Baltic Dry Index. 1323 -01 Brent Crude 83.10
Spot Gold 1771 US 2 Year Yield 4.41 +0.13
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,1030
Coronavirus Cases 06/12/22 World 650,385,317
Deaths 6,647,950
If economists could manage to get themselves thought of as humble, competent people on a level with dentists, that would be splendid.
John Maynard Keynes.
In the stock casinos, good news is bad news apparently. While officially, the global economy isn’t yet in recession, this year’s rising interest rates will eventually push the global economy into recession.
Whether rising interest rates will have much effect on food and energy price inflation is another matter since politicians across the G-7 are still going out of their way to make both food and energy price inflation worse.
With China starting to ease its Covid-19 lockdown policies, its economy will soon be expanding again. The G-7 picked a bad time to start excluding Russian oil.
Asia-Pacific
markets mixed; Beijing eases some Covid measures
UPDATED TUE, DEC 6 2022 12:00 AM
EST
Shares in
the Asia-Pacific were mixed on Tuesday after Wall
Street sold off overnight on fears that the Fed will keep
increasing interest rates.
Hong Kong’s Hang Seng index fell
0.93% in the morning session, with the Hang Seng Tech index declining 1.92% –
despite Beijing easing some Covid test requirements for the city. Markets rallied
on reopening hopes on Monday. Meanwhile, the Shanghai Composite in
mainland China was fractionally lower, and the Shenzhen Component was
up 0.848%.
In Australia, the S&P/ASX 200 fell
0.27% and the Australian dollar was
at around $0.6724 after the Reserve
Bank of Australia raised rates by 25 basis points.
The Nikkei 225 and
Topix in Japan gained 0.38% and 0.24% respectively, while South Korea’s Kospi dropped
0.51% and the MSCI’s broadest index of Asia-Pacific shares outside Japan was
down 1%.
Asia markets: Wall Street, Reserve Bank of Australia, interest rates (cnbc.com)
Stocks
slide amid resilient economy
DEC. 5, 2022 /
5:35 PM
Dec.
5 (UPI) -- U.S. stocks fell Monday after the latest economic reports
showed growth continuing at a hotter-than-expected rate.
The
Dow Jones Industrial Average dropped 482.78 points, or 1.4%, to close at
33,947.1. The S&P 500 slid 72.86 points, or 1.79%, to close at 3,998.84,
and the Nasdaq Composite fell 221.56 points, or 1.93%, to 11,239.94.
Tech
companies and banks saw some of the biggest losses during Monday's slide.
Ceridian HCM and Signature Bank both fell 7.44%; Salesforce Inc. lost 7.35%;
Zions Bancorporation fell 7.33%; and Paycom Software slid 7.18%.
Among
those to record gains Monday were United Airlines, up 2.6%; MGM Resorts, up
1.9%; and Boeing Co. up 1.2%.
Economists
pegged Monday's sell-off to ongoing strength in the economy. The services
sector grew for the 30th consecutive month in November, with the Services
Purchasing Managers Index at 56.5%, up 2.1 percentage points from 54.4% in
October, the
Institute for Supply Management reported.
The Business
Activity Index was up 9 points to 64.7%, and the New Orders Index fell a
half-point to 56%.
The resilient
economy fueled fears among investors that the Federal Reserve will push the
economy into a recession with ongoing interest rate hikes aimed at cooling
inflation.
The Fed
has raised its target federal funds rate six times this year -- including four
consecutive increases of 0.75 percentage point -- from near zero in March to a
target range of 3.75% to 4%.
"Good
economic news is bad news for stocks, as it will keep the risk elevated that
rates might have to end up higher later next year," said Edward Moya,
senior market strategist at OANDA, according
to Kiplinger.
"The
risks that the Fed might need to do more remain elevated, and that is why this
economy needs to head to a recession. This next recession, however, won't be
rescued by quick Fed easing or a fiscal response, as that will fuel inflation
risks."
