Baltic Dry Index. 3115 +68 Brent Crude 70.90
Spot Gold 1775
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 03/12/21 World 264,474,902
Deaths 5,250,070
“Some of the valuations we saw in dot-com era were higher. But overally I consider this even crazier than the dot.com era.”
Charlie Munger.
Don’t look now but omicron infections are surging in South Africa and turning up all around the world. New infections in South Africa have risen from less than a thousand a day in October to over eleven thousand yesterday.
While new hospitalisation hasn’t kept pace, hospitalisations are on the rise.
Will this be the pattern everywhere as we head in towards Christmas and the New Year?
It’s still to early to know, but it’s more likely than not.
What does this mean for our slowing global economy? That’s to early to know too, but at worst it might mean a recession ahead along with continued, if hopefully slowing, inflation.
For stock casinos priced to perfection, that would be very bad news. For the Chinese real estate market, it probably spells disaster.
Don’t look now but the US Treasury yield curve seems to be flattening. What does someone know that we don’t?
This doesn’t seem, to this old dinosaur, to be a good time to be invested at all.
What, me worry?
Chairman Powell, with apologies to Mad Magazine.
Global stocks wobble as Didi delisting revives U.S.-China worries
December 3, 2021 2:48 AM GMT
SYDNEY, Dec 3 (Reuters) - Stocks fell on Friday after Chinese ride-hailing giant Didi said it would delist in New York, renewing concern about U.S.-China tensions and tech regulation, while oil headed for a sixth consecutive weekly drop on Omicron and rate hike worries.
S&P 500 futures fell about 0.5%. Hong Kong's Hang Seng (.HSI) dropped 1.3%, dragged by big tech names. MSCI's index of Asia shares outside Japan (.MIAPJ0000PUS) fell 0.7%.
The risk-sensitive Australian dollar fell 0.3% and at just below 71 cents is close to a one-year low.
Didi (DIDI.N) ran afoul of Chinese regulators by pushing ahead with its $4.4 billion U.S. IPO in July and said on Weibo it was looking to move its listing to Hong Kong. read more
"Delistings starting to happen gives some jitters over the uncertainty as to how this impacts on the broader U.S.-China picture," said Bank of Singapore analyst Moh Siong Sim.
The news about Didi comes a day after Singapore-based ride-hailing and delivery firm Grab (GRAB.O) slid more than 20% on its Nasdaq debut. The listing is the biggest on Wall Street by a Southeast Asian firm. read more
More broadly markets have lurched around on little hard news about Omicron this week, driving the CBOE volatility index (.VIX) toward its biggest one-week leap since the pandemic chaos of February 2020. Short-term yields have also jumped as investors bet on higher rates, even with the Omicron uncertainty.
Traders will need to wait at least another week or so for an early read on the variant's virulence or vaccine resistance. U.S. labour data due later on Friday is also in focus as a guide to rates.
Benchmark brent crude futures finished higher overnight at $69.67 a barrel, but have dropped more than 3% this week and are down more than 18% from October's three-year high.
So far, in the absence of Omicron details some governments have scrambled to shut borders anyway. But other policymakers - most notably the Federal Reserve - are cautiously proceeding apace with plans to move away from crisis-mode responses.
----"The Fed is not ignoring the threat from Omicron, but are choosing not to let it delay policy responses that suggest a more business as usual outlook," said Commonwealth Bank of Australia strategist Tobin Gorey.
"OPEC+ has done a similar thing," he added. "Neither has iced their planned policy changes...and both are perhaps examples that suggest lockdown responses to epidemic surges are becoming less likely."
The bond market's response to Powell's hawkish shift has been to jack up short term rates and push down long ones, reckoning that sooner hikes will end up curbing future inflation and growth, and sharply flattening the U.S. yield curve.
----"It's inflation, not growth, which is making the Fed accelerate tightening plans," said Kit Juckes, a strategist at Societe Generale in London.
"For the first time in ages, the risk to this U.S. economic cycle is that it comes to an end sooner than consensus forecasts expect," he said, forecasting that the U.S. dollar's upward momentum could slow into a peak around the middle of next year.
https://www.reuters.com/markets/europe/global-markets-wrapup-1-2021-12-03/
Yellen: Omicron 'could cause significant problems' for global economy
Treasury Secretary Janet Yellen said the omicron coronavirus variant "could cause significant problems" for the global economy.
