Baltic Dry Index. 2718 +14 Brent Crude 112.67
Spot Gold 1988 Wheat 11.06
“How did the world go bankrupt?"
Two ways. Gradually, then suddenly.”
With apologies to
With the great 21st century folly of the new European war just getting into its stride, the politicians of the G-7 seem determined to bring about the worst possible outcome for the greatest number of the world’s population.
At best, a Great Global Stagflation looms.
At worst, World War Three looms.
In the middle, the first Global Depression since the 1930s looms.
World shares fall on Ukraine conflict, looming U.S. rate hikes
By Elizabeth Dilts Marshall March 11, 2022 11:16 PM GMT
NEW YORK, March 11 (Reuters) - World shares slid on Friday, pressured by uncertainty about the conflict in Ukraine and expectations the Federal Reserve will hike U.S. interest rates next week.
The Nasdaq and the S&P 500 fell, weighed down by tech and growth stocks. Oil prices settled up for the day but down for the week in volatile trading.
Investors kept their focus on Ukraine, where Russian forces bearing down on Kyiv regrouped northwest of the capital. Ukraine's President Volodymyr Zelenskiy said his country had "already reached a strategic turning point" in the conflict. read more
The U.S. announced a ban on imports of Russian seafood, vodka and diamonds and made it harder for Russia to access funds from the International Monetary Fund, as Washington and its allies ramped up sanctions. read more
Financial markets have swung wildly during the war in Ukraine, now in its third week, as investors also braced for central banks to tighten monetary policy to tame inflation just as the global economy begins to slow.
U.S. consumer sentiment fell in early March by more than expected on inflation concerns, according to a Friday report, while data released Thursday showed consumer prices in February notched their largest annual increase in 40 years. read more
Next week, the Fed is expected to begin raising interest rates, and the Bank of England is expected to continue its rate-hikes, especially after January's economic growth numbers from the U.K. came in stronger than expected. read more
"While investors have accepted the Fed will likely begin raising rates next week, there is still a lack of clarity of how far and how fast the Fed moves from there," Lindsey Bell, Ally's Chief Markets & Money Strategist wrote in a note Friday.
"With the market taking action (in the form of volatility) and possibly reducing demand, the Fed may not have to move as quickly. Still, the pace of inflation will be the key driver of policy changes for the better part of this year."
At 4:50 p.m. EST (2150 GMT), MSCI's gauge of stocks across the globe (.MIWD00000PUS) was down 1.15%.
The Dow Jones Industrial Average (.DJI) fell 229.88 points, or 0.69%, to 32,944.19, the S&P 500 (.SPX) lost 55.21 points, or 1.30%, to 4,204.31 and the Nasdaq Composite (.IXIC) dropped 286.15 points, or 2.18%, to 12,843.81.
Investors may be put off by how statistically expensive the S&P 500 is, according to analysts at Bank of America. The benchmark U.S. equity index is statistically expensive on 14 of 20 measures.
Europe's benchmark STOXX 600 index (.STOXX) closed 1% up, making this the first weekly gain after three consecutive weeks of losses.
Emerging market stocks lost 1.55%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was 1.67% lower, while Japan's Nikkei (.N225) lost 2.05%.
Oil futures have soared since Russia's invasion of Ukraine, hitting their highest levels since 2008 during the week and pulling back sharply as more supply looked to come online.
Brent crude futures settled up 3.05% at $112.67 a barrel, and U.S. crude settled up 3.12% at $109.33.
More
https://www.reuters.com/markets/europe/global-markets-wrapup-1-pix-2022-03-11/
Exclusive: Russia's attack on Ukraine halts half of world's neon output for chips
By Alexandra Alper March 11, 2022 3:37 PM GM
WASHINGTON, March 11 (Reuters) - Ukraine's two leading suppliers of neon, which produce about half the world's supply of the key ingredient for making chips, have halted their operations as Moscow has sharpened its attack on the country, threatening to raise prices and aggravate the semiconductor shortage.
