Baltic Dry Index. 2481 +61 Brent Crude 71.69
Spot Gold 1886
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 10/06/21 World 175,181,016
Deaths 3,777,167
At a St. Patrick's Day reception for the then Irish Prime Minister Brian Cowen in 2010, Biden noted that the visitor's mother had lived in America.
"His mom lived in Long Island for 10 years or so, god rest her soul, and, er, although she's, wait—your mom's still alive. It was your dad [who] passed. God bless her soul. I gotta get this straight," Biden said.
Newsweek.
Later today, the official US inflation figures for May. Don’t worry, it’s only transitory, say the experts at the Fed, who’ve never known to be wrong.
Besides, the news is likely to be over shadowed by President Biden’s arrival in GB for the G-7 Great Leaders summit in Cornwall. But first he’s off for a chat with Boris and then a visit to Her Majesty on Sunday at Windsor Castle, only about 11 miles from me although I don’t think he’s coming by later for a LIR update.
After modestly announcing he’s going to lead the global democracies in some sort of union against everyone else, after the G-7 Great Leaders meeting and Windsor, he’s off to Brussels for a NATO meeting and then on to meet “killer” Putin in Geneva on the 16th to lay down the law according to Washington, District of Crooks.
It's a tough life but someone has to do it. Straightening out “killers” is not something I would like to take on and I’m seven years younger than President Biden.
Asia-Pacific stocks edge higher ahead of U.S. inflation data release
SINGAPORE — Shares in Asia-Pacific edged higher in Thursday morning trade, as investors looked ahead to an upcoming release of U.S. inflation data for May.
The Shanghai composite in mainland China gained 0.44% while the Shenzhen component climbed 0.677%. Hong Kong’s Hang Seng index rose 0.57%.
In Japan, the Nikkei 225 was 0.46% higher while the Topix index gained 0.21%. South Korea’s Kospi advanced 0.34%.
Shares in Australia nudged higher, with the S&P/ASX 200 up 0.48%.
MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.55% higher.
Overnight stateside, the Dow dropped 152.68 points to 34,447.14 — its third straight day of losses — while the S&P 500 slipped 0.18% to 4,219.55. The Nasdaq Composite declined roughly 0.1% to 13,911.75.
Those moves came ahead of U.S. consumer inflation data. The U.S. consumer price index for May, set to be reported at 8:30 a.m. ET Thursday, is expected to show headline inflation at 4.7% — the fastest pace since 2008.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 90.173 after recently bouncing from below the 90 level.
The Japanese yen traded at 109.52 per dollar, weaker than levels around 109.2 against the greenback seen earlier this week. The Australian dollar changed hands at $0.7733, having seen a recent drop from about $0.776.
Oil prices were lower in the morning of Asia trading hours, with international benchmark Brent crude futures down 0.69% to $71.72 per barrel. U.S. crude futures shed 0.7% to $69.47 per barrel.
https://www.cnbc.com/2021/06/10/asia-markets-us-inflation-data-currencies-oil.html
Hot inflation may have become scorching in May and is expected to hit a 28-year high
Inflation has been warming up this spring, and it’s expected to hit historical levels for the month of May.
The consensus forecast for the core consumer price index, which excludes food and energy, is 3.5% on a year-over-year basis, according to Dow Jones. That’s the fastest annual pace in 28 years.
Economists expect both core and headline CPI rose by 0.5% in May. Headline CPI is expected to jump 4.7% year-over-year, the highest rate since sky high energy prices spiked inflation readings in the fall of 2008.
“It will be hot. It could be up to 5%,” said Diane Swonk, chief economist at Grant Thornton. “The worst of the heat is going to be the second quarter in terms of headline. It will be interesting to see what it looks like when you strip out the extremes. I think we’re still going to have a warm summer when you have surge pricing kicking in for everything from airfares to hotels.”