"Hopefully it's not something that's going to slow economic growth significantly," Yellen said at the Reuters Next conference on Thursday, Reuters reported. "There's a lot of uncertainty, but it could cause significant problems. We're still evaluating that."
Global markets tanked after detection of the omicron variant was announced last week, with the Dow Jones Industrial Average falling by 900 points.
The new variant, which has already led some countries to impose international travel bans, could make supply chain issues and inflation worse, according to Yellen.
However, it could also slow the growth of the U.S. economy, which would ease some pressures on inflation, Yellen noted.
Yellen said the rise in inflation stems largely from the coronavirus pandemic and "somewhat" from President Biden's American Rescue Plan, according to Reuters.
Omicron cases have been detected in multiple U.S. states on Wednesday and Thursday, spurring conversation about new coronavirus restrictions.
More
https://news.yahoo.com/yellen-omicron-could-cause-significant-005345248.html
Market now is ‘crazier than the dot-com era’, says Berkshire Hathaway vice chairman Charlie Munger
Friday, December 3, 2021
Berkshire Hathaway vice chairman Charlie Munger, a longtime partner of Warren Buffett, has made his first appearance at the sixth annual Sohn conference in Australia on Friday.
The 97-year-old Munger, who is based in southern California, was interviewed by his long time follower in Australia Caledonia’s Dr Mark Nelson.
He told the conference many current sharemarket valutions were out of touch with fundamentals.
“Some of the valuations we saw in dot-com era were higher. But overally I consider this even crazier than the dot.com era,” he said.
Mr Munger said his optimism on Chinese opportunities had moderated, but he considered it an essential trading partner.
“Almost every capitalist is less enthusiastic about China than they were a year ago but I am not despairing about China at all,” he said.
“I don’t think we are going to have a war, and if we don’t have that then the only thing to do is to get along with China.
“Nothing could be more crazy — for either China or the United States — than not getting along with the other.”
---- Both Buffett and Munger were born in Omaha but Munger moved to the west coast to study at Caltech in Pasadena where he still lives.
Munger has been a long time fan of US tech stocks with Berkshire Hathaway now a major shareholder in Apple.
He is known for his dry comments on the madness of the investing crowds.
“I think all successful investment is value investing in the sense that you’re trying to get better prospects than you’re paying for,” Mr Munger told the conference.
“There’s no great company that can’t be turned into a bad investment, just by raising the price.”
He added: “The ordinary human experience is to be way overconfident in your own ideas, particularly if you’ve worked hard for them and express them to other people. The world is full of insanely overconfident people and of course they make lots of mistakes.”
In other news, Chinese companies are bailing on Chinese real estate firms. What do they know that we don’t? An omicron recession ahead?
China-listed firms rush to divest property businesses amid sector crackdown
December 3, 2021 1:34 AM GMT
SHANGHAI, Dec 3 (Reuters) - China-listed companies are increasingly divesting real estate businesses amid stricter regulatory scrutiny of the industry, according to filings and state media, in a year dominated by headlines of financial woe at China Evergrande Group (3333.HK).
Tightened lending curbs in the real estate industry early this year has exacerbated financial troubles at some property developers, triggering sector-wide liquidity stress.
China Evergrande, one of the country's biggest developers, has struggled to make payments on billions of dollars worth of bonds, while smaller peers have likewise missed payments or had their credit ratings downgraded.
On Thursday, liquor and meat producer Beijing Shunxin Agriculture Co Ltd (000860.SZ) said it planned to sell its entire stake in a money-losing property unit.
The announcement came two weeks after liquor product maker Hainan Yedao Group Co Ltd (600238.SS) said it would sell its 40% stake in a property company to focus on core businesses and improve liquidity.
Dozens of China-listed companies, including Xiamen ITG Group Corp Ltd (600755.SS), Aoyuan Beauty Valley Technology Co (000615.SZ) and Zhangtian Financial Group Co Ltd (000540.SZ) have announced plans to dispose of property businesses so far this year, the state-run Securities Times reported.
Reflecting the real estate sector's liquidity crunch, data from the China Trust Association showed outstanding investment from trust firms fell below 2 trillion yuan ($313.66 billion) at the end of the third quarter, down 26% from a year earlier.
Finally, in omicron updates, was it circulating far longer than recent testing suggests?
Omicron Covid variant likely circulating for longer — and more widely — than thought, experts say
LONDON — As more cases of the new omicron Covid variant emerge around the world, experts say it’s likely that the variant, first identified in South Africa last week, had already been circulating for some time.
