Baltic Dry Index. 1873 -154 Brent Crude 84.42
Spot Gold 1826
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 14/01/22 World 320,959,141
Deaths 5,539,206
No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth!
Ronald Reagan.
Rising inflation sinks all stocks? Well not quite but close.
Hawkish statements by Fed members, even if talk is cheap, don’t help either, nor did yesterday’s whipsaw action in the Dow.
But this week’s big under reported story is the almost total failure of the diplomatic talks over the Ukraine.
If it happens, a European war will easily trump inflation and the Fed raising interest rates if they dare.
Commodities will soar.
Japan stocks drop nearly 2%; data shows China’s exports beat expectations
SINGAPORE — Stocks in Japan led losses in major Asia-Pacific markets on Friday as the recent rally in U.S. stocks broke momentum with the Nasdaq snapping a three-day winning streak.
Japan’s Nikkei 225 fell nearly 2% while the Topix tumbled 2%. Autos and tech stocks declined. SoftBank was down 2.25%, while Sony lost nearly 3%.
Hong Kong’s Hang Seng index fell 0.71. The Hang Seng Tech index lost 1.64%, as Alibaba declined 3.56% and JD fell 4%.
Mainland Chinese stocks struggled for direction, as the Shanghai composite declined 0.32%, while the Shenzhen component rose 0.48%.
South Korea’s Kospi was down 1.48%, and Australia’s ASX 200 also dipped 0.96%, with bank stocks falling.
Meanwhile, South Korea’s central bank raised its benchmark rate by 25 basis points to 1.25%, the highest since March 2020 and back to the rate it was at before the pandemic, according to Reuters.
In corporate news in the region, Citi is set to sell its retail businesses in four Southeast Asian countries — Indonesia, Malaysia, Thailand and Vietnam — to Singapore lender United Overseas Bank (UOB). UOB said Citi’s consumer business had a total net asset value of about $4 billion Singapore dollars ($2.9 billion).
----China’s exports grew slightly more than expected in December, while imports rose less than expected, according to customs data released Friday.
Exports rose by 20.9% year-on-year in U.S. dollar-terms, above the 20% increase forecast by a Reuters poll. Imports grew by 19.5% in U.S. dollar-terms, missing expectations of a 26.3% increase.
Overall, in 2021, total exports rose 29.9%, compared to a 3.6% gain in 2020. Imports jumped 30.1% in 2021, after dropping 1.1% in 2020, according to Reuters.
“Exports exceeded expectation again in December, which may reflect the Omicron damage to the global supply chain. Export orders may have shifted to China from other developing countries,” Zhiwei Zhang, chief economist at Pinpoint Asset Management, wrote in a note following the data release.
“On the other hand the global demand remained strong, as developed countries maintain their policies to keep economic activities unrestricted,” he added.
Over on Wall Street, stocks struggled on Thursday as a rebound in tech stocks faded, erasing gains from earlier this week.
The S&P 500 slid 1.42% to 4,659.03, while the Nasdaq Composite fell 2.51% to 14,806.81. The Dow Jones Industrial Average dropped 176.70 points to close at 36,113.62 after rising more than 200 points earlier in the day.
Inflation worries continued to be in focus, as data stateside showed the producer price index, which measures prices received by producers of goods, services and construction, was up 0.2% for December. Overall, wholesale prices jumped nearly 10% in 2021, the highest calendar-year increase ever in data going back to 2010.
More
https://www.cnbc.com/2022/01/14/asia-pacific-stocks-china-december-trade-data-inflation-worries.html
Gold set for best weekly gain since Nov as U.S. dollar, yields ease
January 14, 2022 4:05 AM GMT
Jan 14 (Reuters) - Gold was flat on Friday but the metal was set for its best weekly gain since November, buoyed by a weaker U.S. dollar and Treasury yields, as traders awaited more economic data for clarity about the Federal Reserve's tapering policy.
Spot gold was flat at $1,824.25 per ounce by 0248 GMT, after snapping a four-session rally on Thursday. U.S. gold futures edged up 0.2% to $1,824.30.
The metal has climbed about 1.6% this week, recouping most of the losses of the first week of 2022.
"Gold had been buoyant this week on expectations the Fed will not have to hike interest rates too aggressively," Phillip Futures analyst Avtar Sandu said in a note.
"However, the yellow metal's failure to break above $1,830 and hawkish comments from two Fed bankers caused the contract to retreat to close lower Thursday."
The dollar was headed for its largest weekly fall in eight months on Friday, making the greenback-priced gold cheaper for buyers holding foreign currencies. U.S. 10-year Treasury yields eased off two-year highs hit earlier this week.
