Baltic
Dry Index. 1237 -61 Brent Crude 73.85
Spot Gold 2648 US 2 Year Yield 4.17 unch.
The government solution to a problem is usually as bad as the problem.
Milton Friedman.
In the stock casinos, trouble in South Korea, Australia and France. But will trouble spill over into Asia, and the EU, where former powerhouse Germany is also in deep political trouble facing elections in February?
Spill over to the USA, facing a likely difficult jobs report on Friday. Watch for previous month revisions now that the US elections are over.
South Korea stocks down around 2% as opposition
prepares Yoon impeachment bill
Updated Wed, Dec 4 2024 12:32 AM EST
South Korean markets opened lower
Wednesday, after a day of political upheaval in South Korea that saw President
Yoon Suk Yeol impose and then lift a martial law decree within hours.
The country’s Kospi index was down 1.8%,
and the Kosdaq fell 2.4% as calls for Yoon’s resignation from protestors and
opposition parties intensified.
According
to Reuters, a coalition of lawmakers from opposition parties are planning
to propose a bill to impeach Yoon on Wednesday, which should be voted within 72
hours if introduced. Yoon’s chief of staff and senior secretaries have reportedly offered to resign en masse.
Amid fears of financial instability, the
Bank of Korea said it would boost short-term liquidity and deploy measures
to stabilize the FX market as required following an emergency board meeting. It will also make available any
special loans needed to inject funds into the market, it added.
Earlier, Yonhap
News Agency had reported that country’s top financial regulator was
ready to deploy 10 trillion won ($7.07 billion) in a stock market stabilization
fund at any time to calm market sentiment.
Meanwhile, South Korea’s foreign exchange
authorities are suspected of selling U.S. dollars on the onshore market early
Wednesday in efforts to limit declines in the Korean won, two dealers told
Reuters.
Other Asia-Pacific markets were trading
lower as investors digested events in South Korea.
Japan’s Nikkei 225 was down 0.4%,
while the Topix dropped 0.4%.
Hong Kong’s Hang Seng index was trading
0.1% higher. Mainland China’s CSI 300 dropped 0.2%.
Investors also assessed GDP
data out of Australia, which showed economic growth come in slower
than expected in the third quarter, as elevated borrowing costs and sticky
inflation continued to weigh on the country.
Australia’s S&P/ASX 200 fell 0.38%
to end the trading day at 8,462.6.
In the U.S. overnight, South Korean
stocks swung
wildly amid the political upheaval that rocked the world’s
13th-largest economy.
The iShares MSCI South Korea ETF (EWY), which
tracks more than 90 large and mid-sized companies in South Korea, tumbled as
much as 7% to hit a 52-week low.
Later in the day, the ETF cut losses and
closed Tuesday down 1.6% after Yoon said he would lift the emergency
declaration following the National Assembly’s vote to overturn his
martial law decree.
Meanwhile, the S&P 500 inched up by
0.05%, while the Nasdaq Composite added 0.4%. Both indexes closed at records.
The 30-stock Dow was the laggard, with a decline of nearly 0.2%.
Asia markets live: South Korea martial law, Australia GDP
Amid political chaos, Bank of Korea says it will
boost short-term liquidity and deploy measures to stabilize the FX market
Published Tue, Dec 3 2024 7:01 PM EST Updated 47 Min Ago
The Bank of Korea said Wednesday that it would boost
short-term liquidity and deploy measures to stabilize the FX market as needed,
after South Korean President Yoon Suk Yeol lifted a surprise martial law
declaration overnight.
The announcement came shortly after the
BOK held an emergency board meeting, which started around 9 a.m. local time. In
a statement issued after the meeting, the central bank said it will
also make any special loans available to inject funds into the market, if
needed.
“As announced together with the
government, we will provide sufficient liquidity for a limited time until the
financial and foreign exchange markets stabilize,” the Bank of Korea
said, reiterating a pledge made earlier in the day by South
Korea Finance Minister Choi Sang-mok.
