Baltic Dry Index. 703 -18 Brent Crude 86.19
Spot Gold 1948 US 2 Year Yield 4.11 -0.01
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 26/01/23 World 674,034,619
Deaths 6,751,973
In any
great organization it is far, far safer to be wrong with the majority than to
be right alone.
John Kenneth Galbraith.
In the stock casinos, confusion. How to gamble in a world full of conflicting signals.
In the real world, more sings of a slowing global economy, but China’s reopening will solve that, won’t it?
But what if it doesn’t? What if all the interest rate rises are only now working their way through businesses and the G-7 economies?
Below, this morning’s mixed bag.
Asia-Pacific
markets trade mixed as investors digest slew of economic data
UPDATED THU, JAN 26 2023 12:41 AM
EST
Asia-Pacific shares traded mixed on Thursday as
investors digested a slew of economic data.
Hong Kong’s Hang Seng index and
Hang Seng Tech Index rose 1.79% and 3.26% respectively in their first hour of
trade, leading gains in the region.
The Nikkei 225 and
Topix dipped 0.22% and 0.24% respectively following the release of the Bank of Japan’s summary of opinions from
last week’s meeting. The Japanese
yen last stood at 129.26 against the U.S. dollar.
The Kospi rose 0.6% and
the Kosdaq added 0.94% even as South Korea’s gross domestic product shrank 0.4%
in the fourth quarter, marking the first contraction in more than two years.
Philippines’ gross domestic product expanded a
strong 7.2% in the fourth quarter. Hong Kong is slated to release trade data.
Singapore is posting its manufacturing output data for the month of December
later in the day.
Markets in China and Australia
are closed for a holiday.
Overnight in the U.S., stocks mostly
dipped, as technology stocks languished following Microsoft’s
lackluster guidance.
Singapore factory
output contracts 3.1%, extending decline since October
Singapore’s
annualized manufacturing output for December fell 3.1%, performing better than
Reuters’ expectations of a 6.9% dive.
The reading marks
the third consecutive decline since October, and comes after November’s figure
of a 3.2% dip.
On a month-on-month
basis, Singapore’s manufacturing output data rose 3.2%, compared against a
1.2% decline in the previous month.
Asia-Pacific
markets, trade data, Bank of Japan (cnbc.com)
South Korea’s
economy shrank for the first time in two years, but growth is expected from
China’s reopening
T
South Korea’s economy saw its first quarterly
contraction since the second quarter of 2020, according to advance estimates released by the central
bank.
Real gross domestic product fell by
0.4% in the final quarter of 2022 compared with the previous quarter, according
to the Bank of Korea — reversing gains seen in the three months prior and
shrinking more than the 0.3% contraction forecast by economists in a Reuters
poll.
The worsening conditions in South Korea’s economy signaled that a
recovery, once seen coming from “revenge-spending” consumers putting the pandemic behind them, may
be fading sooner than expected.
A sharp, 5.8% decline in exports dragged down the
overall reading, alongside a 4.1% drop in manufacturing and 0.4% contraction in
private consumption, the central bank said in its release.
Still, South Korea’s benchmark Kospi stock
index continued to show gains for a fourth consecutive session on Thursday,
trading 0.7% higher in the afternoon. The Korean won hovered
at slightly stronger levels, last standing at 1,232.13 against the U.S. dollar.
More
South
Korea economy shrinks, but growth expected from China reopening (cnbc.com)
European markets
head for higher open as positive momentum builds
UPDATED THU, JAN 26 2023 12:26 AM EST
European markets are heading for a higher open
Thursday, building on positive momentum seen in the previous trading session.
Markets have been
buoyed by data this week showing improved business sentiment in Germany and an
uptick in eurozone services and manufacturing activity, prompting optimism that
a recession in the eurozone might be avoided.
Elsewhere
overnight, Asia-Pacific
shares traded mixed on Thursday as investors digested a slew of
economic data, while S&P
500 futures advanced modestly as investors sifted through the
latest batch of corporate earnings that dropped after the bell.
European
markets open to close: stocks, data, earnings and news (cnbc.com)
Legendary investor
Jeremy Grantham says the stock market could crash 50% this year as the bubble
enters its 'final phase'
Tue,
24 January 2023 at 5:59 pm GMT
Even a new year can't shake the
bearishness from GMO's Jeremy Grantham, who said in a Tuesday letter that the stock market will drop another 20% this
year.