Fed Governor Lael Brainard on Thursday became the latest and most senior U.S. central banker to signal that the Fed is likely to start raising interest rates in March. read more
----Investors await U.S. economic data including retail sales and industrial production due later in the day, after December inflation print came in line with expectations. read more
Sandu said gold was moving back and forth in consolidation and a break above the $1,830 resistance would take prices to the next resistance at $1,860.
Spot silver was flat at $23.08 an ounce, platinum was up 0.2% at $971.61, and palladium fell 0.9% to $1,869.91.
In war news, will 2022 be a repeat of 1914? Neither, the USA, NATO or Russia are listening to each other, merely talking at each other.
U.S. officials prepare for escalation as NATO-Russia talks end with no resolution on Ukraine tension
WASHINGTON – U.S. representatives and NATO members Thursday emerged from several days of high-stakes discussions with top Russian officials with warnings that the situation along the Ukraine border is getting worse.
“The drumbeat of war is sounding loud and the rhetoric has gotten rather shrill,” U.S. diplomatic official Michael Carpenter said of the discussions with Moscow.
Moscow’s intentions remain unclear, he added, after the talks in Europe wrapped up.
“There are close to 100,000 troops on the Russian side of its border with Ukraine. Their presence and the live-fire measures being carried out are raising many questions about Moscow’s intention,” he said, adding that the U.S. had seen advanced weaponry, artillery systems, electronic warfare systems and ammunition also staged along the border.
“That begs a lot of questions about what Russia’s intentions are. So we have to take this very seriously and we have to prepare for the eventualities that there could be an escalation,” said Carpenter, who acts as the permanent representative of the U.S. to the Organization for Security and Cooperation in Europe.
In Washington, national security advisor Jake Sullivan said American intelligence agencies have determined that Russia is “laying the groundwork to have the option of fabricating a pretext for an invasion – including through sabotage activities and information operations – by accusing Ukraine of preparing an imminent attack on Russian troops in Eastern Ukraine.”
“We saw this playbook in 2014, and they are preparing this playbook again,” Sullivan told reporters at the White House, adding that the United States is “ready either way.”
More
Europe at greatest risk of war in 30 years, Poland warns
January 13, 2022 11:02 AM GMT
VIENNA, Jan 13 (Reuters) - Europe is nearer war than it has been in 30 years, Poland's foreign minister warned during the third round of diplomacy this week aimed at defusing tensions over Russia's demand that Ukraine never be allowed to join NATO.
Addressing envoys from the 57 members of the Organization for Security and Cooperation in Europe (OSCE), Zbigniew Rau did not name Russia, but listed a string of conflicts in which Moscow's involvement has been alleged.
"It seems that the risk of war in the OSCE area is now greater than ever before in the last 30 years," Rau said in a speech outlining his country's priorities as it holds the OSCE's rotating chairmanship this year.
"For several weeks we have been faced with the prospect of a major military escalation in Eastern Europe."
Poland is among the NATO members that are most hawkish in confronting what it sees as Russia's revisionist ambitions in Eastern Europe.
"We should focus on a peaceful resolution of the conflict in and around Ukraine," Rau added, calling for "full respect of the sovereignty, territorial integrity and unity of Ukraine within its internationally recognised borders".
Russia has deployed more than 100,000 troops near its borders with Ukraine, which is already battling Moscow-backed separatists in its east. Russia annexed Ukraine's Crimea region in 2014.
Thursday's talks in Vienna will be the first this week in which Ukraine will be represented, and there only on a low, ambassadorial level. Ministerial talks between Russia and the U.S. in Geneva on Tuesday and between Russia and NATO in Brussels on Wednesday failed to yield clear progress.
The Kremlin on Thursday gave a bleak assessment of Russia's security talks with the United States and NATO this week, describing them as "unsuccessful" and saying there was disagreement on fundamental issues. read more
https://www.reuters.com/world/europe/europe-greatest-risk-war-30-years-poland-warns-2022-01-13/
Russia says talks on Ukraine crisis at "dead end", threatens action
January 13, 2022 12:19 PM GMT
VIENNA/MOSCOW, Jan 13 (Reuters) - Russia said on Thursday it was hitting a dead end in its efforts to persuade the West to bar Ukraine from joining NATO and roll back decades of alliance expansion in Europe, and threatened unspecified consequences in response.
Deputy Foreign Minister Sergei Ryabkov was quoted by TASS news agency as saying Russian military specialists were providing options to President Vladimir Putin in case the situation around Ukraine worsens, but diplomacy must be given a chance.
He said talks with the United States in Geneva on Monday and with NATO in Brussels on Wednesday had shown there was a "dead end or difference of approaches", and he saw no reason to sit down again in the coming days to re-start the same discussions.
Russia has forced the United States and its allies to the negotiating table by assembling around 100,000 troops near the border with Ukraine, while denying it plans to invade.
It gave a stark assessment of this week's diplomacy before it had even finished, as talks were under way in Vienna on Thursday at the 57-nation Organization for Security and Cooperation in Europe. (OSCE).
