Baltic Dry Index. 1324 -14 Brent Crude 85.57
Spot Gold 1798 U S 2 Year Yield 4.28 +0.03
In central banking as in diplomacy, style, conservative
tailoring, and an easy association with the affluent count greatly and results
far much less.
John Kenneth Galbraith.
OPEC+ to consider deeper oil output cuts ahead of Russia
sanctions and proposed price cap
OPEC and non-OPEC oil producers could impose deeper
oil output cuts on Sunday, energy analysts said, as the influential energy
alliance weighs the impact of a pending ban on Russia’s crude exports and a
possible price cap on Russian oil.
OPEC+, a group of 23 oil-producing nations led by
Saudi Arabia and Russia, will convene on Sunday to decide on the next phase of
production policy.
The highly anticipated meeting comes ahead of
potentially disruptive sanctions on Russian oil, weakening crude demand in
China and mounting fears of a recession.
Claudio Galimberti, senior vice president of
analysis at energy consultancy Rystad, told CNBC from OPEC’s headquarters in
Vienna, Austria, that he believes the group “would be better off to stay the
course” and roll over existing production policy.
“OPEC+ has been rumored to consider
a cut on the basis of demand weakness, specifically in China, over the past few
days. Yet, China’s traffic nationwide is not down dramatically,” Galimberti
said.
Energy market participants remain
wary about the European Union’s sanctions on the purchases of
the Kremlin’s seaborne crude exports on Dec. 5, while the prospect of a G-7
price cap on Russian oil is another source of uncertainty.
The 27-nation EU bloc agreed in
June to ban the purchase of Russian seaborne crude from Dec. 5 as part of a
concerted effort to curtail the Kremlin’s war chest following Moscow’s invasion
of Ukraine.
Concern that an outright ban on
Russian crude imports could send oil prices soaring, however, prompted the G-7
to consider a price cap on the amount it will pay for Russian oil.
No formal agreement has yet been
reached, although Reuters reported Thursday that EU
governments had tentatively agreed to a $60 barrel price cap on Russian seaborne
oil.
“The other factor OPEC will need to
consider is indeed the price cap,” Galimberti said. “It’s still up in the air,
and this adds to the uncertainty.”
The Kremlin has previously warned that
any attempt to impose a price cap on Russian oil will cause more harm than
good.
----Speaking earlier this week, RBC Capital
Markets’ Helima Croft said there was no expectation of a production increase from
the upcoming OPEC+ meeting and a “significant chance” of a deeper output cut.
“There is so much uncertainty,” Croft told CNBC’s
“Squawk Box” on Tuesday. OPEC delegates “have to factor in what happens with
China but also what happens with Russian production.”
However, after news that Sunday’s meeting will be
held virtually, rather than in-person, Croft said in a research note that OPEC
had opted for “no-drama optics” which “seemingly increases the likelihood of a
rollover decision.”
“Irrespective of whether the group chooses to stay
the course or cut deeper, we expect key ministers to signal a willingness to
meet quickly to address any major change in market conditions that may be
arising in the coming weeks and months,” she said in the note.
Oil prices, which have fallen sharply in recent
months, were trading slightly lower ahead of the meeting.
More
OPEC
meeting: Oil output cuts on the table ahead of Russia sanctions (cnbc.com)
The Fed’s path to a ‘Goldilocks’ economy just got a
little more complicated
As far as jobs reports go, November’s wasn’t
exactly what the Federal Reserve was looking for.
A higher-than-expected payrolls number and a hot
wage reading that was twice what Wall Street had forecast only add to the
delicate tightrope walk the Fed has to navigate.
In normal times, a strong jobs market and surging
worker paychecks would be considered high-class problems. But as the central
bank seeks to stem persistent and troublesome inflation, this is too much of a
good thing.
“The Fed can ill afford to take its foot off the
gas at this point for fear that inflation expectations will rebound higher,”
wrote Jefferies chief financial economist Aneta Markowska in a post-nonfarm
payrolls analysis in line with most of Wall Street Friday. “Wage growth remains
consistent with inflation near 4%, and it shows how much more work the Fed
still needs to do.”
Payrolls grew
by 263,000 in November, well ahead of the 200,000 Dow Jones
estimate. Wages rose 0.6% on the month, double the estimate, while 12-month
average hourly earnings accelerated 5.1%, above the 4.6% forecast.
