Baltic
Dry Index. 1421 +10
Brent Crude 59.03
Spot Gold 3255 US 2 Year Yield 3.83 +0.13
US Federal Debt. 36.809 trillion!!!
The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.
Milton Friedman
Like it or not, a great economic experiment is underway thanks to Trump’s tariff wars on friend and foe alike. How it ends, no one knows, least of all President Trump.
It’s stated aim is to return manufacturing to the USA. But that’s far easier said than done.
Its immediate impact, just in time supply chain disruption and a related fall in international tourism, especially tourism to the USA.
By the end of summer, the US and global economies will either be in recession, stagflation, or just possibly a full Trump U-turn on tariffs.
Equally possible, a return to a modern version of the 1930s Great Depression, but this time round with a Pacific Ocean sized sea of unserviceable debt.
Like it or not, we are all of us in, in the great economic experiment underway.
Australia
stocks fall after Prime Minister Albanese returns to power amid global trade
uncertainty
Published
Sun, May 4 2025 7:51 PM EDT Updated 23 Min Ago
Australian
stocks fell Monday after Prime Minister Anthony Albanese returned
to power, while most Asian markets were closed for holidays.
Albanese
is the country’s first prime minister to clinch a second consecutive term in 21
years, indicating Australians’ desire for policy continuity amid an uncertain
global macroeconomic outlook.
The
benchmark S&P/ASX 200 pared
losses to 0.7%, reversing course from strong gains in its last session when it
hit its highest
level since Feb. 27.
The
Australian dollar appreciated by 0.33% against the greenback to trade at
0.6462.
The
offshore Chinese yuan appreciated marginally against the U.S. dollar to 7.2049,
after hitting its strongest level since November 2024 earlier in the session.
The
New Taiwanese dollar continued to strengthen, appreciating 3.16% against the
greenback to 29.738, hitting its strongest level in nearly three years.
Taiwan’s
benchmark Taiex declined 1.31% in choppy trade.
Elsewhere,
India’s benchmark Nifty 50 added
0.41% in early trade while the broader BSE Sensex moved up 0.39%.
Representatives
for Indian billionaire Gautam Adani and his companies reportedly met
with officials from U.S. President Donald Trump’s administration to discuss the
dismissal of the criminal charges levied against him in an overseas bribery probe, Bloomberg reported, citing comments from people familiar with
the matter.
The
talks which began earlier this year have picked up speed in recent weeks and
could lead to a resolution in the coming month or so if the pace continues, the
report added. It also highlighted that Adani’s representatives are trying to
make the case that his prosecution doesn’t align with President Donald
Trump’s priorities and should be reconsidered.
Shares
of Adani Port gained
3.56%, while Adani
Green advanced 1.31% and Adani Enterprises added
1.28%.
Japanese,
South Korean, Hong Kong and Chinese markets were closed for public holidays.
Oil
prices plunged after OPEC+
agreed to raise production for a second month. Brent crude was last down 3.59% at
$59.09 a barrel, while the West
Texas Intermediate crude fell 3.89% to $56.02 per barrel.
U.S. futures edged
down, reversing course from strong wins in Wall Street last week.
The
broad-based S&P 500 ended
Friday’s session 1.47% higher at 5,686.67. This marked its ninth consecutive
day of gains and is its longest winning run since November 2004. The
benchmark also managed to recover
all losses incurred since April 2, when U.S. President Donald Trump
announced retaliatory tariffs.
The Dow Jones Industrial Average jumped
564.47 points, or 1.39%, to end at 41,317.43, and the Nasdaq Composite gained
1.51% to 17,977.73.
Asia markets live: Australia markets fall
China
risks a spiral into deeper deflation as it diverts U.S.-bound exports to
domestic market
Published
Sun, May 4 2025 11:35 PM EDT
As
sky-high tariffs kill U.S. orders for Chinese goods, the country has been
striving to help exporters divert sales to the domestic market — a move that
threatens to drive the world’s second-largest economy into deeper deflation.
Local
Chinese governments and major businesses have voiced support to help tariff-hit
exporters redirect their products to the domestic market for sale. JD.com, Tencent and Douyin,
TikTok’s sister app in China, are among the e-commerce giants promoting sales
of these goods to Chinese consumers.
