Baltic Dry Index. 2294 -77 Brent Crude 74.03
Spot Gold 1788
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 22/12/21 World 276,593,547
Deaths 5,385,351
"Let's make sure that there is certainty during uncertain times in our economy."
President George W. Bush,
In the stock casinos, more wild delusional betting on the everything bubble continuing forever.
In the real world, omicron is fast disrupting the real economy. A Chinese stocks exodus looms for Chinese stocks traded in New York. A disaster looms for China’s property sector next quarter.
Add in the Fed speeding up its bond taper while global and US inflation continues to rise, and to this old dinosaur markets watcher this seems more like a last chance saloon exit rally. Where will the greater fool stock buyers come from next quarter?
Global stocks rise sharply with investors' renewed risk appetite; oil settles up
December 21, 2021 11:02 PM GMT
NEW YORK, Dec 21 (Reuters) - Wall Street closed significantly higher on Tuesday after a bruising session the prior day, with oil prices also gaining as investors sought riskier assets despite surging cases of the Omicron coronavirus variant around the world.
U.S. President Joe Biden said on Tuesday he would be taking steps to fight the Omicron variant, by opening federal testing sites in New York City and buying 500 million at-home tests Americans can order online for free. read more Israel is set to offer a fourth dose of the COVID-19 vaccination to people over 60 years old. read more
World shares had fallen earlier in the week after Omicron infections multiplied around the world, but strong corporate earnings and reports that Moderna Inc's (MRNA.O) COVID-19 vaccine provides protection against the variant gave investors hope on Tuesday. U.S. stocks had also taken a hit after Biden's $1.75 trillion spending bill was dealt a potentially fatal blow on Sunday. read more
"We think this was kind of overdue over the past couple of weeks. We're kind of set up for a rally in time for Santa Claus, which officially begins next Monday," said Scott Brown, technical market strategist at LPL Financial, explaining that a so-called Santa Claus rally can happen in the last five trading days of the year and first two of the new year.
"We think we've had a little bit of a washout. We saw a lot of fear rush into the market."
The Dow Jones Industrial Average (.DJI) rose 1.6% to 35,492.7, and the S&P 500 (.SPX) gained 1.78% to 4,649.23. The Nasdaq Composite (.IXIC) added 2.4% to close at 15,341.09.
MSCI's gauge of stocks across the globe (.MIWD00000PUS) gained 1.61%.
Oil prices settled up more than 3% despite signs of improving supply and concerns the spread of Omicron would curb travel and crimp demand for fuel.
Brent crude settled up $2.46, or 3.4%, at $73.98 a barrel, and U.S. West Texas Intermediate (WTI) crude rose $2.51, or 3.7%, to $71.12 a barrel.
More
https://www.reuters.com/markets/europe/global-markets-wrapup-4-2021-12-21/
Brace for a $600 bln Chinese escape from New York
December 22, 2021 2:07 AM GMT
HONG KONG, Dec 22 (Reuters Breakingviews) - The party’s over for Chinese companies in New York. They’re being squeezed by lawmakers in both Beijing and Washington over data protection, accounting oversight plus other crackdowns and political spats. New U.S. rules that would usher out lingerers won’t apply for two years, but waiting until the last minute only will make leaving harder.
New American laws will force companies to delist read more if their audit papers can’t be reviewed by U.S. bean-counter watchdogs. Assume no change in China’s reluctance to clear the way, and some 270 enterprises are in danger of getting the boot in 2024.
Beijing’s own recent efforts to control corporate funding options and tighten security over consumer information also have spooked overseas investors. Nasdaq’s Golden Dragon index of U.S.-listed Chinese stocks fell roughly a third from the start of 2021 through early December while mainland-listed blue-chip counterparts were broadly flat. The ability to fetch higher valuation multiples had been one key Manhattan attraction.
