Baltic Dry Index. 2289 -07 Brent Crude 81.90
Spot Gold 1793
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 10/01/22 World 307,893,926
Deaths 5,506,053
“The most effective way to destroy people is to deny and obliterate their own understanding of their history.”
George Orwell.
While the Asian stock casinos are mostly fretting over last week’s Fed news, the disappointing US jobs report and rising interest rates, inflation and omicron, the real event of the week is kicking off today in Geneva.
By the end of the week will it be war or peace over the Ukraine?
Russia sees an existential threat by US and NATO meddling in the Ukraine, the USA says nonsense.
As in 1914, no one actually expects war, but that to me at least seems a 50:50 outcome. Washington has given a blank cheque to Kiev, which will all too likely get over used. We will know by the end of the week if saner heads will prevail.
In the meantime, are rising US interest rates and omicron about to crash the Magic Money Tree party in the stock casinos?
South Korean shares tumble 1% in a mixed session across the Asia-Pacific
SINGAPORE — Asia-Pacific markets traded mixed on Monday as investors kept an eye on the coronavirus pandemic and rising interest rates in the U.S.
In South Korea, the Kospi index fell 1% while the Kosdaq was down 1.31%.
Chinese mainland shares rose, reversing earlier losses. The Shanghai composite was up 0.25% and the Shenzhen component added 0.51%.
Australia’s benchmark ASX 200 traded down 0.15%, after retracing some of its earlier losses. The heavily weighted financials subindex traded fractionally lower, but the energy and materials indexes advanced 1.33% and 1.22%, respectively.
Shares of major miners rose: Rio Tinto added 2.15%, Fortescue was up 1.15% and BHP added 2.2%.
Hong Kong’s Hang Seng Index rose 0.82% while Taiwan’s Taiex added 0.15%.
Shares of China Life Insurance in Hong Kong fell 1.78%, recovering from earlier losses of more than 2.3%. Reuters reported that China’s Central Commission for Discipline Inspection said on Saturday that it had placed China Life Chair Wang Bin under investigation. The company’s Shanghai-listed shares fell nearly 2%.
Shimao Group shares traded up 2.55%, pulling back some of its earlier gains of more than 5%. That followed after Chinese business publication Caixin reported the embattled developer is selling all of its real estate projects, both residential and commercial.
Indian stock averages traded higher as the country deals with a third wave of Covid infections. Japan’s markets are closed for a public holiday.
Monday’s session followed a mixed session in Asia on Friday while stateside, the three major stock averages all declined.
----Elsewhere, Covid cases have continued to rise sharply around the globe following the emergence of the highly transmissible omicron variant. Places like the U.S., Australia and U.K. have reported record number of cases in recent weeks.
“Early studies indicate that while Omicron is far more infectious than Delta, it is, mercifully, less likely to cause hospitalisations, and booster vaccines further reduce the risk of hospitalisation,” ANZ Research analysts said in a morning note.
“Unfortunately, as pandemic-induced supply shortages continue to proliferate, it’s clear that the inflation rollercoaster ride isn’t over,” they added.
https://www.cnbc.com/2022/01/10/asia-markets-rising-interest-rates-covid-cases-in-focus.html
Stocks, bonds brace for sky-high U.S. inflation, hawkish Fed
January 10, 2022 4:38 AM GMT
SYDNEY, Jan 10 (Reuters) - Major share markets made cautious gains on Monday as investors counted down to another U.S. inflation reading that could well set the seal on an early rate hike from the Federal Reserve, lifting bond yields yet further.
The explosion in coronavirus cases globally also threatens to crimp consumer spending and growth just as the Fed is considering turning off the liquidity spigots, tough timing for markets addicted to endless cheap money.
That made for wary trading with S&P 500 futures adding 0.1% and Nasdaq futures 0.2%. EUROSTOXX 50 futures and FTSE futures both edged up 0.2%.
MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) added 0.3%, while South Korea (.KS11) lost 1.0%.
Chinese blue chips (.CSI300) were a fraction firmer as recent policy easing was balanced by lingering concerns over the property sector. read more
Analysts fear the U.S. consumer price report on Wednesday will show core inflation climbing to its highest in decades at 5.4% and usher in a rate rise as soon as March.
While the December payrolls number did miss forecasts, the drop in the jobless rate to just 3.9% and strength in wages suggested the economy was running short of workers.