Local
news agency Yonhap reported earlier Wednesday that South Korea’s
financial regulator said it is prepared to allocate 10 trillion won ($7.07
billion) to a stock market stabilization fund at any time.
Yoon declared an emergency martial law and
mobilized the army late Tuesday night. Within hours, the National Assembly
voted to overturn the emergency order, forcing Yoon to lift martial law early
Wednesday morning. The military units that were deployed have also been
withdrawn, Yoon announced at the time.
“In our view, the negative impact to the
economy and financial market could be short-lived as uncertainties on [the]
political and economic environment could be quickly mitigated on the back of
proactive policy response,” Citi analysts said in a note.
South Korean stocks experienced
significant fluctuations in the U.S. on Tuesday amid political turmoil
in Korea. The iShares MSCI
South Korea ETF (EWY), which tracks more than 90 large and mid-sized
companies in South Korea, tumbled as much as 7% to hit a 52-week low before
cutting losses to close 1.6% lower.
Last week, the BOK
cut its benchmark interest rate by 25 basis points in a surprise move.
S&P 500 ticks higher for another record close
on Tuesday: Live updates
Updated Tue, Dec 3 2024 5:17 PM EST
The S&P 500 inched higher
Tuesday, eking out another record close.
The broad market index added 0.05%, ending
at 6,049.88. The Nasdaq
Composite advanced 0.40% to close at 19,480.91, hitting a new intraday
record as Apple rose
to a fresh 52-week high. Both the S&P 500 and the tech-heavy Nasdaq posted
new closing records. The Dow
Jones Industrial Average underperformed, losing 76.47 points, or
0.17%, to settle at 44,705.53.
“U.S. equities are trending sideways today
in front of Friday’s job report, which may provide insight into what the Fed
might do following its December 17 and 18 FOMC meeting,” said Terry Sandven,
chief equity strategist at U.S. Bank Wealth Management. “On balance, we think
there’s much to like about U.S. equities, despite a wall of worry that looms on
the horizon.”
“Inflation, interest rates and earnings
are supportive of a risk-on bias, and technological advances such as Gen AI
continue to expand markets while pushing equities higher,” he added.
Stocks have been on a blistering rally
since the U.S. presidential election. Since the Nov. 5 vote, the S&P 500
has climbed 4.6%, and the Nasdaq has rallied about 5.7%. The Dow is up 5.9%
since then.
“When the market is up 10% or more with a
newly elected President, it has never gone down in the month of December,” said
Ken Mahoney, CEO of Mahoney Asset Management.
But he cautioned this doesn’t mean that
stocks will soar in December, since November was the best month of the year for
the market. During the last trading day of November, the Dow and the
S&P reached
new intraday and closing highs, leading both indexes to post their best
months of 2024. The Dow added 7.5%, while the S&P 500 gained 5.7% last
month.
“But there’s still enough demand for
stocks, because I do think there’s a fair amount of money that’s coming up the
sidelines post election,” Mahoney added.
Economic data released on Tuesday showed
that job
openings were higher in October compared to September. Job openings
hit a total of 7.74 million, topping the Dow Jones estimate of 7.5 million.
This was the first in a salvo of data
releases expected this week that can provide insight into the strength of the
labor market. The main event will be Friday’s November payrolls report.
The data arrives ahead of the Federal
Reserve’s policy meeting on Dec. 17-18. Fed funds futures are currently pricing
in a roughly 72% probability that the central bank lowers interest rates during
its gathering,
Stock market news for Dec. 3, 2024
In other news, nothing good.
For France’s Le Pen, it’s Barnier now, maybe
Macron next
France’s far-right leader has brought the
government to its knees. Now, with the country in political turmoil, she has
the president in her sights.
