Baltic Dry Index. 3073 -66 Brent Crude 73.46
Spot Gold 1826
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 16/07/21 World 189,745,512
Deaths 4,083,197
The big news this morning is the flooding and tragedy in Germany, Belgium, Luxembourg and Switzerland, where reportedly almost 3 months worth of rain fell in just a few days.
With many dead and many more missing, our sympathies and prayers go out to those affected.
This will remain a major news event over the weekend and well into next week.
Dozens dead, more than 1,000 may be missing after floods in Germany
At least 50 people are dead and more than 1,000 others are unaccounted for after floods in Germany caused rivers to burst their banks, swept away cars and caused homes to collapse Thursday, authorities said.
The government in the district of Ahrweiler, which is in the western state of Rhineland-Palatinate, said as many as 1,300 people are assumed to be missing.
Officials said at least 30 people died in North Rhine-Westphalia state and that 28 died in neighboring Rhineland-Palatinate to the south, The Associated Press reported.
Storms caused deadly flooding in Belgium, where media reported eight deaths. Luxembourg and the Netherlands also experienced flooding.
In Germany, torrential rain and storms stranded people on rooftops, and authorities used inflatable boats and helicopters to identify and rescue residents. The German army deployed soldiers to assist in the operation.
German Chancellor Angela Merkel, who was in Washington, D.C., on Thursday to meet with President Joe Biden, said the situation was “characterized by fear, by despair, by suffering.”
Hundreds of thousands of people were faced with catastrophe, she said, and homes became death traps.
More
https://www.cnbc.com/2021/07/16/germany-floods-latest-updates.html
In the markets in Asia this morning, time for a pause. But with Fed Chairman Powell promising no change in his inflation generating policy, nothing more than a pause is expected.
Asia-Pacific stocks mostly fall; Bank of Japan holds steady on monetary policy
SINGAPORE — Shares in Asia-Pacific fell in Friday trade as the Bank of Japan held steady on monetary policy.
The Nikkei 225 in Japan fell 1.08% while the Topix index slipped 0.26%.
Japan’s central bank downgraded its real GDP forecast for 2021 to 3.8% growth, as compared with the 4% growth forecast made in April.
The Bank of Japan also kept its yield curve control target at -0.1% for short-term interest rates and 0% for 10-year Japanese government bond yields. Yield curve control is a policy to stimulate the country’s economy, and entails keeping the 10-year Japanese government bond yield at zero.
Following that announcement, the Japanese yen traded at 110.01 per dollar, against an earlier high of 109.72 against the greenback.
In other markets, South Korea’s Kospi declined 0.68%.
In mainland China, the Shanghai composite dipped 0.14% while the Shenzhen component shed 0.396%. The Hang Seng index in Hong Kong fell 0.14%.
Australia’s S&P/ASX 200 edged 0.13% lower.
MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.51% lower.
Overnight stateside, the S&P 500 shed 0.33% to 4,360.03 while the Nasdaq Composite dipped 0.7% to 14,543.13. The Dow Jones Industrial Average advanced 53.79 points to 34,987.02.
More
https://www.cnbc.com/2021/07/16/asia-markets-bank-of-japan-currencies-oil.html
Fed’s Powell Concedes Anxiety About Higher Inflation but Resists Policy Shift
Plans to reduce central bank asset purchases remain ‘a ways off,’ Fed chief says
Updated July 15, 2021 3:29 pm ET
Federal Reserve Chairman Jerome Powell said recent inflation was uncomfortably above the levels the central bank seeks, concluding two days of testimony in which he sounded somewhat less confident about the economic outlook—and the Fed’s policy path—than earlier this year.
More broad-based price pressures or a weak rebound in the workforce could lead the Fed to conclude it needs to reverse the easy money policies it deployed during the pandemic more rapidly than officials expected a few months ago.
“This is a shock going through the system associated with reopening of the economy, and it has driven inflation well above 2%. And of course we’re not comfortable with that,” Mr. Powell told the Senate Banking Committee on Thursday.
