Baltic Dry Index. 677 -26 Brent Crude 87.91
Spot Gold 1924 US 2 Year Yield 4.17 +0.06
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 27/01/23 World 674,320,085
Deaths 6,755,269
Interest rates are the most important prices in the economy,
according to Nobel laureate F.A. Hayek, because they reflect the collective
time preference of individuals to consume either now or later. Accordingly,
interest rates co-ordinate allocation of capital across the economy by
signalling to businesses whether they should invest. Distortions in interest
rates can cause “clusters of errors” in which large swathes of businesses
unwittingly miscalculate at the same time.
https://www.ft.com/content/2838c142-a560-11df-a5b7-00144feabdc0
As goes China’s economic recovery, so goes the global economy. A soft or hard landing.
Unfortunately, if China’s economic recovery turns into a boom, global inflation likely booms too, putting an end any dreams of the central banksters ending interest rate hikes anytime soon.
With
the Chinese New Year celebrations ending this weekend, by this time next month
we should have a good idea of how goes the Chinese economy.
In the weekend LIR, who really painted "Da Vinci's" Salvator Mundi?
Asian markets edge
higher, tracking Wall Street’s rally
TOKYO — Asian shares
advanced Friday, tracking a rally on Wall Street following reports suggesting
the economy and corporate profits may be doing better than feared.
In Tokyo, data showed the core
consumer price index was up 4.3%, slightly higher than expected at 4.2%, and
higher than the Bank of Japan’s target of 2%.
“This seeks to challenge an eventual policy shift for the
central bank, although the government’s energy subsidies next month could be
tapped on to push back any changes for now,” Yeap Jun Rong, a market analyst at
IG, said in a commentary.
Japan’s benchmark Nikkei 225 NIK,
Markets remained
closed in Shanghai for the Lunar New Year holidays.
Stocks climbed on Wall Street to
their highest level in nearly eight weeks after the Commerce Department
reported the U.S. economy expanded at a 2.9% annual pace in the
last quarter, ending 2022 with momentum despite higher interest rates and
widespread fears of a looming recession. That beat economists’ forecasts for a
2.3% expansion.
The
S&P 500 SPX,
More swings may still be ahead,
as Wall Street digests a growing torrent of earnings and economic reports.
Markets have veered up and down recently as worries about a severe recession and drop-off in
profits battle against hopes the economy can manage a soft landing and the
Federal Reserve may ease up on interest rates.
Other reports Thursday showed
that orders for long-lasting goods from factories strengthened by more than
expected in December and fewer workers applied for jobless claims than
expected last week.
More
Asian
markets edge higher, tracking Wall Street's rally - MarketWatch
China looks
past Covid as tourist bookings surge for the Lunar New Year
BEIJING — People in
China are moving past the pandemic and going out to travel, preliminary data for the
Lunar New Year holiday show.
“Pent-up demand is
being released as many people rush to scenic spots, watch firework shows and
crowd into restaurants and hotels,” Nomura’s chief China economist Ting Lu said
in a report Thursday.
China’s Covid “exit
wave” is quickly ending as official data show a drop in infections, hospitalizations
and deaths, he said. “China has been rapidly reaching its Covid herd immunity,
as the government estimates about 80% of the population has already been
infected with Covid.”
The country saw a surge in Covid infections in
December, just as Beijing ended nearly three years of stringent contact tracing
and border controls. The seven-day Lunar New Year, which officially began
Saturday, is the first major holiday since the end of China’s Covid
restrictions.
Within the country, reservations
for stays at bed and breakfasts more than doubled from a year ago, while ticket
sales for attractions grew by more than fivefold, according to Trip.com data
for the first four days of the Lunar New Year.
The travel booking site claimed
that for those four days, reservations for hotels and other tourist activities
exceeded levels seen for the same period in 2019, before the pandemic.
People in mainland China were also eager to travel
abroad.
Flight bookings for travel from the mainland to
overseas destinations during the first four days of the holiday quadrupled
from a year ago, while related hotel reservations doubled,
Trip.com said.
Travel vs. big-ticket spending
It’s less clear
whether the surge in tourism implies consumption in China is well on its way to
recovering from the slump of the last three years. Retail
sales fell by 0.2% in 2022.
Domestic daily
trips for the Lunar New Year holiday travel period so far — since Jan. 8 — are
up by about 50% from a year ago, according to the Ministry of Transport.
But even the tens
of millions of trips each day is still down sharply from 2019 levels, the
ministry said.
“Shopping mall foot
traffic, new home purchases and auto sales data suggest big-ticket consumption
may remain subdued,” Nomura’s Lu said.