December 4, 2024 4:00 am CET
PARIS — Marine Le Pen has two big aims,
her critics say: to cause chaos and bring down Emmanuel Macron.
The dramatic events of recent days, as the
French political system has ripped itself apart and brought the European
Union’s second-largest country to one of the most serious crisis points in its
modern history, would suggest her opponents are right.
Since beleaguered Prime Minister Michel
Barnier took office in September he has arguably handed the far-right firebrand
much of what she’s dreamed of for years — institutional respect for her
National Rally party, a seat at the top table, and the opportunity to turn
policy into law.
But none of that has proved enough. She
wants more.
So, barring any last-minute surprises,
Barnier and his government, having only been in power for three months, will on
Wednesday fall victim to a no-confidence
vote and earn the dubious distinction of serving the shortest term in
the history of the modern French republic, which was established in 1958.
The French system works in two layers,
with the government and prime minister controlling domestic day-to-day affairs
and the president having a powerful, overarching role. This is the prize Le Pen
hankers after —she’s run run unsuccessfully for it on three occasions and plans
to take another shot in 2027.
The no-confidence vote has arisen over the government’s failure to convince Le
Pen to back a budget that
would have injected €60 billion into state coffers through tax hikes
and spending cuts to address France’s spiraling deficit. Despite a series of
concessions to address her concerns, Barnier’s team believes she repeatedly
moved the goalposts.
Her interest was to making French politics
more chaotic, they think.
Leaving France without a government would,
after all, trigger a political crisis, expose
the country to financial turmoil and potentially pave the way for a
new prime minister who could be even less favorable to her party.
“Le Pen’s conditions were constantly
changing,” as they discussed the budget proposal, said a conservative member of
Barnier’s government, who was granted anonymity because of the politically
sensitive nature of the discussions. “Sunday, she gave a 17th different version
of what her conditions were. The prime minister responded Monday, and once
again, that wasn’t enough.”
In an interview with newspaper La Tribune published Saturday,
Le Pen seemed to indicate that it would take only a concession on drug prices
or pensions for her to give Barnier a second chance. One day later, she
demanded both.
“When you see that such consequential
efforts were made but were deemed insufficient, you have to wonder if all that
wasn’t just a pretense, and that their mind was already made up for another
reason,” the cabinet member said.
Which brings us to Macron.
Le Pen’s real motivation, some believe, is
to force the president himself — the centrist embodiment of everything she
abhors — to step down.
So far she’s stopped short of formally
calling for him to quit, but has far from dismissed the idea.
“Our constitution is clear,” she said on
Monday. “In the event of a serious political crisis, the president of the
republic has three options. Reshuffle [of the government], dissolution [of the
government] or resignation [himself].”
More
For
France’s Le Pen, it’s Barnier now, maybe Macron next – POLITICO
Australia’s recession steepens and deepens
Wednesday 4 December 2024
The Q3 national accounts for Australia
were another shocker, with the economy growing by only 0.3% over the quarter
and by 0.8% over the year.
This meant Australia’s per capita
recession extended to a record seven consecutive quarters after falling by 0.3%
in Q3.
Australia’s real per capita GDP has now
declined by 2.1% since the Albanese government came to office in Q2 2022.
Australia’s labour productivity fell by
0.8% in Q3, but was 0.3% higher year-on-year.
---- Finally, the household sector drove
the decline in per capita GDP, as evidenced by the 2.0% fall in real per capita
household consumption over the year.
There is no sugar coating this release. It
is a shocker that will place more pressure on the Albanese government leading
into next year’s federal election.
The only thing stopping a full-blown
technical recession is the federal government’s mass immigration program
alongside record public spending.
However, the per capita recession has
extended for a record seventh consecutive quarter, smashing Australian
households and collapsing living standards.
Australia's
recession steepens and deepens - MacroBusiness
Turkey economy meltdown as recession strikes and
inflation hits double digits
3 December 2024
Turkey's
central bank is weighing up whether to cut interest rates
in weeks as the country sees investment and production stifled by high
borrowing costs.
