Baltic Dry Index. 1440 +22 Brent Crude 89.51
Spot Gold 1799
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 02/02/22 World 382,176,017
Deaths 5,705,502
"We pay the debts of the last generation, by issuing bonds payable by the next generation."
Dr. Laurence J. Peter, author, The Peter Principal.
With much of Asia closed to the Lunar New Year holiday, Asian casinos are cautiously probing higher.
European and US markets will probably do the same, but given the two “trouble ahead” warnings issued yesterday savvy investors should now be using rallies as profit taking opportunities.
The warnings might be a little early, but stock markets are supposed to discounters of future activity.
Well, they were supposed to be that until Alan Greenspan fell off the orthodox economic wagon back in 1987, panicked into turning them into stock casinos rigged forever upwards by Black Monday, October 19, 1987.
Japan’s Nikkei 225 rises more than 1%; multiple Asia markets remain closed for Lunar New Year holidays
SINGAPORE — Shares in Asia-Pacific rose in Wednesday trade, with multiple major markets in Asia remaining closed for the Lunar New Year holidays.
The Nikkei 225 in Japan gained 1.55% while the Topix index advanced 1.82%.
In Australia, the S&P/ASX 200 climbed 1.17%. Those gains came after Reserve Bank of Australia Governor Philip Lowe reiterated in a speech Wednesday that the central bank’s recent decision to end its bond purchase program “does not mean that an increase in the cash rate is imminent.”
----Lowe’s comments came as investors around the globe have been grappling with the prospect of major central banks tightening monetary policy after almost two years of unprecedented stimulus.
MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.29% higher.
Markets in mainland China, Hong Kong, Singapore and South Korea are closed on Wednesday for the Lunar New Year holidays.
Overnight stateside, shares on Wall Street rose for a third day. The Dow Jones Industrial Average jumped 273.38 points to 35,405.24 while the S&P 500 climbed 0.69% to 4,546.54. The Nasdaq Composite edged 0.75% higher to 14,346.
More
https://www.cnbc.com/2022/02/02/asia-markets-lunar-new-year-holidays-currencies-oil.html
For those who like real numbers, 30 trillion is 30, followed by 12 zeros, not 14 zeros as put out by BBC fake news on the World Service about 5:15 this morning. Not to worry though, team Biden is on the case seeking to get it to 40 trillion.
National debt surpasses $30 trillion for the first time
By Matt Egan. February 1, 2022
America's national debt just hit another sobering milestone.
Total public debt outstanding is now above $30 trillion, according to Treasury Department data published Tuesday.
Government borrowing accelerated during the Covid-19 pandemic as Washington spent aggressively to cushion the economic blow from the crisis. The national debt has surged by about $7 trillion since the end of 2019.
It's impossible to know how much debt is too much, and economists remain divided over how big of a problem this really is. But the latest debt milestone comes at a delicate time as borrowing costs are expected to rise.
After many years of rock-bottom interest rates, the Federal Reserve is shifting into inflation-fighting mode. The Fed is planning to launch its first series of rate hikes since 2015. Higher borrowing costs will only make it harder to finance that mountain of debt.
"It doesn't mean a short-term crisis, but it does mean we are going to be poorer in the long term," said David Kelly, chief global strategist at JPMorgan Asset Management.
Interest costs alone are projected to surpass $5 trillion over the next 10 years and will amount to nearly half of all federal revenue by 2051, according to the Peter G. Peterson Foundation, an organization focused on raising awareness to the fiscal challenge.
Kelly pointed out that rising borrowing costs will limit how much money Washington can spend on other priorities like climate change.
The federal government now owes almost $8 trillion to foreign and international investors, led by Japan and China. Eventually, that will need to be paid back, with interest.
"That means American taxpayers will be paying for the retirement of the people in China and Japan, who are our creditors," said Kelly.
----Still, the national debt has skyrocketed in recent decades, driven up in part by the 2008 financial crisis and then the pandemic.
Total debt outstanding stood at $9.2 trillion in December 2007 just as the Great Recession was beginning, according to Treasury data.
More
'Sound the alarm': National debt hits $30 trillion as economists warn of impact for Americans
| USA TODAY February 1, 2022
WASHINGTON – The national debt surpassed $30 trillion for the first time Tuesday, fueled in part by the coronavirus pandemic and what economists describe as years of unsustainable government spending that could have long-term consequences for every American.
