Baltic Dry Index. 1940 +229 Brent Crude 90.92
Spot Gold 1824
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 11/02/22 World 406,567,714
Deaths 5,80,105
“After
all, no one is stupid enough to prefer war to peace; in peace sons bury their
fathers and in war fathers bury their sons.”
This morning we are spoiled for choice of bad news. In the USA, that Fed “transitory” inflation doesn’t seem to know it’s transitory. It doesn’t seem to be transitory in Europe, either.
In North America, Canada’s trucker protests are now starting to affect the US economy as well as the Canadian economy. The global economy next?
But the really big news overnight was President Biden ordering all remaining Americans in Ukraine to do “a Trudeau” and run away from Ukraine “now.”
He also said that no US troops were coming to rescue them if Russia invades, which he thinks they could do at any time. That would start World War Three, he says.
What does President Biden know that we don’t.
Biden warns Americans in Ukraine to leave, says sending troops to evacuate would be 'world war'
February 11, 2022, 12:33 AM
President Joe Biden issued a warning Thursday to any Americans who remain in Ukraine as Russia continues to threaten an invasion: Leave.
"American citizens should leave now," Biden said in an interview with NBC News anchor Lester Holt.
“It’s not like we’re dealing with a terrorist organization. We’re dealing with one of the largest armies in the world. It’s a very different situation, and things could go crazy quickly,” he said.
Holt asked Biden what scenario could prompt him to send troops to rescue Americans fleeing the country. Biden replied: “There’s not. That's a world war when Americans and Russia start shooting at one another.”
"We’re in a very different world than we’ve ever been," he added.
More
https://www.yahoo.com/news/biden-warns-americans-ukraine-leave-224709284.html
U.S. consumer prices post largest annual gain in 40 years as inflation becomes widespread
February 10, 2022 7:13 PM GMT
WASHINGTON, Feb 10 (Reuters) - U.S. consumer prices rose solidly in January, leading to the biggest annual increase in inflation in 40 years, fueling financial markets speculation for a hefty 50 basis points interest rate hike from the Federal Reserve next month.
The broad increase in prices reported by the Labor Department on Thursday was led by soaring costs for rents, electricity and food, and could heap more political pressure on President Joe Biden, whose popularity has been declining amid anxiety over the rising cost of living.
High inflation, which has overshot the Fed's 2% target, could imperil Biden's economic agenda. Biden in a statement acknowledged the hardships American families are facing, but noted that "there are also signs that we will make it through this challenge." He was alluding to the unchanged reading in the prices of motor vehicles, one of the major drivers of inflation.
"For the Fed, this report provides another wake-up call. Inflation is here and it continues to make its presence known everywhere," said Alexander Lin, an economist at Bank of America Securities in New York. "We believe that today's print endorses the Fed to move more quickly, and the market will likely encourage the Fed to hike 50 basis points at the next meeting."
The consumer price index gained 0.6% last month after a similar increase in December. Food prices rose 0.9%, with the cost of food consumed at home increasing 1.0%. There were strong increases in the prices of cereals and bakery products, dairy, fruits and vegetables. Meat prices rose moderately. Electricity prices jumped 4.2%, offsetting cheaper gasoline and natural gas.
In the 12 months through January, the CPI jumped 7.5%, the biggest year-on-year increase since February 1982.
That followed a 7.0% advance in December and marked the fourth straight month of annual increases in excess of 6%. Economists polled by Reuters had forecast the CPI rising 0.5% on month and accelerating 7.3% on a year-on-year basis.
Effective with the January report, the CPI was re-weighted based on consumer expenditure data from 2019-2020. That increased the goods weight and trimmed services, accounting for some of the above-expectations increase in the CPI.
----Financial markets have priced in a 50 basis points increase in March, according to CME's FedWatch tool. Stocks on Wall Street fell, while the dollar was little changed against a basket of currencies. U.S. Treasury prices fell, with the yield on the 10-year note reaching 2% for the first time since August 2019.
