If/when inflation
returns, especially food price inflation, I can’t see the massed ranks of
central banksters standing firm and letting inflation rip through the global
economy for long.
As social disorder
gathers apace, the central banksters will follow the Italian cavalry tactics, draw their sabres, cut up a side street and
beat a retreat.
Bond-Market Tumult Puts ‘Lower
for Longer’ in the Crosshairs A recent wave of
selling drove up the yield on the 10-year Treasury note, which helps set
borrowing costs from corporate debt to mortgages, to its highest level since
the pandemic began Feb. 28, 2021 8:00 am ET
February’s government-bond rout has rattled one of the
foundations of the past year’s powerful stock-market rally: investor certainty
that ultralow long-term interest rates are here to stay.
A wave of selling during the past two weeks drove the yield
on the benchmark 10-year Treasury note, which helps set borrowing costs on
everything from corporate debt to mortgages, to above 1.5%, its highest level
since the pandemic began and up from 0.7% in October.
A series of Federal Reserve officials have said the climb is a healthy one , reflecting investors’
improving expectations for a vaccine- and stimulus-fueled economic recovery.
Many portfolio managers say they believe rates are likely to flatten out in
coming days as yields finally reach what they see as attractive levels. Those
views will get a fresh test this week, with Fed Chairman Jerome Powell
scheduled to make a public appearance Thursday and the release of February’s
jobs report Friday.
But there are signs, such as unusually soft demand for
recent Treasury debt auctions, that selling may not be over and yields may have
further to rise. Some traders warn that bond markets are signaling a powerful
economic recovery that could upend the dynamics that have held borrowing costs
low while powering stocks to records—potentially a recipe for more of the topsy-turvy trading seen over the past week , when the Dow
industrials swung more than 1,000 points over three days.
More
https://www.wsj.com/articles/bond-market-tumult-puts-lower-for-longer-in-the-crosshairs-11614517200?mod=hp_lista_pos1
Current bond-market selloff worse
than ‘taper tantrum’ in one key way, argues analyst Last Updated: Feb. 27, 2021 at 9:13 a.m. ET
First Published: Feb. 26, 2021 at 11:32 a.m. ET
By Sunny
Oh
Fed hasn’t even
started conversation of moving away from easy policy, says Columbia
Threadneedle’s Al-Hussainy The vicious surge in bond yields over the past few weeks is
drawing comparisons to bond-market selloffs of similar magnitude, most notably
the ‘taper tantrum’ of 2013, but analysts say this analogy falls short in one
crucial measure.
The “guts” of the recent selloff was different because
higher bond yields were a result of panicked market participants demanding
higher interest rates in longer-dated bonds to offset the risk of growth and
inflation. In contrast, previous bond-market tantrums were driven by
expectations around interest rates and the Federal Reserve’s policy.
“We’re kind of mentally benchmarked to the taper tantrum . But in many ways, what’s happening is
significantly worse,” said Ed Al-Hussainy, senior interest rate and currency
analyst at Columbia Threadneedle Investments, in an interview.
“At the time of the taper tantrum, the Fed was setting up
to taper quantitative easing. We have not started the conversation yet at all,”
Al-Hussainy said. That suggests that if expectations of a hawkish turn were
actually priced into bond markets, the pain in Treasurys could have further
room to run.
See : 3 reasons the rise in bond yields is gaining steam and rattling
the stock market
Defining tantrums as episodes when the 30-year Treasury
note yield TMUBMUSD30Y, 2.172% rose around 100 basis points from
trough to peak, he noted three met that definition – 2013, 2015, 2016.
During those tantrums, expectations around Fed policy were
rapidly changing, especially in 2013 when the mere hint of a tapering of asset
purchases by former Fed Chairman Ben Bernanke was enough to roil bond markets.
But this time around, the Fed has consistently stuck to its
messaging that it was unlikely to contemplate tapering its asset purchases and
raising interest rates.
Throughout this week, senior Fed officials from Chairman Jerome Powell to Kansas City Fed President Esther George have underlined their commitment to
supporting the economy through the pandemic.
Nevertheless, the 10-year Treasury note yield TMUBMUSD10Y, 1.412% shot above 1.50% on Thursday, rattling
stock-market investors. The S&P 500 SPX, -0.48% is down 1.8% this week, while the Nasdaq
Composite COMP, +0.56% has tumbled 4.5% over the same stretch.
