Baltic Dry Index. 1296 -47 Brent Crude 89.33
Spot Gold 1815
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 27/01/22 World 363,271,647
Deaths 5,645,913
The four most expensive words in the English language are, ‘This time it’s different.’
Sir John Templeton.
Fed Chairman Powell talked yesterday about removing the punch bowl as soon as March, killing off a stock casino rally turning it into a rout.
Yet he didn’t say anything that wasn’t already expected. Asian markets and US stock futures markets are continuing yesterday’s sell-off.
If the Fed does end a 30 plus year long era of falling interest rates, there’s little reason to be long overpriced stocks in early 2022.
At best, a bout of stagflation lies ahead for most global economies. At worst, a stock casino bear market for 2022 and much of 2023.
But will Chairman Powell and his gang really go through with exterminating the Democrats in this November’s mid-term elections?
By delaying taking the punch bowl away for so long, the Powell Fed now faces the choice of raising interest rates several time this year and next, wiping out many Democrats in Congress, or not raising US interest rates probably saving many Democrats, but at the price of fuelling inflation for another year.
Of course, if the Washington-London War Party can trigger Russia into starting a new European war, all this becomes moot. All the more so if WW1 style, it quickly becomes a more generalised European World War Three with nukes.
Asia markets fall as investors digest Fed remarks; Japan and South Korea both down 3%
SINGAPORE — Asia-Pacific markets fell across the board on Thursday as investors reacted to an overnight update from the U.S. Federal Reserve that indicated the central bank plans to raise interest rates as soon as March.
Japan’s Nikkei 225 fell 3.3% while the Topix was down 2.3%. Over in South Korea, the benchmark Kospi dropped 3.13% and in Hong Kong, the Hang Seng index and the tech-focused Hang Seng Tech index dropped 2.56% and 4.61%, respectively.
Chinese mainland shares also declined: The Shanghai Composite slipped 0.88%, and the Shenzhen component was down 1.52%.
In Australia, shares retraced earlier gains as the ASX 200 fell 2%. Markets in South Asia and Southeast Asia also sold off: India’s Nifty 50 was down 1.87%, Singapore’s Straits Times Index fell 0.59%, and Indonesia’s Jakarta Composite declined 0.15%.
The MSCI Asia ex-Japan index was down 2.23%.
Thursday’s session in the Asia-Pacific followed overnight declines on Wall Street where the Dow Jones Industrial Average ended the day down 129 points, after gaining more than 500 points at one point, following the Fed’s update.
The Taiwan market is closed for a holiday on Thursday.
Tech shares fall
In South Korea, shares of Samsung Electronics fell 2.46% after the company reported a 53% jump in operating profit in the fourth quarter of 2021 compared to the year before, but it was down 12% from the previous three months.
----The Federal Open Market Committee said a quarter-percentage point increase to its benchmark short-term borrowing rate is likely forthcoming — it would be the Fed’s first hike since December 2018.
Fed Chair Jerome Powell indicated at a news conference that the U.S. central bank had “quite a bit of room to raise interest rates without threatening the labor market.” Inflation stateside is running at its hottest level in nearly 40 years.
While the Fed’s post-meeting statement did not provide a specific time for when the hike would come, indications suggest it could happen as soon as at its March meeting.
“The Fed also used this meeting to continue discussion on balance sheet normalisation and released a set of principles on its approach to shrinking the balance-sheet. Of most importance was a desire to make it predictable but sensitive to both the economy and markets,” the ANZ analysts said.
Major U.S. stock market averages reversed gains after Powell’s comments.
The Dow Jones Industrial Average closed down 0.4% on Wednesday at 34,168.09. It was up more than 500 points before the Fed update. The S&P 500 slid 0.2% to 4,349.93, while the Nasdaq Composite ended the session almost flat at 13,542.12, buoyed by Microsoft’s post-earnings gain.
https://www.cnbc.com/2022/01/27/asia-markets-react-to-us-fed-remarks.html
Dow futures drop nearly 400 points as investors assess Fed update
Stock futures fell Wednesday night after the Dow Jones Industrial Average and S&P 500 turned lower following a Federal Reserve update by chair Jerome Powell, at the conclusion of its two-day meeting.
Futures tied to the Dow erased earlier gains and declined 398 points, or 1.17%. S&P 500 futures and Nasdaq 100 futures slipped 1.35% and 1.57%, respectively.
Some tech shares were higher in extended trading, after continued swings in the regular session. Netflix jumped more than 4% on news that Pershing’s Bill Ackman bought 3.1 million shares. Tesla gained almost 3% following a strong earnings report. Meanwhile, Intel lost 2%, despite strong earnings.
