Baltic Dry Index. 2148 +103 Brent Crude 97.11
Spot Gold 1896
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 23/02/22 World 428,285,196
Deaths 5,925,485
“No one believes more firmly than Scotland’s Comrade Sturgeon that all animals are equal. She would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?”
With apologies to Animal Farm [See Covid section.]
We open today with The Great Uncertainty. Is a Russian invasion of Ukraine good or bad for the stock casinos?
Good or bad for commodities?
Good or bad for global inflation?
Good or bad for the Fed and interest rates?
Good or bad for ending the global pandemic?
My instinct says bad, as the west begins the process of cutting off its nose despite its face, but the news out of Asia this morning and overnight stock futures suggests it’s good for the stock casinos at least. Who’d have thought it!
My guess is that any rallies in stocks are last chance saloon exit rallies. Do stocks really rally to the moon if Vlad invades all the way to Kiev? Warsaw? Paris? London?
We are living in very strange, dangerous times.
Asia-Pacific markets rise as investors watch deepening Ukraine crisis; New Zealand dollar jumps
SINGAPORE — Shares in Asia-Pacific rose in Wednesday trade as investors continue monitoring the intensifying crisis surrounding Ukraine.
Mainland Chinese stocks were higher by the afternoon, with the Shanghai composite gaining 0.55% and the Shenzhen component surging 1.313%. Hong Kong’s Hang Seng index advanced 0.69%.
South Korea’s Kospi climbed 0.27%. Elsewhere, the S&P/ASX 200 in Australia recovered from earlier losses, last up 0.34%.
MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.23% higher.
U.S. President Joe Biden said Tuesday Russia has begun “an invasion” of Ukraine and announced sanctions against Russian banks and the country’s sovereign debt, among others. Biden’s announcement came following the Russian parliament’s approval of President Vladimir Putin’s Tuesday request to use military force outside the country’s borders.
“As gripping as the situation in Ukraine is, it doesn’t have a monopoly of the concerns of the markets,” Vishnu Varathan of Mizuho Bank wrote in a Wednesday note.
“A host of other factors, led by monetary policy may be in direct conflict with Ukraine-related haven demand,” he said. “Most prominent is the conflict between an aggressively hawkish Fed that tilts yields higher and haven demand from Ukraine dampens, if not drags, yields.”
The yield on the benchmark U.S. 10-year Treasury note last sat at 1.9407%. The 10-year Treasury has crossed 2% in recent weeks as investors reposition themselves ahead of expected rate hikes by the U.S. Federal Reserve.
Markets in Japan are closed on Wednesday for a holiday.
Overnight on Wall Street, the S&P 500 declined 1.01% to 4,304.76 — more than 10% below its Jan. 3 record close, leaving the index in correction territory. The Dow Jones Industrial Average slipped 482.57 points, or 1.42%, to 33,596.61 while the Nasdaq Composite dropped 1.23% to 13,381.52.
More
https://www.cnbc.com/2022/02/23/asia-markets-russia-ukraine-tensions-currencies-oil.html
West unveils sanctions with more ready if Russia launches full-scale Ukraine invasion
February 23, 2022 4:08 AM GMT
MOSCOW/DONETSK/WASHINGTON, Feb 22 (Reuters) - Western nations and Japan on Tuesday punished Russia with new sanctions for ordering troops into separatist regions of eastern Ukraine and threatened to go further if Moscow launched an all-out invasion of its neighbour.
The United States, the European Union, Britain, Australia, Canada and Japan announced plans to target banks and elites while Germany halted a major gas pipeline project from Russia in one of the worst security crises in Europe in decades.
Bitter about Ukraine's long-term goal to join NATO and claiming it as historic Russian land, Russian President Vladimir Putin has amassed more than 150,000 troops near Ukraine's borders, according to U.S. estimates, and ordered soldiers into the breakaway Donetsk and Luhansk regions to "keep the peace".
The United States dismisses that justification as "nonsense".
Satellite imagery over the past 24 hours shows several new troop and equipment deployments in western Russia and more than 100 vehicles at a small airfield in southern Belarus, which borders Ukraine, according to U.S. firm Maxar.
