Baltic Dry Index. 1465 +41 Brent Crude 79.80
Spot Gold 1911 US 2 Year Yield 4.03 -0.57
Coronavirus
Cases 01/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 14/03/23 World 681,77,948
Deaths 6,812,785
"For more than two thousand
years gold's natural qualities made it man's universal medium of exchange. In
contrast to political money, gold is honest money that survived the ages and
will live on long after the political fiats of today have gone the way of all
paper."
Hans F. Sennholz
With the day’s main story well
covered in mainstream media there’s little need for me to add my two cents,
except to point out the rush to get into US Treasuries and gold.
In the stock casinos hopium that
the bankster rout will be over soon and that the central banksters, horrified
by the damage their rising interest rates have caused, will come to their senses
and start dropping rates.
Today’s US inflation figures will
be closely watched to see if they give the Fed cover to start dropping interest
rates at the coming meeting next week.
Given yesterday’s rush into US Treasuries, there are now some sizeable bets that bonds and not stocks are the new best sector for investments.
Asia markets tumble led by Japan, South Korea
and Hong Kong as investors weigh SVB concerns
UPDATED TUE, MAR 14 2023 1:09 AM
EDT
Asia-Pacific
markets tumbled on Tuesday in a volatile session, after sharp losses seen
overnight on Wall Street as investors grappled with the fallout of failed banks
in the U.S., including Silicon Valley Bank.
In Japan, the Topix led losses
and fell 2.53%, and Nikkei 225 shed
2.1% as shares of Softbank Group fell
as much as 3.5% to its lowest point since October last year in early trade.
South Korea’s Kospi also fell by
nearly 2% and the Kosdaq was 2.57% lower. Hong Kong’s Hang Seng index fell
1.83%, while the Hang Seng Tech index shed 2.11%. In mainland China, the Shanghai Composite was
0.88% lower and the Shenzhen Component fell
1.15%.
In Australia, the S&P/ASX 200 slid
1.64%, largely led by losses in the banking sector. The economy’s consumer
confidence also held near historic lows.
In the U.S, the Dow Jones Industrial Average saw
its fifth straight day of losses, even as a plan to backstop
all the depositors in failed Silicon Valley Bank, along with
other extraordinary measures, failed to boost bank shares. The S&P 500 fell
0.15%, and the Nasdaq
Composite gained 0.45%.
Investors will also be keeping a
close watch on the U.S. consumer price index for February, due to be released
Tuesday.
Asia
markets lower as investors weigh Silicon Valley Bank concerns (cnbc.com)
European stocks
head for higher open but SVB’s collapse rattles global market confidence
UPDATED TUE, MAR 14 2023 1:42 AM
EDT
European markets
are heading for a higher open Tuesday even as the aftershocks from Silicon
Valley Bank’s collapse continue to ripple through financial markets.
Asia-Pacific
markets tumbled on Tuesday in a volatile session, after sharp losses seen
overnight on Wall Street Monday as investors grappled with the fallout of
failed banks in the United States. The Dow Jones Industrial Average notched a
fifth day of losses after a plan to backstop depositors in SVB failed to buoy
bank stocks.
U.S. stock futures rose on Monday night,
however, and traders globally will be looking ahead to the latest U.S.
inflation report due Tuesday.
The U.S. consumer price index for
February is expected
to come in at 0.4% on a monthly basis or at a 6% annual pace,
according to Dow Jones estimates. That’s just slightly lower than January’s
inflation data of 0.5% and 6% respectively.
European
markets live updates: global markets fall after SVB collapse (cnbc.com)
Global
bank stock rout deepens as SVB collapse fans crisis fears
March
14, 2023 5:32 AM GMT
March 14
(Reuters) - Shockwaves from the collapse of Silicon Valley Bank further pounded
global bank stocks on Tuesday as assurances from President Joe Biden and other
policymakers did little to calm markets and prompted a rethink on the interest
rate outlook.
Biden's efforts to reassure markets and
depositors came after emergency U.S. measures to shore up banks
by giving them access to additional funding failed to dispel investor worries
about potential contagion to other lenders worldwide.
Banking stocks in
Asia extended declines on Tuesday, with Japanese firms hit particularly hard
and anxiety about systemic risk leading the wider market lower.