More
Stocks
slide amid resilient economy - UPI.com
Oil prices rise
after price cap on Russian crude, OPEC+ meeting
Oil prices edged higher on Tuesday, after a G-7
price cap on Russian seaborne oil came into force on Monday on top of a
European Union embargo on imports of Russian crude by sea.
Brent
crude futures
had risen 66 cents to $83.34 a barrel by 0108 GMT. West Texas
Intermediate crude (WTI) rose
70 cents to $77.63 a barrel.
Futures fell more than 3% in the previous session, after U.S. service
sector data raised worries that the Federal Reserve could continue its
aggressive policy tightening path.
The Group of Seven
price cap comes as the West tries to limit Moscow’s ability to finance its war
in Ukraine, but Russia has said it will not abide by the measure even if it has
to cut production.
The price cap, to be
enforced by the G-7 nations, the European Union and Australia, comes on top of
the EU’s embargo on imports of Russian crude by sea and similar pledges by the
United States, Canada, Japan and Britain.
Meanwhile, the
Organization of the Petroleum Exporting Countries and allies including Russia,
together called OPEC+, agreed on Sunday to stick to their October plan to cut
output by 2 million barrels per day (bpd) beginning in November.
The Group of Seven
countries and Australia last week agreed on a $60 a barrel price cap on
seaborne Russian oil.
In China, more cities
eased Covid curbs over the weekend, prompting optimism for increased demand in
the world’s top oil importer.
Business and
manufacturing activity in China, the world’s second-largest economy, have been
hit this year by strict measures to curb the spread of the coronavirus.
Oil prices rise after price cap on Russian crude, OPEC+ meeting (cnbc.com)
Finally, yet more trouble in cryptoland. As with the
FTX/FTT/Democrat scandal, I suspect multi juridictions, multi greedy lawyers,
and very little of value left, will vaporise any relief for most victims.
Celsius clients
with collateral stuck on failed crypto platform turn to bankruptcy process for
relief
PUBLISHED SAT, DEC 3 2022 8:00 AM
EST
Alan Knitowski holds
an MBA, has worked in technology and finance for over 25 years and is CEO of a
mobile software company that trades on the Nasdaq. That didn’t prevent him from
getting duped by a crypto firm.
Knitowski borrowed $375,000 from crypto lender
Celsius over several years and posted $1.5 million in bitcoin as collateral. He didn’t want to sell his bitcoin
because he liked it as an investment and believed the price would go up.
That was the Celsius model. Cryptocurrency
investors could essentially store their holdings with the firm in exchange for
a loan in dollars that they could put to use. Knitowski would get the bitcoin
back when he repaid the loan.
But that’s not what happened, because Celsius,
which earlier in the year managed $12 billion in assets, spiraled into bankruptcy in July after a
plunge in crypto prices caused an industrywide liquidity crisis. Knitowski and
thousands of other loan holders had more than $812 million in collateral locked
on the platform, and bankruptcy records show Celsius failed to return
collateral to borrowers even after they repaid their loans.
“Every aspect of what they did was wrong,”
Knitowski, who runs an Austin, Texas-based company called Phunware, said in an interview. “If my
CFO or I actually did anything that looked like this, we would immediately be
charged.”
Creditors are now working through the bankruptcy
process to try and reclaim at least a portion of their funds. They were
provided with some level of optimism on Friday, after Celsius announced the
sale of its asset custody platform called GK8 to Galaxy Digital.
David Adler, a
bankruptcy lawyer at McCarter & English who is representing Celsius
creditors, said money from the transaction has to go to paying legal fees.
Beyond that, there could be funds remaining for former customers.
“The big question is
— who is entitled to the money they get from GK8?” Adler told CNBC. Adler said
he’s representing a group of 75 borrowers who have approximately $100 million
in digital assets on Celsius’ platform.
