Saturday 12 November 2022

Special Update 12/11/22 The Great Disconnect Returns!!!

 Baltic Dry Index. 1355 -35   Brent Crude 95.99

Spot Gold 1771       U S 2 Year Yield 4.34 -0.27 Thurs. Closed Fri.

Covid-19 cases 02/04/20 World 1,000,000

Deaths 53,100

Covid-19 cases 12/11/22 World 639,942,976

Deaths 6,614,516

If all else fails, immortality can always be assured by spectacular error.

John Kenneth Galbraith.

In the stock casinos, euphoria. The Great Grizzly Bear is dead. The boom times are back.  Party like it’s 2009-2019 again!

Well maybe, but not so fast.  Who buys stocks, or real estate, or much of anything else, at the start of what looks like a very nasty arriving global recession?

The Great Disconnect is back but not for long, I think.

In Cryptoland, a Bernie Madoff repeat?

Nasdaq adds 1.9%, S&P 500 closes nearly 1% higher and notches best week since June

UPDATED FRI, NOV 11 2022 5:53 PM EST

The S&P 500 closed out its best week since June as a report on Thursday showing slowing inflation raised hopes that the Federal Reserve would soon slow its tightening campaign.

The broader market index added 0.9%, to close at 3,992.93. This brought its gain for the week to 5.9%, its best week since the one ended June 24 of this year. The Nasdaq Composite added about 1.9% to end at 11,323.33 as investors snapped up tech shares on hopes interest rates would ease. The Dow Jones Industrial Average gained 0.1%, closing at 33,747.86.

Tech stocks on Friday shook off a decline in cryptocurrencies. Virtual currencies tumbled sharply this week and once again came under pressure Friday after FTX filed for bankruptcy protection, and CEO Sam Bankman-Fried resigned. Bitcoin and ether both declined.

Still, tech stocks and related crypto stocks rebounded after opening lower Friday. The tech sector in the S&P 500 surged 10% through Friday, its best weekly performance since April 2020. Amazon was up more than 4% on Friday, while Google-parent Alphabet was 2.6% higher.

The Dow jumped more than 1,200 points on Thursday following a smaller-than-expected rise in consumer prices for the month of October, giving investors hope that inflation may be cooling. The S&P rose 5.5%, and the Nasdaq Composite surged about 7.4%. It was the best day since 2020 for all three indexes.

Treasury yields plunged Thursday on the back of the weaker-than-expected inflation print. The bond market was closed on Friday to observe Veterans Day.

“From an equity market perspective, as long as the threat of much higher rates is out the way, this should remove a major headwind,” Barclays’ head of European equity strategy Emmanuel Cau wrote in a Friday note.

All of the indexes posted a winning week. The Dow was up 4.1% on a weekly basis, while the Nasdaq Composite advanced 8.1%. The week marked a resumption of a comeback rally for the bear market, which began in mid-October

Nasdaq adds 1.9%, S&P 500 closes nearly 1% higher and notches best week since June (cnbc.com)

FTX’s Sam Bankman-Fried lost billions and the company filed for bankruptcy—it could signal the ‘demise’ of crypto, expert says

FTX, one of the world’s largest cryptocurrency exchange platforms, is in major financial turmoil.

At its peak, FTX was valued at $32 billion. The company filed for bankruptcy on Nov. 11 after competing offshore crypto exchange, Binance, backed out of a deal to acquire it and users withdrew around $6 billion in funds.

FTX’s Sam Bankman-Fried, who often goes by SBF, stepped down as CEO on Friday. He saw his estimated net worth drop by billions virtually overnight as his cryptocurrency exchange platform teeters on the brink of collapse.

Between Nov. 8-9, Bankman-Fried’s net worth plummeted to $991.5 million. That’s around a 94% drop from his estimated $15.2 billion previously, according to a Bloomberg analysis.

“The fall of FTX could be the moment that really kicks off the broader decline — maybe even demise — of cryptocurrency,” James Royal, principal reporter at Bankrate, tells CNBC Make It.

What happened?

Binance CEO Changpeng Zhao, commonly known as CZ, initially invested in FTX in 2019, but later sold his controlling stake in 2021, Reuters reports.

Zhao was paid about $2.1 billion worth of FTT, the native crypto token that gives users access to the FTX trading platform.

