Baltic Dry Index. 1484 Thur. Brent Crude 74.99
Spot Gold 1978 U S 2 Year Yield 3.76 unch.
The novel portrays the inner workings of the financial world of
a bank in Paris in the early 1930s. The bank is populated by a cast of shady
characters who are manipulative, unsavory schemers. The owner of the Bertillon
Brothers bank, Jules Bertillon, exemplifies all that is bad about the bank and
will stop at nothing to achieve his sole aim of making as much money as he can.
Stocks close higher Friday as investors try to shake off
latest bank fears: Live updates
UPDATED FRI, MAR 24 2023 5:13 PM EDT
Stocks rose
Friday after a volatile trading session. Although Friday began with fears that
the banking crisis was spilling over to Deutsche Bank, the markets rebounded to
end the week on a higher note.
The Dow Jones Industrial Average gained
132.28 points, or 0.41%, closing at 32,237.53. The S&P 500 rose
0.56%, while Nasdaq Composite ticked
up 0.3%. The major indexes all had a winning week, with the Dow gaining 0.4%
week-to-date as of Friday afternoon, while the S&P 500 and Nasdaq gained
1.4% and 1.6%, respectively.
One factor that helped the market
was a bounce back in regional bank stocks. The sector rallied on Friday, with
the SPDR S&P
Regional Banking ETF gaining
3.01% during the trading session. Amid all the volatility, the KRE ended the
week up 0.18%.
A selloff of Deutsche Bank’s
U.S.-listed shares Friday morning put downward pressure on market sentiment and
the major indexes, before the bank recovered some of its earlier losses.
Deutsche Bank closed 3.11% lower Friday, rebounding from a 7% drop earlier in
the trading session.
A selloff of shares was triggered
after the the
German lender’s credit default swaps jumped, but without an apparent
catalyst. The move appeared to raise concerns once again over the health of the
European banking industry. Earlier this month, Swiss regulators forced a UBS
acquisition of rival Credit Suisse. Deutsche Bank shares traded off their worst
levels of the session, which caused major U.S. indexes to also cut their
losses.
“I think that the market overall
is neither frightened nor optimistic — it’s simply confused,” said George Ball,
president at Sanders Morris Harris. “The price action for the last
month-and-a-half, including today, is a jumble without any direction or
conviction.”
European Central Bank President
Christine Lagarde tried to ease concerns, saying euro zone banks are resilient
with strong capital and liquidity positions. Lagarde said the ECB could provide
liquidity if needed.
Investors continued to assess the
Fed’s latest policy move announced this week. The central bank hiked rates by a
quarter-point. However, it also hinted that its rate-hiking campaign may be
ending soon. Meanwhile, Fed Chair Jerome Powell noted that credit conditions
have tightened, which could put pressure on the economy.
On Thursday, Treasury Secretary
Janet Yellen said regulators are prepared to take more action if needed to
stabilize U.S. banks. Her comments are the latest among regulators attempting
to buoy confidence in the U.S. banking system in the wake of the Silicon Valley
Bank and Signature Bank closures.
Ball said that Deutsche Bank is
“very sound financially,” noting that the market was “overreacting” in wake of
the earlier bank failures.
″[Deutsche] could be crippled if
there’s a big loss of confidence and there’s a run on the bank. There is,
however, no fundamental reason why that should occur, other than nervousness.”
First the banks
started to break in February, then it was the real estate investment trusts
(which “have now accelerated lower particularly in the office space”), and now
it’s the turn of insurance, railroad and airline stocks, BTIG chief market
technician Jonathan Krinsky wrote in a note to clients dated Thursday.
Krinsky highlighted
four insurance stocks that are sitting at or near 52-week lows (Metlife, Chubb,
AIG, Prudential) and said the KBW Nasdaq Insurance Index (KIX) is down
about 16% from its February highs.
Meanwhile, for
adherents of the Dow Theory, Krinsky noted that railroad
stocks were “less than 1% away from their October lows” while airline stocks
“are threatening a multi-month breakdown.”
Technology is holding up the market , so “if tech fails, as we expect, then [the S&P 500] can quickly unravel lower.”
