Baltic Dry Index. 1518 +19 Brent Crude 83.55
Spot Gold 2019 U S 2 Year Yield 4.34 +0.06
It is better to be roughly right than precisely wrong.
John Maynard Keynes.
The
big news yesterday was the International Court of Justice, as expected, finding
a case for probable cause of genocide against Israel’s war on Gaza’s 2.2
million ghetto Palestinians. South Africa and the Global South 16, Israel and
the Global North 1, (the court votes,)
Not
that it changes anything of course. Between
150 to 300 Palestinians will continue to be murdered each day, mostly women and
children. 26,000 so far, with according to Israel, 8,000 of them Hamas terrorists. President Biden
President Genocide Joe Biden, President Joe Biden continues in
office, leader of the free world, but the most impotent US leader since the US
took on global leadership last century.
No
one in the USA seems to know or care at the tremendous damage Israel’s war to
save Netanyahu’s disastrous political career is doing to the west in the rest
of the world. The west’s double standard gets more floodlighted with each
passing day. Warsaw 1943, Gaza 2023-2024, but unlike 1943, no one cares.
In
the stock casinos, though, only a handful of stocks now make up the bull market.
In
the real world global economy, if the economy isn’t actually rolling over, it’s
doing an Oscar worthy performance of faking it. Don’t look now but the price of
crude oil is rising again.
S&P
500 and Nasdaq fall Friday to snap six-day win streak, but both notch weekly
gains: Live updates
UPDATED FRI, JAN 26 2024 4:21 PM EST
The S&P 500 closed
slightly lower Friday, but clinched weekly gains as the latest economic data
added to a positive picture of the economy.
The broad market index inched
down by 0.07% to 4,890.97. The Nasdaq Composite slipped
0.36% to 15,455.36, hurt by a post-earnings slide in Intel.
The Dow Jones
Industrial Average bucked
the trend by adding 60.30 points, or 0.16%, to 38,109.43, an all-time closing
high. All three major averages are now up more than 100% from their pandemic
lows.
Despite Friday’s mixed session,
the major averages recorded a winning week. The S&P 500 advanced around
1.1%, while the technology-heavy Nasdaq Composite climbed about 0.9%. The
blue-chip Dow gained approximately 0.7%.
Friday’s losses ended a six-day
winning streak for the S&P 500 and Nasdaq. Through the end of Thursday’s
session, the benchmark S&P 500 had closed at a record high for five
straight trading days, the longest streak of its kind since November 2021.
Stocks got a boost this week from
encouraging economic data.
December’s core
personal consumption expenditures price index came in line with
economists’ forecasts month over month, but was slightly lower than anticipated
on an annualized basis, data released Friday shows. It’s a preferred gauge of
inflation for the Federal Reserve, which sets monetary policy.
Friday’s PCE print came a day
after gross domestic product data revealed
higher-than-expected economic growth in the fourth quarter.
That bolstered investors’ hopes that the economy has avoided a deep recession.
“All the economic data — both the
GDP and PCE — was good this week,” said Rhys Williams, chief strategist at
Spouting Rock Asset Management. “That was comforting to everybody. And I think
it does show we’re still in this potential ‘Goldilocks’ landing, where the
economy softens a bit but is still positive.”
But sell-offs among some
well-known stocks on the back of earnings reports restricted gains this week.
Chipmaker Intel tumbled nearly
12% on Friday after offering a disappointing
fiscal first-quarter outlook. KLA slid
more than 6% in the session after the semiconductor company posted light
guidance for its fiscal third quarter.
On the other hand, American Express rallied
more than 7% after sharing a better-than-expected forecast for full-year
earnings. That helped the 30-stock Dow mitigate losses from Intel’s drop.
Elsewhere, Tesla,
a retail
investor darling, registered its worst week since October, declining
13.6% in the period. Shares took a leg down after the electric vehicle maker posted
disappointing earnings and warned of trouble in 2024.
Stock
market today: Live updates (cnbc.com)
Tech
layoffs balloon in January as Wall Street rally lifts Alphabet, Meta, Microsoft
to records
The S&P 500 is trading at a record and the
Nasdaq is at its highest in two years. Alphabet shares
reached a new pinnacle on
Thursday, as did Meta and Microsoft,
which ran past $3 trillion in market cap.
