Special Update 20/02/2021 Pent Up Demand! Biden Taxes? Bergs.

Baltic Dry Index. 1698 -72  Brent Crude 62.1

Spot Gold 1784

Covid-19 cases 02/04/20 World 1,000,000

Deaths 53,100

Covid-19 cases 13/02/21 World 111,249,741

Deaths 2,463,661

“In Paris they just simply opened their eyes and stared when we spoke to them in French! We never did succeed in making those idiots understand their own language.”

Mark Twain.

In the casinos, more front-running of the coming Biden Boom, from all the Magic Money Tree money that’s due next month, right?  There’s huge “pent up demand, right?

“When the economy is roaring, they’re roaring. When the economy is weakening, they’re weakening,” Ghriskey said of cyclicals. “The economy will roar, at least for a period of time. There’s huge pent-up demand, whether just for travel or going back to work.”

Well maybe but maybe not.

Besides, even if there is “huge pent up demand,” after what most ordinary people went through last year, many might prefer to save most Uncle Joe’s free MMT cash, in case the virus mutates again and a new round of vaccines is needed later in the year.

But don’t let on to the punters in the casino. Or let on that the casino is on the RMS Titanic heading fast for its berg.

Wall Street closes flat as cyclicals shine, big tech falls

February 19, 2021  12:03 PM By Herbert Lash

NEW YORK (Reuters) - Stocks on Wall Street closed near break-even on Friday as investors sold technology shares that have rallied through the pandemic and rotated into cyclical stocks set to benefit from pent-up demand once the coronavirus pandemic is subdued.

Industrials led rising sectors in the S&P 500, spurred by a 9.9% surge in Deere & Co and Caterpillar’s 5.0% gain to an all-time peak of $211.40 a share. Financials, materials and energy, along with industrials, rose more than 1%.

The S&P 1500 airlines index jumped 3.5%, with post-pandemic travel in focus.

The stay-at-home winners, including Microsoft Corp, Facebook Inc, Alphabet’s Google and Netflix Inc, fell in a trend seen for most of the week. Amazon.com Inc also fell, as investors sold the leaders in the big rally since last March.

Value stocks rose 0.6% while growth fell 0.6%. Advancing stocks led declining shares by about a 2:1 ratio.

A battle continues between tech-led growth stocks and cyclicals, companies that are heavily affected by economic conditions, said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

“When the economy is roaring, they’re roaring. When the economy is weakening, they’re weakening,” Ghriskey said of cyclicals. “The economy will roar, at least for a period of time. There’s huge pent-up demand, whether just for travel or going back to work.”

More

https://www.reuters.com/article/us-usa-stocks/wall-street-closes-flat-as-cyclicals-shine-big-tech-falls-idUSKBN2AJ1BC

Toppy stock markets spark more "bubble" chatter

February 19, 2021  1:40 PM  By Thyagaraju Adinarayan, Aaron Saldanha

LONDON (Reuters) - A strong start for world equities in 2021 after the fastest bear-to-bull market switch last year has prompted market mavens to flag worries about pricey assets, with BofA calling it the “mother-of-all asset bubbles”.

The torrent of cash sloshing around world markets due to the unprecedented stimulus measures in place to fuel economies coming out of the pandemic-led recession has fed into the euphoric rush to equities, particularly Big Tech.

The U.S. Federal Reserve for instance has been purchasing bonds at a record pace, doubling its balance sheet to nearly $8 trillion in less than a year. During the same period, the five biggest tech stocks have seen their market value double.

As financial assets worth $1.1 billion are gobbled up by global central banks every hour, there is irrational exuberance on Wall Street, according to BofA.

Goldman Sachs’ Chief Executive David Solomon and strategists at some major investment banks have since January been warning about stock market volatility, particularly in the immediate future.

Most traditional market-top signals have been flashing amber - just as they did before the bursting of the dotcom bubble two decades ago. But what’s different this time is that interest rates look firmly stapled to the floor for years to come.

Ten-year yields on bonds of G7 countries are hovering near record lows, lending credence to “bubble” naysayers and captured in the hefty ‘equity risk premium’ (ERP) relative to historical averages.

“You’re practically ‘forced’ to move into riskier assets,” said Jeroen Blokland, a portfolio manager at Robeco, adding that outside the United States, things look even less bubbly.

The benchmark U.S. S&P 500 is now the most expensive developed market index based on the price-to-earnings ratio, trading at levels last seen during the dotcom bubble of the late 1990s.

