By Peter Tchir of Academy Securities

A Quirky Report

Last week was not that exciting (except for the last bullet point).

• The S&P 500 and Nasdaq 100 finished roughly where they started (while the Russell 2000 did well).

• Credit spreads did very little (CDX tightened a smidge while bonds widened a touch).

• Bond yields drifted a little higher (9 bps on 2s and 4 bps on 10s), while the 2s vs 10s inverted further to -86 bps (a topic discussed last weekend in Markets Heat Up as Global Relations Cool).

• Oil sank 2%, but “Dr.” copper rose almost 2% as each marched to the beat of their own drum, as opposed to “recession on or off” trading.

• Bitcoin slumped again, but like the proverbial tree falling in a forest when no one is watching, it really didn’t make a sound as so few look to bitcoin for any signal at all at this stage.

• The VIX and MOVE (Treasury vol) indices continued to decline, though the MOVE index seems high relative to VIX. However, it could well be that VIX doesn’t do a particularly good job of assessing options interest in a world dominated by 0DTE options.

• Academy had the opportunity to guest host Bloomberg Surveillance for an hour on Monday morning. While much like the rest of the week, it might be boring to you, but it was fun for us! Academy starts at the 0:49 mark and ends at 1:37. We get to interview experts on oil, rates, and travel and also get to discuss Academy’s unique capabilities including analyzing geopolitical risk for companies and markets.

This week has the potential to be a little more exciting with the Fed meeting taking place, but I wanted to focus on a few “quirky” things. However, with FOMC week coming up, we have to address the Fed before moving on to the “quirks” that I really want to write about.

What Can the Fed Do?

We get CPI on Tuesday which has the potential to move markets as expectations are for improvement across the board. However, I’m of the view that it will take weeks of consistent data to shift us away from this pause/skip narrative. Also, on Tuesday, Academy will be hosting drinks in Boston with General (ret.) Spider Marks. While not market moving, it should be fun and informative.

The only thing that I think the Fed could do to really move markets would be to adjust their dots.

• They could add a hike or two to this year’s projection. However, I’m not sure that would do much for markets as one more hike is already largely priced in.

• The median for the end of 2024 is for 4.25%, though Fed Fund futures are significantly lower. So maybe raising those dots to closer to 5% would do something, but since markets already doubt the existing dots, I’m not sure that will do much.

• It is 2025 and beyond that get more interesting. The last dot plot had 3.125% for the “end of 2025” level, which markets actually think is too low. So, they could bump that up and “lock-in” expectations. The “longer-term” projection is 2.5%, which also seems low.

• If I see the potential for a sell-off in stocks and bonds, it will likely result from a change in tone on the “terminal rate” as opposed to anything else.

• Skip/pause is baked in and is likely the message that we will get (with a heavy dose of data dependency and warnings that inflation is still priority #1, which no one really believes).

• They are unlikely to back down on balance sheet reduction (if they did, that would be a positive). They are also unlikely to discuss accepting a higher average level of inflation than the current 2% target (they probably are going to accept this, but it is just too early to admit it).

• So, I’ll be keeping an eye out to see if they adjust the terminal rate.

In any case, I continue to believe (hope) that at least for a little while, we have a respite from the Fed being the main/only driver of markets! The meeting is important, but it should largely be a non-event.

What Are the Odds?

Let’s start with the one thing that is puzzling me more than almost anything else – how did the economists botch last month’s job numbers so badly?

Seriously, what are the odds of 76 estimates on the Bloomberg terminal ALL being lower than the actual published number?

This has been bothering me so much because the main argument against a recession is the strength of the job market. Job Market Strong = No Recession. I understand that, I’m just perplexed about how the industry (collectively) missed it so badly! These are very smart people. They have resources. They also have many different ways to calculate their estimates. Academy doesn’t have an official estimate of our own, I just look at consensus and what some people that I respect and trust have to say on the data.

So, if you have a number of animals typing away for long enough, one will randomly produce a work of Shakespeare. The odds of it happening are incredibly low, but with enough letters being typed, it will likely happen. Yet, with so many smart humans (some of which presumably use AI in their forecasts), not a single one was higher than the “official” data. Is that really likely?

