Tuesday 29 November 2022

Will China Change Policy? More FTX Fallout.

 Baltic Dry Index. 1347 +83    Brent Crude 84.85

Spot Gold 1754          US 2 Year Yield 4.46 +0.04

Coronavirus Cases 02/04/20 World 1,000,000

Deaths 53,100

Coronavirus Cases 29/11/22 World 646,515,139

Deaths 6,637,661

“Why, sometimes I've believed as many as six impossible things before breakfast.”

 Ebenezer Squid, with apologies to Lewis Carroll and Alice in Wonderland.

In the stock casinos this morning, more hopium that the Chinese Communist Party is about to change its Covid-19 lockdown policy at a press conference later today.

Since that would be admitting that the CCP had gotten the previous policy hopelessly wrong, I have my doubts that a change in policy is coming or that the CCP is about to save the month-end all important money manager bonuses.

 

Hong Kong stocks jump 4% ahead of China’s Covid briefing

UPDATED TUE, NOV 29 2022 12:19 AM EST

Stocks in Hong Kong led gains in the Asia-Pacific alongside Chinese indexes after media reports said China’s state council will hold a press conference at 3 p.m. Beijing time.

Hong Kong’s Hang Seng index jumped 4.24% in the afternoon session, with the Hang Seng Tech index rising past 6%. In mainland China, the Shanghai Composite climbed 2.21% and the Shenzhen Component added 2.5%.

The CSI 300 index, which tracks the largest mainland-listed stocks, climbed nearly 3% as the nation’s Covid cases on Monday were lower than Sunday’s count, the first decline since Nov. 19.

The moves come after a negative start to the week were investors reacted to the unrest over China’s Covid restrictions. Major U.S. indexes lost around 1.5% each.

In Australia, the S&P/ASX 200 was up 0.29%. South Korea’s Kospi traded 0.69% higher. MSCI’s broadest index of Asia-Pacific shares added 1.78%.

Meanwhile, the Nikkei 225 in Japan fell 0.53% and the Topix shed 0.66% as retail sales data missed expectations and the nation’s unemployment rate was unchanged from September.

Hong Kong stocks jump 4% ahead of China's Covid briefing (cnbc.com)

China’s Covid infections drop for the first time in more than a week

BEIJING — Mainland China reported the first decline in daily Covid infections in more than a week on Monday.

The country said local infections, mostly asymptomatic, totaled 38,421, down from a record high of 40,052 reported for Sunday, according to CNBC calculations of Wind Information data.

The last time the daily case count fell from the prior day was on Nov. 19, the data showed.

Local infections fell in Guangdong and Chongqing, two of the hardest-hit regions in the latest Covid wave. No new deaths were reported.

But the capital city of Beijing saw infections rise Monday from a day earlier, as did Shanghai, albeit at a far smaller scale. Shanghai Disneyland said it would suspend operations from Tuesday, after briefly reopening Friday. Universal Beijing Resort remains open.

There was no indication of new protests on Monday. Over the weekend, students and groups of people across China held public demonstrations to protest the country’s stringent zero-Covid policy.

Security has tightened in areas where protesters had gathered in Beijing and Shanghai, according to social media. Some social media reports said police were checking locals’ phones in Shanghai for foreign apps that can’t be accessed in the mainland without a VPN.

China’s official nightly news broadcast Monday did not mention the unrest, but included a segment calling for unity around the current Covid measures. The broadcast also emphasized how the government was maintaining health services and delivery of daily necessities to people in lockdown.

The purpose of the measures is to minimize Covid’s impact on the economy and society, claimed an op-ed Tuesday in People’s Daily, the Chinese Communist Party’s official newspaper. The article firmly ruled out the idea of relaxing controls.

More

China's Covid infections drop for the first time in more than a week (cnbc.com)

 

Stock futures rise after major averages slide on Covid unrest in China

UPDATED TUE, NOV 29 2022 12:22 AM EST

U.S. stock futures were higher on Tuesday morning after the major averages came under pressure from Covid protests in China, and as investors anticipated more economic data and commentary from Federal Reserve leaders this week.

Dow Jones Industrial Average futures added 72 points, or 0.21%. S&P 500 and Nasdaq 100 futures climbed 0.35% and 0.51%, respectively.

The Dow Jones Industrial Average lost 497.57 points, or 1.45%, during the regular session Monday. The S&P 500 slid 1.54%, while the Nasdaq Composite closed down 1.58%.

Growing frustration in mainland China over the country’s zero-Covid policy weighed on markets around the world. On Monday, West Texas Intermediate crude futures briefly fell to their lowest point since last December.

