Monday, 20 January 2025

The Roaring Twenties Part Two. MLK Day. The WEF Meets in Davos.

 Baltic Dry Index. 987 -36           Brent Crude 80.67

Spot Gold 2705                 US 2 Year Yield 4.27 +0.04  

US Federal Debt. 36.373 trillion!

For better and for worse, the rapid pace of the Roaring ‘20s heralded many major societal changes: In these 10 years, women gained the right to vote; Prohibition sparked a black market of bootleggers and raucous speakeasies; technology innovations including the telephone and “talking pictures”  arrived; cities and consumerism began to rise; and the arts flourished, from the rise of jazz music to the cultural explosion of the Harlem Renaissance.

12 Quotes on Life in the Roaring '20s

 With Trump Mania just getting underway, it’s the roaring twenties part two again. Remind me how roaring twenties part one ended.

This time it’s different, right? 

The Donald gets inaugurated on Martin Luther King Day in Washington, Monday.

The same day, The World Economic Forum starts its annual four day meeting in Davos, Switzerland.

Hong Kong stocks lead gains in Asia-Pacific ahead of Donald Trump’s inauguration

Updated Mon, Jan 20 2025 12:28 AM EST

Asia-Pacific markets rose Monday, ahead of Donald Trump’s inauguration as investors awaited greater clarity on the policies of the incoming U.S. administration.

Hong Kong’s Hang Seng index rose 2.41% to the highest level since Dec. 31, lifted by the consumer cyclicals and educational services sector, data from LSEG showed. Mainland China’s CSI 300 added 0.86% after China left its benchmark lending rates unchanged Monday.

The People’s Bank of China held the 1-year loan prime rate at 3.1%, and the 5-year LPR at 3.6%. The offshore yuan strengthened modestly to 7.3345 against the greenback, while the onshore yuan traded at 7.323 per U.S. dollar.

Japan’s Nikkei 225 climbed 1.19%, while the Topix added 1.16%. South Korea’s Kospi slipped 0.18% and the Kosdaq rose 0.48%.

Australia’s S&P/ASX 200 rose 0.46%.

Malaysia’s exports in December surged 16.9% year on year, shooting past Reuters’ estimates of 8.8%. This compares to November’s 4.1% rise. The country’s imports grew 11.9% compared to Reuters’ forecasts of 5.2%.

Hong Kong is set to report its unemployment figures for the same month later in the day.

Several central banks in Asia will be convening later this week. Malaysia’s central bank is expected to keep its policy rate steady at 3% on Wednesday. The Bank of Japan is holding its next policy meeting from Jan. 23 to Jan 24 — BOJ Governor Kazuo Ueda has signaled intentions to hike rates. Singapore’s Monetary Authority of Singapore will be meeting on Friday.

The three major averages posted their first weekly gain of the new year on Friday.

The Dow Jones Industrial Average added 334.70 points, or 0.78%, to end at 43,487.83. The S&P 500 gained 1% to 5,996.66, and the Nasdaq Composite advanced 1.51% to 19,630.20.

President-elect Trump and Chinese President Xi Jinping spoke on the phone Friday about trade, Tiktok, fentanyl and more, talks which Trump described as “very good.”

U.S. markets will be closed on Monday.

Asia markets live: China LPR, Malaysia trade, Hong Kong unemployment

CNBC Daily Open: Markets are getting ready for Trump 2.0

Published Sun, Jan 19 2025 7:41 PM EST

What you need to know today

Clock restarted for TikTok
TikTok said in a statement on X that it’s restoring service in the U.S. after U.S. President-elect Donald Trump wrote on his social media app Truth Social he would “issue an executive order on Monday” to delay a ban on TikTok. On Saturday, Perplexity AI submitted a bid to TikTok’s parent company ByteDance to create a new merged entity combining Perplexity, TikTok U.S. and new capital partners, CNBC learned.

