Baltic Dry Index. 1507 -53 Brent Crude 85.65
Spot Gold 2019 US 2 Year Yield 4.03 +0.03
Coronavirus
Cases 01/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 12/04/23 World 685,102,041
Deaths 6,838,606
"We
shouldn't pour cold water on everything.
We, the eight or nine players in global investment banking, have a very
good future."
Deutsche
Bank, CEO Josef Ackermann. Davos, January 2007.
Later
today the US inflation report for March. Depending on the numbers, the US
central bank will do nothing at its next meeting in May, raise their key
interest rate by 25 basis points, or at the worst, go back to raising their key
interest rate by 50 basis points or more.
In
the stock casinos though, most punters are betting on no change or at worst one
more 25 point rate hike and then a stop for at least the summer, probably longer.
Never
one to chase after 50:50 commodity or stock market bets, I think today is a
good day to let others be brave or foolish with their capital.
Besides,
if the IMF is worried about US banks then so am I. Where there’s one, two, three
cockroaches in US banking there’s likely to be whole lot more hiding out.
Asia markets mostly higher ahead of U.S.
inflation report, bank earnings
UPDATED TUE, APR 11 2023 11:53 PM EDT
Markets in the Asia-Pacific were mostly higher
on Wednesday as investors await key U.S. inflation data that will determine the
Federal Reserve’s path forward in its tightening cycle.
Economists polled by Dow Jones
expect a 6% year-over-year increase in the U.S. consumer price index.
Currently, the Fed is expected to raise rates by 25 basis points next month.
In Japan, the Nikkei 225 rose
0.6% and the Topix gained 0.7% as traders further digested Japan’s producer
price index and machinery orders report. South Korea’s Kospi gained
0.3%.
In Australia, the S&P/ASX 200 inched
up 0.5% while Hong Kong’s Hang Seng index fell
0.6%. In mainland China, the Shanghai Composite rose
0.5% and the Shenzhen Component slid
0.3%.
The
International Monetary Fund warned that the global economy
could be heading for the weakest growth since 1990, downgrading its outlooks
for the coming years.
Overnight on Wall Street, tech stocks fell with
the Nasdaq Composite shedding
0.43%. The S&P 500 ended
Tuesday’s session flat and the Dow
Jones Industrial Average rose 98.27 points, or 0.29%.
Investors also looked ahead to
key bank earnings from the U.S. as JPMorgan Chase, Wells Fargo and Citigroup are set to
report Friday. BlackRock and UnitedHealth Group are
also scheduled to report.
Asia markets mostly
higher ahead of U.S. inflation report, bank earnings (cnbc.com)
Stock
futures are flat ahead of key March inflation data: Live updates
UPDATED TUE, APR 11 2023 7:00 PM EDT
Stock futures were flat in overnight trading
Tuesday as investors turned their focus to March’s highly anticipated inflation
report.
Futures tied to the Dow Jones
Industrial Average traded flat, while S&P 500 and Nasdaq 100 futures inched
0.04% and 0.07% higher, respectively.
Stocks ended Tuesday’s
regular session mixed. The S&P 500 closed
little changed, while the Dow Jones
Industrial Average gained
0.29% and Nasdaq Composite lost
0.43%. Nine of the 11 major S&P sectors finished positive, led to the
upside by a 0.9% gain in the energy sector. Information technology stocks
slumped 1%, led to the downside by chip names and megacap software giant Microsoft.
Wall Street looked ahead to
March’s consumer price index, a key data point that could affect the Federal
Reserve’s rate decision come May. It could also cement the case for a stop to
the central bank’s rate-hiking regime. Economists polled by Dow Jones predict
that CPI rose by 0.2% in March, compared to a 0.4% gain in February.
“It kind of feels like the calm
before the storm,” said Ryan Detrick, chief market strategist at the Carson
Group. “I mean it’s light volume, not a lot of big moves today. Traders are
just kind of getting the eye on the prize, looking to that big CPI number.”
Minutes from the Federal
Reserve’s March policy meeting are also due out Wednesday, and slated to offer
further clues into the mindset behind the central bank’s 25
basis point hike in the wake of Silicon Valley Bank’s collapse and
the turmoil that rattled the broader banking sector.
Stock
market today: Live updates (cnbc.com)
Next,
in banking news, however unlikely, is the UK’s NatWest bank the next Credit
Swiss?
The
IMF downgrades growth, warns on banks.
The
Swiss parliament vetoes nothing.
US hedge fund places
record-breaking bet against NatWest as it gambles on the British bank's shares
plummeting amid ongoing trouble in financial sector
April
12, 2023
An American
hedge fund has placed a record-breaking bet that NatWest shares will plummet as
the global banking system comes under further strain.
