Wednesday, 21 December 2022

Trouble(s) Directly Ahead?

 Baltic Dry Index. 1596 +48     Brent Crude 80.28

Spot Gold 1814            US 2 Year Yield 4.25  unch.

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

Deaths 53,103

Coronavirus Cases 21/12/22 World 658,900,623

Deaths 6,675,696

Former regulators and ex-Binance executives say these local businesses serve as window dressing for the main unregulated exchange.

"They are co-opting the nomenclature of regulation to create a veneer of legitimacy," said John Reed Stark, a former chief of the U.S. Securities and Exchange Commission's Office of Internet Enforcement. Stark said Binance's operations were more opaque even than those of FTX. "There is absolutely no transparency, no sunlight, no confirmation of any kind about its financial position."

Special Report: Binance's books are a black box, filings show, as it tries to rally confidence | Reuters

In a thin trading weeks in the runup to  the Christmas – New Year holidays, normally the bulls try to dress up stocks to improve year-end bonuses. But this year it’s hard to dress up a losing year for most stocks.

Worse, the prospects for stock and cryptos look bleak for much of 2023.

On the positive side, China has mostly abandoned its bizarre Covid-19 lockdown policy.  China’s economy ought to start picking up only to soon run into the annual slowdown for their lunar new year holiday. The inverted US yield curve seems to be flattening slightly, though I wouldn’t read too much into that at year-end.

On the negative side, the NATO proxy war on Russia continues with no end in sight; Europe is leading the rest of the global economy into recession; US smaller banks are suddenly, unexpectedly raising money from the Federal Reserve. Is another US banking problem ahead in Q1 2023?  The fall-out from the FTX crypto fraud is still only just getting underway.

 

Asia-Pacific markets mostly higher as Japanese stocks see second day of losses

UPDATED TUE, DEC 20 2022 11:34 PM EST

Markets in the Asia-Pacific traded mixed after Wall Street ended its four-day losing streak as global bonds rose after the Bank of Japan adjusted its yield curve control tolerance.

Japan continued its second day of losses, as the Nikkei 225 fell 0.7% and the Topix lost 0.63%. The Japanese yen stood at 132.17 against the U.S. dollar. The Kospi in South Korea erased earlier gains and traded 0.14% lower.

The S&P/ASX 200 in Australia rose 1.32% as the country’s foreign minister Penny Wong is slated to meet her Chinese counterpart Wang Yi in Beijing. Wong told reporters before departing for the trip that she will push China to lift trade sanctions and seek consular access for two detained Australians.

Hong Kong’s Hang Seng index gained 0.2% as Chief Executive John Lee is scheduled to travel to Beijing as part of his annual visit until Saturday to brief state leaders on the city’s economic, social and political situation.

In mainland China, the Shenzhen Component fell 0.19% and the Shanghai Composite rose 0.15%.

Asia-Pacific markets mostly higher as Japanese stocks see second day of losses (cnbc.com)

Disney stock on its way to worst year since 1974 after ‘Avatar’ sequel disappoints

Shares decline 5% to lowest since March 2020 after Disney expressed disappointment with ‘Avatar’ box-office returns in China

“Avatar: The Way of Water” couldn’t reverse Walt Disney Co.’s recent funk, which has the stock on a path for its worst year since 1974.

Disney shares DIS, +1.45% sank nearly 5% to their lowest level since March 2020 on Monday, after the blockbuster sequel and one of the priciest movies in Hollywood history fell short of the hype in its opening weekend. “Avatar: The Way of Water” hauled in $134 million domestically and had the second-largest global opening of 2022, but fell short of tracking estimates based on advance U.S. ticket sales and disappointed in one of the biggest markets for the franchise, China.

 

Disney had hoped to clean up in China, where the first movie in 2009 did blockbuster business. “The Way of Water” earned $57.1 million there, which Disney described in a Wall Street Journal report as disappointing but understandable.

“The problem is nobody wants to go to the cinema, because they’ve been told that COVID is extremely dangerous,” Tony Chambers, Disney’s global head of theatrical distribution, said in the article. “Although cinemas are open, the appetite for going to them isn’t really there.”

The news helped send Disney’s stock down 4.8% Monday, the biggest decline of the day for a Dow Jones Industrial Average DJIA, +0.28% component, to $85.78 — two cents shy of Disney’s lowest closing price since 2014. 