Though Blokland sees rising odds that markets globally end up in a bubble, he said the upcoming cash injections and fiscal spending could further support asset prices.

Some data points below signal higher odds of a bubble:

1/ PARTYING LIKE IT’S 1999

Sitting at 22-times 12-month forward earnings, the S&P 500 is trading well above its long-term average of just 16x. Other major indexes are also trading above long-term averages, but are still far from S&P’s extreme levels.

2/ BURSTING CALLS, FALLING PUTS

The frenzy is also visible in options markets. The CBOE put-to-call ratio has been pinned at near 20-year lows for eight months now, at levels last seen just before the dotcom bubble burst in 2000. Put options confer the right to sell at a pre-agreed price and calls allow holders to buy.

More

https://www.reuters.com/article/us-global-stocks-bubbles/toppy-stock-markets-spark-more-bubble-chatter-idUSKBN2AJ1IL

Fed sees 'considerable' risk of ongoing U.S. business failures

February 19, 2021  4:31 PM By Reuters Staff

WASHINGTON (Reuters) - The risks of ongoing business failures in the United States “remain considerable” even as the economy emerges from the coronavirus pandemic, the Federal Reserve said on Friday in its semi-annual monetary policy report to Congress.

Business borrowing “now stands near historic highs,” the U.S. central bank said in the report. Even though large cash balances, low interest rates, and renewed economic growth may dampen problems in the near term, “insolvency risks at small and medium-sized firms, as well as at some large firms, remain considerable.”

Fed Chair Jerome Powell will present the report in hearings before the U.S. Senate Banking Committee on Tuesday and the U.S. House of Representatives Financial Services Committee on Wednesday.

After presenting his own summary of where the economy stands he will field questions from lawmakers that are likely to focus on how much more help the economy needs from the federal government to reach the point where ongoing COVID-19 vaccinations make it safe to resume normal commerce.

The Biden administration is pushing a $1.9 trillion stimulus plan that has already cleared a major hurdle in the Senate, money on top of the nearly $900 billion approved late last year and the roughly $3 trillion appropriated at the start of the crisis in 2020.

Those federal payments, including one-time checks to families, increased unemployment insurance, and loans to small businesses, led to faster-than-expected economic growth and less-than-anticipated financial stress among households and the banks that hold their mortgages and credit card loans.

But while banks and household balance sheets remain in reasonable shape, the Fed’s reference to business debt highlights the potential economic hangover still to come after a historically trying year.

Along with business failures, the report noted how changes to the economy that are still underway could, for example, cut the market for already highly-valued commercial real estate and lead to “sharp declines” in prices - a potential blow to investors or lenders involved with those properties.

More

https://www.reuters.com/article/us-usa-fed-report/fed-sees-considerable-risk-of-ongoing-u-s-business-failures-idUSKBN2AJ1YS

Back in the real US economy, the economy was slowing even before the whiteout caused a blackout that caused it to slow even more. But we will have to wait for next month’s numbers to know just how much more it slowed.

U.S. factory activity cools; cost pressures mounting

February 19, 2021  2:51 PM By Lucia Mutikani

WASHINGTON (Reuters) - U.S. factory activity slowed in early February likely as a global semiconductor chip shortage hurt production at automobile plants, while prices of inputs and manufactured goods soared, which could heighten fears of strong inflation growth this year.

The report from data firm IHS Markit on Friday also showed businesses in the services industry were experiencing higher costs related to the procurement of personal protective equipment, a greater proportion of which they were passing on to clients “through a marked rise in selling prices.”

Inflation is being closely watched amid concerns from some quarters that President Joe Biden’s proposed $1.9 trillion COVID-19 rescue package could cause the economy to overheat. The package would be on top of nearly $900 billion in additional fiscal stimulus provided at the end of December.

“A concern is that firms’ costs have surged higher, driving selling prices for goods and services up at a survey record pace and hinting at a further increase in inflation,” said Chris Williamson, chief business economist at IHS Markit.

IHS Markit’s flash U.S. manufacturing PMI dropped to 58.5 in the first half of this month from a final reading of 59.2 in January. Extreme weather in large parts of the United States was also blamed. The data was in line with economists’ forecasts.

A reading above 50 indicates growth in manufacturing, which accounts for 11.9% of the U.S. economy. Manufacturing has powered ahead as the pandemic left Americans grounded at home, shifting demand to household goods from services like airline travel and hotel accommodation.

