Baltic Dry Index. 1373 +33 Brent Crude 77.53
Spot Gold 1785 US 2 Year Yield 4.26 -0.08
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,1030
Coronavirus Cases 08/12/22 World 651,610,846
Deaths 6,652,044
“The American banking system is unbelievably sound in a million
different ways. Our capital cup runneth over.”
Jamie Dimon, CEO JPMorgan Chase.
(Well maybe! Hopefully we won’t ever have to find out.)
In
the stock casinos, optimism in Asia as China looks likely to ease yet more
Covid lockdown restrictions, caution in Europe as Russian and Kazak oil runs
into a insurance bottleneck in Turkey threatening a supply crisis for Europe,
pessimism in the US casinos that the Fed will keep raising interest rates well
into next year, albeit at a slightly lower pace.
Not
to worry though Ebenezer Squid Jamie Dimon says things have never been
better for US banksters.
Oil
traders and the US treasury yield curve suggest the next global recession is
almost here, if not actually underway already.
Hong Kong stocks
rise nearly 3% after reports say city is considering Covid rule easing
UPDATED THU, DEC 8 2022 12:38 AM
EST
Hong Kong’s Hang Seng index popped on Thursday,
as a local news outlet reported the city is considering further
easing of Covid measures, including lifting its outdoor mask rule and relaxing
mandatory testing for arrivals.
The Hang Seng index was
2.82% higher and the Hang Seng Tech index added 5% — bucking the trend in the
wider Asia-Pacific region, which were weighed down by continued recession
fears.
In mainland
China, the Shenzhen Component inched
up 0.005% while the Shanghai
Composite was 0.14% higher.
In Japan, the Nikkei 225 was
down 0.56% and the Topix was 0.42% lower. South Korea’s Kospi lost
0.56%. In Australia, the S&P/ASX 200 fell
0.58%. The MSCI’s broadest index of Asia-Pacific shares outside Japan rose
0.76%.
U.S.
stocks also fell overnight, with the
S&P 500 posting a fifth straight day of declines.
China’s National
Health Commission releases guidelines for treating Covid at home
China’s health
authorities announced guidelines for treating Covid patients at home on
Thursday, a day after formalizing a policy that allows most infected patients to
quarantine at home, as part of easing measures in the country.
The notice on the
National Health Commission’s website said patients should isolate in a separate
room if possible, and self administer antigen tests.
While noting
patients with acute symptoms should go to a hospital, the announcement included
instructions for patients with milder symptoms to monitor their health at
home and take medicine as needed.
The commission
included a list of medicines used to treat Covid symptoms.
Health authorities
are slated to hold a press briefing at 3 p.m. local time.
Hong
Kong stocks rise nearly 3% after reports say city is considering Covid rule
easing (cnbc.com)
European markets head for flat open as
nervousness over the global economy dominates sentiment
UPDATED THU, DEC 8 2022 12:24 AM EST
European markets are heading for a mixed open
Thursday as investor nervousness continues over the state of the global economy
and inflation.
The U.S. Federal Reserve is
expected to issue a 50 basis point interest rate hike next week and while that
would be a smaller increase than recent rate hikes, investors are increasingly
concerned about whether the central bank can avoid a recession next year in its
attempt to squash inflation.
U.S.
stock futures were down slightly on Thursday morning following a
fifth straight day of losses for the S&P 500 as Wall Street
weighed the likelihood of a downturn.
Sentiment
was more buoyant in the Asia-Pacific region overnight. Hong
Kong’s Hang Seng index popped on Thursday, as a local news outlet reported the city is considering easing
Covid measures further, including lifting its outdoor mask rule and relaxing
mandatory testing for arrivals.
Live
updates: European markets open to close, data, news and earnings (cnbc.com)
Stock futures are
slightly negative as investors assess risk of an economic downturn
UPDATED THU, DEC 8 2022 12:05 AM
EST
U.S. stock futures were down slightly on
Thursday morning following a
fifth straight day of losses for the S&P 500 as Wall Street
weighed the likelihood of a recession.
Dow Jones Industrial Average
futures shed 20 points, or 0.06%. S&P 500 futures lost 0.11%, while Nasdaq
100 futures were 0.18% lower.
Shares of Rent the Runway surged
more than 27% in extended trading. The online retailer topped
revenue expectations in its most recent quarter as shoppers
opted to borrow designer clothes amid rising inflation.
