Baltic Dry Index. 1594 -84 Brent Crude 44.14
Spot Gold 1857
Coronavirus Cases 22/7/20
World 15,044,435
Deaths 618,480
You don't know how to lie. If
you can't lie, you'll never go anywhere."
President Richard Nixon, on
tape giving advice to a political associate.
With the global coronavirus
pandemic virtually out of control, (see the Covid-19 section,) and trillions of
newly created dollars needed to “rescue” the US economy, gold is surging
towards the 2011 all-time high of 1920. In many other currencies, gold is
already making all-time highs.
I suspect that we are
only in the early stages of a new gold bull market. Whoever wins the US
presidential election, is going to continue the present fiat money creation
policies, in an increasingly failing bid to restore the 2019 good old days
economy.
Over the course of
the next presidency, my guess is that we will see gold get to 3,500 dollars per
troy ounce. In other currencies, it’s anyone’s guess. It all depends on how
many newly created out of thin air, Pounds, Euro, Yen, Yuan, get issued.
No amount of newly
issued fiat currency is going to bring back the “good old days boom-time,” until
we bring the global coronavirus pandemic under control. Increasingly I suspect,
we can’t, in many places bring the Covid-19 crisis under control.
Asian markets mixed after lackluster session on Wall Street
Published: July 21, 2020 at 11:32 p.m. ET
Shares were mixed in Asia on Wednesday, with Australia’s benchmark down more than 1% on reports of a sharp rise in coronavirus cases in the Melbourne area.
Tokyo’s Nikkei 225 index NIK, -0.55% lost 0.2% while the Hang Seng HSI, +0.07% in Hong Kong edged 0.2% higher. The Shanghai Composite index SHCOMP, 1.20% gained 1.4% and the Shenzhen Composite 399106, +1.49% advanced 0.7%. South Korea’s Kospi 180721, -0.15% rose 0.2%. The S&P/ASX 200 XJO, -1.58% in Australia skidded 1%. Shares rose in Taiwan Y9999, 0.57% , Bangkok SET, -0.28% and Jakarta JAKIDX, +0.27% but fell in Singapore STI, -0.84% .
Adding to unease was a report by the U.S. Centers for Disease Control that the number of coronavirus cases in some states is much higher than has been reported. Experts have said all along that the toll from the COVID-19 pandemic is much higher than the confirmed cases would indicate, due to issues with testing and data collection.
Australian media reports said authorities would be announcing a sharp
rise in coronavirus cases in the state of Victoria, home to the country’s
second-largest city, Melbourne.
Melbourne was put under lockdown as infections spread, with numbers of
new cases rising into the hundreds daily.
Morehttps://www.marketwatch.com/story/asian-markets-mixed-after-lackluster-session-on-wall-street-2020-07-21?mod=mw_latestnews
At Least $1 Trillion Is Needed to Avert U.S. Disaster, Economists Say
A too-small stimulus could jeopardize the nascent recovery.
July 21, 2020, 4:00 AM EDT
A crisis can stretch for weeks, months, even years, but its arc can be shaped by a few crucial moments in which political leaders choose a course of action. For a U.S. economy still reeling from the devastation of the novel coronavirus, one such moment is approaching.
Economists are warning the nation is in danger of careening off a fiscal cliff unless Congress approves a rescue package to succeed the $2 trillion Cares Act. Key elements of that are set to expire this month, just as a resurgence of the virus in states that rushed to reopen their economies is making the nascent recovery look decidedly vulnerable. The Trump administration is calling on Republicans and Democrats to get legislation passed before the start of the summer recess in August.
“If Congress fumbles this, it’ll be a pretty big setback for the economy,” says Michael Feroli, chief U.S. economist for JPMorgan Chase & Co., the country’s largest bank.
The two parties are approaching this crossroads from wildly different starting positions. House Speaker Nancy Pelosi insists Congress should appropriate even more than the $3.5 trillion Heroes Act passed by the Democrat-controlled House in May. “This is about survival of our economy,” she told reporters on July 16. “The clock is running out on it.”
