Baltic Dry Index. 3185 -29 Brent Crude 68.64
Spot Gold 1836
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 10/05/21 World 158,973,737
Deaths 3,306,824
“No
technology that's connected to the internet is unhackable.”
The Gospel of Technology
In the Asian stock casinos rising nervousness. What just happened in the US economy that caused such a big miss in last Friday’s US employment figures?
According to the US Commerce Secretary, it’s not because too many people on welfare are making more not working, on benefits, than they did working before the pandemic hit.
In the inflation watch section, the pro-Biden CNN goes all in on the Fedster story of inflation going to be restrained, temporary, and no big deal. Hopefully they will be right, but what if they’re wrong?
But today’s real story is that after three days, hackers have still shut down the USA’s largest fuel pipeline that supplies most of the US east coast.
The longer the delay in reopening, the more likely fuel shortages will develop in the US north east, with a fuel glut developing on the US Gulf of Mexico refinery coast. This is the story to watch over the rest of today. According to some experts, it all starts to go wrong fast if the pipeline isn’t back in service by tomorrow.
Which raises the question, just how vulnerable to hacking are GB, EU, Russian and Saudi pipelines? This USA hack should be a wake up call to the oil industry.
Asia-Pacific markets trade broadly higher, oil prices climb
SINGAPORE — Stock markets in Asia-Pacific were broadly higher on Monday, shrugging off the weaker-than-expected April U.S. jobs reports; while oil futures advanced.
South Korea’s Kospi was one of the largest gainers, rising 1.6% in the first session of the week. In Japan, the Nikkei 225 rose 0.5% and the Topix jumped 1%.
Greater China markets were mixed. The Shanghai composite was marginally up by 0.1%, while stocks in Shenzen jumped 0.2%. Hong Kong’s Hang Seng Index fell 0.3%
Last week, the widely watched U.S. jobs report for April came in below expectations. The report showed U.S. employers added 266,000 net payrolls last month and the unemployment rate rose to 6.1%.
James Cheo, Southeast Asia chief investment officer at HSBC Private Banking and Wealth Management, said the U.S. jobs report wouldn’t hit investor sentiment.
“I think in terms of the jobs recovery it’s going to be extremely fragile ... but I think the trajectory is still a jobs improvement so I don’t think it changes very much the investment thesis, the economic recovery is still very strong,” Cheo told CNBC’s “Squawk Box Asia” on Monday.
“And of course these setbacks would mean that the Federal Reserve would still keep interest rates extremely low and I think from that perspective, we are still in a sort of goldilocks environment which is still very conductive for risk assets across the world,” he added.
More
https://www.cnbc.com/2021/05/10/asia-markets-stocks-currencies-australia-retail-sales.html
Growth narrative may shift as pre-pandemic challenges reappear
Monday 10 May 2021 5:15 am
Two major events took place in the world’s two largest economies recently that have the potential to directly impact us here in the UK.
The first is the passage of President Biden’s $1.9trn stimulus bill in the US last month. The second is the recent meeting of the National People’s Congress in Beijing.
Taken together, these two events have the potential to reshape the narrative around the post-pandemic recovery, according to Neil Shearing, group chief economist at Capital Economics in London.
“The story of the pandemic so far has been one of China’s economic outperformance. China managed to suppress the virus quickly, therefore negating the need for lengthy and widespread lockdowns,” Shearing told City A.M. this weekend.
In contrast, other countries have struggled to get on top of the virus and have been in a state of intermittent lockdown for most of the past year, including the UK and most of Europe.
China has not only returned to its pre-virus level of GDP, but also its pre-virus trend of GDP, Shearing pointed out.
Meanwhile, every other major economy is still suffering from large shortfalls in output. Yet, the events of the past month may set the stage for a shift in the narrative.
In the US, not only is the size of the Biden stimulus huge, but it is coming at a time when rising vaccinations and falling virus numbers are allowing many states to ease restrictions on activity.
“The result is likely to be an upsurge in economic growth over the coming months and quarters. We expect the economy to expand by 6.5 per cent this year, some way above the current consensus,” Shearing said.
“In the process, US GDP is likely to blow past its pre-virus level by the end of the second quarter.”
