Baltic Dry Index. 398 -35 Brent Crude 29.36
Spot Gold 1713
Coronavirus Cases 14/5/20
World 4,429,922
Deaths 298,174
It’s
a recession when your neighbour loses his job. It’s a depression when you lose
yours.
Harry
Truman.
Fed Chairman
Powell, came, he saw bankruptcies, and he crashed the stock market and
President Trump’s November re-election prospects.
President Trump
meanwhile was off tilting at windmills in the mistaken belief they were
dangerous attacking giants. “Trump attacked “so-called ‘rich guys’”
in a tweet Wednesday.”
“You must always remember that
some are betting big against it, and make a lot of money if it goes down,”
Trump wrote about the stock market. “Then they go positive, get big publicity,
and make it going up. They get you both ways.”
Well maybe, but
what if they’re right and in the circumstances, stocks are grossly overpriced
for the new global depression unfolding?
From my limited
vantage point in locked down southern England, and from everything I see
reported by the responsible mainstream business media, I see a general public
starting to run out of savings and starting to cutback in the supermarkets
after about a month of panic buying.
In the media, a
rising rate of reported bankruptcy filings, falling production and sales,
dislocated supply chains, massive unemployment and under employment. In a short
few weeks time, masses of graduates and school leavers are about to enter the
worst employment pool since the Great Depression.
Below, waiting for
Chairman Powell’s Fairy Godmother to show up. I bet she’s a no show.
Asian markets slip as hopes for a quick economic rebound fade
It’s a notion catching on among Wall Street
money managers. And it’s coming as investors start to suspect that the Federal
Reserve’s support, as well as $3 trillion in Treasury stimulus, may not be enough
to compensate for soaring unemployment, a wave of bankruptcies and no end in
sight to the pandemic. Managers including Bill Miller, Paul Singer and Paul
Tudor Jones have all voiced doubts about markets or the economy.
Such bearishness starkly contrasts with the optimism that pushed the
S&P 500 Index up 26% from its March low. And the warnings have caught the
attention of President Donald Trump, who’s facing re-election and has seen his
plans to run on a booming economy shredded by the virus. Trump attacked
“so-called ‘rich guys’” in a tweet Wednesday.
“You must always remember that some are betting big against it, and make
a lot of money if it goes down,” Trump wrote about the stock market. “Then they
go positive, get big publicity, and make it going up. They get you both ways.”
His criticism is unlikely to sway Wall Street professionals. The S&P
500 Index is down 3.8% this week, and investors and economists are forecasting
further declines amid a prolonged struggle to right the economy.
Federal Reserve Chair Jerome Powell, Trump’s pick for the job, outlined
a doom-laden scenario with mass bankruptcies and unemployment in a speech
delivered around the same time as the president’s tweet. Powell said
policymakers may have to do more to prevent long-term damage to the economy.
More
Eurozone's factories slash output in March
Eurozone factory output fell at the fastest pace on record in March,
with production of consumer durables down by more than a quarter.
The European Union's statistics agency Wednesday said industrial output
in the 19 countries that share the euro was 11.3% lower than in February, and
12.9% down on the same month last year. That was the largest month-to-month
decline since records began in 1991 and much greater than the previous record
drop, a 4.1% fall recorded in January 2009.
Italy suffered the largest drop in output--a 28.4% collapse that
reflected the fact that the regions that have been in lockdown for the longest
period are home to its manufacturing sector. Slovakia saw a decline of 20.3%,
reflecting its focus on automobile manufacture, an industry that has seen its
global supply chains disrupted since the new coronavirus first led to factory
closures in China during January.
Across the eurozone, makers of consumer durables--such as household
appliances--cut back most sharply with output falling by 26.3%. Production of
nondurable consumer goods was down by just 1.6%.
EBRD cuts GDP forecast for the 37 countries in its region, sees 3.5% contraction
May 13, 2020 /
6:07 AM
LONDON
(Reuters) - The European Bank for Reconstruction and Development (EBRD)
drastically slashed its economic outlook for the 37 countries in its region on
Wednesday, forecasting a contraction of 3.5% this year as a result of a sharp
hit to tourism, remittances and commodity prices from fallout from the
coronavirus.
The
EBRD, which tracks trends in 37 countries across Europe, Asia and Africa, gave
its updated forecast in its latest semi-annual economic outlook. The expected
contraction in gross domestic product in 2020 is a stark reversal from its
prediction in November for a 2.9% expansion forecast.