During the regular session
Wednesday, the S&P 500 declined 0.19% in its fifth straight losing session.
The Dow was virtually flat, adding just 1.58 points. Meanwhile, the Nasdaq
Composite slipped 0.51%.
The Federal Reserve is expected
to issue a 50 basis point interest rate hike next week. It’s a smaller increase
than the prior four rate hikes. Still, investors are increasingly concerned
whether the central bank can avoid a recession next year in its attempt to
squash inflation.
“We’ve been waiting for earnings
to come down, we’ve been waiting for CEOs to acknowledge the fact that a
recession is more likely than not, and here we are,” Liz Young, head of
investment strategy at SoFi, said Wednesday on CNBC’s “Closing Bell: Overtime.”
“It’s hard for me to see how we
wouldn’t have one. But I think it would be a good thing if we just got it over
with,” Young added.
On the economic front, investors
are awaiting the latest data on weekly jobless claims before the bell on
Thursday. Economists polled by Dow Jones are anticipating a reading of 230,000,
up slightly from the prior week’s total of 225,000.
Stock futures are slightly negative as investors assess risk of an economic downturn (cnbc.com)
Blackstone
CEO says financially distressed investors driving REIT redemptions
December 7, 2022 10:54
PM GMT
NEW YORK, Dec 7
(Reuters) - Blackstone Inc (BX.N) Chief Executive Stephen Schwarzman
said on Wednesday that redemptions in his firm's $69 billion non-traded real
estate income trust (REIT) were driven by investors roiled by market volatility
rather than dissatisfaction with the fund.
Blackstone
shares have lost 15% of their value since Dec. 1, when the New York-based firm
disclosed it had for the first time limited redemptions from the REIT, which is
marketed to high net-worth investors rather than institutional clients like
pension funds and insurance firms. Blackstone relies on the REIT for about 17%
of its earnings.
Large redemptions
have been seen at other such funds, with investment firm Starwood Capital
informing investors last week that its $14.6 billion non-traded REIT also had
raised the gates.
There
has also been a wave of redemptions at other non-traded Blackstone funds
marketed to high net-worth investors. The private equity firm disclosed earlier
this week that its $50 billion non-traded business development company, a
provider of corporate credit, had reached its pre-set limit on redemptions,
though no withdrawals were restricted.
Schwarzman told
the Goldman Sachs financial services conference that individual investors were
hit particularly hard by a liquidity crunch in Asia, as the Hang Seng Index
nosedived and many also had to cover positions they amassed with debt, causing
financial distress.
"If
you are an investor who's got margin debt and your market goes down 40%, you
can imagine what it was like to be one of those individuals ... As the world is
busy shrinking, people get scared," Schwarzman said. He added the
redemptions did not mean the investors were not happy with the REIT and its
profits.
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.
More
Blackstone
CEO says financially distressed investors driving REIT redemptions | Reuters
Finally,
how’s that G-7/EU Russian oil price cap doing after just two full days? Better
keep the car fully topped up now.
EU sanctions,
Russian oil price cap cause tanker bottleneck as crude moves through Turkey
New Turkish insurance
rules on oil tankers carrying Russian crude continue to slow down the movement
of tankers off the coast of Turkey and between Russia’s Black Sea ports and the
Mediterranean. Sixteen vessels (none Russian-flagged) are waiting for insurance
clearance, according to MarineTraffic, and that number is expected to grow.
Based on
MarineTraffic data, 35 vessels including nine Russian-flagged tankers have
departed from Russia since the first day (Dec. 5) a G7 nation oil price cap and
European Union ban on most Russian crude purchases went into effect.
“All the vessels
heading to the Bosphorus from the north (to leave Black Sea) are mostly full,”
said Captain Adil Ashiq, United States Western Region executive for
MarineTraffic.
“The majority of crude
is going to Turkey, followed by Greece, Italy, and India,” Ashiq said.
Tankers with a
destination of Russia can be seen in the corresponding MarineTraffic graphic.
VesselsValue tells
CNBC that the average wait for tankers at the Bosphorus has increased compared
to last week by roughly 47%, when there were 14 vessels with an average wait
duration of 64 hours and a combined tonnage capacity of 1.46 million tons.
“As we get further
into the duration of the Russian crude oil sanctions and price cap, we expect
to see increasing congestion on the north and south side of the Bosphorus,
along with areas around the Dardanelles Strait for the same reasons,” said
Graham Close, Senior Trade Analyst at VesselsValue.
