Baltic Dry Index. 801 -73 Brent Crude 86.48
Spot Gold 1928 US 2 Year Yield 4.09 +0.03
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 20/01/23 World 672,559,769
Deaths 6,739,772
“The problem with fiat money is that it rewards the minority that
can handle money, but fools the generation that has worked and saved money.”
“Adam Smith” aka George Goodman.
In the stock casinos, an east-west
split. But with China due to fully reopen after the Lunar New Year holiday, global
inflation is likely to rise as pent up Chinese demand hits still dodgy supply
chains, making it impossible for western central banks do little more than slow
their rate of key interest rate increases.
My money is on the west being
correct in this east-west stock casino split.
Besides, a nasty unnecessary debt
ceiling war has just broken out in Washington, District of Crooks. Though team
Biden have until early June to head off financial catastrophe, delay is not a
card they hold.
Asia-Pacific
markets rise as Japan’s inflation data reaches highest since 1981
UPDATED THU, JAN 19 2023 11:59 PM
EST
Markets in
the Asia-Pacific traded mostly higher on Friday as investors digested Japan’s
inflation data. The nationwide core consumer price index rose
4% in December on an annualized basis, the fastest pace since 1981.
The Nikkei 225 gained
0.32% and the Topix traded 0.4% higher. The yield on the 10-year Japanese
Government Bond inched
lower to stand at 0.406%, slightly below the central bank’s upper ceiling of
its tolerance range.
The Kospi in
South Korea rose 0.37% and the Kosdaq gained 0.62%. In Australia, the S&P/ASX 200 pared
earlier losses to gain 0.26%.
Hong Kong’s Hang Seng index rose
1% and the Hang Seng Tech index climbed 1.59%, leading gains in the region.
Mainland China’s Shanghai Composite traded
0.54% higher as the nation’s central bank left China’s 1-year and 5-year loan
prime rates unchanged. The Shenzhen
Component was up 0.4%.
Stocks on Wall
Street fell Thursday as investors grew increasingly concerned
the Federal Reserve will keep raising rates despite signs of slowing inflation.
The Dow Jones Industrial Average posted saw the third straight negative
session, giving up gains from a short-lived new year’s rally.
More
Asia-Pacific
markets: Japan inflation data, China Loan Prime Rates (cnbc.com)
Stocks
close down, putting all three major indexes on track for weekly losses
JAN. 19, 2023 / 5:35 PM
Jan. 19 (UPI) -- U.S. stocks closed lower Thursday amid ongoing fear
that the Federal Reserve will continue to raise
interest rates in February.
The Dow Jones
Industrial Average fell 252.4 points, or 0.76%, to close at 33,044.56. The
S&P 500 dropped 30.01 points, or 0.76%, to 3,898.85, and the Nasdaq
Composite slid 104.74 points, or 0.96% to 10,852.27.
"Despite
all the big-tech post-pandemic layoffs, the jobs market remains hot," Ed
Moya, senior market analyst at Oanda said, according to CNBC.
"The labor market needs to break to allow the Fed to comfortably keep
rates on hold."
Federal
Reserve Governor Lael Brainard said in a speech in Chicago Thursday
that the Fed is "determined to stay the course."
"Even
with the recent moderation, inflation remains high, and policy will need to be
sufficiently restrictive for some time to make sure inflation returns to 2% on
a sustained basis," she said.
The
Federal Open Market Committee will consider rate hikes at its next meeting Jan.
31-Feb. 1. The Fed raised the federal fund rates seven times in 2022, from near
zero in March to its current range of 4.24% to 4.5%.
The
federal funds rate guides how much banks charge one another for overnight
lending, which trickles down, affecting the economy in all sorts of ways,
including how much banks charge consumers for things like mortgages, auto loans
and credit cards.
---- Thursday's
declines put all three major indexes on pace for their first weekly losses of
the year.
"The
factors driving the sharp YTD rally (short covering, risk bid and lower yields)
appear to be hitting their near-term bounds," Christopher Harvey, head of
equity strategy at Wells Fargo Securities said, according to CNBC. "This
will likely will cause the market to trade sideways-to-down over the short
term."
More
Stocks
close down, putting all three major indexes on track for weekly losses -
UPI.com
America Hit Its Debt Limit, Raising Economic Fears
WASHINGTON — The United States hit its debt
limit on Thursday, prompting the Treasury Department to begin using a series of accounting maneuvers to
ensure the federal government can keep paying its bills.
In a letter to Congress, Treasury
Secretary Janet L. Yellen said the government would begin using what’s known as
“extraordinary measures” to prevent the nation from breaching its statutory
debt limit and asked lawmakers to raise or suspend the cap so that the
government can continue meeting its financial obligations.
