Baltic Dry Index. 3606 +40 Brent Crude 69.55
Spot Gold 1787
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 17/08/21 World 208,708,387
Deaths 4,383,898
Lehman Brothers filed for bankruptcy on September 15, 2008. Hundreds of employees, mostly dressed in business suits, left the bank's offices one by one with boxes in their hands. It was a somber reminder that nothing is forever—even in the richness of the financial and investment world.
At the time of its collapse, Lehman was the fourth-largest investment bank in the United States with 25,000 employees worldwide. It had $639 billion in assets and $613 billion in liabilities.
https://www.investopedia.com/articles/economics/09/lehman-brothers-collapse.asp
The big story continues to be Afghanistan, where a US led, modern day Dunkirk style air evacuation continues amidst scenes of chaos, confusion and panic.
2021 will go down in history as the end of the American Empire. How fast and far it pulls back is still largely in the hands of Americans themselves, or more importantly, their politicians.
Despite President Carter
Biden taking to the media to spin his success at ending the Afghan
misadventure, he is now likely a lame duck one termer President, although at 78
he was always likely to be a one term president.
Outside of America though, a shaken world is just starting to come to terms with what just happened.
Adversaries like Russia, China, North Korea and Iran will draw probably the wrong conclusions on what just happened.
US dependent allies like Japan, South Korea and Taiwan, will begin reassessing what it means to be a US ally. Will Japan seek to join the nuke club?
US dependent “neutrals” like Vietnam, Cambodia, the Philippines, India and Indonesia will now seek to be less dependent neutrals.
US core allies, NATO, Australia and New Zealand must now finally start contributing more to their collective self-interests, but will they?
What it means for the global economy and markets, is still far from clear.
Very short term it should mean nothing, since the Afghan economy and the largely US war in Afghanistan, had negligible impact on the global economy. No one cared.
Longer term, events like these tend to have a much bigger, if unseen at the start, global effect.
With both sides probably surprised at the speed of what just happened, hopefully on the ground at Kabul airport, a local agreement can be brokered to end the chaos and panic and return the evacuation into an orderly exodus.
Below, for now it’s all a big yawn to the stock casinos.
Asia-Pacific stocks mostly slip; China internet shares fall as regulatory fears resurface
SINGAPORE — Shares in Asia-Pacific were mostly lower in Tuesday trade, with Chinese internet stocks in Hong Kong falling again as regulatory fears resurfaced.
By Tuesday afternoon in Hong Kong, shares of Tencent dropped 3.7% while Alibaba dropped 2.77% and JD.com slipped 3.26%. The Hang Seng Tech index slipped 1.15%.
Those losses came after China’s market regulator issued draft rules on Tuesday aimed at stopping unfair competition on the internet.
Hong Kong’s broader Hang Seng index was 0.68% lower.
Mainland Chinese stocks also declined, with the Shanghai composite slipping 0.48% while the Shenzhen component sat 0.466% lower.
In Japan, the Nikkei 225 gained 0.1% while the Topix index was slightly lower. South Korea’s Kospi declined 0.79%.
The S&P/ASX 200 in Australia slipped 1.04%.
Minutes from the Reserve Bank of Australia’s August monetary policy meeting, released Tuesday, showed the central bank acknowledging that outbreaks of the delta variant and the accompanying lockdowns “had introduced a high degree of uncertainty to the outlook for the second half of 2021.”
Investors continue to monitor the Covid situation in Australia, with the country’s largest cities currently under lockdown.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.88%.
Overnight stateside, the Dow Jones Industrial Average jumped 110.02 points to 35,625.40 while the S&P 500 gained 0.26% to 4,479.71. The Nasdaq Composite lagged as it dipped 0.2% to 14,793.76.
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Biden says Afghanistan war was a lost cause, vows to continue aid and diplomacy
WASHINGTON – President Joe Biden on Monday afternoon defended his decision to pull U.S. troops out of Afghanistan, his first remarks since the Taliban ousted the Afghan national government on Sunday.
“I stand squarely behind my decision. After 20 years I’ve learned the hard way that there was never a good time to withdraw U.S. forces,” Biden said in a memorable speech delivered from the East Room of the White House.