Grantham said the ongoing
deterioration of financial conditions will be capped off by a downturn in the
housing market, representing the "final phase" of the stock market
bubble that should help drive the S&P 500 to 3,200 by year-end.
In a worst-case scenario,
Grantham sees the S&P 500 falling as much as 50% to about 2,000.
"Even the direst case of a
50% decline from here would leave us at just under 2,000 on the S&P, or
about 37% cheap. To put this in perspective, it would still be a far smaller
percent deviation from trendline value than the overpricing we had at the end
of 2021 of over 70%. So you shouldn't be tempted to think its absolutely cannot
happen," Grantham warned.
The key to whether or not
Grantham's bleak scenario plays out this year hinges on investor confidence,
which was on a slow yet steady decline throughout 2022 as every rally in stocks
ended up being sold. Similar to 2000 or 2007, any substantial drop in investor
confidence could lead to a swift unwind in asset prices, according to the
note.
Some of the "pins" that
could pop investor confidence include housing markets rolling over, the economy entering a recession, and corporate profits starting to fall. The debt ceiling is another overhang for investors this year.
"Almost any pin can prick
such supreme confidence and cause the first quick and severe decline,"
Grantham said. "To prick these bubbles all you have to do is have
investors question whether their nearly perfect economic and financial conditions
can indeed be extrapolated forever."
And investors shouldn't look to the Federal Reserve for help
in the form of interest rate cuts, according to Grantham. That's because in
1929, 2000, and 2007, the largest part of the stock market decline occurred after
the first rate cut from the Fed.
More
Strong
U.S. economic growth expected in fourth quarter, outlook darkening
January
26, 2023 5:02 AM GMT
WASHINGTON, Jan
26 (Reuters) - The U.S. economy likely maintained a strong pace of growth in
the fourth quarter as consumers boosted spending on goods, but momentum appears
to have slowed considerably towards the end of the year, with higher interest
rates eroding demand.
The
Commerce Department's advance fourth-quarter gross domestic product report on
Thursday could mark the last quarter of solid growth before the lagged effects
of the Federal Reserve's fastest monetary policy tightening cycle since the 1980s
kick in. Most economists expect a recession by the second half of the year,
though mild compared to previous downturns.
Retail sales have
weakened sharply over the last two months and manufacturing looks to have
joined the housing market in recession. While the labor market remains strong,
business sentiment continues to sour, which could eventually hurt hiring.
"This
looks like it could be the last really positive, strong quarterly print we'll
see for a while," said Sam Bullard, a senior economist at Wells Fargo
Securities in Charlotte, North Carolina. "Markets and most people will
look through this number. More recent data are suggesting that economic
momentum is continuing to slow."
More
Strong
U.S. economic growth expected in fourth quarter, outlook darkening | Reuters
Finally,
in cryptoland news, things get curioser and curioser.
BlockFi secret
financials show a $1.2 billion relationship with Sam Bankman-Fried’s crypto
empire
PUBLISHED TUE, JAN 24 2023 7:52
PM EST UPDATED TUE, JAN 24 2023 11:46 PM EST
Bankrupt crypto lender BlockFi had over $1.2 billion in assets
tied up with Sam Bankman-Fried’s FTX and Alameda Research, according to
financials that had previously been redacted but were mistakenly uploaded on
Tuesday without the redactions.
BlockFi’s exposure to FTX was greater than prior
disclosures suggested. The company filed for Chapter 11 bankruptcy protection
in late November, following the collapse of FTX,
which had agreed to rescue the struggling lender before its own meltdown.
The balance shown in the unredacted BlockFi filing
includes $415.9 million worth of assets linked to FTX and $831.3 million in
loans to Alameda. Those figures are as of Jan. 14. Both of Bankman-Fried’s
firms were wrapped into FTX’s November bankruptcy, which sent the crypto
markets reeling.
Lawyers for BlockFi had said earlier that the loan
to Alameda was valued at $671 million,
while there were an additional $355 million in digital assets frozen on the FTX
platform. Bitcoin and ether have since rallied, lifting the value of those
holdings.
The financial presentation was assembled by M3
Partners, an advisor to the creditor committee. The firm is represented by law
firm Brown Rudnick and is entirely composed of BlockFi clients who are owed
money by the bankrupt lender.
More
BlockFi secret financials show $1.2 billion tie to FTX and Alameda (cnbc.com)
Exclusive:
Binance moved $346 mln for seized crypto exchange Bitzlato
January 24, 2023
6:17 PM GMT
LONDON, Jan 24 (Reuters) - Crypto giant
Binance processed almost $346 million in bitcoin for the Bitzlato digital
currency exchange, whose founder was arrested by U.S. authorities last week for
allegedly running a "money laundering engine," blockchain data seen
by Reuters show.
