Monday 15 June 2020

No Billionaire Left Behind – The Fed. Magna Carta Signed?


Baltic Dry Index. 923 +84   Brent Crude 37.95
Spot Gold 1729

Coronavirus Cases 15/6/20 World 8,039,175
Deaths 43,436

For at least another hundred years we must pretend to ourselves and to every one that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still.

Lord Keynes.

Poor economic news out of China, plus an upswing in new coronavirus cases has global stock markets under pressure this morning.

If all the recent rioting, with its lack of masks and social distancing, did generate a new spread of Covid-19 infections, we should start to see a rise in new infections in the cities and towns where the rioting and looting took place, starting this week and continuing probably onwards for another 3 to 4 weeks.

If new coronavirus cases do surge, no amount Federal Reserve cash bungs to Wall Street will trigger a “V” shaped real economy recovery.

For the next few days and weeks, all we can do is wait.

Asian stocks, oil fall as second wave fears grow

June 15, 2020 / 2:05 AM
SYDNEY (Reuters) - Asian shares stumbled on Monday and oil prices slipped as fears of a second wave of coronavirus infections in Beijing sent investors scurrying for safe-havens while underwhelming data from China further weighed on sentiment.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3% with Australian shares off 0.1% and South Korea easing 0.3%. Japan’s Nikkei faltered 0.7%. 

Chinese shares opened in the red with the blue-chip CSI300 index down 0.1%.
Monday’s losses follow a strong rally in global equities since late March, fuelled by central bank and fiscal stimulus and optimism as countries gradually lifted restrictions put in place to curb the spread of the novel coronavirus.

“Any new outbreak will be looked at very, very cautiously by investors. The market is putting into perspective that the COVID-19 issue has not been resolved yet. It’s a reality check,” said James McGlew, analyst at stockbroker Argonaut.

McGlew expects a further correction “as markets quantify what lies ahead of us.”

The lead from Wall Street was also dour with e-minis for the S&P500 sinking 1.1% in early Asian trading.

Risk sentiment took a knock after Beijing recorded dozens of new COVID-19 cases in recent days, all linked to a major wholesale food market. Authorities have closed the centre and locked down nearby housing districts.

Investors are also fretting over a spike in cases in the United States where more than 25,000 new cases were reported on Saturday.
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China's May factory output rises less than expected

June 15, 2020 / 3:43 AM
BEIJING (Reuters) - China’s industrial output rose for a second straight month in May but the gain was smaller than expected, suggesting the economy is still struggling to get back on track after the coronavirus crisis.

Retail sales and investment continued to contract, pointing to an uneven and possibly more drawn-out rebound in other sectors. 

Global leaders are closely watching how long it takes China to get back on its feet as they begin to relax their own stringent anti-virus measures and reboot their economies.

Analysts say signs of improvement continue to be seen in China ranging from steel production and car sales to more lights being turned on in industrial parks. However, they warn it could take many months for broader activity to return to pre-crisis levels.

Industrial output growth quickened to 4.4% in May from a year earlier, the highest reading since December, official data showed on Monday. Analysts polled by Reuters had expected a 5.0% rise from 3.9% in April, the first expansion since the virus emerged in China late last year.

But a collapse in export orders amid global lockdowns has left factories more reliant on domestic demand, which is recovering at a more sluggish pace.

Retail sales fell for a fourth straight month. While the 2.8% drop was smaller than the 7.5% slump in April, it was larger than the 2.0% fall tipped by analysts. Heavy job losses and fears of a second wave of infections continue to make consumers cautious.
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Strangely, Chairman Powell and his bankster gang, never talk about this “no billionaire left behind,” massive cash bung giveaway to Wall Street. Mere millionaires need not apply.

The Fed Just Pulled Off Another Backdoor Bailout of Wall Street

By Pam Martens and Russ Martens: June 10, 2020 ~
The Federal Reserve has authorized 11 financial bailout programs thus far. Despite Fed Chairman Jerome Powell’s reassurances at his press conferences that these programs are to help American families, a full 10 of these programs are actually bailouts of Wall Street banks or their trading units.

The latest Wall Street bank bailout to come out of hiding is the Fed’s Secondary Market Corporate Credit Facility (SMCCF). This program was supposed to buy up corporate bonds in the secondary market in order to help corporate bond markets regain liquidity. Thus far, the only thing the SMCCF has bought up are Exchange Traded Funds (ETFs) holding investment grade and junk-rated bonds.

