Wednesday, 29 March 2023

Alibaba Splits. 40 Thieves Next?

 Baltic Dry Index. 1402  -54          Brent Crude 78.83

Spot Gold 1966               US 2 Year Yield 4.02 +0.08

Coronavirus Cases 01/04/20 World 1,000,000

Deaths 53,103

Coronavirus Cases 29/03/23 World 683,483,603

Deaths 6,828,185

“If you are not happy being in the top one tenth of one percent wealthiest people on earth, being in the top one hundreth of one percent isn't going to do anything for you.”

 Warren Buffett.

In the stock casinos, nervous hopium has returned largely driven by hopes that the recent bank crisis is over, the global central banks will shortly begin cutting interest rates, never mind about inflation, and news from China that Alibaba is going to split into six. Now word from China yet about how the 40 thieves intend to react.

As fairy tales go this one would have a most unhappy ending. With food price inflation soaring, wage price demands soaring in Germany, France and the UK, civil unrest across much of continental Europe, a global central bankster U-turn on interest rates in 2023 will embed soaring inflation in most of the G-7, collapse much of the emerging economies and turn even more countries into Argentina’s, Pakistan’s and Sri Lanka’s. Most of the world would not live happily ever after.

Besides, our global banking crisis is only in remission. No one trusts anyone anymore, let alone the fiction published in bank balance sheets. Deposit flight is only a few days past its start.

 

Hong Kong shares jump almost 2% as Alibaba surges 15%; Asia markets largely up

UPDATED TUE, MAR 28 2023 11:53 PM EDT

Asia-Pacific markets were mostly higher on Wednesday as Alibaba’s Hong Kong-listed shares spiked at the open after the Chinese tech giant announced it will split into six business groups.

Hong Kong’s Hang Seng index gained 1.89%, paring earlier gains, while the Hang Seng Tech index jumped by 2.79%. The gains were mainly led by Alibaba, whose shares jumped 15% at the open, before paring some of its gains to 13.2%.

Mainland Chinese markets also were higher, with the Shanghai Composite down marginally and the Shenzhen Component up 0.27%.

In Australia, the S&P/ASX 200 rose 0.16%, as its February inflation came in lower than expected at 6.8%.

In Japan, the Nikkei 225 was 0.58% higher, and the Topix rose 0.69%. South Korea’s Kospi was down 0.22%, while the Kosdaq index rose 0.43%.

Overnight in the US, all three major indexes fell, with the tech-heavy Nasdaq Composite losing 0.45%, the S&P 500 falling 0.16%, and the Dow Jones Industrial Average shedding 37.83 points, or 0.12%.

Bond yields rose, with the rate on the 2-year U.S. Treasury note climbing back above 4%. Rising rates make future profits, like those promised by growth companies, less attractive.

Hong Kong shares jump almost 2% as Alibaba surges 15%; Asia markets largely up (cnbc.com)

European markets head for a broadly higher open, but doubts linger over banking sector

UPDATED WED, MAR 29 2023 12:30 AM EDT

European markets are heading for a broadly higher open Wednesday, but the expected lukewarm open suggests doubts remain for investors as to the overall health of the banking sector.

Regional markets closed mixed Tuesday, with investors seemingly in a holding pattern after a serious bout of market volatility.

Asia-Pacific markets were mostly higher on Wednesday as Alibaba’s Hong Kong-listed shares spiked at the open after the Chinese tech giant announced it will split into six business groups.

U.S. stock futures ticked higher on Tuesday night after the major averages declined on the back of higher bond yields.

European markets: Here are the opening calls

European markets are heading for a broadly higher open Wednesday.

The U.K.’s FTSE 100 index is expected to open 2 points lower at 7,485, Germany’s DAX 35 points higher at 15,175, France’s CAC up 15 points at 7,103 and Italy’s FTSE MIB 57 points higher at 25,915, according to data from IG.

Earnings are set to come from Next and data releases will include Italian and Russian unemployment figures for February.