Even if the current pressures ease, U.S.-Sino tensions will persist. Nearly two dozen companies, worth some $800 billion, have sought a dual listing in Hong Kong. Another 100 or so with a total market capitalisation of about $400 billion, led by e-commerce outfit Pinduoduo (PDD.O), meet the Asian hub’s standards, Bank of America analysts reckon. It’s easy to see half that combined sum relocating its centre of trading in 2022. Indexers including MSCI and FTSE already use the Hong Kong price for Alibaba (9988.HK), and others.
As the queue grows, so does the danger of investor fatigue and valuation discounts. Similarly, buyouts could be complicated by higher borrowing costs or pushy shareholders. Asian private equity firm PAG recently teamed up with hedge fund Oasis to make an offer for online marketer iClick Interactive Asia (ICLK.O) that will at least force its controlling owner to lift any bid. Some 150 companies worth a combined $40 billion probably will need to be acquired before seeking another listing venue.
The bottom line is that U.S.-listed Chinese companies will spend much of 2022 scrambling to replenish capital. The race will be on before escape routes get crowded. Didi Global (DIDI.N) is already hailing a $32 billion ride home. Others will have to rush to beat the traffic.
More
https://www.reuters.com/markets/asia/brace-600-bln-chinese-escape-new-york-2021-12-22/
China’s property developers have more than big bond payments coming up
BEIJING — China’s struggling real estate developers face a growing number of repayment deadlines in the next few months.
Real estate giant China Evergrande finally defaulted earlier this month without immediately sparking the widespread contagion that global investors had worried about. But the amount of debt and bills the industry faces will only grow in coming months.
Chinese developers face $19.8 billion in maturing offshore, U.S.-dollar denominated bonds in the first quarter, and $18.5 billion in the second, estimates Nomura analysts Ting Lu and Jing Wang.
That first-quarter amount is nearly double the $10.2 billion in maturities of the fourth quarter, the analysts said in a note Tuesday.
Assuming the U.S. dollar holds steady at 6.4 Chinese yuan, the analysts said that including onshore, yuan-denominated bonds brings the total amount of maturing bonds to 191 billion yuan ($29.84 billion) in the fourth quarter, 210 billion in the first and 209 billion in the second.
“However, in view of potential RMB depreciation pressures and surging offshore funding costs amid rising credit defaults, we believe the repayment pressure for developers in the offshore bond markets could be even higher,” the Nomura analysts said.
The yuan, also called the renminbi or RMB, has strengthened against the greenback in recent weeks to trade around 6.37 yuan per U.S. dollar.
But going forward, Fitch Ratings said it expects the yuan to weaken due to a decline in overseas demand for Chinese products and divergence in China’s monetary policy from the U.S. The People’s Bank of China has lowered some key rates in the last week, while the U.S. Federal Reserve has been signaling more aggressive removal of stimulus.
Fitch expects the yuan to weaken to 6.7 versus the U.S. dollar by the end of next year, analysts said in a report Thursday.
Migrant worker wages
The Nomura analysts pointed out another looming repayment deadline for Chinese real estate developers is deferred wages for construction workers, which are due before the Lunar New Year, which kicks off on Jan. 31.
“Unlike other sectors, the construction sector pays a majority of migrant workers’ annual compensation right before the end of each lunar year,” the analysts said. “Based on our informal survey, deferred wages account around two-thirds of their annual pay.”
The analysts estimate about 1.1 trillion yuan in deferred wages is owed to construction workers by private developers. The report noted that paying these construction workers in time is especially critical for developers this time around since the central government has emphasized that stability — including social stability — is a priority next year.
“Failing to pay deferred wages could be severely punished by both the central government and related local governments,” the analysts said, adding that “there is tremendous reputational risk for those developers and constructors that could not pay deferred wages in a timely manner, especially if social protests are triggered.”
Omicron casts a new shadow over economy’s pandemic recovery
Just as Americans and Europeans were eagerly awaiting their most normal holiday season in a couple of years, the omicron variant has unleashed a fresh round of fear and uncertainty — for travelers, shoppers, party-goers and their economies as a whole.