“There’s some real reasons to be cautious. The market’s rallied a lot this quarter, and there’s some concerns that things are going to slow, so I think it’s a kind of balanced risk reward,” Trivariate Research’s Adam Parker said Monday on CNBC’s “Closing Bell: Overtime.”

“I think there was an excuse with maybe some China slowdown fears for people to collect a little profit that they made in the quarter,” he added.

On the economic front, traders will watch for the September reading of the S&P CoreLogic Case-Shiller Home Price Index that is due Tuesday before the bell. The report will give investors insight into how higher interest rates are affecting the housing market. Home prices in the prior month jumped about 13% year over year.

Meanwhile, the latest reading on consumer confidence is set to release at 10 a.m. ET. Wall Street is also expecting the latest corporate earnings results from Hewlett Packard Enterprise Tuesday after the bell.

Fed Chair Jerome Powell is scheduled to speak at the Hutchins Center on Fiscal and Monetary Policy at Brookings on Wednesday. Investors will be listening for insight into the central bank’s fight against inflation.

Stock futures rise after major averages slide on Covid unrest in China (cnbc.com)

 

Finally, crypto fraud is soaring and that’s before the FTX/FTT/SBF/Democrats fraud scandal.

The FTX collapse havoc spreads.

 

Half a billion pounds lost to cryptocurrency fraud in three years

28 November, 2022

Almost half a billion pounds has been lost to cryptocurrency scams over the past three years, according to data from Action Fraud.

Scammers raked in £226m in 2021-22, up from £171m in 2020-21 and £71m the year before, a freedom of information request to the national crime reporting service has revealed.

The number of reports it received about crypto fraud increased to 10,030 in 2021-22, up 16pc on the previous year.

Law firm Pinsent Masons, which obtained the information, said despite the decline of many cryptocurrencies, small investors were still being lured in by “get rich quick” schemes.

The price of Bitcoin has fallen more than 70pc since hitting record highs last year, while the collapse of the world’s second-largest cryptocurrency exchange FTX has sent shockwaves through the crypto market.

Hinesh Shah of Pinsent Masons said he was concerned crypto fraudsters were deliberately targeting inexperienced investors.

“Whenever times are tough, fraudsters always seek to prey on less experienced investors by promising huge returns. Given the huge sums which some crypto investors made during the boom, scams involving cryptocurrencies can be especially potent for smaller investors who may be desperate to make a ‘quick buck’.”

 

Pinsent Masons warned of a rise in "rug pull" scams, where crypto developers abandon a project and run away with investors' funds.

Many of these scams are only coming to light now, the law firm said, as crypto values collapse and investors look to recover their savings only to find they have vanished.

More

Half a billion pounds lost to cryptocurrency fraud in three years (msn.com)

 

The Bahamas has hit out at 'extremely regrettable' criticism from FTX's new CEO after the Nassau-based crypto giant collapsed

November 28, 2022

 The collapse of Bahamas-based FTX has prompted the island-nation to defend its crypto laws and criticize the FTX's new CEO, John J. Ray III.

After the crypto exchange founded by Sam Bankman-Fried entered bankruptcy earlier in November, the Bahamas suspended FTX's license and took control of its digital assets by transferring them into a government crypto wallet.

In a video statement on Sunday, the Bahamas attorney general, Ryan Pinder, took aim at Ray over bankruptcy court filings relating to the country's actions against FTX. 

Pinder said it was "extremely regrettable" that Ray had "misrepresented the timely action" of Bahamian regulators, and accused him of filing "inaccurate allegations."

He added that the Bahamas securities commission "deserves the highest praise for moving so swiftly and decisively" in its liquidation proceedings against FTX.

 

----Pinder hit back at accusations that the Bahamas was failing to properly regulate cryptocurrency amid the FTX fallout. He said: "The world is full of countries in which there is no legislative or regulatory authority over the crypto and digital asset business, but I must say the Bahamas is not one of these countries."

The Caribbean nation has established itself as a crypto hub despite having a population of just 400,000. Bankman-Fried previously told Blockworks that FTX moved there because of "the proactive stance taken by The Bahamas and its regulatory bodies on cryptocurrencies." 

The Bahamas is also home to Deltec Bank, which in 2021 was reported by Bloomberg to hold $15 billion in reserves for Tether, a stablecoin pegged to the US dollar. 

Pinder also suggested that FTX's legal strategy and "intemperate statements" could be being driven by "the prospect of multimillion dollar legal and consultant fees."

"In any case, we urge prudence and accuracy in all future filings," he added.

FTX's bankruptcy has led to calls for tighter crypto regulations from both US senators and the Bank of England.

One FTX lawyer previously said the company had spent almost $300 million on luxury houses for senior executives in the Bahamas, while Fox Business reported that Bankman-Fried often bought $2,500 lunches at one bistro.