But the coronavirus has disrupted labor at both suppliers and manufacturers, leading to shortages of goods critical to the production processes. Motor vehicle manufacturers have been hit by a semiconductor chip shortage, leading some to temporarily close assembly plants this month.

More

https://www.reuters.com/article/us-usa-economy-manufacturing/u-s-factory-activity-cools-cost-pressures-mounting-idUSKBN2AJ1PN

Next, get ready for the Biden tax hikes, says US Treasury Secretary Yellen.

Well if she says so, but I think the Biden voters are expecting more free money not higher taxes. Perhaps she means to tax Wall Street and all the Trump Fed’s billionaires.  Good luck with that, it’s easier to squeeze blood out of a stone.

Yellen says tax hike would pay for part of Biden infrastructure plan

February 18, 2021  10:20 PM

WASHINGTON (Reuters) - U.S. Treasury Secretary Janet Yellen on Thursday said that tax hikes would be needed to pay for at least part of a big infrastructure, climate and education investment package that President Joe Biden plans to introduce later this year.

Yellen, in an interview with CNBC, said details were still being worked out on the infrastructure and clean energy package, which would come on top of a $1.9 trillion coronavirus relief plan that is now working its way through Congress.

She said it would include clean energy investments to fight climate change and investments in education and training to build the skill levels of American workers and boost U.S. competitiveness.

“Certainly part of the package, the parts that are permanent, will be paid for in order to not raise long-term deficits, but we’re still working on the details of the package.”

The infrastructure, climate and education plan will probably be proposed later this year and would involve spending over a number of years, “and probably tax increases to pay for at least part of it would probably phase in slowly over time.”

Biden’s $1.9 trillion COVID-19 stimulus package aims to ensure that growth is strong enough to get back to full employment faster than recent baseline estimates from the Congressional Budget Office, which projected earlier this month that based on current laws, it would take until 2024 to reach pre-pandemic employment levels.

More

https://www.reuters.com/article/us-usa-economy-yellen/yellen-says-tax-hike-would-pay-for-part-of-biden-infrastructure-plan-idUSKBN2AI2Z5?il=0

Finally, a repeat but worth it if you live in North America. So, you really, really, really want to drive an electric vehicle?

Extreme weather is sucking the life from your electric car

Last month’s polar vortex was especially rough for EV owners

By Andrew J. Hawkins@andyjayhawk Feb 10, 2019, 1:00pm EST

As more affordable and longer-range electric cars hit the market, the long-predicted shift to battery-powered transportation seems poised to actually happen. But a serious challenge remains: battery-sucking cold weather.

New research from AAA reveals that when the mercury dips to 20 degrees Fahrenheit, the average driving range of an electric car decreases by 41 percent. When colder temperatures hit, EV owners have the same instinct as their internal combustion engine-driving brethren, which is to crank up the heat as high as it will go. This puts a serious strain on an EV’s battery, reducing the overall range and increasing the need to charge more often to minimize the chance of being stranded by a dead battery.

The appeal of electric vehicles continues to grow since a greater variety of designs and options with increased range have come onto the market,” said Greg Brannon, AAA’s director of Automotive Engineering and Industry Relations, in a statement. “As long as drivers understand that there are limitations when operating electric vehicles in more extreme climates, they are less likely to be caught off guard by an unexpected drop in driving range.”

EV owners discovered this during the recent cold snap that hit central US and Canada. As temperatures plunged, owners of Chevy Bolts and Tesla Model 3s told CNBC they were seeing at most 50 percent less range in their vehicles.

More

https://www.theverge.com/2019/2/10/18217041/electric-car-ev-extreme-weather-polar-vortex

Covid-19 Corner             

This section will continue until it becomes unneeded. 

Researchers urge delaying Pfizer vaccine's second dose as first highly effective

February 18, 2021 5:13 AM By Reuters Staff

(Reuters) - The second dose of Pfizer Inc’s COVID-19 vaccine could be delayed in order to cover all priority groups as the first one is highly protective, two Canada-based researchers said in a letter published in the New England Journal of Medicine.

The vaccine had an efficacy of 92.6% after the first dose, Danuta Skowronski and Gaston De Serres said, based on an analysis of the documents submitted by the drugmaker to the U.S. Food and Drug Administration (FDA).

These findings were similar to the first-dose efficacy of 92.1% reported for Moderna Inc's mRNA-1273 vaccine, according to the letter here on Wednesday.

In its response, Pfizer said alternative dosing regimens of the vaccine had not been evaluated yet and that the decision resided with the health authorities.

