Baltic Dry Index. 1749 +11 Brent Crude 41.02
Spot Gold 1761
Reuters posits for the week ahead, “But as North Korea’s military
threats ebb and flow and troops amass on both sides of a disputed part of the
Indo-Chinese border, geopolitics will likely trump other factors.” I think what happens next in the coronavirus crisis will trump
geopolitics. New cases, undercounted, are running at a million a week.
From the USA to India, Covid-19 cases are
soaring. With major national holidays in
Canada and the USA next week, increased infection is a foreseeable result.
Worse this comes on top of all the recent civil unrest
and demonstrations and rioting, that’s already contributing to a rise in US
cases among the under 35s.
Short of a war, what happens in the next 4-6 weeks in
the coronavirus crisis is likely to trump all else.
If we don’t get on top of the rise in new infections,
globally and in the USA, our highly integrated global economy will suffer from
severe drag.
There will be no “V” shaped recovery, not even a “U”
shaped recovery. Just a muddle along global economy, increasingly running into
rising unemployment, rising bankruptcies, rising real estate distress, rising
global supply chain stress, and after a brief retail sales rebound from lock
down relief, a severe consumer demand shock.
With all this uncertainty ahead, the prudent will
remain in the safety of cash and precious metals. The casinos are for the feckless
and reckless.
Take Five: World stocks' 2020 rollercoaster ride rumbles on
June 26, 2020 / 1:28 PM
World stocks have been on a rollercoaster ride in the first
half of 2020. Having slumped 35% from Feb. 20 to March 23, they are now within
10% of February’s record highs thanks to lashings of fiscal stimulus, interest
rates slashed to 0% or below in most major economies, and massive amounts of
QE. Borrowing costs for high-grade U.S. companies have in fact fallen below
January levels. So what happens over the rest of the year? Much depends on whether another coronavirus wave comes crashing down, further testing policymakers. And if an effective treatment or a vaccine is found, the severest global recession in living memory could also turn out to be the shortest.
Nevertheless, the crisis has exposed weaknesses such as companies’ high debt levels and their over-reliance on share buybacks.
Asian market
anxiety levels look set to rise another notch in coming days due to
geopolitical tensions.
Hong Kong
will be in the Chinese parliament’s sights when it meets on June 28-30 to
finalise a security law aimed at tackling separatism, subversion, terrorism and
collusion with foreign forces.
After a year
of sometimes violent anti-government and anti-Beijing protests, the focus is on
how far-reaching the law is, what activities constitute such crimes and what
the punishment would be. Investors also want to know whether the laws will be
retroactive or create new avenues for asset seizures.
China and
much of Asia will also publish manufacturing surveys. But as North Korea’s
military threats ebb and flow and troops amass on both sides of a disputed part
of the Indo-Chinese border, geopolitics will likely trump other factors.
‘Make no mistake…the pandemic morphed into a Depression-like crisis,’ says UCLA economist, who predicts U.S. economy won’t recover from coronavirus until 2023
Shulman said
the current economic damage created by lockdowns and closures that have been
put in place for months goes well beyond a garden-variety economic recession.
“To call this crisis a recession is a misnomer,” he warned.
“Make no
mistake, the public health crisis of the pandemic morphed into a
depression-like crisis in the economy,” he wrote. Shulman is forecasting a 42%
annual rate of decline in real gross domestic product for the current quarter,
which he says will be followed by a so-called “Nike swoosh,” or more gradual
recovery “that won’t return the level of output to prior fourth quarter of 2019
peak until early 2023.”
“Too many
small businesses will fail, and millions of jobs in restaurants and personal
service firms will disappear,” Shulman wrote. “For too many workers, the
recession will linger on well past the official end date of the depression.”
Shulman’s forecast comes as the U.S. counted 34,700 new confirmed cases on Wednesday, according to the Associated Press, the highest level since a late April peak number of 36,400. While New York and neighboring states have succeeded in flattening their infection curve, 29 states still see increasing cases over the last 14 days, according to a New York Times tracker.
The resurgence of the viral outbreak, which has infected 9.5 million people world-wide, has delayed business reopenings in many parts of the U.S. and compelled Texas to pause its reopening plans. Texas Gov. Greg Abbott said he froze the reopening of the state in response to the spike in cases of COVID-19 and hospitalizations.
Shulman told
MarketWatch that when he prepared the economic forecast, the viral outbreak
looked to be more contained and acknowledges that his grim prediction could be
even worse if the virus gets out of control in many of the hotspot states.
“When we did
this report, we assumed the path was getting better,” he said. “This big
acceleration [in cases] happened in the past week,” he added. The economist
said that the surge in infections and hospitalizations could lead individuals
to impose their own lockdowns, notwithstanding any put in place by local and federal
governments.
