But a note of caution
on Reddit stock bubbles and in taking on the decades long rig in silver prices.
Analysis: A tulip by another
name? 'Gamestonk' and the case for investor caution January
30, 2021 12:16 PM By David Randall
NEW YORK (Reuters) - It sounds like
the start of a parable: Investors stuck inside during a pandemic begin to bid
up an asset until its price becomes untethered to reality. The value soars
until one day the market runs out of buyers and freezes, causing prices to
plummet and some unlucky few to lose fortunes more than ten times their annual
incomes in the span of a few hours.
The date: February 3, 1636. On that day, the
infamous Dutch tulip bubble burst during an outbreak of the bubonic plague,
illustrating that asset prices can plummet just as quickly as they soar,
leaving only pain behind.
Now, almost exactly 385 years and another
pandemic later, Wall Street waits to see how long it will take for history to
repeat itself.
Shares of video game retailer GameStop Corp
have soared 1,625% since the start of January. Driving the rally are individual
investors who have been stuck at home for the last ten months. Many have turned
to online forums like WallStreetBets on Reddit and are buying the stock, some
as a form of protest against hedge fund managers who wagered that it would
fall.
These amateur investors are buoyed by
savings built up over the coronavirus pandemic, two rounds of stimulus payments
and near zero interest rates. Some, such as billionaire entrepreneur Elon Musk,
have referred to the phenomenon as ‘Gamestonk’, a play on the intentional misspelling
of the word ‘stock’ on social media.
The stock price rally to above $300 per
share has emboldened some small investors to pour even more money into a
company that Wall Street analysts tracked by Refinitiv believe is worth
slightly more than $13 per share. The surge increases the risk that individuals
will get caught up in the euphoria and look past the warning signs and
consequences of an eventual crash.
"I dumped my savings into GME, paid my
rent for this month with my credit card, and dumped my rent money into more GME
(which for the people here at WSB, I would not recommend)," a Reddit user
with the handle ssauron here
wrote Thursday on WallStreetBets. "And I'm holding. This is personal for
me, and millions of others."
A form of class warfare waged
through the shares of a video game retailer is notably different than financial
market manias, such as the dotcom bubble in 2000 or the U.S. real estate bubble
that culminated in the 2008 financial crisis, both which were fueled by
assumptions of broad economic growth.
Yet for those who buy GameStop at
the wrong time, the results will likely be the same.
“The reality is that GameStop
doesn’t hurt Wall Street. It might hurt a couple of hedge fund managers out
there, but no one is going to cry for them. The people who will be losing their
life savings are small retail investors,” said Ben Inker, head of asset
allocation at GMO.
The total value of short positions
in Reddit-favored stocks such as GameStop is about $40 billion, limiting the
pain among professional investors to a handful of hedge funds, according to
Barclays.
Overall, GameStop shorts were down
about $5 billion for the year through Tuesday, according to S3 Partners. By
comparison, Tesla Inc, another heavily-shorted stock among professional
investors, caused short sellers $245 billion in losses in 2020, the firm noted.
“While we expect some more
deleveraging, ultimately the scale of the problem appears quite limited,”
Barclays said.
---- “GameStop is not
worth $500, not worth $400, not worth $300, not worth $200, not even worth
$100, not even worth $50,” billionaire investor Leon Cooperman said on CNBC
Thursday. “I’m not damning them. I’m just saying from my experience, this will
end in tears,” he added.
More
https://www.reuters.com/article/retail-trading-bubbles/analysis-a-tulip-by-another-name-gamestonk-and-the-case-for-investor-caution-idUKL1N2K42M3
Silver Thursday Silver
Thursday
was an event that occurred in the United States silver commodity
markets on Thursday, March 27, 1980, following the attempt by brothers Nelson Bunker Hunt , William Herbert Hunt and Lamar Hunt
to corner the silver market. A subsequent steep
fall in silver prices led to panic on commodity and futures
exchanges .
---- On
January 7, 1980, in response to the Hunts' accumulation, the exchange rules
regarding leverage were changed; COMEX adopted "Silver Rule
7", which placed heavy restrictions on the purchase of commodities on margin .
The Hunt brothers had borrowed heavily to finance their purchases, and, as the
price began to fall again, dropping over 50% in just four days, they were
unable to meet their obligations, causing panic in the markets.