“The period of time that
extraordinary measures may last is subject to considerable uncertainty,
including the challenges of forecasting the payments and receipts of the U.S.
government months into the future,” Ms. Yellen said. “I respectfully urge
Congress to act promptly to protect the full faith and credit of the United
States.”
The
milestone of hitting the country’s $31.4 trillion
debt cap is the product of decades of tax cuts and increased
government spending by both Republicans and Democrats. But at a moment of
heightened partisanship and divided government, it is also a warning of the
entrenched partisan battles that are set to dominate Washington in the months
to come, and that could end in economic shock.
Newly
empowered Republicans in the House have vowed that they will not raise the
borrowing limit again unless President Biden agrees to steep
cuts in federal spending. Mr. Biden has said he will not negotiate conditions
for a debt-limit increase, arguing that lawmakers should lift the cap with no
strings attached to cover spending that previous Congresses authorized.
Treasury officials estimate the
measures that they began using on Thursday will enable the government to keep
paying federal workers, Medicare providers, investors who hold U.S. debt and
other recipients of federal dollars at least until early June.
But economists warn that the
nation risks a financial crisis and other immediate economic pain if lawmakers
do not raise the limit before the Treasury Department exhausts its ability to
buy more time.
The
episode has prompted fears in part because of the lessons both parties have
taken from more than a decade of debt-limit fights. A bout of brinkmanship in
2011 between House Republicans and President Barack Obama nearly ended in the
United States defaulting on its debt before Mr. Obama agreed to a set of caps on
future spending increases in exchange for lifting the limit.
Most Democrats have
solidified in their position that negotiations over the debt limit only enhance
the risks of economic calamity by encouraging Republicans to use it as
leverage. That is particularly true of Mr. Biden, who successfully stared down
Republicans and won an increase in 2021 with no stipulations.
Newly elected
Republicans, emboldened by anger among their base and conservative advocacy
groups over failures in the past to exact concessions for raising the limit,
have pledged not to let that happen again.
More
America
Hit Its Debt Limit, Raising Economic Fears – DNyuz
In other news.
China’s recovery
may mean the Fed will have to hike rates longer
PUBLISHED THU, JAN 19 2023 12:43
AM EST
As the end of China’s stringent Covid restrictions
quickens the country’s economic recovery,
concerns about pent-up Chinese demand — and the inflation that may follow —
could mean bad news for the U.S. Federal Reserve.
Economic data indicates
that the Fed’s aggressive rate hikes are pulling down U.S. inflation, but
China’s demand could make commodity prices return to levels from early 2022,
before the U.S. central bank embarked on its journey of hiking rates to bring
down inflationary pressures.
“In our view ... a stronger China increases the chances of a
stubbornly hawkish Fed,” Tavis McCourt, institutional equity strategist at
Raymond James, said in his 2023 Outlook.
“With China, we do
need more of everything – if that drives enough demand to get commodity prices
back up closer to where they were in the spring of last year, then that puts
the progress we’ve seen on inflation in a much more tenuous position,” he said.
With activity
expected to pick up from China, demand for a variety of commodities will be
driven up, McCourt said.
“As consumers are allowed
out of their apartments, and start becoming more mobile, there’s going to be
more gasoline demand and more jet fuel demand,” he said. “Demand is going to
come back really quickly.”
Commodity prices have indeed seen significant
gains since December, when China announced plans to lift some of its strictest
Covid measures.
Three-month
copper futures on the London Metal
Exchange traded at $9,436 on Thursday morning – up around 12.5%
month-to-date. Aluminum prices also rose 11.7% in
January, FactSet Data showed.
More
China's recovery may mean the Fed will have to hike
rates longer (cnbc.com)
China
says COVID has peaked as holiday rush gets into full swing
January 20, 2023 5:28
AM GMT
BEIJING, Jan 20 (Reuters) - China said
the worst was over in its battle against COVID-19 ahead of what is expected to
be one of the busiest days of travel in years on Friday, a mass movement of
people that has fed fears of a further surge in infections.
Vice Premier Sun
Chunlan, who oversees China's virus response, said the outbreak was at a
"relatively low" level, state media reported late on Thursday, after
health officials said the number of COVID patients in clinics, emergency rooms
and with critical conditions had peaked.
But there are widespread doubts about
China's account of an outbreak that has overwhelmed hospitals and crematoriums
since Beijing abandoned strict COVID controls and mass testing last month.
