Baltic Dry Index. 3154 -12 Brent Crude 74.99
Spot Gold 1816
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 29/07/21 World 196,710,185
Deaths 4,203,185
When Alexander the Great visited the philosopher Diogenes and asked whether he could do anything for him, Diogenes is said to have replied: ‘Yes, stand a little less between me and the sun.’ It is what every citizen is entitled to ask of his government.
Henry Hazlitt.
In China’s stock casinos, a telegraph scripted rally. But with President Biden seeming to be about to expand President Trump’s trade war on Chinese firms, a very risky long term bet.
In Washington District of Crooks, no change in policy from the Fed. No surprise there. “Inflation? What inflation,” is in firm control.
County Cork, Ireland goes “green.”
Hong Kong’s Hang Seng index jumps nearly 3% as stocks recover from early week slump
SINGAPORE — Shares in Hong Kong continued to see a rebound in Thursday morning trade from a two-day slump earlier in the week. Meanwhile, Asia-Pacific markets rose after the U.S. Federal Reserve left its benchmark interest rate near zero.
Hong Kong’s Hang Seng index jumped 2.79% in morning trading on Thursday, continuing its bounce back after closing more than 1% up the day before. The index had dived more than 8% over two days early this week.
Chinese tech stocks in Hong Kong, which had been hit hard by the market rout earlier in the week, soared. Shares of Tencent jumped 8.9% while Alibaba gained 6.33% and Meituan climbed 9.11%. The Hang Seng Tech index soared 6.95%.
Mainland Chinese stocks also saw strong gains, with the Shanghai composite up about 1% and the Shenzhen component surging 2.22%.
China’s securities regulators told brokerages late Wednesday that the country will allow Chinese firms to go public in the U.S. as long as they meet listing requirements, a source familiar with the matter told CNBC.
In Japan, the Nikkei 225 advanced 0.38% while the Topix index gained 0.14%.
Elsewhere, South Korea’s Kospi rose 0.25% while the S&P/ASX 200 in Australia climbed 0.38%.
MSCI’s broadest index of Asia-Pacific shares outside Japan traded 1.66% higher.
Shares of Softbank Group in Japan jumped 2.42%. The Japanese conglomerate is selling about one-third of its stake in ride-hailing company Uber to cover losses on its investment in Chinese ride-hailing company Didi, two people familiar with the matter told CNBC.
Sony Group’s stock also surged 2.83%. Those gains came after Sony Interactive Entertainment announced Wednesday that more than 10 million PlayStation 5 units have been sold since launch, remaining the fast-selling console in the company’s history.
Overnight stateside, the Dow Jones Industrial Average fell 127.59 points to 34,930.93 while the S&P 500 was little changed at 4,400.64. The Nasdaq Composite advanced 0.7% to 14,762.58.
The Federal Open Committee ended its two-day meeting by keeping interest rates in a target range between zero and 0.25%.
Fed Chairman Jerome Powell said the U.S. central bank is nowhere near considering a rate hike despite the optimism over the U.S. economy.
https://www.cnbc.com/2021/07/29/asia-markets-us-federal-reserve-softbank-group-currencies-oil.html
Biden nominates Huawei prosecutor for key Chinese exports position
U.S. prosecutor Thea Kendler, an attorney on the criminal case against China’s Huawei and its Chief Financial Officer Meng Wanzhou, will be nominated for a Commerce Department post vital to controlling exports to China, the White House said on Wednesday.
Kendler, an attorney in the Justice Department’s national security division, will be nominated as assistant secretary for export administration at the Commerce Department. The nomination requires confirmation by the Senate.
Kendler is expected to work under Alan Estevez, a former Pentagon official, who was nominated on July 13 to be the Commerce Department’s undersecretary for industry and security, a position central to the U.S.-China tech battle.
The department has restricted sales to Huawei Technologies since 2019, when the company and dozens of its non-U.S. affiliates were added to the U.S. trade blacklist, hobbling the world’s largest telecommunications equipment maker.
Companies are placed on the so-called “entity list” if their actions are viewed as contrary to U.S. security or foreign policy interests.
Recently, the Biden administration added companies to the blacklist over human rights abuses and high-tech surveillance in Xinjiang. Dozens of other Chinese companies on the list include surveillance manufacturers Hikvision and Dahua Technology.
