Baltic Dry Index. 1460 -58 Brent Crude 82.77
Spot Gold 2036 US 2 Year Yield 4.29 -0.05
There can be few fields of human endeavour in which history
counts for so little as in the world of finance. Past experience, to the extent
that it is part of memory at all, is dismissed as the primitive refuge of those
who do not have the insight to appreciate the incredible wonders of the
present.
John Kenneth Galbraith.
It is Fed meeting day one of their two day meeting, with nothing expected from them today. Of course, everyone and their dog are betting on lots of Fed interest rate cuts this year, all the more so as it’s a US Presidential election year. It would be a very brave and foolish Fed Chairman who didn’t cut interest rates in a boost to the incumbent’s chance for re-election.
Later today, Europe releases the rump-EU figures on GDP. With Germany in recession since the US Navy blew up the pipelines that brought cheap Russian natural gas to fuel Germany’s business model, German industry has gone into a large manufacturing recession.
In Hong Kong and China, the markets are largely awaiting on the details of how Evergrande’s liquidation will play out and what damage any fire sale of assets will hit the rest of the death spiral property market.
Hong Kong,
China markets slide in the wake of Evergrande liquidation order
UPDATED TUE, JAN 30 202412:48 AM EST
Asia-Pacific markets were mixed on Tuesday as
China and Hong Kong markets fell as investors continue to grapple with the
fallout from Evergrande’s liquidation order.
On Monday, shares of the embattled property developer were halted after
plunging more than 20%. A Hong Kong court ruled to liquidate the firm, which
was once considered one of China’s largest real estate firms.
Hong
Kong’s Hang Seng index tumbled
1.78%, while the mainland Chinese CSI 300 fell nearly 1%.
Japan’s Nikkei 225 inched
up 0.3% and the broad based Topix was marginally above the flatline.
This comes
as Japan’s unemployment rate in December fell to 2.4%, lower than 2.5% in the
month before and slightly below expectations. Economists polled by Reuters
expected the unemployment rate to stay unchanged at 2.5%.
South
Korea’s Kospi gained
0.27%, while the small cap Kosdaq inched 0.1% lower.
In
Australia, the S&P/ASX 200 ended
the day up 0.29% at 7,600.20, for a seventh straight day of gains.
Overnight
in the U.S., the S&P 500 rose
Monday and closed at a fresh record high as Wall Street looked toward several
mega-cap tech earnings reports and the Federal Reserve’s rate policy
decision.
The
benchmark index climbed 0.76% to 4,927.93, topping its highest ever close of
4,894.16.
The Dow Jones Industrial Average added
0.59%, while the Nasdaq Composite gained
1.12%.
Asia markets live
updates: Japan unemployment, Evergrande liquidation reaction (cnbc.com)
European markets
head for positive open ahead of euro zone GDP data
UPDATED TUE, JAN 30 2024 12:46 AM EST
European markets are heading for a higher open
Tuesday with investors keeping an eye on preliminary fourth-quarter gross
domestic product figures due to be released by the euro zone.
Regional markets on Monday closed
slightly higher as investors looked ahead to a slew of earnings, data and
central bank announcements through the week.
Asia-Pacific markets rose
across the board overnight, except Hong Kong, which fell as investors continue
to grapple with the fallout from Evergrande’s liquidation order.
S&P 500 futures are
little changed Monday night as investors analyzed the latest corporate earnings
with the Federal Reserve policy meeting on the horizon Wednesday.
European
markets live updates: stocks, news, data and earnings (cnbc.com)
Bond investors gear up for looming Fed interest
rate cuts
By Gertrude
Chavez-Dreyfuss January 29, 2024 6:04 PM
GMT
NEW YORK, Jan 29 (Reuters) - Bond investors are
expecting the Federal Reserve to drop its bias toward hiking interest rates at
a policy meeting this week to prepare the market for what could be multiple
rate cuts this year and the first since the start of the COVID-19 pandemic in
2020.
Portfolio managers have increased bets on
long-duration U.S. Treasuries ahead of the meeting, reflecting expectations
that yields on those securities will decline as the U.S. central bank moves
toward cutting rates. As the economy slows, longer-duration bonds tend to
outperform other assets.
Generally, bonds with long
maturities and low coupons have the longest duration. These bonds are more
sensitive to changes in interest rates.
