Baltic Dry Index. 1401 +44 Brent Crude 82.15
Spot Gold 1793 US 2 Year Yield 4.23 0.01
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 15/12/22 World 655,575,187
Deaths 6,664,478
Success is the ability to go from one failure to another with no
loss of enthusiasm.
Winston Spencer Churchill.
As expected, the Fed, the US
central bank, raised its key interest rate by 50 basis points. What wasn’t
expected was for Fed Chairman Powell to declare that more interest rates are to
come and that rates will stay “high” for all of 2023 before declining slightly
in 2024.
Wall Street swooned and took
the Asian stock casinos down with them. Why buy stocks now when they’ll be far
cheaper towards the end of 2023?
Asia
stocks follow Wall St down as Fed warns of higher rates
December 15, 2022
BANGKOK (AP) — Asian shares skidded Thursday after a
retreat on Wall Street as markets registered their dismay over the Federal
Reserve’s warning that still higher interest rates are in store following its
latest increase.
Oil prices fell while U.S.
futures edged higher.
Japan reported its trade deficit
in November surged to over 2 trillion yen ($15 billion) as higher costs for oil
and a weak yen combined to push imports higher. It was the 16th straight month
of red ink and a record high for the month of November.
Tokyo’s Nikkei 225 lost 0.3% to
28,058.42 and the Hang Seng in Hong Kong sank 1.1% to 19,449.15. The Kospi in
Seoul gave up 1.1% to 2,372.78.
The Shanghai Composite index fell
0.3% to 3,167.73 and Australia’s S&P/ASX 200 shed 0.6% to 7,208.80.
Shares fell in Taiwan and Bangkok
but rose in Mumbai.
As expected, the central bank raised its key
short-term rate by 0.50 percentage points on Wednesday. It was
its seventh hike this year. The Fed also said it expects rates to be higher
over the coming few years than it had anticipated.
----The S&P 500
lost 0.6% to 3,995.32, giving up an earlier gain of 0.9%. The Dow Jones
Industrial Average fell 0.4% to 33,966.35, and the Nasdaq composite gave back
0.8%, closing at 11,170.89.
Roughly 70% of the stocks in the
S&P 500 closed lower Wednesday, with technology companies, banks and
retailers among the biggest weights on the benchmark index. Apple fell 1.6%,
Goldman Sachs dropped 2.3% and Best Buy slid 3.9%.
Small company stocks also fell.
The Russell 2000 index slid 0.7% to 1,820.45.
The Fed’s latest hike is smaller
than the previous four 0.75 percentage point increases and comes a day after an
encouraging report showed that inflation in the
U.S. slowed in November for a fifth straight month, to 7.1%.
----The Fed also
signaled it expects its rate will come down by the end of 2024 to 4.1%, and
drop to 3.1% at the end of 2025.
Consumer spending and employment
remain strong. That has made it more difficult for the Fed to tame inflation
while also helping to protect the slowing economy from a possible recession.
The U.S. will release its weekly
report on unemployment benefits on Thursday, along with retail sales data for
November.
More
Asia
stocks follow Wall St down as Fed warns of higher rates | AP News
Fed
raises key rate by half-point and signals more to come
December 14, 2022
WASHINGTON (AP) — The Federal Reserve reinforced its
inflation fight Wednesday by raising its key interest rate for the seventh time
this year and signaling more hikes to come. But it announced a smaller hike
than it had in its past four meetings at a time when inflation is showing signs
of easing.
The Fed made clear, in a
statement and a news conference by Chair Jerome Powell, that it thinks sharply
higher rates are still needed to fully tame the worst inflation bout to strike
the economy in four decades.
The central bank boosted its benchmark rate a half-point
to a range of 4.25% to 4.5%, its highest level in 15 years. Though lower than
its previous three-quarter-point hikes, the latest move will further increase
the costs of many consumer and business loans and the risk of a recession.
More surprisingly, the
policymakers forecast that their key short-term rate will reach a range of 5%
to 5.25% by the end of 2023. That suggests that the Fed is poised to raise its
rate by an additional three-quarters of a point and leave it there through next
year. Some economists had expected that the Fed would project only an
additional half-point increase.
The latest rate hike was announced
one day after an
encouraging report showed that inflation in the United States slowed in November for
a fifth straight month. The year-over-year increase of 7.1%, though still high,
was sharply below a recent peak of 9.1% in June.
“The inflation data in October and November show a
welcome reduction,” Powell said at his news conference. “But it will take
substantially more evidence to give confidence that inflation is on a sustained
downward path.”
