Baltic Dry Index. 2546 -43 Brent Crude 117.05
Spot Gold 1921
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 23/03/22 World 474,693,725
Deaths 6,122,432
If all else fails, immortality can always be assured by spectacular error.
John Kenneth Galbraith.
In the stock casinos, war? What war? Food crisis looming? So what?
In the stock casinos, it’s all about capital fleeing bonds and parking in stocks.
If I’m reading commodities correctly, a spectacular error is in the making. For once I’m with corporate raider, aka asset stripper, Carl Icahn.
Unless Russia’s war in the Ukraine ends while there’s still some of the spring planting season left in Ukraine, I think we are headed for the Giant Stagflation of all times by year end, led by food price inflation.
The only food chain good news, as far as I can see, the Canadian Pacific railway lockout ended before it did any harm to Canadian farm fertiliser delivery.
Now hopefully Canada, the USA and Europe get perfect planting and growing weather and rains.
Bond rout pushes cash back in to stocks
March 23, 2022 2:32 AM GMT
SINGAPORE, March 23 (Reuters) - Asian equities hit three week highs on Wednesday as cash fleeing tumbling bond markets flowed back toward big tech and other beaten-up sectors, while the Ukraine conflict's potential to further hit supplies kept oil and commodity prices high.
MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.6%, with Hong Kong (.HSI), Seoul (.KS11) and Sydney (.AXJO) all registering similar sized gains.
The index is at its highest since March 4. Japan's Nikkei (.N225) jumped 2.5% to touch a two-month top and the moves follow a gain of 1.1% for the S&P 500 (.SPX) and nearly 2% for the Nasdaq (.IXIC) in overnight trade.
Bond markets extended their retreat as investors braced for the Federal Reserve to take an even more aggressive approach to taming inflation. Two-year Treasury yields are up 76 basis points (bps) in March and 10-year yields are up almost 60 bps to 2.4154%, the highest since 2019.
The selloff, which began months ago, gathered momentum in recent sessions after Fed Chair Jerome Powell flagged the possibility of bigger-than-usual interest rate hikes. As a result, the rates-sensitive yen plumbed six-year lows of 121.41 per dollar on Wednesday.
"The move higher in yields stretching over the past two weeks has been the largest one since the global financial crisis and even then the moves were within a couple of basis points of what we are experiencing now," said NatWest Markets' rates strategist Jan Nevruzi.
"At some point the market might start pricing in an economic downturn, particularly if the Fed embarks on a series of 50 bp hikes."
For now, investors have been impressed by U.S. economic strength - notwithstanding headwinds from war and inflation - and are wagering that big businesses with good cashflows can hold their own.
More
https://www.reuters.com/business/global-markets-wrapup-1-2022-03-23/
‘Red flags’ as some China property developers say they can’t release earnings on time
A slew of Chinese real estate developers said this week that they are either not able to release their financial results on time or have yet to set board meetings for them.
Among them is troubled property developer Evergrande which shook investment markets last year as a result of its debt crisis.
The developers gave a variety of reasons for not being able to do so.
In a filing to the Hong Kong exchange on Tuesday, Evergrande said that due to the “drastic changes” in its operational environment since the second half of last year, its auditor added “a large number of additional audit procedures” this year.
Coupled with “the effect caused by the Covid-19 outbreak,” Evergrande will not be able to publish results by the end of March for its year ended Dec. 31, 2021, it said in the filing.
It said that it will publish the audited results “as soon as practicable” after the audit is completed.
Late Tuesday, another major developer Kaisa also said in a filing that it would not be able to publish earnings by Mar. 31, as the audit hasn’t been completed due to a recent Covid lockdown in Shenzhen. Due to this delay, its shares will halt trading from April 1, it said.
Other developers said the resignation of auditors meant they could not issue their financial year (FY) 2021 earnings on time, according to Japanese bank Nomura.
Developer Ronshine said Monday that PricewaterhouseCoopers (PwC) has quit, citing insufficient time for the audit as well as the Covid resurgence in China as two main reasons for the resignation.
In the past two months, developers such as Aoyuan, Shanghai Shimao and Hopson also announced change of auditors.
“When developers change auditors ahead of their full-year results season, it typically raises red flags regarding potential auditing issues and should lead to serious market concerns about the trustworthiness of their financial numbers,” Nomura said in a Monday note.
More
Carl Icahn says there ‘very well could be a recession or even worse’
Famed investor Carl Icahn said Tuesday an economic downturn could be on the horizon and he is loaded on protection against a steep sell-off in the market.
“I think there very well could be a recession or even worse,” Icahn said on CNBC’s “Closing Bell Overtime” to Scott Wapner. “I have kept everything hedged for the last few years. We have a strong hedge on against the long positions and we try to be activist to get that edge... I am negative as you can hear. Short term I don’t even predict.”
