Baltic Dry Index. 1515 Fri. Brent Crude 83.86
Spot Gold 1810 US 2 Year Yield 4.32 +0.01
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 28/12/22 World 662,734,465
Deaths 6,688,778
There can be few fields of human endeavour in which history
counts for so little as in the world of finance. Past experience, to the extent
that it is part of memory at all, is dismissed as the primitive refuge of those
who do not have the insight to appreciate the incredible wonders of the
present.
John Kenneth Galbraith.
Not much need for input from me this morning, the news speaks loudly of a bursting bubble for itself.
Asia
markets mixed as investors look ahead to 2023 headwinds, Hong Kong stocks rise
on China reopening
UPDATED WED, DEC 28 2022 12:08 AM
EST
Asia-Pacific
markets mostly fell after Wall Street’s losses overnight as investors weighed
headwinds for the economy in 2023.
Hong Kong’s Hang Seng index added
1.93% as trade resumed after the holiday weekend – investors further digested
China’s announcement to scrap
quarantine requirements for travelers, reopening faster than
expected.
In mainland China, the Shanghai Composite rose
fractionally and the Shenzhen
Component fell 0.73%. The offshore yuan was
little changed and last stood at 6.707 against the U.S. dollar.
n South Korea, the Kospi fell 2.12% as
stocks of heavyweight chipmakers and battery manufacturers priced in the
effects of ex-dividend, which shareholders would not be entitled to annual
payouts for next year. Australia’s S&P/ASX
200 fell 0.45% after giving up earlier gains.
In Japan, the Nikkei 225 was
down 0.55% and the Topix shed 0.18%. The Bank of Japan reiterated
its stance that the latest widening of its yield curve control
tolerance range should not be interpreted as a chance in monetary policy
direction.
Asia-Pacific shares, China, yuan, Bank of Japan, Hang Seng index (cnbc.com)
S&P 500
closes lower, Nasdaq sheds 1% as bond yields pop
UPDATED TUE, DEC 27 2022 5:43 PM EST
The S&P
500 fell Tuesday, at the start of the holiday-shortened week, as
bond yields climbed and investors weighed the economic outlook for 2023.
The Dow Jones Industrial Average
rose 37.63 points, or 0.11%, to finish at 33,241.56. The S&P 500 fell 0.4%
to settle at 3,829.25, while the Nasdaq Composite shed 1.38% to end at
10,353.23.
China-linked stocks advanced as
the country
loosened Covid restrictions. Tesla dropped
more than 11% on news of an extended production pause, with the
stock on pace for its worst year ever. Southwest
shed nearly 6% as the airline canceled thousands of flights.
Bond yields also
pushed higher, putting pressure on
growth stocks like technology. The yield on the 10-year Treasury note
was last up nearly 11 basis points to trade at 3.85%. Apple’s
stock was among the worst performers in the Dow, falling to levels
not seen since June 2021 and closing 1.4% lower.
“It’s basically the continuation
of high yields depressing growth, with redistribution into other sectors that
are smaller, but not big enough to change the headline index,” said Keith
Lerner, Truist’s co-chief investment officer.
The combination of tax-loss
selling, portfolio rebalancing and investors deciding where to position for
2023 may also be weighing on the indices, said Sameer Samana, senior
global market strategist for Wells Fargo Investment Institute.
Stocks are headed for their worst
yearly performance since 2008, with the Dow and S&P off by 8.5% and 19.7%,
respectively, in 2022. The Nasdaq’s fallen 33.8%.
More
S&P
500 closes lower, Nasdaq sheds 1% as bond yields pop (cnbc.com)
Tesla’s stock is
headed for its worst month, quarter and year on record
Tesla’s sell-off
intensified on Tuesday, with the stock closing down 11%. Elon Musk’s electric
car company is days away from closing out its worst month, quarter and year on
record and has moved past Meta to
become the worst-performing stock in 2022 among the most valuable tech
companies.
The latest drop comes after The Wall Street Journal reported that
Tesla will continue a weeklong production halt at its Shanghai facility, facing
a fresh onslaught of Covid cases within its Chinese workforce.
Reuters reported that when Tesla’s Shanghai plant reopens in
January, it will do so for just 17 days, in a break from Tesla’s established
practices. Shanghai has been battered by a fresh wave of Covid infections this
month.
