Baltic Dry Index. 2665 -267 Brent Crude 74.55
Spot Gold 1783
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 16/12/21 World 272,490,076
Deaths 5,345,829
'Emergencies' have always been the pretext on which the safeguards of individual liberty have been eroded.
Friedrich August von Hayek.
Predictably yesterday, Chairman Powell talked the talk on inflation, but talk is cheap and he didn’t actually do anything about soaring inflation except to say that he will do something about inflation next year.
With a shoddy record of predicting inflation as “transitory,” having a start, middle and end, Chairman Powell went on to predict that the Fed will achieve a “soft landing” for the US economy ahead.
Well if he predicts so, it must be true I suppose, I mean he wouldn’t lie to the American public would he?
Europe’s stock casinos are betting Chairman Powell’s talk is just that, talk. Chairman Powell is more Arthur Burns than Paul Volker.
Fed signals three rate hikes in the cards in 2022 as inflation fight begins
December 15, 2021 10:45 PM GMT
WASHINGTON, Dec 15 (Reuters) - The Federal Reserve said on Wednesday it would end its pandemic-era bond purchases in March and pave the way for three quarter-percentage-point interest rate hikes by the end of 2022 as the economy nears full employment and the U.S. central bank copes with a surge of inflation.
"The economy no longer needs increasing amounts of policy support," Fed Chair Jerome Powell said in a news conference in which he contrasted the near-depression conditions at the onset of the coronavirus pandemic in 2020 with today's environment of rising prices and wages and rapid improvement in the job market.
The pace of inflation is uncomfortably high, he said after the end of the Fed's latest two-day policy meeting, and "in my view, we are making rapid progress toward maximum employment," a combination of circumstances that has now convinced all Fed officials, even the most dovish, that it is time to exit more fully the pandemic policies put in place two years ago.
The scenario laid out by the central bank in its new policy statement and economic projections envisions the pandemic, despite the spread of the Omicron variant, giving way to a particularly benign set of economic conditions - a "soft landing" in which inflation eases largely on its own, interest rates increase comparatively slowly, and the unemployment rate is pinned to a low 3.5% level for three years.
Some analysts were skeptical.
"This is a forecast that implicitly has favorable developments that allow them to leave accommodation but get favorable inflation," said Vincent Reinhart, chief economist at Dreyfuss & Mellon, noting that the three-year rate hike cycle projected by Fed officials never reaches levels that would be considered restrictive, yet inflation is still expected to fall.
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European markets set to surge at the open as investors digest Fed decision
LONDON — European stocks are expected to open much higher on Thursday as investors in the region digest the U.S. Federal Reserve’s decision Wednesday to accelerate the reduction of its monthly bond purchases.
The U.K.’s FTSE index is seen opening 61 points higher at 7,235, Germany’s DAX higher by 161 points at 15,651, France’s CAC 40 up 99 points at 7,028, Italy’s FTSE MIB 281 points higher at 26,974, according to data from IG.
Global investors will be digesting the U.S. central bank’s signal on Wednesday that it would be aggressive on tapering bond purchases and sees several rate hikes in 2022.
The Fed will begin reducing the pace of its asset purchases in January and buy just $60 billion of bonds each month going forward, compared to $90 billion in the month of December.
Projections released overnight indicate that Fed officials see as many as three rate hikes coming in 2022, with two in the following year and another two in 2024.
The decision to aggressively ease bond purchases follows recent inflation data showing a 6.8% surge in November, which was higher than expected and the fastest rate since 1982.
Asia-Pacific markets were mixed Thursday as investors digested the Fed’s indications that its run of ultra-easy monetary policy since the start of the pandemic is coming to a close.
Meanwhile, U.S. stock futures were slightly higher Wednesday evening after the decision. More U.S. economic data is due out Thursday, including housing starts and jobless claims at 8:30 a.m. EST.
There’s more central bank activity on Thursday with the Bank of England set to release its latest monetary policy decision. U.K. inflation climbed to a 10-year high in November, data showed Wednesday, and could influence the bank on whether to tighten monetary policy.
Also in focus for European markets are flash purchasing manager’s index (PMI) data from across the euro zone and U.K. for December. The data will likely reflect the imposition of Covid restrictions and partial lockdowns in some countries, such as Germany and the Netherlands, respectively.
https://www.cnbc.com/2021/12/16/european-markets-positive-as-investors-digest-fed-decision.html
In other news, Russia and China have had enough of the west’s double standards. But are we 1914 like, sleep walking into the next war?