The World Health Organization said on Wednesday that at least 23 countries from five of the six WHO regions have now reported cases of omicron, “and we expect that number to grow.”
The U.S. then became the 24th country to confirm its first case of omicron. It was detected in a fully vaccinated person in California, the Centers for Disease Control and Prevention confirmed on Wednesday. A second U.S. case was identified in a Minnesota man who developed symptoms after returning from New York City where he attended a convention from Nov. 19-21, Minnesota health officials said Thursday. He was also fully vaccinated and has since recovered, they said.
----The omicron variant, or B.1.1.529 as it’s formally known, was first reported to the WHO from South Africa on Nov. 24. The first known sample dated back to Nov. 9.
But there are now increasing signs that the variant was in circulation in other countries before South Africa’s health authorities alerted the world to its presence. There are a growing number of cases being discovered with no travel connection to the region, suggesting community transmission is taking place.
In Scotland in the U.K., for example, 9 cases have been detected that have been traced back to a “single private event” held on Nov. 20 and none of the individuals involved are believed to have any recent travel history to southern Africa.
More
Covid omicron variant expected to hit New York in ‘coming days,’ NY health commissioner says
The new, highly mutated Covid omicron variant is expected to hit New York state in the “coming days,” the state’s health commissioner said Thursday.
“We now have an exposure. We fully expect that it will be detected in the coming days.” said Dr. Mary Bassett, who stepped in as state health commissioner on Wednesday. Bassett was speaking at a news conference alongside New York Gov. Kathy Hochul after Minnesota officials confirmed a second U.S. omicron case in a local man who had just returned from a convention in New York City.
“There’s no question that it will be detected in New York state and in New York City, but it has not yet been detected,” Bassett said.
The Minnesota man, who was fully vaccinated and has since recovered, developed symptoms and was tested shortly after returning from the city to attend the Anime NYC 2021 convention at the Javits Center from Nov. 19 to 21, the department said Thursday.
Anime NYC did not immediately respond to CNBC’s request for comment.
Hochul noted that all convention attendees were required to get vaccinated and she recommended that they get tested. The governor added that the Anime convention organizers have a complete list of individuals who attended the two-day event, which will simplify contact tracing to identify any potential outbreaks.
“Everyone had to be vaccinated in order to participate in the first place,” Hochul said. “That’s why we anticipate if people who test positive, at least, based on this first individual, that the symptoms will be fairly minor.”
More
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Euro zone producer prices surge in Oct, unemployment eases
December 2, 2021 10:16 AM GMT
BRUSSELS, Dec 2 (Reuters) - Euro zone producer prices jumped more than expected in October, data showed on Thursday, driven mainly by a surge in energy prices, while unemployment eased again as the economy continued to recover from the pandemic-induced recession.
The European Union's statistics office Eurostat said prices at factory gates in the 19 countries sharing the euro rose 5.4% month-on-month for a 21.9% year-on-year surge.
Economists polled by Reuters had expected a 3.5% monthly rise and a 19.0% annual gain. Energy prices were the main reason behind the sharp increase, surging 16.8% on the month and rocketing 62.5% year-on-year.
Producer prices translate into higher prices for consumers and in November headline consumer inflation reached 4.9%, by far the highest level in the 25 years since the figure has been compiled, up from 4.1% a month earlier and well ahead of expectations for 4.5%.
More
Wheat rallies as demand flurry offsets virus worries
December 2, 2021 12:03 PM GMT
PARIS/SINGAPORE, Dec 2 (Reuters) - U.S. and European wheat futures rose sharply on Thursday as a series of import tenders and fears of rain damage to Australia's harvest took attention away from a new coronavirus variant.
Soybeans were firm as news of a fresh import purchase by China lent support.
Corn also rose, helped by higher crude oil prices and concern over dry growing conditions in Argentina and southern Brazil.
----In Europe, March wheat on Paris-based Euronext was up 2.4% at 294.25 euros ($333.71) a tonne.
Wheat futures extended a rebound from near three-week lows struck on Tuesday, when investor jitters over the impact of the Omicron variant had sparked a broad sell-off.
News on Thursday of an import tender by Saudi Arabia was a latest sign of buyers taking advantage of the recent pullback in prices.
Egypt's state buying agency on Monday made its biggest purchase in years while Tunisia is holding a tender on Thursday.
