Baltic Dry Index. 2454 +24 Brent Crude 81.71
Spot Gold 1863
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 19/11/21 World 256,348,897
Deaths 5,147,163
A crucial responsibility of any central bank is to control inflation, the average rate of increase in the prices of a broad group of goods and services.
Janet
Yellen.
We open as usual with the Asian stock casinos, where as usual, reality is in short supply.
This time it really is different, since the world’s central banksters discovered the Magic Money Tree forests back in March 2020.
But sooner or later the reality of inflation will intrude.
The earlier a problem is tackled the easier it is to fix. Our central banksters are deliberately pursuing a policy of allowing inflation to build.
When finally the central banksters are forced to face up to the inflation genie they deliberately let out of the bottle, an unpredictable havoc is the likely result.
But not today.
Today, President Jimmy Carter Joe Biden is still trying to stoke up even
more inflation via his “social infrastructure” Magic Money Tree package.
And now Japan is to add oil to the global inflation fire.
Hong Kong’s Hang Seng slips as Alibaba shares drop 9% after disappointing earnings
SINGAPORE — Hong Kong stocks fell on Friday even as other Asia-Pacific markets mostly rose, with Wall Street mostly lifted overnight supported by strong earnings. Alibaba, however, disappointed investors as it missed earnings expectations.
Hong Kong’s Hang Seng index tumbled 1.1% in early trade, building on a broad sell-off in tech stocks during the previous session. The Hang Seng tech index was down around 1% after plunging nearly 3% on Thursday.
Alibaba shares listed in Hong Kong dropped over 9%. On Thursday, Alibaba missed revenue and earnings expectations for the September quarter, as slowing economic growth in China weighed on results. It reported revenue of 200.69 billion yuan ($31.4 billion), less than the 204.93 billion yuan estimated but still a 29% year-on-year rise. The company reported earnings per share of 11.20 yuan, less than an estimate of 12.36 yuan and a 38% year-on-year decline.
----Mainland Chinese stocks, on the other hand, rose. The Shanghai composite was up 0.22%, while the Shenzhen component jumped 0.62%.
In other Asia-Pacific markets, Japan’s Nikkei 225 rose 0.26%, while the Topix was flat. Investors are on the lookout for an expected announcement of a record $488 billion stimulus package in Japan later on Friday, with Reuters citing media reports.
Australia’s ASX 200 was flat after being in positive territory earlier. Shares of Crown Resorts soared more than 16% after a $6.2 billion buyout offer from investment firm Blackstone, according to Reuters.
South Korea’s Kospi was up 0.22%, paring some earlier gains. India’s markets are closed for a holiday on Friday.
U.S. markets were mixed overnight, although strong earnings lifted some indices. The S&P 500 was 0.3% higher to 4,704.54 and the Nasdaq Composite rose 0.5% to 15,993.71. The Dow fell 60 points, or 0.1%, dragged lower by big losses in Cisco shares.
The S&P 500 fell as much as 0.3% at one point before recovering, after strong earnings from Nvidia, the world’s largest chipmaker by market value, and various retailers. Other chipmakers also rose as Nvidia’s strong results lifted optimism for the sector.
More
https://www.cnbc.com/2021/11/19/asia-markets-alibaba-earnings-oil-prices-currencies.html
Japan proposes record stimulus package to fix ailing economy
By YURI KAGEYAMA, AP Business Writer November 19, 2021
TOKYO (AP) — Japan's prime minister outlined Friday a record 56 trillion yen, or $490 billion stimulus package, including cash handouts and aid to ailing businesses, to help the economy out of the doldrums worsened by the coronavirus pandemic.
“The package has more than enough content and scale to deliver a sense of security and hope to the people,” Prime Minister Fumio Kishida told reporters.
The proposal from Kishida was set for Cabinet approval later in the day, but still needs parliamentary approval. Kishida has promised speedy action, and parliament is expected to convene next month.
