Baltic Dry Index. 592 +46 Brent Crude 39.19
Spot Gold 1704
Coronavirus Cases 04/6/20
World 6,619,075
Deaths 390,850
Members
of the House of Lords are not salaried. They can opt to receive a £305 per day
attendance allowance, plus travel expenses and subsidised restaurant
facilities. Peers may also choose to receive a reduced attendance allowance of
£150 per day instead.
Why encourage them
at all?
Below, more on the
Great [Greatest] Disconnect. Other than blowing stock market bubbles for the 1
percent, fuelling wealth disparity, on the Great Nixonian Error of fiat money,
communist money, what benefit to the real economy does a central bank provide?
What could possibly go wrong?
Later today, the
latest on US new unemployment filings. A number below 2 million is expected for
the first time in about 3 months.
Asian shares hit two-month high as economic optimism spreads
June 4, 2020 /
1:03 AM
TOKYO/NEW YORK (Reuters) - Asian shares
rose to a two-month high on Thursday as government stimulus expectations
supported investor confidence in an economic recovery from the global
coronavirus pandemic.
Shares in Australia rose 0.66% after the country’s prime minister unveiled a fourth stimulus package to repair the economy.
Chinese shares .CSI300 were little changed due to lingering worries about diplomatic tension between the United States and China, while U.S. stock futures ESc1 fell 0.23%.
The euro held onto gains before a European Central Bank meeting later on Thursday, where policymakers are expected to increase debt purchases to support the bloc’s weakest economies.
Oil prices fell, reversing gains made the previous session, due to uncertainty about supply cuts by major producers.
Markets for risk assets have been on a tear, carrying some stock market indexes to within sight of levels before the coronavirus outbreak.
The Nasdaq Composite, .IXIC, the S&P 500 .SPX, and the Dow Jones Industrial Average .DJI are close to overtaking all-time closing highs registered in February.
“Liquidity provision by central banks – and expectations that more is coming – is helping to support the recent drive in risk markets,” ANZ Research senior economist Liz Kendall and strategist David Croy, said in a note early on Thursday.
Elsewhere in Asia, Japanese shares .N225 snapped a three-day winning streak and fell 0.06%.
Hong Kong's stock market .HSI gave up early gains and traded 0.12% lower due to concerns about Beijing's plans for a new national security law for the former British colony.
---- Markets await Friday’s U.S. Labor Department May jobs report, which is expected to show the unemployment rate soaring to a post-World War Two high of nearly 20% from 14.7% in April.
More
U.S. new weekly jobless claims seen falling below 2 million
June 4, 2020 / 5:05
AM
WASHINGTON (Reuters) - The number of
Americans filing for unemployment benefits likely dropped below 2 million last
week for the first time since mid-March, but remains astonishingly high as
companies adjust to an environment that has been significantly changed by
COVID-19.
Nevertheless, the weekly jobless claims report from the Labor Department
on Thursday would suggest the worst is over for the labor market, combined with
data on Wednesday that showed a smaller-than-expected drop in private payrolls
in May.
Surveys have also shown consumer confidence, manufacturing and services
industries stabilizing albeit at low levels in May, indicating the downturn
triggered by a near shutdown of the country in mid-March to control the spread
of COVID-19 was bottoming. Many businesses had reopened by mid-May.
Economists said the stubbornly high number of unemployment claims comes
from a second wave of layoffs as businesses navigate weak demand, as well as
some lingering backlogs at state unemployment offices overwhelmed by the flood
of applications early in the shutdown.
“Many of the new claims reflect current layoffs, as the corporate sector
more broadly begins to adjust to the altered outlook for the year ahead,” said
Lou Crandall, chief economist of Wrightson ICAP LLC in Jersey City, New Jersey.
“Even as the economy begins to reopen, new job losses continue to pile up.”
---- Boeing (BA.N) and pipeline operator Energy Transfer (ET.N) have announced layoffs, while some big retailers like JC Penney and high-end chain Neiman Marcus have filed for bankruptcy. States and local governments, whose budgets have been decimated by the COVID-19 fight, are also cutting jobs.