----- The Hunt brothers had invested heavily in futures
contracts through several brokers, including the brokerage firm Bache Halsey Stuart Shields , later Prudential-Bache Securities and Prudential Securities . When the price of
silver dropped below their minimum margin
requirement, they were issued a margin
call for $100 million. The Hunts were unable to meet the margin call, and,
with the brothers facing a potential $1.7 billion loss, the ensuing panic was
felt in the financial markets in general, as well as commodities and futures.
Many government officials feared that if the Hunts were unable to meet their
debts, some large Wall Street brokerage firms and banks might collapse.[2]
To save the situation, a consortium of US banks provided a $1.1
billion line of credit to the brothers which allowed them to pay Bache which,
in turn, survived the ordeal. The U.S. Securities and Exchange
Commission (SEC) later launched an investigation into the Hunt brothers,
who had failed to disclose that they in fact held a 6.5% stake in Bache.[3
https://en.wikipedia.org/wiki/Silver_Thursday
Finally, China. A
blip or is China’s recovery peaking?
China's factory recovery slows in
January as COVID-19 returns January
31, 2021 1:21 AM By Reuters Staff
BEIJING (Reuters) - China’s factory
activity grew at the slowest pace in five months in January, hit by a wave of
domestic coronavirus infections, but still in line with the ongoing recovery in
the world’s second-largest economy.
The official manufacturing
Purchasing Manager’s Index (PMI) fell to 51.3 in January from 51.9 in December,
the National Bureau of Statistics said in a statement on Sunday.
It remained above the 50-point mark
that separates growth from contraction on a monthly basis, but was below the
51.6 expected in a Reuters poll of analyst forecasts.
In January, mainland China reported
more than 2,000 local cases of the coronavirus. While the number was small
compared with other countries, authorities were concerned about transmission
risks during the Lunar New Year travel rush - the world’s biggest annual human
migration spanning 40 days from January to February.
During the month several large
cities were locked down with tens of millions tested for COVID-19, interrupting
factory activity and weighing on the services sector, including logistics and
transportation.
“The recent localised epidemic has
had a certain impact on the production and operation of some enterprises, and
the overall expansion of the manufacturing industry has slowed,” said Zhao
Qinghe, an official at the statistics bureau.
“The period before and after the
Lunar New Year is also traditionally an off-season for the country’s
manufacturing industry,” Zhao said in an accompanying statement.
---- The official PMI, which largely focuses
on big and state-owned firms, showed the sub-index for new export orders stood
at 50.2, expanding for the fifth straight month, though down from 51.3 in
December.
Economic indicators ranging from
trade to producer prices all suggest a further pickup in the industrial sector.
A sub-index for small firm activity
stood at 49.4 in January, up from December’s 48.8.
More
https://www.reuters.com/article/us-china-economy-pmi/chinas-factory-recovery-slows-in-january-as-covid-19-returns-idUSKBN2A001A?il=0
“It is one of the common pieces of Wall
Street experience that when the public goes stock mad and the market leaders
are filled with the arrogance of prolonged success, such little things as high
money rates or decreases in earnings or unraised dividends have no instant
effect on the market -- that is, on the state of mind of the speculating
public. In the end, of course, all violations of the fundamental laws of
economic and financial common sense are paid for; but every bull thinks he will
unload before the break.”
Edwin Lefevre
Covid-19 Corner This
section will continue until it becomes unneeded.
Biden Health Adviser Warns of
Virus Variants, Future Lockdowns
Naomi Nix January 31, 2021
A top health adviser to President Joe Biden
warned Sunday that a new variant of the coronavirus circulating in the U.K.
will likely become the dominant strain in the U.S. and may lead to future
restrictions on in-person gatherings.
Michael Osterholm, director of the Center for Infectious
Disease Research and Policy at the University of Minnesota, said on NBC’s “Meet
the Press” that the nation’s health care system must prepare for a surge in
serious cases such as the one experienced recently in England.
“What we have to do now is also anticipate this and
understand that we’re going to have to change quickly,” said Osterholm, who’s a
member of Biden’s Covid-19 advisory board. “As fast as we’re opening
restaurants, we’re likely to be closing them in the near term.”
His comments come as some locations, including California
and the region of Illinois that includes Chicago, are starting
to relax virus-related restrictions as new infections fall.
Osterholm added that the vaccines being distributed now
have been shown to prevent the most serious health consequences of being
infected by the so-called B.1.1.7 variant.
