Baltic Dry Index. 494 +17 Brent Crude 34.72
Spot Gold 1727
Coronavirus Cases 22/5/20
World 5,197,776
Deaths 334,675
“He’s
called a broker because after dealing with him you are.”
Anon.
We open ahead of
our summer holiday weekend with potentially disastrous news from China. China’s Communist Party is about to end Hong
Kong’s autonomous status and independent rule of law 27 years early.
Such a move will
almost certainly end in the USA reviewing and probably revising Hong Kong’s
special trading status with the USA. Possibly leading to US, UK, and EU
sanctions on China and its leaders.
This is the last
thing the struggling global economy needs as it enters a new recession or
worse. The last thing the US economy needs as it faces roughly 40 million
unemployed.
Hong Kong leads Asian shares
lower as Beijing readies new security law
May 22, 2020 /
12:57 AM
TOKYO (Reuters) - Hong Kong shares tumbled
on Friday after Beijing moved to impose a new security law on the city after
last year’s pro-democracy unrest, risking fresh protests and further straining
fast-deteriorating U.S.-China ties.
Hong Kong's Hang Seng index .HSI
Japan's Nikkei .N225
China is set to impose new national security legislation on
Hong Kong, a Chinese official said on Thursday.
The decision drew a warning from President Donald Trump
that Washington would react “very strongly” against the attempt to gain more
control over the former British colony.
Earlier this month, the U.S. State Department delayed a report to
Congress assessing whether Hong Kong enjoys sufficient autonomy from China to
continue receiving special treatment from the United States.
“The report could be submitted next month and there is risk the
U.S-China confrontations will intensify towards that,” said Ei Kaku, senior
currency strategist at Nomura Securities.
Washington has ramped up criticism of China over the origins of the
coronavirus pandemic. Last week, it moved to block global chip supplies to
blacklisted telecoms equipment giant Huawei Technologies [HWT.UL], while the
U.S. Senate passed legislation that could prevent some Chinese companies from
listing their shares on U.S. exchanges.
---- Markets
were little fazed by China’s announcement that it would not set an economic
growth target this year for the first time in decades and its pledge of more
government support for the virus-hit economy at the start of the annual
parliament meetingm, which had been widely expected.
“The absence of a GDP growth target for this year confirms that, as we
expected, policymakers accept that, after the plunge in Q1, economic growth
will be low for 2020 as a whole even with a significant sequential recovery in
Q2-Q4,” Oxford Economics said in a note to clients.
“The sizeable overall fiscal deficit target indicates significant policy
support for the domestic recovery that we expect to continue despite the
challenging external background. We expect year-on-year GDP growth to average
4% in H2.”
More
The U.S. is in ‘relative decline’
as ‘Chinese power is rapidly rising,’ warns Ray Dalio
Published: May 21, 2020 at 9:19
p.m. ET
The days of U.S. hegemony are
numbered and China is waiting in the wings, argues Ray Dalio, in his most recent
missive on LinkedIn.
The co-chief investment officer and co-chairman of
Bridgewater Associates, outlined his case for why the world’s largest economy
would be overtaken by China soon, presently the second-largest economy on the
planet, with aspirations for much more. Dalio’s comments are part of his series of articles
published on LinkedIn. Dalio’s remarks published on Thursday DJIA, -0.41% SPX, -0.77% COMP, -0.96% Indeed, the Wall Street Journal
reported on Thursday That proposal comes as President Donald Trump claimed
China’s “disinformation and propaganda attack on the United States and Europe
is a disgrace,” in a late-Wednesday missive on
Twitter The U.S. has blamed China for mishandling the COVID-19 pandemic,
which was first identified in Wuhan in December and has since infected more
than 5 million people and claimed nearly 330,000 lives globally, according to data aggregated by
Johns Hopkins University China has defended its response, with Cui Tiankai, China’s
ambassador to the U.S., in an op-ed in the Washington Post ‘won’t end the pandemic.’ On Wednesday, the Senate passed a bill that could force
Chinese companies to give up their listings on American stock exchanges under
legislation approved by the Senate on Wednesday, further elevating the animus
between the No. 1 and 2 economies. Dalio thinks that China is on a better footing and may soon
surpass the U.S. The wealthy investor whose net worth is estimated to be $18
billion, according to Forbes
data There has been a sweeping assumption that China will
eventually eclipse the U.S.’s economic dominance in real terms. Standard
Chartered Bank, for example, had forecast that China will likely become the
world’s biggest economy at some point this year. At last check, U.S. gross domestic product, or GDP, was at
$21.44 trillion on a nominal basis, while China’s GDP was around of $14
trillion. By another measure data from International
Monetary Fund. And back in February
More
In equally bad
economic news, unemployment claims rose again in the USA. The good news, the
rate of new filings continues to fall from April’s shocking high of just under
7 million in a week.
