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What are the first two laws of economics?
For each economist, there exists an equal and opposite economist; the second law says that they're both wrong.
It is the last trading day of November and normally a day to dress up stocks in the global casinos.
But to this old dinosaur market trader it’s a day to run, not walk to the nuclear bunkers.
Germany’s property market just blew up, likely the first of many, while China’s manufacturing recession seems to be deepening.
Toss in that the USA is likely already in
recession and bad things are about to start happening fast.
European markets
head for higher open ahead of euro zone inflation data
UPDATED THU, NOV 30 2023 12:28 AM
EST
European markets are heading for a positive open
Thursday, with regional investors keeping a close eye on the release of
preliminary euro zone inflation data for November.
European markets
closed higher Wednesday after data released in the afternoon showed German
inflation eased to 2.3% in November, significantly more than the 2.6% forecast
in a Reuters poll.
European markets
are also keeping a close eye on the COP28 climate summit that begins Thursday
and the OPEC+ meeting of major oil producers. Production cuts are expected at
the policy meeting, which will be attended by members of the Organization of
Petroleum Exporting Countries and its allies, including Russia.
Elsewhere Thursday, final
third-quarter gross domestic product data for France is also due, as are German
unemployment figures for November.
European
markets live updates: euro zone inflation data, stocks, news (cnbc.com)
Europe's Signa
toppled in property rout
By Alexandra
Schwarz-goerlich and John O'Donnell November 29, 2023 12:46 PM GMT
VIENNA/FRANKFURT, Nov 29 (Reuters) - Property and
retail giant Signa declared insolvency on Wednesday after last-ditch attempts
to secure fresh funding failed, making it the biggest casualty so far of
Europe's property crash.
Controlled by Austrian magnate Rene Benko, the
group is an owner of New York's Chrysler Building as well as several
high-profile projects and department stores across Germany, Austria and
Switzerland.
The multi-billion-euro group, whose tentacles reach
from Germany's best-known department stores, Berlin's KaDeWe Group, to the
country's top department store chain Galeria and a project to build a
skyscraper, is set to send ripples across the continent's embattled property
sector.
Austrian
chancellor Karl Nehammer sought to play down the significance of the company's
collapse. "What's really important is that all those who invested here,
especially the banks, stay stable," he told journalists. "That's
critical."
Research by
analysts at Austria's Raiffeisen Bank International, one of Signa's biggest
lenders, warned earlier this week that its difficulties could trigger a wider
drop in commercial property prices.
The steepest rise
in borrowing costs in the 25-year history of the euro has caused property
prices to tumble in Germany, where much of the group's business is anchored.
Signa blamed its
problems on external factors affecting its property business and pressure on
high-street shopping.
"It will be
a little bit of a rude awakening for investors as they do see the lags in
monetary policy eventually catching on," said Aneeka Gupta, an equity
strategist at investment manager WisdomTree.
The group, which
values its assets at 27 billion euros ($29 billion), is made up of numerous
subsidiaries. JP Morgan estimated its liabilities at 13 billion euros.
Its insolvency
leaves a trail of half-finished construction projects across Germany, including
one of the country's tallest buildings.
HALTED CONSTRUCTION
It had been
making steady progress on the planned 64-story Elbtower skyscraper in Hamburg,
until it stopped paying the builder, who halted work. Construction has also
halted at five other Signa sites in Germany.
Dozens
of banks, insurance companies and pension funds have over the years financed
and invested in Signa companies, bond sale prospectuses and a
Signa presentation seen by Reuters show.
Signa
has borrowed
heavily from banks, including
Switzerland's Julius Baer, which disclosed that it had
an exposure of more than 600 million Swiss
francs ($678 million).
The financial
links are especially strong in Austria, where Signa was founded and is
headquartered.
Raiffeisen
Landesbank Niederoesterreich-Wien, Raiffeisen Landesbank Oberoesterreich and
Erste Group are also among the banks with exposures to Signa.
Other
lenders include Austria's Raiffeisen
Bank International.
Earlier this
month, one of its executives, Hannes Moesenbacher, identified a large exposure
to a client of 755 million euros, referring to Benko's group, according to a
person with knowledge of the matter.
BayernLB and
Helaba, the regional state-backed banks for two of Germany's most affluent
states, Bavaria and Hesse, have each lent the group several hundreds of
millions of euros, said people with knowledge of the matter.
Germany, Europe's
largest economy, is in the middle of a property crisis after a sharp rise in
interest rates and building costs forced some developers into insolvency and
put deals and construction on hold.