In its updated forecasts, the
Fed’s policymakers predicted slower growth and higher unemployment for next
year and 2024. The unemployment rate is envisioned to jump to 4.6% by the end
of 2023, from 3.7% today. That would mark a significant increase in joblessness
that typically would reflect a recession.
Consistent with a sharp slowdown,
the officials also projected that the economy will barely grow next year,
expanding just 0.5%, less than half the forecast it had made in September.
“The Fed is not done — it sees a
prolonged slowdown and a rise in unemployment as the only way to fully derail
inflation,” Diane Swonk, chief economist at KPMG, said in a research note.
More
Fed
raises key rate by half-point and signals more to come | AP News
In other news, can China avoid
recession even as it u-turns on fighting Covid-19? If China can’t avoid the new
global recession, how bad will that make recession in the G-7?
China’s retail
sales shrink far more than expected, while industrial production disappoints
BEIJING — China reported economic data Thursday
that missed expectations across the board during a month in which widespread
Covid controls weighed on growth.
Retail sales fell by 5.9% in
November from a year ago, the National Bureau of Statistics said.
That’s worse than expectations for
a decline of 3.7%, according to analysts polled by Reuters, and a greater drop
than the 0.5%
year-on-year decline in October.
Industrial production
grew by 2.2% in November from a year ago, missing Reuters’ forecast for a 3.6%
increase. The reported pace was also slower than the 5% increase in October.
Fixed asset
investment for the year through November slowed to 5.3% year-on-year growth,
missing Reuters’ expectations for a 5.6% increase. The official print was also
down from 5.8% growth in the first 10 months of the year.
Investment in
infrastructure picked up pace in November from October on a year-to-date basis,
while that in manufacturing slowed slightly. Investment in real estate fell at
a sharper pace amid the industry’s ongoing slump.
The unemployment rate in cities ticked up to 5.7%
in November. The jobless rate for young people ages 16 to 24 remained a far
higher 17.1%.
The decline in retail sales brought the
year-to-date total down by 0.1% from the first 11 months of last year.
Food and medicine
were the only sub-categories that saw sales growth in November from a year ago,
according to the statistics bureau. Clothing and shoes saw sales plunge by
15.6%.
Online sales of
physical goods rose by just 4% year-on-year in November, down sharply from the
prior month, according to CNBC calculations of data accessed through Wind
Information.
Sweeping Covid changes
In the last two
weeks, China has significantly peeled back a host of Covid-related restrictions
that had hampered domestic travel and business activity. Authorities have
emphasized vaccinations for elderly people, and encouraged Covid patients to
recover at home.
Anecdotally, at
least in Beijing, a significant share of the population has since fallen sick,
if not tested positive for Covid, amid below-freezing weather.
A day before the
data release, China’s National Bureau of Statistics canceled its in-person
press conference set for Thursday without explanation.
More
Finally, in the Great
Cryptoland Fraud case, The Bahamas wisely goes after the only real assets left.
FTX’s Bahamian
Liquidators Seek Control of 35 Properties
Dec. 13, 2022, 4:53 PM
· Bahamian courts
can’t recognize US court’s orders, liquidators said
· FTX Digital paid
for properties via $256 million in loans
Bahamian liquidators overseeing the wind-down
of an FTX subsidiary are seeking to dismiss the US-filed bankruptcy of another
FTX entity, claiming they’re owed $256.3 million.
The Chapter 11 case of FTX Property Holdings,
which owns 35 properties in the Bahamas, should be dismissed because all its
assets and creditors are located on the island, the liquidators of FTX Digital
said in a filing Monday with the US Bankruptcy Court for the District of
Delaware.
FTX Property has no connection to the US, the
Bahamian court-appointed liquidators argued.
The request highlights a simmering
international turf war over
the collapsed cryptocurrency business, which filed for bankruptcy last month.
“Respectfully, this Court is not the best
forum to resolve the issues this case would present,” the liquidators said.
Insolvency proceedings for Bahamas-based FTX
Digital began on the island on Nov. 10. More than 130 FTX-related entities,
including FTX Property, subsequently filed for bankruptcy in the US.
The liquidators’ motion came on the same day that FTX’s former CEO and co-founder, Sam Bankman-Fried, was arrested. He was charged with eight criminal counts Tuesday, including conspiracy and wire fraud for allegedly misusing billions of dollars in customers’ funds before the spectacular collapse of his cryptocurrency empire.
