Baltic
Dry Index. 1603 +16 Brent Crude 74.61
Spot Gold 1914 US 2 Year Yield 3.93 -0.27
Coronavirus
Cases 01/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 16/03/23 World 681,967,604
Deaths 6,814,877
My daughter asked me when she came home from school, "What's the financial crisis?" and I said, it's something that happens every five to seven years.
Jamie Dimon, 2008.
Not much need for my input today, everyone in mainstream media seems to have finally recognised we have a banking and financial services, gambling crisis.
So this morning I’ll just comment on how Jamie Dimon’s observation from 2008 needs updating.
Since the discovery of the Great Magic Money Tree forests back in March 2020, the Great Nixonian Error of Fiat Money, August 15, 1971, the Great Fiat Money gambling economy has become unstable and volatile. We now get a crisis every year.
But we haven’t seen anything yet. As global money supply drops, a massive global recession looms, probably starting in Asia. That probably is the beginning of the end for the Great Nixonian Error of Fiat Money, and with it the financialised gambling lifestyle we’ve all come to love and loath.
Look on the upside though, with the coming Great Lifestyle Crash, the planet will be saved from Electric Vehicles, man made global warming, cryptocurrencies, stable coins, ESG agendas, plus champagne socialism.
Of
course our central banksters could opt to make things much worse. In a final
attempt at keeping the Great Nixonian Error going, they might go all out for a
new slave like society operating on central bank issued, politically driven Central
Bank Digital Currency. Just don’t step out of line if they do.
Asia-Pacific
markets fall on bank fears, Credit Suisse announces ‘decisive action’ to borrow
UPDATED THU, MAR 16 2023 12:36 AM
EDT
Asia-Pacific markets dropped on Thursday, but
largely pared losses as the trading day went on as turmoil around Credit Suisse added
onto banking fears in the region.
Shares of Credit Suisse plunged
to a new all-time low Wednesday for the second consecutive day after its top
investor ruled out further assistance.
Hong Kong’s Hang Seng index slid
1.51%, leading losses in the region, and the Hang Seng Tech index lost 0.76% on
Thursday.
In Australia, the S&P/ASX 200 fell
1.54%, dragged by miners and the banking sector. leading losses in the region,
Investors will also digest unemployment numbers from the economy.
In Japan, the Topix fell 1.36% on
Thursday morning as the country saw its trade data for February come in lower
than expected. The Nikkei 225 fell
1.04%.
South Korea’s markets were
briefly in the green, but Kospi has
since fallen 0.41% and the Kosdaq has shed 0.52%.
Overnight in the US, major indexes ended largely lower, with the Dow Jones Industrial Average falling 0.9% and the S&P 500 shedding 0.7%. The Nasdaq Composite eked out a small gain, rising 0.05%.
A recession could
come sooner on cooling bank lending
Plummeting bond yields, steep drops in oil and
stock prices, and a sharp jump in volatility are all signaling that investors
fear a recession is now on the near horizon.
Stocks were down Wednesday, as
worries about Credit Suisse spooked markets already concerned about U.S.
regional banks following the shutdown of Silicon Valley Bank and Signature Bank.
“What you’re really seeing is a significant tightening of
financial conditions. What the markets are saying is this increases risks of a
recession and rightfully so,” said Jim Caron, head of macro strategy for global
fixed income at Morgan Stanley Investment Management. “Equities are down. Bond
yields are down. I think another question is: it looks like we’re pricing in
three rate cuts, does that happen? You can’t rule it out.”
Bond yields came off their lows and stocks
recovered some ground in afternoon trading, following reports
that Swiss authorities were discussing options to stabilize Credit Suisse.
Wall Street has been debating
whether the economy is heading into a recession for months, and many economists
expected it to occur in the second half of this year.
But the rapid moves in markets
after the regional bank failures in the U.S. has some strategists now expecting
a contraction in the economy to come sooner. Economists are also ratcheting
down their growth forecasts on the assumption there will be a pullback in bank
lending.
“A very rough estimate is that
slower loan growth by mid-size banks could subtract a half to a full
percentage-point off the level of GDP over the next year or two,” wrote
JPMorgan economists Wednesday. “We believe this is broadly consistent with our
view that tighter monetary policy will push the US into recession later this year.”
More
A
recession could come sooner on cooling bank lending (cnbc.com)
Moody’s retains
‘negative’ outlook on China’s banks amid challenges of emerging from Covid-zero
PUBLISHED WED, MAR 15 20232:59 AM
EDT
BEIJING — Ratings agency Moody’s said Wednesday it
maintained a “negative” outlook on China’s banking sector as a result of a
drawn out recovery after Beijing’s Covid controls ended.
