Baltic Dry Index. 3281 -01 Brent Crude 72.49
Spot Gold 1812
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 04/08/21 World 200,280,632
Deaths 4,258,927
The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.
Ernest Hemingway.
We open with a developing story with big implications for markets. What happens in the next few hours and days is key. Just how close are we to a military response setting off an inflationary oil and LNG surge.
This might be a good time to fill up the car and add a little physical precious metals.
Incident with multiple tankers in Gulf of Oman raises concerns in oil market
U.S. officials say they are still trying to determine exactly what’s happening, but numerous reports say there’s potentially one hijacked ship in the Gulf of Oman and the status of several others is unclear.
The situation occurred as tensions between the West and Iran have been rising, and as the U.S. and other world powers have been trying to reach a new deal with Iran over its nuclear program.
At a briefing, U.S. State Department spokesman Ned Price said: “We are aware of the reports of a maritime incident in the Gulf of Oman. We are concerned. We are looking into it.”
Price said this was part of a disturbing pattern of belligerent behavior from Iran “including belligerents in the maritime domain.”
Price was referring to what military experts call a drone attack against a ship last week that killed a British crew member and a Romanian crew member aboard the ship Mercer Street.
Other U.S. officials say the situation is moving quickly, but it appears armed Iranian gunmen had boarded the seized tanker.
The incident has not moved oil prices, yet anyway. West Texas Intermediate crude futures for September settled down nearly 1% at $70.50 per barrel but they were off the lows of the day after the reports.
Lloyds List reported that the Panamanian flagged Asphalt Princess was the ship that was reportedly seized by armed men. The British Navy earlier Tuesday had warned of a “potential hijack” in the Gulf of Oman, and the British military’s United Kingdom Maritime Trade Operations warned ship operators that “an incident is currently underway” off of Fujairah, United Arab Emirates, according to news reports.
The Associated Press had reported that at least four ships off the coast of the UAE broadcast warnings Tuesday that they had lost the control of their steering. The four vessels were identified as Queen Ematha, the Golden Brilliant, Jag Poofa and Abyss, according to the AP, citing MarineTraffic.com.
Helima Croft, a former CIA analyst who heads global commodities strategy for RBC, said the activity is alarming and it appears to have been some sort of action that involves the Islamic Revolutionary Guard. The IRGC is a powerful military force that Iran wields separately from the standard Iranian armed forces and it reports directly to the ayatollah.
“It is alarming given the fact we had two fatalities on Friday,” she said. “You have to put it in the context of Iran continuing to make progress on the nuclear restart against the backdrop of a new hard-line government coming to power in Tehran. It raises the risk of unintended escalation, or one side not appreciating the other’s red lines.”
---- Croft said Iran may be using a hard-line stance to try to push Washington into a deal. “The Iranians may be calculating if you raise the temperature enough, Washington will fold because Washington does not want a military operation in the Middle East,” she said.
Croft said the market is singularly focused on the potential of a renewed economic slowdown and drop off in oil demand due to the breakout of the delta variant of Covid.
The escalation of tensions makes it less likely a deal will be struck soon, meaning Iran’s oil will not be back on the market. But if the tensions escalate and the activity disrupts the oil market that would impact prices.
“If we see real signs of a disruption in production or delivery the market will move very quickly,” she said.
More
Now back to the stock casinos. More of the same. Free Magic Money Tree money from the central banksters continues inflating stock mania. But what happens next in shipping could easily derail the best laid plans of mice and central banksters.
Asian shares near 1-wk highs but Delta woes mount
BEIJING — Chinese companies wanting to go global are running into shipping problems.
Access to cheap manufacturing at home gave Chinese businesses an advantage overseas. But it’s turning into a disadvantage now, as the pandemic and trade tensions disrupt international supply channels.
Many goods can’t be shipped out, said Fang Xueyu, vice president of international marketing and general manager for Asia-Pacific at Chinese home appliance company Hisense.
The cost of shipping containers has climbed five-fold from about $3,000 to as much as $15,000 each, while it takes about a week longer for them to get to Europe, she said in a Mandarin-language interview last month.
From the Suez Canal congestion in March to the re-emergence of Covid cases around a major Chinese export hub in Guangzhou in June, logistical disruptions have hit global trade one after the other.