Andy Lipow, president
of Lipow Oil Associates, tells CNBC that concerns about the age and quality of
the shadow fleet carrying Russian crude oil through the Bosphorus will only
grow.
“As the EU sanctions
take hold, these transit delays will impact Chinese and Indian refiners who
remain the largest and grow in importance for Russian oil sales,” Lipow said.
“Turkey wants insurers to provide full and all-encompassing liability insurance
for anything sanctions related and of course, P&I [maritime protection and
indemnity insurance] clubs are not going to do that.”
EU
sanctions, Russian oil price cap cause crude tanker bottleneck (cnbc.com)
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.
Jamie Dimon says
inflation eroding consumer wealth may cause recession next year
PUBLISHED TUE, DEC 6 2022 8:13 AM
EST UPDATED TUE, DEC 6 2022 12:31 PM EST
JPMorgan
Chase CEO Jamie
Dimon said inflation could tip the
U.S. economy into recession next year.
While consumers and companies are currently in
good shape, that may not last much longer, Dimon said Tuesday on CNBC’s
“Squawk Box.” Consumers have $1.5 trillion
in excess savings from Covid pandemic stimulus
programs and are spending 10% more than in 2021, he said.
“Inflation is eroding everything I just said, and
that trillion and a half dollars will run out sometime midyear next year,” Dimon
said. “When you’re looking out forward, those things may very well derail the
economy and cause a mild or hard recession that people worry about.”
The veteran JPMorgan CEO began to raise concerns
about the economy earlier this year. In June, he said he was preparing his bank
for an economic hurricane on the horizon, in part because of the Federal Reserve’s reversal of
bond-buying programs and the Ukraine war.
Adding to pressure for borrowers, the Fed’s
benchmark interest rate is headed to 5%, Dimon noted Tuesday. That rate “may
not be sufficient” to subdue inflation, he added.
During the wide-ranging interview, Dimon called
cryptocurrencies “a complete sideshow”
that is rife with criminality and said globalization was in the process of
being partly reversed as supply chains are restructured amid heightened
geopolitical tensions.
Dimon, 66, has led the New York-based bank since
2006. Under his leadership, JPMorgan became the biggest U.S. bank by assets as
it weathered the 2008 financial crisis, its aftermath and the 2020 coronavirus
pandemic.
While the prospects
for the economy may be dimming, the banking industry will be able to withstand
a cycle of higher loan defaults, he said. That’s in part because of the new
capital requirements imposed on the industry after the 2008 crisis.
“The American banking
system is unbelievably sound in a million different ways,” Dimon said. “Our
capital cup runneth over.”
Jamie Dimon says
inflation eroding consumer wealth may cause recession next year (cnbc.com)
UK
house prices fall in sharpest drop since 2008 crash
WEDNESDAY 07 DECEMBER 2022 7:16 AM
House price growth has continued to cool in the UK,
with last month representing the sharpest decline in value since 2008.
The average cost of a home now stands at £285,579,
after falling by 2.3 per cent in November, according to Halifax today – which
began tracking house prices in 1983.
Growth rates have slowed considerably in the past
few months, in response to higher mortgage rates and the cost of living crunch
in the country.
“While a market slowdown was expected given the
known economic headwinds… This month’s fall reflects the worst of the market
volatility over recent months,” Kim Kinnaird, director of Halifax Mortgages,
said today.
“Some potential home moves have been paused as
homebuyers feel increased pressure on affordability and industry data continues
to suggest that many buyers and sellers are taking stock while the market
continues to stabilise.”
Kinniard lent some relief for those looking to
sell, as the market has banked some of largest leaps in value ever seen, since
the start of the pandemic.
Property prices are up more than £12,000 compared
to this time last year and remain £46,403 above pre-pandemic levels.
UK house prices
fall in sharpest drop since 2008 crash (cityam.com)
Analysis:
East Europeans count their pennies for Christmas as food costs soar
December 7, 2022
1:38 PM GMT
TISZAESZLAR,
Hungary, Dec 7 (Reuters) - Consumers in Eastern Europe are saving up to put
their favourite carp and pork dishes on the table for Christmas as food price
inflation, especially in Hungary and the Baltics, outpaces that in the wider
European Union.
