Baltic Dry Index. 3254 +14 Brent Crude 68.56
Spot Gold 1830
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 12/05/21 World 160,334,125
Deaths 3,331,400
“Threats to freedom of speech, writing, and action, though often trivial in isolation, are cumulative in their effect, and unless checked, lead to a general disrespect for the rights of the citizen.”
George Orwell. [Facebook and Twitter take note.]
In the stock casinos, a critical day. Will the buy the dip crowd show up today or will the recent selloff turn into a rout?
Signs of rising global inflation suggest any stock casino rally may be temporary, to use the Fed Chairman’s favourite word.
Later today the U.S. consumer price index report released by the U.S. Labor Department, which might well be today’s deciding factor, at least for US stocks.
Below, Asian markets struggle in the face of rising inflation fears.
Inflation anxiety jolts stocks, Asia tumbles to two-month lows
The median price for a single-family home in the U.S. rose the most on record in the first quarter, as buyers fought over a dearth of inventory, according to the National Association of Realtors.
Prices jumped 16.2% from a year earlier to a record high of $319,200. The growth eclipsed the 14.8% rate in the fourth quarter, which was the highest in data going back to 1989, the group said in a report Tuesday.
Prices On Fire
Americans are taking advantage of low mortgage rates to buy homes in the suburbs and in less-costly cities across the country, where supplies are tight and bidding wars are common.
“The record-high home prices are happening across nearly all markets, big and small, even in those metros that have long been considered off-the-radar in prior years for many home-seekers,” said Lawrence Yun, the group’s chief economist.
The metropolitan area with the largest increase from a year earlier was Kingston, New York, a picturesque Hudson Valley town about 90 miles (145 kilometers) north of Manhattan. Prices there soared 35.5%. Fairfield County, Connecticut -- home to Greenwich -- followed, with 34.3%.
Of the 183 metro areas measured by the group, 163 had double-digit price gains, up from 161 in the fourth quarter. Springfield, Illinois, was the only area where prices fell.
Goodyear to raise prices of passenger tires for second time in 2021
May 10, 2021
AKRON — Goodyear is raising the price of all passenger tires in North America for the second time in 2021.
The Akron-based tire maker said it will raise prices by up to 8% on all Goodyear, Dunlop and Kelly consumer tires, effective June 1, 2021. Goodyear initiated a similar increase on April 1.
The tire maker said the latest price hike is "in response to changing market dynamics in the industry," noting the value of Goodyear brands.
On Dec. 1, Goodyear raised prices on Goodyear- and Dunlop-branded passenger and light truck tires in the U.S. by up to 5%.
https://www.tirebusiness.com/financial/goodyear-raise-prices-passenger-tires-second-time-2021
This time the Federal Reserve's QE really will cause inflation
The US labour market is as tight as a drum. Small firms cannot find workers, and hourly wages are suddenly surging. It screams incipient inflation.
The National Federation of Independent Businesses said 45pc of its members are struggling to fill positions, the highest since the modern series began in the early 1970s.
It may soon be time to ask whether the US is in the foothills of an inflationary wage-price spiral, compounding the commodity price spiral that has been underway for several months.
One might equally ask whether it is tenable for the US Federal Reserve to keep purchasing $120bn of bonds each month after the output gap has already closed, and at a time when the federal government is running a post-pandemic “war economy” deficit of 13pc of GDP.
The shocking weakness of last week’s nonfarm payrolls report – 266,000 new jobs, compared to a million expected – had more to do with a labour supply crunch than lack of demand. It was rogue data.
It makes little sense for many to work when Joe Biden’s stimulus plan will continue to pay an extra $300 per week in unemployment top-up benefits until September, especially since schools are disrupted and the cost of child care is exorbitant. Goldman Sachs estimates that half of those currently unemployed would take a cut in take-home pay if they found a job today.
Jamie Fahy from Citigroup says inflation is flashing red and the Fed has fallen “behind the curve”. Money is being printed to fund government spending that goes directly into the veins of the economy, or for transfers to poorer Americans with a higher propensity to spend. To all intents and purposes it is helicopter money. The character of QE has self-evidently changed.
Mr Fahy said the immediate inflationary build up is likely to end in one of two ways. Either the Fed blinks, turns hawkish, and winds down QE earlier than it now suggests. This would trigger a taper tantrum and major sell-off in asset markets. Citigroup thinks it could be comparable to the Bernanke tantrum in 2013, a memory that dollar debtors and emerging markets would rather forget.