“Growth in passenger
car retail sales in volume terms dropped noticeably to -21.0% y-o-y during 1-15
January from 3.0% in December, following the ending of the seven-month 50%
purchase tax cut,” he said in the report.
Chinese households’
penchant to save reached record highs last year amid uncertainties about future
income and a slump in the property market. The bulk of household wealth in
China is in real estate.
For people in China
planning to spend more at physical stores this year, supermarkets ranked the
highest, followed by convenience stores, according to an Oliver Wyman survey in
December. Shopping malls ranked lower.
However, sentiment
can shift quickly.
The study found that
within just a week in late December, survey respondents became significantly
more comfortable with venturing out.
“We think that’s a
very positive sign of resilience and how quickly consumer confidence will
improve,” Oliver Wyman partner Imke Wouters said in a phone interview earlier
this month. “Retail sales are directly linked to consumer confidence.”
China looks past Covid as tourist bookings surge for the Lunar New Year (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.
Inflation
might be a monetary problem related to the discovery of the Magic Money Tree
forests back in March 2020! Who knew?
U.S. inflation roller
coaster prompts fresh look at long-ignored money supply
Thu,
26 January 2023 at 11:18 am GMT
NEW YORK (Reuters) - The amount of
money sloshing around the U.S. economy shrank last year for the first time on
record, a development that some economists believe bolsters the case for U.S.
inflation pressures continuing to abate.
The Federal Reserve's main measure of
the nation’s money stock - known as M2 money supply - slid for a fifth straight
month in December, dropping by a record $147.4 billion to a seasonally adjusted
$21.2 trillion from the month before, data from the U.S. central bank released
this week showed.
From a year earlier, the volume of
cash, coins, checking and savings deposits, other small time deposits and cash
parked in money market funds fell by nearly $300 billion and has fallen by more
than $530 billion since last March when the Fed kicked off its aggressive - and
ongoing - process to drain liquidity from the economy to combat high inflation.
M2 took off in March 2020 as the Fed
slashed rates and started buying trillions of dollars in bonds to help support
the economy as the coronavirus pandemic started, ultimately mushrooming by $6.3
trillion - a 40% increase - from its level right before the start of the
crisis.
The recent decline in the money
supply comes as the Fed has been aggressively raising rates to push inflation
back to its 2% target. Since last June, it has also cut its holdings of
Treasury and mortgage bonds by $400 billion to roughly $8.5 trillion to augment
that process, further stripping the economy of financial liquidity.
Money-supply purists have long argued
that the country's ever-growing stock of money was an inflation powder keg.
It's an argument that lost credibility with policymakers in the record-long
economic expansion before the pandemic when M2 rose by more than 80% but
inflation never rose sustainably above the Fed's 2% target and spent much of
that decade notably below it.
That dynamic changed in the last two
years, though, with money supply trends moving in roughly the same direction as
inflation pressures: As money supply rose rapidly into early 2022, so did
inflation; since M2 started a persistent decline last summer, inflation
pressures have also receded.
'A MONETARY
PHENOMENON'
Some Fed officials are now taking
renewed interest.
M2 “exploded during the pandemic, and
correctly predicted that we would get inflation,” Federal Reserve Bank of St.
Louis President James Bullard, an early proponent of policy tightening, said
earlier this month. “Inflation is certainly a monetary phenomenon” and “when
you get a huge movement in money, then you do get the movement in inflation,” as
was seen in the 1960s, ‘70s and ‘80s.
To be sure, measuring money supply is
complicated, with no one way to do it. The Fed itself has altered its approach,
scrapping the publication of an even broader measure, called M3, in 2006.
----A paper published this month
by the Mercatus Center at George Mason University said that economists and
policymakers would do well to keep an eye on money supply measures in the
future.
"Money has all but disappeared
from monetary policy analysis" given the economics profession's emphasis
on the view monetary policy works by managing expectations about the future
path of interest rates, wrote Joshua Hendrickson of the University of
Mississippi. Given money supply's better-than-expected track record on recent
inflation issues, ignoring these numbers has been "misguided," he
said.
U.S.
inflation roller coaster prompts fresh look at long-ignored money supply (yahoo.com)
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.
So nothing to do with bad reactions, sudden deaths
or the excess death rate then.
UK Government Ending COVID-19
Vaccine Boosters for Healthy People Under 50
January 25, 2023 Updated: January 25, 2023
People under 50 without conditions that put them at
risk from COVID-19 will soon not be able to get a COVID-19 booster, the United
Kingdom government announced on Jan. 25.
Uptake in the under-50 population has been
extremely low since early 2022 and the government is accepting a recommendation
from the Joint Committee on Vaccination and Immunisation (JCVI) to end the
booster campaign for most of the age group.