May CPI is expected at 8:30 a.m. ET Thursday and comes as investors are debating whether the period of rising prices is transient, as the Fed believes, or more pervasive and persistent. If it’s the latter, the concern is the central bank would then be forced to back away from its easy policies that have helped keep interest rates low, boosted liquidity and provided fuel for the stock market’s gains.
Greater expectations
Mark Zandi, chief economist at Moody’s Analytics, said he expects a 0.6% jump in May core CPI. “The year-over-year growth rate would be 3.65%,” he said. “The last time it was this high was July 1992.”
The last time the core CPI was above the consensus expectation of 3.5% was February 1993.
Swonk expects headline inflation to reach 4.9% year-over-year. That compares to a 4.2% headline pace in April. Core inflation was 3% year-over-year in April, a level it has only occasionally reached in the past two decades.
“I am worried about rent and owners’ equivalent rent because it should go up. It had decelerated,” she said. Shelter is more than 30% of CPI, and rent costs have bottomed in some cities, Swonk added. “The issue is it could have longer legs and keep overall inflation measures buoyed more than people expect.”
----Some strategists expect the Fed to begin talking about tapering its $120 billion a month in late August when it meets at the Jackson Hole Economic Symposium. It is then expected to wait several months and begin to pare back purchases in December or early next year.
That would then lead to a long period of the Fed slowly reducing its bond purchases before it actually moves to raise interest rates. Most market pros do not expect the Fed to hike interest rates before 2023.
More
China’s Factory Inflation at 2008 High Adds to Global Pressures
Bloomberg NewsUpdated on 9 June 2021, 08:20 BST·
· So far, Chinese manufacturers are absorbing higher costs
Surging costs of imported commodities drove China’s factory-gate inflation to its highest level since 2008, raising the odds that exporters will begin passing on higher prices and boost inflationary pressures in the global economy.
The producer price index climbed 9% in May from a year earlier, driven by price increases for oil, metals and chemicals, the National Bureau of Statistics said Wednesday. The median forecast in a Bloomberg survey of economists was for an 8.5% increase. Consumer inflation increased only 1.3% from a year ago, missing an estimate of 1.6% and suggesting retailers aren’t hiking prices yet due to sluggish domestic demand.
Intense competition among manufacturers in China, which is the world’s top exporter, has had a deflationary impact on global consumer prices since the 1990s. Now, rising costs and surging export demand mean some factories could soon start hiking prices due to low margins, just as inflation starts to pick up in the U.S. and elsewhere following vaccination roll-outs that have allowed economies to re-open.
“Export prices may pick up in dollar terms due to the currency appreciation” of the yuan, said Michelle Lam, Greater China economist at Societe Generale SA. “Supply-side bottlenecks in other emerging market countries are also favorable for the bargaining power of Chinese exporters.” However, the prices pressures will only be transitory, she said.
Goods imported from China make up a relatively small component of the basket used to calculate inflation in advanced economies, meaning that exporter price hikes would need to be large and sustained in order to disturb central banks ultra-loose monetary settings.
“It is impossible to pass on the cost to consumers even in overseas markets. Producers have to eat up these costs,” Iris Pang, chief economist for Greater China at ING Bank NV, told Bloomberg TV. Upstream producers -- who have seen strong profit growth on the back of Beijing’s efforts to rein-in excess capacity in recent years -- have scope to absorb price increases and shield downstream producers, she added.
Global commodity prices have rallied this year on strong property investment in China and record stimulus by governments around the world, combined with supply constraints caused the coronavirus pandemic.
Beijing has launched a campaign to curb prices by cracking down on financial market speculation on commodities as well as hoarding, which have caused slight declines in prices in recent weeks. But ultimately authorities have limited leverage over prices of imported goods such as iron ore.
more
Up next, a tale of two cities. London and Paris rarely see eye to eye and don’t now.
