During the summer, the EIA reported U.S. refinery capacity decreased during 2021 for second consecutive year, in which they discussed one of the major closures in 2021. They also showed this excellent graphic of how refinery capacity has evolved in recent years:

But I stumbled upon a more detailed look recently. In a Twitter thread, Laura Sanicola, an oil and energy reporter at Reuters, highlighted the individual refinery closures from the start of the pandemic through June 2022:

She reports on nine refinery closures, but the theme is consistent. Most of the refineries were closed due to demand loss as a result of the Covid-19 pandemic.

But, aren’t these companies earning billions of dollars? Isn’t that an argument for keeping these refineries open? There are two points to make on that argument.

First, it is possible to make billions of dollars as a company, but to lose money consistently in an individual refinery.

We have seen this happen a lot with East Coast refiners that didn’t have access to cheaper oil from the U.S. shale boom. They had to continue to procure crude oil on the international markets, and that put them at a competitive disadvantage.

Second, current refiner profits are a snapshot in time. Today, U.S. demand for petroleum has largely recovered. In fact, distillate demand has recovered to pre-pandemic levels. But, these companies are projecting the future.

They are looking at long-term demand forecasts for petroleum products. Those projections indicate declining fuel demand over time. Thus, they do not want to invest billions of dollars that could take a decade or more to pay off.

Imagine that you are running a chain of stores. Overall, your company is highly profitable, but you have stores that are consistently unprofitable. Further, those stores are outdated, the outlook for demand in these areas is weak, and it will cost a lot of money to upgrade them. You would probably close those locations.

That, in a nutshell, is why we have lost refining capacity in the U.S. It’s going to take some changes in our energy policy to address this.

The European Parliament on Wednesday voted to formally recognize Russia as a “state sponsor of terrorism” for what it called “deliberate attacks and atrocities carried out by the Russian Federation against the civilian population of Ukraine.”

European legislators also cited “serious violations of human rights and international humanitarian law amount to acts of terror” in the overwhelming vote in favor of the terror label. The move is more symbolic than anything, however, carry no specific legal consequences for Moscow.

The EP is now urging the European Union to enact the same, which would mark a major escalation in already spiraling relations, as it would also likely require more sanctions. 

The parliament statement said it “recognizes Russia as a state sponsor of terrorism and as a state which uses means of terrorism.”

Ukraine’s President Volodymyr Zelensky praised the designation, saying Wednesday, “Russia must be isolated at all levels and held accountable in order to end its long-standing policy of terrorism in Ukraine and across the globe.”

At the same time, Russian Foreign Ministry spokesperson Maria Zakharova angrily dismissed the move, writing on Telegram: “I propose recognizing the European Parliament as a sponsor of idiocy.”

Immediately after the vote, European officials accused Russia of mounting a “sophisticated” cyberattack:

“I confirm that the Parliament has been subject to an external cyber attack, but the Parliamentary services are doing well to defend the Parliament,” Dita Charanzová, Czech MEP and Parliament vice president responsible for cybersecurity, said in a statement.

Another senior Parliament official, requesting not to be named, said “it might be the most sophisticated attack that the Parliament has known so far.”

Eva Kaili, who is the Greek vice president of the European Parliament, pointed the finger at Moscow, saying, “We have a strong indication that it is from Killnet, the hackers with links to Russia indeed. This is my information, but it is under control. It only cut the external access to the Parliament’s website … Unless there is extra attacks we expect it to be back and accessible very soon.”

Shortly after, a group believed by the West to have ties to the Russian state claimed responsibility: 

PRO-RUSSIA GROUP KILLNET CLAIMS RESPONSIBILITY FOR DDOS ATTACK

And similarly, the German Greens’ MEP Alexandra Geese said on Twitter: “This morning Russia was still designated as a terrorist state in an official resolution. This afternoon the entire network collapses in [the European Parliament].” The attack mainly impacted the European Parliament website.

Tl;dr: Perhaps most critically when breaking down the FOMC statement – the focus falls on one word: “various”.

Bloomberg concludes that while policymakers stressed their “strong commitment” to reducing inflation, support for a higher rate peak may have been less than universal.