Don’t tell that to the bosses.
While Wall Street cheers on Silicon Valley, tech companies are downsizing
at an accelerating clip. So far in January, some 23,670 workers have been laid
off from 85 tech companies, according to the website Layoffs.fyi. That’s the
most since March, when almost 38,000 people in the industry were shown the
exits.
Activity picked up this week with SAP announcing
job changes or layoffs for 8,000
employees and Microsoft cutting 1,900
positions in its gaming division. Additionally, high-valued
fintech startup Brex
laid off 20% of its staff and eBay slashed
1,000 jobs, or 9% of its full-time workforce. Jamie Iannone, eBay’s CEO, told
employees in a memo that, “We need to better organize our teams
for speed — allowing us to be more nimble, bring like-work together, and help
us make decisions more quickly.”
Earlier in the month, Google confirmed
that it cut several hundred jobs across the company, and Amazon has
eliminated hundreds
of positions spanning its Prime Video, MGM Studios, Twitch and
Audible divisions. Unity said
it’s cutting about 25%
of its staff, and Discord, which offers a popular messaging service
used by gamers, is shedding
17% of its workforce.
The swarm of activity comes ahead of a barrage of
tech earnings next week, when Alphabet, Amazon, Apple, Meta and Microsoft are
all scheduled to report quarterly results. Investors lauded the cost-cutting
measures that companies put in place last year in response to rising inflation,
interest rates hikes, recession concerns and a brutal market downturn in 2022.
Even with an improving economic outlook, the thriftiness continues.
Layoffs peaked in January of last
year, when 277 technology companies cut almost 90,000 jobs, as the tech
industry was forced to reckon with the end of a more than decade-long bull
market. Most of the rightsizing efforts took place in the first quarter of
2023, and the number of cuts proceeded to decline each month through September,
before ticking up toward the end of the year.
One explanation for the January surge as companies budget for the year
ahead: They’ve learned they can do
more with less.
More
Tech layoffs jump in January as Alphabet, Meta, Microsoft reach high (cnbc.com)
Up
next, EVs. Has the EV boom already gone bust?
Opinion: Evidence EVs
are a fading fad is ‘rolling in fast’ as Tesla, GM and Ford slash prices
EV
doubters like Toyota bet on hybrids, and now look prescient
----Despite Tesla TSLA,
The evidence is rolling in fast.
Earlier this month, Hertz HTZ,
Outside
of wealthy, trendy communities, consumers are walking past plug-in EVs and snapping up hybrids and
gasoline-powered engines instead. In the fourth quarter of 2023, EV sales
crawled up by just 1.3%. According to Edmunds, EVs tend to sit on dealer lots
for about three weeks longer than gasoline-powered cars. With Mercedes Benz MBG,
More
Finally,
the breakdown of law and order. Is theft about to ruin our current global
economy?
Europe must not weaponize euro,
ECB policymaker warns
January 26, 2024 7:48 AM GMT
RIGA, Jan 26 (Reuters) - The euro zone should not weaponize its own
currency in a global conflict as that could ultimately undermine it, an
influential European Central Bank policymaker said on Friday, just as the EU
was contemplating seizing Russian state assets.
European officials have been debating for months whether to confiscate
frozen Russian assets, including central bank reserves, to use the cash to fund
Ukraine's reconstruction.
But some are concerned that the broader repercussions of such a move,
from retaliation to loss of confidence in European assets, will far outweigh
the gain.
"Weaponizing a currency inevitably reduces its attractiveness and
encourages the emergence of alternatives," Bank of Italy Governor Fabio
Panetta said in a speech without directly referring to Russia. "This power
must be used wisely, however, because international relations are part of a
‘repeated game'."
The EU, United States, Japan and Canada froze some $300 billion of
Russian central bank assets in 2022 when Russia invaded Ukraine. Some $200
billion of that is held in Europe, mainly in the Belgian clearing house
Euroclear.