---- Earlier this year, as the price of bitcoin dropped,
Knitowski paid off one of his Celsius loans to avoid getting margin called and
having to increase his collateral. But after doing so, the company didn’t
return the bitcoin that was serving as collateral for that loan. Instead, the
assets were deposited into an account called “Earn.” According to the company’s
terms and conditions, assets in those accounts are the property of Celsius, not
customers.
“Imagine you pay off your car, but someone keeps
it,” Knitowski said. “You pay off your house, but somebody keeps it. In
this case, it would be like you pay off the loan. And instead, you don’t get
your collateral back even though it’s paid off.”
Failure to disclose
That wasn’t the only problem. The crypto platform
also failed to provide borrowers with a complete federal Truth in Lending Act
(TILA) disclosure, according to former employees and an email sent to customers
on July 4. The act is a consumer protection measure that requires lenders to
give borrowers critical information, such as the annual percentage rate (APR),
term of the loan, and total costs to the borrower.
The email to borrowers said, “the disclosures required to be provided to you under the federal Truth in Lending Act did not include one or more of the following,” and then proceeded to list more than a dozen possible missing disclosures.
---- While Celsius’ implosion doesn’t carry the
magnitude of FTX, which had been valued recently at $32 billion, company
management has faced its share of criticism. According to a court filing in
October, top executives took out millions of dollars in assets prior to the company halting withdrawals of customer
funds.
A former employee, who asked not to be named, said
there was a lack of financial oversight that led to significant holes on the
company’s balance sheet. One of the biggest problems was that Celsius had a
synthetic short, which occurs when a company’s assets and liabilities don’t
correspond.
The former employee
told CNBC that when customers deposited crypto assets with Celsius, it was
supposed to ensure those funds were available any time a customer wanted to
withdraw them. However, Celsius was taking customer deposits and lending them
to risky platforms, so it didn’t have the liquidity to return funds on demand.
As a result, when
customers wanted to withdraw funds, Celsius would scramble to purchase assets
on the open market, often at a premium, the person said.
More
Celsius users with crypto collateral stuck turn to
bankruptcy process (cnbc.com)
Sam Bankman-Fried
could face years in prison over FTX’s $32 billion meltdown — if the U.S. ever
gets around to arresting him
Sam Bankman-Fried, the disgraced former CEO of FTX —
the bankrupt cryptocurrency exchange that was worth $32 billion a few weeks ago
— has a real knack for self-promotional PR. For years, he cast himself in the
likeness of a young boy genius turned business titan, capable of miraculously
growing his crypto empire as other players got wiped out.
Everyone from Silicon Valley’s top venture capitalists to A-list celebrities
bought the act.
But during Bankman-Fried’s press
junket of the last few weeks, the onetime wunderkind has spun a new narrative –
one in which he was simply an inexperienced and novice businessman who was out
of his depth, didn’t know what he was doing, and crucially, didn’t know what
was happening at the businesses he founded.
It is quite the departure from the image he had carefully cultivated since launching
his first crypto firm in 2017 – and according to former federal
prosecutors, trial attorneys and legal experts speaking to CNBC, it recalls a
classic legal defense dubbed the “bad businessman strategy.”
At least $8 billion in customer funds are missing, reportedly used
to backstop billions in losses at Alameda Research, the hedge fund he also
founded. Both of his companies are now bankrupt with billions of dollars
worth of debt on the books.
---- Bankman-Fried admitted he had a “bad month,”
but denied committing fraud at his crypto exchange.
Fraud is the kind of
criminal charge that can put you behind bars for life. With Bankman-Fried, the
question is whether he misled FTX customers to believe their money was
available, and not being used as collateral for loans or for other purposes,
according to Renato Mariotti, a former federal prosecutor and trial attorney
who has represented clients in derivative-related claims and securities class
actions.
“It sure looks like
there’s a chargeable fraud case here,” said Mariotti. “If I represented Mr.
Bankman-Fried, I would tell him he should be very concerned about prison time.
That it should be an overriding concern for him.”