“The EBRD region, just like most of the world, is facing the greatest
challenge since World War 2,” EBRD chief economist Beata Javorcik told Reuters.
“What started as a health crisis has become an economic crisis, and almost all
economies in the region are expected to experience a substantial contraction
this year.”
Predictions were based on a scenario that foresaw a gradual relaxation
of containment measures and return to normality during the second half of the
year, though it took into account an ongoing hit to demand, especially service
sectors such as tourism and hospitality.
However, under a scenario that would require extended social distancing,
economies across the region could suffer double-digit contractions, Javorcik
added.
Some countries are seen suffering sharper losses in output than others.
Albania is due to see one of the biggest hits with its economy predicted to
shrink 9% in 2020 thanks to heavy reliance on producing textiles for the
Italian fashion industry, remittances and tourism.
Russia’s economy is expected to shrink by 4.5% as a steep tumble in oil
prices exacerbated data painting a bleak picture of the spread of the virus
across the country.
More
Commerzbank plunges to loss as pandemic thwarts recovery
May 13, 2020 /
6:24 AM
FRANKFURT
(Reuters) - Germany’s Commerzbank (CBKG.DE) said on Wednesday
it swung to a loss in the first quarter as the impact of the coronavirus
pandemic drove up loan loss provisions and risked derailing its recovery.
The German lender has endured a rough few months as it halted its 2019 dividend plans, back-tracked on the sale of its Polish lender mBank (MBK.WA), faced credit rating downgrades, and lost a long-standing sponsorship deal for the local soccer team to larger rival Deutsche Bank (DBKGn.DE).
The 150-year-old bank, which is still partially owned by the state after a bailout during the last financial crisis, warned that its target for turning a profit in 2020 now seems “very ambitious”.
The bank’s shares were down more than 5% at midday in Frankfurt.
Chief executive Martin Zielke said the bank faces a difficult market environment for the foreseeable future and is focusing on additional cost cuts.
“This crisis is a profound turning point,” he told shareholders at its annual shareholder meeting.
The bank reported a net loss of 295 million euros ($320 million) in the
first quarter, compared with a net profit of 122 million euros last year. The
quarterly numbers came in worse than a consensus forecast for a 240 million
euro loss.
It said that the impact of measures to control the coronavirus hit
earnings by 479 million euros in the quarter, and it expects charges for credit
losses of between 1 billion and 1.4 billion euros this year.
Provisions for credit losses in the quarter were 326 million euros,
compared with 78 million euros a year ago.
More
Qatar Airways in talks to defer Airbus, Boeing orders -SCMP
May 13, 2020 /
12:33 PM
DUBAI (Reuters) - Qatar Airways, one of the Middle East’s
biggest airlines, is in talks with Airbus (AIR.PA) and Boeing (BA.N) to defer aircraft orders
for several years, its chief executive was quoted as saying on Wednesday. “Well we are in negotiation with them, so I don’t want to talk about this, but yes it will be deferred for several years,” Akbar al-Baker told Hong Kong’s South China Morning Post newspaper.
The airline is also willing to provide capital to Cathay Pacific (0293.HK), which it holds a 9.99% stake in, the newspaper reported.
The report did not say how many aircraft the airline was looking to defer or for exactly how long. Qatar Airways has over 200 Airbus and Boeing aircraft on order, it said.
Baker told Reuters on Monday a recovery in global travel demand from the coronavirus pandemic could be as far as four years away, and said the airline would reduce its fleet by a quarter.
Boeing goes another month without a single airliner order
May
12 2020
Boeing failed to sell a single commercial airplane but saw orders for
108 planes canceled in April as a sharp drop in air travel erased any demand
among airlines for new jetliners.
It marked the second month this year in which Boeing received no orders,
a fate that would have seemed impossible not long ago.
Boeing also indicated Tuesday that it is no longer certain about completing
orders for another 101 planes and dropped them from its backlog, which dropped
below 5,000 for the first time since 2013.
Airbus said it received orders for nine planes in April, bringing its
2020 total to 299 planes after cancellations. The European plane maker said its
backlog was 7,645 jets.
The COVID-19 outbreak has caused global air traffic to plummet and
compounded a crisis at Boeing Co. that began with two fatal crashes and the
grounding of its best-selling plane, the 737 Max.
Airlines are bleeding money and canceling thousands of flights while
passengers remain too scared to fly. Airlines have grounded 16,000 planes —
nearly two-thirds of the world’s fleet — and they are delaying deliveries of
jets that they agreed to buy before the pandemic.