Hence the dovish lean to a hawkish message from the Minutes

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Since The Fed hiked rates by 75bps (for the 4th time) on Nov 2nd, the dollar has been monkeyhammered lower while bonds and bullion have outperformed (along with gains in stocks) as hopes for a pause (the FOMC statement) dominated reality of no pause (Powell and dozens of Fed Speakers since)…

Source: Bloomberg

While there has been lots of volatility, the market’s expectation for The Fed’s terminal rate is basically flat while the market’s pricing in a more dovish reaction by The Fed after they have reached the peak and sparked a recession…

Source: Bloomberg

The yield curve has flattened dramatically since the last FOMC statement (inverting ever deeper as recession risks get priced in)…

Source: Bloomberg

So, all eyes will be on the Minutes for any signs of the ‘pivot/pause/slow-down’ that was hinted at in the statement but which Chair Powell destroyed in the press conference. Additionally, the ‘higher for longer’ narrative that has been pushed by numerous Fed Speakers in the last two weeks will be important to pay attention to (i.e if a higher terminal rate than previously thought is needed… and then maintaining that restrictive stance for longer before cutting rates to save the world). Any signals on financial stability anxiety, especially related to QT, will be monitored closely.

The bottom line is that the Minutes will be eyed for commentary on the central bank’s reaction function to both labor and inflation.

Ahead of the Minutes, the market priced a just 12% chance of 75bps at December’s FOMC (100% chance of 50bps), and 63% chance of 50bps in February.

So what do The Minutes Show?

The Doves:

A substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate.

Several officials also voiced concerns that “continued rapid policy tightening” would raise risks of financial instability.

The Hawks:

In discussing potential policy actions at upcoming meetings, participants reaffirmed their strong commitment to returning inflation to the Committee’s 2 percent objective, and they continued to anticipate that ongoing increases in the target range for the federal funds rate would be appropriate in order to attain a sufficiently restrictive stance of policy to bring inflation down over time. Many participants commented that there was significant uncertainty about the ultimate level of the federal funds rate needed to achieve the Committee’s goals and that their assessment of that level would depend, in part, on incoming data.

A few other participants noted that, before slowing the pace of policy rate increases, it could be advantageous to wait until the stance of policy was more clearly in restrictive territory and there were more concrete signs that inflation pressures were receding significantly

With monetary policy approaching a ‘sufficiently restrictive’ level, participants emphasised final destination of Fed funds rate had become more important than pace.

Even so, various participants noted that, with inflation showing little sign thus far of abating, and with supply and demand imbalances in the economy persisting, their assessment of the ultimate level of the federal funds rate that would be necessary to achieve the Committee’s goals was somewhat higher than they had previously expected.

On inflation:

Participants concurred there were very few signs of inflation pressures abating.

In light of the continuing broad-based and unacceptably high level of inflation and upside risks to the inflation outlook, participants remarked that purposefully moving to a more restrictive policy stance was consistent with risk-management considerations.

This was before the big drops in CPI/PPI and so this will likely shift dramatically in the next FOMC statement.

On being clueless about the economy:

Participants generally noted that the uncertainty associated with their economic outlooks was high and that the risks to the inflation outlook remained tilted to the upside…. Participants observed that recent inflation had been higher and more persistent than anticipated.

On market stability:

A few participants commented that slowing the pace of increase could reduce the risk of instability in the financial system.

Fed officials discussed turmoil in the UK government bond market, and while they judged that the market for US Treasuries remained “orderly,” a few participants suggested the Fed should be prepared to address any US market functioning issues in ways that “would not affect the stance of monetary policy, especially during episodes of monetary policy tightening”

On the labor market:

Participants observed labor market remained tight; many noted tentative signs it might be moving slowly toward better balance of supply and demand.

On the dreaded wage-price spiral:

few participants commented that the ongoing tightness in the labor market could lead to an emergence of a wage–price spiral, even though one had not yet developed

Interactive Brokers’ Chief Strategist Steve Sosnick says:

“With pivot off the table, and with no pause coming yet, slower pacing seems to be enough for stock traders now.”

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Read the full Minutes below: