Friday, 20 December 2024

US PCE Day. Bubble Over?

Baltic Dry Index. 976 -52            Brent Crude  72.68

Spot Gold 2604               US 2 Year Yield 4.32  -0.03

Buy low and sell high. It's pretty simple. The problem is knowing what's low and what's high.

Jim Rogers.

More Wobble or the everything bubble top? Is the deep state out to sink Trump or is it just the end of the Covid 19 “free” money bubble?

Asia markets mostly fall as investors assess China rate decision; Australian stocks hit 3-month low

Updated Fri, Dec 20 2024 1:42 AM EST

Asia-Pacific markets mostly fell on Friday as investors digest inflation data out of Japan, as well as an interest rate decision out of China.

The People’s Bank of China held its loan prime rates steady on Friday, leaving the one-year rate unchanged at 3.1% and the five-year rate at 3.6%.

The one-year LPR influences corporate loans and most household loans in China, while the five-year LPR serves as a benchmark for mortgage rates.

Hong Kong’s Hang Seng index rose 0.16% after the LPR decision, while mainland China’s CSI 300 dropped 0.41%.

Japan also released its November inflation numbers, a day after the Bank of Japan held rates at 0.25%.

The core inflation rate in the country — which strips out prices of fresh food — came in at 2.7%, slightly higher than the 2.6% expected from economists polled by Reuters

Headline inflation came in at 2.9%, higher than the 2.3% seen in October.

Japan’s Nikkei 225 fell 0.29% after the inflation reading and closed at 38,701.9, while the broad-based Topix slipped 0.44% and finished at 2,701.99.

South Korea’s Kospi was down 1.3% to end at 2,404.15, and the small cap Kosdaq lost 2.35% to 668.31, leading Asian losses.

Australia’s S&P/ASX 200 fell 1.24% to close at 8,067, its lowest closing level since September.

Overnight in the U.S., the Dow Jones Industrial Average narrowly snapped its longest losing streak since 1974 on Thursday.

The 30-stock Dow added 0.04%, but other major U.S. indexes fell, with the S&P 500 down 0.09% and the Nasdaq Composite falling 0.10%.

The 10-year Treasury yield also rose for a second day, topping 4.5% and pressuring stocks. The benchmark yield surged more than 13 points in the previous session.

Asia markets live: China LPR, Japan CPI

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.

Bank of England holds interest rates and downgrades growth forecasts

Thursday 19 December 2024 12:03 pm  |  Updated:  Thursday 19 December 2024 12:31 pm

The Bank of England held interest rates at 4.75 per cent today, while downgrading economic forecasts for the UK towards stagnant growth.

Only six members of the Bank’s Monetary Policy Committee voted to keep interest rates steady, less than had been expected, as three voted to cut rates by 0.25 per cent citing fears over a weaker economy.

The Bank slashed UK growth forecasts for the last quarter of 2024 to zero, down from its estimate last month of a 0.3 per cent rise. GDP fell by 0.1 per cent in both September and October.

“The prospective increase in labour costs from higher National Insurance contributions from next April, announced in the Budget, is currently weighing heavily on sentiment,” the Bank said.

Companies are considering cutting their headcount, accelerating investment in automation, and offshoring labour to deal with the National Insurance hike, it added.

Despite sour prospects for growth, fears over inflation continue to plague the Bank, as it stated that early reactions to the Budget suggested a “risk of greater upward pressure” on inflation than previously thought.

Provisions introduced in the Budget are expected to “push prices up – notably for the food and drink, hospitality, leisure and care sectors – and CPI inflation higher next year”, it said.

Meanwhile, forecasted increases in pay for next year were raised to three to four per cent, up from two to four per cent in the previous estimates.

The news came following higher-than-expected earnings data from the Office for National Statistics earlier this week, which came in at 5.4 per cent, compared to the 4.6 per cent forecast by markets.

Inflation data, also released earlier this week, revealed that prices had increased by 2.6 per cent throughout November, up from 2.3 per cent in October.

The Bank expected inflation to continue to tick up in the near term, with the Budget expected to up the rate of price increases by 0.5 per cent. 

More

Bank of England holds interest rates and downgrades growth forecasts

Germany and France are in crisis – is the next global financial crash brewing?

19 December 2024

Things are not quite going according to plan for Rachel Reeves. The economy has contracted for the past two months and inflation is proving hard to shift. The first Labour budget in more than 14 years received a frosty reception. But everything is relative; at least the chancellor had no trouble getting her measures through parliament, which is more than can be said for Emmanuel Macron in France. And if opposition MPs at Westminster were to call a vote of no confidence, Labour’s massive majority means it would be spared the defeat suffered by Germany’s chancellor, Olaf Scholz, earlier this week.

In Germany and France, support is growing for parties of the hard right and the hard left, and it is not difficult to see why. A crisis that affected countries on the periphery of the 20-nation eurozone 15 years ago – Greece, Portugal and Ireland – has now worked its way to the core of the single currency zone. Let’s be clear: France is not the new Greece. The European Central Bank would probably step in to buy French bonds in the event of a full-scale speculative attack, and is now better equipped to do so than during the last crisis.

Even so, there are signs of history repeating itself. The global financial crisis that erupted in 2008 didn’t appear out of nowhere, and there were plenty of warning signs in the 1990s – from Mexico to Thailand, and from South Korea to Russia – of trouble ahead. In spite of these red flags, few imagined that the crisis would spread to the world’s biggest economy the US, until it was too late. There are red flags flying now too. It matters that Scholz faces being ousted as chancellor in February’s snap election, and it matters that Macron can only get MPs to pass a stopgap budget. These are not minor squalls; they are signs of a coming storm.