Sheng
Qiuping, vice commerce minister, in a statement last month described China’s vast domestic
market as a crucial buffer for exporters in weathering external shocks, urging
local authorities to coordinate efforts in stabilizing exports and boosting
consumption.
“The
side effect is a ferocious price war among Chinese firms,” said Yingke Zhou,
senior China economist at Barclays Bank.
JD.com,
for instance, has pledged 200 billion yuan ($28 billion) to help exporters and
has set up a dedicated section on its platform for goods originally intended
for U.S. buyers, with discounts of up to 55%.
An
influx of discounted goods intended for the U.S. market would also erode
companies’ profitability, which in turn would weigh on employment, Zhou
said. Uncertain
job prospects and worries over income stability have already been
contributing to weak consumer demand.
After
hovering just above zero in 2023 and 2024, the consumer price index slipped
into negative territory, declining for two
straight months in February and March. The producer price index fell
for a
29th consecutive month in March, down 2.5% from a year earlier, to
clock its steepest decline in four months.
As
the trade war knocks down export orders, deflation in China’s wholesale prices
will likely deepen to 2.8% in April, from
2.5% in March, according to a team of economists at Morgan Stanley. “We
believe the tariff impact will be the most acute this quarter, as many
exporters have halted their production and shipments to the U.S.”
For
the full year, Shan Hui, chief China economist at Goldman Sachs, expects
China’s CPI to fall to 0%, from a 0.2% year-on-year growth in 2024, and PPI to decline by
1.6% from a 2.2% drop last year.
“Prices
will need to fall for domestic and other foreign buyers to help absorb the
excess supply left behind by U.S. importers,” Shan said, adding that
manufacturing capacity may not adjust quickly to “sudden tariff increases,”
likely worsening the overcapacity issues in some industries.
Goldman
projects China’s real gross domestic product to grow just 4.0% this year, even
as Chinese authorities have set the growth
target for 2025 at “around 5%.”
----As
more firms shut down or scale back operations, the fallout will spill into the
labor market. Goldman Sachs’ Shan estimates that 16 million jobs, over 2% of
China’s labor force, are involved in the production of U.S.-bound goods.
The
Trump administration last week ended the “de minimis” exemptions that had allowed
Chinese e-commerce firms like Shein and Temu to ship low-value parcels into the
U.S. without paying tariffs.
“The
removal of the de minimis rule and declining cashflow are pushing many small
and medium-sized enterprises toward insolvency,” said Wang Dan, China director
at political risk consultancy firm Eurasia Group, warning that job losses are
mounting in export-reliant regions.
She
estimates the urban unemployment rate to reach an average 5.7% this year, above
the official 5.5% target, Wang said.
More
China risks deeper deflation by diverting exports to domestic market
In
other news.
Warren
Buffett knocks tariffs and protectionism: ‘Trade should not be a weapon’
Published
Sat, May 3 2025 9:30 AM EDT Updated Sat, May 3 2025 10:51 AM EDT
OMAHA,
Nebraska — Warren Buffett on Saturday criticized President Donald Trump’s
hardline trade policy, without naming him directly, saying it’s a big
mistake to slap punitive tariffs on the rest of the world.
“Trade
should not be a weapon,” Buffett said at Berkshire Hathaway’s shareholder
meeting,
an annual gathering in front of thousands in Omaha, Nebraska. “I do think that
the more prosperous the rest of the world becomes, it won’t be at our expense,
the more prosperous we’ll become, and the safer we’ll feel, and your children
will feel someday.”
Trade
and tariffs “can be an act of war,” added the legendary investor. “And I think
it’s led to bad things. Just the attitudes it’s brought out. In the United
States, I mean, we should be looking to trade with the rest of the world and we
should do what we do best and they should do what they do best.”
Buffett’s
comments, his most direct yet on tariffs, came after the White House’s rollout
of the highest levies on imports in generations shocked the world last month,
triggering extreme volatility on Wall Street. The president later went on to
announce a sudden 90-day pause on much of the increase, except for China, as
the White House sought to make deals with countries. The pause has stabilized
the market somewhat.
Still,
Trump has slapped tariffs of 145% on imported Chinese goods this year,
prompting China to impose retaliatory levies of 125%. China said last
week it
is evaluating the possibility of starting trade negotiations with the U.S.
