Special Update 06/03/2021 Boom And Bust. A 22 Year Drought?

 Baltic Dry Index. 1829 +50  Brent Crude 69.36

Spot Gold 1701

Covid-19 cases 02/04/20 World 1,000,000

Deaths 53,100

Covid-19 cases 06/03/21 World 116,674,535

Deaths 2,592,130

Capitalism is chronically unstable. Boom and bust has always marked capitalism in the United States. There were panics in 1785, 1791, 1819, 1857, 1869, 1873, 1907, 1929 and 1987.

John Kenneth Galbraith.

We open with the official spin on a volatile week in the casinos and the latest official employment figures from the US BLS, the Bureau of Lying Statistics.

All’s well buy more, there’s a big consumer spending boom coming, don’t you know!

Well there maybe a sugar rush boom from the next installment of free money, but what kind of a “boom” happens in the casinos after that, once food price inflation hits?

Wall Street Week Ahead: Investors weigh how far tech stocks can slide after volatile week

March 5, 2021  10:39 PM  By Lewis Krauskopf

NEW YORK (Reuters) - As U.S. technology shares stumble, investors are debating whether the decline is an opportunity to scoop up bargains or a sign of more pain to come for stocks that have led markets higher for years.

The Nasdaq Composite, an index heavily populated by tech and growth names, has slumped 8.3% since its Feb 12 closing record, over three times the decline for the S&P 500. Drops in popular growth stocks have been even steeper, with Tesla shares off 27% and Peloton down 32%.

Taking advantage of pullbacks in names like Apple and Amazon has been a winning strategy over the last decade as big technology and growth stocks drove the market’s gains. In a sign some bargain-hunters may have already swooped in after a bumpy week, the Nasdaq reversed a steep loss during Friday’s session to end up 1.6%.

Some market participants, however, worry the current decline could be longer-lasting than previous dips, as expectations of a powerful U.S. economic recovery fuel a shift away from the “stay-at-home” trade towards names primed to benefit from a nationwide reopening. A surge in bond yields is accelerating that rotation, with the benchmark 10-year Treasury yield hitting 1.625% on Friday, its highest level in over a year.

“As the economy reopens, other sectors are going to have fantastic earnings growth,” said Ed Clissold, chief U.S. strategist at Ned Davis Research. Earnings increases for the large tech and growth stocks are “not going to look nearly as good.”

Data on Friday showing U.S. employment rising more than expected in February offered further evidence of a rebounding economy.

Investors are awaiting the March 16-17 Federal Reserve meeting, after comments from Fed Chair Jerome Powell gave little indication that the central bank was concerned by the recent yield rally.

The rise in Treasury yields, which move inversely to bond prices, means bonds offer greater competition to equities and other comparatively risky investments. Higher yields can weigh even more on tech and growth stocks with lofty valuations, as they threaten to erode the value of their longer-term cash flows.

The S&P 500 technology sector has pulled back 7% since yields began their latest surge in mid-February, while the Russell 1000 growth index has fallen 7.7% against a 1.8% gain for its counterpart value index, which is replete with bank and other stocks expected to gain in a rebounding economy.

More

https://www.reuters.com/article/us-usa-stocks-weekahead/wall-street-week-ahead-investors-weigh-how-far-tech-stocks-can-slide-after-volatile-week-idUSKBN2AX2KK

U.S. labor market roars back; full recovery still years away

March 5, 2021  5:03 AM  By Lucia Mutikani

WASHINGTON (Reuters) - The U.S. economy created more jobs than expected in February as falling new COVID-19 infections and additional pandemic relief money from the government boosted hiring at restaurants and other services businesses, firmly putting the labor market recovery back on track.

Though job growth momentum is expected to build in the months ahead amid an acceleration in the pace of vaccinations and more fiscal stimulus, it will probably take several years for the labor market to heal from the deep scars inflicted by the coronavirus pandemic, which is now in its second year.

The Labor Department’s closely watched employment report on Friday showed at least 4.1 million Americans have been out of work for more than six months, accounting for 41.5% of the unemployed population in February. Another 3.5 million have permanently lost their jobs.

“There remains easy fuel for strong payroll gains in coming months as the reopening gains momentum,” said Robert Rosener, an economist at Morgan Stanley in New York. “But there is much further to go before conditions are consistent with maximum employment.”

