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Daily Archives: April 8, 2022

Chuckles of the Day

Bartender, There’s a Fly In My Beer

A millionaire, a hard hat, and an old drunk are at a bar.

When they get their beers, they notice a fly in each mug.

The millionaire politely asks the bartender for another beer, then proceeds to sip it.

The hard hat spills out just enough to get rid of the fly and quaffs the rest.

It’s now the old drunk’s turn. He sticks his hand into the beer, grabs the fly by the wings, and shouts, “Spit it out! Spit it out!”

* * * * * * *

What’s For Sale?

Two young businessmen in Florida were sitting down for a break in their soon-to-be new store in the shopping mall.

As yet, the store wasn’t ready, with only a few shelves and display racks set up.

One said to the other, “I’ll bet that any minute now some senior is going to walk by, put his face to the window, and ask what we’re selling.”

Sure enough, just a moment later, a curious senior gentleman walked up to the window, looked around intensely and rapped on the glass, then in a loud voice asked, “What are you sellin’ here?”

One of the men replied sarcastically, “We’re selling ass-holes.”

Without skipping a beat, the old timer said, “You’re doing well, only two left.”

Chart: U.S. Initial Jobless Claims Down Last Week

The lowest level since 1968

Source : Bloomberg

Shanghai Readies ‘Shelter Hospital’ for 50,000 COVID-19 Patients

Ni Dandan wrote . . . . . . . . .

Shanghai is set to open its largest “shelter hospital” that can accomodate 50,000 COVID-19 patients with mild or no symptoms, authorities said Friday as daily infections continue to surge.

The National Exhibition and Convention Center in the city’s Qingpu District spans around 600,000 square meters — the size of 84 soccer fields — and will temporarily serve as a shelter hospital starting Saturday, according to city authorities. Known as fangcang in Chinese, the supersized quarantine venues were first put to use during the first wave of the COVID-19 outbreak in Wuhan in 2020.

Shanghai has been grappling to contain its worst COVID-19 outbreak since the first COVID-19 cases in the current wave were detected on March 1. The city logged another daily record of 21,222 cases for Thursday, with about 25 million residents in lockdown for a second week.

China’s financial hub recorded 131,524 COVID-positive cases as of Thursday, of which 96% were said to be asymptomatic. Those showing symptoms were aged between 10 days and 98 years, with one patient in a severe condition, authorities said during a press conference Friday.

Shanghai currently has four shelter hospitals directly managed by the city government, with 38,000 beds combined, according to the city’s housing and urban development authority. The city’s districts have also started operating smaller shelter hospitals with a total capacity of 21,000 beds, with provisions for an additional 20,000 beds.

Despite a large number of beds in shelter hospitals, many residents who have tested positive in recent days said they were still waiting to be taken to the quarantine centers.

Wu Song, who used a pseudonym citing privacy reasons, told Sixth Tone that he lives just 2 kilometers away from the Shanghai World Expo Exhibition and Convention Center, which has been turned into a shelter hospital. The 45-year-old tested positive Monday and has since been urging authorities to move him to centralized quarantine.

“I live with my mother who is in her late 70s,” he said. “I tried to isolate myself in my bedroom but I’m still worried of infecting her. The Expo fangcang is my best choice and it’s the closest and the conditions inside are the best as far as I’ve learned.”

Meanwhile, those already in the shelter hospitals have been sharing their daily life from inside such facilities on social media.

A user named Dazaozi on the short video app Douyin — the Chinese version of TikTok — has been at the Shanghai World Expo Center since March 28. In his video, he said that the first patient from his designated zone at the shelter hospital since he arrived was discharged Thursday.

“One has to test negative three times in a row,” the man said in a video. “They don’t test us everyday though, but every other day. It will be another five or seven days till I can be discharged.”

Source : Sixth Tone

What Can the Fed Do About the Price of Food, Medicine, Gasoline, or Rent?

Mish wrote . . . . . . . . .

The above chart shows percentage weights in the CPI according to the latest CPI Report, relative weights.

I believe the BLS has a subtotal error in the table. Specifically, the Shelter Less Energy Services subtotals do not add up to 57.395 (32.802+6.971+5.597=45.37). I believe the BLS is missing Education, Recreation, and other services.

Items in blue are inelastic, that is demand for them will not change regardless of what the Fed does.

Items in green are elastic items. The Fed can reduce demand for them by hiking rates.

What the Fed Can and Cannot Do

The Fed cannot directly influence the price of anything because it cannot produce either goods or services.

The Fed can reduce or increase demand where demand is elastic by raising or lowering the cost of money.

Demand Destruction

I have often spoken of demand destruction by Fed rate hikes. Curiously, the primary demand destruction is not even in the tables.

Home prices are not in the CPI. Yet by hiking rates, the Fed will certainly cool the demand for housing.

With decreased demand for housing comes decreased demand for things like furniture, landscaping, carpet, etc.

By hiking rates, the Fed also reduces the demand to hold stocks. The price of equities drops. That also reduces the demand for housing, new cars, eating out, and travel.

Elastic vs Inelastic Demand

Elastic items total only 19.59%.

Inelastic items total a whopping 80.41%.

This is why inflation Expectations theory the Fed abides by is total nonsense.

People will not rent two homes if they perceive prices will rise. Nor will people stop paying rent and wait for declines in they believe prices will fall.

The same applies to buying food, gas etc.

CPI Percentage Weights

The idea behind inflation expectations is that if consumers think prices will go down, they will hold off purchases and the economy will collapse. The corollary is that is consumers think inflation will rise, they will rush out and buy things causing the economy to overheat.