The Rockettes have canceled their Christmas show in New York. Some London restaurants have emptied out as commuters avoid the downtown. Broadway shows are canceling some performances. The National Hockey League suspended its games until after Christmas. Boston plans to require diners, revelers and shoppers to show proof of vaccination to enter restaurants, bars and stores.
A heightened sense of anxiety has begun to erode the willingness of some people and some businesses to carry on as usual in the face of the extraordinarily contagious omicron variant, which has fast become the dominant version of the virus in the United States.
Other people are still traveling, spending and congregating as they normally do, though often with more caution. Holiday air travel remains robust. Many stores and restaurants are still enjoying solid sales. And omicron has yet to keep audiences away from movie theaters in significant numbers.
---- At the same time, no one knows yet what omicron will ultimately mean for the health of the Western economies, which have endured a wild ride of downturns and recoveries since early 2020.
“These mutations keep coming,” said Robin Brooks, chief economist at the Institute of International Finance. “What is the probability that sometime we get a really nasty one? No one has any idea. This thing is mutating, and it’s very, very hard to say.’’
Will omicron cause outbreaks at factories and ports, disrupt operations and worsen supply chain bottlenecks that have forced up prices and contributed to the hottest U.S. inflation in decades?
Will it mean people will hunker down at home again and spend less on services — restaurant meals, concerts, hotel stays — which could weaken the economy but potentially defuse inflationary pressures?
Will return-to-office plans for white collar workers be put on hold indefinitely, deepening the hit to many cities’ downtown businesses?
Or will omicron prove a blip that scarcely slows what has become a surprisingly strong recovery from the short but intense pandemic recession?
More
Finally, will USA really become the dominant player in LNG sales next year?
Germany goes winter insane.
So much for COP26.
U.S. to be world's biggest LNG exporter in 2022
Tue, December 21, 2021, 6:05 AM
(Reuters) - The United States is set to become the world's biggest liquefied natural gas (LNG) exporter in 2022, surpassing Qatar and Australia, and may hold that title for years to come.
In a year when China and other large economies in Europe and Asia scrambled to source enough supply for heating and power generation, the United States was sitting on a bevy of supply - one that will grow in coming years.
Global LNG demand has hit record highs each year since 2015, due mostly to surging demand in China and the rest of Asia. Much of that global appetite has been met by steadily rising U.S. LNG exports, which have reached new records every year since 2016 and is poised to continue in 2022.
The U.S. Energy Information Administration projects U.S. LNG exports will reach 11.5 billion cubic feet per day (bcfd) in 2022. That would account for roughly 22% of expected world LNG demand of 53.3 bcfd next year, according to analysts at Goldman Sachs and would outpace both Australia and Qatar, the two largest exporters at present.
One billion cubic feet is enough gas for about 5 million U.S. homes for a day.
The United States should remain the biggest LNG exporter by capacity until around 2025, when Qatar could regain the lead as its North Field expansion starts to enter service. But if some U.S. developers start building new LNG export plants, the United States may not give up the crown.
More
https://www.yahoo.com/news/u-worlds-biggest-lng-exporter-060556992.html
Germany Is Closing Half of Its Reactors at Worst Possible Time
Tue, December 21, 2021, 6:00 AM
(Bloomberg) -- Germany is set to close almost half of its nuclear power capacity before the end of the year, putting further strain on European grids already coping with one of the worst energy crunches in the region’s history.
The shutdowns of Grohnde, Gundremmingen C and Brokdorf -- part of the country’s nuclear phaseout -- will leave just three atomic plants, which will be taken offline by the end of 2022. Beyond the squeeze on supply, the closures remove a key source of low-carbon power in a nation where emissions are on the rise.
After the 2011 Fukushima disaster, Germany vowed to ditch all of its reactors. At the time, the country was a leader in renewables, but the phaseout has left it more reliant on coal and lignite for electricity generation. The nation fell behind in the net-zero race after making major concessions to the coal lobby, to protesters against wind farms and to manufacturers, particularly carmakers.