More

Disney stock on its way to worst year since 1974 after 'Avatar' sequel disappoints - MarketWatch

Japan warns of China's COVID situation, cuts view on factory output

TOKYO, Dec 21 (Reuters) - Japan will pay close attention to the COVID-19 situation in China, in addition to risks from a global economic slowdown, price hikes and supply constraints, according to its monthly report for December.

The economic report from the Cabinet Office comes as Japan, the world's third-largest economy, wrestles with sluggish global growth and high import costs that have weighed on its exports and manufacturing activity.

The government cut its view on factory output for the first time in six months as global demand for semiconductors is pausing, but it kept its assessment on the overall economy unchanged by saying it was "improving moderately".

"If China's infection situation impacts on supply chains or trades, it could also impact on Japan's economy as we've seen earlier this year," a Cabinet Office official said.

Meanwhile, Tokyo upgraded its view on business sentiment for the first time in a year to say it was showing signs of recovery. Previously, the government said recovery in business sentiment was pausing.

Corporations posted upbeat earnings, and those of manufacturers were especially inflated by a weak yen. The government's support for a domestic travel discount programme and reopening to foreign tourists helped the business mood for non-manufacturers.

In other key economic areas, the Cabinet Office left its view on private consumption unchanged saying it was moderately picking up.

It also said capital spending was recovering.

The report reiterated that the government expects the Bank of Japan to achieve its 2% price target stably based on the economy, prices and financial situation.

The central bank jolted markets on Tuesday with a surprise tweak to its bond yield control that allows long-term interest rates to rise more, a move aimed at easing some of the costs of prolonged monetary stimulus.

Japan warns of China's COVID situation, cuts view on factory output | Reuters

Finally, is Binance the next FTX? Hopefully not. But something about ducks comes to mind.

Special Report: Binance's books are a black box, filings show, as it tries to rally confidence

LONDON, Dec 19 (Reuters) - The world's biggest crypto exchange, Binance, is battling to shore up confidence after a surge in customer withdrawals and a steep drop in the value of its digital token.

The exchange said it dealt with net outflows of around $6 billion over 72 hours last week "without breaking stride" because its finances are solid and "we take our responsibility as a custodian seriously." After the collapse of rival exchange FTX last month, Binance's founder Changpeng Zhao promised his company would "lead by example" in embracing transparency.

Yet a Reuters analysis of Binance's corporate filings shows that the core of the business – the giant Binance.com exchange that has processed trades worth over $22 trillion this year – remains mostly hidden from public view.

Binance declines to say where Binance.com is based. It doesn't disclose basic financial information such as revenue, profit and cash reserves. The company has its own crypto coin, but doesn't reveal what role it plays on its balance sheet. It lends customers money against their crypto assets and lets them trade on margin, with borrowed funds. But it doesn't detail how big those bets are, how exposed Binance is to that risk, or the full extent of its reserves to finance withdrawals

Binance is not required to publish detailed financial statements because it is not a public company, unlike U.S. rival Coinbase, which is listed on the Nasdaq. Nor has Binance raised outside capital since 2018, industry data show, which means it hasn't had to share financial information with external investors since then.

And as Reuters reported in October, Binance has actively avoided oversight. Zhao approved a plan by lieutenants to "insulate" Binance's main operation from U.S. regulatory scrutiny by setting up a new American exchange, according to company messages and interviews with former employees, advisers and business associates. Zhao denied signing off on the plan and said the unit was set up with advice from top law firms.

Binance's huge role in the crypto market – it accounts for over half of all trading volume – has made its operations a keen topic of interest for U.S. regulators. The company is under investigation by the U.S. Justice Department for possible money-laundering and sanctions violations, and Reuters reported this month that some prosecutors believe they have gathered sufficient evidence to charge Binance and some top executives.

More

Special Report: Binance's books are a black box, filings show, as it tries to rally confidence | Reuters

Boris Johnson's brother quits as adviser to Binance unit

December 19, 2022

(Reuters) -Binance said on Monday Jo Johnson, brother of former British Prime Minister Boris Johnson, had resigned from the UK advisory board of its unit, as the cryptocurrency industry braces for further pain in the aftermath of the FTX fiasco last month.