The government’s closely watched employment report for May, scheduled for release on Friday, is likely to show nonfarm payrolls falling by 8 million in May after a record 20.537 million plunge in April, according to a Reuters survey of economists. The unemployment rate is forecast rocketing to 19.8%, a post World War Two record, from 14.7% in April.
More
There’s a danger in the disconnect between complacent markets and weak fundamentals, analyst warns
Published: June 3, 2020 at 8:19
a.m. ET
---- Investors continued to flock to the hard-hit cyclical
sectors, including energy, industrials and materials.Mike Larson, senior analyst at Weiss Ratings, said he has never seen anything like it.
“It’s the biggest disconnect I can remember in the almost-quarter century I’ve been active in the markets,” he said. “I can’t recall a time when we’ve seen a large disconnect between, not just what’s going on in Main Street versus what’s going on in Wall Street, but what’s going on in the underlying fundamentals that would normally impact Wall Street.”
Larson said it’s unlikely a V-shaped recovery in the economy will take place. Even situations that previously caused markets to gyrate — like U.S.-China trade tensions — are now largely brushed aside. “We’re seeing a clear and an obvious breakdown in that relationship and yet the markets have hardly blinked.”
The markets also have ignored the protests over the police killing of George Floyd and ensuing violence that has gripped cities nationwide. “It’s hard as an American, much less as an analyst or investor, to look at what’s going on on Main Street in the last week, and believe that this isn’t going to have serious repercussions, or shouldn’t be having serious repercussions, in terms of risk appetite or the trajectory of any economic recovery and/or longer-term sort of impacts on society.”
The biggest dislocation he sees is in the high-yield, or junk bond JNK, +1.01%, segment of the market.
“The instant the Fed began discussing buying and backstopping high-yield
bonds, fallen angels and so on, through a couple of different means, we’ve seen
enormous inflows into ETFs. We’ve seen enormous interest in buying the riskiest
possible credits out there,” he said. Larson pointed out the Fed itself was
warning about corporate lending less than half a year ago, as has the Federal
Deposit Insurance Corp., the Bank for International Settlements and the
International Monetary Fund.
But what about the move lower in interest rates, and the positive impact
that has on valuations?
“I understand completely when you’re discounting future cash flows back
to the present, lower rates help, and that contributes to the
there-is-no-alternative trade, so I get the other side of the trade, and it’s
hard to lean too hard against it in the short term,” he said.
“But when you look at whether, ultimately, the credit quality and the
underlying fundamentals are going to support the asset values, you have to use
some extraordinarily generous economic assumptions, and assumptions about the
vigor of this rebound, to get from point A to point B. I think that’s the real
danger here — I think that there’s a lot of complacency on what liquidity can
accomplish when it comes to fixing solvency-related and asset valuation-related
excesses.”
He recommends having a defensive posture in portfolios. “That includes
things like carrying more cash than you did prior to the first quarter of 2018,
focusing on more yield-oriented defensive sectors than you would have from 2009
through 2018,” he said. On a three-to-five year basis, safer plays from gold to
longer-term Treasurys have outperformed, with the one exception being the
technology sector, he said.
More
Office Towers Are Still Going Up, but Who Will Fill Them?
Developers around the country are grappling with the fallout from the coronavirus pandemic as tenants cancel plans and workers fear returning to the office.
Before the pandemic shut down businesses, a robust economy
had powered a building boom, sending office towers skyward in urban areas
across the United States. The coronavirus outbreak, though, has scrambled plans
and sent jitters through the real estate industry.
Skyscrapers scheduled to open this year will remake
skylines in cities like Milwaukee, Nashville and Salt Lake City. Office vacancy
rates, following a decade-long trend, had shrunk to 9.7 percent at the end of
the third quarter of 2019, compared with 13 percent in the third quarter of
2010, according to Deloitte.
Developers were confident that the demand would remain
strong. But the pandemic darkened the picture.
“There is a pause occurring as companies more broadly
consider their real estate needs,” said Jim Berry, Deloitte’s U.S. real estate
sector leader.