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

BlackRock Says Forget About Rate Cuts This Year

28 March 2023 at 23:29 BST

Anyone out there betting the US Federal Reserve will actually cut rates this year has got it very wrong, says BlackRock. The world’s biggest money manager has taken a dim view of Wall Street wishful thinkers who expect rate cuts, given the continuing risk of recession. But BlackRock’s position runs counter to that of TD Securities and DoubleLine Capital, both of which contend the Fed is mistaken about the need to keep raising rates. The collapse of three mid-size US banks and the forced marriage of Credit Suisse to UBS may have prompted a rethink by some on monetary policy, but Fed Chair Jerome Powell made clear with a fresh rate hike that the inflation fight will go on. Here’s your markets wrap.

----The US government is coming for crypto. The CFTC lawsuit against Binance, the world’s biggest digital-asset exchange, was just the latest. In recent weeks entrepreneur Justin Sun and the crypto app Sushi were sued by regulators and Coinbase also fell under scrutiny. Securities and Exchange Commission Chair Gary Gensler has asserted that cryptocurrencies are subject to the same regulations as securities, and just this year banking regulators issued the sternest warning yet against crypto. Since then, many banks have reduced their exposure to digital assets, and crypto-friendly banks Silvergate and Signature blew up. Meanwhile, US prosecutors added a new charge against FTX founder Sam Bankman-Fried for allegedly bribing Chinese government officials in order to get them to unfreeze accounts at Alameda Research, a Hong Kong-based trading firm affiliated with FTX. 

More

Bloomberg Evening Briefing: Fed Unlikely to Cut Rates in 2023, BlackRock Says - Bloomberg

In banksterism news, is another big scandal about to rock the big banks? Nestle considers diversifying its banks.

As Oscar Wide almost quipped, banksters, they can resist anything except temptation.

 

French financial prosecutors search bank offices over dividend stripping - spokesperson

March 28, 2023

PARIS (Reuters) - French authorities on Tuesday searched offices of several large banks, including Societe Generale, BNP Paribas and HSBC on the suspicion of money laundering and fiscal fraud, a spokesperson of the PNF financial prosecution office told Reuters.

Societe General confirmed the searches. The other concerned banks could not immediately be reached for comment.

The spokesperson confirmed earlier reports by paper Le Monde which said the probe was linked to dividend stripping and also hit Exane and Natixis.

The PNF said that five investigations were ongoing linked to so-called "cum-cum" practices, through which wealthy clients sought to evade taxes on dividends through complex legal structures.

"The ongoing operations, which have required several months of preparation, are being carried out by 16 investigating judges and over 150 investigation agents", the PNF said in a statement issued around midday on Tuesday.

French financial prosecutors search bank offices over dividend stripping - spokesperson (msn.com)

Nestle to examine banking relationships following Credit Suisse downfall

March 28, 2023

ZURICH (Reuters) -Nestle will examine its banking relationships following the planned takeover of Credit Suisse by UBS, the food group's Chief Executive Mark Schneider said on Tuesday.

The world's largest food group was a client of Credit Suisse, Schneider told broadcaster TeleZueri in an interview to be shown on Tuesday evening, and had been following the collapse of Switzerland's second-biggest bank.

"We have worked closely with Credit Suisse for many decades in a spirit of trust," Schneider told the broadcaster.

"You can see from such an example that Switzerland as a business location and a financial centre are very closely linked. We now have to see how to reorganise our banking relationships, both with Swiss and international providers."

Schneider said the intervention by the Swiss government, the central bank and financial market regulator to engineer a merger with UBS had stabilised the situation and restored confidence.

Speaking about Nestle, Schneider said the company had made a good start to 2023, although further price rises by the company were likely, Schneider said, to offset inflation of raw material costs.

The maker of Nescafe instant coffee and KitKat chocolate bars raised prices by 8.2% last year, but that did not fully offset the impact of increased ingredient costs on margins.

Price increases had so far only had a "very limited" impact on consumer spending, Schneider said.

"As inflation continues, and then also affects our own profitability, we will have to adjust prices," Schneider said.

"We will continue to do this in a responsible way, we don't want to be a price driver. We respond to inflation, we don't fuel it," he said.

The food maker was also working on savings to reach its goal for a full-year underlying trading operating profit margin target of between 17% and 17.5% , Schneider added.