Johnson had joined Bifinity, a payments technology company that Binance launched in March this year, as an adviser in September, according to The Telegraph, which first reported the news of his exit.

Celebrities and other prominent proponents of crypto have sought to distance themselves from the nascent asset class after Binance rival FTX filed for bankruptcy last month following a liquidity crunch.

“Lord Johnson has recently taken on the role of Executive Chairman of FutureLearn. He will be focusing on his new role within the digital learning platform, and is looking to scale back other activities," Binance said in an emailed statement.

A spokesperson for Johnson did not respond to Reuters requests for comment. 

Reuters reported in October that Binance had sought ways to circumvent regulatory scrutiny in Britain. Last year, the country's Financial Conduct Authority (FCA) had also warned that Binance did not hold any form of permission to offer services regulated by Britain.

Boris Johnson's brother quits as adviser to Binance unit (msn.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.

World Bank cuts China growth outlook on COVID, property woes

BEIJING, Dec 20 (Reuters) - The World Bank has cut its China growth outlook for this year and next, citing the impact of the abrupt loosening of strict COVID-19 containment measures and persistent property sector weakness.

The Washington-based lender, in a report released on Tuesday, said it expected China's economy to grow 2.7% in 2022, before recovering to 4.3% in 2023 as it reopens following the worst of the pandemic.

The bank's expected expansion for 2022 would be well below the official target of around 5.5%.

In September, the World Bank forecast China's growth at 2.8% this year and 4.5% next year.

"China's growth outlook is subject to significant risks, stemming from the uncertain trajectory of the pandemic, of how policies evolve in response to the COVID-19 situation, and the behavioral responses of households and businesses," the bank said in its report.

"Persistent stress in the real estate sector could have wider macroeconomic and financial spillovers."

China also faces highly uncertain global growth prospects and heightened geopolitical tension, the lender said.

Last week, Chinese leaders pledged to step up policy adjustment to support the slowing economy, to cushion the impact on businesses and consumers of a surge in COVID-19 infections at a time when a weakening global economy is hurting exports.

World Bank cuts China growth outlook on COVID, property woes | Reuters

Two Chinese property developers to raise funds via discounted share sales

HONG KONG, Dec 20 (Reuters) - CIFI Holdings (0884.HK) on Tuesday became the latest Chinese property developer to raise funds by selling new shares at discounted prices, while Agile Group (3383.HK) announced its second such capital raising since November.

After a raft of government measures supported their share prices, a number of developers including heavyweights like Country Garden (2007.HK) have since November turned to top-up share placements.

The method, in which a controlling shareholder sells existing shares and then the company issues the same amount of new shares to them, allows funds to be raised without any large dilution in stake for the controlling shareholder.

Shanghai-based CIFI, which is undergoing an offshore debt restructuring, said it would raise HK$957.6 million ($123 million) by selling shares at HK$1.14 apiece, a 14% discount to Monday's closing price.

Guangzhou-based Agile said it would raise HK$617.2 million ($79.3 million) by selling shares at HK$2.32 apiece, a 17.4% discount to Monday's closing price. It is the second top-up placement for Agile since November when it raised HK$783 million.

The companies, which saw their shares slide in line with the discounted share sale prices, said they would use the proceeds to repay existing debt.

China's property sector has over the past one and a half- years been grappling with a severe debt crisis - initially triggered by government moves to rein in ballooning debt - with many developers defaulting as they struggle to sell apartments and raise funds.

Two Chinese property developers to raise funds via discounted share sales | 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

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.

COVID-19 tools used to expand global surveillance

Tue, December 20, 2022 at 5:04 AM GMT

From Beijing to Jerusalem to Hyderabad, India, The Associated Press has found that authorities used COVID-19 technologies and data to halt travel for activists and ordinary people, and link people’s health information to other surveillance and law enforcement tools.(Dec. 20)

Video.

COVID-19 tools used to expand global surveillance (yahoo.com)

Police seize on COVID-19 tech to expand global surveillance

Tue, December 20, 2022 at 5:26 AM GMT

JERUSALEM (AP) — Majd Ramlawi was serving coffee in Jerusalem’s Old City when a chilling text message appeared on his phone.

“You have been spotted as having participated in acts of violence in the Al-Aqsa Mosque,” it read in Arabic. “We will hold you accountable.”