That G-7 FinMin agreement for a global minimum corporate tax rate of 15 percent lasted just 4 days. GB’s Chancellor, who hosted the meetings at the US Ambassador’s mansion in Regent’s Park, London, now says that the agreement should apply to all, except of course, the financial services firms located in London.
I wonder if any of the other G-6 want anyone exempted too? No, they wouldn’t, would they?
Sunak wants the City to be exempt from G7 tax raid
The Chancellor is arguing that Britain’s world-leading financial sector warrants a ‘carve out’ from the rules
Rishi Sunak is pushing for the City of London to be exempt from a new global minimum corporation tax system approved by G7 finance ministers.
The Chancellor declared victory over multinational tax avoidance last weekend after the G7 agreed on an international deal to impose a 15pc minimum corporation tax rate, as well as a 20pc tax on “super-profits” on the world’s 100 largest companies.
The plans are aimed at cracking down on multinationals shifting where they pay tax, with the UK and other European states particularly keen to make big US tech companies pay more on this side of the Atlantic.
The UK, however, is reported to be pushing “for an exemption on financial services”, according to the Financial Times, over fears that global banks with headquarters in London will be caught up in the measures.
More
France expects minimum tax to yield "several billion" euros -minister
June 9, 2021 9:55 AM
PARIS (Reuters) - France expects to raise several billions of euros in extra revenue from a global minimum tax rate currently being negotiated internationally, Finance Minister Bruno Le Maire said on Wednesday.
Le Maire and his counterparts from the Group of Seven powers agreed on Saturday to support a minimum rate of at least 15% in talks under way at the Organisation for Economic Cooperation and Development on rewriting the rules of cross-border taxation among 139 countries.
Asked on BFM TV how much the minimum tax would yield in France, Le Maire said: “It’s still a bit hard to evaluate, but it’s several billion euros per year.”
A separate pillar of the international talks is focused on how to share out among different countries the right to tax the 100 biggest companies whose profits are considered to be beyond a normal level.
Le Maire said that, under this pillar, France could expect to see 500 million to 1 billion euros in extra tax revenue whereas its existing digital services tax, which Paris has promised to repeal once there is an international deal, generates about 450 million euros per year.
Some European countries had concerns that Amazon may fall outside the proposals for taxing “super-profits” because its overall operating margin is below the qualifying threshold of 10%.
Officials close to the talks said on Tuesday that G7 states had found a way to include Amazon by specifically targeting its more profitable cloud computing unit, which Le Maire said he was in favour of.
“I would like us to segment out Amazon’s activities so that what is highly profitable is subject to this digital taxation,” Le Maire said. “Amazon must pay this tax.”
Biden set to meet Putin in 18th-century Swiss villa for first summit
- Disputes likely over cyber-attacks, human rights and Ukraine
- First overseas trip will start with G7 summit in Cornwall
Wed 9 Jun 2021 18.24 BST
Joe Biden and the Russian president, Vladimir Putin, are set to hold their 16 June summit in an 18th-century Swiss villa overlooking Lake Geneva, a soothing setting for what promise to be heated talks.
The US president’s first foreign trip since entering the White House got off to an inauspicious start, however, when he was assaulted by a cicada before boarding Air Force One bound for the UK on Wednesday morning, ready to begin his overseas visit by attending the G7 meeting in Cornwall.
Biden will meet Boris Johnson to discuss the UK-US relationship and he and Jill Biden will meet Queen Elizabeth at Windsor Castle on Sunday.
----Asked about his aim for the foreign trip, Biden said it was “strengthening the alliance”, probably referring to both the Group of Seven powers (G7) and the North Atlantic Treaty Organisation (Nato).
That aim, he said was to “make it clear to Putin and China that Europe and the US are tight”. He said he did not know if talking to Putin about harbouring cybercriminals in Russia would produce an agreement, against a backdrop of the US facing an increasing threat from foreign ransomware attacks.
Bitter disputes over election interference, cyberattacks, human rights and Ukraine hang over the first face-to-face meeting with Putin since Biden took office on 20 January.
