Baltic Dry Index. 1886 -10 Brent Crude 92.45
Spot Gold 1891
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 18/02/22 World 420,283,446
Deaths 5,881,479
Political leaders are expert at saying nothing.
P. J. O'Rourke.
Another day and yet another warning from Washington that Russia could invade Ukraine “at any time.” Russia continues to deny it’s going to invade Ukraine, at any time or any other time.
In the stock casinos, a bad week just gets worse. With Fed rate hikes coming and a possible new European war starting possibly this weekend, in stocks it’s becoming a game of pass the parcel.
Only in the gold market are they convinced that the District of Crooks has got it right.
In the oil market, the punters are nervous about being long in case the rumours of a new USA-Iran deal are correct and Iranian crude oil will come flooding onto the market in the second half of 2022.
Of course, if Russia does invade Ukraine, Russian oil and gas exports will likely be hit, making for a short term oil and gas shock, likely sending the Brent crude oil price heading for the mid 100s. It will take massive oil releases from global strategic stockpile to keep the price in the low 100s.
Inflation, of course, will soar. Voters everywhere will be furious. Incumbents everywhere will be terrified.
Yet another
Friday of guessing will it be war or peace?
Asia-Pacific stocks mostly slide as Russia-Ukraine tensions continue to rattle investors
SINGAPORE — Shares in Asia-Pacific largely declined in Friday trade, as simmering tensions between Ukraine and Russia continue to keep investors on edge.
Japan’s Nikkei 225 shed 0.23%, trimming losses after declining more than 1% earlier, while the Topix index dipped 0.21%. Over in South Korea, the Kospi fell 0.21%.
Mainland Chinese stocks were mixed as the Shanghai composite hovered above the flatline and the Shenzhen component edged 0.364% lower. Hong Kong’s Hang Seng index dropped 0.48%.
In Australia, the S&P/ASX 200 slipped 0.55%.
MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.39% lower.
The ongoing Russia-Ukraine crisis is at a pivotal moment, with Kyiv accusing pro-Moscow separatists of attacking a village near the border.
Fears of a Russian invasion of Ukraine have driven investors toward safe-haven assets such as gold. Spot gold was last at $1,890.13 per ounce, following its ascent earlier in the week from below $1,860.
The Japanese yen, also commonly seen as a safe-haven asset, traded at 115.16 per dollar — still stronger than levels above 115.6 seen against the greenback earlier this week.
Overnight on Wall Street, the Dow Jones Industrial Average dropped 622.24 points to 34,312.03. The S&P 500 shed 2.12% to 4,380.26 while the tech-heavy Nasdaq Composite fell 2.88% to 13,716.72.
More
DOJ official warns companies 'foolish' not to shore up cybersecurity amid Russia tensions
Thu, February 17, 2022, 8:57 PM
A top Justice Department official issued a stark warning Thursday to companies in the U.S. and abroad, calling on them to immediately shore up their cybersecurity defenses amid a potential Russian invasion of Ukraine.
"Given the very high tensions that we are experiencing, companies of any size and of all sizes would be foolish not to be preparing right now as we speak — to increase their defenses, to do things like patching, to heighten their alert systems, to be monitoring in real-time their cybersecurity," deputy attorney general Lisa Monaco said in remarks at the Munich Cybersecurity Conference. "They need to be as we say, 'shields up' and to be really on the most heightened level of alert that they can be and taking all necessary precautions."
MORE: DHS warns of Russian cyberattack on US if it responds to Ukraine invasion
Monaco said the threat was in no way "hypothetical," citing the devastating NotPetya cyberattack in 2017 that started in Ukraine before spreading globally and causing billions of dollars worth of damage.
More
https://www.yahoo.com/gma/doj-official-warns-companies-foolish-205754133.html
Ukraine crisis takes centre stage at Munich Security Conference
By Sarah Marsh and Sabine Siebold February 1, 2022
BERLIN/MUNICH (Reuters) - World leaders converge this weekend on Germany for the annual Munich Security Conference which will be dominated by the Ukraine crisis as major Western powers warn the Kremlin looks close to launching an invasion of the former Soviet state.