The booster availability to the younger, healthy
population will end in England on Feb. 12, the government said.
National Health Service (NHS) official Steve
Russell said that people should get their booster before the availability ends.
“The NHS will continue to operate a smaller scale
vaccine offer from mid-February onwards to ensure those eligible for first and
second doses can still get their jabs,” Maria Caulfield, the health minister,
said.
Health officials have also accepted the
recommendation to end the availability of the initial vaccination, or a primary
series, for the population not at clinical risk subject to further
consideration, according to Caulfield.
No date has been given as of yet
for the end of the primary series campaign. The JCVI recommended it be ended
before the end of 2023, narrowing the targets to “those persons at higher risk
of severe COVID-19,” including individuals aged 12 to 49 who are household
contacts of immune-suppressed people.
Most children are already unable to get a booster or
primary series.
‘Transition Continues’
The JCVI said the change in
vaccine availability stems from the high levels of immunity acquired through
vaccination and/or infection as well as the lower severity of cases Omicron and
its subvariants cause, when compared to earlier strains.
“Based on the current data,
keeping the booster (third dose) offer open to these groups is considered of
limited ongoing value and the overall impact on vaccine coverage is
negligible,” the committee said.
Officials also noted that after
an initial high uptake of a booster, or third dose, in December 2021, uptake
has been low, at less than 0.1 percent per week since April 2022 in all people
under 50 who are eligible for an additional shot.
----Other developed countries
have also seen enthusiasm for the vaccines lag as a growing body of evidence
shows their effects are worse initially against the newer variants that have
emerged and that the protection quickly wanes, especially against infection.
Some studies have indicated that the vaccinated are more likely to get infected
after a period of time.
UK authorities in late 2022
approved the Moderna and Pfizer bivalent boosters to try to better combat COVID-19.
More
UK Government Ending COVID-19 Vaccine Boosters for
Healthy People Under 50 (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.
Graphene researchers discover
long-term memory in 2D nanofluidic channels
25
January 2023
Published in Science, a collaboration
between teams from the National Graphene
Institute (NGI) at The University of Manchester, and the École Normale Supérieure (ENS), Paris,
demonstrated the Hebbian learning in artificial nanochannels, where the
channels showed short and long term memory. Hebbian learning is a technical
term introduced in 1949 by Donald Hebb, describing the process of learning by
repetitively doing an action.
Hebbian learning is
a well-known learning mechanism, it is the process when we ‘get used’ to doing
an action. Similar to what occurs in neural networks, the researchers were able
to show the existence of memory in two-dimensional channels which are similar
to atomic-scale tunnels with heights varying from several nanometers down to
angstroms (10-10 m). This was done using simple salts
(including table salt) dissolved in water flowing through nanochannels and by
the application of voltage (< 1 V) scans/pulses.
The study
spotlights the importance of the recent development of ultrathin nanochannels.
Two types of nanochannels were used in this study. The ‘pristine channels’ were
from the Manchester team led by Prof. Radha Boya, which are obtained by the assembly
of 2D layers of MoS2. These channels have little surface charge and
are atomically smooth. Prof. Lyderic
Bocquet’s group at ENS developed the ‘activated channels’, these have high
surface charge and are obtained by electron beam etching of graphite.
An important
difference between solid-state and biological memories is that the former works
by electrons, while the latter have ionic flows central to their functioning.
While solid-state silicon or metal oxide based ‘memory devices’ that can
‘learn’ have long been developed, this is an important first demonstration of
‘learning’ by simple ionic solutions and low voltages. “The memory effects in
nanochannels could have future use in developing nanofluidic computers, logic
circuits, and in mimicking biological neuron synapses with artificial
nanochannels”, said co-lead author Prof. Lyderic Bocquet.
More
Researchers show
long-term memory in 2D nanofluidic channels (manchester.ac.uk)
Another weekend and a last weekend
before the Fed and BOE meet to set their new key interest rate once again.
Anything more than a tiny quarter of one percent rate increase by the Fed will
likely disturb the global stock casinos. But the damage from ZIRP, NIRP and mountains
of Magic Money Tree forest money has yet to fully play out in the global
economy. Have a great weekend everyone.
Hayek observed that interest rate stimulus interfered with
economic calculations, causing managers to invest in projects that would not
otherwise have appeared profitable. Losses can subsequently materialise as
customer demand fails to meet forecasts that were, in retrospect, optimistic.
Long-term projects are highly sensitive to interest rates and are therefore more
susceptible to such distortions. Pension obligations and long-term,
capital-intensive projects are at high risk of miscalculation based on
artificially low rates.
https://www.ft.com/content/2838c142-a560-11df-a5b7-00144feabdc0
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