Republican Senate
Majority Leader Mitch McConnell has dismissed the bill as a bloated liberal
wish list. Many of his colleagues have raised concerns about adding more to a
federal debt that now exceeds 80% of the country’s gross domestic product. That
said, McConnell told the White House he’s open to as much as $1 trillion. “New
spikes in large and economically central states show that we are nowhere near
out of the woods,” he said on July 20, adding that he hopes to unveil a plan
this week. “It would neither be another multitrillion-dollar bridge loan to
make up for a totally shut-down economy nor an ordinary stimulus for a nation
ready to get back to normal.”
Economists are not
nearly as divided. A growing body of research shows the $3 trillion approved by
Congress since March played an enormous role in preventing the economy from
sinking into a depression. Most important, the Cares Act sent direct payments
of $1,200 to low- and middle-income households, plus more to those with
children, and topped up unemployment benefits by $600 a week. Income for some
families increased, and they spent most of the money, providing the overall
economy with desperately needed relief.
More
Dollar wobbles as traders eye U.S. fiscal stimulus debate
July 22, 2020 /
2:09 AM
TOKYO (Reuters) -
The dollar nursed losses against most currencies in Asian trade on Wednesday,
undermined by concern that Republicans and Democrats are struggling to reach
consensus on the next round of U.S. economic stimulus measures.
The euro traded near its strongest level in more than a year after
European leaders agreed a stimulus plan to fuel recovery from the economic drag
caused by the COVID-19 pandemic.
Risk appetite has improved greatly this week as progress in developing
vaccines for the novel coronavirus reduced the U.S. dollar’s safe-harbour
appeal.
Investors also expect a massive amount of fiscal spending to support
growth in major economies but could easily be disappointed if any stimulus
falls short of expectations.
“You could say the dollar is weaker due to a risk-on move,” said Shane
Oliver, head of investment strategy and chief economist at AMP Capital
Investors in Sydney.
“Ironically, the dollar’s weakness has been exacerbated by concerns that the United States is not doing as much as the Europeans have on stimulus.”
Against the British pound GBP=D3, the dollar traded at $1.2727, close to a six-week low.
The dollar fell to 0.9323 Swiss franc CHF= to reach the lowest since March.
The euro EUR=D3 briefly touched the highest since Jan. 10 before settling at $1.1539.
Against the pound, the euro EURGBP= was little changed at 90.67 pence.
The dollar was steady at 106.79 yen JPY=.
Republicans and Democrats remained far apart on Tuesday on how much to
spend on the next round of coronavirus relief as they discussed proposals to
extend unemployment insurance for Americans thrown out of work and provide more
money for schools.
House Speaker Nancy Pelosi said the $1 trillion package the Republicans
are considering is not sufficient. The Democratic-run House of Representatives
passed a $3 trillion relief bill two months ago that the Republican-majority
Senate has ignored.
More
Next, fun and illegal
games in Uncle Scam’s stock casinos. Who on “Wall Street” knew frontrunning the
client orders is the equivalent to stealing cash from them? I mean, when did
they pass such a law or make such a rule? Why?
Happily, no one on
Wall Street went to jail, just to the bank. Wall Street's bent, who’d have
thought it?
Citadel Fined For Frontrunning Of Client Orders After Threatening To Sue Zerohedge
by Tyler Durden Mon, 07/20/2020 - 22:17
One month ago, shortly after our return to twitter from "permanent" banishment, when so much public attention had suddenly shifted to the retail daytrading platform Robinhood, we explained just how it is that Robinhood was so efficient at moving markets, and it had nothing to do with Robinhood or its small but dedicated army of 10-year-old daytrading fanatics. Instead, it had everything to do with various High Frequency Trading platforms buying up the retail orderflow that Robinhood was so generously packaging and reselling to the highest bidder, effectively giving HFTs a risk-free way of making pennies from every trade, which would then propagate like wildfire across various trading venues, massively accentuating every small move thanks to the momentum-ignition capabilities of HFT algos.
----Unfortunately,
both of those tweets no longer exist for the simple reason that just days after
they were published, we received an angry letter from Citadel's lawyers at
Clare Locke threatening to sue us into oblivion if we did not immediately
retract and delete said tweets.