Opponents argue that seizing assets could prompt investors from other
countries to flee, fearing for the safety of their own investments, ultimately
weakening the currency and pushing up yields.
Panetta, a former ECB board member, argued that the conflict around
Ukraine had led to an increase in the role of the Chinese renminbi at the
expense of other currencies, since much of Russia's trade is now done in the
Chinese currency.
"The Chinese authorities are explicitly promoting its role on the
global stage and encouraging its use in other countries, including those
sanctioned by the international community following the invasion of
Ukraine," Panetta said.
As a result, the renminbi overtook the euro as the second most used
currency for trade finance and the yen as the fourth most used currency for
global payments, Panetta said.
Panetta instead argued that Europe should strengthen the euro by making
it more attractive, implementing long-delayed changes that would enhance its
role as a reserve currency.
This includes the creation of a safe asset that is issued in sufficient,
predictable quantities, and the completion of a banking union that would the
reduce the difficulty of cross-border banking. Another step would be an
efficient payment and market infrastructure system across the bloc, he said.
Europe must not weaponize euro, ECB policymaker warns
| Reuters
If all
else fails, immortality can always be assured by spectacular error.
John Kenneth
Galbraith.
Global
Inflation/Stagflation/Recession Watch.
Given
our Magic Money Tree central banksters and our spendthrift politicians, inflation/recession now needs an entire
section of its own.
Evergrande's possible liquidation and what happens next
By Clare Jim and Scott Murdoch January 26, 2024 6:14 AM GMT
HONG KONG, Jan 26 (Reuters)
- A key offshore bondholder group of China Evergrande (3333.HK), opens new tab plans to join a
petition to liquidate the developer at a hearing in a Hong Kong court on
Monday, Reuters reported this
week.
The bondholder group owns more than $2 billion in offshore notes
guaranteed by Evergrande and its support to a winding-up petition against the
world's most indebted developer increases the chances of an immediate
liquidation order from the court, lawyers in the industry said.
If a liquidation order is issued, a provisional
liquidator and then an official liquidator will be appointed to take control
and prepare to sell the developer's assets to repay its debts.
The liquidators could propose a new debt
restructuring plan to offshore creditors holding $23 billion of debt in
Evergrande if they determine the company had enough assets or if a white knight
investor appeared. They would also investigate the company's affairs and could
refer any suspected misconduct by directors to Hong Kong prosecutors.
Evergrande could appeal a
liquidation order, but the liquidation process would proceed pending appeal.
It is unclear if Evergrande shares would be suspended from
trading after a liquidation order. Listing rules require a company to
demonstrate a business structure with sufficient operations and asset values.
HOW MUCH DEBT MIGHT CREDITORS RECOVER AND WHAT ARE THE MAIN
CHALLENGES?
Evergrande cited a Deloitte analysis during a Hong Kong court
hearing in July that estimated a
recovery rate of 3.4% if the developer were liquidated.
However, after Evergrande
said in September its flagship unit and its chairman Hui Ka Yan were
being investigated by
the authorities for unspecified "illegal crimes", creditors now
expect a recovery rate of less than 3%.
Evergrande's dollar bonds were bid at around one cent on the
dollar on Friday.
Most of Evergrande's assets have been sold or seized by
creditors, leaving its two units listed in Hong Kong - Evergrande Property
Services Group (6666.HK), opens new tab and Evergrande New
Energy Vehicle Group (0708.HK), opens new tab. Their combined market
capitalisation had dropped to $973 million as of Friday.
A liquidator could sell Evergrande's holdings in the two units
although it might be difficult to find buyers.
More
Evergrande's possible liquidation and what happens next | Reuters
Covid-19
Corner
This
section will continue until it becomes unneeded.
mRNA Vaccines Contain Prion Region, May Be
Linked to Prion-Like Diseases
As
pathogenic prions accumulate, people may start to develop prion diseases such
as Creutzfeldt-Jakob disease and mad cow disease.
January 24, 2024 Updated January 25, 2024
The COVID-19
virus and its vaccine sequences have a prion region on their surface spike
proteins. Earlier in the pandemic and vaccine rollout, some researchers were
concerned that these prion regions may promote incurable prion diseases, such
as Creutzfeldt-Jakob disease (CJD).
