Baltic Dry Index. 1288 -12 Brent Crude 91.73
Spot Gold 1764 US 2 Year Yield 4.35 -0.02
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 17/11/22 World 641,546,909
Deaths 6,620,072
"There is no means of avoiding the final
collapse of a boom brought about by credit expansion. The alternative is only
whether the crisis should come sooner as the result of voluntary abandonment of
further credit expansion, or later as a final and total catastrophe of the
currency system involved."
Ludwig
von Mises.
Happily this morning, nuclear war with Russia is off, it was a Ukrainian missile strike on Poland says NATO, and with that good news Asian stocks got hammered.
It’s a funny old world as the Great Nixonian Error of Fiat Money draws to the end of the Great Error. Without fiat money, would FTX and cryptocurrency have ever been possible?
With global interest rates having risen from
virtually zero at the start of the year with more interest rate hikes still to
come to end the Great Inflation, I suspect many, if not most stocks, still have
much further to fall.
Hong Kong stocks
drop more than 2% as Tencent slashes Meituan stake; Japan posts $15 billion
trade deficit
UPDATED WED, NOV 16 2022 11:58 PM EST
Shares in
the Asia-Pacific traded mostly lower with the Hang Seng Index falling
2.5% as Chinese technology stocks saw sharp losses after Tencent announced
to slash its over $20 billion-stake in Meituan.
In mainland China, the Shanghai Composite fell
1% and the Shenzhen Component also
fell 1.32%. Australia’s S&P/ASX 200 was
about flat as the nation’s unemployment numbers came in better than expected.
In Japan, the Nikkei 225 shed
0.4% while the Topix gained 0.2% as the country reported a trade deficit of
$15.5 billion, bigger than forecasted in a Reuters poll. South Korea’s Kospi fell 0.9%
after a delayed open.
Economic leaders of the region will gather in
Thailand for the Asia Pacific Economic Cooperation (APEC) summit. Indonesia’s
central bank continues its two-day meeting today — economists are expecting the
benchmark interest rate to be raised by 50 basis points to 5.25%.
Overnight on Wall Street, U.S.
stocks fell as investors weighed a gloomy
fourth-quarter outlook cut from Target – triggering sharp
losses in its stock price as well as other industry peers.
Chip
stocks hammered in Asia, dollar firms on Fed outlook
November 17, 2022 4:20
AM GMT
TOKYO, Nov 17
(Reuters) - Chip stocks took a beating on Thursday, sending most Asian share
indexes lower, following grim signals from Micron Technology overnight about
excess inventories and sluggish demand.
Meanwhile,
the U.S. dollar rebounded after stronger-than-expected U.S. retail sales suggested the Federal
Reserve was unlikely to ease up in its battle with inflation.
That
fuelled concerns about the economic outlook, with the U.S. Treasury yield curve
remaining deeply inverted in Tokyo trading and suggesting that investors are
braced for recession.
"Inflation
is likely to remain elevated for some time ... because in the U.S., at least,
it's services that are driving inflation, and that can have greater
persistency," Salim Ramji, global head of ETFs and index investments at
BlackRock, told the Reuters Global Markets Forum on Wednesday.
"(In
equities) minimum volatility strategies can help investors stay invested while
reducing risk," he said.
Hong
Kong's Hang Seng Index (.HSI) tumbled 2.7%, with its tech stocks (.HSTECH) slipping
more than 5%. Mainland Chinese shares also declined, with blue chips (.CSI300) falling
1.2%.
More
Chip
stocks hammered in Asia, dollar firms on Fed outlook | Reuters
IMF chief says
war in Ukraine is the ‘single most important negative factor’ for global
economy
The war in Ukraine is the “single most important
negative factor” for the world economy this year — and most likely for 2023 as
well, IMF chief Kristalina Georgieva told CNBC Wednesday.
“We judge the war in Ukraine to be
the single most important negative factor for the world economy this year, most
likely also next year,” she told CNBC’s Martin Soong on the sidelines of the
Group of 20 meeting in Bali, Indonesia.
“Anything that creates more anxiety is, of course, damaging for the
prospects for growth and for meeting the needs and aspirations of people
everywhere,” said the managing director of the International Monetary Fund.
