Wednesday, 11 January 2023

Bunker Time!!!

 Baltic Dry Index. 1096 -43       Brent Crude 79.54

Spot Gold 1873             US 2 Year Yield 4.24 +0.05

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

Deaths 53,103

Coronavirus Cases 11/01/23 World 669,382,961

Deaths 6,717,887

“Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

Ronald Reagan.

Not really much need for me to comment today. Today’s articles speak loudly for themselves.

Our stock casinos are living in Never-Never Land. Things are going to get worse before, eventually, they get better. 2024 probably timed to the US presidential election.  Bunker time and I don’t mean golf.


European markets head for positive open as investors looks ahead to U.S. inflation data

UPDATED WED, JAN 11 2023 12:43 AM EST

European markets are heading for a higher open as investors gear up for more inflation data this week, with U.S. consumer price data for December due Thursday.

U.S. Federal Reserve Chairman Jerome Powell on Tuesday emphasized the need for the central bank to be free of political influence while it tackles persistently high inflation.

In a speech delivered to Sweden’s Riksbank, Powell noted that stabilizing prices requires making tough decisions that can be politically unpopular. The speech did not contain any direct clues about where policy is headed for a Fed that raised interest rates seven times in 2022, and has indicated that more increases are likely this year.

U.S. stock futures were little changed Tuesday evening, while Asia-Pacific shares traded higher as investors looked ahead to U.S. consumer price index data.

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

World Bank makes big cut to its 2023 growth outlook, says globe is ‘perilously close’ to recession

The World Bank slashed its global growth forecasts from projections it made in mid-2022 on the back of what it sees as broadly worsening economic conditions.

The international development institution downgraded almost all of its forecasts for advanced economies in the world, cutting its growth outlook for the global economy to 1.7% for 2023, it said in its latest report, Global Economic Prospects. The organization earlier projected the world economy to expand by 3% in 2023.

The adjustment was led by a significant downgrade to its prospects for the U.S. economy — it now forecasts 0.5% growth from an earlier projection of 2.4%.

The World Bank slashed its global growth forecasts from projections it made in mid-2022 on the back of what it sees as broadly worsening economic conditions.

The international development institution downgraded almost all of its forecasts for advanced economies in the world, cutting its growth outlook for the global economy to 1.7% for 2023, it said in its latest report, Global Economic Prospects. The organization earlier projected the world economy to expand by 3% in 2023.

The adjustment was led by a significant downgrade to its prospects for the U.S. economy — it now forecasts 0.5% growth from an earlier projection of 2.4%.

More

World Bank: Global economy going into recession, 2023 growth to slow (cnbc.com)

Powell says Fed might have to make unpopular decisions to stabilize prices

Federal Reserve Chairman Jerome Powell on Tuesday emphasized the need for the central bank to be free of political influence while it tackles persistently high inflation.

In a speech delivered to Sweden’s Riksbank, Powell noted that stabilizing prices requires making tough decisions that can be unpopular politically.

“Price stability is the bedrock of a healthy economy and provides the public with immeasurable benefits over time. But restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy,” the chairman said in prepared remarks.

“The absence of direct political control over our decisions allows us to take these necessary measures without considering short-term political factors,” he added.

Powell’s remarks came at a forum to discuss central bank independence and were to be followed by a question-and-answer session.

The speech did not contain any direct clues about where policy is headed for a Fed that raised interest rates seven times in 2022, for a total of 4.25 percentage points, and has indicated that more increases likely are on the way this year.

More

Powell says Fed might make unpopular decisions to stabilize prices (cnbc.com)

The Buy Now, Pay Later Bubble Is About to Burst

Many Gen Zers have rejected traditional credit in favor of new-age layaway programs, which are riskier than they may seem.

JANUARY 10, 2023, 2:37 PM ET

As familiar as Americans are with the concept of credit, many of us, upon encountering a sandwich that can be financed in four easy payments of $3.49, might think: Yikes, we’re in trouble.

 

Putting a banh mi on layaway—this is the world that buy-now, pay-later programs have wrought. In a few short years, financial-technology firms such as Affirm, Afterpay, and Klarna, which allow consumers to pay for purchases over several interest-free installments, have infiltrated nearly every corner of e-commerce. People are buying cardigans with this kind of financing. They’re buying groceries and OLED TVs. During the summer of 2020, at the height of the coronavirus pandemic, they bought enough Peloton products to account for 30 percent of Affirm’s revenue. And though Americans have used layaway programs since the Great Depression, today’s pay-later plans flip the order of operations: Rather than claiming an item and taking it home only after you’ve paid in full, consumers using these modern payment plans can acquire an item for just a small deposit and a cursory credit check.