Data from City
regulator the Financial Conduct Authority showed Marshall Wace had taken a 0.61
per cent short position in NatWest shares.
It was the
largest short in NatWest stock reported to the FCA, under regulations in place
since 2012, according to analysis by The Times, which first reported the
position.
Banking shares
have come under pressure since a crisis enveloped US lenders including Silicon
Valley Bank and European giant Credit Suisse.
NatWest shares
have fallen by 8 per cent since the crisis began around a month ago.
However,
markets have been relatively calm since Credit Suisse’s emergency rescue by its
Swiss rival UBS.
And analysts
think major UK banks - which have been forced to be much more cautious since
the 2008 crisis - are largely insulated from the problems.
NatWest
remains more than 40 per cent owned by the taxpayer after it was rescued during
the financial crisis in 2008.
Earlier this
month, the Treasury pushed back its plan to sell down its holding in the bank
by two years, to 2025, in response to the recent share price fall.
Banks in ‘more precarious situation’ creating
risks for global growth, IMF chief economist warns
Interest rate rises
have increased banks’ vulnerabilities — and their response presents a
significant risk to global growth, the International Monetary Fund’s chief
economist warned Tuesday.
“We are concerned
about what we have seen in the banking sector, particularly in the U.S. but
maybe also in other countries, might do to growth in 2023,” Pierre-Olivier
Gourinchas told CNBC’s Joumanna Bercetche in Washington, D.C.
Central bank hikes
have increased funding costs for banks, while lenders have also seen some
losses in assets like long-term bonds.
“Banks are in a more precarious situation. They
have healthy cushions, but it’s certainly going to lead them to be a little bit
more prudent and maybe cut down lending somewhat,” Gourinchas said.
In one scenario, the IMF sees
funding conditions for banks tightening further and squeezing lending, bringing
its forecast of
2.8% global growth in 2023 down to 2.5%.
Gourinchas said its models had also
forecast a more adverse scenario where financial stability is not contained.
“That would lead to massive capital flows from the
rest of the world trying to go back to safety, going to U.S. Treasurys, dollar
appreciation, increasing risk premia, loss of confidence,” he said. In this
scenario, the IMF sees the world economy growing at about 1% for this year. But
the likelihood of this is comparatively low, Gourinchas noted, at about 15%.
The IMF on Tuesday released its latest global
growth report, which contained its weakest medium-term growth
expectations for more than 30 years.
More
Banks
creating downside risks for global growth: IMF chief economist (cnbc.com)
Swiss
parliament's lower house rejects Credit Suisse rescue package
April 12, 20231 2:06
AM GMT+1
BERN, April 12 (Reuters) - The lower
house of Switzerland's parliament voted late on Tuesday to retrospectively
reject the 109 billion Swiss francs of financial guarantees the government gave
to Credit Suisse (CSGN.S) as part of a hastily
cobbled-together rescue package.
At an extraordinary
government session called to discuss Credit Suisse's demise, 102
parliamentarians voted against the measure. Earlier on Tuesday, Switzerland's upper house voted in favor of the
government guarantees.
The votes are,
however, largely symbolic as the state has committed the funds and lawmakers
cannot overturn that decision.
Swiss
parliament's lower house rejects Credit Suisse rescue package | Reuters
Finally,
yet another recession warning from “Dr. Doom.” I think we get stagflation first
followed eventually by recession.
Nouriel Roubini on recession: 'US will head to recession as more
financial institutions may falter’
Economist
Nouriel Roubini, who goes by the nickname 'Doctor Doom' by Wall Street, said
that as the credit crunch intensifies in the system, there will be a recession
in the US economy.
Updated
Apr 11, 2023, 2:37 PM IST
Economist Nouriel Roubini, who correctly predicted the 2008 financial
crisis, said that the United States may see more banks and financial institutes
go bankrupt in the current situation leading to a recession-like situation.
In a recent interview with CNBC-TV 18, Roubini, CEO of Roubini Macro
Associates, LLC, said the current period marks the beginning of a credit crunch
in the banking system, especially the regional banks in the US, which usually
lends money to households, corporations and businesses.
“Recently, the problems of the banks have come from what is referred to
as market or duration risk, meaning having long-term securities whose value is
falling as interest rates are going higher. But we are going from market risk
to credit risk, because now there is a beginning of a credit crunch in the
banking system, especially the regional banks that lend money to households, to
corporations, to businesses, to commercial real estate,” he said.
Roubini, who goes by the nickname 'Doctor Doom' by Wall
Street, said that as the credit crunch intensifies in the system, there
will be a recession in the US economy. “Once that happens there will be more
non-performing loans and more defaults and therefore, there will be more stress
for parts of the US banking system,” he said during his chat with CNBC
TV-18.