“I am president of the United States of America. The buck stops with me,” he added.
The president’s remarks came amid mounting criticism of his administration’s handling of the situation, as chaos engulfed parts of Kabul and the civilian government collapsed.
“The truth is, this did unfold more quickly than we anticipated,” Biden said of the lighting offensive by the Taliban, which captured the entire country in less than two weeks.
Still, Biden said his resolve had not wavered, and the past week has effectively proven that 20 years of war have not produced an Afghan army that can defend the government, or a government willing to remain in the country as the Taliban approached.
“American troops cannot and should not be fighting in a war and dying in a war that Afghan forces are not willing to fight for themselves,” Biden said. “We gave them every chance to determine their own future. We could not provide them with the will to fight for that future,” he added.
“I know my decision will be criticized, but I would rather take all that criticism than pass this decision on to a future president,” Biden said.
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Finally, is the beginning of the end of the office of the 20th century at hand. And if it is, what now for city centre office real estate values?
One in 10 London offices are at risk of becoming ‘obsolete’ under new energy rules
Published Mon, Aug 16 2021 2:11 AM EDT
LONDON — About 10% of London offices could soon become unusable when new rules on energy efficiency are implemented, according to analysis from a leading real estate company.
Under the new standards, set to be introduced in 2023, buildings in England and Wales with an energy efficiency rating lower than ‘E’ will not be able to close new leasing’s. The upcoming measures come as part of broader government efforts toward carbon neutrality. The lowest energy efficiency rating is set at ‘G,’ the least efficient, to ‘A,’ the most efficient.
In this context, analysis published last week by Colliers showed that around 20 million square feet of London workspace, representing almost 10% of the total stock, are not compliant with these rules.
It raises questions about the future of these office blocks, particularly at a time when many workers are pushing to partly work from home amid the ongoing coronavirus pandemic.
“It is like a double-hit for these buildings,” Andrew Burrell, chief property economist at Capital Economics, told CNBC, referring to the upcoming environmental regulations and the impact of the Covid-19 crisis.
Offices that do not comply with the energy efficiency rules are at risk of becoming “obsolete,” he added.
In addition, the same study found that only approximately 20% of central London offices currently have an energy classification of ‘A’ and ‘B’, with around 57% of workspaces in the U.K. capital city falling into the ‘D’ and ‘G’ categories.
Tom Wildash, co-head of West End leasing at Colliers, told CNBC that landlords have to decide whether to upgrade their buildings to an energy rating of ‘E’ to comply with the 2023 rules or renew the energy rating directly to a ‘B’ to comply with 2030 legislation. The U.K. government has reportedly consulted on legislation that could mean only ‘A’ or ‘B’ ratings for non-domestic buildings can be leased by 2030.
“This is coming quicker than [landlords] expected,” Wildash said, adding that “behind the scenes they will probably tell you it is under control.”
Landsec and British Land, two leading office developers in London, have introduced their own plans to become carbon neutral in the coming years. However, the new energy rules will demand refurbishments and therefore additional costs in some of the existing stock.
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MF Global, formerly known as Man Financial, was a major global financial derivatives broker, or commodities brokerage firm that went bankrupt in 2011.
----In 2011, MF Global faced major pressures to its liquidity over several months. Some analysts and financial commentators indicate that MF Global probably experienced a number of trading days in 2011 during which the firm's bets on sovereign debt would have required the use of customer funds to meet capital requirements, thereby maintaining operating funds and possibly overall solvency. A large part of these pressures on MF Global were a result of the firm's involvement in a significant number of repurchase agreements. Many of these repo agreements were conducted off their balance sheet.
https://en.wikipedia.org/wiki/MF_Global
Global Inflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Next while helping the poor and hungry is never wrong, it will add to US domestic inflation pressure.
Biden administration approves largest increase to food assistance benefits in SNAP program history
Laura Reiley August 15, 2021
The Biden administration has approved the largest increase to food assistance benefits in the history of the Supplemental Nutrition Assistance Program, a move that will substantially retool the program to provide the targeted assistance advocates have long argued is desperately needed by poor families.
