Baltic Dry Index. 5202 +35 Brent Crude 79.01
Spot Gold 1761
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 04/10/21 World 235,724,933
Deaths 4,816,005
'Emergencies' have always been the pretext on which the safeguards of individual liberty have been eroded.
Friedrich August von Hayek.
The big news today will be in China and Hong Kong, although the socialist media’s coverage of the “Pandora Papers” will probably be the leading story in MSM.
Has Beijing worked out some sort of rescue deal for China Evergrande Group? If so, what kind of a deal and who wins and who loses?
Given the scale of Evergrande’s debt problem and its operating plan closely resembling a real estate Ponzi scheme, the details of any rescue attempt will be closely scrutinised by those losing out.
Below, a pause before the storm?
China Evergrande trading halt spurs asset sale speculation
October 4, 20215:42 AM BST
HONG KONG, Oct 4 (Reuters) - Shares of distressed developer China Evergrande (3333.HK) and its profitable property management unit were suspended from trade in Hong Kong on Monday, sparking speculation about a possible asset divestment at the cash-strapped company.
Once China's top-selling developer, Evergrande is facing what could be one of the country's largest-ever restructurings as a crackdown on debt leaves it unable to refinance $305 billion in liabilities.
The Hong Kong stock exchange gave no reason for the suspension of Evergrande or of shares in its unit Evergrande Property Services Group (6666.HK) and it was unclear who initiated the suspension. Evergrande did not immediately respond to a request for comment.
But speculation soon turned to an asset sale and the move also seemed to rekindle broader market concerns about the risk of contagion or of a hit to China's property sector and the broader economy if Evergrande collapses or is liquidated at rock-bottom prices.
"Looks like the property management unit is the easiest to dispose in the grand scheme of things, indicative of the company trying to generate near term cash," said OCBC analyst Ezien Hoo.
----Beijing has prodded government-owned firms and state-backed property developers to purchase some of Evergrande's assets, people with knowledge of the matter told Reuters last week.
Chinese property group Hopson Development (0754.HK) said in a statement on Monday it had suspended trading in its shares, pending an announcement related to a major acquisition of a Hong Kong-listed firm and a possible mandatory offer.
It was unclear whether the deal was related to Evergrande Group, and Hopson did not respond to a request for further comment. However, Hopson stands in good stead compared with other property developers, owning more assets than liabilities, improving profit in the first half and paying a dividend.
More
https://www.reuters.com/business/china-evergrande-share-trading-halted-hong-kong-2021-10-04/
European markets set for positive open; China Evergrande trading halt watched
European stocks are expected to open broadly in positive territory on Monday as markets head into the first full trading week of October.
The U.K.’s FTSE index is seen opening 21 points higher at 7,040, Germany’s DAX 11 points higher at 15,137, France’s CAC 40 up 9 points at 6,506, according to IG data.
European markets look set to start the month after a tricky September, with concerns around inflation, Federal Reserve tapering and rising interest rates dominating sentiment. The 10-year U.S. Treasury yield topped 1.56% last week, its highest point since June.
Asian markets were mixed on Monday, with Hong Kong’s Hang Seng index tumbling more than 2% as trading in shares of China Evergrande was halted as investor concern surrounding the indebted property developer returned.
Trading in the shares of Evergrande Property Services was also halted. There were no reasons given for the trading halts. At the same time, the shares of another Chinese property developer Hopson were also suspended.
There are no major earnings or data releases on Monday. Events of interest, however, include a meeting of euro zone finance ministers on Monday to discuss matters including the EU’s recovery plans, banking union and fiscal policy.
Oil markets will be tracking a meeting of OPEC and non-OPEC ministers too.
https://www.cnbc.com/2021/10/04/european-markets-stocks-data-china-evergrande-trading-halted.html
The other big news this week will likely come from Washington District of Crooks.
Will President Biden manage to get enough of his Democrat Party to agree to pass any of his trillion dollar spending bills? What if neither pass?
The prospect of just under 5 trillion of new spending failing to pass, would represent a shock to a US economy that already looks to be heading into trouble.
So the stock casinos right now are still betting on some sort of botched spending bills passing.
But is the US economy already slowly rolling over?
Restaurants' Fragile Recovery Is Fizzling in the U.S.
Kate Krader, Leslie Patton and Alexandre Tanzi Publishing date: Oct 02, 2021
(Bloomberg) — After a brief glimpse of normalcy this summer, the fragile recovery in the U.S. restaurant industry is sputtering.
Data and interviews with restaurateurs point to a deterioration in finances due to surging costs for everything from salmon to uniforms and labor shortages. A survey found that 51% of small restaurants in the country couldn’t pay their rent in September, up from 40% in July.