Third Bridge
analyst Omar Fahmy says that community and regional banks across the U.S. are
headed toward a capital hoarding era as net interest margins tighten.
“Our experts say
we’re entering a period of capital hoarding for many community and regional banks
as institutions compete for deposits and look to pull back on lending,” Fahmy
wrote in a Friday note.
“On average, we
anticipate widespread NIM compression amongst regional banks followed by
heightened efforts to improve their capital efficiency ratios.”
The analyst added
that he warns investors “to avoid a situation where commercial property owners
opt for foreclosure, regional banks will have to start considering widespread
loan modifications.”
“While loan
modifications to commercial real estate debt would relieve short-term pressure
on banks and landlords, this would trigger their classification as Troubled
Debt Restructuring. This would increase the risk rating of the loan and force
banks to hold more risk-adjusted capital that could otherwise be lent,” said
Fahmy.
Nearly $100 billion in deposits pulled from banks;
officials call system ‘sound and resilient’
Regulators again assured the public that the
banking system is safe, as fresh data showed customers recently pulled nearly
$100 billion in deposits.
Treasury Secretary Janet Yellen, Federal Reserve
Chairman Jerome Powell and more than a dozen other officials convened a special
closed meeting of the Financial Stability Oversight Council on Friday.
“The Council discussed current conditions in the
banking sector and noted that while some institutions have come under stress,
the U.S. banking system remains sound and resilient,” the statement said. “The
Council also discussed ongoing efforts at member agencies to monitor financial
developments.”
There were no other details
provided on the meeting.
The readout, released shortly after
the market closed Friday, came around the same time as new Fed data showed that bank customers
collectively pulled $98.4 billion from accounts for the week ended March 15.
That would have covered the period
when the sudden failures
of Silicon Valley Bank and Signature Bank rocked the industry.
Data show that the bulk of the money came from small banks. Large
institutions saw deposits increase by $67 billion, while smaller banks saw
outflows of $120 billion.
The withdrawals brought total
deposits down to just over $17.5 trillion and represented about 0.6% of the
total. Deposits have been on a steady decline over the past year or so, falling
$582.4 billion since February 2022, according to the Fed data released Friday.
---- Banks have been flocking to
emergency lending facilities set up after the failures of SVB and Signature.
Data released Thursday showed that institutions took a daily average of $116.1
billion of loans from the central bank’s discount window, the highest since the
financial crisis, and have taken out $53.7 billion from the Bank Term Funding
Program.
$100
billion pulled from banks but system called 'sound and resilient' (cnbc.com)
Treasury yields fall as concerns over global banking
system grow once again
PUBLISHED FRI, MAR 24 2023 5:17
AM EDT
U.S. Treasury yields fell on Friday as investors
considered what the latest developments in the banking sector and the Federal
Reserve’s interest rate policy expectations could mean for the economy. Renewed
concerns over the state of the global banking system also made Treasurys more
appealing.
At 6:07 a.m. ET, the yield on the 10-year
Treasury was down by close to 10
basis points to 3.298%. The 2-year
Treasury yield was at 3.591% after
falling by more than 20 basis points.
Yields and prices move in opposite directions and
one basis point equals 0.01%.
The move comes after Deutsche Bank’s credit default
swaps jumped, sending the stock down sharply. The move appeared to raise
concerns once again over the health of the European banking industry. Earlier
this month, Swiss regulators forced a UBS acquisition of rival UBS.
Investors digested a week of central bank interest
rate policy decisions.
More
In food price inflation news, it doesn’t
look like it will end anytime soon.
Global Food Roundup:
Appetite for Cooking Oil and Farm Labor Shortage
By Agnieszka de Sousa
24 March
2023 at 12:00 GMTFrom a
looming cooking oil shortage to Britain scouring the world in search of
farm workers, here’s a snapshot of key food stories from around the
world:
Food Inflation
Food prices continued to soar in parts of the
world. In the UK, general inflation rose unexpectedly for the first time
in four months after food and drink prices rallied at the fastest pace
in 45 years. Vegetable
shortages in supermarkets were partly blamed for the surprise jump. The
price of a basket of English breakfast items
went higher too, crossing £35 ($43) for the first time.
