Turmoil Or Merely Trouble Ahead in 2021?

 Baltic Dry Index. 1148 +14 Brent Crude 45.14

Spot Gold 1875

Coronavirus Cases 23/11/20 World 58,986,439

Deaths 1,393,689 

“Only a few find the way, some don’t recognize it when they do – some… don’t ever want to.”

Alice in Washington, with apologies to Lewis Carroll.

First up, the good to better news. Stocks press on higher in a holiday shortened week in the world’s leading economy.

Britain and Canada reach a trade deal, sort of. 

The possible not so good news, will this week’s US Thanksgiving Day holiday lead in early to mid-December to a new surge in US corona virus infections, hospitalisations, and about year-end deaths?

Asian shares rise as investors count on vaccine relief

November 23, 2020 1:18 AM  By Andrew Galbraith

SHANGHAI (Reuters) - Asian shares climbed on Monday, with a broad regional index touching a record high on hopes for imminent coronavirus vaccines, but worries over the impact of economic lockdowns and uncertainty over U.S. stimulus capped gains.

A top official of the U.S. government’s vaccine development effort said Sunday that the first vaccines could be given to U.S. healthcare workers and others recommended by mid-December.

Despite the grim backdrop of accelerating COVID-19 infections in the United States, the forecast helped to raise hopes that lockdowns that have paralysed the global economy could be nearing an end.

“With the vaccine on its way and the likelihood that economic damage being done by the virus will lift, we’ll still have in place substantial support from central banks and governments. And that is an economic sweet spot that should see a significant economic bounce,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“It’s fascinating that investors are willing to focus on that aspect. It does require some pretty heavy squinting, including looking through the rising infection rates that we’re seeing right now. But there is a real optimism around it.”

Total U.S. COVID-19 cases topped 12 million over the weekend and more than 255,000 have died.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.56% on Monday, pushing past a previous record high touched on Friday.

Seoul’s Kospi was 1.82% higher as an optimistic earnings outlook for South Korean chip giants drove gains.

Japanese markets were closed for a holiday, but Nikkei futures added 0.19% to 25,795.

The regional index also got a boost from Australian shares which gained 0.51% as the country eased some COVID-19 restrictions. Most of the country has seen no new community infections or deaths in several weeks.

Chinese blue-chips added 0.69%. Hong Kong’s Hang Seng was an outlier, edging down 0.2%.

While most regional indexes were up on Monday, sentiment was fragile as monetary and fiscal help for the U.S. economy remained elusive.

More

https://uk.reuters.com/article/uk-global-markets/asian-shares-rise-as-investors-count-on-vaccine-relief-idUKKBN28302D

 

U.K., Canada Reach Trade Deal in a Brexit Boost for Johnson

Joe Mayes

·  Talks to begin next year to expand deal to cover digital trade

The U.K. agreed with Canada to maintain the trading conditions it has through its European Union membership and to begin talks on a broader deal that would pave the way for even closer links with Britain’s 12th-biggest trading partner.

The two countries will begin negotiations next year to expand their commercial agreements to cover digital trade, the environment and women’s economic empowerment, the U.K.’s Department for International Trade said in an emailed statement on Saturday.

The agreement could provide a major boost to U.K. Prime Minister Boris Johnson in his efforts to plot a new course for Britain as a global trading nation outside the EU. Without the new accord, the U.K. and Canada would face tariffs on trade from Jan. 1, when the Brexit transition period ends.

Today’s agreement covers bilateral trade worth about 20 billion pounds ($27 billion) in 2019, the trade office said. The U.K. is Canada’s third-largest export market after the U.S. and China. Last year, Canada was the U.K.’s 15th-largest export market.

---- The Canada deal would be the second major trade accord announced by Britain in less than a month, after it agreed to terms with Japan in late October. Meanwhile, trade negotiations are ongoing with countries including Australia, New Zealand and the U.S.

The U.K. still needs to roll over 14 other EU agreements by Jan. 1 to avoid defaulting to World Trade Organization terms, including with nations such as Mexico, Turkey and Singapore -- agreements which cover about 60 billion pounds of trade with Britain.

https://www.bloomberg.com/news/articles/2020-11-21/u-k-canada-reach-trade-deal-in-a-brexit-boost-for-johnson?srnd=premium-canada

Finally, as year-end approaches, turmoil or merely trouble ahead in 2021?

