Baltic
Dry Index. 1355 -35 Brent Crude 95.31
Spot Gold 1762 US 2 Year Yield 4.34 Thurs.
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 14/11/22 World 640,370,253
Deaths 6,615,494
Why did I take up stealing? To
live better, to own things I couldn't afford, to acquire this good taste that
you now enjoy and which I should be very reluctant to give up.
Cary Grant. To Catch A Thief.
The big story this week will likely be the fallout from the collapse of the FTX cryptocurrency exchange. At first sight it shouldn’t be big enough to rank alongside the collapse of Lehman Bros. or the scandal of the Madoff Ponzi scheme, but it will still hurt. For more on that scroll down to the next section.
In the stock casinos, the Great Disconnect is back but for how long?
My apologies for today’s length.
Hong Kong stocks
rise 2% in mixed Asia session, Softbank shares drop 14%
UPDATED MON, NOV 14 2022 12:18 AM EST
Hong Kong’s
Hang Seng popped as Japan’s benchmark index was dragged lower by tech giant
SoftBank Group in a mixed Asia-Pacific session after closing
the previous week with a big rally.
The Hang Seng index in
Hong Kong rose 2.6%, mostly boosted
by property stocks. In mainland China, the Shanghai Composite added
0.62% and the Shenzhen Component gained
0.33%.
Japan’s Nikkei 225 fell
0.77%, as heavyweight
SoftBank plunged 14% after its Vision Fund reported further losses, and
the Topix fell 0.67%.
The S&P/ASX 200 in
Australia and South Korea’s Kospi were
about flat. MSCI’s broadest index of Asia-Pacific shares outside Japan was up
1%.
Shares in the region ended higher last week
after U.S. consumer
prices rose less than expected and China announced some
easing of its Covid measures. The Hang Seng index saw the best
day since March 16.
Later this week, Japan is slated
to report figures for gross domestic product, trade and consumer inflation,
while Indonesia’s central bank holds a monetary policy meeting. Alibaba and JD.com are
expected to release earnings results.
Bitcoin falls below
$16,000 to lowest since Nov. 2020 as FTX saga continues
Bitcoin fell
as low as $15,904.44 in Asia’s morning, according to Coin Metrics, marking its
lowest levels in around two years. Bitcoin last hovered around similar levels
in Nov. 16, 2020, when it reached $15,860.81.
Ether also
fell, reaching as low as $1,170.34, as more
details emerge around crypto exchange FTX’s operations.
Crypto investors have lost around $2 trillion since its peak a year ago.
Hong
Kong stocks rise 2% in mixed Asia session, Softbank shares drop 14% (cnbc.com)
Stock futures
fall following the S&P 500′s best week since June
UPDATED MON, NOV 14 2022 12:22 AM EST
Stock
futures traded lower early Monday morning after the S&P 500 posted its
biggest weekly gain in almost five months on the back of easing inflation data.
Dow Jones Industrial Average
futures fell 84 points, or 0.25%. S&P 500 futures declined 0.32% and Nasdaq
100 futures traded 0.55% lower.
The S&P 500 rallied 5.9% last
week for its best week since June. Investors cheered a lighter-than-expected
inflation reading, betting that the Federal Reserve would soon slow its
aggressive tightening campaign.
“A notable shift has occurred in
the market, with investors increasingly risk-on across asset classes,” said
Mark Hackett, Nationwide’s chief of investment research. “Technical
indicators have improved dramatically, with investor sentiment, momentum,
breadth, and risk factors all showing notable improvement.”
The tech-heavy Nasdaq Composite
gained 8.1% last week for its best week since March, while the blue-chip Dow
advanced 4.2%.
The Cboe Volatility Index,
known as Wall Street’s fear gauge or the VIX, fell 1 point to 22.5,
hitting the lowest level since August. The VIX, which tracks the 30-day
implied volatility of the S&P 500, had traded above the 30 point threshold
for most of October.