"It was consistent with the Fed's evolving view that the labour market is getting close to or is already at maximum employment with wage pressures building," said analysts at NatWest Markets.
"This should add to speculation about a March hike, and we have pulled our expectation for the Fed's lift-off to occur in March instead of June."
A raft of Fed officials will be out to offer their latest thinking this week, including Chair Jerome Powell and Governor Lael Brainard who face confirmation hearings.
----Yields on 10-year U.S. Treasury notes were near highs last seen in early 2020 at 1.765%, having shot up 25 basis points last week in their biggest move since late 2019. The next chart target is the 1.95/1.97% area. U/S
"We think that the increase in long-dated Treasury yields has further to run," said Nicholas Farr, an economist at Capital Economics.
"Markets may still be underestimating how far the federal funds rate will rise in the next few years, so our forecast is for the 10-year yield to rise by around another 50bp, to 2.25%, by the end of 2023."
More
https://www.reuters.com/markets/europe/global-markets-wrapup-3-pix-2022-01-10/
In other news, will it be war or peace? All the signs going in to today’s talks between Russia and the USA suggest war or at least a land replay of the Cuban missile crisis of 1962.
No concessions, no breakthroughs: Russia, US start 'difficult' talks on Ukraine
Issued on:
Russia said on Sunday it would not make concessions under U.S. pressure and warned that this week's talks on the Ukraine crisis might end early, while Washington said no breakthroughs were expected and progress depended on de-escalation from Moscow.
The hard line from Moscow underscored the fragile prospects for negotiations that Washington hopes will avert the danger of a new Russian invasion of Ukraine, at the tensest point in U.S.-Russia relations since the Cold War ended three decades ago.
Talks begin on Monday in Geneva before moving to Brussels and Vienna, but the state-owned RIA news agency quoted Deputy Foreign Minister Sergei Ryabkov as saying it was entirely possible the diplomacy could end after a single meeting.
"I can't rule out anything, this is an entirely possible scenario and the Americans ... should have no illusions about this," he was quoted as saying.
"Naturally, we will not make any concessions under pressure" or amid constant threats from participants in the talks, said Ryabkov, who will lead the Russian delegation in Geneva.
Moscow was not optimistic going into the talks, Interfax news agency quoted Ryabkov as saying.
The U.S. prognosis was similarly gloomy.
"I don't think we're going to see any breakthroughs in the coming week," U.S. Secretary of State Antony Blinken said in a CNN interview.
In response to Russian demands for Western security guarantees, the United States and allies have said they are prepared to discuss the possibility of each side restricting military exercises and missile deployments in the region.
Both sides will put proposals on the table and then see if there are grounds for moving forward, Blinken said.
"To make actual progress, it's very hard to see that happening when there's an ongoing escalation, when Russia has a gun to the head of Ukraine with 100,000 troops near its borders," Blinken said in an interview with ABC News.
Ahead of the formal talks, U.S. Deputy Secretary of State Wendy Sherman met with Ryabkov on Sunday in Geneva and told him Washington "would welcome genuine progress through diplomacy," the State Department said.
Ryabkov told reporters his meeting with Sherman had been "complex but businesslike," Russian new agency Interfax said.
Tens of thousands of Russian troops are gathered within reach of the border with Ukraine in preparation for what Washington and Kyiv say could be an invasion, eight years after Russia seized the Crimea peninsula from Ukraine.
The comments from Russia's Ryabkov, who has compared the situation to the 1962 Cuban missile crisis when the world stood on the brink of nuclear war, were consistent with the uncompromising line Russia has been signalling for weeks.
More
Finally, in the USA, an omicron over reaction in the labour force is having a bad effect on the economy. Perhaps someone needs to explain to the rule makers that with omicron’s fast transmission rate but low pathogenicity, there’s little point in self isolation and harming the economy.
Omicron explosion spurs nationwide breakdown of services
Ambulances in Kansas speed toward hospitals then suddenly change direction because hospitals are full. Employee shortages in New York City cause delays in trash and subway services and diminish the ranks of firefighters and emergency workers. Airport officials shut down security checkpoints at the biggest terminal in Phoenix and schools across the nation struggle to find teachers for their classrooms.
The current explosion of omicron-fueled coronavirus infections in the U.S. is causing a breakdown in basic functions and services — the latest illustration of how COVID-19 keeps upending life more than two years into the pandemic.