His comments come almost a month after California-based Silicon Valley
Bank in the US collapsed. The closure of SVB is being touted as the
largest bank closure since the failure of Lehman Brothers, which led to the
2008 financial crisis.
The development has shocked the tech industry worldwide, as tech
unicorns and SaaS were the biggest customers for SVB. Silicon Valley Bank in
all had $209 billion in total assets and about $175.4 billion in total
deposits, as of December 2022.
Discussing more about the US economy, Roubini said that the tight labour
market implies wage inflation is still too high in the US.
“The fact that the labour market is still tight, the low unemployment
rate, ageing of the population, restrictions on migration, falling labour force
participation rate implies that the wage inflation is still too high,” he
explained.
More
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.
We Need to
Talk About Inflation — the warning signs are still there
Stephen
D King’s timely book should be essential reading for economic policymakers
everywhere
April
11, 2023
Economic
history is rarely taught in universities these days. This is a pity, since it
is a better guide to policymaking than Nobel Prize winning theses in economic
theory. As a result, every two generations or so we are destined to repeat
serious policy mistakes. In Britain the Truss government failed to study the
Barber Boom of 1972-73 and arguably the world’s central banks too have failed
to learn from the oil price shocks of 1973 and 1980.
Stephen
D King’s highly readable and informative book provides a welcome antidote. Its
title is spot on. We should talk about inflation, not least because of its
arbitrary incidence. It penalises thrift and rewards profligacy. It makes
planning difficult. And it enables government through sleight of hand to impose
stealth taxes through freezing tax thresholds and real wage cuts on its employees.
King’s canter through 2,000 years of inflationary history — from Emperor
Diocletian’s debasement of the coinage through to the Federal Reserve’s
decision in 2021 to allow inflation to run at above the 2 per cent “central
target” — is instructive. Money matters. Print too much and inflation generally
follows. But sadly the quantity of money and inflation is not so correlated as
to make monetarism — the strict control of supply — an effective policy guide.
Confidence in a currency matters too. Lose it and trust in institutions diminishes. You only have to look at the experience of Argentina and Brazil. But the history of institutions in mature economies also contains lessons. During the 19th century, the high water mark of the gold standard, the purchasing power of sterling increased by 48 per cent.
During the 20th century, when both the gold standard and the post-1945 Bretton Woods system of fixed exchange rate collapsed, sterling’s purchasing power fell by 98 per cent. When inflation is rising, governments invariably blame external factors. And we should be in no doubt that the supply chain problems arising from the pandemic, and the energy price increases generated by the war in Ukraine, have been a major factor in the recent upsurge in inflation. But the ease with which inflation took root must also reflect the excessively loose monetary policy of recent years.
King concedes in We Need to Talk About Inflation that “the big challenge regarding inflation is to work out which of its many instances are temporary — the Korean war, for example — and which are likely to persist”. The answer, he writes, lies in four tests.
First, have there been institutional changes suggesting an increased bias in favour of inflation? King argues that central banks’ bias against deflation during the past decade may have created a bias in favour of inflation. He adds that by distorting the bond market, quantitative easing removed a key early warning indicator available to central banks to gauge inflationary risks: freely moving prices in government paper. Quantitative easing — the lowering of market interest rates through the large-scale buying of government bonds — also muddied the relationship between finance ministries and central banks, sucking the latter into the corrosive orbit of fiscal decision making.
Second, are there signs of monetary excess that indicate heightened inflationary risk? Here, King points to the rate of US monetary expansion during the pandemic.
Third,
are inflationary risks trivialised or excused? It took 2.5 years for the annual
rate of UK inflation to rise from 0.3 per cent to 10 per cent: yet, throughout
that period, the Bank of England persistently forecast that inflation would
return to the 2 per cent target within two years.
More,
much more.
We Need to Talk About Inflation — the warning signs are still there | Financial Times (ft.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
More bogus “science” comes to light.
Masks Cause Headaches, Itching,
and Lower Oxygen Intake: Study
Apr 9
2023
A systematic review of 2,168
studies that looked into the adverse effects of wearing masks during the
COVID-19 pandemic has found that the practice led to negative health
consequences, including itching, headaches, and restriction of oxygen.
“We found significant effects in
both medical surgical and N95 masks, with a greater impact of the second,”
states the review, published in the “Frontiers in Public Health” on
April 5. A meta-analysis of multiple studies found that headache was the “most
frequent symptom” among mask wearers, with a prevalence of 62 percent for general
mask use and up to 70 percent when using N95 masks. Shortness of breath was
observed at 33 percent for general mask use and 37 percent among N95 users.
