Daily SITREP for Friday, March 17, 2023 Read this on the Blog Welcome to the SITREP for Friday, March 17, 2023. Two very different banking crises played out this last week and, while both seem to be over, the panicky reactions in world markets indicates a lot of FUD (fear, uncertainty, and doubt) has built up. This suggests that companies won’t get the benefit of the doubt if there’s a stumble or any sign of weakness. ...
Recently, there was a great discussion on the frequency of crisis management exercises in a forum I’m part of. What was most surprising to me was the degree of consensus on the ideal tempo. The vast majority of folks recommended a quarterly & annual frequency. – Quarterly low-intensity tabletops focused on skills development and team cohesion. – Annual high-intensity simulations to reinforce learning and test teams and systems in a realistic environment. ...
Good morning. 💕 Happy Valentine’s Day 💕 It’s a slightly different intro today because I’ve some exciting news to share. I know, I know. Every email you get starts with someone saying how excited they are: excited that you signed up for free coupons, excited that you joined an exclusive group of only 3,289,000 other professions, excited that you chose their firm to clean your windows, etc., etc. I get it. ...
Good morning. A recent outbreak of bird flu has been detected in mammals raising concerns that a variant of the H5N1 virus could eventually infect humans. The chances of this are slim but it’s a good reminder to review plans nevertheless. Meanwhile, the metrics are a mix of extremes: wheat and iron and steel are at some of their highest prices for the 90-day period, while shipping and the VIX are at their lowest. Oil is relatively low but has been fluctuating recently. ...
Good morning. ding! You’ve got mail…. 📬 Welcome to the first Daily SITREP! No more anxiously waiting between updates: now you’ll be getting the metrics and critical events delivered to your inbox daily, Monday – Friday. Please keep the feedback coming – that way, I can make this as useful as possible (and not waste valuable space in your inbox). Yesterday was Blue Monday when the reality of the New Year sets in: whatever excitement there was around the holidays has faded, the decorations are back in the attic, and we’ve all gotten used to writing ‘2023’ on our checks. And there was a similar feeling with the key metrics: movements are relatively gentle and valuations seem to be stabilizing for the moment as things settle into the New year. Unfortunately, some of this stability comes from pretty grim contributing factors – there’s no let up in Russia’s attacks on Ukraine, for example – and the results are no less pleasant as the cost of living bites and layoffs continue. Nevertheless, this is a moment of relative calm which should be appreciated. And a bit like your New Year’s resolutions, it’s worth reviewing any big plans you made for your organization in early January to see if those are still great ideas now the enthusiasm has ebbed a little. ...
Good morning. ENI is about to sign a new gas deal with Libya which is good news but adds a fraction of what the EU needs. Fiddly fingers (that’s a technical term – look it up) caused Tuesday’s wild opening on the NYSE while it was Microsoft’s turn on Wednesday. Meanwhile, several recent stories about Egypt bring the combined challenges of what prices, inflation and sovereign debt info focus. These same conditions exist in many countries so the stories are worth reading to get a sense of what’s going on in frontier markets. ...
Good morning. America hit the debt limit yesterday: that means no more borrowing is possible until the debt ceiling is lifted. The government will keep running and paying the bills for a few months because funds have already been appropriated or because the extraordinary measures introduced by Treasury Secretary Yellen provide additional financial flexibility. The political back and forth has begun: House Republicans are vowing to force the White House to make tough choices on spending cuts while the Biden administration has refused to negotiate, calling this “economic vandalism”. ...
Good morning. The extent of yesterday’s earthquake in Turkey and Syria is becoming clear and many difficult days of search, rescue and recovery lie ahead. Although tragic, something like this is outside the scope of this newsletter and I can’t do justice to such a fast-moving event so I won’t be continuing to cover the response unless there is a significant development. (As a reminder, there are many reputable organizations providing relief in the affected areas and they would appreciate your support if possible but do check the credentials of any organization before donating.) ...
Good morning. A few articles on the transition to renewable energy I found this week are worth a read. The first explains why crossing 5% usage is the ‘tipping point’ for mass adoption and what the current uptake looks like in different countries, and for different technologies. Read ‘Clean Energy Has a Tipping Point, and 87 Countries Have Reached It’ from Bloomberg here. The others concern the minerals we need to create the hardware and infrastructure needed to sustain this switch. This all comes down to mining enormous tracts of land to get at the minerals needed to make solar panels, EV engine components, and batteries. Congo and Indonesia are two places developing new mining projects at the moment, but China dominates the entire sector as either a source of rare earth minerals or as the backer of these enormous projects. As the US dominates the oil and gas sector, China now dominates the rare earth sector. ...
Good morning. The newly released 2021 Chinese census showed a surprising drop in population for the first time in 60 years which, while not unexpected, was earlier than many had expected. Meanwhile, millions in Asia are preparing to celebrate the Lunar New Year which for many in China, means it’s the first chance to see family in years now that COVID restrictions have lifted. Sadly, that may be a bittersweet reunion for some as elderly, rural relatives may be exposed to COVID for the first time. However, the end of the celebrations in February will be the start of the big economic reopening. ...