The bad news, at
roughly 40 million unemployed, that’s about 25 percent of the US labour force.
Many others are underemployed, or working on reduced hours or pay scales, or
both. Depression era unemployment. Life
changing unemployment.
Post WW2 deep
recession history suggests that only about 60 percent of the lost jobs come
back over time in the eventual recovery. That suggests a core rate of
unemployment ahead of about 15 to 17 million unemployed.
No “V” shaped
recovery, though probably not the dreaded “I or L,” recovery.
U.S. labour market struggles as
layoffs spread despite businesses reopening
May 21, 2020 /
1:51 PM
WASHINGTON (Reuters) - Millions more
Americans filed for unemployment benefits last week, more than two months after
a shutdown of the country to deal with the coronavirus crisis, pointing to a
second wave of layoffs in industries not initially impacted by closures caused
by the pandemic.
The Labor Department’s weekly jobless claims report on Thursday, the
most timely data on the economy’s health, also showed the number of people on
unemployment rolls surging to a record high in early May, suggesting that
businesses were probably not rushing to rehire workers as they reopen.
This also raises questions about the efficacy of the government’s
Paycheck Protection Program. A broad lockdown of the country in mid-March to
contain the spread of COVID-19, the respiratory illness caused by the novel
coronavirus, initially led to layoffs in mostly low-wage consumer-facing
businesses such as restaurants and retailers. But economists say weak demand
was causing layoffs in other industries like utilities, information, finance
and insurance, and education.
“This raises the possibility that new private and public sector cutbacks
may be creating a major barrier to stopping the labour market bleeding,” said
Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania.
Initial claims for state unemployment benefits totaled a seasonally
adjusted 2.438 million in the week ended May 16, down from 2.687 million in the
prior week, the government said.
Last week’s claims reading was in line with economists’ expectations,
and marked the seventh straight weekly decline. First-time claims have been
gradually decreasing since hitting a record 6.867 million in the week ended
March 28. Still they remained more than triple their peak during the 2007/09
Great Recession.
More
2.4 million more in U.S. file for
unemployment, Labor Dept. says
May 21, 2020 /
8:33 AM
May 21 (UPI) -- Another 2.4 million American workers have filed for new
unemployment benefits, the Labor Department said in its weekly report Thursday.
The department reported the new figure at about 2.44 million, a decrease
of 249,000 from the previous week, which was revised down Thursday by 294,000
claims
Most economists had predicted about 2.4 million new claims. Thursday's figure pushes the total number of Americans
seeking new unemployment benefits to nearly 40 million over the last nine
weeks. Last week In addition to claims filed through traditional
unemployment programs, states have also reported more than 840,000 initial
claims under the newly created Pandemic Unemployment Assistance program. ---- The Labor Department said the unemployment rate
reached 14.7 percent last month, and some economists expect it will rise again
when the May jobs report comes in a couple weeks. Goldman Sachs said this week expects the new figure to be 25 percent. https://www.upi.com/Top_News/US/2020/05/21/24-million-more-in-US-file-for-unemployment-Labor-Dept-says/4361590059797/?ls=2
Finally, in UK
news, the UK economy is in such dire condition the BOE now flirts with negative
interest rates for the first time.