Renewed demand has put the focus back on ebbing availability of milling-grade wheat, with top supplier Russia considering further export restrictions and alternative supply from Australia made uncertain by torrential rain. read more
Supply concerns had last month pushed Chicago wheat to a nine-year high and Euronext to an all-time peak.
"The supply shortfall in the northern hemisphere is pushing buyers to go for more Australian wheat," said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney. "But we have more lower quality wheat crop."
Australian farmers are on course to harvest a record 34.4 million tonnes of wheat this year, but early harvest results have shown more lower quality readings.
More
Low stocks to support palm prices in coming months - top analysts
December 2, 2021 12:01 PM GMT
JAKARTA, Dec 2 (Reuters) - Palm oil production will likely remain soft until at least the first half of 2022, which would continue to provide cushion for prices in the coming months, despite caution of reaching peaks, top industry analysts said on Thursday.
Prices of the versatile vegetable oil have risen sharply this year, due to demand returning amid an easing of pandemic restrictions, coupled with disappointing output from major producers Indonesia and Malaysia that pushed prices to record highs.
"Prices would be supported in the next six months, they will continue to be supported by the global situation and still low stocks," Thomas Mielke, head of Hamburg-based analyst firm Oil World, told a palm oil conference.
However, he said the prices may have peaked and there is a potential price correction between now and June, which could bring palm oil futures to as low as 4,000 ringgit ($946.07) per tonne.
The Malaysian palm benchmark price, which hit a historical high in October, traded at 4,567 ringgit a tonne on Thursday.
At the same conference, Dorab Mistry, director of Indian consumer goods company Godrej International, said that Malaysian palm oil production was only expected to recover around May.
Output from Malaysia this year was seen "at best" at 18 million tonnes and next year at 19 million tonnes, Mistry said.
In rival Indonesia, 2022 production is seen up by at least one million tonnes, he said.
Mistry expected the benchmark contract to trade between 5,000-5,400 ringgit a tonne between now and February before sliding to between 4,800 and 4,000 ringgit in April to September.
More
Covid-19 Corner
This section will continue until it becomes unneeded.
Today some better Covid news. But it’s still too early to start counting South African chickens.
Sigh of relief in South Africa as Omicron variant appears to be ‘super mild‘ mutation with Covid death rate not jumping
Thursday 02 December 2021 6:00 am
The WHO and Coronavirus experts are increasingly convinced the new Omicron variant is ‘super mild’ and has, so far, not led to a jump in Covid death rates anywhere in Southern Africa.
The WHO is calling this morning for countries to drop travel restrictions and end the mass hysteria, and instead be cautiously optimistic as more and more reports out of South Africa suggest the new Omicron variant is not more lethal than the previous Delta variant.
In fact, there have been no reports of hospitalisations or deaths as a result of anyone being diagnosed with Omicron.
Most patients merely experience a severe headache, nausea, dizziness and a high pulse rate, according to hospitals and medics across Southern Africa.
However, the news of the new variant, first reported in South Africa, led to mass hysteria around the world: markets thumbed and dozens of countries imposed travel restrictions and additional checks, including the UK, US, EU, Israel, Australia and Japan after the new mutation popped up in the UK, Germany, Italy, Czech Republic and Israel among other countries.
Dr Angelique Coetzee, chair of the South African Medical Association, said this reaction was “medically seen, not justified.”
A GP for over three decades, and chair of the South African Medical Association, she was the first African doctor to suggest to local authorities Covid had mutated into a new strain.
Coetzee called the response from many European countries, including the UK, “just a hype.”
---- South Africa’s health minister Joe Phaahla also said the majority of cases of Omicron seen by doctors in his country have been “mild”.
Asked what he knows about how unwell people are who have it, Dr Phaahla said: “It is still too early at this stage.
He added he has heard from GPs that the “majority of the people they’ve been seeing are mild.”
“Our clinicians have not witnessed severe illness. Part of it may be because the majority of those who are positive are young people,” Dr Paahla added.
More.
UK scientists discover what causes blood clot complications in AstraZeneca Covid vaccine
Thursday 02 December 2021 7:11 am
UK scientists believe they have found the reason behind the extremely rare blood clot complications stemming from the Oxford/AstraZeneca vaccine.
According to an international team of researchers from Cardiff and the US, the reaction can be traced to the way the adenovirus used by the vaccine to shuttle the coronavirus’ genetic material into cells binds with a specific protein in the blood, known as platelet factor 4 (PF4).