Ukrainian President Volodymyr Zelenskiy, U.S. Vice President Kamala Harris and NATO Secretary-General Jens Stoltenberg will be among the dignitaries attending the three-day event, known as "Davos for defence", which kicks off on Friday at the luxurious Bayerischer Hof hotel in Munich.
No Russian delegation will attend the conference, the Kremlin said last week - the first no-show in years, underscoring how much East-West relations have deteriorated.
Even at the height of the Ukrainian revolution preceding Russia's annexation of Crimea, Russian Foreign Minister Sergei Lavrov attended. Russian Foreign Ministry spokesperson Maria Zakharova said the forum had increasingly become biased towards the West, "losing its inclusivity, objectivity".
More
Gold touches $1,900 for the first time since June on flare up in Russia-Ukraine tensions
Feb 17, 2022 3:04 PM GMT By Myra P. Saefong and Mark DeCambre
Gold futures jumped on Thursday, touching a high of $1,900 an ounce for the first time since June of last year, as a flare-up in tensions between Russia and Ukraine renewed concerns about a wider military conflict.
Officials supporting Russia in the Donbas region have accused Ukraine's armed forces of launching grenades and mortar attacks into the Russia-backed region, which would be a breach of cease-fire agreements.
The accusations come as Moscow has been seen continuing to build up troops along the Ukraine border, despite claiming that it is withdrawing forces, according to U.S. intelligence.
Gold has been reacting to the geopolitical tensions in Eastern Europe, as well as evidence that inflation is surging in many parts of the world in the aftershocks from the COVID-19 pandemic.
Prices for the metal have climbed this month, benefitting mainly from "haven-investment demand brought about by the U.S.-Russia tension over Ukraine and concerns of persistent, elevated inflation," said Jeff Klearman, portfolio manager at GraniteShares, which offers the GraniteShares Gold Trust (BAR).
Against that backdrop, gold for April delivery rose $24.40, or 1.3%, to trade at $1,895.90 an ounce, following a 0.8% gain on Wednesday, which had marked the highest settlement for the most-active contract since June 11, FactSet data show. Prices on Thursday touched a high at $1,900, also for the first time since June.
The upside for gold, however, has been somewhat limited by concerns about central banks plans to raise interest rates to combat high inflation. The minutes released on Wednesday from the Federal Reserve's late-January policy meeting, however, didn't imply that the central bank was adopting a more hawkish stance than investors have already anticipated.
The meeting minutes seemed to indicate the Fed would act to increase rates "more cautiously than previously believed, adding to inflation concerns and supporting gold prices," Klearman told MarketWatch.
He points out that while 10-year real yields have increased 25 basis points since the end of January, from -71 basis points to -46 basis points, they are still negative despite growing expectations the Fed will tighten six or more times this year.
"Even more importantly 10-year inflation expectations have not declined, hovering near 2.5%," Klearman said. "Both these facts indicate the market is not convinced the Fed's current policies are aggressive enough to reduce inflation going forward, which is supportive of gold prices."
More
Finally, lookout below for cryptos?
Cryptocurrencies will suffer massive losses as the Fed ends 'crazy' speculation by hiking rates, JPMorgan strategist says
Wed, February 16, 2022, 4:23 PM
Cryptocurrencies are likely to plunge even further as the Federal Reserve raises interest rates and brings an era of "crazy" speculation to an end, according to a senior JPMorgan strategist.
"At some stage, I expect to see massive losses in crypto, because there is nothing there," David Kelly, chief global strategist at JPMorgan Asset Management, told Insider.
Cryptocurrencies have already dropped sharply, with bitcoin tumbling from a high of above $68,000 in November to around $44,000 on Wednesday. The market capitalization of all cryptocurrencies has slumped from above $3 trillion in November to less than $2 trillion today.
Investors have pivoted away from riskier investments, given the Fed prepares to hike interest rates numerous times in 2022 in an effort to tame inflation.
But Kelly said the rout isn't done yet, and he argues that digital assets are in particular danger because they serve no purpose. "It's still all fairy dust and very vulnerable to higher interest rates," he said.
The Fed's pandemic-era stimulus forced bond yields down to ultra-low levels, which prompted investors to turn to highly speculative investments such as cryptocurrencies and unprofitable tech stocks, according to the veteran strategist.
