Baltic Dry Index. 3255 +80 Brent Crude 76.18
Spot Gold 1781
Gold is money. Everything else is credit.
J. P. Morgan.
“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.
Key inflation indicator posts biggest year-over-year gain in nearly three decades
A key inflation indicator that the Federal Reserve uses to set policy rose 3.4% in May from a year ago, the fastest increase since the early 1990s, the Commerce Department reported Friday.
Though the gain was the biggest since April 1992, it met the Dow Jones estimate and markets reacted little to the news. The stock market posted mostly solid gains, while government bond yields were moderately higher.
The core personal consumption expenditures price index increase reflects the rapid pace of economic expansion and resulting price pressures, and amplified how far the nation has come since the Covid pandemic-induced shutdown of 2020.
Though the reading could add to inflation concerns, Fed officials continue to insist that they see the current situation as temporary and likely to abate as conditions return to normal.
The core index rose 0.5% for the month, which actually was below the 0.6% estimate.
Including volatile food and energy prices, the PCE index rose 3.9% for the year and 0.4% for the month.
Most of the inflation increase came from energy, with prices rising 27.4% against just a 0.4% gain in food costs.
The headline increase was the biggest since August 2008, just before the worst of the financial crisis hit and sent inflation on a path lower that would last throughout the longest economic recovery in U.S. history.
Inflation has spiked recently amid a confluence of factors. They include supply chain disruptions in which manufacturers of key products have been unable to keep up with escalating demand that has come with the economic reopening.
Soaring real estate prices also have played a factor as lumber costs have soared, though that trend has reversed lately.
Finally, the current numbers are influenced by what economists call “base effects,” or skewed comparisons with a year ago when government restrictions put much of the economy in limbo. Those base effects are likely to dissipate when the June numbers come out next month.
A separate part of Thursday’s report showed that consumer spending was flat for the month, versus the estimate for a 0.4% increase, while personal income declined 2%, less than the expected 2.7% decline. Those numbers also had been distorted, primarily by government stimulus checks that had sharply boosted both income and spending.
The personal saving rate was 12.4%, a decline from April’s 14.5%.
Hotels’ and Restaurants’ Rebound Summer Held Back by Shortages of Everything
Just when demand is surging, hospitality businesses are squeezed from all sides, including lack of workers and rising costs of supplies
Shut for long stretches because of the pandemic, Mississippi River Distilling Co. in LeClaire, Iowa, has been counting on a summer rebound.
Crowds have come rushing back. But the distillery and events space can’t find enough workers to serve its customers. And prices for spirits-making commodities, such as corn and glass, have spiraled. So have costs for lumber and construction, making a long-delayed plan to build a new party and wedding venue about 25% more expensive.
“What’s at stake this summer is to try to build enough bank for the off months down the road,” said co-owner Ryan Burchett. An outsider “might see the patios packed and say, ‘Everything is back. We made it.’ But we didn’t yet.”
Referring to the revenue lost to the pandemic, he said: “There’s a hole. It can’t be filled.”
Summer looked like the on-ramp to a big recovery for the leisure and hospitality industry, hard hit by the pandemic and its lockdowns and propped up with billions in government aid. Instead, restaurants, theme parks, hotels and tourist attractions are finding themselves squeezed from multiple sides: rising costs, worker shortages, unpredictable supplies of some foods and, in some cases, demand so overwhelming it’s difficult to avoid leaving customers dissatisfied.
Some hotels are limiting services because they can’t hire enough staff to keep up. Experienced servers at one restaurant chain are having to train new people five days a week. A theme park says rapidly rising demand at restaurants and attractions across the U.S. means every week brings concerns about a shortage of some food item or higher commodity prices.
Together, these forces are restraining the recovery for an industry that, just before the pandemic, was responsible for nearly 17 million jobs and 4.2% of U.S. GDP, much of it through small businesses.
Operators of hospitality businesses are battling back with tactics ranging from higher pay, signing bonuses and perks for workers to technology such as tablets where restaurant customers self-order or self-pay.
The challenges also threaten to hobble the rebound for regions reliant on summer tourism. In the seaside county of Cape May, N.J., this season accounts for as much as 75% of annual tourist revenue, said Vicki Clark, president of the county’s Chamber of Commerce.
