Baltic Dry Index. 3371 -05 Brent Crude 69.45
Spot Gold 1739
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 09/08/21 World 203,455,121
Deaths 4,307,456
“A good politician is quite as unthinkable as an honest burglar.”
H. L. Mencken.
Another holiday shortened week in Asia with both Japan and Singapore closed today.
As a result, Asian guidance is mixed this morning. In the stock casinos the week is likely to depend on what happens next in Asia’s rising third wave of Covid-19 infections and their impact on the global economy, plus what happens this week in global inflation signals.
On this last point the week is off to a “good” start. Rising covid infections are believed by many to be slowing the global economy, especially in East Asia and that in turn has weighed on the crude oil price driving the price of Brent crude back below 70 dollars this morning.
It's a good start but for a bad reason.
Besides, there are rising signs of continuing global food price inflation. Floods in Europe and China have impacted Europe’s potato production and impacted China’s pork production. Frosts and freezing weather have impacted Brazil’s coffee, orange juice and sugar production. While drought in northern Mexico to southern Canada is impacting production of almonds to beef.
Hopefully, not impacting too badly America and Canada’s wheat and other grains production, although winter wheat excepted it’s still early to call.
Below, Asia says over to Europe and America.
Asia-Pacific markets advance, with Hong Kong shares up almost 1%
SINGAPORE — Asia-Pacific markets traded mostly higher on Monday, with indexes in Australia, Hong Kong and the Chinese mainland posting gains.
Australia’s benchmark ASX 200 rose 0.16% as investors kept an eye on the Covid-19 situation in the country. The Australian dollar changed hands at $0.7354 against the greenback, climbing from an earlier level around $0.7326. The Aussie fell from levels above $0.7400 following a resurgent dollar Friday on the back of strong nonfarm payrolls data.
Australia reported 280 new Covid cases over a 24-hour period on Sunday, with most of them in the populous state of New South Wales. Reports said that about 15 million people, or 60% of the country’s population, are under a strict lockdown.
In South Korea, the Kospi index retraced most of its earlier losses and traded near flat at 3,269.17. The Kosdaq also reversed losses to gain 0.05%. Meanwhile, Hong Kong’s Hang Seng index rose 0.97%.
Chinese mainland shares traded mixed: The Shanghai composite was up 0.56% while the Shenzhen component was fractionally lower.
Hiring in the U.S. rose at its fastest pace in nearly a year in July despite fears over the Covid-19 delta variant and tight labor supply issues.
“The market reacted positively to the strong non-farm payrolls data, with a risk-on move (not always the case this year),” said analysts from ANZ Research in a Monday morning note.
“The strength of data gives credence to the Fed’s view that the labour market will maintain momentum through the summer, even with the concerns around the Delta variant,” the analysts wrote, adding that while there is still a long way to go toward reaching full employment, Friday’s figures offset some of the pessimism that had been building.
Markets in Japan and Singapore are closed for public holidays.
China’s export growth unexpectedly slowed in July while imports also lost momentum. Exports rose 19.3% from a year ago, compared with a 32.2% gain in June and versus a market forecast of a 20.8% gain, Reuters reported. Imports rose 28.1% from a year earlier, less than a market forecast of a 33% increase.
“Extreme weather conditions and local Covid outbreaks have not helped while supply disruption have also hampered export activity,” said Rodrigo Catril, a senior foreign-exchange strategist at the National Australia Bank, in a morning note.
China is expected to release inflation data on Monday.
More
Next, Wells Fargo says they have the Fed trapped over an easy money barrel.
Strong jobs report is not a game changer for Fed policy, Wells Fargo suggests
The latest jobs report may not be a game changer for the Federal Reserve’s easy money policies.
According to Wells Fargo Securities’ Michael Schumacher, it’s premature to assume July’s strong numbers will push the Fed meaningfully closer to tapering its monthly bond purchases.
“This report was pretty strong. Not a blockbuster,” the firm’s head of macro strategy told CNBC’s “Trading Nation” on Friday. “If there’s another strong one after it, it’s conceivable the Fed may start talking about tapering in a pretty serious way. Let’s say in October.”
Under Schumacher’s scenario, the Fed could start to implement tapering as soon as this November. The move would likely put upward pressure on the benchmark 10-year Treasury Note yield.
But there’s a wildcard to Schumacher’s forecast: Covid-19 delta variant cases. The surge could put negative pressure on yields.
“It’s an open question just how severely delta turns out to be and also how aggressively governments react to it,” he said.
Schumacher doubts the government will issue dramatic lockdowns, but he warns new constraints on movement would hurt economic activity.