Her comments were in response to a missile
that struck Polish territory late Tuesday, which killed two
civilians.
Preliminary
assessments suggest the Russian-made missile may have been
fired by Ukrainian forces at an incoming Russian missile.
NATO’s secretary-general said “there was no
indication this was the result of a deliberate attack,” even as
investigations are ongoing.
“But let me be clear, this is not
Ukraine’s fault. Russia bears ultimate responsibility as it continues its
illegal war against Ukraine,” Jens Stoltenberg said.
Most G-20 members condemned Russia’s aggression against Ukraine in a
draft declaration on Tuesday.
More
IMF's Georgieva: Russia-Ukraine war is most important factor hurting growth (cnbc.com)
Next, more on the likely fraud of FTX. Why
did it happen? I’d suggest looking into if any of the funding round tripped in
whole or part.
Why were so many smart
people so dumb about FTX? Did they seriously just like Sam Bankman-Fried’s
‘vibe’?
15 November, 2022
Do you ever get the
impression that the entire economy is an elaborate scheme and nobody in charge
actually knows what the hell they’re doing? I’ve been getting that feeling a
lot lately. In just the past couple of weeks, we’ve been treated to the spectacle
of Elon Musk dramatically running Twitter into the ground and the wild
implosion of FTX.
If
you haven’t been following the FTX drama, a quick summary: in 2019 a
twentysomething called Sam Bankman-Fried launched a cryptocurrency exchange
that got people who get excited about that sort of thing very excited indeed.
All of the big players in venture capital, including Sequoia Capital, whose
early-stage investments include Apple, Google and YouTube, basically lined up
to throw money at the kid. SBF (as he is sometimes known) was routinely
described as the “next Warren Buffett” and predicted to be “the world’s first trillionaire”.
It
seems, however, that FTX was doing some very dubious things: namely, furtively shifting customer
funds to Alameda Research, a firm also operated by Bankman-Fried, which then
gambled them away on risky trades. Instead of becoming the world’s first
trillionaire, SBF saw his net worth plummet from $16.2bn to about $3 overnight. Former US Treasury secretary Larry
Summers has likened FTX’s collapse to the Enron scandal, saying that from the
reports, there were “whiffs of fraud” about it.
SBF
lost it all in style, mind you: he lived in a luxury compound in the Bahamas
with nine of his employees. According to reports, “all 10 are, or used to be, paired up in
romantic relationships with each other.”
This
would all be extremely amusing – the Fyre festival of finance
– were it not for the fact that a lot of ordinary people stand to lose money
because of FTX going bankrupt. The Ontario Teachers’ Pension Plan, for
example, invested $75m in FTX. Also unamusing is the fact that my
bank apparently does more due diligence when I buy a sofa than Silicon Valley’s
most high-profile investors appear to have done before giving billions of
dollars to a scruffy twentysomething who liked to nap on beanbags.
Why
on earth did some of the supposedly smartest minds in venture capital give
Bankman-Fried so much money and provide so little oversight? Two reasons, I think. The first is
that nobody understood what on earth the guy was talking about and decided that
that meant he was a genius. Secondly, they just liked his vibe.
“I
don’t know how I know, I just do. SBF is a winner,” wrote Adam Fisher, a
business journalist, in a glowing profile of Bankman-Fried that was published
on Sequoia’s website in September and yanked from it very recently. The same
13,000-word hagiography also reveals that SBF’s big vision for FTX – the description
that made all these fancy finance guys open their pockets – was that it would
be a place where “you can do anything you want with your next dollar. You can
buy bitcoin … You can buy a banana.” SBF, by the way, delivered this amazing
pitch while playing League of Legends in the meeting.
Was
Sequoia annoyed that SBF was playing video games while asking them for money?
Nah, they loved it. “We were incredibly impressed,” one funder said, according
to Fisher’s profile. “It was one of those your-hair-is-blown-back type of
meetings.”
More
Coinbase
CFO says full contagion impact of FTX collapse still to show - WSJ
November 16, 2022 10:40 PM GMT
Nov 16 (Reuters)
- The full extent of the fallout on the crypto industry from the collapse of
Sam Bankman-Fried's FTX was yet to come out, Coinbase Global Inc (COIN.O) Chief Financial Officer Alesia
Haas told the Wall Street Journal on Wednesday.