The federal government now owes $23.5 trillion in debt to creditors and another $6.5 trillion to itself. Debt to creditors soared by $1.5 trillion over the last year alone, according to the Peter G. Peterson Foundation, a nonpartisan organization focused on addressing the country’s fiscal challenges.
“It does not make sense as a society to simply spend more than we take in on a permanent and growing basis,” said Michael A. Peterson, the group’s chief executive officer. “What that essentially does is place the burden onto our future and onto the next generation.”
The mounting debt can impact the health and economic security of Americans in numerous ways – hitting their pocketbooks through higher interest rates, for example, or syphoning off government funding needed for other programs.
A $30 trillion debt amounts to about $90,000 per American. Net interest costs on the debt average $1 billion per day or roughly $2,600 per household this year.
And it’s going to get worse.
Over the next three decades, net interest payments on the debt are projected to hit new records – totaling more than $60 trillion and, by 2051, taking up nearly half of all federal revenues and measuring nearly 9% of the gross domestic product, economists warn.
More
In other economic news, two well respected economists make an early warning on the next recession. Watch the US debt explode in the next recession. Gold at 1,800 anyone?
Recession, not inflation, will be the big worry in 6 months: David Rosenberg
Watch: Rosenberg says we're headed into a bear market
Author of the article: Publishing date: Feb 01, 2022
David Rosenberg of Rosenberg Research talks with the Financial Post’s Larysa Harapyn about how we’re headed into a bear market. He says recession, not inflation, will be the big worry in six months.
Veteran strategist David Roche warns markets could be at a ‘turning point’ toward a bear market
Veteran strategist David Roche warned the recent volatility could be pointing toward a bear market, rather than a temporary speed bump in a continued bull run.
“What we’re in the process of seeing is not a minor interruption in a bull market but perhaps a turning point towards a bear market,” Roche, president and global strategist at Independent Strategy, told CNBC’s “Street Signs Asia” on Monday.
He explained that “all the good factors” that drove economies during the pandemic — such as government financing of both household and corporate balance sheets — are set to be “slowly withdrawn.”
Meanwhile, supply side disruptions in labor markets means that worker incomes are not going to replace the money that previously came from public authorities, the former global strategist and head of research at Morgan Stanley added.
“So, because this is so important with what drove financial markets — excess money chasing insufficient assets — I would say we’re about a quarter of the way through the education of the punters,” Roche said.
“There is practically nobody in the business left except me — which tells you about my age — there’s nobody left who actually remembers what a bear market is really like,” he warned. “People really only remember buying on dips, that every time anything went down, pain threshold of central banks was quickly reached and they reverse policy if they were tightening.”
More
In better UK news, that’ll be fizzy drinks all round.
UK strikes new deal to ensure CO2 gas supplies
February 1, 2022 11:10 AM GMT
LONDON, Feb 1 (Reuters) - Britain said on Tuesday it had reached an agreement with carbon dioxide producers CF Industries to ensure a sustainable supply of the widely-used gas whose production has been threatened by high global prices.
The deal is the latest agreement struck between the government and the American company to ensure that industries such as meat production - where it is used to stun animals for slaughter and preserve the shelf life of meat - can keep functioning.
CO2 is a byproduct of the fertiliser that is produced by CF Industries which has two plants in northern England.
"The deal will enable CF Fertilisers’ Billingham plant to continue to operate while global gas prices remain high. It means key sectors, including food processing and nuclear power, are ensured supplies of CO2," the business department said in a statement.
Its statement added: "In the longer term, the government would like to see the market take measures to improve resilience, and we are engaging on ways this could happen."
Finally, if Russia invades the Ukraine, will Biden’s sanctions bring down Boeing and Airbus?
Boeing says Ukraine tensions creating 'adverse climate' for business
January 31, 2022 5:21 PM GMT
Jan 31 (Reuters) - Boeing Co (BA.N) said on Monday the ongoing tensions between the United States and Russia over Ukraine were creating an "adverse climate" for its business and threatening to disrupt its supply chain.
Boeing relies heavily on Russia's VSMPO-AVISMA (VSMO.MM) for the supply of titanium, a lightweight metal that is used widely in planemaking.
Russia has massed tens of thousands of troops near Ukraine's border as it presses demands for a new security arrangement in Europe, prompting U.S. and European officials to threaten a barrage of sanctions if it invades.
The planemaker said it would monitor and evaluate for any sanctions or restrictions that might be imposed by the U.S. government and any responses from Russia that could directly affect company's supply chain, business partners or customers.