While 17 percent of surgical mask
wearers experienced itching, this number was at 51 percent among users of N95.
Acne prevalence among mask users was at 38 percent and skin irritation was at
36 percent. Dizziness was found to be prevalent among 5 percent of subjects.
“Masks interfered with O2-uptake
and CO2-release and compromised respiratory compensation,” the review states.
“Though evaluated wearing durations are shorter than daily/prolonged use,
outcomes independently validate mask-induced exhaustion-syndrome (MIES) and
down-stream physio-metabolic disfunctions. MIES can have long-term clinical
consequences, especially for vulnerable groups.”
The restriction of oxygen uptake
and hindrance in carbon-di-oxide release was identified as more significant
among users of N95 masks. Continuous rebreathing of carbon dioxide results in
the “right-shift of hemoglobin-O2 saturation curve.”
“Since O2 and CO2 homeostasis
influences diverse down-stream metabolic processes, corresponding changes
toward clinically concerning directions may lead to unfavorable consequences
such as transient hypoxemia and hypercarbia, increased breath humidity, and
body temperature along with compromised physiological compensations,” the
review states.
The review also said that several mask-related symptoms may have been misinterpreted as symptoms of long COVID. “In any case, the possible MIES contrasts with the WHO definition of health,” it states, referring to the World Health Organization.
It suggested that the side effects of face masks be assessed based on risk-benefit analysis after taking into consideration their effectiveness against viral transmissions. If “strong empirical evidence” showing the effectiveness of masks is absent, the study recommended that wearing masks should not be mandated, “let alone enforced by law.”
Prior to the COVID-19 pandemic, existing data on respiratory viruses had shown that there was no basis for wearing masks to prevent their spread. “All the studies done in the world until 2020 showed that there is no justification for this,” Yoav Yehezkelli, a specialist in internal medicine and a lieutenant colonel in the Israel Defense Forces, said in an interview with The Epoch Times in January.
The U.S. Centers for Disease
Control and Prevention as well as the WHO issued guidelines that there was no
need for wearing masks in the general public, he pointed out.
But in 2020 following the COVID-19 outbreak, recommendations on mask-wearing around the world suddenly changed “without having any new professional support to confirm that it does indeed have effectiveness against respiratory infection.”
More
Masks Cause
Headaches, Itching, and Lower Oxygen Intake: Study (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.
Nano-composite silicon anode promises EV range boost
& 10-min charging
C.C. Weiss April 10, 2023
We've been covering the exploration and development of silicon
battery anodes for well over
a decade, but most of the breakthroughs
have come at laboratory level. The past few years have seen the technology
moving toward commercialization, and Silicon Valley battery materials company
Sila announced this month that its Titan Silicon anode is now available. The
new anode is already set to feature in the upcoming all-electric Mercedes-Benz
G-Class and promises the potential for range increases of 20% and dramatic
charging time decreases down to as low as 10 minutes.
Sila announced Titan Silicon availability last week, calling
the technology a high-performance nano-composite silicon that's engineered to
replace common graphite anodes on a mass scale. It estimates that the
alternative anode tech could increase battery capacity enough to boost electric
vehicle range by up to 20%, representing the potential addition of more than
100 miles (161 km) in current market range leaders like the 516-mile (830-km)
2023 Lucid Air Grand Touring. It believes future iterations could double those
gains.
"Titan
Silicon is the highest performing nano-composite silicon in the market
today," said Gene Berdichevsky, Sila cofounder and CEO. "Our battery
and materials teams are constantly iterating and improving upon our chemistry
to deliver the best and most cost-efficient results possible. With the wide
adoption of EVs, consumers are looking for best-in-class solutions that deliver
best-in-class performance, and our solutions provide just that: longer range
and faster charge."
As far
as the faster charging goes, Sila quotes a charging time as low as 20 minutes
for 10 to 80%. That doesn't sound any faster than current-generation batteries,
such as the 18-minute 10
to 80% time that comes with Hyundai's 800-V ultra-fast charging, but Sila says
its 20-minute time would represent an improvement for packs that currently take
60 minutes to charge that same 10-to-80% gap. It believes it will be able to
halve that figure down to 10 minutes in the future.
More
Nano-composite
silicon anode promises EV range boost & 10-min charging (newatlas.com)
A large Bank is exactly the place where a vain and shallow person
in authority, if he be a man of gravity and method, as such men often are, may
do infinite evil in no long time, and before he is detected. If he is lucky
enough to begin at a time of expansion in trade, he is nearly sure not to be
found out till the time of contraction has arrived, and then very large figures
will be required to reckon the evil he has done.
Walter Bagehot. Lombard Street. 1873
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