Some 45% to 54% of the world's semiconductor-grade neon, critical for the lasers used to make chips, comes from two Ukrainian companies, Ingas and Cryoin, according to Reuters calculations based on figures from the companies and market research firm Techcet. Global neon consumption for chip production reached about 540 metric tons last year, Techcet estimates.
Both firms have shuttered their operations, according to company representatives contacted by Reuters, as Russian troops have escalated their attacks on cities throughout Ukraine, killing civilians and destroying key infrastructure.
The stoppage casts a cloud over the worldwide output of chips, already in short supply after the coronavirus pandemic drove up demand for cellphones, laptops and later cars, forcing some firms to scale back production.
----Cryoin, which produced roughly 10,000 to 15,000 cubic meters of neon per month, and is located in Odessa, halted operations on Feb. 24 when the invasion began to keep employees safe, according to business development director Larissa Bondarenko.
Bondarenko said the company would be unable to fill orders for 13,000 cubic meter of neon in March unless the violence stopped. She said the company could weather at least three months with the plant closed, but warned that if equipment were damaged, that would prove a bigger drag on company finances and make it harder to restart operations quickly.
She also said she was unsure the company could access additional raw materials for purifying neon.
More
Goldman cuts U.S. GDP forecast to a full point below consensus, as it says recession odds are as high as 35%
March 11, 2022 at 7:37:24 AM EST
----Besides the humanitarian catastrophe, sky-high commodities prices have been the result so far of what has been a two-week invasion. Economists at Goldman Sachs have now cut their forecast for growth for the world’s largest economy in 2022 to 1.75%, from 2% previously and the consensus of 2.75%.
It’s a pretty straightforward call. “Combining our commodity strategists’ forecasts with estimates of pass-through to consumer prices, we estimate that rising gas and food prices will create an effective 0.7 percent point drag on real disposable personal income in 2022 with larger drags for lower-income households whose spending is typically more sensitive to fluctuations in income,” said the note written by Joseph Briggs. “Although households will likely partially offset this income drag by reducing savings, this hit to income should weigh on spending in 2022.”
Besides commodity prices, the Goldman team also noted that consumer sentiment tends to be affected by geopolitical crises, and already gauges from Morning Consult and Ipsos have dropped. The downgrade to Europe’s growth prospects will hit U.S. exports, and a tightening of financial conditions will also weigh on U.S. growth.
The Goldman team said, if anything, they may be too positive on the outlook for the U.S. economy. “Even after these downgrades, we still see risks around our growth forecast as skewed to the downside, particularly if sanctions escalate or if oil prices rise even further, for example, to the $175/barrel price target our commodity strategists see as possible if supply losses reach four million barrels a day. Additionally, we have not assumed any growth hit due to metal shortages since—aside from palladium—only a small share of U.S. commodity demand is met by Russian exports,” said Briggs.
Recession risks, they said, are mounting.
More
Moscow retaliates against Western sanctions with export bans
Thu, March 10, 2022, 12:06 PM
(Reuters) - Russia sought on Thursday to retaliate against Western sanctions imposed over its invasion of Ukraine by banning exports of certain goods and agricultural commodities.
Exporting telecom, medical, auto, agricultural, electrical and tech equipment, as well as some forestry products, will be banned until the end of 2022.
"These measures are a logical response to those imposed against Russia and are aimed at ensuring uninterrupted functioning of key sectors of the economy," the economy ministry said.
Further measures could include restricting foreign ships from entering Russian ports and allowing Russian airlines to register jets leased from Western firms as their own property, the government said.
Interfax news agency cited a source familiar with legislation being prepared as saying Russia may temporarily ban grain exports to a group of ex-Soviet countries forming part of the Eurasian Economic Union (EEU) from March 15 to August 31, as well as sugar exports outside the EEU area.
The measures come after Western sanctions in response to Russia's invasion of Ukraine that threaten to cripple Russia's energy-dependent economy.