Ramlawi, then 19, was among hundreds of people who civil rights attorneys estimate got the text last year, at the height of one of the most turbulent recent periods in the Holy Land. Many, including Ramlawi, say they only lived or worked in the neighborhood, and had nothing to do with the unrest. What he didn’t know was that the feared internal security agency, the Shin Bet, was using mass surveillance technology mobilized for coronavirus contact tracing, against Israeli residents and citizens for purposes entirely unrelated to COVID-19.

In the pandemic’s bewildering early days, millions worldwide believed government officials who said they needed confidential data for new tech tools that could help stop coronavirus’ spread. In return, governments got a firehose of individuals’ private health details, photographs that captured their facial measurements and their home addresses.

Now, from Beijing to Jerusalem to Hyderabad, India, and Perth, Australia, The Associated Press has found that authorities used these technologies and data to halt travel for activists and ordinary people, harass marginalized communities and link people’s health information to other surveillance and law enforcement tools. In some cases, data was shared with spy agencies. The issue has taken on fresh urgency almost three years into the pandemic as China’s ultra-strict zero-COVID policies recently ignited the sharpest public rebuke of the country’s authoritarian leadership since the pro-democracy protests in Tiananmen Square in 1989.

For more than a year, AP journalists interviewed sources and pored over thousands of documents to trace how technologies marketed to “flatten the curve” were put to other uses. Just as the balance between privacy and national security shifted after the Sept. 11 terrorist attacks, COVID-19 has given officials justification to embed tracking tools in society that have lasted long after lockdowns.

“Any intervention that increases state power to monitor individuals has a long tail and is a ratcheting system,” said John Scott-Railton, a senior researcher at the Toronto-based internet watchdog Citizen Lab. “Once you get it, is very unlikely it will ever go away.”

CODE RED

In China, the last major country in the world to enforce strict COVID-19 lockdowns, citizens have been required to install cell-phone apps to move about freely in most cities. Drawing from telecommunications data and PCR test results, the apps produce individual QR codes that change from green to yellow or red, depending on a person’s health status.

More

Police seize on COVID-19 tech to expand global surveillance (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.

Perovskite/silicon tandem solar cell advance breaks efficiency record

Michael Irving  December 19, 2022

Perovskite and silicon are proving to be a formidable duo in the world of solar cells, and now they’ve hit a new record efficiency. A team at Helmholtz Zentrum Berlin (HZB) have developed solar cells with an efficiency of over 32%.

Silicon has long been the industry standard for solar cells, thanks to its efficiency, durability and cost, but current devices are approaching the theoretical maximum limit of efficiency. Perovskite, meanwhile, is a young upstart that’s quickly risen through the ranks and threatens to steal the crown.

But the best outcome seems to be when these two materials put aside their rivalry and team up. Perovskite/silicon tandem solar cells are more efficient than either material alone, thanks to their ability to harvest different parts of the solar spectrum – perovskite taps into blue light better, while silicon focuses more on red and infrared wavelengths.

The new HZB device is made up of a top cell made of several thin layers of perovskite, and a bottom cell that does the same with silicon. Having a series of layers allows the different colors of light to filter down to the lower levels, and minimizes electrical losses. The team also designed a new interface between the active area and the electrodes, which helped boost the overall efficiency of the cell.

The end result is a perovskite/silicon tandem solar cell that boasts an efficiency of 32.5%. This new record, which has been independently verified, is currently the highest of any emerging photovoltaic technology according to a chart kept and regularly updated by the National Renewable Energy Lab (NREL). It's a decent step up from the previous record-holder of 31.25%, achieved just a few months ago, while a year before that it was just shy of 30%. The team claims this latest advance pushes the technology into an important new realm.

“At 32.5%, the solar cell efficiency of the HZB tandems is now in ranges previously only achieved by expensive III/V semiconductors,” said Professor Bernd Rech, scientific director of HZB. “The NREL graph clearly shows how spectacular the last two increases from EPFL and HZB really are.”

Source: Helmholtz Zentrum Berlin

Perovskite/silicon tandem solar cell advance breaks efficiency record (newatlas.com)

When I see a bird that walks like a duck and swims like a duck and quacks like a duck, I call that bird a duck. 




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