Credit Bubble Bulletin

Credit Bubble Bulletin2020-05-20T17:01:05-06:00

Presented by Doug Noland

Daily Commentary

Tuesday, December 7, 2021

[Yahoo/Bloomberg] Tech Stocks Lead Rebound; Nasdaq Rallies: Markets Wrap

[Reuters] Oil rises on easing Omicron fears and Iran delay

[CNBC] U.S. trade deficit narrows sharply in October

[USAT] Omicron could be more contagious, less dangerous. That would be ‘good news for the human race.’

[Yahoo/Bloomberg] China Traders Chase Financial, Property Stocks on Policy Shift

[Reuters] China c.bank cuts rates on relending facility, benchmark cut chances seen as low

[Reuters] Developer China Evergrande’s shares firm as restructuring looms

[Yahoo/Bloomberg] Bondholders Don’t Get Paid; Kaisa Deferral: Evergrande Update

[Yahoo/Bloomberg] Evergrande’s Epic Restructuring Puts Onus on Xi to Limit Fallout

[Reuters] Explainer: What’s next for China Evergrande after missing coupon payments

[Reuters] China Evergrande’s snowballing debt crisis

[Yahoo/Bloomberg] China’s Exports and Imports Hit New Records on Strong Demand

[AP] End of an era: Germany’s Merkel bows out after 16 years

[Reuters] Biden to tell Putin he’ll face toughest sanctions yet if he invades Ukraine

[Reuters] China says U.S. will ‘pay the price’ for diplomatic boycott of Olympics

[NYT] China Nears a Reckoning as Property Firms Face Tough Deadlines

[NYT] As China Evergrande Teeters, Beijing Steps In

[WSJ] Junk-Bond Investors Fear Bumpy 2022 After November Slump

[WSJ] China Increasingly Obscures True State of Its Economy to Outsiders

[WSJ] Why the Turkish Lira Is Falling Like a Rock

[FT] Beijing seeks to orchestrate slow motion collapse for Evergrande

[FT] China property stocks rise as Beijing tries to ease Evergrande turmoil

[FT] Omicron’s less severe cases prompt cautious optimism in South Africa

Weekly Commentary

November 26, 2021: Black Friday

I posted a link Thursday morning to a Bloomberg article, “New Coronavirus Variant a ‘Serious Concern’ in South Africa.” The seemingly small outbreak generated minimal media attention. Within 24 hours, however, global markets were in a tailspin, with Crisis Dynamics gaining critical momentum. The World Health Organization Friday in an emergency meeting designated the new B.1.1.529 – “Omicron” – a “variant of concern.”

From Thursday’s Bloomberg article, “Virologists have detected almost 100 cases linked to the variant in the country to date…” By Friday, there were individual cases reported in Hong Kong, Brussels and Israel, all travelers from South Africa, along with a number of infections in Botswana. Friday from Bloomberg: “Early PCR test results showed that 90% of 1,100 new cases reported Wednesday in the South African province that includes Johannesburg were caused by the new variant.” “This new variant, B.1.1.529 seems to spread very quick! In less than 2 weeks now dominates all infections following a devastating Delta wave in South Africa.”

It could take scientists several weeks to better understand what the world is dealing with.

November 26 – Financial Times (Clive Cookson and Oliver Barnes): “The 50 mutations on the new B.1.1.529 variant… include more than 30 on the spike protein, the exposed part of the virus that binds with human cells. These changes could make it more transmissible than the dominant Delta variant and more likely to evade the immune protection conferred by vaccines or prior infection. Scientists are concerned for two main reasons. One is epidemiological and relates to the speed with which the variant that emerged this month is spreading in South Africa, particularly in Gauteng province… Daily cases have more than tripled in South Africa since Tuesday, with 2,828 cases recorded on Friday. Early testing results indicated that 90% of the new cases on Wednesday in Gauteng were caused by the new variant… The other cause for concern is its highly unusual genetic profile. Jeffrey Barrett, director of the Covid-19 Genomics Initiative at the Wellcome Sanger Institute, described Omicron as ‘an unprecedented sampling’ of mutations from four earlier variants of concern: Alpha, Beta, Gamma and Delta. There are other genetic changes that have not been seen before, whose significance is as yet unknown, he added. Worryingly, said Jacob Glanville, a computational immunologist and founder of California therapeutics company Centivax, 15 of the mutations are on the ‘receptor binding domain’ — which acts like a ‘grappling hook’ for the Sars-Cov-2 virus to enter human cells. These mutations help the virus circumvent the body’s immune defences because it is trained by vaccines or prior infection to recognise and fight the original Wuhan strain. By comparison, the Delta variant which accounts for almost all sequenced cases worldwide dented the effectiveness of vaccines with just three mutations in this region.” (more…)

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