China’s economy missed a national growth target in
2022 due to the spread of the highly contagious omicron variant and a prolonged
slump in the massive real estate sector. While Beijing ended its stringent
Covid controls in early December, the economic rebound so far has remained muted.
“Our outlook on the
banking sector remains negative,” said Vice President Nicholas Zhu and
Associate Managing Director Chen Huang, the authors of the report.
Moody’s had changed
its outlook on China’s banks to “negative” from “stable” in November due to
“deteriorating operating environment, asset quality and profitability.”
The ratings agency
affirmed its negative outlook earlier this month. Wednesday’s report focused on
fourth-quarter data on Chinese banks’ operations.
The pandemic damaged corporate and individual
balance sheets over the last few years, and it will take time to repair them,
even as the overall economy is recovering, China’s National Bureau of
Statistics spokesperson Fu Linghui told reporters Wednesday.
The statistics bureau’s latest data showed
slower-than-expected industrial production growth, retail sales that were in
line with expectations, and better-than-expected fixed asset investment for the
first two months of the year.
Risks from bad loans
Chinese banks’ asset quality face risks from
non-performing loans, the Moody’s analysts said.
Although those bad loans aren’t growing
significantly, they said the economic environment makes it difficult for
lenders and borrowers to find new sources of growth.
More
Moody's negative outlook on China banks as country
emerges from Covid-zero (cnbc.com)
Moody’s cuts
outlook on U.S. banking system to negative, citing ‘rapidly deteriorating
operating environment’
PUBLISHED
TUE, MAR 14 2023 10:41 AM EDTUPDATED TUE, MAR 14 2023 8:21 PM EDT
In a harsh blow to an
already-reeling sector, Moody’s Investors Service cut its view on the entire
banking system to negative from stable.
The firm, part of the
big three rating services, said Monday it was making the move in light of key
bank failures that prompted regulators to step in Sunday with a dramatic rescue
plan for depositors and other institutions impacted by the crisis.
“We have changed to
negative from stable our outlook on the US banking system to reflect the rapid
deterioration in the operating environment following deposit runs at Silicon
Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures
of SVB and SNY,” Moody’s said in a report.
The move followed
action late Monday, when Moody’s warned it either was downgrading or placing on
review for downgrade seven individual institutions.
The moves are
important because they could impact credit ratings and thus borrowing costs for
the sector.
In its downgrade of
the entire sector, the rating agency noted the extraordinary actions taken to
shore up impacted banks. But it said other institutions with unrealized losses
or uninsured depositors still could be at risk.
More
SVB’s failure
will have a ripple effect across technology ‘for years to come’
PUBLISHED TUE, MAR 14 2023 8:40
PM EDT
Silicon
Valley Bank was the backbone of many
startups and venture capital funds around the world. The effects of its
collapse, the biggest banking failure since the 2008 financial crisis, is
likely to be felt across the technology landscape globally over the coming
years.
“With SVB in essence the Godfather of the Silicon
Valley banking ecosystem for the past few decades in the tech world, we believe
the negative ripple impact of this historical collapse will have a myriad of
implications for the tech world going forward,” Dan Ives, analyst at Wedbush
Securities, said in a note on Tuesday.
SVB’s collapse began last week when it said it
needed to raise $2.25 billion to
shore up its balance sheet. Venture capital firms told their portfolio companies to withdraw money from the
bank and other clients looked to get
their cash before it became unobtainable. This effectively led to a bank run.
---- But the episode has the potential to impact the technology
world in several ways, from making it harder for startups to raise funds to
forcing firms to change their business model, according to investors and
analysts who spoke to CNBC.
‘Last thing we needed’
SVB was critical to the growth of the technology
industry, not just in the U.S. but in places like Europe and even China.
The 40-year old institution had an intimate link
to the technology world offering traditional banking services as well as
funding companies that were deemed too risky for traditional lenders. SVB also
provided other services like credit lines and lines to startups.
When times were good, SVB thrived. But over the
past year, the U.S. Federal Reserve has hiked interest rates, hurting the once
high-flying technology sector. The funding environment has got harder for
startups in the U.S., Europe and elsewhere.
SVB’s collapse has come at an already difficult
time for startup investors.
“This whole Silicon Valley Bank thing is the last
thing we needed and was completely unexpected,” Ben Harburg, managing partner
of Beijing, China-based venture capital fund MSA Capital, told CNBC.
Startups have had to
tighten their belt while technology giants have axed tens of thousands of
workers in a bid to cut costs.
In such an
environment, SVB played a key role in providing credit lines or other
instruments that allowed startups to pay their employees or ride out hard
times.
“Silicon Valley Bank
was very paternalistic to this sector, they not only provided payroll services,
loans to founders against their illiquid credit, but lines of credit as well.