Nestle to examine banking relationships following Credit Suisse downfall (msn.com)

ECB may copy Bank of England's way of steering rates: Schnabel

March 27, 2023

NEW YORK (Reuters) - The European Central Bank could take a leaf from the Bank of England's book as it looks for new ways of managing liquidity in the banking sector and steering short-term interest rates on the market, ECB board member Isabel Schnabel said on Monday.

The ECB is now rapidly shrinking its balance sheet but this is unlikely to fall back to its level of before the 2008-2009 global financial crisis, so policymakers are now studying a new way to steer short-term interest rates in a new normal.

Outlining possible changes to the ECB's 'corridor system' of a wide gap between the deposit and lending rates, Schnabel pointed to the BoE's example, in which banks themselves determine the amount of liquidity they want to hold.

"The Bank of England’s approach has a number of benefits that may be particularly relevant for a large and heterogeneous currency area like the euro area," Schnabel, the head of the ECB's market operations, said.

"One is that it may provide better insurance against potential fragmentation shocks," she told a lecture at Columbia University. "A more balanced reserve distribution could strengthen the resilience of the currency union."

The BoE currently offers regular collateralised lending operations based on individual bank demands to fill any shortfall in the need for reserves as quantitative tightening or the reduction of bond holdings proceeds.

Using the same rate for providing and remunerating reserves ensures that money market rates will trade closely to the policy rate, Schnabel argued.

A benefit is that the BoE can wind down its massive government bond portfolio without needing to know ahead of time the demand for excess reserves, Schnabel added.

Another benefit of such a demand-driven framework is that it offers more flexibility on how the central bank provides reserves.

"A third benefit is that the Bank of England’s approach may potentially lead to a leaner balance sheet depending on banks’ demand for reserves," Schnabel said.

Schnabel also examined but appeared to dismiss a 'floor system' used by the U.S. Federal Reserve, in which the policy rate creates a lower bound, or floor, for the market interest rate, removing any incentive for banks to lend funds at a lower rate.

ECB may copy Bank of England's way of steering rates: Schnabel (msn.com)

Bank regulators eye tougher oversight after Silicon Valley Bank collapse

March 28, 2023

Silicon Valley Bank’s failure was a “textbook case of mismanagement” that shows that banks with more than $100 billion in assets may need tougher oversight, and the government will review the federal insurance program that protects deposits, regulators told a Senate committee looking into the crisis.

But lawmakers squabbled Tuesday over the causes of the meltdowns at SVB and Signature Bank. In a hearing of the Senate Banking Committee, Republicans disputed the idea that tougher rules for midsize banks would have kept the institutions from failing and raised concerns that regulators’ decisions to insure all deposits at those two banks could set a dangerous precedent. Democrats, meanwhile, insisted that the recent meltdown leaves little ambiguity on the need for revamped rules.

Top officials from the Federal Reserve, Treasury Department, and Federal Deposit Insurance Corporation said they would support strengthening banking regulations, including for firms with assets over $100 billion. Silicon Valley Bank had $211 billion in assets at the end of last year.

The FDIC will also embark on a “comprehensive” review of bank deposit insurance, with its chair saying the decision to cover all uninsured depositors at SVB and Signature Bank was a “highly consequential one that has implications for the system.” The cost of SVB’s failure to the government’s Deposit Insurance Fund — funded mainly through quarterly premiums on insured banks — is roughly $20 billion, according to FDIC estimates. FDIC Chair Martin Gruenberg said 88 percent of SVB’s deposits when it failed were over the usual $250,000 limit for insurance, and the top 10 largest accounts had $13.3 billion.

More

Bank regulators eye tougher oversight after Silicon Valley Bank collapse (msn.com)

U.S. FDIC tells Signature Bank's crypto clients to close accounts by April 5

March 28 (Reuters) - The U.S. Federal Deposit Insurance Corp (FDIC) has informed collapsed lender Signature Bank's (SBNY.O) crypto clients that they have until April 5 to close their accounts and move their money.

The deposits in question were not part of a rescue deal arranged with Flagstar Bank, a unit of New York Community Bancorp (NYCB.N), earlier this month.

"Flagstar's bid did not include about $4 billion in deposits related to Signature's digital-asset business," an FDIC spokesperson said.

"Those are the deposits we are encouraging customers to move before April 5. If they have not by that day, we will mail checks to the address on record."