First winning week for U.S. stocks in 2025
Markets in the U.S. rose on Friday to end the week higher for the first time in 2025. The pan-European Stoxx 600 index climbed 0.69%. The U.K.’s FTSE 100 rose 1.35% to close at a record high. The index was lifted by mining stocks, which advanced on the news that Glencore reportedly considered a merger with Rio Tinto although talks are no longer active.

TSMC confident of continued funding under Trump
Taiwan Semiconductor Manufacturing Co expects that it’ll continue to receive the $6.6 billion it was promised under the Biden administration’s CHIPS and Science Act even after Trump takes office, TSMC Chief Financial Officer Wendell Huang told CNBC in an exclusive interview. On the campaign trail, Trump criticized the CHIPS Act and accused Taiwan of stealing the chip business from U.S.

Hamas and Israel exchange hostages and prisoners
The ceasefire between Israel and Hamas took effect on Sunday. Hamas released three women to Israel, its first batch of hostages, in exchange for Palestinians prisoners to be set free by Israel. The process will continue over the next weeks, during which, Hamas will release 33 of the 98 Israeli and foreign hostages as Israel returns Palestinian prisoners.

 [PRO] Trump to determine direction of markets
The inauguration of Trump will happen later Monday. Investors will want to keep an eye on what executive orders Trump will sign beginning from the first day of his presidency, especially as they relate to tariffs and corporate policies. Those orders could chart the direction of stocks for much longer than just the near term.

The bottom line

The S&P 500 surged above the shiny 6,000 level following Trump’s election victory but has largely erased all its gains and reverted to its pre-election level in the past few weeks. As Trump prepares to enter the White House, however, it seems like investors are gearing up to play the market based on his agenda again.

Stocks finally ended the week on a positive note, their first weekly gain for the year. For the week, the S&P 500 advanced 2.9% and the Dow Jones Industrial Average jumped 3.7%, their best weekly performance since the week of the U.S. presidential election in November. The Nasdaq Composite added 2.5%, its best week since early December.

Banks largely contributed to the bump in the indexes as better-than-expected earnings reports from big banks lifted their shares higher. Shares of Goldman Sachs popped around 12% on the week and JPMorgan Chase climbed 8% in the same period. Overall, the financial sector rallied more than 6% last week, outperforming the S&P.

Trump’s term as president might provide more forward momentum for bank stocks. Rising business and consumer confidence, an extension of tax cuts, and deregulation of the finance industry are potential drivers of the sector, according to Chris Senyek, chief investment strategist at Wolfe Research.

“We still see Financials as the biggest sectoral winner under the Trump administration,” Senyek wrote in a note on Friday.

That said, apart from anticipation of Trump sitting in the Oval Office, muted back-to-back inflation readings for December also buoyed animal spirits in the markets: All sectors of the market ended the week in the green.

The better-than-expected economic data earlier this week has helped “revive the goldilocks narrative for equities, and likely prompted some re-risking,” Barclays strategist Emmanuel Cau wrote in a Friday note.

Typically, any change involves increased risks. That’s true with Trump 2.0 — but as the number “two” suggests, a change we’ve seen before might mitigate a tiny bit of that uncertainty. 

CNBC Daily Open: Markets are getting ready for Trump 2.0

In other news.

Commerzbank explores thousands of job cuts after approach from UniCredit, FT reports

Published Sun, Jan 19 2025 4:11 AM EST

Commerzbank is exploring cutting thousands of jobs as it seeks to fend off an unwanted approach from Italy’s UniCredit, the Financial Times reported on Saturday, citing people familiar with the matter.

The plans that are not yet finalised, were expected to be unveiled to the workers’ council over the coming weeks, the report added.

Commerzbank did not immediately respond to a Reuters request for comment outside regular business hours.

Commerzbank’s supervisory board chairman Jens Weidmann said there is little chance for an amicable merger with UniCredit after the Italian bank’s surprise purchase of a large stake in the German lender, newspaper Handelsblatt reported earlier this week.