“What you have in Europe, what you have around the world, I wouldn’t call it chaos, but a lot of disturbances in the logistics system,” said Alexander Klose, executive vice president of overseas operations at Chinese electric car start-up Aiways.
“So we had to rebook shifts, we had to delay shifts, because no ships were available, no containers were available. That definitely impacted us,” he told CNBC in an interview in June.
For the company, which makes its cars in China and sells them to Europe, Klose said the disruptions “delayed some shipments by two, three months just because cars were sitting in a port and not being transported.”
Foreign demand for Chinese-made products has remained strong — both by companies’ accounts and official data. The customs agency said in the first half of the year, exports to the European Union rose 35.9% from a year ago to $233 billion, while those to the U.S. climbed 42.6% to $252.86 billion.
---- But the shipping delays mark the latest challenge Chinese companies face in trying to reach international markets.
Out of about 3,400 Chinese companies that operate internationally, only about 200 make more than $1 billion in sales overseas, said James Root, a partner at management consulting firm Bain.
More
https://www.cnbc.com/2021/08/04/shipping-made-in-china-products-run-into-new-logistics-problems.html
Credit Suisse mulls hiking junior staff salaries to $100,000
Monday 2 August 2021 7:07 pm
Credit Suisse has reportedly become the latest banking giant to hike junior staff salaries to $100,000 amid growing competition for fresh talent.
According to Financial News, the lender will pay first year analysts $100,000 a year, with salaries to rise to $105,000 and $110,000 over the next two years.
City A.M. understands that the hike, which is yet to be finalised, is part of a general review of compensation across the company.
If confirmed, Credit Suisse will join a number of its rivals in increasing graduate level pay to six-figure levels.
Morgan Stanley, Citigroup, JP Morgan Chase, Bank of America, Barclays, Nomura and UBS have all done the same in the last few months.
Banking giants have been looking to entice younger workers after up to 70 per cent of junior bankers quit their roles due to burnout from severe workloads since the onset of the pandemic.
But earlier today former London Stock Exchange Group chief executive Xavier Rolet hit out at “entitled” new recruits, saying that they should stop complaining about working hours.
In comments to the Mail on Sunday, Rolet advised banks to hire “poor hungry kids who managed to put themselves through college” instead of entitled graduates with unrealistic expectations.
More
https://www.cityam.com/credit-suisse-mulls-hiking-junior-staff-salaries-to-100000/
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
Inflation is like toothpaste. Once it's out, you can hardly get it back in again.
Karl Otto Pohl.
Covid-19 Corner
This section will continue until it becomes unneeded.
With delta, is it even safe to go to music festivals or outdoor concerts? Here’s what experts say
Outdoor music festival Lollapalooza brought thousands of people to Chicago’s Grant Park.
Photographs from Lollapalooza, which took place from Wednesday to Sunday, show large groups of un-masked concertgoers cheering in densely packed crowds. Organizers have not released official attendance numbers, but over 100,000 people were expected to attend each day of the four-day festival.
Lollapalooza’s safety measures ahead of the event were straightforward: The festival required attendees to present their vaccination card indicating that they were fully or partially vaccinated. Unvaccinated individuals had to show proof of a negative Covid test within 72 hours of attending and wear a mask.
But even with the safety protocol in place, is it safe to attend a crowded outdoor concert at this stage of the pandemic with the more transmissible delta variant dominating?
It’s too early to say whether there will be an outbreak due to the Lallpalooza concert.
But we know from data out of a Provincetown, Massachusetts outbreak that people who are fully vaccinated are capable of getting infected with and transmitting Covid, Dr. Jorge Parada, medical director of Loyola Medicine’s Infection Control Program, tells CNBC Make It.
“The more crowded the venue, the more likely they’ll happen,” he says.
“At this point, for everybody, it’s really about balancing risk,” says Anna Bershteyn, assistant professor at New York University Grossman School of Medicine, who specializes in infectious disease modeling.
Here’s what experts want you to know about the risks, as well as some safety measures to keep in mind if you’re planning to attend a large outdoor concert or gathering:
More
CDC says 7-day average of daily U.S. Covid cases surpassed peak seen last summer
Published Mon, Aug 2 2021 4:33 PM EDT Updated Mon, Aug 2 2021 6:58 PM EDT
The seven-day average of daily coronavirus cases in the U.S. surpassed the peak seen last summer when the nation didn’t have an authorized Covid-19 vaccine, CDC Director Dr. Rochelle Walensky said Monday, citing data published over the weekend.