The real estate
sector was a bedrock of Germany's economy for years, accounting for roughly a
fifth of output and one in 10 jobs. Fuelled by low interest rates, billions
were funneled into property, which was viewed as stable and safe until the
latest spike in borrowing costs.
Weakness in
commercial real estate in the United States, with offices still empty after the
pandemic, and the struggles of major property developers in China have focused
global attention on the sector.
Europe's Signa toppled in property rout | Reuters
China factory
activity shrinks for a second month in November
China’s factory activity
contracted for a second straight month in November, while non-manufacturing
activity hit yet another new low for the year, signaling that the world’s
second-largest economy is not yet out of the woods and may require more muscular
policy support.
The official
manufacturing purchasing managers’ index unexpectedly fell slightly to 49.4 in
November from 49.5 in October, according to data from the National Bureau of Statistics released
Thursday. This was slightly worse than the median forecast for 49.7 in a
Reuters poll. China’s official manufacturing PMI also came in below forecast
last month.
The official
non-manufacturing managers’ index slipped to 50.2 in November from 50.6 in
October, according to the same NBS release. This was the weakest reading since
December 2022.
A PMI reading above 50 indicates expansion in activity, while a
reading below that level points to a contraction.
“Survey results show that more than 60% of manufacturing companies
reported insufficient market demand. Insufficient market demand is still the
primary difficulty affecting the current recovery and development of the
manufacturing industry,” Zhao Qinghe, a senior statistician at the Service
Industry Survey Center of the National Bureau of Statistics, said in a separate statement.
More
China
November factory PMI unexpectedly weaker (cnbc.com)
Americans
are ‘doom spending’ — here’s why that’s a problem
Consumer spending has remained remarkably
resilient in the face of some stiff economic headwinds.
Nearly all Americans, 96%, are
concerned about the current state of the economy, according to a recent report by Intuit Credit Karma.
Still, more than a quarter are
“doom spending,” or spending money despite economic and geopolitical concerns,
the report found.
Even as inflation and high interest rates have squeezed
budgets, a record 200 million shoppers turned out between Black Friday and
Cyber Monday, according to the National Retail Federation. This season, holiday spending is expected to
reach record levels, totaling up to $966.6 billion, the NRF projects.
“Much like doom scrolling, we’re seeing people
mindlessly shop to soothe concerns about the economy and foreign affairs, which
could take a toll on their financial wellbeing,” said Courtney Alev, Credit
Karma’s consumer financial advocate.
Even as credit card debt tops
$1 trillion, Gen Z and millennials are particularly susceptible to this
mindset, other reports show.
Rather than cut expenses, 73% of
Gen Zers say they would rather live in the moment, a recent Prosperity Index
study by Intuit found.
High inflation has made it
particularly hard for those just starting out. More than half, or 53%, of Gen
Zers said the increased cost of living is a barrier to their financial success,
according to a separate
survey from Bank of America.
More
Americans
are 'doom spending' — here's why that's a problem (cnbc.com)
US - Conference Board
Leading Economic Index vs. GDP
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.
GDP in the third
quarter raised to 5.2% — but surge in growth is fading
The
numbers: The U.S. economy grew
at a zippy 5.2% annual pace in the third quarter — faster than previously
reported — but the surprisingly strong gain appears to have been a one-off.
Gross domestic product, the
official scorecard for the economy, was revised up Wednesday from an initially reported 4.9% rate of growth. It was the
biggest increase in a decade, if the pandemic years of 2020 and 2021 are
excluded.
The economy seemed to have cooled off in the waning
months of the year, however. Businesses are hiring fewer people and consumer
spending has softened, among other things.
GDP is on track to expand at a meeker 1% to 2% annual
clip in the fourth quarter, the most recent forecasts show. The figures are
adjusted to take inflation into account.
Key details: Households
boosted spending at a 3.6% pace in the third quarter, down from an original 4%. Read the full GDP release.
Consumer spending represents about 70% of the economy.
The increase in the third quarter was unusually large and cannot be sustained
given the current level of growth in household incomes, economists say.
Business
investment, the next biggest leg of the economy, expanded at a revised 2.4%
clip, compared with 0.8% originally.
Inventories were
also stronger than initially reported, and contributed 1.4 percentage points to
the increase in headline GDP.
Business profits,
meanwhile, increased for the second quarter in a row. They rose 3.3% to mark
the largest gain in five quarters, suggesting that higher labor costs are not
weighing much on earnings.
Government spending
was also a strong contributor to GDP. Outlays rose at a 5.5% rate, versus 4.6%
initially.
Most other figures
in the report were little changed.