Flagstar on March 19 entered into an agreement with U.S. regulators to buy deposits and loans from New York-based Signature Bank.

The FDIC had said that the deal would see Flagstar Bank assume substantially all of Signature Bank's deposits, some of its loan portfolios and all 40 of its former branches. Roughly $60 billion of Signature Bank's loans and $4 billion of its deposits would remain with it in receivership.

More

U.S. FDIC tells Signature Bank's crypto clients to close accounts by April 5 | 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.

Food inflation soars to record 15 per cent as sugar price hike leaves retailers warning of more misery to come

TUESDAY 28 MARCH 2023 7:00 AM

Shop price inflation is yet to reach its “peak” as the rising cost of sugar and high manufacturing costs present a double whammy ahead of crucial Easter trade, a leading retail body has warned.

The British Retail Consortium (BRC) shop price index showed annual inflation accelerated to 8.9 per cent in March, up from 8.4 per cent in February – a fresh high for shoppers who have had no relief from soaring living costs.

Food inflation also continued to sky rocket in March, rising to 15 per cent from 14.5 per cent in February – the highest rate on record. 

Grocery stores battled supply shortages due to bad weather in southern Europe and northern Africa, which disrupted crop growth, seeing the rise in fresh food prices soar to 17 per cent, up from 16.3 per cent in February. 

What is driving food price inflation?

“Shop price inflation has yet to peak. As Easter approaches, the rising cost of sugar coupled with high manufacturing costs left some customers with a sour taste, as price rises for chocolate, sweets and fizzy drinks increased in March,” said Helen Dickinson OBE, chief executive of the BRC.

“Fruit and vegetable prices also rose as poor harvests in Europe and North Africa worsened availability, and imports became more expensive due to the weakening pound. “

Costs of ambient food, such as canned goods, rose to 12.4 per cent in March, up from 12.2 per cent in February. 

The cost of goods in stores have been on a steady increase due to a hike in energy costs, shortages of goods and materials and the impact of Covid-19, with consumers bearing the brunt of this fallout. 

“Inflation continues to have an impact on the spending power of shoppers and increased energy bills from April will add more pressure,” Mike Watkins, head of retailer and Business Insight, NielsenIQ, said. 

He added: “Since food prices have risen retailers have seen more visits but less basket spend, as shoppers manage their weekly food bills by shopping little and more often and seeking out the lowest prices.”

Food inflation soars to record 15 per cent as sugar price hike leaves retailers warning of more misery to come Easter will not be sweet for shoppers as food inflation soars to 15 per cent in March and retail bodies warn we are yet to see ‘peak’ (cityam.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

Major Media Fall for Fake Wuhan Raccoon Dog Story

March 27, 2023 Updated: March 27, 2023

Recent reports from major media organizations claim that new evidence points to raccoon dogs at the Wuhan Seafood Market as the origin of COVID-19. The story was first reported by The Atlantic, which claimed that the raccoon dog discovery was “The Strongest Evidence Yet That an Animal Started the Pandemic.” The New York Times scrambled to put out a same-day story of their own, titled “New Data Links Pandemic’s Origins to Raccoon Dogs at Wuhan Market.”

Science Magazine, the outlet that helped Dr. Anthony Fauci seed the natural origin narrative for COVID-19’s emergence, also put out an urgent same-day news story, claiming that “Unearthed genetic sequences from China market may point to animal origin of COVID-19.”

The problem with the reporting is that the raccoon dog narrative was entirely made up out of thin air and the news organizations who reported it knew this to be the case. There was no new evidence. Additionally, the scientists involved in pushing the story were known to be close associates of Fauci and have a history of pushing false narratives.

The raccoon dog story is closely linked to a private teleconference that Fauci organized on Feb. 1, 2020, during which the elevating of the natural origin narrative and suppression of the lab leak theory for COVID-19’s emergence was discussed. It was at that teleconference that Fauci commissioned a paper from four scientists who were in attendance: Kristian Andersen, Edward Holmes, Robert Garry, and Andrew Rambaut.

The group, which is now also behind the raccoon dog story, immediately set about writing the fraudulent Proximal Origin paper as a cudgel that Fauci could use against anyone who deigned to question the natural origin narrative. In fact, when President Donald Trump questioned the narrative at an April 17, 2020, White House press conference, Fauci invoked the Proximal Origin paper without acknowledging his role in creating it. Fauci even pretended not to know who the authors of the paper were.

