Baltic Dry Index. 3039 -34 Brent Crude 72.77
Spot Gold 1814
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 19/07/21 World 191,229,700
Deaths 4,105,820
“A people that elect corrupt politicians, imposters, thieves and traitors are not victims, but accomplices.”
George Orwell.
Saudi Arabia and the UAE stopped feuding on Sunday and agreed to start increasing oil production and exports starting next month.
A little oil price relief on the inflation front for once.
How much relief depends pretty much on how much extra supply matches or exceeds rising demand as the global economy gets back to closer to business as usual.
Asian stock casinos, however, continued to pull back, worried perhaps about a mid-summer correction.
Still any inflation relief is a big plus for most of the world.
Major Asia markets fall more than 1%; oil prices slip after OPEC and allies reach deal
SINGAPORE — Shares in Asia-Pacific slipped in Monday trade, as oil prices fell after OPEC and its allies reached a deal.
The Nikkei 225 in Japan dropped 1.46% in afternoon trade while the Topix index shed 1.39%. South Korea’s Kospi fell 0.91%.
In Hong Kong, the Hang Seng index slipped 1.59% by the afternoon. Mainland Chinese stocks also declined, with the Shanghai composite down about 0.3% while the Shenzhen component dipped fractionally.
Australian stocks also declined as the S&P/ASX 200 dropped 0.85%.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.19%.
In the afternoon of Asia trading hours on Monday, international benchmark Brent crude futures slipped 1.06% to $72.81 per barrel. U.S. crude futures also declined 1.09% to $71.03 per barrel.
Shares of oil firms in Asia-Pacific also declined in Monday trade, with Santos in Australia falling 2.56%. Japan’s Inpex dropped 2.1%, while Japan Petroleum Exploration plunged 2.56%. CNOOC shares in Hong Kong slipped 1.35%.
OPEC and its allies reached a deal on Sunday to phase out 5.8 million barrels per day of oil production cuts by September 2022. Coordinated increases in oil supply from the group — collectively known as OPEC+ — will start in August, OPEC said in a statement.
The development came as Brent surged more than 40% so far in 2021, with demand for crude rising as the global economy recovers from the pandemic.
More
https://www.cnbc.com/2021/07/19/asia-markets-opec-and-allies-currencies-oil.html
OPEC, Russian allies agree to boost oil output 400,000 barrels daily
July 18, 2021 / 9:52 AM
July 18 (UPI) -- The Organization of the Petroleum Exporting Countries and its Russia-led oil-producing allies agreed Sunday in Dubai, United Arab Emirates, to boost production by 400,000 barrels a day in an effort to increase capacity before the COVID-19 pandemic began March 2020.
Known as OPEC+, the alliance also includes Saudi Arabia, Iraq and Kuwait.
The producers will increase beginning next month and continue through the latter part of 2022, The Wall Street Journal reported. Market conditions will be assessed in December.
"The conference noted that oil demand was clearly showing signs of improvement and that market fundamentals were continuously strengthening," Opec + said in a statement.
With the economy improving, price have risen amide shortages and supply delays.
Abu Dhabi's baseline for oil production will increase from 3.16 million barrels per day to 3.5 million barrels per day. And Saudi Arabia's output will go from 11 million to 11.5 million barrels per day.
On July 1, West Texas Intermediate crude, the international oil benchmark, has soared to more than $75 a barrel for the first time in three years. At the start of this year, oil was around $48.50 per barrel. WTI crude was $71.45 on Friday and Brent crude was $73.30.
At the start of the month, the average price for a gallon of unleaded gasoline was at $3.123 per gallon, compared to $2.179 per gallon a year ago, according to AAA.
"During the month of June, we estimate that the market was in a 2.3 million barrel per day deficit... The bottom line, demand is surging as we head into the summer travel season, and that is against a nearly inelastic supply curve," Jeff Currie, global head of commodities research at Goldman Sachs, said on CNBC's Worldwide Exchange.
Opinion: Expect a 10% or worse correction in U.S. stocks by mid-August, says this forecaster with a proven track record
Last Updated: July 17, 2021 at 8:45 a.m. ET First Published: July 15, 2021 at 4:23 p.m. ET
By Mark Hulbert
Market breadth hasn’t been this poor since October 2018 and the start of a 20%-plus decline
Get ready for the most severe correction since the bull market began in March 2020.
To be sure, predictions are a dime a dozen on Wall Street. But this one comes from Hayes Martin, president of investment advisory firm Market Extremes. I was introduced to Martin’s work several years ago and since then I’ve found his predictions of market turning points to be impressive. (For the record: Martin does not have an investment newsletter; my newsletter-tracking firm does not audit his investment performance.)
