WASHINGTON (AP) — Forty years ago, a newly
elected American president declared government the source of many of the nation’s
problems, reshaping the parameters of U.S. politics for decades to come. On
Wednesday night, President Joe Biden unabashedly embraced government as the
solution.
In an address to a joint session of Congress and
the nation, Biden offered up government as both an organizing principle for the
nation’s democracy and an engine for economic growth and social well-being. He
issued a pointed rejoinder to the fiscal philosophy espoused by Ronald Reagan
in the 1980s, arguing that “trickle-down economics has never worked,” and
offered in its place an eye-popping $4 trillion in new government spending to
bolster infrastructure and remake a social safety net that buckled for many
Americans during the COVID-19 pandemic.
“We have to prove democracy still works, that our
government still works and can deliver for our people,” Biden declared.
Jeanne Whalen April
29, 20021
The damage of the global semiconductor shortage continues
to widen beyond automakers, with Apple, Samsung and Caterpillar warning this
week of current or potential impacts.
Apple on Wednesday said a lack of chips is hampering
production of iPads and Mac computers, which could cost the company about $3
billion to $4 billion in sales in the quarter ending in June.
Caterpillar, the tractor and heavy-machinery manufacturer, said Thursday that it has not yet felt any impact but could
later this year. And Samsung said its sales of display panels to smartphone
manufacturers have suffered because those manufacturers cannot get enough chips
to make handsets.
The companies released the details in quarterly earnings
reports that were otherwise strong, fueled by soaring demand as the global
economy begins to emerge from the coronavirus pandemic. The scarcity of chips
could cloud some of that recovery if it continues to hamper manufacturing in
the coming months.
“It’s already an impediment. For people who want to
purchase cars or computers, they are being told some of the products may not be
available,” Bernard Baumohl, an economist at the
Economic Outlook Group , said in an interview.
Trouble in the auto sector continued to deepen this week as
well, with
Ford saying it expects to produce 1.1 million fewer vehicles this year
because it cannot get enough chips. The company expects to lose about half of
its second-quarter production, up from about 17 percent in the first quarter.
Semiconductor availability “will get worse before it gets
better,” Ford said in a statement as it reported earnings. “Currently, the
company believes that the issue will bottom out during the second quarter, with
improvement through the remainder of the year.”
Also this week, Volkswagen
said it will suspend production of Jettas and Tiguan SUVs in Mexico next
month because of the chip shortage. General Motors, Ford and others also
have been idling factories .
The roots of the shortage lie in the early weeks of the
pandemic, when auto plants worldwide abruptly shut down amid stay-at-home orders.
Auto sales plummeted, and car companies and their parts suppliers drastically
cut their semiconductor purchases.
At the same time, demand for computers and other
electronics soared as many consumers began working from home. That caused
electronics manufacturers to step up their chip purchases. When auto demand
bounced back, car companies found semiconductor factories too busy with other
orders to fill their needs.
Making matters worse, semiconductor factories in Texas were
forced offline during this year’s cold snap and have taken a while to restore
production. Fires at two different Japanese factories also have lowered chip
output.
Ford this week said the more recent fire, at a Renasas
Electronics factory in March , particularly hurt auto-chip supply. Ford said
it expects shipments from that plant to resume by the end of June.
Chip factories cost billions of dollars to build or expand,
so there is no simple way to quickly boost production. That has left all chip
buyers competing fiercely for scarce supplies.
More
https://www.msn.com/en-us/money/companies/chip-shortage-spreads-hurting-sales-at-apple-and-samsung/ar-BB1gbYFC?ocid=uxbndlbing
Finally, more on the
Greensill scandal involving former UK Prime Minister “Dodgy” Dave Cameron. I
suppose we’re lucky in the UK Dodgy Dave didn’t appoint Lex Greensill to run
the Bank of England.
Greensill collapse could cost UK
taxpayer up to £5bn, MPs told One expert tells Treasury committee firm’s business model
‘was as close to fraud as you could imagine’
Wed 28 Apr 2021 19.40 BST
The failure of Greensill Capital
will cost UK taxpayers up to £5bn, a parliamentary inquiry has heard, as one
expert said the lender’s business model was “as close to fraud as you could
imagine”.
The former City minister Paul Myners said the government
could end up footing the bill of unpaid state-backed loans and social support
for thousands of steelworkers whose jobs are currently at risk at one of
Greensill’s largest borrowers, Liberty Steel, owned by metals magnate Sanjeev
Gupta.