Here’s why that matters: A leaked balance sheet revealed that the value of Bankman-Fried’s crypto trading firm, Alameda Research, was heavily reliant on the value of FTT, according to Coindesk.

So when Zhao announced on Nov. 6 that his company would liquidate any remaining FTT it held due to “recent revelations,” it triggered fears among investors that FTX would be unable to pay its debts.

Many began to withdraw their funds, which led to a stark 72% drop in FTT’s price. As FTT’s price fell, so did the value of FTX’s assets that were tied to it.

What happens to crypto traders on the FTX platform if it collapses?

“The first thing traders need to do now is understand the legal duty that an exchange has to them, and whether their assets are held securely,” Royal says.

Like many other crypto exchanges, FTX’s insurance coverage only addresses certain criminal events such as theft or fraud, Martin Leinweber, digital asset product strategist at MarketVector Indexes, tells CNBC Make it.

“There is no insurance coverage just because the exchange fails,” he says. “If there’s no bailout, depositors in FTX could lose everything.”

How will FTX’s downfall affect crypto prices?

In short, it doesn’t look good. “The events shook the broader cryptocurrency markets, sending bitcoin and other currencies to two-year lows,” Leinweber says.

Bitcoin’s price hovered around $17,000 as of Nov. 11, down from above $20,000 on Nov. 8 and well below the peak price of around $68,000 it reached in November 2021.

“With the exception of so-called stablecoins, crypto prices are supported entirely by belief in their future, not by any fundamental underpinning such as assets or cash flow,” Royal says.

That means crypto’s value solely depends on what someone is willing to pay for it, which is why its price can be subject to erratic fluctuations and dips.

“Crypto has been seen as a lottery ticket, and hypesters have been pumping crypto for years,” Royal says. “Unfortunately, it usually takes massive losses for the scales to fall from traders’ eyes.”

FTX's Sam Bankman-Fried lost billionaire status, filed bankruptcy (cnbc.com)

EXCLUSIVE At least $1 billion of client funds missing at failed crypto firm FTX – sources

New York, Nov 11 (Reuters) - At least $1 billion of customer funds have vanished from collapsed crypto exchange FTX, according to two people familiar with the matter.

The exchange's founder Sam Bankman-Fried secretly transferred $10 billion of customer funds from FTX to Bankman-Fried's trading company Alameda Research, the people told Reuters.

A large portion of that total has since disappeared, they said. One source put the missing amount at about $1.7 billion. The other said the gap was between $1 billion and $2 billion.

While it is known that FTX moved customer funds to Alameda, the missing funds are reported here for the first time.

The financial hole was revealed in records that Bankman-Fried shared with other senior executives last Sunday, according to the two sources. The records provided an up-to-date account of the situation at the time, they said. Both sources held senior FTX positions until this week and said they were briefed on the company's finances by top staff.

More

EXCLUSIVE At least $1 billion of client funds missing at failed crypto firm FTX – sources | 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.

Euro zone bond market flashes recession signal

November 11, 2022

LONDON (Reuters) -The euro zone government bond market on Friday delivered the clearest sign yet that Germany, the region's largest economy, could be on the verge of a recession, as short-dated yields rose sharply.

Global bond yields plummeted on Thursday after data showed U.S. consumer inflation rose by much less than expected last month, which could offer the Federal Reserve some room to slow down the pace at which it plans to raise interest rates.

In Europe, data on Friday showed harmonised inflation in Germany, the euro zone's biggest economy, rose at a rate of 11.6% in October, its highest since reunification in 1990, due in large part to spiralling food and energy costs. Separate reports this week have forecast a steep drop in consumer spending.

Yields on the benchmark 10-year Bund rose by 15 basis points (bps), their largest one-day rise since late September, to trade around 2.153%.

Those on the two-year Schatz rose as much as 17 bps to a high of 2.15%, briefly pushing above those for 10-year debt. This inversion can often herald the onset of a recession.

"There is a widening acceptance that we're going to be seeing Germany in particular, but also the euro zone heading into recession in the first quarter of next year," StoneX strategist Fiona Cincotta said.

"All the signals are out there," she said.

The gap between two- and 10-year yields has only inverted on a handful of occasions in the last 20 years and only ever by a fraction, with the exception of the run-up to the financial crisis in 2008, when it turned negative by as much as 23 bps.