Tesla shares have fallen 73% from their record
high in November 2021. The stock is down 69% in 2022, more than double the
decline in the Nasdaq. Among major carmakers, Ford is
down 46% and General Motors has
fallen 43%. Since its IPO in 2010, Tesla has only fallen in one other year, an
11% drop in 2016.
---- For the month of December, Tesla has plunged 44%, by far its
worst month ever, as it had never fallen more than 25% in a single month. And
in the fourth quarter, the stock is down 59%, worse than its 38% drop in the
second quarter of this year, which had been its worst period on record.
Last week, Tesla expanded discounts in North
America for buyers of Model 3 and Model Y electric vehicles. Those discounts
came after the automaker offered incentives in mainland China for December auto
sales earlier this month.
Pressure is also mounting in the used-car market, with the
average price for a used Tesla dropping 17% from July highs, and with used
Teslas lingering longer than other makes before being resold.
More
Tesla's
stock is headed for its worst month, quarter, year on record (cnbc.com)
In crypto
news, FTX keeps going from bad to worse. Pouring good money after bad it seems
to me. Other than some Bahamian real estate, what real assests are left?
Mango goes
bad.
FTX
customers file class action to lay claim to dwindling assets
December
28, 2022 1:03 AM GMT
Dec 27 (Reuters) - FTX customers filed
a class action lawsuit against the failed crypto exchange and its former top
executives including Sam Bankman-Fried on Tuesday, seeking a declaration that
the company's holdings of digital assets belong to customers.
The lawsuit is the
latest legal effort to lay claim to the dwindling assets of FTX, which is already feuding with liquidators in
the Bahamas and Antigua as well as the bankruptcy estate of Blockfi, another
failed crypto company.
FTX pledged to segregate customer
accounts and instead allowed them to be misappropriated and therefore customers
should be repaid first, according to the lawsuit filed in U.S. Bankruptcy Court
in Delaware.
"Customer class
members should not have to stand in line along with secured or general
unsecured creditors in these bankruptcy proceedings just to share in the
diminished estate assets of the FTX Group and Alameda," said the
complaint.
FTX did not immediately respond to a
request for comment.
Bahamas-based FTX
halted withdrawals last month and filed for bankruptcy after customers rushed
to pull their holdings from the what was once the second-largest cryptocurrency
exchange after questions surfaced about its finances.
More
FTX
customers file class action to lay claim to dwindling assets | Reuters
U.S.
charges fraud in Mango crypto manipulation case
December
27, 2022 10:56 PM GMT
NEW YORK, Dec 27 (Reuters) - U.S.
prosecutors have filed criminal charges of commodities fraud and manipulation
against a man accused of trying to steal about $110 million in October by
rigging the Mango Markets cryptocurrency exchange.
According to a complaint
made public on Tuesday in Manhattan federal court, Avraham Eisenberg's trades
in futures related to Mango's crypto token MNGO enabled him to withdraw $110
million in cryptocurrencies from other investors' deposits, with no apparent
intention to repay the funds.
Eisenberg was arrested on Monday night
in Puerto Rico, U.S. Attorney Damian Williams in Manhattan said in a court
filing. It was unclear whether Eisenberg has a lawyer.
Mango is a
decentralized cryptocurrency exchange run by Mango DAO that lets investors
lend, borrow, swap, and use leverage to trade cryptocurrency assets.
The Dec. 23
complaint signed by FBI Special Agent Brandon Racz said Eisenberg on Oct. 11
used two accounts to concurrently buy and sell futures based on the relative
values of MNGO and the stablecoin USD Coin (USDC).
By being on both sides of the
transaction, Eisenberg artificially inflated the price of MNGO relative to
USDC, allowing him to borrow and then withdraw $110 million of different
cryptocurrencies, the complaint said.
Mango soon began
negotiations with Eisenberg and reached a settlement to recoup $67 million.
"All mango
depositors will be made whole," with token holders who vote for the
settlement agreeing not to "pursue any criminal investigations or freezing
of funds once the tokens are sent back," a community post said at the time.
More
U.S.
charges fraud in Mango crypto manipulation case | Reuters
Finally, Russia
retaliates on oil. What will happen to the price of crude oil from February?
Putin
bans Russian oil exports to countries that implement price cap
December
27, 2022 5:55 PM GMT
MOSCOW, Dec 27
(Reuters) - President Vladimir Putin on Tuesday delivered Russia's long-awaited
response to a Western price cap, signing a decree that bans the supply of crude
oil and oil products from Feb. 1 for five months to nations that abide by the
cap.