----In an interview on July 14, Martin said the U.S. stock market today is most definitely not firing on all cylinders. In fact, he said, the market’s internal health is now worse than at any time since October 2018. That was the beginning of a 20% decline in the S&P 500 SPX, -0.75% and a 26% decline in the small-cap Russell 2000 Index RUT, -1.24%. (Martin anticipated that decline as well; see my Oct. 4, 2018, column.)
Martin hastened to add that the market’s internal health is not as bad today as it was in 2018. This time around, he is forecasting a decline of 10% or more for the leading U.S. stock indexes. As for timing, he says that the decline could begin at any time, but he anticipates that it will begin no later than mid-August.
The source of the market’s ill-health
Martin bases his sobering forecast on the increasing divergences within the U.S. market, as indicated by fewer and fewer stocks participating in the headline-grabbing strength of the leading indices. One indicator of these divergences is the growing number of stocks hitting new lows, for example. On Wednesday of this week, for example, even as the Nasdaq 100 NDX, -0.77% and the S&P 100 OEX, -0.78% indexes were hitting new highs, many sectors were registering a plurality of new lows.
This was particularly evident in the small- and mid-cap sectors, as represented by the Russell 2000 index. On July 13 there were more new lows than new highs within that index for the second consecutive day. In Martin’s data for the Russell 2000’s new highs and new lows, which extends back to June 2000, what happened this week has happened only three other times — in September 2014, July 2015 and October 2018. In all three cases, three months later both the S&P 500 and Russell 2000 were at least 10% lower.
Martin reports that the only area of the market not showing dangerous divergences right now is the large-cap dominated S&P 500. Except for that sector, he says that the “stock market’s current internals are some of the worst I’ve seen in decades.”
Martin added that these severe divergences are occurring as equities are severely overvalued — with some stocks in bubble territory. This means that, when the market does decline, it’s likely to fall more than it would otherwise.
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As stock prices peak, markets begin to fear looming threats
NEW YORK (AP) — With the U.S. economy humming, corporate profits flowing and stock prices peaking, investors on Wall Street are beginning to pose an anxious question: Is it all downhill from here?
Financial markets are always trying to set prices now for where the economy and corporate profits are likely to be in the future. And even though readings across the economy are still at eye-popping levels, investors see some areas of concern.
New variants of the coronavirus are threatening to weaken economies around the world. Many of the U.S. government’s pandemic relief efforts are fading. Inflation is raging as supplies of goods and components fall short of surging demand. And the beginning of the end of the Federal Reserve’s assistance for markets is coming into sight.
So far, investors have largely put aside nervousness — broad measures like the S&P 500 and Nasdaq composite are hitting record highs. Major stock market averages, in fact, have nearly doubled since bottoming in March 2020.
The U.S. recovery from the recession is proceeding so quickly that many forecasters estimate that the economy will expand this year by roughly 7%. That would be the most robust calendar-year growth since 1984.
Outside the U.S., too, economies are showing sustained growth. The Chinese economy, the world’s second-largest, has slowed sharply from last year, though Beijing said it grew nearly 8% in the April-June period. And among the European countries that use the euro currency, growth for 2021 is expected to reach a brisk pace of nearly 5%.
Still, some sharp moves underneath the stock market’s surface and across other markets show newfound hesitance and anxiety about the potential economic threats. Yields on longer-term U.S. government bonds have sunk, for example, while stocks of companies most closely tied to the strength of the economy have slumped.
For now, many voices on Wall Street see the nervousness as merely a blip: They are forecasting stocks and bond yields to rise through the year as the economy and corporate profits continue to grow. Many factors are behind the recent shifts in markets, particularly the sharp drop in bond yields, including some technical ones that likely worsened the swings and may be short-lived.
But some of those same analysts also acknowledge that the shifting signals in markets may be an inflection point following months of gangbusters performance and raging optimism. The fear isn’t that economic growth may slow. It’s that any one of threats to the economy will weaken growth too much, too quickly and perhaps even derail the recovery from the pandemic recession and puncture corporate profits.
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Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof.
John Kenneth Galbraith.
Global Inflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
The new real estate normal
STAR, Idaho — The new “For Sale” sign had been posted in the yard for less than 10 minutes when the first visitors started driving by the house, slowing down and stopping to take pictures. Trevor Descisciolo watched from his front lawn, trying to understand how the home he referred to as “a basic little starter” had suddenly become a destination in the far exurbs of Boise.
A few minutes later, another car pulled to the curb, and the driver rolled down his window. “Do you guys have a list price yet?” he asked.