‘Black Swan’ author says if investors don’t use a ‘tail hedge,’ he recommends ‘not being in the market’—‘We’re facing a huge amount of uncertainty
That’s
“Black Swan: The Impact of the Highly Improbable” author Nassim Nicholas Taleb
offering his view on the risks swirling in the market and a growing lack of
clarity about the future in the era of a deadly pandemic that has created a
public-health and economic crisis.
Speaking
during an interview on CNBC on Friday, the popular author, shared the notion
that investors should be hedged against so-called “tail risk,” which refers to
extreme events that have a low probability of happening in a distribution of
outcomes. Taleb has spent his career chronicling so-called “tail risk” events,
which have a tiny probability of occurrence, but nonetheless take place more
often than one would guess, and therefore often are underestimated by the broader
investment community.
Taleb said
the current market landscape, perhaps, has amplified uncertainties, even if the
stock market has been mostly rising, despite signs of a spreading COVID-19
pandemic that is re-intensifying in places and threatening to de-rail
projections for a “V-shaped,” or quick, economic recovery.
“We are
printing money like there’s no tomorrow,” Taleb said, referencing the
Federal Reserve’s efforts to ease the financial pain of the epidemic by
delivering trillions of stimulus to the market. The Fed also cut interest rates
to a superlow range of 0% and 0.25% back in March, and may not have a lot of
room to further ease the economic pain of the viral outbreak and other problems
that could arise amid this crisis.
“And COVID
seems to be there even if the pandemic…dies down, you will still
have people cautious enough that it will impact a lot of industries,”
he said.
Coronavirus cases in India cross 500,000 as big cities reel from surge
June 27, 2020 / 5:34 AM
NEW DELHI
(Reuters) - India reported over 17,000 new coronavirus cases over the last 24
hours, pushing the country’s total above 500,000, federal health ministry data
showed on Saturday, with infections surging in major cities including the
capital New Delhi.
India has
the world’s fourth-biggest outbreak of the virus that causes COVID-19, below
only the United States, Brazil and Russia in confirmed infections, according to
a Reuters tally.
Infections
are expected to continue rising steadily in India. Experts advising the federal
government say the authorities should now prioritise reducing mortality over
containing the spread of the virus.
“Our focus
should be on preventing deaths and not really getting bogged down because of
the numbers. Numbers are going to increase,” said Dr Manoj Murhekar, a member
of India’s main coronavirus task force and director of the National Institute
of Epidemiology.
The
COV-IND-19 study group, led by Bhramar Mukherjee, a biostatistics professor
from the University of Michigan, forecasts that India could see between 770,000
and 925,000 cases by July 15.
As
infections mount swiftly and hospitals become stretched, some cities like New
Delhi are scrambling to build temporary facilities with thousands of beds to
quarantine and treat COVID-19 patients.
Severe COVID-19 can damage the brain, preliminary study finds
June 25, 2020 / 11:37 PM
LONDON
(Reuters) - A preliminary study of patients hospitalised with COVID-19 has
found the disease can damage the brain, causing complications such as stroke,
inflammation, psychosis and dementia-like symptoms in some severe cases.
The findings
are the first detailed look at a range of neurological complications of
COVID-19, the researchers said, and underline a need for larger studies to find
the mechanisms behind them and assist the search for treatments.
“This (is)
an important snapshot of the brain-related complications of COVID-19 in
hospitalised patients. It is critically important that we continue to collect
this information to really understand this virus fully,” said Sarah Pett, a
University College London professor who co-led the work.
The study,
published in the Lancet Psychiatry journal on Thursday, looked in detail at 125
cases from across the UK. Co-lead researcher Benedict Michael, from Liverpool
University, said it was important to note that it focused on severe cases.
Data was
collected between April 2 and April 26 - when the disease was spreading
exponentially in the UK.
The most
common brain complication seen was stroke, which was reported in 77 of 125
patients. Of these, most were in patients over 60, and most were caused by a
blood clot in the brain, known as an ischaemic stroke.
The
study also found that 39 of the 125 patients showed signs of confusion or
changes in behaviour reflecting an altered mental state. Of these, nine had
unspecified brain dysfunction, known as encephalopathy, and seven had
inflammation of the brain, or encephalitis.
More
Vaccine Makers Turn to Microchip Tech to Beat Glass Shortages
We'll need millions of vials to distribute
the vaccine. The US government thinks manufacturing methods from the
semiconductor industry can help.