Unlike during most of 2020, today’s struggles aren’t visible with the naked eye: Customers are still flocking to eateries, for the most part, in spite of rising prices and lingering fears of the delta coronavirus variant. But the anxiety over mounting expenses is palpable among restaurant owners from New York City to Nashville, Tennessee.
“You might see a restaurant that’s doing well on a Friday night, but that doesn’t at all tell the story of how they’re doing. Probably not good,” said Daisuke Utagawa, a Washington, D.C., chef whose restaurants include Haikan and Daikaya. “For us, personally, we haven’t seen any sort of recovery. We are still underwater.”
The industry is raising the alarm. Its main lobbying group this week called on Congress for more aid to help meet payroll and pay down debt, citing a survey showing that a majority of restaurant operators have seen business conditions deteriorate in the past three months. Like many companies around the world, food-service firms are also hit by supply-chain bottlenecks.
Underscoring the surge in expenses, a closely watched price gauge hit its highest since 1991 in August, driven by energy and food, the Commerce Department said Friday.
----Large public-traded companies including Chipotle Mexican Grill Inc. and McDonald’s Corp. are scheduled to report quarterly earnings in October. While the recovery in fast food has been stronger, with brisk sales via drive-thru and takeout options, costs and the lack of workers are eating into profitability.
More
https://financialpost.com/pmn/business-pmn/restaurants-fragile-recovery-is-fizzling-in-the-u-s
October 4, 2021
ANALYSIS-Global natgas price surge looms for United States this winter
Gas prices in Europe and Asia have more than tripled this year, causing manufacturers to curtail activity from Spain to Britain and sparking power crises in China.
The United States has been shielded from that global crunch because it has plenty of gas supply, most of which stays in the country since U.S. export capacity is still relatively small.
The benchmark U.S. natural gas contract has been rallying, lately hitting seven-year highs, but its $5.62 per million British thermal units (mmBtu) price is a far cry from the $30-plus being paid in Europe and Asia.
However, the U.S. market is worried about the coming cold, particularly in New England and California - where prices for gas to be delivered this winter are far above the nationwide benchmark. In New England, buyers are expecting gas to cost more than $20 per mmBtu.
High winter prices are nothing new for New England and California, where the limited number of pipelines into both regions regularly become constrained on the coldest days. But this winter could be worse.
Both regions have spent years aggressively moving away from fossil fuels through regulations, power plant retirements and carbon pricing that makes power from fossil-fired generation, particularly coal, more expensive.
U.S. gas currently being delivered to the Henry Hub terminal in Louisiana, the nation’s benchmark, recently surpassed $6 for the first time since 2014. For January that price is in the same range, suggesting buyers think the country as a whole will have ample pipeline and storage access to keep fuel flowing this winter.
“Henry Hub prices continue to climb for the winter months, but we should see even bigger increases on the East and West Coasts for New England and California,” said Matt Smith, lead oil analyst for the Americas at commodity analytics firm Kpler.
In New England, gas for January delivery is soaring, trading this week at more than $22 at the region's Algonquin hub NG-CG-BS-SNL, which would be the highest price paid in a month since January and February of 2014.
That reflects the region, which turns to liquefied natural gas (LNG) when its pipelines become congested, will have to compete with buyers in Europe and Asia already paying a lot more for the super-cooled fuel.
More
I
am not a member of any organized political party. I am a Democrat.
Will Rogers.
Global Inflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Is mainstream media finally waking up to the risk of 1970s style stagflation? Better late than never.
Now someone needs to wake up our Magic Money Tree obsessed Central banksters, although with US President Biden promising another 4.5 trillion more Magic Money Tree spending, it may be impossible to undo the monetary inflation effect already let loose in the global system.
‘A perfect storm’: supply chain crisis could blow world economy off course
From Liverpool to LA, shortages of energy, labour and transport are threatening recovery from Covid
How the supply chain crisis is affecting six big economies
Sat 2 Oct 2021 10.00 BST
It was all going so well. Successful vaccination programmes were driving the post-pandemic recovery of the global economy, stock markets were back at record highs, and prices were rising just enough to make deflation fears a thing of the past.
But a supply crunch that initially put a question mark over the availability of luxury cars or whether there would be enough PlayStations under our Christmas trees is instead morphing into a full-blown crisis featuring a shortage of energy, labour and transport from Liverpool to Los Angeles, and from Qingdao to Queensland.
All the problems are in one way or another tangled up in the surge of post-pandemic consumer demand, but taken together they threaten what one leading economist calls a “stagflationary wind” that could blow the global economy off course.
Mohamed El-Erian, an adviser to the insurance giant Allianz and president of Queens’ College, Cambridge, says this week’s surprise fall in factory output in China was a clear warning that the world economy could slump while prices were still rising quickly, a doomsday double whammy that almost sank the UK in the 1970s.
