Baltic Dry Index. 3822 -122 Brent Crude 72.58
Spot Gold 1822
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 07/09/21 World 221,997,794
Deaths 4,589,122
When the operations of capitalism come to resemble those of the casino. Ill fortune will be the lot of the many.
John Maynard Keynes.
In the stock casinos, more of the same. Too much newly created Magic Money Tree fiat money seeking a way to make easy money.
Why flip hamburgers or metal bash for a living, when the planet’s central banksters are oiling the easy life through stock gambling.
Still what was it Keynes warned about? Silly old fool, what did he know about Magic Money Tree life post March 2020!
Chinese stocks rise as data shows China’s exports in August beat expectations
Published Mon, Sep 6 2021 7:38 PM EDT
SINGAPORE — Shares in Asia-Pacific were mixed in Tuesday trade, as data showed China’s August trade data came in above expectations.
The Shanghai composite in mainland China rose 0.64% while the Shenzhen component advanced 0.233%. Hong Kong’s Hang Seng index gained 0.89%.
China’s exports jumped 25.6% year-over-year in August, customs data showed Tuesday — above expectations for a 17.1% rise by analysts in a Reuters poll.
The Nikkei 225 in Japan rose 0.79% while the Topix index advanced 0.92%, with shares in the country continuing to trek upward after two straight trading days of solid gains. That comes as investor sentiment is buoyed by the prospect of more stimulus that has reportedly been called for by prime minister contender Fumio Kishida.
Elsewhere, South Korea’s Kospi dipped 0.5%. The S&P/ASX 200 in Australia shed 0.13%, ahead of the Reserve Bank of Australia expected rate decision announcement at 12:30 p.m. HK/SIN on Tuesday.
MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.16% higher.
Markets in the U.S. were closed on Monday for a holiday.
More
Next, the sound of one hand clapping in stocks. Put it out on the record in case the roof falls in.
Market bull Tom Lee predicts a record September, but warns that a 10% correction could come in October
Longtime market bull Tom Lee is predicting a profitable period for investors in September.
According to Lee, the S&P 500 is positioned to surge more than 100 points this month. However, he warns the positive momentum has an expiration date.
“We could have a really strong rally in September,” the Fundstrat Global Advisors’ co-founder and head of research told CNBC’s “Trading Nation” on Friday. “We didn’t think there was a window for a 10% correction for most of 2021. The window where we think you could start to have potentially a 10% pullback is October.”
Lee attributes the vulnerability to growing fiscal and monetary policy risks — as well as uncertainty surrounding the pandemic and flu season.
“We get that much closer to tapering,” the CNBC contributor said. “That’s really when the debt ceiling rhetoric comes back, and if there are going to be concerns about the debt ceiling, the bond market could panic.”
When there’s upheaval in the bond market, it typically spills to stocks. But in the meantime, Lee indicates he would be a buyer.
He sees uncertainty regarding Covid-19 delta cases and its economic impact pushing the Federal Reserve to stay dovish for longer. According to Lee, it’s a recipe for new market highs.
More
https://www.cnbc.com/2021/09/06/correction-may-strike-stocks-after-record-september-tom-lee-.html
In commodities news, without bauxite from Coup hit Guinea, where will China get enough aluminium?
Everyone and their dog starts front running China.
Aluminum Jumps Again as Guinea Coup Adds to Supply Worries
Bloomberg News6 September 2021, 01:42 BST Updated on 6 September 2021, 17:54 BST
· Guinea is a major exporter of bauxite used to make aluminum
· Junta leader urges mining companies to keep operating
Aluminum climbed to the highest in more than a decade after a coup in Guinea fueled concerns over raw material supplies, with futures holding gains even after the head of the junta urged miners to keep operations running.
Metal prices extended gains and producer shares surged -- industry leader Aluminum Corp. of China, or Chalco, jumped as much as 10%. Guinea is a major supplier of bauxite, the feedstock needed to make aluminum, and accounts for more than half of the imports by China.
More
Next, if you want a new car, better buy now before prices go up. Just don’t tell Jerry at the Fed, he still thinks inflation is transitory.
Major automakers fear the global chip shortage could persist for some time
Published Mon, Sep 6 2021 10:37 AM EDT
Car manufacturers including Ford, Volkswagen and Daimler are still struggling to deal with the impact of the global chip shortage, with executives from each of the companies warning a lack of silicon is likely to remain a problem.
Volkswagen CEO Herbert Diess, Daimler CEO Ola Kallenius and Ford Europe chairman of the management board Gunnar Herrmann told CNBC’s Annette Weisbach at the Munich Motor Show on Monday that it’s hard to tell when the complex issue will be resolved.
Germany’s Volkswagen, Europe’s largest carmaker, has lost market share in China as a result of the chip shortage, Diess said.