Strategic nuclear stability and regional conflicts will also be on the table.
Meanwhile, diplomatic sources expect confirmation of the Geneva venue later on Wednesday. The Swiss police and army have closed the two parks surrounding the Villa La Grange and installed barricades and barbed wire.
More
https://www.theguardian.com/us-news/2021/jun/09/biden-putin-summit-villa-switzerland-venue
Finally, an interesting read. Who got paid off at America’s IRS?
The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax
Jesse EisingerJeff ErnsthausenPaul KielJune 8, 5 a.m. EDT
In 2007, Jeff Bezos, then a multibillionaire and now the world’s richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011. In 2018, Tesla founder Elon Musk, the second-richest person in the world, also paid no federal income taxes.
Michael Bloomberg managed to do the same in recent years. Billionaire investor Carl Icahn did it twice. George Soros paid no federal income tax three years in a row.
The Secret IRS Files
ProPublica has obtained a vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people, covering more than 15 years. The data provides an unprecedented look inside the financial lives of America’s titans, including Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg. It shows not just their income and taxes, but also their investments, stock trades, gambling winnings and even the results of audits.
Taken together, it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most. The IRS records show that the wealthiest can — perfectly legally — pay income taxes that are only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow each year.
More
During a 2008 campaign rally, Biden said: "Look, John's last-minute economic plan does nothing to tackle the number one job facing the middle class, and it happens to be, as Barack says, a three-letter word: Jobs. J-O-B-S."
Newsweek.
Global Inflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Surprise Jump in U.S. Wages Gives Inflation Debate a New Twist
By Olivia Rockeman and Reade Pickert
· Growth in pay risks inflation spark; some see it as temporary
Consumer prices are rising quickly as the economy reopens after the pandemic. A closely watched data release on Thursday is expected to show prices rose another 0.4% in May -- pushing annual inflation above April’s 4.2%, already the highest in more than a decade.
Many policy makers and economists see the price spike as temporary –- partly because they haven’t been anticipating much in the way of wage growth, which has been relatively stagnant for years at the lower end of the pay scale.
But last week’s jobs report showed a larger-than-forecast pickup in average hourly wages for a second straight month. It turns out that whatever the unemployment numbers say, there’s a shortage of people ready to work at the going rate of compensation -- prompting many employers to boost pay or offer bonuses in order to staff up.
Read More: Higher Wages, Signing Bonuses Help Fuel Restaurant Jobs Rebound
Dreaded Spiral
That raises the prospect of what’s known and dreaded in economics as a wage-price spiral. The idea is that higher wages spur more spending growth that strains production capacity and drives up business costs. In turn, companies raise prices and workers demand even larger pay increases to stay ahead of a rising cost of living.
‘Full Denial’
Some economists say the central bank is understating a significant risk.
“Fed officials do not believe that wage pressures can exist
in a world with 6% unemployment, so they are in full denial,” Stephen Stanley,
chief economist at Amherst Pierpont Securities LLC, said in a note. “A
substantial pickup in wage gains would be the quickest path to turning a ‘transitory’
inflation blip into a persistent upturn.”
Across the U.S., job openings grew to a record-high 9.3 million in April, and
some analysts say that’s
increased workers’ bargaining power. Other economists cite entrenched trends
like declining union membership, and argue that they leave workers lacking the
clout to make the pay increases stick in the longer term.
More
Almost half of Americans are willing to take on debt in a post-pandemic spending splurge, survey finds
Published Wed, Jun 9 2021 8:31 AM EDT
Americans are ready to start spending money to treat themselves — and 44% are willing to go into debt to do it, a report from CreditCards.com finds.
Millennials, ages 24-40, are most likely to take on more debt (59%) followed by Gen Zers, ages 18-24, coming in at 56%. Only 40% of Gen Xers, ages 41-56, and 32% of baby boomers, ages 57-75, said the same.