The plan includes doling out 100,000 yen ($880) each in monetary assistance to those 18 years or younger, and aid for ailing businesses, Kishida and other politicians said.
----The government has been studying restarting the “GoTo Travel” campaign of discounts at restaurants and stores, designed to encourage domestic travel. The campaign, which began last year, got discontinued when COVID cases started to surge.
Some critics have said the government approach amounts to “baramaki,” or “spreading out handouts,” which could prove ineffective in generating growth in the long run. Others say the proposed cash aid leaves out families without children and other poor.
The scale of the latest package will require Japan to sink deeper into debt by issuing bonds.
More
In US news, persistent inflation is starting to frighten the horses. Still words are cheap and the central banksters are hopelessly out of touch with reality. In the real world on fiat currency, rents and home prices almost never fall except when a population moves away for whatever reason.
Below, the Fedster’s still believing that Magic Money Tree policies only bring about “transitory” inflation. Dream on!
Fed policymakers start penciling in earlier U.S. rate hikes
November 19, 2021 12:53 AM GMT
Nov 18 (Reuters) - Federal Reserve policymakers are penciling in the possibility of earlier interest rate hikes than they thought would be needed just a few months ago, as inflation continues to soar and the economy picks up speed.
The shift comes as President Joe Biden nears a decision on whether to keep Jerome Powell as Fed chair for another term, or to elevate Governor Lael Brainard to that post instead. Earlier this week Biden signaled he could make an announcement on Friday.
Whoever Biden picks will face the thorny task of steering toward the Fed's two goals, stable prices and full employment, when they appear to be increasingly in conflict.
Both Powell and Brainard have said they believe the current inflation surge will subside next year as supply chains are repaired, and have argued the Fed should keep interest rates at rock bottom to give more time for the millions of Americans who lost employment or left the workforce during the pandemic to get a job if they want to.
Many of their Fed colleagues have signed on to that view, but continued rising prices are challenging it.
On Thursday, one of the U.S. central bank's most reliable policy doves said he is "more open-minded" to raising interest rates next year than he was six months ago. A 2022 interest rate hike, Chicago Fed President Charles Evans said, could be appropriate if inflation continues to stick despite his expectations to the contrary. read more
----Separately, Atlanta Federal Reserve President Raphael Bostic said he believes the U.S. central bank could start raising interest rates in the middle of next year, based on the jobs outlook.
Separately, Atlanta Federal Reserve President Raphael Bostic said he believes the U.S. central bank could start raising interest rates in the middle of next year, based on the jobs outlook.
More
https://www.reuters.com/markets/us/feds-evans-may-need-more-restrictive-policy-2021-11-18/
If Biden picks Brainard over Powell for Fed chief, expect an immediate market impact
Published Thu, Nov 18 2021 7:40 AM EST
If Lael Brainard is named Federal Reserve chairman, the first move by financial markets may be to price in an even more dovish central bank.
That means the Fed would be expected to take longer to raise interest rates or tighten policy than under Fed Chairman Jerome Powell. Currently, traders are expecting the Fed to begin raising rates in the second half of next year, once it winds down its bond buying program.
Until just recently, Powell was expected to be renominated to the chairmanship, but President Joe Biden has now interviewed both Powell and Brainard and is expected to make an announcement by the weekend.
“I think the market views Brainard as slightly more dovish. I think the honest answer is there probably is not a significant difference between either candidate. The biggest asset that Powell has is the trust and the confidence of the market, and a kind of a track record of doing exactly what he thinks is right despite the considerable amount of political pressure,” said Ed Mills, Washington policy strategist at Raymond James.
Economists and investors perceive Brainard as more political, whether she proves to be or not. Mills said she is seen as political because of her donation to the presidential campaign of Hilary Clinton in 2016.