“We are relatively weak because of semiconductor shortages,” he said. “We are hit more in China than the rest of the world. That’s why we are losing market share.”
Diess said his colleagues in China have been pushing for more semiconductors, describing the lack of chips as a “really big concern.”
The Wolfsburg-headquartered company was expecting the semiconductor situation to improve after the summer holidays but that hasn’t been the case. Malaysia, where many of Volkswagen’s suppliers are based, has been hit hard by the coronavirus in recent weeks, leading to several factory shutdowns.
Diess said he believes the chip shortage issues will start to dissipate as countries reduce Covid-19 transmission, but he expects there to be a general shortage of semiconductors for some time. “We will face a general shortage of semiconductors because the internet of things is growing so fast so there will be constraints which we will try to manage,” he said.
Ford Europe’s Herrmann, meanwhile, estimates the chip shortage could continue through to 2024, adding that it’s difficult to pinpoint exactly when it will end.
The shortage is thought to have been exacerbated by the move to electric vehicles. For example, a Ford Focus typically uses roughly 300 chips, whereas one of Ford’s new electric vehicles can have up to 3,000 chips.
Beyond chips, there are now other shortages to contend with. Ford is facing a “new crisis” in raw materials, Herrmann said.
“It’s not only semiconductors,” he said, adding that lithium, plastics and steel are all in relatively short supply. “You find shortages or constraints all over the place.”
Car prices will rise as the cost of raw materials goes up, Herrmann said.
More
https://www.cnbc.com/2021/09/06/vw-ford-daimler-fear-chip-shortage-could-persist-for-some-time.html
Finally, all good things must come to an end, just not this sort of end. An oddity, or another sign that the central bankster, Magic Money Tree fiat money “everything” bubble, is fast closing in on its pin.
China Evergrande bonds suspended as prices slump
September 6, 2021 8:51 AM By Andrew Galbraith
SHANGHAI (Reuters) - Bonds issued by heavily indebted developer China Evergrande Group plunged on Monday on growing investor worries over the company’s ability to pay its debts, prompting China’s stock exchanges to halt trading.
The Shanghai Stock Exchange said in a statement that it had temporarily suspended trading in China Evergrande Group’s 6.98% July 2022 corporate bond following “abnormal fluctuations.” The exchange had also suspended trading in the bond on Friday.
Shanghai exchange data showed the bonds sliding more than 25% to a low of 40.18 yuan after the resumption of trade on Monday afternoon, reflecting investor doubts that Evergrande will be able to repay investors in full on the bond’s maturity next year.
The company’s 5.9% May 2023 Shenzhen-traded bond, which was also suspended from trading, fell more than 35% after trading resumed on Monday afternoon.
The slump in bond prices on Monday comes after China Securities Depository and Clearing Co. (CSDC) on Friday effectively erased their value for use in collateral repo trading by reducing the “conversion ratio” of the July 2022 bond to zero, effective Sept. 7.
Other Evergrande bonds, including the May 2023 Shenzhen bond, had been included on a CSDC table of conversion ratios on Thursday for use on Sept. 6, but were not included in Friday’s table.
The conversion ratio determines leverage limits for repo financing given a specific bond pledged as collateral. CSDC is owned by the Shanghai and Shenzhen stock exchanges.
A director at a local brokerage said that the reduction in the conversion ratio was a “grey rhino” - a highly obvious yet ignored threat. “It was bound to happen.”
China Evergrande declined to comment.
Worries surrounding Evergrande, which has been scrambling to raise funds to pay lenders and suppliers, have spilled into broader concerns that a debt crisis could send shockwaves through China’s banking system.
On Friday, an index of high-yield Chinese dollar issuers fell to its lowest level since spring 2020.
Global Inflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
High inflation looms over ECB meeting
Issued on: 06/09/2021 - 04:54
Rising eurozone inflation provides the backdrop for the meeting of European Central Bank governors Thursday, with markets hoping for hints when policymakers might start easing their massive pandemic-era stimulus.
As the economic recovery gathered steam in the 19-nation club, consumer prices rose in August at a pace not seen in the past decade, climbing beyond three percent -- overshooting the ECB's new two-percent target.
ECB president Christine Lagarde previously promised to "look through" the surge and policymakers expect the rate to rise even further in coming months before falling back.
"We are more worried about the inflation rate being too low in the medium term rather than too high," Isabel Schnabel, a member of the ECB's executive board, said last month.
The ECB considers the jump in consumer prices to be driven by one-off, pandemic-related effects as energy prices recover and policies aimed at mitigating the economic impact are rolled back.
As such, observers do not expect the ECB's governing council to touch historically low interest rates or announce any significant change to their colossal bond-purchasing programme, despite some grumbling among its 25 members.