The
Group of Seven major powers, the European Union and Australia agreed this month to a $60-per-barrel
price cap on Russian seaborne crude oil effective from Dec. 5 over Moscow's
"special military operation" in Ukraine.
The cap is close
to the current price for Russian oil, but well beneath the windfall price
Russia was able to sell for this year and that helped offset the impact of
financial sanctions on Moscow.
Russia
is the world's second largest oil exporter after Saudi Arabia, and a major
disruption to its sales would have far reaching consequences for global energy
supplies.
The
decree, published on a government portal and the Kremlin website, was presented
as a direct response to "actions that are unfriendly and contradictory to
international law by the United States and foreign states and international
organisations joining them".
“Deliveries of
Russian oil and oil products to foreign entities and individuals are banned, on
the condition that in the contracts for these supplies, the use of a maximum
price fixing mechanism is directly or indirectly envisaged," the decree
stated, referring specifically to the United States and other foreign states
that have imposed the price cap.
"The
established ban applies to all stages of supply up to the end buyer."
---- Russia has
been promising to respond officially for weeks, and the eventual decree largely
established what officials had already said publicly.
The
G7 price cap allows non-EU countries to continue importing seaborne Russian
crude oil, but it will prohibit shipping, insurance and re-insurance companies
from handling cargoes of Russian crude around the globe, unless it is being
sold for less than the price cap.
More
Putin
bans Russian oil exports to countries that implement price cap | 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.
South
Korea December exports to fall for third month as China demand still weak:
Reuters poll
December
28, 2022 5:08 AM GMT
SEOUL, Dec 28
(Reuters) - South Korea's exports likely extended their falling streak to a
third straight month in December, a Reuters poll showed on Wednesday, with
demand from China yet to recover from loosening COVID-19 restrictions.
The
country's outbound shipments were projected to have fallen 10.1% in December
from the same month a year ago, according to the median forecast of 12
economists.
That
would be the third straight month of year-on-year declines, after a 14.0% loss
in November, which was the biggest in 2-1/2 years, and 5.8% in October.
"South
Korea's exports are under pressure from declining exports to China, where the
economy still remains sluggish even after easing of its COVID-19 restrictions,
and weak sales of IT products, mainly semiconductors," said Park
Sang-hyun, chief economist at HI Investment and Securities.
"Moreover,
global economic slowdown is materialising, so exports are likely to continue
the falling trend for the time being."
China has eased
some of its most stringent restrictions to fight COVID-19 since last month.
During
the first 20 days of December, South Korea's exports shrank 8.8% from the same
period a year ago. Those to China dropped 25.5%, outweighing gains in U.S. and
EU-bound shipments, in likely the seventh consecutive falling month.
Meanwhile,
imports were expected to have fallen at a much milder pace of 0.6% in December,
after a 24-month gaining streak through November.
Altogether, the
trade balance is set to remain in deficit for a ninth consecutive month. It is
also on track for the first annual shortfall in 14 years and the largest-ever.
Full
monthly trade data is scheduled for release on Sunday, Jan. 1, at 9 a.m. (0000
GMT).
More
Nearly
three in five German industry associations foresee gloomy 2023
December 27, 2022
8:30 AM GMT
BERLIN, Dec 27 (Reuters) - Nearly three
out of five German industry associations are pessimistic about next year and
expect their companies to produce less as high energy prices due to the war in
Ukraine show no signs of abating, found a survey published Tuesday.
Of the 49 associations surveyed by the
IW economic institute, 30 said they expect their members to produce less, while
13 said they expect their sectors to produce more.
Nearly 40 associations said the current
situation for their companies is worse than a year ago, when many assumed that
the worst of the coronavirus pandemic had been mostly overcome.
With inflation at record highs,
however, the mood in the German economy has not recovered, according to the
survey, which was conducted from mid-November through early December.
"Businesses do not expect the high
energy prices to fall back to pre-crisis levels in the foreseeable future. That
clouds the outlook for the coming year enormously," said IW economic
expert Michael Groemling.
He warned that the situation for energy-intensive firms was particularly
precarious and their success is tied to affordable energy.
Nearly three in five German industry associations foresee gloomy 2023 | 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.
With Covid-19 starting to become only endemic,
this section is close to coming to its end.
