David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Why So Many Electric Car Chargers in America Don't Work

    This article from Bloomberg may be of interest. Here is a section: 

    There isn’t a single reason for EV charger failures. Some of the problems, particularly with older machines, can be chalked up to a new technology going through the usual learning curve of improvements, all while sitting outside, exposed to the weather. There have been cycles of needed upgrades, such as replacing modems to deal with 5G wireless internet service. The myriad networks, retail outlets and garage owners who own the machines don’t always stay on top of maintenance. And chargers must communicate with a rapidly expanding variety of cars. 

    To that end, the precise scope of the problem isn’t known. EV drivers face a complex landscape of competing charging companies, each with its own stations and app, and there is no central repository of data on station performance. One widely cited 2022 study of fast-charging stations in the San Francisco Bay Area (excluding Tesla Inc.’s Superchargers), found that about 25% of the 657 plugs weren’t working. While J.D. Power doesn’t disclose reliability rankings, Gruber said the worst-performing charging company leaves drivers unable to plug in about 39% of the time. 

    “With public charging, it’s a bit of the wild, wild West,” he said.

    Tesla proved that reliable charging is possible. The all-electric automaker runs a global network of 45,000 Superchargers, which can add up to 200 miles of range in just 15 minutes. Tesla consistently gets the highest customer-satisfaction marks of any charging company in J.D. Power’s surveys, Gruber said. Its drivers report charger downtime of just 3%.

    But Tesla has the advantage of keeping everything in-house. Until recently, Superchargers could only be used by Tesla cars, and didn’t need to work with the growing array of other EVs and batteries. Tesla also owns its Supercharger network, whereas many of the public chargers installed over the past decade are owned by whoever owns the parking lot where they’re located. Such property owners, Gruber said, don’t have as strong an incentive to maintain their machines.

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    'In a lot of the world, the clock has hit midnight': China is calling in loans to dozens of countries from Pakistan to Kenya

    This fascinating article by Bernard Condon for The Associated Press may be of interest. Here is a section:  

    As Parks dug into the details of the loans, he found something alarming: Clauses mandating that borrowing countries deposit U.S. dollars or other foreign currency in secret escrow accounts that Beijing could raid if those countries stopped paying interest on their loans.

    In effect, China had jumped to the front of the line to get paid without other lenders knowing.

    In Uganda, Parks revealed a loan to expand the main airport included an escrow account that could hold more than $15 million. A legislative probe blasted the finance minister for agreeing to such terms, with the lead investigator saying he should be prosecuted and jailed.

    Parks is not sure how many such accounts have been set up, but governments insisting on any kind of collateral, much less collateral in the form of hard cash, is rare in sovereign lending. And their very existence has rattled non-Chinese banks, bond investors and other lenders and made them unwilling to accept less than they’re owed.

    “The other creditors are saying, ‘We’re not going to offer anything if China is, in effect, at the head of the repayment line,’” Parks said. “It leads to paralysis. Everyone is sizing each other up and saying, ‘Am I going to be a chump here?’”

    Loans as ‘currency exchanges’
    Meanwhile, Beijing has taken on a new kind of hidden lending that has added to the confusion and distrust. Parks and others found that China’s central bank has effectively been lending tens of billions of dollars through what appear as ordinary foreign currency exchanges.

    Foreign currency exchanges, called swaps, allow countries to essentially borrow more widely used currencies like the U.S. dollar to plug temporary shortages in foreign reserves. They are intended for liquidity purposes, not to build things, and last for only a few months.

    But China’s swaps mimic loans by lasting years and charging higher-than-normal interest rates. And importantly, they don’t show up on the books as loans that would add to a country’s debt total.

    Mongolia has taken out $1.8 billion annually in such swaps for years, an amount equivalent to 14% of its annual economic output. Pakistan has taken out nearly $3.6 billion annually for years and Laos $300 million.

    The swaps can help stave off default by replenishing currency reserves, but they pile more loans on top of old ones and can make a collapse much worse, akin to what happened in the runup to 2009 financial crisis when U.S. banks kept offering ever-bigger mortgages to homeowners who couldn’t afford the first one.

    Some poor countries struggling to repay China now find themselves stuck in a kind of loan limbo: China won’t budge in taking losses, and the IMF won’t offer low-interest loans if the money is just going to pay interest on Chinese debt.

    For Chad and Ethiopia, it’s been more than a year since IMF rescue packages were approved in so-called staff-level agreements, but nearly all the money has been withheld as negotiations among its creditors drag on.