The problem for the eurozone’s big two is that they have near-stagnant economies alongside generous social welfare systems that date back to the postwar decades, when growth was still strong. Low levels of unemployment ensured there were the tax revenues needed to pay for pensions and other benefits. The arrival of the baby-boomer generation meant there were plenty of workers for each retiree. The US picked up most of the tab for Europe’s defence during the cold war, allowing European governments to prioritise welfare spending. But those favourable conditions no longer apply. Birthrates have fallen, and the baby boomers are getting older. Europe is being forced to dig deeper to pay for its own defence in the face of the threat posed by Russia.

Most important of all, growth rates have slumped. Germany’s economy is no bigger now than it was before the start of the Covid pandemic, five years ago; over the same period France has grown by less than 1% a year on average. Stagnant living standards mean unhappy voters, as Scholz has found to his cost. Weak growth also means governments have difficulty balancing the books, leading to pressure to cut benefits and raise taxes. As Macron is finding, this approach doesn’t go down well either.

The eurozone wasn’t supposed to pan out like this. The rationale for the single currency when it was launched a quarter of a century ago was that it would lead to faster growth and close the gap in living standards with the US. In fact, the opposite has happened: growth rates have been weak and the gap with the US has widened.

Design flaws in the euro were obvious from the outset: it was a one-size-fits-all approach for countries that had different needs, and it was based on the neoliberal principles that low inflation and balanced budgets would deliver stronger growth. The lack of a common fiscal policy to redistribute resources from richer to poorer eurozone countries hasn’t helped either.

The euro’s failure to deliver has had significant consequences. First, slow growth has made member states more conservative and more resistant to change. Europe has lacked the dynamism of the US and has stuck with old industries for far too long. That is especially true of Germany, which has been painfully slow to enter the digital age and to recognise the threat to its fossil-fuel-dominated auto companies. Second, while there has been some recognition of the need for change, it is not obvious that it will actually materialise.

More

Germany and France are in crisis – is the next global financial crash brewing?

Covid-19 Corner

This section will continue until it becomes unneeded.

How Many Lives Were Lost to COVID-19? A Look Back Nearly 5 Years Later

December 19, 2024

What's New

Deaths from COVID-19 have slowed significantly but continue adding to a tally of more than 7 million deaths from the virus in the nearly five years since the World Health Organization (WHO) declared a pandemic.

Why It Matters

The world was transformed by the emergence of SARS-CoV-2, the coronavirus that causes COVID-19. Business as usual ground to a halt when the WHO declared a pandemic on March 11, 2020, about four months after the virus was first detected in Wuhan, China.

Since the pandemic was affirmed, the WHO reports that around 777 million people have been infected by the virus worldwide, giving the illness an overall worldwide mortality rate of a little less than 1 percent—much higher than common ailments like the flu.

What To Know

In the United States, at least 103 million COVID-19 cases have been reported since the pandemic began. The Centers for Disease Control and Prevention (CDCreports that at least 1.21 million people have officially died of the illness in the U.S., although the actual number of deaths could be higher.

While the WHO's worldwide confirmed death toll is 7,077,725 through December 1, the organization estimates that there were a massive 14.9 million "excess deaths" associated with the virus in 2020 and 2021 alone. The figure includes both confirmed COVID-19 deaths and indirect ones caused by "the pandemic's impact on health systems and society."

A meta-analysis of seven COVID-19 studies, published by medical journal Cureus in August 2023, found that people who are unvaccinated are 2.46 times more likely to die of COVID-19 than those who are vaccinated.

In addition to deaths, COVID-19 has seriously harmed the long-term health of many of those infected, due to complications like "long COVID" and the COVID-associated children's inflammatory syndrome MIS-C.

More

How Many Lives Were Lost to COVID-19? A Look Back Nearly 5 Years Later

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.

Fluorination strategy unlocks graphene's potential for optoelectronic and energy applications

18 December 2024

Researchers from Tohoku University and collaborators have developed a weak fluorination strategy to address the zero-bandgap limitation of graphene. Details of the research were published in the journal Applied Physics Letters.

In most electronic materials, a "gate," i.e., a bandgap, exists that can either stop or allow electricity to pass. This is how we control electricity in things like computers or phones. But graphene has no such gate, meaning it conducts electricity continuously and cannot be turned off.

To counteract this, scientists have often added a small amount of fluorine atoms to graphene, slightly changing its structure and introducing a bandgap, without damaging its core advantages. Fluorination, however, relies on the use of hazardous chemicals, rendering it dangerous and impractical to apply on a large scale.

"We developed an environmentally-friendly approach, one where we utilized fluoropolymers under controlled conditions to achieve selective fluorination," said Dr. Yaping Qi, assistant professor at Tohoku University. "This advancement also enables enhanced photoluminescence and tunable transport properties while maintaining high carrier mobility, making graphene more applicable for use in optoelectronic and energy devices."

Qi and her colleagues used advanced techniques, including photoluminescence (PL) mapping and Raman spectroscopy, to analyze how fluorination changes graphene's structure and optical properties. Their tests showed that fluorinated graphene has improved light-emitting abilities, making it promising for use in LEDs, sensors, and other energy technologies.

More

More information: Yue Xue et al, Photoluminescence and transport properties of fluorinated graphene via a weak fluorination strategy, Applied Physics Letters (2024). DOI: 10.1063/5.0197942

Provided by Tohoku University

Fluorination strategy unlocks graphene's potential for optoelectronic and energy applications

Next, the world global debt clock. Nations debts to GDP compared.

World Debt Clocks (usdebtclock.org)

Another weekend and it’s almost time to celebrate Christmas 2025. Have a great weekend everyone.

The last leg of a bull market always ends in hysteria; the last leg of a bear market always ends in panic.

Jim Rogers.


No comments:

Post a Comment