The country has seen its GDP shrink by 0.2
percent in the quarter between July and September, according to data from the
Turkish statistical agency on Friday, having dropped by the same margin in the
previous one.
These two consecutive quarters of negative
GDP growth led economists to declare the economy in recession.
The Turkish economy
also saw 2.1 percent year-on-year growth in the third quarter, which the agency
said was its slowest rate since the pandemic sparked global chaos in the second
quarter of 2020.
Meanwhile, household consumption
contracted by 0.3 percent quarter-on-quarter, while government consumption also
saw a 0.4 percent drop.
Household consumption increased year on
year by 3.1 percent and government consumption decreased by 0.9 percent, as
per Euronews.
Nicholas Farr, Emerging Europe Economist
at Capital Economics told the outlet: "The central bank suggested at its
meeting last week that it thought domestic demand was slowing, and today's data
supports this view.
"This could raise expectations that
the central bank may cut interest
rates as soon as its December meeting," he added, though he said
such a move would be "jumping the gun".
Turkey also continues to see
eye-wateringly high inflation, estimated to be 48.6 percent year-on-year in
October.
However, it's some way down from the
25-year high of 85.5 percent reported in 2022, with some estimates suggesting
it was significantly more severe.
The bank central bank says there have been
positive signs and that the country is on a path towards lower inflation, as
per the Wall Street Journal.
The key rate, which determines bank
lending rates and the cost of credit for borrowers, has stayed at 50 percent
for eight months, which economists believe has chilled consumption.
More
Turkey economy meltdown as recession strikes and inflation hits double digits
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.
Commodities
trading giant Cargill plans to cut around 8,000 jobs
3
December 2024
(Reuters)
-Global trading house Cargill said on Tuesday it plans to cut around 5% of its
staff, or about 8,000 jobs after revenue slumped in its most recent fiscal year
as crop prices hit multi-year lows.
Agricultural
merchants including privately held Cargill are under pressure as prices of the
commodity crops they trade, such as wheat, corn and soybeans, have dropped to
near four-year lows and crop processing margins have shrunk.
Most
of Cargill's job reductions would take place this year, the company's president
and CEO, Brian Sikes, said in a memo reviewed by Reuters on Tuesday.
"They
will focus on streamlining our organisational structure by removing layers,
expanding the scope and responsibilities of our managers, and reducing
duplication of work," Sikes said in the memo.
The
move is part of a shift in strategy at the nearly 160-year-old company, Cargill
said, when asked about the memo.
"Unfortunately,
that means reducing our global workforce by approximately 5%," it said.
Minnesota-based
Cargill has more than 160,000 employees, which implies that a 5% cut in staff
would hit about 8,000 jobs.
Unlisted
Cargill reported revenue of $160 billion for its 2024 fiscal year that ended in
May, down from a record $177 billion in the previous year.
Cargill
does not release quarterly earnings statements, but in a memo seen by Reuters
in August, it said less than one-third of its businesses met their earnings
goals in the last fiscal year.
"Impacts
to our operations and frontline teams will be kept to a minimum as we empower
them to continue delivering for our customers," Sikes said in the memo.
The
move comes after Cargill said in August it would undergo structural changes
after missing internal earnings goals, with plans to streamline operations into
three units from five as part of its 2030 strategy, Reuters reported in August.
Sikes
said the company will hold a meeting on Dec. 9 to share more information about
the restructuring.
"This
week, for those in countries where we can immediately communicate to employees
whose roles are impacted, we'll set up meetings to explain next steps," he
said.
Bloomberg
News reported Cargill's job cut plan earlier.
Commodities trading giant Cargill plans to cut around 8,000 jobs
Another
Car Manufacturer in Crisis: 1,600 Employees Sent Home
3
December 2024
The
car industry has faced one challenge after another in recent years.