The estimate was shared during the Treasury select
committee’s first fact-gathering session as part of its inquiry into
Greensill’s collapse. It is one of four parliamentary inquiries into the firm’s
failure, which has sparked concerns about undeclared government lobbying by
former officials – following
David Cameron’s attempts to influence ministers on Greensill’s behalf – and
the lack of regulation of supply chain finance.
Lord Myners, who was giving evidence
alongside university professors and former Treasury secretary Nicholas
Macpherson, said he believed the taxpayer would be left to cover as much as
£1bn in unpaid loans, including those lent to Gupta’s businesses.
Myners said the ultimate cost could
be “in the region of £3bn to £5bn” once the wider impact was taken into
account. “It’s actually going to cost a lot more if you count the
externalities, the indirect costs: the cost of having to rescue the steel
industry from its ‘saviour’ Mr Gupta; the costs of dealing with social
implications of the closure of plants, if necessary; or the net present value of
upfront subsidies to keep the steel industry in its current form operating,” he
said.
---- The company’s relationship with Greensill has also
come under scrutiny over claims that Greensill was offering loans to GFG
Alliance and other borrowers based on speculative invoices that named customers
it had never done business with. Those loans, which were backed by nonexistent
trades, were then packaged up and sold to investors at Credit Suisse as
so-called securitised assets.
“The securitisation of it just hid the
nature of what was being securitised,” said Dr Richard Bruce, a supply chain
expert from the University of Sheffield Management School. “That is, I think,
as close to fraud as you can imagine really … because you’re trying to deceive
me into believing that it’s a security when there isn’t [one].”
---- Greensill is facing criminal complaints by Germany’s
financial regulator, BaFin, which says Greensill’s local bank could not provide
evidence of receivables on its balance sheet. Prosecutors raided the homes of
five Greensill bankers, who are suspected of possible wrongdoing, last week.
Lord Macpherson took aim at
persistent lobbying efforts by Greensill Capital, founded by Australian
financier Lex Greensill, which involved dispatching Cameron, its special adviser,
to contact former colleagues.
Cameron controversially contacted
the chancellor, Rishi Sunak, on his private mobile at the start of the pandemic
last year, and pushed officials across the Treasury and Bank of England to give
Greensill access to the government’s largest emergency Covid loan scheme, which
would have involved bending the rules.
More
https://www.theguardian.com/business/2021/apr/28/greensill-collapse-could-cost-uk-taxpayer-up-to-5bn-mps-told
“Unfortunately, the hardest thing for people to understand is
that maybe if you leave things alone, it'll be better than stepping in and
trying to do something.”
Milton Friedman
Global Inflation Watch. Given our Magic Money Tree central banksters and our
spendthrift politicians, inflation now
needs an entire section of its own.
“Nothing is so permanent
as a temporary government program.”
Milton Friedman
Next up for Fed's Powell and the
taper test: 'string' theory April 29, 2021 11:05 AM
By Ann Saphir
(Reuters) - The list of what will get
Federal Reserve Chair Jerome Powell to start thinking about cutting back on the
central bank’s support for the U.S. economy is a short one: jobs, jobs and more
jobs.
That was perhaps the sharpest
message from the Fed’s two-day policy-setting meeting that wrapped up
Wednesday, at which it left interest rates on hold and repeated a pledge to
continue buying bonds at its current pace until it sees “substantial further
progress” toward its twin goals of full employment and 2% inflation.
Powell had earlier this month
cheered a government report showing U.S. employers added nearly a million jobs
in March, and said he would want to see “a string” of months like that to show
progress toward the Fed’s goals.
“What did I mean by a string?” he
said at a press conference following the meeting. “I can tell you what it’s
not: it’s not one really good employment reading, which is what we got in
March.”
That wasn’t enough information for
Karim Basta, chief economist at III Capital Management. “Thanks,” he quipped in
response to Powell’s “string” definition.
But with the U.S. economy more than
8 million jobs short of where it was in February 2020 before the pandemic,
continued job gains at March’s pace would get halfway to filling the hole by
summer, when many analysts expect the Fed will flag a coming policy change.
“We don’t have to get all the way to
our goals to taper asset purchases - we just need to make substantial further
progress,” Powell said.
The upbeat assessment of economic
conditions and a less downbeat assessment of risks point to “the first steps on
the path toward tapering QE asset purchases,” said James Knightley, ING’s chief
international economist.
The Fed’s promise on bond buying is
not just tied to jobs -it also hinges on inflation. But judging progress by
that metric will be tough.