Jens Weidmann, the president of the German Bundesbank, urged the ECB in August not to ignore the risk of a higher inflation outlook, and said the ECB must stand ready to gradually scale back its bond-buying.
- Focus on Lagarde -
"Even if some ECB hawks re-emerged over the last days, we don't expect their pushback to be strong enough to deliver any changes to the ECB's monetary policy stance," ING bank economists Carsten Brzeski and Antoine Bouvet said.
The ECB last year launched a 1.85-trillion-euro ($2.2 trillion) pandemic emergency bond-buying programme (PEPP) to help the euro region weather the coronavirus crisis.
The huge asset purchases, scheduled to run until March 2022, are aimed at keeping borrowing costs low to keep credit flowing and boost economic growth.
The ECB will on Thursday also unveil the latest quarterly growth and inflation forecasts, but analysts expect few surprises.
The inflation outlook is predicted to stay roughly unchanged, at 1.5 percent in 2022 and 1.4 percent in 2023 -- keeping the ECB's 2.0 percent goal well out of reach.
More
https://www.france24.com/en/live-news/20210906-high-inflation-looms-over-ecb-meeting
Europe Faces Energy Price Shock With Gas and Power at Records
By Vanessa Dezem, Rachel Morison, and Will Mathis6 September 2021, 11:18 BST
· Wholesale prices could lead to 20% increase in bills for homes
· ‘Europe will face a very tight winter’: Engie EnergyScan
Europe is facing an energy price shock as the cost of natural gas and electricity surges to record levels.
A gas supply crunch is boosting the cost of producing power from the U.K. to Germany just as businesses reopen and people return to the office, increasing demand. Rising prices are fueling inflation and threatening to stall the economic recovery as energy-intensive industries from fertilizer to steel may need to curb output.
More
Inflation could spark new global financial crisis, says Russia’s central bank
Warning highlights country’s growing concern over worldwide increases in prices
September 3 2021
Russia’s central bank says a new financial crisis on the scale of the 2008 collapse could happen in less than 18 months if global inflation is not kept in check.
A surge in public and private sector debt levels during the recovery from the pandemic could cause the global economy to “deteriorate drastically and rapidly” if the US Federal Reserve has to jack up interest rates to quell inflation, the Bank of Russia warned in its annual monetary policy forecast.
The report, published on Thursday, said global gross domestic product growth could slow to just 1.1 per cent as higher interest rates prompt investors to dump risky assets. Emerging market countries with high levels of foreign debt would be particularly hurt.
“Risk premiums will increase significantly, the most indebted countries will struggle to service their debt, and a significant financial crisis will begin in the global economy in the first quarter of 2023 — one comparable to the 2008-2009 crisis, with a long period of uncertainty and a protracted recovery,” the central bank said.
The prediction is not the central bank’s central scenario. This instead foresees a broad economic recovery with inflationary pressures dissipating by the end of this year and is “significantly more likely” than its alternative scenarios of financial crisis, a worsening pandemic or rising global inflation.
Even so, the warning indicates Russia’s growing concern over increasing inflation worldwide. Whereas US and European central bank officials have said they consider price increases to be temporary, Russian central bank governor Elvira Nabiullina told the Financial Times in July that growing inflationary pressure in Russia was likely to be a long-term phenomenon.
Russia’s warning also comes as inflationary pressures build across emerging Europe. The region’s easing of coronavirus restrictions has brought economic output in the second quarter back to pre-pandemic levels.
At
the same time, however, this “recovery has been accompanied by a marked
increase in price pressures. Consumer and producer price inflation reached
multiyear highs in July and shows no sign of letting up,” Capital Economics, a
consultancy, said in a note to clients.
Several large emerging markets have raised interest rates aggressively this
year in an attempt to keep rising inflation under control. Ukraine has raised
its policy rate by 2 percentage points, Russia by 2.25 points and Brazil by
3.25. But pressures remain strong.
Inflation in Brazil is running at 9 per cent, well above the central bank’s 3.75 per cent target, and economists expect the policy rate to rise to 7.5 per cent by the end of the year, from 5.25 per cent today.
More
https://www.ft.com/content/624b3082-6774-4967-aab1-d5d617eb49b0
Covid-19 Corner
This section will continue until it becomes unneeded.
Covid vaccination rates have slumped in some parts of the world, and experts are worried
Published Mon, Sep 6 2021 1:21 AM EDT
When coronavirus vaccines were developed, trialed and authorized for emergency use in record time, millions of people eagerly awaited the protection and peace of mind they afforded.
But around nine months after vaccination rollouts began in the West there has been a slowdown in some national and state-wide immunization drives across the U.S. and Europe.
This slowdown, combined with a slow uptake in some areas, is worrying experts. Particularly as many Covid preventative measures have been relaxed and cases are rising in both the U.S. and parts of Europe.