Supply
chain issues, fluctuating demand, and the shift toward electric vehicles have
left many manufacturers scrambling to adjust.
At
Opel’s Rüsselsheim plant in Germany, the reality of these pressures is becoming
clear, according to Handelsblatt
This
week, parts of the factory went silent as production of the Opel Astra and DS 4
was paused. Employees were sent home but received full pay for the week.
From
December 9, the factory will reduce operations to a single shift. This schedule
will stay in place until at least the end of January.
The
decision wasn’t easy. Stellantis, Opel’s parent company, stated the changes
were necessary to address current market conditions and completed orders.
A
Temporary Pause or a Sign of Deeper Trouble?
The
Opel Astra has been performing well, with a 47% sales increase in Europe this
year. But the DS 4 hasn’t fared as well, showing declining demand.
The
Rüsselsheim plant, which produces both models, now finds itself at a
crossroads.
Shifting
to single-shift production isn’t just about cutting costs. Opel aims to
streamline operations to improve the factory’s competitiveness in the long
term.
For
the 1,600 employees working there, the news is a mixed bag—while job security
isn’t immediately threatened, the future feels uncertain.
The
changes at Rüsselsheim come during a challenging time for Stellantis. This
week, Carlos Tavares, the group’s CEO, officially stepped down. While some
analysts suspect he was pushed out, the company has not confirmed this.
For
Opel, the focus now is on weathering the storm. The automotive industry is in
flux, and companies must adapt quickly to stay relevant.
At
Rüsselsheim, the immediate priority is aligning production with the current
reality. Whether these adjustments will be enough remains to be seen.
The
coming months will be critical—not just for Opel, but for the entire industry
navigating these turbulent times.
Another Car Manufacturer in Crisis: 1,600 Employees Sent Home
Covid-19 Corner
This section will continue until it becomes unneeded.
Natural proteins may offer new way to treat covid-19 and autoimmune disorders
2
December 2024
Some
people naturally have higher levels of proteins that protect them from
covid-19. New studies at Umeå University of our immune system may pave the way
for more personalized treatments of both covid-19 and autoimmune disorders.
In
his doctoral research at Umeå University and the Industrial Doctoral School,
Ionut Sebastian Mihai has explored how our body's defense system works at the
smallest level to find new ways to treat diseases like covid-19 and autoimmune
disorders.
One
of his findings involves natural proteins, called serpins, that can blockthe
SARS-CoV-2 virus - the virus responsible for covid-19 - from entering human
cells. Remarkably, some individuals naturally have higher levels of these
proteins.
One
of his findings involves natural proteins, called serpins, that can block the
SARS-CoV-2 virus - the virus responsible for covid-19 - from entering human
cells. Remarkably, some individuals naturally have higher levels of these
proteins.
Serpins
work by inhibiting a specific enzyme which the virus uses to enter cells.
Individuals with higher levels of serpins in their lung cells may therefore
have increased resistance to covid-19. This finding suggests potential avenues
for developing treatments that enhance natural defenses against the virus.
Ionut
Sebastian Mihai's research has also shed light on other critical components of
the immune defense system, which is like a complex army with different types of
soldiers, each playing a unique role in protecting us from illnesses. One of
these soldiers is a special type of white blood cell that helps coordinate the
body's response to threats, called T cells. Ionut Sebastian
Mihai has identified important "commanders" within these white blood
cells, directing how they grown and respond to infections.
"Understanding
these cells at the DNA and RNA levels can help us find ways to develop vaccines
and medicines that can boost the immune system when it is weak or calm it down
when it is overactive," says Ionut Sebastian Mihai.
The
new research results could lead to therapies tailored to each person's unique
immune system, making treatments more effective with fewer side effects.