"Bank
runs have started (and) interbank markets have become stressed," said
Damien Boey, chief equity strategist at Sydney-based investment bank
Barrenjoey. "Arguably, liquidity measures should have stopped these
dynamics but Main Street has been watching news and queues – not financial
plumbing."
A furious race to reprice interest rate expectations also
sent waves through markets as investors bet the Federal Reserve will be
reluctant to hike next week.
Traders
currently see a 50% chance of no rate hike at that meeting, with rate cuts
priced in for the second half of the year. Early last week, a 25 basis-point
hike was fully priced in, with a 70% chance seen of 50 basis points.
Analysts
say uncertainty continues to dog the sector with investors still extremely
worried about the health of smaller global banks, the prospect of tighter
regulation and a preference to protect depositors at the expense of
shareholders should other banks fail.
Major U.S. banks
lost around $90 billion in stock market value on Monday, bringing their loss
over the past three trading sessions to nearly $190 billion.
Regional
U.S. banks were hit the hardest. Shares of First Republic Bank (FRC.N) tumbled more than 60% as news of fresh
financing failed to reassure investors and rating's agency Moody's reviewed it
for a downgrade.
More
Global
bank stock rout deepens as SVB collapse fans crisis fears | Reuters
In
bankster news, the flight to safety. Will someone put Credit Swiss out of its
misery.
Regional banks are
seeing flight of deposits to too-big-to-fail megabanks
The unexpected demise
of Signature Bank over the weekend, on the heels of the failure of Silicon
Valley Bank, ignited a shoot-first-and-ask-questions-later reaction among
regional-bank investors as customers moved deposits to the largest U.S. banks
for perceived safekeeping, observers said Monday.
Shares of regional banks such as
First Republic Bank FRC,
First Republic Bank said it received liquidity from the Federal Reserve and
JPMorgan Chase & Co. JPM,
First Republic’s executive chair, Jim Herbert, told
CNBC-TV that the bank has not seen many depositors leave and that it’s been
able to meet demands for withdrawals.
First Republic said it’s open for business as usual,
according to a Monday statement.
----First
Republic’s stock was down 50% on Monday afternoon amid steep losses among
regional banks. The KBW Bank Index BKX,
Over the weekend, crypto-friendly
Signature Bank SBNY,
“Investors are scared by a flight
of deposits to the too-big-to-fail banks,” Janney Montgomery Scott bank analyst
Christopher Marinac told MarketWatch. “It’s a perception problem that’s become
a perception crisis.”
Even though the Federal Reserve
announced a new backstop program and President Joe Biden declared U.S. banks safe, investors
remain skeptical about the fixes in place for the banking system — or they
simply haven’t taken the time to absorb the moves by regulators to calm investors,
Marinac said. “There’s a disbelief out there that there are no more failures
coming,” he said.
More
Regional
banks are seeing flight of deposits to too-big-to-fail megabanks - MarketWatch
Credit Suisse shares
fall to new record low after collapse of SVB and Signature Bank
Credit Suisse shares
on Monday reached a new record low, falling as much as 15% as investors
continued to hammer away at the stock of the Swiss banking giant after the
collapse of banks in the U.S.
While SVB Financial and Signature
Bank collapsed in the wake of the downturn in the technology and crypto sectors
as interest rates rise, Credit Suisse’s difficulties have been of its own
making.
Credit Suisse CSGN,
According to FactSet, Credit Suisse shares trade at 0.2
estimated 2023 tangible book value. Rival UBS UBS,
Credit
Suisse was not the only European bank to see its shares slide: Commerzbank CBK,
Analysts at Morgan Stanley say
they don’t expect eurozone banks to be forced into selling their bonds, the way
SVB had to, owing to hedging programs in place. They also say increased deposit
competition will be gradual. “A higher liquidity starting point and lower loan
growth explains why deposit competition is lower in Europe,” the analysts say.
Credit Suisse shares fall to new record low after collapse of SVB and Signature Bank - MarketWatch
More
regulation coming?