FTX Property owes FTX Digital $256.3 million,
the liquidators said. FTX Digital is the largest creditor of FTX Property, they
said.
The liquidators filed for
Chapter 15 protection on behalf of FTX Digital last month. The liquidators seek
US bankruptcy court recognition of the Bahamian insolvency process under
Chapter 15 of the bankruptcy code.
FTX Property’s two directors as of July 2021
were Bankman-Fried and Ryan Salame, the liquidators said. But only
Bankman-Fried signed the papers that supposedly authorized the entity’s Chapter
11 petition, the liquidators said.
Bahamian courts have jurisdiction over the
real estate and “cannot recognize” the Delaware court’s orders, the liquidators
said. Bahamian law doesn’t allow recognition of a foreign insolvency proceeding
for a Bahamian company, they said.
FTX’s Bahamian
Liquidators Seek Control of 35 Properties (bloomberglaw.com)
FTX insider
turned on Sam Bankman-Fried days before bankruptcy, flagging potential fraud to
regulators
Days before FTX’s bankruptcy filing last month,
co-CEO Ryan Salame told Bahamian authorities that founder Sam Bankman-Fried may
have committed fraud by sending customer money from the crypto exchange to his
other firm, Alameda Research.
According to a filing on Wednesday
tied to FTX’s bankruptcy proceedings, Salame disclosed “possible mishandling of
clients’ assets” by Bankman-Fried. The letter included in the filing was dated
Nov. 9, and was sent from the Securities Commission of the Bahamas to the
commissioner of police. FTX declared
bankruptcy on Nov. 11.
The disclosure on Wednesday marks
the first public acknowledgement of an insider turning on Bankman-Fried, who
was arrested in the Bahamas on Monday after the U.S. Attorney for the Southern District
of New York shared a sealed indictment with the Bahamian government. The
indictment, unsealed on
Tuesday, charged Bankman-Fried with eight criminal counts related to fraud,
money laundering and improper use of customer funds.
Salame told regulators that only three individuals
at FTX — Bankman-Fried, Nishad Singh and Gary Wang — had the kind of access and
authority to engineer the possibly fraudulent transfers to Alameda, a hedge
fund and trading firm. Salame said he advised Bankman-Fried and Alameda
executives that the possible mishandling of customer funds, which were
commingled with Alameda, was contrary to “normal corporate governance.”
Salame’s LinkedIn profile says he’s based in the
Bahamas. He also has multiple residences in the U.S., with homes in
Massachusetts, Washington, D.C., and New Jersey. He had departed the Bahamas
for the U.S. by Nov. 9, according to the letter.
Ex-FTX
exec Salame alerted Bahamas regulators to SBF potential fraud (cnbc.com)
Exclusive:
How a secret software change allowed FTX to use client money
December 14, 2022
2:18 AM GMT
Dec 13 (Reuters)
- In mid-2020, FTX's chief engineer made a secret change to the cryptocurrency exchange’s
software.
He tweaked the
code to exempt Alameda Research, a hedge fund owned by FTX founder Sam
Bankman-Fried, from a feature on the trading platform that would have
automatically sold off Alameda's assets if it was losing too much borrowed money.
In a note
explaining the change, the engineer, Nishad Singh, emphasized that FTX should
never sell Alameda's positions. "Be extra careful not to liquidate,” Singh
wrote in the comment in the platform's code, which it showed he helped author.
Reuters reviewed the code base, which has not been previously reported.
The exemption
allowed Alameda to keep borrowing funds from FTX irrespective of the value of
the collateral securing those loans. That tweak in the code got the attention
of the U.S. Securities and Exchange Commission, which charged Bankman-Fried with fraud on Tuesday. The SEC said the tweak meant Alameda had
a “virtually unlimited line of credit.” Furthermore, the billions of dollars
that FTX secretly lent to Alameda over the next two years didn't come from its
own reserves, but rather were other FTX customers' deposits, the SEC said.
The SEC and a
spokesperson for Bankman-Fried declined to comment for this story. Singh did
not respond to several requests for comment.
The regulator,
which called the exchange “a house of cards,” alleged Bankman-Fried concealed
that FTX diverted customer funds to Alameda in order to make undisclosed
venture investments, luxury real estate purchases, and political donations.
U.S. prosecutors and the Commodity Futures Trading Commission also filed
separate criminal and civil charges, respectively.
The complaints –
along with previously unreported FTX documents seen by Reuters and three people
familiar with the crypto exchange – provide new insights into how Bankman-Fried
dipped into customer funds and spent billions more than FTX was making without
the knowledge of investors, its customers and most employees.