More
Stock
futures fall following the S&P 500's best week since June (cnbc.com)
IMF
says global economic outlook getting 'gloomier', risks abound
November 14, 2022 1:57 AM GMT
WASHINGTON, Nov
13 (Reuters) - The global economic outlook is even gloomier than projected last
month, the International Monetary Fund said on Sunday, citing a steady
worsening in purchasing manager surveys in recent months.
It
blamed the darker outlook on tightening monetary policy triggered by
persistently high and broad-based inflation, weak growth momentum in China, and
ongoing supply disruptions and food insecurity caused by Russia’s invasion of
Ukraine.
The global lender last month cut its global growth forecast for
2023 to 2.7% from a previous forecast of 2.9%.
In
a blog prepared for a summit of G20 leaders in Indonesia, the IMF said recent
high-frequency indicators "confirm that the outlook is gloomier,"
particularly in Europe.
It
said recent purchasing manager indices that gauge manufacturing and services
activity signaled weakness in most Group of 20 major economies, with economic
activity set to contract while inflation remained stubbornly high.
"Readings
for a growing share of G20 countries have fallen from expansionary territory
earlier this year to levels that signal contraction," the IMF said, adding
that global fragmentation added to "a confluence of downside risks."
"The
challenges that the global economy is facing are immense and weakening economic
indicators point to further challenges ahead," the IMF said, adding that
the current policy environment was "unusually uncertain."
A worsening
energy crisis in Europe would severely harm growth and raise inflation, while
prolonged high inflation could prompt larger-than-anticipated policy interest
hikes and further tightening of global financial conditions.
That
in turn posed "increasing risks of a sovereign debt crisis for vulnerable
economies," the IMF said.
More
IMF
says global economic outlook getting 'gloomier', risks abound | Reuters
Finally, in other news, inflation hasn’t gone
away.
Fed
may cut size of rate increases, but is not 'softening' inflation fight, Waller
says
November 14, 2022 12:56
AM GMT
WASHINGTON, Nov
13 (Reuters) - The U.S. Federal Reserve may consider slowing the pace of rate
increases at its next meeting but that should not be seen as a
"softening" in its commitment to lower inflation, Federal Reserve
Gov. Christopher Waller said on Sunday.
Markets
should now pay attention to the "endpoint" of rate increases, not the
pace of each move, and that endpoint is likely still "a ways off,"
Waller said in response to a series of questions on monetary policy at an
economic conference organized by UBS in Australia. "It depends on
inflation."
"We're at a
point we can start thinking maybe of going to a slower pace," Waller said,
but "we're not softening...Quit paying attention to the pace and start
paying attention to where the endpoint is going to be. Until we get inflation
down, that endpoint is still a ways out there."
A
report released last week showing slower than expected inflation in October was
"good news," but was "just one data point" that would have
to be followed with other similar readings to show convincingly that inflation
is slowing, he said.
The 7.7% annualized
increase in inflation recorded in October is still "enormous," Waller
said, noting that even if the Fed scaled back from three quarter point
increases to a half point increase at its next meeting, "you're still
going up."
"We're going
to need to see a continued run of this kind of behavior and inflation slowly
starting to come down before we really start thinking about taking our foot off
the brakes," Waller said, adding that he has been further convinced the
Fed is on the right path because its rates increases so far have not
"broken anything."
More
Fed
may cut size of rate increases, but is not 'softening' inflation fight, Waller
says | Reuters
Germany's
IG Metall union calls for further strikes on Monday
November 13, 2022
8:07 AM GMT
FRANKFURT, Nov 13 (Reuters) - Germany's
IG Metall union on Sunday called for new strikes on Monday in its ongoing wage
dispute.
The so-called warning strikes will take
place at targeted locations in the states of Hesse, Thuringia and
Rhineland-Palatinate, the union said.
The union, which represents metal and
electric industry workers, have called for an 8% pay increase.