Western companies have pulled out of Russia en masse as the United States, European Union and Britain imposed sanctions aimed at curbing Moscow's access to funding.
In response, a government commission on Wednesday approved the first step towards nationalising assets of foreign firms that leave the country.
The proposal to restrict foreign ships' entry into Russian ports comes after Britain last week banned from its ports all Russian-operated ships. The European Union has yet to provide clarity on the prospect of a similar ban by the bloc.
https://www.yahoo.com/news/russia-suspends-exports-tech-telecoms-120643963.html
Russia says its businesses can steal patents from anyone in ‘unfriendly’ countries
By Hannah Knowles and Zina Pozen March 9, 2022
Russia has effectively legalized patent theft from anyone affiliated with countries “unfriendly” to it, declaring that unauthorized use will not be compensated.
The decree, issued this week, illustrates the economic war waged around Russia’s invasion of Ukraine, as the West levies sanctions and pulls away from Russia’s huge oil and gas industry. Russian officials have also raised the possibility of lifting restrictions on some trademarks, according to state media, which could allow continued use of brands such as McDonald’s that are withdrawing from Russia in droves.
The effect of losing patent protections will vary by company, experts say, depending on whether they have a valuable patent in Russia. The U.S. government has long warned of intellectual property rights violations in the country; last year Russia was among nine nations on a “priority watch list” for alleged failures to protect intellectual property. Now Russian entities could not be sued for damages if they use certain patents without permission.
The patent decree and any further lifting of intellectual property protections could affect Western investment in Russia well beyond any de-escalation of the war in Ukraine, said Josh Gerben, an intellectual property lawyer in Washington. Firms that already saw risks in Russian business would have more reason to worry.
“It’s just another example of how [Putin] has forever changed the relationship that Russia will have with the world,” Gerben said.
Russia’s decree removes protections for patent holders who are registered in hostile countries, do business in them or hold their nationality.
The Kremlin has not issued any decree lifting protections on trademarks. But Russia’s Ministry of Economic Development said last week that authorities are considering “removing restrictions on the use of intellectual property contained in certain goods whose supply to Russia is restricted,” according to Russian state news outlet Tass, and that potential measures could affect inventions, computer programs and trademarks.
The ministry said the measures would “mitigate the impact on the market of supply chain breaks, as well as shortages of goods and services that have arisen due to the new sanctions of western countries,” Tass stated.
Gerben said a similar decree on trademarks would pave the way for Russian companies to exploit American brand names that have halted their business in Russia. He gave a hypothetical involving McDonald’s, one of the latest global giants to suspend operations in Russia under public pressure.
More
https://www.washingtonpost.com/business/2022/03/09/russia-allows-patent-theft/
Bennett advises Zelensky to surrender to Russia, Zelensky refuses
Vladimir Putin made an offer to end the Russian war with Ukraine, but the offer includes many Ukrainian sacrifices.
By BARAK RAVID/WALLA Published: MARCH 11, 2022 19:26
Prime Minister Naftali Bennett told Ukrainian President Volodymyr Zelenksy that he recommends Ukraine take the offer made by Russian President Vladimir Putin to end the war - which includes many Ukrainian sacrifices - in a phone call on Tuesday, according to an official in Ukraine's government. According to the official, Zelenksy did not take Bennett's advice.
The source claimed that the phone call was initiated by Bennett. "If I were you, I would think about the lives of my people and take the offer," Bennett reportedly said.
Zelenksy's response was short. "I hear you," he said.
https://www.jpost.com/israel-news/article-701041
In modern war... you will die like a dog for no good reason.
Ernest Hemingway.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Record Food Prices Could Leap 22% More on Ukraine War, UN Warns
Fri, March 11, 2022, 1:50 PM
(Bloomberg) -- Record-high global food costs could surge another 22% as Russia’s assault on Ukraine stifles trade and slashes future harvests, the United Nations warned.