Nonfarm payrolls surged by 379,000 jobs last month after rising 166,000 in January. Payrolls fell in December for the first time in eight months. The economy has recouped 12.7 million of the 22.2 million jobs lost in the pandemic recession.

Economists polled by Reuters had forecast February payrolls increasing by 182,000 jobs. Restaurants and bars hired 286,000 workers, accounting for 75% of the payrolls gain. There were also increases in employment at hotels and motels and at amusements, gambling and recreation establishments.

Altogether, leisure and hospitality employment jumped by 355,000 jobs, making up 94% of all jobs created last month.

More

https://www.reuters.com/article/us-usa-economy/u-s-labor-market-roars-back-full-recovery-still-years-away-idUSKBN2AX0CY

Yellen says higher Treasury yields signal recovery, not inflation

March 5, 2021  11:49 PM

WASHINGTON (Reuters) - U.S. Treasury Secretary Janet Yellen on Friday said higher long-term Treasury debt yields were a sign market participants were anticipating a stronger recovery, not of increased inflation concerns.

“I don’t see that the markets are expecting inflation to rise above the 2% inflation objective that the Fed has as an average inflation rate over the longer run,” Yellen said in a PBS Newshour interview.

She added the United States needs faster job growth than seen during February, but can reach full employment by next year with President Joe Biden’s $1.9 trillion stimulus plan in place.

https://www.reuters.com/article/us-usa-treasury-yellen/yellen-says-higher-treasury-yields-signal-recovery-not-inflation-idUSKBN2AX2MO

Up next, just what the stock casinos, the Fedsters, and official Washington District of Crooks doesn’t want to hear. Rosie doesn’t just rain on stock mania’s parade, he swamps it.

David Rosenberg: Why investors shouldn't believe the Roaring Twenties' hype

There is no global boom coming once we get past this crisis

Mar 04, 2021

Can you believe that we now have three magazine covers — The Economist, Bloomberg Businessweek and MoneyWeek — talking about the Roaring Twenties? I don’t think in my entire career that I have seen a fairy tale like this emerge as a given by Wall Street seers and the mainstream media.

Why anyone would compare today’s landscape to what happened after the Spanish flu (and the devastation from the First World War) is anyone’s guess, except for the reality that this is the story that most investors yearn to hear. But outside of the fact that these two periods shared a health crisis, there are no other comparisons to be made that are relevant. I highly recommend that nobody draw inferences from what happened in the 1920s, for several reasons, aside from the fact there is no global boom coming once we get past this crisis since a lot of time and effort will be spent cleaning up all these debt excesses.

For one, coming out of the First World War, which was ending as the Spanish flu was starting, the United States had come to account for half of global manufacturing production. That’s because the war savaged the entire European economy and gave U.S. industry the opportunity to grab global market share in exports and industrial production.

Second, the U.S. dealt with the Spanish flu totally differently. The economy never went into full lockdown. People just learned to live with the disease, which ultimately vanished on herd immunity. Back then, nobody turned to the government for help; it was all about community and charity. These were the days before welfare and unemployment insurance benefits and company bailouts. Public attitudes toward illness and death were far different and there was no internet or social media to try to influence people’s perceptions and stir up emotions.

The economy did collapse back then, but the government did not blow its brains out on fiscal largesse. We went into the 1920s with tremendous pent-up demand once the crisis ended, and balance sheets were in far better shape. Government debt-to-GDP was 10 per cent, not more than 100 per cent. And that better public-sector balance sheet allowed the federal government to cut taxes by the mid-1920s: top marginal rates for corporations were initially raised from 10 per cent in 1920 to 13.5 per cent by 1926 but cut to 11 per cent by the end of the decade; for individuals, the rate went from 58 per cent after the war to 24 per cent by 1929. Does anyone think taxes are going to be coming down in the U.S. any time soon?

We also have to remember that, in the 1920s, we had a rural economy become more urban. Half the population back then lived in rural areas, compared to one in five today. We saw first-hand in China during the past two decades how urbanizing the population is massively stimulative to the economy. That impetus to growth hardly exists today — if anything, people are leaving the inner city to the sparse areas of the country. And we had a 25-per-cent homeownership rate back then versus 64 per cent today — we were on the precipice then of people shifting from being renters to homeowners. That arithmetically is less possible today, but that shift in the Roaring Twenties was very much pro-growth.

