Baltic Dry Index. 1324 -14 Brent Crude 85.82
Spot Gold 1807 US 2 Year Yield 4.28 +0.03
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,1030
Coronavirus Cases 05/12/22 World 650,037,616
Deaths 6,646,554
There are three roads to ruin; women, gambling and technicians. The most pleasant is with women, the quickest is with gambling, but the surest is with technicians.
Georges Pompidou.
Today, the Great Western Oil Gamble kicks off. No one, outside of China, India and about half of the global population, is supposed to buy seaborn Russian oil, nor pay more than $60 a barrel if they do.
Russia has said it won’t sell oil to any “unfriendly” country taking part and will take appropriate counter measures.
OPEC says it will leave its current production quotas unchanged, but it’s already failing to meet its current production quotas.
So what happens next as finally winter kicks
in across most of Europe? No one knows of course, that’s why it’s all a Great
Russian Roulette gamble, but my guess is that it all ends badly across Europe
in the winter ahead and that it accelerates the arrival and severity of the new
global recession.
Hong Kong
stocks jump 3% as China relaxes some virus rules
UPDATED SUN, DEC 4 2022 11:24 PM EST
Shares in the Asia-Pacific rose on Monday as
China relaxed virus testing rules in some cities, signaling more easing may
come in the nation, which has been under strict Covid-related restrictions
for more than two years.
Hong Kong’s Hang Seng index rose
3.46% in the morning session, leading
gains in the region, with the Hang Seng Tech index rising
6.57%. In mainland China, the Shanghai Composite added
1.56% and the Shenzhen Component gained
0.649%.
Oil
prices rose 2% before paring gains to trade around 1% higher as
OPEC+ stuck to its policy of lowering oil production and China relaxed some
Covid rules.
The Nikkei 225 in
Japan gained fractionally and the S&P/ASX 200 in
Australia rose 0.48%. South Korea’s Kospi bucked
the trend to fall 0.62%. The MSCI’s broadest index of Asia-Pacific shares
outside Japan rose 1.69%.
In the U.S. on Friday, stocks fell after
a strong
jobs report but markets later focused on the possibility of
smaller Fed hikes, and major indexes closed slightly lower.
Asia markets: China Covid relaxation, Hong Kong stocks rise (cnbc.com)
Manufacturing orders from China down 40% in
unrelenting demand collapse
U.S. logistic
managers are bracing for delays in the delivery of goods from China in early
January as a result of canceled sailings of container ships and rollovers of
exports by ocean carriers.
Carriers have been
executing on an active capacity management strategy by announcing more blank
sailings and suspending services to balance supply with demand. “The
unrelenting decline in container freight rates from Asia, caused by a collapse
in demand, is compelling ocean carriers to blank more sailings than ever before
as vessel utilization hits new lows,” said Joe Monaghan, CEO of Worldwide
Logistics Group.
U.S. manufacturing
orders in China are down 40 percent, according to the latest CNBC Supply Chain
Heat Map data. As a result of the decrease in orders, Worldwide Logistics tells
CNBC it is expecting Chinese factories to shut down two weeks earlier than
usual for the Chinese Lunar New Year — Chinese New Year’s Eve falls on Jan. 21
next year. The seven days after the holiday are considered a national holiday.
“Many of the
manufacturers will be closed in early January for the holiday, which
is much earlier than last year,” Monaghan said.
Supply chain research
firm Project44 tells CNBC that after reaching record-breaking levels of trade
during the pandemic lockdowns, vessel TEU (twenty-foot equivalent unit) volume
from China to the U.S. has significantly pulled back since the end of summer
2022 — including a decline of 21% in total vessel container volume between
August and November.
Asia-based global shipping firm HLS warned clients
in a recent communication about the ocean transport business climate.
″It seems to be a
very bad time for the shipping industry. We have the combination of declining
demands and overcapacity as
new tonnage enters the market,” it wrote.
More
Manufacturing
orders from China down 40% in demand collapse (cnbc.com)
European markets
head for flat open as investors gauge China’s Covid relaxation, oil moves
UPDATED MON, DEC 5 2022 12:28 AM EST
European
markets are heading for a tepid open on Monday, bucking a positive trend in
Asia-Pacific markets overnight, where shares rose on Monday as China relaxed
Covid testing rules in some cities and signaled more easing may come.
Oil
prices rose 2% before paring gains to trade around 1% higher as
OPEC+ stuck to its policy of lowering oil production and as China relaxed some
of its Covid rules.
The alliance of OPEC and non-OPEC
producers agreed to stay the course on output policy ahead of a pending ban
from the European Union on Russian crude.
European markets closed lower
Friday, influenced by a decline in U.S. markets as investors digested the
latest U.S. jobs data that showed payrolls rose by 263,000 in November, a
bigger gain than expected.