A report from the agency’s Food and Agriculture Organization on Friday shows the far-reaching fallout of the war on the world’s food system, with the impact set to stretch well beyond the next season. Ukraine and Russia together account for more than a tenth of all calories traded globally, and those flows have been stifled since the conflict erupted late last month.
Soaring production costs means other countries will only partly be able to compensate for the “sudden and steep reduction” in Black Sea grain and sunflower exports in the coming 2022-23 season, FAO said. That will likely push international food and feed prices 22% higher and a “considerable” supply gap will linger going forward if the war persists and energy stays expensive.
“The likely disruptions to agricultural activities of these two major exporters of staple commodities could seriously escalate food insecurity globally,” Qu Dongyu, FAO director general, said in a separate statement, adding hunger could also rise in Ukraine. “International food and input prices are already high and volatile.”
Read more: The world’s next food emergency is here as war componds hunger.
As many as 13.1 million more people worldwide could go undernourished next season in a worst-case scenario. That assumes a 25-million-ton drop in Ukraine and Russia’s combined wheat and corn exports, and a 3-million-ton drop in oilseeds. A more moderate supply shock could still mean about 8 million additional people facing hunger.
More
https://finance.yahoo.com/news/record-food-prices-could-leap-135000572.html
Russia Sanctions Blowback Only Beginning: Globalization in the Crosshairs, Russian Retaliation Coming?
Posted on March 10, 2022 by Yves Smith
It’s surprising that the business press has not gotten to be apocalyptic about the worst case downside of the economic war on Russia. And by that we are not including nuclear winter. Due to the fact that financial and real economy effects occur in very different time scales, we are in a phase similar to the runup to the global financial crisis, where it was clear Something Bad to Horrible was underway, yet the press and pols were largely sanguine. I gasped out loud in May 2007 when Bernanke declared that subprime was contained.
The reason the blowback from the sanctions could be cataclysmic is that trying to isolate one of the biggest commodity producers in the world, with significant market share in many critical ones, will soon hit Covid-stressed supply chains. And if the economic brinksmanship isn’t dialed down soon, we’ll see tightly-coupled systems start to go critical. Because the hollowed out business press is much more fixated on finance than nitty gritty real economy operations, some bad outcomes will be noticed quickly because they affect visible companies, while others could be just as detrimental but not be picked up until the effects were advanced.
And recall that the defining characteristic of a tightly coupled process is that a shock moves through the system so quickly that it can’t be interrupted (or may not be reversible at all. Mind you, that does not necessarily mean it moves quickly in clock time.
Another characteristic of tightly coupled systems is that moves to reduce risk once the system is spiraling out of control are virtually assured to make matters worse, since participants don’t understand the system well enough to know how to intervene. The only measures that do help are ones that reduce the tight coupling, like trading halts.
Admittedly, the Something Bad to Horrible that is now occupying center stage is the prosecution of the war itself. That plus the West’s desire to punish Russia, combined with its unwillingness to do so militarily, has led to unprecedented economic measures, like preventing Russia’s central bank from using $300 billion of its foreign exchange reserves. Even the Financial Times politely pointed out that that move would focus the minds of other central bankers. As Michael Hudson and other commentators have pointed out, this move alone is a strong impetus of the heretofore slow-moving trend for China and other major non-Western economies to move away from the dollar, which has been a powerful tool of American economic and increasingly foreign policy.
So far, Russia has not imposed much in the way of counter-sanctions, although Russia-friendly websites report that Putin signed a series of measures early this week, to be announced Thursday. Since that shoe has yet to drop, we’ll go over only a few examples of how sanctions aimed at Russia are set to do a great deal of harm outside Russia. (Yes, it is theoretically possible that the US could de-escalate and swallow a peace negotiated by Ukraine, but given the press-induced blood lust and Biden Administration’s ego investment, that seems vanishingly unlikely).
