Baltic Dry Index. 1764 -109 Brent Crude 86.06
Spot Gold 1818
“Every gun that is made, every warship launched, every rocket fired, signifies in the final sense a theft from those who hunger and are not fed, those who are cold and are not clothed.”
Dwight D. Eisenhower.
After a dismal week of diplomacy between the USA and Russia over the Ukraine, with the White House ending the week busy conditioning the public for yet more war, the stock casinos had a dismal week too.
But with the Fed starting its bond taper this month and promising interest rate hikes beginning in March, plus 30 million US families losing their child credit payments this week, the US economy is off to a very rocky start to 2022.
If a new European war over the Ukraine does start this month amidst a continuing coronavirus pandemic, a spectacular rush for the casino exits looks highly likely.
To this old dinosaur market watcher it’s time to be out of most markets and let others carry the risk of disaster. The risk/reward balance is far out of balance.
Dow drops 200 points Friday as bank stocks get hit, market posts second losing week to start 2022
Major bank stocks declined after their earnings reports on Friday, weighing on the U.S. markets as Wall Street notched a second straight negative week to start the year.
The Dow Jones Industrial Average slid 201.81 points, or 0.56%, to 35,911.81. The S&P 500 inched up 0.08% to 4,662.85, while the tech-heavy Nasdaq Composite outperformed with a 0.59% gain to close at 14,893.75.
Bank stocks, which had outperformed in recent weeks as interest rates moved higher, were broadly lower as their reports appeared to underwhelm investors despite strong headline numbers.
JPMorgan Chase, the No. 1 U.S. bank by assets, showed profit and revenue that topped estimates, but shares fell more than 6%. The company’s earnings were helped by a large credit reserve release, and CFO Jeremy Barnum warned that the company would likely miss a key profit target in the next two years.
Citigroup’s stock fell nearly 1.3% after the bank beat revenue estimates but showed a 26% decline in profits. Shares of Morgan Stanley and Goldman Sachs, which report next week, also declined.
----Shares of Netflix jumped more than 1% after announcing a price increase for U.S. and Canadian subscribers, helping the Nasdaq outperform on Friday.
Casino stocks were another bright spot on Friday after Macau’s government announced it would allow just six casino licenses in the gambling hub. Las Vegas Sands surged 14.1%, while Wynn Resorts gained 8.6%. Oil stocks also outperformed as crude prices rose.
On the data front, retail sales were down 1.9% in December, a worse reading than the 0.1% drop expected by economists surveyed by Dow Jones. January’s preliminary consumer sentiment reading from the University of Michigan came in lower than expected as Americans reported higher long-term inflation expectations.
Consumer discretionary stocks were under pressure after the report, with Bath & Body Works and Under Armour falling more than 2%. Shares of Peloton fell nearly 2.6% after Nasdaq announced that the stock would be dropped from the Nasdaq 100 index.
“The recent spread of the Omicron variant likely weighed on sales, but other factors also could be at work. Supporting the idea that this wasn’t all a COVID story, consumers likely shift shopping from in-person to online when the virus spreads, but nonstore sales plunged 8.7% in December,” JPMorgan economist Daniel Silver said in a note to clients.
It has been a rocky start to 2022 for investors. Tech stocks fell sharply in the first week of the year as the Fed signaled a more aggressive approach to inflation, accompanied by a spike in interest rates. Both of those moves partially reversed course earlier this week but had snapped back by Friday afternoon.
For the week, the Nasdaq shed 0.28%, while the Dow and S&P 500 lost 0.88% and 0.30%, respectively. This marked the third negative week in a row for the Nasdaq.
----In other data news, business inventories for November came in higher than expected, but industrial production disappointed, declining 0.1% compared to a projected 0.2% gain.
More
https://www.cnbc.com/2022/01/13/stock-market-futures-open-to-close-news.html
Mounting congestion at the world's largest port in China may cause a massive blow to already weakened global supply chain
Thu, January 13, 2022, 6:26 PM
The rapid spread of the Omicron variant of the coronavirus is leading to yet another wave of global supply chain backlogs that experts warn could be even worse than in previous months.
Congestion is mounting at the world's largest port in Shanghai as ships reroute to the location to avoid bottlenecks at nearby facilities that have suspended or limited operations due to COVID-19 outbreaks, Bloomberg reported. The backlogs have been exacerbated by an increase of outbreaks across the country, leaving many ports and freight companies understaffed and functioning at reduced capacity.