“From a pure emissions perspective, it was always a questionable idea to shut down German nuclear before the plants have reached the end of their lifetime,” said Hanns Koenig, head of commissioned projects at Aurora Energy Research. “It was always clear that the nuclear phaseout would need coal and gas plants to run more and therefore cause substantial extra emissions.”
Atomic plants are designed to generate power around the clock, providing valuable backup when the wind doesn’t blow or the sun doesn’t shine. While the shutdowns have been known about for years and are unlikely to cause a spike in prices, the removal of 4 gigawatts of baseload output highlights a dwindling reserve of buffer capacity in Germany. It’s one reason why prices are higher next year: electricity for delivery in 2022 has jumped more than fivefold this year.
The timing could hardly be worse. Power prices are near record levels across Europe, and Germany will need to rely on generation from costly gas and coal for another 20 years or so -- before they too are phased out. Keeping the nuclear stations open any longer isn’t an option since that would require hundreds of millions of euros of investment, Koenig said.
Increased reliance on fossil fuels will boost emissions further, and Germany is not alone. A number of countries in Europe have ramped up coal-fired power production in recent months as gas supplies failed to meet rebounding demand and wind generation fell short.
More
https://www.yahoo.com/news/germany-closing-half-reactors-worst-060000902.html
Socrates.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
German consumer morale darkens as Omicron raises spectre of recession
December 21, 2021 10:46 AM GMT
BERLIN, Dec 21 (Reuters) - German consumer morale will deteriorate further at the start of next year, a survey showed on Tuesday, as the COVID-19 pandemic and the rise of the Omicron variant push Europe's largest economy to the brink of a recession during the winter.
The Nuremberg-based GfK market research institute said its consumer sentiment index, based on a survey of about 2,000 Germans, fell to -6.8 points heading into January, against a revised -1.8 points a month earlier.
The January reading was the lowest since June and compared with a Reuters forecast for a smaller drop to -2.5.
The Berlin-based DIW research institute said it expects the country's economy to shrink in the last quarter of the year.
At the same time, prospects for the first quarter of 2022 look grim as industry continues to suffer from supply shortages and consumption could be further hit by more restrictions, the economy's last pillar of support, DIW said.
The Ifo economic institute this month said that it expected Germany's economic output to shrink by 0.5% on the quarter over October to December and stagnate from January to March.
This would bring Germany close to a technical recession, defined as two consecutive quarters of contraction.
GfK economist Rolf Buerkl said the high infection rates of the fourth coronavirus wave, triggered by the Delta variant, has already resulted in restrictions for retailers and service providers this month.
Germany banned unvaccinated people from entering non-essential establishments at the beginning of the month in an attempt to limit the spread of the disease. read more
The so-called 2G rule - which restricts access to vaccinated or recovered people - has hit the Christmas business badly, Buerkl added.
"The outlook for the beginning of next year is also subdued against the background of the rapid spread of the Omicron variant," Buerkl said.
The unusually high inflation rate in Germany is also dampening consumer morale, he added.
More
Energy crisis will stretch into spring with Ofgem expected to hike household bills by £700
By: Nicholas Earl Tuesday 21 December 2021 11:20 am
The energy crisis will extend into the new year, with UK households facing a “painful” £700 increase in their energy bills, warns Investec.
Analysts at the investment bank estimate the capped bill for average use could rise from £1,277 to £2,000 when the market regulator reviews the current limits next April.
The price hike would represent a 56 per cent increase in costs, and an approximately £60 per month rise in consumer bills.
The possibility of the price cap being raised next year has been established in the media for a while, with Ofgem increasing the price cap by 12 per cent in October and chief executive Jonathan Brearley confirming to BBC Radio 4’s Today Programme earlier this month “costs have to be passed on to consumers” where there are “legitimate price increases.”
Investec’s forecasting also follows Cornwall Insights gloomy predictions earlier this week, expecting the cap will increase to a slightly-less-steep £1,865 per annum before potentially soaring to £2,240 by next winter.
Nevertheless, the sheer scale of the price rises will have implications for households and the wider market.