Deregulation
Gets Some Blame for SVB Blowup
13 March 2023 at 22:29
GMT
President Joe Biden sought on Monday to reassure
markets and consumers that any collateral damage from the implosion of Silicon
Valley Bank would be limited. As the government emphasized no taxpayer dollars
would be used to clean up the
mess (thus obviating any use of the word “bailout”), he also promised to
hold responsible those behind the
collapse of SVB as well as Signature Bank, whose crypto industry ties
may have led to its undoing. “Americans can have confidence that the banking
system is safe. Your deposits will be there when you need them,” Biden said at
the White House.
So who is to blame? The SVB failure has many
pointing fingers at Donald Trump-era deregulation. Eight years ago, SVB Chief Executive
Officer Greg Becker urged Congress to pass legislation that
would let his firm skate on all the work that comes with stress tests and
resolution plans. Legions of executives from other regional
lenders made a similar case. Eventually, they got their wish. With more than
a few Democrats joining Republican majorities in backing the measure,
Trump in 2018 signed a law that allowed mid-sized banks like SVB to skirt
some of the strictest post-financial crisis regulations. So who is
to blame? The SVB failure has many pointing fingers at Donald Trump-era deregulation. Eight years ago, SVB Chief Executive
Officer Greg Becker urged Congress to pass legislation that
would let his firm skate on all the work that comes with stress tests and
resolution plans. Legions of executives from other regional
lenders made a similar case. Eventually, they got their wish. With more
than a few Democrats joining Republican majorities in backing the
measure, Trump in 2018 signed a law that allowed mid-sized banks like SVB
to skirt some of the strictest post-financial crisis regulations.
More
Bloomberg
Evening Briefing: Bank Deregulation Blamed for SVB Blowup - Bloomberg
Mortgage rates
tumble in the wake of bank failures
The average rate on the popular 30-year fixed
mortgage dropped to 6.57% on Monday, according to Mortgage
News Daily. That’s down from a rate of 6.76% on Friday and a recent
high of 7.05% last Wednesday.
Mortgage rates loosely follow the
yield on the 10-year Treasury,
which fell to a one-month low in response to the failures of Silicon Valley Bank and Signature Bank and
the ensuing ripple through the nation’s banking sector.
In real terms, for a buyer looking
at a $500,000 home with a 20% down payment on a 30-year fixed mortgage, the
monthly payment this week is $128 less than it was just last week. It is still,
however, higher than it was in January.
---- “This mini banking crisis has to drive a change in
consumer behavior in order to have a lasting positive impact on rates. It’s
still all about inflation,” said Matthew Graham, chief operating officer at
Mortgage News Daily.
Markets now have to contend with
the “inflationary impact of consumer fear,” he added, noting that Tuesday
brings a fresh consumer price index report, a monthly measure of inflation in
the economy.
As recently as last week, Federal
Reserve Chairman Jerome Powell told
members of Congress that the latest economic data has come in
stronger than expected.
More
Mortgage
rates tumble in the wake of bank failures (cnbc.com)
Finally, we leave the last word on the Silly Con Valley crash to the WSJ. “Will a universal uninsured deposit guarantee be next?”
The Silicon Valley Bank Bailout
The
bill for bad policy comes due, but there’s risk in a second rescue of the banking
system in 15 years.
By The Editorial Board March 12, 2023 8:00 pm ET
The Treasury and Federal Reserve stepped in late
Sunday to contain the financial damage from Friday’s closure of Silicon Valley
Bank, guaranteeing even uninsured deposits and offering loans to other banks so
they don’t have to take losses on their fixed-income assets.
This is a de facto bailout of the banking system,
even as regulators and Biden officials have been telling us that the economy is
great and there was nothing to worry about. The unpleasant truth—which
Washington will never admit—is that SVB’s failure is the bill coming due for
years of monetary and regulatory mistakes.
Wall Street and Silicon Valley were in full panic
over the weekend demanding that the Treasury and Fed intervene to save the day.
It’s revealing to see who can keep a cool head in a crisis—and it wasn’t
billionaire hedge-fund operator Bill Ackman or venture
investor David Sacks, both frantic panic spreaders.
The Federal Deposit Insurance Corp. closed SVB, and
the cleanest solution would be for the agency to find a private buyer for the
bank. This has been the first resort in most previous financial panics, and the
FDIC was holding an auction that closed Sunday afternoon.