Some key phrases of note from the above text:
- "'Frontrunning' is an industry term of art that refers to an illegal form of trading."
- "Citadel Securites does not engage in such conduct [i.e., frontrunning] and there was no factual basis whatsoever for ZeroHedge to publish such an incendiary, false, and reckless allegation to its 742,000 Twitter followers" [it's 771,000 now].
- "ZeroHedge's statement obviously disparages the lawfulness and integrity of Citadel Securities' business pratices."
- "Quite obviously, this most recent iteration of this same harmful allegation was not made in jest."
- "We demand that ZeroHedge immediately retract this tweet by deleting it from ZeroHedge's Twitter page... A refusal to promptly take down these remedial steps will be seen as further evidence of actual malice and will only increase the already substantial legal risk faced by you and ZeroHedge."
As the letter correctly notes, this was not the first time Citadel
Securities (which is majority-owned by Ken Griffin, the billionaire investor,
and is the sister firm to Citadel, the hedge fund he runs) threatened legal
action against Zero Hedge for accusing the trading giant of frontrunning
orders. On November 22, just hours if not minutes after a tweet of a similar
nature, we got a similar legal threat from the same law firm. Again, some of
the highlights from that particular letter:
Needless to say, instead of engaging in a legal battle with the world's richest and most powerful trader and his army of lawyers, we decided to simply comply with their demand. That said, dear gentlemen from ClareLocke - we do know very well that frontrunning is an unethical and illegal trading practice. But we wonder: does your client know that?
The reason why we ask is very simple. According to a Letter of Acceptance (No. 2014041859401), Waiver and Consent published by financial regulator FINRA, none other than Citadel Securities was censured and fined for engaging in - drumroll - "trading ahead of customer orders."
----Now we admit that our financial jargon is a bit rusty these days, but "trading ahead of customer orders" sounds awfully similar to another far more popular "term of art", one which we know very well: frontrunning!
Jargon aside, some of the other highlighted words we are very familiar
with, such as "hundreds of thousands"... and "559
instances" in which Citadel traded ahead of customer orders.
Now, we may be getting a little ahead of ourselves here, but it was
Citadel's own lawyers that informed us on more than one occasion that:
"frontrunning" is an unethical and illegal trading
practice."
So, what are we to make of this? Could it be that Citadel was engaging
in at least 559 instance of what its lawyer called "unethical and
illegal trading practice." Surely not: after all the lawyers would
surely know very well how ridiculous and laughable their letter and threats
would look if it ever emerged that Citadel was indeed frontrunning its
customers.
But then we read that Finra censured and fined Citadel
$700,000 - or as twitter user @KennethDread puts it 0.70% Basquiats...
----Of course, since the action was launched by Finra and not the SEC - probably for a reason - Citadel was allowed to put the whole sordid affair behind it without admitting or denying the claims. Just one glitch: the company was required to make whole any customers affected, not something a market maker does if they legitimately "deny" anything bad actually happened.
The good news is that neither Citadel nor its lawyers can go after us
again for merely reporting what Finra already found because on page 11 of the
AWC we read the following:
The Firm may not take any action or make or permit to be made any public
statement, including in regulatory filings or otherwise, denying, directly
or indirectly, any finding in this AWC or create the impression that the AWC
is without factual basis.
Which means that going forward, allegations about Citadel frontran its
clients - on at least 559 instances no less - are fair game. That said, Citadel
did make a statement to the FT:
"We have addressed all of Finra’s concerns and take very seriously
our obligations to comply fully with its rules. The issue relates to a limited
number of manually handled orders, most of which occurred in 2012-2014."
Which is a succinct way of summarizing precisely what Finra said. Our
own request for comments was not returned by the publication time.
But wait, there's more!
More
Finally, Softbank
again. Curioser and curioser.
SoftBank pulls $700M from Credit Suisse fund
Published: July
20, 2020 at 10:52 p.m. ET
SoftBank Group Corp. has pulled about $700 million from a Credit Suisse
Group AG fund after executives at the Swiss bank grew concerned that the Japanese
conglomerate held conflicting roles in the fund that weren't fully disclosed to
other investors, according to people familiar with the matter.