Mr. Powell said pandemic-related bottlenecks and other supply constraints for a small group of goods and services have led to rapid price increases. He said it would be an error to overreact to inflation that results from one-time increases in the prices of certain services, like air travel and hotel rates, or goods, like new and used cars, that have surged due to the reopening of the economy.
More
Gundlach says the dollar is ‘doomed’ over the long term because of rising U.S. deficits
DoubleLine Capital CEO Jeffrey Gundlach offered a dire long-term assessment on the U.S. dollar Thursday, telling CNBC in an interview he thinks the greenback is “doomed.”
“Ultimately, the size of our deficits — both trade deficit, which has exploded post-pandemic, and the budget deficit, which is, obviously, completely off the charts — suggest that in the intermediate term — I don’t really think this year, exactly, but in the intermediate term — the dollar is going to fall pretty substantially,” Gundlach said on “Halftime Report.”
“That’s going to be a very important dynamic, because one of the things that’s helped the bond market, without any doubt, has been foreign buying, with the interest rate differentials having favored hedged U.S. bond positions for foreign bond investors,” he added.
The so-called bond king made his remarks as the U.S. dollar index traded around 92.64 on Thursday, up about 0.25% on the session. The dollar index, which measures the world’s reserve currency against a group of six currencies, was up 3% year to date.
“When it was below about 89, we announced very publicly that we were positive on the dollar for the near term,” said Gundlach, whose Los Angeles-based investment firm has more than $135 billion in assets under management as of March 31.
“It’s a question of what your horizon is,” Gundlach said. “In the short term, the dynamics have been and will continue to be in place for the dollar to be marginally or moderately stronger.”
“In the longer term, I think the dollar ... [is] doomed,” he added.
‘Bond King’ Gundlach says inflation environment today reminds him of the 1970s: ‘Jimmy Carteresque’
The current inflation scenario is reminiscent of the 1970s and the Federal Reserve needs to take action to temper the rising prices, according to the “Bond King” Jeffrey Gundlach.
The DoubleLine Capital CEO told CNBC’s “Halftime Report” on Thursday that with inflation rising and Treasury yields remaining so low, U.S. bonds are essentially negative yielding assets.
“When you look at real interest rates on long-date Treasurys, it looks like Jimmy Carter area,” said Gundlach. “We’re talking about the CPI at 5.4%, and if we want to use the 10-year Treasury it’s not even at 1.4%, that’s a negative 4% interest rate. That’s Jimmy Carteresque.”
Inflation readings have continued to roll in higher in recent months, as warned by the Federal Reserve, though the numbers lately have been higher than even the central bank may have anticipated. June’s consumer price index came in at 5.4% — its largest year-over-year increase since 2008 — and the producer price index for last month jumped 7.3% on a year-over-year basis.
Gundlach compared the current period of rising prices to the 1970s, when inflation ballooned from 1% under President Lyndon Johnson in 1965 to a breakneck of near 15% in March 1980.
“A lot of things remind me of the 1970s. We’re just pulling out of a failed war in Afghanistan where we basically fought to stalemate. It kind of reminds me of the ’70s in Vietnam and we had guns and butter that lead to inflation in the late ‘60s and the ‘70s and even the early ’80s and we certainly have guns, butter, student loan cancellation, free unemployment benefits and everything else,” Gundlach said.
To combat the price rises in the Jimmy Carter era, then-Fed Chairman Paul Volcker hiked the federal funds rate and tightened the money supply. The rate, used by banks and credit unions for overnight loans to other depository institutions, reached a record 22.36% in July 1981.
Meanwhile, the central bank is sticking with its unprecedented stimulus programs and interest rates near-zero, which Gundlach said is keeping the stock market elevated near record highs.
Fed Chairman Jerome Powell has repeatedly signaled that the central bank believes rising inflation will be transitory, but Gundlach said a few more months of hot inflation readings are going to necessitate action from the Fed.