But Rohit
Chopra, the Elizabeth Warren acolyte on the FDIC board, is hostile to bank
mergers on ideological grounds, and the purchase terms could be too onerous for
some potential buyers. The biggest banks are now the safest, and deposits are
flooding into them. J.P. Morgan can park that money at the Federal Reserve and
earn interest on its reserves. Why take on a new political headache?
SVB executives
made mistakes, and they will pay for them, but they were encouraged by easy
money and misguided regulation. As the Fed flooded the world with dollar
liquidity, money flowed into venture startups that were SVB’s customer base.
The bank’s deposits soared—far beyond what it could safely lend.
---- Treasury Secretary Janet
Yellen said Sunday there will be no “bailout” for SVB, but she is indulging
in semantics. The feds said they will guarantee even uninsured deposits at SVB
as well as at Signature Bank in New York. Typically in a bank failure those
depositors would get their money back with a 15% to 20% haircut. This would no
doubt be a hardship for many customers, but the $250,000 limit was known.
Will a universal uninsured deposit guarantee be next?
This would be a monumental policy surrender, essentially admitting that the
regulatory machinery established in 2010 by Dodd-Frank failed. We may be the
only people in the world who still worry about “moral hazard.” But a nationwide
guarantee for uninsured deposits, even for a limited time, means this will
become the default policy any time there is a financial panic.
---- For the second time in 15 years (excluding the
brief Covid-caused panic), regulators will have encouraged a credit mania, and
then failed to foresee the financial panic when the easy money stopped.
Democrats and the press corps may try to pin the problem on bankers or the
Trump Administration, but these are political diversions.
You can’t run the most reckless monetary and fiscal
experiment in history without the bill eventually coming due. The first invoice
arrived as inflation. The second has come as a financial panic, with economic
damage that may not end with Silicon Valley Bank.
More
The Silicon Valley Bank Bailout - WSJ
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.
Bill Ackman says
U.S. did the ‘right thing’ in protecting SVB depositors. Not everyone agrees
PUBLISHED MON, MAR 13 2023 4:02
AM EDT
Billionaire investor
Bill Ackman said the U.S. government’s action to protect depositors after
the implosion of Silicon Valley Bank is “not a bailout” and helps restore
confidence in the banking system.
In his latest tweet
on SVB’s collapse, the hedge fund investor said the U.S. government did the
“right thing.”
“This was not a bailout in any form. The people who screwed up
will bear the consequences,” wrote the CEO of Pershing Square. “Importantly,
our gov’t has sent a message that depositors can trust the banking system.”
Ackman’s comments came after banking
regulators announced plans over
the weekend to backstop depositors with money at Silicon Valley Bank, which was shut down on Friday after a bank run.
“Without this confidence, we are left with three
or possibly four too-big-to-fail banks where the taxpayer is explicitly on the
hook, and our national system of community and regional banks is toast,” Ackman
added.
Ackman further explained that in this incident, shareholders and
bondholders of the banks will be mainly the ones affected, and the losses will
be absorbed by the Federal Deposit Insurance Corporation’s (FDIC) insurance
fund.
---- Not everyone agrees.
Peter Schiff, chief
economist and global strategist at Euro Pacific Capital, said the move is “yet
another mistake” by the U.S. government and the Fed.
He explained in another tweet: “The bailout means depositors will put their
money in the riskiest banks and get paid higher interest, as there’s no
downside risk.”
The result?
″... all banks will
take on greater risks to pay higher rates. So in the long-run many more banks
will fall, with far greater long-term costs,” Schiff said.
---- Ackman said in the tweet that had the government “not
intervened today, we would have had a 1930s bank run continuing first thing
Monday causing enormous economic damage and hardship to millions.”
“More banks will likely fail despite the
intervention, but we now have a clear roadmap for how the gov’t will manage
them.”
‘Lost faith’
Still, some analysts are not convinced the
regulators’ action will shore up confidence in the U.S. banking system and
limit the fallout.
“I don’t think that you can understate the danger
that the American banking system is in,” veteran bank analyst Dick Bove, told
CNBC’s “Squawk Box Asia” on
Monday.
