My edited version of Noland's column:
Coronavirus Watch:
March 8 – Bloomberg (Jonathan Levin):
“A highly infectious Covid-19 variant is circulating widely in Florida, prompting concern that a resurgence of the virus is possible in the state and beyond, even as cases and hospitalizations drop dramatically. In Florida, as elsewhere in the U.S., Covid cases, hospitalizations and deaths have dropped significantly… But conditions aren’t improving quite as quickly in the Sunshine State, at least in certain key categories. The per-capita rate of Covid-19 patients currently in Florida hospitals is now about 25% above the national average.”
March 11 – CNN (Flora Charner and Marcia Reverdosa):
“A second wave of Covid-19 is ripping through Brazil, pushing hospitals and ICUs toward collapse and claiming record numbers of daily deaths. While a new variant of the coronavirus spreads throughout the country, many Brazilians continue to defy mask mandates mobility restrictions following the example of President Jair Bolsonaro, who recently said people need to ‘stop being sissies’ and ‘whining’ about the virus.”
Market Mania Watch:
March 10 – Bloomberg (Justina Lee):
“The electric-vehicle craze is a classic sign of a ‘big market delusion’ that has entrapped investors throughout history, according to quant pioneer Rob Arnott. The 600% rally in a year that sent the combined value of eight manufacturers to $1 trillion is pricing every firm as a major winner in the clean-energy boom. Yet just as the once-highly valued PalmPilot lost in the smartphone revolution, not all of them will succeed in the EV age, the Research Affiliates chairman co-wrote in a new paper. ‘All of these companies are priced as if they are going to be huge winners, but they are competitors!’ Arnott said…”
March 11 – Bloomberg (James Tarmy):
“On Thursday, a digital artwork less than a month old hammered for $60.25 million at Christie’s in New York, shattering every previous record set for the medium and pushing the NFT market into the price range of blue-chip masterworks. With buyer’s premium the total comes to $69 million. Everydays: the First 5,000 Days is a mosaic of every image that artist Mike Winkelmann, who goes by the name Beeple, has made since 2013. The artwork is attached to a non-fungible token (NFT), a digital certificate of authenticity that runs on blockchain technology. Unlike some of his other artworks, Everydays doesn’t come with anything physical (a box, a plaque) attached. Bidding opened at $100 on Feb. 25. ‘The first day of bidding was one of the most magical events in my auction career,’ says Noah Davis, a specialist at Christie’s who organized the sale. ‘I’ve never seen anything like it.’”
Market Instability Watch:
March 8 – Bloomberg (Vildana Hajric and Lu Wang):
“One of the best manifestations of the rotation from formerly high-flying growth stocks to value shares can be seen in the divergence of the Nasdaq 100 from the Dow Jones Industrial Average. As the 125-year-old benchmark climbed to another intraday record, the Nasdaq 100 slumped to a level traditionally seen as a correction. It’s the first time since 1993 that the Dow rose and closed within 1% of a record, while the tech-heavy gauge was down more than 10% from its high.”
Inflation Watch:
March 10 – Associated Press (Martin Crutsinger):
“The U.S. government’s budget deficit through February hit an all-time high of $l.05 trillion for the first five months of this budget year… The… October through February deficit was 68% larger than the $624.5 billion deficit recorded during the same period last year. ... The Congressional Budget Office has projected that the deficit for the budget year that ends on Sept. 30 will be $2.3 trillion. However, that estimate does NOT include the cost of President Joe Biden’s $1.9 trillion COVID relief measure…”
March 12 – Reuters (Zandi Shabalala):
“Demand and prices for battery material cobalt are soaring as electric vehicles stream out of showrooms in China and Europe… The price of the metal stands at $53,000 per tonne, up 65% this year and around its highest since December 2018, having been as low as $25,000 in 2019 due to a global market surplus.”
Biden Administration Watch:
U.S. Bubble Watch:
March 8 – Politico (Katy O’Donnell):
“Home prices in January… were up 14% over the same month the previous year, while sales jumped 24%, despite an unemployment rate that was almost twice as high. Demand for existing homes is so strong that the average residence is on the market for just three weeks, and inventory is at a record low after seeing its steepest drop last year since the data was first tracked in 1999.”
March 11 – Wall Street Journal (Orla McCaffrey):
“Americans extracted more cash from their homes through cash-out refinancings in 2020 than in any year since the financial crisis. U.S. homeowners cashed out $152.7 billion in home equity last year, a 42% increase from 2019 and the most since 2007, according to… Freddie Mac. It was a blockbuster year for mortgage originations in general as well: Lenders churned out more mortgages than ever in 2020, fueled by about $2.8 trillion in refis, according to… Black Knight Inc.”
March 9 – Reuters (Lucia Mutikani):
“Nearly a third of U.S. households receiving unemployment benefits are struggling to cover routine expenses such as food, housing and medical treatment, according a survey published by the Commerce Department’s Census Bureau…”
China Watch:
March 9 – Bloomberg (Richard Frost):
“A world-beating rally in Chinese stocks has turned into the biggest rout globally, shocking investors with the severity of its reversal and evading state efforts to slow the pace of losses. In just 14 trading days, the nation’s benchmark CSI 300 Index has plummeted 14% from a 13-year high. That compares with a 2.2% drop by the MSCI All-Country World Index. The plunge has wiped out more than $1.3 trillion of value and hammered the holdings of retail investors who piled in at the peak…”
March 6 – Reuters (Stella Qiu, Ryan Woo and Colin Qian):
“China’s February exports grew at a record pace from a year earlier when COVID-19 battered the world’s second-biggest economy…, while imports rose less sharply. Exports in dollar terms skyrocketed 154.9% in February compared with a year earlier, while imports gained 17.3%, the most since October 2018… In the January-February period, exports jumped 60.6% from a year earlier, when lockdowns to contain the pandemic paralysed the country’s economic activity. That exceeded the forecast of… a 38.9% surge.”
Global Bubble Watch:
March 6 – New York Times (Peter S. Goodman, Alexandra Stevenson, Niraj Chokshi and Michael Corkery):
“Off the coast of Los Angeles, more than two dozen container ships filled with exercise bikes, electronics and other highly sought imports have been idling for as long as two weeks. In Kansas City, farmers are struggling to ship soybeans to buyers in Asia. In China, furniture destined for North America piles up on factory floors. Around the planet, the pandemic has disrupted trade to an extraordinary degree, driving up the cost of shipping goods… The virus has thrown off the choreography of moving cargo from one continent to another… ‘I’ve never seen anything like this,’ said Lars Mikael Jensen, head of Global Ocean Network at A.P. Moller-Maersk, the world’s largest shipping company. ‘All the links in the supply chain are stretched. The ships, the trucks, the warehouses.’”
Japan Watch:
Social, Political, Environmental, Cybersecurity Instability Watch:
March 9 – New York Times (Andrew Ross Sorkin): “‘Bitcoin uses more electricity per transaction than any other method known to mankind, and so it’s not a great climate thing.’ That was what Bill Gates recently told me. At a time when companies and investors increasingly say they are focused on climate and sustainability issues, some of them may be about to collide with the reality of another financial trend, one currently worth about $1 trillion: Bitcoin. The cryptocurrency has become inescapable, with big companies like Tesla and individual investors alike rushing to stock up on the digital token. But depending on which study you read, the annual carbon emissions from the electricity required to mine Bitcoin and process its transactions are equal to the amount emitted by all of New Zealand. Or Argentina.”
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