Air travel in the U.S. is down more than 90% from a year ago, and global
traffic has seen a similar plunge.
Boeing CEO David Calhoun said air travel will recover so slowly that
“most likely” one of the major U.S. airlines will go out of business.
More
Maersk warns of 20% to 25% volume fall in 2Q
Published: May 13, 2020 at 2:56 a.m. ET
A.P. Moeller-Maersk A/S posted better-than-expected first-quarter
earnings as cost cuts and higher freight rates helped offset a slump in demand
from the Covid-19 pandemic, but warned that second-quarter volumes could fall
20%-25%.
The Danish shipping company on Wednesday swung to a quarterly net profit
of $197 million from a loss of $659 million in the same period last year,
beating a $25 million average analysts' forecast from FactSet. Earnings last
year were weighed by a $552 million loss on discontinued operations.
Revenue rose 0.3% to $9.57 billion, against $9.4 billion expected, while
earnings before interest, tax, depreciation and amortization of $1.52 billion
beat Maersk's own guidance of $1.4 billion.
Maersk, which is considered a barometer of global trade, saw shipping
volumes fall 3.2%, while average freight rates rose 5.7% on year.
Lockdowns, first in Asia and then across Europe and North America, have
led to significantly lower demand, especially on the company's East-West
trades. In response, Maersk has cancelled a number of sailings and vessels have
been idled, leading to a 3.5% decline in deployed capacity.
Global container trade declined by 4.7% in the first quarter and Maersk
said container demand is expected to weaken further in 2020, particularly in
the second quarter.
"Looking into 2Q 2020, visibility remains low as a result of the
Covid-19 pandemic," said Chief Executive Soren Skou.
"As global demand continues to be significantly affected, we expect
volumes in 2Q to decrease across all businesses, possibly by as much as
20%-25%...we are strongly positioned to weather the storm."
Maersk scrapped most of its full-year guidance in March amid the
Covid-19 impact to global transport, supply chains and demand visibility, but
said Wednesday that it still sees 2020 volume growth in its ocean unit in line
or slightly lower than the market growth, a high cash conversion ratio and
accumulated capital expenditure for 2020-21 of $3 billion to $4 billion.
Mazda posts 47% plunge in annual profit, skips financial forecasts
May 14, 2020 /
5:46 AM
TOKYO (Reuters) - Mazda Motor Corp (7261.T)
on Thursday declined to give an earnings forecast and posted its lowest annual
profit operating profit in eight years as the coronavirus outbreak hammered
global vehicle demand. Profit at Japan’s No. 5 automaker came in at 43.6 billion yen ($408 million) for the year ended March 31, nearly half the 82.3 billion yen for the previous year and its lowest since the year ended March 31, 2012.
Still, it exceeded a consensus estimate of 25.7 billion yen from 17 analysts polled by Refinitiv.
Mazda declined to give an earnings forecast for the current business year due to uncertainties about the longer-term impact of the coronavirus on its operations and sales.
It saw a 9% decline in global vehicle sales last year to 1.42 million units, after sales dropped by 20% during the fourth quarter, when vehicle plants and car showrooms began to close due to lockdown measures ordered in many countries.
The automaker took a particularly big hit in China, its second-largest market and where the coronavirus originated.
Global automakers have begun to gradually resume operations at their
vehicle plants, but weak demand, supply chain disruptions and social distancing
measures at factories are expected to limit output in the coming months.
Any recovery in car demand is expected to be slow and patchy with job
losses and reduced income likely to weigh on consumer spending. Fewer people
commuting to work may also dampen demand for new cars.
Some analysts believe global vehicle sales this year could tumble by a
third, a much steeper decline than the 11% fall seen in the 2009/10 financial
year amid the global financial crisis.
"There
is no means of avoiding the final collapse of a boom brought about by credit
expansion. The alternative is only whether the crisis should come sooner as the
result of voluntary abandonment of further credit expansion, or later as a
final and total catastrophe of the currency system involved."
Ludwig
von Mises
Covid-19 Corner
Though
hopefully, we are passing/have passed the peak of new cases, at least of the
first SARS-CoV-2 outbreak, this section will continue until it becomes
unneeded.
Harvard and MIT researchers are developing a face mask that lights up when it detects the coronavirus
·
For the last six years, bioengineers have been
developing sensors that can detect viruses like Zika and Ebola
·
Sensors in face mask would light up to signal
the presence of the new coronavirus when an infected person breathes, coughs,
or sneezes
Published: 12:48pm, 14 May, 2020
Pandemics were top of mind for Jim Collins years before the new
coronavirus emerged.