Buffett
explained that protectionist policies could have negative consequences over the
long term for the U.S., after it’s become the leading industrial nation in the
world.
“It’s
a big mistake, in my view, when you have seven and a half billion people that
don’t like you very well, and you got 300 million that are crowing in some way
about how well they’ve done - I don’t think it’s right, and I don’t think it’s
wise,” Buffett said. “The United States won. I mean, we have become an
incredibly important country, starting from nothing 250 years ago. There’s not
been anything like it.”
----Berkshire
said in its first-quarter
earnings report that tariffs and other geopolitical events created
“considerable uncertainty” for the conglomerate. The firm said it’s not able to
predict any potential impact from tariffs at this time.
Buffett
has been in a defensive mode, selling stocks for 10 straight quarters.
Berkshire dumped more than $134 billion worth of stock in 2024, mainly due to
reductions in Berkshire’s two largest equity holdings — Apple and Bank of America. As a result
of the selling spree, Berkshire’s enormous pile of cash grew to yet
another record, at $347 billion at the end of March.
Warren Buffett
knocks tariffs and protectionism: 'Trade should not be a weapon'
Trump
shrugs off recession fears, saying a downturn would be OK in the long term
May
3, 2025
President
Donald Trump appeared to dismiss growing concerns that his economic policies
could cause a recession, telling NBC News that the economy would be “OK” in the
long term even if a recession happens in the near future.
“Some
people on Wall Street say that we’re going to have the greatest economy in
history. Why don’t you talk about them? Because some people on Wall Street say
this is the greatest thing to ever happen,” Trump said in an interview clip
from “Meet the Press with Kristen Welker” released on Friday.
Pressed
on whether he would be okay with a recession in the short term to achieve his
long-term goals, the president said, “Look yes, everything’s okay. What we are
— I said, this is a transition period. I think we’re going to do
fantastically.”
Trump’s
economic policies - and particularly the trade war he has ignited with his
whipsaw, abrupt tariffs – have already sent the
world’s largest economy into reverse: Gross domestic product, which measures
all the goods and services produced in the economy, registered at an annualized
rate of -0.3% in the first quarter, as businesses hoarded goods and consumer
spending decelerated, the Commerce Department said Wednesday.
That
was far worse than economists had expected, and it marked the worst quarter
since 2022.
Trump
has warned previously that Americans would see some economic “disturbance”
throughout a transition period as his policies reset
the global economic order for friend and foe alike. He has imposed
sweeping global tariffs (and paused some of them), and he has levied especially
high import taxes against China, a major US trading partner.
Earlier
this week, for example, he acknowledged that tariffs could
lead to shortages and higher prices for everyday Americans.
“You
know, somebody said, ‘Oh, the shelves are going to be open,’” Trump said.
“Well, maybe the children will have two dolls instead of 30 dolls, you know?
And maybe the two dolls will cost a couple of bucks more than they would
normally.”
Trump
and some administration official have also previously signaled that tariffs may
plunge the economy into a recession – and that may
be an acceptable outcome.
Treasury
Secretary Scott Bessent suggested America needed a “detox” period. If Trump’s
tariffs succeeded at restoring America’s manufacturing prowess, Commerce
Secretary Howard Lutnick said a recession would be “worth it.” And Trump has
sometimes declined to rule out a recession as a result of his actions.
The
US economy is powered by consumption – about two thirds. And throwing sand into
that growth engine can cause major disruptions.
The
economy is weakening, certainly. But it’s too early yet to tell if the US is in
a recession; the official definition of a recession in the United States is “a
significant decline in economic activity that is spread across the economy and
that lasts more than a few months.”
Trump shrugs off recession fears, saying a downturn would be OK in the long term
Global Inflation/Stagflation/Recession
Watch.
Given
our Magic Money Tree central banksters and our spendthrift politicians,
inflation now needs an entire section of its own.