U.S. Secretary of State Antony Blinken and French Foreign Minister Jean-Yves Le Drian cancelled separate scheduled meetings with Russian counterpart Sergei Lavrov on Tuesday as weeks of frantic diplomacy failed to end the crisis.
"To put it simply Russia just announced that it is carving out a big chunk of Ukraine," Biden said on Tuesday.
"This is the beginning of a Russian invasion."
Plans announced by Biden to bolster Estonia, Latvia and Lithuania include sending 800 infantry soldiers and up to eight F-35 fighter jets to locations along NATO's eastern flank, a U.S. official said, but are a redistribution, not additions.
Putin did not watch Biden's speech and Russia will first look at what the United States has outlined before responding, according to Kremlin spokesperson Dmitry Peskov, cited by Russian news agencies.
----n perhaps the most significant measure announced on Tuesday, Germany halted the $11 billion Nord Stream 2 pipeline owned by Russian state-owned gas giant Gazprom , a move likely to raise gas prices in Europe.
Built and awaiting German approval, the pipeline had been set to ease the pressure on European consumers facing record energy prices but critics including the United States have long argued it would increase Europe's energy dependence on Russia.
German Economy Minister Robert Habeck warned that gas prices in Europe were likely to rise in the short term. Dmitry Medvedev, Russia's former president and now deputy chairman of its Security Council, suggested prices could double.
"Welcome to the new world where Europeans will soon have to pay 2,000 euros per thousand cubic metres!" he said on Twitter.
The Kremlin said it hoped the Nord Stream delay was temporary and Putin said Russia "aims to continue uninterrupted supplies" of energy to the world.
More
Russia’s Ukraine incursion could complicate the Federal Reserve’s interest rate decisions
The outlook for Federal Reserve rate hikes after March may become less clear if Russia continues its incursion into Ukraine.
That’s because the tensions have pushed up the price of oil and gasoline, a major purchase for many Americans, and it’s the U.S. consumer that drives about 70% of the U.S. economy.
The prices of oil and other commodities have been rising on concerns that Russia’s troop movements into Ukraine and sanctions from the U.S. and allies could potentially lead to limited supplies. Russia is a major exporter of oil and natural gas. The country is also the largest exporter of wheat and palladium. Moscow is also a major player in nickel, aluminum and other metals.
“It’s really about oil rather than the other, wheat, palladium and nickel,” said Mark Zandi, chief economist at Moody’s Analytics. “Oil is probably up $10 or $15 a barrel because of the conflict... That will probably add, if sustained, about 30 or 40 cents a gallon to unleaded. That’s as much as a half-percentage point to year-over-year consumer inflation, and we’re already at 7.5%. My sense is it really complicates the Fed’s efforts to rein in inflation and get back to full employment.”
Consumers across the U.S. were paying an average $3.53 per gallon of unleaded gasoline Tuesday, up 90 cents from a year ago and 21 cents in the past month, according to AAA. Crude oil is up about 50% in the past year.
Economists said it will be the price of oil that could ultimately drive Fed policy. The jump in oil prices is first a catalyst for inflation, and eventually it could become disinflationary if the price goes higher and endures, dampening economic growth. Indeed, if Russia launches a full-scale military invasion into Ukraine, prices could go much higher, energy analysts say.
“It makes things more complicated,” said Bruce Kasman, JPMorgan’s chief economist. “There is a scenario where the growth hit starts to get more substantial. There’s also scenarios where the price increases are not as damaging to growth and it’s feeding inflation.”
More
How a Russian invasion of Ukraine, the ‘breadbasket of Europe,’ could hit supply chains
Oil and gas prices are set to spike further as the Russia-Ukraine crisis escalates, but the impact on energy won’t be the only ramification.
From wheat to barley, and copper to nickel, analysts tell CNBC that supply chains are set to be disrupted as the crisis takes a turn for the worse.
Ukraine is considered the “breadbasket of Europe,” and an invasion would result in the food supply chain getting “hit hard,” said Alan Holland, CEO and founder at sourcing technology company Keelvar.
Russia and Ukraine are also big suppliers of metals and other commodities, analysts said.