----The week’s volatility continued on Wednesday and stocks took a turn lower after the Fed concluded its two-day meeting and signaled the central bank would hikes rates to fight persistent inflation. Powell said there’s “quite a bit of room” to do so before hurting the labor market. The benchmark 10-year Treasury yield climbed above 1.8% following his remarks.
“While offering some clarity on how the Fed would begin the process of removing policy accommodation, the outcome of the meeting fell short in providing the needed guidance on the timing and magnitude of the shift in policy,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.
Some investors have started to bet on as many as five rate hikes this year, following Powell’s press conference. Uncertainty about the timing and magnitude of the Fed’s plans to tighten monetary policy had been building since the December meeting.
More
https://www.cnbc.com/2022/01/26/stock-market-futures-open-to-close-news.html
In other news, is Europe about to shoot itself in both feet? Other than the USA and China who gains from a new European war?
Not to worry though, President Biden has promised to supply US LNG if Russia cuts off Europe from Russian gas. But after the Afghan fiasco last August, can President Biden actually deliver sufficient US LNG and at what price?
Russian gas supply halt would deal EU economic hit -report
January 27, 2022 5:12 AM GMT
BRUSSELS, Jan 27 (Reuters) - The European Union could cope with a short term halt to all Russian gas imports but doing so would have "profound economic consequences" and require emergency measures to curb demand, according to analysis by the think tank Bruegel.
Escalating tensions between the West and Russia over Ukraine have raised concerns about Russian gas flows to Europe, prompting the European Commission and the United States to investigate alternative supplies.
In an analysis due to be published on Thursday, Bruegel said that if Russia cut off all gas, the EU would need to both hike imports of liquefied natural gas (LNG) and impose emergency measures to cut demand -- such as factory closures -- to avoid severe shortages.
Simone Tagliapietra, a senior fellow at Bruegel, said such a scenario would have "profound consequences for the economy."
"Such a war-scenario would imply difficult and costly decisions for Europe to orderly manage the situation," he said.
Soaring gas prices in recent months amid lower-than-expected supplies Russian supply have already hiked Europeans' household bills, and forced some gas-reliant industries to curb production.
Russia supplies around 40% of EU gas use, but reliance varies between countries. Central and eastern European states with pipelines designed to import gas from the east, rather than Western Europe, could still suffer shortages if Moscow cut supply, said Bruegel, which provides research to EU ministers and institutions including the EU Parliament.
The analysis said spare infrastructure capacity could add 17 TWh of weekly imports from Norway, North Africa and LNG - nearly replacing levels Europe received from Russia in recent weeks. However, those countries may not be able to boost deliveries, and measures to curb demand would also be needed.
In a scenario with very cold weather plus no Russian gas from February, EU gas storage could be emptied by end-March, Bruegel said.
Were Russian gas supplies to be cut off into next winter and beyond, the analysis said the EU would find it harder to manage.
Europe would need to curb gas use further, with options including higher coal-fuelled power production -- resulting in more CO2 emissions -- or Germany delaying nuclear plant closures, a politically sensitive decision.
A jump in LNG demand could also see prices soar, hitting the EU economy and poorer countries bidding to buy LNG.
More
Finally, fiat
dollars [your currency here] anyone? Trashing the planet’s future for free
money now. Digital dollars next?
Debt Up $2 Trillion in 1 Year of Biden
January 26, 2022 | 4:44am EST
When President Joe Biden was sworn in on Jan. 20, 2021, the federal government's debt stood at $27,751,896,236,414.77.
When his first year in office ended on Jan. 20, 2022, it stood at $29,867,021,509,573.92.
That means that during Biden's first 12 months in office, the federal debt grew by more than $2 trillion — or $2,115,125,273,159.15 to be exact.
How do you put that in perspective?
The United States of America had existed for 210 years — and 40 presidents had served as this nation's chief executive — before the debt first topped $2 trillion in 1986.
On Jan. 1, 1790, when President George Washington was serving his first year in office, the total federal debt was $71,060,508.50, according to data published by the U.S. Treasury.
By Jan. 1, 1835, when President Andrew Jackson was in his second term, it had actually dropped to $33,733.05. He then paid it off entirely.
"President Andrew Jackson was a staunch opponent of the existing banking system," NPR reported last August. "He also wanted to get rid of the national debt. In fact, his administration paid off all the interest-bearing debt on Jan. 1, 1835."
"That was the one time in U.S. history when the country was debt free," NPR reported back in 2011. "It lasted exactly one year."
More
https://www.cnsnews.com/commentary/terence-p-jeffrey/debt-2-trillion-1-year-biden
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Oil breaks $90/bbl for the first time since 2014 on Russia tensions
January 26, 2022 8:26 PM GMT
NEW YORK, Jan 26 (Reuters) - Oil rose on Wednesday, tuoching $90 a barrel for the first time in seven years, supported as tight supply and rising political tensions between Russia and Ukraine added to concerns about further disruption in an already-tight market.