Tractor Supply CEO says inflation and supply chain delays will be challenges for foreseeable future
Tractor Supply Company has increased some prices in the face of inflation and supply chain constraints, headwinds that the retailer’s CEO said he believes are here for the foreseeable future.
“We have had some moderate price increases across our business. To date our customers have not demonstrated any elasticity or concerns there,” Tractor Supply CEO Hal Lawton said on Friday during an interview at the National Retail Federation’s online conference.
“It’s our obligation to try to keep the prices as low as we can for them, even as we navigate this inflationary environment that we are in that I suspect is more structural than transient, despite some of the other rhetoric,” Lawton said.
The company is facing price increases across the board, including the costs of raw materials and the transportation of goods.
“There is inflation in the market across almost all facets,” Lawton said. “A big raw material component for us is corn, and we’ve seen corn prices up dramatically over the last three months. Another big raw material component for us is steel. We’ve seen significant increases there — not to mention the freight cost increases and the cost of imports.”
Lawton also said he doesn’t expect delays in the supply chain to go away anytime soon.
“There’s substantive disruption occurring in the supply chain,” Lawton said. “I think we are going to see it this way for quite some time as we migrate through the second half of the year. This is going to be an issue for us for the foreseeable future.”
Despite significant delays in its supply chain and increased demand, the company has been able to maintain enough stock in its stores due to its relationship with its suppliers, Lawton said.
As with other retailers, the delays the company is experiencing are occurring at all stages of the supply chain, which is why it could take time to get back up to speed.
More
U.S. economy growth from January-April solid at 6.4%, Commerce Dept. says
June 24, 2021 / 11:39 AM
June 24 (UPI) -- The Commerce Department said in an updated assessment on Thursday that the overall U.S. economy grew by more than 6% between January and April -- the second-best quarterly mark of the COVID-19 era, and unchanged from the first two estimates.
The department said gross domestic product, the overall output of goods and services, climbed by 6.4% in the first quarter. That's exactly the same figure pegged by its first two reports in April and May.
With more businesses reopening from coronavirus-related restrictions and an uptick in vaccinations nationally in the first three months of 2021, the department said consumers were encouraged to spend more.
"The 'third' estimate of GDP released today is based on more complete source data than were available for the 'second' estimate issued last month," the department said in its report.
"The increase ... reflected increases in personal consumption expenditures, nonresidential fixed investment, federal government spending, residential fixed investment, and state and local government spending that were partly offset by decreases in private inventory investment and exports."
The first-quarter growth was the second-largest since the start of the COVID-19 pandemic early last year. Only the third quarter of 2020 performed better, when the economy saw a record surge of 33%. The first-quarter growth added modestly to a 4.3% growth from the final three months of 2020.
The department said Thursday that the top categories for purchases between January and April were durable goods, retail and accommodation and food services.
The department's first report for the second quarter, which covers April through June, is due July 29.
https://www.upi.com/Top_News/US/2021/06/24/economy-first-quarter-growth-commerce/6611624547249/
This new model flags vulnerability to a financial crisis, and it finds the U.S. is most at risk
Wouldn’t it be great to know when financial crises are about to happen?
That’s the idea behind a new warning model created by Japanese bank Nomura, with the somewhat unfortunate name Cassandra, given the Trojan priestess of Greek mythology was cursed to never be believed despite her accurate forecasts. Financial crises, they say, are better viewed through the perspective of financial cycles than business cycles.
Financial cycles are often “associated with aggressive risk taking and can be self-fulfilling, as rapid credit growth drives up asset prices, which increases collateral values and, in turn, further increases the availability of credit. Financial cycles are driven by, but also feed, an unsustainable economic expansion, which manifests itself in unsustainable credit and asset price booms,” they say.
The Singapore-based economics research team at Nomura built a model around five different early warning signs: the ratio of private credit to GDP, the debt service ratio, real equity prices, real property prices and the real effective exchange rate. Nomura says Cassandra correctly signalled two-thirds of the past 53 crises in 40 countries since the early 1990s, and it is currently warning that six economies – the U.S., Japan, Germany, Taiwan, Sweden and Netherlands – appear vulnerable to financial crises over the next 12 quarters.