One way Russia has been naughty is in seizing commercial jets under lease. According to Bloomberg, it’s managed to hang on to all but two dozen of over 500 planes. I had assumed Russia would keep them for domestic-only use; they can’t run much of a commercial airline service otherwise. If things ever get back to sort of normal, Russia probably won’t be able to lease planes for a very long time again and might have to make large deposits on service contracts, but count on the profit-minded to find a way.
It doesn’t appear that Russia is even trying to pretend it has no option: “Oh, gee, we understand you want your planes, but we can’t find a safe way to do that given the givens” or “Gee, we’d love to return those jets, but we are entitled to lease termination payments. How about gold for equipment?” From Bloomberg:
Technically, lessors have until March 28 to retrieve the planes under European Union sanctions. But state-owned Aeroflot PJSC and other Russian airlines have already gathered the vast bulk of them back inside the country, out of reach of their owners. The government aided the effort by instructing carriers to stop flying internationally and return the jets to Russia by Tuesday….
In telexes over the weekend, Russian authorities urged the nation’s airlines to restrict flying to domestic routes and friendly Belarus to prevent their jets being grabbed by repossession crews lying in wait, Emily Wicker, a partner with law firm Clifford Chance, told the lessor conference. The Russian government also advised operators to re-register foreign-owned aircraft in Russia from their traditional base of Bermuda, another move that could thwart efforts to revoke an aircraft’s certification — or track its maintenance and upkeep.
More, much, much more.
Below, why a “green energy” economy may not be possible, and if it is, it won’t be quick and it will be very inflationary, setting off a new long-term commodity Supercycle. Probably the largest seen so far.
The “New Energy Economy”: An Exercise in Magical Thinking
https://media4.manhattan-institute.org/sites/default/files/R-0319-MM.pdf
Mines, Minerals, and "Green" Energy: A Reality Check
https://www.manhattan-institute.org/mines-minerals-and-green-energy-reality-check
"An Environmental Disaster": An EV Battery Metals Crunch Is On The Horizon As The Industry Races To Recycle
by Tyler Durden Monday, Aug 02, 2021 - 08:40 PM
Covid-19 Corner
This section will continue until it becomes unneeded.
How will COVID end? Experts look to past epidemics for clues
Thu, March 10, 2022, 3:06 PM
NEW YORK (AP) — Two years into the COVID-19 pandemic, most of the world has seen a dramatic improvement in infections, hospitalizations and death rates in recent weeks, signaling the crisis appears to be winding down. But how will it end? Past epidemics may provide clues.
The ends of epidemics are not as thoroughly researched as their beginnings. But there are recurring themes that could offer lessons for the months ahead, said Erica Charters of the University of Oxford, who studies the issue.
“One thing we have learned is it’s a long, drawn-out process” that includes different types of endings that may not all occur at the same time, she said. That includes a “medical end,” when disease recedes, the “political end,” when government prevention measures cease, and the “social end,” when people move on.
The COVID-19 global pandemic has waxed and waned differently in different parts of the world. But in the United States, at least, there is reason to believe the end is near.
About 65% of Americans are fully vaccinated, and about 29% are both vaccinated and boosted. Cases have been falling for nearly two months, with the U.S. daily average dropping about 40% in the last week alone. Hospitalizations also have plummeted, down nearly 30%. Mask mandates are vanishing — even federal health officials have stopped wearing them — and President Joe Biden has said it’s time for people to return to offices and many aspects of pre-pandemic life.
But this pandemic has been full of surprises, lasting more than two years and causing nearly 1 million deaths in the U.S. and more than 6 million around the world. Its severity has been surprising, in part because many people drew the wrong lesson from a 2009-2010 flu pandemic that turned out to be nowhere as deadly as initially feared.
“We got all worried but then nothing happened (in 2009), and I think that was what the expectation was" when COVID-19 first emerged, said Kristin Heitman, a Maryland-based researcher who collaborated with Charters.
That said, some experts offered takeaways from past epidemics that may inform how the end of the COVID-19 pandemic may play out.