---- The
auto-liquidation exemption written into FTX code allowed Alameda to continually
increase its line of credit until it “grew to tens of billions of dollars and
effectively became limitless,” the SEC complaint said. It was one of two ways
that Bankman-Fried diverted customer funds to Alameda.
The other was a
mechanism whereby FTX customers deposited over $8 billion in traditional
currency into bank accounts secretly controlled by Alameda. These deposits were
reflected in an internal account on FTX that was not tied to Alameda, which
concealed its liability, the complaint said.
More
Exclusive: How a
secret software change allowed FTX to use client money | 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.
Drought emergency
declared for all Southern California
Wed, December 14, 2022 at 9:46 PM
As California faces the prospect
of a fourth consecutive dry year, officials
with the Metropolitan Water District of Southern California have declared a
regional drought emergency and called on water agencies to immediately reduce
their use of all imported supplies.
The decision from the MWD's board
came about eight months after officials declared a similar emergency for 7
million people who are dependent on supplies from the State Water Project, a
vast network of reservoirs, canals and dams that convey water from Northern
California. Residents reliant on California's other major supply — the Colorado
River — had not been included in that emergency declaration.
"Conditions on the Colorado
River are growing increasingly dire," MWD Chairwoman Gloria Gray said in a
statement. "We simply cannot continue turning to that source to make up
the difference in our limited state supplies. In addition, three years of
California drought are drawing down our local storage."
Officials said the call for
conservation in Colorado River-dependent areas could become mandatory if
drought conditions persist in the coming months, which some experts say is likely. By April, the MWD will
consider allocating supplies to all of its 26 member agencies, requiring them
to either cut their use of imported water or face steep additional fees. The
agencies together serve about 19 million people.
----The Colorado River has fallen to such historic lows that
Lake Mead and Lake Powell — the nation's two largest reservoirs — could reach "dead pool",
or the point at which water no longer passes downstream from a dam. California
and six other states that rely on the river have been under pressure from the federal
government to drastically reduce their use.
In October, some California water
agencies, including the MWD, pledged usage reductions of up to
400,000 acre-feet per year, or about 9% of the state's total 4.4 million water
allotment from the river, through 2026. Still, other states are demanding that
California do more to cut usage.
More
Drought
emergency declared for all Southern California (yahoo.com)
OJ prices rise after Florida oranges damaged by hurricanes, disease
DEC. 13, 2022 / 9:19 PM
Dec. 13 (UPI) -- Orange juice is about to get even more expensive after hurricanes
and disease damaged many of Florida's citrus groves.
Orange
juice prices, which have increased along with other groceries due to inflation,
could see even bigger price
hikes in 2023 due to supply
chain issues as growers in Florida grapple with the worst crop in more than 80
years.
"It
is an incredibly heartbreaking moment for
growers," said Shannon Shepp, executive director of the Florida Department
of Citrus.
"To
grow a crop for nine months and then watch it fall to the ground, or watch
trees blow over, is incredibly devastating. In a time when you're seeing
declined production anyway, it's a kick in the gut," she said.
Most of
Florida's oranges are used for orange juice production, forcing orange juice
makers to look to the international market, according to Shepp who said imports
could soften prices.
The U.S.
Department of Agriculture said the orange forecast for the 2022-23 season is at
2.83 million tons for the United States, which is down 18% from the previous
season.
Florida's
orange forecast stands at 20 million boxes, or 900,000 tons, which is down 51%
from last season.
"The
December crop forecast reflects the very real
challenges that Hurricane Ian,
Hurricane Nicole and the ongoing impacts of citrus greening have created for
growers across the state," Shepp said. "Florida citrus growers are
resilient. They have withstood centuries of extreme weather, and this hurricane
season is no exception."
In
addition to damage from severe weather, disease is a growing issue as Florida
farmers deal with citrus greening in "100% of Florida groves,"
according to Shepp.
Citrus
greening, which has no known cure, cuts off nutrients to orange trees. Over
time, insects carry the infection to other trees, which produce fewer oranges
and eventually die off.
The
impact of weather and disease on Florida orange groves will trickle down to
grocery stores where consumers will find limited supplies and higher prices,
according to economists.
"We're
going to have higher prices because we're so short on supply -- historically
short," said Tanner Ehmke, lead economist for dairy and specialty crops at
CoBank.
While
Ehmke expects retail prices to follow orange juice future prices, which have
spiked 42% this year, consumers may not see the impact for another three to six
months.