However, his overall worry affecting the bond market is sticker than expected inflation. Schumacher is concerned it would spark a significant jump in yields.
“The thing is no one has really dealt with a pandemic. We haven’t had one in a hundred years,” he said. “So for anyone to say with a lot of confidence that inflation is going to go up and come down pretty dramatically and be back to ‘normal in four months or six months’ or something like that seems a bit foolish to us.”
More
Finally, just who’s winning that infamous trade war between the USA and China and who’s not?
China July trade surplus with United States at $35.4 bln
August 7, 2021 4:40 AM By Reuters Staff
BEIJING, Aug 7 (Reuters) - China’s trade surplus with the United States stood at $35.4 billion in July, Reuters calculations based on Chinese customs data showed on Saturday, up from $32.58 billion in June.
For the first seven months of the year, the surplus was $200.32 billion, up from $164.92 billion during the first half of 2021.
Amid worsening relations between the world’s two largest economies, U.S. Deputy Secretary of State Wendy Sherman had a face-to-face meeting with China’s Foreign Minister Wang Yi at the end of July.
However, no specific outcomes were agreed and the meeting did not mention the prospect of a meeting between U.S. President Joe Biden and Chinese President Xi Jinping
“I’m just a banker doing God’s work”
Lloyd Blankfein, CEO Goldman Sachs, 2008.
Global Inflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
There are about 1 million more job openings than people looking for work
Employers in the U.S. face an interesting challenge ahead – how to fill nearly 10 million job openings with about a million fewer workers than there are positions available.
How successful they are will go a long way in determining whether the recent strong of outsized job gains can continue.
The Department of Labor reported Friday that there are some 8.7 million potential workers who have been looking for jobs and are counted among the unemployed. At the same time, job placement site Indeed estimates there are about 9.8 million job vacancies as of July 16, or just a few days after the government’s sample period for the monthly numbers.
Companies have been using a variety of techniques, including signing bonuses, higher salaries and flexible working arrangements, to entice people. That likely will have to continue as the Covid-19 pandemic changes the jobs market, perhaps permanently.
“This is one of the most complex labor markets in recent memory,” said Scott Hamilton, global managing director for the human resources and compensation consulting practice at Gallagher, a global insurance brokerage, risk management and consulting firm. “One of the biggest factors is employers are essentially having to buy back job applicants’ Covid lifestyle.”
A just-released survey from Gallagher shows the extent to which employers are willing to go to entice workers in the pandemic era.
Some 41% of employers responding said they are offering enhanced benefits. One such enticement: 19% say they are offering pet insurance, a perk that is expected to rise to 27% of companies in the next two years.
They’re also providing discount programs, legal services and identity theft protection, though 71% of respondents said medical and pharmacy benefits remain atop the most important added benefits they’re offering.
More
U.S. consumer credit grows at record rate in June
August 6, 2021 10:06 PM
WASHINGTON (Reuters) - U.S. consumer credit grew at the fastest rate ever in June, as Americans increased their credit card usage to drive consumer spending in the second quarter, data from the Federal Reserve showed on Friday.
Total consumer credit expanded at a pace of $37.69 billion, which was the quickest rate ever and followed a $36.69 billion increase in May, the U.S. central bank said. Economists polled by Reuters had expected consumer credit to increase at a rate of $23.00 billion in June.
An alternate measure tracking the monthly change in the total amount of credit outstanding increased by the most since December 2010, the data showed. That measure showed that revolving credit, which mostly measures credit-card use, rose by $17.858 billion, the largest gain since 2006, after climbing by $9.089 billion in May.
The surge in June could explain the sustained robustness in consumer spending during last quarter, even as the flow of stimulus money from the government ebbed.
“We expect consumer credit growth will continue at a healthy clip in the second half of 2021, supported by strong consumer spending and an easing of lending standards for consumer loans,” said Nancy Vanden Houten, lead economist at Oxford Economics in New York.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, notched a second straight quarter of double-digit growth. That helped to pull the level of gross domestic product above its peak in the fourth quarter of 2019.
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
"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
If the financial system goes down, our business is going down and, trust me, yours and everyone else's is going down, too.
Lloyd Blankfein’s CEO Goldman Sachs, threat 2008. “Mr. Goldman Sacks.”
Covid-19 Corner
This section will continue until it becomes unneeded.
COVID: 88% of people who receive 3rd shot feel similar or better than 2nd
Some 14 people out of more than 400,000 who were vaccinated with a third shot were diagnosed with the virus, among them two who were hospitalized.