Exclusive: In latest China jab, U.S. drafts list of 89 firms with military ties

November 23, 2020 3:49 AM  By Karen Freifeld

(Reuters) - The Trump administration is close to declaring that 89 Chinese aerospace and other companies have military ties, restricting them from buying a range of U.S. goods and technology, according to a draft copy of the list seen by Reuters.

The list, if published, could further escalate trade tensions with Beijing and hurt U.S. companies that sell civil aviation parts and components to China, among other industries.

A spokesman for the U.S. Department of Commerce, which produced the list, declined to comment. The Chinese foreign ministry did not immediately response to a request for comment.

Commercial Aircraft Corp of China Ltd (COMAC), which is spearheading Chinese efforts to compete with Boeing and Airbus, is on the list, as is Aviation Industry Corporation of China (AVIC) and 10 of its related entities. The list is included in a draft rule that identifies Chinese and Russian companies the U.S. considers “military end users,” a designation that means U.S. suppliers must seek licenses to sell a broad swath of commercially available items to them.

According to the rule, applications for such licenses are more likely to be denied than granted.

U.S. President Donald Trump has stepped up his actions in recent months against China. Ten days ago, he unveiled an executive order prohibiting U.S. investments in Chinese companies that Washington says are owned or controlled by the Chinese military.

The pending list comes after the Commerce Department expanded the definition of “military end user” in April. The April rule includes not only armed service and national police, but any person or entity that supports or contributes to the maintenance or production of military items -- even if their business is primarily non-military.

More

https://uk.reuters.com/article/uk-usa-china-military-companies-exclusiv/exclusive-in-latest-china-jab-u-s-drafts-list-of-89-firms-with-military-ties-idUKKBN28307N

New central London office construction falls 50% in six months - Deloitte

November 23, 2020 12:17 AM

LONDON (Reuters) - Construction of new office space in central London fell by 50% in the six months to the end of September as the impact of the COVID-19 pandemic on major cities kept developers away, according to a survey published on Monday.

The amount of new space under construction plunged to 2.6 million square feet, taking volumes back to their historical averages after a pre-pandemic boom, Deloitte Real Estate’s London Office Crane Survey showed.

The survey also showed a higher-than-average 40% of new construction was pre-let, signalling less speculative building.

At least six speculative schemes were put entirely on hold pending more clarity, with many more postponed until 2021, Deloitte said.

Developers reported that weak tenant demand was the major obstacle to starting any new project after the pandemic forced many people to work from home, leaving parts of the capital almost deserted.

The shift to working from home has prompted many companies to consider a longer-term, more flexible approach to office attendance, prompting questions over future demand for tower blocks in the capital.

https://uk.reuters.com/article/uk-health-coronavirus-britain-constructi/new-central-london-office-construction-falls-50-in-six-months-deloitte-idUKKBN28300H

Two Key Economic Dates in December

Sunday, November 22, 2020

December 12th: Possible Government shutdown. From the WaPo: White House chief of staff ‘can’t guarantee’ U.S. government will avert December shutdown

Congress and the White House have until Dec. 11 to approve new spending legislation to prevent the federal government from shutting down in the middle of a pandemic and amid a surge in coronavirus cases. Meadows said he was hopeful an agreement would be reached but did not rule out that an impasse. There has already been two government shutdowns during President Trump’s four years in office, one lasting more than a month.

It is possible that there will be a shutdown from December 12th through January 20th. This would eclipse the previous longest government shutdown of 35 days in 2018-2019.

December 26th: End of CARES Act provisions. There are two COVID related unemployment programs that end on December 26th.

The first is the Pandemic Unemployment Assistance (PUA) Program. This is a special program that provides up to 39 weeks of benefits for business owners, self-employed, independent contractors or gig workers not receiving other unemployment insurance.

PUA is not payable for any week of unemployment ending after December 31, 2020. Accordingly, in states where the week of unemployment ends on a Saturday, the last week that PUA may be paid is the week ending December 26, 2020. For states where the week of unemployment ends on a Sunday, the last week that PUA is payable is the week ending December 27, 2020.

As of October 31st, in the most recent report (lags weekly claims), there were 8.7 million receiving PUA benefits (there are questions about these numbers).

The second is the Pandemic Emergency Unemployment Compensation (PEUC) Program. This program "provides up to 13 additional weeks of benefits to individuals who have exhausted their regular unemployment compensation (UC) entitlement". Just like the PUA, this program ends on December 26th. There are currently 4.4 million people receiving these extended benefits, and this has been increasing sharply. On October 1st, about 1.8 million people were receiving benefits from the PEUC, so this has most than doubled over the last month as people exhaust their regular benefits.   This number will probably continue to increase over the next month.