Finally, so you really, really, really, want an electric vehicle? Perhaps it’s not a good idea to start with GM’s EV (lightning?) Bolt. I wonder how well they do in flash floods? It’s that word “flash” that focuses my mind.
Unfortunately for GM, “One of the fires occurred while the vehicle was charging at the home of a Vermont state lawmaker earlier this month.” Should have gone to Tesla?
GM warns some Bolt EV owners: Don’t park them inside or charge them unattended overnight
Published Wed, Jul 14 2021 3:23 PM ED TUpdated Wed, Jul 14 2021 8:14 PM EDT
General Motors is telling owners of 2017-2019 Bolt EVs that were part of a recent recall not to park their vehicles inside or charge them unattended overnight after two of the vehicles caught fire.
The two Bolt EVs were repaired as part of a recall of nearly 69,000 of the vehicles that were flagged for fire risks. The recall was initially announced in November by GM and the National Highway Traffic Safety Administration.
One of the fires occurred while the vehicle was charging at the home of a Vermont state lawmaker earlier this month. The other fire happened in New Jersey, a spokesman for GM said, adding that it was notified about it earlier this week.
“General Motors has been notified of two recent Chevrolet Bolt EV fire incidents in vehicles that were remedied as part of the safety recall announced in November 2020,” the company said in an emailed statement. “Out of an abundance of caution, we are asking owners of 2017-2019 Chevrolet Bolt EVs who were part of the recall population to park their vehicles outdoors immediately after charging and not leave their vehicles charging overnight while we investigate these incidents.”
The NHTSA on Wednesday said battery cell packs in the impacted vehicles have the potential to smoke and ignite internally, which could spread to the rest of the vehicle and cause a structure fire if the vehicle is parked inside a garage or near a house.
More
"There are none so blind as those who will not see"
John Heywood 1546.
Global Inflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
White House quietly signals inflationary run could last years
by Christian Datoc July 15, 2021 06:00 AM
The White House is sending mixed messages on the United States's post-pandemic inflationary run, with quiet signals suggesting the period might last years longer than administration officials have publicly indicated.
The Consumer Price Index report for May published by the Bureau of Labor Statistics showed that year-over-year inflation jumped 5.4%, marking three straight months of increases and the single-largest increase since the Great Recession of 2008.
Still, the White House's Council of Economic Advisers noted roughly 60% of that increase could be attributed to auto industry demand, exacerbated by severe semiconductor shortages.
More
Producer Prices in U.S. Surge in June, Exceeding Forecasts
By Olivia Rockeman14 July 2021, 13:31 BST Updated on 14 July 2021, 14:45 BST
· PPI increased 1% from month earlier and 7.3% from year ago
· Services costs accounted for 60% of gain; goods prices also up
Prices paid to U.S. producers rose in June by more than expected, indicating pressure is mounting on companies to pass along higher costs to consumers.
The producer price index for final demand increased 1% from the prior month and 7.3% from June of last year, Labor Department data showed Wednesday. Excluding volatile food and energy components, the so-called core PPI also rose 1%, the most on record, and was up 5.6% from a year ago.
The median forecasts in a Bloomberg survey of economists called for a 0.6% month-over-month advance in the overall PPI and a 0.5% increase in the core figure. The annual increases were the largest in data back to 2010.
The PPI, which tracks changes in the cost of production, has accelerated at a faster pace than expected in recent months due to higher commodity prices and complications with global supply chains. Challenges in hiring skilled workers have also put upward pressure on wages.
The increases in production and labor costs help explain why the pace of consumer inflation has exceeded economists’ estimates in each of the last four months.
Consumer Prices
A report Tuesday showed the consumer price index surged in June by the most since 2008. The increase was primarily in categories associated with reopening, including hotel stays, car rentals and airfares.
Federal Reserve officials have said upward pressure on prices is likely to be transitory, but some investors worry the recent gains will lead to more persistent inflation.
