Baltic Dry Index. 2689 -38 Brent Crude 100.77
Spot Gold 1917
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 16/03/22 World 462,045,316
Deaths 6,073,767
My daughter asked me when she came home from school, "What's the financial crisis?" and I said, it's something that happens every five to seven years.
Jamie Dimon.
It is day 2 of the Fed’s secret meeting in Washington, where we will learn later today of just how serious or otherwise, they are about tackling runaway inflation.
US consumer inflation is officially running at 7.9 percent, but if calculated on the same basis as in the 1970s is actually running about 15 percent.
It’s also a day that Russia has to pay off some bonds, but will they or will they default?
It also seems to be a day that Ukraine is giving up on joining NATO, though not the European Union.
A day that the US and Iran might reach a new deal.
Day 21 of the stupid new European war that generating an all too real food chain supply crisis.
And one day out from the Bank of England likely raising their key interest rate again.
All in all, an interesting day.
Hong Kong's Hang Seng index jumps more than 2%, rebounding after days of losses
Published Tue, Mar 15 2022 7:40 PM EDT Updated An Hour Ago
SINGAPORE — Shares in Asia-Pacific were mostly higher in Wednesday trade, though markets in mainland China were mixed amid the Covid resurgence in the country.
Hong Kong’s Hang Seng index rose more than 3% in early trade before retracing some of those gains, sitting 2.5% higher by the afternoon. Shares of Chinese tech giant Tencent surged more than 7% while life insurer AIA climbed 2%.
On Tuesday, the Hang Seng had tumbled nearly 6% to close at its lowest since Feb. 2016.
Mainland Chinese stocks were more muted as the Shanghai composite hovered fractionally higher and the Shenzhen component shed 0.232%. That comes as China grapples with its most severe Covid outbreak since the height of the pandemic in 2020, with major cities scrambling to limit business activity.
In Japan, the Nikkei 225 climbed 1.38% while the Topix index gained 1.36%. South Korea’s Kospi advanced 0.79%.
Australia’s S&P/ASX 200 rose 1.09%. MSCI’s broadest index of Asia-Pacific shares outside Japan traded 1.4% higher.
Oil prices were higher in the afternoon of Asia trading hours of Wednesday, after tumbling on Tuesday and continuing its recent fall.
International benchmark Brent crude futures gained 1.16% to $101.07 per barrel. U.S. crude futures also rose, climbing 0.72% to $97.13 per barrel.
Overnight stateside, the Dow Jones Industrial Average jumped 599.10 points, or 1.82%, to 33,544.34. The S&P 500 index climbed 2.14% to 4,262.45 while the tech-heavy Nasdaq Composite surged 2.92% to 12,948.62.
The U.S. Federal Reserve is set to announce its latest interest rate decision Wednesday stateside. The central bank is widely expected to raise rates by a quarter point, its first hike since 2018.
Meanwhile, the Russian state is due to pay $117 million in interest on two sovereign eurobonds on Wednesday, the first of four payment dates to creditors in March alone as the country faces the prospect of defaulting on its debt. That comes after international sanctions on Russia’s central bank have blocked off a substantial portion of the country’s foreign exchange reserves following Russia’s invasion of Ukraine.
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In really explosive news, Saudi Arabia is considering selling its oil to China in yuan.
Stealing half the Russian central bank’s dollar reserves in sanctions, has a way of focusing minds on the dangers of relying on the US politicians running the fiat currency scam, aka the US dollar reserve standard.
The Bank of England stealing Venezuela’s 31 tons of gold stored there last December, probably didn’t help either.
With President Biden desperate to save the Democrats from a mid-term election rout in November, he’s desperate to get the price of oil, and with it domestic inflation down.
So desperate, he’s talking to Venezuela about getting oil for dropping sanctions, and about to do a deal with Iran to get Iranian oil back into the global market.
But supposing Venezuela and Iran decide to follow Saudi Arabia’s lead and start pricing their oil in yuan?