Also, keep in mind that the share of the economy that was “non-essential” (that could be shut down, such as cyclical services) back then was less than 10 per cent versus more than 70 per cent today. In the 1920s, we made things: manufacturing commanded one-third of the workforce compared to less than 10 per cent now. The economy was so much more geared towards industries that were “essential” (that could not be closed down) and carried with them powerful multiplier impacts through the rest of the economy.

More

https://financialpost.com/investing/investing-pro/david-rosenberg-why-investors-shouldnt-believe-the-roaring-twenties-hype

Next, has the USA entered another of the 22 year droughts possibly tied to the 22 year double sunspot cycle lows? Not everyone agrees that there is a 22 year drought cycle, but there seem to be too many near line ups to me. I made a lot of money in soybeans and oats back in 1986-87. The good old days.

Historic drought deepens in the West as window for rain, snow closes

Becky Bolinger and Andrew Freedman, The Washington Post

Published 1:47 pm CST, Wednesday, March 3, 2021

The year 2020 is going to be remembered for a lot of things, many of them not so good. Included in the not-so-good list is the drought that has plagued the West, lasting into 2021. According to the U.S. Drought Monitor, which has published weekly maps on drought since 2000, the 2020 drought is the worst, in terms of its geographical scope, in over 20 years.

Almost 80% of the Western U.S. is in drought, with nearly 42% of the region in "extreme" or "exceptional" drought.

Much of the region saw developing drought in the summer, following a warm and dry spring. Since then, conditions have deteriorated, and the precipitation deficits continue to build. At its maximum extent in January 2021, 47% of the west was in extreme drought or worse.

More

https://www.lmtonline.com/news/article/Historic-drought-deepens-in-the-West-as-window-15997705.php

Evidence of a 22-year Rhythm of Drought in the Western United States Related to the Hale Solar Cycle since the 17th Century

https://link.springer.com/chapter/10.1007/978-94-009-9428-7_13

Droughts                           Sunspot cycle lows.

1910-12                              1912

1933-40                              1933

1954-56                              1956

1975-77                              1978

1985-87                              1987*

1998-99                              1996

2020-21?                            2020

*An eleven year cycle low.

11 or 22-year cycles?

It turns out that the sun's magnetic polarity flips every other sunspot cycle. Thus, it turns out that the solar cycle is approximately 22 years long.

http://www.grandunification.com/hypertext/Heliometeorology.html

The 'boom-bust' cycle is generated by monetary intervention in the market, specifically bank credit expansion to business.

Murray Rothbard.

Covid-19 Corner             

This section will continue until it becomes unneeded.  

Canada approves J&J's COVID-19 vaccine, moves up some Pfizer deliveries

March 5, 2021  3:08 PM  By David Ljunggren, Steve Scherer

OTTAWA (Reuters) - Canada’s drug regulator on Friday approved Johnson & Johnson’s COVID-19 vaccine, the fourth such shot to be given the green light, as Ottawa brought forward deliveries of millions of Pfizer doses.

“To people watching at home right now who are looking forward to getting their shot - your turn is coming,” Prime Minister Justin Trudeau said in a televised briefing.

Trudeau also said Pfizer Inc had agreed to accelerate deliveries, shipping a total of 3.5 million doses ahead of schedule by the end of May.

Deliveries to Canada have been slow - lagging many other developed nations - even though it has ordered more doses per capita than any other country.

With a population of almost 38 million, Canada now expects 36.5 million doses of previously approved vaccines to be delivered by the end of June.

The regulator authorized the Pfizer-BioNTech and Moderna Inc vaccines in December, and AstraZeneca’s in February. Each of these requires two shots.

The government of Ontario, Canada’s most populous province, said on Friday it would extend the maximum period between first and second doses to four months, speeding up access to a first shot.

In addition to seniors and healthcare workers, Ontario now plans to prioritize shots for those who are unable to work from home, including teachers, and it aims to administer at least one dose of a vaccine to all adults over 60 by early June, officials said.

The J&J vaccine is the first single-dose vaccine approved in Canada and it can be stored in normal fridges, while the Pfizer-BioNTech and Moderna shots must be kept in freezers.