The problem for Fauci and the Proximal Origin authors was that their narrative was entirely contrived, which meant that the group had to make up a plausible-sounding story. The story they came up with was that pangolins were responsible for the outbreak. Pangolins are scaly, anteater-type mammals that have been known to be used in traditional Chinese medicine. There is no evidence that pangolins played any role in the pandemic, nor that they were sold at the Wuhan Seafood Market, where Fauci’s group wanted to place the origin of the pandemic. In addition, all animals at the market tested negative for COVID-19.

Notwithstanding these problems, Fauci’s group initially hung on to its pangolin narrative. Then, in the Summer of 2022, the group co-published another paper, this time raising the possibility that raccoon dogs were responsible for the pandemic. As evidence, the group included a photo of raccoon dogs that a member of the group, Edward Holmes, had allegedly taken at the Wuhan Seafood Market in 2014. The group did not explain how the presence of raccoon dogs in 2014 led to an outbreak six years later. Notwithstanding, the idea that raccoon dogs might have been responsible was seeded.

Then, earlier this month, in what superficially appears to have been a huge coincidence, Florence Debarre, a French scientist who is associated with Fauci’s group and is known for pushing the natural origin narrative on Twitter, suddenly discovered raccoon dog DNA in a data sample uploaded by Chinese scientists who were themselves studying the Wuhan Seafood Market.

Debarre told The Atlantic she came across this data “by almost pure happenstance” when she “spotted the sequences pinging onto the server late last Thursday night with no warning or fanfare.”

Incredibly, the data that Debarre had apparently stumbled upon included raccoon dog DNA, which, even more incredibly, came from Stall 29, the same spot where Holmes had snapped the photo of raccoon dogs nearly a decade earlier.

Debarre quickly teamed up with Fauci’s group of scientists to promote the raccoon dog narrative. Notably, the same four scientists—Andersen, Holmes, Garry, and Rambaut—who led Fauci’s Feb 1, 2020, secret teleconference, and who also led the Proximal Origin effort, are now leading the raccoon dog story.

More. Much, much, more.

Major Media Fall for Fake Wuhan Raccoon Dog Story (theepochtimes.com)

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.

I have my doubts that battery swapping is financially viable, scalable, or safe.

China's Nio opens trial for high-speed EV battery swapping stations

28 March 2023

SHANGHAI (Reuters) - Chinese electric vehicle (EV) maker Nio Inc began trial operation on Tuesday of faster, more efficient battery swapping stations in China in its push to make battery swapping a viable alternative to rival EV makers' rapid-charging technology.

With capacity to store up to 21 battery packs each, Nio's Power Swap Station 3.0 can speed up battery swapping to less than five minutes and lower the service cost per swap, Shen Fei, Nio senior vice president for power management, told reporters at an event in Shanghai last Thursday. The comments were embargoed for release on Tuesday.

Tesla's rapid-charging Supercharger allows EV users to top up vehicles to a range of 200 miles in 15 minutes.

Battery swapping allows drivers to replace depleted packs quickly with fully charged packs, rather than plugging the vehicle in to a charging point. Swapping could help to ease the strain on power grids at peak times when drivers recharge, but industry analysts and executives expect it would only become feasible if batteries become more standardised.

Nio is among only a handful of EV makers betting on battery swapping as a major power option for electric cars. Rival Tesla has dismissed battery swapping as "riddled with problems and not suitable for widescale use".

Nio, which has set a target of 2,300 battery swapping stations globally by year-end, had 1,323 in operation as of March 23, Shen said. It aims for 900 of the latest power swap stations to be operating this year, he added.

Nearly 60% of the power replenished for Nio cars in February was via battery swapping, while another 23% was from home chargers, Shen said.

Fewer than 10% of Nio users used public chargers while 80.5% of the power charged from Nio's 14,000 chargers nationwide was for non-Nio users, including Tesla and BYD vehicles, he added.

China's Nio opens trial for high-speed EV battery swapping stations (msn.com)

“Cash, though, is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent.”

Warren Buffett.

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