UniCredit now controls around 28% of the shares in Commerzbank, in which the lender holds about 9.5% directly, and it has also secured access to a total of 18.5% through financial instruments.

Commerzbank explores thousands of job cuts after approach from UniCredit, FT reports

Investor who predicted dot-com crash issues chilling three-word warning as another market storm brews

By LAUREN ACTON-TAYLOR FOR DAILYMAIL.COM

Published: 03:06, 17 January 2025 | Updated: 07:52, 17 January 2025

A billionaire investor who predicted the dot-com crash 25 years ago warned that he is 'on bubble watch' as warning signs appear to have cropped up in the market. 

Howard Marks, one of the most respected value investors, pointed out cautionary signs in the stock market that could mean poor returns over the long term or a large decline nearer term. 

'It shouldn't come as a surprise that the return on an investment is significantly a function of the price paid for it. For that reason, investors clearly shouldn't be indifferent to today's market valuation,' Marks wrote in his latest memo

He said that, although he doesn't believe a bubble poses an immediate threat, there are signs he's noticing that may speed up the process. 

These include the market optimism since late 2022, Artificial Intelligence enthusiasm, a reliance on tech giants, and index investing bias. 

Marks said that the above average valuation on the S&P 500, and the fact that its stocks in most industrial groups sell at higher multiples than stocks in those industries in the rest of the world, was one of the 'cautionary signs' of a bubble. 

He also mentioned Bitcoin, and said: 'Regardless of its merit, that fact that its price rose 465% in the last two years doesn't suggest an overabundance of caution.' 

'A bubble not only reflects a rapid rise in stock prices, but it is a temporary mania characterized by -or, perhaps better, resulting from - the following: highly irrational exuberance, outright adoration of the subject companies or assets and a belief that they can't miss, massive fear of being left behind if one fails to participate, and a resulting conviction that, for these stocks, "there's no price too high",' Marks wrote. 

Looking at examples of the 2000 bubble, he highlighted the twenty companies that were the most heavily represented in the index. 

At the beginning of 2024, only six of them were still in the top twenty. Microsoft Inc, one of today's top leading companies, was in the top twenty 25 years ago. 

'In bubbles, investors treat the leading companies - and pay for their stocks - as though the firms are sure to remain leaders for decades,' he said.  

Marks notably took trouble with the enthusiasm behind AI, which he believed may have been extended to other high-tech areas. 

Yet, he also offered counterarguments to his points stating that the p/e ratio on the S&P 500 is high 'but not insane.' The top performing seven companies, dubbed the 'Magnificent Seven' are great companies who may have warranted high p/e ratios. 

Marks added that he hadn't heard people saying, 'there's no price too high', which he considered a sure sign of a bubble, and he said that, while high-priced, the markets don't appear to be extreme. 

He concluded: 'I'm not an equity investor, and I'm certainly no expert on technology. Thus, I can't speak authoritatively about whether we're in a bubble. I just want to lay out the facts as I see them and suggest how you might think about them... just as I did 25 years ago.'

Investor who predicted dot-com crash issues chilling three-word warning as another market storm brews | Daily Mail Online

Burning Teslas add to toxic pollution delaying L.A. return

The L.A. wildfires have taken at least 27 lives and destroyed thousands of homes

Eliyahu Kamisher, Laura Curtis and Kara Carlson

Published Jan 16, 2025  •  Last updated Jan 17. 2025

As the smoke clears from devastating Los Angeles wildfires, efforts to clean up the affected areas are being complicated by burnt-out electric and hybrid vehicles and home-battery storage systems.

Lithium batteries from Tesla Inc., along with those from other carmakers, have added to the mix of toxic materials requiring specialized removal in the wake of the fires. They will delay the fire victims’ return to their properties.