Or the Fed persists with loose money regardless, stoking a consumption boom that sucks in imports and leads to a balance of payments scare. This second course would send the dollar into a tailspin and potentially lead to a vicious circle as China, Japan, and the eurozone stop recycling a large part of their $720bn combined current account surpluses into the US debt markets.
Such a monetary boom would be much more painful in the end. Mr Fahy says a little inflation may be elixir for stock markets but this turns toxic once the CPI index crosses 4pc. At that point bonds and equities both deteriorate, and there is nowhere to hide in a conventional portfolio. “It could be a painful adjustment process from the current frothy valuations,” he said.
It is worth remembering that Wall Street equities lost half their value in real terms in the decade after the onset of the Great Inflation in 1967. I keep hearing claims that this is nothing like the “guns and butter” fiscal expansion of the Johnson era but actually Joe Biden’s $6 trillion plans are an order of magnitude greater, if defined by deficit-to-GDP ratios.
----Janet Yellen explained in a speech as Fed chief in 2015 how inflation pauperises households and pensioners that depend on fixed incomes to survive, and how it eats into the real earnings of poorer workers least able to defend themselves.
She also argued that the Fed was ultimately responsible for the destructive consequences of the Great Inflation in the 1960s and 1970s. In her words the institution allowed chronically over-heated labour and product markets to crystallise what was otherwise just a commodity shock. It caused an “inflationary psychology” to take hold.
https://www.telegraph.co.uk/business/2021/05/11/fed-qe-really-will-cause-inflation-time/
Inflation is the fiscal complement of statism and arbitrary government. It is a cog in the complex of policies and institutions which gradually lead toward totalitarianism .
Ludwig von Mises
Covid-19 Corner
This section will continue until it becomes unneeded.
Finally, mainstream media picks up on a subject we’ve covered since early last year. Why isn’t there a US criminal investigation into America’s culpability/criminality in releasing SARS-2 on the world?
Tucker Carlson: Anthony Fauci let the coronavirus pandemic happen, why isn't there a criminal investigation?
Fauci exploited a loophole that allowed him to fund research at the Wuhan Lab that likely became COVID-19
May 10, 2021
India’s New Covid Cases Have Peaked, Cambridge Tracker Shows
By Jeanette RodriguesUpdated on 12 May 2021, 04:42 BST·
· WHO says virus variant identified in India is more infectious
“But there is substantial variation among states and union territories in their trajectories, with cases continuing to increase over the next two weeks in areas such as Assam, Himachal Pradesh, Tamil Nadu and Tripura,” the researchers wrote.
The projections are based on reported numbers and are in line with those from some other experts, including Prime Minister Narendra Modi’s advisers. India reported a record 414,188 new cases on May 7 -- about 32% higher than the world’s previous peak reported by the U.S. last year but with just a fraction of the testing and vast undercounting -- and official data suggest daily deaths could continue near the unprecedented 4,000-level.
Health services remain overwhelmed and several hospitals face a shortage in oxygen supplies. With the state being criticized for failing to ensure critical needs including oxygen and medicines, businesses are suspending operations and offering employees time off “to heal.”
More
Coronavirus Strain Found in India Is a ‘Variant of Concern,’ WHO Says
B.1.617 becomes fourth variant so classified by agency, which says it may be more transmissible than some others
Updated May 10, 2021 4:47 pm ET
The World Health Organization on Monday classified a coronavirus variant first spotted in India as a global “variant of concern,” saying preliminary studies showed it may be more transmissible than some other variants.
The WHO didn’t report any evidence suggesting that currently authorized vaccines would be less effective against the variant.
The variant, known as B.1.617, is being studied by scientists around the world as they try to figure out its role in the fast growing Covid-19 surge in India, which reported more than 366,000 new daily cases on Monday. The variant has already spread to more than 30 countries, according to the WHO, including the U.S., the U.K., France and Japan.
The surge in India rose rapidly last month, overwhelming hospitals in the country’s hardest-hit cities. Anecdotally speaking, “the pattern now is that one person in the family gets it, the whole family seems to get it,” said Dr. Soumya Swaminathan, the WHO’s chief scientist, in an interview. “This is unlike the first wave. And so I think what we’re seeing is more transmissible.
More
One AstraZeneca Covid vaccine dose gives 80% lower death risk: English data
Last Updated: May 11, 2021, 01:27 PM IST
Data from the rollout of AstraZeneca
NSE 0.69 %'s COVID-19 vaccine shows one
dose of the shot results in 80% less risk of death from the disease, Public
Health England said on Monday.