"If you push real interest rates up to a positive level, you will starve the crazy ideas of cash and funnel money towards projects that actually have a positive, real economic return," he said.
Kelly's skepticism about digital assets is not universally shared within JPMorgan, which gives customers access to crypto investment products.
The lender has a dedicated blockchain unit, called Onyx, that on Tuesday revealed it had bought a space within a crypto-powered metaverse called Decentraland. A metaverse is a virtual world where avatars can interact with each other, play games, hold meetings, trade assets and many other activities.
Kelly's thinking is more in tune with that of JPMorgan CEO Jamie Dimon, who in October called bitcoin "worthless." Yet Dimon has said the bank's customers are adults, and the bank will give them access to digital assets if they want it.
The Fed could rock markets if it moves faster than investors currently expect, Kelly said — perhaps by hiking interest rates by 50 basis points in March, in response to January's red-hot inflation numbers.
"Anything carrying very high valuations would be vulnerable, if you expect the Fed to be more aggressive early," he said.
https://www.yahoo.com/news/cryptocurrencies-suffer-massive-losses-fed-162356501.html
Nobody is making Americans buy Chinese goods.
P.
J. O'Rourke.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Fed’s Bullard says inflation ‘could get out of control.’ Well if he says so, but for most Americans, Brits and and Euros, inflation IS out of control and likely to get far worse before it gets better if it ever does.
Fed’s Bullard says inflation ‘could get out of control,’ so action is needed now
NEW YORK — St. Louis Federal Reserve President James Bullard cautioned Thursday that without central bank action on interest rates, inflation could become an even more serious problem.
“We’re at more risk now than we’ve been in a generation that this could get out of control,” he said during a panel talk at Columbia University. “One scenario would be ... a new surprise that hits us that we can’t anticipate right now, but we would have even more inflation. That’s the kind of situation that we want to ... make sure it doesn’t occur.”
Bullard has made news lately with his calls for aggressive Fed action. He has advocated for a full percentage point in rate increases by July in an effort to stem price surges that are running at the fastest pace in 40 years.
In his remarks Thursday, Bullard repeated his assertion that the Fed should “front-load” rate hikes as way to get ahead of inflation running at a 7.5% clip over the past year.
Fed officials had been resisting tightening policy, insisting for much of last year that the current run-up in prices was tied to pandemic-specific factors, such as clogged supply chains and outsized demand for goods over services, and would fade over time.
“Overall, I’d say there’s been too much emphasis and too much mindshare devoted to the idea that inflation will dissipate at some point in the future,” Bullard said. “We’re at risk that inflation won’t dissipate, and 2022 will be the second year in a row of quite high inflation. So that’s why given this situation, the Fed should move faster and more aggressively than we would have in other circumstances.”
More
Billionaire investor Carl Icahn predicts the Fed's money-printing party will end badly because the government can't control inflation
Thu, February 17, 2022, 11:25 AM
Billionaire investor Carl Icahn warned red-hot inflation spells trouble for markets, as the government is incapable of controlling price increases.
"It doesn't end happily," the Icahn Enterprises chairman told Bloomberg in a Wednesday interview. He questioned the Federal Reserve's unprecedented money-printing game, aimed at supporting the flow of credit to households and businesses during the pandemic.
"Sooner or later, a situation like this is going to end relatively badly. You can't keep printing up money, and printing it up, and printing it up because that debt – which you have now that you can't control — the government can't control inflation," he said.
The only thing the Fed can control is its policy, Icahn said. He highlighted Former Fed Chair Paul Volcker's efforts to fight persistently high inflation and reset the economy in the late 1970s.
When COVID-19 hit in early 2020 and the entire economy hunkered down as demand collapsed, the central bank and government quickly sprang into action — an indication of lessons learned from the great financial crisis. The Fed cut its benchmark interest rate to nearly zero and announced massive stimulus packages to prop up the economy and incentivize borrowers to consume.
With all this money being printed and dropping into the system, the economy was apparently on the road to recovery and US stock markets consistently hit record highs throughout last year.
But that, combined with supply chain constraints, has led to US inflation hitting its highest level in nearly 4 decades, with the popular CPI (Consumer Price Inflation) index hitting 7.5% in January.
Against that backdrop, Icahn said he isn't predicting a near-term end to euphoria in markets.