 

The Bahamas has hit out at 'extremely regrettable' criticism from FTX's new CEO after the Nassau-based crypto giant collapsed (msn.com)

 

How FTX ‘death spiral’ spelled doom for BlockFi, according to bankruptcy filing

There was supposedly one man who could save crypto — Sam Bankman-Fried. The former FTX CEO bailed out and took over crypto firms as cryptocurrency markets withered with Terra’s spring crash. In October, FTX won the bidding war for bankrupt crypto firm Voyager Digital in a highly advantageous deal.

With the collapse of FTX, the firms which Bankman-Fried saved now find themselves in an uncertain state. Voyager put itself back up for auction last week. Today, BlockFi filed for bankruptcy in New Jersey, after weeks of speculation that the FTX collapse had fatally crippled it.

The FTX “death spiral,” as BlockFi advisor Mark Renzi put it, has now spread to another crypto entity. BlockFi’s bankruptcy had been anticipated for some time, but in a detailed 41-page filing, Renzi walks creditors, investors, and the court through his perspective at the helm of BlockFi.

According to Renzi, exposure to two successive hedge fund failures, the FTX rescue, and broader market uncertainty all conspired to force BlockFi into bankruptcy.

Renzi is keen to underscore that from his point of view, BlockFi doesn’t “face the myriad issues apparently facing FTX.” Renzi pointed to a $30 million settlement with the SEC and the company’s corporate governance and risk management protocols, writing that BlockFi is “well-positioned to move forward despite the fact that 2022 has been a uniquely terrible year for the cryptocurrency industry.”

The “issues” that Renzi refer to may include FTX’s well publicized lack of financial, risk, anti-money laundering (AML), or audit systems. In a court filing, newly appointed FTX CEO John Ray said he’d never seen “such a complete failure of corporate controls” as in FTX.

More

How FTX 'death spiral' spelled doom for BlockFi, according to filing (cnbc.com)

“If I had a world of my own, everything would be nonsense. Nothing would be what it is, because everything would be what it isn't. And contrary wise, what is, it wouldn't be. And what it wouldn't be, it would. You see?”

Sam Bankman-Fried, with apologies to Lewis Carroll, Alice's Adventures in Wonderland / Through the Looking-Glass

 

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.

Globalized Supply Chain Brings More-Turbulent Food Prices

Imports of food and related ingredients have steadily risen in most economies, exposing consumers to supply disruptions that drive up prices

Nov. 27, 2022 9:00 am ET

For decades, globalization has increased the variety and reduced the cost of food. Now the pandemic, war in Ukraine and other global disruptions have shown how that complex supply chain can also result in more turbulent prices.

Food-price inflation hit multidecade highs this year in the U.S. and elsewhere, outpacing overall consumer prices. While food inflation has cooled in recent weeks, food prices globally are still 25% higher than before Covid-19 struck in early 2020, according to the United Nations Food Price Index.

Among the factors pushing up prices, food-industry executives and economists say, have been manufacturing and transport disruptions stemming from the pandemic and the impact of the war in Ukraine on energy and grain prices. While those issues may recede, and some suppliers say they will try to source from closer to home, analysts expect price swings to be more frequent.

Food and drink, like many manufactured goods from cars to iPhones, often include components from around the world. American pizzas can be topped with ham from Spain and Mexican sauce. Scotch whisky is sometimes made with Ukrainian barley. Overall, almost a quarter of global food exports now have a foreign component, according to data from the World Trade Organization.

“When people think of globalized trade, they don’t think that one of the major components of globalization was the food chain,“ said Susan Wachter, a professor at the Wharton School of the University of Pennsylvania, who studies inflation. “The increased complexity of that food chain makes food supply extremely vulnerable to supply shocks,” she added.

Rabobank predicts food prices will stay volatile next year, given energy shortages, supply problems for key agricultural commodities and high fertilizer prices. U.S. food prices will rise 3% to 4% next year, above historical rates, the Agriculture Department projects.

----In modern times, the volume and variety of food crossing borders jumped as the world globalized. The U.S. imported about 18.3% by value of its food and beverages in 2020, up from 13.2% in 2008, according to the Agriculture Department. Globally, the share of wheat consumption sourced from abroad rose to 25% in 2019 from 17% in 1995, according to the International Food Policy Research Institute. In 2019, a country was 50% more likely to form a direct food and agricultural trade link with another country than in 1995, according to the U.N. Food and Agriculture Organization.

More

Globalized Supply Chain Brings More-Turbulent Food Prices - WSJ

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.

With Covid-19 starting to become only endemic, this section is close to coming to its end.  