Is this the beginning of the end of the Great Nixonian Error of Fiat Money? Well, the fiat money dollar reserve standard part anyway. China’s yuan is a fiat money too, for now.
Saudi Arabia Considers Accepting Yuan Instead of Dollars for Chinese Oil Sales
Updated March 15, 2022 11:48 am ET
Saudi Arabia is in active talks with Beijing to price some of its oil sales to China in yuan, people familiar with the matter said, a move that would dent the U.S. dollar’s dominance of the global petroleum market and mark another shift by the world’s top crude exporter toward Asia.
The talks with China over yuan-priced oil contracts have been off and on for six years but have accelerated this year as the Saudis have grown increasingly unhappy with decades-old U.S. security commitments to defend the kingdom, the people said.
The Saudis are angry over the U.S.’s lack of support for their intervention in the Yemen civil war, and over the Biden administration’s attempt to strike a deal with Iran over its nuclear program. Saudi officials have said they were shocked by the precipitous U.S. withdrawal from Afghanistan last year.
China buys more than 25% of the oil that Saudi Arabia exports. If priced in yuan, those sales would boost the standing of China’s currency. The Saudis are also considering including yuan-denominated futures contracts, known as the petroyuan, in the pricing model of Saudi Arabian Oil Co. , known as Aramco.
It would be a profound shift for Saudi Arabia to price even some of its roughly 6.2 million barrels of day of crude exports in anything other than dollars. The majority of global oil sales—around 80%—are done in dollars, and the Saudis have traded oil exclusively in dollars since 1974, in a deal with the Nixon administration that included security guarantees for the kingdom.
China introduced yuan-priced oil contracts in 2018 as part of its efforts to make its currency tradable across the world, but they haven’t made a dent in the dollar’s dominance of the oil market. For China, using dollars has become a hazard highlighted by U.S. sanctions on Iran over its nuclear program and on Russia in response to the Ukraine invasion.
China has stepped up its courtship of the Saudi kingdom. In recent years, China has helped Saudi Arabia build its own ballistic missiles, consulted on a nuclear program and begun investing in Crown Prince Mohammed bin Salman’s pet projects, such as Neom, a futuristic new city. Saudi Arabia has invited Chinese President Xi Jinping to visit later this year.
Meanwhile the Saudi relationship with the U.S. has deteriorated under President Biden, who said in the 2020 campaign that the kingdom should be a “pariah” for the killing of Saudi journalist Jamal Khashoggi in 2018. Prince Mohammed, who U.S. intelligence authorities say ordered Mr. Khashoggi’s killing, refused to sit in on a call between Mr. Biden and the Saudi ruler, King Salman, last month.
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Finally, despite Brexit, as the extreme left-wing BBC would say, the UK is getting less dependent on Russian natural gas by the day.
Now let’s all hope that GB and Europe learn from last year’s folly and use the summer to stock up for next winter’s need for winter gas supply.
New gas field found under North Sea
Tuesday 15 March 2022 8:35 am
A new gas field under the North Sea off the coast of East Anglia has produced its “first gas” this week, according to offshore exploration and production company IOG.
It revealed gas from its Blythe well started flowing into the UK gas grid last weekend, while Elgood – a second gas grid – is also due to start producing within days.
The gas will flow into Bacton, on the Norfolk coast, and meet demand in the southeast and then the rest of the UK.
Both grids are part of its Saturn Banks project, which has been set up to create a new production hub in the Southern North Sea.
Development of another field, Nailsworth, is expected to begin this year, and would produce gas towards the end of 2023.
IOG chair Fiona MacAulay said: “With heightened energy security risks across Europe and the continued urgency of the energy transition, there has never been a more important time to bring new UK gas resources onstream. This is especially true of IOG’s gas which has far lower carbon intensity than imports.”
The finding of the new field was also welcomed by Offshore Energies UK (OEUK), which represents the UK offshore industry.
It argued the new field demonstrated the vital role of the UK Continental Shelf in supporting the nation’s energy security during the current global energy crisis.
