Baltic Dry Index. 946 -30 Brent Crude 85.28
Spot Gold 1920 U S 2 Year Yield 4.22 +0.10
A large Bank is exactly the place where a vain and shallow person
in authority, if he be a man of gravity and method, as such men often are, may
do infinite evil in no long time, and before he is detected. If he is lucky
enough to begin at a time of expansion in trade, he is nearly sure not to be
found out till the time of contraction has arrived, and then very large figures
will be required to reckon the evil he has done.
Walter
Bagehot. Lombard Street. 1873
In
the stock casinos, more hopium.
In
Washington, District of Crooks, a debt ceiling horror show looms.
In
Davos 2023, a no show of A lists turns into the B and C list gathering of not
quite Lords of the Universe. Who wants to list Davos attendee 2023 on their
obituary?
The
old order is dying or dead pre 1914 style, but what is replacing it?
Look
away from the rising oil price, the soaring gold price, the collapsing Baltic
freight index, and the inverted US Treasury yield curve now!
Dow closes 100 points higher, S&P 500 and Nasdaq
notch best week since November
UPDATED FRI, JAN 13 2023 5:37 PM EST
Stocks rose Friday as investors digested bank
earnings and bet inflation would ease in 2023.
All of the major indexes fought their way into the
green after beginning the day deep in the red. The Dow Jones Industrial Average
rose 112.64 points, or 0.33%, to 34,302.61. The S&P 500 rose 0.40% to
3,999.09, and the Nasdaq Composite advanced 0.71% to 11,079.16.
The S&P and Nasdaq each posted their second
consecutive positive week and best weekly performance since November. The
tech-heavy Nasdaq was the outperformer for the week after rising 4.82%. The
S&P advanced 2.67%, and the Dow added 2%.
Bank earnings weighed on equities to start the
day, but sentiment reversed as investors appeared to shrug off negative news
that was expected to some degree, according to Ross Mayfield, investment
strategy analyst at Baird.
“Financials weren’t really quite
expected to have a blockbuster quarter,” he said. “It’s just providing a bit of
a sentiment wave, and since the banks lead earnings season they can kind of set
the tone for how investors look at the broader picture.”
“Frankly, the market has rallied
pretty nicely over the last few weeks, absent a catalyst, and so there might be
a little bit of profit taking out of earnings season going,” Mayfield added.
Wells Fargo, whose profits for
the last quarter had
been cut by half, said it’s preparing for the economy to “get worse
than it’s been over the last few quarters.”
JPMorgan Chase posted revenue
that beat expectations, but even so, the bank warned it’s setting aside more
money to cover credit losses because a
“mild recession” is its “central case.” The bank posted a $2.3
billion provision for credit losses in the quarter, a 49% increase from the
third quarter.
The CEOs of Citigroup and
Bank of America also said they’re anticipating a “mild recession.”
Elsewhere, Delta Air Lines
reported earnings and revenue that beat estimates for the final quarter of
2022. However, the stock slid 3.5%. Investors have been awaiting these results
to gain more insight into the health of the economy.
In economic data, the University
of Michigan consumer sentiment survey showed the one-year inflation outlook
down to 4%, the third straight monthly decrease and the lowest level since
April 2021.
That followed December’s CPI
report, released Thursday, which 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.
Dow
closes 100 points higher, S&P 500 and Nasdaq notch best week since November
(cnbc.com)
Yellen warns of U.S. default risk by
early June, urges debt limit hike
January 14, 2023 1:33
AM GMT
WASHINGTON, Jan 13 (Reuters) - U.S. Treasury
Secretary Janet Yellen said on Friday the United States will likely hit the
$31.4 trillion statutory debt limit on Jan. 19, forcing the Treasury to launch
extraordinary cash management measures that can likely prevent default until
early June.
"Once the limit is reached, Treasury will need
to start taking certain extraordinary measures to prevent the United States
from defaulting on its obligations," Yellen said in a letter to new
Republican House of Representatives Speaker Kevin McCarthy and other
congressional leaders.
She urged the
lawmakers to act quickly to raise the debt ceiling to "protect the full
faith and credit" of the United States.
"While
Treasury is not currently able to provide an estimate of how long extraordinary
measures will enable us to continue to pay the government's obligations, it is
unlikely that cash and extraordinary measures will be exhausted before early
June," the letter said.