----Yet Europe's energy crisis is forcing governments to spend big to protect consumers and businesses, meaning more bond supply will hit the markets in the coming months. That complicates the ECB's efforts to tighten credit conditions to bring inflation back towards its 2% target from around five times that level currently.

Yields on Italian 10-year bonds rose 20 bps to 4.204%. Italy is one of the euro zone's larger, more indebted members. The closely watched gap between German and Italian 10-year yields earlier reached its narrowest since July, at 197.2 bps.

Analysts said the outlook for Italian bonds was less favourable as the ECB was expected to formalise plans to begin selling part of its bond holdings, so-called quantitative tightening (QT), next year.

"We're struggling to see how ECB QT doesn't see Italian bonds suffer," Rabobank senior rates strategist Lyn Graham-Taylor said.

"The fact we're going into what we believe will be a fairly large recession, we struggle to see how Italian bonds don't suffer during that process," she added.

More

Euro zone bond market flashes recession signal (msn.com)

EU expects recession to hit Europe as inflation hangs on

The European Union’s executive commission slashed its forecast for economic growth next year

November 11, 2022

The European Union's executive commission slashed its forecast for economic growth next year, saying the 19 countries that use the euro currency will slide into recession over the winter as peak inflation hangs on for longer than expected and high fuel and heating costs erode consumer purchasing power.

The European Commission's autumn forecast released Friday predicts falling economic output in the last three months of this year and the first months of 2023. It says high energy prices, a rising cost of living, higher interest rates and overall uncertainty “are expected to tip the EU, the euro area and most member states into recession in the last quarter of the year.”

The growth forecast for all of 2023 was lowered to 0.3% from 1.4% expected in the previous forecast from July.

“Growth is expected to return to Europe in spring, as inflation gradually relaxes its grip on the economy,” the report said. “However, with powerful headwinds still holding back demand, economic activity is set to be subdued.”

The worst performer next year is likely to be Germany, Europe's largest economy and one of the most dependent on Russian natural gas before the war in Ukraine. Gas and electricity prices have soared as Russia has dialed back supplies to Europe to a mere trickle of what they were before the invasion of Ukraine.

Germany was expected to see output shrink by 0.6% over the next year.

Inflation will peak later than expected, near the end of the year, and will lift the average rate to 8.5% for 2022 and to 6.1% for 2023 in the eurozone. That is an upward revision of nearly 1 percentage point for 2022 and more than 2 points for 2023.

Two consecutive quarters of falling output is one common definition of recession, although the economists on the eurozone business cycle dating committee use a broader set of data including employment figures.

The commission indicated the job market was likely to hold up relatively well despite shrinking output over the winter, forecasting an increase in the unemployment rate from 6.8% this year to 7.2% next and a decrease to 7% in 2024.

EU expects recession to hit Europe as inflation hangs on | The Independent

BoE will need to raise rates to 4.75% to bring down inflation - NIESR

November 11, 2022

LONDON (Reuters) - The Bank of England will probably need to raise interest rates to 4.75% in order to bring inflation back to its 2% target, something only likely to be achieved in three years' time, the National Institute of Economic and Social Research said.

Last week, the BoE raised Bank Rate to 3% as it sought to counter the risks from an inflation rate currently running above 10%, but it also said investors were pricing in too many further increases.

BoE will need to raise rates to 4.75% to bring down inflation - NIESR (msn.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

https://www.zerohedge.com/markets/environmental-disaster-ev-battery-metals-crunch-horizon-industry-races-recycle

Covid-19 Corner

This section will continue until it becomes unneeded.

This weekend, something a little different. Have we got cancer all wrong?

Expert Explains Cancer May Be Metabolic Disease, and Shares a Cure

Nov 8 2022

“Cancer is not a genetic disease, it’s a metabolic disease,” Thomas N. Seyfried, a well-known scholar in cancer research and a Professor of Biology at Boston College, told The Epoch Times. “Once people understand that cancer is a metabolic disease, then you will begin to see a very big reduction in death and greatly improved quality of life and survival.”

 

Cancer Has Remained High for Decades

According to the statistics of the American Cancer Society, although the incidence of cancer in the United States has been declining slowly since the beginning of the 21st century, if we look at it over an extended period of time, we will find that the incidence of cancer is actually increasing, not decreasing.