Putin and Xi Show United Front Amid Rising Tensions With U.S.
Wed, December 15, 2021, 7:13 PM
MOSCOW — President Joe Biden may have his alliance of democracies, but as a video summit on Wednesday underscored, Russia and China still have each other.
President Xi Jinping of China, facing a diplomatic boycott of this winter’s Beijing Olympics from Biden and others, secured a public pledge from President Vladimir Putin of Russia that he would attend — the first national leader to do so.
Putin, facing threats of crushing Western sanctions if Russian forces attack Ukraine, heard Xi propose that Russian and China cooperate to “more effectively safeguard the security interests of both parties.”
The videoconference between Xi and Putin on Wednesday — the 37th time the two men had met since 2013, according to Xi — was both a show of solidarity between two autocrats battling Western pressure and a display of the kind of mutually beneficial, increasingly tight partnership their two countries are building.
“We firmly support each other on issues concerning each other’s core interests and safeguarding the dignity of each country,” Xi told Putin, according to reports in the Chinese state news media.
There is still plenty of friction between Russia and China, onetime adversaries that share a land border stretching more than 2,600 miles, over matters like Siberian logging and history. But on trade, security and geopolitics they are increasingly on the same page, forming a bloc trying to take on American influence as both countries’ confrontations with the United States deepen.
The two countries do not have a formal alliance. But Xi told Putin that “in its closeness and effectiveness, this relationship even exceeds an alliance,” according to a Kremlin aide, Yuri Ushakov, who briefed reporters in Moscow on the meeting after it ended.
The two leaders discussed forming an “independent financial infrastructure,” Ushakov said, to reduce their reliance on Western banks and their vulnerability to punitive measures from the West. And they floated a possible three-way summit with India, evidence of their broader geopolitical ambitions; Putin traveled to New Delhi to meet with Prime Minister Narendra Modi last week.
“A new model of cooperation has been formed between our countries — one based on foundations like noninterference in domestic affairs and respect for each others’ interests,” Putin told Xi in televised remarks.
In a bit of symbolic stagecraft, both men spoke with both the Chinese and Russian flags in the frame behind them — in contrast to Putin’s videoconference last week with Biden, when Putin spoke next to only the Russian flag.
Analysts say that an important factor in Russian-Chinese ties is the personal chemistry between Putin and Xi, both men in their late 60s who have consolidated control over their countries’ political systems. Xi addressed Putin as his “old friend,” while the Russian president called his Chinese counterpart both his “dear friend” and “esteemed friend.”
More
https://www.yahoo.com/news/putin-xi-show-united-front-191353495.html
Finally, garbage in, garbage out. Government statistics lie, who knew?
Japan admits overstating some government economic data for years
December 15, 2021 6:53 AM GMT
TOKYO, Dec 15 (Reuters) - The Japanese government overstated construction orders data received from builders for years, Prime Minister Fumio Kishida said on Wednesday, an admission that could dent credibility of official statistics widely used by investors and economists.
It was not clear why the government started the practice of rewriting the data. It is also unclear how gross domestic product (GDP) figures may have been affected, though analysts expected any impact to be minimal, particularly as the builders involved were likely to be smaller firms.
"It is regrettable that such a thing has happened," Kishida said. "The government will examine as soon as possible what steps it can take to avoid such an incident from happening again."
He made the comment in a parliamentary session after the Asahi newspaper reported the Ministry of Land, Infrastructure, Transport and Tourism had been "rewriting" data received from about 12,000 select companies since 2013 at a pace of about 10,000 entries per year.
Kishida said "improvements" had been made to the figures since January 2020 and that there was no direct impact on GDP data for fiscal year 2020 and 2021.
While the impact on past GDP numbers may be small, the revelation is likely to raise questions about the reliability of data that is a cornerstone for economists and investors looking to understand and forecast trends in the world's third-largest economy.
It is also not the first time that issues have been raised about government data, including a flaw in health ministry data in 2018.
"The biggest problem is not the effect on the GDP per se but the damage to reliability of (official) statistics," said Saisuke Sakai, senior economist at Mizuho Research and Technologies.
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Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
U.S. wheat rises on news Russia to reduce export quota
December 16, 2021 3:46 AM GMT
BEIJING, Dec 16 (Reuters) - U.S. wheat prices rose on Thursday on news that Russia, the world's largest wheat exporter, could reduce its export quota to secure domestic supply in the face of food inflation, while soybean prices climbed tracking firmer soyoil futures.