More
Fed holds rates near zero, says economy has gotten better even with pandemic worries
The Federal Reserve on Wednesday held its benchmark interest rate near zero and said the economy continues to progress despite concerns over the pandemic spread.
As expected, the Federal Open Market Committee concluded its two-day meeting by keeping interest rates in a target range between zero and 0.25%.
Along with that, the committee said in a unanimously approved statement that the economy continues to “strengthen.”
Despite the optimism about the economy, Chairman Jerome Powell said the Fed is nowhere near considering a rate hike.
“Our approach here has been to be as transparent as we can. We have not reached substantial further progress yet,” he said. “We see ourselves having some ground to cover to get there.”
“Substantial further progress” on inflation and employment is the benchmark the Fed has set before it will tighten policy, which would mean slowing and ultimately stopping monthly bond purchases and ultimately raising interest rates.. The statement noted only that “progress” has been made, and the FOMC will continue to watch conditions to see how close they get to the Fed’s goals.
More
https://www.cnbc.com/2021/07/28/fed-decision-july-2021.html
Finally, with imperfect timing, right before the Beijing scripted rally, UBS says never try to catch a falling sword, especially a Chinese one. I hope that no one is paying UBS for their untimely advice.
UBS warns that it’s not time to bottom fish in the Chinese markets yet
Published Wed, Jul 28 2021 1:32 AM EDT
Investors looking for bargains in the Chinese market should beware as stocks there could see further losses, warns UBS Global Wealth Management’s Kelvin Tay.
“I think there’s actually more room for this to actually run,” Tay, regional chief investment officer at the firm, told CNBC’s “Squawk Box Asia” on Wednesday. “I certainly don’t think this is the bottom.”
Following a rout that started late last week and accelerated as the Hang Seng index in Hong Kong plunged more than 8% in just two days, China’s markets are now among the worst-performing in Asia-Pacific year to date.
Tay said many institutional funds are currently reassessing risks as Chinese regulations target industries such as technology and private education. He explained the process is likely to take a few weeks before funds come to a final decision on whether they should liquidate or accumulate more stocks in the Chinese markets.
“I think the decision is probably going to sway towards the liquidating side,” Tay warned. “I don’t think this is actually time to bottom fish.”
Tay said Beijing’s regulatory crackdown coincides with a “window of opportunity” as the global economy bounces back from the pandemic.
“Economic growth this year is not disputed because you have the U.S. growing at 7%, you have the eurozone recovering at 4.3%, that in turn is likely to pull the Chinese economy along with it as well,” he said.
Furthermore, the Politburo meeting next year in October will coincide with the end of Chinese President Xi Jinping’s second five-year term — a “very, very important event” for the country.
Outlook for Chinese regulation
Looking ahead, Tay predicted that three potential catalysts could end the current uncertain regulatory outlook in China.
“I think the first indication should come sometime this week or next from the July Politburo meeting,” he said, adding that the event will be “closely scrutinized by investors” for clues on regulation.
The next potential catalyst is if the Chinese economy sees a major slowdown, a scenario he described as “very unlikely.”
“Ironically, if the economy slows down dramatically from here, then they are likely to take a step backwards because you can’t afford to actually tighten things on a regulatory basis … and not risk the economy tilting over,” Tay explained.
The last catalyst, which Tay said was the “least probable” among the three, is if U.S.-China relations see a “dramatic improvement” overnight.
More
'Emergencies' have always been the pretext on which the safeguards of individual liberty have been eroded.
Friedrich August von Hayek.
Global Inflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Shipping prices may be heading higher but are ‘not super yet,’ analysts say
Published Wed, Jul 28 2021 1:23 AM EDT
Shipping rates may be rising, but they are “not super yet,” according to one analyst.
Dry bulk shipping rates surged this year as the global economy bounced back and commodity demand recovered, but some market watchers say the industry may not be headed for a sustained period of robust growth just yet.
“Is it a supercycle? Well, I would say not yet, but it has the potential to become one,” said Mark Williams, managing director of Shipping Strategy, a maritime consultancy.
A so-called supercycle refers to a sustained period of high and increasing prices, typically driven by strong demand and low supply.
He said rates for capesize vessels — the largest category of ships that carry dry cargo and raw materials such as grain, iron ore and coal — are around the levels seen in mid-2019. Reuters reported on Tuesday that average daily earnings for capesizes were $31,880 — a jump of more than 10 times the figure of about $3,000 in February last year.