The timing is unfortunate for Mark F. Irgens, whose
25-story BMO Tower in Milwaukee opened in mid-April at the peak of the
statewide lockdown in Wisconsin. A month later, a small fraction of typical
daytime foot traffic was passing by as most businesses adhered to the
governor’s stay-at-home directive, which expired last week. A restaurant that
was slated for the ground level was canceled, and three potential tenants have
delayed their plans.
Instead of showing off the building’s sparkling Italian
marble floors and panoramic vistas of Lake Michigan, Mr. Irgens is worrying
about who is going to pull out next and what type of corporate landscape he
might face when the pandemic finally ends.
But he is not putting on the brakes. The BMO had been
planned for five years, and he has leases to negotiate, investors to please,
tenants to woo and loans to pay off.
“Development projects are different than making widgets,”
he said. “You can’t stop; you can’t turn it off. You have to continue.”
More
Finally, an UK
upside to the lockdown downside plus some good weather.
UK electricity coal free for first month ever
Coronavirus slump and sunniest spring on record send green energy soaring
Tue 2 Jun 2020 17.25 BST Last modified on Tue 2 Jun
2020 19.15 BST
The UK’s electricity system recorded its “greenest” ever month in May after running without coal-fired electricity for a full calendar month.
The National Grid, the energy system operator, said the country’s sunniest spring on record helped generate enough solar power to reduce the carbon intensity of the grid to its lowest level ever recorded.
The bright and breezy weather helped wind and solar power make up about 28% of Britain’s electricity last month, narrowly behind gas-fired power generation, which made up 30% of the energy mix.
Meanwhile, the record low demand for electricity during the coronavirus lockdown has left little room for the UK’s last remaining coal power plants to play a role.
Since April the UK’s electricity system has run without coal-fired power for about 54 consecutive days, which has helped the carbon intensity of the electricity grid fall to the lowest average carbon intensity on record at 143 grams of CO2 per kilowatt-hour.
The lowest carbon intensity ever was recorded at 46g CO2/kWh on Sunday 24 May.
The record was possible, in part, because of the collapse of energy demand in the UK caused by the coronavirus lockdown and two bank holidays in a fortnight. But the chief reason was the unseasonably sunny spring weather, said Roisin Quinn, head of National Grid’s control centre.
This spring was the sunniest since records began in 1929, according to the Met Office, and the driest May for 124 years. The Met Office recorded more than 573 hours of sunshine between 1 March and 27 May, beating the previous record of 555.3 hours in 1948.
“Great Britain’s incredible coal-free run has continued throughout May, giving us the first full calendar month – 744 straight hours – of electricity generation without coal since the Industrial Revolution,” Quinn said.
The combination of record low demand for electricity and near-record highs for renewable energy output is a “unique challenge” for the National Grid’s control room, Quinn said, because engineers had to make sure that the rise of renewable energy did not overload the grid.
National Grid’s energy system operator arm expects to spend £500m more than usual this summer because it will need to pay generators to turn off their wind farms, solar projects or power plants.
Over the last bank holiday weekend alone the company reportedly paid £50m to electricity generators to turn down their supplies, on top of a £50m contract offered to the Sizewell B nuclear plant to run at half capacity this summer.
https://www.theguardian.com/business/2020/jun/02/uk-electricity-coal-free-for-first-month-ever
In central banking as in diplomacy, style, conservative
tailoring, and an easy association with the affluent count greatly and results
far much less.
John Kenneth Galbraith
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.
Two Doctors Explain Why COVID-19 Was Likely Lab Experiment
by Tyler Durden Tue, 06/02/2020 - 22:05
Authored
by Jonathan Latham, PhD and Allison Wilson, PhD via Independent Science
News (emphasis ours)The Case Is Building That COVID-19 Had a Lab Origin
If the public has learned a lesson
from the COVID-19 pandemic it is that science does not generate certainty. Do
homemade face masks work? What is the death rate of COVID-19? How accurate are
the tests? How many people have no symptoms? And so on. Practically the lone
undisputed assertion made so far is that all the nearest known genetic
relatives of its cause, the Sars-CoV-2 virus, are found in horseshoe bats (Zhou et al., 2020). Therefore, the likely viral reservoir
was a bat.