That policy U-turn,
which followed historic protests against the government's
"zero-COVID" regime, unleashed the virus on 1.4 billion people who
had been largely shielded since it emerged in the city of Wuhan at the end of
2019.
Some health experts expect that more
than one million people will die of the disease in China this year, with
British-based health data firm Airfinity forecasting COVID fatalities could hit
36,000 a day next week.
"Recently, the
overall pandemic in the country is at a relatively low level," Sun said in
comments reported by the state-run Xinhua news agency.
"The number of
critical patients at hospitals is decreasing steadily, though the rescue
mission is still heavy."
Her comments came on the eve of what is
expected to be one of the busiest days of travel across China since the
pandemic erupted in late 2019, as millions of city-dwellers travel to home
towns for the Lunar New Year holiday that officially begins on Saturday.
A total of 2.1
billion trips are expected to take place across China between Jan. 7 and Feb.
15, the transport ministry has estimated.
Passengers laden
with luggage and boxes of gifts packed on to trains on Friday, heading for
long-awaited family reunions.
More
China says COVID has peaked as holiday rush gets into full swing | Reuters
Finally, in cryptoland, pot calls
kettle black.
Davos crypto
crowd distance themselves from FTX and Sam Bankman-Fried: “It’s fraud”
PUBLISHED THU, JAN 19 2023 4:18
AM EST
DAVOS, Switzerland — The crypto community at
Davos sought to distance themselves from the dramatic collapse of FTX and its
co-founder Sam Bankman-Fried who is now facing federal criminal charges in the
U.S.
Bankman-Fried, FTX’s former CEO, was charged by U.S. federal prosecutors on eight criminal counts, including securities and
wire fraud. He was extradited from the Bahamas to the U.S., and has so
far pled not guilty. Two
of his former business associates, FTX co-founder Gary Wang and ex-Alameda
Research CEO Caroline Ellison, pled guilty to
federal fraud charges and agreed to cooperate with U.S. prosecutors.
“FTX in my view now gets painted as a crypto
problem. I think if you really peel enough onion layers, it’s not really a
crypto ... problem to happen here, it’s fraud. And I think we should not
pretend it’s something else,” Brad Garlinghouse, CEO, Ripple, told CNBC.
Garlinghouse also spelled out Ripple’s own
exposure to the collapsed crypto exchange. In an interview Wednesday, he said
that Ripple had leased some $10 million of XRP to FTX, which “they used on various things related to
FTX.” XRP is the native cryptocurrency of Ripple.
----Other crypto executives also had a similar view to
Garlinghouse.
“It’s important to
distinguish this [FTX collapse], it’s a failure of institutions, it’s a failure
of individuals … this is very different from the technology,” Rene Reinsberg,
co-founder of Celo, said during a CNBC-hosted panel on Thursday.
Crypto executives
acknowledged the reputational impact on the industry from the FTX fallout but
said it will focus more attention on the well-run businesses.
More
Davos crypto crowd distance themselves from FTX and
Sam Bankman-Fried (cnbc.com)
Crypto lender
Genesis files for bankruptcy in latest blow to Barry Silbert’s DCG empire
Crypto lender Genesis
filed for Chapter 11 bankruptcy protection late Thursday night in Manhattan
federal court, the latest casualty in the industry contagion caused by the
collapse of FTX and a crippling blow to a business once at the heart of Barry
Silbert’s Digital Currency Group.
The company listed
over 100,000 creditors in a “mega” bankruptcy filing, with aggregate
liabilities ranging from $1.2 billion to $11 billion dollars, according to
bankruptcy documents.
Three separate petitions were filed for Genesis’ holding
companies. In a statement, the company noted that the companies were only
involved in Genesis’ crypto lending business. The company’s derivatives and
spot trading business will continue unhindered, as will Genesis Global Trading.
---- The filing follows months of speculation over
whether Genesis would enter bankruptcy protection, and just days after the
Securities and Exchange Commission filed
suit against Genesis and its onetime partner, Gemini, over the
unregistered offering and sale of securities.
Genesis listed a $765.9 million
loan payable from Gemini in Thursday’s bankruptcy filing. Other sizeable claims
included a $78 million loan payable from Donut, a high-yield, decentralized
platform, and a VanEck fund, with a $53.1 million loan payable.
Gemini co-founder Cameron
Winklevoss initially responded to the news on Twitter, writing that Silbert and
DCG “continue to refuse to offer creditors a fair deal.”
“We have been preparing to take direct legal action against Barry, DCG,
and others,” he continued.
More
Crypto lender Genesis Trading files for bankruptcy protection (cnbc.com)
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.