Transportation
Index Dives into Bear Market: Warning Sirens Blare for Broader Market Chaos
Saturday,
May 03, 2025 - 13:30
Historically,
when the Dow Jones Transportation Average (DJTA) enters a bear market, defined
as a decline of 20% or more from its recent peak, it often serves as a leading
indicator of broader economic and market challenges. The transportation sector
is considered a bellwether for economic activity because it reflects the
movement of goods and services, which is closely tied to consumer demand,
industrial production, and global trade. Below is an analysis of that history
showing the performance of broad-based markets following a transportation index
bear market, based on relevant data and economic theory:
Key
Historical Insights
Dow
Theory and Market Correlation:
- Dow Theory,
developed by Charles Dow in the early 1900s, states that the DJTA and DJIA
tend to move in tandem because the transportation stocks reflect the
economic activity that drives industrial production. A bear market in the
DJTA can signal weakening economic fundamentals, potentially foreshadowing
broader market declines.
- While a DJTA
bear market often precedes or coincides with broader market corrections,
it does not always lead to a full-blown bear market in the S&P 500.
For instance, in 2022, the DJTA entered bear market territory with a 20%
drop from its November 2021 high, driven by rising fuel costs and
inflation fears. While the S&P 500 also experienced a bear market in
2022 (declining 25% from January to October), the transportation decline
was part of a broader economic response to Federal Reserve rate hikes and
geopolitical tensions rather than a sole trigger.
Historical
Examples:
2000-2002
(Dot-Com Bubble Burst)
- The DJTA
entered a bear market as part of the broader economic slowdown following
the tech bubble collapse. The S&P 500 fell 49% from its March 2000
peak to October 2002, and the DJTA’s decline reflected reduced economic
activity. However, the bear market in transports was exacerbated by
sector-specific issues like rising fuel costs and reduced shipping demand,
amplifying broader market weakness.
2007-2009
(Global Financial Crisis)
- The DJTA saw
significant declines as global trade slowed, with companies like FedEx and
UPS dropping sharply. The S&P 500 fell 57% from October 2007 to March
2009, the deepest bear market since 1945. The transportation sector’s
struggles were a symptom of collapsing demand, reinforcing the broader
markets downturn.
More
Temu
halts shipping direct from China as de minimis tariff loophole is cut off
Published
Fri, May 2 2025 2:42 PM EDT Updated Fri, May 2 2025 4:42 PM EDT
Chinese
bargain retailer Temu changed
its business model in the U.S. as the Trump administration’s new rules on
low-value shipments took effect Friday.
In
recent days, Temu has abruptly shifted its website and app to only display
listings for products shipped from U.S.-based warehouses. Items shipped
directly from China, which previously blanketed the site, are now labeled
as out
of stock.
Temu
made a name for itself in the U.S. as a destination for ultra-discounted items
shipped direct from China, such as $5 sneakers and $1.50 garlic presses. It’s
been able to keep prices low because of the so-called de minimis rule, which
has allowed items worth $800 or less to enter the country duty-free since 2016.
The
loophole expired Friday at 12:01 a.m. EDT as a result of an executive order
signed by President Donald Trump in April. Trump briefly
suspended the de minimis rule in February before
reinstating the provision days later as customs officials struggled to process
and collect tariffs on a mountain of low-value packages.
The
end of de minimis, as well as Trump’s new 145% tariffs on China, has forced
Temu to raise prices, suspend its aggressive online advertising push and now
alter the selection of goods available to American shoppers to circumvent
higher levies.
A
Temu spokesperson confirmed to CNBC that all sales in the U.S. are now handled
by local sellers and said they are fulfilled “from within the country.” Temu
said pricing for U.S. shoppers “remains unchanged.”
“Temu
has been actively recruiting U.S. sellers to join the platform,” the
spokesperson said. “The move is designed to help local merchants reach more
customers and grow their businesses.”
Before
the change, shoppers who attempted to purchase Temu products shipped from China
were confronted with “import charges” of between 130%
and 150%. The fees often cost more than the individual item and more than
doubled the price of many orders.
Temu
advertises that local products have “no import charges” and “no extra charges
upon delivery.”
The
company, which is owned by Chinese e-commerce giant PDD Holdings, has gradually built up its
inventory in the U.S. over the past year in anticipation of escalating trade
tensions and the removal of de minimis.
More
Temu halts
shipments direct from China as de minimis tariff rule ends
Covid-19
Corner
This
section will continue only occasionally when something of interest occurs.