The first question that I have is what are they predicting? At first blush, that seems like a stupid question because the obvious answer is that “they are predicting jobs data”, but it is actually far more nuanced than that.

• Are they trying to predict the Establishment Survey jobs number or are they trying to predict the number of jobs created? Those are not quite the same thing.

• ADP, for example, changed their methodology to try to produce a job number that would be more predictive of the NFP data. Why they would take their own unique payroll data (and manipulate it) to try to estimate the official government data is beyond me, but they did it. So, ADP isn’t really trying to analyze how many jobs were created, it is trying to produce data that helps people predict NFP (at least the Establishment Survey).

• So, how many people in the Bloomberg consensus are trying to report the number of jobs created versus predicting what NFP will be (before the inevitably large revisions)? My working assumption is that people are trying to estimate the number of jobs (not predict NFP), but that could be a flaw in my logic. I feel incredibly sorry for those who apparently miss it on the initial report (which is how they will be remembered by traders) only to have been proven accurate once the final revisions are reported (which aren’t very market moving). “Hey, it turns out that you were right and we were wrong”, but that admission is only in the “fine print” and few will pay attention to it.

• The Household Survey showed a loss of 310k! Why does no one seem to care about that? The Household Survey is used to calculate unemployment rates, so clearly someone at the BLS must think that it is useful. We largely refer to the NFP data in terms of jobs (Establishment Survey) when discussing the unemployment rate (Household Survey). These key numbers do not come from the same data series!

  • The margin of error on the data (according to the BLS) is 130,000 for the Establishment and 600,000 for the Household! 600,000 for the Household! So real job creation in the Household would not be statistically significant if it were anywhere from -900,000 to +300,000! Seems insane. Even on the Establishment Survey, job creation of “only” 210,000 would be inside of the margin of error. This means that 20 estimates would have been spot on or a bit high (or the “real” number would have been an even higher print of 469k). It strikes me as so odd that we publish 339k as such an exact number, but a +/- 130k deviation would not be statistically significant.

• By the way, response rates are slipping. BLS tracks response rates. In April 2013, the jobs data had a response rate of 64% (a C- even under a generous grading system). It is down to 42.7% (a level even Blutarsky might be embarrassed by). Why have survey response rates dropped so much? Is there any “selection” bias in those who respond to the survey, versus those who don’t? Is there anyone at the BLS asking what they are doing wrong since less than 50% of people respond? I would be shocked if there isn’t, yet here we are, publishing numbers down to 1,000 people. JOLTS is even worse – from 69% down to 31%.

The takeaway is that if we are predicting NFP (rather than jobs), that task has become more difficult as the survey response rate is reduced and more numbers must be “fudged” at the official level to produce a report. All of that “fudging” or “smoothing” or “seasonality” (which is always tricky) must be almost impossible to track in an economy that went through COVID, COVID shutdowns, and various stages of “re-openings” etc.

I’m back to where I started, what are the odds that so many smart people got it so wrong?

ADP versus NFP

ADP also came in higher than every single estimate, but only 31 people chose to submit estimates on ADP and at 278k versus a high estimate of 250k, at least some were “in the ballpark”.

So, let’s explore how the 31 who submitted estimates for both behaved.

The biggest differences were that one person had 55k more for NFP than ADP and one had a -30k differential. The average was 17k. So clearly, they are trying to pick up differences in how ADP calculates things versus NFP. If you were trying to estimate jobs created in May, wouldn’t you have the same submission for both? Apparently not. I’m not really sure why, unless they really are trying to understand the nuances of the two reports.

The other thing that I found surprising (though maybe this is indicative of how little people care about responding even to the Bloomberg surveys for estimates) was that 28 submissions for ADP and NFP were on the same date, and for the 3 that were different, ADP was actually the more recent of the submissions. Maybe it was because this month the data came out on Thursday (and then again on Friday) so no one had time to change their official estimates of NFP. However, I would have expected to see at least one person try to increase their estimate after the surprising beat by ADP.

On the NFP estimates, 4 firms submitted on June 2nd (presumably before the release) and they had an average estimate of 221k with a high of 241k (which was the 2nd highest estimate). Presumably they learned something from ADP, as they came in closer to the number (and some are within the margin of error).