More
Asia-Pacific stocks mixed as investors react to hot U.S. inflation report
SINGAPORE — Shares in Asia-Pacific were mixed in Friday trade, as investors in the region reacted to the Thursday release of a hotter-than-expected U.S. consumer inflation report that pushed the 10-year Treasury yield past 2%.
Mainland Chinese stocks were mixed by the afternoon, with the Shanghai composite rising 0.34% while the Shenzhen component shed 0.306%. Hong Kong’s Hang Seng index nudged fractionally higher.
South Korea’s Kospi fell 0.28%, with shares of game developer Krafton plunging more than 11% after it announced Thursday a 84.9% year-on-year drop in its net profit for the fourth quarter.
The S&P/ASX 200 in Australia declined 0.66%. In Southeast Asia, the Straits Times index in Singapore climbed 0.22%.
MSCI’s broadest index of Asia-Pacific shares outside Japan declined 0.65%.
Markets in Japan are closed on Friday for a holiday.
Investors monitored moves in U.S. bond yields on Friday, after the U.S. consumer price index for January showed a hotter-than-expected 7.5% year-over-year rise — its largest gain since 1982. The reading was also higher than Dow Jones estimates of 7.2% for the closely watched inflation gauge.
The benchmark U.S. 10-year Treasury yield, which crossed 2% Thursday stateside after starting the year at 1.51%, last sat at 2.0363%. Yields move inversely to prices.
The major indexes on Wall Street tumbled overnight, with the Dow Jones Industrial Average dropping 526.47 points to 35,241.59 while the S&P 500 shed 1.81% to 4,504.08. The tech-heavy Nasdaq Composite lagged as it plunged 2.1% to 14,185.64.
More
https://www.cnbc.com/2022/02/11/asia-markets-us-inflation-treasury-yields-currencies-oil.html
Column: Historic central bank drain questions 'buy the dip'
By Jamie McGeever February 10, 2022 9:28 AM GMT
ORLANDO, Fla., Feb 9 (Reuters) - The chances of investors avoiding a rare down year for stocks are shrinking as central banks prepare to undertake the biggest liquidity drain in history.
The U.S. Federal Reserve, European Central Bank and Bank of England are flagging a reversal of emergency pandemic monetary settings. The mix of higher interest rates, a halt to bond buying and an eventual reduction of their bloated balance sheets will sap trillions of dollars of liquidity from world markets over the next 12 months and beyond.
To what extent historically expensive stock prices can absorb that shock is the investment question of the year.
Analysts at Morgan Stanley estimate that the G4 central banks will drain $2.2 trillion worth of liquidity from the global financial system over 12 months, in what they called "the largest quantitative tightening in history."
They reckon the combined G4 central bank balance sheet will peak in May, and the $2.2 trillion reduction will be more than four times larger than the $500 billion drained when so-called 'quantitative tightening' was last tried in 2018.
That's worth noting. World stocks fell 20% peak to trough that year as the Fed was raising rates and began shrinking its balance sheet. The eventual toll on markets forced the Fed to put these particular policy tools back in their box.
Could a 20% slide - technically ushering in a bear market - be on the cards this year? With the Fed under political pressure to tame inflation and make policy for Main Street rather than Wall Street, and with BoE and even ECB tightening now on the table too, it's a credible prospect.
Citi strategist Matt King notes that if the relationship between central bank liquidity and financial markets in the coming months is as strong as it has been over the last decade, stocks and other markets are vulnerable.
G4 central banks expanded their balance sheets by a combined $8 trillion in 2020 and a further $3 trillion last year. Their aggregate balance sheet stands at over $26 trillion.
This was the jet fuel for last year's equity boom, King argues, which delivered S&P 500 total returns of almost 30%. If it's the relative change rather than the absolute level of liquidity that drives markets, removing even a fraction of the post-pandemic support could be huge.
"It's not a global arms race in terms of tightening, but there is an inter-linkage in their policies, which collectively creates a global move. And that matters for risk assets," King says.