Patience running out in China over COVID lockdowns - and it poses major challenge to ruling Communist party

Many in China have watched the World Cup on TV and wonder why the rest of the world is getting on with life, gathering unmasked in large stadiums, while they risk being locked in their homes at short notice or having their businesses shut down and unable to trade.

Monday 28 November 2022 08:22, UK

To see people protesting in the streets in China is incredibly rare.

To have those protests accompanied by shouts of "down with the CPP (Chinese Communist Party)" and "down with President Xi" is almost unheard of.

But that was exactly what happened in the streets of Shanghai on Saturday night, a gathering that started with just 100 or so people grew as word spread, the videos circulated widely on Chinese social media before the censors rushed to take them down.

The challenge for the ruling CPP feels significant and it is not just the boldness of the chants that will be causing alarm.

It's the fact that it is now one of many such protests springing up.

It's the fact that it was not in response to something local, but something that happened thousands of miles away on the other side of the country.

And, perhaps most importantly, it's the fact that the underlying cause of the agitation, the zero-COVID agenda, is something being experienced by every single Chinese citizen.

It is hard to see exactly how this wave of anger is quashed without some sort of radical action.

The spark for the Shanghai protest was a fire in the city of Urumqi in Xinjiang, a province on the far west side of this vast country.

Ten people, including children, died. It's alleged a coronavirus lockdown prevented them from leaving the building and prevented firefighters from getting speedy access.

The province of Xinjiang has been experiencing a particularly harsh lockdown, lasting more than three months, with people in some places unable to leave their homes even to buy food.

Protests erupted there on Friday night.

This is particularly extraordinary as the province of Xinjiang is one of the most tightly policed and heavily surveilled places in the whole of China.

More

Patience running out in China over COVID lockdowns - and it poses major challenge to ruling Communist party | World News | Sky News

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.

University of Manchester graphene partnership with Khalifa University aims to tackle global challenges

28 November 2022

An ambitious partnership between The University of Manchester and Abu Dhabi-based Khalifa University of Science and Technology has been agreed with the aim to deliver a funding boost to graphene innovation that will help tackle the planet’s big challenges.

Professor Dame Nancy Rothwell, President & Vice-Chancellor of The University of Manchester, and Professor Sir John O’Reilly, President, Khalifa University (pictured above) officially signed a contract between the two institutions during a VIP visit by a Manchester delegation to the United Arab Emirates (UAE). Senior officials from both universities were present at the signing (pictured below).

This international partnership will further accelerate Manchester and Abu Dhabi’s world-leading research and innovation into graphene and other 2D materials. The Research & Innovation Center for Graphene and 2D Materials (RIC-2D), based in Khalifa University, is part of a strategic investment programme supported by the Government of Abu Dhabi, UAE. 

Growing international partnership

This partnership will support expediting the development of the RIC-2D at Khalifa University as well as help building capability in graphene and 2D materials in collaboration with Graphene@Manchester, a community that includes the academic–led National Graphene Institute (NGI) and the commercially-focused Graphene Engineering Innovation Centre (GEIC), a pioneering facility already backed by the Abu Dhabi-based renewable energy company Masdar.

The historic agreement will bring together the vision of the two universities to tackle some of the globe’s biggest challenges, such as providing clean drinking water for millions of people and supporting a circular ‘green economy’ in all parts of the world.

Graphene – originally isolated at The University of Manchester, the global ‘home of graphene’ – has the potential to deliver transformational technologies. The focus of the Khalifa–Manchester partnership will be on key themes, with a priority to meet the most immediate of global challenges, including  climate change and the energy crisis. These flagship areas are:

●          Water filtration and desalination – graphene and 2D materials are being applied to next generation filtration technologies to significantly boost their effectiveness and efficiency to help safeguard the world’s precious supply of drinking water

●          Construction – graphene is helping to develop building materials that are much more sustainable and when applied at scale can expect to slash global CO2 emissions

●          Energy storage – applications are being developed across the energy storage sector to produce more efficient batteries, with greater capacity and higher performance, and other energy storage systems vital to a circular ‘green economy’

●          Lightweighting of materials – the use of graphene and 2D materials to take weight out of vehicles, as well as large structures and infrastructure, will also be a key to building a more sustainable future.

More

Manchester graphene deal with UAE aims at global challenges

“Chairman Powell: Would you tell me, please, which way I ought to go from here?
The Cheshire Cat: That depends a good deal on where you want to get to.
Chairman Powell: I don't much care where.
The Cheshire Cat: Then it doesn't much matter which way you go.
Chairman Powell: ...So long as I get somewhere.
The Cheshire Cat: Oh, you're sure to do that, if only you raise interest rates long enough.

With apologies to Lewis Carroll and Alice in Wonderland.

No comments:

Post a Comment