The Baltic Dry Index, which tracks rates for vessels that carry dry bulk commodities, gained about 74% from the start of the year to July 3.
“It’s good — (but) really, it’s not super yet,” he said during a panel discussion at TradeWinds’ Shipowners Forum Singapore 2021 earlier this month.
The vice president of maritime and supply chain excellence at mining giant BHP agreed.
“We’re seeing rates at multi-year highs, but we don’t see them reaching the bull cycle peaks that we’ve seen previously,” Rashpal Bhatti said at the same session.
More
IMF warns rising inflation could last longer than expected
IMF: Higher-than-expected inflation could pose 'major risk' to economic recovery
July 27, 2021
The International Monetary Fund warned on Tuesday that a recent inflation burst could prove longer lasting than expected, forcing central banks across the world to take action to address the rising cost of goods and services.
"Aftershocks from the pandemic upheaval of last year pose unique policy challenges," the Washington-based organization said in its latest World Economic Outlook report. "Pent-up demand and supply chain bottlenecks are putting upward pressure on prices."
In June, the Labor Department reported that consumer prices jumped 0.9% from May and 5.4% over the past year – the biggest increase in 13 years, fueling worries that a rapidly rebounding economy could lead to runaway growth.
FED BALANCE SHEET TOPS $8T FOR THE FIRST TIME
Surging inflation has rattled Wall Street in recent months, with investors concerned that a spike in consumer prices could force the Federal Reserve to pump the brakes earlier than expected and start unwinding the ultra-easy monetary policies it put in place to support the economy during the pandemic.
Still, the IMF maintained that higher-than-expected inflation is expected to subside by 2022, although it acknowledged that "uncertainty remains high."
"There is, however, a risk that transitory pressures could become more persistent and central banks may need to take preemptive action," the IMF said.
It urged central banks to avoid tightening monetary policy until there's more clarity about the direction that inflation is headed and to provide "clear communication" on the economic outlook.
More
https://www.foxbusiness.com/economy/imf-warns-rising-inflation-could-last-longer-than-expected
Low-carbon hydrogen is not cheap and needs support, says major energy organization
Published Wed, Jul 28 2021 5:01 AM EDT
Low-carbon hydrogen isn’t “cost competitive with other energy supplies in most applications and locations” and the situation is unlikely to change unless there’s “significant support to bridge the price gap,” according to the World Energy Council.
Published Tuesday, the analysis – which was put together in collaboration with PwC and the U.S. Electric Power Research Institute – raised the question of where funding for such support would come from, but also pointed to the increasing profile of the sector and the positive effect this could have.
In an announcement accompanying a briefing, the London-based energy organization said “environmental and political drivers” were “sending encouraging signals to the market and prompting growing interest.” Globally, many pilot projects were being developed, built or in operation, it added.
Described by the International Energy Agency as a “versatile energy carrier,” hydrogen has a diverse range of applications and can be deployed in sectors such as industry and transport.
It can be produced in a number of ways. One method includes using electrolysis, with an electric current splitting water into oxygen and hydrogen. If the electricity used in the process comes from a renewable source, such as wind or solar, then some call it green or renewable hydrogen.
Currently, the vast majority of hydrogen generation is based on fossil fuels, and green hydrogen is expensive to produce. Efforts are being made to drive costs down, however.
The U.S. Department of Energy recently launched its Energy Earthshots Initiative and said the first of these would focus on cutting the cost of “clean” hydrogen to $1 per kilogram (2.2 lbs) in a decade. According to the DOE, hydrogen from renewables is priced at around $5 a kilogram today.
More
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
If a government resorts to inflation, that is, creates money in order to cover its budget deficits or expands credit in order to stimulate business, then no power on earth, no gimmick, device, trick or even indexation can prevent its economic consequences.
Henry Hazlitt.
Covid-19 Corner
This section will continue until it becomes unneeded.
The Latest: WHO says coronavirus deaths up 21% in last week
GENEVA — The World Health Organization says the number of coronavirus deaths globally jumped by 21% in the last week.
Most of the 69,000 deaths were reported in the Americas and Southeast Asia. The U.N. health agency also noted that COVID-19 cases rose by 8% worldwide and that there are now nearly 194 million infections.