But for the moment,
Bankman-Fried appears unconcerned with his personal legal exposure. When Sorkin
asked him if he was concerned about criminal liability, he demurred.
More
Sam Bankman-Fried could face years in prison over FTX meltdown (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.
UK
recession to officially begin this winter, City economists predict
MONDAY 05 DECEMBER 2022 10:55 AM
The UK’s recession will officially begin this
winter and is likely to last for most of next year, a closely watched survey
out today suggests.
S&P Global and the Chartered Institute of
Procurement and Supply’s (CIPS) final purchasing managers’ index (PMI)
measuring private sector activity in November was unchanged at 48.2, the lowest
number since January 2021 when the UK was in the constrained by tough pandemic
lockdowns.
The reading was below analysts’ expectations but
held steady from an earlier estimate. The services PMI was unchanged at 48.8. Services firms
generate about two thirds of UK GDP.
The figure prompted experts to predict the
forewarned recession will start during the final weeks of this year.
A recession is typically defined as two consecutive
quarters of contraction. The UK economy shrank 0.2 per cent over the summer.
Britain’s PMI has now been below the 50 point
threshold that separates growth and contraction for four months now, indicating
consumers and businesses started cutting spending during the summer when the
cost of living crisis gathered pace.
Chris Williamson, chief business economist at
S&P Global Market Intelligence, said Britain is now in the teeth of the
worst economic slowdown outside the Covid-19 pandemic since the financial
crisis in 2008.
The economy is being spiked by the worst inflation
crunch in 41 years, with prices rising 11.1 per cent over the year to October.
More
UK recession to officially begin this winter, City
economists predict (cityam.com)
Indonesia’s GoTo
has lost almost 70% of its valuation since its April IPO
PUBLISHED SUN, DEC 4 2022 11:55
PM EST
Indonesia’s GoTo
Group has lost 68.5% of its initial value of 400 trillion
rupiah ($28 billion) since its
initial public offering in April.
While the stock has ticked lower most of the year,
GoTo shares sold off after pre-IPO shareholders opted out of a secondary
offering following the lock-up expiration on Nov. 30.
GoTo Group is the merged entity between Indonesia’s
two largest tech companies: ride-hailing giant Gojek and e-commerce marketplace
Tokopedia. Early investors such as SoftBank and Alibaba had agreed to an
eight-month lock-up period to support GoTo’s stock price following its IPO.
In October, GoTo had said it was working with pre-IPO shareholders
to explore a coordinated secondary offering of their shares before the lock-up expired to facilitate an orderly
sale through the negotiated market.
However, that did not work out. On Wednesday, the
last day of the lock-up, GoTo said those pre-IPO shareholders decided to not
proceed with the secondary offering.
The stock fell by 7% to 141 rupiah on Thursday and
continued to drop in Monday trading. It was last seen trading near 123 rupiah,
giving the company a valuation of about 126 trillion rupiah.
Other Southeast Asian tech companies have also seen
their valuations fall since going public. Competitor Grab has lost 69% of its
initial valuation of about $40 billion since its U.S. listing in December 2021
via a special purpose acquisition vehicle. Indonesian e-commerce company
Bukalapak is down about 70% from an initial valuation of $6 billion since its Jakarta IPO in August 2021.
In November, GoTo Group reported its nine-month accumulated losses surged from 11.58
trillion rupiah a year ago to 20.32 trillion rupiah, even as its third-quarter
losses shrank with cost cuts.
The group also announced in the same month that it
will be laying off 12% of its workforce – or about 3,000 jobs.
Indonesia's GoTo lost almost 70% of its valuation
since its April IPO (cnbc.com)
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.
New Zealand announces inquiry into
Covid-19 response
While
strict Covid-19 response was broadly considered one of the most successful in
the world, PM says inquiry will help prepare for next pandemic
Mon 5 Dec 2022 05.17 GMT
New Zealand will launch an official inquiry into its
Covid-19 response so that future governments are better prepared to deal with
pandemics, prime minister Jacinda Ardern has
announced.
