Baltic Dry Index. 3212 -54 Brent Crude 68.53
Spot Gold 1819
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 07/05/21 World 156,710,852
Deaths 3,269,846
My daughter asked me when she came home from school, "What's the financial crisis?" and I said, it's something that happens every five to seven years.
Jamie Dimon, CEO JP Morgan Chase. America’s largest bank.
Is the global boom back? While it’s to early to know for sure, commodities, the rebound in global trade and a world economy awash in tsunamis of Magic Money Tree, free fiat money, sugar high cash, suggest it is. Can serious global inflation be far away?
Asia Stocks Climb After Robust Data Boost U.S.: Markets Wrap
By Emily BarrettUpdated on 7 May 2021, 05:26 BST
Commodities rally continues with copper at record high
Taiwan and South Korea led modest gains across the region that lifted MSCI Inc.’s gauge. U.S. contracts climbed after renewed gains in U.S. benchmarks overnight, which included a fresh record for the Dow Jones Industrial Average. Copper soared to an all-time high on expectations that rebounding economies will spur a boom in global demand.
China’s latest trade data showed exports rose well ahead of expectations and imports saw the fastest growth since 2011. Traders shrugged off news overnight that the Biden administration is likely to preserve limits on U.S. investments in certain Chinese companies.
U.S. economic reports helped sentiment, as applications for state unemployment insurance fell to a fresh pandemic low, and separate data showed a rebound in productivity. Traders now turn to Friday’s payrolls numbers. Treasuries were steady with yields well below recent highs.
Investors are focusing on strengthening growth in the world’s largest economies, shaking off concerns for now that a faster-than-expected rebound could spur excessive inflation. The Federal Reserve remains committed to near-zero interest rates to bring about a full recovery, though an announcement of a pullback in its heavy monthly bond purchases seems increasingly likely in the second half of this year.
“Most of the developed markets are going to treat the spike in inflation as transitory unless they start to see significant pass-through of commodity prices and wage inflation,” said Binay Chandgothia, portfolio manager at Principal Global Investors.Increased attention to stretched valuations could spur more talk of the Fed adjusting policy. The central bank’s semi-annual financial stability report noted rising appetite for risk across a variety of asset markets could exacerbate vulnerabilities in the U.S. financial system.
Elsewhere, spot iron ore broke $200 a ton for the first time, while copper approached a record high.
More
U.S. economy likely created nearly a million jobs in April
ReutersLast Updated: May 07, 2021, 09:46 AM IST
U.S. employers likely hired nearly a
million workers in April as they rushed to meet a surge in demand, unleashed by
the reopening of the economy amid rapidly improving public health and massive
financial help from the government.
The Labor Department's closely watched employment report on Friday will be the
first to show the impact of the White House's $1.9 trillion COVID-19 pandemic
rescue package, which was approved in March. It is likely to show the economy
entered the second quarter with even greater momentum, firmly putting it on
track this year for its best performance in almost four decades.
"We are looking for a pretty good figure, reflecting the ongoing reopening
we have seen," said James Knightley, chief international economist at ING
in New York. "With cash in people's pockets, economic activity is looking
good and that should lead to more and more hiring right across the
economy."
According to a Reuters survey of
economists, nonfarm payrolls likely increased by 978,000 jobs last month after
rising by 916,000 in March. That would leave employment about 7.5 million jobs
below its peak in February 2020.
Twelve months ago, the economy purged a record 20.679 million jobs as it reeled
from mandatory closures of nonessential businesses to slow the first wave of
COVID-19 infections.
April's payrolls estimates range from as low as 656,000 to as high as 2.1 million jobs. New claims for unemployment benefits have dropped below 500,000 for the first-time since the pandemic started and job cuts announced by U.S.-based employers in April were the lowest in nearly 21 years.
Also arguing for another month of blockbuster job growth, consumers' perceptions of the labor market are the strongest in 13 months. But the pent-up demand, which contributed to the economy's 6.4% annualized growth pace in the first quarter, the second-fastest since the third quarter of 2003, has triggered shortages of labor and raw materials.
From manufacturing to restaurants, employers are scrambling for workers. A range of factors, including parents still at home caring for children, coronavirus-related retirements and generous unemployment checks, are blamed for the labor shortages.
"While we do not expect that lack of workers will weigh noticeably on April employment, rehiring could become more difficult in coming months before expanded unemployment benefits expire in September," said Veronica Clark, an economist at Citigroup in New York.
More
China trade surges as global demand recovers from pandemic
May 7, 2021
BEIJING (AP) — China’s exports surged 32.3% over a year ago in April as global consumer demand strengthened, while imports rose 43.1%.