OJ prices rise after Florida oranges damaged by
hurricanes, disease - UPI.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.
China won’t report
asymptomatic COVID cases in further shift
BEIJING (AP) — China said Wednesday it would
stop reporting asymptomatic COVID-19 cases since they’ve become “impossible” to
track with mass testing no longer required, another step in the country’s
uncertain exit from some of the world’s strictest antivirus policies.
China last week announced its most significant easing yet of antivirus
measures and has begun to see what appears to be a rapid increase in new
infections, raising concerns that its health system could become overwhelmed as
those in other countries did during early COVID waves.
So far, though, many of those newly sick are
staying home and there has been little evidence of a surge in patient numbers.
But it’s difficult to get a clear picture of the virus’s spread, and the new
reporting rules could make that even harder. Some hospitals have reportedly
struggled to remain staffed because of rising infections among their employees.
A notice on the National Health Commission’s
website on Wednesday said it stopped publishing daily figures on COVID-19 cases
where no symptoms are detected since it was “impossible to accurately grasp the
actual number of asymptomatic infected persons,” which have generally accounted
for the vast majority of new infections.
The only numbers they’re reporting are confirmed
cases detected in public testing facilities where symptoms are displayed. Many
people also test at home — and any positive results there would also not be
captured.
China’s government-supplied figures have not
been independently verified and questions have been raised about whether the ruling
Communist Party has sought to minimize numbers of cases and deaths.
While many governments have long focused on only
the more serious cases, the latest move is part of a sea change for China,
which has maintained a “zero COVID” policy that seeks to stamp out all virus
transmission.
That included frequent mass testing campaigns,
and it used to mean that anyone who tested positive was isolated in a
government facility, even if they had no symptoms. Now people can recover at
home if they don’t need medical care.
While many greeted the relaxing of the rules
with relief, the major and rapid shift has also caused some concern — after
years during which the Chinese government talked about the virus as a major
threat.
More
China won't report asymptomatic COVID cases in further
shift | AP 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.
Brexit Britain signs
£119m 'cutting-edge' Japan deal after being blocked from EU scheme
14 December, 2022
Following a visit to
Japan, UK Science Minister George Freeman has announced that the UK will launch
a global research fund to deepen scientific collaboration between international
research partners. The new International Science Partnerships Fund has been
handed an initial £119million in support of UK researchers collaborating with
scientists in Japan and around the world. This fund brings Britain closer to
enacting its "Plan B", after the country was blocked by EU from a
major £80billion flagship research programme. Despite having negotiated its
entry into the EU's Horizon Europe programme, disputes over the Brexit deal has
meant that the UK has continued to be blocked from participating.
While this
£80billion science programme that would have let UK researchers access
prestigious EU grants and collaborate with European scientists on a range of
projects, has not yet come to fruition.
While the
Government has continued to push for its reentry into the programme, it is also
looking to secure a backup plan, particularly by increasing collaboration with
non EU countries like Australia, Switzerland, and now Japan.
While in
Tokyo, Mr Freeman unveiled the first phase of the new International Science Partnerships
Fund (ISPF), which will support and fund UK scientists and innovators to work
with peers around the world on some of the most pressing issues facing the
world.
In a keynote
speech to scientists, investors, industrialists and global research leaders, he
laid down the UK's plans to take a more global approach to science, innovation
and business.
This approach would
involve collaborating with partners across the world to "both drive
innovation, investment and prosperity in the UK, while also strengthening the
UK's leadership in tackling the big global challenges facing the globe."
----This deal with Japan follows a Memorandum of Understanding on Science
with European science powerhouse Switzerland earlier this year.
The Department
for Business, Energy, and Industrial Strategy, while this partnership is not
aimed as a replacement to the UK collaborations with the EU, "the
Government cannot wait forever to invest through association."
They added
that the Government's top priority was to invest in the "UK's
world-leading R&D sector and facilitate their collaborations with
international counterparts.
"It is
disappointing that while the Government continues to focus on strengthening the
UK's international links and collaborations globally, the EU's persistent
delays to the UK's association to Horizon is damaging collaboration with
European partners."
Brexit Britain
signs £119m 'cutting-edge' Japan deal after being blocked from EU scheme
(msn.com)
The
professors who taught Efficient Market Theory said that someone throwing darts
at the stock tables could select stock portfolio having prospects just as good
as one selected by the brightest, most hard-working securities analyst.
Observing correctly that the market was frequently efficient, they went on to conclude
incorrectly that it was always efficient.
Warren
Buffett.
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