---- Nathan Piper, head of oil and gas research at Investec, calculates the additional bill would come to around £18bn, which is roughly 0.8 per cent of 2021 GDP and 1.4 per cent of total consumer spending.
Consequently, he predicts this would add 1.8 percentage points to headline inflation in April 2022.
Gas prices are set to remain high this winter, following multiple rallies on UK and European gas benchmarks, amid shortages in supply and storage alongside increased demand in a colder-than-expected winter.
Piper also points to delays over certifying the Nord Stream 2 pipeline, which is unlikely to be greenlit until next summer at the earliest, amid sustained geopolitical uncertainty and France shutting down its nuclear power sites.
He warned: “This is not a price spike, we believe there is a high likelihood of both prolonged and even higher gas prices through winter with an impact that stretches out over the next two years.”
More
Henry Hazlitt.
Covid-19 Corner
This section will continue until it becomes unneeded.
Stunning COVID Data From Denmark (But Not For The Reason You've Been Told)
Tuesday, Dec 21, 2021 - 02:00 AM
The Danes are now publishing extremely detailed daily data about Covid cases and hospitalizations - not just about Omicron, but all Covid variants.
And, in news that will surprise precisely no one who has been alive the last two years, they paint a picture entirely different than what the media claims.
Omicron - which continues to appear significantly less dangerous though more transmissible than earlier variants of Covid - has been used as a cover for vaccine failure.
Most new Covid cases in Denmark occur in people who are vaccinated or boosted - and that is true for both Omicron and earlier variants. More than 76 percent of non-Omicron Covid infections in Denmark are in vaccinated people, along with about 90 percent of Omicron infections.
Further, only 25 of the 561 people currently hospitalized in Denmark for Covid have the Omicron variant. The Danes do not provide an exact number for patients in intensive care with Omicron, saying only that it is fewer than five.
Perhaps the most stunning fact about Omicron and Denmark is that its rise actually parallels a marked slowdown in the growth of Danish hospitalizations and intensive care patients. Those rose roughly fivefold between mid-October and late November, as the Danes left the happy vaccine valley. Since then they have barely budged, rising about 20 percent.
---- The Danish data also show that people with Omicron are both less likely to be hospitalized than those with other variants and released from the hospital much more quickly - in line with what South African health authorities have reported.
On Friday, for example, the Danes reported that the total number of hospital patients with Omicron since the epidemic began reached 77, up by 20 patients from Thursday.
But the number of Omicron patients currently hospitalized rose only by eight between Thursday and Friday, from 17 to 25. Thus 12 out of the 17 Omicron patients on Thursday appear to have been released overnight.
Compared to Monday’s report, the trend is even more clear. The number of Omicron cases has roughly tripled, but the number of people hospitalized has barely budged, from 14 to 25.
SOURCE: https://www.ssi.dk/-/media/cdn/files/covid19/omikron/statusrapport/rapp…
https://www.ssi.dk/-/media/cdn/files/covid19/omikron/statusrapport/rapp…
About the only reason for concern in any of the Danish data is that Omicron still appears to be preferentially infecting younger people - though not people under 15, who are more likely to be unvaccinated.
Overall, though, the figures out of Denmark largely back those from South Africa - and make clear that the reason that Europe has seen a massive rise in cases and hospitalizations this fall has nothing to do with Omicron and everything to do with vaccine failure.
https://www.zerohedge.com/covid-19/stunning-covid-data-denmark-not-reason-youve-been-told
Thailand reinstates mandatory COVID-19 quarantine over Omicron concerns
December 21, 2021 9:13 AM GMT
Dec 21 (Reuters) - Thailand will reinstate its mandatory COVID-19 quarantine for foreign visitors and scrap a quarantine waiver from Tuesday due to concerns over the spread of the Omicron variant of the coronavirus.
The decision to halt Thailand's "Test and Go" waiver means visitors will have to undergo hotel quarantine, which ranges between 7 to 10 days.