Some European Union governments continued to
step up measures to slow the pace of inflation. In Sweden,
the government proposed relief to families with children in an effort to
support the most vulnerable households. Portugal is considering slashing VAT on
items and working with retailers to bring down prices.
Crop World
Ukrainian farmers are
cutting fertilizer use, idling land and switching to cheaper-to-grow oilseeds —
all of which risk reducing grain output by a fifth from last
year’s already-low level. Global grain stockpiles are expected to fall
near the lowest in a decade.
There are signs that a shortage of
vegetable oils is coming, driven by a global biofuel boom as governments
from the US to Brazil and Indonesia embrace energy made from
plants. Soybeans, canola, or even animal fat, are used in an attempt
to move away from fossil fuels. On the flipside, that’s intensifying a
debate over food versus fuel.
More
Supply Chain Latest: Vegetable Oil Shortages and UK
Farm Labor - Bloomberg
Finally,
more from Seymour Hersh on the recent CIA disinformation pipeline campaign. Six
men on a rented yacht, sailed from Poland and blew up the pipelines f0r Ukraine.
Well, if they so, I suppose, and I have a bridge for sale in Brooklyn.
THE COVER-UP
The
Biden Administration continues to conceal its responsibility for the
destruction of the Nord Stream pipelines
March
22, 2023.
It’s been six weeks
since I published a report, based on anonymous sourcing, naming President Joe Biden
as the official who ordered the mysterious destruction last September of Nord
Stream 2, a new $11-billion pipeline that was scheduled to double the volume of
natural gas delivered from Russia to Germany. The story gained traction in
Germany and Western Europe, but was subject to a near media blackout in the
US. Two weeks ago, after a visit by German Chancellor Olaf Scholz to
Washington, US and German intelligence agencies attempted to add to the
blackout by feeding the New York Times and the German
weekly Die Zeit false cover stories to counter the report
that Biden and US operatives were responsible for the pipelines’ destruction.
Press aides for the
White House and Central Intelligence Agency have consistently denied that
America was responsible for exploding the pipelines, and those pro forma
denials were more than enough for the White House press corps. There is no
evidence that any reporter assigned there has yet to ask the White House press
secretary whether Biden had done what any serious leader would do: formally
“task” the American intelligence community to conduct a deep investigation,
with all of its assets, and find out just who had done the deed in the Baltic
Sea. According to a source within the intelligence community, the president has
not done so, nor will he. Why not? Because he knows the answer.
---- In early March, President Biden hosted
German Chancellor Olaf Scholz in Washington. The trip included only two public
events—a brief pro forma exchange of compliments between Biden and Scholz
before the White House press corps, with no questions allowed; and a CNN interview
with Scholz by Fareed Zakaria, who did not touch on the pipeline allegations.
The chancellor had flown to Washington with no members of the German press on
board, no formal dinner scheduled, and the two world leaders were not slated to
conduct a press conference, as routinely happens at such high-profile meetings.
Instead, it was later reported that Biden and
Scholz had an 80-minute meeting, with no aides present for much of the time.
There have been no statements or written understandings made public since then
by either government, but I was told by someone with access to
diplomatic intelligence that there was a discussion of the pipeline
exposé and, as a result, certain elements in the Central Intelligence
Agency were asked to prepare a cover story in collaboration with German
intelligence that would provide the American and German press with an
alternative version for the destruction of Nord Stream 2.
In the words of the intelligence
community, the agency was “to pulse the system” in an effort to discount the
claim that Biden had ordered the pipelines’ destruction.
More,
subscription required.
THE COVER-UP -
Seymour Hersh (substack.com)
"It was a total fabrication by American intelligence that was passed along to the Germans, and aimed at discrediting your story," Hersh was told by a source within the American intelligence community.
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.
Is
Deutsche Bank the next Credit Suisse? Will Germany follow the Swiss and merge
DB into a “rescuer,” trashing the AT1 bondholders in favour of the
shareholders?
Deutsche Bank shares tumble, default insurance cost shoots up
March 24,
2023
LONDON/FRANKFURT (Reuters)
-Deutsche Bank shares fell for a third day on Friday, after a sharp jump in the
cost of insuring against the risk of default late the day before fuelled
concerns about the overall stability of Europe's banks.