The SMCCF program began operations on May 12. By May 18 the Fed had spent $1.58 billion buying up ETFs. The ultimate goal of the facility, at this point, is to spend $250 billion on ETFs and secondary market corporate bonds. The U.S. Treasury Department was supposed to hand over $25 billion of taxpayer money to eat losses on the SMCCF program. Instead, without explanation, the latest data from the Fed shows that the Treasury deposited $37.5 billion into the SMCCF, suggesting the program is expecting losses of greater than $25 billion.

The bulk of the purchases of ETFs were those issued by BlackRock, the company to whom the New York Fed has outsourced the program. The Fed is allowing BlackRock to buy up its own, previously sinking, ETFs as well as those of other ETF issuers. The New York Fed gave BlackRock a no-bid contract to run the program as investment manager. But that’s far from the only outrage.

Here’s where you need to pay close attention. The Fed released a list of the Wall Street firms that are selling these ETFs to the Fed’s bailout facility. (See chart above.) The majority of the sellers just happen to be the very same firms that create these ETFs under the title of “Authorized Participants.”

We’ll let James Chen of Investopedia explain what function “Authorized Participants” perform for an ETF. He writes as follows:

“Authorized participants (AP) are one of the major parties at the center of the creation and redemption process for exchange-traded funds (ETF). They provide a large portion of liquidity in the ETF market by obtaining the underlying assets required to create a fund. When there is a shortage of shares in the market, the authorized participant creates more. Conversely, the authorized participant will reduce shares in circulation when supply [exceeds] demand. This can be done with the creation and redemption mechanism that keeps share prices aligned with its underlying net asset value (NAV).

“Authorized participants are responsible for acquiring the securities that the ETF wants to hold…In return, authorized participants receive a block of equally valued shares called a creation unit. Issuers can use the services of one or more authorized participants for a fund. Large and active funds tend to have a greater number of authorized participants. This also differs between various types of funds. Equities, on average, have more participants than bonds, perhaps due to greater trading volume.

“Traditionally, authorized participants are large banks like Bank of America (BAC), JPMorgan Chase (JPM), Goldman Sachs (GS), and Morgan Stanley (MS), among others. They do not receive compensation from a sponsor and have no legal obligation to redeem or create the ETF’s shares. Instead, authorized participants are compensated through activity in the secondary market or service fees collected from clients yearning to execute primary trades.”

That phrase in the above paragraph, highlighting that authorized participants “have no legal obligation to redeem or create the ETF’s shares” is part of the train wreck that is happening right now on Wall Street.

----If, as the authors suggest, money market funds are holding bond ETFs as cash substitutes and they have now become illiquid, this may explain why the Fed had to also establish a Money Market Mutual Fund Liquidity Facility which has, as of last Wednesday, bailed out $29.86 billion of assets that no one else wanted.
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America’s currency is losing its exceptionalism
By Brooke Sample  June 13, 2020, 1:00 PM GMT+1

A Crash in the Dollar Is Coming — Stephen Roach

The era of the U.S. dollar’s “exorbitant privilege” as the world’s primary reserve currency is coming to an end. France’s then-finance minister Valery Giscard d’Estaing coined that phrase in the 1960s largely out of frustration, bemoaning a U.S. that drew freely on the rest of the world to support its overextended standard of living. For almost 60 years, the world complained but did nothing about it. Those days are over.

Already stressed by the impact of the Covid-19 pandemic, U.S. living standards are about to be squeezed as never before. At the same time, the world is having serious doubts about the once widely accepted presumption of American exceptionalism. Currencies set the equilibrium between these two forces — domestic economic fundamentals and foreign perceptions of a nation’s strength or weakness. The balance is shifting, and a crash in the dollar could well be in the offing.
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Finally, is Covid-19 about to kill off some of the commodity markets?

Column: Knives out for nickel market as restaurants close

June 12, 2020 / 2:57 PM
LONDON (Reuters) - The knives may be out for the nickel market.

Stainless steel knives specifically, together with stainless steel forks and spoons.
COVID-19 has hit just about every aspect of the global economy but the hospitality business is one of the worst affected.

A wave of restaurant closures in the developed world would generate a surge of unwanted cutlery. If 20% of restaurants closed, it would translate to around 80,000 tonnes of stainless steel scrap containing 24,000 tonnes of nickel, according to analysts at Citi.

That’s the equivalent of a medium-sized production plant such as Glencore’s Koniambo facility in New Caledonia.

Citi’s calculation is based on the fact that kitchenware is still one of the main drivers of stainless steel consumption. And stainless steel remains the key driver of nickel demand despite the future promise of usage in lithium-ion batteries.

The focus on what happens to the restaurant sector in a post-coronavirus world is symptomatic of a shift in nickel market narrative from supply to demand disruption.