"For
people whose immune systems mistakenly attack their own bodies, for example, as
seen in autoimmune diseases like multiple sclerosis or rheumatoid arthritis,
this research offers hope for treatments that can correct these mistakes. Same
goes for hard to deal infections and certain types of cancer. The secret is in
the genes and the environment."
Ionut
Sebastian Mihai has also studied how certain viruses spread in the brain and
identified signals in the immune system that help these infections progress.
These findings could contribute to methods for preventing or treating severe
brain diseases caused by viruses.
Natural proteins may offer new way to treat covid-19 and autoimmune disorders
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.
Physicists
close in on fractionally-charged electron mystery in graphene
02 Dec
2024
Physicists
in the US have found an explanation for why electrons in a material called
pentalayer moiré graphene carry fractional charges even in the absence of a
magnetic field. This phenomenon is known as the fractional quantum anomalous
Hall effect, and teams at the Massachusetts Institute of Technology (MIT),
Johns Hopkins University and Harvard University/University of California,
Berkeley have independently suggested that an interaction-induced topological
“flat” band in the material’s electronic structure may be responsible.
Scientists
already knew that electrons in graphene could, in effect, split into fractions
of themselves in the presence of a very strong magnetic field. This is an
example of the fractional quantum Hall effect, which occurs when a material’s
Hall conductance is quantized at fractional multiples of e2/h.
In
2023, several teams of researchers introduced a
new twist by observing this fractional quantization even without a magnetic
field. The fractional quantum
anomalous Hall effect, as it was dubbed, was
initially observed in material called twisted molybdenum ditelluride (MoTe2).
Then,
in February this year, an MIT team led by
physicist Long Ju spotted the same effect in pentalayer moiré graphene. This
material consists of a layer of a two-dimensional hexagonal boron nitride (hBN)
with five layers of graphene (carbon sheets just one atom thick) stacked on top
of it. The graphene and hBN layers are twisted at a small angle with respect to
each other, resulting in a moiré pattern that can induce conflicting properties
such as superconductivity and insulating behaviour within the structure.
Answering
questions
Although
Ju and colleagues were the first to observe the fractional quantum anomalous
Hall effect in graphene, their paper did not explain why it occurred. In the
latest group of studies, other scientists have put forward a possible solution
to the mystery.
According
to MIT’s Senthil Todadri, the
effect could stem from the fact that electrons in two-dimensional materials
like graphene are confined in such small spaces that they start interacting
strongly. This means that they can no longer be considered as independent
charges that naturally repel each other. The Johns Hopkins team led by Ya-Hui Zhang and
the Harvard/Berkeley team led by Ashvin
Vishwanath and Daniel E Parker came
to similar conclusions, and published their work in Physical Review Letters alongside
that of the MIT team.
Crystal-like
periodic patterns form an electronic “flat” band
Todadri
and colleagues started their analyses with a reasonably realistic model of the
pentalayer graphene. This model treats the inter-electron Coulomb repulsion in
an approximate way, replacing the “push” of all the other electrons on any
given electron with a single potential, Todadri explains. “Such a strategy is
routinely employed in quantum mechanical calculations of, say, the structure of
atoms, molecules or solids,” he notes.
The
MIT physicists found that the moiré arrangement of pentalayer graphene induces
a weak electron potential that forces electrons passing through it to arrange
themselves in crystal-like periodic patterns that form a “flat” electronic
band. This band is absent in calculations that do not account for
electron–electron interactions, they say.
Such
flat bands are especially interesting because electrons in them become
“dispersionless” – that is, their kinetic energy is suppressed. As the
electrons slow almost to a halt, their effective mass approaches infinity,
leading to exotic topological phenomena as well as strongly correlated states
of matter associated with high-temperature superconductivity and magnetism.
Other quantum properties of solids such as fractional splitting of electrons
can also occur.
More
Physicists close
in on fractionally-charged electron mystery in graphene – Physics World
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
"It's strange that men should take up crime when there are
so many legal ways to be dishonest. “
Al Capone.
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