Some countries, grappling with low supplies, are looking at dosing patterns or volumes that differ from how the vaccines were tested in clinical trials.

There are differences over the merits of such strategies, with some arguing the urgency of the pandemic requires flexibility, while others oppose abandoning data-driven approaches for the sake of expediency.

Skowronski and De Serres cautioned that there may be uncertainty about the duration of protection with a single dose, but said the administration of the second dose a month after the first provided “little added benefit in the short term”.

Skowronski works at the British Columbia Centre for Disease Control, while De Serres is from the Institut National de Santé Publique du Québec

In Britain, authorities have said that data supported its decision to move to a 12-week dosing schedule for Pfizer’s COVID vaccine. Both Pfizer and partner BioNTech have warned that they had no evidence to prove it.

Pfizer’s vaccine is authorized to be taken 21 days apart.

The U.S. FDA and the European Medicines agency have stuck by the interval tested in the trials.

https://www.reuters.com/article/us-health-coronavirus-pfizer/researchers-urge-delaying-pfizer-vaccines-second-dose-as-first-highly-effective-idUSKBN2AI0EC

Pfizer says South African variant could significantly reduce protective antibodies

February 17, 2021 10:33 PM 

(Reuters) - A laboratory study suggests that the South African variant of the coronavirus may reduce protective antibodies elicited by the Pfizer Inc/BioNTech SE vaccine by two-thirds, and it is not clear if the shot will be effective against the mutation, the companies said on Wednesday.

The study found the vaccine was still able to neutralize the virus and there is not yet evidence from trials in people that the variant reduces vaccine protection, the companies said.

Still, they are making investments and talking to regulators about developing an updated version of their mRNA vaccine or a booster shot, if needed.

For the study, scientists from the companies and the University of Texas Medical Branch (UTMB) developed an engineered virus that contained the same mutations carried on the spike portion of the highly contagious coronavirus variant first discovered in South Africa, known as B.1.351. The spike, used by the virus to enter human cells, is the primary target of many COVID-19 vaccines.

Researchers tested the engineered virus against blood taken from people who had been given the vaccine, and found a two- thirds reduction in the level of neutralizing antibodies compared with its effect on the most common version of the virus prevalent in U.S. trials.

Their findings were published in the New England Journal of Medicine (NEJM).

Because there is no established benchmark yet to determine what level of antibodies are needed to protect against the virus, it is unclear whether that two-thirds reduction will render the vaccine ineffective against the variant spreading around the world.

However, UTMB professor and study co-author Pei-Yong Shi said he believes the Pfizer vaccine will likely be protective against the variant.

“We don’t know what the minimum neutralizing number is. We don’t have that cutoff line,” he said, adding that he suspects the immune response observed is likely to be significantly above where it needs to be to provide protection.

That is because in clinical trials, both the Pfizer/BioNTech vaccine and a similar shot from Moderna Inc conferred some protection after a single dose with an antibody response lower than the reduced levels caused by the South African variant in the laboratory study.

Even if the concerning variant significantly reduces effectiveness, the vaccine should still help protect against severe disease and death, he noted. Health experts have said that is the most important factor in keeping stretched healthcare systems from becoming overwhelmed.

More work is needed to understand whether the vaccine works against the South African variant, Shi said, including clinical trials and the development of correlates of protection - the benchmarks to determine what antibody levels are protective.

Pfizer and BioNTech said they were doing similar lab work to understand whether their vaccine is effective against another variant first found in Brazil.

More

https://www.reuters.com/article/us-health-coronavirus-vaccines-variants/pfizer-says-south-african-variant-could-significantly-reduce-vaccine-protection-idUSKBN2AH2VG

Covid-19 Was Spreading in China Before First Confirmed Cases, Fresh Evidence Suggests

The number, and genetic sequencing, of the first cases identified by China suggest coronavirus was spreading before early December 2019

Feb. 19, 2021 5:30 am ET

New evidence from China is affirming what epidemiologists have long suspected: The coronavirus likely began spreading unnoticed around the Wuhan area in November 2019, before it exploded in multiple different locations throughout the city in December.

Chinese authorities have identified 174 confirmed Covid-19 cases around the city from December 2019, said World Health Organization researchers, enough to suggest there were many more mild, asymptomatic or otherwise undetected cases than previously thought.

Many of the 174 cases had no known connection to the market that was initially considered the source of the outbreak, according to information gathered by WHO investigators during the four-week mission to China to examine the origins of the virus. Chinese authorities declined to give the WHO team raw data on these cases and potential earlier ones, team members said.