According to Bloomberg, many companies have started mandating strict testing protocols in advance of the Chinese New Year next month, further slowing operations. An outbreak in Shenzhen, for example, has left a queue of ships as workers seek treatment and testing, leading officials to start restricting goods from entering the port.
Meanwhile, in Tianjin, trucking capacity is estimated to be running at half its standard output, after workers were ordered to take a half-day off work for required testing, Bloomberg reported.
Frederic Neumann, co-head of Asian Economics Research at HSBC, wrote in a note to clients this week that the delays could contribute to the "mother of all supply chain stumbles," given China's significant role in global trade.
According to Neumann, the Omicron variant is "potent enough to deprive Asia's factory of a critical number of workers," creating a scenario that will be "hugely disruptive."
"A rapid spread of Omicron across Asia — from Korea to India, and mainland China to Indonesia — raises the risk of major production disruptions," Neumann wrote in the note. "And, here, Omicron, might prove even more disruptive than past waves: with slower moving variants, many governments were able to shield essential manufacturing operations, limiting the impact on the output of essential goods and components."
More
https://www.yahoo.com/news/mounting-congestion-worlds-largest-port-182611703.html
Next, more on so you really, really, really want to drive an EV in winter.
Canada opens probe into Tesla's heating system following consumer complaints
Fri, January 14, 2022, 2:11 AM
San Francisco (Reuters) - Canada's auto safety regulator said on Thursday it has opened an investigation into the heating system of Tesla Model 3 and Model Y vehicles following 16 consumer complaints about its performance during cold weather.
Transport Canada said it is concerned that a malfunctioning heating and air-conditioning system "may affect windshield defogging/defrosting and therefore driver visibility."
"A company is required to notify Transport Canada and all current owners when they become aware of a defect that could affect the safety of a person. ... These notices are commonly referred to as ‘safety recalls,’" it said.
The regulator said it has informed Tesla of the investigation.
Tesla did not respond to a Reuters request for comment. In 2020, Tesla CEO Elon Musk tweeted, "Model Y heat pump is some of the best engineering I’ve seen in a while."
A number of Tesla owners complained that the heat pumps are failing in extreme cold temperatures, according to Drive Tesla Canada, a Tesla news provider. The report said the heating problems happened even after Tesla early last year replaced faulty sensors in heat pumps in some 2020-2021 Model 3 and Model Y vehicles to address the issue.
The U.S. safety regulator, the National Highway Traffic Safety Administration, did not have an immediate comment on the issue.
https://www.yahoo.com/news/canada-opens-probe-teslas-heating-021115890.html
Finally, in real news the Washington War Party is busy prepping the public for yet more war.
White House: Russia prepping pretext for Ukraine invasion
WASHINGTON (AP) — U.S. intelligence officials have determined a Russian effort is underway to create a pretext for its troops to further invade Ukraine, and Moscow has already prepositioned operatives to conduct “a false-flag operation” in eastern Ukraine, according to the White House.
White House press secretary Jen Psaki said on Friday the intelligence findings show Russia is also laying the groundwork through a social media disinformation campaign that frames Ukraine as an aggressor that has been preparing an imminent attack against Russian-backed forces in eastern Ukraine.
Psaki charged that Russia has already dispatched operatives trained in urban warfare who could use explosives to carry out acts of sabotage against Russia’s own proxy forces — blaming the acts on Ukraine — if Russian President Vladimir Putin decides he wants to move forward with an invasion.
“We are concerned that the Russian government is preparing for an invasion in Ukraine that may result in widespread human rights violations and war crimes should diplomacy fail to meet their objectives,” Psaki said.
Pentagon spokesman John Kirby described the intelligence as “very credible.” A U.S. official, who was not authorized to comment on the intelligence and spoke on condition of anonymity, said much of it was gleaned from intercepted communications and observations of the movements of people.
The U.S. intelligence findings, which were declassified and shared with U.S. allies before being made public, estimate that a military invasion could begin between mid-January and mid-February.
Ukraine is also monitoring the potential use of disinformation by Russia. Separately, Ukrainian media on Friday reported that authorities believed Russian special services were planning a possible false flag incident to provoke additional conflict.
The new U.S. intelligence was unveiled after a series of talks between Russia and the U.S. and its Western allies this week in Europe aimed at heading off the escalating crisis made little progress.
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.
Retail sales dropped 1.9% in December as higher prices caused consumers to curb spending
Retail sales fell much more than expected in December as surging prices took a big bite out of spending, the Commerce Department reported Friday.