The Credit Suisse probe began last month after bank executives became
concerned about potential conflicts of interest in the fund, as well as three
sister funds, which make money by providing short-term cash to companies.
The funds hold assets sourced from Greensill Capital, a U.K.-based
financing firm. SoftBank owns a major stake in Greensill. The Credit Suisse
fund in which SoftBank invested also provided financing to several other
companies that SoftBank has invested in.
In essence, SoftBank was acting as both lender and borrower in a complex
circle of transactions. Credit Suisse found that aspects of this arrangement
weren't fully disclosed to its investors, according to the people familiar with
the matter.
The four funds that Credit Suisse reviewed manage about $7 billion and
are sold to pension funds, corporate treasurers and wealthy families as safe,
short-term investments.
Greensill's business, known as supply-chain finance, involves paying
companies' suppliers faster than normal, but at a discount to the invoiced
amount. The corporate clients, known as obligors, agree to pay back Greensill
later. Those promises are packed up into securities and sold to the Credit
Suisse funds.
The supply-chain
finance industry was rocked in recent months as global trade has slowed and
corporate defaults and bankruptcies have multiplied. Regulators, ratings firms
and accountants are also concerned about the financing method, which critics
say can be used to disguise the overall level of debt on companies' balance
sheets.
More
Swiss banker: “Why is supply-chain finance
like a laundry?”
“Have you guessed the riddle yet?” The Swiss
banker said, turning to Germany’s BaFin.
“No I give it up,” BaFin replied: “What’s the
answer?”
“I haven’t the slightest idea,” said the Swiss
banker.
With
apologies to Alice,
Covid-19 Corner
This
section will continue until it becomes unneeded.
Undiagnosed virus infections could be 27 times higher in South Korea's Daegu city: study
July 22, 2020 /
4:58 AM
SEOUL (Reuters) - A small South Korean survey of people with no history
of COVID-19, but living in a city with the most cases, showed that one in nine
had antibodies to the novel coronavirus, indicating the virus may have spread
more widely than thought.
The study said based on the survey, roughly 185,290 people could have
contracted the virus in Daegu city, which is the country’s fourth-largest city
with a population of 2.5 million.
“It was estimated that the number of undiagnosed missing cases may be
27-fold higher than the number of confirmed cases based on PCR testing in
Daegu,” the study said.
Daegu city recorded 6,886 coronavirus cases alone as of June 6, said the
study published in the Journal of Korean Medical Science (JKMS) on July 16, but
announced by the journal on Tuesday night according to local media.
The study done between May 25 and June 5 followed 198 people in Daegu
city who had never been tested for COVID-19, and found 15 of them, or 7.6%, had
antibodies.
That is a much higher infection rate than that found in a survey of more
than 3,000 people in South Korea that excluded Daegu, in which only one person
showed neutralising antibodies to the novel coronavirus earlier this month.
Antibody, or serology, tests show whether a person has been exposed to
the virus. Similar studies have shown infection rates ranging from 0.1% in
Tokyo to 17% in London and 5.2% in Spain nationwide.
South Korea, an early success story in
containing the virus among its 51 million population after a severe outbreak in
Daegu in March, has reported 13,879 cases and 297 deaths. The country is now
battling small but persistent clusters of infections with 63 new cases reported
on Tuesday.
California reports nearly 12,000 COVID cases, biggest increase since pandemic started
July 21, 2020 /
3:31 AM
(Reuters) - California reported a record
increase of more than 11,800 new cases of COVID-19 on Monday, according to a
Reuters tally of county data, as the Trump administration pushes for schools to
reopen to help businesses return to normal.
If California were a country, it would be rank fifth in the world for
total cases at nearly 400,000, behind the United States, Brazil, India and
Russia.
This is the first time California has reported over 10,000 new
infections since setting a record with 10,861 cases on July 14.
Florida has reported over 10,000 new cases a day for the last six days
in a row and Texas has reported over 10,000 cases for five out of the last
seven days.