06.26.2020 07:00 AM
----But
the science of producing a safe, broadly-effective vaccine is just the first
step. Actually exiting the pandemic will require the subsequent manufacturing
of the best-performing ones, bottling them up, shipping them around the world,
and doling them out to vulnerable populations. In the case of Covid-19, that’s
pretty much everybody on the planet, which means making somewhere between 7 and
15 billion doses. (Many vaccines have to be given in two doses—a primer and a
boost.) No one has ever tried to do that before. And as these historic efforts
to produce an unprecedented number of shots in so short a time are ramping up,
vaccine makers say the biggest bottleneck they’re encountering is a cruelly
literal one.
“The challenge is not making the vaccine itself, it’s filling vials. There just aren’t enough vials in the world,” Pascal Soriot, the executive director and CEO of AstraZeneca, told reporters in a press briefing last month. AstraZeneca is working with the University of Oxford on one of the frontrunners in the Covid-19 vaccine race. But it’s just one of many pharmaceutical firms scrambling to source containers for that critical bottling step. Executives from AG Schott, one of the world’s major medical glass producers, recently told The Wall Street Journal that the company has received requests from vaccine makers for a billion vials—double what it can produce this year.
Medical glass is strong but it’s still breakable. So manufacturers typically don’t make lots of excess inventory. They make what pharmaceutical companies order. And pharmaceutical companies typically don’t put in those orders until they know they’ve got a vaccine that works, plus distribution contracts in place to provide bulk doses to customers. But nothing about these times is typical. Governments and nonprofits are pumping money into ramping up vaccine manufacturing capacity in parallel with clinical testing so that individual companies don’t have to assume so much risk for paying for trials and production themselves. They’re also experimenting with nanotechnology borrowed from the semiconductor industry to make an end- run around traditional forms of glass.
In the US, this concerted effort has been dubbed Operation Warp Speed. The US government’s Biomedical Advanced Research and Development Authority, or Barda, has so far invested approximately $2.2 billion in Covid-19 vaccine makers, including AstraZeneca, Johnson & Johnson, and Moderna Therapeutics, according to the agency’s portfolio. In partnership with the National Institutes of Health, these companies are planning to start Phase 3 trials this summer. Their goal is to not have a long gap between the time they prove that a vaccine works and when they can start making it available to lots of people.
Avoiding a scenario in which an effective vaccine gets rationed to a chosen few also means overcoming the glass bottle shortage. The issue was on the US government’s radar early on in the pandemic, according to a 60-page whistleblower complaint filed by Rick Bright, the former director of Barda who was abruptly ousted from his post in April. In it, Bright claimed that between January and March he repeatedly and unsuccessfully urged administration officials to secure supplies needed for a mass immunization campaign, including needles, syringes, and glass vials.
----But closing the glass gap will take time. Supply chain experts say that booting up a new manufacturing site capable of making an additional 100 to 500 million vials per year will take at least six to eight months. That’s if glass vial makers can get their hands on the raw materials to feed those production lines. Medical glass has to be able to withstand huge temperature swings and keep chemically-finicky vaccine components stable. Making it requires melting down an especially angular species of sand found in beaches and riverbeds, with grains jagged enough that they lock together to form a sturdy glass solid. This type of sand is in such high demand—for use in everything from solar panels to concrete—that it’s sparked a violent boom in illegal sand mining in recent years.
More
https://www.wired.com/story/vaccine-makers-turn-to-microchip-tech-to-beat-glass-shortages/?utm_source=nl&utm_brand=wired&utm_mailing=WIR_Daily_062620_CoronavirusUpdate&utm_campaign=aud-dev&utm_medium=email&utm_term=WIR_Science&bxid=5cc9e09a3f92a477a0e84d6d&cndid=52110326&esrc=&source=EDT_WIR_NEWSLETTER_0_SCIENCE_ZZ
Remember those early days?
https://londonirvinereport.blogspot.com/2020/01/weekend-update-25012020-did-china.html
Finally, in the strange
Case of the ‘Dog That Didn’t Bark, the EU moves to close the stable doors, now
that 4 billion Euros or so, have bolted to Euro heaven. Do “oversight” and
“Wirecard” go together in a single English sentence?
Germany’s
regulator BaFin, is one of the few organisations on planet Earth, that makes
the Trump administration look like joined up adult government. I wonder if
they’d like to buy my New York bridge? Better yet, maybe I can sell it to
Softbank.
“Is
there any point to which you would wish to draw my attention?'
'To the curious incident of the dog in the day and night-time.'
'The dog did nothing in the day and night-time.'
'That was the curious incident,' remarked the European Commission.”
'To the curious incident of the dog in the day and night-time.'
'The dog did nothing in the day and night-time.'
'That was the curious incident,' remarked the European Commission.”