In December 2023, researchers from Oxford
showed that 8 percent of the time, the body does not make spike protein from
Pfizer mRNA vaccines but may form aberrant proteins instead. This has led
researchers to investigate the potential risks of such unintentional
formations.
Subsequently, on Jan. 12, retired French
biomathematician Jean-Claude Perez published a preprint study
discussing whether such mistakes could lead to the formation of prion-like
proteins. He concluded that prion-like protein formation is possible.
More. Subscription required.
mRNA Vaccines Contain Prion Region, May Be Linked to Prion-Like Diseases | The Epoch Times
Technology Update.
With events happening fast in the
development of solar power and graphene, I’ve added this section.
Simple
cellulose filter thoroughly purifies syringe-injected water
Ben Coxworth January 24, 2024
While we've
seen quite a few filtration systems for making polluted water drinkable, many
are quite complex, or utilize costly materials. By contrast, an experimental
new setup simply requires users to inject dirty water through a layer of
cellulose.
Developed
by scientists from The University of Texas at Austin, the prototype device
consists of a roughly hockey-puck-shaped housing, inside of which is a hydrogel
film supported by a membrane full of microscopic pores.
The
hydrogel is in turn made up of "an intertwined web" of cellulose
nanofibers. Cellulose is the most common organic compound on Earth – it can be
easily and inexpensively obtained from a wide variety of readily available
natural sources, such as plants.
When
utilizing the device, users start by drawing water from a stream, lake or
somewhere else, using a regular syringe. They then place the end of that
syringe in a port on top of the filter, and inject the water into it.
As the water passes through the tiny gaps between
the nanofibers, nearly 100% of the suspended-solid particles larger than 10
nanometers are trapped – bacteria and viruses typically exceed that size. As a
result, the water which trickles out of the underside of the filter is rendered
clean and drinkable. What's more, each filter can be used up to 30 times, and
will biodegrade when discarded.
In tests performed so far, syringes as large as 1.5
liters (1.6 quarts) were utilized to collect muddy water, river water and water
contaminated with microplastics, all of which were successfully purified using
the filter. The scientists are now working on scaling up the technology, so it
can treat larger quantities of water in one session.
"The pressing concern of
particle-polluted water, particularly in remote and underdeveloped regions
where people frequently rely on contaminated water sources for consumption,
demands immediate attention and recognition," said the lead scientist,
Prof. Guihua Yu. "Our system, with its high efficiency in removing diverse
types of particles, offers an attractive yet practical solution in improving
freshwater availability."
A paper on the research was
recently published in the journal Nature
Sustainability.
Simple cellulose filter thoroughly purifies
syringe-injected water (newatlas.com)
This weekend’s music
diversion. The almost totally forgotten Herr Endler. Approx. 13 minutes.
Johann
Samuel Endler (1694-1762) - Sinfonia D-Dur, Nr.11
Johann Samuel Endler (1694-1762) - Sinfonia D-Dur,
Nr.11 (youtube.com)
This weekend’s chess
update. Approx. 13 minutes.
Will
There be Vengeance? || Nepo vs Ding || Tata Steel Chess (2024)
Will There be Vengeance? || Nepo vs Ding || Tata Steel
Chess (2024) (youtube.com)
Finally, this
weekend, what’s gone wrong at Boeing. Can Boeing be fixed?
Why Boeing’s Problems with the 737 MAX Began More Than 25 Years Ago
24 JAN 2024| by Bill George
Aggressive cost cutting
and rocky leadership changes have eroded the culture at Boeing, a company once
admired for its engineering rigor, says Bill George. What will it take to repair the
reputational damage wrought by years of crises involving its 737 MAX?
Once again, Boeing’s 737 MAX is back in the
headlines.
After two crashes that killed 346 people in 2018 and
2019 and five years of ensuing design changes and regulatory scrutiny, the 737
MAX is grounded again after a mid-air blowout of a fuselage panel on January 5.