I am not sure what to make of the difference in estimates between ADP and NFP. However, I was surprised by how few seemed to incorporate ADP results into revised forecasts (narrow window of time might explain that). In addition, I was surprised by indications that people tried to predict ADP separate from NFP. Is this a possible indication that they are trying to predict the specific data releases rather than predicting the number of jobs created?

Sherlock Holmes on Jobs

The fictional detective is credited with saying the following:

“When you have eliminated all which is impossible, then whatever remains, however improbable, must be the truth.”

What if the “impossible” is that many smart people, working independently with ample resources (including some harnessing AI), got it so wrong?

• We know that response rates are low.

• We know that “smoothing” data is difficult after the massive COVID disruptions.

• We know that the acknowledged margin of error is large.

Then why is it so difficult to believe that the official data (which doesn’t even agree with itself) is wrong?

I am going to bet on the economists who can be fluid, rather than the rigid nature of official data.

I’m not all doom and gloom, but the assertion that jobs are extremely strong and therefore recession risk is low might be built on a shaky foundation (at least a foundation that Sherlock would question).

The Rule of 3

I might as well go “all-in” on quirky today.

In a world where we hear consensus this/consensus that, contrarian this/contrarian that, etc., I keep thinking about the Rule of 3.

The Rule of 3 is loosely related to the “by the time my mother knows” rule. By the time my mother is asking me about something in the financial world, the trade is played out.

The Rule of 3 is quirky, but perhaps useful.

• Something happens that very few people pay attention to.

• Then people start talking about this “thing” and it happens. The “thing” could be as simple as “stocks rise from 3:50 to 4:00” every day. Only some people are talking about it and few are betting on it

• Then more and more people start talking about something that “always” happens. This time there is lots of “chatter” about “stocks go up from 3:50 to 4:00” and more people bet on it.

• Then “everyone” is talking about how stocks have to go up from 3:50 to 4:00. All sorts of reasons are provided, and people bet on this. Then, guess what, it doesn’t happen.

Loosely the “Rule of 3” says that by the 3rd time something is supposed to happen (and “everyone” agrees that it will happen”), it doesn’t happen.

As quirky as it sounds, when trying to be contrarian, I find that thinking about this helps. What is “everyone” saying happens “after the FOMC” for example? Do we always sell-off on the announcement and rally hard after Powell is done with the press conference? I don’t know, but I think that this is an interesting way to think about positioning around things like this.

Though, does the “Rule of 3” apply to the “Rule of 3”? This to me is similar to asking, “if the consensus is always wrong” and that is consensus, isn’t it wrong too? If “the consensus is always wrong” is completely accurate, then every contrarian would be a zillionaire (and finding consensus should be easier than ever using AI). It would also violate its own rule of “something that is consensus cannot always be right”, so betting against the consensus will sometimes be wrong.

Or, in the “Rule of 3”, every third application of the “Rule of 3” will be wrong (so the 3rd time will work as well as the previous 2 times).

But, every 3rd time that this is applied, it too should be wrong

I guess that is a long and somewhat colorful way of saying that figuring out what is consensus is difficult and figuring out how markets will respond to consensus is trickier than it seems. This might be really relevant as we head into a week with more relevant data than last week, a long weekend coming up, and the FOMC. I do currently believe that “good news is good and bad news is bad” for markets, but that might be too consensus. However, that might not matter (and yes, my head hurts). As quirky as this might seem, I think that this is a useful exercise.

Interstate 95 in Philadelphia closed on Sunday after a tanker truck burst into flames underneath an overpass, causing a portion of the bridge to collapse. 

All lanes on 1-95 are shut down in both directions nearing Cottman Avenue exit due to large fire. Smoke is visible. Avoid 1-95 approaching Northeast Philadelphia and expect delays. https://t.co/DydujHbkqr

— Philadelphia OEM (@PhilaOEM) June 11, 2023

NBC’s Randy Gyllenhaal reported the ‘accident’ broke out around 0630 ET on the off-ramp to Cottman Avenue, right underneath I-95, in the Tacony neighborhood in Northeast Philadelphia. 