FLU
Before COVID-19, influenza was considered the most deadly pandemic agent. A 1918-1919 flu pandemic killed 50 million people around the world, including 675,000 in the U.S., historians estimate. Another flu pandemic in 1957-1958 killed an estimated 116,000 Americans, and another in 1968 killed 100,000 more.
A new flu in 2009 caused another pandemic, but one that turned out not to be particularly dangerous to the elderly — the group that tends to die the most from flu and its complications. Ultimately, fewer than 13,000 U.S. deaths were attributed to that pandemic.
The World Health Organization in August 2010 declared the flu had moved into a post-pandemic period, with cases and outbreaks moving into customary seasonal patterns.
More
https://www.yahoo.com/news/covid-end-experts-look-past-150629084.html
World Health Organization - Landscape of COVID-19 candidate vaccines. https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines
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 more useful Covid links.
Johns Hopkins Coronavirus resource centre
https://coronavirus.jhu.edu/map.html
Rt Covid-19
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.
Interest in electric aircraft grows as NASA nears test of X-57 Maxwell
March 11, 2022 / 2:00 AM
ORLANDO, Fla., March 11 (UPI) -- NASA is planning its first crewed test flight of an all-electric plane, the X-57 Maxwell test aircraft, in the next few months as interest in electric aircraft grows.
The first crewed flight of NASA's plane will take place at the agency's Armstrong Flight Center, part of Edwards Air Force Base in Southern California. NASA is currently aiming for May for the flight, Tim Williams, NASA research test pilot, told UPI in an interview.
Williams plans to fly the plane, a modified Italian-made plane known as a Tecnam P2006T, in the first test of its all-electric propulsion system, he said.
The use of a modified Tecnam, a proven flight vehicle, means he doesn't have to "worry about wearing a parachute, but I'll be worried about plenty of other things," Williams said.
"The first thing that you have to worry about is electric motors, and how to get power out to them throughout the flight, and ... you're going to have electro-magnetic interference that is potentially an issue," Williams said.
Electric aircraft already exist, but they are mostly for very short trips or for research in uncrewed flights, Williams noted. He said NASA hopes to eventually show that electric planes can fly hundred of miles.
The test in May will use two large electric cruise motors with propellers. Later, NASA intends to outfit the plane with 18 propellers. Distance and duration of the first flight has yet to be determined, a NASA spokeswoman said.
RELATED Electric jet startup announces $1B deal with Brazilian commercial airliner
The X-57 initially will have a range of approximately 100 miles and a cruise speed of 170 miles, which puts it in the air for about 40 minutes, according to NASA.
The test program's goals are to prove the X-57's electric motors, made by Joby Aviation, are reliable during vibrations and dynamics of flight and that the batteries can run at about 70 percent of their maximum output for hours if needed, Williams said.
Joby is currently developing and testing all-electric vertical takeoff aircraft that could be used in dense urban areas where horizontal takeoff on a runway is difficult.
More
https://www.upi.com/Science_News/2022/03/11/NASA-electric-plane-X57-evtol-aam/1651646856124/
This weekend’s musical diversion. How to play the recorder like a pro. Approx. 8 minutes.
Antonio Vivaldi: Concerto in C Major RV 533
https://www.youtube.com/watch?v=NJV2RIpv02w
This weekend’s chess update. Approx. 17 minutes.
Sometimes You Just Have To Relax
https://www.youtube.com/watch?v=vx2p45gn3as
Next, more, more difficult Sudoku. Approx. 16 minutes.
Improve At Sudoku: What To Do When You Get Stuck
https://www.youtube.com/watch?v=BnmxrrZUgbk
In maths update today, more calculus. Who invented it? Approx. 8 minutes.
The Calculus Controversy
https://www.youtube.com/watch?v=axZTv5YJssA
Today, why Luxembourg? Why indeed? Approx. 4 minutes.
Why Does Luxembourg Exist? (Short Animated Documentary)
https://www.youtube.com/watch?v=c7I8kdzH2LA
The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.
Ernest Hemingway.
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