Notes Today:

 

• Tensions between Ukraine and Russia have led to the U.S. delivering 90 tons of military aid that arrived in Ukraine.

• State Department orders families of U.S. embassy personnel in Ukraine to begin evacuating the country as soon as Monday.

• The FOMC meets this week, and they are projected to hasten the taper of asset purchases. 

• Reports upcoming are the estimate of Q4 GDP and December New Home sales, December Personal Income and Outlays and November Case-Shiller house prices. 

• If you think your stock portfolio had a rough week, Jeff Bezos lost $20 billion of his fortune, Changpeng Zhao of Binance dropped $17.7 billion, and Zuckerberg’s wealth fell $10.4 billion. 
• Feel better?

• The Arizona Democratic Party on Saturday voted to formally censure the state’s senior senator for her part in killing the Freedom to Vote and John Lewis Voting Rights Acts.

• Artificial snow has become a Winter Olympics fixture as climate change shrinks the number of countries that get enough natural snowfall to hold the event. But Beijing will be the first host to rely completely on man-made powder. 

Powerful evidence suggests that fishing fleets are deliberately dumping their used nets and lines at sea, threatening the complete collapse of marine ecosystems.

 

Quick Overview is up to date

You may want to note that the China Containerized Freight Index is making new highs while The BDI Baltic Exchange Dry Index is making lows.

Nassim Taleb on BitCoin - 

to 0

@nntaleb

View BTC is as a contagious disease. It will spread, spread & its price will rally until saturation, that is ~every sucker stupid enough to buy the story is invested. When all suckers are in, the prevailing belief will make it an "obvious" investment. That's maximal fragility.

 

Comment 1: Why BTC is worth exactly 0 Gold and other precious metals are largely maintenance free, do not degrade over an historical horizon, and do not require maintenance to refresh their physical properties over time. Cryptocurrencies require a sustained amount of interest in them.

Let us go deeper into how a currency can come about.

No transaction between two persons is analytically pairwise

in an open economy. The root of the confusion lies in the

prevalent naïve-libertarian illusion that a transaction between

two consenting adults, when devoid of coercion, is effectively

just a transaction between two consenting adults and can

be isolated and discussed as such12. But one must consider

the ensemble of transactions and the interactions between

agents: people happen to engage in contractual agreements

with others; for them a specific transaction is just one piece.

To be able to regularly buy goods denominated in bitcoin

(whose prices fixed in bitcoin but floating in U.S.$ or some

other fiat currency), one must have an income that is fixed in

bitcoin. Such an income must come from somewhere, say, an

employer. For an employer to pay a salary fixed in bitcoin, she

or he must be getting revenues fixed in bitcoin. Furthermore,

for the vendor to offer a can of beer in fixed bitcoins, she or

he must be paying for the raw material, and have the overhead

fixed in bitcoin. The same applies to the mismatch of assets

and obligations on a balance sheet. All this requires a parity

in bitcoin-USD of low enough volatility to be tolerable and

for variations to remain inconsequential.

Notes Today:

 

• Nikkei 225 Hits 6-week Low
• Heating Oil Hits 7-year High
• S&P/ASX 200 at 4-week Low
• Crude at 7-Year High 

• British consumer price inflation rose more than expected to 5.4% in December, its highest in almost 30 years
• Germanies housing boom has accelerated yet again. Home prices rose 14% in 2021. 

• Julia Davis @JuliaDavisNews: On multiple (RUSSIAN) shows, experts and pundits are claiming that the principle of MAD (mutually assured destruction) is obsolete and trying to convince the audiences that Russia could prevail over the U.S. in a nuclear war. 

• The Baltic Exchange Dry  Index  at its lowest level in about a year, on weaker demand across all vessel segments.

 Palm Oil at all time high

 Quick Overview is up to date

 US wages growing at the fastest pace in two decades

Moex Russia Index  falls 13% over past four trading days on fears of Moscow invasion of Ukraine 

Green Hills Software CEO Dan O'Dowd took out a full page ad in Sunday’s New York Times calling TSLA's “Full Self-Driving” software “the worst software ever sold by a Fortune 500 company.

• AP California prosecutors have filed two counts of vehicular manslaughter against the driver of a Tesla on Autopilot who ran a red light, slammed into another car and killed two people in 2019.

British troops sent to Ukraine: Soldiers and hi-tech weapons on way amid fears of Russian invasion | Daily Mail Online

 

 Dow Theory

 Philadelphia housing index  (HGX)

 Nasdaq advance decline line

 NYSE advance decline line

Has Eurodollar (interest rate) decided to put in a “long term” top?

Notes Today:

 

• China’s economy expanded 8.1% in 2021, defying expectations, despite slowing in the last quarter.

• The pentagon declares climate change a national security issue. Btw, the pentagon has known this for decades. 

• US annual rate of inflation jumped to 7% in December, its highest level since June 1982. 

• The euro zone’s annual inflation rate rose to 5%, record high, in December. 

• The Insurance industries had the fourth-costliest year ever for natural disasters, according to Munich Re. 

• Argentina’s interest rates are currently at a remarkable 40%. Inflation  at 51.2%

• TheBaltic Dry index has lost nearly 23% this week. 

• China would like to produce 40% more soybeans by 2025 hoping to become self-sufficient. 

• Fears rise over how unregulated trading and promotion of crypto assets are creating a new generation of addicts.

Tulip file:  Economist  According to some estimates, Bitcoins’ electricity use is approaching that of Italy. “You waste all these resources only to end up with a system that is controlled by people you have even less reason to trust than those who run conventional financial institutions,” 

•  China’s birth rate plummeted to just 7.5 births per 1,000 people in 2021, the lowest figure since records began in 1949.