The advance monthly sales report to close out the year showed a decline of 1.9%, considerably worse than the Dow Jones estimate for just a 0.1% drop.
Excluding autos, sales fell 2.3%, a number that also fell well short of expectations for a 0.3% rise.
In addition to the weak December numbers, the November gain was revised down to 0.2% from the initially reported 0.3% increase.
Considering that the sales numbers are not adjusted for inflation, the data point to a slow ending to what had otherwise been a strong 2021 in which sales rose 16.9% from the pandemic-scarred 2020.
The consumer price index rose 0.5% for the month, bringing the year-over-year gain to 7%, the highest since June 1982. Wholesale price also rose, climbing 9.7% in the 12-month period for the biggest calendar-year rise since data was kept going back to 2010.
Online spending took the biggest hit as a share of overall spending, with nonstore retailers reporting a plunge of 8.7% for the month. Furniture and home furnishing sales declined 5.5% and sporting goods, music and book stores saw a 4.3% drop.
Surging omicron cases exacted damage across the board as consumer activity waned.
Restaurants and bars, which posted a 41.3% annual gain in 2021 to lead all categories, saw a decline of 0.8% for the month. Gas stations were a close second for the year, with a 41% surge in sales, but saw a 0.7% decrease in December as fuel costs moved lower. Gasoline prices fell 0.5% to close out a year when prices at the sump soared 49.6%.
More
https://www.cnbc.com/2022/01/14/retail-sales-december-2021.html
More than 30 million families lose child tax credit starting this month
Jan. 14, 2022 / 9:25 AM
Jan. 14 (UPI) -- U.S. families won't receive a child tax credit this weekend, marking the first time since July many families will go without the payment.
The move will affect 36 million families that were receiving $300-per-child monthly checks from the IRS to help pay for groceries and other expenses.
U.S. President Joe Biden's Build Back Better Act -- which remains in limbo -- would have ensured that families receive a payment on Friday.
The effort hit a roadblock with opposition from Sen. Joe Manchin, D-W.Va., whose support is crucial in passing the legislation.
Though Speaker of the House Nancy Pelosi believes that a deal can be reached, it wouldn't happen in time for families to receive a check this week.
Families are planning to cut back on essentials and expenses to cope with the financial hit.
"The CTC went away, but grocery prices haven't gone down," a 44-year-old single mother of three Stormy Johnson told CBS News. "Now that I don't have that payment, the reality of life is that there will be times I won't eat to make sure my kids can."
Children may be most affected with 10 million kids at risk of slipping into poverty.
The CTC payments reduced food insufficiency by 26%, according to a study published Thursday.
https://www.upi.com/Top_News/US/2022/01/14/Child-Tax-Credit-stalled/2321642165964/
Henry Kaufman, 1970s Wall Street Dr. Doom, Blasts Powell on Inflation
Thu, January 13, 2022, 6:36 PM
(Bloomberg) -- Henry Kaufman is one of the rare Wall Street veterans who can authoritatively draw parallels between the inflation scare of the 1970s and today’s alarming run-up in prices. And he has zero confidence Chair Jerome Powell’s Federal Reserve is ready for the battle it now faces.
Kaufman decades ago was the celebrated chief economist at Salomon Brothers nicknamed “Dr. Doom.” He correctly anticipated the era’s crippling inflation and approved when then-Fed Chairman Paul Volcker delivered the so-called Saturday Night Special, a radical -- and unexpected -- tightening of monetary policy on an October weekend in 1979.
To Kaufman, Powell is no Volcker. Not even close.
“I don’t think this Federal Reserve and this leadership has the stamina to act decisively. They’ll act incrementally,” Kaufman, 94, said in a phone interview. “In order to turn the market around to a more non-inflationary attitude, you have to shock the market. You can’t raise interest rates bit-by-bit.”
---- A more serious pledge to tame inflation would require the Fed going much further, Kaufman said. Volcker’s 1979 decision to restrict the supply of money drove short-term rates to excruciating levels but, eventually, also crushed inflation. Prices, rising at an annual 14.8% in March 1980, were ticking up at just 2.5% a year by July 1983. Volcker emerged a hero.
“It requited
a lot of fortitude in 1979 to do what the Fed did,” Kaufman said. [Required?]
Now, inflation is again roaring back. From an average of 1.7% in the 10 years through 2020 -- below the Fed’s 2% objective -- it jumped to a four-decade high of 7% last month.
