Bloomberg - December 8, 2023
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Today’s Must-Reads
The EU-China chill is good for some countries.
Here comes the Yuan again.
Beijing isn’t winning friends in the Global South.
Follow the science. Really, please.
Qatar and Netanyahu, unlikely bedfellows.
The UK’s migration policy splits Sunak’s Tories
And Quiet Flows the Bosporus
I was in Istanbul for the first time a couple of weeks ago and was mesmerized by the ship traffic on the Bosporus. All sizes and manners of boats sailed east to west, north to south, Asia to Europe, and the reverse, of course. Commuter ferries miraculously skirted out of the way of giant tankers and cargo ships, which coursed between the Black Sea and the Sea of Marmara, to and from points along the Aegean and Suez and Gibraltar — and the great world beyond. There’ve been enough accidents on the strait for a system of sorts to be put in place for the big boats: There’s a time to head south and a time to head north, according to a schedule to minimize chances of collision. Still, people remember stories of fog-bound freighters smashing into houses on the shore.
No one really talks about the war on the far end of the Black Sea, though. It seems so far away.
The ships sail on: In Istanbul, looking at Asia from Europe Photograph by Howard Chua-Eoan/Bloomberg
Worries have long abated about a global food crisis because of strangled trade routes from some of the planet’s greatest granaries. The price of wheat — both Ukrainian and Russian pass through the waterway — is remarkably low. After spiking to more than $14 a bushel in March 2022 at the start of the war, it is now just about $6.20, around a dollar lower than July level when Moscow said it would target ships carrying enemy grain, ending a deal that had allowed the commodity to be transported directly across the Black Sea from Ukrainian ports like Odesa. Ukrainian grain — while also detoured on to rail lines that take it through friendly European territory — must now hug the coastal waters of Romania and Bulgaria to reach the Bosporus. Kyiv takes no comfort at the low price of wheat.
The placidity of commerce belies Ukraine’s plight — and the sheer enormity of the war. In a column this week, Marc Champion said: “Too many people appear to have lost sight that this is the largest military engagement Europe has seen since 1945, dwarfing even Israel’s heavy-handed counter-terrorist operation in Gaza.” The headline of his piece broadcasts the urgency: “Fund Ukraine. The Alternative is Loss, Not Peace.” In Washington DC on Thursday, however, every Republican senator voted to block additional aid to both Ukraine and Israel unless the Biden administration tightened the southern US border against Latin American migrants.
Europe has been just as ineffective. Says Pankaj Mishra: “Russia has survived its war better than expected. Squabbling European and US leaders threaten crucial aid to Ukraine. Trump’s fortunes are on the rise. And Europe now looks less like a democratic bulwark against Trumpist populism than a likely prelude to it.” Marc says the options for Kyiv are brutal: “The upshot is that Ukraine can’t stop fighting no matter what happens to its funding and arms supplies from allies. The only question is how many extra lives and additional territory will be lost should Western resolve fail, depriving Ukrainians of the means to fight back with enough force to persuade Putin that there’s nothing more he can win.”
There’s Science, and Then There’s Policy
There was always something incongruent with the United Nations climate conference COP28 being headed by Sultan bin Ahmed Al Jaber. After all, he is the chief executive officer of the Abu Dhabi National Oil Company. Still, Lara Williams doesn’t fault him too much for the quote that raised a ruckus this week. “There is no science out there, or no scenario out there, that says that the phase-out of fossil fuel is what’s going to achieve 1.5C,” Al Jaber said at an online event in November. “Show me the roadmap for a phase-out of fossil fuel that will allow for sustainable socio-economic development, unless you want to take the world back into caves.” Lara says “Science rarely, if ever, provides us with a single, definitive pathway.” Indeed, what Al Jaber says is technically true. “In scenarios compatible with limiting warming to 1.5C above pre-industrial temperatures, fossil fuel use is greatly reduced — though not eliminated — while unabated coal use is completely phased out by 2050.” Science provides the data; policy makers have to decide how to use the information to come up with workable solutions.