Germany's IG
Metall union calls for further strikes on Monday | Reuters
Global Inflation/Stagflation/Recession
Watch.
Given
our Magic Money Tree central banksters and our spendthrift politicians,
inflation now needs an entire section of its own.
Today, how the “second” largest crypto exchange blew up and went to crypto hell. I’m not sure about that “second” nor that this was ever a legitimate “exchange” but time will tell. I think the whole cryptocurrency universe is a scam and this just might be the beginning of its end.
But
then, I don’t think that Twitter has a product containing any value, let alone
a value reckoned in the billions. Are Twitter and Facebook living on borrowed
time?
Sam
Bankman-Fried’s Alameda quietly used FTX customer funds without raising alarm
bells, say sources
The quant trading
firm Sam Bankman-Fried founded was able to quietly use customer funds from his
exchange FTX in a way that flew under the radar of investors, employees and
auditors in the process, according to a source.
The way they did it
was by using billions from FTX users without their knowledge, says the source.
Alameda Research, the fund started by Bankman-Fried, borrowed
billions in customer funds from its founder’s exchange, FTX, according to a
source familiar with company operations, who asked not to be named because the
details were confidential.
The crypto exchange
drastically underestimated the amount FTX needed to keep on hand if someone
wanted to cash out, according to the source. Trading platforms are required by
their regulators to hold enough money to match what customers deposit. They
need the same cushion, if not more, in the event that a user borrows money to
make a trade. According to the source, FTX did not have nearly enough on hand.
Its biggest customer,
according to a source, was the hedge fund Alameda. The fund was partially able
to cover up this activity because the assets it was trading never touched its
own balance sheet. Instead of holding any money, it was borrowing billions from
FTX users, then trading it, the source said.
None of this was
disclosed to customers, to CNBC’s knowledge. In general, mixing customer funds
with counterparties and trading them without explicit consent, according to
U.S. securities law, is illegal. It also violates FTX’s terms of service. Sam
Bankman-Fried declined to comment on allegations of misappropriating customer
funds, but did say its recent bankruptcy filing was a result of issues with a
leveraged trading position.
----In making some of these leveraged trades, the
quant fund was using a cryptocurrency created by the exchange called FTT as
collateral. In a lending agreement, collateral is typically the borrower’s
pledge to secure repayment. It’s often dollars, or something else of value —
like real estate. In this case, a source said Alameda was borrowing from FTX,
and using the exchange’s in-house cryptocurrency, FTT token, to back those
loans. The price of the FTT token nosedived 75% in a day, making the collateral
insufficient to cover the trade.
In the past week, FTX has crashed from
a $32 billion cryptocurrency powerhouse, into bankruptcy. The blurred lines
between FTX and Alameda Research resulted in a massive liquidity crisis for
both companies. Bankman-Fried stepped down as CEO of FTX and said Alameda
Research is shutting down. The company has since said it’s removing
trading and withdrawals, and moving digital assets offline after a suspected $477
million hack.
More
Hacking
fears after $650m vanishes from collapsed crypto firm
Exchange's collapse on Friday risks sparking a
wider panic
Cryptocurrency
exchange FTX is facing fresh controversy after observers noticed “unusual”
withdrawals totalling around $650m from the collapsed website’s funds on
Saturday.
The collapse of
FTX, one of the world’s biggest exchanges, has wiped $150bn (£126bn) off the
cryptocurrency market’s value, amid fears that the crisis could yet deepen.
FTX filed for
bankruptcy protection in the US on Friday following a liquidity crisis that
left the crypto exchange unable to meet customer demands for billions of
dollars worth of withdrawals.
In the hours after
the collapse, there were “abnormalities with wallet movements”, the general
counsel of FTX’s US arm Ryne Miller said, which prompted fears the site had been
hacked.
Mr Miller wrote on
Twitter that FTX had begun moving digital assets into cold storage – wallets
that are unconnected to the internet – following its bankruptcy on Friday, and
said the process was later accelerated “to mitigate damage upon observing
unauthorised transactions”.