U.S. Covid cases, based on a seven-day moving average, reached 72,790 on Friday, according to data compiled by the Centers for Disease Control and Prevention. That’s higher than the peak in average daily cases seen last summer, when the country was reporting about 68,700 new cases per day, according to the CDC.
The daily average in Covid cases has since dropped, however, falling to 68,326 new cases per day on Saturday and 63,250 new cases per day on Sunday, according to the agency.
While data published on the CDC website shows a decline in the seven-day average of daily case counts in the following days, a separate coronavirus dataset maintained by Johns Hopkins University does not show a decline. Rather it shows a continued increase in the seven-day average to nearly 80,000 new cases per day as of Sunday.
----The CDC director’s comments come as Covid cases in the U.S. begin to spike once again, with the highly contagious delta variant fueling infections, particularly in regions of the nation with low vaccination rates.
One out of 3 Covid cases occurred in Florida and Texas over the past week, White House Covid czar Jeff Zients said Monday. About 17% of cases came from seven states with low vaccination rates, he added.
The seven-day average of hospital admissions is about 6,200 per day, an increase of about 41% from the previous seven-day period, according to Walensky. The seven-day average of daily deaths has also risen to 300 per day, an increase of more than 25%, she said, but still far below last summer’s peak of more than 1,100 daily deaths in early August 2020.
More
US hits 70% vaccination rate -- a month late, amid a surge
The U.S. on Monday finally reached President Joe Biden’s goal of getting at least one COVID-19 shot into 70% of American adults -- a month late and amid a fierce surge by the delta variant that is swamping hospitals and leading to new mask rules and mandatory vaccinations around the country.
In a major retreat in the Deep South, Louisiana ordered nearly everyone, vaccinated or not, to wear masks again in all indoor public settings, including schools and colleges. And other cities and states likewise moved to reinstate precautions to counter a crisis blamed on the fast-spreading variant and stubborn resistance to getting the vaccine.
“As quickly as we can discharge them they’re coming in and they’re coming in very sick. We started seeing entire families come down,” lamented Dr. Sergio Segarra, chief medical officer of Baptist Hospital Miami. The Florida medical-center chain reported an increase of over 140% in the past two weeks in the number of people now hospitalized with the virus.
Biden had set a vaccination goal of 70% by the Fourth of July. That figure was the low end of initial government estimates for what would be necessary to achieve herd immunity in the U.S. But that has been rendered insufficient by the highly contagious delta variant, which has enabled the virus to come storming back.
---- The U.S. still has not hit the administration’s other goal of fully vaccinating 165 million American adults by July 4. It is about 8.5 million short.
New cases per day in the U.S. have increased sixfold over the past month to an average of nearly 80,000, a level not seen since mid-February. And deaths per day have climbed over the past two weeks from an average of 259 to 360.
More
https://apnews.com/article/joe-biden-health-coronavirus-pandemic-e33cc7e3eb782ceffdc9107a7cac25ab
Rapid virus spread through Indonesia taxes health workers
JAKARTA, Indonesia (AP) — Irman Pahlepi is back at work in Jakarta’s Dr. Suyoto public hospital, immediately resuming his duties treating COVID-19 patients after recovering from an infection himself — for the second time.
With numbers of infections in Indonesia skyrocketing and deaths steadily climbing, health care workers are being depleted as the virus spares nobody, Pahlepi, 30, felt he had no option but to jump right back in.
“We have so many extra patients to treat compared to last year,” he said. “The number of COVID-19 patients is four times higher now than during the previous highest spike in January.”
Indonesia, the world’s fourth most populous country, had its deadliest day with 2,069 deaths from COVID-19 last Tuesday and fatalities remain high. As of Sunday, total official cases stood at more than 3.4 million with 97,291 deaths, though with poor testing and many people dying at home, the real figures are thought to be considerably higher.
As the region grapples with a new coronavirus wave fueled by the delta variant, Indonesia’s death rate hit a 7-day rolling average of 6.5 per million on Aug. 1, second only to Myanmar and far higher than India’s peak rate of 3.04 that it hit in May during the worst of its outbreak.
Among the dead in Indonesia are more than 1,200 health care workers, including 598 doctors, according to the Risk Mitigation Team of the Indonesian Medical Association. The doctors included at least 24 who were fully vaccinated.