Brent crude gained $1.76, or 2%, to settle at $89.96 a barrel, after surpassing $90 for the first time since October 2014. U.S. West Texas Intermediate (WTI) crude closed up $1.75, or 2%, to $87.35 a barrel.
Oil prices edged off their gains in post-settlement trading, retreating with other risk assets like equities after investors interpreted U.S. Federal Reserve Chairman Jerome Powell's comments in a press conference on expected interest rate hikes as somewhat hawkish. read more
Russia has amassed thousands of troops on Ukraine's border, fanning fears of an invasion. Energy market prices rose on worries that Russia's gas supply to Europe could be interrupted. Russia is also one of the world's largest oil exporters.
U.S. Secretary of State Tony Blinken said the United States will make sure global energy supplies are not interrupted if Russia takes action.
"Markets are nervous that physical supply could be disrupted," said Paul Sheldon, chief geopolitical advisor, analytics, at S&P Global Platts. "Most likely, flows will continue, but the risks are not negligible that something could affect physical balances."
----Global political tensions have added to worries about an already tight energy market. OPEC+ is having trouble meeting monthly production targets as it restores supply to markets after drastic cuts in 2020, and the United States is more than a million barrels short of its record level of daily output.
"The only organization that can change the course of prices now is OPEC," said Claudio Galimberti, senior vice president of analysis at Rystad.
Meanwhile, demand remains strong, suggesting inventories may decline further. The Organization of the Petroleum Exporting Countries and allies (OPEC+) meets on Feb. 2 to consider another output increase.
More
https://www.reuters.com/business/energy/oil-dips-profit-taking-ahead-fed-update-2022-01-26/
Prices Surge on Promise that U.S. will Supply LNG to Europe
Wed, January 26, 2022, 5:56 PM
Natural gas surged higher on concerns over energy supplies in Europe. This movement in price action comes ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 217 Bcf draw in stockpiles, according to survey provider Estimize. According to a recent National Oceanic Atmospheric Administration report, warmer than normal weather is expected to cover most of the West and planes, and warmer than average weather will cover most of the mid-West for the next 6-10 days Prices are buoyed by strong demand on Europe.
----The White House has promised that it will supply LNG to Europe. This winter, its allies will not freeze if Russia cuts off its natural gas or crude oil exports as retaliation for economic sanctions promised by the U.S. and its allies if Moscow invades Ukraine.
https://www.yahoo.com/news/prices-surge-promise-u-supply-175609593.html
IMF says the Fed’s rate hikes will ‘definitely slow down Asia’s recovery’
Published Wed, Jan 26 2022 1:58 AM EST
The Federal Reserve’s move to raise interest rates and tighten policy aggressively will hamper the economic recovery in Asia, according to the International Monetary Fund.
The current account surplus and the level of reserves are much higher among Asian countries this time compared to 2013 during the so-called “taper tantrum,” said Changyong Rhee, director of the Asia and Pacific department at the IMF.
However, he warned the higher debt burden is a problem for the region.
“Overall, the debt has increased quite significantly after the global financial crisis. Around 2007, Asia accounted for about 27% of the global debt. Now in 2021, Asia accounted for almost 40% of global debt,” he told CNBC’s “Squawk Box Asia” on Wednesday.
In 2013, the Fed triggered a “taper tantrum” when it began to wind down its asset purchase program. Investors panicked and it sparked a sell-off in bonds, causing Treasury yields to surge.
As a result, emerging markets in Asia suffered sharp capital outflows and currency depreciation at that time, forcing central banks in the region to hike interest rates to protect their capital accounts.
This time, the Fed’s higher interest rates “may not cause a big shock to the financial market, but they can definitely slow down Asia’s recovery and growth,” Rhee added.
----Asian governments may need to prepare for faster policy normalization following the Fed’s move to curb inflationary pressures, according to Rhee.
“The situation is quite heterogeneous in Asia. Like Singapore and [South] Korea and several Asian countries, inflation is already higher and the output gap is small. So the central banks have to move quickly as Singapore did this week,” he said, referring to Singapore’s central bank decision on Tuesday to tighten monetary policy over inflationary concerns.
More
Covid-19 Corner
This section will continue until it becomes unneeded.
Omicron subvariant appears more contagious, but not more severe, Denmark says
January 27, 2022 12:22 AM GMT
COPENHAGEN, Jan 26 (Reuters) - The BA.2 subvariant of the Omicron coronavirus variant, which is dominant in Denmark, appears more contagious than the more common BA.1 sub-lineage, Danish Health Minister Magnus Heunicke said on Wednesday in a national address.