 

In 1975, approximately 400 out of every 100,000 Americans had cancer. By 2018, that number had grown to roughly 445, an increase of more than 10 percent [1].

 

Cancer May Not Be a Genetic Disease

“Why are so many people dying from cancer?” Seyfried asked. “Because the theory is wrong. The theory that underlies cancer is incorrect.”

 

Cancer is still generally considered a genetic disorder. Medical textbooks use somatic mutation theory to explain the cause of cancer. These textbooks state that cancer is caused by mutations in proto-oncogenes or tumor suppressor genes [4], and the mutated cells then multiply indefinitely and form malignant tumors. However, Seyfried mentioned a number of facts in this interview and in his published research [5] that are inconsistent with the above theory:

More

Expert Explains Cancer May Be Metabolic Disease, and Shares a Cure (theepochtimes.com)

Covid infections in the UK plummet by 21 percent in a week in first fall in all four nations in three months

11 November, 2022

Covid infections have fallen 21 per cent week-on-week in a sign that the autumn wave may be beginning to fade.

All four UK nations experienced a drop for in cases for the first time since mid-August, the Office for National Statistics said.

The total number of people in private households in the UK testing positive for the virus stood at 1.5 million in the week to November 1, down from 1.9 million in the previous week, according to the figures.

Around one in 40 people in England tested positive during the period, the figures showed. This is down from one in 35 last week.

An estimated 2.2 per cent of the population in London received a positive result - down 0.4 on the previous week.

Covid infections in the UK plummet by 21 percent in a week in first fall in all four nations in three months (msn.com)

World Health Organization - Landscape of COVID-19 candidate vaccineshttps://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines

NY Times Coronavirus Vaccine Trackerhttps://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html

Regulatory Focus COVID-19 vaccine trackerhttps://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

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.

IBM reveals Osprey, the world's most powerful quantum computer

Michael Irving  November 09, 2022

IBM has unveiled the most powerful quantum processor in the world – the Osprey, which boasts a massive 433 quantum bits (qubits). The new chip headlines a raft of advances in quantum computers that the company has announced, as it prepares for a massive leap next year.

While they’ve served us well for decades, traditional computers are increasingly paling in comparison to those young upstarts, quantum computers. Where the former stores and processes data in binary bits, as zeroes and ones, the latter uses qubits that can be zero, one or both at the same time. This exponentially raises the processing power for each added qubit, allowing them to potentially perform calculations that are impossible for conventional computers.

With the power of 433 qubits, IBM’s Osprey is the most advanced quantum processor in the world by a large margin. It packs twice as many qubits as the previous record-holder – Xanadu’s Borealis, which was tested with 216 qubits – and over three times more than IBM’s own Eagle, announced last year, which packed 127 qubits.

The Osprey has a similar architecture to its forebear, being comprised of a single layer of qubits atop several layers of control wiring, which helps cram more qubits in while reducing their error rate. An integrated filtering system has now been added, which helps reduce noise and improve stability of the device.

----As impressive as this year’s updates are, IBM is looking to next year as the real turning point. The company’s roadmap says that next year’s quantum processor, the Condor, will boast a stunning 1,121 qubits. Also on the cards is a modular processor called the Heron, which can stack multiple 133-qubit units together to make more powerful quantum processors.

More

IBM reveals Osprey, the world's most powerful quantum computer (newatlas.com)

This weekend’s music diversion.  Approx. 4 minutes.

Vivaldi: Concerto in F major for Violin, 2 oboes, 2 horns, cello, bassoon & strings RV 571 - 3....

Vivaldi: Concerto in F major for Violin, 2 oboes, 2 horns, cello, bassoon & strings RV 571 - 3.... - YouTube

This weekend’s chess update. Approx. 10 minutes.

Is Magnus Carlsen OF THIS WORLD ?? Crushes Super GM With Alien Chess Moves

Is Magnus Carlsen OF THIS WORLD ?? Crushes Super GM With Alien Chess Moves - YouTube

This week’s maths update. Approx. 5 minutes.


The mathematical secrets of Pascal’s triangle - Wajdi Mohamed Ratemi

The mathematical secrets of Pascal’s triangle - Wajdi Mohamed Ratemi - YouTube

There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.

John Kenneth Galbraith.

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