"If we don't hear constructive response to our proposals within reasonable timeframe & aggressive behaviour towards (Russia) continues, we'll have to take necessary measures to ensure strategic balance and eliminate unacceptable threats to our national security," the Russian mission to the OSCE said on Twitter, quoting its Ambassador Alexander Lukashevich.
More
https://www.reuters.com/world/europe/russia-says-us-nato-talks-so-far-unsuccessful-2022-01-13/
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Column: Escalating U.S. inflation forces macro policy rethink: Kemp
January 14, 2022 1:00 AM GMT
LONDON, Jan 13 (Reuters) - U.S. consumer prices are rising at the fastest rate for decades, a sign that aggregate demand for goods and services from households and businesses is overwhelming the economy’s productive capacity.
Prices for all goods and services increased at a compound rate of 4.2% per year over the two years ending in December 2021, the fastest two-year increase since 1991 (https://tmsnrt.rs/3qnnbYl).
At this rate, the price level will double and nominal wages will halve every 17 years, fast enough to ensure that inflation has become much more noticeable for households and businesses and has risen up the political agenda.
Contrary to the earlier views of policymakers at the White House and the Federal Reserve, the increase in prices has been neither transitory nor confined to volatile items such as gasoline.
Core prices for all items other than food and energy increased at a compound annual rate of 3.5% in the two years to December, the fastest since 1993 (“Consumer price index”, U.S. Bureau of Labor Statistics, Jan. 12).
And in the most recent three months, ending in December, core prices were advancing at an annualised rate of almost 7%, implying inflationary pressure was intensifying rather than easing.
Price rises were faster for goods (15.8%) even when food and energy are excluded (13.7%) but services prices were also rising much more rapidly (5.0%) than the Fed’s long-term average target of just over 2.0% per year.
More
Manhattan rents were the highest ever for December
Published Thu, Jan 13 2022 12:01 AM EST
Manhattan rents hit their highest level ever for a December as the supply of apartments plummeted and landlords started demanding double-digit increases.
The average apartment rent in Manhattan hit $4,440 in December, while the more widely watched net effective median rent (median rent including all discounts) hit $3,392 — the highest level for December on record — according to a report from Douglas Elliman and Miller Samuel. The net effective median rent was up 21% over last year.
The surge marks a dramatic turnaround from a year ago, when there were more than 25,000 empty apartments for rent in Manhattan and even the most bullish brokers predicted a years-long recovery. Now, rents are often above pre-pandemic levels and renters are facing sticker shock on their rent increases for this year.
‘A geyser of demand’
“What started as a trickle earlier last year has become like a geyser of demand,” said Janna Raskopf, a leading rental broker in Manhattan with Douglas Elliman. “I’ve been doing this for 14 years and it’s absolutely unprecedented.”
Raskopf and other brokers say demand is being driven largely by college graduates getting new jobs in Manhattan. Many poured back to the city last spring, when Mayor Bill de Blasio announced that the city would reopen July 1. Even though only about a third of office workers are back at their desks in Manhattan, the expectation of a return-to-office continues to bring in waves of people, brokers say.
New Yorkers who sold their apartments and moved their tax residency to Florida or another low-tax state are also renting to keep a part-time foothold in the city. Raskopf said even the very wealthy are sometimes choosing to rent rather than buy in Manhattan, waiting on the sidelines until they see how the city’s economic and cultural future develops post-pandemic.
All of the demand has created a sudden shortfall of supply. A year ago, the vacancy rate — normally around 2% for Manhattan — was 11%. Inventory had plunged by 81% in December 2021 compared with December 2020, according to the report.
Now, the vacancy rate is an unusually low 1.7%, with only 4,700 apartments available. Supply is so low that overall leasing activity fell by 40% in December compared with last year, due to a shortage of rental apartments.
More
https://www.cnbc.com/2022/01/13/manhattan-rents-were-the-highest-ever-for-december-.html
Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state.
William F. Rickenbacker.
Covid-19 Corner
This section will continue until it becomes unneeded.
Polish scientists find gene that doubles risk of serious COVID
January 13, 2022 1:07 PM GMT
WARSAW, Jan 13 (Reuters) - Polish scientists have found a gene that they say more than doubles the risk of becoming severely ill with COVID-19, a discovery they hope could help doctors identify people who are most at risk from the disease.
With vaccine hesitancy a major factor behind high coronavirus death rates in central and eastern Europe, researchers hope that identifying those at greatest risk will encourage them to get a shot and give them access to more intensive treatment options in case of an infection.
"After more than a year and a half of work it was possible to identify a gene responsible for a predisposition to becoming seriously ill (with coronavirus)," said Health Minister Adam Niedzielski.
"This means that in the future we will be able to... identify people with a predisposition to suffer seriously from COVID."