Perhaps more than the prospects for Fed policy, a large
driver of the bond-market selloff comes down to investors asking more yield to
make up for the risks around increased fiscal spending, growth and inflation in
the future, said Al-Hussainy.
The main way to measure this compensation is via the term
premium.
Bond-market analysts say a bond’s yield is made up of the
term premium and future path of short-term interest rates. The former measures
how much extra compensation investors need in return for the risk of owning
longer-dated bonds over their shorter-dated peers.
That’s because Treasurys with extended maturities are
vulnerable to uncertainty around how economic growth and inflation could
develop over time, an increasingly pressing issue as trillions in fiscal relief
and a mound of consumer savings raises the risk that an economy firing on all
cylinders could emerge out of the wreckage of the COVID-19 pandemic.
That term premium is now at a positive 28 basis points as
of Thursday, after plumbing a low of negative 88 basis points in August,
according to data from the New York’s Fed branch.
In that regard, Al-Hussainy said it
could reflect the success of the central bank’s new framework which aims to
lift inflation above 2% for a sustained period before easing off the pedal.
“There really is no appetite at the
Fed to step in front of” rising bond yields, he said.
https://www.marketwatch.com/story/current-bond-market-selloff-worse-than-taper-tantrum-in-one-key-way-argues-analyst-11614357162?mod=home-page
Analysis: Central banks will
happily ignore inflation-mongers March 1, 2021 7:36 AM
By Balazs Koranyi , Howard
Schneider , Leika Kihara
FRANKFURT (Reuters) - The world’s biggest central banks
will happily live with higher inflation and investors now aggressively betting
on a quicker end to monetary stimulus are all but certain to be proved wrong.
After a decade of underestimating
inflation, central bankers in the United States, Europe and Japan have every
reason keep money taps open and policymakers are even rewriting their own rules
so they can let price growth overshoot their targets.
If anything, central banks are more
likely to nudge up stimulus, particularly in the euro zone, keeping borrowing
costs depressed and ignoring the inflation hawks at least until growth is back
to pre-pandemic levels -- and not just fleetingly.
The Reserve Bank of Australia
already launched a surprise bond buying operation while the European Central
Bank has repeatedly warned investors not to push yields too high, unless they
want to fight its 1 trillion euro war chest.
The argument behind the inflation
warning is that once economies reopen, massive government stimulus will combine
with pent up consumer demand, unleashing spending-fuelled price pressures
unseen for decades.
Although top economists are weighing
in on both sides of the debate, the voices that really count all seem to be
downplaying the threat.
---- First off, much of the inflation rise
is temporary, driven by the rebound in oil, one-off stimulus measures and the
base effect of tanking prices a year ago. So this is not the sort of sustained
inflation policymakers are looking for.
Tighter policy could also choke off
growth - a costly blunder with tens of millions still out of work after the
biggest peacetime economic crisis in a century. In the worst case, higher
borrowing costs would even raise debt sustainability concerns, particularly in
heavily indebted southern Europe and across emerging markets.
And lastly, the Fed and European Central
Bank both tightened policy too quickly in the past decade, forcing them into
the type of credibility-damaging reversal they are now keen to avoid.
More
https://www.reuters.com/article/us-global-economy-central-banks-analysis/analysis-central-banks-will-happily-ignore-inflation-mongers-idUSKCN2AT1KL
Finally,
yet more Texas fallout from that great global warming, cold spell. Coming soon,
a reckoning of the costs to the food supply chain.
Texas electricity firm files for
bankruptcy citing $1.8 billion in claims from grid operator March 1, 20216:51 AM
HOUSTON (Reuters) - Texas’s largest
and oldest electric power cooperative on Monday filed for bankruptcy protection
in federal court in Houston, citing a disputed $1.8 billion bill from the
state’s grid operator.
Brazos Electric Power Cooperative
Inc is one of dozens of electricity providers facing enormous charges stemming
from a severe cold snap last month. The fallout threatens utilities and power
marketers who collectively face billions of dollars in blackout-related
charges, executives said.
Unusually frigid temperatures
knocked out nearly half of the state’s power plants in mid-February, leaving
4.3 million people without heat or light for days and bursting water pipes that
damaged homes and businesses. Brazos and others that committed to provide power
to the grid and could not, were required to buy replacement power at high rates
and cover other firms’ unpaid fees.