“We’re finalizing it soon,” Descisciolo said. “What kind of place are you looking for?”
The driver stared for a moment and considered the house. It was a two-story craftsman in a subdivision of mass-produced homes, where identical mailboxes aligned the sidewalk and some of the cul-de-sacs backed up to cornfields. “Honestly?” he said. “At this point we’re looking for pretty much anything.”
In the record-setting housing market of 2021, homeownership has become the dividing line for a fractured economy that’s racing toward extremes. Real estate values have surged by almost 25 percent since the beginning of the pandemic, creating more than $1 trillion in new wealth for existing homeowners. Many of them have used that money to buy investment properties and second homes, further driving up prices while first-time buyers increasingly struggle to afford anything at all.
Homeowners on average are now reported to have as much as 80 times greater net worth than renters, who continue to suffer disproportionately from some of the pandemic’s worst effects: high rates of unemployment, eviction and a historic increase in the cost of living.
Descisciolo had moved from California to Idaho a few years earlier with his wife and two young daughters, in part because the area was still affordable for a middle-class family. He’d managed to buy their home in a new suburb called Star in 2018 with help from a relative, spending $239,000 for a new three-bedroom house with a horseshoe pit in the backyard. During the next few years, he’d watched out his back window as the Boise metropolitan area continued to expand outward, until the crop dusters slowly disappeared from the sky above his house and construction crews built another subdivision behind his backyard. Then, early in the pandemic, he’d begun to receive form letters from investors offering to buy his home. “We can pay now. We can pay cash,” one read. Descisciolo started checking the estimated value of his house on Zillow, watching in disbelief as it continued to rise by $30,000 each month, until it felt to him like the only sensible thing to do was to sell and then use the proceeds to build a bigger home for his family farther from the city.
More
https://www.msn.com/en-us/money/realestate/the-new-real-estate-normal/ar-AAMir6k
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.
Pfizer COVID vaccine makes 10 times more antibodies than Sinovac - study
Israelis have been almost exclusively vaccinated with the Pfizer vaccine. So far, some 5.7 million Israelis have had at least one shot.
By MAAYAN JAFFE-HOFFMAN JULY 17, 2021 17:39
The Pfizer coronavirus vaccine could be almost 10 times more effective at combating COVID-19 infection compared to China’s Sinovac vaccine, according to a new study published last week in the Lancet by researchers from the University of Hong Kong.
The scientists enrolled 1,442 vaccinated healthcare workers from various medical facilities across their country. The report details the results of 93 participants for whom the team now has complete data on antibody concentrations - before getting the jab and after the first and second doses.
Some 63 participants received the Pfizer vaccine and the other 30 the Sinovac, the report said. Participants ranged in age from 26 to 65.
In healthcare workers who received the Pfizer vaccine, antibody concentrations “rose substantially after the first dose and then rose again after the second dose of vaccination,” the researchers wrote. In contrast, healthcare workers who were jabbed with Sinovac “had low concentrations … after the first dose, rising to moderate concentrations after the second dose.”
Israelis have been almost exclusively vaccinated with the Pfizer vaccine. So far, according to the most recent Health Ministry report, some 5.7 million Israelis have had at least one shot.
The Pfizer vaccine is a novelty mRNA vaccine. The Sinovac shot is an inactivated virus vaccine.
The team used two tests to evaluate antibody levels. One is known as ELISA, which detects antibodies that bind to the receptor binding domain of the spike protein. The other is the sVNT test, which measures antibodies that neutralize viruses generated from vaccination.
Finally, the Hong Kong team examined a subset of 12 participants from each cohort - Pfizer and Sinovac - using a PRNT serological test that measures virus-specific neutralizing antibody titers.
Those who were administered the Pfizer vaccine had nearly 10 times the amount of antibodies (269) compared to those who received Sinovac (27) - a difference that the report’s authors said, “could translate into substantial differences in vaccine effectiveness.”
The data is only preliminary, and the authors said it did not include information on other potential correlates of protection, such as T cells. In addition, it did not take variants into account.
One of the report’s authors, epidemiologist Ben Cowling, said that the study should not deter people from getting inoculated with Sinovac.
More
Covid Still Killing Americans Faster Than Guns, Cars and Flu Combined
The U.S. remains a dangerous place for the unvaccinated
Tom Randall July 16, 2021, 9:00 AM EDT
Even with half the U.S. vaccinated, Covid-19 continues to kill people faster than guns, car crashes and influenza combined, according to a review of mortality data.