“A lot of the cars in the evacuation area were lithium batteries,” said Jacqui Irwin, a state assembly member representing the Pacific Palisades, one of the neighbourhoods hardest hit by the fires. “We’ve heard from firefighters that those lithium batteries burned fires near homes – like those with power walls – for much longer.”

The L.A. wildfires, which began Jan. 7, have taken at least 27 lives and destroyed thousands of homes. The Federal Emergency Management Agency has already allocated US$100 million to the cleanup efforts.

There were over 431,000 Teslas in operation in the Los Angeles area as of October 2024, according to data from S&P Global Mobility. Based on new registrations, their market share locally was three times that of the rest of the nation. The Tesla Model Y was the biggest-selling vehicle in the state through September, according to the California New Car Dealers Association.

Fires in lithium batteries can require large amounts of water to put out. Automakers publish guides for first responders detailing how to respond.

In some Palisades and Eaton fire areas, residents who had been under evacuation orders were allowed to return to their homes Thursday. But others whose homes were destroyed or are in areas of heavy fire damage will have to wait until utilities and structures are inspected and determined to be safe before they’re allowed to look for personal items or inspect damage themselves.

At a briefing Wednesday, county Deputy Public Works Director Cid Tesoro urged residents allowed into areas burned by the Eaton fire not to try to clean up debris, which can contain sharp objects and toxic materials, including asbestos, lead, mercury and other chemicals.

California Governor Gavin Newsom is also aware of the complications. In an executive order this week, he said the state is “still adapting to newer technologies” like lithium-ion batteries, which can pose distinct risks when exposed to high heat from fires. Two years ago, Newsom signed an executive order requiring all vehicles sold in the state be zero-emission by 2035.

San Diego firefighter Robert Rezende, a specialist in lithium-battery hazards who’ll be assisting in the cleanup effort, said protocols developed during the 2023 fires in Maui will be used in Los Angeles. But the scale of this event, and the hazards, are magnitudes larger.

More

Burning Teslas add to toxic pollution delaying L.A. return | Financial Post

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.

Billionaire wealth surges to ‘unimaginable’ levels in 2024 as Oxfam predicts emergence of five trillionaires within a decade

Published Sun, Jan 19 2025 7:02 PM EST

Billionaire wealth surged in 2024, as the world’s richest people increasingly benefited from inheritance and powerful connections, according to Oxfam’s latest annual inequality report.

The combined wealth of the world’s most wealthy rose from $13 trillion to $15 trillion in just 12 months, the global charity said Sunday. It marks the second largest annual increase in billionaire wealth since Oxfam records started.

Meanwhile, the number of people living in poverty has barely changed since 1990, the charity said, citing World Bank Data. The richest 1% of people own nearly 45% of all wealth, while 44% of humanity are living below the World Bank poverty line of $6.85 per day, the data showed.

As the wealth of the world’s richest people accelerates at a faster pace than previously predicted, Oxfam now expects to see at least five trillionaires within a decade.

“The capture of our global economy by a privileged few has reached heights once considered unimaginable,” said Oxfam International Executive Director Amitabh Behar.

More

Oxfam inequality report: Billionaire wealth surges by $2 trillion

World Economic Forum President Borge Brende on Planning for a ‘Geopolitical Recession’

January 16, 2025 7:14 AM EST

Do you think 2025 will be politically more or less stable than 2024?

We’re planning our annual meeting against the most complex geopolitical backdrop in decades. I think that will continue into 2025. In a way, we are in a geopolitical recession. Fortunately, it hasn’t impacted the global economy as badly as it could have. We’re still expecting more than 3% growth. Provided there are no further escalations of conflicts and new crises, we have to expect that 2025 will be, similarly to 2024, a challenging geopolitical year.

What does “geopolitical recession” mean?

It means that we are in a polarized, fragmented world where we see less cooperation than in the past, and more competition. There is more focus on national interest. That is a challenge, as many of the biggest problems we face need global solutions.