The researchers from the Medical University of Bialystok found that the gene was the fourth most important factor determining how seriously a person suffers from COVID-19, after age, weight and gender.
The gene is present in around 14% of the Polish population, compared to 8-9% in Europe as a whole and 27% in India, said Marcin Moniuszko, the professor in charge of the project.
Other studies have also shown the importance of genetic factors in how seriously COVID-19 develops.
In November, British scientists said they had identified a version of a gene that may be associated with double the risk of lung failure from COVID-19.
Why Cuba’s extraordinary Covid vaccine success could provide the best hope for low-income countries
Published Thu, Jan 13 2022 1:18 AM EST
Cuba has vaccinated a greater percentage of its population against Covid-19 than almost all of the world’s largest and richest nations. In fact, only the oil-rich United Arab Emirates boasts a stronger vaccination record.
The tiny Communist-run Caribbean island has achieved this milestone by producing its own Covid vaccine, even as it struggles to keep supermarket shelves stocked amid a decades-old U.S. trade embargo.
“It is an incredible feat,” Helen Yaffe, a Cuba expert and lecturer in economic and social history at the University of Glasgow, Scotland, told CNBC via telephone.
“Those of us who have studied biotech aren’t surprised in that sense, because it has not just come out of the blue. It is the product of a conscious government policy of state investment in the sector, in both public health and in medical science.”
To date, around 86% of the Cuban population has been fully vaccinated against Covid with three doses, and another 7% have been partly inoculated against the disease, according to official statistics compiled by Our World in Data.
---- The country of roughly 11 million remains the only country in Latin America and the Caribbean to have produced a homegrown shot for Covid.
“Just the sheer audacity of this tiny little country to produce its own vaccines and vaccinating 90% of its population is an extraordinary thing,” John Kirk, professor emeritus at the Latin America program of Dalhousie University in Nova Scotia, Canada, told CNBC via telephone.
Cuba’s prestigious biotech sector has developed five different Covid vaccines, including Abdala, Soberana 02 and Soberana Plus — all of which Cuba says provide upwards of 90% protection against symptomatic Covid when three doses are administered.
---- Unlike U.S. pharmaceutical giants Pfizer and Moderna, which use mRNA technology, all of Cuba’s vaccines are subunit protein vaccines — like the Novavax vaccine. Crucially for low-income countries, they are cheap to produce, can be manufactured at scale and do not require deep freezing.
It has prompted international health officials to tout the shots as a potential source of hope for the “global south,” particularly as low vaccination rates persist. For instance, while around 70% of people in the European Union have been fully vaccinated, less than 10% of the African population have been fully vaccinated.
---- Vicente Verez, head of Cuba’s Finlay Vaccine Institute, told Reuters last month that the U.N. health agency was assessing Cuba’s manufacturing facilities to a “first-world standard,” citing the costly process in upgrading theirs to that level.
Verez has said previously that the necessary documents and data would be submitted to the WHO in the first quarter of 2022. Approval from the WHO would be an important step to making the shots available throughout the world.
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.
Solar window start-up aims to turn skyscrapers into vertical solar farms with investment from major window manufacturer
Published Wed, Jan 12 2022 3:43 PM EST Updated Wed, Jan 12 2022 9:56 PM EST
A material science start-up, Ubiquitous Energy, is raising tens of millions of dollars to turn windows into surfaces that capture solar energy. The California start-up announced on Tuesday it closed a $30 million funding round, including an investment from consumer window and door manufacturing giant Andersen Corporation, bringing its total funding raised to $70 million.
Ubiquitous makes a coating for windows that uses semiconducting materials to convert sunlight into electricity. The coating is just nanometers thick and tiny wires connect the solar window to electrical systems where the energy is used
The pre-revenue company will use the most recent funding to do manufacturing research and development work, CEO Susan Stone told CNBC. Ubiquitous aims to be producing at scale by early 2024, Stone said.
When they get there, “we’ll be able to make floor to ceiling glass,” Stone said. “We can turn skyscrapers into vertical solar farms.”
Ubiquitous is also targeting the home residential market, which makes the Andersen investment particularly strategic. Andersen is a private company and doesn’t disclose its financials, but did tell CNBC it had revenues exceeding $3 billion in 2021.
Andersen was particularly impressed with Ubiquitous because its solar film is clear and unobtrusively integrated into the window frame.
---- Stone knows that this transparency is key to success.
“They have to look indistinguishable from traditional windows, or we won’t see mass deployment,” said Stone. “Aesthetics is our guiding light.”
The $30 million raise is a bridge to get the company ready to manufacture after more than a decade of work. Ubiquitous was founded in 2011 and its technology was born out of work done by scientists and engineers at Massachusetts Institute of Technology and Michigan State University.
Government does not solve problems; it subsidizes them.
Ronald Reagan.
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