The founder and chairman of Icahn Enterprises said surging inflation is a major threat to the economy, while the Russia-Ukraine war only added more uncertainty to his outlook.
The Federal Reserve raised interest rates for the first time in more than three years in an attempt to battle inflation that is running at its highest level in 40 years. Fed Chairman Jerome Powell this week vowed tough action on soaring prices, indicating he’s open to rate hikes more than the traditional 25 basis points.
“I really don’t know if they can engineer a soft landing,” Icahn said. “I think there is going to be a rough landing... Inflation is a terrible thing when it gets going.”
Icahn, a longtime activist investor and so-called corporate raider, said he believes the system of company boards needs to be fixed and weak management could lead to disasters.
“There’s no accountability in Corporate America. You have some very fine companies, some very fine CEOs, but far too many that are not up to the task,” the longtime activist investor said.
To position for a recession in America, Icahn said he’s betting against malls and commercial real estate.
In commodities news, Russian oil slows the crude oil surge, for now, with the emphasis on “for now.”
In global agriculture news, no one quite knows how to trade the disaster of the Russia v Ukraine war.
Right now Ukraine’s winter wheat crop should be getting fertiliser. The spring crops of barley, corn [maize,] and sunflowers should be starting planting. None of this is happening nor likely to happen anytime soon, if ever this year.
Russian Oil Seeps Into Global Market to Ease Supply Fears for Now
· Traders monitor Russian crude leakage, wild price swings
· China’s demand has been subdued due to virus flare-up
BySharon ChoUpdated on23 March 2022, 02:07 GMT
Millions of barrels of Russian oil are still finding a way to buyers almost a month after the country first invaded Ukraine, tempering concerns that a sanctions backlash would all but choke off supply and cause the market for physical cargoes to overheat.
India’s oil refiners grabbed multiple cargoes of Russia’s flagship Urals crude this month, potentially supplanting the Middle Eastern varieties they normally purchase from Abu Dhabi and Iraq. Meanwhile, China’s private processors are still thought to be targeting their favored cargoes from the east of Russia -- likely at knock-down prices.
More
Ukraine war imperils wheat, but farmers in no rush to pivot
DUBAI, United Arab Emirates (AP) — Russia’s war in Ukraine could mean changes for Ed Kessel’s farm along a quiet stretch of western North Dakota.
Worldwide, farmers like Kessel are weighing whether to change their planting patterns and grow more wheat this spring as the war has choked off or thrown into question grain supplies from a region known as “the breadbasket of the world.”
Ukraine and Russia account for a third of global wheat and barley exports, which countries in the Middle East, Asia and Africa rely on to feed millions of people who subsist on subsidized bread and bargain noodles. They are also top exporters of other grains and sunflower seed oil used for cooking and food processing.
Kessel said he may plant some more wheat and ride the tide of high prices that have spiked by a third since the invasion, helping offset losses from drought and the increasing cost of fuel, but not a lot more.
“Honestly, it probably will help us plant a few more wheat acres. We’ll put a few more acres into wheat and a few more into sunflowers,” said Kessel, also first vice president of the North Dakota Grain Growers Association.
Major grain producers like the United States, Canada, France, Australia and Argentina are being closely watched to see if they can quickly ramp up production to fill in the gaps from lost Ukrainian and Russian supplies. But farmers are facing the prospect of another year of drought, climbing fuel and fertilizer costs, and supply chain disruptions from the COVID-19 pandemic. Major producers also are hamstrung by factors like legal limits on exports and farming patterns.
That means uncertainty for countries like Egypt, Lebanon, Pakistan, Iran, Ethiopia and others that cannot grow enough wheat, barley, corn or other grains to meet their needs. The war has raised the specter of food shortages and political instability in countries that rely on affordable grain imports.
Any extra grain exports from anywhere in the world “will likely only partially offset lower Black Sea shipments over the remainder of the current season,” the International Grains Council said in its March report.
About half of the grain the World Food Program buys to feed 125 million people worldwide comes from Ukraine. The double blow of rising food prices and depressed wheat exports from the war is a recipe for “catastrophe not just in Ukraine, but potentially globally,” the head of the U.N. food assistance agency warned.
"In economics, hope and faith coexist with great scientific pretension."
John Kenneth Galbraith.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Fertilizer prices are at record highs. Here’s what that means for the global economy
Published Tue, Mar 22 2022 8:28 AM EDT
LONDON — Supply shortages fueled by the Ukraine-Russia conflict, along with a host of pre-existing factors, have driven fertilizer prices to record highs.