On Monday, U.S. President Joe Biden warned of "swift and severe consequences" from the United States and its allies if Moscow attacked Ukraine. read more
Western aerospace companies have shored up their stocks of titanium and are scrambling to bolster supply chains in case the metal is thrust into a potential trade war between Russia and the West. read more
Boeing Chief Executive David Calhoun said last week that the company is "protected for quite a while, but not forever."
Separately, the Chicago-based company said it was expecting negative operating cash flows in future quarters until deliveries start returning to historical levels.
The company also flagged that it might have to consider getting additional funding, if the pace and scope of the recovery worsened.
A trillion here, a trillion there, and pretty soon you're talking about real money.
With apologies to Everett Dirksen.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Nat Gas Jumps as Freezing Temperatures Hit US East Coast
Mon, January 31, 2022, 6:27 AM
Natural gas prices are trading higher during the pre-market session early Monday, putting the market in a position to test the November 26 top at $5.088 and a key technical area at $5.094. Both should be considered trigger points for a further acceleration to the upside.
The daily chart indicates the market has room to run with near-term targets lined up at $5.468, $5.821 and $6.132.
At 06:28 GMT, March natural gas is trading $4.976, up $0.337 or +7.26%.
The catalyst behind the rally is a strong weather system called a Nor’easter. It’s bringing rain, snow, and strong winds to the East this weekend, with very cold air on the back side of the storm, including freezing temperatures into the Southeastern United States.
The U.S. Energy Information Administration reported last week that domestic natural-gas supplies fell by 219 billion cubic feet (Bcf) for the week ended January 21. Ahead of the report, there was a wide range of withdrawal estimates.
Natural Gas Intelligence (NGI) said a Bloomberg survey of eight analysts produced a range of withdrawal projections from 198 Bcf to 225 Bcf, with a median pull of 215 Bcf. The Wall Street Journal poll results averaged 215 Bcf as well, though the range of estimates was tighter. Reuters polled 17 analysts, whose estimates were as steep as 230 Bcf with a median draw of 216 Bcf. NGI modeled a 198 Bcf pull.
Last year, the EIA recorded a 137 Bcf withdrawal from storage in the similar week, while the five-year average draw is 161 Bcf.
Total stocks now stand at 2.591 trillion cubic feet (Tcf), down 308 Bcf from a year ago and 25 Bcf below the five-year average, the government said.
More
https://www.yahoo.com/news/nat-gas-jumps-freezing-temperatures-062757886.html
Shrinking U.S. Cattle Herd Means No Relief for Soaring Beef
Michael Hirtzer and Dominic Carey Mon, January 31, 2022, 8:52 PM
(Bloomberg) -- Drought is shrinking the American cattle herd, meaning consumers are unlikely to get relief from near-record beef prices anytime soon.
Abnormally dry conditions last year in the northern U.S. Plains squeezed supplies of hay and feed for cattle, prompting some ranchers to sell to slaughterhouses animals usually held for breeding. Now, deepening drought in the southern part of the Plains -- where most cattle in the U.S. are raised -- could force another round of herd reductions later this year.
“Drought is looming large,” Derrell Peel, extension livestock marketing specialist at Oklahoma State University, said in a phone interview.
The U.S. Department of Agriculture in its biannual cattle inventory report Monday said the herd was 2% smaller than a year ago. It’s the third straight yearly drop and the smallest herd since 2016. Analysts surveyed by Bloomberg expected only a 1.1% decline.
“The cycle we are in right now is a liquidation phase,” Peel said.
Meat prices have been surging ever since the Covid-19 outbreak sickened workers at slaughterhouses, forcing shutdowns that slowed the amount of food moving into the supply chain. Meanwhile, demand stayed strong even at the higher prices. The smaller cattle supplies may raise costs for meatpackers and potentially consumers as well.
“I don’t really expect beef prices to decline very much,” Peel said.
https://www.yahoo.com/news/shrinking-u-cattle-herd-means-185605253.html
Trucker Protest Strands Beef Shipments at U.S.-Canada Border
Jen Skerritt Mon, January 31, 2022, 11:40 PM
(Bloomberg) -- Protesters who are rallying against vaccine mandates are holding up shipments of Canadian beef to the U.S.
More than 150 loads of beef are stuck at the border at Coutts, Alberta, the Canadian Meat Council said Monday. A blockade of vehicles has been slowing traffic at the crossing between Alberta and Montana since the weekend in a protest against rules that require truckers crossing the border to be fully vaccinated.
“It is not yet clear what the provincial or federal government is doing to facilitate a resolution. The longer this takes, it will cause more supply chain issues and this will affect everyone from producer to consumer,” Marie-France MacKinnon, a spokesperson for the council, said by email.
