Baltic Dry Index. 976 -67 Brent Crude 83.64
Spot Gold 1895 US 2 Year Yield 4.12 -0.08
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 13/01/23 World 670,393,039
Deaths 6,724,256
The
12th floor.
US inflation numbers released yesterday were about as expected setting off a relief rally in the US stock casinos.
But much of the slowdown came from a drop in the gasoline price reflecting the drop in crude oil prices in turn reflecting the slowdown in China’s economy due to its former Covid-19 lockdown policy.
But China as abandoned that lockdown policy and is busy reopening its economy, with a sharp rebound expected next month after this month’s slowdown for the Lunar New Year holiday ends on January 27th.
Food price inflation rose another 0.3 percent in December, suggesting that if crude oil prices start rising again from next month, food a energy price inflation will lead to higher US inflation numbers in early 2023.
Consumer prices
fell 0.1% in December, in line with expectations from economists
Inflation closed out 2022 in a modest retreat,
with consumer prices in December posting their biggest monthly decline since
early in the pandemic, the Labor
Department reported Thursday.
The consumer price index, which measures the cost
of a broad basket of goods and services, fell 0.1% for the month, in line with
the Dow Jones estimate. That equated to the largest month-over-month decrease
since April 2020, as much of the country was in lockdown to combat Covid.
Even with the decline, headline CPI
rose 6.5% from a year ago, highlighting the persistent burden that the rising cost
of living has placed on U.S. households. However, that was the smallest annual
increase since October 2021.
Excluding volatile food and energy
prices, so-called core CPI rose 0.3%, also meeting expectations. Core was up
5.7% from a year ago, once again in line.
A steep drop in
gasoline was responsible for most of the monthly decline. Prices at the pump
tumbled 9.4% for the month and are now down 1.5% from a year ago after surging
past $5 a gallon in mid-2022.
Fuel oil slid 16.6%
for the month, also contributing to a total 4.5% decline in the energy index.
Food prices increased
0.3% in December while shelter also saw another sharp gain up 0.8% for the
month and now 7.5% higher from a year ago. Shelter accounts for about one-third
of the total CPI index.
Used vehicle prices,
also an important initial driver of inflation, were off 2.5% for the month and
are now down 8.8% year over year. Medical care services increased 0.1% after
dropping for two straight months, while apparel prices rose 0.5% and transportation
services were up 0.2% and are still 14.6% higher from a year ago. However,
airline fares fell 3.1% for the month though are still up 28.5% from a year
ago.
More
December
CPI: Prices fell 0.1% reflecting a slowdown for inflation (cnbc.com)
Asia-Pacific
shares trade mostly higher following cooler U.S. inflation print
UPDATED FRI, JAN 13 2023 12:12 AM
EST
Asia-Pacific shares traded mostly higher after
the U.S. consumer price index showed
inflation cooled in December, raising investors’ hopes that the
Federal Reserve can return to slower interest rate hikes.
Hong Kong’s Hang Seng index added
0.16%. Mainland China’s Shanghai
Composite inched up 0.56% and the Shenzhen Component rose
0.55%.
Australia’s S&P/ASX 200 was
up 0.66%. The Kospi rose
0.76%, and the Kosdaq traded flat. The MSCI’s broadest index of Asia-Pacific
shares outside Japan gained 0.55%.
Bucking the overall trend is Japan’s Nikkei 225, which
fell 1.04%. The Topix declined fractionally.
China is set to release its trade
data for December later in the day.
Overnight in the U.S., major
stock indexes closed
higher after the latest U.S. consumer price index reading. The
index fell 0.1% in December, marking the largest month-over-month decrease
since April 2020.
Asia-Pacific
shares mostly higher following cooler inflation print (cnbc.com)
Stock futures are
flat as investors await big bank earnings
UPDATED THU, JAN 12 2023 6:39 PM
EST
Stock futures were flat in overnight trading
Thursday as investors braced for big bank earnings to commence.
Futures tied to the
Dow Jones Industrial Average and S&P 500 were flat, while Nasdaq 100
futures dipped 0.10%.
The overnight moves
followed a positive day for the three major indexes. The Nasdaq Composite
snatched its fifth day of gains — a first since July. Stocks rose broadly as
December’s CPI report showed prices declined 0.1% over November. While prices
rose at a 6.5% pace compared to the previous year, the results heightened hopes
that the Federal Reserve may soon slow its hiking.
The Dow Jones
Industrial Average added 216.96 points, or 0.64%. The S&P 500 and Nasdaq
Composite gained 0.34% and 0.64%, respectively, during regular trading.
Stocks are headed
for a winning week, with the Nasdaq and S&P on pace for their best weekly
performance since November. The Nasdaq is up 4.09% through Thursday’s close.
The S&P advanced 2.26%, while the Dow added 1.66%.