Prices for raw materials that constitute the fertilizer market — ammonia, nitrogen, nitrates, phosphates, potash and sulphates — are up 30% since the turn of the year and now exceed those seen during the food and energy crisis in 2008, according to British commodity consultancy CRU.
Russia and Ukraine are among the most important producers of agricultural commodities in the world, with exportable supplies in global foodstuff and fertilizer markets concentrated in a small number of countries.
In 2021, Russia was the world’s top exporter of nitrogen fertilizers and the second-largest supplier of both potassic and phosphorous fertilizers, according to the U.N. Food and Agriculture Organization.
Trade between Russia and the rest of the world has not stopped, but has been severely disrupted as importers and vessel charterers steer clear of the country in light of the invasion of Ukraine, CRU Head of Fertilizers Chris Lawson said on Tuesday.
Russia, which accounts for around 14% of global fertilizer exports, has temporarily suspended outgoing trade, which is expected to have a strong ripple effect across global food markets.
“Furthermore, gas is a key input for fertilizer production. High gas prices have resulted in a curtailing of production in regions such as Europe, further constricting an already tight market,” Lawson said.
Meanwhile, sanctions on Russian-ally Belarus have substantial implications for the potash market, with Russia and Belarus contributing a combined 40% of annual traded volumes.
“Since the beginning of 2020, nitrogen fertilizer prices have increased fourfold, while phosphate and potash prices over threefold,” Lawson explained.
“While farmers in developed markets have benefitted from high agricultural commodity prices, helping to partly offset high input prices, demand destruction is increasingly likely due to high prices and supply shortfalls.”
Economies around the world are already dealing with historically high inflation driven largely by soaring food and energy prices. The U.N. Food and Agriculture Index shows food prices are at an all-time high, and Lawson suggested that a prolonged period of fertilizer shortage will affect longer-term farming yields.
----While much of the focus of discussions around price spikes in the wake of Russia’s invasion of Ukraine has been dominated by energy, the supply shock to fertilizer, wheat and other grains is expected to compound the problem.
In a research note earlier this month, Barclays Chief U.K. and Senior European Economist Fabrice Montagné and Head of Economics Research Christian Keller suggested that “the breadth and intensity of this supply shock could have more severe consequences than previous commodity price spikes, by broadening inflationary pressure.”
More
https://www.cnbc.com/2022/03/22/fertilizer-prices-are-at-record-highs-heres-what-that-means.html
Oil is likely to remain volatile and expensive as world deals with supply shortages
Published Mon, Mar 21 2022 4:09 PM EDT Updated Mon, Mar 21 2022 5:38 PM EDT
Oil prices are racing higher again and are expected to see more sharp spikes and sudden dips as the world deals with potential supply shortages.
For consumers, that means a longer period of expensive gasoline — with prices at the pump staying above $4 per gallon. For the economy, that means more inflation. Besides the strain on consumers, there will be higher costs across the board for any business relying on petroleum — from airlines and truckers to chemical companies and plastics producers.
Russia’s invasion of Ukraine came at a time when oil prices were already moving higher on tight supplies and growing demand from reopening economies. Now, the loss of a big chunk of Russia’s 5 million barrels a day of exports has put additional pressure on prices.
“I remain constructive on oil because I do not see any immediate off ramp to the war in Ukraine. Market participants have been consistently giving Putin the benefit of the doubt on his professed willingness to negotiate, but we think we should pay attention to his actions not his words,” said Helima Croft, head of global commodities strategy at RBC.
Oil jumped more than 7% Monday, as the European Union considers joining the U.S. in an oil embargo and after Saudi Aramco facilities were attacked over the weekend by Iranian-aligned Houthi rebels in Yemen.
Analysts also acknowledge that there could be sudden collapses in the price, particularly if there were some resolution of Russia’s attack on Ukraine.
“The range of outcomes in any given two-week period is wide. We went from $90 to $130 per barrel in a month. We went from $125 to $95 in a week, and that is going to be the normal type of volatility. $10 a week is nothing, 10% moves nothing,” said Daniel Pickering, chief investment officer of Pickering Energy Partners.
Pickering said the market was back to trading fear Monday.
More
Covid-19 Corner
This section will continue until it becomes unneeded.
China's Shanghai denies lockdown rumours as daily COVID infections near 1,000
March 23, 2022 5:19 AM GMT
SHANGHAI, March 23 (Reuters) - Authorities in the Chinese city of Shanghai have denied rumours of a city-wide lockdown after a sixth straight increase in daily asymptomatic coronavirus cases pushed its count to record levels despite a campaign of mass testing aimed at stifling the spread.
The latest outbreak in China's wealthy commercial hub remains tiny by global standards.
But its testing campaign, with many people locked in residential compounds for days, follows Beijing's national "dynamic clearance" policy to stamp out flare-ups as quickly as possible.
