Baltic Dry Index. 1338 -17 Brent Crude 87.20
Spot Gold 1799 US 2 Year Yield 4.38 -0.10
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,1030
Coronavirus Cases 02/12/22 World 648,599,893
Deaths 6,642,618
“Stop the
distribution, change the world,” is the marquee slogan used by a South Korean
truckers’ union that went on strike recently in the latest threat to
global supply chains.
The labor unrest in Asia’s fourth-largest economy has global implications
because Korea serves as a key hub in international supply chains, producing
cars, chips, ships, monitors, smartphones and steel. The trade ministry on
Thursday partly blamed the strike for the exports decline.
The trade slump
extends across the region and beyond high-tech industries, recent data
show. Taiwan’s export orders
contracted in October at the worst pace in nearly three years, and Hong Kong’s shipments abroad fell for a sixth straight month. Vietnam’s exports in November posted their first monthly decline this
year. Thailand’s exports fell
in October for the first time since February 2021.
With rising
interest rates and weakening global demand, Korean manufacturers have been
bracing for tough times already. The outlook among exporters fell to the lowest
point since the beginning of the pandemic this quarter and industrial
production has fallen for four months in a row.
At the center of
Korea’s weakening exports is a deterioration in semiconductor demand.
Memory-chip prices remain under pressure as China’s economy downshifts, damping
demand for high-tech electronics and parts imported from elsewhere.
Bloomberg, December 1, 2022.
The November month-end dress up stocks over, reality returned to the stock casinos.
Not much reason for me to comment this morning, except to note that the G-7 is about to embark on a massive bout of Russian roulette over oil pricing. If this gamble goes wrong we get the next massive oil shock since 1973 and 1979.
The
difference this time round, we imposed it on ourselves.
Japanese stocks
lead losses in Asia as investors seek clarity on China’s Covid rule changes
UPDATED FRI, DEC 2 2022 12:35 AM
EST
Markets in the Asia-Pacific mostly fell while
investors looked for clarity after China signaled
slight easing of its stringent Covid restrictions.
Stocks in Japan led losses in the
wider region, with the Nikkei 225 trading
1.8% lower and the Topix falling 1.65%. The Kospi in South Korea fell 1.5% as
the nation saw its annualized consumer price index for November inch lower from
the previous month. In Australia, the S&P/ASX 200 fell
0.72%.
Hong Kong’s Hang Seng index struggled
for direction and fell 0.64%. In mainland China, the Shanghai Composite also
fell 0.35% and the Shenzhen Component lost
0.35%.
Overnight in the U.S., the Dow closed
nearly 200 points lower ahead of a key jobs report, in which
economists expect to see slower
growth but resilience for November amid announcements of
layoffs and hiring freezes.
Asia markets: South Korea inflation, U.S. jobs report, China Covid-zero (cnbc.com)
Russian oil sanctions are about to kick in. And
they could disrupt markets in a big way
Upcoming sanctions on Russian oil are set to be
“really disruptive” for energy markets if European nations fail to set a cap on
prices, analysts warned.
The 27 countries of the European
Union agreed in June to ban the purchase of Russian crude oil from Dec. 5. In
practical terms, the EU — together with the United States, Japan, Canada and
the U.K. — want to drastically cut Russia’s oil revenues in a bid to drain the
Kremlin’s war chest following its invasion
of Ukraine.
However, concerns that a complete ban would send crude prices
soaring led the G-7 to consider setting a cap on the amount it will pay for
Russian oil.
An outright ban on
Russian imports could be “really disruptive” to markets, according to Henning
Gloystein, director of energy, climate and resources at political
risk consultancy Eurasia Group.
The potential for
rising oil prices is “why there’s pressure from the U.S.” to agree on a cap,
Gloystein told CNBC on Wednesday.
A price limit would
see G-7 nations buy Russian oil at a lower price, in an effort to reduce
Russia’s oil income without raising crude prices across the globe.
However, EU nations
have been in dispute for several days over the right level to cap prices.
---- On Wednesday, Russian oil traded at about $66 a barrel.
Officials at the Kremlin have repeatedly said a price cap is anti-competitive
and they will not sell their oil to countries that have implemented the cap.
They’re hoping that
other major buyers — such as India and China — won’t agree to the limit and so
will continue to purchase Russian oil.