The state’s grid operator, Electric
Reliability Council of Texas (ERCOT), on Friday said $2.1 billion in initial
bills went unpaid, underscoring the financial stress on utilities and power
marketers. More providers likely will reject the bills in coming days,
executives said.
“The municipal power sector is in a
real crisis,” said Maulin Patani, a founder of Volt Electricity Provider LP, an
independent power marketer that is not a member of the Brazos coop. ERCOT
should suspend the service charges to halt further defaults, he said in an
interview on Sunday.
The city of Denton, in north Texas,
last week sued ERCOT in a state court to prevent it from charging it for fees
unpaid by other users of the grid. Denton Electric could face tens of millions
of dollars for fees that were not collected from others, the suit claimed.
Debt analyst Fitch Ratings last week
also warned of potential downgrades to all Texas municipal power firms that use
the state’s grid. Costs from the storm “could exceed the liquidity immediately
available to these issuers,” Fitch said.
ERCOT triggered the squeeze when it
pushed up spot-market rates to $9,000 per megawatt hour (mwh) over more than
four days and levied huge fees for services. The service fees were 500 times
the usual rate, according to industry executives.
Brazos Electric coop executive Clifton Karnei, who sat on
ERCOT’s board of directors until last week, signed the Brazos coop’s bankruptcy
submissions. Through its 16 utility company members, Brazos provides
electricity to more than 660,000 customers across the state of Texas.
https://www.reuters.com/article/us-bankruptcy-brazoselectric-texas-outag/texas-electricity-firm-files-for-bankruptcy-citing-1-8-billion-in-claims-from-grid-operator-idUSKCN2AT1FE
Well, fancy giving money to the Government! Might as well have
put it down the drain. Fancy giving money to the Government! Nobody will see
the stuff again. Well, they've no idea what money's for- Ten to one they'll
start another war. I've heard a lot of silly things, but, Lor'! Fancy giving
money to the Government!
A. P. Herbert
Covid-19 Corner This
section will continue until it becomes unneeded.
Finland declares state of
emergency amid rising infections Jedidajah Otte 1 March, 2021
The Finnish government has
declared a state of emergency over rising coronavirus infections.
Prime minister Sanna Marin
last week had made an in-principle decision on declaring a state of emergency,
the Helsingin Sanomat newspaper reported.
The main reason for the decision is
that restaurants cannot be closed under the current Infectious Diseases Act,
the paper reported.
Reuters reports:
The decision comes as new variants
contribute to a sharp rise in infections in the country, which has already
closed its borders.
The state of emergency would also
allow the government to further shut schools and limit movement between
regions.
“The government sees it necessary
that we all have fewer contacts,” prime inster Sanna Marin told a news
conference. “Everyone now has the opportunity to impact how the spring and
summer will turn out.”
Several Finnish regions have seen a
rapid rise in Covid-19 infections in the past two weeks, with outbreaks among
skiers in Lapland and workers at shipping yards and construction sites.
Finland, among the European
countries least affected by the virus so far, has recorded 58,064 cases and 742
deaths since the start of the pandemic with 210 people currently hospitalised.
https://www.theguardian.com/world/live/2021/mar/01/coronavirus-live-news-vaccine-acceptance-rising-in-uk-us-and-france-south-africa-eases-restrictions?page=with:block-603cccf58f08d196fd22ac3c#block-603cccf58f08d196fd22ac3c
Hungary stretches vaccine supply
to counter "exponential" rise in cases March 1, 2021 12:49 PM By Reuters Staff
BUDAPEST (Reuters) - Hungary is adjusting its COVID-19
vaccination drive to give as many first shots as possible in the face of
fast-spreading infections, widening immunisation by providing at least some
protection to recipients, authorities said on Monday.
Announcing the initiative, Surgeon
General Cecilia Muller said she expected new coronavirus cases to surge in the
coming weeks, and so Hungary would try to stretch supplies by extending the
period between the two jabs, while maintaining safety.
“Data show exponential growth (in
infection),” Muller told an online press briefing. “The coming weeks will be
very difficult.”
The central European country of 10
million surpassed 15,000 deaths from coronavirus at the weekend, a death rate
roughly on par with that seen in the United States. Hungarians who have fallen
sick with the disease so far now number 432,925.
Hungary is the first country in the
European Union to authorise and use vaccines from Russia and China, causing
unease among Western peers but contributing to a rapid rise in vaccinations as
supplies now come from five manufacturers.