And a lot of these companies were having trouble already raising equity and
they were counting on those lines to extend their runway, to push out the cash
burn beyond the recession we all expect.” Matt Higgins, CEO of RSE Ventures,
told CNBC’s “Street Signs Asia” on Tuesday.
“That evaporated
overnight and there’s not another lender that’s going to be stepping in to fill
those shoes.”
More
SVB's failure will have a ripple effect across
technology for years (cnbc.com)
Southeast Asia VC
firms could see a larger impact from SVB fallout than startups
SINGAPORE — Compared to startups, Southeast Asia’s
venture capital firms could see a bigger impact from the collapse of Silicon
Valley Bank because finding a replacement for the U.S.-based bank in the region
will be challenging.
“I think from a VC firm’s
perspective, you will see a bigger impact here,” said David Gowdey, managing
partner at Jungle Ventures, told CNBC’s “Squawk Box Asia.”
“That’s really because the local banks here aren’t
providing the same product and services that SVB provides,” Gowdey said
Tuesday, adding that SVB was Jungle Ventures’ primary bank.
While SVB served tech
startups and venture capital firms mostly located in the U.S. or have a
presence in the U.S. Some VCs based in Southeast Asia — such as Jungle Ventures
and Golden Gate Ventures — were also clients of SVB.
The bank provided VC
firms and startups access to the U.S. capital market as well as networking opportunities
in the U.S.
More
Southeast
Asia VC firms more impacted from SVB fallout than startups (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.
China sees record
7.7 million applicants for 200,000 government jobs
A record number of people in China took the civil
service exam this year, as unemployment
among young people soared.
According to CNBC analysis of state
media reports, 7.7 million people took the civil service exam in the 2023
application round, vying for more than 200,000 government jobs at the national
and provincial level.
Government jobs are typically
regarded as stable and prestigious in China. GDP growth has slowed from its
rapid pace of the past decades.
The interest in government jobs comes as Xi Jinping last
week cemented his position as China’s leader for an unprecedented third term.
Xi sees unity under the ruling
Chinese Communist Party as essential for building up the country. That’s meant
the party has and is set to increase its presence in the economy, including
among businesses that are not state-owned.
Studying “Xi thought” is a growing requirement for
schools in China.
For millions of people who want a
government job, they must take China’s civil service exam — which starts with
questions on Xi’s report to the party’s
congress and Xi thought in a multiple-choice section.
Here’s a sample question, from Gongkaotong, which
sells test preparation questions for the civil service exam:
More
China
jobs: Record 7.7 million applicants for 200,000 government jobs (cnbc.com)
Japan
Inc delivers largest wage increases in decades
March
15, 2023 10:23 AM GMT
TOKYO, March 15
(Reuters) - Top Japanese companies offered their largest pay increases in a
quarter century at annual labour talks which wrapped up on Wednesday, heeding,
at least for now, Prime Minister Fumio Kishida's calls for higher wages to
counter rising living costs.
Worker pay has
been one casualty of years of sputtering growth in the world's third-largest
economy since the late 1990s, leaving Japanese salaries well behind the OECD
average.
But now a weak
yen and rising commodities prices have driven up import costs and pushed
inflation to the highest in four decades, prompting Kishida to beat the drum
for better pay.
The average wage
increase at "shunto" spring wage talks this year was the highest in
about 30 years, according to the Keidanren business lobby, which did not give a
more exact figure. That put the increase broadly in line with analysts'
expectations for a boost of almost 3%, which would be the highest since 2.9% in
1997.
"This spring
marks a turning point for growth and wealth distribution," Kishida told a
meeting with representatives of business lobbies and unions. He also said he
aimed for a nationwide increase in the minimum wage.
A number of
Japan's biggest corporations - including Toyota Motor Corp (7203.T) and
Hitachi Ltd (6501.T) - said they had agreed fully to the requested
increases from unions, results that were widely flagged in recent weeks.
"Given the
surge in prices, employee expectations were running higher than most
years," Hitachi Vice President Kenichi Tanaka told a briefing.
The Rengo
umbrella labour group had called for a 5% pay hike.
This year's talks
marked the first time that all of Japan's major automakers had fully accepted
union demands, Akihiro Kaneko, the president of an umbrella group of automaker
unions, said.
More
Japan Inc delivers
largest wage increases in decades | Reuters
Terence Corcoran:
Silicon Valley Bank is part of global move to mark-to-market
SVB’s
failure originates with fiscal, monetary and woke policies
Terence CorcoranPublished Mar 15, 2023
The
dramatic wipeout of California’s Silicon Valley Bank and its takeover by the
U.S. government can easily be seen as a major case of corporate mismanagement
by executives who bungled a dangerous situation. When the bank couldn’t raise
money to cover a cash crisis, its big-time depositors created a run that forced
U.S. regulators to bail out the bank and set up a regime that will allow
billionaire depositors to get their money back.