Exports rose to $263.9 billion, in line with the previous month’s growth but down from the explosive 60.6% rise in the first two months of 2021, customs data showed Friday. Imports increased to 43.1%, accelerating from March’s 38.1% expansion.
Exports to the United States rose 30.8% over a year ago to $42 billion despite a lingering tariff war with Washington, the General Administration of Customs of China reported. Imports of American goods rose 23.5% to $13.9 billion.
China’s global trade surplus narrowed by 5% to $42.8 billion, an indication demand is recovering faster in China than in the rest of the world. Its political volatile surplus with the United States widened by 33.4% to $28.1 billion.
Exporters have benefited from the relatively early reopening of China’s economy and demand for masks and other medical supplies while some governments are re-imposing anti-virus curbs that limit business and trade.
Traders are watching for signs of what President Joe Biden might do about reviving tariff war talks with Beijing.
Finally, with so much free money pumped into the UK economy in 2020-2021, deliberately false low interest rates, plus Brexit’s great vaccine success, the GB economy is forecast to boom. Let’s just hope UK inflation does boom too.
UK economy set to grow at fastest rate in more than 70 years
By Szu Ping Chan 6 May, 2021
The UK economy will enjoy its strongest growth in more than 70 years in 2021 as Covid-19 restrictions are lifted, according to the Bank of England.
The economy is expected to expand by 7.25% this year, with extra government cash for workers and businesses helping to limit job losses.
This would be the strongest growth since official records began in 1949.
However, it comes after the economy shrank almost 10% last year in the sharpest drop in 300 years.
Bank policymakers also held interest rates at a record low of 0.1%.
The Bank expects the recovery to gather pace as the reopening of high streets paves the way for a mini-spending boom.
The UK's rapid vaccine rollout is expected to support consumer confidence, with the economy expected to get back to its pre-pandemic size before the end of the year.
Andrew Bailey, the governor of the Bank of England, compared the rapid expansion to the growth seen during the Industrial Revolution two centuries ago, when factories started using new manufacturing processes.
"I don't think we've had a bounce-back quite of this nature, certainly in modern times," he said.
While Mr Bailey cautioned that the surge in output would only return the UK economy back its 2019 size, he added: "Given what the economy has been through, it is good news."
Chancellor Rishi Sunak announced in the March Budget that the furlough scheme, which subsidises employees' wages, would be extended until the end of September.
Mr Bailey said the extension would help to limit the rise in unemployment "significantly".
The Bank now expects the unemployment rate to peak at 5.5% later this year. This is far below the 7.75% it predicted in February.
It expects "most employees" to return to work as the economy starts to reopen.
The number of people on furlough is expected to fall to 2.75 million in the three months to June, from just under five million at the start of this year.
More
https://www.bbc.co.uk/news/business-57008220
Good judgment comes from experience, and a lot of that comes from bad judgment.
Will Rogers.
Global Inflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Copper is ‘the new oil’ and low inventories could push it to $20,000 per ton, analysts say
Published Thu, May 6 2021 12:37 AM EDT
The world risks “running out of copper” amid widening supply and demand deficits, according to Bank of America, and prices could hit $20,000 per metric ton by 2025.
In a note Tuesday, Bank of America commodity strategist Michael Widmer highlighted inventories measured in tons are now at levels seen 15 years ago, implying that stocks currently cover just over three weeks of demand. This comes as the global economy is beginning to open up and reflate.
“Linked to that, we forecast copper market deficits, and further inventory declines, this year and next,” Widmer said.
“With (London Metal Exchange) inventories close to the pinch-point at which time spreads can move violently, there is a risk backwardation, driven by a rally in nearby prices, may increase.”
Backwardation is when an underlying asset is trading at a higher price than the futures market for that asset.
Widmer also highlighted that a rise in volatility resulting from falling inventories was not without precedent, since nickel shortages in LME warehouses in 2006/7 drove nickel prices more than 300% higher.
Given the fundamental environment and the depleted inventories, Widmer suggested that copper may spike to $13,000/t in the coming years after notching $10,000 last week for the first time in a decade.
Copper prices stood at just under $4.54 per pound as of 5:30 a.m. London time on Thursday, up 30% for the session.
After deficits in 2021 and 2022, BofA expects the copper market to rebalance in 2023 and 2024 before fresh shortfalls and a further draw down on inventories kick in from 2025.
“In our view, scrap supply is critical and our analysis suggests that scrap usage at smelters/refiners could increase from around 4,200t in 2016 to 6,700t by 2025,” Widmer said.