“Fortunately, that one has not shown its ability to evade
the protection from the vaccine,” said Osterholm. “But its ability to cause many
more infections and much more serious illness is there.”
Estimates released
Friday suggest coronavirus infections have leveled off across the U.K, but are
not falling fast. Caseloads remain high -- meaning that a high rate of
hospitalizations and deaths will continue in the short-term.
In the U.S., Covid-19 cases are likely going to recede
during the summer but certain regions -- such as Southern California and
southern Florida -- are likely going to experience “epidemics” because of the
new variant, said former Food and Drug Administration Commissioner Scott
Gottlieb.
“As we immunize more of the population and if people
continue to wear masks and be vigilant in these parts of the country, we can
keep this at bay,” Gottlieb said on CBS’s “Face the Nation.”
New U.S. coronavirus infections have slowed markedly this
month, with hospitalizations also declining but at a slower pace. Reported
deaths, which lag both measures, remain near record levels.
https://www.msn.com/en-us/money/markets/biden-health-adviser-warns-of-virus-variants-future-lockdowns/ar-BB1dgjTD?ocid=uxbndlbing
Fresh data show toll South
African virus variant takes on vaccine efficacy January
30, 2021 1:15 PM By Julie Steenhuysen
CHICAGO
(Reuters) - Clinical trial data on two COVID-19 vaccines show that a
coronavirus variant first identified in South Africa is lessening their ability
to protect against the illness, underscoring the need to vaccinate vast numbers
of people as quickly as possible, scientists said.
The vaccines from Novavax Inc and
Johnson & Johnson were welcomed as important future weapons in curbing
deaths and hospitalizations in a pandemic that has infected more than 101
million people and claimed over 2 million lives worldwide.
But they were significantly less
effective at preventing COVID-19 in trial participants in South Africa, where
the potent new variant is widespread, compared with countries in which this
mutation is still rare, according to preliminary data released by the
companies.
“Clearly, the mutants have a
diminishing effect on the efficacy of the vaccines,” Dr. Anthony Fauci,
director of the National Institute of Allergy and Infectious Disease, said in a
briefing. “We can see that we are going to be challenged.”
Novavax reported midstage trial
results on Thursday that showed its vaccine was 50% effective overall at
preventing COVID-19 among people in South Africa.
That compared with late-stage
results from the United Kingdom, in which the vaccine was up to 89.3% effective
at preventing COVID-19.
On Friday, J&J said a single
shot of its coronavirus vaccine was 66% effective overall in a massive trial
across three continents.
But there were wide differences by
region. In the United States, where the South African variant was first
reported this week, efficacy reached 72%, compared with just 57% in South
Africa, where the new variant, known as B 1.351, made up 95% of the COVID-19
cases reported in the trial.
Another highly transmissible variant
first discovered in the UK and now in more than half of U.S. states has been
less able to evade vaccine efficacy than its South African counterpart.
The new findings, however, raise
questions about how highly-effective vaccines from Pfizer Inc with partner
BioNTech, and Moderna Inc will fare against new variants. The two vaccines
showed an efficacy of around 95% in trials conducted primarily in the United
States before the new virus versions were identified in other countries.
“It’s a different pandemic now,” said Dr.
Dan Barouch, a researcher at Harvard University Medical School’s Beth Israel
Deaconess Medical Center in Boston who helped develop the J&J vaccine.
Barouch said there are now a wide
variety of new variants circulating, including in Brazil, South Africa and even
the United States, that are substantially resistant to vaccine-induced
antibodies.
Pfizer Chief Executive Albert Bourla
said there was “a high possibility” that emerging variants may eventually
render the company’s vaccine ineffective.
“This is not the case yet ... but I
think it’s a very high likelihood that one day that will happen,” Bourla said
at the World Economic Forum. The drugmaker is considering whether its vaccine
needs to be altered to defend against the South African variant.
More
https://www.reuters.com/article/us-health-coronavirus-vaccines-variant/fresh-data-show-toll-south-african-virus-variant-takes-on-vaccine-efficacy-idUSKBN29Z0I7
New clinical trials raise fears
the coronavirus is learning how to resist vaccines Emily Baumgaertner Sat, January 30, 2021, 4:08 AM
New data showing that two COVID-19
vaccines are far less effective in South Africa than in other places they were
tested have heightened fears that the coronavirus is quickly finding ways to
elude the world’s most powerful tools to contain it.