Western procurement has also
increased, with Hungary upping its order of Pfizer-BioNTech vaccines to 10.87
million from an earlier order of 6.5 million, Muller said.
The country also has orders from
Moderna and AstraZeneca and expects to order supplies of the single-dose
Johnson & Johnson vaccine once it becomes available in the EU, Muller said.
The new approach to vaccination
means a 12-week gap between AstraZeneca shots and 35 days between Pfizer shots,
she said.
Authorities had detected a rising
concentration of the virus in wastewater nationwide, with the capital Budapest
especially exposed, which might necessitate further restrictions if vaccination
efforts fail to curb the pandemic, she added.
https://www.reuters.com/article/us-health-coronavirus-hungary-vaccines/hungary-stretches-vaccine-supply-to-counter-exponential-rise-in-cases-idUSKCN2AT2E6?il=0
Ukraine throws away unused
COVID-19 shots as doctors skip their own vaccinations March 1, 2021 12:59 PM
By Natalia Zinets , Pavel
Polityuk
KYIV (Reuters) - Ukrainian medical facilities have thrown
away some unused COVID-19 vaccines after doctors failed to show up for their
own appointments to be vaccinated, ruling party lawmakers said on Monday.
Ukraine has just begun vaccinating
its 41 million people against COVID-19 after receiving a first batch of 500,000
doses of Indian-made AstraZeneca shots last week, but faces a battle against
vaccine scepticism that predates the pandemic.
The government has prioritised
giving shots to frontline medical workers but cited statistics showing that 47%
of Ukrainians do not want the vaccine.
“It is important for us to
understand how all the processes are set up, why doctors refuse to be
vaccinated,” Oleksandr Korniyenko, the head of President Volodymyr Zelenskiy’s
Servant of the People party, told a televised meeting.
“This is very bad, but there is no
other option... if a person does not come, it (vaccine bottle) can be kept open
for 2-3 hours, after which it must be disposed of,” the head of parliament’s
health committee Mykhailo Radutskyi said.
A total of 3,141 shots were
administered of Feb. 28, including just 90 shots in the past 24 hours, health
ministry data showed.
Health Minister Maksym Stepanov said
the government was working to ensure vaccines do not get thrown away, adding
this also happened in other countries.
More
https://www.reuters.com/article/us-health-coronavirus-ukraine/ukraine-throws-away-unused-covid-19-shots-as-doctors-skip-their-own-vaccinations-idUSKCN2AT2EY
States easing virus restrictions
despite experts’ warnings By
HEATHER HOLLINGSWORTH and TAMMY WEBBER March 1, 2021
MISSION, Kan. (AP) — With the U.S.
vaccination drive picking up speed and a third formula on the way, states eager
to reopen for business are easing coronavirus restrictions despite warnings
from health experts that the outbreak is far from over and that moving too
quickly could prolong the misery.
Massachusetts on Monday made it much
easier to grab dinner and a show. In Missouri, where individual communities get
to make the rules, the two biggest metropolitan areas — St. Louis and Kansas
City — are relaxing some measures. Iowa’s governor recently lifted mask
requirements and limits on the number of people allowed in bars and restaurants,
while the town of Lawrence, home to the University of Kansas, now lets
establishments stay open until midnight.
---- The
push to reopen comes as COVID-19 vaccine shipments to the states are ramping
up. Nearly 20% of the nation’s adults — or over 50 million people — have
received at least one dose of vaccine, and 10% have been fully inoculated 2 1/2
months into the campaign to snuff out the virus, according to the Centers for
Disease Control and Prevention.
Johnson & Johnson shipped out nearly 4
million doses of its newly authorized, one-shot COVID-19 vaccine Sunday night
to be delivered to states for use starting on Tuesday. The company will deliver
about 16 million more doses by the end of March and a total of 100 million by
the end of June.
That adds to the supply being distributed by
Pfizer and Moderna and should help
the nation
In New York City, where limited indoor dining
has resumed, officials said the J&J vaccine will help the city to inoculate
millions more people by summer, including through door-to-door vaccinations of
homebound senior citizens.
But the efforts come with strong warnings from
health officials against reopening too quickly, as worrisome coronavirus
variants spread.