Eight of the 11
S&P 500 sectors finished positive Thursday, led to the upside by 2022
stalwart energy. Consumer staples stocks lagged, with the sector slipping
0.79%.
Earnings season
kicks into full gear Friday with results from big bank stocks JPMorgan Chase,
Wells Fargo, Citigroup and Bank of America. Investors will monitor the
releases, which are expected to offer more insight into the health of the
economy and set the tone for earnings season.
“As the tug-of-war
among analysts intensifies around the prospects for a recession — and the depth
of a recession — the earnings reports from the banks, coupled with their
guidance, should help clarify how businesses and consumers are managing,” said
Quincy Krosby, LPL Financial’s chief global strategist.
More
Stock futures are flat as investors await big bank earnings (cnbc.com)
Elsewhere in the US economy things weren’t
quite so rosy.
Blackrock
poised to cut 500 jobs as the world’s biggest money manager hit by downturn
THURSDAY 12 JANUARY 2023 11:52 AM
Blackrock is planning to lay off 500 staff
globally, according to reports, as the world’s largest asset manager continues
to grapple with 2022’s market sell-off.
The planned redundancies, first reported by Reuters
and Insider, represent a roughly 2.5 per cent reduction in Blackrock’s global
workforce. They were communicated to employees in an internal memo from Chief
Executive Larry Fink and President Rob Kapito, according to the reports.
Blackrock declined to comment on the reports.
News of the expected job cuts come
after a difficult year for the world’s largest asset manager. In the nine
months to September 30, Blackrock’s net income fell to $3.7bn from $4.6bn in
the same period last year, while its assets under management as of September 30
stood at $8.0bn, down from $10.0m at the beginning of 2022. It will report its
fourth quarter earnings tomorrow.
Asset managers more broadly have struggled to find
returns in a recessionary environment.
According to Morningstar figures, the US Market
Index lost 19 per cent last year – its biggest annual loss since 2008 – while
the US Core Bond Index lost 13 per cent in 2022, the worst performance since
1999.
Other major financial services companies have also
announced major cost cutting measures this week.
Goldman Sachs started laying off 3,200 staff members on Wednesday
while Credit
Suisse is reportedly considering halving its bonus pool.
Japanese investment bank Nomura also laid off 30
members of its London staff, after the global slump in dealmaking, Financial
News reported yesterday.
A Nomura spokesperson said: “2022 saw a material
deterioration in global investment banking fee pools and, as a result, we have
had to reduce headcount in certain areas. These changes are designed to ensure
we retain focus in our key areas of competitive advantage, whilst maintaining
core capabilities to position the platform for sustainable profitability.”
According Refinitiv data, mergers and acquisitions
worth $1.4tn were announced in the second half of 2022, down from $2.2tn in the
first half of the year.
Blackrock poised to cut 500 jobs as the world's biggest money manager hit by downturn (cityam.com)
Finally, in cryptoland, more bad news. Is
there ever any other kind of news?
Crypto firms
Genesis and Gemini charged by SEC with selling unregistered securities
The Securities and Exchange Commission on Thursday charged crypto
firms Genesis
and Gemini with allegedly selling unregistered securities in
connection with a high-yield product offered to depositors.
Gemini, a crypto exchange, and
Genesis, a crypto lender, partnered in February 2021 on a Gemini product called
Earn, which touted yields of up to 8% for customers.
According to the SEC, Genesis loaned Gemini users’ crypto and sent a
portion of the profits back to Gemini, which then deducted an agent fee,
sometimes over 4%, and returned the remaining profit to its users. Genesis
should have registered that product as a securities offering, SEC officials
said in a complaint filed in Manhattan federal court.
“Today’s charges build on previous actions to make
clear to the marketplace and the investing public that crypto lending platforms
and other intermediaries need to comply with our time-tested securities laws,”
SEC chair Gary Gensler said in a statement.
Gemini’s Earn program, supported by
Genesis’ lending activities, met the SEC’s definition by including both an
investment contract and a note, SEC officials said. Those two features are part
of how the SEC assesses whether an offering is a security.
The SEC says the Earn program
netted the companies billions of dollars in crypto assets. The agency is
seeking permanent injunctive relief, disgorgement, and civil penalties against
both Genesis and Gemini, and noted that “investigations into other securities
law violations and into other entities and persons relating to the alleged
misconduct are ongoing.”
The two firms have been engaged in a high-profile
battle over $900 million in customer assets that Gemini
entrusted to Genesis as part of the Earn program, which was shuttered this
week. Genesis suspended withdrawals after the failure of FTX in November caused
a rush for the exits across the crypto universe, and the firm has yet to allow
Earn customers to pull their funds.
“The U.S. retail investors who
participated in the Gemini Earn program have suffered significant harm,” the
SEC complaint read. More than 340,000 investors have been affected by the
freeze.