The title of Citi’s research note, “Nickel’s unfavorable end-use demand outlook” (May 27, 2020), tells you the bank isn’t that enthusiastic about the metal’s prospects.

London Metal Exchange (LME) nickel collapsed from more than $14,000 per tonne at the start of January to a coronavirus-induced low of $10,865 in March.

It has since recovered to a current $12,780, part of a broader bounce-back in the industrial metals complex thanks to massive government stimulus and optimism about China, the world’s biggest metals user.

Supply-side disruption due to lockdowns has played its part with several major nickel producers curtailing or closing operations over March and April.

However, as lockdowns ease, supply chains are normalising. The largest ongoing outage is at Sumitomo’s Ambatovy operations in Madagascar.

----Other key stainless end-users are in the aerospace and oil and gas industries, both of which are also expected to experience a drawn-out recovery.

The three sectors between them account for around 23% of total nickel end-usage and prolonged weakness will feed into a 15% fall in demand this year with the disruption rolling into next year, according to Citi.

The bank wraps its gloomy demand prognosis into a forecast that nickel could be set for “three years of large surplus and a considerable stock overhang.”
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"I never did anything by accident, nor did any of my inventions come by accident; they came by work."

Thomas Edison.

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.

Asymptomatic transmission of coronavirus appears to be worse than SARS or influenza — 5 reasons you should care

Published: June 12, 2020 at 12:22 a.m. ET
How worried should you be about asymptomatic transmission of COVID-19?

The World Health Organization on Tuesday attempted to clarify comments made just 24 hours earlier that transmission of the novel coronavirus in carriers who don’t show apparent symptoms happened in “very rare” cases. 

Maria Van Kerkhove said it was a “misunderstanding to state that asymptomatic transmission globally is very rare,” and that her comments during Monday’s WHO news briefing had been based on “a very small subset of studies.” “I was just responding to a question; I wasn’t stating a policy of WHO,” she said.

The WHO currently estimates that 16% of people with COVID-19 are asymptomatic and can transmit the coronavirus, while other data show that 40% of coronavirus transmission is due to carriers not displaying symptoms of the illness.

Public-health officials have advised people to keep a distance of six feet from one another. Face masks are designed to prevent the wearer, who may be infected with COVID-19 but have very mild or no symptoms, from spreading invisible droplets to another person and thereby infecting them too.

But “there’s nothing magic about six feet,” said Gregory Poland, who studies the immunogenetics of vaccine response in adults and children at the Mayo Clinic in Rochester, Minn., and is an expert with the Infectious Diseases Society of America.

“The virus can’t measure,” he told MarketWatch. “For example, the viral cloud while speaking will extend 27 feet and linger in the air for about 30 minutes. This is more like influenza in the sense that people transmit the virus prior to experiencing any symptoms and some people, of course, will not get sick.”

Also see:Yes, America needs to brace itself for a second wave of coronavirus

Asymptomatic transmission “is the Achilles’ heel of COVID-19 pandemic control through the public-health strategies we have currently deployed,” according to a study by researchers at the University of California, San Francisco published May 28 in the New England Journal of Medicine.
“Symptom-based screening has utility, but epidemiologic evaluations of COVID-19 outbreaks within skilled nursing facilities ... strongly demonstrate that our current approaches are inadequate,” researchers Monica Gandhi, Deborah Yokoe and Diane Havlir wrote.
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China reports 49 new COVID-19 cases for June 14; 36 in Beijing

June 15, 2020 / 1:27 AM
SHANGHAI (Reuters) - Mainland China reported 49 new confirmed COVID-19 cases for June 14, down from 57 a day earlier, the national health authority said on Monday. 

The National Health Commission (NHC) said in a statement that 39 of the new confirmed cases were locally transmitted.

Thirty-six of the new cases were in Beijing, the same number reported for the capital a day earlier and tied for the highest daily infection count for the city since authorities started releasing data.

The NHC reported 10 new imported coronavirus cases in mainland China as of the end of June 14, down from 19 a day earlier. The commission also reported 18 new asymptomatic cases, up from nine a day earlier.

The total number of COVID-19 cases in mainland China now stands at 83,181. The death toll remains unchanged at 4,634.

China does not count asymptomatic patients, who are infected with the virus but do not display symptoms, as confirmed cases.

China Cases Jump; IMF to Further Lower Forecast: Virus Update

Bloomberg News
June 13, 2020, 10:51 PM GMT+1 Updated on June 14, 2020, 7:59 AM GMT+1
China cases jumped the most in almost two months as Beijing shut a major food market and nearby housing districts amid fears of a resurgence of the coronavirus.