"I'm not predicting that we're in a bear market," he said. "I'm not predicting that this is going to end, sort of this euphoric atmosphere."
"You really can't predict. There are too many variables."
To combat high inflation, a more hawkish Fed is dialing back its pandemic-era purchases and wants to raise rates as soon as March. And now, the investor euphoria of last year seems to have cooled.
"I think it's economics 101 in high school," Icahn said. "You can't just keep pushing out money ... because that money will definitely lose its worth, like anything else."
"The Fed keeps pushing it out there, and that's great for a while," Icahn added. "It's like, it makes you happy. And at times it's certainly needed, but now you can't. That party has to stop."
More
https://www.yahoo.com/news/billionaire-investor-carl-icahn-predicts-095759490.html
Are you a Democrat because you're a union member? Then why, after eight years of Bill Clinton, does some Chinese guy in Guangdong province have your job?
P.
J. O'Rourke.
Covid-19 Corner
This section will continue until it becomes unneeded.
Estimated 73% of US now immune to omicron: Is that enough?
The omicron wave that assaulted the United States this winter also bolstered its defenses, leaving enough protection against the coronavirus that future spikes will likely require much less — if any — dramatic disruption to society.
Millions of individual Americans’ immune systems now recognize the virus and are primed to fight it off if they encounter omicron, or even another variant.
About half of eligible Americans have received booster shots, there have been nearly 80 million confirmed infections overall and many more infections have never been reported. One influential model uses those factors and others to estimate that 73% of Americans are, for now, immune to omicron, the dominant variant, and that could rise to 80% by mid-March.
This will prevent or shorten new illnesses in protected people and reduce the amount of virus circulating overall, likely tamping down new waves. Hospitals will get a break from overwhelmed ICUs, experts agree.
“We have changed,” said Ali Mokdad, a professor of health metrics sciences at the University of Washington in Seattle. “We have been exposed to this virus and we know how to deal with it.”
---- And there will be future outbreaks. The notion of a “herd immunity” that could stop the virus has slipped away under the harsh reality of new variants, waning immunity, and the rejection of vaccines by some Americans.
But the coronavirus is no longer new. Two years ago it arrived in a nation where nobody’s immune system had seen it before. The entire population — 330 million people — were immunologically naive, that is, susceptible to infection.
“I am optimistic even if we have a surge in summer, cases will go up, but hospitalizations and deaths will not,” said Mokdad, who works on the Institute for Health Metrics and Evaluation model, which calculated the 73% figure for The Associated Press.
With varying degrees of relief and caution, many Americans are starting to return to their pre-pandemic lifestyles.
More
New Omicron Subvariant BA.2 Spreading Rapidly, Accounts For Roughly 1 Out Of Every 5 New Covid Cases Sequenced Globally, Says WHO
Wed, February 16, 2022, 10:13 PM
The World Health Organization has released a new report on Omicron sub-variant BA.2 which shows the strain accounted for 21.5% of all new Omicron cases analyzed worldwide in the first week of February. Omicron, in turn, represented nearly all of the variants identified globally (98.3%) in the genomically-sequenced samples submitted to the GISAID data-sharing hub in the previous 30 days.
Translation: BA.2 is spreading rapidly, though it is unclear to what effect.
BA.2 — sometimes called “Stealth
Omicron” — accounted for the majority of new cases identified in 10 countries
as of Monday. Those include Denmark, India, China, Bangladesh, Brunei
Darussalam, Guam, Montenegro, Nepal, Pakistan and the Philippines. The report
notes, however, that there are massive differences
in its spread across the globe “with the South-East Asia Region reporting the
highest prevalence of BA.2 among Omicron sequences (44.7%) and the Region of
the Americas reporting the lowest prevalence (1%).”
That’s good news for the U.S., most of which is removing restrictions after the winter Omicron wave. The prevalence of BA.2 has tripled from 1.2% during the week ending 29 January 2022 to 3.6% during the week ending 5 February 2022, but it still makes up a very small proportion of new cases.
By contrast, the new Omicron strain’s prevalence in South Africa rose from 27% on February 4 to 86% by February 11. In the United Kingdom it jumped six-fold from January 17-31, from 2.2% to 12%. Denmark saw its BA.2 numbers double from the last week of 2021 to mid-January 2022, from 20% to 45%. It became the dominant variant in that country by the third week of January, at 66% of sequenced samples.