WHO said that “if these trends continue, the cumulative number of cases reported globally could exceed 200 million in the next two weeks.” It added that the number of COVID-19 deaths increased in all regions except for Europe. The biggest numbers of cases were reported in the U.S., Brazil, Indonesia, the U.K. and India.
Delta variant: The epidemic will sweep across the U.S. at different times, Dr. Scott Gottlieb says
Dr. Scott Gottlieb told CNBC that he expects surging U.S. coronavirus cases, linked to the highly transmissible delta variant, to start decreasing in just a few weeks.
“Probably, in two or three weeks, I think that we were probably about three weeks behind the U.K.,” said the former FDA chief in the Trump administration.
“The U.K. clearly is on a downslope...I would expect some of the southern states that really were the epicenter of this epidemic to start rolling over in the next two or three weeks.”
While the epidemic is still expanding across southern states, the rate of expansion is showing signs slowing. Gottlieb told “The News with Shepard Smith” that the slowdown is a sign that those southern states may be reaching their peak.
Gottlieb did warn, however, that northern states may start to see more delta spread, as rates decrease in the south.
“Here, in this country, it’s going to be much more regionalized now, I don’t expect the density of the spread of delta in states like New York or Michigan to be what it was in the south,” Gottlieb said. “We have more vaccine coverage, up there, we’ve had more prior infection, but you will see an uptick in cases, even in states where there is a lot of vaccine coverage, probably just not as severe.”
Experts ask to see data behind new policy
,
WASHINGTON - New recommendations from federal health officials this week on when vaccinated Americans should don face masks came with a startling bolt of news: People who have had their shots and become infected with the delta variant of the coronavirus can harbor large amounts of virus just like unvaccinated people. That means they could become spreaders of the disease and should return to wearing masks indoors in certain situations, including when vulnerable people are present.
But the Centers for Disease Control and Prevention did not publish the new research. In the text of the updated masking guidance, the agency merely cited "CDC COVID-19 Response Team, unpublished data, 2021."
Some outside scientists have their own message: Show us the data.
"They're making a claim that people with delta who are vaccinated and unvaccinated have similar levels of viral load, but nobody knows what that means," said Gregg Gonsalves, an associate professor at the Yale School of Public Health. "It's meaningless unless we see the data."
When CDC Director Rochelle Walensky spoke to reporters Tuesday, she cited the "new scientific data" but provided limited details about how the research was done. She said the data comes from outbreak investigations in which researchers compared delta infections among vaccinated and unvaccinated people.
More
https://www.chron.com/news/article/Experts-ask-to-see-data-behind-new-policy-16347545.php
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.
Flush with pharmaceutical cash, Lilly takes solar power into rainy, windy, cloudy, County Cork Ireland. Well it only cost 5 million euros to go token green. Besides, big pharma is booming in the coronavirus pandemic.
Ireland's biggest solar energy farm opens in Kinsale
Updated / Monday, 26 Jul 2021 11:03
The biggest solar energy farm in the country has been opened near Kinsale in Co Cork.
The €5 million facility is located on a 16-acre site at Dunderrow.
It will produce up to 5.6 megawatts of electricity for US pharmaceutical manufacturer, Lilly.
The company is one of the longest-established pharmaceutical manufacturers in Ireland.
It is based on a 50-hectare site near Kinsale since 1978 and has been manufacturing there since 1981.
Lilly has a workforce of almost 2,000 directly and another 500 indirectly in Ireland, and continues to grow.
Its latest development is a solar energy farm - the biggest in the Republic - capable of producing up to 5.6 megawatts of electricity.
That is enough to the supply electricity needs of every house in Kinsale, or to more than 1,000 households.
The facility will reduce Lilly's carbon footprint by 2,350 tonnes per year at its Dunderrow plant.
It was opened by Taoiseach Micheál Martin and Lilly Chairman and Chief Executive Dave Ricks.
https://www.rte.ie/news/regional/2021/0726/1237231-solar-farm-kinsale/
The whole gospel of Karl Marx can be summed up in a single sentence: Hate the man who is better off than you are.
Never under any circumstances admit that his success may be due to his own efforts, to the productive contribution he has made to the whole community. Always attribute his success to the exploitation, the cheating, the more or less open robbery of others. Never under any circumstances admit that your own failure may be owing to your own weakness, or that the failure of anyone else may be due to his own defects - his laziness, incompetence, improvidence, or stupidity.
Henry Hazlitt.
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