Daily new local COVID-19 infections in Shanghai neared 1,000 on Tuesday, but authorities vowed to stick with a "slicing and gridding" approach to screen neighbourhoods one by one, rather than shut down entirely.
The lockdown rumours triggered panic buying late on Tuesday night, with slots on Alibaba's "Freshhippo" delivery app running out a minute after midnight.
"Please do not believe and spread rumours," the city government said on its Weibo microblog site.
City health official Wu Jinglei said several streets and residential compounds had been unsealed after testing, but some areas face another round on Wednesday and Thursday, as the focus of its efforts is narrowed.
The city is using two stadiums as quarantine facilities for mild cases and asymptomatic carriers, Wu added at Wednesday's news briefing.
A handful of subway stations also suspended operations on Wednesday, the firm managing the transit system said, citing COVID-19 controls.
The municipality reported 977 domestically transmitted asymptomatic infections for Tuesday, data from the National Health Commission (NHC) showed, up from 865 a day earlier.
It also reported four local cases with confirmed symptoms, which China counts separately, down from 31 a day earlier.
---- Mainland China reported 2,591 locally transmitted cases with confirmed symptoms on Tuesday, versus 2,281 a day earlier, the NHC data showed. The number of new local asymptomatic cases stood at 2,346 compared with 2,313 a day earlier.
The top steelmaking city of Tangshan said late on Tuesday residents who are not essential workers must stay home unless in an emergency or they need to be tested. The city government did not specify when the citywide lockdown would be lifted. read more
The northeastern city of Shenyang also announced that its 9 million residents would have to go through another three rounds of testing from Thursday through to March 30, after the three rounds already completed.
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.
Newly discovered enzyme helps reduce plastic waste to a simple molecule
Nick Lavars March 21, 2022
Over the past five years or so we've seen some important breakthroughs demonstrating how enzymes can be used to break down common plastics, such as the PET used for everything from drink bottles to shampoo containers. In pursuit of a circular economy for plastic waste, scientists have now discovered a new enzyme that further breaks down one of the key plastic building blocks left behind by this process, leaving simple molecules that can be repurposed for use in new products.
In 2016 scientists in Japan discovered a bacterium with a natural appetite for PET plastics, using enzymes to break it down in a matter of weeks. Researchers at the University of Portsmouth then succeeded in engineering a better-performing version of this enzyme, called PETase, and in 2020 combined it with another called MHETase to form a super enzyme that digests PET plastics at six times the speed.
What's left through the process is the two chemical building blocks of PET, ethlyene glycol (EF) and TPA, and one is more problematic than the other.
"While EG is a chemical with many uses – it’s part of the antifreeze you put into your car, for example – TPA does not have many uses outside of PET, nor is it something that most bacteria can even digest," explains study author Professor Jen DuBois. "However, the Portsmouth team revealed that an enzyme from PET-consuming bacteria recognizes TPA like a hand in a glove. Our group then demonstrated that this enzyme, called TPADO, breaks down TPA and pretty much only TPA, with amazing efficiency.”
The team's previous discoveries have come about by studying these enzymes at the Diamond Light Source Facility in the UK, which blasts them with beams of powerful X-rays. The result is an ultra-high resolution model of the enzyme that reveals the individual atoms inside it, showing how TPADO carries out its TPA-consuming duties. As in their previous work, this incredible detail offers a blueprint for the scientists to engineer even more efficient versions of the enzyme.
“The last few years have seen incredible advances in the engineering of enzymes to break down PET plastic into its building blocks," said study author Professor John McGeehan. "This work goes a stage further and looks at the first enzyme in a cascade that can deconstruct those building blocks into simpler molecules. These can then be utilized by bacteria to generate sustainable chemicals and materials, essential making valuable products out of plastic waste."
The research was published in the journal The Proceedings of the National Academy of Sciences.
Source: University of Portsmouth
“The singular feature of the great crash of 1929 was that the worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning. Nothing could have been more ingeniously designed to maximize the suffering, and also to ensure that as few as possible escaped the common misfortune. The fortunate speculator who had funds to answer the first margin call presently got another and equally urgent one, and if he met that there would still be another. In the end all the money he had was extracted from him and lost. The man with the smart money, who was safely out of the market when the first crash came, naturally went back in to pick up bargains. …..The bargains then suffered a ruinous fall. Even the man who waited out all of October and all of November, who saw the volume of trading return to normal and saw Wall Street become as placid as a produce market, and who then bought common stocks would see their value drop to a third or a fourth of the purchase price in the next twenty-four months. The Coolidge bull market was a remarkable phenomenon. The ruthlessness of its liquidation was, in its own way, equally remarkable."
J. K. Galbraith. The Great Crash: 1929.
No comments:
Post a Comment