"What
we are seeing now is a fallout of FTX is becoming much more like the 2008
financial crisis where it's exposing poor credit practices and is exposing poor
risk management," Haas told the WSJ in an interview.
It will take a
few days or weeks to understand the full contagion of the event, Haas added.
FTX filed for bankruptcy protection in the
United States on Friday in the highest-profile crypto blowup to date, after
traders pulled billions from the platform in three days and rival exchange
Binance abandoned a rescue deal.
The collapse has
fanned fears about the future of the crypto industry after FTX outlined a
"severe liquidity crisis". Since then regulators have opened
investigations and lawmakers have called for clearer rules on how the industry
operates.
"We're
gonna see a drive towards regulation both in the U.S. and globally," Haas
told the Journal.
Coinbase,
which many believe is poised to gain market share from FTX's collapse, recently
underwent a second round of job cuts this year.
Cryptocurrencies
have been roiled as higher interest rates and worries of an economic downturn
force investors to dump risky assets. Shares in Coinbase are down roughly 81%
so far this year.
Coinbase
CFO says full contagion impact of FTX collapse still to show - WSJ | Reuters
Finally, thankfully, weathermen, like
economists and central banksters, are usually wrong.
Cold winter warning:
Met Office says La Nina could spark big chill in UK for 3 MONTHS
16
November, 2022
Knock-on effects of
global meteorological events threaten a higher-than-average probability of
colder weather until January, according to the Met Office.
A La Nina cooling of the
eastern Pacific and a negative "Indian Ocean Dipole" - irregular sea
temperatures in the Indian Ocean - will drive the cold blast.
The Met
Office's three-month outlook warns the "likelihood of a colder three-month
period overall is slightly greater than normal" at 1.3-times the average.
However,
those hoping for a White Christmas will have to wait, as it is too early to
"identify weather for a particular day".
The
report states: "There is good general agreement with respect to increased
chances of high pressure centred closer to the UK which would see greater
likelihood of a reduction in the frequency of rain-bearing systems, an increase
in cold, and a reduction in storminess.
"Drivers
relevant to the current outlook are La Nina, which can bring higher pressure
regimes to the north and west of Europe during late autumn and early winter
[and] an ongoing negative Indian Ocean Dipole which could potentially reinforce
the influence of La Nina."
Long-range
forecasters agree that after months of milder than average weather, winter
could bite hard.
Weather
models show thermometers nosediving this weekend with the mercury in parts
expected to drop below freezing.
Much of
the country will dip into single figures overnight while daytime temperatures
barely limp above 10C.
Exacta
Weather forecaster James Madden said: "It is likely to turn colder through
the second half of November with the chance of seeing frosts and outbreaks of
more wintry weather.
"This
pattern will be driven by high pressure similar to that which brought the
milder weather at the start of the month.
"However,
we are now looking at a significant change to something colder with the
potential for wintry blasts and snow before the end of the month."
In the
shorter term, Britain is facing a barrage of Atlantic storm systems threatening
a torrent of wind and rain.
More
Cold winter
warning: Met Office says La Nina could spark big chill in UK for 3 MONTHS
(msn.com)
“Fiat-money! Let the State 'create' money, and make the poor
rich, and free them from the bonds of the capitalists! How foolish to forego
the opportunity of making everybody rich, and consequently happy, that the
State's right to create money gives it! How wrong to forego it simply because
this would run counter to the interests of the rich! How wicked of the
economists to assert that it is not within the power of the State to create
wealth by means of the printing press!- You statesmen want to build railways,
and complain of the low state of the exchequer? Well, then, do not beg loans
from the capitalists and anxiously calculate whether your railways will bring
in enough to enable you to pay interest and amortization on your debt. Create
money, and help yourselves.”
Ludwig von Mises, The
Theory of Money and Credit.
Given
our Magic Money Tree central banksters and our spendthrift politicians,
inflation now needs an entire section of its own.
FTSE
100 Live: Food and energy costs drive inflation rate to 11.1%
16
November, 2022
The UK’s annual
rate of inflation today surged by more than expected to a fresh four-decade
high of 11.1%.