When it comes to what respondents are willing to incur charges for, car purchases and other automotive spending topped the list.
More than two-thirds, or 67%, plan to spend money in the second half of the year, with travel and out-of-home entertainment the most popular purchases.
Everyone is entitled to treat themselves after enduring the Covid-19 pandemic, said Ted Rossman, senior industry analyst at CreditCards.com.
“You can go out and splurge a little bit,” he said “Do it with savings.
“Don’t go into debt for it.”
Credit card interest rates are creeping higher, with the average card charging over 16%. If you don’t have a great credit score, you can easily be paying 20% to 25%, Rossman noted
More
Chinese factories worried about profits face a record gap between rising production costs and selling prices
Published Wed, Jun 9 2021 3:38 AM EDT
BEIJING — Chinese factories are facing the largest gap on record between the speed at which producer prices and consumer prices are climbing.
Selling prices to private consumers are holding fairly steady, while production costs are soaring. That cuts into how much money manufacturers can make.
China’s producer price index rose 9% in May from a year ago — the fastest since 2008 — as commodity prices surged, while the consumer price index climbed 1.3%, the National Bureau of Statistics said Wednesday.
The difference between the two reached 7.7 percentage points, the highest on record, surpassing the previous peak of 7 percentage points in 2017.
The widening gap affects heavy commodity users the most, Larry Hu, chief China economist at Macquarie, said in a report Wednesday. He noted that manufacturers of cars, ships and airplanes are seeing earnings losses.
On the other hand, coal miners and steel producers are benefiting from the commodity price surge, the report showed.
Hu expects the gap between the producer and consumer price indexes to narrow as commodity prices pull back from highs and the global economic recovery becomes driven more by demand for services, rather than goods.
Four years ago, commodity prices climbed on the back of China’s cuts to production. Economists said this round of increases is due largely to a recovery in the global economy from the coronavirus pandemic. China remains the largest user of many major commodities such as iron ore and copper.
Covid-19 Corner
This section will continue until it becomes unneeded.
Aspirin does not improve survival chances for hospitalized Covid patients, British study finds
Published Wed, Jun 9 2021 2:58 AM EDT
LONDON — The cheap and widely-available drug aspirin does not improve survival for patients hospitalized with Covid-19, a U.K. study has found.
Oxford University researchers had hoped to find that the blood-thinning medicine could help hospitalized Covid-19 patients who are at an increased risk of clots forming in their blood vessels, particularly in the lungs, but found aspirin didn’t help to prevent deaths.
The study — part of a wider “RECOVERY” trial investigating various possible treatments for people hospitalized with coronavirus — involved nearly 15,000 patients hospitalized with the virus. Roughly half of the patients were given 150mg of aspirin daily compared to the other half which were given the usual care alone.
The study found that “there was no evidence that aspirin treatment reduced mortality” and “no significant difference” in the number of people that died, with 17% of people in both groups dying in hospital after 28 days.
“The data show that in patients hospitalised with Covid-19, aspirin was not associated with reductions in 28-day mortality or in the risk of progressing to invasive mechanical ventilation or death,” Peter Horby, professor of emerging infectious diseases in the Nuffield Department of Medicine at the University of Oxford, and joint chief investigator for the RECOVERY trial, said of the study.
“Although aspirin was associated with a small increase in the likelihood of being discharged alive this does not seem to be sufficient to justify its widespread use for patients hospitalised with Covid-19.”
Martin Landray, a professor of medicine and epidemiology at the Nuffield Department of Population Health at the University of Oxford and one of the chief investigators in the study, described the results as “disappointing.”
More
https://www.cnbc.com/2021/06/09/aspirin-does-not-improve-survival-for-covid-patients-uk-study.html
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.
New tech cheaply produces lithium and H2, while desalinating seawater
Loz Blain June 07, 2021
With the rise of the lithium-based battery, demand for this soft, silvery-white metal – the lightest solid element in the periodic table – has exploded. With the race to zero carbon by 2050 gathering steam, forcing the electrification of transport, lithium will be an even more valuable asset in the next 30 years.