Russia is considering reducing its wheat export quota slightly from a previously planned 9 million tonnes, five sources familiar with discussions among officials told Reuters on Wednesday.
The most-active wheat contract on the Chicago Board of Trade was up 0.4% at $7.59 a bushel, as of 0320 GMT, while soybeans edged up 0.7% to $12.72 a bushel, set for a third consecutive day of gains.
CBOT soyoil futures rallied after the National Oilseed Processors Association (NOPA) said supplies among its U.S. members had slipped to 1.832 billion lbs by the end of November, from 1.835 billion a month earlier.
This was its first monthly decline since June, surprising analysts who had expected oil stockpiles to climb.
Meanwhile, the most-active corn contract was also up 0.5% at $5.89 a bushel.
Argentina will cut export taxes on soybeans, corn and wheat, but only if they are organics, which currently make up a small fraction of the major grains producer's harvest. read more
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Soaring fuel and clothes prices push inflation to 5.1 per cent, its highest level in a decade
Wednesday 15 December 2021 8:25 am
Skyrocketing prices in transport and retail have pushed inflation to its highest level for a decade piling pressure on the UK’s central bank to hike interest rates.
Inflation jumped to 5.1 per cent in November, up from 4.2 per cent in October, and well over double a Bank of England target to keep inflation at two per cent. The last time inflation reached similar heights was September 2011 when it stood at 5.2 per cent.
Transport costs were the largest driver behind inflation as fuel costs skyrocketed. Spiralling bills for clothing and footwear have also driven up prices.
Ed Monk, associate director at Fidelity International commented, “reports of a record number of manufacturers hiking prices this past week suggests the squeeze on households has much further to go.
“The Bank of England is currently caught between its two primary functions – controlling inflation and ensuring financial stability…. The problem is that there is clearly a concern that the economy is too weak to withstand any increase in borrowing costs,” Monk added, noting that the central bank is expected to keep interest rates at their record low level of 0.1 per cent in tomorrow’s upcoming spending announcement.
The central bank yesterday came under fire from the IMF which urged a hike in interest rates in order to soothe runaway inflation. In its latest modelling the UK’s central bank predicted that inflation would stand well below its current rate at 4.3 per cent for November.
Grant Fitzner, chief economist at the Office for National Statistics (ONS), said: “a wide range of price rises contributed to another steep rise in inflation, which now stands at its highest rate for over a decade.
“The price of fuel increased notably, pushing average petrol prices higher than we have seen before. Clothing costs – which increased after falling this time last year – along with price rises for food, second-hand cars and increased tobacco duty all helped drive up inflation this month,” he continued, noting that the costs of goods produced by factories and the price of raw materials have increased to their highest rate in 12 years.
Rising retail prices come at a time when Brits are also being hammered by record energy costs.
IMF takes swipe at Bank of England over rate inertia amid soaring inflation
Tuesday 14 December 2021 1:10 pm
The International Monetary Fund (IMF) today fired a warning shot at the Bank of England, urging the central bank to hike interest rates now to tame runaway inflation.
The world’s economic watchdog told the Bank it needs to “withdraw the exceptional support provided during” the Covid-19 crisis or risk facing spiralling inflation.
In a stark warning, the rate of price rises will not revert back to the Bank’s two per cent target until 2024, the organisation said.
In its annual check up on the UK economy, the IMF predicted inflation will hit a three-decade high of 5.5 per cent next spring.
Threadneedle Street should avoid “inaction bias” or risk spiking the UK economy with negative inflationary shocks by sitting on its hands and leaving rates at a record low 0.1 per cent.
Official inflation estimates are announced tomorrow and are expected to intensify pressure on the Old Lady to act to hose down red hot inflation.
City economists expect the rate to climb to around five per cent, scaling further above the Bank’s two per cent. The Office for National Statistics estimates inflation is already running at 4.2 per cent.
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Covid-19 Corner
This section will continue until it becomes unneeded.
Omicron thrives in airways, not lungs; new data on asymptomatic cases
December 15, 2021 10:22 PM GMT
Dec 15 (Reuters) - The following is a summary of some recent studies on COVID-19. They include research that warrants further study to corroborate the findings and that has yet to be certified by peer review.
Omicron multiplies faster in airways, slower in lungs
Major differences in how efficiently Omicron and other variants of the coronavirus multiply may help predict Omicron's effects, researchers said on Wednesday.