"QE produced an 'everything rally'. At a minimum, that liquidity is no longer pushing everything up. So logically, you should be worrying about the risk of an 'everything selloff'," he adds
More
https://www.reuters.com/markets/europe/historic-central-bank-drain-questions-buy-dip-2022-02-10/
GM, Toyota, Ford cut production following Canadian trucking protests
February 10, 2022 9:45 PM GMT
WASHINGTON, Feb 10 (Reuters) - Toyota Motor Corp (7203.T), General Motors Co (GM.N), Ford Motor (F.N) and Chrysler-parent Stellantis (STLA.MI) said they had been forced to cancel or scale back some production at North American plants on Thursday because of parts shortages stemming from Canadian trucker protests against pandemic mandates.
The truckers, who oppose a vaccinate-or-quarantine requirement for cross-border drivers, have used their big rigs to snarl traffic at the Ambassador Bridge linking Detroit and Windsor, Ontario - which accounts for about 25% of U.S.-Canadian trade.
A Toyota spokesman told Reuters the automaker was suspending production through Saturday at plants on both sides of the border, in Ontario and Kentucky. The largest Japanese automaker said it was "experiencing multiple dropped logistics routes" and it is "not isolated to only one or two parts at this point."
The shortages affected Toyota's production of the RAV4 - the best-selling non-truck vehicle in the United States, Camry, Avalon, Lexus RX and Lexus ES, the automaker said.
Ford said it was running its plants in Windsor and Oakville, another Canadian city, at reduced capacity. It added that it hoped for a quick resolution "because it could have widespread impact on all automakers in the U.S. and Canada."
Stellantis said some U.S. and Canadian plants cut short shifts on Thursday after many shortened shifts Wednesday night "due to parts shortages caused by the closure of the Detroit/Windsor bridge."
GM said it was forced to halt production Thursday at a Michigan plant where it builds sport utility vehicles after the protests.
More
Finally, yesterday we asked “what else could possibly go wrong?” Reuters couldn’t wait to tell us.
There’s a global shortage of diesel and its price is rising fast. If it isn’t addressed and rectified fast, our foods, (and most other) supply chains are in for yet more disruption.
No matter how high you bid the price, if the product isn’t available it doesn’t get supplied. And just wait until the Washington-London War Party force Russia into the next European war.
Analysis: After oil, gas and coal, global fuel shortage spreads to diesel
February 10, 2022 2:58 AM GMT
LONDON, Feb 10 (Reuters) - Global supplies of diesel are dwindling as refiners struggle to keep pace with rapid post-pandemic demand recovery, exacerbating an acute global energy shortage which has already sent the prices of gas, coal and crude oil soaring.
At a time when global central banks are fretting over inflation rates not seen for decades, diesel shortages would push up fuel and transportation costs further and add more upward pressure on retail prices.
The U.S. and Asian diesel imports on which Europe relies have been limited in recent weeks due to higher domestic consumption for manufacturing and road fuel purposes.
Gasoil inventories, which include diesel and heating oil, held in independent storage in Europe’s Amsterdam-Rotterdam-Antwerp (ARA) refining and storage area fell last week by 2.5%, data from Dutch consultancy Insights Global showed.
Regional stocks were at their lowest level for this time of year since 2008, according to the data, while Singapore’s onshore inventories of middle distillates also sank to multi-year lows of 8.21 million barrels.
"Diesel demand seems to be improving in (northwest Europe) but lower refining capacity compared with pre-COVID and low import levels are keeping the market under severe pressure," said Insights Global's Lars van Wageningen.
Northwest European diesel cargo prices reached $114/bbl on Monday, the highest since September 2014, while margins to crude reached two-year highs last week.
Morgan Stanley analysts note that diesel prices reached around $180 a barrel in 2008, drivenby an "exceedingly tight" middle distillate market as Brent crude rose close to $150/bbl.
----Last week, a winter storm tested fuel availability in the U.S. with some utilities preparing to use more distillate fuel oil to meet demand, while South Korea and India have been unable to fill a supply gap left by China’s recent clampdown on refined product exports due to their own domestic needs. read more
Tight supply has pushed Asian diesel prices for the benchmark 10ppm gasoil to their highest since Sept. 2014.