“Powell, I think, will be much less concerned about the midterm elections in determining when they should raise interest rates,” said Peter Boockvar, chief investment officer at Bleakley Global Advisors. “I’m not saying that’s what Brainard is going to do if she’s in that seat, but that’s going to be the perception.”
The choice of either candidate is not expected to be tumultuous for stocks, but financial markets could react.
Boockvar and others do not expect much market reaction at all to Powell, if he is nominated for four more years, but it could be different in the case of Brainard.
“I think you’ll get a 10 minute bounce in the [stock] market if Brainard gets the appointment, and you’ll see more than just a 10 minute response in the Treasury market, where you’ll see a steepening yield curve,” Boockvar said.
More
U.S. to start raising interest rates from Sept 2022 - JP Morgan
November 18, 2021 1:15 PM
LONDON (Reuters) - The U.S. Federal Reserve will start raising interest rates from September 2022, economists at the country’s biggest bank said in a 2022 outlook note.
JPMorgan expects the central bank to raise rates by 0.25% from the third quarter of next year and keep raising them by 25 basis points every quarter “at least until real rates are at zero,” the team led by chief economist Mike Feroli wrote.
Ten-year inflation-adjusted yields or “real yields” stood at minus 1.12% on Thursday.
The bank’s forecast for the first Fed rate hike is a little more conservative than at some rivals, such as Deutsche Bank, which expects the first U.S. hike as early as July 2022. Money markets expect the first increase at a similar time.
JPMorgan’s economists expect U.S. economic growth to average 3.5% in 2022, compared to 5.5% in 2021, and full employment to be achieved by mid-2022.
Inflation is also expected to slow in the coming quarters, with core prices projected to average 2.2% by the third quarter of 2022 compared to 4.2% in the fourth quarter of 2021.
“Supply bottlenecks in the goods sector appear to be easing, and we expect that to continue in 2022,” the economists wrote.
Gold gains as investors focus on inflation
November 19, 2021 5:37 AM GMT
Nov 19 (Reuters) - Gold prices rose on Friday as concerns over more persistent inflation bolstered the metal's appeal as an inflation hedge, though prospects of quicker interest rate hikes limited gains.
Spot gold advanced 0.2% to $1,862.97 per ounce by 0455 GMT. U.S. gold futures gained 0.2% to $1,864.90.
Gold scaled its highest level in more than five months earlier this week as an acceleration in U.S. consumer prices last month heightened concerns of more long-lasting inflation. read more
But as inflation continues to soar and the economy picks up speed, Federal Reserve policymakers are pencilling in the possibility of earlier interest rate hikes than they thought would be needed just a few months ago. read more
Higher interest rates raise the non-interest bearing gold's opportunity cost, reducing the metal's appeal.
"Gold's unusual rise along with the dollar and yields suggests that markets believe the Fed is not hawkish enough, keeping inflation expectations elevated and real yields low, supporting bullion," DailyFX currency strategist Ilya Spivak said.
More
https://www.reuters.com/markets/europe/gold-set-weekly-dip-faster-rate-hike-prospects-2021-11-19/
Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.
Milton Friedman.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Today, wishful thinking meet reality.
Could Biden's spending plans push inflation even higher?
Aimee Picchi November 18, 2021
With President Joe Biden this week signing the $1.2 trillion infrastructure bill and Congress now negotiating the $1.75 trillion Build Back Better plan, questions are being raised about what the spending bills' impact will be on inflation. After all, these bills will be funneling new funding into an economy that's seeing consumer prices rise at their fastest rate in 30 years.
But some economists say fears about the spending bills' impact on inflation are overblown. The reason, they say, is that the spending bills will spread investment over a number of years, beginning in 2022 — a point when supply-chain issues currently pushing up prices will likely have subsided
"The timing is really important — that money will only start flowing into the economy maybe in the end of next year and in 2023 and on," said William Foster, vice president and senior credit officer at Moody's Investors Service. "We think inflation will moderate by the middle of next year. By then, the supply-chain issues will work themselves out."