After loose bolts were discovered on other MAX 9s, the Federal Aviation
Administration (FAA) grounded the plans and opened an investigation into
whether MAX is safe to fly, accompanied by a stern warning, saying, “This incident should have never happened, and it
cannot happen again.”
Boeing has also experienced repeated problems in
design and production with its newest jumbo jet, the 787 Dreamliner. Such
frequent, repeated crises point to a deeper issue than
isolated engineering mishaps. The underlying cause of these issues is a
leadership failure that has allowed cultural drift away from Boeing’s
once-vaunted engineering quality.
William Boeing created the commercial aviation
industry. For the next century, Boeing was the leading producer, based on its
excellence in aircraft design and safety. Boeing’s problems today date back to
former CEO Philip Condit, who made two ill-fated decisions that dramatically
changed Boeing’s culture. The first was acquiring archrival McDonnell Douglas
in 1997, a leader in military aviation with its fighter jets and Boeing’s major
competitor in commercial aviation. In contrast to Boeing’s culture of engineering
excellence, McDonnell Douglas focused on cost-cutting and upgrading older
airplane models at the expense of all-new aircraft.
Secondly, in 2001 Condit moved Boeing’s headquarters
from its original home in Seattle to Chicago—all to gain $60 million in state and local tax credits over 20
years. With none of its businesses based in Chicago, the move separated
Boeing’s corporate executives from its engineering and product decisions and
alienated its Seattle-based engineers.
Leader turnover, ethical lapses, and
buybacks
After Condit resigned in 2003 following an ethics
scandal, Boeing’s board convinced former McDonnell Douglas executive Harry
Stonecipher to come out of retirement to replace Condit. Stonecipher, a General
Electric (GE) alum, immediately set out to change Boeing’s culture, proclaiming, “When people say I changed the culture of
Boeing, that was the intent, so that it is run like a business rather than a
great engineering firm.”
One of Stonecipher’s fated decisions was to turn down
the proposal from Boeing’s head of commercial aviation to design an all-new
single-aisle aircraft to replace the Boeing 727 (FAA-certified in 1964), 737
(1968 certification) and 757 (1972). Instead of designing a new airplane
incorporating all the advances in aviation technology from the past 30-40
years, Stonecipher elected to maximize profits from older models and use the
cash to buy back Boeing stock.
Just two years after taking over, Stonecipher
resigned after violating the company’s code of conduct. Rather than promoting
the internal candidate, Alan Mulally, who headed up commercial aviation and led
the development of the highly successful Boeing 777, the board recruited ex-GE
executive Jim McNerney to succeed Stonecipher. At the time, McNerney was CEO of
3M, a tenure that lasted just four years. Meanwhile, Mulally became CEO of
Ford, where he led one of the most important business turnarounds in history.
Maximizing earnings, but at what cost?
By 2011, Boeing found its 737 losing out to rival
Airbus’s A320neo with major customers like American Airlines. Rather than
designing a new aircraft to replace the 737, McNerney opted for a five-year
program to upgrade to the 737 MAX. This decision required the redesign to stay
within FAA’s original type-certification with the same flying characteristics.
Boeing also agreed with customers like Southwest Airlines to avoid retraining
pilots and upgrading its training manuals. These decisions minimized short-term
cost to maximize short-term earnings.
In my experience with advanced technology products,
quick fixes often lead to design compromises that create more problems. This
happened with the 737 MAX in 2015 when it encountered stall problems. Rather
than further design changes that would have risked the 737’s original
type-certification, Boeing opted for a major software change that was not
disclosed to the FAA or described in its pilot’s manual.
The flaws in the software design that took flight
control away from the pilots without their knowledge based on data from a
single sensor, ultimately led to the two 737 MAX crashes in 2018 and 2019,
causing the deaths of 346 people. After the first crash, Boeing issued a statement that offered pilots and passengers “our
assurance that the 737 MAX is as safe as any airplane that has ever flown the
skies.” That assurance came back to haunt Boeing four months later when the
second MAX crashed.
More
Why Boeing’s Problems with the 737 MAX Began More Than
25 Years Ago - HBS Working Knowledge
In any
great organization it is far, far safer to be wrong with the majority than to
be right alone.
John Kenneth Galbraith.
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