“The supply chain problems are much more persistent than most policymakers expected, although companies are less surprised,” he said. “Governments are having to rethink quickly because the three elements – supply side, transport, labour – are coming together to blow a stagflationary wind through the global economy.”
Energy shortages are providing the starkest illustration of the problem, with increasing numbers of petrol stations in the UK running out of fuel, and cities in northern China having to ration power and force factories in the world’s number one manufacturing nation to shutter just when pre-Christmas demand is reaching a peak in the west.
Both countries have been caught out by not having enough reserves amid a scramble throughout the world for natural gas and for oil, which has almost doubled in price in 12 months to nearly $80 a barrel.
---- But even if they could get their hands on more sources of energy and materials, and factories could make more goods, it would still cost more to ship things. Drewry’s shipping index, which measures the cost of containers, is up 291% compared with a year ago. On some busy routes, such as from China to Europe’s biggest port Rotterdam, the cost of shipping a container has risen sixfold in the past year.
The problems don’t end when the goods arrive at a port, with labour shortages presenting a final problem in the increasingly tortuous journey of products to their final destination. A lack of truck drivers in many parts of Europe, partly because of disputes over conditions and partly because of ongoing Covid restrictions, is causing delays.
Flavio Romero Macau, a supply chain expert at Edith Cowan University in Western Australia, says that massive pent-up consumer demand in the wake of the pandemic has strained the world’s delicately balanced economic ecosystem.
“Consumers are crazy to buy things because the world is awash with dollars from government stimulus, higher savings and pent-up demand. PlayStations, laptops, phones, gym equipment – you name it people are trying to buy it,” he says.
“Higher demand and restricted supply equals inflation: there’s no way out of it. You put all these things together and its a perfect storm.”
While warnings increase about the threat of stagflation, more economists believe central banks might have to move more quickly to raise interest rates if inflation takes hold across the developed world.
More
George Goodman, aka Adam Smith, The Money Game. 1968. Disproved March 2020 with the discovery of the Magic Money Tree forest.
Covid-19 Corner
This section will continue until it becomes unneeded.
Merck pill seen as 'huge advance,' raises hope of preventing COVID-19 deaths
October 2, 202112:27 AM BST
Oct 1 (Reuters) - An experimental antiviral pill developed by Merck & Co (MRK.N) could halve the chances of dying or being hospitalized for those most at risk of contracting severe COVID-19, according to data that experts hailed as a potential breakthrough in how the virus is treated.
If it gets authorization, molnupiravir, which is designed to introduce errors into the genetic code of the virus, would be the first oral antiviral medication for COVID-19.
Merck and partner Ridgeback Biotherapeutics said they plan to seek U.S. emergency use authorization for the pill as soon as possible and to make regulatory applications worldwide.
"An oral antiviral that can impact hospitalization risk to such a degree would be game-changing," said Amesh Adalja, senior scholar at the Johns Hopkins Center for Health Security.
Current treatment options include Gilead Sciences Inc's (GILD.O) infused antiviral remdesivir and generic steroid dexamethasone, both of which are generally only given once a patient has already been hospitalized.
"This is going to change the dialogue around how to manage COVID-19," Merck Chief Executive Robert Davis told Reuters.
Existing treatments are "cumbersome and logistically challenging to administer. A simple oral pill would be the opposite of that," Adalja added.
The results from the Phase III trial, which sent Merck shares up more than 9%, were so strong that the study is being stopped early at the recommendation of outside monitors.
----Pfizer and Swiss drugmaker Roche Holding AG (ROG.S) are also racing to develop an easy-to-administer antiviral pill for COVID-19. For now, only antibody cocktails that have to be given intravenously are approved for non-hospitalized patients.
More
COVID SCIENCE-Delta increases COVID-19 risks for pregnant women; Pfizer/BioNTech vaccine antibodies gone by 7 months for many
by Reuters Friday, 1 October 2021 19:44 GMT
Oct 1 (Reuters) - The following is a summary of some recent studies on COVID-19. They include research that warrants further study to corroborate the findings and that have yet to be certified by peer review.
Delta variant increases risks for pregnant women
Compared to coronavirus cases earlier in the pandemic, infections with the Delta variant lead to worse outcomes for unvaccinated pregnant women, new data suggest. Doctors studied 1,515 pregnant women with COVID-19 who received care from a large public health system in Dallas from May 2020 through Sept. 4, 2021. Overall, 82 women - 81 of whom were unvaccinated - developed severe illness, including 10 who needed ventilators and two who died.
The proportion of severe or critical cases among pregnant women was around 5% until early 2021, and were "largely nonexistent" in February and most of March 2021, the researchers said in a statement. In late summer, during the peak of the surge of the Delta variant, the proportion of pregnant COVID-19 patients requiring hospitalization jumped to 10% to 15%, they reported in the American Journal of Obstetrics and Gynecology https://bit.ly/3l1b94p.