But there’s
more to the SVB meltdown than botched financial management. The reality
bulldozer rolling over SVB and other institutions and markets is the same one
that’s rumbling over the world economy. We are living through the unpredicted
but inevitable COVID-19 lockdown aftermath, the product of national monetary,
fiscal and regulatory policies imposed by institutions distracted by other
economic, social and environmental issues.
One of the
aspects of the SVB failure was the bank’s massive accumulation of $150 billion
in deposits during the 2020-22 pandemic years, much of it coming from tech
companies looking for a place to park surplus cash. An example is Roku Inc., a
U.S. digital media firm that had almost $500 million on deposit at SVB. Along with scores of other tech
firms, Roku stood to lose its deposits, although now it will likely get bailed
out by Washington.
The problem
at SVB is that it had no real place to invest the pandemic-related surge in
deposits from Roku and others, so it bought U.S. government securities, mostly
when interest rates were low. While government securities are safe long term,
they fluctuate in value with interest rate movements. When rates rose, the
SVB’s bond holdings declined in market value. Other banks, such as First
Republic in San Francisco, are in the same boat and will also get bailed out.
The long-standing debate in economics and financial regulation over whether
banks and other institutions should be forced to mark their investment
portfolios to market value rather than face value or acquisition value dates
back decades, from the Enron crisis of the 1990s to the 2008 financial meltdown.
More
Silicon Valley Bank is part of global move to mark-to-market: Opinion | Financial Post
Covid-19 Corner
This section will continue until it becomes unneeded.
3 years after COVID-19
lockdowns, have we really emerged from those dark days safely?
Wed, March 15, 2023 at 9:00 AM GMT
On Feb. 17, 2020, the USA TODAY
Editorial Board met with the director of the National Institute
of Allergy and Infectious Diseases.
As a published synopsis of the interview said: "With China taking extreme
measures to prevent further spread of COVID-19 and
previously quarantined American cruise ship passengers returning to
the United States, Dr. Anthony Fauci, America’s point man on infectious
diseases, spoke with (us) about the latest coronavirus
developments."
On March 11, the World
Health Organization announced: "In the past two weeks, the number of cases
of COVID-19 outside China has increased 13-fold, and the number of affected
countries has tripled. There are now more than 118,000 cases in 114
countries, and 4,291 people have lost their lives. ... COVID-19 can be characterized as a
pandemic."
That same day, President
Donald Trump issued a travel suspension from
Europe for 30 days. On March
15, states began implementing shutdowns.
Three years later, with uneven
distribution of tests, vaccines and treatments, the world has
recorded about 677 million cases of COVID-19 and nearly 7 million
deaths, according to Johns
Hopkins University.
In the United States, the Centers
for Disease Control and Prevention reports nearly 104 million cases and more than 1.1
million deaths.
As the Biden administration winds down the treatment of
COVID-19 as an emergency by May 11 and as Americans, more than 70% vaccinated, have mostly gone on as if the pandemic
has ended, the USA TODAY Opinion team looks back on the lockdown and
how our lives have changed.
More
3 years after COVID-19 lockdowns, have we really
emerged from those dark days safely? (yahoo.com)
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.
"Reddmatter" shows evidence of room temperature
superconductivity
Michael Irving March 14, 2023
Scientists at the University of Rochester claim to have
created a material that acts as a superconductor at room temperature and lower
pressures than ever before. If confirmed, this “reddmatter,” as they call it,
could mark a major breakthrough.
Even if a material is a good conductor of electricity, it
will still encounter some resistance that affects efficiency. But in
superconductors, electrons can flow freely with zero resistance, which could
theoretically provide major advantages in energy grids, electric vehicles,
quantum computers and even high-speed maglev trains.
But of
course, there’s a catch: superconductivity only really works at temperatures
close to absolute zero, which makes it prohibitive for widespread real-world
use. In recent years, scientists have found that some materials can work
as superconductors
at higher temperatures, but only if you apply very high pressures, which
brings its own challenges to scaling up the tech.
In the
new study, the Rochester scientists claim to have created a material that works
as a superconductor at room temperature and relatively low pressure. The
material is a nitrogen-doped lutetium hydride (NDLH), and it demonstrates
superconductivity at a balmy 20.9 °C (69.5 °F) at 145,000 psi of pressure. The
latter figure may sound high, but it’s about two orders of magnitude lower than
has been needed in other experiments, and falls within the range used in some
manufacturing techniques.
----The study was published in the journal Nature, and the team describes the work in the video below.
More
"Reddmatter"
shows evidence of room temperature superconductivity (newatlas.com)
Just because you have a good hand today doesn't mean it's good tomorrow. And some of the things we're doing may become very disadvantageous at some point.
Jamie Dimon.
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