Jun 24 20215:25 PM EDT
Microsoft just unveiled Windows 11: Here’s everything it announced
Jordan Novet Kif Leswing Todd Haselton
Microsoft revealed Windows 11 during an online event on Thursday. The announcement comes almost six years after the introduction of Windows 10, which is the world’s most widely used PC operating system, with over 1.3 billion devices using it.
Windows, which represents over 10% of Microsoft’s revenue even as the company has grown by selling cloud services, became more critical during the pandemic as people stayed home and spent more time with Windows 10 for school, work and gaming. Microsoft reported higher Windows revenue from consumer PCs — but Apple’s Mac revenue also rose, and shipments of PCs running Google’s Chrome OS skyrocketed.
During the event, Microsoft:
- Announced Windows 11, which will be a free update and is due out by the holidays
- Showed new Xbox features coming to Windows 11
- Revealed big changes to its Microsoft Teams app in Windows 11
- Unveiled support for Android apps through the Amazon Appstore in Windows 11
- Took a shot at Apple and said its new Microsoft Store has lower fees
More
https://www.cnbc.com/2021/06/24/microsoft-windows-11-event-live-updates.html
Just because you have a good hand today doesn't mean it's good tomorrow. And some of the things we're doing may become very disadvantageous at some point.
Jamie Dimon.
Covid-19 Corner
This section will continue until it becomes unneeded.
Dating first cases of COVID-19
David L. Roberts , Jeremy S. Rossman, Ivan Jarić Published: June 24, 2021
Abstract
Questions persist as to the origin of the COVID-19 pandemic. Evidence is building that its origin as a zoonotic spillover occurred prior to the officially accepted timing of early December, 2019. Here we provide novel methods to date the origin of COVID-19 cases. We show that six countries had exceptionally early cases, unlikely to represent part of their main case series. The model suggests a likely timing of the first case of COVID-19 in China as November 17 (95% CI October 4). Origination dates are discussed for the first five countries outside China and each continent. Results infer that SARS-CoV-2 emerged in China in early October to mid-November, and by January, had spread globally. This suggests an earlier and more rapid timeline of spread. Our study provides new approaches for estimating dates of the arrival of infectious diseases based on small samples that can be applied to many epidemiological situations.
Author summary
While the COVID-19 pandemic continues, questions still persist as to its origins. Evidence is building that its origin as a zoonotic spillover occurred before the officially accepted timing of early December, 2019. We date the origin of COVID-19 cases from 203 countries and territories using a model from conservation science. We use a method that was originally developed to date the timing of extinction, and turn it to date the timing of origination using case dates rather than sighting events. Our results suggest that the virus emerged in China in early October to mid-November, 2019 (the most likely date being November 17), and by January, 2020, had spread globally. This suggests a much earlier and more rapid spread than is evident from confirmed cases. In addition, our study provides a new approach for estimating dates of the arrival of infectious diseases in new areas that can be applied to many different situations in the future.
More.
https://journals.plos.org/plospathogens/article?id=10.1371/journal.ppat.1009620
Next two repeats from the past week due to their importance.
Dr. John Campbell explains all. Approx. 22 minutes.
Money for antivirals
https://www.youtube.com/watch?v=Of5_oiuqDp8
But should we be vaccinating at all, at least with the current vaccines? A prominent virologist says no. Approx. 29 minutes.
The Vaccines: Awesome Ingenuity or A Huge Mistake?
https://www.youtube.com/watch?v=cjMZvpmuaKY
CDC says roughly 4,100 people have been hospitalized or died with Covid breakthrough infections after vaccination
More than 4,100 people have been hospitalized or died with Covid-19 in the U.S. even though they’ve been fully vaccinated, according to new data from the Centers for Disease Control and Prevention.
So far, at least 750 fully vaccinated people have died after contracting Covid, but the CDC noted that 142 of those fatalities were asymptomatic or unrelated to Covid-19, according to data as of Monday that was released Friday.
The CDC received 3,907 reports of people who have been hospitalized with breakthrough Covid infections, despite being fully vaccinated. Of those, more than 1,000 of those patients were asymptomatic or their hospitalizations weren’t related to Covid-19, the CDC said.