China and India
G-7 nations agreed
to impose a limit on Russian oil in September, and have been working on the
details ever since. At the time, the EU’s energy chief, Kadri Simson, told CNBC
she was hoping China
and India would support the price cap, too.
Both nations
stepped up their purchases of Russian oil following Moscow’s invasion of
Ukraine, benefiting from discounted rates. Their participation is seen as
essential if the restrictions on Russian oil are to work.
“China and India
are crucial as they buy the bulk of Russian oil,” Jacob Kirkegaard, senior
fellow at the Peterson Institute For International Economics, told CNBC.
“They won’t commit,
however, for political reasons, as the cap is a U.S.-sponsored policy and [for]
commercial reasons, as they already get a lot of cheap oil from Russia, so why
jeopardize that? Thinking they would voluntarily join was always naive as
Ukraine is not that important to them.”
India’s petroleum
minister, Shri Hardeep S Puri, told CNBC in September he has a “moral duty” to
his country’s consumers. “We will buy oil from Russia, we will buy from
wherever,” he added.
As such, there are growing
doubts about the true impact of the restrictions on Russia.
More
Russian oil sanctions are about to kick in. And they could disrupt markets in a big way (cnbc.com)
In
crypto-land, more easy come easy go. People lose $100 million equity stakes all
the time.
Sam Bankman-Fried says
he isn't sure what happened to his $100 million stake in Twitter, shortly after
Elon Musk claimed the crypto mogul didn't have any shares
Wed, November 30, 2022 at 10:55 AM
Sam Bankman-Fried, the co-founder and former CEO of collapsed crypto
exchange FTX, says he isn't sure what happened to his $100 million stake in
Twitter.
"I believe that that it was
intended for Alameda to rollover at least $20 million or more," Bankman-Fried
told Axios on Monday,
referring to Alameda Research, the trading firm he also co-founded. "I
don't know for sure whether that ultimately happened."
Bankman-Fried added that some of
the stake may have been sold before Twitter went private in late October but
couldn't confirm this.
In a text message viewed by
Axios, Bankman-Fried told new Twitter owner Elon Musk that the stake Alameda
owned was worth around $100 million. The report doesn't say when the message
was sent.
Axios' interview with the crypto
mogul came just days after Musk claimed that Bankman-Fried hadn't invested in
the social-media company since it went private. Musk's comments came in
response to an article by Semafor which said that Musk had invited him to roll over
his public Twitter shares into a stake in Musk's privately-held company, shortly after he offered to buy Twitter.
The Financial Times reported that an FTX balance sheet dated November
10 listed that it had shares in Twitter, which it described as an
"illiquid" asset.
"As I said, neither I nor
Twitter have taken any investment from SBF/FTX," Musk tweeted last Wednesday in response to the Semafor article.
In another tweet, he said: "He may have owned shares in Twitter as a public
company, but he certainly does not own shares in Twitter as a private
company."
More
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.
The Kiel Canal is closed /
Striking truck drivers in South Korea threatened with fines / Container prices
continue to fall
The German inland shipping industry has
not had much luck in the past two years. After a Finnish crane ship crashed
into the two high bridges in Holtenau, Kiel, on the morning of 30 November –
causing massive damage to the structure – the transverse axis of the Kiel
Canal, which is important for the entire European logistics chain as it
directly connects the Baltic and North Sea, has been closed.
It is
not yet clear how long the waterway will remain shut. The German authorities
have appointed an expert to take a close look at the mishap; whether and when
they will give the green light remains unclear. The barges, with their goods,
are already jammed, and goods are now being transferred to rail and road.
The situation is not better in Austria, where
railway workers went on a 24-hour strike on 28 November – 8,000 connections
were affected, and one million passengers were stranded. The stoppage of the
entire rail traffic was also felt in neighbouring countries. The reason for the
strike was the deadlock in collective bargaining – railway workers are
complaining about new employees on the night train being paid a net monthly
wage of EUR 1,356 for 40 hours of work. The rail workers’ union is demanding a
pay raise of EUR 400 per month for the sector’s 50,000 employees. The current
offer on their table is of EUR 208/month more, and a one-off payment of EUR
1,000.
Truckers
in South Korea are even more tenacious. They have been on strike for more than
a week to get their system of minimum wage, Safe Freight Rate, extended. The
strike, the second one is less than six months (see Plasteurope.com of 16.06.2022), has serious consequences: experts estimate that
Asia’s fourth-largest economy is suffering a loss of more than USD 220 mn (EUR
210 mn) every day.