The Justice Department on Jan. 18 said
it charged
Bitzlato’s co-founder and majority shareholder Anatoly Legkodymov, a
Russian national living in China, with operating an unlicensed money exchange
business that "fueled a high-tech axis of cryptocrime" by processing
$700 million in illicit funds.
Bitzlato had touted the laxity of its
background checks on clients, the Justice Department said, adding that when the
exchange did ask users for ID information, "it repeatedly allowed them to
provide information belonging to "straw man" registrants."
Binance, the world's largest crypto
exchange, was among Bitzlato's top three counterparties by the amount of bitcoin
received between May 2018 and September 2022, the U.S. Treasury's Financial
Crimes Enforcement Network (FinCEN) said last week.
More
Exclusive: Binance
moved $346 mln for seized crypto exchange Bitzlato | Reuters
Will Bitcoin mint
more millionaires or is this just a 'dead cat bounce'? Here are 3 reasons why
Warren Buffett says crypto 'will come to a very bad ending'
Mon,
23 January 2023 at 5:00 pm GMT
It's been a tough year for Bitcoin
and its backers. Even back in 2018, the Oracle of Omaha himself predicted that
it and other cryptocurrencies were headed for trouble.
"They will come to a very bad
ending," Warren Buffett told CNBC at the time.
After hitting an all-time peak of
around $69,000 per unit on November 10, 2021, the world's leading digital
currency has since erased roughly 67% of its value, sitting at about $23,000
right now.
To be sure, bitcoin has rallied in
recent weeks, up nearly 40% so far in 2023.
But what would the world's most
famous investor say to those who might be thinking of buying Bitcoin right now?
“If you ... owned all of the bitcoin
in the world and you offered it to me for $25, I wouldn’t take it,” Buffett
told CNBC earlier this year.
Other than Bitcoin's disappointing
track record, here are three more reasons Buffett won’t go near it.
More
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 is
cooling, but prices on many items are going to stay high for months
PUBLISHED WED, JAN 25 2023 5:00
AM EST
Inflation may be
cooling. But, for most Americans, the price of a cup of coffee or a bag of
groceries hasn’t budged.
In the months ahead,
the big question is whether consumers will start to feel relief, too.
Over the past few months, many of the key factors that fueled a four-decade high in inflation have begun to fade. Shipping costs have dropped.
Cotton, beef and other commodities have gotten cheaper. And shoppers found
deeper discounts online and at malls during the holiday
season, as retailers tried
to clear through excess inventory. Consumer prices fell
0.1% in December compared with the prior month, according to the Labor
Department. It marked the
biggest monthly drop in nearly three years.
But cheaper freight and commodity costs won’t
immediately trickle down to consumers, in part due to supplier contracts that
set prices for months in advance.
Prices are still well above where they were a year ago. The headline consumer
price index, which measures the cost of a wide variety of goods and services,
is up 6.5% as of December, according to Labor Department data. Some price
increases are eye-popping: The
cost of large Grade A eggs has more than doubled, while the price tags for cereal and bakery products have
climbed 16.1%.
“There are some prices, some goods for which
prices are falling,” said Mark Zandi, chief economist of Moody’s Analytics.
“But broadly, prices aren’t falling. It’s just that the rate of increase is
slowing.”
Retailers, restaurants, airlines and other
companies are deciding whether to pass on price cuts or impress investors with
improved profit margins. Consumers are getting pickier about spending. And
economists are weighing whether the U.S. will enter a recession this year.
More
Inflation is cooling, but high prices will stick around (cnbc.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.
DOD Awards New $3 Million Grant
to EcoHealth Alliance Group Tied to Wuhan Lab
January 24, 2023Updated: January 24, 2023
The Department of Defense (DOD) in December awarded a $3 million
grant to EcoHealth Alliance Inc, the nonprofit
organization that for years prior to the COVID-19 pandemic funneled money to the Wuhan Institute of Virology in China.
The DOD awarded the
approximately $2,987,827.07 grant to EcoHealth beginning Dec. 12 for the
purpose of “reducing the threat of viral spillover from wildlife in the
Philippines,” according to USASpending.gov, a database of spending by
the federal government.
The grant will expire in December
2025, the records show.