In the case of the infrastructure bill, the $1.2 trillion will be spread over five years. The social spending plan, which hasn't yet been passed by Congress, would tackle issues like climate change and child care over 10 years.
Foster also noted that the Build Back Better Act would pay for itself by boosting taxes on the rich and corporations. That would avoid adding to the federal deficit, cushioning its inflationary impact.
---- The counterpoint, articulated by other economists including Lawrence Summers, is that stubbornly high prices are likely to persist for the foreseeable future as the economy overheats. Under this view, inflation is already affecting a wide range of goods and services, while a rapid surge in wages could cause employers to pull back on hiring. Also troubling is that signals suggest consumers now expect prices to keep rising — expectations that can hurt economic growth as people look to economize and trim their spending.
More
Inflation's wrath hits home: Families struggle to cope amid surging childcare costs
Swapna Venugopal Ramaswamy, USA TODAY November 18, 2021
Less than three months after Hannah Sharp enrolled her 2-year-old son at a daycare center in Boise, Idaho, he tested positive for COVID-19.
The toddler, Emerson, had been exposed to the virus at the small, family-run center by an unvaccinated teacher. Thankfully, the symptoms were mild, and he recovered quickly.
But Sharp did not want to go back to the same center. When she desperately began calling other daycare facilities in the area, she was put on months-long wait lists. And the costs had skyrocketed.
“I was paying $700 per month. When I started looking, the cheapest I found was $950 and the expensive ones were upwards of $1,200. I couldn’t afford that,” says Sharp, who works in nonprofit communications. “The price has just been going up because of the housing growth in our area. There's huge demand and very, very, very little supply.”
The rising U.S. inflation rate, which hit a three-decade high in October, up by 6.2% from a year ago, has consumers paying more for everything from rent, energy, and food.
While the pandemic-fueled worker shortage has affected all industries, the childcare sector, which lost 36% of its workforce as centers closed due to low enrollment, getting workers back has been a challenge.
About 80% of the childcare providers reported experiencing staffing shortages in a June survey conducted by the National Association for the Education of Young Children. In Idaho, 91% of the centers reported worker shortages.
The national median hourly wage for childcare workers -- $12.24 in May 2020, according to the Bureau of Labor Statistics – hasn’t helped either.
---- Nationally,, the average price of a one-bedroom apartment increased by 20% between September 2020 and September 2021, according to Apartment Guide’s annual rent report. During the same time, rents in Boise were up by 49%.
“With the state’s average childcare wages, people simply cannot afford housing, “says Oppenheimer.
More
Surging shipping costs will drive up prices for some consumer products by 10%, new UN report finds
BEIJING — The global surge in container shipping rates could send consumer prices 1.5% higher over the next year, according to a report from the United Nations Conference on Trade and Development (UNCTAD).
The rate for a single shipping container has skyrocketed over the last 18 months as the coronavirus pandemic disrupted supply chains and trade channels. Routes have seen costs rise by seven times, if not more.
“UNCTAD’s analysis shows that the current surge in container freight rates, if sustained, could increase global import price levels by 11% and consumer price levels by 1.5% between now and 2023,” the UN report said Thursday. “UNCTAD’s analysis shows that the current surge in container freight rates, if sustained, could increase global import price levels by 11% and consumer price levels by 1.5% between now and 2023,” the UN report said Thursday.
By country, the U.S. would see consumer prices rise by 1.2%, while China would see a 1.4% increase, the report said. The analysis found that smaller countries more dependent on imports would see consumer prices rise by a much higher 7.5%.
By product, electronics, furniture, and apparel would see the greatest price increases — of at least 10% globally — due to supply chain distribution, UNCTAD said, noting containers account for 17% of total seaborne trade volume.
----The container shipping cost surge would also drag down growth in major economies, the analysis said.
