David Fuller and Eoin Treacy's Comment of the Day
Category - General

    James Webb Space Telescope rockets into history

    This article from NewAtlas may be of interest to subscribers. Here is a section:

    The new mirror is as revolutionary as the spacecraft that carries it. Instead of being in a single piece, it is made of 18 gold-plated beryllium hexagonal mirror segments measuring 1.32 m (4 ft). These are controlled by hundreds of actuators that allow the telescope to adjust its own optics. This is extremely important because the JWST will be over a million miles away. The Hubble mission's early days were marred by a design flaw that required astronauts to visit the telescope several times to make repairs and adjustments, but this won't be an option for the JWST – it has to be as self-reliant as possible.

    Unlike the Hubble, which sees in visible and ultraviolet light, the JWST looks in the infrared range. This will allow it to see further into the past than any previous instrument by seeking out objects at the edges of the universe, which date back to near the beginning of time and are receding from us so fast that their light has shifted into the infrared band.

    With this capability, the 6,500 kg (14,300 lb) Webb will look at how the first galaxies formed in the early universe, study star formation, learn more about how galaxies evolve, and focus on exoplanets in other solar systems to seek out evidence of potential life.

    Unfortunately, this super vision requires the JWST to operate at temperatures below -223.2 °C (-369.7 °F), which is difficult to achieve in the full glare of the Sun. To do this, the telescope is equipped with a sun shield about the size of a tennis court that is made of five layers of thin sheets of a polyimide film called Kapton that are coated with aluminum. This material is stable across a wide range of temperatures and insulates the telescope, allowing the spacecraft to be hotter than boiling water on one side, but colder than liquid oxygen on the other.

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    Why the Bezzle Matters to the Economy

    This article by Michael Pettis for the Carnegie Endowment for International Peace may be of interest to subscribers. Here is a section:

    First, the bezzle represents recorded or perceived wealth that does not exist as real wealth (productive capacity), and as such it boosts collective recorded wealth above real economic wealth. This discrepancy gooses GDP growth in at least three ways. One way this happens is that bezzle creates a temporary wealth effect that boosts consumption and investment spending to a level higher than where either normally would have been. A second way is when part of this false wealth shows up either as higher income or higher profits for the entity that benefits from the boost in recorded wealth. A third way is when rising market values collateralize increases in borrowing that are then used either to raise prices further or to increase spending. It is not a coincidence that GDP growth rates are always higher than expected in periods during which a great deal of bezzle is being created.

    Second, the reverse is true when the bezzle is directly or indirectly recognized and amortized, as it must eventually be. One or more sectors of the economy (households, businesses, local governments, farmers, or banks) must absorb the loss. As they do, the wealth effect reverses, their lower earnings or profits are reflected in lower-than-expected GDP figures, and they are forced to pay down the debt. Just as it is not simply a coincidence that bezzle is created mainly during economic booms, nor is it a coincidence that it tends to be recognized during economic downturns or financial crises.

    Third, bezzle creation seems to be systemic. There are periods, in other words, when it seems that the operation of the financial system errs toward creating bezzle, and these times always seem to be followed by periods in which the bezzle is automatically wrung out of the system.

    Fourth, as Galbraith especially pointed out, the bezzle has a self-reinforcing impact on growth in either direction. When it is being created, the illusion of wealth tends to reinforce growth and encourage the creation of more bezzle. When it is being amortized, it tends to inflict additional costs of financial distress on the economy, especially to the extent that it was financed by debt.

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    The Stock Market Is Suffering From Bad Breadth

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    The problem for money managers is that when the returns of the market are being driven by a handful of stocks, they must own those stocks or risk underperforming the market, which creates continuous demand for those stocks that are leading the market higher no matter what their prices. And it was clear during the small correction late last month that so-called market neutral players had been using Apple, Microsoft and Nvidia as a hedge, because as the market declined, those stocks actually rose, as hedges were unwound.