The construction industry in particular is suffering
from a lack of materials. Half of all construction projects in South Korea are
at a standstill or have already had to be halted. Therefore, the government
wants to force truck drivers to get back behind the wheel under the threat of
heavy fines – those who refuse work are to lose their driving licence or even
go to jail.
The peak season (Christmas presents!) for the
airline industry is also slow this year. According to Dutch analysis company, ACD World, the amount of cargo flown around the world is
stagnating. Compared to the previous year, the volume, measured in terms of
tonnage transported, has decreased by 17%. But there is no lack of capacity –
their availability has increased by 3%.
But it is not only air freight that is
deficient; there is also a shortage of goods for shipping. This is directly
being reflected in freight rates for 40-foot containers (FEU). In the week from
28 November to 4 December, transporting a steel box from China to the US West
Coast cost a whopping 16% less than the previous week, at USD 2,100 (EUR
2,039). The same picture emerged for the route to the East Coast, where the
price fell by 14% to USD 4,900. Rates also plummeted for the routes to and from
Europe: from China to Northern Europe the price fell by almost 9% to USD 4,100.
For the return leg, the freight rate fell by 6.25% to USD 750.
The rate for transport from China to Southern Europe fell somewhat less
sharply: USD 4,400, a drop of 2.2% on the previous week. From Southern Europe
to China the rate remained at USD 1,000, as did the route from the US East
Coast to Northern Europe, also at USD 1,000. In contrast, the price for
Northern Europe to the US East Coast fell slightly – a decrease of 2.7% means USD
7,200.
Published on 01.12.2022
UK
faces dreaded long period of stagflation in 2023, warns JP Morgan
The
UK economy faces a “lengthy period of stagnation” amid persistent inflation,
warned JP Morgan
16:05 Wed 30 Nov 2022
The UK economy
faces a “lengthy period of stagnation” amid persistent inflation, JP Morgan
warned as it published an updated forecast for the coming year, with fellow investment
bank Citigroup predicting a much bigger decline.
Rising fuel prices,
tighter monetary and fiscal policies, global economic downturn, rising
ill-health and knock-on effects from the pandemic and Brexit will all continue
to impact the UK economy next year, JP Morgan said.
As a result,
economists forecast gross domestic product is will fall 0.6% in the coming
year.
Meanwhile, Citi
also today issued its own prediction that UK GDP will be squeezed 1.5% next
year.
This is
at the worse end of forecasts from major investment banks, a sharper decline
than the dramatic 1.2% fall forecast by Goldman Sachs (NYSE:GS), with economists on average foreseeing a 0.5% drop in
GDP.
In
chancellor Jeremy Hunt’s recent autumn statement it was revealed that the
Office for Budget Responsibility projects GDP to decline 1.4% in 2023 with
growth forecast of 1.3% in 2024.
“The UK
now faces a lengthy period of stagnation with the case for optimism resting
more on hope than expectation,” JPMorgan said.
While
inflation, currently above 11%, is set to drop in the new year, JPM suggested
labour market resilience and wage growth will see the core figure remain well
above the Bank of England’s
target of 2%.
More
UK faces dreaded
long period of stagflation in 2023, warns JP Morgan (proactiveinvestors.co.uk)
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.
Vaccinated People Make Up Majority
of COVID-19 Deaths: CDC Data
Dec 1 2022
Data from the Centers for Disease Control and Prevention (CDC) showed that vaccinated and boosted people
made up most of the COVID-19 deaths in August.
Of the total 6,512 deaths recorded in August 2022, 58.6 percent of the
deaths were attributed to vaccinated or boosted people, and seem to be a sign
of a growing trend where vaccinated individuals are increasingly becoming the
majority in COVID-19 mortalities.
In January 2022, COVID-19
mortalities in the vaccinated was still the minority with 41 percent of the
data related to vaccinated or boosted individuals.
However, analysis of the CDC data from June
and July showed over 50 percent of deaths were being reported in vaccinated
individuals, with 62 and 61 percent reported respectively.
“We can no longer say this is a pandemic of the unvaccinated,” Cynthia Cox, the vice-president of the Kaiser Family Foundation told the Washington Post in an article dated Nov. 23.