“This really does, I think, remind everyone of when COVID-19 first appeared and there were such major disruptions across every part of our normal life,” said Tom Cotter, director of emergency response and preparedness at the global health nonprofit Project HOPE. “And the unfortunate reality is, there’s no way of predicting what will happen next until we get our vaccination numbers — globally — up.”
First responders, hospitals, schools and government agencies have employed an all-hands-on-deck approach to keep the public safe, but they are worried how much longer they can keep it up.
In Kansas’ Johnson County, paramedics are working 80 hours a week. Ambulances have frequently been forced to alter their course when the hospitals they’re heading to tell them they’re too overwhelmed to help, confusing the patients’ already anxious family members driving behind them. When the ambulances arrive at hospitals, some of their emergency patients end up in waiting rooms because there are no beds.
----The omicron variant spreads even more easily than other coronavirus strains, and has already become dominant in many countries. It also more readily infects those who have been vaccinated or had previously been infected by prior versions of the virus. However, early studies show omicron is less likely to cause severe illness than the previous delta variant, and vaccination and a booster still offer strong protection from serious illness, hospitalization and death.
Still, its easy transmissibility has led to skyrocketing cases in the U.S., which is affecting businesses, government offices and public services alike.
----In New York City, officials have had to delay or scale back trash and subway services because of a virus-fueled staffing hemorrhage. The Metropolitan Transportation Authority said about one-fifth of subway operators and conductors — 1,300 people — have been absent in recent days. Almost one-fourth of the city sanitation department’s workers were out sick Thursday, Sanitation Commissioner Edward Grayson said.
“Everybody’s working ’round the clock, 12-hour shifts,” Grayson said.
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.
New and used car prices keep climbing. Don’t expect relief anytime soon
Published Sat, Jan 8 2022 9:00 AM EST
When it comes to car shopping these days, sticker price may mean sticker shock.
New and used car prices continue to spurt higher amid strong demand and tight inventory. While a manufacturing slowdown has improved slightly, there won’t be a return to normal anytime soon for car buyers.
“The typical dealership experience that consumers are familiar with — walking dealer lots with rows and rows of cars, negotiating over price and getting many incentives — is not likely to return this year because there are 4.5 [million] to 5 million consumers on the sidelines waiting for cars,” said Tyson Jominy, head of data and analytics for J.D. Power.
“This pent-up demand will keep inventories low and prices high throughout most of 2022,” Jominy said.
An ongoing global shortage of microchips — key components needed for today’s autos to operate — that began in 2020 continues to slow down manufacturers’ production of new vehicles, which has translated into demand outpacing supply.
“It’s slightly better in the sense that there is no more drop-off of inventory — it’s not getting any worse,” said Ivan Drury, senior manager of insights for Edmunds.com. “But we’re still talking many months out until it starts looking more normal.”
The average transaction price for a new car is now higher than the manufacturer’s suggested retail price, or MSRP: $45,872 versus $45,209, according to the most recent data from Edmunds.
An estimated 89% of shoppers are paying more than sticker price or within 5% of it, Jominy said.
More
https://www.cnbc.com/2022/01/08/new-and-used-car-prices-keep-climbing-dont-expect-relief-soon.html
Electricity Prices Surge Across U.S. Northeast as Cold Sets In
Fri, January 7, 2022, 6:36 PM
(Bloomberg) -- Electricity prices are surging on power grids from Virginia to Maine as homeowners cranked up heaters to combat freezing temperatures.
New York City’s spot price briefly spiked to $1,280.60 per megawatt-hour at 11 a.m. before settling between $200 and $300, according to the grid operator’s website. New England prices tripled in the late morning from a day earlier, touching $286. Prices in New Jersey and Philadelphia topped $100. Prices in the region this time of year typically range between $40 and $70 per megawatt-hour.
Demand is coming in above the grid operators’ forecasts after a no’easter swept into the region after blanketing Washington with snow for a second time this week. New England is especially vulnerable to price spikes because it’s at the end of the natural gas pipeline and has to rely on costly imports. Natural gas is the main fuel for power plants.
Power prices across the Midwest are also popping to about $100 a megawatt-hour on the central U.S. grid run by the Midcontinent Independent System Operator, known as MISO. That’s three times more expensive than prices on the grid’s Gulf Coast region.