Industrial production, a major driver of growth, is set to fall by more than 1% in the U.S. and euro area, and drop by 0.2% in China, if container freight rates rise 10% and supply chains remain disrupted, the report said.
As of late October, more than 600 container ships were stuck outside ports worldwide, twice the level at the start of the year, Swiss logistics giant Kuehne+Nagel told CNBC’s “Squawk Box Asia.” The company projected late last month that the congestion would last until at least February.
To me, a wise and humane policy is occasionally to let inflation rise even when inflation is running above target.
Janet Yellen.
Covid-19 Corner
This section will continue until it becomes unneeded.
Macron says France does not need to lock down non-vaccinated people as COVID spreads
November 19, 20211:29 AM GMT
PARIS, Nov 18 (Reuters) - France does not need to follow those European countries imposing COVID-19 lockdowns on unvaccinated people, because of the success of its health pass in curbing the virus' spread, President Emmanuel Macron said.
Europe has again become the epicentre of the pandemic, prompting some countries including Germany and Austria to reintroduce restrictions in the run-up to Christmas and causing debate over whether vaccines alone are enough to tame COVID-19.
"Those countries locking down the non-vaccinated are those which have not put in place the (health) pass. Therefore this step is not necessary in France," Macron told La Voix du Nord newspaper in an interview published on Thursday.
In France, proof of vaccination or a recent negative test is required to go to restaurants, cafes and cinemas and to take long-distance trains, among other activities.
Europe accounted last week for more than half of the seven-day average of infections globally and about half of the latest deaths, according to a Reuters tally
More
SKorea sees record virus jump as thousands take college exam
SEOUL, South Korea (AP) — South Korea reported its biggest daily jump in coronavirus infections since the start of the pandemic as hundreds of thousands of masked students flocked to schools on Thursday for the country’s highly competitive college entrance exam amid growing concerns about the delta-driven spread.
About 509,000 students were taking the one-day exam at 1,395 sites across the nation, including hospitals and shelters.
The annual exam, called “Suneung,” or the College Scholastic Ability Test, is crucial in the education-obsessed country, where careers, social standings and even marriage prospects greatly depend on which university a person attends.
Students were required to have their temperatures taken before entering classrooms, and those with fevers were sent to separate testing areas. The Education Ministry said that 68 infected students and 105 others in self-quarantine took the hours-long test in isolation.
The 3,292 new cases reported by the Korea Disease Control and Prevention Agency on Thursday marked the second straight day of over 3,000 cases. The agency said 29 patients died in the past 24 hours, bringing the death toll to 3,187, while 506 others were in serious or critical condition.
More
Record high cases, more rules and partial lockdowns: A new Covid wave engulfs Europe
Published Thu, Nov 18 2021 4:42 AM EST
LONDON — The latest wave of Covid-19 cases is hitting Europe with a vengeance with a number of countries seeing record numbers of daily infections, imposing partial lockdowns and placing more restrictions on unvaccinated people.
Germany shattered a new record on Thursday, reporting more than 65,000 new cases, with health officials warning that the true number of cases could be two or three times as many.
In the neighboring Netherlands, more than 20,000 new cases were reported Wednesday, a new record for the third day in a row, and in France, where a fifth wave of the pandemic is underway, the number of new cases topped 20,000 on Wednesday, a level not reached since Aug. 25, Reuters reported.
While the Netherlands and Austria have introduced partial lockdowns, other countries are desperate to avoid implementing full or medium-scale lockdown measures similar to 2020 given the economic harm they can do, instead opting for more Covid rules and Covid passports.
In Belgium, new Covid measures mandating working from home and indoor mask use have been announced, amid one of Europe’s sharpest rises for infections.
Belgian Prime Minister Alexander de Croo is keen to avoid another lockdown, however, telling CNBC’s Silvia Amaro Wednesday that while there was an uptick in cases, it was not as dramatic as previous waves thanks to widespread vaccination.