However, most of these
ancestor-like bat coronaviruses cannot infect humans (Ge et al.,
2013). In consequence, from its beginning, a key question hanging
over the pandemic has been: How did a bat RNA virus evolve into a human
pathogen that is both virulent and deadly?
The answer almost universally
seized upon is that there was an intermediate species. Some animal, perhaps a
snake, perhaps a palm civet, perhaps a pangolin, served as a temporary host.
This bridging animal would probably have had an ACE2 cellular receptor (the
molecule which allows cellular entry of the virus) intermediate in protein sequence
(or at least structure) between the bat and the human one (Wan et al., 2020).
----But one
other troubling possibility must be dispensed with. It follows from the fact
that the epicentre city, Wuhan (pop. 11 million), happens to be the global
epicentre of bat coronavirus research (e.g. Hu et al., 2017).
Prompted by this proximity,
various researchers
and news media, prominently the Washington Post, and with much more data Newsweek, have drawn up a prima
facie case that a laboratory origin is a strong possibility
(Zhan et al., 2020; Piplani et al.,
2020). That is, one of the two labs in Wuhan that has worked on
coronaviruses accidentally let a natural virus escape; or, the lab was
genetically engineering (or otherwise manipulating) a Sars-CoV-2-like virus
which then escaped.
Unfortunately, in the US at least,
the question of the pandemic’s origin has become a political football; either
an opportunity for Sinophobia or a partisan “blame game“.
More.
Much more.
What Experts Know About a Rare Inflammatory Syndrome Linked to COVID-19
The syndrome resembles a childhood illness called Kawasaki disease, but research is ongoing about both conditions
smithsonianmag.com June 2, 2020
4:10PM
Scientists are racing to better understand what causes the condition, called “multisystem inflammatory syndrome in children,” or MIS-C, Jennifer Couzin-Frankel reports for Science magazine. The children present fevers, stomach pain, rashes and heart problems—or, as 14-year-old Jack McMorrow told the New York Times’ Pam Belluck, a pain “almost like someone injected you with straight-up fire.”
A lot remains to be discovered about MIS-C. It seems rare among those exposed to the virus behind COVID-19 and has affected both children and young adults, per the Washington Post’s Ariana Eunjung Cha and Chelsea Janes. MIS-C has also been compared to Kawasaki disease, another pediatric inflammatory syndrome.
What is Kawasaki disease?
Like with MIS-C, children with Kawasaki disease (KD) have symptoms like rash and fever. Kids with KD can also show signs like swollen hands and feet, peeling skin, red eyes, “strawberry tongue,” and swollen lymph glands in the neck. KD is a relatively uncommon condition, affecting about 15 to 20 out of 100,000 kids under 5 years old according to the Kawasaki Disease Research Center at the University of California, San Diego, though it can also appear in older kids and teens.
The similarities in symptoms “raise some concern that [MIS-C] is somehow linked to KD, although that exact linkage still has to be figured out,” Adriana Tremoulet, UCSD pediatrician and KD specialist, tells the KD Foundation in a video about the pandemic.
The disease was first described in 1967 by Japanese pediatrician Tomisaku Kawasaki. The cause of KD is not yet known, but the current hypothesis is that kids have a genetic predisposition for the disease. When they encounter something in the environment, called a trigger, the disease appears, per a video by the KD Foundation. Researchers aren’t sure yet what might trigger classic KD, but they have a good idea of what happens in the body when KD takes hold.
More
Study panning anti-malaria drug Trump took against COVID faces new questions
June 2, 2020 /
9:07 PM
Hydroxychloroquine
- which has anti-inflammatory and antiviral properties - inhibited the coronavirus
in laboratory experiments but has not been proven effective in humans,
particularly in placebo-controlled, randomized clinical trials considered the
gold standard for data.
The debate has become highly politicized, and many scientists have voiced
concern.
Nearly 150 doctors signed an open letter to the Lancet last week calling
the article’s conclusions into question and asking to make public the peer
review comments that preceded publication.