It was the final monthly
employment report before the Fed’s two-day meeting on Dec. 13-14, in which the
central bank is expected to slow to a 50 basis point interest rate hike from
the 75 basis point hikes seen in recent months.
Live
updates: European markets, stocks, data, news and earnings (cnbc.com)
G7
begins to press Russia on Ukraine with oil price cap
December 5, 2022 5:59 AM GMT
KYIV, Dec 5
(Reuters) - A Group of Seven (G7) price cap on Russian seaborne oil came into force on Monday as the West
tries to limit Moscow's ability to finance its war in Ukraine, though Russia
has said it will not abide by the measure even if it has
to cut production.
The
G7 nations and Australia on Friday agreed a $60 per barrel price cap on Russian
seaborne crude oil after European Union members overcame resistance from
Poland. Russia is the world's second-largest oil exporter.
Ukrainian
President Volodymyr Zelenskiy said the world had shown weakness by setting the
cap at that level while Russian Deputy Prime Minister Alexander Novak said on Sunday it was a gross
interference that contradicted the rules of free trade.
"We
are working on mechanisms to prohibit the use of a price cap instrument,
regardless of what level is set, because such interference could further
destabilise the market," said Novak, the Russian government official in
charge of its oil, gas, atomic energy and coal.
"We will
sell oil and petroleum products only to those countries that will work with us
under market conditions, even if we have to reduce production a little,"
he said.
The G7 agreement allows Russian oil to be
shipped to third-party countries using G7 and EU tankers, insurance companies
and credit institutions, only if the cargo is bought at or below the $60 per
barrel cap.
Industry
players and a U.S. official said in October that Russia can access enough tankers to ship most of its
oil beyond the reach of the cap, underscoring the limits of the most ambitious
plan yet to curb Russia's wartime revenue.
More
G7
begins to press Russia on Ukraine with oil price cap | Reuters
The Unavoidable Crash
After years of ultra-loose fiscal, monetary, and credit policies and the onset of major negative supply shocks, stagflationary pressures are now putting the squeeze on a massive mountain of public- and private-sector debt. The mother of all economic crises looms, and there will be little that policymakers can do about it.
NEW YORK – The world economy is lurching toward an unprecedented confluence of economic, financial, and debt crises, following the explosion of deficits, borrowing, and leverage in recent decades.
In the private
sector, the mountain of debt includes that of households (such as mortgages,
credit cards, auto loans, student loans, personal loans), businesses and
corporations (bank loans, bond debt, and private debt), and the financial
sector (liabilities of bank and nonbank institutions). In the public sector, it
includes central, provincial, and local government bonds and other formal
liabilities, as well as implicit debts such as unfunded liabilities from
pay-as-you-go pension schemes and health-care systems – all of which will
continue to grow as societies age.
Just looking at
explicit debts, the figures are staggering. Globally, total private- and public-sector debt as a share of GDP rose from 200% in 1999 to 350% in
2021. The ratio is now 420% across advanced economies, and 330% in China. In
the United States, it is 420%, which is higher than during the Great Depression
and after World War II.
----The explosion of
unsustainable debt ratios implied that many borrowers – households,
corporations, banks, shadow banks, governments, and even entire countries –
were insolvent “zombies” that were being propped up by low interest rates
(which kept their debt-servicing costs manageable). During both the 2008 global
financial crisis and the COVID-19 crisis, many insolvent agents that would have
gone bankrupt were rescued by zero- or negative-interest-rate policies, QE, and
outright fiscal bailouts.
But now, inflation –
fed by the same ultra-loose fiscal, monetary, and credit policies – has ended
this financial Dawn of the Dead. With central banks forced to increase interest rates in
an effort to restore price stability, zombies are experiencing sharp increases
in their debt-servicing costs.
More
The Unavoidable Crash by Nouriel Roubini - Project Syndicate (project-syndicate.org)
Finally, would the last one out of the crypto
bubble please turn out the lights.
Crypto Stocks Teeter
Near Abyss as Fink’s Warning Adds to Angst
Sat,
December 3, 2022 at 3:00 PM
(Bloomberg) -- Analysts and investors are struggling to call
a bottom in crypto stocks in the wake of a brutal month that ended with the
head of BlackRock Inc. saying most digital-asset firms won’t survive.
Cryptocurrency firms including Coinbase Global Inc., Galaxy
Digital Holdings Ltd. and MicroStrategy Inc. all plunged more than 25% last
month. The declines added to the pain of a dismal year amid a deep and extended
plunge in Bitcoin and other digital tokens. While that trio of firms rallied
this week, they’ve still wiped out roughly $52 billion of shareholder value in
2022.
Already reeling from the so-called
crypto winter, investors were dealt a major blow with the high-profile collapse
of Sam Bankman-Fried’s FTX exchange in early November, which sent Bitcoin
tumbling. To top it off, BlackRock Chief Executive Larry Fink said this week
that he expects most crypto companies will fold after FTX’s demise. A Schwab
index tracking crypto-linked stocks is coming off its worst month since June,
and is down 63% this year.