“If our expectation of increased supply in secondary material, a non-transparent market, did not materialize, inventories could deplete within the next three years, giving rise to even more violent price swings that could take the red metal above $20,000/t ($9.07/lb).”
---- Commodity prices rose 3% in April, taking the global index up 80% since April 2020, and HSBC commodity analysts highlighted in a note Wednesday that demand for copper is being supported by investment in electrification as emission reduction strategies are further bolstered by policymakers.
Copper remains Livermore’s favorite commodity at present, Neuhauser said.
“I think copper is the new oil and I think copper, for the next five to 10 years, is going to look tremendous with the potential for $20,000 per metric ton,” Neuhauser said.
https://www.cnbc.com/2021/05/06/copper-is-the-new-oil-and-could-hit-20000-per-ton-analysts-say.html
Covid-19 Corner
This section will continue until it becomes unneeded.
Today, Covid-19, the evidence points to a man-made virus and accidental release in Wuhan. A long, but must read article, though we’ve covered this more than a few times last year.
Bulletin Of Atomic Scientists Opens The Wuhan Virus Pandora's Box
by Tyler Durden Wednesday, May 05, 2021 - 10:10 PM
Authored by Nicholas Wade via the Bulletin of the Atomic Scientists (emphasis ours),
-----Comparing the rival scenarios of SARS2 origin. The evidence above adds up to a serious case that the SARS2 virus could have been created in a lab, from which it then escaped. But the case, however substantial, falls short of proof. Proof would consist of evidence from the Wuhan Institute of Virology, or related labs in Wuhan, that SARS2 or a predecessor virus was under development there. For lack of access to such records, another approach is to take certain salient facts about the SARS2 virus and ask how well each is explained by the two rival scenarios of origin, those of natural emergence and lab escape. Here are four tests of the two hypotheses. A couple have some technical detail, but these are among the most persuasive for those who may care to follow the argument.
1) The place of origin. Start with geography. The two closest known relatives of the SARS2 virus were collected from bats living in caves in Yunnan, a province of southern China. If the SARS2 virus had first infected people living around the Yunnan caves, that would strongly support the idea that the virus had spilled over to people naturally. But this isn’t what happened. The pandemic broke out 1,500 kilometers away, in Wuhan.
Beta-coronaviruses, the family of bat viruses to which SARS2 belongs, infect the horseshoe bat Rhinolophus affinis, which ranges across southern China. The bats’ range is 50 kilometers, so it’s unlikely that any made it to Wuhan. In any case, the first cases of the COVID-19 pandemic probably occurred in September, when temperatures in Hubei province are already cold enough to send bats into hibernation.
What if the bat viruses infected some intermediate host first? You would need a longstanding population of bats in frequent proximity with an intermediate host, which in turn must often cross paths with people. All these exchanges of virus must take place somewhere outside Wuhan, a busy metropolis which so far as is known is not a natural habitat of Rhinolophus bat colonies. The infected person (or animal) carrying this highly transmissible virus must have traveled to Wuhan without infecting anyone else. No one in his or her family got sick. If the person jumped on a train to Wuhan, no fellow passengers fell ill.
It’s a stretch, in other words, to get the pandemic to break out naturally outside Wuhan and then, without leaving any trace, to make its first appearance there.
For the lab escape scenario, a Wuhan origin for the virus is a no-brainer. Wuhan is home to China’s leading center of coronavirus research where, as noted above, researchers were genetically engineering bat coronaviruses to attack human cells. They were doing so under the minimal safety conditions of a BSL2 lab. If a virus with the unexpected infectiousness of SARS2 had been generated there, its escape would be no surprise.
---- Where we are so far. Neither the natural emergence nor the lab escape hypothesis can yet be ruled out. There is still no direct evidence for either. So no definitive conclusion can be reached.
That said, the available evidence leans more strongly in one direction than the other. Readers will form their own opinion. But it seems to me that proponents of lab escape can explain all the available facts about SARS2 considerably more easily than can those who favor natural emergence.
It’s documented that researchers at the Wuhan Institute of Virology were doing gain-of-function experiments designed to make coronaviruses infect human cells and humanized mice. This is exactly the kind of experiment from which a SARS2-like virus could have emerged. The researchers were not vaccinated against the viruses under study, and they were working in the minimal safety conditions of a BSL2 laboratory. So escape of a virus would not be at all surprising.
In all of China, the pandemic broke out on the doorstep of the Wuhan institute. The virus was already well adapted to humans, as expected for a virus grown in humanized mice. It possessed an unusual enhancement, a furin cleavage site, which is not possessed by any other known SARS-related beta-coronavirus, and this site included a double arginine codon also unknown among beta-coronaviruses. What more evidence could you want, aside from the presently unobtainable lab records documenting SARS2’s creation?