The International Monetary Fund expects to further revise down its forecast for the global economy this year. U.S. cases rose at the fastest pace in two weeks while Brazil’s infections increased 2.6% and deaths climbed 2.1%.

AstraZeneca Plc pledged 400 million doses of Oxford University’s vaccine at no profit. Pfizer’s CEO expects a vaccine by October. Dr. Reddy’s Laboratories Ltd. has a deal with Gilead Sciences Inc. for Remdesivir. and Sinovac Biotech Ltd. said its coronavirus shot is safe.

----Key Developments:

  • Virus Tracker: Cases pass 7.7 million; deaths exceed 428,000
  • Beijing shuts biggest vegetable market after 45 cases
  • Businesses transformed by Covid-19 plan to keep the changes
  • Asia’s densest slum has become a model for beating the virus
  • As lockdown lifts, New York City still longs for its old self
  • How a “second wave” sparks renewed pandemic fears
More

Tokyo reports 47 new daily coronavirus infections

Today 04:35 pm JST
TOKYO The Tokyo metropolitan government on Sunday confirmed 47 new coronavirus infections, Tokyo Gov Yuriko Koike said.

Of the daily figure, 18 people were traced to nightlife establishments.

"Just because something doesn't do what you planned it to do doesn't mean it's useless."

Thomas Edison.

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.
"Hell, there are no rules here - we're trying to accomplish something."
Thomas Edison.

Scientists apply 'twistronics' to light propagation and make a breakthrough discovery

Promising pathway for leapfrog advancement in imaging, optical-computing technologies, biosensing and more

Date: June 11, 2020

Source: Advanced Science Research Center, GC/CUNY

Summary: A research team has employed ''twistronics'' concepts (the science of layering and twisting two-dimensional materials to control their electrical properties) to manipulate the flow of light in extreme ways. The findings hold the promise for leapfrog advances in a variety of light-driven technologies, including nano-imaging devices; high-speed, low-energy optical computers; and biosensors. 

A research team led by scientists at the Advanced Science Research Center at The Graduate Center, CUNY (CUNY ASRC), in collaboration with National University of Singapore, University of Texas at Austin and Monash University, has employed "twistronics" concepts (the science of layering and twisting two-dimensional materials to control their electrical properties) to manipulate the flow of light in extreme ways. The findings, published in the journal Nature, hold the promise for leapfrog advances in a variety of light-driven technologies, including nano-imaging devices; high-speed, low-energy optical computers; and biosensors.

The team took inspiration from the recent discovery of superconductivity in a pair of stacked graphene layers that were rotated to the "magic twist angle" of 1.1 degrees. In this configuration, electrons flow with no resistance. Separately, each graphene layer shows no special electrical properties. The discovery has shown how the careful control of rotational symmetries can unveil unexpected material responses.

The research team discovered that an analogous principle can be applied to manipulate light in highly unusual ways. At a specific rotation angle between two ultrathin layers of molybdenum trioxide, the researchers were able to prevent optical diffraction and enable robust light propagation in a tightly focused beam at desired wavelengths.

----"While photons -- the quanta of light -- have very different physical properties than electrons, we have been intrigued by the emerging discovery of twistronics, and have been wondering if twisted two-dimensional materials may also provide unusual transport properties for light, to benefit photon-based technologies," said Andrea Alù, founding director of the CUNY ASRC's Photonics Initiative and Einstein Professor of Physics at The Graduate Center. "To unveil this phenomenon, we used thin layers of molybdenum trioxide. By stacking two of such layers on top of each other and controlling their relative rotation, we have observed dramatic control of the light guiding properties. At the photonic magic angle, light does not diffract, and it propagates very confined along straight lines. 
This is an ideal feature for nanoscience and photonic technologies."
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Is 15 June 1215 the true date of Magna Carta?

In 1215, King John sealed Magna Carta, a document that safeguarded basic freedoms and placed limits on the power of the crown. The event was a turning point in British constitutional history, but are we marking its anniversary on the correct date?

----The date 15 June seems fixed by Magna Carta itself. King John ends the Charter by stating that it has been “given by our hand in the meadow which is called Runnymede between Windsor and Staines on the 15th day of June in the 17th year of our reign”.

But, but, much more.

The Monthly Coppock Indicators finished May

DJIA: 25,383 +12 Down. NASDAQ: 9,490 +178 Up. SP500: 3,044 +83 Down.

The NASDAQ has remained up. The S&P and the DJIA still remain down despite the best efforts of the Fed to get them to go higher.

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