U.K. Stops Publishing Key Covid-19 Statistics
December 26, 2022
The U.K. has
stopped publishing certain covid-19 modelling data, as officials say it is not
necessary as the country “lives with the disease.”
The country’s Health
Security Agency announced this week it would no longer report the growth and
reproductive rates of infections as part of its standard publication schedule.
The growth rate and
“R” rate give an idea of how fast infection rates are increasing or decreasing
around the country. In recent months, the U.K.H.S.A. has shared this
information every two weeks. But according to the agency’s website,
the most recent update — published December 23 — will be the last.
In addition,
medium-term projections, which modelled potential hospitalisations and deaths
on a fortnightly basis, will no longer be published from January 6.
What does the latest covid data show?
Friday’s R rate
update gave England a result between 1 and 1.2. This means every ten infected
people are likely to pass the virus on to between ten and 12 others.
England’s overall
growth rate was between 0 and 4%, with covid infections increasing the most in
the east and south west of the country.
At the height of the
pandemic, these figures were much higher as the virus spread more quickly among
the population.
But the changing
nature of testing and reporting results also makes it hard to properly compare
results from different time periods
More
U.K. Stops Publishing Key Covid-19 Statistics
(forbes.com)
China
will publish COVID-19 data once a month, under Category B disease management
December
27, 2022.
China will eventually
publish data on COVID-19 cases once a month when the disease comes under
Category B management, an official at the Chinese Center for Disease Control
and Prevention said on Tuesday.
China’s management of COVID-19 was downgraded to
the less strict Category B from the current top-level Category A, as the
disease has become less virulent and will gradually evolve into a common
respiratory infection.
Official statistics,
however, showed only one COVID-19 death in the seven days to Monday, fuelling
doubts among health experts and residents about the government's data. The
numbers are inconsistent with the experience of much less populous countries
after they re-opened.
Doctors say hospitals are
overwhelmed with five- to six-times more patients than usual, most of them
elderly. International health experts estimate millions of daily infections and
predict at least one million COVID-19 deaths in China next year.
Nevertheless, authorities are determined to
dismantle the last vestiges of their zero COVID-19 policies.
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.
Wind energy and solar
power set to power China’s next 40 years
The recently concluded COP27
international climate change summit in Sharm El Sheik offered world leaders,
experts, and activists an opportunity to stop and take stock one year after
a landmark agreement to “phase down” coal emissions. Already, there is reason
for concern: A November 2022 report from the International Energy Agency found that, if nothing is done, emissions from
already existing coal assets are enough to tip the world across the 1.5 degrees
Celsius increase scientists and world leaders agreed was the threshold for a
safe climate under the 2015 Paris Agreement and the 2021 Glasgow Compact.
Because China is the world’s
largest burner of coal, any discussion of a coal phasedown hinges on whether it
can cut its reliance on fossil fuels. Although China has set ambitious targets
for cutting emissions over the coming decades, political leaders remain wary
that cutting coal power too much, too fast could affect the country’s energy
security and economic growth. This summer, an unprecedented heat wave and
severe drought put serious strain on China’s power system, as high temperatures
drove power demand much higher than planners anticipated, while droughtlike
conditions in traditionally water-rich regions like the southwestern province
of Sichuan hampered the output of hydroelectric dams, causing
significant power outages.
China is not alone in
experiencing grid resilience issues due to extreme weather. In Texas, a 2021
winter storm wreaked havoc on gas infrastructure and transmission lines,
knocking out power to millions and leading to hundreds of deaths. This summer,
several French nuclear power plants had to reduce output as rising temperatures warmed the
water used to cool reactors.
The good news is that China can
simultaneously enhance its energy security, address recent grid reliability
issues, and cut its reliance on coal power. The solution lies in its
world-class renewable resources — and a willingness to invest in a modern and
more resilient grid. A new study, conducted by myself and my colleagues at the
Berkeley Lab, Energy Innovation, and the University of California,
Berkeley, found China could more than double the share of
carbon-free electricity production to 80% by 2035, while cutting power
generation costs without sacrificing reliability. This transition would
generate more economic growth, reduce air pollution, dampen the volatility of
energy prices, and have significant benefits for the health of the Chinese
people.
China is already the world leader in wind and solar
development, adding more wind, solar, and offshore wind capacity than any other
country in 2021.
More
"In
economics, hope and faith coexist with great scientific pretension."
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