Republicans
now in control of the House have threatened to use the debt ceiling as leverage to
demand spending cuts from Democrats and the Biden administration. This has
raised concerns in Washington and on Wall Street about a bruising fight over
the debt ceiling this year that could be at least as disruptive as the
protracted battle of 2011, which prompted a brief downgrade of the U.S. credit
rating and years of forced domestic and military spending cuts.
The White House said on Friday after Yellen's
letter that it will not negotiate over raising the debt ceiling.
"This should be done without conditions,"
White House spokesperson Karine Jean-Pierre told reporters. "There’s going
to be no negotiation over it."
---- Yellen's
estimate expressing confidence that the government could pay its bills only
through early June without increasing the limit marks a deadline considerably
sooner than forecasts by some outside budget analysts that the government would
exhaust its cash and borrowing capacity - the so called "X Date" -
sometime in the third quarter of calendar 2023.
Analysts have noted that some Treasury bills
maturing in the second half of the year are sporting a premium in their yields
that may be tied to elevated risk of a default in that window.
More
Yellen
warns of U.S. default risk by early June, urges debt limit hike | Reuters
In
other news, no one wants to be seen in Davos this year. But how will the Lords
of the Universe be able to rig 2023?
Just one G-7 leader will join the Davos elite this year
as regular people battle cost-of-living crisis
Olaf Scholz is the only G-7 leader set to attend
the World Economic Forum’s annual summit in Davos next week, with the German
chancellor due to speak on the main stage for the second time since taking
office in 2021.
It is not the first time the summit
has been sparsely attended by leaders from the powerful political union. Over
the last decade, sometimes only two or three have made it to the picturesque
Swiss mountain resort, and in 2017 only the U.K.’s Theresa May made an
appearance — although it did attract
Chinese President Xi Jinping. Their reasons for absence often
involve more pressing issues being tackled at home.
But it does mark a decline from
more recent years. The record was in 2018, when six of the seven attended. That
included former U.S. leader Donald Trump, who attended twice during his one
term in office, unlike his predecessor Barack Obama, who never attended.
The 2023 summit, which is a return
to tradition after two years of pandemic disruption saw it held
online in 2021 and held
in May rather than January in 2022, will nonetheless be packed
with high-profile names from the worlds of business and finance, politics,
media, academia and civil society.
Held under the tagline of
“Cooperation in a Fragmented World” from Jan. 16-20, panelists and keynote speakers include
South African President Cyril Ramaphosa, former U.S. Secretary of State Henry
Kissinger, World Health Organization Director General Tedros Ghebreyesus, U.N.
Secretary General Antonio Guterres, and the actor Idris Elba.
Scholz is due to give a special
address on Wednesday at 3:45 p.m. local time. His own predecessor, Angela
Merkel, was a regular Davos presence during her 16-year term, most recently challenging the
increasing “own interests first” mentality of some nations in 2019.
While Scholz’s G-7 counterparts
will all have their own reasons for their absence, politicians are inevitably
wary of being seen “hobnobbing with a global financial elite,” Ed Owen, a
former political advisor and founder of consultancy The Story Network, told
CNBC.
More
Germany's
Scholz only G7 leader set to attend Davos (cnbc.com)
Finally,
a potential setback for ending global food price inflation.
Drought in Americas Threatens Outlook for
Crucial Crop Supplies
13 January 2023 at 12:00 GMT
From devastating droughts to millions of hungry
chickens and the Philippines’ onion crisis, here’s a snapshot of recent
key food stories from around the world:
Crop Outlook
Grain traders are closely watching Argentina where the
worst drought in 60 years threatens the outlook for soybeans. Harvest
estimates are getting slashed — including from forecasters using
satellite imagery. If dry weather doesn’t abate by the second quarter, the
country’s output could be the smallest since 2009, the the Buenos Aires
Grain Exchange said.
Argentina is the world’s top soy meal and soy
oil exporter and prices have rallied, with soybean meal futures
reaching a nine-month high in Chicago this week. Now, some traders
are beginning to secure oilseed supplies for processing from Brazil, which in
contrast is set for bumper harvests.
And on Thursday, the US government made a surprise cut to
domestic corn and soy supply estimates because of dryness.
Trade Curbs
In wheat, there are good supplies
coming from India. It’s set to collect a record amount this season as
favorable weather and heat-resistant seeds are expected to boost
yields. That could set the stage for the country to lift export restrictions.
In another move that would mark further
easing of a global wave of food protectionism, the country is considering removing restrictions
on rice exports thanks to adequate government stockpiles.
