Monday, 9 January 2023

Asian Optimism. The Money’s Gone.

Baltic Dry Index. 1130 -16       Brent Crude 79.68

Spot Gold 1879             US 2 Year Yield 4.24 -0.21

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

Deaths 53,103

Coronavirus Cases 06/01/23 World 668,202,608

Deaths 6,713,617

There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.

John Kenneth Galbraith.

In the Asian stock casinos, it’s all about hopium on a fast rebound in China’s economy. But with the Chinese Lunar New Year holiday soon to start just as a new great Covid-19 surge is sweeping across China that fast rebound might be much slower than the gamblers expect.  More March rather than January. 


Asia-Pacific markets rise as China reopens borders with Hong Kong

UPDATED MON, JAN 9 2023 12:28 AM EST

Asia-Pacific markets traded higher as Hong Kong and mainland China resumed quarantine-free travel over the weekend, signaling the end of zero-Covid policy which kept borders effectively closed for nearly three years.

South Korea’s Kospi rose 2.51%, leading gains in the region and the Kosdaq gained 1.48%.

Hong Kong’s Hang Seng index gained 1.46% on the first day of trade following the reopening. Technology stocks led gains alongside travel and consumer names. In mainland, the Shanghai Composite rose 0.6% and the Shenzhen Component rose 0.62%

The S&P/ASX 200 gained 0.6% as investors digested the Australia’s buildings approvals print that came in significantly lower than expected. Japan’s markets were closed to observe Coming of Age Day, a public holiday.

In the U.S., major indexes ended last week with their first rally of the new trading year. Nonfarm payrolls for December came in slightly higher than expected, while wages rose at a slower pace than expected. ISM’s non-manufacturing purchasing managers’ index showed a contraction in the services sector — adding to hopes that the Federal Reserve’s rate hikes are making progress in taming inflation.

Asia-Pacific markets: Hong Kong and mainland China resumes, Australia building approvals (cnbc.com)

European markets set for positive open, buoyed by China reopening

UPDATED MON, JAN 9 2023 12:26 AM EST

European markets are heading for a positive open at the start of the new trading week, with market sentiment buoyed by a further reopening of the Chinese economy.

Asia-Pacific markets traded higher overnight as Hong Kong and mainland China resumed quarantine-free travel over the weekend, signaling the end of zero-Covid policy which kept borders effectively closed for nearly three years.

Meanwhile, U.S. stock futures inched higher in overnight trading Sunday after the major averages notched their first big rally of the new trading year.

European markets live updates: stocks, data, news and earnings (cnbc.com)

China’s big consumer market isn’t rebounding to pre-pandemic levels just yet

BEIJING — It’s going to take time for Chinese consumers to really start spending again, despite China’s abrupt shift toward reopening.

About a month after Guangzhou city resumed in-store dining, local coffee shop owner Timothy Chong said revenue was recovering — to 50% of normal levels.

“In late December, customer flow gradually normalized, with a slight upward trend, but [a recovery in] business volume still needs to wait,” he said in Chinese, translated by CNBC.

He expects it will take at least three or four months before revenue can return to normal. For the past six months, revenue had dropped to 30% of typical levels, Chong said. He said Bem Bom Coffee’s first store opened in late 2019, followed by a second store and a coffee academy in August 2021.

China’s retail sales were down slightly for 2022 as of November, official data showed. Consumption has lagged overall economic growth since the pandemic began nearly three years ago.

For the year ahead, Bain partner Derek Deng kept a lid on expectations. “The hope is we at least get back to the first quarter of 2022 level,” he said, noting that was just before the Shanghai lockdown.

Retail sales for the first three months of 2022 were up by about 3.3% from a year ago, but had slowed to a decline of 0.7% for the first half of the year, according to Wind Information.

A return to 2021 — when retail sales rebounded by 12.5%— would be an optimistic scenario, Deng said. “I don’t think people are seeing that as sort of the base case, mostly because the macro factors are actually less favorable compared to 2021.”