"The stagnation in vaccine uptake in our region is of serious concern," Dr. Hans Kluge, regional director of WHO's European region, said in a press statement last week.
"Now that public health and social measures are being relaxed in many countries, the public's vaccination acceptance is crucial if we are to avoid greater transmission, more severe disease, an increase in deaths and a bigger risk that new variants of concern will emerge."
He said there had been 64 million confirmed cases and 1.3 million deaths in the region, which comprises 53 countries ranging from those in Western Europe to Russia and its surrounding countries. Kluge added that 33 countries in the region had reported a greater-than-10% increase in their 14-day case incidence rate.
"This high transmission is deeply worrying — particularly in the light of low vaccination uptake in priority populations in a number of countries," Kluge said.
"In the past 6 weeks, vaccination uptake in the region has slowed down, influenced by a lack of access to vaccines in some countries and a lack of vaccine acceptance in others. As of today, only 6% of people in lower and lower-middle-income countries in our region have completed a full vaccination series."
More
https://www.cnbc.com/2021/09/06/covid-vaccinations-have-slumped-in-parts-of-the-us-and-europe.html
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.
Green ammonia: The rocky pathway to a new clean fuel
Loz Blain September 03, 2021
You'll be hearing a lot more about ammonia as a clean fuel option as the race to zero carbon by 2050 progresses. In particular, it looks like a strong option for long-haul shipping and trucking. So what is it, how is it made, and how does it shape up as a green fuel?
Chemically, ammonia is a molecule comprising three hydrogen atoms, all linked to one central nitrogen atom. Both very common elements; the Earth's atmosphere is mostly nitrogen, and hydrogen is of course the most abundant element in the universe. That doesn't mean it's simple to produce, but we'll get to that.
At atmospheric pressure, ammonia is a very stinky gas with a boiling point of −33.3 °C (−28.0 °F). Kept cold or under a modest amount of pressure, it's relatively easy to liquefy, making it a much easier green fuel to transport and store than hydrogen. You can truck it about or keep it in tanks, cheap as chips. Hydrogen is nearly 30 times more expensive to store.
Indeed, in many ways, ammonia does a better job of storing hydrogen than hydrogen gas itself; H2 is notorious for leaking away through the metal walls of containers, for embrittling steel it comes into contact with, and for taking a lot of energy to liquefy at cryogenic temperatures. And then there's density: it may sound weird, but there's one and a half times more hydrogen in a gallon of ammonia than there is in a gallon of hydrogen, all else being equal.
----Ammonia as a fuel
By volume, ammonia (15.6 MJ/l) carries 70 percent more energy than liquid hydrogen (9.1 MJ/l at cryogenic temperatures) and nearly three times as much energy as compressed hydrogen gas (5.6 MJ/l at a pressure of 700 bar). By weight, it carries 6,250 Wh/kg – more than 20 times as much energy as today's lithium batteries, and more than enough to overcome the inefficiencies introduced when you extract the energy.
Diesel, as the dominant fossil fuel for long haul shipping, is of course considerably better, giving you 38.6 MJ/l and 12,667 Wh/kg in a combustion cycle. But ammonia's numbers are enough to bring it into the conversation, and diesel's days are numbered.
There are a few key ways ammonia can be used as a fuel. One is by "cracking" it back into H2 and N2 gases, and then using the hydrogen, either as a combustion fuel or to produce electricity via a fuel cell. Efficiency-wise, Australia's CSIRO calculates ammonia returns about 2,094 Wh/kg when converted to hydrogen and run through a PEM fuel cell. That's about 19 percent of the 10 MWh/ton of renewable energy it takes to create the ammonia.
Another option is to burn the ammonia directly as a combustion fuel, combining it with oxygen to release energy, with nitrogen gas and water the only exhaust products. This is not super simple – ammonia doesn't burn at lower temperatures, so typically another combustion fuel needs to be used in conjunction. Also, if the combustion process isn't well managed, it can release large amounts of nitrous oxide, a potent greenhouse gas. But when done properly, CSIRO calculates it returns 2,315 Wh/kg, or 21 percent of the energy input for ammonia synthesis.
A third is to use ammonia directly as a fuel for a high-temperature solid oxide fuel cell (SOFC), creating electricity with nitrogen and water as by-products. This is much more efficient, returning as much as 5,510 Wh/kg, or 50 percent of the energy input. A drawback here is that SOFC technology is expensive and tends to work slowly, offering poor power density – but it's possible to run a hybrid system off a single fuel tank, converting a percentage of the ammonia fuel to hydrogen when burst power is needed.
More
Under capitalism, man exploits man. Under communism, it’s just the opposite.
John Kenneth Galbraith.
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