If he were advising Powell, Kaufman said he’d urge the Fed chair to be “draconian,” starting with an immediate 50-basis point increase in short-term rates and explicitly signaling more to come. Plus, the central bank would have to commit in writing to doing whatever is necessary to stop prices from spiraling higher.
That’s a stark contrast with market and economist expectations for the Fed to wait until March to start boosting its key rate, and then only by a quarter point.
Even with several doses of strong medicine, it would take at least a year for inflation to moderate to 3%, Kaufman said. The median forecast of economists surveyed by Bloomberg is for consumer prices to rise by less than 3% by year-end,
“The longer the Fed takes to tackle a high rate of inflation, the more inflationary psychology is embedded in the private sector -- and the more it will have to shock the system,” Kaufman said.
Kaufman was born in Germany during the Weimar Republic and fled the Nazi regime in 1937. He earned a PhD in banking and finance at New York University, worked for the Fed as an economist and then, over a quarter century at Salomon, became Wall Street’s authority on the bond market and monetary policy.
Big Call
He was called “Dr. Doom” for his bearish views and his criticism of government policy. But in 1982, Kaufman famously predicted that interest rates would fall -- triggering a historic rally in stocks and ushering in the bull market.
More
https://finance.yahoo.com/news/henry-kaufman-1970s-wall-street-183629857.html
Below, why a “green energy” economy may not be possible, and if it is, it won’t be quick and it will be very inflationary, setting off a new long-term commodity Supercycle. Probably the largest seen so far.
The “New Energy Economy”: An Exercise in Magical Thinking
https://media4.manhattan-institute.org/sites/default/files/R-0319-MM.pdf
Mines, Minerals, and "Green" Energy: A Reality Check
https://www.manhattan-institute.org/mines-minerals-and-green-energy-reality-check
"An Environmental Disaster": An EV Battery Metals Crunch Is On The Horizon As The Industry Races To Recycle
by Tyler Durden Monday, Aug 02, 2021 - 08:40 PM
Covid-19 Corner
This section will continue until it becomes unneeded.
COVID-19: New Omicron sub variant discovered in Israel
Published: JANUARY 13, 2022 21:30 Updated: JANUARY 14, 2022 07:24
Some 20 cases of a new sub-variant that developed from the original Omicron variant have been discovered in Israel, KAN reported on Thursday evening.
The sub-variant, known as BA2, was discovered during genetic sequencing of sample COVID patients. It contains more mutations than the original Omicron and may be more violent. However, the danger posed by the new sub-variant is still uncertain, and the Health Ministry's coronavirus outreach headquarters clarified that there was no evidence that BA2 behaved differently than Omicron.
BA2 was first seen in China a few weeks ago, and is suspected to have originated in India. It has also been observed in Denmark, Australia, Canada and Singapore, Kan reported.
Scientists quoted in KAN's report said they were concerned about this new development.
Over the past 10 days, Israel has continuously hit a new record of virus carriers, increasing from 12,000 a day to 48,000, with experts believing that the real number of those infected is likely to be much higher.
The number of serious patients, while still limited, has also started to increase. There were 283 patients on Thursday compared with 136 a week earlier. In addition, 284 new patients were classified as serious over the previous seven days, marking an increase of 189% over the previous week.
However, the general situation of Omicron patients appear to be much better than in previous waves.
If the new sub-variant is indeed more violent than Omicron, this may cause more severe illness and raise the number of serious patients in hospital. It is being tracked by Israeli and international researchers.
https://www.jpost.com/breaking-news/article-692495
Supermarket shelves go bare as Omicron disrupts US
Issued on: 14/01/2022
As the Omicron variant of Covid-19 sweeps the United States, empty supermarket shelves have become the latest sign of the pandemic's ongoing disruption to the country's supply chains.
"It's not as bad as Sunday but there are still plenty of empty shelves, lots of products are missing," Justin Toone, a regular shopper at a Giant supermarket in the Washington suburb of Bethesda, Maryland, told AFP.
Shortages have been a recurring feature of the Covid-19 pandemic in the United States, with a run on toilet paper marking its early days, but a wider range of items have gone out of stock lately, particularly in areas struck by bad winter weather like snow storms.
"Last week for several days in a row, there was nothing, no fruit, no vegetables in this Giant store and also in all grocery stores around," Toone said.
Honey, eggs, milk and meat disappeared from the shelves in nearby stores.