Nonetheless, he said, “pressure is mounting in our hospitals so we have to be prudent, but prudent measures should enable us to avoid having to close down certain parts of our society or economy.”
Read more: Belgium announces new Covid restrictions, but prime minister vows to avoid lockdown
Covid passes or passports are becoming the norm across Europe, and state an individual’s Covid status (whether one is vaccinated or recovered from a virus). They are not without controversy, however, and such passes are leading to an increasing number of public spaces — from bars and movie theaters to Christmas markets — becoming segregated, with access granted to vaccinated people but restricted for the unvaccinated.
More
https://www.cnbc.com/2021/11/18/covid-record-breaking-cases-as-europes-latest-wave-takes-hold.html
German disease control head warns of ‘terrible Christmas’ as Covid cases go through the roof
Thursday 18 November 2021 9:38 am
The head of Germany’s disease control agency has warned that the country faces a “really terrible Christmas” unless steps are taken to counter the sharp rise in coronavirus infections.
German politicians are debating measures that would replace the nationwide epidemic rules, which will expire at the end of the month.
The Robert Koch Institute, Germany’s disease control agency, said on Thursday that 65,371 newly confirmed cases had been reported in a single day, continuing the upward trend that experts have been warning about for weeks.
“We are currently heading towards a serious emergency,” said the agency’s director, Lothar Wieler. “We are going to have a really terrible Christmas if we don’t take counter-measures now.”
Wieler said Germany needs to increase its vaccination rates to significantly above 75 per cent, from 67.7 per cent at present.
Some regions in Germany have vaccination rates as low as 57.6%.
He also called for the closure of clubs and bars, an end to large-scale events and access to many parts of public life to be limited to those with vaccine or recovery certificates.
Wieler warned that hospitals across Germany are struggling to find beds for Covid-19 patients and those with other illnesses.
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
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
Centers for Disease Control Coronavirus
https://www.cdc.gov/coronavirus/2019-ncov/index.html
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.
China's Sinopec completes successful trial of crude to olefin technology
Wed, November 17, 2021, 9:33 AM
SINGAPORE (Reuters) - China's Sinopec Corp said on Wednesday it completed a successful trial processing crude oil directly into olefin, making the top Asian refiner one of the world's few companies that have applied the technology at an industrial scale.
With a yield of close to 50%, the manufacturing process cuts significantly production cost as well as carbon dioxide emission, compared with the traditional approach of refining crude into intermediate fuels which are further processed into olefin, Sinopec said.
Olefin - mainly ethylene and propylene - is the key building block for making petrochemicals such as plastics and synthetic fibre.
Following the trial at Sinopec subsidiary plant in Tianjin, the refiner will follow up with building a one million tonne per year crude-to-olefin plant, it said, without giving further details.
China, the world's largest emitter of green house gases, is expected to cap its primary crude oil refining capacity at one billion tonnes annually by 2025 (20 million barrels per day), under a national goal to hit carbon emission peak before 2030.
But it remains short of petrochemicals such as plastics and synthetic fibre.
ExxonMobil is another firm equipped with such technology, Sinopec added.
The U.S. oil and gas major said last week it had made a final investment decision to build a multi-billion dollar petrochemical complex in south China, which will incorporate a similar manufacturing process according to industry experts.
https://www.yahoo.com/news/chinas-sinopec-completes-successful-trial-093337294.html
Another weekend and a
Thanksgiving holiday week ahead in the USA. How much more will Thanksgiving
cost in 2021 compared to 2020? 2022
compared to 2021? Inflation looks to me to be here to stay. Looks likely to
accelerate from here if President Carter Biden gets his spend, spend,
spend “social infrastructure” package through the Congress.
Buy now for 2023. Have a great weekend everyone.
It is a way to take people's wealth from them without having to openly raise taxes. Inflation is the most universal tax of all.
Thomas
Sowell.
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