Jenny Stanning, external relations manager at OEUK, said: “This new source of gas, from the UK’s own waters, boosts our energy security at time when the Ukraine crisis has reminded us of the urgency and importance of maintaining our own energy supplies.”
Currently, 24m households heat their homes with gas which also produces about 40 per cent of the country’s electricity.
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Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
War in Ukraine disrupts key supply chains - and lives
It can be hard to measure the ways that Russia’s war in Ukraine has disrupted the global supply of parts and raw materials needed to complete a variety of products – from cars to computer chips.
But cutting off one of those supply links brought a “depressing feeling” to Andrey Bibik, head of the Interpipe steel plant in Dnipro, Ukraine. He spent the first hours of the war winding down his bustling 24-hour operation and sending almost everyone home.
“It’s empty and lonely. You don’t hear a sound. You see everything is frozen,” he said.
Getting Interpipe’s steel transmission pipes to Texas oil companies and its railway wheels to European high-speed train operators has been put on hold. Hundreds of the plant’s roughly 10,000 employees have joined the fight against Russia. Others have fled; a remaining skeleton crew runs its canteens and makes spikey metal obstacles to block Russian tanks and convoys. Its bomb shelters house dozens of local families at night.
“It was a hard choice to stop production. We had plenty of orders, a lot of customers awaiting our material. But if you have to choose between safety, and possible profits, I think the answer is obvious,” said Bibik, who’s worked at the company for nearly two decades.
---- Similar production halts have spread across other industries in Ukraine, motivated not just by safety concerns but also because the war and mass exodus of refugees have closed off roads and railways to commercial freight traffic. Some of Interpipe’s finished products bound for overseas export are now stalled at the Black Sea port of Odesa.
Ukraine accounts for only about 0.3% of the world’s exports, while Russia’s share is about 1.9%, according to a report by the Dutch bank ING. Still, some industries doing business with these nations are starting to feel the war’s impact.
For Russia, a key producer of energy, steel and raw metals such as nickel, copper, platinum and palladium — many of which are important to the auto industry — the supply concerns are tied to punishing Western economic sanctions and Russia’s moves to retaliate against them.
---- The disruption of another Ukrainian industry — the making of wiring harnesses used in cars — is already hurting European automakers. Ukraine has more than 30 automotive plants, most of them centered near the western border with Poland and other European neighbors, according to a government agency that promotes foreign investment.
German parts supplier Leoni said production has been interrupted at its two western Ukraine plants in Styri and Kolomyja and that it’s looking for temporary alternatives. “We are aware that this situation is currently affecting not only Leoni, but the entire industry,” said spokesperson Gregor le Claire.
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Argentina halts export registration for soy oil, meal
Mon, March 14, 2022, 12:56 AM
BUENOS AIRES (Reuters) - Argentina has halted registration of export sales of soy oil and meal, the South American country's government said in a statement on Sunday, drawing swift condemnation from the industry in the world's top exporter of processed soy products.
The move stops sales and exports of the 2021/22 crop, but physical shipments have not started because no harvesting has taken place. The decision by Argentina, the top global exporter of both soybean meal and oil, will likely roil the world soy market, which has seen prices spike on Russia's invasion of Ukraine.
U.S. soymeal futures prices jumped more than 2.2% in the wake of the announcement, while soyoil futures eased 1.26%.
Argentina's average monthly exports stood at 1.5 million tonnes of meal and 300,000 tonnes of soy oil in 2021, according to shipping agency NABSA.
The country is forecast to account for 41% of global soymeal exports and 48% of world soy oil exports in the 2021-22 crop year, according to the U.S. Department of Agriculture.
The sub-secretary of agricultural markets said in a statement that export registrations of soybean oil, soymeal and other related products would immediately be halted, a move which comes ahead of the 2021/22 harvest starting within weeks. Around 5 million tonnes of soy oil and other soy byproducts from the 2021/22 campaign have so far been formally registered for export, government data showed.
The local CIARA chamber of oilseed processors and exporters, which represents the industry, said that the government had closed export registration because, the chamber alleged, the government wanted to raise tariffs "by two points" on exports.