Rising energy and
food bills caused the spike in October, with today’s figure from the Office for
National Statistics comparing with 10.1% in September and City forecasts of
around 10.7%.
The core inflation
rate remained at 6.5%, adding to pressure on the Bank of England after recent
big interest rate rises.
FTSE 100 Live 16
November: Food and energy costs drive inflation rate to 11.1% | Evening
Standard
Falling household
spending power is painful part of the cure for inflation
16 November, 2022
The sharp rise in inflation is a bill that's been in the post
for the British economy since the spring.
It's
finally landed on the national doormat, but the fact we knew it was coming will
not make it any easier to pay.
The chief
driver of CPI reaching 11.1%, a one percentage point leap to a
41-year high, is the
rising cost of energy finally reaching households.
Thanks to
the price cap mechanism operated by energy regulator Ofgem, and now the
government's energy price guarantee (EPG), the real cost of domestic gas and
electricity is only fed through to consumers gradually.
While
other parts of the economy reflected the soaring cost of wholesale gas,
particularly food production, energy bill payers were protected through the
summer by the price cap, set in April, of £2,000 for "typical use"
for a family in a three-bedroomed house.
That changed
in October, when typical bills went up to £2,500.
Consumers
still have some protection, with the EPG capping unit prices of gas and
electricity, but the leap in domestic outgoings accounts for almost all of the
increase in inflation.
Without
the support it would have been even worse.
Before
the government announced its energy support plan, Ofgem predicted bills of
closer to £3,500 and the Bank of England forecast inflation would reach 13%.
Thanks to
the EPG, unit prices of gas and electricity increased last month by around 25%
rather than 75%.
Even so,
households are paying a staggering 90% more for gas, electricity and fuel oils
than they were a year ago.
Consumers
have had no such protection from the impact on food prices, up 16.4%
year-on-year in October.
That
reflects the impact of energy costs on the three F's fundamental to agriculture
- feed, fuel and fertiliser - and may add a fourth 'F' when shoppers get to the
checkout.
This
combination has a particularly severe impact on the poorest households, who
spend a greater proportion of their income on energy and food bills.
The
Office for National Statistics says that 'real' inflation for the poorest 30%
of households is more than 12%, compared to a little over 10% for the richest
third.
Even if
the volatile impact of energy and food prices is stripped out, underlying
"core inflation" remains at 6.5%, a figure that the Bank of England's
monetary policy committee will be wary of at its next meeting in December.
More
Falling household
spending power is painful part of the cure for inflation (msn.com)
What if the Fed’s own
forecasts are wrong?
16
November, 2022
The Federal Reserve’s summary of Economic
Projections in September doesn’t anticipate a recession in the next three
years. And Chair Jerome Powell still seems to think that a soft landing for the
economy is possible. In my view, however, a US recession is highly likely in
the next 12 to 18 months. Why don’t I share the Fed’s optimism?
The projections by the Fed governors will
always paint a rosy picture. They’re instructed to condition their view on an
optimal monetary policy, which obviously makes better outcomes achievable. In
the real world, as has been demonstrated over the past year, policy is often
far from that ideal, so actual results will usually be worse than implied by
the projections.
In the same vein, the Fed model that underpins
its staff forecast contains assumptions that contribute to more pleasant
forecasts. They include that the Fed will pursue the optimal monetary policy
path in the future (regardless of past errors) and that households and
businesses know this.
These assumptions rule out persistent
monetary policy errors or the loss of confidence by households and businesses
in the Fed’s commitment and ability to achieve its employment and inflation
objectives.
The Fed also operates in a world
where there’s an important political economy constraint. Admitting that a
recession would be required to get inflation in check might undercut public
support for a tighter monetary policy. It also could subject the Fed to criticism
that might ultimately undermine its independence or cause Congress to limit its
authority in the future. Sugarcoating the cost of what the Fed needs to do may
be viewed as a necessary evil so it can carry out its mission successfully. But
it also runs the risk of undercutting the Fed’s credibility.
More
What if the Fed’s
own forecasts are wrong? | Mint (livemint.com)
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.
Covid-19
death registrations remain steady at low level
November
15, 2022
Covid-19
death registrations in England and Wales look to have
levelled off, in fresh evidence the recent wave has peaked.