Britain borrows at negative
interest rate for first time
May 20, 2020 /
11:40 AM
LONDON (Reuters) - Britain sold a
government bond with a negative yield for the first time on Wednesday, meaning
the government is effectively being rewarded for borrowing after investors
agreed to be repaid slightly less than they lent.
It joins Japan, Germany and some other European countries in selling
debt yielding less than 0%, reflecting the prospect the coronavirus pandemic
will cause a severe global recession and bond-buying by central banks to
mitigate its impact.
Wednesday’s auction saw 3.75 billion pounds of gilts maturing in July
2023 sold at an average yield of -0.003%.
While investors will receive annual interest of 0.75%, they paid above
face value for the bond so the cash return will be less than they have lent if
they hold the debt to maturity.
“The impact of the Bank of England’s rate cuts and increased asset
purchases is absolutely clear from this morning’s groundbreaking gilt auction,”
said Hugh Gimber, global market strategist at J.P. Morgan Asset Management.
The BoE cut interest rates to a record-low 0.1% in March and began
buying 200 billion pounds of assets, mostly gilts, to help the economy and cap
a spike in yields seen at the start of the coronavirus crisis.
More
BoE's Bailey re-thinking sub-zero
rates, but says reviews are mixed
May 20, 2020 /
3:01 PM
LONDON (Reuters) -
Bank of England Governor Andrew Bailey said he was less opposed to negative interest
rates than before the coronavirus crisis escalated, but that there were “mixed
reviews” about how well they had worked for other central banks.
Bailey said the BoE was not ruling out taking rates below 0% for the
first time, but it was “not ruling it in” either.
“(We’re) looking very carefully at the experiences of those other
central banks that have used negative rates, and a number of them are actually
publishing quite interesting assessments at the moment,” he told lawmakers on
Wednesday.
“There are some pretty mixed reviews of it, I have to say.”
The Bank of Japan and the European Central Bank have cut rates below
zero to deter banks from parking cash at the central banks and instead lend it
out to boost growth.
Both have also recently sought to reward banks that use their credit
lines, recognising the need for incentives.
Bailey said last week the BoE was not contemplating taking rates into
negative territory but has sounded increasingly less opposed to the idea than
his predecessor Mark Carney.
More
Explainer: How do negative
interest rates work?
May 20, 2020 /
2:41 PM
LONDON (Reuters) -
Investors are pricing in the possibility the Bank of England will follow other
central banks in cutting interest rates to below zero for the first time.
---- The European Central Bank, the Bank of Japan and
others have already taken rates negative and President Donald Trump last year
labelled U.S. central bankers “boneheads” for not doing so. This is how a negative rate policy works alongside some of
its potential pitfalls:
WHY HAVE SOME CENTRAL BANKS
ADOPTED NEGATIVE RATES?
During the global financial crisis of 2008-09, many central
banks cut interest rates close to zero. With their economies still struggling in the years that
followed, policymakers in the euro zone, Switzerland, Denmark, Sweden and Japan
allowed rates to fall to slightly below 0%. The coronavirus pandemic has now put pressure on central
banks to pump even more stimulus into their economies. The U.S. Federal Reserve, which had managed to push up
borrowing costs in recent years, cut rates back to just above zero but has
signalled it does not intend to go further. The BoE cut its Bank Rate to a record low of 0.1% in March
and has said it is ready to do more to help the economy, probably most
immediately by buying more government bonds. But new governor Andrew Bailey has sounded less opposed to
the idea of negative rates than his predecessor Mark Carney and the BoE’s chief
economist Andy Haldane said it was something being considered. Investors are betting the BoE might go negative around the
end of this year.
HOW DOES IT WORK?
