Monday, 12 December 2022

The Fed, CPI, Options Expiration.

 Baltic Dry Index. 1386 +01    Brent Crude 76.55

Spot Gold 1788         US 2 Year Yield 4.33 +0.02

Coronavirus Cases 02/04/20 World 1,000,000

Deaths 53,100

Coronavirus Cases 12/12/22 World 653,815,436

Deaths 6,658,727

Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof.

John Kenneth Galbraith

In the stock  casinos, it’s all about the US Federal Reserve interest rate hike. How big or how little?  Plus how does Fed Chairman Powell and his gang see the future.

Does Chairman Powell agree with US Treasury Secretary Yellin that US inflation will be much lower by the end of 2023, and if it is, will it be the result of a new massive global recession?

Adding to the mix, the US on Tuesday releases its CPI for November, before the US stock casinos close out Friday with a massive options expiration.

All in all an interesting week for the punters, but how will it end?

 

Hong Kong shares briefly drop 2% as investors look ahead to Fed meeting, U.S. inflation this week

UPDATED MON, DEC 12 2022 12:00 AM EST

Shares in the Asia-Pacific declined Monday as investors looked ahead to a Fed meeting and U.S. inflation data this week.

Hong Kong’s Hang Seng index briefly fell 2%, leading losses in the region before last trading at 1.88%. The Hang Seng Tech index shed 3.30%.

In Australia, the S&P/ASX 200 was down 0.40%. Japan’s Nikkei 225′s fell 0.17% while the Topix slid 0.14%.

South Korean benchmark Kospi shed 0.57%, and the Kosdaq dipped 0.44%. The MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 1.13%.

Mainland China’s Shanghai Composite lost 0.63% and the Shenzhen Component was down 0.478%.

On Monday, India is scheduled to release inflation and industrial output data.

Later this week stateside, the Federal Reserve is set to begin its two-day meeting on Tuesday. Economists widely expect the U.S. central bank to raise rates by half a percentage point Wednesday.

The latest reading for the U.S. consumer price index is also slated for Tuesday. Analysts polled by Reuters expect the index rose 0.3% in November.

Asia-Pacific markets, CPI data, Fed, Hang Seng Index (cnbc.com)

 

Stock futures slip to start the week with Fed meeting, key inflation data on deck

UPDATED MON, DEC 12 2022 12:34 AM EST

U.S. stock futures were fractionally lower early Monday ahead of a week with several anticipated events in the ongoing fight against inflation.

Futures for the Dow Jones Industrial Average slipped 3 points, or 0.01%. Those for the S&P 500 and Nasdaq 100 edged 0.07% and 0.1% lower, respectively.

The move in futures comes as investors will be focused on inflation this week. On Tuesday, the November consumer price index will be released, and traders will be looking for a sign that inflation is slowing.

The Federal Reserve has a two-day meeting starting the same day. The central bank is expected to announce another rate hike on Wednesday, though traders are anticipating a smaller move than in recent months.

In addition to the expected rate hike, the Fed’s updated economic projections and Chair Jerome Powell’s press conference could be key signals for what the central bank wants to do in the coming months.

“Financial conditions have eased dramatically since the October CPI reading released last month, so the Fed will likely use the December FOMC meeting to walk those back. ...We think the markets are too sanguine on rates after the first quarter and we expect Powell to take a more hawkish tone and for the dots to indicate higher rates for a longer period of time than what is currently being priced in by the futures markets,” said Cliff Hodge, chief investment officer for Cornerstone Wealth.

Wall Street is coming off a rocky week that saw all three major averages lose ground. The Dow fell 2.77% for its worst week since September. The S&P 500 dropped 3.37%, while the Nasdaq Composite shed 3.99%.

Stock futures slip to start the week with Fed meeting, key inflation data on deck (cnbc.com)

U.S. inflation will be much lower by end of 2023, Yellen says

Dec 11 (Reuters) - U.S. Treasury Secretary Janet Yellen on Sunday forecast a substantial reduction in U.S. inflation in 2023, barring an unexpected shock.

"I believe by the end of next year you will see much lower inflation if there's not ... an unanticipated shock," she told CBS' '60 Minutes' in an interview released Sunday.

Asked about the likelihood of recession, the former Federal Reserve chair said, "There's a risk of a recession. But ... it certainly isn't, in my view, something that is necessary to bring inflation down."