Major fire on 95 North approaching Cottman @FOX29philly @CBSPhiladelphia @NBCPhiladelphia looks like the grass is on fire pic.twitter.com/PKbUYkrWLn

— Sgt. Mark Fusetti (Retired) (@MarkFusetti) June 11, 2023

All north and southbound lanes are closed for 3 to 4 miles between Bridge Street and Academy Road. Traffic chaos has erupted across that section of the city, as per traffic data via TomTom. 

Gyllenhaal said officials are on the scene and investigating the accident and the state of the bridge. He said the southbound side is “compromised” while there could be structural issues with the northbound section. 

All lanes of I95 closed in both directions between Woodhaven and Aramingo exits due to fire/road collapse. Other streets closed for the response. Avoid area. Plan and seek alternative travel routes. pic.twitter.com/myNyH0nCiq

— Philadelphia OEM (@PhilaOEM) June 11, 2023

Officials told Gyllenhaal, “The roadway is gone.” 

The runoff from the tanker is also causing underground explosions, explained Captain Derrick Bowmer of the Philadelphia Fire Department. There have been multiple reports of exploding manholes around the area. 

“We will be here for awhile,” Bowmer said. “We have fire coming out of those manholes.”

He said the ‘highways isn’t expected to re-open anytime soon,’ and this could spark significant traffic delays on Monday morning, considering the I-95 highway is a major interstate through the Mid-Alantic corridor. 

Pennsylvania Governor Josh Shapiro tweeted he has been briefed on the tanker explosion and bridge collapse. 

Authored by Dave DeCamp via AntiWar.com,

A group of Republican senators at the end of last week introduced a bill to repeal the 2001 Authorization for the Use of Military Force (AUMF) that was passed in the wake of the September 11th attacks and is still being used to justify wars today.

The End Endless Wars Act was introduced by Senators Rand Paul (R-KY), Mike Lee (R-UT), JD Vance (R-OH), and Mike Braun (R-IN). The legislation would repeal the 2001 AUMF 180 days after its enactment.

“If there exists any desire to reclaim our Constitutional power and send a message to the world that we are a nation of peace, Congress should pass this bill and repeal the 2001 Authorization for war. After all, the 2001 AUMF never intended to authorize worldwide war, all the time, everywhere, forever,” said Sen. Paul, according to a press release from his office.

Sen. Lee said the 2001 AUMF has “become one of the many instruments of misuse, and it is time for members of Congress to end this authority that keeps us in endless wars.”

Sen. Braun said that no president should “have the authority to singlehandedly wage war” and called to “return this power to the people and repeal this authorization that has far outlived its’ purpose.”

The 2001 AUMF currently authorizes war in Syria, Iraq, Somalia, Yemen, and several other countries. There’s been a push in Congress to repeal the 2002 AUMF that was used for the 2003 invasion of Iraq, but that authorization is not used today, and repealing it won’t end any current wars.

A new report from Brown University’s Watson Institute claims the post 9/11 “war on terror” caused at least 4.5 million deaths in 7 countries.

Read More Here: https://t.co/Qs2FFZLJNQ#EndlessWars #AntiWar4Life #TheFreeThoughtProject #TFTP pic.twitter.com/9UOziKRG3d

— The Free Thought Project 2.0 (@TheFreeThought2) June 7, 2023

In March, the Senate voted to repeal the 2002 AUMF and the 1991 AUMF used for the Gulf War. At the time, Sen. Paul attempted to include an amendment to the legislation to repeal the 2001 AUMF, but it failed in a vote of 9-86.

A proposed amendment to a California bill would brand parents who refuse to affirm their own child’s gender as ‘abusive,’ and could result in loss of custody.

Proposed by Democratic Assemblymember Lori Wilson and state Senator Scott Weiner (who last year suggested “offering Drag Queen 101 as part of the K-12 curriculum, introduced a bill that grants judicial leniency to certain pedophiles, and who was accused of a hate-crime hoax), AB957 amends the state Family Code addressing the “health, safety and welfare of the child” in every household.

As the Daily Mail notes, if passed, the law could result in children being removed from their parents’ home if family members are deemed ‘anti-LGBTQ+.’

The bill was originally passed on May 3, but was Amended June 3. by Weiner where it will need to pass again with revisions.

Under the code, courts would be given complete authority to remove children from their homes if their parents refuse to affirm their gender. It would also require schools, churches and other organizations to follow suit or face repercussions for ‘impacting the health, safety and welfare of [a] child.’