Researchers think this may spark a chain reaction in the immune system which can culminate in the development of blood clots – a condition known as vaccine-induced immune thrombotic thrombocytopenia (VITT).
Professor Alan Parker, from Cardiff University’s School of Medicine, said: “VITT only happens in extremely rare cases because a chain of complex events needs to take place to trigger this ultra-rare side effect.
“Our data confirms PF4 can bind to adenoviruses, an important step in unravelling the mechanism underlying VITT. Establishing a mechanism could help to prevent and treat this disorder.
“We hope our findings can be used to better understand the rare side effects of these new vaccines – and potentially to design new and improved vaccines to turn the tide on this global pandemic,” he added.
Scientists from AstraZeneca also took part in the research, which was published in the journal Science Advances.
A spokeswoman for the company told the BBC: “Although the research is not definitive, it offers interesting insights and AstraZeneca is exploring ways to leverage these findings as part of our efforts to remove this extremely rare side effect.”
Special radiation can kill COVID-19 and polio virus, Israeli study shows
By ROSSELLA TERCATIN Published: NOVEMBER 25, 2021 17:58 Updated: NOVEMBER 28, 2021 19:31
A special form of radiation known as millimeter waves can kill 99% of corona and polioviruses from surfaces within two seconds, new research from scientists at Ariel University has shown. The results can have important implications on how to disinfect environments and equipment in a fast and efficient way.
“Our laboratory focuses on electromagnetic radiation sources,” said Prof. Moshe Einat from the Department of Electrical Engineering, and a co-author of the study recently published in the journal Environmental Chemistry Letters. “This type of radiation operates in the millimeter-wave regime, which means that they have a wavelength of about three millimeters. Just for comparison, the radiation from a cellphone has a wavelength of about 30 centimeters, and that from a microwave of about 12 centimeters.”
Millimeters waves have many applications. In the medical field, preliminary research has shown that they can be very effective in targeting tumors and killing cancerous cells. In addition, they can be used to transfer energy and electricity without using wires, as well as in the manufacturing process of unique materials such as synthetic diamonds.
“They make the process go much faster than the current ones,” Einat said.
After the coronavirus pandemic broke out, Einat and his team had the idea to use the waves to kill the virus, and they started cooperating with Dr. Gabi Gerlitz, a molecular biologist.
“We saw that the radiation could increase the temperature of the vials and therefore kill the virus,” said Garlitz, lead author of the study.
It does not appear that the technology can currently target the virus in the human body, “but it can be very useful for rooms, equipment and all forms of surfaces that need to be clear from any virus and coronavirus specifically,” he noted.
According to Garlitz, the big advantage offered by millimeter waves is that they can disinfect a surface very fast.
More.
Omicron: Tracking South African COVID 19 Spread
https://www.youtube.com/watch?v=e_pinIDSklQ
Approx. 9 minutes.
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.
Dogger Bank C: World’s largest offshore wind farm passes last milestone before £9bn construction
Thursday 02 December 2021 7:23 am
Joint venture partners SSE Renewables and Equinor said this morning that they have reached financial close on Dogger Bank Wind Farm C, the third phase of what will be the world’s largest offshore wind farm when complete in March 2026.
SSE Renewables and Equinor have started constructing the first two phases of the 3.6GW Dogger Bank Wind Farm with Eni, joint venture partner on phases A and B of the world-leading offshore wind project to be installed off the north east coast of England.
Now, with financial close being reached on the project’s third phase, Dogger Bank Wind Farm has passed the last milestone ahead of its construction delivery programme.
Total investment in Dogger Bank Wind Farm will be around £9bn, of which around £3bn is for phase C including offshore transmission capex in the range of £900-1000m.
Dogger Bank C has a capacity of 1,200MW and will generate around 6TWh. In total, Dogger Bank will produce enough clean, renewable electricity to supply 5 per cent of the UK’s demand, equivalent to powering six million UK homes.
Dogger Bank A and B is a joint venture between SSE Renewables (40 per cent), Equinor (40 per cent) and Eni (20 per cent).
Another weekend and a weekend to watch for omicron developments. By next weekend we should start getting better data on transmissibility and severity. Have a great weekend everyone.
"Hopefully it's not something that's going to slow economic growth significantly," Yellen said at the Reuters Next conference on Thursday, Reuters reported. "There's a lot of uncertainty, but it could cause significant problems. We're still evaluating that."
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