All of those things together add up
to a prescription of more of the same for the Fed — continued
interest rate hikes, even if they’re a bit smaller than the
three-quarter percentage point per meeting run the central bank has been on
since June.
More
The
Fed's path to a 'Goldilocks' economy just got more complicated (cnbc.com)
Payrolls and wages blow past expectations, flying in the
face of Fed rate hikes
Job growth was much better than expected in
November despite the Federal Reserve’s aggressive efforts to slow the labor
market and tackle inflation.
Nonfarm payrolls increased 263,000 for the month
while the unemployment rate was 3.7%, the Labor Department reported Friday.
Economists surveyed by Dow Jones had been looking for an increase of 200,000 on
the payrolls number and 3.7% for the jobless rate.
The monthly gain was a slight decrease from
October’s upwardly revised 284,000. A broader measure of unemployment that
includes discouraged workers and those holding part-time jobs for economic
reasons edged lower to 6.7%.
The numbers likely will do little to slow a Fed
that has been raising interest rates steadily this year to bring down inflation
still running near its highest level in more than 40 years. The rate increases
have brought the Fed’s benchmark overnight borrowing rate to a target range of
3.75%-4%.
In another blow to the Fed’s anti-inflation
efforts, average hourly earnings jumped 0.6% for the month, double the Dow
Jones estimate. Wages were up 5.1% on a year-over-year basis, also well above
the 4.6% expectation.
The Dow Jones Industrial Average fell as much as
350 points after the report on worries the hot jobs data could make the Fed
even more aggressive. However, stocks shaved most of their losses as the
trading session neared its close. Treasury yields initially jumped on the jobs
news before turning mixed later.
“To have 263,000 jobs added even after policy rates
have been raised by some [375] basis points is no joke,” said Seema Shah, chief
global strategist at Principal Asset Management. “The labor market is hot, hot,
hot, heaping pressure on the Fed to continue raising policy rates.”
Leisure and hospitality led the job gains, adding
88,000 positions.
More
Blackstone's $69 bln REIT curbs
redemptions in blow to property empire
December
2, 2022 4:10 AM GMT
NEW
YORK, Dec 1 (Reuters) - Blackstone Inc (BX.N) limited
withdrawals from its $69 billion unlisted real estate income trust (REIT) on
Thursday after a surge in redemption requests, an unprecedented blow to a
franchise that helped it turn into an asset management behemoth.
The curbs came
because redemptions hit pre-set limits, rather than Blackstone setting the
limits on the day. Nonetheless, they fueled investor concerns about the future
of the REIT, which makes up about 17% of Blackstone's earnings. Blackstone
shares ended trading down 7.1% on the news.
Many investors in
the REIT are concerned that Blackstone has been slow to adjust the vehicle's
valuation to that of publicly traded REITs that have taken a hit amid rising
interest rates, a source close to the fund said. Rising interest rates weigh on
real estate values because they make financing properties more expensive.
Blackstone
has reported a 9.3% year-to-date return for its REIT, net of fees, a contrast
to the publicly traded Dow Jones U.S. Select REIT Total Return Index (.DWRTFT) 22.19%
decline over the same period.
That outperformance has some investors questioning
how Blackstone comes up with the valuation of its REIT, said Alex Snyder, a
portfolio manager at CenterSquare Investment Management LLC in Philadelphia.
"People are taking profits at the value
Blackstone says their REIT shares are at," said Snyder.
A Blackstone spokesperson declined to comment on
how the New York-based firm calculates the valuation of its REIT, but said its
portfolio was concentrated in rental housing and logistics in the southern and
western United States that have short duration leases and rents outpacing
inflation.
The spokesperson added that the REIT relied on a
long-term fixed rate debt structure, making it resilient.
"Our business is built on performance, not
fund flows, and performance is rock solid," the spokesperson said.
The REIT is marketed to wealthy individual
investors. Two sources familiar with the matter said turmoil in Asian markets,
fueled by concerns about China's economic prospects and political stability,
contributed to the redemptions. The majority of investors redeeming were from
Asia and needed the liquidity, they said.
Blackstone told investors in a letter it would curb
withdrawals from its REIT after it received redemption requests in November
greater than 2% of its monthly net asset value and 5% of its quarterly net
asset value. As a result, the REIT allowed investors in November to redeem $1.3
billion, equivalent to approximately 43% of investors' repurchase requests.