Meanwhile, one of the key messages from the National People’s Congress in Beijing was that policy support for China’s economy will be withdrawn over the course of this year.
“The activity data will continue to look extremely strong over the coming months. But this will be flattered by the practice of reporting and analysing Chinese growth rates in year-on-year terms, and the fact that the base for comparison this time last year was extremely depressed,” Shearing explained.
Headlines about China’s outperformance are likely to fade.
“Underlying momentum is already slowing, and the withdrawal of policy support means that this is likely to show up in the year-on-year growth rates over the second half of the year,” he added.
As ever, the reality is more nuanced than the headlines suggest.
The fact that China’s economy is now back above its pre-virus path makes a slowdown in growth all but inevitable.
Read more: China records best ever GDP growth in post-Covid bounce-back
At the same time, the fact that the US economy is still below its pre-virus path means there is significant scope for a rebound in output as the economy opens up.
“This is now being “turbo-charged” with additional stimulus, Shearing noted.
The best way to judge the performance of different economies throughout the pandemic has been to focus on levels of output rather than growth rates, he argued. Viewed this way, China is still faring far better than any other major economy.
More
https://www.cityam.com/shift-as-pre-pandemic-issues-reemerge/
U.S. has long way to go to recover from pandemic -commerce secretary
May 9, 2021
Colonial Pipeline is working to restore service and has some smaller lateral lines between terminals and delivery points operating again, the company announced Sunday afternoon.
The company, the operator of the country’s largest fuel pipeline, temporarily suspended all operations due to a ransomware attack on Friday.
Its four mainlines remain offline. Colonial said it’s developing a restart plan, but provided no timetable as to when full service will be restored.
“We are in the process of restoring service to other laterals and will bring our full system back online only when we believe it is safe to do so, and in full compliance with the approval of all federal regulations,” Colonial said in a statement.
The federal government is working to avoid supply disruptions after the company suspended operations, U.S. Commerce Secretary Gina Raimondo said Sunday morning.
“This is what businesses now have to worry about,” Raimondo said during an interview on CBS’ “Face the Nation.” “Unfortunately, these sorts of attacks are becoming more frequent. They’re here to stay.”
President Joe Biden has been briefed on the ransomware attack and the F.B.I. said it’s working closely with Colonial Pipeline and government partners to address the situation.
The Department of Energy is leading the federal response, according to Colonial. The Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency is coordinating with the company.
Colonial said it learned Friday that it “was the victim of a cybersecurity attack” and has since shut down 5,500 miles of pipeline that carry nearly half of the fuel supplies on the East Coast, raising fears of spot shortages of gasoline, diesel and jet fuel.
The pipeline is the largest refined products pipeline in the nation, according to Colonial.
“It’s an all hands on decks effort right now,” Raimondo said. “We’re working closely with the company, state and local officials to make sure that they get back up to normal operations as quickly as possible and there aren’t disruptions to supply.”
The company connects refineries on the Gulf Coast to more than 50 million people in the southern and eastern U.S., according to its website.
The ultimate impact of the attack on fuel prices is unclear since there’s no timeline for Colonial to resume operations, according to Bernadette Johnson, senior vice president of power and renewables at Enverus. Johnson predicted a short-term spike in refined product prices given a short-term outage.
“Refined product storage in both the USGC and Northeast can mitigate the impact of a short term event,” Johnson said Saturday.
But If the shutdown persists, the country could see shortages of fuel develop rapidly, according to John Kilduff, a partner at Again Capital in New York. Kilduff predicted that gas prices will skyrocket on the open of futures trading Sunday evening if the company’s operations don’t resume by then.
Johnson agreed: “If this outage were to persist for a significant amount of time, there would be product shortfalls in the Northeast and a glut of product in the USGC, which would impact prices across the country,” she said.
Jay Hatfield, founder and CEO of Infrastructure Capital Management in New York, said a temporary outage will likely drive already rising national retail gas prices over $3 per gallon for the first time since 2014.
More
What Happens to Stocks and Cryptocurrencies When the Fed Stops Raining Money?
An unprecedented fiscal and monetary stimulus led by the Federal Reserve is fueling a new investor euphoria. Is this a new bubble? And when could it burst?