Under a negative rate policy, banks and other financial
institutions are required to pay interest for parking excess cash — beyond what
regulators say they must keep on hand for safety reasons — securely with the
central bank. Avoiding the charges is an incentive for banks to use their
money to lend more to businesses and consumers, helping growth. The ECB introduced negative rates in 2014. Its deposit rate
is currently -0.5%. The Bank of Japan went negative in 2016, mostly to prevent
a strengthening yen from hurting its export-heavy economy. The BOJ uses
aggressive asset purchases to guide short-term rates to -0.1% and the long-term
rate to about zero.
More
Time
has a way of changing our assets into liabilities.
Peter
Drucker.
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.
Doctors Are Using Mixed Reality
to Treat COVID-19 Patients
"This is not a gimmick."
21 May 2020
Doctors in the U.K. have started using mixed reality
headsets to communicate with their peers, drastically cutting down how many
medical workers need to come into contact with COVID-19 patients. The Microsoft goggles let the wearer communicate with
colleagues or request information like x-ray results from technicians waiting
safely in a different room, BBC
News reports .
And while the idea seems alien at first, doctors told BBC News they
think the technology will definitely help limit future spread of the
coronavirus. “This is not a gimmick,” Dr. James Kinross, a surgeon at
Imperial College, told BBC News . “It provides clinicians with
capabilities that they cannot have with any other platform that’ll have
immediate patient benefit.” Relying on mixed reality to communicate with other medical
staff who used to all work in the same room was a weird adjustment to make, Dr.
Louis Koizia, a consultant physician at St. Mary’s hospital, told BBC News .
But after getting used to it, he preferred it to the alternative. “Initially it felt a little bit bizarre and a bit odd,”
Koizia told BBC News . “But actually, if I compared it to the PPE and
the visors and the goggles that I was wearing beforehand, it’s probably more
comfortable.” Kinross even suspects doctors will continue to use mixed
reality after the pandemic ends. “So I don’t see this technology going anywhere,” Kinross
told BBC News . “In fact, if anything, I see this being much more
widely deployed.”
Top HIV scientist says he
wouldn't count on a vaccine for coronavirus soon
May 20, 2020 /
10:11 PM
(Reuters)
- A top U.S. scientist said on Wednesday that governments should not count on a
successful vaccine against COVID-19 being developed anytime soon when deciding
whether to ease restrictions imposed to curb the pandemic.
William Haseltine, a groundbreaking researcher of cancer, HIV/AIDS and
human genome projects, said the better approach now is to manage the disease
through careful tracing of infections and strict isolation measures whenever it
starts spreading.
While a COVID-19 vaccine could be developed, he said, “I wouldn’t count
on it.”
Vaccines developed previously for other types of coronavirus had failed
to protect mucous membranes in the nose where the virus typically enters the
body, he said.
Even without an effective treatment or vaccine, the virus can be
controlled by identifying infections, finding people who have been exposed and
isolating them, he said. He urged people to wear masks, wash hands, clean
surfaces and keep a distance.
He said China and some other Asian countries used that strategy
successfully, while the United States and other countries did not do enough to
“forcibly isolate” all who were exposed to the virus.
China, South Korea and Taiwan have done the best at curbing infections,
he said, while the United States, Russia and Brazil have done the worst.
Tests on animals of experimental COVID-19 vaccines had been able to
reduce the viral load in organs like lungs although the infections remained, he
said.
More
Why Creating a Covid-19 Vaccine
Is Taking So Long
Developing a vaccine that’s both effective
and safe is grueling, methodical work. And once we have one, we’ll need many,
many doses too.