    There have been episodes of declining breadth in the past, and those usually presage large corrections or bear markets. The Nifty 50 episode in the 1960s is one example. But even in the dot-com bubble, breadth declined steadily until March of 2000, at which point there was only one stock standing: Cisco Systems Inc. When Cisco broke on an earnings report, that was it for the dot-com bubble.

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    Three Sinovac Doses Fail to Protect Against Omicron in Study

    This article from Bloomberg may be of interest to subscribers. Here is a section: 

    While much is still unknown about how Sinovac’s shot holds up to omicron -- including how T cells, the immune system’s weapon against virus-infected cells, will respond -- the initial results are a blow to those who have received CoronaVac. There have been more than 2.3 billion doses of the shot produced and shipped out, mostly in China and the developing world. 

    With omicron seen to be about 70 times more transmissible than the delta variant, the prospect of having to roll out different boosters or even re-vaccinate with a more omicron-specific vaccine will set back the world’s efforts to exit the pandemic.

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    European Gas Plunges 20% as Rally Lures Flotilla of U.S. LNG

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    European natural gas prices plunged more than 20% on Thursday as this year’s stellar rally attracted a flotilla of U.S. cargoes.

    At least 10 vessels are heading to Europe, according to ship-tracking data compiled by Bloomberg. Another 20 ships appear to be crossing the Atlantic, but are yet to declare their final destinations. U.S. cargoes of liquefied natural gas will help offset lower flows from Russia, Europe’s top supplier.

    Gas prices in Europe have surged more than sixfold this year as Russia curbed supplies just as pandemic-hit economies reopened, boosting demand. Delayed maintenance work and power-plant outages also contributed to the rally. Prices in Europe are 13 times higher than in the U.S. and the market is also trading at a rare premium to Asia, making the continent a prime destination for LNG.


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    Europe's Power Crunch Shuts Down Factories as Prices Hit Record

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    Electricite de France SA said last week it will halt four reactors accounting for 10% of the nation’s nuclear capacity, straining power grids already faced with the prospect of a spell of cold weather. At the beginning of January, almost 30% of France’s nuclear capacity will be offline, increasing the country’s reliance on gas, coal and even oil.

    “If we have a very, very cold day, it could be problematic, especially if we have to import and our neighbors have problems as well,” said Paris-based Anne-Sophie Corbeau, a research scholar at the Center on Global Energy Policy at Columbia University. “This is the domino effect we need to fear. But electricity will be expensive, there’s going to be a cost to pay.”

    German power for next year jumped to a high of 335 euros a megawatt-hour, following a 25% rally on Tuesday, before slipping back. The French equivalent rose as much as 2.5% to record of 408 euros. Prices gained amid thin holiday trading even as gas declines. There was also speculation some traders may be closing short positions due to rising capital requirements from exchanges.

    “The strength in the French market has been the main engine -- aside from gas prices -- of strength in neighboring markets, including Germany, in recent days,” said Glenn Rickson, head of European power analysis at S&P Global Platts.

    “I also suspect that any big moves ahead of the run-up to Christmas have as much to do with the thinness of the market and traders needing to close short positions ahead of shutting down for the holidays as anything else.”

    Soaring gas and power prices have already forced European utility giants from RWE AG to Uniper SE to boost liquidity requirements. Many smaller suppliers didn’t have the same option, with more than 20 going out of business in the U.K. alone.

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    Musk Says He Has Sold Enough Stock to Unwind 10% of His Stake

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    Elon Musk has disposed of enough shares to reach a target of reducing his stake in Tesla Inc. by 10%, the head of the electric-car leader said in an interview. 

    “I sold stock that should roughly make my total Tesla share sale roughly 10%,” he told satirical website Babylon Bee. 

    Musk has been offloading Tesla stock since asking his Twitter followers in November whether he should sell some of his stake. The move is part of a plan to generate cash to cover an estimated tax bill of more than $10 billion on stock options Musk is due to exercise.

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