“Strong demand in sectors where production bottlenecks or other supply constraints have limited production has led to especially rapid price increases for some goods and services, which should partially reverse as the effects of the bottlenecks unwind,” Fed Chair Jerome Powell said Wednesday in prepared remarks to lawmakers.
More
BlackRock chief warns on inflation as staff enjoy 8 per cent pay rise
Increase in base salary for global employees comes as asset manager’s earnings beat forecasts
July 14, 2021
BlackRock chief executive Larry Fink has warned that the US should brace itself
for a period of higher inflation, as the world’s largest asset manager handed
the majority of its employees an 8 per cent pay rise.
The forecast came a day after figures showed the US consumer price index rose in June at the fastest pace in more than a decade, fanning concerns the economy may be overheating.
“We have been accustomed to sub-2 per cent inflation,” said Fink, who did not rule out inflation staying above 3 per cent thanks to a mix of higher energy costs, global supply chain disruptions and the Federal Reserve’s focus on job growth.
“In conversations with business leaders, they are seeing higher commodity prices and some are raising their prices and wages,”
Fink told the Financial Times. BlackRock announced the increase in base salary for all employees up to and including director level alongside second-quarter earnings that comfortably beat analysts’ expectations. Riding the rebound in equity markets, BlackRock’s assets under management surged to a record $9.5tn. Revenues climbed 32 per cent to $4.8bn, exceeding expectations of $4.6bn, thanks to strong organic growth and higher performance fees.
More
https://www.ft.com/content/4731cfa6-1a19-466b-b56d-73ef543932c5
UK hiring surged in June as economy bounces back - ONS
Published Thu, Jul 15 2021 2:37 AM EDT
The number of employees on British company payrolls surged by 356,000 in June from May, the biggest increase since the start of the coronavirus pandemic, as the economy bounced back from its coronavirus lockdowns, tax data showed on Thursday.
The increase was driven by a 94,000 leap in accommodation and food jobs, which were heavily hit by lockdowns that have now largely lifted, and by a 72,000 rise in jobs in administration and support services.
The headline unemployment rate for the three months to May rose to 4.8%, the Office for National Statistics said.
Economists polled by Reuters had mostly expected the unemployment rate to hold at 4.7% in the three months to April.
Thursday’s figures also showed the fastest headline wage growth in the year to May since records began in 2000 although the comparisons have been skewed by greater job losses among low-paid workers and comparison with depressed wages a year ago.
Average weekly earnings in the three months to the end of May rose by 7.3% compared with a year earlier.
The ONS estimated underlying wage growth, excluding distortions caused by the pandemic, was between 3.9% and 5.1% for average weekly earnings and between 3.2% and 4.4% for average earnings excluding bonuses.
More
https://www.cnbc.com/2021/07/15/uk-hiring-surged-in-june-as-economy-bounces-back-ons.html
Below, why a “green energy” economy may not be possible anyway, and if it is, it won’t be quick and it will be very inflationary, setting off a new long-term commodity Supercycle. Probably the largest seen so far.
The “New Energy Economy”: An Exercise in Magical Thinking
https://media4.manhattan-institute.org/sites/default/files/R-0319-MM.pdf
Mines, Minerals, and "Green" Energy: A Reality Check
https://www.manhattan-institute.org/mines-minerals-and-green-energy-reality-check
Covid-19 Corner
This section will continue until it becomes unneeded.
Cases surge to 6-month high in Tokyo a week before Olympics
TOKYO (AP) — New coronavirus cases surged to 1,308 in Tokyo on Thursday, a six-month high, as fears rise of a possible dramatic increase that could flood hospitals during the Olympics that start in eight days.
Tokyo is under a fourth state of emergency, which began Monday and requires restaurants and bars to close early and not serve alcohol through the Olympics, which start July 23.
Thursday’s tally is the highest since 1,485 were recorded on Jan. 21, when Japan was under an earlier state of emergency, and is also a jump from Wednesday’s 1,149.