Deutsche shares, which have lost a fifth of their value so far this
month, were last down 5.5% at 8.843 euros ($9.57), not far off Monday's
five-month low.
They closed 3.2% lower on Thursday, while the bank's credit default swaps (CDS) - a form of insurance for bondholders - shot up to 173 basis points (bps) from 142 bps the day before, according to data from S&P Market Intelligence on Thursday.
This marks the largest one-day rise in Deutsche's CDS on record,
according to Refinitiv data.
Some
of Deutsche Bank's bonds meanwhile sold off too. Its 7.5% Additional Tier-1
dollar bonds fell by 1 cent to 74.716 cents on the dollar, pushing the yield up
to 22.87%.. That yield is double what it was just two weeks ago, according to
Tradeweb data.
AT1s issued by banks have come under pressure since Credit Suisse was
forced to write down $17 billion of its AT1s as part of a forced takeover by
UBS at the weekend.
European banks have had a rough ride in the last week with developments
at Credit Suisse and turmoil among regional U.S. banks fueling concerns about
the health of the global banking sector.
The STOXX 600 index of European banks - which does not include shares of
Credit Suisse or UBS - has seen one of its most volatile weeks of trading in a
year. The index was last down 2.1%, heading for a monthly decline of 17%.
Deutsche Bank
shares tumble, default insurance cost shoots up (msn.com)
BoE's Bailey urges firms to assume lower inflation when
setting prices
March 24, 2023
LONDON (Reuters) -British businesses should
consider official forecasts showing inflation will fall this year when setting
their prices, Bank of England Governor Andrew Bailey said on Friday.
"When companies set prices, I understand that
they have to reflect the costs that they face," Bailey told the BBC.
"But what I would say, please, is that when we
are setting prices in the economy and people are looking forwards, we do expect
inflation to come down sharply this year. And I would just say, please bear
that in mind," he said.
Bailey went on to say he did not have any evidence
that companies were putting prices up more than necessary.
Britain's central bank raised its main interest
rate to 4.25% on Thursday from 4%, a day after official figures showed an
unexpected rise in the annual rate of consumer price inflation to 10.4% in
February.
Bailey
repeated that the central bank expected inflation to fall sharply this year as
the impact of last year's steep rise in energy prices fell out of year-on-year
price comparisons, and said he was "very relieved" that inflation had
stabilised.
Now I do see encouraging signs. There is evidence
of encouraging progress. But we have to be extremely vigilant on that
front," he said.
"And I would say to people who are setting
prices, please understand that if we get inflation embedded, interest rates
will have to go up further."
Financial markets on Friday priced in one more BoE
interest rate rise this year, taking rates to a peak of 4.5%.
Last year Bailey faced criticism from trade unions
after he said that attempts to ensure pay growth matched inflation would delay
the return of inflation to its 2% target, and shift the costs of higher
inflation to those with weaker bargaining power.
On Thursday, BoE staff revised up their short-term
forecast for the economy to predict modest growth in the three months to the
end of June, rather than a contraction.
Bailey said Britain's economy now had a good chance
of avoiding recession.
More
BoE's Bailey urges
firms to assume lower inflation when setting prices (msn.com)
If
trivial pursuit were designed by economists, it would have 100 questions and
3,000 answers.
Ronald Reagan.
Below,
why a “green energy” economy may not be possible, and if it is, it won’t be
quick and it will be very inflationary, setting off a new long-term commodity
Supercycle. Probably the largest seen so far.
The
“New Energy Economy”: An Exercise in Magical Thinking
https://media4.manhattan-institute.org/sites/default/files/R-0319-MM.pdf
Mines,
Minerals, and "Green" Energy: A Reality Check
https://www.manhattan-institute.org/mines-minerals-and-green-energy-reality-check
"An
Environmental Disaster": An EV Battery Metals Crunch Is On The Horizon As
The Industry Races To Recycle
by Tyler Durden Monday, Aug 02, 2021 - 08:40 PM
Covid-19
Corner
This
section will continue until it becomes unneeded.