“The entire MISO footprint is experiencing very cold temperatures this morning, which led to a higher-than-expected load,” spokesman Brandon Morris said in an email.
https://www.yahoo.com/news/electricity-prices-surge-across-u-183633581.html
A growing global potato shortage is affecting french fries from Japan to Kenya
Sat, January 8, 2022, 3:18 PM
There's a growing global potato shortage - a real problem for a planet addicted to french fries and chips.
A number of popular items, including marmite and cream cheese, have faced scarcities amid supply chain disruptions wrought by the coronavirus pandemic and extreme weather. Potatoes are the latest to join the list, becoming unevenly available in some countries and fast-food chains because of a confluence of factors.
In Japan, McDonald's locations stopped offering large and medium-size french fry orders late last month, after pandemic-related supply chain issues and floods in the Port of Vancouver delayed potato shipments.
Days later, South Africa's leading makers of potato chips warned that potatoes were in disturbingly short supply after a bad frost and excessive rains led to low local yields, on top of global sourcing shortages.
In Kenya this month, Kentucky Fried Chicken locations struck french fries, known locally as chips, from menus, as virus-related shipping delays held up containers full of potatoes for more than a month.
"You love our chips a little too much, and we've run out," KFC Kenya tweeted on Jan. 3. "Sorry!"
----Beyond the inconvenience, the shortage attracted some anger among Kenyans over KFC's reliance on imported instead of local potatoes, which are in their harvest season.
KFC's chief executive for East Africa, Jacques Theunissen, told Kenya's Business Daily that it could not easily switch to Kenyan potatoes because of global quality standards.
"All suppliers need to go through the global QA [quality assurance] approval process, and we cannot bypass that even if we run out to ensure that our food is safe for consumption by our customers," he said.
Some called for a KFC boycott on social media and asked why the franchise had not sought approval for local suppliers from the start.
More
https://www.yahoo.com/news/growing-global-potato-shortage-affecting-151840940.html
FOOD CRISIS LOOMING?
Meat and egg shortages fears after stores report ‘bare shelves’ amid Omicron cases
SEVERAL American supermarkets are reporting incidents of “bare shelves” as fears grow over an imminent meat and egg shortage amid a surge in Omicron cases.
Food chains have been one of the first to be disrupted by the new super strain as workers fall ill and productivity drops.
The effect of Omicorn has already seen a shortfall of labor, including farms, manufactures and distributors, according to The Los Angeles Times.
Schools and day care centres are also feeling the ramifications with fuel prices set to rise as more Americans are kept working at home.
The Grand Rapids Mich.-based grocery distributor and store operator SpartanNash Co. claim they have seen a tripling of cases among their staff, leading to delays and workers who feel stretched thin.
And with reports of “bare shelves,” Bindiya Vakil, chief executive of supply-chain consultant Resilinc Corp, warns that “Labor shortages due to Omicron are only going to exacerbate the issue.”
----The president also announced that his administration will purchase half a billion at-home rapid Covid tests for Americans.
The at-home tests are available to order for free through a website.
'OMICRON IS NAILING US'
However, those plans have done little to quell immediate fears among meat production companies - who have reported signs of declining productivity.
During 2020, major outbreaks at plants led to shortages and spikes and a temporary shutdown of businesses.
And although the situation is considered less severe than two years ago, meat companies have again seen the number of hogs and cattle slaughter decline by as much as 6% in the past week, according to US Department of Agriculture figures.
The paper also adds that plants are finding it difficult to obtain food inspectors to come to work to oversee the processing of animals, which is legally required.
Covid-19 Corner
This section will continue until it becomes unneeded.
Cyprus reportedly discovers a Covid variant that combines omicron and delta
Published Sat, Jan 8 2022 5:03 PM EST Updated Sat, Jan 8 2022 5:05 PM EST
A researcher in Cyprus has discovered a strain of the coronavirus that combines the delta and omicron variant, Bloomberg News reported on Saturday.
Leondios Kostrikis, professor of biological sciences at the University of Cyprus, called the strain “deltacron,” because of its omicron-like genetic signatures within the delta genomes, Bloomberg said.
So far, Kostrikis and his team have found 25 cases of the virus, according to the report. It’s still too early to tell whether there are more cases of the strain or what impacts it could have.
“We will see in the future if this strain is more pathological or more contagious or if it will prevail” against the two dominant strains, delta and omicron, Kostrikis said in an interview with Sigma TV Friday. He believes omicron will also overtake deltacron, he added.
The researchers sent their findings this week to GISAID, an international database that tracks viruses, according to Bloomberg.