This will be a critical year for the future of Europe. Where do you see the opportunities for the E.U.?

I think we are at a 1918, 1945, 1989 [type of] inflection point, in many ways, because we are between orders. We had one order. There is a new order on its way, but we don’t know exactly where it is. There is a war going on in Europe, with Ukraine. A destabilized Syria could have huge impact on Europe. It will be critical that we don’t see Syria ending up in sectarian wars again, but that there can be an agreement on an inclusive way of governing the country, moving forward. Europe is also at an inflection point economically and will need to decide on how to increase its competitiveness. It is not black and white. Spain is now the fastest-growing of the OECD economies. Greece is one of the fastest-growing European economies too. And the euro is still the second most important currency in the world. But the two biggest continental powers have real challenges. Germany, more on the economy side, and France, more on the political side.

What does President Donald Trump’s election tell you about what that future order will look like?

I think President Trump was elected based on immigration and inflation. There will be more focus on U.S. national interests. The new world order is not defined yet, but it will be, in my view, a more multi-polar order, because there are more nations in the mix, but the U.S. is still extremely important. In one way, we have a unipolar order when it comes to defense—45% of global military capabilities are with the U.S. Trump will also be important in defining this new world order. Will this be multi-polarity with multilateralism? Or will it be multi-polarity with a clearly shrinking role for multilateralism? And economically, the U.S. is, together with China and the E.U., still extremely important.

What do you hope people take away from Davos?

That we have tried to identify areas where there is enough self-interest to collaborate, like cybercrime or being better prepared for future pandemics. AI at its best can be an equalizer, but it can also be winner-takes-all. We need to start a discussion of at least some basic traffic rules. Climate change: maybe we can also get some agreements. Regardless of political views on this, there is a snowball effect—$2 trillion is being invested annually in renewables. And Davos is a very good place to create those snowball effects. We’d like a lot of snowballs rolling down the hills.

WEF President on Planning for a ‘Geopolitical Recession' | TIME

Covid-19 Corner

This section will continue until it becomes unneeded.

The mystery of why Covid-19 seems to be becoming milder

14th January 2025

Covid-19 is now ubiquitous – but hospitalisations seem to be on a downward trajectory. No one knows why.

When virologists took their first peek at XEC, the Covid-19 variant which started to become dominant in the autumn of 2024, the early signs were ominous.

The latest descendant of the Omicron variant of SARS-CoV-2, XEC had arisen through recombination, a process where two other variants had forged their genetic material together. Tests seemed to indicate that this would easily allow it to evade the immune protection offered by past infections or the latest iterations of the Covid-19 vaccines, based on the older JN.1 and KP.2 variants.

"The spike protein is quite different from previous variants, so it was quite easy to assume that XEC has the potential to evade immunity induced by JN.1 infection," says Kei Sato, a virology professor at the University of Tokyo, who carried out one of the first studies of XEC, published in December 2024.

In the US, infectious disease specialists braced themselves for an immediate surge in hospitalisations in the wake of the Thanksgiving holiday weekend. But it didn't happen. Surveillance testing carried out by measuring Covid in wastewater samples across major cities indicated that XEC was definitely infecting people. However, the numbers of people actually ending up in hospital was considerably less than previous winters. According to CDC data, the rate of hospitalisations at the start of Dec 2023 was 6.1 per 100,000 people. During the equivalent week in December 2024, that had fallen to two per 100,000 people.

What was going on?

"Right now, we're seeing pretty low levels of people who are critically ill, even though there's an astronomical amount of Covid in wastewater," says Peter Chin-Hong, a professor in the Health Division of Infectious Diseases at the University of California, San Francisco. "It just shows that regardless of how scary a variant might look in the lab, the environment in which it lands is much more inhospitable."