Tokyo Gov. Yuriko Koike noted that the largest increase in serious cases and hospitalizations was among people in their 50s and younger who are largely unvaccinated. She expressed concern about the impact on the medical system as infections are propelled by the more contagious delta strain of the virus.
----New daily cases have been steadily climbing since mid-June and experts say they could hit several thousand during the games.
Japan’s slow vaccination rollout has improved dramatically since May as the government desperately pushes to improve the inoculation rate before the Olympics, but is slowing again due to shortages of imported vaccines. The latest government data show just 19.7% of the population has been fully vaccinated.
Due to the state of emergency in Tokyo and a fear of infections accelerating during the games, organizers last week decided to bar fans for most events, except for limited numbers at outlying locations.
More
WHO warns of 'chaos' if people have freedom to choose different Covid-19 vaccines
Wed, 14 July 2021, 11:48 am
The World Health Organization (WHO) has warned there will be “chaos” if people start mixing different types of Covid-19 vaccine.
The organisation’s chief scientist Soumya Swaminathan insists public health authorities must use the available data to decide how vaccines are administered, claiming individuals shouldn't take it upon themselves to mix and match jabs from different manufacturers, or decide when to have them.
Some countries are planning to roll out a third vaccine, or a booster shot, to those most at risk of becoming seriously ill from Covid-19 before winter hits later this year and there is concern about how this will be monitored.
“It’s a little bit of a dangerous trend here,” Swaminathan said during an online briefing on Monday when asked about booster shots. “It will be a chaotic situation in countries if citizens start deciding when and who will be taking a second, a third and a fourth dose.”
“Individuals should not decide for themselves, public health agencies can, based on available data,” Swaminathan later said in a tweet. “Data from mix and match studies of different vaccines are awaited – immunogenicity and safety both need to be evaluated.”
A clinical trial is currently being carried out by the University of Oxford in the U.K. to determine the viability of having an AstraZeneca vaccine followed by a second dose of Pfizer or vice versa, with the Novovax Inc and Moderna Inc also being considered.
Other studies have shown no negative effects from mixing vaccines, but further research is required to validate the findings.
Some countries have considered mixing vaccines if there is a short supply of a particular one, and last month, WHO said Pfizer vaccinations could be administered after a first dose of AstraZeneca if there was no alternative.
https://uk.style.yahoo.com/warns-chaos-people-freedom-choose-104847950.html
To boost or not to boost? The big COVID-19 vaccine question
Rich Haridy July 13, 2021
When will COVID-19 vaccine booster shots be necessary? Pfizer has recently claimed a third booster dose of its vaccine may be needed six to 12 months after full vaccination but not everyone is convinced, with new research finding mRNA vaccines could offer years of protection.
A recent press release from Pfizer and BioNTech offered an update on their ongoing clinical trial testing the effect of a third booster shot of their current mRNA vaccine delivered six months after a second dose. No specific data was outlined in the statement, instead the companies simply noted a booster shot delivered six months after initial vaccination elicited high levels of protection.
“… we have said, and we continue to believe that it is likely, based on the totality of the data we have to date, that a third dose may be needed within 6 to 12 months after full vaccination,” the companies stated in the press release. “While protection against severe disease remained high across the full 6 months, a decline in efficacy against symptomatic disease over time and the continued emergence of variants are expected.”
In a rare move the Centers for Disease Control and Prevention (CDC) and the Food and Drug Administration (FDA) released a joint statement pushing back on the booster claims by Pfizer and BioNTech. Noting virtually all recent COVID-19 deaths and hospitalizations were among unvaccinated individuals, the federal agencies indicated there is currently no evidence to indicate the need for a booster shot.
“Americans who have been fully vaccinated do not need a booster shot at this time,” the joint statement noted. “We continue to review any new data as it becomes available and will keep the public informed. We are prepared for booster doses if and when the science demonstrates that they are needed.”