Patrick Penfield, a professor of supply chain management at Syracuse University, said that previous Covid-19 waves affected different parts of the country over a period of time, allowing grocery stores to adjust their supply chains.
"Since the Omicron variant is so contagious, it's impacting the entire United States all at once. So many US grocery stores and food producers are dealing with employees being out sick, or being asked to quarantine," he said.
Further up the supply chain, there are issues producing enough food, delivering it and even unloading it once it gets to the grocery stores.
This has left grocery stores to adapt by restocking shelves with what they have in stock and, for items that are in short supply, limiting how many they put out so customers don't buy them all at once.
Parts of the country that face disruptive weather are most vulnerable to such shortages, Penfield said.
Grocery stores are most likely to run out of perishable goods like fresh produce that can't be stockpiled, hence why shelves in some Washington-area stores remained empty days after a recent snowfall.
The United States is seeing massive numbers of new Covid-19 cases as Omicron tears through the population, and Penfield warned that shortages at grocery stores could persist until the end of March, assuming "everything goes back to normal and we have no new variant."
The National Grocers Association (NGA), which represents independent players in the food distribution industry, said the challenges businesses nationwide have faced finding enough employees "strain critical industries, including grocery and the food industry at large."
In a recent survey of their 1,500 members, some reported operating for brief periods at half capacity during the height of the outbreak.
"While there is plenty of food in the supply chain, we anticipate consumers will continue to experience sporadic disruptions in certain product categories as we have seen over the past year and half due to the ongoing supply and labor challenges," the NGA said in an email.
https://www.france24.com/en/live-news/20220114-supermarket-shelves-go-bare-as-omicron-disrupts-us
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 more useful Covid links.
Johns Hopkins Coronavirus resource centre
https://coronavirus.jhu.edu/map.html
Rt Covid-19
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.
Rubbery electrolyte makes for longer-lasting, safer EV batteries
Michael Irving January 12, 2022
Famously an insulator, rubber might not seem like a great candidate for an electrolyte material in a battery, but researchers at Georgia Tech have developed a new rubbery material with a high conductivity. This elastomer electrolyte could make for safer electric vehicle batteries with longer range.
Lithium-ion batteries have ushered in revolutions in many kinds of technology, from smartphones to electric vehicles. But there’s always the risk of fire or explosion when the battery is damaged or overheated, thanks to the liquid electrolyte that ferries lithium ions between the electrodes.
Solid-state electrolytes can help reduce that risk, but they bring their own problems. Often made of ceramic materials, they can be somewhat fragile, and the interface between them and the electrodes can be patchy, reducing the conductivity of ions through the battery.
The Georgia Tech researchers say their new elastomer electrolyte takes steps towards solving both these problems. The rubbery material can bounce back from bumps to the battery, and maintains a smooth connection with the electrodes. That keeps its conductivity high but also prevents the growth of lithium dendrites, which are often the first step towards failure of a battery.
The rubber itself isn’t the part doing the conducting though. It’s embedded with conductive plastic crystals of a material called succinonitrile, while the elastomer provides a 3D scaffold to give the electrolyte its shape and stability.
In tests, lithium metal batteries made with the new electrolyte were able to operate at a voltage of 4.5 V at room temperature, with a capacity of 93 mAh g-1 and almost no capacity fading over 1,000 cycles. There was also no sign of dendrites forming after 100 cycles.
There’s still room for improvement of course, and the team is investigating ways to boost the cycle time and ionic conductivity. The team says this could eventually lead to safer and longer lasting batteries for electric vehicles.
“Higher ionic conductivity means you can move more ions at the same time,” says Michael Lee, lead author of the study. “By increasing specific energy and energy density of these batteries, you can increase the mileage of the EV.”
The research was published in the journal Nature.
Source: Georgia Tech
This weekend’s musical diversion. Vivaldi goes minor. Approx. 8 minutes.
Concerto Del Vivaldi / RV 107 in G minor (Autograph score)
https://www.youtube.com/watch?v=snGGbbCluNw
This weekend’s chess update. Approx. 16 minutes.
15-Year-Old Eline Roebers Beats a Grandmaster to Win First Place
https://www.youtube.com/watch?v=EvXOC5BGQQQ
This weekend’s maths update. Approx. 14 minutes. Pay attention to the comments.
That Time Euler Was Wrong
https://www.youtube.com/watch?v=1pWFDOhImok
“I hate war as only a soldier who has lived it can, only as one who has seen its brutality, its futility, its stupidity.”
Dwight D. Eisenhower.
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