In the first three months of 2022, Gemini made around $2.7
million in agent fees off Earn, the SEC complaint alleges. Genesis would use
Gemini users’ assets for institutional lending or as “collateral for Genesis’
own borrowing,” the agency said.
Over the same period, Genesis paid
out $166.2 million in interest to clients, including Gemini, on $169.8 million
of interest income, the SEC said.
More
SEC
charges Genesis and Gemini with selling unregistered securities (cnbc.com)
Major media want to know who guaranteed Sam Bankman-Fried's $250
million bond
January
12, 2023 9:56 PM GMT
NEW YORK, Jan 12
(Reuters) - Eight major media outlets on Thursday asked the U.S. judge
overseeing Sam Bankman-Fried's criminal case to make public the names of two
people who helped guarantee the FTX cryptocurrency exchange founder's $250
million bond.
Saying
the public interest "cannot be overstated," lawyers for the outlets,
including Reuters, said the public's right to know Bankman-Fried's guarantors
outweighed their privacy and safety rights.
In a letter to
U.S. District Judge Lewis Kaplan in Manhattan, the lawyers distinguished the
case from another judge's December 2020 decision not to reveal who
guaranteed a bond for British socialite Ghislaine Maxwell, then accused and
later convicted of aiding in financier Jeffrey Epstein's sex crimes.
"While
Mr. Bankman-Fried is accused of serious financial crimes, a public association
with him does not carry nearly the same stigma as with the Jeffrey Epstein child
sex trafficking scandal," lawyers for the outlets wrote.
Media seeking to
identify Bankman-Fried's sureties also include the Associated Press, Bloomberg,
CNBC, Wall Street Journal publisher Dow Jones, the Financial Times, Insider and
the Washington Post. The New York Times has asked separately for the names.
A
spokesman for Mark Cohen and Christian Everdell, who represent Bankman-Fried,
declined to comment. Cohen and Everdell also represented Maxwell in her
criminal case.
More
Major
media want to know who guaranteed Sam Bankman-Fried's $250 million bond |
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.
Global recession warning as World Bank
cuts economic forecast
11
January 2023
The global economy is
"perilously close to falling into recession", according to the latest
forecast from the World Bank.
It expects the
world economy to grow by just 1.7% this year - a sharp decrease from the 3% it
predicted in June.
The report
blames a number of factors stemming from Russia's invasion of Ukraine and the
impact of the pandemic.
The effects of
higher interest rates are picked out as the key challenge for policy makers to
overcome.
World Bank
president David Malpass said the downturn would be "broad-based" and
growth in people's earnings in almost every part of the world was likely to
"be slower than it was during the decade before Covid-19".
The 1.7% growth
figure would be the lowest since 1991, with the exceptions of the recessions of
2009 and 2020, which were caused by the global
financial crisis and
the Covid
pandemic.
The World Bank said the US, the Eurozone and
China - the three most influential parts of the world for economic growth -
were "all undergoing a period of pronounced weakness", a downturn
that was worsening the problems faced by poorer countries.
After surging 5.3%
in post-pandemic 2021, growth in the world's richest economies is likely to
slow sharply from 2.5% in 2022 to just 0.5% this year.
"Over the past two decades, slowdowns of this scale have foreshadowed a global recession," the bank warned, adding that it anticipated "a sharp, long-lasting slowdown".
If a global recession were to occur, it would be the first time since the 1930s that there have been two global recessions within the same decade.
The World Bank said it expected the global pace of price rises to slow from 7.6% in 2022 to 5.2% this year, as those pressures ease.
While some "prices spikes are possible". the bank said it expected energy prices to fall in general. It pointed to an increase in global production and lower demand in Europe, where an energy crisis has led businesses and households to reduce their use of gas.
Crop prices are
also forecast to fall by 5% this year although they will still be significantly
higher than they were a few years ago, having risen by 13% in 2022.
Despite those developments, inflation is expected to remain well above the 2% rate typically considered healthy.
Central banks in dozens of countries, including the US and the UK, have been raising interest rates in response to the problem, aiming to cool their economies and ease the pressures pushing up prices.
But they are
navigating a delicate path as they try to address the cost-of-living crisis
while not tipping their economies into recession.
The World Bank
said higher borrowing costs have stifled business investments and warned that
more companies were struggling with their debts. Developing economies are also
being squeezed hard by US interest rates, which are expected to rise further.
Many of them borrow money in US dollars.
The Bank said
that even with the global economy "under pressure" the right
government policies could offer hope. It recommended measures to boost
investments and create jobs, tackle climate change, address the debts of poorer
countries and facilitate international trade.
Global
recession warning as World Bank cuts economic forecast - BBC News
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.