More
https://newatlas.com/health-wellbeing/are-boosters-needed-coronavirus-vaccine-mrna-cdc-pfizer/
Countries Signal Doubts About Delta Protection From Chinese Vaccine
Thailand and Indonesia say they will give a booster shot to healthcare workers who received Sinovac
July 13, 2021 9:45 am ET
Thailand became the latest country to signal waning confidence in a Chinese vaccine against the highly contagious Delta variant, saying it would offer booster shots of Western doses to healthcare workers.
Healthcare workers who received two doses of the vaccine developed by Sinovac Biotech Ltd. would be given a third shot made by either Pfizer Inc. and BioNTech SE or AstraZeneca PLC, Thailand’s health ministry said Monday. Those who had only one dose would receive AstraZeneca as their second.
The decision to mix the vaccines makes Thailand the latest country to show reservations about whether Chinese vaccines work well enough to protect medical workers against the Delta variant, which was first detected in India and is thought to be far more contagious than earlier versions of the virus. The strain has spread to at least 98 countries.
Indonesia said last week that it would offer medical workers a booster shot from Moderna Inc. Around 90% of the country’s medical staff have received two doses of the Sinovac vaccine, but hundreds have fallen ill from Covid-19, reducing medical manpower amid a surge of the virus, according to Indonesia’s health ministry and doctors’ groups.
Sinovac didn’t respond to a request for comment.
The Persian Gulf island nation of Bahrain said in June that it had started giving booster shots of the Pfizer vaccine to vulnerable residents who had received two shots of a separate Chinese vaccine made by Sinopharm.
Sinovac and Sinopharm are studying the protection the vaccines provide against the Delta variant, but haven’t released any data yet.
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.
Scientists convert tamarind waste into energy storage material for EVs
Ben Coxworth July 14, 2021
Along with their batteries, many electric cars now utilize supercapacitors for tasks such as quickly delivering power while accelerating. Thanks to new research, a key component of such devices could soon be made from waste tamarind shells.
Although not particularly common in places like North America and Europe, tamarind fruit is consumed in great quantities in Asia and other regions. And while the shells of its pods are compostable, they're most often just dumped in landfills.
Seeking a high-value use for the shells, an international team of scientists set about utilizing them as the source material for carbon nanosheets, which store the electrical charge within supercapacitors. The project was led by Singapore's Nanyang Technological University, and also involved researchers from India's Alagappa University and the Western Norway University of Applied Sciences.
The scientists started by washing tamarind shells that were obtained as waste from the food industry, after which the shells were dried at a temperature of 100 ºC (212 ºF) for about six hours. Next, the washed and dried shells were ground into a powder that was baked in a furnace at 700 to 900 ºC (1,292 to 1,652 ºF) for 150 minutes, in the absence of oxygen.
Doing so converted the powder into carbon nanosheets, which are ultra-thin layers of carbon. The tamarind shells were particularly well-suited to the task, as they are both rich in carbon and porous in structure – that porosity increases the surface area of the carbon in the nanosheets, allowing it to store more electricity.
Additionally, the tamarind carbon nanosheets exhibited good electrical conductivity and thermal stability. What's more, the production process was less energy-intensive than the procedure required for making nanosheets out of commonly used hemp fibers. In that process, the fibers initially have to heated at over 180 ºC (356 ºF) for 24 hours, after which they're baked in a furnace like the tamarind pods.
That said, the researchers are now trying to reduce the energy requirements of their technique, along with investigating other ways of making it more eco-friendly. They're also hoping to scale the technology up for commercial-level production of the carbon nanosheets.
A paper on the study, which is being led by Nanyang's Asst. Prof. (Steve) Cuong Dang, was recently published in the journal Chemosphere.
Source: Nanyang Technological University
Another weekend and how high will inflation go and for how long, before the massed ranks of central banksters toss in the towel on inflation being “transitory?” Just how far behind the inflation curve are our central banksters willing to gamble? Have a great, safe weekend everyone.
A stunning maths YouTube in the weekend LIR edition.
Be thankful we're not getting all the government we're paying for.
Will
Rogers.
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