U.S. Agriculture Secretary Tom Vilsack is expected to announce Monday morning that benefit amounts for the program, formerly known as food stamps, will rise an average of 25 percent above pre-pandemic levels. First reported by the New York Times and confirmed by a spokeswoman at the Agriculture Department, average monthly benefits, which were $121 per person before the pandemic, will rise by $36 under the new rules.
The increase is based on an update to the algorithm that governs the Thrifty Food Plan, which tracks the cost of 58 different categories of groceries needed to provide a budget-conscious diet for a family of four.
---- n response to the economic downturn and widespread unemployment due to the pandemic, many Americans have relied on coronavirus-relief legislation passed by Congress that temporarily increased unemployment benefits, halted evictions and suspended student loan payments.
This aid represents a dramatic, but largely temporary, expansion of the social safety net — one that many advocates argue should be permanently enshrined. With many of these key provisions set to expire in September, federal lawmakers are under urgent deadlines to decide what policies might endure.
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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
"An Environmental Disaster": An EV Battery Metals Crunch Is On The Horizon As The Industry Races To Recycle
by Tyler Durden Monday, Aug 02, 2021 - 08:40 PM
Refco
Refco was a New York-based financial services company, primarily known as a broker of commodities and futures contracts. It was founded in 1969 by Raymond Earl Friedman as Ray E. Friedman and Co. Prior to its collapse in October, 2005, the firm had over $4 billion in approximately 200,000 customer accounts, and it was the largest broker on the Chicago Mercantile Exchange. The firm's balance sheet at the time of the collapse showed about $75 billion in assets and a roughly equal amount in liabilities. Though these filings have since been disowned by the company, they are probably roughly accurate in showing the firm's level of leverage.
----Refco Inc. entered crisis on Monday, October 10, 2005, when it announced that its chief executive officer and chairman, Phillip R. Bennett had hidden $430 million in bad debts from the company's auditors and investors, and had agreed to take a leave of absence.
https://en.wikipedia.org/wiki/Refco
Covid-19 Corner
This section will continue until it becomes unneeded.
Pfizer submits data to FDA for authorization of Covid vaccine booster shot for general population
Pfizer and BioNTech said Monday they have submitted early stage clinical trial data to the Food and Drug Administration as part of their U.S. application seeking authorization of a Covid vaccine booster for everyone 16 and older — not just people with weak immune systems.
In a phase one trial, a booster dose of the vaccine generated “significantly higher neutralizing antibodies” against the original coronavirus strain as well as the beta and delta variants, the companies said in a press release. Participants in the trial received a third shot of the two-dose vaccine about eight to nine months after receiving their second shot, they said.
“The data we’ve seen to date suggest a third dose of our vaccine elicits antibody levels that significantly exceed those seen after the two-dose primary schedule,” Pfizer CEO Albert Bourla said in a statement. “We are pleased to submit these data to the FDA as we continue working together to address the evolving challenges of this pandemic.”
The companies said late-stage trial results evaluating the third dose are expected shortly and will also be submitted to the FDA and other regulatory authorities worldwide.
The announcement from the drugmakers comes after federal health officials Friday approved administering Covid booster shots of Pfizer’s and Moderna’s vaccines to Americans with weakened immune systems, which includes cancer and HIV patients and people who have had organ transplants.
U.S. new data suggests immune-compromised individuals don’t produce an adequate immune response after receiving two doses of a Covid vaccine.
More
NIH director: U.S. could see 200,000 daily COVID-19 cases in 'next couple of weeks'
Aug. 15, 2021 / 6:52 PM By Daniel Uria
Aug. 15 (UPI) -- The United States could soon see more than 200,000 new COVID-19 cases every day as the more contagious Delta variant continues to spread, the director of the National Institutes of Health said Sunday.
NIH Director Dr. Francis Colllins told Fox News Sunday he will "be surprised if we don't cross 200,000 cases a day in the next couple of weeks" as the Centers for Disease Control and Prevention reported 140,144 new cases and a seven-day moving average of 119,523 infections on Friday.
The CDC reported 804 deaths and a 544 seven-day moving average Friday. The weekly average dropped to 182 on July 10.