"It is totally contrary to the export interest of Argentina," the chamber said on Twitter. "In addition to being illegal, it will affect the income of foreign currency and employment in the agroindustrial chain."
More
https://www.yahoo.com/news/argentina-halts-export-registration-soy-005653090.html
Russia temporarily bans grain exports to ex-Soviet countries
Mon, March 14, 2022, 3:15 PM
(Reuters) -Russia on Monday temporarily banned grain exports to ex-Soviet countries and most sugar exports, but a senior minister said it would keep on providing special export licences to traders within its current quota.
Russia is the world's largest wheat exporter with Egypt and Turkey among the main buyers. It competes mainly with the European Union and Ukraine.
Prime Minister Mikhail Mishustin on Monday signed an order banning the export of white and raw sugar until Aug. 31, and banning wheat, rye, barley and maize exports to neighbouring Eurasian Economic Union states until June 30.
Deputy Prime Minister Viktoria Abramchenko, however, said the export of grain within the quota under individual licences would continue to be allowed.
Moscow last week voiced concern about the quick pace of its grain exports to neighbouring ex-Soviet countries, with which it shares free customs zones under the Eurasian Economic Union. Supplies to the union are not subject to Russia's grain export quotas and current taxes.
The measures were adopted "to protect the domestic food market in the face of external constraints," the government statement said.
European wheat prices rose on Monday after Interfax news agency reported on Russia's bank on grain exports. It did not initially mention the exclusions from the ban.
The government made no mention of the export licenses in its statement either, but said that international transit of grain via the Union would be allowed.
Russian wheat exports are down by 45% since the start of the current July-June marketing season because of a smaller crop, grain export taxes, and the export quota set at 11 million tonnes of grain, including 8 million tonnes of wheat, for Feb. 15-June 30.
The country still has 6 million to 6.5 million tonnes of wheat to export until June 30, Dmitry Rylko, head of the IKAR agriculture consultancy, said.
https://www.yahoo.com/news/russia-may-suspend-grain-exports-151503504.html
Covid-19 Corner
This section will continue until it becomes unneeded.
Covid cases are rising as omicron’s ‘stealth’ subvariant spreads around the world
Published Tue, Mar 15 2022 4:48 AM EDT
LONDON — Covid cases are rising in Europe, with an increasing number being attributed to the prevalence of a “stealth” subvariant of the omicron strain.
Covid cases have increased dramatically in the U.K. in recent weeks, while Germany continues to mark record high daily infections with more than 250,000 new cases a day. Elsewhere, France, Switzerland, Italy and the Netherlands are also seeing Covid infections start to rise again, aided and abetted by the relaxation of coronavirus measures and the spread of a new subvariant of omicron, known as BA.2.
Public health officials and scientists are closely monitoring BA.2, which has been described as a “stealth” variant because it has genetic mutations that could make it harder to distinguish from the delta variant using PCR tests, compared with the original omicron variant, BA.1.
The new subvariant would be the latest in a long line to emerge since the pandemic began in China in late 2019. The omicron variant — the most transmissible strain so far — overtook the delta variant, which itself supplanted the alpha variant — and even this was not the original strain of the virus.
Now, Danish scientists believe that the BA.2 subvariant is 1½ times more transmissible than the original omicron strain, and is already overtaking it. The BA.2 variant is now responsible for over half of the new cases in Germany and makes up around 11% of cases in the U.S.
That number is expected to rise further, as it has in Europe.
“It’s clear that BA.2 is more transmissible than BA.1 and this, combined with the relaxation of mitigation measures and waning immunity, is contributing to the current surge in infections,” Lawrence Young, a professor of molecular oncology at Warwick University, told CNBC on Monday.
“The increased infectiousness of BA.2 is already out-competing and replacing BA.1, and we are likely to see similar waves of infection as other variants enter the population.”
More
https://www.cnbc.com/2022/03/15/is-omicron-subvariant-bapoint2-to-blame-for-rising-covid-cases.html
Chinese virus cases climb, raise threat of trade disruption
BEIJING (AP) — Chinese authorities on Tuesday tightened anti-virus controls at ports, raising the risk of trade disruptions after some auto and electronics factories shut down as the government fights coronavirus outbreaks.