By MAAYAN JAFFE-HOFFMAN AUGUST 8, 2021 22:20
Some 88% of people who received the third shot of the coronavirus vaccine said they felt “similar” or “better” compared to how they felt in the days following receiving the second vaccine, according to a new report by Clalit Health Services.
The health fund released a first report on the side effects of the third shot, based on data it captured from some 4,500 people over 60 out of the 240,000 of their members who received it.
Some 31% reported one or more side effects.
Some 24% reported pain at the site of injection, 6% swelling in the injection area and 1% swelling in the armpit.
Another 15% of respondents said they experienced at least one systemic side effect.
Some 9% reported fatigue, 6.1% feeling generally unwell, 4.3% headaches, 4.3% muscle pain, 2.1% joint pain, 1.4% fever, 0.7% vomiting or diarrhea and 0.1% rash.
Only 1% of respondents experienced any other symptoms: 0.4% reported difficulty breathing and 0.3% irregular heartbeat or chest pains.
Similarly, only 1% of respondents said they sought medical treatment due to one or more of these side effects.
“Although we do not yet have long-term research on the efficacy and safety of the third dose,” said Prof. Ran Balicer, Clalit’s chief innovation officer, “these findings continue to point to the benefit of immunization now, in addition to careful behavior by older adults and avoiding gatherings in closed spaces during these weeks.”
At the same time, a small number of older people who were vaccinated with a third COVID shot were infected with coronavirus, The Jerusalem Post has confirmed.
More
US averaging 100,000 new COVID-19 infections a day
FORT LAUDERDALE, Fla. (AP) — The COVID-19 outbreak in the United States crossed 100,000 new confirmed daily infections Saturday, a milestone last exceeded during the winter surge and driven by the highly transmissible delta variant and low vaccination rates in the South.
Health officials fear that cases, hospitalizations and deaths will continue to soar if more Americans don’t embrace the vaccine. Nationwide, 50% of residents are fully vaccinated and more than 70% of adults have received at least one dose.
“Our models show that if we don’t (vaccinate people), we could be up to several hundred thousand cases a day, similar to our surge in early January,” Centers for Disease Control and Prevention director Rochelle Walensky said on CNN this week.
It took the U.S. about nine months to cross 100,000 average daily cases in November before peaking at about 250,000 in early January. Cases bottomed out in June, averaging about 11,000 per day, but six weeks later the number is 107,143.
Hospitalizations and deaths are also increasing, though all are still below peaks seen early this year before vaccines became widely available. More than 44,000 Americans are currently hospitalized with COVID-19, according to the CDC, up 30% in a week and nearly four times the number in June. More than 120,000 were hospitalized in January.
The seven-day average for deaths rose from about 270 deaths per day two weeks ago to nearly 500 a day as of Friday, according to Johns Hopkins University. Deaths peaked at 3,500 per day in January. Deaths usually lag behind hospitalizations as the disease normally takes a few weeks to kill.
More
https://apnews.com/article/health-coronavirus-pandemic-b0811d7287ef240ae619ba1e385e0a63
Global Covid Deaths Estimated to Reach 5.3 Million by December
By Shawna Kwan7 August 2021, 03:38 BST
· IHME projection puts the excess death toll at 12 million
· Fatalities expected to peak in September and slowly decrease
The world will see 5.3 million reported deaths and 12 million excess fatalities by December as the delta variant drives a surge in Covid-19 cases, according to projections by the Institute for Health Metrics and Evaluation.
The U.S.-based institute expects deaths to peak at the beginning of September then slowly decline afterward, it said in a report published Friday. The IHME’s forecasts distinguish between officially reported Covid-19 deaths and excess deaths attributed to the illness including unreported fatalities.
More
At-home saliva test can spot COVID-19 variants in an hour
Aug. 7, 2021 / 1:05 AM HealthDay News
Spit and scan. That's all you have to do, and in less than an hour, you can not only find out if you have COVID-19 but what variant you have, all without leaving your home.
This is the hope and promise of a new saliva-based COVID-19 test that is currently under development.
"Several at-home tests are available for telling you whether you have COVID-19, but none of them test for variants," said study author Dr. Xiao Tan, a clinical fellow at the Wyss Institute for Biologically Inspired Engineering at Harvard University, in Boston.
There are no plans to commercialize the test yet, but a new proof-of-concept study shows that the technology works as well as the gold standard PCR tests and could cost as little as $3 per test, which is a lot cheaper than currently available COVID-19 home tests.