Some analysts said Blackstone's REIT runs the risk
of getting caught in a spiral of selling assets to meet redemptions if it
cannot regain the trust of its investors. On Thursday, the firm said the REIT
had agreed to sell its 49.9% interest in two Las Vegas casinos for $1.27
billion.
Evergrande's EV unit suspends mass
production due to lack of orders - sources
December 2, 2022
5:49 AM GMT
SHANGHAI, Dec 2
(Reuters) - China Evergrande Group's electric vehicle unit has suspended mass
production of its only model due to a lack of new orders, two people with
knowledge of the matter said, in the latest set of troubles facing the indebted
property developer.
China
Evergrande New Energy Vehicle Group (0708.HK) said in mid-September that
it had started mass production of the Hengchi 5 model at a plant in the
northern city of Tianjin and in late October said it had delivered its first
100 cars.
However, the company has paused production as there
are not enough new orders for the electric sport-utility vehicle, said the
people, who declined to be named because they were not authorised to speak to
media.
The two people also said many employees have yet to
receive salaries for October and November.
Evergrande did not immediately respond to a request
for comment.
Two other people said some work was still
continuing. One of these two said the unit planned to lay off 10% of workers
and would suspend salary payments to 25% of its workers for 1 to 3 months.
It was not immediately clear how long mass
production would stay suspended for.
Once China's top-selling property developer,
Evergrande has been at the centre of a deepening debt crisis that has seen
multiple developers default on offshore debt obligations over the past year,
leaving many negotiating restructuring.
The group had touted the EV unit as key to its
transformation plans, with Chairman Hui Ka Yan vowing to shift the group's
primary business within 10 years from real estate to the automobile venture,
and to make 1 million vehicles a year by 2025.
In
July，the unit said it had received non-binding
pre-orders for more than 37,000 units of
the Hengchi 5.
The suspension at
Evergrande's EV arm comes as automakers and investors are bracing for a
downturn in the world's largest car market due to a sputtering economy, despite
government incentives starting in June to boost sales, such as tax cuts and
subsidies.
More
Evergrande's EV unit suspends mass production due to lack of orders - 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.
As the Fed plans to 'raise and
hold,' new projections may show the cost
December 2, 2022
12:05 PM GMT
WASHINGTON, Dec 2 (Reuters) - U.S. Federal Reserve
officials have signaled plans for a half-point interest rate hike at their
meeting this month, and while that would be a step down from recent rate
increases, new projections issued then could show a policy rate headed toward
levels last seen on the eve of the 2007 financial crisis.
Moreover, in an outlook that could lean against
market expectations for rate cuts by the end of next year, the 19 U.S. central
bankers' new forecasts may well show the federal funds rate remaining at that
elevated level at least through 2023.
The updated outlooks will be a fresh chance for Fed
officials to show how their "raise and hold" strategy is expected to
play out in terms of the ultimate level of the overnight policy rate, and the
progress of growth, inflation and unemployment in what they hope is a resilient
economy.
The rate-setting Federal Open Market Committee
meets on Dec. 13-14, capping a volatile year that saw the central bank respond
to the fastest outbreak of inflation since the 1980s with the fastest increase
in interest rates since then to try to offset it. That aggressive response sent
a shock through the financial system that at one stage erased nearly $12
trillion of U.S. stock market value and more recently pushed home mortgages
rates to 7% for a population used to cheap money.
Equity markets have risen
lately and rocketed this week when Fed Chair Jerome Powell, in what were likely
his last public remarks before the meeting, said the Fed was ready to slow down
from a string of four straight three-quarter-point rate hikes - a potentially
inconvenient outcome for a Fed chair who wants to keep financial conditions
tight and keep public expectations firmly focused on the inflation battle.
More
As the Fed plans to 'raise and hold,' new projections may show the cost | Reuters
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.
Inside China's fight over the
future of zero-COVID
December 2, 2022
10:39 AM GMT
SHANGHAI, Dec 2 (Reuters) - Samuel Ren is sick of
zero-COVID.
"Omicron is not a threat, it is just like a
normal cold," said the IT worker in his mid-20s in Shanghai, describing
China's ongoing lockdown measures as "ridiculous".