Individuals and organizations who refuse or do not acknowledge a child’s gender identity could potentially face abuse charges, however, a spokesperson for Rep. Wilson’s office said the bill only applies to family law and not criminal law. 

The revisions have already been slammed by those who say the state should not step into private residences to monitor each child’s gender and their parents’ response. 

Nicole Peterson, founder of Facts Law Truth Justice, told the Daily Signal that the law is ‘horrifying’ and troublesome for parents everywhere. 

‘If a parent or guardian is unwilling or simply not ready to affirm their 7-year-old’s new identity — as they transition from Spongebob to Batman to Dora the Explorer — they can be found guilty of child abuse under AB-957 if it passes into law,’ she said. -Daily Mail

Here, California state assembly member Wilson explains her reasoning behind considering in a state bill that a parent’s lack of affirmation of a child’s gender identity could factor into losing a custody battle. pic.twitter.com/RZjH7SRuHv

— Benjamin Ryan (@benryanwriter) June 10, 2023

“This is a horrifying bill for children, and for parents and guardians not just in California, but across the country,” said Peterson, who suggested that if California’s governor runs for US President in 2028, he’ll bring the law to every state.

In a statement to the Washington Free Beacon, San Francisco-based attorney Erin Friday said she thinks the new revisions could escalate to more laws that push such boundaries.

“It’s not a giant leap–it’s a tiny step to get there,” said Friday, adding “We know exactly where they are going with it. I didn’t think the bill could get worse, but it got worse.”

As the Mail notes, the language of the revisions and how they would be enforced is vague and ambiguous, and doesn’t mention the age range of the children that this could apply to. It also doesn’t distinguish between ‘affirming’ and ‘sex-change.’ Instead, it asks judges to consider parents’ rejection or non-affirmation of their child’s gender.

Weiner is also pushing a bill which would require foster parents to affirm the identity of children who identify as transgender.

Authored by Daniel Lacalle,

Most politicians have used the “Ukraine invasion card” to justify the massive inflationary burst in 2021-2023.

It does not matter if inflation was already elevated prior to the war.

Supply chain disruptions, demand recovery, wage growth… Many excuses were used to justify inflation, except the only one that can make aggregate prices rise in unison, which is the creation of more units of currency well above demand.

Inflationists will blame inflation on anything and everything except the only thing that makes all prices, which are measured in monetary units, rise at the same: Money supply growth rising faster than real economic output.

Supply chain disruption and commodity inflation are caused by monetary expansion: More units of currency going to relatively scarce assets. Profits, wages, or commodities are not causes of inflation, but consequences. The unit used to measure prices is weakened by massive increase of its supply. It is as if I sell apples measured in glasses of milk, and suddenly the issuer of milk puts hundreds of gallons more in the market. My apples will cost more glasses of milk to adjust to the reality of the new unit of measure.

Long-term inflation expectations have risen to 3%, the highest level in twelve years. Furthermore, according to the Bureau of Labor Statistics, in April the Consumer Price Index increased 0.4 percent, seasonally adjusted (SA), and rose 4.9 percent over the past 12 months, not seasonally adjusted (NSA). The index for all items less food and energy increased 0.4 percent in April (SA); up 5.5 percent over the year (NSA). However, commodities have plummeted in the past year.

Crude oil (WTI) is down 38% in the past year, trading below pre-Ukraine invasion level. Gasoil (-44%), gasoline (-40%), heating oil (-44%), natural gas (Henry Hub -74% and NBP -65%) have all plummeted to pre-war levels.

Even wheat is down 30% from a year before June 4th, 2023. The FAO Food Price Index has also corrected to a two-year low in May.

Why do commodities plummet in the middle of the China recovery and elevated demand growth and tight supply? Monetary factors again. The massive rate hikes and the subsequent monetary contraction have impacted the internationally quoted prices of goods all over the world. It is more expensive to purchase storage, finance margin calls, hire tankers and start long positions.

If commodities and the Ukraine war were to blame for inflation, why is the consumer price index remain so elevated? Money supply growth is plummeting but not enough to revert the price expansion of 2020-2023 and, in fact, global money supply has not fallen lower than $101 trillion, according to Bloomberg. That is a significant drop in money supply from its highs, and one that justifies the rapid decline in headline inflation, but not enough to revert the price increases for consumers.