05.20.2020 10:00
AM
The race is on for a
Covid-19 vaccine , but the pace is less hare and more tortoise. And
necessarily so: Developing a vaccine that’s both
effective and safe is grueling, methodical work. “When experts optimistically say that they expect a
Covid-19 vaccine by the end of 2020, they’re talking about an emergency use
authorized vaccine, not a fully-approved one,” says Dr. Seema Yasmin, director
of the Stanford Health Communication Initiative. No one can say for sure when a Covid-19
vaccine might arrive , because vaccine development is broken into several
stages, each with a highly variable timeline. “But here’s a comparison,” Yasmin
says. “The fastest vaccine we previously developed was for mumps, and that took
four years to develop. And typically it takes 10 to 15 years to develop a
vaccine. So 12 to 18 months would be record-breaking.” Now, about those stages. The first is the exploratory
phase, in which drug companies tinker with different approaches. With Covid-19,
for instance, some drugmakers are trying to develop a nucleotide-based vaccine,
which uses the virus’s genetic code instead of its proteins. Typically, the
exploratory phase could take two to four years, though new technologies are
speeding up the progress. Also, this novel coronavirus is similar to the first
SARS virus, so that may give researchers a head start. Got a coronavirus-related news tip? Send it to
us at covidtips@wired.com . Next comes the preclinical stage, in which a vaccine
candidate is tested in cell cultures and animals to see if it triggers an
immune response. “If there’s no immune response or the vaccine is causing harm
to cells, then it’s back to square one, the exploratory stage,” says Yasmin.
“The reality is there’s no way to speed up this stage, and it will probably
take at least a year.” But if all goes well, the candidate heads to clinical
trials. The experimental vaccine is given to a small group of people, then a
bigger group, then an even bigger group, typically in an outbreak area. This
series of tests can take years to complete. Some bioethicists have recently
proposed that the Covid-19 pandemic is so serious that so-called “challenge
trials ” should be considered to accelerate the process. In a challenge
trial, researchers would intentionally infect the people they vaccinate in a
controlled environment to see if the drug is effective. No such studies have
been authorized yet. The next stage is regulatory review, in which the
manufacturer submits an application for a license to produce the vaccine. In
the US, this typically takes 10 months and is authorized through the Food and
Drug Administration, though it’s virtually a given that regulators will speed
up the approval of a Covid-19 vaccine. But we aren’t done yet. Scaling up production—for instance,
building manufacturing facilities—can take years and hundreds of millions of
dollars. The production of any Covid-19 vaccine will of course be fast-tracked,
but drugmakers will still need to produce enough materials to vaccinate
billions of people. To learn more about the race for a Covid-19 vaccine, check
out our video with Yasmin above.
Why coronavirus has caused a glut
of gourmet food from canceled summer events
Published: May 21, 2020 at 5:19 a.m. ET
Coronavirus has derailed all of the top summer sporting events and
celebrations, from grand slam tennis tournament Wimbledon to the Tokyo
Olympics, causing a glut of gourmet food.
Hospitality events have completely disappeared across Europe and
suppliers of strawberries and Stilton cheese are sounding the alarm that sales
are tanking.
The summer soundscape will miss the popping of bottles of bubbly while
hundreds of thousands of servings of strawberries will go uneaten as
coronavirus cancels celebrations and calls off the season’s sports.
Champagne, the French region which produces the same-named bubbly, has
cut the supply of the delicacy to support prices through falling demand.
France’s Comité Champagne, which regulates the industry, is banning presales of
Champagne currently fermenting to avoid flooding the market, according to
French news site The Local.
Demand for Champagne in the U.K. has reportedly been cut in half through
the lockdown, despite a surge in sales of cider and beer.
Meanwhile, Britain’s famous blue cheese, Stilton, has seen sales fall by
30% since lockdown began, according to the Stilton Cheesemakers’ Association,
which represents producers of the much loved delicacy.
The cheese, known for the its distinct smell and blue fungus, can only
be produced in the English counties Derbyshire, Nottinghamshire, and
Leicestershire
Prince Charles, patron of the Specialist Cheesemakers Association, is
urging Brits to back Britain’s cheesemakers, some of which could be “lost
forever.”
“The closure of our pubs and restaurants has had a devastating impact on
the sales of British cheese, and I understand that some of our smallest producers
are really suffering as a result,” he said in a statement.