Yellen's comment came days before the Fed is expected to slow the aggressive pace of interest rate increases it has pursued this year. Fed Chair Jerome Powell has telegraphed a smaller, half-of-a-percentage point increase in the policy rate, to a range of 4.25%-4.5%, after four 75-basis point hikes this year.

Yellen told CBS that economic growth was slowing substantially, inflation was easing and she remained hopeful that the labor market would remain healthy.

She said she hoped the spike in inflation seen this year would be short-lived, and said the U.S. government had learned "a lotta lessons" about the need to curtail inflation after high prices seen in the 1970s.

Shipping costs had come down and long delivery lags had eased, while gasoline prices at the pump were "way down."

"I think we'll see a substantial reduction in inflation in the year ahead," she said.

U.S. inflation will be much lower by end of 2023, Yellen says | 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.

Japan's wholesale inflation near steady at 9.3% as commodity prices ease

TOKYO, Dec 12 (Reuters) - Japan's November wholesale prices rose 9.3% from a year earlier, data showed on Monday, a rate of increase that was almost unchanged from the previous month and showed initial signs of an inflation peak amid easing global commodity prices.

It was the 21st consecutive month to show an annual rise in wholesale prices.

While food and energy costs continued to rise, the data may offer some relief for Japan's economy, which relies almost entirely on imports for fuel and raw material.

The rise in the corporate goods price index, which measures prices that companies charge each other for goods and services, exceeded market forecasts for a 8.9% percent gain but was slightly below the revised 9.4% annual increase seen in October.

The index, at 118.5, reached its highest ever level.

The yen-based import price index in November was 28.2% higher than a year earlier, slowing sharply from October's revised annual surge of 42.3%, according to the Bank of Japan (BOJ) data. The currency has rebounded from multi-decade lows, moderating rises in import costs.

More

Japan's wholesale inflation near steady at 9.3% as commodity prices ease | Reuters

Opinion: Household wealth down by $13.5 trillion in 2022, second-worst destruction on record

Last Updated: Dec. 10, 2022 at 9:30 a.m. ET First Published: Dec. 9, 2022 at 5:09 p.m. ET

American households lost about $6.8 trillion in wealth over the first three quarters of 2022 as the stock market SPX, -0.73%   DJIA, -0.90%   COMP, -0.70% shed more than 25% of its value, the Federal Reserve reported Friday in the government’s quarterly financial accounts.

 

Nominal net worth fell 4.6% to $143.3 trillion, as the market value of assets fell by $6 trillion and liabilities rose by about $900 billion. Households’ balance sheets were propped up by a 10% increase in home equity, which is the greatest source of wealth for most American families.

But the loss in real wealth from January through September was about twice as large — $13.5 trillion in current dollars — after accounting for the rapid inflation experienced this year. Inflation makes both debts and liabilities worth less in terms of purchasing power.

The 8.6% drop in real wealth over three quarters is the second-fastest decline on record (the data series begins in 1959). The only greater drop was following the financial crisis of 2008-09. (The wealth lost during the Great Depression of the 1930s would likely hold the record if we had the data.)

Even after adjusting for inflation, real household wealth was about 10% higher than it was in late 2019, just before the COVID-19 pandemic hit.

Household balance sheets — in the aggregate — remained in excellent shape despite the losses on Wall Street and the erosion of purchasing power. Wealth as a share of annual disposable (after-tax) personal income slipped slightly to 769%, not far off the record 825% in the first quarter of the year.

----Warning signs are also flashing as household debt has awakened, like Rip Van Winkle, after a 10-year nap. Following a decade of no growth in debt in inflation-adjusted terms, real household debt grew at a 4.3% annual rate in the third quarter, the fastest growth since 2007.

Consumers are taking on debt or dipping into their savings to maintain their living standards. By one measure highlighted in this Fed report, the personal savings rate has fallen to 3.7% of disposable income, after averaging more than 10% for the past 10 years.

More

Opinion: Opinion: Household wealth falls $13.5 trillion, second worst drop on record - MarketWatch

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

https://www.zerohedge.com/markets/environmental-disaster-ev-battery-metals-crunch-horizon-industry-races-recycle


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.

New Autopsy Report Reveals Those Who Died Suddenly Were Likely Killed by the COVID Vaccine

December 8, 2022 Updated: December 8, 2022

A major new autopsy report has found that three people who died unexpectedly at home with no pre-existing disease shortly after COVID vaccination were likely killed by the vaccine. A further two deaths were found to be possibly due to the vaccine.