The government announced the royal commission of inquiry
– to be chaired by Australian-based epidemiologist Prof Tony Blakely, former
cabinet minister Hekia Parata and former treasury secretary John Whitehead – on
Monday afternoon.
It will begin in February 2023 and be completed in
mid-2024, Ardern told a media briefing.
“A
royal commission of inquiry is the highest form of public inquiry and is the
right thing to do, given the Covid-19 emergency was the most significant threat
to the health of New Zealanders and our economy since world war two,” Ardern
said, adding that while every country grappled with the virus, there was no
playbook for managing it.
“It had been over 100 years since we experienced a
pandemic of this scale, so it’s critical we compile what worked and what we can
learn from it should it ever happen again.”
The inquiry will look at the overall response between
February 2020 and October 2022, including the policy settings required to
support the public health response, as well as what can be learned and how that
can be applied to any future pandemics.
“New Zealand experienced fewer cases, hospitalisations
and deaths than nearly any other country in the first two years of the pandemic
but there has undoubtedly been a huge impact on New Zealanders both here and
abroad,” Ardern said.
New Zealand’s strict Covid-19 response was broadly
considered one of the most successful in the world, with a low Covid-19
mortality rate through the first 18 months of the pandemic until vaccines
became widely available. Life-expectancy actually increased during this period.
But the announcement comes at a time when the country is
experiencing a surge of Covid-19 cases with very few restrictions still in
place. On Monday, the ministry of health announced 34,528 new community cases
for the week, compared to 27,076 cases in the week prior. There have been a
total of 2,235 deaths attributed to the virus in New Zealand since the pandemic
began.
According to the terms of reference,
the commission may assess whether the government’s initial elimination strategy
and later minimisation and protection strategy – as well as supporting economic
and other measures – were effective in limiting the spread of infection.
It will also consider whether the strategies were
effective in limiting the impact of the virus on vulnerable groups and the
health system, while taking into account the strategies adopted by comparable
jurisdictions.
More
New Zealand announces inquiry into Covid-19 response |
New Zealand | The Guardian
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.
Sparc advances commercial
graphene additive manufacturing
Sparc
Technologies’ said that construction is underway for its new modular and
scalable graphene-based additive manufacturing facility in Adelaide.
The
manufacturing facility will support the production of commercial quantities of
graphene-based additives for the growing global markets for coatings and
composites.
Sparc
Technologies managing director, Mike Bartels advised that all equipment for the
manufacturing facility has been delivered onsite and that construction was
underway.
“This
will enable Sparc to supply our global customer base with commercial quantities
of ecosparc product for the coatings and composites markets. Our ongoing
comprehensive testing program with global tier 1 and 2 coatings companies
continues to demonstrate the significant performance improvement of coatings
and composites materials employing our products,” Bartels said.
“By
improving coatings performance the frequency of asset maintenance can be
significantly reduced which subsequently serves to reduce costs and importantly
the environmental footprint associated with such activities.”
Successfully
incorporating graphene into targeted materials is one of the key challenges
faced by the graphene industry. Graphene tends to re-agglomerate and homogenous
dispersion is vital if graphene is to impart its unique and varied attributes
when incorporated into targeted materials.
Recognising
this challenge, Sparc has addressed the issue through a range of unique
processes, which will benefit companies involved in the production of both
coatings and composite materials.
The
intellectual property supporting Sparc’s graphene-based additive technology is
being protected with provisional patent filings, the first of which is
associated with Anticorrosive Epoxy Coatings coatings. A number of further
patent filings will occur in early 2023.
Sparc
Technologies is a South Australia-based company focused
on the development of innovative technology solutions using the unique
properties of graphene.
Sparc advances
commercial graphene additive manufacturing (manmonthly.com.au)
Economics is extremely useful as a form of
employment for economists.
John Kenneth Galbraith.
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