Note that if people get laid off again, as COVID surges, many more people could exhaust their regular benefits.

https://www.calculatedriskblog.com/

The Global Cost Of The COVID Pandemic

Sun, 11/22/2020 - 08:45

While the cost of the pandemic will only be truly known in years to come, Deutsche Bank's Jim Reid writes that "we can get some good early indications by looking at debt increases around the world."

Looking at the latest debt report by the Institute of International Finance, which we profiled yesterday, the IIF suggested that global debt will hit $277 trillion (365%) by the end of 2020 up around $20 trillion over the year (just shy of the annual size of the US economy). Excluding financial debt (where there is double counting risk), global debt/GDP will go up by 35pp in 2020.

According to Reid, "it’s hard to believe there’s been a bigger global increase through history. For example during WWII we didn’t have a hugely levered global private sector, only big government debt increases. Obviously, falling GDP will have increased these numbers a little - but on the other side, many countries have offered huge loans, loan guarantees and equity injections which won’t fully show up in these numbers."

So for today’s edition of Reid's Chart of the Day, the credit strategist decided to look at these rises by country and across different sectors of the economy so far in 2020. Most of the increases have been from Governments but non-financials have also seen substantial debt increases which makes sense. Households have been shielded a little more, likely due to extensive furlough schemes which show up in the government numbers, and which will only make the final numbers even worse once furloughs expire.

The numbers are simply staggering, especially for the 5 nations at the top, which have all seen their debt increase by over 25% (in debt/GDP) terms in just the past year, with Canada's 70%+ increase a truly staggering number.

Looking ahead, while Reid thinks 2021 will be a decent year on vaccine hopes, at some point there will be a debt sting in the tail: "There is no such thing as a free lunch and someone will have to pay. Whether it will be bondholders (negative returns) or tax payers, or a combination of the two, it will likely be a big story for beyond the euphoria year of 2021."

https://www.zerohedge.com/markets/global-cost-covid-pandemic

Winter Watch.

The Arctic winter sea-ice expansion and northern hemisphere snow cover. From around mid-October, the northern hemisphere snow cover usually rapidly expands, while the Arctic ice gradually expands back towards its winter maximum.

Over simplified, a rapid expansion of both, especially if early, can be a sign of a harsher than normal arriving northern hemisphere winter. Perhaps more so in 2020-2021 as we’re in the low of the ending sunspot cycle, which possibly also influenced this year’s record Atlantic hurricane season.

Northern Eur-Asia turned snowy fast in mid-October.  The Arctic sea ice expansion was slow, and from a very low level at the end of September, but with the vastly expanded snow cover, sea ice formation sped up.

With the Laptev sea ice virtually back to normal, at the end of the third week of November I’m starting to think that it will likely be a normal to slightly warmer winter ahead for western Europe.

The failure of the Kara Sea ice to return to normal, leads me to bet on a warmer western European winter ahead.

Arctic and Antarctic Sea Ice.

http://nsidc.org/arcticseaicenews/

https://www.natice.noaa.gov/pub/ims/ims_gif/DATA/cursnow_asiaeurope.gif

Covid-19 Corner                       

This section will continue until it becomes unneeded.

U.S. Plans First Vaccinations in Weeks, Warp Speed Chief Says

By Elizabeth Dexheimer and Tony Czuczka

November 22, 2020, 2:25 PM GMT Updated on November 22, 2020, 7:32 PM GMT

Vaccinations against Covid-19 in the U.S. will “hopefully” start in less than three weeks, according to the head of the federal government’s program to accelerate a vaccine.

“On the 11th or on the 12th of December, hopefully the first people will be immunized across the United States, across all states, in all the areas where the state departments of health will have told us where to deliver the vaccines,” Moncef Slaoui, head of the government’s operation Warp Speed, said on CNN’s “State of the Union” on Sunday.

Current plans envisage another milestone around May: a 70% immunization rate across the U.S., which “would allow for true herd immunity to take place,” said Slaoui, a former head of GlaxoSmithKline’s vaccines operation. “Most people need to be immunized before we can go back to a normal life.”

While an effective vaccine is expected to be widely distributed in the U.S. in 2021, hurdles remain. An advisory panel of the Food and Drug Administration is meeting on Dec. 10 to discuss emergency use authorization for a vaccine candidate. Pfizer Inc. and BioNTech SE have requested that authorization for their product.