“To be expected,” Dr. Paul Offit, a top advisor to the Food and Drug Administration on children’s vaccines told CNBC. “The vaccines aren’t 100% effective, even against severe disease. Very small percentage of the 600,000 deaths.”
Breakthrough cases are Covid-19 infections that bypass vaccine protection. They are very rare and many are asymptomatic. The vaccines are highly effective but don’t block every infection. Pfizer and Moderna’s phase three clinical studies found that their two-dose regimens were 95% and 94% effective at blocking Covid-19, respectively, while Johnson & Johnson’s one-shot vaccine was found to be 66% effective in its studies. All three, however, have been found to be extremely effective in preventing people from getting severely sick from Covid.
The CDC doesn’t count every breakthrough case. It stopped counting all breakthrough cases May 1 and now only tallies those that lead to hospitalization or death, a move the agency was criticized for by health experts.
More
Japan discloses more COVID-19 cases among Olympics arrivals, report says
June 25, 2021 / 1:44 PM
June 25 (UPI) -- The Japanese government said four coronavirus cases had been found among Olympics arrivals from overseas, after two members of the Ugandan delegation tested positive for COVID-19.
Tokyo said a French national who arrived in February, an Egyptian in April, a Sri Lankan in May and a Ghanaian in June all tested positive. The public was not informed of the positive tests at the time and the individuals had traveled to Japan for Olympics-related reasons, the Mainichi Shimbun reported Friday, citing the Cabinet Secretary's office.
More
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
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 21st century onwards.
Durable concrete uses graphene particles to fend off water and cracks
Nick Lavars June 21, 2021
As scientists work to shore up the strength and durability of concrete, it mightn't come as a huge surprise that the wonder material graphene is proving to be a promising additive. As the world's strongest artificial material, it may have a lot to offer the world of construction, and the latest example of this comes from Northwestern University researchers, who have developed a novel form of graphene-infused cement that is highly resistant to water and cracks.
As the key ingredient in the production of concrete, the world's most widely used material, cement has a massive environmental footprint, accounting for around eight percent of global greenhouse gas emissions. One way researchers hope to reduce this burden is by developing forms of concrete that last for longer, which reduces the need for further concrete to replace compromised structures.
One of the reasons concrete structures fail is the formation of cracks, which start out as tiny ruptures. Once water infiltrates these ruptures, they can cause them to grow in size until the entire thing needs repairing or replacing. We've seen some interesting ways scientists may be able to intervene in this process, through "self-healing" concrete that patches up its own cracks with help from blood enzymes, fungus and special glues.
Graphene might also play a part in this. We've seen promising concrete prototypes that use flakes of graphene to decrease water permeability, and even how old tires can be converted into graphene for the production of stronger concrete. And the technology is starting to make its way into the real world, with engineers recently pouring the world's first graphene-enhanced concrete slab in England.
The Northwestern University researchers have been cooking up yet another supercharged cement recipe, where tiny particles of the wonder material are incorporated to make concrete more resistant to water. The team experimented with a range of particle types, including carbon nanotubes, carbon nanofibers and graphene nanoplatelets, and then tested their performance through an advanced technique known as scratch testing. This subjects the microscopic bits of the material to conical probes to test their fracture response.
More
You can't unscramble eggs.
J. P. Morgan.
This weekend’s musical diversion. J. S. Bach again. Approx. 11 minutes.
Bach - Brandenburg Concerto No. 3 in G major BWV 1048 - Sato | Netherlands Bach Society
https://www.youtube.com/watch?v=qr0f6t2UbOo
This weekend’s chess masterclass. Approx. 10 minutes.
Looks Scarier Than it Is :) || Rajabov vs Aronian || Paris Rapid & Blitz (2021)
https://www.youtube.com/watch?v=4ONdu4cEeGA
This weekend’s Maths update. How the ancients knew the earth was round and roughly how big. Approx. 15 minutes.
Johnny Ball and Measuring the Earth
https://www.youtube.com/watch?v=2yaYDOHL1Gg&t=92s
Anybody has a right to evade taxes if he can get away with it. No citizen has a moral obligation to assist in maintaining his government
J. P. Morgan.
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