More
https://apnews.com/article/kansas-city-michael-brown-kansas-coronavirus-pandemic-massachusetts-3599a9631d08de3945f5c95f000e5611
COVID-19 and
Vitamin D (NEW Studies) Approx. 15
minutes. https://www.youtube.com/watch?v=_MHsJB3m1go
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on Sme.sk and Korzar.sk Next, some vaccine links
kindly sent along from a LIR reader in Canada. The links come from a most
informative update from Stanford Hospital in California.
World
Health Organization - Landscape of COVID-19 candidate vaccines . https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines
NY
Times Coronavirus Vaccine Tracker . https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html
Stanford
Website . https://racetoacure.stanford.edu/clinical-trials/132
Regulatory
Focus COVID-19 vaccine tracker . https://www.raps.org/news-and-articles/news-articles/2020/3/covid-19-vaccine-tracker
Some other useful Covid links.
Johns Hopkins Coronavirus
resource centre
https://coronavirus.jhu.edu/map.html
Rt Covid-19
https://rt.live/
Centers for Disease Control
Coronavirus
https://www.cdc.gov/coronavirus/2019-ncov/index.html
The Spectator
https://data.spectator.co.uk/city/national
Technology Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
Updates as they get reported.
Weak electrolyte bonds keep
lithium metal battery running in the cold By Nick Lavars February 28, 2021
Among the promising experimental
battery architectures scientists are exploring is one that uses pure lithium
metal for the anode, rather than the mix of materials used in today's
lithium-ion devices. Scientists working in this area have now made a
breakthrough around how these devices function at ultra-low temperatures,
building a version that relies on weak bonds in its electrolyte to offer
unprecedented performance in the cold.
The
reason lithium metal batteries are seen as such a promising technology is
because of the excellent energy density a pure lithium metal anode offers,
compared to the mix of graphite and copper used today. So profound is this
difference, that lithium metal is described as a " dream material "
by some battery researchers, and seen as critical to breaking the
energy-density bottleneck by others.
As the solution that carries the
lithium ions back and forth between the anode and the other electrode, the
cathode, during cycling, the electrolyte plays an important part in an
operating battery. Researchers at the University of California, San Diego
(UCSD) were attempting to develop a battery that could be charged and
discharged at extremely low temperatures, something that normally requires
extra heating systems, and they focused on the electrolyte component to make
that happen.
The goal was to develop an
electrolyte that doesn't freeze up and is able to keep the lithium ions moving
between the electrodes in the cold. The researchers were experimenting with two
types of electrolytes, one that binds strongly to the ions and one that binds
with them far more weakly. In doing so, they found that how easily the
electrolyte can let go of the ions dictates how well the battery functions at
low temperatures.
The experimental cell with the strongly binding electrolyte
stopped working after just two cycles when used at temperatures of -60 °C (76
°F). The cell with the weakly binding electrolyte, meanwhile, was still running
smoothly after 50 cycles and retained 76 percent of its capacity. When
subjected to -40 °C (-40 °F) temperatures, it retained 84 percent of its
capacity.
“We found that the binding between the lithium ions and the
electrolyte, and the structures that the ions take in the electrolyte, mean
either life or death for these batteries at low temperature,” said first author
John Holoubek,
Further investigations of these proof-of-concept cells
revealed that the ions deposited far more uniformly on the anode in the battery
with the weakly binding electrolyte, whereas the strongly binding electrolyte
caused chunky and needle like deposits. These are known as dendrites and are
another key focus for scientists working on lithium metal batteries, as they
quickly cause the battery to short circuit and fail.
“How lithium ions interact with the electrolyte at the
atomic level not only enables sustainable cycling at very, very low
temperature, but also prevents dendrite formation,” says study author Zheng
Chen.
The team built on these findings by building a prototype
lithium metal battery with a sulfur-based cathode and weakly binding
electrolyte. This type of device could find use in extreme environments where
ultra-cold temperatures require extra heating apparatuses for batteries to keep
functioning, such as outer space and deep-sea exploration.
“The significance of this work is really two-fold,” says
study author Ping Liu. “Scientifically, it presents insights that are contrary
to conventional wisdom. Technologically, it is the first rechargeable lithium
metal battery that can deliver meaningful energy density while being fully
operated at -60 C. Both aspects present a complete solution for ultra-low
temperature batteries.”
The research was published in the journal Nature
Energy .
https://newatlas.com/energy/weak-electrolyte-bonds-lithium-metal-battery-cold/
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