Some indications suggest that Covid in 2025 is a milder disease. The once common symptoms of loss of taste and smell are becoming less common. And though some people are being hospitalised and dying, Chin-Hong says the vast majority of people will either be asymptomatic or experience a cold so mild that some might well mistake it for a seasonal allergy, such as a pollen complaint. While immunocompromised individuals are still particularly vulnerable, he believes that the major risk factor for more severe Covid is now simply being over the age of 75.

Despite this, experts have advised that all vulnerable groups should get the latest Covid-19 vaccine, which can provide vital protection against serious illness, hospitalisation and death. And while XEC seems to cause less severe disease, there's no guarantee that more severe variants won't emerge in the future. This means the threat posed by Covid-19 is far from over and the virus should not be underestimated. Experts expect it to continue being a significant and persistent threat to public health. The risk of developing Long Covid has not gone away either. For some people, the condition can last years.

More

The mystery of why Covid-19 seems to be becoming milder - BBC Future

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.

Scientists observe and control ultrafast surface waves on graphene

January 17, 2025

Imagine standing by a lake and throwing a stone into the water. Waves spread out in circular patterns and can reflect at obstacles and boundaries. Researchers at the University of Regensburg, in collaboration with colleagues from Milan and Pisa, have recreated this everyday phenomenon in a fascinating miniature world: They observed the propagation of waves—not on water but in an "electron sea"—using one of the fastest slow-motion cameras on the nanoscale. The study is published in Nano Letters.

Such electron seas are typically found on the surfaces of metals or materials with metallic properties. In this case, the material was graphene—a so-called two-dimensional material composed of a single layer of carbon atoms. Instead of a stone, the scientists used laser pulses, focusing them on a sharp metallic tip positioned just above the material's surface.

"The light sets the electrons in the tip in motion," explains Simon Anglhuber from the Institute of Experimental and Applied Physics of the UR. The resulting oscillations exert a force on the electrons in graphene.

This generates a circular electron density wave that propagates through the graphene beneath the tip. The wave can reflect off the edges of the sample and travel back to the tip. These reflections can then be measured optically by reversing the previous process and converting the electron wave back into light. By precisely moving the tip over the sample, the researchers could record a film showing the wave's oscillation at various locations over time.

High-precision analysis of wave motion

The new technique allows for the direct observation of electron wave propagation in both space and time. This was achieved with a resolution on the nanometer scale—relevant for modern semiconductor technologies—and a temporal resolution in the femtosecond range. In terms of temporal resolution, the method can be compared to an ultra-fast slow-motion camera with a frame rate of over 10 trillion frames per second.

The result is a highly precise analysis of wave motion, including its speed, damping, and frequency, without requiring complex computational transformations. Notably, the researchers observed a distinction between the propagation of the wave's center of mass and the propagation of individual wave peaks and troughs. By precisely measuring these two speeds, it is possible to infer the properties of the material through which the waves are propagating.

In their experiments, the researchers compared graphene samples produced by different methods and found significant differences in wave propagation, which were linked to variations in sample quality. These findings are expected to contribute to the development of better samples for use in optoelectronic devices, such as highly sensitive light sensors.

Remarkably, the method also works for heavily damped electron waves in the so-called terahertz and mid-infrared range—a spectral region between our 5G network and visible light that has been difficult to access so far.

Ultrafast control of surface waves

As a final step, the researchers used another laser pulse to deliberately perturb the electron sea in the graphene sample while the electron wave was propagating. By including the second laser pulse, they were able to selectively weaken the wave. This not only allows for observation of the waves and insights into the material in its static form but also enables control and ultrafast alteration of material properties.

This direct control of electron density waves could be a key step toward developing new electronic components with clock speeds more than a thousand times faster than current electronics.

Scientists observe and control ultrafast surface waves on graphene

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

World Debt Clocks (usdebtclock.org)

Every day I wake up determined to deliver a better life for the people all across America that have been ignored, neglected and abandoned.

Donald Trump.

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