 

Quick Overview is up to date

 Is Soy Bean Oil about to follow Palm Oil to new highs?

Notes Today 

S&P 500 Earnigs grew by 65% in 2021 - the highest annual increase on record.

RCEP: Asia readies world’s largest trade deal

Trade barriers between most countries in the Asia Pacific will be lowered significantly from January 1 as the world’s largest free trading bloc opens for business. The Regional Comprehensive Economic Partnership (RCEP) is a trade deal between the 10-member Association of Southeast Asian Nations (ASEAN) and China, Japan, South Korea, Australia and New Zealand. RCEP will cover about 30% of global gross domestic product (GDP), worth $26.2 trillion (€23.17 trillion), and nearly a third of the world’s population, some 2.2 billion people.

ChinaIs Running Out of Water and That’s Scary for Asia

Thousands of rivers have disappeared, while industrialization and pollution have spoiled much of the water that remains. By some estimates, 80% to 90% of China’s groundwater and half of its river water is too dirty to drink; more than half of its groundwater and one-quarter of its river water cannot even be used for industry or farming.

Pat Gelsinger: When I make statements like we're on or ahead of schedule on Intel 7, 4, 3, 20A and 18A, over the same period of time that the competitors have slipped their process technology. The gap is closing faster than I forecast at the beginning of the year for this. (chart  log scale)

Btw, INTC is part of the Dogs of the Dow for 2022

 

Quick Overview is up to date

Happy Holidays 

Historically – “Times person of the year”  suggests substantial change in direction is forthcoming ..  👇

 Quick Overview is up to date

The World Ahead

 Quick Overview is up to date

Notes Today:

• Jerome Powell, chairman of the Federal Reserve, said America’s central bank may reduce its monthly asset purchases “a few months sooner” than planned. 

• Inflation in the eurozone ascends to 4.9% – highest since the euro was introduced.. 

• Economist: The secretary-general of NATO, Jens Stoltenberg, warned Russia that there would be a “high price to pay” if it were to use force against Ukraine. The sabre-rattling came as Russia massed troops on the border of the former Soviet republic. On Monday, Belarus announced joint exercises with Russia on its own border with Ukraine. 

• Guardian: Patients who survive severe Covid are more than twice as likely to die over the following year than those who remain uninfected or experience milder virus symptoms, a study says.

         The research, published in Frontiers in Medicine, suggests that serious coronavirus infections                 may significantly damage long-term health, showing the importance of vaccination. 

• If you use an iPhone and go to Privacy > Tracking > and find the Facebook app there, you can turn off ALL of their tracking devices and that will hurt their bottom line.

 Money has to be / go somewhere..

Asian markets slide on Covid variant jitters

The emergence of a heavily mutated new strain of Covid-19 in South Africa, labeled B.1.1.529, has sent Asian investors scurrying for the exit door. The UK has paused flights from South Africa and five other neighbouring countries. We can expect more of the same elsewhere, the complacency seen with the emergence of delta in India being a lesson harshly learned. Two cases with the new variant have already been detected in Hong Kong today. There are also media reports this morning about tightening virus restrictions in parts of China.

Equity markets are being heavily sold including US futures, with OTC markets being closed overnight for the Thanksgiving holiday. S&P 500 futures are 0.85% lower, with Nasdaq futures down 0.70% and growth-centric Dow Jones futures tumbling by 1.25%.

 

Quick Overview is up to date

Dow Trend Earnings aka Fed Model

According to the model the DJIA should be trading 

at $97,000.

Btw, current earnings for the DJIA are $1601.47

thats up from $1011.07 year ago.

     Later 

 

Quick Overview is up to date

Later

 

Quick Overview is up to date

 1 Year relative performance:

Oats performing as advertised. So far.

 

Later

Quick Overview is up to date

Notes today: "some" of the current problems.

• The S&P 500 fell 2% as fears over a government shutdown grew following the refusal by Senate Republicans (head in sand)
  of a debt-ceiling suspension. 
• The Nasdaq 100 had its worst day since March and the Dow Jones followed suit. 

• The world economy is facing inflation from surging energy prices at 3 year high. 
• Natural Gas at 7 year high. 
• Cotton above a buck. 
• Oats (they know) all-time high. 

• German import prices rose by 16.5% YoY in August most since the 1980s, after 15% in July, 12.9% in June, 11.8% in May.. Natural gas jumped a whiopping 177.5% in Aug & oil by 63.6%.

• China is literally out of gas (energy is being rationed) while they are sitting on millions of unsold apartments. 

• 10-year treasuries up 1.55%. Liquidity may be less plentiful sooner than anticipated. 

• The recovery is slowing due to the ongoing pandemic. 

• Yellen told Congress that unless the debt ceiling is lifted, the U.S. will effectively be out of cash by Oct. 18. Republicans (head in sand) are “now” of course united in opposing a  lifting of the ceiling. 

• Senator Elizabeth Warren opposes a new term for Jerome Powell calling the Fed leader a “dangerous man.” 

• Is Biden’s $3.5 trillion economic agenda alive?  when and by how much?
• In deep red West Virginia, Biden’s $3.5tn spending proposal is immensely popular. Are you paying attention Manchin? 

• Voter protections appear to be fading away...

So that no one gets depressed I’m ignoring  other current problems.😏

 

 

Later

 

FT: The real risk from Evergrande

The China Real Estate / Evergrande  disaster   has everyone watching Iron Ore