The Big Short.

Nickel goes parabolic.

1. An unstable government in an unstable country (with nuclear weapons):

Opposition parties in Pakistan's parliament are set to topple the government of Prime Minister Imran Khan, as critics charge his policies are stoking inflation and amount to "selling out Pakistan's sovereignty" to the International Monetary Fund in exchange for loans.

Observers say the development could spark investor outflows and even damage China's Belt and Road Initiative in the country.

The opposition is in the final stages of drafting a "no-confidence" motion against Khan's government, which will be tabled in the National Assembly this week, Nikkei Asia learned from people familiar with the matter.

There are 162 opposition politicians behind the move, which needs 10 more votes for the motion to pass in the assembly of 342 lawmakers. The opposition claims it has secured the support of 24 members of government and can easily topple Khan's administration. (Source: asia.nikkei.com)

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2. Brain damage:

Even a mild case of Covid-19 can damage the brain and addle thinking, scientists found in a study that highlights the illness’s alarming impact on mental function.

Researchers identified Covid-associated brain damage months after infection, including in the region linked to smell, and shrinkage in size equivalent to as much as a decade of normal aging. The changes were linked to cognitive decline in the study, which was published Monday in the journal Nature. 

The findings represent striking evidence of the virus’s impact on the central nervous system. More research will be required to understand whether the evidence from the Wellcome Centre for Integrative Neuroimaging at the University of Oxford means Covid-19 will exacerbate the global burden of dementia -- which cost an estimated $1.3 trillion in the year the pandemic began -- and other neurodegenerative conditions. (Sources: nature.com, bloomberg.com)

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3. China’s Covid encore:

China logged its highest daily total of locally transmitted Covid-19 infections in more than two years, with the highly transmissible Omicron variant of the coronavirus posing a fresh test to China’s ability to quickly smother outbreaks.

China’s National Health Commission said Monday that it had detected 526 domestic infection cases, 214 of which were symptomatic, on the prior day, marking the single highest daily tally by either measure since the initial pandemic outbreak in the central Chinese city of Wuhan in early 2020.

Most of those who tested positive on Sunday were in the eastern port cities of Qingdao and Shanghai, with others detected in the southern province of Guangdong and the northeastern province of Jilin. (Source: wsj.com)

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4. Massive short squeeze:

The London Metal Exchange halted trading in its nickel market after an unprecedented price spike left brokers struggling to pay margin calls against deeply unprofitable short positions.

Nickel, used in stainless steel and electric-vehicle batteries, surged as much as 111% during the Asian day on Tuesday to trade briefly above $100,000 a ton. The frenzied move -- the largest-ever on the LME -- came as investors and industrial users who had sold the metal scrambled to buy the contracts back after prices initially rallied on concerns about supplies from Russia, while brokers rushed to collect margin payments to cover their deeply unprofitable positions. 

The massive short squeeze in nickel has embroiled a major Chinese bank as well as the largest producer of nickel, according to people familiar with the matter. Chinese entrepreneur Xiang Guangda -- known as “Big Shot” -- has for months held a large short position on the LME through his company, Tsingshan Holding Group Co., the world’s largest nickel and stainless steel producer. 

In recent days, Tsingshan has been under growing pressure from its brokers to meet margin calls on that position -- a market dynamic which has helped to drive prices ever higher. (Source: bloomberg.com)

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