The deltacron variant comes as omicron continues its rapid spread across the globe, causing a surge in Covid-19 cases. The U.S. is reporting a seven-day average of more than 600,000 new cases daily, according to a CNBC analysis Friday of data from Johns Hopkins University. That’s a 72% increase from the previous week and a pandemic record.
These European countries have a higher prevalence of Covid than both the U.S. and the U.K.
Published Fri, Jan 7 2022 10:45 AM EST
The emergence of the highly transmissible omicron variant has seen cases of Covid-19 surge in countries all over the world.
Over the past 28 days, the U.S. and the U.K. have recorded the highest number of new cases of the virus in the world, according to data from Johns Hopkins University.
However, there are a handful of countries with a higher prevalence of Covid-19 than the U.K. and the U.S., which recorded 2,664 and 1,810 cases per million people respectively for the week to Jan. 6, figures from Our World in Data show.
Among those countries are Ireland, Greece and Denmark.
Ireland
In the week ending Jan. 6, Ireland had a seven-day average of 4,020 cases of Covid-19 per million people, according to Our World in Data. There were 23,817 new cases confirmed in the country on Thursday, according to official government data, marking the highest daily figure to date.
In the week to Jan. 5, 40 deaths were caused by the virus in Ireland. Despite cases reaching record highs over the past week, Ireland’s fatalities from the coronavirus are a far cry from the peak of 220 deaths in April 2020. However, hospitalizations and deaths are both on the rise as cases continue to surge.
Government figures show that 2.3 million booster doses had been administered by Thursday, meaning 55% of the eligible population has received three shots of a Covid vaccine. Meanwhile, 77% of the population is fully vaccinated with the initial two doses.
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.
Nematicity is a new piece in a phase diagram puzzle
Date: January 6, 2022
Source: Columbia University
Summary: A team sees stripes in samples of twisted double bilayer graphene, indicating the presence of a nematic phase characterized by broken rotational symmetry.
Although twisted sheets of double bilayer graphene have been studied extensively the past few years, there are still pieces missing in the puzzle that is its phase diagram -- the different undisturbed, ground states of the system. Writing in Nature Physics, Carmen Rubio-Verdú and colleagues have found a new puzzle piece: an electronic nematic phase.
First described in another state of matter called a liquid crystal, a nematic phase occurs when particles in a material break an otherwise symmetrical structure and come to loosely orient with one another along the same axis. This phenomenon is the basis of the LCD display commonly used in televisions and computer monitors. In an electronic nematic phase, the particles in question are electrons, whose behavior and arrangement in a material can influence how well that material will conduct an electrical current in different directions.
"The data are amazing," says co-author Rafael Fernandes, a theoretical physicist at the University of Minnesotawho met senior author Abhay Pasupathy as a postdoc at Columbia. "You can clearly see that there's a symmetry being broken."
Broken symmetries often yield novel quantum effects, he explained. Twisted double bilayer graphene usually has three-fold symmetry -- no matter how many times you rotate an image of it in 120 degree turns, it stays the same. Using scanning tunnelling microscopy and spectroscopy to record the electronic properties of individual atoms, Rubio-Verdú and her colleagues recorded twisted graphene at different voltages. "What we see are stripes," she said -- those are electrons re-aligning and breaking the sample's symmetry, even as the underlying atomic lattice remains the same. In this observed nematic phase, the image can now only be flipped 180 degrees.
----Understanding the full suite of electronic behavior in moiré materials like twisted graphene may one day help physicists make better sense of another quantum phase, superconductivity, in which an electrical current moves through a material with zero resistance. This phase, however, currently occurs at very low temperatures -- even so-called high-temperature superconductors, used in devices like MRI machines, must be kept nearly 100 °F below zero. Although moiré materials like twisted graphene are studied at temperatures nearing -450 °F, they share similarities with high-temperature superconductors, said Rubio-Verdú, like superconducting and insulating states that depend on electron doping.
The field is still asking fundamental questions about the nature of moiré materials, but the discovery of an electronic nematic phase in twisted double bilayer graphene is just one more piece of that puzzle now put into place. "We're seeing electronic nematicity in another class of compounds," said Fernandes. "As people are figuring out all kinds of different ways of twisting different layers, we now want to figure out what's common and robust."
“A people that elect corrupt politicians, imposters, thieves and traitors are not victims, but accomplices.”
George Orwell.
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