Compared to the earlier Delta variant, Omicron multiplies itself 70 times more quickly in tissues that line airway passages, which may facilitate person-to-person spread, they said. But in lung tissues, Omicron replicates 10 times more slowly than the original version of the coronavirus, which might contribute to less-severe illness.
A formal report of the findings is under peer review for publication and has not been released by the research team. In a news release issued by Hong Kong University, study leader Dr. Michael Chan Chi-wai said, "It is important to note that the severity of disease in humans is not determined only by virus replication" but also by each person's immune response to the infection, which sometimes evolves into life-threatening inflammation.
Chan added, "By infecting many more people, a very infectious virus may cause more severe disease and death even though the virus itself may be less pathogenic. Therefore, taken together with our recent studies showing that the Omicron variant can partially escape immunity from vaccines and past infection, the overall threat from Omicron variant is likely to be very significant."
Omicron grips cells more tightly, withstands some antibodies
A structural model of how the Omicron variant attaches to cells and antibodies sheds light on its behavior and will help in designing neutralizing antibodies, according to researchers.
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Canada advises against international travel amid Omicron threat
December 16, 2021 2:16 AM GMT
TORONTO, Dec 15 (Reuters) - Canada's government implored residents on Wednesday not to leave the country as provinces ramp up vaccinations to combat the fast-spreading Omicron coronavirus variant, even as efforts to head off a COVID-19 wave are complicated by public fatigue over the pandemic.
COVID-19 case numbers are increasing, with the national seven-day average of new cases at its highest point since Oct. 1, as Canadian hospitals struggle to clear backlogs from months of postponed procedures. Many exhausted staff members appear ill-equipped for another surge in infections.
"I say very clearly: Now is not the time to travel," Health Minister Jean-Yves Duclos told a news conference, adding it is clear there is community transmission of Omicron in Canada.
"I understand this sucks," Prime Minister Justin Trudeau told reporters as he urged Canadians to follow public health advice and "be careful during this holiday season. Get your kids their shots."
Children aged 5 to 11 had the highest infection rate of any age group in Ontario for the two weeks ended Tuesday.
Ontario will start offering a third shot of the vaccine to everyone over age 18 this week, while shortening the required gap between second and third doses to three months from six.
The province, Canada's most-populous, is also reducing capacity by half at indoor events with a capacity of at least 1,000, including sports activities, concerts and commercial film and television production.
Canada has banned travel from 10 African countries because of concerns about the new variant.
The federal government advised residents in March 2020 not to travel abroad unless necessary. It withdrew the notice this past October - before the first Omicron cases were reported - citing the success of vaccination campaigns.
Peter Juni, director of Ontario's COVID-19 science advisory table, urged people to take precautions, get vaccinated and not take Omicron lightly.
"What really worries me is that people are asleep at the steering wheel, internationally," he said. "They have wishful thinking it will be mild. ... This is not a realistic attitude."
More
https://www.reuters.com/world/americas/canada-tries-tackle-omicron-amid-pandemic-fatigue-2021-12-15/
Ancient Greek drug could cut COVID-19 deaths - Israeli scientist
Published: DECEMBER 14, 2021 17:37 Updated: DECEMBER 14, 2021 21:26
An ancient Greek drug derived from the saffron plant could improve the treatment of people with severe COVID-19 and reduce the COVID mortality rate by as much as 50%, according to a report published earlier this month in the European Journal of Internal Medicine by an Israeli researcher from the Hebrew University of Jerusalem and Hadassah Medical School.
The drug, colchicine, dates back thousands of years to ancient Egypt, where it was known for its special healing properties. It is one of a few medicines that survived until modern times. Most recently, it has been used to treat and prevent inflammation caused by gout that can lead to painful arthritis and Familial Mediterranean Fever (FMF), which is common among Jewish people of North African descent.
Prof. Ami Schattner researched and analyzed all patients treated in controlled trials of this ancient drug for the past 20 years. He found that among its uses and potential uses, colchicine also appears effective in treating COVID-19.
So far, four controlled studies of around 6,000 coronavirus patients have been published on the effect of colchicine, Schattner said, each showing a “significant improvement in severe coronavirus indices and, most importantly, there was a decrease in mortality by about 50% compared to those who were not treated with colchicine.”
The drug is cheap, a small half-milligram dose is needed per day, and it has already been proven safe to use, he said, making colchicine “an important discovery that could significantly contribute to improving the morbidity and mortality of many patients, if confirmed in further studies.”