That’s because an all-but certain
move higher in inflation readings in coming months will carry “no implication”
for Fed policy, Powell said, because it will reflect transitory pressures that
will soon unwind.
The comparison to the hit prices
took last year during the nationwide lockdowns will push up April and May’s
headline inflation readings by as much as one percentage point, Powell said.
Supply bottlenecks as companies
struggle to keep up with surging demand from newly vaccinated Americans going
out and doing more will also push prices higher. Those will come back down once
companies address the supply issues, he said, but it’s uncertain how long that
will take.
More
https://www.reuters.com/article/us-usa-fed-taper-test/next-up-for-feds-powell-and-the-taper-test-string-theory-idUSKBN2CG121
Peter
Tertzakian: How a bout of even mild inflation could knock out the world's
ambitious plans for decarbonization The market battle between EVs and ICE
vehicles may well be determined in the mines and oilfields of the world Apr 28, 2021
The global economy is gaining
momentum, even before the masks have come off the pandemic.
Unemployment rates are falling
faster than expected in key countries, most notably the United States. Global
GDP is being revised upwards to 6 per cent this year, according to the
International Monetary Fund’s latest World Economic Outlook report. Put simply,
this means that after contracting 3.3 per cent in 2020, the global economy will
be larger in 2021 than in the pre-pandemic days of 2019. It seems we are back
on a fast-moving train (still diesel-powered), and it’s all happening before
governments shell out a couple of trillion dollars on the clean energy
transition.
Not surprisingly, economy talk in
Zoom breakout rooms is of budding inflation and interest rate hikes. We haven’t
experienced that duo in any meaningful way for at least 40 years.
The 1970s was a nasty decade overall
— prices rose by over 10 per cent a year, wage and price controls were brought
in, and interest rates were hiked quarterly to combat the scourge that kept
eroding our spending power. Can you imagine taking out a mortgage at 20 per
cent?
For now, those extremes aren’t
likely. But it’s not too early to think about what even mildly inflating prices
and upticks in interest rates could mean to energy, especially with the
accelerated ambitions for decarbonization.
Here are six considerations:
More
https://financialpost.com/commodities/energy/oil-gas/peter-tertzakian-how-a-bout-of-even-mild-inflation-could-knock-out-the-worlds-ambitious-plans-for-decarbonization
High Lumber
Costs Add More Than $35K to New-Home Prices According to NAHB’s latest estimates, rising lumber prices
have added $35,872 to the price of an average new single-family home. April 29, 20021
Rising softwood lumber prices over
the last 12 months have added $35,872 to the price of an average new
single-family home, and $12,966 to the market value of an average new
multifamily home, according to the latest estimates from the NAHB. The increase
in the multifamily value translates to households paying $119 a month more to
rent a new apartment.
For the prices reported by Random
Lengths on April 17, 2020, the total cost to a builder for all the lumber and
manufactured lumber products described above was $16,927 for the products in an
average single-family home, and $5,940 for the products in an average
multifamily home.
A year later, based on Random
Lengths prices reported on April 23, 2021, the fully phased-in costs have risen
to $48,136 for the softwood lumber products in an average single-family, and
$17,220 for the products in an average multifamily, home. These estimates
represent a 184 percent ($31,210) and 190 percent ($11,280) increase in
single-family and multifamily builders’ lumber costs, respectively, during the
course of the past year.
Prices to home buyers have gone up
somewhat more than this, due to factors such as interest on construction loans,
brokers’ fees, and margins required to attract capital and get construction
loans underwritten. For items such as lumber that are purchased and used
throughout the construction process, NAHB estimates that the final price will
increase by 14.94 percent above builder cost.
More
https://www.builderonline.com/data-analysis/high-lumber-costs-add-more-than-35k-to-new-home-prices_c
“Many people want the government to protect
the consumer. A much more urgent problem is to protect the consumer from the
government.”
Milton
Friedman
Covid-19 Corner This
section will continue until it becomes unneeded.
Brazil passes 400,000 Covid-19
deaths as vaccine rollout stalls Issued
on: 29/04/2021 -
23:55
Brazil on Thursday became the second country to pass
400,000 COVID-19 deaths after the United States, and experts warned the daily
toll could remain high for several months due to slow vaccinations and
loosening social restrictions.
Brazil on Thursday registered 3,001 new COVID-19
deaths, taking its total since the pandemic began to 401,186 fatalities, the
Health Ministry said.