With apologies to Sir Silver Blaze.
German oversight of Wirecard to be examined by EU watchdog
June 26, 2020 / 7:19 AM
BRUSSELS (Reuters) - The European
Commission will ask its markets watchdog to investigate whether German financial
regulator BaFin failed in its supervision of payments company Wirecard.
Germany’s Wirecard (WDIG.DE) collapsed on
Thursday owing creditors almost $4 billion. Depending on that preliminary probe’s results, the Commission could launch an investigation into whether BaFin broke EU law on financial reporting, Valdis Dombrovskis, the Commission’s executive vice president, told the Financial Times newspaper in an interview.
“We will be asking ESMA (the European Securities and Markets Authority) to investigate whether there have been supervisory failures, and if so, to set out a possible course of action,” Dombrovskis told the newspaper.
“We need to clarify what went wrong,” he said, adding he would set a mid-July deadline for ESMA to reply.
ESMA confirmed that it had been asked to look at how BaFin enforced the EU’s transparency directive which covers financial reporting requirements for listed companies.
“We have received a request from the European Commission for a fact-finding analysis of events leading up to the collapse of Wirecard and supervisory responses to the events,” an ESMA spokesman said.
Dombrovskis could use the findings from ESMA’s analysis to order a formal “breach of union law” investigation, requiring BaFin to provide information to ESMA.
If a breach
is found, BaFin could be ordered by Brussels to make changes to its practices,
an embarrassing situation for a national regulator.
The EU’s
transparency rules aim to ensure that investors are given the proper flow of
information about a company.
SoftBank plans to sue EY over Wirecard scandal - Der Spiegel
June 26, 2020 / 10:47 AM
BERLIN
(Reuters) - SoftBank is planning to sue accounting firm EY over its role in the
scandal involving German payments company Wirecard, news magazine Der Spiegel
reported on Friday, citing sources close to the Japanese company.
Wirecard
collapsed on Thursday owing creditors almost $4 billion (£3.2 billion) after
disclosing a gaping hole in its books that its longtime auditor EY blamed on a
sophisticated global fraud.
SoftBank put
money into Wirecard last year.
SoftBank did
not respond to a request for immediate comment.
Wirecard Shows Life at Hedge Funds can be Agony
Short sellers deserve our appreciation, not scorn, for helping root out corporate frauds.By Chris Bryant
June 25, 2020, 10:25 AM GMT+1
You know the German finance world has been
shaken when even the president of BaFin, the country’s conservative stock
market regulator, showers praise on hedge funds. Apologizing for Germany’s
failure to prevent a massive accounting fraud at electronic-payments group
Wirecard AG, Felix Hufeld paid
belated tribute this week to those
“journalists, analysts or yes, let it be short sellers, who have been
digging out inconsistencies persistently and rigorously.”
---- Things rarely pan out smoothly when
doing this, but the tribulations of shorting Wirecard, which started filing for
insolvency on Thursday, belong in a category of their own. With an army of
credulous equity analysts and fund managers cheering the stock higher, and an
auditor happy to sign off the accounts, Wirecard was a mightily difficult beast
for the shorts to slay. Despite all kinds of warning signs,
investors “gave the company the benefit of the doubt over and over and
over again,” Jim Chanos, the founder of hedge fund Kynikos Associates —
who helped expose Enron’s accounting crimes — told Bloomberg Television.
---- When Wirecard admitted this week that
four-fifths of its net cash probably didn’t exist, Coatue Management, TCI Fund
Management, Greenvale Capital and Darsana Capital Partners were among the funds with
the largest short positions.
But, believe it or not, for many short
sellers it’s not only about the money. They perform an important though rarely
acknowledged function in rooting out corporate malfeasance through countless
hours of detective work, often at great expense. As with Wirecard, they’re
sometimes happy to share their concerns with regulators. “Short selling
can be a valuable indicator of fraud and misrepresentation,” Fahmi Quadir of
Safkhet Capital, a prominent Wirecard short, wrote in a letter to BaFin last
year after the regulator took the rare step of banning the shorting of the
German company’s stock.
More
Now comes, I suspect, the most
interesting part of this still growing European scandal. As forensic
accountants pour over the books, who moved what money for whom, and why? Any
alphabet soups involved do you think?
A. VIVALDI: Concerto for Violin, Organ, Strings and B.C. in F major RV 542, La Serenissima
The Monthly Coppock Indicators finished May.
DJIA: 25,383 +12 Down. NASDAQ: 9,490 +178
Up. SP500: 3,044 +83 Down.
The NASDAQ has rebounded to up. The S&P and the DJIA remain down. But
the game is now totally rigged by the Fed.
No comments:
Post a Comment