More Food for Thought
Bird flu devastating
poultry flocks continues to spread, with Japan culling close to 10 million
birds in a record outbreak as authorities struggle to tamp down the
disease. Millions of chickens have gone unfed as rail
disruptions delay corn shipments to a California poultry farm.
More
Supply Chain Latest: Drought Threatens Crops in
Argentina and US - Bloomberg
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.
Does easing US inflation point the way for the world?
13
January 2023
The US helped spark a global surge in the cost of living. Now that the country's price inflation shows signs of easing, does it point the way for the rest of the world?
The US was the first major economy where inflation
took root, as a wave of pandemic relief money from the government set off a
boom in activity and spending.
The price increases soon spread overseas, as strong demand from American buyers pushed up the cost of oil and other essentials, global shipping firms raised fees, and companies faced with shortages hiked prices.
Then, when the US central bank started raising interest rates to fight the problem, it triggered a rush of money into the country, sending the dollar to its strongest level in two decades - and raising costs in other countries even more.
The US was hardly the only force behind the sudden rise in the cost of living - the war in Ukraine also played a massive role, knocking out food supplies and disrupting energy markets, especially in Europe.
Still, analysts say that if America's inflation problem is improving, that is good news for the rest of the world, especially if it means the central bank can ease up on its fight, allowing exchange rates to stabilise.
"To the extent that US inflation slows, that's going to be helpful for the inflation situation in the rest of the world," says Maurice Obstfeld, a professor of economics at the University of California, Berkeley and a senior fellow at the Peterson Institute for International Economics.
But, he cautions, so far the price easing remains
modest: "We don't want to get ahead of ourselves."
More
Does easing US inflation point the way for the world? - 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.
The new
variant sweeping America. Approx. 20 minutes.
XBB.1.5 most will
catch this soon
XBB.1.5 most will catch this soon (rumble.com)
World
Health Organization - Landscape of COVID-19 candidate vaccines. https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines
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 more useful Covid links.
Johns Hopkins Coronavirus
resource centre
https://coronavirus.jhu.edu/map.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, I’ve added this section.
This weekend, great news for Sweden
and Europe if you don’t mind waiting until 2032-2037.
Game changer? Europe's biggest ever discovery of rare metals
used to make phones and cars
12
January 2023
The largest discovery of
rare earth metals in European history has sparked hopes of countering Chinese
dominance in the sector.
Swedish mining company LKAB said it found more than one million tonnes
of the rare resources used to make smartphones, electric vehicles, wind
turbines and speakers in the nation's Arctic region.
EU leaders hope the discovery will counter Chinese and Russian dominance
over the mining of rare earth metals.
Rare earth elements have not been mined in Europe, making the continent
dependent on imports from elsewhere.
Demand for them is expected to rise in coming years due to a spike in
demand for electric vehicles and renewable energy products.
LKAB chief executive Jan Mostrom said: "This is good news, not only
for LKAB, the region and the Swedish people, but also for Europe and the
climate.
"It could become a significant building block for producing the
critical raw materials that are absolutely crucial to enable the green
transition."
The vast majority of the rare earth minerals are currently mined in
China, where many of the world's most popular electronics are made.
Swedish energy minister Ebba Busch said: "Electrification, the EU's
self-sufficiency, and independence from Russia and China will begin in the
mine."
However, LKAB said it would be at least 10 to 15 years before it could
potentially begin mining the deposit and shipping to market.
Game changer?
Europe's biggest ever discovery of rare metals used to make phones and cars
(msn.com)
This weekend’s music diversion. Approx.
8 minutes.
Virtuoso
Baroque Trumpet Concertos. Bahb Civiletti's "The Art of the High
Baroque".
Virtuoso
Baroque Trumpet Concertos. Bahb Civiletti's "The Art of the High Baroque".
- YouTube
This
weekend’s chess update. Approx.15 minutes.
She
Was Something Else
She
Was Something Else - YouTube
This
weekend’s maths update. Approx. 9 minutes.
Card
Memorisation (using numbers) – Numberphile
Card
Memorisation (using numbers) - Numberphile - YouTube
“It is hard for us, without being flippant, to even see a scenario
within any kind of realm of reason that would see us losing one dollar in any
of those [Credit Default Swap] transactions.”
Joseph J. Cassano, former head
of A.I.G. Financial Products, London, August 2007. AIG was bailed out with 85
billion September 2008, after Cassano’s riskless CDS blew up.
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