A brutal surge of coronavirus infections this year has pushed
hospitals around the country to the brink of their capacities and led to
100,000 deaths in just over a month.
Brazil’s COVID-19 deaths have fallen slightly from a peak
of more than 4,000 in a single day in early April, prompting many local
governments to ease lockdowns.
But infectious disease experts warned that this easing will
keep deaths elevated for months as vaccines alone
cannot be counted on to contain the virus. Two experts said they expect deaths
to continue to average above 2,000 per day.
ADVERTISING “Brazil will repeat the same mistake
as last year,” said epidemiologist Pedro Hallal, who led a national
study on COVID-19.
----India has recently surpassed Brazil in average daily deaths,
although Brazil has a higher cumulative toll despite having a population
one-sixth the size of India’s.
The surge in infections is being driven by the P.1
coronavirus variant discovered in Brazil that is believed to be 2.5 times more
contagious that the original version.
More
https://www.france24.com/en/americas/20210429-brazil-passes-400-000-covid-19-deaths-as-vaccine-rollout-stalls
India's Covid-19 oxygen crisis:
why is there a deadly crunch? Issued on: 29/04/2021
---- Experts have long raised the alarm about shortages of medical oxygen in
India and other poor countries to treat pneumonia, the world's biggest
preventable infectious killer of children under five.
But the government has for years
failed to invest enough money into such infrastructure, experts say.
- Does India produce enough oxygen?
-
The short answer: yes.
Experts say the vast nation of 1.3
billion people is producing enough oxygen -- just over 7,000 tonnes a day. Most
is for industrial use, but can be diverted for medical purposes.
The bottlenecks are in transport and
storage.
Liquid oxygen at very low
temperatures has to be transported in cryogenic tankers to distributors, which
then convert it into gas for filling cylinders.
But India is short of cryogenic
tankers.
And such special tankers, when
filled, have to be transported by road and not by air for safety reasons.
Most oxygen producers are in India's
east, while the soaring demand has been in cities including financial hub
Mumbai in the west and the capital Delhi in the north.
"The supply chain has to be
tweaked to move medical oxygen from certain regions which have excess supply to
regions which need more supply," the head of one of India's biggest
medical oxygen suppliers Inox Air Products, Siddharth Jain, told AFP.
Meanwhile, many hospitals do not
have on-site oxygen plants, often because of poor infrastructure, a lack of
expertise and high costs.
Late last year, India issued tenders
for on-site oxygen plants for hospitals. But the plans were never actioned,
local media report.
- What's being done? -
The government is importing mobile
oxygen generation plants and tankers, building more than 500 new plants and
buying portable oxygen concentrators.
Industries have been ordered by the
government not to use liquid oxygen.
Oxygen supplies are being brought to
hard-hit regions using special train services.
The military has also been mobilised
to transport tankers and other supplies domestically and from international
sources.
More
https://www.france24.com/en/live-news/20210429-india-s-covid-19-oxygen-crisis-why-is-there-a-deadly-crunch
Brazil says Russian Covid vaccine
carried live cold virus Issued on: 28/04/2021
Tainted batches of Russia's Sputnik
V Covid vaccine sent to Brazil carried a live version of a common cold-causing
virus, the South American country's health regulator reported in a presentation
explaining its decision to ban the drug's import.
Top virologist Angela Rasmussen told
AFP the finding "raises questions about the integrity of the manufacturing
processes" and could be a safety issue for people with weaker immune
systems, if the problem was found to be widespread.
Russia's Gamaleya Institute, which
developed the vaccine, has denied the reports.
The issue centers around an
"adenovirus vector" -- a virus that normally causes mild respiratory
illness but in vaccines is genetically modified so that it cannot replicate,
and edited to carry the DNA instructions for human cells to develop the spike
protein of the coronavirus.
This in turn trains the human system
to be prepared in case it then encounters the real coronavirus.
The Sputnik V vaccine uses two
different adenovirus vectors to accomplish this task: adenovirus type 26 (Ad26)
for the first shot, and adenovirus type 5 (Ad5) for the second shot.
According to a slideshow uploaded
online, scientists at Anvisa, Brazil's regulator, said they tested samples of
the booster shot and found it was "replication competent" -- meaning
that once inside the body, the adenovirus can continue to multiply.
They added that this had likely
occurred because of a manufacturing problem called "recombination,"
in which the modified adenovirus had gained back the genes it needed to
replicate while it was being grown inside engineered human cells in a lab.
Brazilian regulators did not
evaluate the first shot.