It also said protection against death from the Pfizer-BioNTech vaccine rises
from approximately 80% after one dose to 97% after two doses in its new
analysis.
PHE said the study was the first on protection against mortality from the
AstraZeneca vaccine based on data from a real world setting.
The study looked at new symptomatic cases of COVID-19 between December and April and people who died within 28 days of their positive test by vaccination status.
People who had a single dose of AstraZeneca vaccine were 55% protected against death, with a figure of 44% protection for a single dose of Pfizer, compared to unvaccinated people.
"Combined with the protection vaccines offer against becoming a case in the first place, this is equivalent to approximately 80% protection against mortality in individuals vaccinated with a single dose of either vaccine," PHE said in a statement.
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.
Global renewable energy grew at fastest pace in two decades in 2020 - IEA
May 11, 2021 6:08 AM
LONDON (Reuters) - Renewable energy grew at its fastest pace in two decades last year, led by China, and will continue to grow in the next two years, a report by the International Energy Agency (IEA) showed on Tuesday.
New renewable energy capacity in 2020 rose by 45% to 280 gigawatts (GW) last year, the largest year-on-year increase since 1999, even though there were supply chain disruptions and construction delays due to the impact of COVID-19.
China accounted for 50% of renewable energy capacity growth last year and will account for 45% this year and 58% in 2022, the report said.
Globally, around 270 GW of new capacity is forecast to be added this year and nearly 280 GW in 2022, the IEA said in a renewable energy market outlook.
These forecasts have been increased by more than 25% from the agency’s previous forecasts in November as governments have auctioned record amounts of renewable energy and companies have signed a record number of power purchase agreements.
Governments auctioned 75 GW of offshore and onshore wind, solar photovoltaic and bioenergy capacity last year, up 20% from 2019.
“Wind and solar power are giving us more reasons to be optimistic about our climate goals as they break record after record,” said IEA executive director Fatih Birol.
“Last year the increase in renewable capacity accounted for 90% of the entire global power sector’s expansion,” he added.
However, governments need to set policies to encourage more investment in solar and wind and the additional grid infrastructure they will require, as well as other renewable technologies such as bioenergy and geothermal, Birol added.
SSE and Equinor to build Scotland's first carbon capture power station
Tuesday 11 May 2021 8:19 am
Energy heavyweights SSE and Equinor have tabled plans to build Scotland’s first power station using carbon capture technology, in a step towards a low carbon future.
If repurposed, the gas-fired unit at Peterhead, Aberdeenshire, could catch up to 1.5m tonnes of carbon dioxide from its emissions each year.
The plans are still dependant on securing sufficient investment but is hoped to be ready by 2026.
According to SSE, the Peterhead power station could hit 15 per cent of the government’s target to capture 10m tonnes of CO2 annually by 2030.
Capturing around 90 per cent of the site’s carbon emissions, the technology will store the CO2 at the Acorn Project’s site, located around 100km offshore in rock formations deep below the North Sea.
“Once up and running, CO2 emissions saved through this station alone will be the equivalent of taking 60 million cars off the road every year,” energy minister Anne-Marie Trevelyan said, adding that “Developing and applying this technology in Scotland will be a key element in the energy transition whilst creating a skills base and jobs on the ground that will endure and grow for decades to come.”
Energy giant Shell has also been involved in the building of the Acorn CO2 storage site, which is run by a subsidiary of UK low-carbon tech firm Storegga Geotechnologies.
Both the Peterhead and Acorn site were funded by the government in March, which formed part of Scotland’s move towards net zero infrastructure.
The Peterhead Power Station, which is looking to be decarbonised, awaits a final decision that depends on government subsidies for carbon capture and storage.
The project will also require the construction of the infrastructure needed to store carbon emissions deep under the North Sea.
SSE and Equinor have also begun developing two low-carbon power stations in North Lincolnshire, which were announced last month.
The green ventures mark another step into the green energy market by energy giants and also signals investment into Scotland.
Norwegian oil producer Equinor, which has attempted to rebrand and distance itself from its oil legacy since 2018, has added offshore wind and pioneering floating wind farms to its portfolio.
More
https://www.cityam.com/sse-and-equinor-to-build-scotlands-first-carbon-capture-power-station/
The most important thing to remember is that inflation is not an act of God, that inflation is not a catastrophe of the elements or a disease that comes like the plague. Inflation is a policy.
Ludwig von Mises.
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