The vaccine mandate for truckers has sparked concerns about delivery problems and higher freight costs at a time when the supply chain is already under strain from weather disruptions and a lack of available workers. Canadian trucking groups have estimated as many as 90% of truckers are vaccinated, but in the U.S., only about half of truckers are vaccinated.
Earlier Monday, Prime Minister Justin Trudeau denounced the convoy of truckers and other protesters who have blockaded parts of Ottawa, Canada’s capital city. The protest has become a catch-all movement against Covid restrictions, with many demonstrators carrying anti-Trudeau flags and signs.
Canadian Transport Minister Omar Alghabra said the mandate has not had a “measurable impact on the volume of traffic crossing our border” and about 100,000 truckers crossed in the first week after the rule was implemented.
Grocers in some parts of Canada are seeing shortages of fruits and vegetables while others are having trouble supplying eggs and meat, said Gary Sands, senior vice president of the Canadian Federation of Independent Grocers. Most of the shortages are in semi-rural or remote areas that depend on trucks for deliveries, he said.
Last year’s flooding in British Columbia, virus-related worker absenteeism and labor shortages have all snarled the food supply chain, Sands said.
More
https://www.yahoo.com/news/trucker-protest-strands-beef-shipments-234015392.html
France Follows Germany With Stronger-Than-Expected Inflation
· Energy costs surged while services, food also quickened
· France spending more than EU15 billion to cap energy bills
French inflation slowed less than expected, raising pressure on the European Central Bank to reassess its plan to exit crisis-era stimulus more gradually than counterparts in the U.S. and U.K.
More
Covid-19 Corner
This section will continue until it becomes unneeded.
Australia's COVID-19 hospital admissions fall to lowest in weeks
Reuters February 2, 2022 5:26 AM GMT
SYDNEY, Feb 2 (Reuters) - Australia's COVID-19 hospitalisation rate fell to its lowest in nearly three weeks on Wednesday, while a steady rate of daily infections raised hopes the worst of an outbreak fuelled by the Omicron coronavirus variant may have passed.
Hospital cases fell to about 4,600 on Wednesday, with all states seeing a dip in admission numbers, after a peak of nearly 5,400 a week ago.
"We've seen the peaks of Omicron, I think, come through in (New South Wales and Victoria)," Prime Minister Scott Morrison, who is under pressure over his handling of the Omicron wave, told a media briefing.
With COVID-19 hospitalisations stabilising, Morrison said he had tasked health officials to check the impact on the health system before easing more border curbs. Morrison said last week he hoped international borders may fully reopen "before Easter".
Australia is going through a staggered border reopening allowing in only skilled migrants, international students and backpackers.
More
What is the Omicron BA.2 variant and is it more dangerous?
Rich Haridy January 31, 2022
One of the mysteries surrounding Omicron’s emergence in late 2021 was its distinct differences from any SARS-CoV-2 variant that had appeared before. Researchers quickly concluded it was genomically closest to strains of the virus from early 2020, raising plenty of questions as to where it came from.
In November 2021, before the World Health Organization formally dubbed this new variant Omicron, researchers had clearly tracked three distinct genomic lineages labeled BA.1, BA.2 and BA.3. All three of these lineages seemed to emerge at the same time but it was BA.1 that was first to take the world by storm.
Ultimately, in late November, the WHO decided to incorporate all three lineages into the same moniker – Omicron.
Viral evolution expert Trevor Bedford points out that the differences between these two Omicron lineages are significant. Looking at amino acid changes between BA.1 and BA.2 (referred to by Bedford as 21K and 21L), he cites around 40 variations.
“For comparison Alpha, Beta and Gamma are each about as divergent from each other in terms of amino acid changes across the genome as Omicron 21K and 21L are from each other,” Bedford says.
Sub-lineages are not unexpected in terms of viral evolution. As viruses are constantly mutating, scientists expect to see persistent shifting in a genome. More than 200 sub-lineages had been cataloged with the Delta variant before it was replaced by Omicron in late 2021.
However, the strange thing about Omicron is that it emerged with three distinct lineages, out of nowhere, and scientists are struggling to understand how that could be possible. Bedford believes the three Omicron subtypes may have arisen in a single person harboring a chronic infection that allowed the virus to mutate constantly for many months.
Other hypotheses point to Omicron emerging from animal infections. Although, because there are three distinct lineages, for this to be true it would mean there were three separate spillover events from animal to human, all around the same time late last year. Scientists indicate this is unlikely, although not impossible.