"We have throughout the past year suggested extending
duration in anticipation of the cycle turning," said Kathy Jones, chief
fixed income strategist at the Schwab Center for Financial Research in New
York.
The Fed is widely expected to hold interest rates steady at the
end of its two-day policy meeting on Wednesday, with some investors seeing a
possibility that it could ramp up its dovish tone after it was perceived to have pivoted from a
tightening policy outlook at its meeting last month.
---- In the rate futures
market, rate cut bets were a little more aggressive. Federal funds futures, a
straightforward measure of where traders believe the U.S. central bank's
benchmark overnight interest rate will be at any given time, have priced in
five 25-basis-point cuts for 2024, according to LSEG's rate probability app.
The market is pricing in the first rate cut to
occur at the April 30-May 1 meeting, with a 91% probability. Futures showed
less than a 50% chance of a cut at the March 19-20 meeting. Odds of a cut in
March were as high as 80% three weeks ago.
---- "We have moved
to longer duration for all the portfolios we manage," said Jeff
Klingelhofer, co-head of investments at Thornburg Investment Management in
Santa Fe, New Mexico, with around $43 billion in assets under management.
"The bar for reverting back to higher rates is quite high
and we're unlikely to go there," he added, noting that given how
aggressive the Fed's rate hikes have been over the last two years, a U.S.
recession is more likely than not.
Since last month's meeting, however, U.S. non-farm payrolls data
for December and gross domestic product growth
for the fourth quarter of 2023 came in surprisingly strong.
More
Bond
investors gear up for looming Fed interest rate cuts | Reuters
Finally, more alleged fraud in cryptoland.
Who’d have thought it?
DOJ and SEC
unveil charges in $1.9 billion HyperFund cryptocurrency fraud
The Department of Justice on Monday announced criminal charges
against two people and the guilty plea of a third person for orchestrating a
worldwide $1.9 billion cryptocurrency Ponzi
fraud scheme known as HyperFund, among other names.
The Securities
and Exchange Commission, in a related civil action, charged two of
those individuals for their involvement in the alleged crypto pyramid
scheme, which collapsed in 2022.
The three defendants charged by the DOJ falsely claimed that investors in
HyperFund would receive “substantial returns paid from cryptocurrency mining
operations, which did not in fact exist,” said acting Assistant Attorney
General Nicole Argentieri of the DOJ’s Criminal Division.
“The level of alleged fraud here is
staggering,” said Erek Barron, the U.S. Attorney for Maryland.
Charged in the criminal case were
Sam Lee, an Australian citizen who lives in Dubai, United Arab Emirates, who is
accused of co-founding HyperFund, as well as two HyperFund promoters, Rodney
Burton of Miami, and Brenda Chunga of Severna Park, Maryland.
Lee, a 35-year-old also known as
Xue Lee, is charged with a single count of conspiracy to commit securities
fraud and wire fraud. Burton, 54, who is also known as “Bitcoin Rodney” is
charged with one count of conspiracy to operate an unlicensed money-transmitting
business and another count of operating an unlicensed money-transmitting
business.
Both men face a maximum possible
sentence of five years in prison if convicted.
Chunga, who is also known as Bitcoin Beautee, pled guilty Monday to one
count of conspiracy to commit securities fraud and wire fraud, for which she
faces the same possible maximum sentence.
Chunga separately agreed to settle
civil charges by the SEC for violating the anti-fraud and registration
provisions of U.S. securities laws. As part of that settlement, she agreed to
disgorge money she made in the scheme and civil fines to be determined later.
---- HyperFund was also known as HyperTech, HyperCapital,
HyperVerse and HyperNation.
The DOJ alleges that
from June 2020 through November 2022, Lee and his co-conspirators sold
investment contracts online through HyperFund’s platform and claimed that
investors would earn returns of between .5% and 1% each day until their
original investment was either doubled or tripled through revenue from
large-scale crypto mining.
In July 2021,
HyperFund began to block withdrawals by investors, the DOJ alleges.
HyperFund cryptocurrency fraud charged by DOJ, SEC (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.
Plummeting Inflation Raises New Risk for Fed: Rising
Real Interest Rates
January 28, 2024
Federal
Reserve officials start the year with a problem they would ordinarily love to
have: Inflation has fallen much faster than expected.