“While we can’t predict how long FDA’s review will take, the agency will review the request as expeditiously as possible, while still doing so in a thorough and science-based manner, so that we can help make available a vaccine that the American people deserve as soon as possible,” FDA Commissioner Stephen Hahn tweeted on Sunday.

While we can’t predict how long FDA’s review will take, the agency will review the request as expeditiously as possible, while still doing so in a thorough and science-based manner, so that we can help make available a vaccine that the American people deserve as soon as possible.

With daily infections hovering around record levels , the U.S. reported 1,446 virus-linked deaths Saturday to cap a week of rapidly rising death rates. Only about half of adults say they would get a Covid-19 vaccine, according to a Pew Research Center survey in September.

Anthony Fauci, the U.S. government’s top infectious disease specialist, said achieving herd immunity is possible, though he didn’t think that was likely by May.

“If you get an overwhelming majority of people vaccinated, with a highly efficacious vaccine, we can reasonably quickly get to the herd immunity that would be a blanket of protection for the country,” Fauci said on CBS’s “Face the Nation.”

More

https://www.bloomberg.com/news/articles/2020-11-22/u-s-vaccine-train-won-t-be-derailed-warp-speed-leader-says?srnd=premium-europe

U.S. Cases Pass 12 Million; California Hits Record: Virus Update

November 20, 2020, 11:12 PM GMT Updated on November 21, 2020, 10:15 PM GMT

California reported record infections for the second consecutive day as total U.S. cases surpassed 12 million. New Jersey also broke a record, passing 300,000 cases.

The U.S. Centers for Disease Control and Prevention escalated its warning against traveling on cruise ships to the highest level. Cases and deaths slowed in the U.K. and Italy.

President Donald Trump stayed quiet on sharing U.S.-made vaccines as leaders of the world’s richest countries pushed for equality in the race to vaccinate people against the coronavirus.

• Global Tracker: Cases reach 57.9 million; deaths 1.3 million
• Virus surge threatens newfound U.S. corporate profit optimism
• Mass Covid vaccination gets a dry run in a Louisiana parking lot
• Pfizer’s Covid vaccine still faces hurdles after FDA filing Friday
• One in five U.S. hospitals face staffing crisis within a week
• Hong Kong, Singapore delay planned travel bubble for two weeks
• Vaccine Tracker: Encouraging breakthroughs offer hope

More

https://www.bloomberg.com/news/articles/2020-11-20/california-hits-record-toronto-locks-down-again-virus-update?srnd=coronavirus

Germany braces for extension of lockdown until Dec. 20

November 22, 2020 11:38 AM

BERLIN (Reuters) - Germany will have to extend its measures to contain the COVID-19 pandemic until Dec. 20, according to senior politicians and a draft proposal obtained by Reuters on Sunday.

Germany imposed a month-long “lockdown-lite” from Nov. 2 to contain a second wave of the virus that is sweeping much of Europe, but infection numbers have not declined.

“Everything points to the fact that the current restrictions must be extended for some time beyond Nov. 30,” Finance Minister Olaf Scholz told Bild am Sonntag (BamS).

Bars and restaurants are closed, but schools and shops remain open. Private gatherings are limited to a maximum of 10 people from two households and the draft proposal says that number would be reduced to five.

It was unclear which of the 16 German federal states were backing the draft proposal.

The leader of Bavaria’s Christian Social Union, Markus Soeder, told BamS that ideally measures would be extended by three weeks, which would imply Dec. 20 as an end-date.

“The wave has been broken, but unfortunately the number of new infections is not coming down. Instead, intensive care units continue to be swamped and the death roll rises,” Soeder said.

He said cinemas, bars and hotels would need to remain closed, adding there should be a ban on fireworks and alcohol on New Year’s Eve in large public squares. The draft suggests a sales and purchase ban on fireworks.

Chancellor Angela Merkel will meet with state leaders on Nov. 25 to discuss whether to impose further restrictions or extend the current ones.

More

https://uk.reuters.com/article/uk-health-coronavirus-germany/germany-braces-for-extension-of-lockdown-until-dec-20-idUKKBN2820CA?il=0

COVID-19: Nearly monthlong lockdown to begin in Toronto

Nov. 21, 2020 / 12:12 PM

Nov. 21 (UPI) -- Toronto will begin a 28-day lockdown Monday due to risk of the COVID-19 pandemic overwhelming hospitals.