The drug is also well-tolerated, the doctor said. The only side-effects in some patients can be bouts of diarrhea; about 10% of patients discontinue the use of the drug for this reason.
The drug has been tested in the treatment of the COVID-19 pandemic around the world, including in Canada, Greece, South Africa, Spain and Brazil. Many of the tests were double-blind placebo studies, increasing their likelihood of accuracy.
“The results were impressive,” he said.
----Further randomized controlled trials are needed to confirm these preliminary results, according to Schattner, which he believes will likely lead to expanding indications for low-dose colchicine. But he said there is no reason that the drug could not start being used right now.
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Explainer: How worried should we be about the Omicron variant?
December 14, 20218:37 PM GMT
Dec 14 (Reuters) - The Omicron coronavirus variant has been detected in 77 countries since it was first identified three weeks ago, fueling concerns that its large number of mutations will help it spread faster and evade protection provided by COVID-19 vaccines or prior infection. read more
Scientists await answers to these important questions:
IS IT MORE CONTAGIOUS?
The fast-spreading Delta variant remains dominant worldwide, and it is unclear whether Omicron is inherently more contagious than its predecessor, the World Health Organization (WHO) said in a brief issued on Sunday.
Early data suggests that the new variant is spreading faster than previous versions of the virus. In South Africa, the UK and Denmark, the number of new Omicron infections has been doubling every two days - "an alarming rate of growth," according to Dr. Eric Topol, director of the Scripps Research Translational Institute in La Jolla, California.
The Omicron variant accounted for about 44% of infections in London on Monday and was expected to become the dominant version of the virus there within 48 hours. read more
WHAT TYPE OF ILLNESS DOES IT CAUSE?
Scientists say it is still too early to know whether Omicron causes more or less severe COVID-19 than previous versions of the virus.
In South Africa, scientists have said they see no sign that the Omicron variant is causing more severe illness. Hospital data found that COVID-19 admissions were rising sharply in more than half of the country's nine provinces, but there have been comparatively few deaths and indicators such as the median length of hospital stay have been reassuring.
Among the 43 people identified as having the Omicron variant in the United States, most reported mild symptoms including coughing, congestion and fatigue.
People so far infected with Omicron have largely reported mild illness likely because many have at least some immunity from vaccinations and/or prior infection.
A more clear picture of Omicron's severity will come from analyzing outcomes for a larger number of infected people, particularly older, unvaccinated, previously uninfected patients.
More
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.
New method to measure spin waves brings us one step closer to spin superfluidity
Date: December 13, 2021
Source: Harvard John A. Paulson School of Engineering and Applied Sciences
Summary: Researchers have demonstrated the ability to both excite and detect spin waves in a two-dimensional graphene magnet, but they couldn't measure any of the wave's specific properties. Now, researchers have demonstrated a new way to measure the quintessential properties of spin waves in graphene.
Spin waves, a change in electron spin that propagates through a material, could fundamentally change how devices store and carry information. These waves, also known as magnons, don't scatter or couple with other particles. Under the right conditions, they can even act like a superfluid, moving through a material with zero energy loss.
But the very properties that make them so powerful also make them nearly impossible to measure. In a previous study, researchers at the Harvard John A. Paulson School of Engineering and Applied Sciences (SEAS) demonstrated the ability to both excite and detect spin waves in a two-dimensional graphene magnet, but they couldn't measure any of the wave's specific properties.
Now, SEAS researchers have demonstrated a new way to measure the quintessential properties of spin waves in graphene.
"In previous experiments, we only knew that we could generate spin waves, but we didn't know anything about their properties in a quantitative way," said Amir Yacoby, Professor of Physics and of Applied Physics at SEAS and senior author of the paper. "With this new work, we can determine all these quantitative numbers, including the energy and number of spin waves, their chemical potential, and temperature. This is an extremely important tool that we can use to explore new ways of generating magnons and get closer to achieving spin superfluidity."
The research is published in Nature Physics.
Measuring the properties of a spin wave is like measuring the properties of a tidal wave if water itself was undetectable. If you couldn't see water, how could you measure the speed, height, or number of tidal waves? One way would be to introduce something into the system that you can measure, like a surfer. The speed of the tidal wave could be detected by measuring the speed of the surfer.
In this case, Yacoby and his team used an electron surfer.
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To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm.
Friedrich August von Hayek.
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