Refiners generally respond to high margins and low inventories by ramping up output. But the global oil refining complex is under strain, with capacity falling for the first time in 30 years last year as closures outweighed new additions, the International Energy Agency said last month. read more
More
“The nuclear arms race is like two sworn enemies standing waist deep in gasoline, one with three matches, the other with five.”
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Inflation rises 7.5% over the past year, even more than expected and the highest since 1982
Published Thu, Feb 10 2022 8:30 AM EST
Consumer prices in January surged more than expected over the past 12 months, indicating a worsening outlook for inflation and cementing the likelihood of substantial interest rate hikes this year.
The consumer price index, which measures the costs of dozens of everyday consumer goods, rose 7.5% compared to a year ago, the Labor Department reported Thursday.
That compared to Dow Jones estimates of 7.2% for the closely watched inflation gauge. It was the highest reading since February 1982.
Stripping out volatile gas and grocery costs, the CPI increased 6%, compared to the estimate of 5.9%.
The monthly rates also came in hotter than expected, with headline and core CPI both rising 0.6%, compared to the estimates for a 0.4% increase on both measures.
Core inflation rose at its fastest level since August 1982.
More
But back in Ivory Tower land, or the District of Crooks, no one saw inflation coming.
U.S. may be on 'cusp' of inflation slowdown, Fed's Bostic tells CNBC
Wed, February 9, 2022, 1:44 PM
WASHINGTON (Reuters) - The U.S. economy may be nearing a turn lower in inflation, Atlanta Fed President Raphael Bostic said on Wednesday, though he added he is still leaning towards a slightly faster pace of interest rate increases this year.
"I am very hopeful we are going to start to see that decline ... There is some evidence we are on the cusp of that," Bostic said in an interview on CNBC.
While Bostic still expects just three quarter-percentage-point rate increases will be appropriate this year, he said: "I am leaning a little towards four. We are going to have to see how the economy responds as we take our first steps," with an initial rate increase expected in March.
---- Bostic said more important to him than the high headline inflation number is whether the month-to-month pace of change continues to moderate, a sign the economy may be working through the supply-chain problems and other difficulties that have been driving prices higher but are associated with the bumpy reopening from the coronavirus pandemic.
"If we are going to see a return to numbers closer to our (2%) target we need to see those month-over-month changes start to decline," Bostic said. In recent months "what we have seen is inflation not get worse on a month-to-month level, and I am hopeful that will translate into a slow decline as we move through the spring and into summer, which will give me some comfort that we are heading in the right direction."
More
https://www.yahoo.com/news/feds-bostic-says-u-may-134416217.html
Analysis: Hot inflation fuels case for 'big-bang' Fed rate hike in March
February 11, 2022 1:58 AM GMT
Feb 10 (Reuters) - Pressure increased on the Federal Reserve on Thursday to take a stronger stand against inflation after an unexpectedly large jump in U.S. consumer prices defied hopes that the pocketbook squeeze would ease and bolstered the view that the U.S. central bank is behind the curve.
In the hours after a government report showed consumer prices rose at their fastest pace since the early 1980s, traders piled into previously improbable bets that the Fed will start its coming round of rate hikes with a "big bang" 50 basis-point rate hike. One Fed policymaker who just last week said such a move was unnecessary said he had changed his mind. The yield on two-year Treasuries rose the most since June 5, 2009.
The massive market shift and St. Louis Fed President James Bullard's embrace of a full percentage point's worth of rate hikes over the next four months suggests an internal Fed debate over how fast and high to raise interest rates will only intensify ahead of the next rate-decision meeting on March 15-16.
More
https://www.reuters.com/world/us/hot-inflation-builds-case-big-bang-fed-rate-hike-march-2022-02-10/
EU raises inflation forecasts on supply disruptions, energy crisis
Published Thu, Feb 10 2022 5:04 AM EST
The European Commission on Thursday raised its inflation expectations for this year, but is still expecting prices to move below the European Central Bank’s target of 2% in 2023.