---- Canada has pre-ordered 10 million doses of the J&J vaccine, with options to order up to 28 million more. In a statement, the Brunswick, New Jersey-based company said it planned to provide the 10 million doses by the end of September.

U.S. President Joe Biden said earlier this week that J&J was behind in manufacturing. The company was due to have shipped 37 million doses to the United States by the end of this month but looks set to fall well short of that.

So far, 4.2% of the Canadian population has received at least one dose of a coronavirus vaccine, according to volunteer-run tracking site COVID-19 Tracker Canada, compared with 16% in the United States.

https://www.reuters.com/article/us-health-coronavirus-canada-vaccine/canada-approves-jjs-covid-19-vaccine-moves-up-some-pfizer-deliveries-idUSKBN2AX1R5

B117 coronavirus variant might soon become dominant in Germany: RKI head

March 5, 2021  8:38 AM  By Reuters Staff

BERLIN (Reuters) - A more contagious variant of the coronavirus first detected in Britain might soon become the predominant strain in Germany, making it hard to stop its spread, the head of the Robert Koch Institute said on Friday.

Lothar Wieler said the B117 variant now made up more than 40% of coronavirus cases in Germany, compared to about 6% of cases four weeks ago.

“It is foreseeable that B117 will soon be the predominant variant in Germany and then it will be even more difficult to keep the virus in check because B117 is more contagious and even more dangerous in all age groups,” he said.

https://www.reuters.com/article/us-health-coronavirus-germany-variants/b117-coronavirus-variant-might-soon-become-dominant-in-germany-rki-head-idUSKBN2AX0RV

World no closer to answer on COVID origins despite WHO probe - expert

March 5, 2021  9:08 AM  By Reuters Staff

SHANGHAI (Reuters) - Despite a high-profile visit to China by a team of international experts in January, the world is no closer to knowing the origins of COVID-19, according to one of the authors of an open letter calling for a new investigation into the pandemic.

“At this point we are no further advanced than we were a year ago,” said Nikolai Petrovsky, an expert in vaccines at Flinders University in Adelaide, Australia, and one of 26 global experts who signed the open letter, published on Thursday.

In January, a team of scientists picked by the World Health Organization (WHO) visited hospitals and research institutes in Wuhan, the central Chinese city where the coronavirus was identified, in search of clues about the origins of COVID-19.

But the mission has come under fire, with critics accusing the WHO of relying too much on politically compromised Chinese fieldwork and data.

Team members also said China was reluctant to share vital data that could show COVID-19 was circulating months earlier than first recognised.

The open letter said the WHO mission “did not have the mandate, the independence, or the necessary accesses to carry out a full and unrestricted investigation” into all theories about the origins of COVID-19.

“All possibilities remain on the table and I have yet to see a single piece of independent scientific data that rules out any of them,” said Petrovsky.

At a press briefing to mark the end of the WHO visit to Wuhan, mission head Peter Ben Embarek appeared to rule out the possibility that the virus leaked from a laboratory in Wuhan.

But Petrovsky said it “doesn’t make any sense” to rule any possibility out, and said the aim of the open letter was “to get an acknowledgement globally that no one has yet identified the source of the virus and we need to keep searching.”

“We need an open mind and if we close down some avenues because they are considered too sensitive, that is not how science operates,” he said.

https://www.reuters.com/article/us-health-coronavirus-china-who/world-no-closer-to-answer-on-covid-origins-despite-who-probe-expert-idUSKBN2AX0U1

Next, some very useful vaccine links kindly sent along from a LIR reader in Canada. The links come from a most informative update from Stanford Hospital in California.

World Health Organization - Landscape of COVID-19 candidate vaccines. https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines

NY Times Coronavirus Vaccine Tracker. https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html

Stanford Website. https://racetoacure.stanford.edu/clinical-trials/132

FDA information. https://www.fda.gov/media/139638/download

Regulatory Focus COVID-19 vaccine tracker. https://www.raps.org/news-and-articles/news-articles/2020/3/covid-19-vaccine-tracker

Some more useful Covid links.

Johns Hopkins Coronavirus resource centre

https://coronavirus.jhu.edu/map.html

Rt Covid-19

https://rt.live/

The Spectator Covid-19 data tracker (UK)

https://data.spectator.co.uk/city/national

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 21^st century onwards.