The supply of raw materials for batteries could even end up being a national security issue, too; China's global leadership on high-volume EV production has put it ahead of the game, and while the majority of ground-based lithium reserves are in the "lithium triangle" of Chile, Bolivia and Argentina, China controls more than half's the world's supply simply through investments and ownership. It has shown in the past that it's not afraid to wield commodity supplies as a weapon.
But as with other metals like uranium, land-based lithium reserves pale in comparison to what's out there in the sea. According to researchers at Saudi Arabia's King Abdullah University of Science and Technology (KAUST), there's about 5,000 times as much lithium in the oceans as there is in land deposits, and a newly developed technology could start extracting it cheaply enough to make the big time – while producing hydrogen gas, chlorine gas and desalinated water as a bonus.
The process relies on an electrochemical cell containing a ceramic membrane made from lithium lanthanum titanium oxide (LLTO), with pores just wide enough to let lithium ions through while blocking larger metal ions. “LLTO membranes have never been used to extract and concentrate lithium ions before,” says post-doctorate researcher Zhen Li, who developed the cell.
---- According to the research team, the electricity required to produce a kilogram of lithium in this way (about 76.3 kWh) would cost around US$5 – and every kilogram of lithium would generate a bonus 0.87 kg of hydrogen gas and 31.12 kg of chlorine gas. At 2020 prices, these side products alone could sell for between US$6.90 and $11.70.
As for what that kilogram of lithium phosphate is worth, I couldn't find a price for 99.95 percent pure lithium phosphate, so take this with a grain of salt, but at 99.99 percent purity it's going for more than US$4,700 per kilo in small quantities. It'll be nothing near that in bulk wholesale – and indeed it seems most EV batteries use battery-grade (99.5 percent) lithium carbonate, which is more like US$14 per kilo. Make of that what you will.
Another side bonus is that the seawater that goes through just one stage of this process comes out with total salt concentrations under 500 parts per million. According to the researchers, this "implies that after lithium harvest, the remaining water can be treated as freshwater. Hence, the process also has a potential to integrate with seawater desalination to further enhance its economic viability."
How long will the gear last? Well, the researchers say they tested the LLTO membrane for more than 2,000 hours in Red Sea water and found "a negligible decay in performance," so things seem positive there. And will the equipment be expensive? It doesn't seem that way. "Although a rigorous economic analysis will be still necessary to include other capital and operating expenses," reads the paper, "it is arguable that the energy cost is the major expenditure in this process."
It should be noted that there are rare earth metals in the cell design itself. Also that the process of enriching seawater takes a hundred hours, and this device has only been tested on a lab bench at very small scale. But the researchers say there's plenty of room for optimization, and since the process appears to speed up considerably in the latter stages as lithium concentrations rise, it seems apparent that a richer feed content – the water from shale gas fields, for example – might tip the equation even further.
Will we end up regretting it if we pull all the lithium out of the oceans? Will all the fish go bipolar? Well, there's rather a lot of lithium in there. About 180 billion tons, which would supply the projected 2030 global demand for lithium more than 100,000 times over. So it'd certainly take a while – a while in which the bajillions of dollars currently being pumped into finding better battery solutions than lithium might well bear fruit.
Still, it certainly looks like a promising lithium production method with some very neat cherries on top.
The full paper is open access at the peer-reviewed journal Energy & Environmental Science.
https://newatlas.com/materials/kaust-lithium-phosphate-llto-hydrogen-desalination/
At Syracuse University College of Law, Biden "used five pages from a published law review article without quotation or attribution," according to a faculty report. He cited the source in only a single footnote.
In a letter to law school faculty pleading not to be dismissed, Biden wrote, "if I had intended to cheat, would I have been so stupid? ... I value my word above all else."
Newsweek.
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