A late-January report from the Statens Serum Institut, which operates under the auspices of the Dutch Ministry of Health, found that BA.2 will likely account for “nearly 100% of all cases by mid-February 2022.” The report also found that “BA.2 may be approx. 30% more transmissible than BA.1 (the original Omicron). “Consequently,” the assessment continues, “this quick increase in BA.2 may lead to a steeper epidemic curve with a higher peak and may postpone the time at which infection rates decline until February.”
More
https://www.yahoo.com/news/omicron-subvariant-ba-2-spreading-221350533.html
Germany announces end to most COVID restrictions on March 20
February 16, 2022
BERLIN (AP) — Germany’s leaders on Wednesday announced plans to end most of the country’s coronavirus restrictions by March 20, a decision that coincided with moves by neighboring Austria and Switzerland to drop many of their curbs sooner.
A three-step plan was endorsed by Chancellor Olaf Scholz and the country’s 16 state governors as official figures show Germany’s COVID-19 infection rate beginning to drift downward.
“The peak has now probably been reached,” Scholz said, adding that “a constantly improved situation” can be expected in the coming weeks.
The easing is to start with scrapping rules that prevented people without proof of vaccination or recovery from visiting nonessential stores and the lifting of limits on private gatherings of vaccinated people.
Beginning on March 4, requirements to enter restaurants and bars will be relaxed, with a negative test sufficing rather than, as in many areas at present, proof of vaccination or recovery plus a test or a booster shot. Nightclubs will be allowed to reopen, albeit with entry restrictions.
Next, some vaccine links kindly sent along from a LIR reader in Canada.
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.
A new concentrated solar power system could cut energy costs to 5 cents per kWh
By Chris Young Feb 16, 2022 (Updated: Feb 16, 2022 10:37 EST)
Concentrated solar power (CPS) has the potential to lower the cost of renewable energy and provide highly available dispatchable energy at any time of the day.
The National Renewable Energy Laboratory (NREL) and the Department of Energy (DoE) are both working on the next generation of CPS facilities as part of the DoE's plans to reach an energy cost goal of 5 cents per kWh, a press statement reveals.
In the road to achieve this goal, U.S. government agency awarded NREL $2 million to develop a prototype for a system that can harness the great energy potential of molten salts while taming their corrosive properties.
Concentrated solar power (CPS) uses a large array of mirrors, or heliostats, to direct sunlight into collection towers that store that energy in the form of heat in sand, rocks, or molten salt. As it incorporates long-lasting thermal heat storage, it can dispatch energy at any time of the day, and it's particularly useful in areas that might rely on traditional solar PV energy (solar panels) during peak hours. Demand for energy typically peaks near sundown when solar panels start to produce less energy — a phenomenon known as the duck curve.
The DoE has identified three key areas of innovation for CPS: storing heat in liquids like molten salts, in sand-like particles, and also in gases. Though the U.S. government agency decided to focus most of its funding into particle-based storage, it also provided funding for NREL to run a two-year liquid molten salt research program.
Molten salts have great potential as they are practical to work with and can easily move through pipes and heat exchangers. It's those properties that have also led to renewed interest in the ideas of molten salt reactors, as the world continues to grapple with the transition away from fossil fuel consumption.
A few practical challenges have stood in the way when it comes to molten salt CPS. For example, the material is corrosive and can cause damage to holding tanks during the process of transferring heat energy. However, according to Craig Turchi, who leads thermal energy science and technologies research at NREL, the researchers have "actually solved that problem by and large. NREL and partners did a lot of great science on the salt chemistry — how to purify it, how to make it relatively noncorrosive if you control the chemistry, and we demonstrated that in the lab."
More
Another weekend and thankfully still no new European war. Washington has been forecasting a Russian invasion of Ukraine now for over two months. Perhaps Moscow didn’t get the memo. But will it still be peace by Monday’s casino openings? Have a great weekend everyone.
A U.S. dollar is an IOU from the Federal Reserve Bank. It's a promissory note that doesn't actually promise anything. It's not backed by gold or silver.
P.
J. O'Rourke.
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