Until last week,
the company was a top five venue for trading cryptocurrencies globally,
handling tens of billions of dollars of trade each day. Concerns about its
balance sheet following a report in the industry press triggered its liquidity
crisis.
Mr Miller wrote on
Twitter that FTX had begun moving digital assets into cold storage – wallets
that are unconnected to the internet – following its bankruptcy on Friday, and
said the process was later accelerated “to mitigate damage upon observing
unauthorised transactions”.
Until last week,
the company was a top five venue for trading cryptocurrencies globally,
handling tens of billions of dollars of trade each day. Concerns about its
balance sheet following a report in the industry press triggered its liquidity
crisis.
More
Hacking fears after
$650m vanishes from collapsed crypto firm (telegraph.co.uk)
The spectacular implosion of crypto’s
biggest star, explained
FTX
and Sam Bankman-Fried just experienced a shocking downfall.
----FTX ran a memorable ad featuring Larry David during the Super Bowl encouraging people to jump into crypto, even if they didn’t really get it. He bought the naming rights to the Miami Heat’s arena; whether that name will soon have to change is uncertain. Bankman-Fried was a major donor to Joe Biden’s presidential campaign and again in the 2022 midterms, largely in primaries. He slowed political spending down in the election cycle’s final weeks. He had positioned himself as the “acceptable” face of crypto to Washington, DC, policymakers, and the public.
In a matter of days, his empire has exploded in a rather
spectacular fashion. Thanks to a leak about
the financial health of a trading firm he founded, Alameda Research, and some
savvy maneuvers from a competing exchange, Binance, investors began to pull
their money out of FTX en masse. FTT, a token the company issues, plunged in
value. FTX was forced to seek a bailout.
The competitor that helped orchestrate FTX’s demise said it would
buy it and then
backed out after briefly kicking FTX’s tires. Billions of
dollars have
been wiped from Bankman-Fried’s net worth. It’s still not entirely
clear what happened, why it happened so quickly, or what will happen to FTX or
its customers. Regulatory probes
are certainly on the horizon. It appears that FTX is facing an $8
billion shortfall and has commenced
bankruptcy proceedings in the US.
John J. Ray III, who has been tapped as FTX’s new CEO, said in
a statement on
Friday that Chapter 11 is “appropriate to provide FTX Group the opportunity to
assess its situation and develop a process to maximize recoveries for
stakeholders.” Bankman-Fried, who in recent days has said he’s intent on
finding ways to help customers who can’t get their money out of the exchange,
will remain on to assist in the transition. It’s hard to see this ending well.
As Bloomberg notes,
Chapter 11 bankruptcy means the company can keep operations going as it figures
out how to pay creditors. Some 130 entities, including FTX, FTX US, and Alameda
Research, are involved in the proceedings.
In a series of tweets on Friday, Bankman-Fried reiterated that he was sorry. “I’m piecing together all of the details, but I was shocked to see things unravel the way they did earlier this week,” he wrote.
Crypto has seen a series of blowups over the past decade, and this
is among the biggest — the industry’s Bear
Stearns moment, in a way.
“Sam
went from being the darling of the regulators to suddenly being a pariah, and
it happened in a matter of what? Three days?” said Douglas Borthwick, chief
business officer at INX, a crypto trading platform. “Astounding.”
Up until very recently, the story was that FTX and Alameda were in
decent shape. FTX had
a $32 billion valuation, its smaller FTX US division (that’s in line
with US regulations and doesn’t allow nearly as much
risky behavior as regular FTX does) was pegged at $8
billion, and Alameda had
brought in a $1 billion profit in a single year. Things have since
fallen apart very fast.