“This is not some sideshow or minor issue,” said Dr. Walid Gellad, a
professor at University of Pittsburgh’s medical school, who was not a signatory
of the letter but has been critical of the study.
“We’re in an unprecedented pandemic. We’ve organized these enormous
clinical trials to figure out if something works. And this study stopped or
paused a couple of those trials, and changed the narrative around a drug that
no one knows if it works or not,” he said.
The observational study published in the Lancet on May 22 looked at
96,000 hospitalized COVID-19 patients, some treated with the decades-old
malaria drug that Trump said he took and has urged others to use.
Several clinical trials were put on hold after the study was published.
The study, using data provided by healthcare data analytics firm
Surgisphere, was not a traditional clinical trial that would have compared
hydroxychloroquine to a placebo or other medicine.
The Lancet’s editors said in a note that serious scientific questions
about the study were brought to their attention and an independent audit of the
data has already been commissioned.
---- Earlier on Tuesday, the New England Journal of Medicine (NEJM) said it was concerned about the quality of the data behind a different study it published in May that also used data from Surgisphere and had the same lead author.
Dr. Mandeep Mehra, the lead author and a professor of Medicine at
Harvard Medical School, defended the use of the Surgisphere dataset as an
intermediary step until clinical data is available.
“I eagerly await word from the independent audits, the results of which
will inform any further action,” Mehra said in a statement after the Lancet
note.
The World Health Organization (WHO) suspended hydroxychloroquine’s use
in a large trial on COVID-19 patients after the Lancet study. Following the WHO
trial suspension, the governments of France, Italy and Belgium halted the use
of hydroxychloroquine for COVID-19 patients.
Among the critics of the study to sign the letter last week were several
academics from the University of Oxford and Mahidol Oxford Tropical Medicine
Research Unit (MORU) in Bangkok, which had been conducting the global “COPCOV”
trial of hydroxychloroquine as a treatment of COVID-19.
The trial was paused last week, after the Lancet article.
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.
Exotic nanotubes move in less-mysterious ways
Date:
June 2, 2020
Source:
Rice University
Summary:
Researchers capture the first video of boron nitride nanotubes in motion to
prove their potential for materials and medical applications.
Boron nitride nanotubes are anything but boring, according to Rice
University scientists who have found a way to watch how they move in liquids.
The researchers' method to study the real-time dynamics of boron nitride
nanotubes (BNNTs) allowed them to confirm, for the first time, that Brownian
motion of BNNTs in solution matches predictions and that, like carbon nanotubes
of comparable sizes, they remain rigid.
Those properties and others -- BNNTs are nearly transparent to visible
light, resist oxidation, are stable semiconductors and are excellent conductors
of heat -- could make them useful as building blocks for composite materials or
in biomedical studies, among other applications. The study will help scientists
better understand particle behavior in the likes of liquid crystals, gels and
polymer networks.
Rice scientists Matteo Pasquali and Angel Martí and graduate student and
lead author Ashleigh Smith McWilliams isolated single BNNTs by combining them
with a fluorescent rhodamine surfactant.
This allowed the researchers to show their Brownian motion -- the random
way particles move in a fluid, like dust in air -- is the same as for carbon
nanotubes, and thus they will behave in a similar way in fluid flows. That
means BNNTs can be used in liquid-phase processing for the large-scale
production of films, fibers and composites.
"BNNTs are typically invisible in fluorescence microscopy,"
Martí said. "However, when they are covered by fluorescent surfactants,
they can be easily seen as small moving rods. BNNTs are a million times thinner
than a hair. Understanding how these nanostructures move and diffuse in
solution at a fundamental level is of great importance for manufacturing
materials with specific and desired properties."
The new data comes from experiments carried out at Rice and reported in
the Journal of Physical Chemistry B.
Understanding how shear helps nanotubes align has already paid off in the
Pasquali lab's development of conductive carbon nanotube fibers, films and
coatings, already making waves in materials and medical research.
More
If all else fails, immortality can always be assured by
spectacular error.
John Kenneth
Galbraith.
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 higher.
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