May 8, 2021 12:00 am ET
To veterans of financial bubbles, there is plenty familiar about the present. Stock valuations are their richest since the dot-com bubble in 2000. Home prices are back to their pre-financial crisis peak. Risky companies can borrow at the lowest rates on record. Individual investors are pouring money into green energy and cryptocurrency.
This boom has some legitimate explanations, from the advances in digital commerce to fiscally greased growth that will likely be the strongest since 1983.
But there is one driver above all: the Federal Reserve. Easy monetary policy has regularly fueled financial booms, and it is exceptionally easy now. The Fed has kept interest rates near zero for the past year and signaled rates won’t change for at least two more years. It is buying hundreds of billions of dollars of bonds. As a result, the 10-year Treasury bond yield is well below inflation—that is, real yields are deeply negative —for only the second time in 40 years.
There are good reasons why rates are so low. The Fed acted in response to a pandemic that at its most intense threatened even more damage than the 2007-09 financial crisis. Yet in great part thanks to the Fed and Congress, which has passed some $5 trillion in fiscal stimulus, this recovery looks much healthier than the last. That could undermine the reasons for such low rates, threatening the underpinnings of market valuations.
“Equity markets at a minimum are priced to perfection on the assumption rates will be low for a long time,” said Harvard University economist Jeremy Stein, who served as a Fed governor alongside now-chairman Jerome Powell. “And certainly you get the sense the Fed is trying really hard to say, ‘Everything is fine, we’re in no rush to raise rates.’ But while I don’t think we’re headed for sustained high inflation it’s completely possible we’ll have several quarters of hot readings on inflation.”
Since stocks’ valuations are only justified if interest rates stay extremely low, how do they reprice if the Fed has to tighten monetary policy to combat inflation and bond yields rise one to 1.5 percentage points, he asked. “You could get a serious correction in asset prices.”
‘A bit frothy’
The Fed has been here before. In the late 1990s its willingness to cut rates in response to the Asian financial crisis and the near collapse of the hedge fund Long-Term Capital Management was seen by some as an implicit market backstop, inflating the ensuing dot-com bubble. Its low-rate policy in the wake of that collapsed bubble was then blamed for driving up housing prices. Both times Fed officials defended their policy, arguing that to raise rates (or not cut them) simply to prevent bubbles would compromise their main goals of low unemployment and inflation, and do more harm than letting the bubble deflate on its own.
More
Covid-19 Corner
This section will continue until it becomes unneeded.
Scientists train bees to identify coronavirus infection
By Celine Castronuovo - 05/08/21 01:56 PM EDT
A group of Dutch scientists is enlisting the help of an unusual group of participants for a new kind of rapid COVID-19 test: bees that have been specially trained to detect the virus.
Researchers at insect technology start-up InsectSense and Wageningen University in the Netherlands announced in a press release this week that they had trained more than 150 bees in a study to identify samples containing the virus that causes COVID-19 based on its scent.
The group said that as part of the study, the bees were given a sugar water solution reward each time they were exposed to an infected sample, upon which the bees extended their tongues to receive the solution.
The bees, which because of their sensitivity to smells can be trained within just a few minutes to detect volatiles and odors, then associated the reward with positive samples, and began sticking out their tongues after being exposed to the COVID-19 scent alone, the researchers said.
The scientists noted that the study indicated overwhelmingly promising results, with only a small number of false positives and false negatives recorded.
According to the press release, InsectSense has developed a prototype machine that can train bees to detect the virus, which the scientists hope can be adopted in low-income countries where access to materials for polymerase chain reaction tests is limited.
“Not all laboratories have that, especially in smaller-income countries,” Wim van der Poel, a professor at Wageningen University, told The Washington Post.
“Bees are everywhere, and the apparatus is not very complicated,” he added.
While the results of the study have not yet been published in a journal or peer-reviewed, van der Poel told the Post he believes the bee COVID-19 testing can achieve a roughly 95 percent accuracy rate by using multiple insects per sample.
More
A Small Brazilian Town Is Beating Covid-19 Through a Unique Experiment
Serrana starts to return to normal as the pandemic continues to rage across the rest of the country
May 7, 2021 9:00 am ET
SERRANA, Brazil—This town of 45,000 people in southeastern Brazil has been at the center of a unique experiment for the past three months: vaccinate nearly every adult against Covid-19 and see what happens.