GDP is updated
twice after the initial results are published to incorporate new information
not immediately available. The second update for the third quarter is due in
one month.
----Looking
ahead: “Evidence of economic
strength over the summer could mislead some to assume the economy is on a
strong trajectory — it is not,” said chief economist Gregory Daco of EY
Parthenon.
“Nothing [in this
report] was sufficient to change the economy’s overall trajectory nor the
expectation that growth will slow significantly in the fourth quarter,” said
chief economist Joshua Shapiro of MFR Inc.
GDP
in the third quarter raised to 5.2% — but surge in growth is fading -
MarketWatch
Global growth to slow but avoid a hard landing - OECD
November 29, 2023
PARIS (Reuters) - The
global economy will slow slightly next year but the risk of a hard landing has
subsided despite high levels of debt and uncertainty over interest rates, the
Organisation for Economic Cooperation and Development said on Wednesday.
Global growth
is set to moderate from 2.9% this year to 2.7% in 2024 before picking up in
2025 to 3.0%, the Paris-based policy forum said in its latest Economic Outlook.
Growth in
advanced economies that make up the OECD's 38 members was seen headed for a
soft landing with the United States holding up better than expected so far.
The OECD
forecast U.S. growth would slow from 2.4% this year to 1.5% next year, revising
up its estimates from September when it predicted U.S. growth of 2.2% in 2023
and 1.3% in 2024.
Though the
risk of a hard landing in the United States and elsewhere had eased, the OECD
said that the risk of recession was not off the table given weak housing
markets, high oil prices and sluggish lending.
China's
economy was also expected to slow as it grapples with a deflating real estate
bubble and consumers save more in the face of greater uncertainty about the
outlook.
Its growth was
seen easing from 5.2% this year to 4.7% in 2024 - both marginally higher than
expected in September - before slowing further in 2025 to 4.2%, the OECD
forecast.
In the euro
area, growth was seen picking up from 0.6% this year to 0.9% in 2024 and 1.1%
in 2025 as Germany - the region's largest economy - emerged from a recession
this year.
Nonetheless,
the OECD warned that, because of the high level of bank financing in the euro
zone, the full impact of interest rate hikes remained uncertain and could weigh
more on growth than expected.
Meanwhile,
Japan, the only major advanced economy yet to hike interest rates in the
current cycle, was expected to see growth slow from 1.7% this year to 1.0% in
2024 before picking up to 1.2% in 2024.
While
countries' growth outlooks were diverging, they shared similar fiscal pressures
with debt burdens projected to keep rising for years to come in G7 countries,
the OECD warned.
Global growth to slow but avoid a hard landing - OECD
(msn.com)
The
market 'bloodbath is likely to continue' with investors set to lose tens of
trillions over next decade, Nouriel Roubini says
November 28, 2023
World economies are facing a
"megathreatened age," with stagflation set to become a core driver of
major market headwinds, "Dr. Doom" Nouriel Roubini said in a Project Syndicate article published
Friday.
This will be reflected in both equity
and fixed-income markets, as the downturn that investors suffered in 2022
becomes a long-term trend.
"This bloodbath is likely to
continue," Roubini wrote.
Assuming inflation averages 5%
instead of the Fed's 2% target, long-term bond yields would need to be close to
7.5% for a real return of 2.5%, he explained.
But if Treasury yields rise from
about 4.5% to 7.5%, bond prices will crash by 30% and equities will be in a
"serious bear market," he added
"Globally, losses for
bondholders and equity investors alike could grow into the tens of trillions of
dollars over the next decade," Roubini warned.
As to why inflation will stay high,
he referenced a plethora of threats, ranging from an aging workforce to
deglobalization, as well as increased government spending on areas such as war
and climate adaptation.
But the situation is made worse by
the fact that debt has boomed among both private and government borrowers,
triggering a "debt trap" scenario for central banks. And efforts to
reduce inflation through higher interest rates risk causing a recession among
highly-leveraged borrowers, something governments want to avoid.
Faced with this, central
banks could raise inflation targets above historical averages, as signaled by
the fact that many are pausing rate hikes despite still too-high core
inflation, Roubini said.
Other analysts have also warned that
the increase in public borrowing and spending will lead to eventual defaults,
unless debt ratios are brought down. To deal with this situation, Roubini noted
that some countries will simply allow higher inflation to erode nominal debt.
Covid-19 Corner
This
section will continue until it becomes unneeded.
Top WHO
Consultant Who Works for US Intelligence Helped Downplay COVID Lab Leak Theory:
Official
Consultant
captured on tape promoting the view of scientist who worked with the Chinese.