More
Vaccinated
People Make Up Majority of COVID-19 Deaths: CDC Data (theepochtimes.com)
Chinese vaccine plans spark hope for end of 'zero
COVID'
Wed, November 30, 2022 at 9:31 AM
BEIJING (AP) — A campaign to
vaccinate the elderly has sparked hopes China might roll back severe anti-virus
controls that prompted protesters to demand
President Xi Jinping resign, but
the country faces daunting hurdles and up to a year of hard work before “zero
COVID” can end.
Stock markets rose after the
National Health Commission on Tuesday announced the long-awaited campaign. A
low vaccination rate is one of the biggest obstacles to ending curbs that have
confined millions of people to their homes, depressed the economy and kept most
visitors out of China. Health officials gave no indication how long it might
take.
A vaccination campaign will
require months and China also needs to build up its hospitals and work out a
long-term virus strategy, health experts and economists warn. They say “zero COVID” is likely to stay in
place until mid-2023 and
possibly as late as 2024.
“China is in no place right now
to move away from its ‘zero-COVID’ policy toward a ‘living with COVID’ policy,”
said Mark Williams, chief Asia economist for Capital Economics. “Health care
capacity is very weak.”
China, where the virus first was
detected in late 2019 in the central city of Wuhan, is the last major country
trying to stop transmission completely. Others are relaxing controls and trying
to live with the virus that has killed at least 6.6 million people worldwide
and sickened almost 650 million.
Chinese protesters accuse the
ruling Communist Party of failing to outline a path away from restrictions that
have repeatedly closed businesses and schools and suspended access to
neighborhoods. The curbs have kept case numbers lower than other countries but
are seen by the public and scientists as excessive.
Families who have been confined
at home for up to four months say they lack reliable access to food and
medicine. Others struggle to get treatment for other medical problems. Authorities
faced public fury over reports two children who were in quarantine
died after their parents
said anti-virus controls hampered efforts to get emergency medical care.
----The ruling party has promised
to make restrictions less disruptive and eased some controls this week
following protests in Shanghai, Beijing and at least six other major cities.
But party leaders said they were sticking to “zero COVID“ and gave no sign when
it might end.
On Wednesday, the Health Commission
reported 37,828 new cases in the past 24 hours, including 33,540 without
symptoms. The official death toll stands at 5,233 out of 319,536 confirmed
cases, compared with 1.1 million deaths in the United States out of almost 100
million infections.
Beijing has tried to discredit
protesters by accusing them of working for “foreign forces,” a reference to
long-running complaints that Washington and other Western governments are
trying to sabotage China’s economic and political rise.
More
Chinese vaccine plans spark hope for end of 'zero
COVID' (yahoo.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.
Fusion power is 'approaching' reality thanks to a
magnetic field breakthrough
Wed, November 30, 2022
at 7:52 PM
Fusion power may
be a more realistic prospect than you think. As Motherboard reports, researchers at the Energy Department's Lawrence
Livermore National Laboratory have discovered that a new magnetic field setup more than tripled
the energy output of the fusion reaction hotspot in experiments,
"approaching" the level required for self-sustaining ignition in
plasmas. The field was particularly effective at trapping heat within the
hotspot, boosting the energy yield.
The hotspot's creation involved
blasting 200 lasers at a fusion fuel pellet made from hydrogen isotopes like
deuterium and tritium. The resulting X-rays made the pellet implode and thus
produce the extremely high pressures and heat needed for fusion. The team
achieved their feat by wrapping a coil around a pellet made using special
metals.
The notion of using magnets to heat
the fuel isn't new. University of Rochester scientists found they could use
magnetism to their advantage in 2012. The Lawrence Livermore study was far more
effective, however, producing 40 percent heat and more than three times the
energy.
Practical fusion reactors are still
many years away. The output is still far less than the energy required to
create self-sustaining reactions. The finding makes ignition considerably more
achievable, though, and that in turn improves the chances of an energy-positive
fusion system. This also isn't the end of the magnetism experiments. A future
test will use an ice-laden cryogenic capsule to help understand fusion physics.
Even if ignition is still distant, the learnings from this study could provide
a clearer path to that breakthrough moment.
Fusion power is
'approaching' reality thanks to a magnetic field breakthrough (yahoo.com)
In any
great organization it is far, far safer to be wrong with the majority than to
be right alone.
John Kenneth
Galbraith.
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