On November 2, Ian Allison at CoinDesk published
a leak revealing that much of Alameda’s $14.6 billion in assets
were parked in a digital token created by FTX, called FTT. (In crypto, tokens are
digital assets built on a blockchain.) Among other perks, FTT tokens give
holders a discount on FTX trading fees. But the tokens were, like a lot of
crypto tokens, kind of a made-up thing where their value was derived in
believing there was value. “They printed this token out of thin air, endowed it
with some valuation, and then Alameda used it as collateral,” said Nic Carter,
partner at venture capital firm Castle Island Ventures.
Bloomberg’s Tracy Alloway used
the example of a Beanie Baby you buy for $5 and then sell for $20
because you make a price guide saying that’s what he’s worth. In this case, FTX
was making the Beanie Baby itself — as in issuing the FTT token for free — then
buying some of the tokens back for whatever amount. It was then able to say the
token was worth that amount and do business
with it, by, for example, using it as collateral for a loan.
The CoinDesk leak and revelations that it had so much money in FTT
prompted questions about Alameda’s financial health and concerns that a fall in
the token’s value could cause
real problems for both the trading firm and FTX.
Days later, on November 6, Zhao said
on Twitter that Binance would be liquidating its FTT holdings,
which it received after exiting its stake in FTX last year. (Binance was an
investor in FTX, with Zhao
buying a 20 percent stake in the exchange soon after its launch,
according to Reuters.) He said Binance received $2 billion in tokens, including
some in the FTX token, at the time, but due to “recent revelations that have
come to light,” they were offloading the FTT.
The whole thing sort of spiraled from there. Alameda’s CEO,
Caroline Ellison, insisted Alameda
was fine and offered
to buy Binance’s FTT at $22 a token, around where it was at the
time. Bankman-Fried claimed FTX’s assets were fine. Investors didn’t believe
them.
FTT’s value plunged to
under $5 as holders made a mad dash to sell, and customers started trying to
pull their money out of FTX altogether. The exchange suffered from a liquidity
crunch, meaning it ran out of money. By Tuesday, November 8, it became clear
that this was all sort of the “this is fine” meme but the fire had engulfed the
building and everyone in it.
Bankman-Fried announced that
FTX had reached a “strategic transaction” to hand FTX over to Binance (but not
FTX US). Zhao said Binance
had signed a non-binding letter of intent to buy FTX, pending due diligence.
The non-binding part wound up being important as reports
soon began to emerge that Binance might back out, which it
eventually did.
----The long and short of it is that
when you give your money to a crypto exchange, you are supposed to be able to
get it back when you want to. That means “a client fund needs to be segregated,
whether that’s dollars or whether that’s crypto,” Borthwick said. And if the exchange
isn’t holding onto the client funds but is instead lending them or trading them
(as Matt Levine at Bloomberg points out, banks, for example, lend customer deposits), then it
runs the risk of not having the money to hand back to clients, especially when
the clients come asking for the money all at once. In a tweet on Thursday, Bankman-Fried insisted that
FTX has a “total market value of assets/collateral higher than client
deposits,” but that’s not the same as liquidity — he’s saying FTX still has
that customer money, they just can’t get it out of the things it’s in.
----Compounding everything is that when some crypto entities fell apart earlier this year, Bankman-Fried offered to step in to try to save some of them. Now, he’s the one that needs help, and it’s not clear what will happen with any of the deals he made to help out others when things were still supposedly good at FTX. “I think it’s actually possible that none of those deals are consummated,” Carter said. FTX’s downfall has triggered concerns about a sort of crypto contagion, where one failure leads to another leads to another. BlockFi, which FTX had inked a bailout agreement with over the summer, said it would pause client withdrawals on Thursday and asked that no one make deposits into their wallets or accounts “given the lack of clarity” on the FTX, FTX US, and Alameda situation.
More
FTX and Sam Bankman-Fried are collapsing. How crypto’s biggest star imploded. - Vox
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.
With Covid-19 starting to become only endemic,
this section is close to coming to its end.
EXCLUSIVE: Signs You Have a Spike Protein Blood Clot, and
What to Do About It
In this two-part paper, we aim
to give an overview on COVID-19 related abnormal blood clots, how they form,
how to detect them early, and how they're being treated
Dr.