Some
650 deaths registered in the week to November 4 mentioned coronavirus on the
death certificate, according to the Office for National Statistics (ONS).
This
is broadly unchanged from the 651 registrations in the previous week, but also
5% below the 687 that were registered two weeks earlier.
Deaths
began to rise in mid-September, driven by the latest wave of Covid-19
infections.
But this
increase looks to have peaked in mid-October – and at a level below those seen
in previous waves of the virus.
During the summer wave,
deaths in England and Wales peaked at 810 in the week to July 29.
And at
the start of the year, weekly deaths peaked at 1,484.
This was
well below the numbers seen during the first stage of the pandemic, before the
roll-out of vaccines, when the weekly total topped 8,000.
Separate
ONS figures published last week showed that an estimated 1.3 million people in
private households in England were likely to have had coronavirus in the week
to November 1, down from 1.6 million in the previous week.
Wales has
also seen a fall, with 72,400 people estimated to have had Covid-19 in the same
period, down from 77,500.
It could
take another couple of weeks for the drop in infections to be mirrored clearly
in the number of death registrations.
This is
because the trend in registrations tends to lag behind the trend in infections,
due to the length of time between someone catching the virus and becoming
seriously ill, as well as the time it takes for deaths to be registered.
Covid-19 death registrations remain steady at low level (msn.com)
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.
World's
first electric lithium mine: Birth of a North American supply chain
Loz Blain November 16, 2022
As the world rushes toward "the greatest
disconnect between supply and demand in the history of commodities," Snow
Lake Lithium CEO Philip Gross talks us through his company's plans to open the
world's first all-electric lithium mine in Canada.
----"The consumers are overwhelming the
manufacturers," he says, "so the manufacturers are pushing down on
their battery guys. And the battery guys are saying OK, we'll build another
factory for you. They're building 13 or 14 gigafactories now, just in North
America. And there's no raw material to meet that. This is a
massive, organic growth in demand that didn't exist three, five years ago. It's
a monumental disconnect between supply and demand, and there's no way to fix it
now, other than going on your hands and knees to China. China has no interest
in supplying you with lithium or batteries. Their end goal is to dominate the
automobile industry."
While the bulk of the world's
known lithium resources are located in Australia and South America, Chinese
businesses own large stakes in most of the mining operations. More than two-thirds of global lithium processing is done in
China, and China makes somewhere around
80% of the world's batteries. Lithium mines take at least a decade to get up
and running; there's scant chance of the Western world catching up.
----"Nobody was interested in lithium for decades,"
says Gross. "People used it in ceramics, and some pharmaceuticals, and
that was the entire market. Snow Lake's lithium resource was found back in the
1930s, and it was a huge disappointment. They kept drilling, desperately hoping
for gold. Nobody in the history of the world ever bothered looking for lithium.
No money was spent on it, and no money was spent on ecosystems. If you bring
lithium out of the ground in North America, you can't do anything with it
unless you send it to China."
Thus, as Snow Lake
Lithium races to create the world's first fully-electric lithium mine to pull
that metal out of the ground and process it into 6% spodumene, it's signed a
MoU with Korean battery giant LG, which is planning a hydroxide processing
plant nearby, capable of taking that spodumene and turning it into
battery-grade lithium ready for the gigafactories. And so begins a fledgeling
North American lithium battery supply chain.
Snow Lake's 55,000-acre site is located some 400 miles north
of Winnipeg, and the LG plant will be close by, perfectly positioned to move
bulk product down into the centre of the USA and out to every major
manufacturing center via rail. With just 1% of its property explored, Gross
says the company expects to supply around 160,000 tonnes of 6% spodumene a
year, opening in 2025 or 26.
More
World's first
electric lithium mine: Birth of an American supply chain (newatlas.com)
“This was the argument put forward during the War when the
expenditure on the army and navy had to be met; and this was the argument put
forward in Germany and Austria after the War when a part of the population had
to be provided with cheap food, the losses on the operation of the railways and
other public undertakings met, and reparations payments made. The assistance of
inflation is invoked whenever a government is unwilling to increase taxation or
unable to raise a loan; that is the truth of the matter.”
Ludwig von Mises, The Theory of Money and Credit.
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