---- Bove pointed out the U.S. banking system is
at risk for two reasons.
“Number one, the
depositors have lost faith in American banks: Forget the people who may or may
not have been taking money out of SVB. Deposits in American banks have dropped
6% in the last 12 months,” he noted.
“The second group
that has lost faith in the American banking system are investors,” he added.
“The investors have lost faith because the American banks have a whole bunch of
accounting tricks that they can play, to show earnings when earnings don’t
exist, to show capital when capital doesn’t exist.”
He went on to say
that accounting practices for the banking industry are “totally unacceptable,”
and that banks are using “accounting gimmickry to avoid indicating what the
true equity is in these banks.”
“The government is
now on its back feet. And the government is trying to do whatever it can to
stop what could be a major, major negative thrust,” Bove said.
More
Bill Ackman says U.S. did right thing in protecting
SVB depositors (cnbc.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
Finding COVID-19's origins is a moral imperative - WHO's Tedros
March 12, 2023
GENEVA (Reuters) -Discovering the origins of COVID-19 is a moral
imperative and all hypotheses must be explored, the head of the World Health
Organization said, in the clearest indication yet that the U.N. body remains
committed to finding how the virus arose.
A U.S. agency was reported by the
Wall Street Journal to have assessed the pandemic had likely been caused by an
unintended Chinese laboratory leak, raising pressure on the WHO to come up with
answers. Beijing denies the assessment which could soon become public after the
U.S. House of Representatives voted this week to declassify it.
"Understanding #COVID19's
origins and exploring all hypotheses remains: a scientific imperative, to help
us prevent future outbreaks (and) a moral imperative, for the sake of the
millions of people who died and those who live with #LongCOVID," Tedros
Adhanom Ghebreyesus said on Twitter late on Saturday.
He was writing to mark
three years since the WHO first used the word "pandemic" to describe
the global outbreak of COVID-19.
Activists, politicians and academics
said in an open letter this weekend that the focus of the anniversary should be
on preventing a repeat of the unequal COVID-19 vaccine rollout, saying this led
to at least 1.3 million preventable deaths.
In 2021, a WHO-led team spent weeks
in and around Wuhan, China where the first human cases were reported and said
in a joint report that the virus had probably been transmitted from bats to
humans through another animal, but further research was needed. China has said
no more visits are needed.
Since then, the WHO has set up a
scientific advisory group on dangerous pathogens but it has not yet reached any
conclusions on how the pandemic began, saying key pieces of data are missing.
Finding COVID-19's
origins is a moral imperative - WHO's Tedros (msn.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.
Microscopy: Highest resolution
in three dimensions
Date: March 10, 2023
Source:
Ludwig-Maximilians-Universität München
Summary:
Researchers have developed a super-resolution microscopy method for the rapid
differentiation of molecular structures in 3D.
Super-resolution microscopy methods
are essential for uncovering the structures of cells and the dynamics of
molecules. Since researchers overcame the resolution limit of around 250
nanometers (and winning the 2014 Nobel Prize in Chemistry for their efforts),
which had long been considered absolute, the methods of microscopy have
progressed rapidly. Now a team led by LMU chemist Prof. Philip Tinnefeld has
made a further advance through the combination of various methods, achieving
the highest resolution in three-dimensional space and paving the way for a
fundamentally new approach for faster imaging of dense molecular structures.
The new method permits axial resolution of under 0.3 nanometers.
The researchers combined the
so-called pMINFLUX method developed by Tinnefeld's team with an approach that
utilizes special properties of graphene as an energy acceptor. pMINFLUX is
based on the measurement of the fluorescence intensity of molecules excited by
laser pulses. The method makes it possible to distinguish their lateral
distances with a resolution of just 1 nanometer. Graphene absorbs the energy of
a fluorescent molecule that is no more than 40 nanometers distant from its
surface. The fluorescence intensity of the molecule therefore depends on its
distance from graphene and can be used for axial distance measurement.
More
Microscopy:
Highest resolution in three dimensions -- ScienceDaily
"With the exception only of the
period of the gold standard, practically all governments of history have used
their exclusive power to issue money to defraud and plunder the people."
F. A. von Hayek.
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