In 2014, his bioengineering laboratory at MIT began developing sensors
that could detect the Ebola virus when it was freeze-dried onto a piece of
paper. The small team of scientists from MIT and Harvard first published their
research in 2016; by then, they'd tailored the technology to address the
growing Zika virus threat.
Now, they're adjusting their tool again to identify coronavirus cases.
The team is developing a face mask that produces a fluorescent signal
when a person with the coronavirus breathes, coughs, or sneezes. If the
technology proves successful, it could address flaws associated with other
screening methods like temperature checks.
“As we open up our transit system, you could envision it being used in
airports as we go through security, as we wait to get on a plane,” Collins
said. “You or I could use it on the way to and from work. Hospitals could use
it for patients as they come in or wait in the waiting room as a pre-screen of
who's infected.”
Doctors could even use them to diagnose patients
on the spot, without having to send samples to a laboratory. At a time when
testing snafus and delays have hampered many countries' ability to control
outbreaks, tools that quickly identify patients are critical.
Collins said his lab's current project is in the
“very early stages”, but the results have been promising. For the last few
weeks, his team has been testing the sensors' ability to detect coronavirus in
a small saliva sample.
They're also experimenting with design: right now, the lab is debating
whether to embed sensors on the inside of a mask or develop a module that can
be attached to any over-the-counter mask.
The team hopes to demonstrate that the concept actually works within the
next few weeks.
----
The virus-identifying technology more generally, however, has
already been proven. By 2018, the lab's sensors could detect Sars, measles,
influenza, hepatitis C, West Nile, and other viruses.
More
Let’s Say There’s a Covid-19 Vaccine—Who Gets It First?
An immunization shot is still in
development, but debate over who gets priority has already begun.
05.12.2020 07:00
AM
The
race to
find a vaccine against Covid-19 is well underway. It has to be—without one, the
Before Time is never coming back. More than a hundred candidates are
cooking, most still preliminary. A handful are in early human
studies, three in Phase II clinical trials designed to see if
they actually confer immunity to the disease.
But nobody thinks
finding a winner will be easy; vaccine development typically takes years.
That’s time researchers and governments don’t feel like they have. Globally,
more than 4 million people have gotten sick, and 280,000 have died. People sheltering
in place and the closure of businesses has cost 30 million jobs in the United
States alone. As the famed virologist Peter Piot wrote in an account of his
own experience after getting sick with Covid-19, “the only real exit strategy
from this crisis is a vaccine that can be rolled out worldwide.”
Even if scientists do develop a safe, broadly effective vaccine, nobody knows how to give it to billions of people. It’ll be scarce at first and—depending on how it works and how it’s made—potentially difficult to transport. They have to figure out how to deploy it now, so that a planet’s worth of people in desperate need will be able to get it.
One approach might be to initially give the vaccine only to members of specific groups. Of course, then someone will have to decide which groups get priority. That order will be hard to figure out. Even if the answer is “whoever is most at risk of dying,” the epidemiological data still isn’t clear on which group meets that criterion. Older people are more likely to get severely ill and die, but researchers are still trying to work out the role that children play as carriers, for example. “The more fine-grained that is, the more we can define the risk groups, both with respect to how much risk they have of getting infected and the risk of severe outcomes,” says Andreas Handel, an infectious disease modeler at the University of Georgia.
And “most at risk” isn’t necessarily the right answer. Maybe people at high risk of catching the disease but with a lower risk of bad outcomes should be first in line. That could mean prioritizing people with high-exposure jobs that involve a lot of public contact, or that could mean addressing the systemic problems that have led to poorer, African American, and Latinx people facing more illness and death from Covid-19. That’s not easy. “It could be groups with underlying health conditions, or people who, because of the kind of work they’re doing, can’t avoid contact—like health care workers, police officers, grocery store workers,” Handel says.
More
Nightmare at sea ends in death for some cruise ship workers
Recent deaths of crew have underscored concern about the mental health of more than 90,000 cruise workers stranded on ships for two months
May 12, 2020 1:03 PM EDT
----Carrick and
Harrison are among the more than 90,000 cruise workers in U.S. waters stranded
on ships two months after the coronavirus pandemic began forcing cruise lines
to halt operations and repatriate crew. While companies work through a thicket
of shifting rules on returning workers to their home countries, recent deaths
of crew have shook the industry and underscored concern about mental health.