Premier Doug Ford announced Friday the lockdown in the city along with the Peel Region, which includes widespread closures similar to those early on in the pandemic as COVID-19 cases spike across Ontario province.

Under the lockdown, gyms, nail and hair salons, gaming establishments, such as casinos and bingo halls, cinemas, and performing art centers will all be closed. Restaurants and bars will also be closed except for takeout and drive-thru delivery. Libraries will also be open for pick-up and drop-off of materials, and hotels and motels will be allowed to continue to operate though facilities like pools will remain closed.

Indoor sports facilities will close and outdoor sports will be limited to 10 people with social distancing.

Toronto Transit Commission spokesperson Stuart Green said the new lockdown would not affect bus service though the TCC goal continues to be to have no more than 15 passengers on each bus.

The province said it will fine people $750 for violation of public health rules.

The province reported eight new COVID-19 deaths Friday, bringing the death toll in the province to 3,451. This month alone, 315 people have died of COVID-19 in Ontario. Hospitalizations have increased by 22% and intensive care unit visits have increased by 50%.

Since the pandemic began, Canada has had 324,152 cases and 11,385 deaths, according to Johns Hopkins University global tracker.

More

https://www.upi.com/Top_News/World-News/2020/11/21/COVID-19-Nearly-monthlong-lockdown-to-begin-in-Toronto/8491605968936/

Next, some vaccine links kindly sent along from a LIR reader in Canada. The links come from a most informative update from Stanford Hospital in California.

World Health Organization - Landscape of COVID-19 candidate vaccines. https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines

NY Times Coronavirus Vaccine Tracker. https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html

Stanford Website. https://racetoacure.stanford.edu/clinical-trials/132

Regulatory Focus COVID-19 vaccine tracker. https://www.raps.org/news-and-articles/news-articles/2020/3/covid-19-vaccine-tracker

Some other useful Covid links.

Johns Hopkins Coronavirus resource centre

https://coronavirus.jhu.edu/map.html

Rt Covid-19

https://rt.live/

Covid19info.live 

https://wuflu.live/

Centers for Disease Control Coronavirus

https://www.cdc.gov/coronavirus/2019-ncov/index.html

 

Technology Update.

With events happening fast in the development of solar power and graphene, I’ve added this section. Updates as they get reported. Is converting sunlight to usable cheap AC or DC energy mankind’s future from the 21^st century onwards.

Staying ahead of the curve with 3D curved graphene

Date: November 20, 2020

Source: Tohoku University

Summary: A team of researchers has amplified 3D graphene's electrical properties by controlling its curvature.

"Our research showed the conservation and the degradation of the ultra-low dissipative transport of Dirac electrons on the 3D curved surface for the first time," said Yoichi Tanabe, leading author of the study.

Graphene is a 2D atomic-layer material, shaped like honeycombs, which possesses excellent electrical, chemical, thermal, and mechanical properties for a wide range of applications such as semiconductors, electrical batteries, and composites.

Graphene sheets stacked together form graphite which makes up the lead in our pencils. However, packing together graphene tightly means it loses its 2D electronic properties.

One way to overcome this is to separate the graphene sheets with air-filled pores -- like a sponge -- at the nanometer scale and make it into a three-dimensional structure. This amplifies graphene's properties for practical purposes.

But doing so is not without its challenges; converting 2D graphene into 3D graphene introduces crystal defects and a host of other problems that cause it to lose its desirable characteristics. Little is known about how the curved surface degrades the graphene's electric transport properties and whether this is the reason for graphene losing its Dirac fermions.

The research team sought to investigate this by taking a single, 2D graphene sheet and folding it into a 3D structure with a bicontinuous and open porous structure.

The structure, with a curvature radius down to 25-50 nanometers, retained the basic electronic properties of 2D graphene well. Meanwhile, the motion of electrons on the 3D curvature enhanced electron scattering that had originated from the intrinsic curvature effects. In fact, nanoscale curvature provides a new degree of freedom to manipulate graphene's electronic behaviors for the emergent and unique electrical properties of 3D graphene.

https://www.sciencedaily.com/releases/2020/11/201120095904.htm?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+sciencedaily%2Fmatter_energy%2Fgraphene+%28Graphene+News+--+ScienceDaily%29

“Every misadventure requires a first debt.”

Alice in Washington, with apologies to Lewis Carroll.