The bulk of Chinese household wealth is tied up in real estate, a one-time hot market that’s slumped in the last year. Mainland Chinese stock markets dropped in 2022 for the first time in four years. Exports, a driver of China’s growth, have started to decline in the last few months as global demand wanes.

Deng also noted fears of a second Covid wave, the highly contagious XBB omicron subvariant coming in from overseas and geopolitical uncertainties.

More

China's big consumer market isn't rebounding to pre-pandemic levels just yet (cnbc.com)

'Life is moving forward': China declares new COVID phase

BEIJING, Jan 9 (Reuters) - China braced for a "new phase" in its battle against COVID-19 on Monday and financial markets strengthened after Beijing dropped pandemic border controls in the latest easing of curbs that has let the virus loose on its 1.4 billion population.

Sunday's reopening is one of the last steps in China's dismantling of its "zero-COVID" regime, which began last month after historic protests against curbs that kept the virus at bay for three years but caused widespread frustration among its people and severe damage to the world's second-largest economy.

While Beijing's move to drop quarantine is expected also to boost outbound travel, several nations are demanding negative tests from visitors from China, seeking to contain an outbreak that is overwhelming many of China's hospitals and crematoriums.

"Life is moving forward again!," the official newspaper of the Communist Party, the People's Daily, wrote in an editorial praising the government's virus policies late on Sunday which it said had moved from "preventing infection" to "preventing severe disease".

"Today, the virus is weak, we are stronger."

China's state Xinhua news agency said the country had entered a "new phase" of its COVID response, citing its virus prevention experience, the development of the epidemic and increased vaccination levels.

China's top health officials and state media have repeatedly said COVID infections are peaking across the country and they are playing down the threat now posed by the disease.

---- Officially, China has reported just 5,272 COVID-related deaths as of Jan.8, one of the lowest rates of death from the infection in the world.

But the World Health Organization has said China is under-reporting the scale of the outbreak and international health experts estimate more than one million people in the country could die from the disease this year.

Shrugging off those gloomy forecasts, investors are betting that China's reopening will help revive the $17 trillion economy and bolster the outlook for global growth.

More

'Life is moving forward': China declares new COVID phase | Reuters

Back in Ponziland cryptoland, the Bahamas is struggling after the fraud of FTX.

‘The money is gone’: Bahamas tries to turn page after FTX

January 9 2023

----The cryptocurrency exchange FTX was supposed to be the crown jewel of the Bahamian government’s push to be the global destination for all things crypto, after years of having an economy overly reliant on tourism and banking. Instead, FTX is bankrupt and Bahamians are trying to figure out what’s next for their country and whether their national crypto experiment has failed. Regulators are trying to locate FTX’s customers’ missing money.

Meanwhile, charities like Rolle’s and dozens of contractors now out of work hope that another company will come along and bring new opportunities to the island nation, without the complications and embarrassment of an alleged billion-dollar fraud.

Rolle, a Pentecostal preacher known as the “singing bishop,” is a prominent figure in the Bahamas. For decades, he’s cooked and donated food to the poor and provided school lunches from his neighborhood kitchen at International Deliverance Praying Ministry in Over-The-Hill, one of the most impoverished parts of the capital of Nassau. Rolle and his staff feed roughly 2,500 people a week.

----Rolle’s ministry received $50,000 from FTX in early 2022, one of several donations FTX made to the Bahamian people when it relocated to the Caribbean island nation in 2021. It was money, he said, that was used to restore a food storage trailer and make additional food donations. Rolle said it cost upward of $10,000 a week to run his food donation program.

Asked about the failure of FTX, Rolle described it as a sad distraction from the many issues facing the country. Others are angry, particularly with Sam Bankman-Fried, the young founder of FTX. The Bahamas had a reputation, like some other Caribbean isles, as a destination for illicit and offshore finance. There was a belief that crypto would allow the island to diversify its economy, give Bahamians more financial opportunities and overall help provide the country a more prosperous future.