‘Jewel in the crown’ Covid-19 infection survey bows out
March 23, 2023
Official estimates of UK
Covid-19 infections will come to a halt on Friday – just as levels may be on
the increase again.
The long-running coronavirus
infection survey, dubbed the “envy of the world” for its success in measuring
prevalence of the virus among the population, will publish its final regular
update on March 24.
Any
further monitoring of Covid-19 will be announced after a review to ensure it is
“cost effective”, according to the UK Health Security Agency (UKHSA).
Statistical
experts hailed the survey as the “jewel in the crown of UK science”, adding it
is “vital” this kind of “trusted and reliable” resource is available in the
future.
The
infection survey has run continuously for nearly three years, providing
valuable weekly data on levels of Covid-19 across the UK and allowing
successive waves of the virus to be identified and tracked.
It has
also supplied crucial information on the emergence of new variants, antibody
levels and long Covid.
The survey
collected tests from households regardless of whether participants knew they
had Covid-19, or if they were reporting results to the NHS, meaning
it provided a snapshot of the true spread of the virus, which was often
underestimated by Government figures.
Sir David Spiegelhalter, emeritus professor of statistics at Cambridge
University and chairman of the advisory board for the survey, told the
PA news agency it had been an “extraordinary achievement” which has provided
“vital evidence of great value both to national policy and international
scientific understanding”.
He continued: “There is a general consensus that the
survey has been a world-leading demonstration of how health surveillance can
best be done. A loyal cohort of participants have provided repeated swabs,
blood tests and symptom data – and if we did not test people without symptoms,
how else would we know how many were infected and yet symptom-free?
More
‘Jewel in the crown’ Covid-19 infection survey bows
out (msn.com)
World Health Organization - Landscape of COVID-19 candidate vaccines. https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines
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 more useful Covid links.
Johns Hopkins Coronavirus
resource centre
https://coronavirus.jhu.edu/map.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, I’ve added this section.
Black Swan Graphene is revolutionizing
the concrete and plastics industries with low-cost, high-performance bulk
graphene
The
company has a production capacity of 40 tonnes at its pilot plant in the UK and
is creating a fully integrated graphite-to-graphene facility in Québec
Fri
24 Mar 2023
Two hundred times
stronger than steel and a better conductor of heat and electricity than copper,
graphene is set to transform industries from concrete to plastics, and even
battery materials.
Dubbed the “wonder
material” due to its ability to make products stronger, smaller, and lighter,
graphene is a thin, single layer of graphite.
Bulk graphene, which,
generally speaking, has five to 100 layers, has significant potential in
large-volume applications because it is far cheaper to produce than the
single-layer graphene used in low-volume applications, usually
electronics.
And, just like carbon fibre experienced in the 1990s, demand for
bulk graphene is set to explode once the price is right, according to Goldman Sachs
(NYSE:GS) analysts.
In a 2016 research report, the analysts cited
a price tipping point of US$25 per kilo for bulk graphene to be
competitively priced as a tire additive.
With a focus on low-cost, high-performance bulk graphene,
Black Swan Graphene intends to enter the market with a target selling
price of US$8 to US$10 per kilogram.
The company, which already has a production capacity of 40 tonnes
at its pilot plant in the United Kingdom, is creating a fully integrated
graphite-to-graphene facility in Québec, Canada.
More
This weekend’s music diversion. A very talented 10 year old plays from memory the
music of a long forgotten brilliant English composer. Approx. 8 minutes.
Baston
concerto for recorder No. 2 in C major Bagi Flóra
Baston
concerto for recorder No. 2 in C major Bagi Flóra - YouTube
This
weekend’s chess update. Approx. 14 minutes.
You're
a Wizard, Hikaru!
You're a Wizard,
Hikaru! - YouTube
This
weekend math’s update. Approx. 4 minutes.
Animating
Nicomachus's 2000 year old mathematical gem (Mathologer Christmas video)
Animating
Nicomachus's 2000 year old mathematical gem (Mathologer Christmas video) -
YouTube
A bank is a confidence trick. If you put up the right signs, the
wizards of finance themselves will come in and ask you to take their money.
House of All Nations. 1938.
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