In recent weeks, after most of the adults here got their second dose, Covid-19 cases and deaths plunged and life has started to return to normal as the pandemic continues to rage across Brazil.
----The experiment in Serrana, a town in Brazil’s sugar-cane-producing savanna, provides hope for countries around the world still battling with coronavirus outbreaks that mass vaccination works. It also offers new evidence of the efficacy of Sinovac’s Covid-19 vaccine, which is being rolled out in dozens of developing nations from Egypt to the Philippines.
All of Serrana’s adults were offered CoronaVac between February and April as part of the experiment, known as Project S. It is the first mass trial of its kind in which an entire town is vaccinated for Covid-19 before the rest of the country.
Not everyone in the town was eligible, including minors under 18, adult women who are pregnant or nursing, and others with serious health problems. Of the roughly 27,700 eligible adults, 27,150, or 98%, were vaccinated, according to town officials.
The Butantan Institute, the public-research center that is producing CoronaVac in Brazil and running the experiment, declined to comment until the full results of the mass trial are released later this month.
Town officials and residents said they are thrilled with the results so far. Infections are down 75% from a March peak in Serrana, while there have been no deaths from Covid-19 among the people who were fully vaccinated, suggesting CoronaVac is also effective against the aggressive P.1 variant sweeping the region.
“The numbers speak for themselves,” said Serrana’s mayor, Léo Capitelli. “It worked!”
In the waiting room of the town’s intensive-care unit, the effects of CoronaVac are already visible. “Only three weeks ago, this was so full, people had to stand,” said Lucia Elaine Caldano, the unit’s administrator, pointing to rows of empty chairs. In the past three weeks, only one person has been put on a ventilator—a woman who had refused to take the vaccine.
More
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
Centers for Disease Control Coronavirus
https://www.cdc.gov/coronavirus/2019-ncov/index.html
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.
IBM's new 2-nm chips have transistors smaller than a strand of DNA
Michael Irving May 06, 2021
In a shining example of the inexorable march of technology, IBM has unveiled new semiconductor chips with the smallest transistors ever made. The new 2-nanometer (nm) tech allows the company to cram a staggering 50 billion transistors onto a chip the size of a fingernail.
The current industry standard is chips with 7-nm transistors, with some high-end consumer devices, such as Apple’s M1 processors, beginning to make the move to 5 nm. And experimental chips have shrunk as small as 2.5 nm.
IBM’s new chips pip them all, with transistors now measuring just 2 nm wide – for reference, that's narrower than a strand of human DNA. That, of course, means the tiny transistors can be squeezed onto a chip far more densely than ever before, boosting the device’s processing power and energy efficiency in the process. The company claims that, when compared to current 7-nm chips, the new 2-nm chips can reach 45 percent higher performance or 75 percent lower energy use.
In practical terms, IBM says the tech could give a performance boost to everything from consumer electronics to AI object recognition to the reaction times of autonomous vehicles. Or, its energy savings could reduce the sizeable carbon footprint of data centers, or make for smartphone batteries that last four days on a single charge.
Transistors are often used to define technological progress – Moore’s law states that the number of transistors on a chip will double every two years or so. While it’s held more or less true since it was proposed in the 1960s, that rate has slowed down somewhat in recent years.
It’s been nearly four years since IBM revealed its 5-nm chips with 30 billion transistors – if Moore’s law was followed to a T, we’re two years late and 10 billion transistors short. In fact, IBM is only now doubling the transistors on its first 7-nm chips unveiled in 2015.
Still, we shouldn’t diminish the new development – 2 nm is quite the feat of engineering. As recently as 2019, engineers expressed concerns that technology wouldn’t allow much progress to be made smaller than 3 nm. Research by many companies over the past few years have put those concerns to rest.
It’s likely that we won’t see these 2-nm chips in consumer electronics until 2023 at the earliest, so for now go enjoy the benefits of the still-impressive 5-nm chips.
IBM discusses the new tech breakthrough in the video below.
https://newatlas.com/computers/ibm-2-nm-chips-transistors/
“We worried for decades about WMDs – Weapons of Mass Destruction. Now it is time to worry about a new kind of WMDs – Weapons of Mass Disruption.”
John Mariotti.
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