The country enacted the Digital Assets and Registered Exchanges Act in 2020, making the Bahamas one of the first countries to put together a regulatory framework for cryptocurrencies and other digital assets. The prime minister, Philip Davis, participated in the groundbreaking ceremony for FTX’s new $60 million headquarters in Nassau in April, along with Bankman-Fried.

----“It’s frustrating. Now when people think about crypto they are going to think of FTX,” Deleveaux said. “That’s going to make my own job much harder.”

In some ways, FTX was both ubiquitous and removed from the local community, Bahamians said. Its ads were everywhere, most notably at the Nassau Airport in the hall for tourist arrivals. But at the same time, FTX ran most of its operations from the secure luxury compound known as Albany, where residents like Tiger Woods and Justin Timberlake can be regularly spotted. Albany is located on the opposite side of New Providence, the most populated island in the Bahamas and the location of Nassau.

----One bartender at the Margaritaville Resort, where FTX ran up an unpaid $55,000 tab, described a group of 10 to 15 mostly white FTX employees who would eat in the restaurant, faces buried in their laptops the entire time. While FTX did hire Bahamians or contracted with Bahamian businesses, it was almost entirely for logistics jobs like construction, janitor services or food catering.

Just as quickly as FTX became engrained in elite Bahamian circles did the whole thing unravel. FTX failed in spectacular fashion in early November, going from solvent to bankrupt in less than a week. One food catering servicer said he had to let go most of his workers after FTX, his biggest contract, went bankrupt.

More

'The money is gone': Bahamas tries to turn page after FTX | AP News

 

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.

Big fall in euro zone inflation offers little help for ECB

January 7 2023

FRANKFURT/BRUSSELS (Reuters) -Euro zone inflation tumbled last month but underlying price pressures are still rising and economic growth indicators are surprisingly benign, suggesting that the European Central Bank will keep raising interest rates for months to come.

Fighting a historic surge in prices, the ECB has since July increased borrowing costs at its fastest pace on record. It has promised a string of further moves this year to curb inflation that its own economists see staying above its 2% target well into 2025.

Consumer price growth across the 19 countries using the euro slowed to 9.2% in December from 10.1% a month earlier, Eurostat data showed on Friday - well below a Reuters poll forecast of 9.7%, with the decline driven by lower energy prices.

The euro zone has since expanded to 20 nations, with Croatia joining on Jan. 1.

But the headline number masked a more malignant trend, with all key components of core inflation accelerating.

Excluding volatile food and energy prices, inflation picked up to 6.9% from 6.6%, while an even narrower measure that also excludes alcohol and tobacco rose to 5.2% from 5%.

Services and non-energy industrial goods inflation, both watched closely by the ECB to gauge the durability of price growth, accelerated, adding to concerns that inflation is proving more stubborn than expected.

“Rising core inflation means that not much will sway the European Central Bank from the hawkish path it set out late last year," ING economist Bert Colijn said.

A string of other indicators also suggest that the bloc's winter recession will be milder than anticipated, leaving the ECB with more work to do to tame prices.

A key economic sentiment indicator improved more than expected while retail sales data also showed surprising resilience.

Exceptionally mild weather, implying lower consumption of costly energy, will help too, by propping up household spending power and preserving corporate margins.

But that may complicate life for the ECB.

The recession was expected to push up unemployment, naturally dampening price pressures. But employment, already at a record high, is actually going up, not down.

Fiscal support for households is also proving more generous than hoped and this excessive spending is adding to purchasing power, weighing against the ECB's restrictive policies.

More

Big fall in euro zone inflation offers little help for ECB (msn.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

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.