Food prices in
Hungary were a staggering 45.2% higher in October than a year earlier, Eurostat
data shows, with 10 countries in the EU's east facing food price inflation of
more than 20%. The cost of food was 33.3% higher in Lithuania and up 30% in
Latvia compared to October 2021.
And while there
are signs headline inflation may be peaking in some countries, food prices are
still rising strongly, adding to a cost-of-living squeeze and forcing central
banks to keep interest rates high even as economies start slowing sharply.
Experts say local
factors are exacerbating a global trend driven by rising energy and fertilizer
costs, including low food industry productivity in some ex-communist countries,
heavy exposure to imports, and surging wages in tight labour markets.
In Hungary, a
severe drought decimated maize and wheat crops this year and caused animal feed
prices to rocket, while the weak forint has raised import costs.
On their farm in
Tiszaeszlar, eastern Hungary, Lajos Kander's family rear more than 2,000 hairy
"mangalica" pigs, a traditional breed prized for their meat.
The Kanders
usually grow maize and wheat and produce their own feedstock. But the drought
has forced them to buy some feed on the market, where Lajos Kander said maize
and autumn wheat prices have nearly doubled from 2021.
More
Analysis: East
Europeans count their pennies for Christmas as food costs soar | 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.
China eases Covid
restrictions on travel and production
PUBLISHED WED, DEC 7 2022 1:24 AM
EST
BEIJING — In a
significant easing of Covid controls, the Chinese government said Wednesday
that people will no longer need to show negative virus tests or health codes in
order to travel between different parts of the country.
Chinese authorities
also said that unless an area is designated as high-risk, work and local
production cannot be stopped.
The announcement on
the National Health Commission’s website formalized other recent changes to
Covid controls, such as allowing more people to quarantine at home.
The measures also
said that other than facilities such as retirement homes, elementary and middle
schools and health clinics, venues should not require negative virus tests or
health code checks.
In an example of how
strict Covid controls had become in mainland China, the capital city of Beijing
this year increasingly required people to scan a health code with a smartphone
app in order to enter public venues. The health code then had to show a
negative virus test result from within the last two or three days.
If the health code decided the user had come into
contact with an infection or Covid risk area, the app would show a pop-up
window, making it impossible for the person to enter public areas, or board a
train or airplane until the pop-up was resolved.
The capital city relaxed its health code scanning
requirements on Tuesday.
Despite a national easing in Covid measures in
mid-November, a surge of infections and the ensuing local implementation of
China’s stringent zero-Covid policy added to people’s frustration with the
controls. Students and groups of people held public protests during
the last weekend of November.
More
China eases Covid restrictions on travel and
production (cnbc.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.
European
tech industry loses $400 billion market value, report says
December 7, 2022
10:48 AM GMT
LONDON/STOCKHOLM,
Dec 7 (Reuters) - The European tech industry saw $400 billion in value wiped
out this year and an 18% decline in venture capital funding, according to a
report from venture capital firm Atomico.
The combined
value of public and private tech firms in Europe fell to $2.7 trillion, down
from $3.1 trillion in late 2021. High interest rates, the war in Ukraine,
and a shrinking talent pool were among the reasons cited for the drop.
Market pressures
forced a number of Europe's best-known companies to raise funds at a discount to their once sky-high valuations. For example,
Swedish payments firm Klarna Bank AB raised $800 million at
a valuation of $6.7 billion, an 85% drop from its 2021 price tag of $46
billion.
"The European
tech ecosystem is facing the most challenging macroeconomic environment since
the global financial crisis," Tom Wehmeier, partner at Atomico, told
Reuters.
Venture capital
funding in Europe was down to $85 billion for the year, based on data collected
across 41 countries, an 18% decline from the $100 billion raised in 2021.
The number of new
"unicorns" - firms valued at $1 billion or more - also fell this
year, down from 105 to just 31 in 2022.
Despite these
challenges, Atomico found industry insiders remain enthusiastic. In a survey of
founders and investors on the continent, 77% said they were either as
enthusiastic, or more so, about the future of the European tech industry than
in 2021.
"This is a
new reality," Wehmier added. "The financial markets have changed, and
with that, the expectations of everyone working within the European tech
industry need to evolve."
European tech
industry loses $400 billion market value, report says | Reuters
The taxpayer:
that’s someone who works for the federal government, but doesn’t have to take a
civil service examination.
Ronald Reagan.
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