The situation has improved dramatically since January, when Covid deaths outpaced heart disease and cancer as the country’s top killer, according to a Bloomberg analysis. Still, for the month of June, coronavirus was responsible for 337 deaths a day. For comparison, the historic average deaths from gunshots, car crashes and complications from the flu add up to 306 a day.
Note: Flu deaths vary seasonally and from year to year, so the daily figure is derived from the average annual tally recorded from 2010 to 2020. Average daily deaths from heart disease, cancer, guns and car crashes are from 2019.
“The sad reality is that despite our progress, we’re still losing people to this virus,” Jeff Zients, the White House pandemic response coordinator, said at a press briefing last week. “Which is especially tragic given that, at this point, it is unnecessary and preventable. Virtually all Covid-19 hospitalizations and deaths in the United States are now occurring among unvaccinated individuals.”
Data for the analysis were gathered from Johns Hopkins University, the U.S. Centers for Disease Control and Prevention and the National Highway Traffic Safety Administration.
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Music festival in the Netherlands leads to over 1,000 Covid infections
Published Thu, Jul 15 2021 8:32 AM EDT Updated Thu, Jul 15 2021 10:17 AM EDT
A festival in the Netherlands has shocked officials after 1,000 coronavirus infections were linked to the event despite it requiring a “test for entry.”
The Verknipt outdoor festival, which took place in Utrecht in early July, was attended by 20,000 people over two days. Everyone who attended had to show a QR code that demonstrated that they were vaccinated, had recently had a Covid infection or had a negative Covid test.
Organizers have insisted the event was carefully planned and controlled but despite this, 1,050 people who attended the festival have since tested positive for Covid, according to Utrecht’s regional heath board.
“We cannot say that all these people were infected at the festival itself; it could also be possible that they’ve been infected while travelling to the festival or in the evening before going to the festival or having an after-party. So they’re (the cases) all linked to the festival but we can’t 100% say they were infected at the festival,” Lennart van Trigt, a spokesman for the Utrecht health board, or GGD, said.
Nonetheless, he said that the amount of cases was “quite staggering” and could increase slightly in the coming days.
The event highlighted problems in the “test for entry” process, van Trigt added, with people allowed to do Covid tests as much as 40 hours before the event, allowing the possibility of getting infected with Covid in the meantime.
“We’ve found out now that this period is too long. We should have had a 24 hour [period], that would be a lot better because in 40 hours people can do a lot of things like visiting friends and going to bars and clubs. So in a period of 24 hours people can do less things and it’s safer,” he said.
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.
Data transmission speed record clocks blistering 319 Terabits per second
Michael Irving July 13, 2021
The world record for fastest internet speed has been utterly shattered as Japanese engineers have demonstrated a data transmission rate of 319 Terabits per second (Tb/s) through optical fibers. The record was set over more than 3,000 km (1,864 miles) of fibers, and is apparently compatible with existing cable infrastructure.
It’s hard to overstate just how incredibly fast that transmission speed is. It’s almost twice the previous record of 178 Tb/s, set less than a year ago, and seven times faster than the record before that – 44.2 Tb/s from an experimental photonic chip. NASA gets by with “only” 400 Gb/s, and it absolutely demolishes speeds currently available to consumers: the fastest home internet connections top out at 10 Gb/s in parts of Japan, New Zealand and the US.
The breakthrough was achieved using existing fiber optic infrastructure, with more advanced technologies added on. For starters, they make use of four “cores” – the glass tubes inside the fibers that carry data – rather than the standard single core. The signals are broken into multiple wavelengths transmitted simultaneously, using a technique called wavelength-division multiplexing (WDM). A rarely used third “band” is added to carry more data, and the distance is extended using various optical amplification technologies.
The system starts with a comb laser, which generates 552 channels at different wavelengths. This light is then run through dual polarization modulation, delaying some wavelengths to create different signal sequences. Each of these signal sequences is then fed into one of the four cores of the optical fiber.
The data travels down about 70 km (43.5 miles) of optical fiber, before it encounters optical amplifiers to keep the signal strong over long distances. Here it runs through two new types of fiber amplifiers, one doped in erbium and the other in thulium, before going through a common process called Raman amplification. The signal sequences are then directed into a new segment of optical fiber, and repeating this process allowed the team to transmit data over a distance of 3,001 km (1,864.7 miles).
Importantly, the four-core optical fiber has the exact same diameter as a standard single-core fiber, after the protective cladding is taken into account. That means that this technology should be relatively straightforward to implement into existing fiber optic infrastructure.
A paper describing the achievement was presented at the International Conference on Optical Fiber Communications last month.
In any great organization it is far, far safer to be wrong with the majority than to be right alone.
John Kenneth Galbraith.
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