'Egg carton' quantum dot array could lead to ultralow power devices

Date:  March 4, 2021

Source:  University of Michigan

Summary:  A new path toward sending and receiving information with single photons of light has been discovered by an international team of researchers.

Their experiment demonstrated the possibility of using an effect known as nonlinearity to modify and detect extremely weak light signals, taking advantage of distinct changes to a quantum system to advance next generation computing.

Today, as silicon-electronics-based information technology becomes increasingly throttled by heating and energy consumption, nonlinear optics is under intense investigation as a potential solution. The quantum egg carton captures and releases photons, supporting "excited" quantum states while it possesses the extra energy. As the energy in the system rises, it takes a bigger jump in energy to get to that next excited state -- that's the nonlinearity.

"Researchers have wondered whether detectable nonlinear effects can be sustained at extremely low power levels -- down to individual photons. This would bring us to the fundamental lower limit of power consumption in information processing," said Hui Deng, professor of physics and senior author of the paper in Nature.

"We demonstrated a new type of hybrid state to bring us to that regime, linking light and matter through an array of quantum dots," she added.

The physicists and engineers used a new kind of semiconductor to create quantum dots arranged like an egg carton. Quantum dots are essentially tiny structures that can isolate and confine individual quantum particles, such as electrons and other, stranger things. These dots are the pockets in the egg carton. In this case, they confine excitons, quasi-particles made up of an electron and a "hole." A hole appears when an electron in a semiconductor is kicked into a higher energy band, leaving a positive charge behind in its usual spot. If the hole shadows the electron in its parallel energy band, the two are considered as a single entity, an exciton.

In conventional devices -- with little to no nonlinearity -- the excitons roam freely and scarcely meet with each other. These materials can contain many identical excitons at the same time without researchers noticing any change to the material properties.

However, if the exciton is confined to a quantum dot, it becomes impossible to put in a second identical exciton in the same pocket. You'll need an exciton with a higher energy if you want to get another one in there, which means you'll need a higher energy photon to make it. This is known as quantum blockade, and it's the cause of the nonlinearity.

But typical quantum dots are only a few atoms across -- they aren't on a usable scale. As a solution, Deng's team created an array of quantum dots that contribute to the nonlinearity all at once.

More

https://www.sciencedaily.com/releases/2021/03/210304125324.htm?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+sciencedaily%2Fmatter_energy%2Fgraphene+%28Graphene+News+--+ScienceDaily%29

Finally, I've been searching for articles, updates on the flying skills of non flying pilots, etc. ahead of when we resume more normal flying conditions again. In addition to possibly rusty pilots, they will be flying possibly rusty planes out of mothballing.  Bad weather/icing skills might need refreshing, but I can find little in public on airline plans at handling safety after "normality" returns.  Just general “safety is our top priority” self-serving airline statements.

Are pilots still using simulators and being paid to keep up skill levels?

Supposedly we are just a few months off from all the vaccinations allowing for the return of more widespread travel, yet there seems to be little in the public domain about how this is going to happen safely.

Perhaps I'm a little early, but I do live under the southern flight path into Heathrow. Normally planes are heading west before turning north over my residential complex or the recreation park to my immediate west, before turning east to integrate with the northern flight path and heading in to Heathrow.

Below, how easily things can go wrong even in normal times. Approx. 13 minutes.

How a Fatal Delay Caused this Aircraft to Crash Just After Takeoff | Spanair 5022

https://www.youtube.com/watch?v=5sZngFtEkOQ

This weekend’s musical diversion.  In the third movement, Vivaldi invents the (admittedly very high class,) Bavarian oompah band, Italian style. Not many people know that, including Vivaldi.

Approx. 9 minutes. At 6.25 for those pressed for time

A. VIVALDI: Concerto for Violin, 2 Oboes, 2 Horns and Bassoon in F major RV 571, Les Ambassadeurs

https://www.youtube.com/watch?v=hsvF_a94o_o

This week’s chess lesson, the world champion humbled in a blitz.

Magnus Carlsen Crushed in 26 Seconds!!!

https://www.youtube.com/watch?v=fQ1P7JUadZE

Boom/bust cycles are not inevitable and would not occur were it not for the inflationary monetary policies that always precede recessions.

Peter D. Schiff.