European Central
Bank member says market is mispricing rate hikes, expects more to come
PUBLISHED THU, JAN 19 2023 2:31
AM EST
DAVOS, Switzerland — The European Central Bank
will not stop with one single 50 basis point hike at its next rate-setting
meetings, a board member told CNBC Thursday.
“It will not stop after a single 50 basis point
hike, that’s for sure,” Klaas Knot, who serves as the governor of the Dutch
central bank, said regarding the ECB’s upcoming moves.
The European
Central Bank raised rates four times
throughout 2022, bringing its deposit rate to 2%. The central bank in December
said it would be increasing rates further in 2023 to address sky-high
inflation.
Recent data has shown a slowdown in headline
inflation, even if it remains well above the ECB’s 2% target.
December inflation came in at 9.2% in the euro
zone, according to preliminary numbers. This was the second consecutive monthly
drop in price rises across the euro zone. However, Knot doesn’t think all of
the recent data is “encouraging.”
“What we have seen
thus far is data that is not encouraging from our end,” he said at the World
Economic Forum in Davos.
“We have seen one
more inflation reading where there were no signs of abating of [the] underlying
inflationary pressures. So we have to do what we’ll have to do, and core
inflation has not yet turned the corner in the euro area and that means the
market developments I have seen in, let’s say, last two weeks or so are not
entirely welcomed from my perspective. I don’t think they are compatible
actually with a timely return of inflation toward 2%,” Knot said.
More
European Central Bank member says market is mispricing
rate hikes, expects more to come (cnbc.com)
Jamie Dimon
says rates will rise above 5% because there is still ‘a lot of underlying
inflation’
PUBLISHED THU, JAN 19 2023 6:21
AM EST
JPMorgan
Chase CEO Jamie
Dimon believes that interest rates
could go higher than what the Federal Reserve currently projects as inflation
remains stubbornly high.
“I actually think rates are probably going to go
higher than 5% ... because I think there’s a lot of underlying inflation, which
won’t go away so quick,” Dimon said on CNBC’s “Squawk
Box” Thursday from the World Economic
Forum in Davos, Switzerland.
To battle soaring prices, the Federal Reserve has
raised its benchmark interest rate to a targeted range between 4.25% and 4.5%, the highest level in 15 years. The expected
“terminal rate,” or point where officials expect to end the rate hikes,
was set at 5.1% at its December meeting.
The consumer price index,
which measures the cost of a broad basket of goods and services, rose 6.5% in
December from a year ago, marking the smallest annual increase since October
2021.
Dimon said the recent easing of inflation comes from
temporary factors such as a pullback in oil prices and a slowdown in China due
to the pandemic.
“We’ve had the benefit of China’s slowing down,
the benefit of oil prices dropping a little bit,” Dimon said. “I think oil gas
prices probably go up the next 10 years ... China isn’t going to be
deflationary anymore.”
The series of aggressive rate hikes have fueled
worries of a recession in the U.S. Central bankers still feel they have leeway
to raise rates as the labor market and the consumer remains strong.
The JPMorgan chief said if the U.S. suffers a mild
recession, interest rates will rise to 6%. He added that it’s hard for anyone
to predict economic downturns.
“I know there are going to be recessions, ups and
downs. I really don’t spend that much time worrying about it. I do worry that
poor public policy that damages American growth,” Dimon said.
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.
China Braces For Covid Surge After Lunar New
Year
By Margaret Sutherlin18
January 2023 at 22:02 GMT
For 1.4 billion Chinese citizens that had the government
dictate their movements since the pandemic began, the surge of
infections since the end of the Covid Zero policy has
forced them to suddenly figure out how to survive on their own. As the Lunar
New Year holiday approaches President Xi Jinping asked the public to “make an
extra effort to pull through” the virus wave, and state media urged people to “take primary
responsibility for their own health.” Rural China is bracing for an onslaught
of Covid cases because of the
holiday. While China’s
propaganda arms have sought to
control the narrative by highlighting stories of self-sacrifice, the traumatic
experiences risk upending the social contract that underpins the Communist
Party’s legitimacy: An acceptance of one-party rule in return for competent
governance that keeps people safe and improves their lives. Instead, citizens
are now gaining real-world experience in effectively living without the party.
Bloomberg Evening Briefing: China Braces for Covid Wave After Lunar New Year - Bloomberg
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.
No update today. Normal service
resumes tomorrow.
Another weekend and the start of the
Chinese New Year and the year of the rabbit. Have a great weekend everyone.
Flanagan and Allen - Run Rabbit
Run.wmv
Flanagan
and Allen - Run Rabbit Run.wmv - YouTube
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