The grip of public debt costs - especially the 10-year US bond - is tightening around the necks of the United States, companies, and individuals. But why is it rising? Is it because things are going well, so it's inevitable that there will be more inflation (something we are feeling in Spain)? Or is it due to excessive public spending - and now private investment -, distrust in US institutions, and, the simplest of all, expensive oil due to Iran and Ukraine? The answer could be the latter, which is the simplest. According to Financial Times, in this past September that ended on Wednesday, the yield of the US 10-year bond had a correlation of 0.65 with the price of a barrel of oil, on a scale where -1 indicates that both move in completely opposite ways and 1 that they move identically. The figure is close to the record of 0.66 from 1990 when Iraq invaded Kuwait. Debt traders now seem to be oil traders.
Trump threatens to add fuel to the global energy crisis
In February, about 8 million barrels of diesel, fuel oil, and heating oil were sailing the world's oceans every day. Now, only 5.5 million barrels are. The cause is the collapse of Middle East exports by 1.7 million barrels and Russia by about 800,000. The supply shortage has driven diesel prices to records almost worldwide, leading to inflation by increasing the cost of road freight transport. Now, Donald Trump could worsen the problem by banning US fuel exports, which could remove an additional 1.5 million barrels from the market. The idea is very Trumpian: leaving his foreign partners (Mexico, UK, France) without fuel to favor his electoral base, in this case, farmers who cannot afford to buy diesel for their machinery due to the consequences of a crisis for which Trump is at least partially responsible for his attack on Iran.
The 'cryptolink' of the US Secretary of Commerce and Putin's war
There is an indirect but unsettling 'cryptolink' between the US Secretary of Commerce, Howard Lutnick, and Vladimir Putin's war against Ukraine. Until less than two years ago when he entered the government and transferred his shares to his children, Lutnick was the owner and CEO of Cantor Fitzgerald, the broker that holds most of the assets backing the 'crypto' USDT and also owns 5% of Tether, the company that issues it. Now, the 'New York Times' has uncovered the use of USDT by Russia to purchase technology that serves both civilian purposes and to build drones and missiles. The information poses a notable contradiction: the company of the family of the secretary in charge of export controls to Russia makes money thanks to the issuer of a currency used to circumvent them, and also owns the company that enables this. Lutnick is not Talleyrand, who received money from the czar while advising Napoleon.
Hollywood, Silicon Valley's most expensive 'trend'
Here's a series proposal: the most prestigious streaming brand is also Hollywood's biggest money loser, which, in turn, doesn't matter to its owner. The brand is Apple TV, the absolute winner of this year's Emmys, awarded two weeks ago, but reportedly loses a billion dollars (880 million euros) every year, according to US press. Manageable for Apple, which earns that amount in three days (yes, you read that right). It's a revealing case of how Hollywood has been devoured by Silicon Valley, which keeps it as part of its ecosystems, or simply because it feels like it. The best example: David Ellison, son of Oracle owner and founder Larry Ellison, who, with a group of partners, has bought half of Hollywood - from Paramount to HBO, through CNN - committing 121 billion euros, a lot, but not reaching the 165 billion of the paternal fortune.
China swaps Venezuelan oil for Nicaraguan mines
First, China tried with Cuba. But it found more misery than business. From there, it jumped to Venezuela, to which it lent 63 billion dollars (56 billion euros) between 2007 and 2016. Again, it didn't go well. Caracas only paid back 44 billion euros, mostly in oil. And since Trump took Maduro away in a helicopter on January 3, Beijing hasn't seen more. But China is persistent. And now it's investing in the other Latin American country whose main foreign policy beacon is poking the US in the eye: Nicaragua. In just over two years since Nicaraguan President, the communist Daniel Ortega, decided that holding elections is a waste of time, Beijing has injected around a billion dollars into the country, where it has opened no less than 80 mines. Beijing seems calm. But the Cuban and Venezuelan precedents do not invite optimism.
Lamu: Three thousand donkeys, two cars, and now, 14 billion
Until a few years ago, Lamu, in northern Kenya, was an island isolated from the world, with 3,000 donkeys and only two cars (the governor's and a British NGO's that cared for donkeys), sometimes crossing paths with American mercenaries operating in neighboring Somalia, or passing by the (shielded) villas of Madonna or Sting. But that Lamu is disappearing. On Wednesday, construction began there for a refinery symbolizing the economic change in Africa. Not only because of the project's location but also the planned investment of 14 billion euros. The refinery will not be built by China or any multilateral development aid organization but by an African entrepreneur, Nigerian Aliko Dangote, who is also the continent's richest man and is launching Africa's largest IPO. The endearing Africa of donkeys in the street is giving way to another reality.