More
https://www.zerohedge.com/covid-19/bulletin-atomic-scientists-opens-wuhan-virus-pandoras-box
Japan to extend emergency virus measures as Olympics approach
Issued on:
Japan will prolong a virus state of emergency in Tokyo and other regions and impose restrictions in more areas on Friday as cases surge less than three months before the Olympics.
The emergency measures, less strict than the blanket lockdowns seen in other countries, focus on limiting commercial activity with malls closed and bars and restaurants told to shut or stop serving alcohol.
They were imposed in Tokyo, Osaka and two other regions in late April -- just weeks after a previous state of emergency was lifted -- and had been due to end on May 11.
But the government is expected to extend the restrictions until the end of May and also impose them in Fukuoka and Aichi prefectures, where infections are spiking.
A formal announcement will be made later on Friday, with officials expected to ease some measures to allow department stores to reopen and a limited number of spectators at sports events.
Japan's Covid-19 outbreak remains much smaller than in many countries, with around 10,000 deaths.
But its vaccine rollout is moving slowly and more infectious variants are driving fresh waves of contagion, with record case numbers seen in some regions and medics warning that hospitals are under strain.
Osaka governor Hirofumi Yoshimura warned Thursday that "the situation of infections is very tough" and "the medical system is reaching breaking point", saying he had requested an extension of the emergency measures.
The pandemic-postponed 2020 Olympics are due to open on July 23, and the government and Games organisers insist they will go ahead safely -- even though a majority of Japanese people support cancellation or another delay.
US drugs giant Pfizer and its German partner BioNTech on Thursday announced a deal with the International Olympic Committee to provide vaccines to competitors and staff at the Tokyo Games.
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.
Redesigned power inverter promises range boost for electric vehicles
Nick Lavars May 03, 2021
While ever-improving battery technology draws a lot of the attention when it comes to improving the range of electric vehicles, these machines feature many moving parts that play a role in their overall performance. By reimagining the way power inverters relay the current from the battery to the electric motor, scientists at the Fraunhofer Institute for Reliability and Microintegration have conjured up a new design they say works much more efficiently, and could improve EV range as much as six percent.
A power inverter is an electronic device that converts a direct current into an alternating current, and in the context of an electric vehicle, it takes electricity from the battery and converts it to run the electric motors. As an intermediary between the battery and motor, the power inverter and its transistors are made to deal with large electric currents, which causes them to increase in temperature as the vehicle is used.
To combat this, power inverters in electric cars use solid cooling elements that feature ducts resting in water, where the heat is directed and dissipated. It is these cooling elements that are the focus of the Fraunhofer scientists, who have been developing advanced transistors for inverters made of silicon carbide semiconductors, which offer a lower rate of power loss as an electric vehicle is operated.
The team set out to design cooling elements for these advanced transistors that didn't compromise on the power gains offered by the silicon carbide semiconductors. They leveraged 3D printing to produce cooling elements with much thinner walls, and positioned the transistors on a thin metal plate measuring just a few millimeters thick.
The upshot of this thinner design is the transistors are closer to the cooling water, which boosts the cooling effects. The cooling ducts double as structural components, supporting the metal plates, while the thin nature of the materials enables them to absorb stresses as the inverter heats and is cooled, by deforming ever so slightly. Additionally, flexible copper wires tie the whole thing together instead of solid copper tracks, further reducing the stress during operation.
“We expect that by optimizing the drive train in this way, the range of electric cars will ultimately be extended by up to six percent,” says Eugen Erhardt,
Erhardt notes there is still a long way to go to turn this prototype into a functional component of a production vehicle, though the researchers will get a better idea of its potential in the upcoming months. This includes testing in collaboration with Robert Bosch, and also with Porsche, which will install and test the inverter in a new drive-train designed specifically for it.
https://newatlas.com/automotive/redesigned-power-inverter-greater-range-electric-vehicles/
Another weekend and it’s time to spend, spend, spend like there’s no tomorrow. With all the global Magic Money Tree programs, led by spendthrift America under Biden-Powell, it’s probably better to buy now goods and services that you really need for the future, even if that means taking on debt with rigged lower interest rates, because if the Magic Money Tree forest ever goes wrong there might not be a tomorrow for the Great Nixonian Error of fiat money. Have a great weekend everyone.
Too many people spend money they haven't earned to buy things they don't want to impress people they don't like.
Will Rogers.
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