Yuhong Dong Dr.
Jordan Vaughn
Nov 6 2022
We previously covered how the spike proteins of SARS-CoV-2 and the COVID vaccines
can both cause blood clotting.
A normal/negative COVID test result does not completely exclude the potential of clots. Regardless of whether the diagnosis is confirmed or not, if there is a symptom, the most important step is to prevent it.
Move around as much as you can. If you’re resting in bed, try to stretch your legs to keep blood circulating. Don’t start any blood-thinning medications without consulting your doctor first.
Avoid taking any COVID-19 vaccine as much as possible. Once vaccinated, the spike protein is highly thrombogenic, directly activating the clotting cascade. So, the first strategy of preventing the formation of clots is to detox spike protein.
For example, a number of natural ways to increase autophagy could be helpful to degrade
spike proteins from the body.
Methods to boost autophagy include
intermittent fasting, sunlight, quality and timely sleep, meditation, and
walking, as well as naturally derived molecules like ivermectin, melatonin,
resveratrol, spermidine, terpene nutrient, etc.
What to Test For
Activation of the clotting cascade
leads to both large clots (causing strokes and pulmonary emboli) as well as
microclots (causing microinfarcts in many organs, but most notably the brain).
All long-COVD symptoms may
indicate the potential existence of microclots in the body, including but not
limited to brain fog, memory loss, sleep disorders, anxiety or depression,
chest pain, breathlessness, tachycardia, fatigue, post-exertional malaise, etc.
In the legs, swelling is the most
common sign of a blood clot. If you have significant swelling in one leg, call
your doctor right away.
Some patients have symptoms called “COVID toes”—red, swollen toes that might be due to small clots in the blood vessels of the feet.
More
EXCLUSIVE: Signs
You Have a Spike Protein Blood Clot, and What to Do About It
(theepochtimes.com)
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
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, among other things, I’ve added this
section. Updates as they get reported.
Broken Hill's $41m battery power storage facility one step closer
as sod turned for historic outback project
By Oliver Brown and
Ben Loughran Posted Fri
11 Nov 2022 at 9:29pm
Construction
of a multi-million-dollar energy storage facility in Broken Hill is one step closer
after a sod-turning ceremony on Thursday.
The $41 million grid-scale, battery-based energy storage system
(BESS) is being built in partnership between AGL and the Australian Renewable
Energy Agency.
It will store electricity generated by wind and solar facilities
to use if Broken Hill's power grid fails.
The facility should be fully operational from mid-2023.
The BESS is the latest AGL addition to the area, joining other
renewable initiatives like the Silverton Wind Farm and Broken Hill Solar Farm.
'A really important step'
AGL's general manager of energy hubs Travis Hughes said the
sod-turning event was a pivotal moment in renewable energy for the far
west.
"We've got a number of other developments that have occurred
in the region and the addition of the battery is an example of how the
transition occurs," he said.
"Battery technology is well-advanced [which] enables it
to be integrated into the energy system.
AGL and its construction partners Fluence and Valmec will connect
the BESS to the nearby Transgrid Broken Hill substation via an overhead
powerline.
Fluence's Australian general manager and Asia-Pacific vice
president of growth Achal Sondhi was also in Broken Hill for the sod-turning
ceremony.
He said Fluence had been creating renewable energy projects in
Australia since it was formed in 2018.
"We believe battery storage is going to be a key enabler for
the energy transition, and that's why we're here," Mr Sondhi said.
"We want to make sure that transition is led by Australia
given how far Australia is already with a lot of the renewable development it
has
More
"We finished the year, and
we reported that we had $17 billion of cash sitting at the bank's parent
company as a liquidity cushion. As the year has gone on, that liquidity cushion
has been virtually unchanged."
Bear Stearns CEO Alan Schwartz. March 12, 2008. Bust March 17, 2008.
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