It’s a very stressful situation,” said Fabrizio Barcellona, assistant
secretary for seafarers at the International Transport Workers’ Federation,
which represents local unions. “The prolonged periods they have to stay on
board can create a situation of unrest. People can become distressed and that
can create flash points.”
Carnival Corp.’s Princess Cruises said Sunday a 39-year-old crew member
from the Ukraine was killed after leaping off its Regal Princess in the port of
Rotterdam. The ship’s crew was in the process of being repatriated, the company
said in an emailed statement.
Another worker was found dead in his cabin on the Carnival Breeze,
unrelated to Covid-19, the company said. Carnival, the world’s largest
operator, said it was not providing details of the death out of respect for the
worker’s family.
“Many of these people have been isolated in their small cabins for 21
hours a day and they’re breaking down from the loneliness and stress,” said
Thomas, who operates the pages from Vancouver, Canada. “Many have been told to
pack quickly to leave, and then their charter flights get canceled. Those highs
and lows are taking their toll.”
The cruise line operators say government policy changes and travel
restrictions have complicated efforts to get crew home. More than 124 cruise
ships with 94,600 workers aboard are underway or at anchor in U.S. waters, the
U.S. Coast Guard said Monday.
“That one simple question – how do we get you home? – turns out to be
incredibly complex to answer,” Michael Bayley, chief executive officer of Royal
Caribbean International, wrote in a letter to crew members this month. “Each
country has rules and regulations for who can travel home, and how, and when.
But in the wake of the coronavirus pandemic, those rules have gone in all
different directions – and they frequently change without notice.”
About 15 countries won’t allow their citizens to return home at all amid
the pandemic, said Bayley.
More
Technology Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
Updates as they get reported. Is converting sunlight to usable cheap AC or DC
energy mankind’s future from the 21st century onwards.
Inexpensive process converts waste seaweed into biofuel, fertilizer and more
Ben Coxworth May
12, 2020
Thanks
to factors such as agricultural fertilizer runoff, Sargassum seaweed is growing
out of control in many regions – it washes up on beaches in huge amounts.
Utilizing a new technique, that rotting organic matter could soon be converted
into biofuels and other products.
Ordinarily, the processing of seaweed involves straining it out of salt
water, rinsing it in fresh water, then drying it. According to the University
of Exeter's Prof. Mike Allen, though, "the costs of these processes can be
prohibitively high." Along with colleagues from the University of Bath, he
set out to develop a cheaper, more commercially viable alternative.
The resulting process doesn't require the waste seaweed to be removed
from the salt water. Instead, it begins with two types of catalysts being added
to a vat of the vegetation. These chemicals release sugars from the seaweed,
that can be used to feed a special yeast which in turn produces a substitute
for palm oil.
Additionally, the catalysts prepare the seaweed for the next phase of
the process, which is known as hydrothermal liquefaction. In a nutshell, this
involves subjecting the material to high temperatures and pressures. The end
products are a bio-oil that can be further processed into fuels, along with
what is described as a high-quality, low-cost fertilizer.
And as an added bonus, if any pieces of plastic waste are present in the washed-up seaweed, those are likewise converted into bio-oil – so they do not need to be removed prior to processing.
"For the first time this study demonstrates that, rather than a hindrance, the presence of saltwater can be helpful," says the lead scientist, U Bath's Prof. Christopher Chuck. "The oil industry creates a variety of products including liquid fuel, plastics and fertilizers – and we can benefit from a similar flexibility. We can simply alter the process conditions to produce larger or smaller amounts of specific by-products, allowing us to have meet variable demand."
The research is described in a paper that was recently published in the Journal of Chemical Technology and Biotechnology.
And this isn't the only potential use for Sargassum seaweed. Previously, scientists from Spain’s University of Alicante announced a method of utilizing it as a source of biomass for power plants. Additionally, a team from from Germany's Fraunhofer Institute for Chemical Technology has converted a different type of seaweed waste into high-quality building insulation.
Source: University of Bath
“Once the principle is admitted that it is the duty of the
government to protect the individual against his own foolishness, no serious
objections can be advanced against further encroachments.”
Ludwig
von Mises
The Monthly Coppock Indicators finished April
DJIA: 24,346 +26 Down. NASDAQ: 8,890 +162 Up.
SP500: 2,912 +89 Down.
The NASDAQ has rebounded to
up. The S&P and the DJIA remain down.
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