"That's heartbreaking considering we never thought we would be back in that space again. That was January, February. That shouldn't be August," said Collins. "But here we are with Delta variant, which is so contagious and this heartbreaking situation where 90 million people are still unvaccinated who are sitting ducks for this virus and that's the mess we're in. We're in a world of hurt and it's a critical juncture to try to do everything we can to turn that around."
Daily cases had been below 100,000 since the end of February before spiking in recent weeks, and the United States last reported more than 200,000 cases in January, before COVID-19 vaccines were widely available.
Since the start of the pandemic, the United States has reported a total of 36,663,707 cases and 621,595 deaths, leading the world in both categories, according to data gathered by Johns Hopkins University.
To date, 50.7% of Americans are fully vaccinated while 59.7% have received at least one dose, while 61.7% of adults have completed their vaccine series and 72% have at least received their first dose, according to the CDC.
More
https://www.upi.com/Top_News/US/2021/08/15/NIH-director-US-surpass-200000-daily-cases/8941629059153/
Indonesia reports most COVID-19 deaths in past week; world up 0.1%
Aug. 15, 2021 / 1:57 PM
Aug. 15 (UPI) -- Coronavirus is continuing to surge in Indonesia with the nation recording the most deaths in the past week, 10,768, and moving into the top 10 for most fatalities, as the world's infections and fatalities increases remain about the same from seven days ago.
Indonesia last week moved past Italy into 10th place with 117,588 deaths, including 1,222 added Sunday. And the nation had the sixth-most infections, 193,925, with 20,813 more Sunday and in 13th place overall with 3,854,354, according to Worldometers.info.
The United States, which is in the midst of a fourth wave of COVID-19, gained the most infections in the past week with 848,664, a gain of 9%, with deaths rising 3,768 at 8%.
The United States has reported a world-leading 621,568 deaths and 36,660,942 cases, according to Johns Hopkins tracking.
Worldwide, the totals are 4,373,268 deaths and 207,894,016 cases so far Sunday. The one-week changes are an increase of 0.6% in cases and a decrease of 0.1% in deaths.
Brazil is second in fatalities with 568,833 and India third with 431,225. India is second in cases at 32,192,576 ahead of Brazil with 20,350,142.
Vaccinations continue to rise significantly worldwide, growing by around 600 million doses over two weeks to 4.68 billion, according to tracking by Bloomberg.
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
The Great Maine Potato War — The Year the Spuds Didn’t Show Up
It was May of 1976. The Apple Computer Company had started a month ago, The Bad News Bears showed in theaters, kids hummed along to Peter Frampton and, in New York, 50 million pounds of Maine potatoes that were supposed to be delivered never showed up. A Maine potato war for the ages had broken out.
The story behind the Maine potato war would take more than 10 years to sort itself out in the courts. The potatoes in question hadn’t disappeared. Many simply rotted in warehouses in Maine and elsewhere, unavailable for delivery.
The spuds were destroyed by an out-of-control market and two groups of mega-millionaires hell bent on cheating each other, with neither side willing to back down.
Technology Update.
With events happening fast in the development of solar power and graphene, I’ve added this section. Updates as they get reported.
The Green New Deal Crossroads — America First vs. America Dependent
By LAWRENCE
KUDLOW,
The Biden administration is now rolling towards its goal of a Green New Deal. The infrastructure deal has about $140 billion worth of subsidies and government investment funds.
Subsidies for electric cars, electric charging stations. A transformation of our utility grid, handouts to certain companies, a slush fund for the energy department — all under the general grandiose goal of net-zero emissions by some date certain yet to be determined.
American car-makers are boasting that electric vehicles will be half of their sales by 2030 even though right now they're only 3%. Mind you this whole exercise is a textbook case of central planning that is unprecedented in this country.
Instead of free markets and free choice, we’re getting guidelines that will turn into mandates, that will completely disrupt our entire transportation and energy and power systems in this country.
It is a breathtaking endeavor that is doomed to fail — a) because consumers don't want the high prices and high costs, b) because America does not even remotely have the resources to support this net-zero emissions crusade, and c) because Americans are already waking up to the enormous national security and military risks endemic to this poorly thought out utopian plan.