11/27/2023 Updated: 11/28/2023
A top U.S.
intelligence official who also serves as a consultant with the World Health
Organization played a key role in downplaying the theory that COVID-19 came
from a laboratory in China, a former official says.
Adrienne Keen was “very involved in
discrediting the information that we were trying to present to the secretary of
state," Thomas DiNanno, a former U.S. acting secretary of state,
told Sky News.
He said that
Ms. Keen was an advocate for zoonosis, or the idea that COVID-19 comes from
animals, even though no animal has been identified as the origin years after
the disease first appeared.
Mr. DiNanno, who
helped efforts to probe the COVID-19 origins, said he learned later that Ms.
Keen held a job with the World Health Organization (WHO), which is part of the
United Nations (UN).
"They are a
political agency. They're a UN agency. So it's just not appropriate to do work
for a foreign power. And that would include the United Nations,” he said.
Ms. Keen is
listed on LinkedIn as holding multiple positions, including being a consultant
for WHO, director for global health security for the U.S. Office of the
Director of National Intelligence, and an adviser for the U.S. State
Department.
The COVID-19
pandemic started in Wuhan, China, the same city in which a high-level
laboratory funded in part by the United States is located.
In audio from a Jan. 6, 2021, meeting
involving Ms. Keen, she promoted the viewpoint of Ralph Baric, a U.S. scientist
who has worked closely with
scientists at the lab, according to Sky News. Ms. Keen was responding to an analysis from Dr. Steven Quay, who has said evidence points to COVID-19 coming
from the lab.
"I think Ralph
pointed out some of the issues with the probabilities you’ve come up with Dr.
Quay. I share a lot of those concerns," Ms. Keen was quoted as saying
during the meeting.
"It would be
in the best interest of the public to know what were 'the comments of a natural
origin advocate, Ralph Baric' during the January 6, 2021 meeting mentioned,"
Bryce Nickels, a professor of genetics at Rutgers University and co-founder of
the group Biosafety Now, told The Epoch Times via email.
Ms. Keen and Dr.
Quay did not respond to requests for comment. On X, Dr. Quay said that Mr.
Baric's concerns "showed that he failed to have a high school AP-level
understanding of statistics."
The Epoch Times
has submitted a Freedom of Information Act request for the audio and related
materials.
The Office of the
Director of National Intelligence declined to dispute the quote.
More
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.
Slightly off topic today, but
interesting.
Antimicrobial textile coating makes
superbug-squashing hospital curtains
Michael Irving November 29, 2023
Hospitals
are meant to heal people, but there’s an increasing risk of patients picking up
a superbug or two during their stay. Scientists have now developed long-lasting
antimicrobial coatings for textiles that could allow things like hospital
curtains to quickly kill viruses and bacteria.
Despite the
best efforts of medical staff, hospitals can be hotbeds
of pathogen exchange. And while smooth
surfaces like door handles or railings can be fairly easy to disinfect, it’s
harder to clean materials like textiles. For the new study, scientists at Empa,
BASF, Spiez Laboratory and the Technical University of Berlin have developed a
new treatment to make fabrics antimicrobial.
The team concocted
a new formula of disinfectant that contained benzalkonium chloride, then
applied it to fabric samples by soaking them in a primer solution then running
them through coater rolls. The technique was carefully optimized so that just
the right concentration, exposure time, pressure and drying were applied to
ensure the coating stuck to the fabric just right.
To test the
antimicrobial power of the coating, the team then incubated common hospital
bacteria like staphylococcus and pseudomonas with the samples. After just 10
minutes the bacteria were significantly reduced or killed. The coating also
fared well against viruses, killing 99% of them.
That’s a good start, but it’s
no use being effective at killing bacteria and viruses if the effect is
short-lived. So the team also conducted experiments to investigate how durable
the fabric coating would be. Samples stored for six months were found to have
the same antibacterial profile as fresh ones, and artificial aging tests
suggested that the coating would remain stable on fabric for up to five years.
The coating is easily washed
away however, so it wouldn’t be suitable for applications like staff uniforms,
patient gowns or bedding. But the team says the coating could be useful for
things like curtains around beds or air filters. Combined with other weapons
like antimicrobial
lights or materials, the coating could eventually help curb the spread of
superbugs in hospitals.
The research was published in
the journal Scientific
Reports.
Antimicrobial textile coating makes superbug-squashing
hospital curtains (newatlas.com)
If your bank returns your check marked "Insufficient Funds," you can call them and ask if they meant you or them.
Anon.