In examining 13 genetic sequences of the virus from December, Chinese authorities found similar sequences among those linked to the market, but slight differences in those of people without any link to it, according to the WHO investigators. The two sets likely began to diverge between mid-November and early December, but could possibly indicate infections as far back as September, said Marion Koopmans, a Dutch virologist on the WHO team.

More

https://www.wsj.com/articles/covid-19-was-spreading-in-china-before-first-confirmed-cases-fresh-evidence-suggests-11613730600?mod=hp_lead_pos10

Approx. 6 minutes.

Why Are COVID Fatality Rates Dropping?

https://www.youtube.com/watch?v=fiEk7JJwTT4

Next, some very useful 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

FDA information. https://www.fda.gov/media/139638/download

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

Some more 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/

The Spectator Covid-19 data tracker (UK)

https://data.spectator.co.uk/city/national

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.

Vestas reveals offshore turbine with world's largest sweep

By Paul Ridden  February 11, 2021

Denmark's Vestas is looking to become an industry leader in offshore wind, and has introduced the V236-15.0 MW turbine to take the fight to GE. The new design's blades offer the largest swept area in the world.

Vestas got into the offshore turbine business over 25 years ago with the installation of 500-kW V39 units at Denmark's Tunoe Knob wind farm. The size and energy production capacities of turbines has grown steadily ever since, with GE Renewable Energy recently announcing that its world-beating 14-MW Haliade-X will be part of phase C of the Dogger Bank offshore wind project due for completion in 2026. Now Vestas has gone even bigger.

Thanks to its three 115.5-m (379-ft) blades, the new design is reported to have the largest swept area in the world, which adds up to 43,742 m². It should be good for sites where wind speeds are high too, with Vestas saying that it's "rated to withstand IEC 1 extreme wind conditions up to 50 m/s and IEC T up to 57 m/s."

Each turbine is expected to deliver around 80 GWh of energy per year, depending on site-specific conditions, which is said to work out as being enough to power 20,000 European homes.

The V236-15.0 MW also offers the potential to reduce the number of turbines deployed at offshore windfarm level – with Vestas calculating that the "offshore turbine offers 65 percent higher annual energy production than the V173-9.5 MW, and for a 900-MW wind park it boosts production by five percent with 34 fewer turbines."

The company expects the first V236-15.0 MW prototype to be built in 2022, with serial production following two years later. It has a design lifetime of 25 years.

“With the V236-15.0 MW, we raise the bar in terms of technological innovation and industrialization in the wind energy industry, in favor of building scale," says Anders Nielsen, Vestas CTO. "By leveraging Vestas’ extensive proven technology, the new platform combines innovation with certainty to offer industry-leading performance while reaping the benefits of building on the supply chain of our entire product portfolio. The new offshore platform forms a solid foundation for future products and upgrades.”

https://newatlas.com/energy/vestas-v236-15-mw-offshore-wind-turbine/

Danish wind turbine maker Vestas lays of 450 employees in U.S. state of Colorado

February 17, 2021 1:19 PM

COPENHAGEN (Reuters) - Danish wind turbine maker Vestas said on Wednesday it would lay off 450 positions in three factories across Colorado in the United States, as a result of lower demand.

Vestas said it expected to offer new roles elsewhere in the business to 150 of the affected employees.

https://www.reuters.com/article/uk-vestas-layoffs/danish-wind-turbine-maker-vestas-lays-of-450-employees-in-u-s-state-of-colorado-idUSKBN2AH1Q1?il=0

This weekend’s musical diversion.  Germany’s highly talented, and very under recognised, Johann Friedrich Fasch. Today the only music of his that ever gets airtime now.

Fasch - Concerto for trumpet, 2 oboes, strings & basso continuo a 8 in D major, FWV L:D1

https://www.youtube.com/watch?v=5AOIdtxDQHc

 

Next, this week’s chess masterclass.  Approx. 13 minutes.

Destroyed by a... Chessable Course?? || So vs Carlsen || Opera (2021) FINALS

https://www.youtube.com/watch?v=dBj_wcAJQPs

 

Finally, how green is green biomass? Can the eco-loons and bureaucrats ever get anything right? Approx. 11 minutes.

https://www.youtube.com/watch?v=qJ_5sLWhVyI

 

If you don’t read the newspaper, you’re uninformed. If you read the newspaper, you’re misinformed.

Mark Twain.