The report, published in Clinical Research in Cardiology, the official journal of the German Cardiac Society, detailed autopsies carried out at Heidelberg University Hospital in 2021. Led by Thomas Longerich and Peter Schirmacher, it found that in five deaths that occurred within a week of the first or second dose of vaccination with Pfizer or Moderna, inflammation of the heart tissue due to an autoimmune response triggered by the vaccine had likely or possibly caused the death.

In total the report looked at 35 autopsies carried out at the University of Heidelberg in people who died within 20 days of COVID vaccination, of which 10 were deemed on examination to be due to a pre-existing illness and not the vaccine. For the remaining 20, the report did not rule out the vaccine as a cause of death, which Dr. Schirmacher has confirmed to me is intentional as the autopsy results were inconclusive. Almost all of the remaining cases were of a cardiovascular cause, as indicated in the table below from the supplementary materials, where 21 of the 30 deaths are attributed to a cardiovascular cause. One of these is attributed to blood clots (VITT) from AstraZeneca vaccination (the report was looking specifically at post-vaccine myocarditis deaths), leaving 20 from other cardiovascular causes.

----For the five deaths in the main report attributed as likely or possibly due to the vaccines, the authors state:

“All cases lacked significant coronary heart disease, acute or chronic manifestations of ischaemic heart disease, manifestations of cardiomyopathy or other signs of a pre-existing, clinically relevant heart disease.”

More

New Autopsy Report Reveals Those Who Died Suddenly Were Likely Killed by the COVID Vaccine (theepochtimes.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.

New battery technology has potential to significantly reduce energy storage costs

New, low-cost battery built with four times the capacity of lithium

Date: December 7, 2022

Source: University of Sydney

Summary: Researchers are hoping that a new, low-cost battery which holds four times the energy capacity of lithium-ion batteries and is far cheaper to produce will significantly reduce the cost of transitioning to a decarbonized economy.

An international team of researchers are hoping that a new, low-cost battery which holds four times the energy capacity of lithium-ion batteries and is far cheaper to produce will significantly reduce the cost of transitioning to a decarbonised economy.

Led by Dr Shenlong Zhao from the University's School of Chemical and Biomolecular Engineering, the battery has been made using sodium-sulphur -- a type of molten salt that can be processed from sea water -- costing much less to produce than lithium-ion.

Although sodium-sulphur (Na-S) batteries have existed for more than half a century, they have been an inferior alternative and their widespread use has been limited by low energy capacity and short life cycles.

Using a simple pyrolysis process and carbon-based electrodes to improve the reactivity of sulphur and the reversibility of reactions between sulphur and sodium, the researchers' battery has shaken off its formerly sluggish reputation, exhibiting super-high capacity and ultra-long life at room temperature.

The researchers say the Na-S battery is also a more energy dense and less toxic alternative to lithium-ion batteries, which, while used extensively in electronic devices and for energy storage, are expensive to manufacture and recycle.

Dr Zhao's Na-S battery has been specifically designed to provide a high-performing solution for large renewable energy storage systems, such as electrical grids, while significantly reducing operational costs.

According to the Clean Energy Council, in 2021 32.5 percent of Australia's electricity came from clean energy sources and the industry is accelerating. Household energy storage is also growing. According to a recent report a record 33,000 batteries were installed in 2021.

"Our sodium battery has the potential to dramatically reduce costs while providing four times as much storage capacity. This is a significant breakthrough for renewable energy development which, although it reduces costs in the long term, has had several financial barriers to entry," said lead researcher Dr Zhao.

"When the sun isn't shining and the breeze isn't blowing, we need high-quality storage solutions that don't cost the Earth and are easily accessible on a local or regional level.

"We hope that by providing a technology that reduces costs we can sooner reach a clean energy horizon. It probably goes without saying but the faster we can decarbonise -- the better chances we have of capping warming.

"Storage solutions that are manufactured using plentiful resources like sodium -- which can be processed from sea water -- also have the potential to guarantee greater energy security more broadly and allow more countries to join the shift towards decarbonisation."

The lab-scale batteries (cion batteries) have been successfully fabricated and tested in the University of Sydney's chemical engineering facility. The researchers now plan to improve and commercialise the recently fabricated Ah-level pouch cells.

New battery technology has potential to significantly reduce energy storage costs: New, low-cost battery built with four times the capacity of lithium -- ScienceDaily

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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