Lara, however, does have a very definite problem with a specific policy Al Jaber and his company are pursuing: They plan to pump 5 million barrels of crude per day by 2027, up from 3 million barrels today. That doesn’t exactly make it easier for the world to wean itself from fossil fuels. For his part, Javier Blas believes we shouldn’t be surprised by that self-dealing: “Expecting Big Oil to disrupt the energy industry is foolish — and counterproductive.” To its credit, ADNOC has set up a pioneering green hydrogen refilling station for zero-emission vehicles. It should do more.
Telltale Charts
“Blink and you missed it, but on Sunday night and into the early hours of Monday gold reached a record of more than $2,135 a troy ounce — and promptly fell back. Gold is now about 6% lower than that fleeting zenith and essentially unchanged from where it was a week ago. This isn’t the behavior we expect of serious millennia-old asset classes; that’s what magical new-age virtual tokens are for.” — Marcus Ashworth in “Gold’s Fickleness Makes It Bitcoin for Boomers.”
“This year’s near-doubling of the yuan’s share as a global payments currency has largely gone unremarked because the figures are still rather modest, and forecasts of the dollar’s impending demise have so far turned out to be greatly exaggerated. … The world’s attention is fixated on China’s wobbly domestic growth. … Yet, ignoring the yuan’s rise might be a mistake. Going by the experience of treasurers at multinational firms, Beijing’s two-decade-old project to put its own legal tender in the race for preeminence — and the exorbitant privilege that comes with it — seems to have got some momentum.” — Andy Mukherjee in “The Yuan Is Showing Some Muscle in International Trade.”
Further Reading
Google’s Gemini is still playing catch-up. — Parmy Olson
Don’t expect Big Oil to save the planet. — Javier Blas
Premier League’s winning strategy. — Matthew Brooker
You don’t really want to host a World Expo. — Gearoid Reidy
Pulp Fiction lessons for real life central bankers. — Daniel Moss
Bitcoin and the Rolex Recession. — Lionel Laurent
Walk of the Town: A Monument to Print Journalism
I often take a quick stroll through a pretty little formal garden on the way to work here in London. The dampness and rain have lent an algae-like green to the stone statue in one corner, giving the three figures an extraterrestrial tint. Or it could just be the effect of the passage of time. The 66-year-old sculpture is a monument to printers — to the print as a medium for news, if we are to interpret the artifact more accurately. The three figures are a typesetter, a writer and a newspaper delivery boy. A tinge of nostalgia came over me for the fate of print journalism. My grandfather and uncle owned and ran newspapers in the Philippines. I worked for three famous print magazines: Time, People and Businessweek. My family’s papers have long shut. Time and People are no longer the media giants they used to be. And last week, Bloomberg announced that Businessweek, which it owns, will soon cease to publish weekly and become a monthly.
Little green men? Or ghosts of journalism past? Photograph by Howard Chua-Eoan/Bloomberg
To anyone paying magazines half a mind, these developments are not surprising. While he shares my nostalgia for the glory days of print, my former Businessweek colleague Peter Coy — who now writes a New York Times newsletter that appears only online — puts it in context: “It’s faintly ridiculous that people are still growing trees, cutting down trees, making paper, etc., etc. Printing and mailing costs have soared in recent years. And many younger readers haven’t developed the habit of reading magazines in print.” Peter says that Businessweek may have vanished completely in 2009 had it not been given a fresh lease on life by a new owner, Michael Bloomberg. Businessweek’s name is likely to stay on: Its monthly print schedule will be supplemented by weekly Businessweek stories online. Those of you who never picked up the print edition will never know what you’re missing. I’m a sentimental sap, that’s all.
I take comfort in the fact that the monument to print is in the space where the church of St. John Zachary stood until it was consumed by the Great Fire of London in 1666. John Zachary is the very English way of referring to Jesus’ cousin and forerunner, John the Baptist, son of Zacharias. The Baptist is, of course, a perfect journalistic symbol: A voice crying in the wilderness, “Prepare ye the way of the Lord.” Gospel truth that you don’t have to be in print to bring people the news.
Drawdown
Thanks for sticking with me. Here’s something I hope makes you smile. What big teeth you have!
”Uh, hi… Did you just say ‘Nice to meet you?’ or ‘I’d like to eat you’?” Illustration by Howard Chua-Eoan/Bloomberg
Notes: Please send predatory critique and fulsome feedback to Howard Chua-Eoan at hchuaeoan@bloomberg.net.
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