Tensions between Russia and Ukraine reached fever pitch in the past few days as President Vladimir Putin ordered the Kremlin’s forces into two pro-Russian separatist regions in eastern Ukraine. It came after he said Russia would formally recognize the independence of Donetsk and Luhansk.
U.S. President Joe Biden on Tuesday described Russia’s actions as the beginning “an invasion” of Ukraine.
Here’s what’s at risk if a military conflict takes place or crippling sanctions are imposed.
Ukraine produces wheat, barley and rye that much of Europe relies on, analysts said. It’s also a big producer of corn.
“Even though harvesting season is still a few months away, a prolonged conflict would create bread shortages [and increase consumer prices] this fall,” said Holland.
In fact, it’s not just the European Union that will be hit — many nations in the Middle East and Africa also rely on Ukranian wheat and corn, and disruptions to that supply could affect food security in those regions, said Dawn Tiura, president at Sourcing Industry Group.
“China is also a big recipient of Ukrainian corn — in fact, Ukraine replaced the U.S. as China’s top corn supplier in 2021,” she said.
Wheat and corn prices were already soaring. Wheat futures traded in Chicago have jumped about 12% since the start of this year, while corn futures spiked 14.5% in the same period.
Food inflation has been rising, and could worsen if an armed conflict erupts.
“Rising food prices would only be exacerbated with additional price shocks, especially if core agricultural areas in Ukraine are seized by Russian loyalists,” said Per Hong, senior partner at consulting firm Kearney.
He pointed out that Russia is also the world’s top wheat exporter. Together with Ukraine, both account for roughly 29% of the global wheat export market.
Further, any disruptions to the natural gas supply will in turn affect the production of energy-intensive products such as fertilizers — and that’s bound to hit agriculture further, said Holland. Fertilizers were already in short supply last year, leading to soaring prices.
Russia was the largest supplier of natural gas and oil to the European Union last year.
----Russia also controls about 10% of global copper reserves, and is a major producer of nickel and platinum, according to Hong.
Nickel is a key raw material used in electric vehicle batteries, and copper — widely seen as an economic bellwether — is extensively used in electronics manufacturing and construction of homes.
“The U.S. chip industry heavily relies on Ukrainian-sourced neon and Russia also exports a number of elements critical to the manufacturing of semiconductors, jet engines, automobiles and medicine,” Hong said.
While most of the European Union would be affected by the escalating crisis, Germany would be especially hard-hit.
More
Next up, an already sick German economy shoots itself in both feet. As goes Germany so goes the rump-EU.
Germany slumps into second recession, says Bundesbank
Mon, February 21, 2022, 1:11 PM
Germany may have slumped into a recession for the second time since the
pandemic started, its central bank has warned.
The Bundesbank said Europe’s largest economy could see output drop “noticeably”
this quarter as it emerges from its worst-ever surge in cases.
German GDP fell by 0.7pc in the fourth quarter of last year, meaning another decline in output would tip it into a technical recession.
Officials warned that labour shortages were “markedly” blighting activity across the economy.
The Bundesbank’s monthly report said: “In contrast to previous waves of the pandemic, it’s not just the services sector that’s hit by restrictions and adapted behaviour.”
However, despite the gloomy assessment, recent business surveys suggest German business activity picked up sharply this month.
An improving services industry led
private sector activity to rise at the fastest rate in six months, according to
purchasing managers’ index data from IHS Markit.
Its composite PMI gauge climbed to 56.2, versus 53.8 in January. A reading
above 50 indicates expansion compared with the previous month.
Manufacturers reported that supply chain bottlenecks have continued to ease over recent weeks, but cautioned that the prices they charge are none the less rising at the second-fastest rate on record.
More
https://www.yahoo.com/news/germany-slumps-second-recession-says-131158630.html
“Canada
and Scotland had come to a time when no one dared speak his mind, when fierce,
growling dogs roamed everywhere, and when you had to watch your comrades torn
to pieces after confessing to shocking crimes.”
Animal Farm.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Billionaire investor David Einhorn says the speculative market bubble peaked last year — and warns the Fed may struggle to curb inflation
Mon, February 21, 2022, 2:06 PM3 min read
· David Einhorn said the speculative bubble in financial markets peaked a year ago.