There is an enormous amount to be said and discussed on this topic. We’ve already begun —and will continue — to express our opposition to the Green New Deal. But here are a few brief points:
First, raising corporate average fuel economy standards, as Mr. Biden announced today, would significantly increase the cost of cars and trucks. And significantly reduce automobile safety. These two reasons were the basis of the Trump administration's opposition to punitive CAFE standards.
Second, the Green New Deal utopians have no idea of the cost and difficulties of creating an entire new infrastructure. Nor do they understand that a new infrastructure would generate enormous carbon emissions by itself. Nor do they understand that the minerals and materials that go into electric power and batteries and new electricity grids and so forth are simply not available to the United States at the present time.
The Biden administration is reducing access to minerals and oil and gas resources. Leases are being canceled at the Arctic National Wildlife Refuge. The Keystone pipeline was canceled. Far-left ideologs are in charge of the Environmental Protection Agency and the Energy and Interior Departments.
To generate battery driven autos and anything else, we need minerals like nickel, cobalt, lithium, and copper. Guess who has them. China. Some 95% of rare earth mining and processing is done in the communist country. They have a monopoly.
Some 45% of the world’s supply of polysilicon necessary to build solar panels is done in China. And actually in terms of these resources, China and the Congo are the biggest players. Both employ slave labor and child labor. Both lack human rights and freedoms.
These Green New Deal utopians don’t realize that they will make America dependent on communist China and its ally, the Congo. This is not something we want to do. This becomes a national security and military security issue. The recent bans by the Bidens on mining for all resources have decreased access to federal lands, and they seek to impose penalties on oil, gas and coal producers.
In short, the Biden administration has no planning for the scale of investments necessary in critical minerals and a brand new infrastructure. Their hopes for a vast emission reduction will decimate this country’s consumers, businesses, factories, jobs, and the economy.
More
https://www.nysun.com/national/the-green-new-deal-crossroads-america-first-vs/91607/
The Great Salad Oil Scandal
The salad oil scandal, also referred to as the soybean scandal, was a major corporate scandal in 1963 that caused over $180 million ($1.52 billion today) in losses to corporations including American Express, Bank of America and Bank Leumi, as well as many international trading companies.[1] The scandal's ability to push otherwise cautious and conservative lenders into increasingly risky practices has prompted some comparisons to later financial crises including the 2007–2008 subprime mortgage crisis.[2]
The scandal involved the Allied Crude Vegetable Oil company in New Jersey, owned by Anthony "Tino" De Angelis, a former commodities broker. De Angelis had been in trouble with the law previously for supplying schools with beef from uncertified sources under the National School Lunch Act.
De Angelis was awarded a contract with Food for Peace, a federal program which sold excess food stocks to poor countries.[1] He discovered that he could obtain loans based upon Allied's fraudulently-inflated inventory of salad oil.[3] Ships supposedly full of salad oil for Allied would dock and inspectors would certify the cargo, allowing Allied to post the oil as collateral and obtain millions of dollars in bank loans. In reality, the ships tanks contained only water, with a few feet of salad oil floating on top to trick inspectors. When inspectors audited Allied's facilities, the company would transfer the same oil stock from tank to tank to fool the inspectors while entertaining them during lunch.[4] In all, Allied posted 1.8 billion pounds of soybean oil as collateral to fraudulently obtain $180 million in loans, when the actual stock was a mere 110 million pounds.[1]
https://en.wikipedia.org/wiki/Salad_Oil_scandal
Ah yes, the good old days in commodities trading. When things go wrong.
I was lucky enough to be around for all of them, except the Great Salad Oil swindle. I was too young, still at school. Happily, not involved in any of them.
But I did have the good fortune to be around for the Comex silver rig against the Hunt Brothers, the great silver default 1980; the Drexel Burnham Lambert illegal activities bankruptcy 1990; the Barings Bank unauthourised trading bankruptcy 1995; the Bear Stearns bust March 2008, plus some lesser scandals. Commodities? What’s not to like?
Just remember in commodities trading, it’s de rigueur to count all your rings and fingers after shaking hands.
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