Central banks engineered the massive inflationary burst, as proven in the BIS study by Claudio Borio et al (2023 https://www.bis.org/publ/bisbull67.htm) and now find that it is relatively easy to reduce annualized inflation to 4-5% but not that simple to bring it to 2%.

What no central bank wants to tell you is that the only way in which inflation will be brought down significantly is a recession. That is why they talk of a “soft landing” that is impossible if they truly wanted inflation to fall permanently.

Days after Ukraine’s counteroffensive was widely reported to have begun in international press reports, currently concentrated in four areas of the east and south, President Volodymyr Zelensky appeared to give belated confirmation that it is indeed in progress for the first time in Saturday statements.

“Counteroffensive and defensive actions are being taken in Ukraine,” Zelensky said from the Ukrainian capital while standing alongside Canadian Prime Minister Justin Trudeau. The Canadian leader had made a “surprise” visit to the war-ravaged country. “I don’t comment on the scale. I am in touch with our commanders. Everyone is in a positive mood. Pass this on to Putin.”

Canada has pledged another $375 million in defense aid, and Trudeau along with other NATO heads of state will attend a big NATO annual meeting in Vilnius, Lithuania early next month. Zelensky is pushing for full membership in the alliance, or at least to receive strong security guarantees. 

In a Saturday press conference, Zelensky remarked that it’s “interesting” Putin earlier commented on counteroffensive, claiming that it implies “Russians feel they won’t stay” on Ukrainian territory “for long.”

Putin had said from Sochi the day prior, on Friday, “We can clearly say the offensive has started, as indicated by the Ukrainian army’s use of strategic reserves.”

“But the Ukrainian troops haven’t achieved their stated tasks in a single area of fighting,” Putin described. “We are seeing that the Ukrainian regime’s troops are suffering significant losses,” Putin asserted without clarifying details.

“It’s known that the offensive side suffers losses of 3 to 1 – it’s sort of classic – but in this case, the losses significantly exceed that classic level,” he added.

Ukraine did suffer a setback, and hugely symbolic blow, after Russia destroyed several West-supplied tanks and armored fighting vehicles, as widely circulating footage and imagery showed. 

Meanwhile fighting has intensified along front lines as the below first-person footage capturing a fresh assault by Ukrainian troops documents…

Multiple war analysts have at this point confirmed that Russian forces destroyed their first German-made Leopard II tank, which happened Wednesday in the south of the country. Videos and photographs which have emerged also appear to show destroyed Bradley fighting vehicles provided by the United States. Drone footage captured a Leopard II tank being destroyed at is was traveling in a column of other vehicles.

Authored by Alexander Zhang via The Epoch Times,

The government has announced it will remove the windfall tax on oil and gas companies if energy prices fall to “normal levels.”

The temporary windfall tax was announced last year by then-Chancellor Rishi Sunak to fund a relief package for households struggling with rising bills following Russian President Vladimir Putin’s invasion of Ukraine.

The levy has raised around £2.8 billion to date, but the government said energy companies are cutting back on investment as a result, putting the long-term future of the UK’s domestic supply at risk.

In an announcement on Friday, the Treasury said it will slash the current 75 percent tax on North Sea oil and gas profits back to its regular 40 percent “if prices fall to historically normal levels for a sustained period.”

The government said it will take the move if the average price of oil fell to or below 71.40 dollars per barrel for two consecutive quarters, and the average price of gas fell to under 54p.

‘Protect Domestic Energy Supply’

Downing Street said the change was being made to “protect domestic energy supply and safeguard thousands of jobs reliant on that sector.”

“Industry has warned that companies are cutting back on investment,” the government said.

“This puts the long-term future of the UK’s domestic supply at risk, meaning we would be forced to import more from abroad at a time when reliable and affordable energy is a focus for families and businesses.”

The Treasury said that the tax will not be removed before 2028 if the Office for Budget Responsibility’s energy price forecasts are accurate.

Gareth Davies, exchequer secretary to the Treasury, said: “It is right that we recover excess profits resulting from Putin’s war and use the money to help people with their energy bills.