· The Greenlight Capital boss warned the Fed's rate hikes might not curb inflation.
· Einhorn predicted an economic slowdown, touted copper, and bemoaned the passive-investing boom.
Billionaire investor David Einhorn asserted that the speculative bubble in markets peaked last February, and warned the Federal Reserve might struggle to rein in inflation, speaking in a recent two-part RealVision interview.
The Greenlight Capital boss also predicted a US economic slowdown, explained why he's bullish on copper, and sounded the alarm on passive investing.
Einhorn blamed loose monetary and fiscal policies for an "enormous bubble" in recent years, but said the market mania peaked last year.
"The speculative stuff that I thought was truly insane
a year ago — it's derated very, very substantially," he said.
"The top for that thing really popped last February," he added,
drawing a comparison to the dot-com bubble bursting in March 2000.
Einhorn predicted that some goods and services would continue to rise in price, and said some inflation isn't being reflected in official estimates. As a result, the Fed trimming its balance sheet and gradually hiking interest rates might not be a sufficient response to inflation.
"It's not clear to me that that will be enough to get it under control," he said.
Einhorn suggested US gross domestic product would suffer this year from a combination of stimulus being reduced, consumers spending less as higher rates hit their portfolios, and fewer people returning to work, compared with last year.
"There's going to be somewhat of a slowdown, regardless of what the Fed does," he said, cautioning that the downturn could morph into a recession.
More
https://www.yahoo.com/news/billionaire-investor-david-einhorn-says-140658923.html
Covid-19 Corner
This section will continue until it becomes unneeded.
“If liberty means anything at all it means the right to tell people what they do not want to hear.”
Animal Farm.
Public Health Scotland Stops Releasing Covid Data to Protect The Public From Reaching Bad Conclusions
February 20, 2022
Public Health Scotland (PHS) is upset that critics are using its data to oppose Covid mandates and policies. PHS believes that the anti-vaxxers are seizing on the data to undermine its case for continued mandates. One official is quoted as saying that “[t]he case rates, hospitalization rates, the death rates are very simple statistics” and critics are misreading the data “inappropriately and sometimes willfully.” The solution? PHS will reportedly stop sharing the data with the public. It appears that it is not enough for companies like Twitter to ban critics from social media. Now, citizens will be protected not just from opposing views but information that will only confuse them.
According to papers like The Herald, the PHS will now withhold data after critics noted that, for the first time, the case rate among vaccinated (and boosted) individuals had overtaken the unvaccinated for Covid. The PHS notes that there are various reasons for this shift and that it does not support anti-vax theories.
These officials raise some interesting points to explain the differential, including what is viewed as a higher testing rate for the vaccinated and the overestimation of the size of the unvaxxed population. However, that is the point. I was able to read the interpretation of both sides and reach my own conclusions. These are not particularly complex explanations for the different rates. Free speech allows both sides to be heard by an informed electorate. These policies impact every aspect of our lives. Citizens should be allowed access to this data — as should experts who may have opposing views of their import.
Instead, the impulse of these officials is to bar access to information to protect the public from itself. It is reminiscent of the call by Sen. Elizabeth Warren (D., Mass.) for Amazon and other companies to use algorithms to steer readers away from bad choices. There was also the letter from Democratic Reps. Anna Eshoo and Jerry McNerney of California to cable carriers like AT&T asking why they are still allowing people to watch Fox News. The problem is that citizens are reaching the wrong conclusions or reading the wrong sources and must be protected from their own proclivities or ignorance.
More
COVID swamping Hong Kong, study warns coming weeks will be far, far worse
Tue, February 22, 2022, 1:36 AM
HONG KONG (Reuters) - Hong Kong faces a drastic spread of COVID-19 in coming weeks, as university researchers predicted new infections could peak at 180,000 daily in early to mid-March, with the Chinese-controlled city already barely able to cope with 6,000 cases a day.
Health authorities in the Asian financial hub said infections were rising "exponentially", and a backlog in testing meant they were unable to get a full picture.
On Tuesday, they reported 6,211 new cases, 32 deaths and a further 9,369 cases that came up positive in preliminary tests.