"There is no evidence that the BA.2 variant causes more disease, but it must be more contagious," Heunicke told a news conference.
The BA.1 lineage currently accounts for 98% of all cases globally but in Denmark has been pushed aside by BA.2, which became the dominant strain in the second week of January.
The UK Health Security Agency has designated BA.2 a variant under investigation, saying it could have a growth advantage. read more
Preliminary calculations suggest BA.2 could be 1.5 times more infectious than BA.1, Denmark's top infectious disease authority, Statens Serum Institut (SSI), said in a note on Wednesday.
However, an initial analysis by the institute showed no difference in the risk of hospitalisation for BA.2 compared to BA.1.
"There is some indication that it is more contagious, especially for the unvaccinated, but that it can also infect people who have been vaccinated to a greater extent," SSI's technical director Tyra Grove Krause said at the briefing.
This could mean the peak of Denmark's epidemic will extend a bit further into February than previously forecast, Krause said.
BA.2 cases have also been registered in Britain, Sweden and Norway, but to a much lesser extent than in Denmark.
More
Two-thirds with Omicron say they have had Covid before
By Michelle Roberts Health editor, BBC News online January 26, 2022
Two-thirds of people recently infected with the Omicron variant say they had already had Covid previously.
The findings come from a large, continuing study, React, swab-testing thousands of volunteers in England.
More work is needed to know how many are true reinfections - but the results reveal the groups that appear to be more likely to catch Covid again.
They include healthcare workers and households with children or lots of members under one roof.
Winter wave
More than two million people have been tested in the study.
The latest findings, for the first two weeks of 2022 - round 17 - are based on about 100,000 polymerase chain reaction (PCR) tests posted to volunteers and then returned.
About 4,000 were positive, by far the highest rate seen since the pandemic began.
And when a selection of them were sequenced to check what type of Covid was to blame, virtually all were Omicron - the highly infectious variant, first identified in South Africa, causing a big winter wave of infections in the UK.
It is not yet clear how many of the volunteers who tested positive had been fully vaccinated.
Two shots offer little protection against catching Omicron, although protection against severe disease wanes less.
But booster doses have been rolled out at speed since Omicron hit, to top up people's protection.
Two out of every three (65%) of the infected volunteers said they had already previously tested positive for Covid.
Many of these could have been reinfected.
Although, in some instances, the latest PCR tests might be picking up old traces of virus.
Other estimates have suggested one in every 10 Omicron case is a possible reinfection.
Currently, daily Covid case figures reported by the government - which reflect the number of infections picked up by people coming forward for testing - do not include reinfections for all countries of the UK.
But that will all change on 31 January, when anyone who has a second positive test - if it has occurred 90 days after the first one - will be added in to the official UK figures.
More
https://www.bbc.co.uk/news/health-60132096
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.
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.
Kerala Gets India's 1st Graphene Innovation Centre
Wednesday, January 26, 2022
Kerala
state government run Digital University Kerala (DUK), along with along with
Centre for Materials for Electronics Technology (C-MET) in Thrissur, is ready
to launch India's first Graphene Innovation Centre
Approved by Ministry of Electronics & Information Technology (MeiTY),
Government of India and Kerala government, the upcoming centre will have
incubation centre and facilities to create new Graphene products.
----Graphene is a one-atom-thick sheet of carbon atoms arranged in a honeycomb-like pattern. Graphene is considered to be the world's thinnest, strongest and most conductive material - of both electricity and heat.
Tata Steel Limited is set to be the industrial partner of the upcoming Graphene Innovation Centre. The other collaborators include scientists from the National Graphene Institute, University of Manchester, and other industrial partners from around the world.
----Saji Gopinath, Vice Chancellor of DUK, said in a media statement, "We expect the centre to offer students, researchers, established industries and budding startups to test and experiment new innovative products, and make it a thriving environment for innovative graphene-based product development."
Graphene
is one of the top most agendas on the list of big tech corporations in their
search for finding the material that can serve as the next building block for
electronic devices and transform the manufacturing sector and its various
processes.
To date, Graphene the thinnest material one can imagine. It's just one atom
thick! This means this material is mathematically 2-Dimensional nevertheless
one can still hold this single layer of atoms in hands.
Surprisingly, graphene isn't a unique or rare substance. In fact, it has the
same carbon structure as the graphite you use every day when you draw or write
with your pencil But at the same time, in 0.03” of graphite, there are about 3
million graphene layers!
More
https://www.indianweb2.com/2022/01/kerala-gets-indias-1st-graphene.html
The Stock Market is designed to transfer money from the active to the patient.
Warren Buffett.
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