Data Doesn’t Support
New COVID-19 Booster Shots for Most, Says Vaccine Expert
Wed,
January 11, 2023 at 11:02 PM GMT
In a perspective published Jan.
11 in the New England Journal of Medicine, vaccine expert Dr.
Paul Offit says it’s time to rethink booster recommendations.
In the third year of the
pandemic, the population’s immune situation is vastly different from what it
was in 2019 when SARS-CoV-2 emerged. Now, most people have been vaccinated
against the virus, been infected with it (once or multiple times), or both. And
the latest data show that the newest booster shot, which targets the Omicron
BA.4/5 strain and original virus variants in a bivalent formulation, isn’t that much more effective in generating
virus-fighting antibodies than the original vaccine when used as a booster.
“The experience of the past year
has taught us that chasing these Omicron variants with a bivalent vaccine is a
losing game,” says Offit, director of the vaccine education center at the
Children’s Hospital of Philadelphia and a member of the U.S. Food and Drug
Administration’s vaccine advisory committee. Offit also developed the rotavirus
vaccine.
In his perspective piece, Offit cites
data from two leading virologists—Dr. David Ho, director of the Aaron Diamond
AIDS Research Center at Columbia University, and Dr. Dan Barouch at
Harvard Medical School—who reported that when serum from people boosted with
the bivalent Omicron booster was compared to that from people boosted with a
dose of the original vaccine, their levels of neutralizing antibodies against
BA.4/5 were comparable. Ho’s work also showed that the bivalent booster did not
produce appreciably different antibody responses against newer Omicron
variants, such as BQ.1, BQ.1.1, XBB, and now XBB.1.5,
which together account for 83% of new infections in the U.S. as of the first week
of January.
Antibodies are the immune system’s first line of defense, and
serve as the front line for blocking viruses from infecting cells. But as most
people know, either from personal experience or anecdotally through reports
from friends and family, even those who are vaccinated and have received the
Omicron BA.4/5 booster have gotten infected with the virus. While their vaccination
and boosting protected them from getting seriously sick, they weren’t immune to
infection. So why are these infections occurring if the bivalent vaccine was
supposed to zero in on the BA.4/5 variant better than the original booster?
More
Data Doesn’t
Support New COVID-19 Booster Shots for Most, Says Vaccine Expert (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.
World's new largest wind turbine sweeps 10 football
fields per spin
Loz Blain January 09, 2023
The China
State Shipbuilding Corporation (CSSC) is upping the ante on offshore wind,
announcing it's building the largest and most powerful wind turbine ever,
making a peak 18 megawatts with an enormous 260-meter (853-ft) diameter on its
three-bladed rotor.
It makes
sense for a shipbuilding enterprise to get involved with this project; the
blades of much smaller turbines are already a
huge pain to transport, so
building them right next to a dock in a facility designed for making, handling
and launching enormous structures into the water eliminates a ton of problems
as you attempt to go bigger.
Size is paramount when it
comes to wind; the longer your blades, the larger the swept area and the more
energy you can harvest from a single pole – and when it comes to offshore wind,
the sea-bed foundations carry an outsized cost, so being able to generate more
from fewer locations is a big deal.
The previous record-holder,
the MingYang
Smart Energy MySE 16.0-242 uses 118-m (387-ft) blades to sweep a
46,000-sq-m (495,140-sq-ft) area. CSSC Haizhuang's new H260-18MW turbine
increases the blade length by 8.5%, to 128 m (420 ft), bumping up the swept
area by 15.2% to 53,000 sq m (570,490 sq ft).
In the de facto
standard for putting huge areas in some kind of human context, that's a jump
from about 8.6 standard NFL football fields' worth of swept area to about 9.9.
Under peak conditions, the H260-18MW machine will generate 44.8 kWh of energy
every time it spins.
Weirdly, it
promises to deliver less power at the end of the day than the smaller MingYang
turbine. CSSC says the new size king of offshore wind, "can output more
than 74 million kilowatt-hours of clean electricity per year, which can meet
the annual electricity consumption of 40,000 households of three," while
MingYang says, "a single MySE 16.0-242 turbine can generate 80,000 MWh of
electricity every year, enough to power more than 20,000 households."
Those sound like some wildly different households.
CSSC says
that an example 1-gigawatt capacity offshore wind farm using these 18-MW beasts
would require 13% fewer units than if you'd used 16-MW turbines, and the
corresponding reduction in sea bed work, cabling and whatnot would reduce the
cost of the farm by "hundreds of millions of yuan," with each 100
million yuan representing about US$14.8 million at current exchange rates.
More
World's new
largest wind turbine sweeps 10 football fields per spin (newatlas.com)
Another weekend and a holiday weekend in the USA. Time to dress up the stock indexes today?
Have a great weekend everyone.
The
worst thing about Friday the 13th
Monday the 16th
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