---- Meanwhile, the cancellation
of Wimbledon, where fans in 2019 downed almost 200,000 servings of
strawberries, has left British fruit farmers fearful they could face a sticky
summer. The loss of sporting events such as Formula One, cricket Test matches,
football, and other important outside events will also hit producers hard.
It was reported trade association British Summer Fruits would double its
marketing and public relations spend in 2020.
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.
Graphene-reinforced carbon fiber
may lead to affordable, stronger car materials
Date:
May 18, 2020
Source:
Penn State
Summary:
A new way of creating carbon fibers -- which are typically expensive to make --
could one day lead to using these lightweight, high-strength materials to
improve safety and reduce the cost of producing cars, according to a team of
researchers. Using a mix of computer simulations and laboratory experiments,
the team found that adding small amounts of the 2D graphene to the production
process both reduces the production cost and strengthens the fibers.
For decades, carbon fibers have been a mainstay of airplane production.
If created in the right way, these long strands of carbon-based atoms, narrower
than human hair, are lightweight, stiff and strong -- a perfect application for
keeping passengers safe in a vehicle soaring miles above the ground.
"Even though carbon fibers have really nice features, they would
make a car far more expensive" with the way carbon fibers are manufactured
now, said Adri van Duin, professor of mechanical and chemical engineering, Penn
State. "If you can get these properties easier to manufacture then you can
make cars significantly lighter, lower the cost of them and make them
safer."
Carbon fiber sells for about $15 per pound today, and the team, which
includes researchers from Penn State, the University of Virginia and Oak Ridge
National Laboratory, in collaboration with industry partners Solvay and
Oshkosh, wants to reduce that to $5 per pound by making changes to the complex
production process. A lower production cost will increase carbon fiber's
potential applications, including in cars. Further, the team's research may
lower the cost of producing other types of carbon fibers, some of which sell
for up to $900 per pound today.
"Currently most carbon fibers are produced from a polymer known as
polyacrylonitrile, or PAN, and it is pretty costly," said Ma?gorzata Kowalik,
researcher in Penn State's Department of Mechanical Engineering. "The
price of PAN makes up about 50% of the production cost of carbon fibers."
PAN is used to create 90% of carbon fibers found in the market today,
but its production requires an enormous amount of energy. First, PAN fibers
have to be heated to 200-300 degrees Celsius to oxidize them. Next, they must
be heated to 1,200-1,600 degrees Celsius to transform the atoms into carbon.
Finally, they have to be heated to 2,100 degrees Celsius so that the molecules
are aligned properly. Without this series of steps, the resulting material
would lack its needed strength and stiffness.
The team reported in a recent issue of Science Advances that
adding trace amounts of graphene -- only 0.075% concentration by weight -- to
the first stages of this process allowed the team to create a carbon fiber that
had 225% greater strength and 184% greater stiffness than the conventionally
made PAN-based carbon fibers.
The team gleaned insight into the chemical reactions taking place
through a series of small- and large-scale computer simulations conducted on
several supercomputers, the Institute for Computational and Data Sciences
(ICDS) Advanced CyberInfrastructure; the National Science Foundation
(NSF)-funded CyberLAMP, which is maintained by ICDS; and the NSF-funded Extreme
Science and Engineering Discovery Environment (XSEDE), a multi-institute
network of supercomputers and related resources. They also studied the
properties of each material using laboratories in Penn State's Materials
Research Institute (MRI).
More
Another weekend and a
bank holiday weekend on both sides of the Atlantic. Sadly no Monaco Grand Prix
or Indy 500 this year, although the US organisers hope to run the Indy 500
later in the year. With many national lockdowns easing, have we already beaten
Sars-Cov-2 crisis phase one?
While it’s too early
to know for certain, was it the lockdowns that beat the coronavirus crisis, the
arrival of summer in the northern hemisphere, or that the virus just ran out of
heavily compromised victims? Equally uncertain, was that it or merely phase
one. Have a great weekend everyone.
When in
doubt predict that the present trend will continue.
Anon.
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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