California’s daily increases have already surpassed the highest daily
tally reported by any European country during the height of the pandemic there.
The biggest outbreak in the state is in Los Angeles County, which has
nearly 160,000 total cases on Monday. Hospitals are filling with COVID patients
and Los Angeles reported record numbers of currently hospitalized coronavirus
patients for the second day in a row on Monday.
More
Coronavirus latest: cases spike in India’s factories as Australia suffers worst day yet for infections
·
Indian manufacturers are implementing
temperature checks and mandatory mask-wearing but labour advocates say the
measures do not go far enough
·
Elsewhere, tougher border restrictions were
imposed in Australia to curb the spread of the virus as it suffered its worst
day yet for new infections
Reopened factories across India
are experiencing spikes in coronavirus infections, according to the country’s
trade unions, who have accused companies of putting workers at risk by skimping
on health and safety as they rush to get business back on track.
The claims come as tougher border restrictions were imposed in Australia to curb the spread
of the virus as the country suffered its worst day yet for new infections, and
hi-tech “smart helmets” were rolled out in Mumbai to speed up screenings and
identify suspected cases in India’s worst-hit city.
Bajirao Thengde, who works at a motorbike factory in western India’s
Maharashtra state, said that when he voiced his fears about going to work after
dozens of colleagues fell sick, his boss said he should “learn to live with the
virus”.
It was only after several workers died and district authorities ordered
a seven-day lockdown that the plant finally closed on July 10, weeks after the
first cases appeared.
----
India has issued health and safety guidelines for
manufacturing facilities as part of a gradual exit from a weeks-long lockdown
that has left millions jobless and short of food. According to most estimates,
the Indian economy will register a record contraction of over 4.5 per cent in
the current financial year that started on April 1 owing to the pandemic.
With so much bad
Sars-cov-2 news around, we'll end on some positive news of a possible magic
bullet. Just as infection with cowpox gave immunity to smallpox, news out of
China suggests that infection with an animal betacoronavirus seems to trigger
antigens that take out Covid-19.
Many dog owners
might have been infected without knowing. It only causes mild illness in animals
and no illness in humans. But far more testing needs to be done.
Some useful Covid links.
Johns Hopkins Coronavirus
resource centre
Rt Covid-19
Covid19info.live
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.
Bosch creates single unit to oversee software, systems development
July 21, 2020 /
12:10 PM
(Reuters) - Germany’s Robert Bosch GmbH, the world’s largest auto parts
supplier, said on Tuesday it is consolidating its software and electronics
expertise in a single division, in order to get new digitalized vehicle
functions on the road significantly faster.
Bosch is the latest large automotive company to shift its emphasis from
hardware to software as vehicles continue their transformation into mobile
devices that combine transportation with digital services from e-commerce to
infotainment — a trend driven heavily by electric car maker Tesla Inc.
Starting in early 2021, Bosch will draw together parts of its automotive
electronics, chassis and powertrain divisions and combine them with its car
multimedia division, with 17,000 employees in more than 20 countries.
“Supplying software from a single source is our response to the enormous
challenge of making cars ever more digitalized,” said Bosch board member Harald
Kroeger, a former Daimler AG executive and onetime Tesla board member who is
spearheading the new division.
Bosch is joining a move by automakers such as Tesla, Volkswagen AG (VOWG_p.DE) and General Motors Co and large suppliers such as Aptiv PLC to consolidate many of the vehicle’s functions into a single digital “architecture.” Similar to what Tesla has been doing for more than five year, the consolidated system will oversee computers, control units and sensors, and can be more easily and quickly revised through wireless over-the-air updates.
Bosch said centralized computers and software in the vehicle will link such functions as automated driving, advanced driver assistance, digital dashboards and Internet connectivity.
Bosch supplies key components to many of the world’s automakers, from Tesla to Daimler.
“I am not crazy; my reality is just different from yours.”
President Trump, with apologies to Lewis Carroll and Alice.
The Monthly Coppock Indicators finished June
DJIA: 25,813 -2 Down. NASDAQ: 10,059 +196 Up.
SP500: 3,100 +75 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. The Dow has now gone negative.
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