“Thanks to the revenue raised from windfall taxes on energy profits, we will have helped save the typical household £1,500 on their energy bill by July.

“While we stepped into help, never again can our energy supplies be at the whim of petrostate despots like Putin.

“That’s why it’s so important that we secure investment in our own domestic supply, protecting the tens of thousands of British jobs that come with it.”

‘Step In the Right Direction’

Offshore Energies UK, which represents the industry, welcomed the government’s new policy but said that it is not enough to restore confidence.

“We’ve always been clear that when the windfall conditions go, the windfall tax should go,” its chief executive David Whitehouse said.

“This is a step in the right direction, but many more will need to be taken to restore confidence to our sector.

“We will now work closely with government and lenders to understand the detail of the measure and its effectiveness at unlocking investment.”

But opposition parties have voiced opposition to the government’s move.

A Labour spokesperson said:

“It’s right that as oil and gas producers are making historically high profits that they are asked to contribute more. We need a proper windfall tax on the enormous profits of oil and gas giants to help with ease the cost of living crisis.

“We will look at the detail of this change. Of course, if the windfalls of war disappear then we’ll look at what the right long-term tax position should be for the North Sea.”

The Green Party said it is “beyond comprehension that the government seems happy to allow these huge corporations to not only wreck the climate but to profit off the back of the cost-of-living crisis which they themselves have contributed to.”

Liberal Democrat leader Sir Ed Davey said: “This out-of-touch government has shown yet again that it doesn’t care about people struggling just to get by, or the small businesses clinging on.

“This energy tax failure ranks as one of Rishi Sunak’s biggest personal failures as chancellor and prime minister.”

Range anxiety is frequently cited as one of the biggest turnoffs of electric vehicles (EVs).

Even as recent as 2021, the average range of an EV was just 217 miles (349 km), falling significantly short from the average gas car’s range of 413 miles (665 km).

Thankfully, as Visual Capitalist’s Marcus Lu shows in the infographic below, EVs with over 300 miles of range are becoming more common.

Below are the top 10 EVs for 2023, ranked by their EPA combined driving range.

For further context, we’ve also included price. These values are for the specific trim that achieves the stated range. In some cases, more expensive trims are available but have a lower range (e.g. Tesla Plaid).

Note that the EV market is rapidly evolving, and the data in this table has a limited shelf life. For example, Rivian is releasing a battery option dubbed the “Max pack” which promises up to 400 miles, but is not yet EPA rated.

Authored by Tsvetana Paraskova via OilPrice.com,

• According to the president of Germany’s energy regulator, the energy crisis isn’t over yet despite high natural gas storage levels.

• Natural gas storage facilities in the EU are currently at 70% capacity while in Germany natural gas storage tanks are 76% full.

• In order to secure enough gas supply for the coming winter, Germany will need a storage level of 75% by the first of September.

The energy crisis is not over yet, Klaus Müller, the president of Germany’s energy regulator, told the Funke media outlet on Wednesday.

Despite the fact that the levels of natural gas in storage are more comfortable than in the previous two years, the crisis is far from over, and weather will be the biggest factor, Müller, president of Germany’s Federal Network Agency, Bundesnetzagentur, said.  

As of June 6, storage tanks in Germany were 76% full, while in the EU the overall level is just over 70%, according to data from Gas Infrastructure Europe.

“If everything goes well, we will have full storage facilities in the late summer,” Müller said, referring to Germany’s storage levels.

The regulator said in its latest weekly report that “to secure the gas supply for next winter, there must be a storage level of 75% by 1 September.”

“It was possible to prevent a gas deficit situation last winter. At the same time, preparing for the 2023/2024 winter is a key challenge. It is therefore still important to save gas,” the regulator added.

Germany’s natural gas consumption in the week beginning May 22 was 23.2% below the average consumption for the 2018-2021 period, and down by 9% compared with the week prior, the regulator added.

Last month, one of Germany’s top utility firms, E.On, said that the energy crisis is not over yet, and the situation with energy supply in Europe could deteriorate later this year.

“The crisis is not over yet,” E.On’s chief financial officer Marc Spieker said at the presentation of the utility giant’s first-quarter results in early May.