“Questions about whether crypto has a
future have become prevalent after a year during which many tokens lost more
than 70% of their value and the collapse of FTX has exacerbated a crisis of
confidence that had started in the spring,” said Mark Palmer, an analyst at
BTIG LLC.
----FTX’s sudden downfall sparked fears of contagion across
the industry, which ultimately became a reality this week when crypto lender
BlockFi Inc. also filed for bankruptcy.
“We expect the crypto space to
continue to be toxic for investors in the near-term and expect overall chain
activity to be relatively quiet among users as we continue to wait out
potential contagion effects as a result of the bankruptcy of FTX,” Chase White,
an analyst at Compass Point, wrote in a note to clients.
More
Crypto Stocks Teeter Near Abyss as Fink’s Warning Adds to Angst (yahoo.com)
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.
Oil
Industry Executive Warns of Another ‘Major’ Crisis in the Coming Weeks
By December
2, 2022 Updated: December 2, 2022
The
head of the largest oil and natural gas trade association warned that failure
to replenish the U.S. Strategic Petroleum Reserve (SPR) could trigger another
oil crisis in the coming weeks.
“The Strategic
Petroleum Reserve, unfortunately, has become the strategic political reserve.
And we have grave concerns about how it has been so politicized. This is for
emergency purposes, not to lower gasoline prices during a time during a
political season,” American Petroleum Institute CEO Mike Sommers said in a
Friday interview on Fox News.
Sommers
added that “I think doing this willy-nilly and doing it in a way that that
doesn’t make sense for the market we’re in, we could be dealing with another
major oil crisis here in the next few weeks.” Sommers did not elaborate.
Starting
earlier this year, the Biden administration has been releasing oil from the SPR
in the midst of historically high gas prices. After tens of millions of barrels
of oil were released, as of Nov. 25, it’s down to 389.1 million barrels—the lowest amount in decades.
“We’re
also real concerned, Maria, about how low it has gone. Lowest level since 1984,
not necessarily because of market conditions, but because of political
concerns,” Sommers told the news outlet Friday, adding that the federal
government needs to start replenishing the SPR in the near future.
“The best
plan, in my view, is for us not to continue to use it in a way that is for
political purposes and rather do it in a market-based way. And if there is an
emergency, that’s what this is for. And the real concern is that 1984, when it
was at the levels that we’re in currently, we were using 20 percent less oil,”
Sommers said.
More
Oil Industry Executive Warns of Another ‘Major’ Crisis in the Coming Weeks (theepochtimes.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.
Autopsies Show COVID-19
Vaccination Likely Caused Fatal Heart Inflammation: Study
Dec 2 2022
A serious side effect linked to
COVID-19 vaccines can lead to death, according to a new study.
Post-vaccination myocarditis, a form of heart inflammation, was identified in a subset of people
who died “unexpectedly” at home within 20 days of receiving a COVID-19 vaccine.
Researchers analyzed autopsies that had been performed on the people and
conducted additional research, including studying tissue samples.
Researchers started with a group of 35, but excluded 10 from further analysis because other causes of death were identified. Of the remaining 25, researchers identified evidence of myocarditis in five.
All of the five people received a Moderna or Pfizer vaccine within seven days of their death, with a mean of 2.5 days. The median age was 58 years. None of the people had COVID-19 infection prior to being vaccinated and nasal swabs returned negative.
Autopsy findings combined with the lack of evidence of other causes of death and how the vaccination happened shortly before the deaths enabled researchers to say that for three of the cases, vaccination was the “likely cause” of the myocarditis and that the cardiac condition “was the cause of sudden death.”
In one of the other cases, myocarditis was believed to be the cause of death but researchers detected a herpes virus, an alternative explanation for the incidence of heart inflammation. The remaining case did not include an alternative explanation for the myocarditis but the researchers said the impact of the inflammation was “discrete and mainly observed in the pericardial fat.” They classified the two cases as possibly caused by vaccination.
“In general, a causal
link between myocarditis and anti-SARS-CoV-2 vaccination is supported by
several considerations,” the researchers said, including the “close temporal
relation to vaccination”; the “absence of any other significant pre-existing
heart disease”; and the negative testing for any “myocarditis-causing
infectious agents.”
Limitations included the small
cohort size.
The study (pdf) was published by Clinical Research in Cardiology on
Nov. 27. The researchers all work for Heidelberg University Hospital. They
were funded by German authorities.
Moderna and Pfizer did not respond
to requests for comment.
More
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.
No update today. Normal service
returns tomorrow.
Italians come to
ruin most generally in three ways, women, gambling, and farming. My family
chose the slowest one.
Pope St. John
XXIII
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