It does,
nonetheless, pose a conundrum. The reason: If inflation has sustainably
returned to the Fed’s 2% target, then real rates—nominal rates adjusted for
inflation—have risen and might be restricting economic activity too much. This
means the Fed needs to cut interest rates. The question is, when and by how
much?
The Fed won’t
cut at its two-day meeting ending this Wednesday because the economy has been
growing solidly. While inflation excluding food and energy on a monthly basis
has been at or below 2% in six of the last seven months, the Fed wants to be
sure that can be sustained before cutting rates.
Instead, Fed
officials are likely to take a symbolically important step this week by no
longer signaling in their policy statement that rates are more likely to rise
than fall. Ditching this so-called tightening bias would affirm that officials
are entertaining lower rates in the coming months.
Normally, the
Fed cuts interest rates because economic activity is slowing sharply. Not this
time: Growth remained surprisingly robust through the end of last year. Rather,
they are mulling whether softening inflation means real interest rates will be
unnecessarily restrictive if they don’t act.
Militating against a rate cut soon: Bond yields have fallen and stocks have risen, which could bolster economic activity and consumer spending. For that reason, officials could wait until May or even later to cut, said William English, a former senior Fed economist who is a professor at Yale School of Management.
----
The case for cutting later
Policymakers
might want to move carefully to lower rates because they are not sure if the
recent inflation cooling will last or if the economy will rev up in a way that
sustains somewhat higher inflation. Several officials have said they want to
avoid at all costs cutting rates only to have to raise them again.
Dean Maki,
chief economist at hedge fund Point72 Asset Management, thinks the Fed will
wait until June to cut interest rates because growth and hiring will exceed its
expectations this year.
Concerns that
lower inflation will raise real rates are misplaced because it will also boost
purchasing power, consumer confidence and spending, said Maki. “Growth
strengthens when inflation falls. I can’t think of examples in the last several
decades where growth weakens after inflation falls,” he said.
More
Plummeting Inflation Raises New Risk for Fed: Rising Real Interest Rates (msn.com)
Covid-19 Corner
This
section will continue until it becomes unneeded.
Recent Higher-Than-Normal Death Rate in UK Raises Doubt on
Efficacy of COVID-19 Vaccines
January 27, 2024
In the
past two years, the UK has recorded abnormally high death rates. According to
the Office for National Statistics the number of registered deaths in
England and Wales in the week ending Dec. 1, 2023, was 3.9 percent above the
previous five-year average, with COVID-19-related deaths accounting for 1.6
percent. Some scientists point out that the level of protection offered by
COVID-19 vaccines might be showing signs of lagging and that it may be
necessary to take additional precautionary measures in the future.
The UK was
one of the pacesetters in vaccine adoption and holds one of the highest early
COVID-19 vaccination rates. They were among the first countries to approve the
Pfizer/BioNTech vaccine for widespread use and began vaccinations on Dec. 8,
2020.
Statistics from the Office for National
Statistics show that as of August 2022, more
than 90 percent of individuals aged 12 and above in the UK had received at
least one dose of vaccine. Furthermore, nearly 90 percent of the population has
completed the recommended two-dose regimen. Impressively, approximately 70
percent of citizens have gone a step further by receiving three or more doses.
However,
young women showed an increased risk of death from heart disease after the
first dose of a non-mRNA vaccine, with the risk 12 weeks after vaccination
being 3.5 times higher than the long-term risk. Compared with the general
population, people who receive non-mRNA vaccines are more likely to develop
severe illness after infection and are at greater risk of adverse complications
after vaccination.
In 2022, The Lancet published a research report, in
which a pooled analysis of national prospective cohort studies of 30 million
people in the UK showed that after initial injection of the COVID-19 vaccine
booster dose, the elderly, and patients with multimorbidity had a higher risk
of hospitalization and mortality rates. In addition, people with specific
underlying health conditions, especially those receiving immunosuppressive
treatments and patients with chronic kidney disease, were still at high risk
despite receiving booster doses.
Another British study published in July
2023 evaluated the effectiveness of the AstraZeneca and Pfizer vaccines in
426,785 patients with kidney disease. The results showed that patients who
received two doses of AstraZeneca had increased risk of COVID-19 infection,
COVID-19-related hospitalization, COVID-19-related death, and non-COVID-19
death compared with patients who received two doses of the Pfizer vaccine by
43, 59, 44 and 9 percents respectively. The consistent findings across various
disease subgroups, including dialysis and transplant recipients, underscore the
robustness and reliability of the results.