With that backdrop, let’s have a Q&A. I believe the answers are obvious in all cases.

Inflation Expectations Q&A

Q: If consumers think the price of food will drop, will they stop eating out?

Q: If consumers think the price of food will drop, will they stop eating at home?

Q: If consumers think the price of natural gas will drop, will they stop heating their homes and stop cooking to wait for the event.

Q: If consumers think the price of gas will drop, will they stop driving or not fill up their car if it is running on empty?

Q: If consumers think the price of gas will rise, can they do anything about it other than fill up their tank more frequently?

Q: If consumers think the price of rent will drop, will they hold off renting until that happens?

Q: If consumers think the price of rent will rise, will they rent two apartments to take advantage?

Asset Irony

People will rush to buy stocks in a bubble if they think prices will rise. They will hold off buying stocks if they expect prices will go down.

People will buy houses to rent or fix up if they think home prices will rise. They will hold off housing speculation if they expect prices will drop.

The very things where expectations do matter are the very things the Fed ignores.

Demand destruction will occur in the small subset of elastic items plus housing and stocks.

Except as related to recreation and eating out, rate hikes will not impact food, energy, or shelter, the overwhelming majority of the CPI.

Source : Mish Talk

BYD Auto Output to Get Even Greener

Cheng Yu wrote . . . . . . . . .

Chinese electric vehicle maker BYD said that it has stopped producing traditional fossil fuel-powered vehicles since March, thus becoming the first automaker worldwide to cease production of such products while focusing on environmentally friendly vehicles.

“In the future, BYD will focus on pure electric and plug-in hybrids in the automobile sector,” the company said in a statement filed to the Hong Kong stock exchange on Sunday.

The company said that it will continue to offer services and after-sales support for existing customers of traditional gasoline-powered vehicles throughout the car’s life cycle.

The move came as China is quickly switching gears to new energy vehicles amid the country’s broader push for low-carbon and high-quality economic development.

The country highlighted the replacement of fossil fuel-powered cars with clean-burning fuels in its vehicles for green development during the 14th Five-Year Plan period (2021-25).

BYD, which is backed by legendary investor Warren Buffett, sold 104,878 NEVs in March, 24,218 more than a year ago.

The Shenzhen, Guangdong province-based company further said in a release that the adjustment comes amid the country’s carbon neutrality efforts, as well as the company’s commitment to building low-carbon and environmentally friendly vehicles through technological innovations.

The China Association of Automobile Manufacturers and other industry peers predict that China’s NEV sales will exceed 5 million units this year, which is ahead of the country’s goal to raise NEVs to about 20 percent of total vehicle sales volume by 2025, according to China’s 2021-35 development plan for the NEV industry.

“As local vehicle makers ramp up efforts to improve internet of vehicles technologies and innovations in business models, more NEVs will be widely accepted by consumers,” said Fu Bingfeng, executive vice-president of the China Association of Automobile Manufacturers, at a recent news conference.

“Together with the efforts in carbon neutrality, the country is very likely to achieve its target for NEVs ahead of schedule,” Fu said.

Source : China Daily

Scientists Discover Genetic Variants that Speed Up and Slow Down Brain Aging

Leigh Hopper wrote . . . . . . . . .

Researchers from a USC-led consortium have discovered 15 “hot spots” in the genome that either speed up brain aging or slow it down — a finding that could provide new drug targets to resist developmental delays, Alzheimer’s disease and other degenerative brain disorders.

The research appeared online in Nature Neuroscience.

“The big game-changer here is discovering locations on the chromosome that speed up or slow down brain aging in worldwide populations. These can quickly become new drug targets,” said Paul Thompson of USC, a lead author on the study and the co-founder and director of the ENIGMA Consortium. “Through our AI4AD [Artificial Intelligence for Alzheimer’s Disease] initiative we even have a genome-guided drug repurposing program to target these and find new and existing drugs that help us age better.”

ENIGMA is working group based at USC that is exploring a vast trove of brain data and has published some of the largest-ever neuroimaging studies of schizophrenia, major depression, bipolar disorder, epilepsy, Parkinson’s disease, and even HIV infection.

To discover the hot spots, or genomic loci, more than 200 ENIGMA-member scientists from all over the world looked for people whose brains were scanned twice with MRI. The scans provided a measure of how fast their brains were gaining or losing tissue in regions that control memory, emotion and analytical thinking.

After computing brain tissue change rates in 15,000 people of all ages, researchers screened a million markers in their genomes to detect 15 genomic loci — specific, physical locations of genes or other DNA sequences on a chromosome — that were speeding up brain tissue changes.

Dementia and Alzheimer’s research implications

These loci included some well-known Alzheimer’s risk genes, such as APOE, and some novel ones, Thompson said. The researchers also found overlap with genes involved with depression, schizophrenia and cognitive functioning.

“Some of these genetic variants affect the growth rates of brain substructures in childhood, while others affect the speed of brain tissue loss in older adulthood,” said co-author Neda Jahanshad, an associate professor of neurology at the Keck School of Medicine of USC. “The different parts of the brain have specific genes associated with their rates of change.”

Thompson added, “You can see that APOE — the famous Alzheimer’s gene — hits a couple of brain structures adversely — the hippocampus and amygdala — which also makes sense as they are the brain regions most vulnerable to Alzheimer’s and it seems to speed tissue loss there specifically.”

ENIGMA also has international projects studying childhood brain disorders — from Tourette syndrome and autism to epilepsy. The new list of genes that slow down or speed up brain growth in children provides new leads to pursue in these disorders as well, the researchers said.

Source: University of Southern California