From 2019 to 2021, the total value of buy-now, pay-later (or BNPL) loans originated in the United States grew more than 1,000 percent, from $2 billion to $24.2 billion. That’s still a small fraction of the amount charged to credit cards, but the fast adoption of BNPL points to its mainstream appeal. The popular embrace of this kind of lending system says a lot about Americans’ relationship to debt—particularly among the younger borrowers who made BNPL popular (about half of BNPL users are 33 or under). “We found that most of the people that use buy now, pay later either don’t have or don’t use a credit card,” Marco Di Maggio, an economist at Harvard, told me. He said that Gen Z was skeptical of credit cards, possibly because many of them had seen their parents sink into debt. Following the ’08 financial crisis, personal debt became a public bogeyman. The elimination of housing wealth for millions of Americans fueled a credit crunch, in which banks tightened credit standards and sharply curtailed their lending. Government agencies such as the Consumer Financial Protection Bureau also strongly discouraged overextension.

 

----Older consumers might see fractured payments on chicken thighs as a sign of financial precarity, but many young people find BNPL’s nuances liberating, Di Maggio told me. They perceive credit cards as encouraging a kick-the-can attitude toward debt, with interest steadily accruing from month to month. (Indeed, roughly 60 percent of credit-card holders don’t pay the full amount on their monthly bills, according to a McKinsey survey.) Traditional lenders profit from sustained delinquency, whereas most BNPL loan terms are fixed at six weeks. BNPL providers can offer zero-percent interest rates because they charge merchants three to four times the average credit-card processing fee. 

More

The Buy Now, Pay Later Bubble Is About to Burst - The Atlantic

Finally, when sanctions fail.

Russia's Sakhalin-1 near full oil output after Exxon exit -source

NEW DELHI, Jan 9 (Reuters) - Russia has restored oil output at its Sakhalin-1 project after struggling with production following the exit of previous operator Exxon Mobil Corp (XOM.N) due to sanctions, an industry source said.

Oil output from Russia's Sakhalin-1 project has recovered to 140,000-150,000 barrels per day (bpd), about 65% of the capacity and will soon hit full level of about 220,000 bpd, an industry source familiar with the matter said on Monday.

Sakhalin-1 output collapsed after Exxon issued force majeure and abandoned the offshore project due to Western sanctions.

Western countries and their allies imposed various sanctions on Russia after Moscow sent its troops to Ukraine for a "special military operation" in February last year. Moscow retaliated by blocking foreign investors' assets, seizing them in some cases.

Oil output of Sakhalin-1 is expected to reach near the peak level of about 200,000-220,000 bpd in "three to four weeks", said the source, who declined to be named as he is not authorised to speak to media.

Russia has established a new entity, managed by a Rosneft subsidiary, that owns investor's rights in Sakhalin-1 after the exit of ExxonMobil.

Russia last year approved requests of India's ONGC Videsh, the overseas investment arm of state-run Oil and Natural Gas Corp (ONGC.NS), and Sakhalin Oil and Gas Development Co (SODECO), a consortium of Japanese firms, to retain their 20% and 30% stake respectively in the project.

More

Russia's Sakhalin-1 near full oil output after Exxon exit -source | Reuters

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 Fed May Need to Hike Interest Rates Beyond 5%

Tue, January 10, 2023 at 12:33 p.m. GMT

(Bloomberg) -- Jamie Dimon said the Federal Reserve’s rate hikes might need to go beyond what’s currently expected, but he’s in favor of a pause to see the full impact of last year’s increases.

“I’m on the side that it may not be enough,” Dimon said. “We were a little slow getting going. It caught up. I don’t think there’s any harm done by waiting three or six months.”

The CEO of the biggest US bank made his comments ahead of US inflation data due Thursday and fourth-quarter results from top banks beginning Friday. Fed officials slowed their rate hikes last month, raising borrowing costs by 50 basis points after four consecutive 75 basis-point increases. The target benchmark rate is 4.25% to 4.5%.

The wide-ranging interview took place Monday at JPMorgan’s annual health-care investment-banking conference in San Francisco — the first time it’s been held in person since before the pandemic. Dimon, who has been an advocate for employees coming into the office, said about 60% of JPMorgan’s workforce does so full-time and “about the rest” are there half the time.

On the economy, Dimon reiterated comments he made throughout much of last year, saying that while the consumer is still strong, heightened risks remain. He cited the impact of Russia’s invasion of Ukraine and quantitative tightening.

While peers including Goldman Sachs Group Inc. and Morgan Stanley are laying off employees, JPMorgan is “still in hiring mode,” Dimon said, adding that he understands why firms are being cautious. He said wage pressure has waned a bit as attrition levels ease.