Researchers
also found little evidence of any difference in outcomes between patients who
had received the first two doses of AstraZeneca and Pfizer after both had
received their third dose of the Pfizer vaccine.
More
The CDC Covered Up
the Vaccine’s Risks
1/26/2024 Updated: 1/26/2024
By the Spring
of 2021, Americans were inundated by a cacophony of demands that everyone
immediately line up for the shot that would supposedly end the pandemic. The
screams of certainty were deafening. It was everywhere you turned: TV, radio,
newspaper, social media, and medical authorities at all levels.
Several
features of this campaign were suspicious. People had begun to notice that the
virus itself was nowhere near as deadly as had been claimed. Yes people got
sick but, as with the flu, most everyone shook it off in time. Why get
vaccinated for a pathogen against which your immunity can be earned the
old-fashioned way? It never made sense that this was somehow essential for the
whole population.
Then there was
the question of whether it was going to be effective. Coronaviruses are
fast-mutating, and the whole history of vaccines suggests they are not capable
of keeping up. It’s even worse: some specialists at the time said that mass
vaccination against one variant drives the virus to mutate even more, while
disabling the capacity of the immune system to resist. That suspicion was
confirmed true by the time the year was up.
Then there is
the pressing question of safety. It was a new technology and hence an
experiment. Absolutely no regular member of the public knew precisely what was
in it yet. And yet everyone was forced to line up, roll up their sleeves, and
accept it. No drug in the history of the FDA had been rolled out this way.
As for the
claim that the shots are “safe,” that was never believable. To say “we don’t
know” would have been the only honest statement, simply because there was no
record of experience with these vaccines. You cannot declare something to be
safe when there is no actual evidence or possibility of evidence within the
time frame. It might be or it might not be. That should have been unbearably
obvious.
More
The CDC Covered Up the Vaccine’s Risks | The Epoch
Times
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.
Graphene Derived From Coal Could Replace Sand in Concrete
Silvia Cernea Clark Rice University January 29, 2024
The world’s reliance on concrete, the second most consumed
material after water, is leading to an environmental and resource crisis, with
sand mining rates outstripping
natural replenishment.
A study by Rice University researchers
found that graphene derived from metallurgical coke, a coal-based product,
could serve not only as a reinforcing additive in cement but also as a
replacement for sand in concrete.
“This could have a major
impact on one of the biggest industries in the world,” said James
Tour, Rice’s T. T. and W. F. Chao
Professor and a professor of chemistry, materials science and nanoengineering.
“We compared concrete made using the graphene aggregate substitute with
concrete made using suitable sand aggregates, and we found our concrete is 25%
lighter but just as tough.”
Concrete, a mixture of
aggregates like sand and gravel bonded with cement and water, is essential for
urban development. With 68% of the global population expected to live in urban areas by 2050, demand for
concrete and hence sand mining is projected to grow significantly. This has
tripled in the last two decades, reaching about 50 billion tons yearly.
However, this comes at a significant environmental cost.
Cement production, a key
component of concrete, accounts for 8% of worldwide carbon dioxide emissions. Moreover, sand mining, largely unregulated, poses
severe threats to river and coastal ecosystems. According to a 2022 United
Nations report, this escalating demand for sand, coupled with population growth
and urban expansion, could soon trigger a “sand crisis.”
Applying its signature Joule-heating technique to metallurgical coke, the Tour lab has created a
type of graphene that could serve as a substitute for sand in concrete.
“Initial experiments where metallurgical coke
was converted into graphene resulted in a material that appeared similar in
size to sand,” said Paul Advincula, a Rice doctoral alum who is a lead author
on the study. “We decided to explore the use of metallurgical coke-derived
graphene as a total replacement for sand in concrete, and our findings show
that it would work really well.”
Tests comparing conventional concrete with
concrete made from graphene aggregates show promising results. The
graphene-based concrete not only matches the mechanical properties of standard
concrete but also offers a higher strength-to-weight ratio.
More
In central banking as in diplomacy, style, conservative
tailoring, and an easy association with the affluent count greatly and results
far much less.
John Kenneth Galbraith.
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