The test, called Minimally Instrumented SHERLOCK, or miSHERLOCK, is based on CRISPR gene-targeting technology. It only requires off-the-shelf chemical agents, a 3D printer and commonly available equipment.
By contrast, COVID-19 tests based on PCR technology require highly specialized equipment and can take roughly four hours for results. If a sample were to be tested for a specific variant using PCR technology, it would have to be genetically sequenced, which takes even more time and resources, Tan explained.
There are currently several at-home COVID-19 tests available. Some tests require samples be sent to a lab for analysis, while others provide results at home using various technologies such as test cards and processing fluid. No PCR tests can be processed at home.
So, researchers at the Wyss Institute, the Massachusetts Institute of Technology, and several Boston-area hospitals collaborated to develop the new test.
For the study, the researchers tested saliva samples from 27 people with COVID-19 and 21 people without the virus. The test identified the virus about 96% of the time, which is on par with the PCR tests. What's more, the test detected three different variants of COVID-19: Britain, South African and Brazilian variants.
The study was conducted before the Delta variant began widely circulating so it did not look for this strain, but the technology can be rapidly tweaked to detect additional variants, the researchers noted.
"Theoretically, you could find out you are positive for COVID-19, but negative for Delta all at once," Tan said.
The test could also be used in areas that don't have access to genetic sequencing facilities, said study author Dr. Rose Lee, an instructor in pediatrics at Boston Children's Hospital.
More
https://www.upi.com/Health_News/2021/08/07/coronavirus-saliva-home-test/4801628286329/
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.
On Friday I wrote “In other aspirational news, President Biden sets an unreachable US EV target.” Today a real expert, Jack Lifton, writing for the always excellent and informative Investor Intel website, explains why in detail.
Jack Lifton on why President Biden’s EV Plan for America simply does not add up
Jack Lifton | August 06, 2021
American President Biden has decreed that by 2030 one-half of all new American car/truck production shall be EVs. If 2030 is a 20 million car/truck build year this would mean that it would also be a 160,000 tons of lithium (10,000,000 x 16kg Li/car/truck =160,000 tons) utilization year in and for the USA just for batteries for those cars. This is twice as much lithium as was produced globally in 2020. China, of course, has already committed to producing that number of EVs in 2030, but, unlike the free market USA, it, China’s industrial policy long-term planning has already accumulated 60% of current global lithium production and an even higher percentage of lithium processing capacity for battery materials. Although it is very likely that Chinese BEVs will be sold in the USA by 2030 it is very unlikely that domestic American lithium-ion battery makers will fare well in price or volume with their Chinese competitors.
The increasing costs of maintaining global lithium production even, if possible, at twice current levels and the decline of resource grades that is inevitable combined with the increasing proportion of lithium necessary for even a low percentage conversion of the existing global ICE fleet are the reasons that the world’s largest EV battery maker, China’s CATL, is developing a sodium-based rechargeable battery for mass production and use. It will be used for stationary storage especially in China where vast spaces and large populations are still off the grid and where China plans to use wind and solar to feed the grid during the day and will conserve precious lithium by using sodium for stationary storage batteries to be able to maintain consumer electric power around the clock.
America’s Global Environmental Elites (GEEs) do not understand China’s long-term planning for the production of energy, its use, or distribution, so they cover their ignorance by simply declaring China to be the world’s biggest “carbon” emitter, and ignore the reasons for China’s long-term plan to reduce its dependence on fossil fuel energy production not to eliminate it! This ignorance is making America and the west increasingly unlikely to be able to compete industrially with China much longer.
The production of base, structural metals, such as iron(steel) and aluminum and the key technology metal, copper, require uninterrupted high-density baseload, which cannot be supplied by wind or solar even with battery storage. It is the same for heavy (cars, trucks, large scale machines) industrial manufacturing. The Chinese are now leading the world in these categories and in their maintaining and even increasing their baseload superiority. Chinese electricity production is today twice that of the USA, and China alone produces 1/3 of the globe’s electricity. This is not by chance.
More
Citigroup’s Chuck Prince wants to keep dancing, and can you really blame him?
By wpcomimportuser1 July 10, 2007
The Citigroup chief executive told the Financial Times that the party would end at some point but there was so much liquidity it would not be disrupted by the turmoil in the US subprime mortgage market.
He denied that Citigroup, one of the biggest providers of finance to private equity deals, was pulling back.
“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing,” he said in an interview with the FT in Japan.
Now the prospect of Chuck Prince dancing is in itself unsettling. But his account amounts to quite an elegant explanation of why financial bubbles persist.
More
http://business.time.com/2007/07/10/citigroups_chuck_prince_wants/
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