Jamie Dimon Says Fed May Need to Hike Interest Rates Beyond 5% (yahoo.com)

Christmas spending fails to keep pace with UK inflation

Surging cost of essentials forces households to rein in December purchases

10 January 2023


Christmas sales failed to match the pace of overall UK inflation in December, early data from industry bodies indicated on Tuesday.

As the cost of living crisis put a higher price tag on this year’s festive season, the British Retail Consortium, a trade association, reported that the value of its members’ total sales — mostly big supermarkets and chains — rose by 6.9 per cent last month compared with December 2021.

But despite stronger sales values, exceeding the three-month average of 4.4 per cent, “growth remained below inflation”, said BRC chief executive Helen Dickinson. December marked the “ninth consecutive month of falling volumes”.

 Consumer price inflation stood at 10.7 per cent in November, having dipped for the first time in 18 months, down from October’s 41-year high of 11.1 per cent.

The gloomy message from retailers was reflected in separate data from payments company Barclaycard, also published on Tuesday, which suggested that the surging costs of essentials had forced households to dial back on discretionary purchases.

According to Barclaycard, which gathers figures from almost half of the UK’s credit and debit card transactions, consumer card spending was 4.4 per cent up on December 2021. It also surpassed November’s annual spending growth of 3.9 per cent.

But despite the Christmas boost, spending trailed far behind the level of inflation. Outgoings on utilities climbed 40.6 per cent in December, as the cold snap prompted more households to increase their heating, leaving people with less budget room for gifts and holiday activities.

Yet, “the retail, travel and hospitality sectors all saw noticeable growth in December”, said Esme Harwood, a director at Barclays. People spent more on going out last month, with pubs, bars and clubs enjoying their biggest uplift since May 2022, as Christmas parties and the World Cup boosted takings.

Restaurants reported a fall of 3.9 per cent compared with 2021, but this was still significantly better on the 10.3 per cent year-on-year decline in November.

The rate of inflation is expected to have fallen further in December, with the Office for National Statistics set to release official figures next week. But the fall in the annual rate will not bring prices down, leaving households still exposed to cost of living pressure.

“Cost pressures show little immediate signs of waning, and consumer spending will be further constrained by increasing living costs,” noted Dickinson.

Growing business pessimism was reflected in the UK labour market, which softened at the end of 2022, according to a survey of recruiters that showed placements of permanent staff fell at the fastest rate in almost two years in December.

More

Christmas spending fails to keep pace with UK inflation | Financial Times (ft.com)

Recession fears force UK businesses to park hiring plans

TUESDAY 10 JANUARY 2023 6:00 AM

Recession fears are forcing businesses to mothball hiring plans to keep costs at a minimum, a new survey out today reveals.

KPMG and the Recruitment and Employment Confederation’s (REC) permanent hiring index stumbled to 44.5 in December from 46.4 in the previous month.

The reading has now been below the 50 point mark that separates growth and contraction, indicating the UK jobs market’s surprise resilience to the economic slowdown has been breached.

Official unemployment figures have held at multi-decade lows for months and vacancies have stayed around record levels despite experts warning the UK is on course for an at least year long recession.

However, KPMG and the REC’s figures reinforce purchasing managers’ indexes (PMI) out last week that indicated businesses are considering shedding workers or reining in recruitment drives in response to the darkening economic outlook.

“The challenging economic environment continues to constrain the jobs market,” Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, said.

London’s jobs market is the best performing in the UK and is actually on the mend, boosted by strong demand for financial services workers. 

Nonetheless, despite a rise to 46.6 from 44.4, permanent hires are shrinking in the capital.

Permanent hires do tend to soften in December, while temporary billings receive a boost due to the busy Christmas shopping period. Part-time actually expanded in December, with the index hitting 51.6.

Pay is rising far above its long-term trend, but growth is cooling, KPMG and the REC found, with the pair’s full-time wage index hitting 61.9, down slightly from 62. Part-time pay is also rising, albeit at a slower pace.

Despite accelerating pay, inflation is eroding households’ spending power. The Resolution Foundation warned yesterday that real incomes will still be below pre-pandemic levels in 2028.

Recession fears force UK businesses to park hiring plans (cityam.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.

South Korea shares eye-opening Covid statistics to defend its new rules for travelers from China

South Korea on Tuesday hit back at claims that its Covid rules for Chinese travelers are “discriminatory,” saying more than half of its imported cases are coming from China.

In a response to CNBC, Seung-ho Choi, a deputy director at the Korea Disease Control and Prevention Agency said that up to 80% of “imported confirmed cases” in South Korea are coming from China.