“Compared with the current market environment, our forecast also factors in the possibility of a further deterioration in the remainder of the year. We believe we are well-positioned to deal with the volatility that is expected to continue,” Spieker added.

The story of human evolution is a fascinating one, stretching back in an unbroken chain over millions of years.

From the tiniest protocells to modern humans, our species has undergone a remarkable journey of adaptation, innovation, and survival.

In this article, Visual Capitalist’s Mark Belan takes a look at the key developmental stages in the evolution of life on Earth that led to the emergence of Homo sapiens—us!

From Protocells to People

Evolution is the result of millions of minute mutations over millions of years, but the evolutionary process that created us can bucketed into a few key categories.

1. Protocells and Early Microorganisms

The first life forms on Earth were simple, single-celled microorganisms known as protocells. These precursor cells lacked a nucleus or other membrane-bound organelles, and they had simple genetic proteins called RNA.

Over time, RNA complexified into the more stable DNA. Protocells slowly developed specialized organelles, becoming more complex microbes that would eventually form eukaryotes – the complex, unicellular organisms that would birth a diverse array of life forms, from simple sponges to complex animals.

2. The First Animals

Dickinsonia is the earliest example of an animal we know of. Though it was a simple, flat creature that lacked a mouth or digestive system, it symbolizes the first multicellular organism of substantial complexity.

Over time, the first sophisticated organ systems began to arise. Bilateral symmetry emerged, as well as early versions of the nervous and circulatory systems. Simple eyes, called eyespots, also appeared around the time that spinal cords and vertebrate creatures began to emerge.

3. Fish and Tetrapods

One of the most significant developments in the evolution of life was the transition from marine to terrestrial environments.

Up until 500 million years ago, all life was sequestered in the sea. Fish were the first vertebrates and introduced additional organs like stomachs, spleens, and body components like scales, teeth, blood, and more. Bony fish arose, and over time their development brought about sophisticated changes to the skeletal system, eventually producing “proto-limbs” that would enable organisms to walk on land.

Researchers are still unsure which specific organism might have first crawled on land, but candidates share these pre-limb characteristics. Tiktaalik is one popular candidate because it had specialized bones that suggest it could support its own weight while moving out of shallow waters.

These creatures eventually became the tetrapods (“four-footed”), and they had features like four-legs, a backbone, and lungs which could absorb oxygen from air. All the amphibians, reptiles, birds, and mammals that followed are descendants of the original tetrapods.

4. The First Mammals

Around 200 million years ago, the first mammals emerged. These early mammals were small, shrew-like creatures that lived alongside the dinosaurs. Over time, however, mammals evolved hair, specialized teeth, sweat glands to regulate body temperature, and a more efficient circulatory system.

Mammals also brought about features like nocturnality, mammary glands, external genitalia, and a variety of other features that distinguished them from other living species at the time, like birds or reptiles.

5. The Great Apes and First Homo Species

Around 7 million years ago, the first great apes emerged in Africa. These apes, such as orangutans, gorillas, and chimpanzees, were highly intelligent and social creatures that lived in complex communities. Over time, one lineage of apes would give rise to the first members of the genus Homo, which includes our own species.

The main developmental changes during this time were the full-time bipedalism of apes, increasing brain size, and advanced bone development that enabled dexterity for tool construction and hunting. Inventions like fire and clothing arose early in the Homo genus, and eventually complex language, hair loss, and dramatic facial changes would evolve.

Researchers struggle with resolving the exact progression of the Homo species. Many Homo species existed at the same time, and since many fossil records overlap, resolving which ones came first is an area of intense focus.

The Future of Human Evolution

As humans continue to evolve, we can expect to see significant changes in our physical and cognitive abilities over the next 10,000 years.

With the rise of technology and the increasing interconnectedness of the world, we may see a shift towards a more globalized and homogeneous human population, with less genetic diversity.

This has been described as “The Great Averaging”, where genetic diversity minimizes and we start to become more alike.

Other theories suggest that we might develop features like a taller, lighter build, with smaller brains and a less aggressive personality.

However, as with all evolution, these changes will be shaped by a complex interplay of genetic, environmental, and cultural factors. It is impossible to predict exactly how humans will evolve over the next 10,000 years, but one thing is certain: the future of human evolution will be shaped by the choices we make today.