Many others are exhausted from the workload, said Mahesa Paranadipa, who co-leads the mitigation team, making them more likely to fall ill, like Pahlepi.
More
COVID-19 variants: What comes after Delta?
Rich Haridy August 02, 2021
In the space of a few months the Delta variant has become the dominant strain of SARS-CoV-2 around the world. But what comes after Delta, how are new variants being named, and what are "Variants of Concern"?
For much of the first year of the pandemic researchers watched the SARS-CoV-2 virus mutate and change as it spread across the globe. This was expected. Viruses constantly mutate. In fact, genomic changes in a virus can be so pronounced from person to person scientists are able to track chains of transmission in stunning detail.
The vast majority of mutations initially seen with SARS-CoV-2 were relatively benign. No particular variant seemed to be outperforming any other. By the end of 2020, however, a new SARS-CoV-2 variant had become notably predominant in the United Kingdom.
Initially dubbed B.1.1.7 (also informally known as the UK or Kent variant) the variant’s rapid spread clearly indicated certain mutations had generated significant transmission advantages. Since then, researchers have been able to home in on the particular genomic features unique to this variant and flag other viral lineages with similar features.
In May, the World Health Organization (WHO) stepped in to help clarify the growing confusion over variant names. While scientists often referred to these new variants by their particular lineage label (B.1.1.7; B.1.351; B.1.617.2; etc), many found it easier to tag a variant by its place of origin (UK variant; South African variant; Indian variant; etc).
Noting the “stigmatizing and discriminatory” nature of labeling a variant with a geographical name the WHO introduced a universal naming system based on letters of the Greek alphabet. Scientific lineages were still still recommended for research purposes but national authorities and media outlets were urged to adopt these new, neutral labels.
But if novel variants are emerging all the time when does one attain an official label?
The WHO’s Technical Advisory Group on Viral Evolution has established three tiers of classification for novel SARS-CoV-2 variants: Alerts for Further Monitoring, Variants of Interest, and Variants of Concern.
Now that scientists are getting a grasp on what kinds of genomic mutations can significantly alter the severity or transmissibility of SARS-CoV-2, novel variants with the potential to become problematic can be detected sooner. These variants are labeled with an Alert for Further Monitoring.
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.
Today, so you really want to go the Li-ion grid storage battery route? Think anyone will bring any of this up at COP 26 in Glasgow in November?
Tesla Megapack Battery Fire In Australia Finally Extinguished After Four Days Of Burning
Monday, Aug 02, 2021 - 10:00 PM
Four days ago, we reported a shipping container-sized Tesla Megapack battery unit at the world's largest energy storage project, operated by France's Neoen SA, in Australia's Victoria, dubbed "Victorian Big Battery," caught fire during a test-run.
Victoria Country Fire Authority (CFA) published a statement Monday that said the 13-ton battery was finally extinguished after four days, according to Bloomberg.
"There was one battery pack on fire to start with, but it did spread to a second pack that was very close to it," Chief CFA Fire Officer Ian Beswicke said in a statement. CFA has yet to determine the origins of what caused the Tesla battery to combust spontaneously.
On Friday, when the fire was first reported, CFA officials were so concerned about toxic fumes spewing from the battery unit that they issued air quality warnings for surrounding suburbs and urged people to move indoors.
The problem with lithium-ion batteries is that besides emitting toxic fumes during a blaze, the sheer amount of water to extinguish the fire is not ESG-friendly.
For a regular Tesla car battery weighing around 1,200 pounds, it takes about 20 tons of water to put out the blaze. Some Tesla vehicle fires have taken upwards of 75 tons of water.
Now picture a 13-ton, or approximately 26,000-pound battery catching fire and the amount of water needed to extinguish it. CFA didn't release the number of tons of water it took to extinguish the blaze, but statements show it took four days to put out flames.
As for the considerable amounts of gas and smoke emitted from the lithium-ion battery blaze, there has yet to be any quantifiable data released by CFA detailing the environmental impact.
The whole ESG push for "green technology" on the grid sounds wonderful, but if a mishap occurs, firefighters do not have the technology to quickly and efficiently put out a lithium-ion battery blaze.
Never think that war, no matter how necessary, nor how justified, is not a crime.
Ernest
Hemingway.
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