Choi said the number of people traveling from China who tested positive for Covid-19 went up 14 times from November to December.

Choi also said that its policies cover “all Korean nationals and non-Korean nationals coming from China. This is not confined only to Chinese people. There is no discrimination for nationality in this measure.”

“China’s COVID-19 situation is still worsening …which has created the possibility of new variants to be detected,” he said.

More

South Korea Covid rules: Not discriminatory to Chinese travelers (cnbc.com)

When will COVID-19 be over? How Austin doctors, scientists predict the future of pandemic

Mon, January 9, 2023 at 4:38 PM GMT

----Toby Hatton, a trauma nurse with Ascension Seton who did his master's thesis in pandemics and pandemic response, says pandemics usually last between three and five years.

"All it takes is one mutation the right way or one mutation the wrong way," he said, to change the trajectory of this disease.

Dr. Amy Siegel, who ran some of the clinical testing for coronavirus vaccines and treatments at Austin Regional Clinic's clinical branch, said that in a year from now we will be in an endemic mode, but "it's not ever going to go away."

"I'm optimistic that we might be nearing the end of the pandemic where COVID-19 is more like an endemic," Siegel said.

The difference between pandemic and endemic is that in a pandemic there is active fighting of an illness all the time and that the illness is winning. An endemic is like the flu, in which we have seasonal spurts, but it doesn't control us.

Learning to live with COVID-19

"We have to change our mindset and say this is what we will be living with. We have to get the vaccine to make life as normal as we can," said Dr. Meena Iyer, chief medical officer at Dell Children's Medical Center.

Lauren Ancel Meyers, a University of Texas professor and head of the UT COVID-19 Modeling Consortium, agrees. The consortium has been predicting the trajectory of this disease since it was only known to be in China.

"It doesn't seem likely that COVID-19 is going to be eradicated unless we can come up with a vaccine that is universal and everyone is willing to take it," Meyers said. "That doesn't seem likely."

What is more likely is that COVID-19 "morphs into a more manageable, less severe threat," she said. It becomes something for which we get a yearly booster vaccine and we use new oral medications from Pfizer or Merck or other treatments that are still being developed to lessen the symptoms.

"It doesn't send people to the hospital and people don't die from it, because we are able to manage it more effectively," Meyers said.

Those new oral medications and other treatments, she said, "may be game-changing."

The gift of the omicron variant

"Omicron swept through like no other wave," Meyers said. "We benefit from it with more immunity."

Even people who are still not vaccinated, but got the omicron variant of the coronavirus, now have some natural immunity. It's not as robust as a vaccination, and natural immunity is thought to decease more quickly than the vaccine's immunity.

We might now have gotten to a level of immunity that makes it harder for the virus to mutate.

More

When will COVID-19 be over? How Austin doctors, scientists predict the future of pandemic (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.

Move over, graphene. There's a new super-material in town: Graphullerene

New family of carbon super-structures discovered for futurologists to fizz over

Fri 6 Jan 2023 // 14:45 UTC

Graphene, that much-hyped super-material yet to transform industry, has competition on the block in the form of a related 3D carbon structure made up of linked balls.

The new material, dubbed graphullerene, could have potential applications in new kinds of optical and electronic devices owing to its ability to confine and polarize light as well as its quantum properties.

Researchers led by Columbia University associate professor of chemistry Xavier Roy developed the new structure by combining two existing forms of carbon. The first, graphene, is the well-known two-dimensional lattice of carbon atoms which provoked such enthusiasm and speculation following its discovery at the UK's University of Manchester in 2004. The second is fullerene, which forms the carbon lattice into a ball, named after 20th century futurist and engineer Buckminster Fuller.

The resulting two-dimensional structure of linked carbon balls is called graphullerene, and its three-dimensional solid, graphullerite. Graphullerene is made up of layers of linked fullerenes peeled into ultra-thin flakes from a larger graphullerite crystal.

Roy told online publication Phys.org that because each ball was made up of 60 carbon atoms, fullerenes could be linked in a number of different ways, resulting in a variety of electronic, magnetic, and optical properties. The current result – published in Nature this week – is just one possible configuration, he said.

"Graphullerite… crystals are charge neutral and the exfoliated molecularly thin flakes have no residual counterions or impurities, providing a platform for the investigations of confined light, and the construction of quantum-materials-based devices. This study also reveals that there is an entire family of higher and lower-dimensional super-atomic [forms] of carbon that may be chemically prepared and studied," the paper said.

More

There's a new super-material in town: Graphullerene • The Register

“As government expands, liberty contracts.”

Ronald Reagan.

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