According to records, the grant
was awarded as part of a Defense Threat Reduction Agency (DTRA) program
that aims to “support and stimulate basic, applied and advanced research at
educational or research institutions, non-profit organizations, and commercial
firms, which support the advancement of fundamental knowledge and understanding
of the sciences with an emphasis on exploring new and innovative research for
combating or countering Weapons of Mass Destruction (WMD).”
DTRA has spent from $100,000
per year to $1,000,000 per year over a 5-year period on such research,
according to the System for Award Management (SAM).
EcoHealth Alliance describes
itself as a “global environmental health nonprofit organization dedicated to
protecting wildlife and public health from the emergence of disease,” on its
official website.
However, the New York-based
nonprofit has come under scrutiny from Republican lawmakers and experts after
documents released in 2021 detailed its work using federal money to fund
research into bat coronaviruses at the Chinese lab.
According to the documents, the
National Institutes of Health (NIH) awarded a number of grants
to EcoHealth Alliance between 2014 and 2019 amounting to over $3
million, including one for $666,422 for research into “Understanding the Risk of Bat
Coronavirus Emergence.”
Led by EcoHealth Alliance
President Peter Daszak, the research was set to “investigate the ecology,
evolutionary biology, and transmission dynamics of bat coronaviruses at the
human-wildlife interface.”
“Specifically, we will conduct
field studies in China to obtain high-quality samples from bats, and identify,
characterize and isolate known and novel coronavirus,” the grant proposal
reads. “We will analyze the patterns of coronavirus transmission among
bats and other wildlife, and the risk of spillover to humans.”
---- Daszak, who
has dismissed the lab leak theory, was initially part of the World Health
Organization (WHO) team investigating the origins of COVID-19 in China, but the
team’s report was largely hindered by Beijing’s lack of data.
NIH subsequently ended a subgrant to EcoHealth in 2020, some of which was
conveyed to the Wuhan Institute of Virology, due to its failure to
meet award terms and conditions.
However, in September
2022, EcoHealth Alliance received another government grant from the National Institute of
Allergy and Infectious Diseases (NIAID), previously headed by Anthony Fauci,
despite those concerns over its violation of the term of its contracts.
More
DOD Awards New $3
Million Grant to EcoHealth Alliance Group Tied to Wuhan Lab (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.
Australian
battery company signals plan to bid for Britishvolt
Founder of Recharge Industries
to meet UK officials this week
25
January 2023
An Australian battery company has made a preliminary bid for collapsed UK
battery producer Britishvolt as it seeks to capitalise on closer ties forged
between Australia and the UK over the past year to rescue the business.
David
Collard, founder of Recharge Industries, told the Financial Times that he will
tour the Britishvolt site in Northumberland this week and meet British
government officials before making a formal offer.
Collard said Britain’s free trade agreement with Australia and the Aukus security alliance should reinforce the benefits of combining Britishvolt with his company’s existing plan to construct a battery factory in Geelong, a coastal city in Australia, by 2024
“We’re a pin that brings it all together,” he said, adding that Recharge already
has the backing of Jefferies and another international bank.
The
collapse of Britishvolt this month extinguished the UK’s hopes of incubating a
world-leading global battery maker. The business, once valued at £700mn, is
expected to attract bids of less than £10mn.
Collard
is up against a dozen potential bidders for the site, which include Jaguar Land
Rover owner Tata Motors and DeaLab, a London-based financial group with close
links to Indonesia.
Administrators
are expected to sell the remnants of the business — including its site located
in Blyth and 26 technical staff — by the end of the month.
The UK government offered Britishvolt £100mn
in funding, before it collapsed, based on the condition that it must begin
construction work on the site in Blyth, Northumberland to unlock the money.
Collard said Recharge would want to secure that money if it takes over.
Recharge
was launched in 2021 by Scale Facilitation, ex-PwC partner Collard’s New
York-based investment vehicle which has backed a handful of start-ups in the
medical technology and green energy sectors.
----Collard
said that Recharge would likely transfer its lithium-ion battery technology
being used at the Geelong plant to Blyth to speed up the revival of the British
site.
That would mean switching technologies to
batteries based on lithium, rather than cobalt and nickel as was planned, but
Collard said that would enable Recharge to achieve efficiencies of scale by
constructing both plants at the same time.
He said that Recharge’s existing global chain
of 230 suppliers could be linked with the British business to accelerate its
launch.
More
Australian battery
company signals plan to bid for Britishvolt | Financial Times (ft.com)
Nothing is so admirable in
politics as a short memory.
John Kenneth Galbraith.
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