His frustration about civil rights and economic
damage won't sway Cai Shiyu, a 70-year-old resident of the megacity who has
heart disease and high blood pressure.
"This isn't like a cold that just goes away
after a while," said Cai, who feels one case of COVID-19 is too many to
tolerate. "Otherwise the epidemic will definitely rebound."
Opinions about
President Xi Jinping's signature "zero-COVID" policy vary wildly
across China, a country often viewed from overseas as a surveillance state that
enforces iron discipline.
The
fierce debate, which has ignited several anti-lockdown protests, illustrates the difficulties facing Xi and his
government in relaxing the world's most rigid COVID rules while heading off
national discontent.
After nearly
three years, a significant loosening of zero-COVID measures has been signalled
by senior government officials and public health experts. Vice Premier Sun
Chunlan said on Thursday that China's health system had "withstood the
test" of COVID, allowing further adjustments to state policies.
This unnerves
people such as Cai, who say a low death toll testifies to the merits of the
hardline approach.
Officially, there
have been about 5,200 COVID deaths in China, versus more than 1 million in the
United States, 690,000 in Brazil and 212,000 in Britain. A U.S.-scale death
rate would have seen over 4 million die in the country of 1.4 billion people.
The
potential risks of moving away from strict curbs, just as daily
infections hit record levels,
are heightened by comparatively low vaccination rates among the elderly and
concerns about the resilience of the healthcare system.
More
Inside
China's fight over the future of zero-COVID | Reuters
World
Health Organization - Landscape of COVID-19 candidate vaccines. https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines
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 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.
Traversable wormhole recreated
in a quantum computer for first time
Michael Irving November 30, 2022
Wormholes are a staple of sci-fi, and there’s a possibility
that they exist in the real universe. But how would they work? Physicists have
now used a quantum processor to simulate a traversable wormhole, teleporting
information between two quantum systems.
In fiction, wormholes are usually depicted as tunnels that
connect two distant points in space, allowing instantaneous travel across the
cosmos. But while they might seem like little more than a convenient story
device, wormholes are surprisingly plausible in reality. Einstein himself
proposed their existence as a feature of his general theory of relativity, and
in the decades since scientists have studied where and how
we might find them.
But
their properties remain poorly understood, with several conflicting models all
possible. That creates a paradox – to find out more, we’d need observations of
real wormholes, but to observe them we’d need to find out more so we know what
to look for. Computer simulations can help break the loop, allowing physicists
to test different models of wormholes and see how they might behave.
In the
new study, scientists have achieved that for the first time. This kind of
simulation can’t be run on just any old computer though – it required the power
of quantum
computers, which tap into the strange realm of quantum physics to perform
calculations beyond the reach of traditional computers.
The
team was investigating an intriguing correlation between wormholes and quantum
physics – the idea of a wormhole sending things across the universe in the
blink of an eye sounds suspiciously like quantum
teleportation, where information can be instantly sent between two
entangled particles, no matter how far apart they are.
Using Google’s
Sycamore quantum processor, scientists from Caltech, Harvard, Fermilab and
Google ran the first simulation of a wormhole. The key was an established model
known as SYK that could simulate quantum gravity effects – in this case, the
team entangled two simplified SYK systems together, then sent a quantum bit
(qubit) of information into one of them.
And
sure enough, the information emerged out of the second system. This
demonstrated not only quantum teleportation, but because the two SYK models
also simulate quantum gravity, it was a realistic simulation of how a
traversable wormhole would work in the real world.
More
Traversable
wormhole recreated in a quantum computer for first time (newatlas.com)
This weekend’s music diversion. Approx.
10 minutes.
Concerto
Del Vivaldi / RV 376 in B♭ major (Autograph
score)
Concerto
Del Vivaldi / RV 376 in B♭ major (Autograph score) -
YouTube
This
weekend’s chess update. Approx. 9 minutes.
He Just Knows the Answer
He Just
Knows the Answer - YouTube
This weekend’s Crypto Fraud update.
Approx. 23 minutes. Tether next? Surely not.
Why
I Will Never Trust or Invest in Crypto Ever Again!
Why I
Will Never Trust or Invest in Crypto Ever Again! - YouTube
“When we remember we are all mad, the mysteries
disappear and life stands explained.”
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