Stock prices in China and Hong Kong sank for a second day following the shutdown on Monday of Shenzhen, a tech and finance hub adjacent to Hong Kong in the south, and Changchun, an auto center in the northeast. Bus service to Shanghai, China’s business capital and biggest city, was suspended.
China’s case numbers are low compared with other major countries or Hong Kong. But authorities are enforcing a “zero tolerance” strategy that aims to keep the virus out of the country. It has temporarily shut down major cities to find every infected person.
The restrictions have wider potential ramifications, coming at a time when the global economy is under pressure from Russia’s war on Ukraine, surging oil prices and weak consumer demand.
“We can think of no risk to the global economy, excluding nuclear warfare, that is greater than the risk of a COVID outbreak in China that shutters industrial production,” Carl B. Weinberg of High-Frequency Economics said in a report. “Uncountable manufacturing supply chains pass through China.”
Economists say for now, smartphone makers and other industries can use factories and suppliers in other parts of China. But a bigger threat looms if business is disrupted at ports in Shenzhen, Shanghai or nearby Ningbo.
They link Chinese factories at the center of global manufacturing networks with foreign suppliers and markets. A one-month slowdown at Shenzhen’s Yantian Port last year caused a backlog of thousands of shipping containers and sent shockwaves through global supply chains.
“The risk here is whether COVID will be found at Yantian Port,” said Iris Pang, chief China economist for ING. “If the port has to be suspended, it will affect a lot of electronic imports and exports.”
There was no sign of major disruption, but port operators announced curbs on face-to-face contact with shippers and sailors.
The agency that manages the Shanghai port closed windows where customers submit documents and said that function would go online. It gave no indication cargo-handling or other operations were affected.
More
https://apnews.com/article/covid-business-health-china-beijing-5d48c5d0ea3cf554f1e449b3a3e2591a
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.
Ford plans seven new EVs and massive battery plant for Europe
Nick Lavars March 14, 2022
Ford has announced plans to significantly ramp up its electrification efforts in Europe, outlining seven new EV models for the region and massive new investment in an assembly plant in Cologne, Germany. The new generation of electric vehicles will include passenger and commercial models, with manufacturing to be supported by what could become one of Europe's biggest battery factories.
Last year, we saw Ford begin to throw more weight behind its electric vehicle vision for Europe, announcing plans to sell exclusively 100-percent EVs on the continent by 2030. This was accompanied by a US$1-billion investment in a vehicle assembly facility in Cologne, which it is rebranding as the Ford Cologne Electrification Center, its first dedicated production plant for EVs.
The company announced on Monday that its investment in the Cologne plant will total $2 billion, as it funds the production of three new passenger vehicles and four new commercial vehicles for the European market. The first cab off the rank will be a five-seat medium-sized crossover with a claimed 500-km (310-mile) range, with the name to be revealed later this year and production to kick off in 2023. A sports crossover will join the lineup in 2024.
Four models of the Transit will begin to appear in 2023, including the one-tonne Transit Custom van and Tourneo Custom multipurpose van, along with smaller variants the year after. An all-electric version of the Ford Puma, the company's best-selling passenger vehicle in Europe last year, is also planned for 2024.
“These new Ford electric vehicles signal what is nothing less than the total transformation of our brand in Europe – a new generation of zero-emission vehicles, optimized for a connected world, offering our customers truly outstanding user experiences,” said Stuart Rowley, chair, Ford of Europe.
Set to play an important part in this strategy is a new battery manufacturing plant planned for Turkey that is set to become one of Europe's largest. Details are yet to be finalized, but the plant would manufacture nickel NMC cells for use in battery modules, with an expected annual capacity of between 30 and 45 GWh. Production of the cells is slated to kick off around 2025.
Peace is not absence of conflict, it is the ability to handle conflict by peaceful means.
Ronald Reagan.
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