The U.S. company Novavax reported
this week that although its vaccine was nearly 90% effective in clinical trials
conducted in Britain, the figure fell to 49% in South Africa — and that nearly
all the infections the company analyzed in South Africa involved the B.1.351
variant that emerged there late last year and has spread to the United States
and at least 30 other countries.
Johnson & Johnson announced
Friday that its new shot was 72% effective against preventing moderate or
severe illness in the United States, compared with 66% in Latin America and 57%
in South Africa.
Laboratory tests had suggested that
the vaccines authorized in the U.S. — one from Pfizer and BioNTech, the other
from Moderna and the National Institutes of Health — trigger a smaller immune
response to the South Africa variant.
Now there is evidence from tests in
people that some variants are less vulnerable to certain vaccines.
“From an evolutionary biology
perspective, this is totally expected and anticipated,” said Dr. Michael Mina,
a Harvard epidemiologist. “But it never feels good to be validated on something
so scary.”
Researchers once believed it would
take several more months, or even years, for the virus to develop resistance to
vaccines. They said the speedy evolution is largely a result of the virus’ unchecked
spread.
More than 100 million people have
been infected worldwide, and each of those infections is an opportunity for the
virus to randomly mutate.
A mutation that happens to give the
virus an advantage — the ability to resist the body’s natural defenses, for
example — can become the basis for a heartier variant.
One early sign that this process was
underway was the significant number of people who were contracting the
coronavirus a second time.
More
https://www.yahoo.com/entertainment/clinical-trials-raise-fears-coronavirus-040855671.html
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
The Spectator
https://data.spectator.co.uk/city/nationa l
Technology Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
Updates as they get reported.
A little soap simplifies making
2D nanoflakes Experiments
refine processing of hexagonal boron nitride Date:
January 27, 2021
Source:
Rice University
Summary:
The right combination of surfactant, water and processing can maximize the
quality of 2D hexagonal boron nitride for such products as antibacterial films.
Just a little soap helps clean up
the challenging process of preparing two-dimensional hexagonal boron nitride
(hBN).
Rice University chemists have found
a way to get the maximum amount of quality 2D hBN nanosheets from its natural
bulk form by processing it with surfactant (aka soap) and water. The surfactant
surrounds and stabilizes the microscopic flakes, preserving their properties.
Experiments by the lab of Rice
chemist Angel Martí identified the "sweet spot" for making stable
dispersions of hBN, which can be processed into very thin antibacterial films
that handle temperatures up to 900 degrees Celsius (1,652 degrees Fahrenheit).
The work led by Martí, alumna
Ashleigh Smith McWilliams and graduate student Cecilia Martínez-Jiménez is
detailed in the American Chemical Society journal ACS Applied Nano Materials .
"Boron nitride materials are
interesting, particularly because they are extremely resistant to heat,"
Martí said. "They are as light as graphene and carbon nanotubes, but you
can put hBN in a flame and nothing happens to it."
He said bulk hBN is cheap and easy
to obtain, but processing it into microscopic building blocks has been a
challenge. "The first step is to be able to exfoliate and disperse them,
but research on how to do that has been scattered," Martí said. "When
we decided to set a benchmark, we found the processes that have been extremely
useful for graphene and nanotubes don't work as well for boron nitride."
Sonicating bulk hBN in water
successfully exfoliated the material and made it soluble. "That surprised
us, because nanotubes or graphene just float on top," Martí said.
"The hBN dispersed throughout, though they weren't particularly stable.
"It turned out the borders of
boron nitride crystals are made of amine and nitric oxide groups and boric
acid, and all of these groups are polar (with positive or negative
charge)," he said. "So when you exfoliate them, the edges are full of
these functional groups that really like water. That never happens with
graphene."
Experiments with nine surfactants
helped them find just the right type and amount to keep 2D hBN from clumping
without cutting individual flakes too much during sonication. The researchers
used 1% by weight of each surfactant in water, added 20 milligrams of bulk hBN,
then stirred and sonicated the mix.
More
https://www.sciencedaily.com/releases/2021/01/210127152531.htm?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+sciencedaily%2Fmatter_energy%2Fgraphene+%28Graphene+News+--+ScienceDaily%29
“As a rule, Panics do not destroy capital;
they merely reveal the extent to which it has been previously destroyed by its
betrayal into hopelessly unproductive works.”
John Stuart Mill
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