Rasmussen, a research scientist at
Canada's Vaccine and Infectious Disease Organization, described the error as a
quality control issue, rather than a problem inherent to the technology.
If batches used in the real world
were tainted, then "for most people this probably won't be a big deal
because adenoviruses are generally not thought of as really important human
pathogens," she said.
"But in people who are immune
compromised... there could be a higher rate of adverse effects because of it,
including potentially serious ones."
The bigger problem, she added, was
the unfortunate impact on confidence over a vaccine that a study in The Lancet
journal showed was safe and more than 90 percent effective.
More
https://www.france24.com/en/live-news/20210428-brazil-says-russian-covid-vaccine-carried-live-cold-virus
Next, some 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
Regulatory
Focus COVID-19 vaccine tracker . https://www.raps.org/news-and-articles/news-articles/2020/3/covid-19-vaccine-tracker
Some other useful Covid links.
Johns Hopkins Coronavirus
resource centre
https://coronavirus.jhu.edu/map.html
Rt Covid-19
https://rt.live/
Centers for Disease Control
Coronavirus
https://www.cdc.gov/coronavirus/2019-ncov/index.html
The Spectator
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.
New two-dimensional material Date: April 27, 2021
Source: Universität Bayreuth
Summary: An international team has discovered a
previously unknown two-dimensional material by using modern high-pressure
technology. The new material, beryllonitrene, consists of regularly arranged
nitrogen and beryllium atoms. It has an unusual electronic lattice structure
that shows great potential for applications in quantum technology.
An international team with
researchers from the University of Bayreuth has succeeded for the first time in
discovering a previously unknown two-dimensional material by using modern
high-pressure technology. The new material, beryllonitrene, consists of regularly
arranged nitrogen and beryllium atoms. It has an unusual electronic lattice
structure that shows great potential for applications in quantum technology.
Its synthesis required a compression pressure that is about one million times
higher than the pressure of the Earth's atmosphere. The scientists have
presented their discovery in the journal Physical Review Letters .
Since the discovery of graphene,
which is made of carbon atoms, interest in two-dimensional materials has grown
steadily in research and industry. Under extremely high pressures of up to 100
gigapascals, researchers from the University of Bayreuth, together with
international partners, have now produced novel compounds composed of nitrogen
and beryllium atoms. These are beryllium polynitrides, some of which conform to
the monoclinic, others to the triclinic crystal system. The triclinic beryllium
polynitrides exhibit one unusual characteristic when the pressure drops. They
take on a crystal structure made up of layers. Each layer contains zigzag
nitrogen chains connected by beryllium atoms. It can therefore be described as
a planar structure consisting of BeN? pentagons and Be?N? hexagons. Thus, each
layer represents a two-dimensional material, beryllonitrene.
----
"However, there is no possibility of devising a process for the production
of beryllonitrene on an industrial scale as long as extremely high pressures,
such as can only be generated in the research laboratory, are required for
this. Nevertheless, it is highly significant that the new compound was created
during decompression and that it can exist under ambient conditions. In
principle, we cannot rule out that one day it will be possible to reproduce
beryllonitrene or a similar 2D material with technically less complex processes
and use it industrially. With our study, we have opened up new prospects for
high-pressure research in the development of technologically promising 2D
materials that may surpass graphene," says corresponding author Prof. Dr.
Leonid Dubrovinsky from the Bavarian Research Institute of Experimental
Geochemistry & Geophysics at the University of Bayreuth.
https://www.sciencedaily.com/releases/2021/04/210427094825.htm?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+sciencedaily%2Fmatter_energy%2Fgraphene+%28Graphene+News+--+ScienceDaily%29
Another weekend and
the last weekend before the Great Biden Bout of Inflation? But it’s only
temporary, and nothing to worry about, right? So what if the price of cars,
computers, energy, food, houses, insurance, medicines and schooling rises.
Wages and pensions will keep up, right? And remember it’s only temporary,
Chairman Powell says so. Have a great weekend everyone.
“Five simple truths embody most of what we know about inflation:
Inflation is a monetary phenomenon arising from a more rapid increase in the
quantity of money than in output (though, of course, the reasons for the
increase in money may be various). In today’s world government determines—or
can determine—the quantity of money. There is only one cure for inflation: a
slower rate of increase in the quantity of money. It takes time—measured in
years, not months—for inflation to develop; it takes time for inflation to be
cured. Unpleasant side effects of the cure are unavoidable.”
Milton
Friedman
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