Meanwhile, a so-called "sandbox" programme, which requires visitors to remain in a specific location but allows them free movement outside of their accommodation, will also be suspended in all places except for the tourist resort island of Phuket.
"After Dec. 21, there will be no new registrations for 'Test and Go', only quarantine or Phuket sandbox," said deputy government spokeswoman Rachada Dhanadirek.
The announcement came a day after Thailand reported the first case of local transmission of the Omicron variant. read more
It also came weeks after Thailand reopened to foreign visitors in November, ending nearly 18 months of strict entry policies that contributed to a collapse in tourism, a key industry and economic driver that drew 40 million visitors in 2019.
More
Singapore to suspend new ticket sales for quarantine-free travel starting Thursday
Singapore will freeze new ticket sales for quarantine-free travel in an effort to limit exposure to imported omicron cases, the health ministry said in a statement Wednesday.
The suspension, which begins Thursday and runs through Jan. 20, applies to flights and buses into the city-state.
Travelers who have already booked tickets under Singapore’s vaccinated travel lane arrangements will still be able to enter the country without serving quarantines.
“Our border measures will help to buy us time to study and understand the Omicron variant, and to strengthen our defences, including enhancing our healthcare capacity, and getting more people vaccinated and boosted,” the health ministry said.
Singapore has so far detected 65 imported omicron cases. As of Monday, there were six local omicron cases in the country, the health ministry said.
About 96% of Singapore’s eligible population is fully vaccinated, or about 87% of the total population, according to health ministry data. More than a third of the total population (34%) has received a booster. Shots for children between 5 and 11 years old have been approved and are set to begin Monday.
When the ticket sale suspension ends on Jan. 20, the number of people allowed to visit Singapore without serving quarantines will be temporarily reduced, according to the press release.
The health ministry said the Civil Aviation Authority of Singapore and the Ministry of Trade and Industry will provide more details on vaccinated travel lanes via air and land, respectively.
Travelers who enter Singapore under quarantine-free arrangements have to take a PCR test on arrival, and daily antigen rapid tests for the first seven days in the country.
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.
Today and tomorrow, some serious reading on Tesla and Alibaba. Perhaps someone at the SEC should be reading this stuff too!
Sadly, I’m not qualified to know if this masterclass take-down is correct, but I’ve no reason to think that it isn’t. Perhaps someone at the SEC might care to comment.
Perhaps not Chairman Gensler, he probably doesn’t know much more about this sort of thing than me, but there must be at least a few bright lads and ladettes employed there that know how to read these filings.
Where’s that accountant who tried to blow up the Madoff fraud, unsuccessfully as it turned out, before Bernie Madoff managed to do it himself?
It’s not about Tesla…or Alibaba…..it’s much bigger than that….
December 15, 2021
As you know, the primary value proposition I try to bring to my readers is:
I scour the planet for financial reports and government documents that nobody reads or cares about. I read them, interpret them and explain exactly how these documents and the underlying transactions/trends will eventually change your life forever. Hey, it’s what I do. I consider it a public service. You can thank me later…
So let’s start today’s discussion with a general review and primer on “how to read Chinese SEC filings”… then we’ll apply what we’ve learned to both the last Tesla 10-K and the current Alibaba 6-K , 20-F (and prior filings) and we’ll see what conclusions we can draw. After that, we’ll move on and dig into the Cayman Islands Monetary Authority (CIMA) Fact Sheets and Investments Statistical Digest and finish up with a review of the Financial Stability Board’s (FSB) annual Global Monitoring Report on Non-Bank Financial Intermediation as it applies and compares to the Observatory of Economic Complexity (OEC) visualization data. What fun! Are you ready!
More, much, much more!
http://www.deepthroatipo.com/its-not-about-tesla-or-alibaba-its-much-bigger-than-that/
U.S. Securities and Exchange Commission.
The mission of the SEC is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. The SEC strives to promote a market environment that is worthy of the public's trust.
“Why a four-year-old child could understand this report. Run out and find me a four-year-old child. I can’t make head nor tail out of it.”
The SEC, with apologies to Groucho Marx.
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