Sudden Death: The No. 1 Cause of Death for Under 65s in 2021

Jan 6 2023

Believe it or not, it’s now the No. 1 cause of death for this age group. Is there a silent epidemic that’s impairing and destroying your immune system (and literally obliterating 90% of your DNA repair mechanism)? And, what extreme remedies can reverse the attack?


STORY AT-A-GLANCE

·         Mounting evidence shows the COVID shots are destroying people’s immune systems and are triggering turbo-charged cancers

·         A survey by Steve Kirsch found sudden death is the No. 1 cause of death among those under the age of 65 who got the COVID jab

·         Myocarditis as a cause of death is now registering across all age ranges but only for the vaccinated. Cardiac-related deaths are also significantly elevated among younger people (under 65) who got the jab compared to their unjabbed peers

·         Recent research shows repeated jabs trigger a switch in the types of antibodies your body produces and lower your ability to clear viruses. By switching from spike-specific neutralizing IgG antibodies to IgG4 antibodies, your body switches from tumor suppression mode into tumor progression mode

·         In addition to the potential for cancer cells to run amok, IgG4 dominance may also have severe autoimmune implications, as the COVID jab spike protein share similarities with human proteins

Evidence showing the COVID shots are a public health disaster keeps mounting. In late December 2022, Steve Kirsch1 and Jessica Rose,2 Ph.D., both published Substack articles detailing some of the latest evidence showing the shots are destroying people’s immune systems and have triggered an avalanche of turbo-charged cancers.

 

Kirsch’s article3 features results from a recent survey he conducted. It included four questions: age, whether the deceased was jabbed or not, year of death and cause of death. While the number of responses is low, major insights can still be gleaned by looking at the trends.

More

Sudden Death: The No. 1 Cause of Death for Under 65s in 2021 (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.

Space-Based Solar Power Hardware Was Just Launched Into Orbit for Testing

January 6, 2023

Space-based solar power could provide round-the-clock access to renewable energy, sidestepping one of the technology’s biggest limitations. Now the idea is going to get its first true test after a Falcon 9 rocket successfully launched experimental hardware designed to assess its feasibility.

The idea of stationing gigantic solar panels in orbit around Earth and beaming the power back has been around for decades. The possibility is attractive, because in space you’re no longer at the mercy of the weather or the planet’s cycles of day and night, and solar radiation levels are higher as sunlight has not had to pass through the atmosphere.

So far though, space-based solar power has remained in the realm of sci-fi due to the technical complexity and unforgiving economics of space technologies. But thanks to a $100 million donation in 2013, a multidisciplinary team from Caltech has been quietly working on it over the past decade, developing the various technologies required to make it a reality. And this past Tuesday, prototypes of some of the key subsystems required for a full-scale space-based solar power plant were delivered into orbit by SpaceX for testing.

Over the next few months, the team behind the Caltech Space Solar Power Project will test out the systems that will allow their flexible solar panels to unfurl in space and the technology designed to transmit power back to Earth. They will also assess how well different kinds of solar panel technologies hold up in the harsh environment of space.

“No matter what happens, this prototype is a major step forward,” Ali Hajimiri, one of the three Caltech professors leading the project, said in a statement. “It works here on Earth, and has passed the rigorous steps required of anything launched into space. There are still many risks, but having gone through the whole process has taught us valuable lessons.”

Building solar panels in space is a much more complicated business than doing so on Earth. The biggest challenge is getting them there in the first place, which is limited by the incredible cost of launching material into orbit. As a result, the team has had to focus on reducing the weight of their solar panels as much as possible without sacrificing their generating capacity.

Their solution combines ultra-thin flexible solar panels, an ingenious design that integrates power generation and transmission, and a novel modular architecture that makes it possible to combine many smaller, self-contained panels to create large arrays.

More

Space-Based Solar Power Hardware Was Just Launched Into Orbit for Testing (singularityhub.com)

"In economics, hope and faith coexist with great scientific pretension."

John Kenneth Galbraith.

 

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