In a paper titled "Modelling the fifth wave of COVID-19 in Hong Kong", researchers at the University of Hong Kong said they updated their Feb. 10 study to show the number of daily deaths potentially peaking at near 100 by late March, and cumulative deaths potentially rising to around 3,206 by mid-May.
Less than two weeks ago the same researchers had predicted daily infections potentially peaking at around 28,000 by mid-March with a total of 954 deaths by the end of June.
In the absence of much more intensive social distancing measures, like a city-wide lockdown, "the trajectory of the fifth wave is unlikely to change substantially from its current course," the study said.
Hong Kong has reported that since the start of February daily infections have surged by around 70 times, overwhelming the government's testing, hospital and quarantine capacities, as it attempts to stifle the virus.
The Hong Kong government has adopted a "dynamic zero COVID" strategy similar to mainland China, aiming to eradicate any outbreaks at all costs.
Home to 7.4 million people, Hong Kong already has some of the world's toughest rules to curb COVID-19. Stringent flight restrictions mean that very few flights are able to land while most transit passengers are banned.
More
https://www.yahoo.com/news/hong-kong-finds-covid-samples-013646395.html
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.
Today, something a little different from Germany.
Can birch trees be used to soak up microplastics from polluted soil?
Nick Lavars February 21, 2022
The omnipresent nature of plastic waste threatens the environment in all sorts of ways, particularly as it is broken down into tiny fragments known as microplastics. This includes contaminating soil through sources such as wastewater irrigation and sewage, and scientists in Germany are exploring an interesting solution to this problem, demonstrating how birch trees might be used to soak up the small plastic particles with their roots.
Microplastics measuring less than 5 mm (0.2 in) in size are beginning to show up everywhere, from snowfall in the Arctic to sea ice in the Antarctic and the upper reaches of the world's tallest mountain in between. While the extent of the pollution is increasingly clear, there remains much to learn about its effects on different ecosystems (though scientists are making good inroads around the risk to marine organisms).
Similarly, studies have shown that tiny plastic particles can be taken up by plants, including vegetables that we eat. Others have demonstrated that they accumulate in the root systems, which poses a problem for root crops like carrots and potatoes, but raises the possibility of using plants to remove plastic particles from ecosystems in a controlled manner.
The team in Germany, made up of scientists from the Leibniz-Institute of Freshwater Ecology and Inland Fisheries, the German Research Centre for Geosciences and art studio Studio Austen, sought to apply this thinking to silver birch trees. Use of this species has been studied as a way of cleaning industrial pollutants and heavy metals from polluted soils, as they can sequester the contaminants in their tissues. Because their roots grow close to the soil surface where microplastic contamination is known to be higher, the scientists saw them as a good candidate to tackle this form of pollution.
The experiments involved adding microplastic beads tagged with fluorescent dyes to the soil of potted silver birch trees. The root systems were analyzed using fluorescence and confocal laser scanning microscopy five months later, which revealed microplastics in different sections of the root system in between five and 17 percent of the trees.
While the impacts of microplastic absorption on the silver birch trees will be subject to further research, we have seen studies demonstrate how it can negatively affect plant growth. One published in June of 2020 showed that the particles can build up and reduce the total biomass of a plant, which doesn't bode well for crop productivity.
"The uptake rate of microplastics and the effects on the short- and long-term health of the trees still need to be studied," said Kat Austen, the lead author of the study. "But this pilot study suggests birch has real potential for long-term soil remediation solutions – including reducing the amount of microplastics in soil and possibly water."
The research was published in the journal Science of The Total Environment.
Source: Leibniz-Institute of Freshwater Ecology and Inland Fisheries
“Comrades!' The Great Leader Trudeau cried. 'You do not imagine,
I hope, that we pigs are doing this in a spirit of selfishness and privilege?
Many of us actually dislike milk and apples and vaccines. I dislike them
myself. Our sole object in taking these things is to preserve our health. Milk
and apples (this has been proved by Science, comrades) contain substances
absolutely necessary to the well-being of a pig. We pigs are brainworkers. The
whole management and organisation of this farm depend on us. Day and night we
are watching over your welfare. It is for your sake that we drink the milk and
eat those apples and force you all to get vaccinated.”
Animal Farm.
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