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    This Equities Rally Is Running on Hope and a Story

    This article from John Authers at Bloomberg may be of interest. Here is a section:

    For the first, virtually all of the S&P 500’s gain for the year (barring this week’s surge) can be traced to the 7.5% rally from March 13 to April 13, which took it from 3,856 to 4,146. This coincided with the creation and growth of the BTFP as well as an expansion of the Fed’s balance sheet in response to the collapse of SVB and Signature Bank. Whatever the official interest rates, money was available. As money is also fungible, it had a way of finding where it could make the best return. The Fed’s balance sheet grew roughly $400 billion to $8.73 trillion between March 1 and March 22 as it tried to contain the crisis. It currently stands at around $8.50 trillion.

    For the second, there was a slide in the expected federal funds rate on the anticipation that the Fed would pivot (since largely reversed). As the rally started, the projected rate after next month’s Federal Open Market Committee meeting had just dropped from about 5.5% to about 4.7%. Coinciding with this was a “defrosting of credit markets” that saw investment-grade corporate spreads compressing almost 30 basis points from this year’s peak of 163 on March 15 — again a phenomenon that was likely helped by the BTFP and increased liquidity.

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    Wildfires Rage On in Western Canada, Shutting More Energy Output

    This article from Bloomberg may be of interest. Here is a section:

    Companies including Chevron Corp., Paramount Resources Ltd. and Crescent Point Energy Corp. also have announced shutdowns, and consultant Rystad Energy estimates that the equivalent of about 240,000 barrels of daily production — and perhaps more than 300,000 barrels — has been shut due to the fires. 

    So far, the blazes have mostly struck the gas-producing region of western Alberta. But ConocoPhillips said on Wednesday that it evacuated and then returned non-essential workers to the Surmont oil-sands site because of a wildfire nearby. Surmont produced about 143,000 barrels a day in March. 

    Conditions are expected to worsen heading into the weekend, raising the possibility of even more blazes, Christie Tucker, a spokeswoman for Alberta Wildfire, said during a media briefing Wednesday. 

    “It will get hotter and drier as we head to the weekend, and as we’ve seen, that can lead to more active wildfire behavior,” she said.
     

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    BT Plans to Cut Up to 55,000 Jobs Following Fiber Rollout

    This article from Bloomberg may be of interest. Here is a section: 

    BT Group Plc said it plans to cut its workforce by as many as 55,000 people by the end of the decade, after the UK’s biggest network operator completes its nationwide fiber-optic rollout. 

    The company’s workforce will drop to 75,000 to 90,000 people by the fiscal year ending in March 2030 from about 130,000 currently, counting employees and contractors, the company said in its full-year earnings statement on Thursday. That’s a decline of about 42%.

    Chief Executive Officer Philip Jansen is slashing costs at BT, fighting an industrywide slump as telecom carriers spend heavily on networks to keep up with surging data demand without a corresponding rise in revenues. On Tuesday, British rival Vodafone Group Plc announced plans to reduce headcount by 11,000 over the next three years. Jansen has pledged to cut expenses by £3 billion ($3.7 billion) a year by 2025 against 2020 levels, and has been weighing more dramatic job cuts since at least 2019. 

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    Dynatrace Rises on Strong Results and Forecast

    This note following Dynatrace’s earnings may be of interest. Here is a section:

    Dynatrace shares are up 5.9% in premarket trading, after the infrastructure-software company reported fourth-quarter results that beat expectations and gave a full-year forecast that is ahead of the analyst consensus.

    Barclays (equal weight, PT $41)
    Profitability metrics were “all nicely above consensus,” while the outlook seems conservative
    “The results and guide provide ammunition for the bulls, suggesting stronger product/[go-to-market] execution and/or improving macro conditions”

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    African Central Banks Poised to Hold Rates as Inflation Softens

    This article from Bloomberg may be of interest. Here is a section: 

    A temporary slowdown in inflation may give Egypt’s MPC room to pause, especially after Governor Hassan Abdalla signaled higher interest rates are doing little to cool prices.

    The central bank “is likely to remain data-led, and will see declining global commodity prices and a reduction in domestic inflation as supportive of their current monetary stance,” said Farouk Soussa, an economist at Goldman Sachs Group Inc. The monetary authority sees inflationary pressures stoked mainly by supply issues, “reducing the rationale for a further hike in the medium term,” he said.

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    Eoin's personal portfolio: commodity long breakeven stop triggered April 19th 2023