In short - yes.
BA.1, the variant we generally refer to as Omicron, shot off like a rocket around the globe over December and January. But many of the countries first to experience an Omicron wave have seen case numbers rapidly decrease in recent weeks, with many experts optimistically suggesting this variant could pass more swiftly than prior waves.
Recent reports from the UK and Denmark are raising concerns over BA.2 increasing its prominence. In England the proportion of BA.2 sequenced cases has skyrocketed from virtually nothing in late December to over five percent in some parts of the country by mid-January.
More
COVID patients face risks after hospital; kids' hearts return to normal after rare inflammatory illness
January 31, 2022 10:12 PM GMT
Jan 31 (Reuters) - The following is a summary of some recent studies on COVID-19. They include research that warrants further study to corroborate the findings and that has yet to be certified by peer review.
COVID-19 patients face risks after hospital discharge
People face substantially higher risks of health problems in the months after being discharged from the hospital following a bout of COVID-19, researchers in England found.
Comparing 24,673 COVID-19 patients who survived at least a week after hospital discharge and 123,362 similarly aged people in the general population, they found the COVID-19 survivors had twice the risk of hospital admission or death during the next 10 months. Compared with 16,058 patients who had been hospitalized for influenza, the COVID-19 patients were 37% more likely to be readmitted or die due to their initial infection or other lower respiratory tract infection, and 37% more likely to experience cognitive-related admission or death, researchers reported in PLOS Medicine. COVID-19 patients with dementia who survived hospitalization were at particularly high risk for death in the months afterward, according to the report.
"Large numbers of people have been hospitalized with COVID-19... and the raised risks of death and readmission... could significantly impact public health and resources," the researchers wrote. "Risks might be minimized or mitigated by increasing monitoring of patients in the months following hospital discharge, and greater awareness among patients and clinicians of potential problems."
Heart returns to normal after rare post-COVID illness in kids
In children who develop the rare but life-threatening COVID-19-related multisystem inflammatory syndrome (MIS-C), heart function begins to recover within a week after diagnosis and returns to normal within three months, a new study suggests.
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.
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.
Cosmic physics mimicked on table-top as graphene enables Schwinger effect
Date: January 27, 2022
Source: University of Manchester
Summary: Researchers have succeeded in observing the so-called Schwinger effect, an elusive process that normally occurs only in cosmic events. By applying high currents through specially designed graphene-based devices, the team succeeded in producing particle-antiparticle pairs from a vacuum.
Researchers at The University of Manchester have succeeded in observing the so-called Schwinger effect, an elusive process that normally occurs only in cosmic events. By applying high currents through specially designed graphene-based devices, the team -- based at the National Graphene Institute -- succeeded in producing particle-antiparticle pairs from a vacuum.
A vacuum is assumed to be completely empty space, without any matter or elementary particles. However, it was predicted by Nobel laureate Julian Schwinger 70 years ago that intense electric or magnetic fields can break down the vacuum and spontaneously create elementary particles.
This requires truly cosmic-strength fields such as those around magnetars or created transitorily during high-energy collisions of charged nuclei. It has been a long-standing goal of particle physics to probe these theoretical predictions experimentally and some are currently planned for high-energy colliders around the world.
Now the research team -- led by another Nobel laureate, Prof Sir Andre Geim in collaboration with colleagues from UK, Spain, US and Japan -- has used graphene to mimic the Schwinger production of electron and positron pairs.
In January 2022 issue of Science, they report specially designed devices such as narrow constrictions and superlattices made from graphene, which allowed the researchers to achieve exceptionally strong electric fields in a simple, table-top setup. Spontaneous production of electron and hole pairs was clearly observed (holes are a solid-state analogue of positrons) and the process' details agreed well with theoretical predictions.
The scientists also observed another unusual high-energy process that so far has no analogies in particle physics and astrophysics. They filled their simulated vacuum with electrons and accelerated them to the maximum velocity allowed by graphene's vacuum, which is 1/300 of the speed of light. At this point, something seemingly impossible happened: electrons seemed to become superluminous, providing an electric current higher than allowed by general rules of quantum condensed matter physics. The origin of this effect was explained as spontaneous generation of additional charge carriers (holes). Theoretical description of this process provided by the research team is rather different from the Schwinger one for the empty space.
More
"The London Banker Henry Fauntleroy forged to keep his bank solvent. He was executed for it in 1824."
Charles P. Kindleberger, Manias, Panics and Crashes.
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