COVID-19
leaves longer-lasting symptoms than flu or pneumonia, study finds
May
2, 2025
Even
mild COVID-19 cases can trigger lingering symptoms, especially in women and younger
adults, while severe cases show a strong link to long-term fatigue, brain fog,
and joint pain, setting COVID-19 apart from other respiratory infections.
In
a recent study published in the journal PLOS
One,
researchers at the University of Texas Southwestern Medical Center, USA,
assessed the associations between the severity of coronavirus disease 2019
(COVID-19) and the risk of post-acute symptoms.
Among
symptomatic COVID-19 patients, nearly two-thirds regain their usual health
status within one or two months, while others experience protracted recoveries.
According to the United States Centers for Disease Control and Prevention, long
COVID is defined as sequelae that persist for at least three months following
the initial infection. However, other studies suggest post-acute COVID-19 as
symptoms lasting up to 120 days after recovery.
Further,
while long COVID is more likely in subjects who had the most severe initial
disease, individuals with mild initial disease also develop symptoms. Some
studies have observed differences in long-term sequelae between COVID-19 and
influenza. Moreover, while post-acute COVID-19 has been repeatedly studied, few
studies have focused on the nuanced delineations of acute disease severity or
compared it to other infectious respiratory diseases.
About
the study
In
the present study, researchers examined the risk of post-acute COVID-19 across
severity levels of initial illness among US adults. They extracted data from
the Clinformatics Data Mart database. Eligible subjects were aged ≥ 18 years
and had clinically diagnosed or lab-confirmed COVID-19 in 2020, with continuous
inclusion in the database from January to December 2020, and reported symptoms
at diagnosis.
Similar
criteria were used for individuals with influenza during the 2018–19 influenza
season. Moreover, another cohort was created for subjects diagnosed with
pneumonia in 2018. The primary outcome was the presence or absence of symptoms
four weeks, three months, and six months after COVID-19 diagnosis. The
following symptoms were considered: fatigue, cough, dyspnea, anosmia, ageusia,
arrhythmias, brain fog, insomnia, joint pain, general pain, muscle weakness,
and headache.
More
COVID-19 leaves longer-lasting symptoms than flu or pneumonia, study finds
Technology
Update.
With events happening fast in the
development of solar power and graphene, among other things, I’ve added this
section. Updates as they get reported.
Precision-engineered surface can enhance silicon solar cell
performance
May 1, 2025
Converting sunlight into electricity is the task of photovoltaic
solar cells, but nearly half the light that reaches a flat silicon solar cell
surface is lost to reflection. While traditional antireflective coatings help,
they only work within a narrow range of light frequency and incidence angles. A
new study may have overcome this limit.
As reported in Advanced
Photonics Nexus, researchers have proposed a new type of antireflective
coating using a single, ultrathin layer of polycrystalline silicon
nanostructures (a.k.a. a metasurface). Achieving minimal reflection across
certain wavelengths and angles, the metasurface was reportedly developed by
combining forward and inverse design techniques, enhanced by artificial
intelligence (AI).
The result is a coating that sharply
reduces sunlight reflection across a wide range of wavelengths and angles,
setting a new benchmark for performance with minimal material complexity.
The coating works across the visible and
near-infrared spectrum (500 to 1200 nanometers) and is effective even when the
sunlight hits at steep angles. It reflects as little as 2% of incoming light at
direct angles and about 4.4% at oblique angles—unprecedented results for a
single-layer design.
This breakthrough shows that an
intelligently designed nanostructural layer can boost the efficiency of
mainstream solar panels. Because it is both high-performing and relatively
simple, it could lead to more efficient solar panels, potentially speeding up
the transition to clean energy.
Beyond solar energy, the approach also
advances how scientists design metasurfaces for optics and photonics. It opens
the door to multifunctional photonic coatings that could benefit not just solar
power but also sensors and other optical devices.
More information: Anton Ovcharenko et al, Forward and inverse design of
single-layer metasurface-based broadband antireflective coating for silicon
solar cells, Advanced Photonics Nexus (2025). DOI: 10.1117/1.APN.4.3.036009
Precision-engineered
surface can enhance silicon solar cell performance
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
There
may be a recession in stock prices, but not anything in the nature of a crash.
Irving Fisher, October 1929.