The Brussels-based institution said inflation will hit 3.5% this year from a November forecast of 2.2%.
The debate over inflation in the 19-member bloc is fierce. On the one hand, some argue that current inflationary pressures will ease and a degree of loose monetary policy is needed. Others counter that the ECB needs to tighten monetary policy after consecutive historic monthly highs in inflation.
Bundesbank Governor Joachim Nagel became the second central banker in the last few days to indicate that the ECB may raise rates later this year.
However, the European Commission, the executive arm of the EU, said Thursday that inflationary pressures are likely to come down next year.
“After reaching a record rate of 4.6% in the fourth quarter of last year, inflation in the euro area is projected to peak at 4.8% in the first quarter of 2022 and remain above 3% until the third quarter of the year,” the commission said in a statement.
“As the pressures from supply constraints and high energy prices fade, inflation is expected to decline to 2.1% in the final quarter of the year, before moving below the European Central Bank’s 2% target throughout 2023,” the institution added.
As such, the commission estimated that annual inflation in the euro area will rise from 2.6% in 2021 to 3.5% in 2022, before then falling to 1.7% in 2023.
These numbers, however, point to an upward revision in the ECB’s own inflation forecasts at its next meeting in March.
More
“Never, never, never believe any war will be smooth and easy, or that anyone who embarks on the strange voyage can measure the tides and hurricanes he will encounter. The statesman who yields to war fever must realize that once the signal is given, he is no longer the master of policy but the slave of unforeseeable and uncontrollable events. ”
Covid-19 Corner
This section will continue until it becomes unneeded.
Omicron subvariant BA.2 is rising. What do we know about it?
Laura Ramirez-FeldmanReporter/Producer Wed, February 9, 2022, 5:10 PM
Two years into the COVID-19 pandemic, and just when new cases and hospitalizations in the U.S. are on the decline, an Omicron subvariant called BA.2 is gaining significant traction in some parts of the world.
Dr. Dorit Nitzan, a World Health Organization regional director, told the Jerusalem Post on Monday that Omicron BA.2 is likely to become dominant worldwide due to its high transmissibility. “The expected trajectory is that it will become the new dominant variant, as once it crosses past a certain threshold it becomes dominant — like we’re seeing in Denmark and the U.K.,” Nitzan said.
While the original Omicron variant, first detected in South Africa in late November, is still responsible for the majority of new cases in most countries, BA.2 has rapidly spread in places such as South Africa, India, England and Denmark, where it is now dominant.
In the U.S., Omicron BA.2 is circulating at a low level, accounting for less than 4 percent of new coronavirus cases, according to the Centers for Disease Control and Prevention. But some experts believe it is just a matter of time until the subvariant takes over and becomes dominant.
“Anytime a variant is more transmissible, even if it’s a little more transmissible, it seems to have taken on that dominance,” Dr. Monica Gandhi, an infectious disease specialist and professor of medicine at the University of California, San Francisco, told Yahoo News. “So Delta was much more transmissible than Alpha. It took over. Then Omicron was four times more transmissible than Delta. It took over. If the BA.2 is more transmissible than BA.1, it'll take over,” she said.
According to public health experts in both Denmark and the U.K., the variant appears to be between 30 and 34 percent more infectious than the currently dominant BA.1 form. A recent Danish study also found that BA.2 was relatively better than BA.1 at infecting vaccinated people, which indicates the subvariant has greater "immune-evasive properties."
More
https://www.yahoo.com/news/omicron-subvariant-ba-2-is-rising-what-do-we-know-about-it-171026165.html
Heart problems surge in COVID patients up to 12 months after infection
Rich Haridy February 08, 2022
A massive analysis of health records has revealed recovered COVID-19 patients are at a significantly higher risk of cardiovascular complications in the year following an acute infection. The new findings, published in Nature Medicine, showed COVID-19 survivors were 55 percent more likely to experience a serious cardiovascular event after recovering.
“We wanted to build upon our past research on COVID’s long-term effects by taking a closer look at what’s happening in people’s hearts,” explained Ziyad Al-Aly, senior author on the new study from Washington University. “What we’re seeing isn’t good. COVID-19 can lead to serious cardiovascular complications and death. The heart does not regenerate or easily mend after heart damage. These are diseases that will affect people for a lifetime.”
The researchers looked at medical records from the US Department of Veteran Affairs, analyzing around 150,000 positive COVID-19 cases. Cardiovascular outcomes in the 12 months after acute disease were compared to two large control groups of more than five million patients.
In a period starting 30 days after initial infection, and up to a year later, COVID patients were 72 percent more likely to experience coronary artery disease compared to those without SARS-CoV-2 infection. They were also 52 percent more likely to have a stroke and 63 percent more likely to suffer a heart attack.
Overall, the study found COVID-19 patients experienced a 55 percent higher rate of major adverse cardiovascular events in the year following their acute disease. These adverse events included cerebrovascular disorders such as stroke, ischemic and non-ischemic heart disease, pericarditis, myocarditis, and heart failure.
Al-Aly pointed out that risks of cardiovascular events were higher in those with pre-existing heart conditions and those suffering from more severe COVID-19. However, across all cohorts the study still found COVID-19 increased one’s risk of heart problems.
“… most remarkably, people who have never had any heart problems and were considered low risk are also developing heart problems after COVID-19,” said Al-Aly. “Our data showed an increased risk of heart damage for young people and old people; males and females; Blacks, whites and all races; people with obesity and people without; people with diabetes and those without; people with prior heart disease and no prior heart disease; people with mild COVID infections and those with more severe COVID who needed to be hospitalized for it.”
Exactly why SARS-CoV-2 infection is increasing a person’s risk of cardiovascular disease is still unclear. In the new study the researchers hypothesize a number of potential mechanisms, such as lingering damage in cells from the acute viral infection to a persistent hyperactive immune response following the disease.
More
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.
Major breakthrough on nuclear fusion energy
Wed, February 9, 2022, 1:48 PM
European scientists say they have made a major breakthrough in their quest to develop practical nuclear fusion - the energy process that powers the stars.
The UK-based JET laboratory has smashed its own world record for the amount of energy it can extract by squeezing together two forms of hydrogen.
If nuclear fusion can be successfully recreated on Earth it holds out the potential of virtually unlimited supplies of low-carbon, low-radiation energy.
The experiments produced 59 megajoules of energy over five seconds (11 megawatts of power).
This is more than double what was achieved in similar tests back in 1997.
It's not a massive energy output - only enough to boil about 60 kettles' worth of water. But the significance is that it validates design choices that have been made for an even bigger fusion reactor now being constructed in France.
"The JET experiments put us a step closer to fusion power," said Dr Joe Milnes, the head of operations at the reactor lab. "We've demonstrated that we can create a mini star inside of our machine and hold it there for five seconds and get high performance, which really takes us into a new realm."
The ITER facility in southern France is supported by a consortium of world governments, including from EU member states, the US, China and Russia. It is expected to be the last step in proving nuclear fusion can become a reliable energy provider in the second half of this century.
Operating the power plants of the future based on fusion would produce no greenhouse gases and only very small amounts of short-lived radioactive waste.
"These experiments we've just completed had to work," said JET CEO Prof Ian Chapman. "If they hadn't then we'd have real concerns about whether ITER could meet its goals.
"This was high stakes and the fact that we achieved what we did was down to the brilliance of people and their trust in the scientific endeavour," he told BBC News.
More
https://www.yahoo.com/news/oxfords-jet-lab-smashes-nuclear-120021127.html
Another weekend and one week closer to Spring in the northern hemisphere. One week closer to the end of the winter Olympics too, on February 20th. I wonder if they know that in the Kremlin? Have a great weekend everyone. Stock up now for Christmas and 2023?
“Military men are just dumb, stupid animals to be used as pawns in foreign policy.”
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