Pregnant women face greater risks for complications with any type of severe respiratory infection, so these findings of the higher risk from the Delta variant further emphasize the need for them to get vaccinated for COVID-19, study leader Dr. Emily Adhikari of the University of Texas Southwestern Medical Center said in a statement. On Wednesday, the U.S. Centers for Disease Control and Prevention https://bit.ly/39UAExN called for "urgent action" to increase COVID-19 vaccination among people who are pregnant, recently pregnant, including those who are breastfeeding, or who might become pregnant in the future, saying "the benefits of vaccination outweigh known or potential risks."
Pfizer/BioNTech vaccine antibodies disappear in many by 7 months
Six months after receiving the second dose of the two-shot vaccine from Pfizer Inc and BioNTech SE, many recipients no longer have vaccine-induced antibodies that can immediately neutralize worrisome variants of the coronavirus, a new study suggests.
Researchers analyzed blood samples from 46 healthy, mostly young or middle-aged adults after receipt of the two doses and again six months after the second dose. "Our study shows vaccination with the Pfizer-BioNtech vaccine induces high levels of neutralizing antibodies against the original vaccine strain, but these levels drop by nearly 10-fold by seven months" after the initial dose, Bali Pulendran of Stanford University and Mehul Suthar of Emory University said by email.
In roughly half of all subjects, neutralizing antibodies that can block infection against coronavirus variants such as Delta, Beta, and Mu were undetectable at six months after the second dose, their team reported on Thursday on bioRxiv https://bit.ly/3A4p1z0 ahead of peer review.
Neutralizing antibodies are not the immune system's only defense against the virus. Still, they "are critically important in protecting against SARS-CoV-2 infection," said Pulendran and Suthar. "These findings suggest that administering a booster dose at around 6 to 7 months following the initial immunization will likely enhance protection against SARS-CoV-2 and its variants."
More
https://news.trust.org/item/20211001194329-xkwip
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
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, something a little different, as the Arctic sea ice is growing again having passed its minimum around mid-September, Antarctica, aka as “Hell,” is coming off a record cold winter.
What, if anything, does it mean for the coming energy supply short, Northern Hemisphere this winter?
South Pole posts most severe cold season on record, an anomaly in a warming world
Oct. 1, 2021 at 3:24 pm Updated Oct. 1, 2021 at 5:12 pm
Amid a record hot summer in large parts of Northern Hemisphere, beset by devastating fires, floods and hurricanes, Antarctica was mired in a deep, deep freeze. That’s typically the case during the southernmost continent’s winter months, but 2021 was different.
The chill was exceptional, even for the coldest location on the planet.
The average temperature at the Amundsen-Scott South Pole Station between April and September, a frigid minus-78 degrees (minus-61 Celsius), was the coldest on record, dating back to 1957. This was 4.5 degrees lower than the most recent 30-year average.
We first learned of this record through a tweet from Stefano Di Battista, who has published research on Antarctic temperatures. The legitimacy of Di Battista’s information was confirmed by Richard Cullather, a research scientist at NASA’s Global Modeling and Assimilation Office.
The temperature averaged over September was also the coldest on record at South Pole, wrote David Bromwich, a polar researcher at Ohio State University, in an email.
The extreme cold over Antarctica helped push sea ice levels surrounding the continent to their fifth-highest level on record in August, according to the National Snow and Ice Data Center.
Extraordinarily cold weather continues to grip the Antarctic Plateau. Maximiliano Herrera, a climatologist who monitors world weather extremes, tweeted that temperature at Russia’s Vostok Station sunk to minus-110.9 degrees (minus-79.4 Celsius) on Thursday (Sept. 30), which was just one degree (0.6 Celsius) from the world’s lowest temperature on record during October.
The current temperatures are still some distance from the coldest ever observed on the continent. In 1983, Vostok plummeted to minus-129 degrees (minus-89.6 Celsius). Satellites have detected temperatures as low as minus-144 degrees (minus-98 Celsius).
Matthew Lazzara, an expert on the meteorology of Antarctica and scientist at the University of Wisconsin, monitored the South Pole temperatures in recent months from his office in Madison with awe. In an interview, he said it was around minus-100 degrees on numerous occasions. Over the years, he’s traveled to Antarctica numerous times to support his research.
“At these temperatures, it is difficult to operate aircraft,” he wrote in an email. “[B]etween -50°C and -58°C you put the aircraft at risk with the hydraulics freezing up or fuel turning into a jelly.”
---- The conditions over Antarctica are in stark contrast to much of the rest of the planet which notched its fourth hottest June through August on record, according to the National Oceanic and Atmospheric Administration. The Northern Hemisphere registered its second hottest summer.
More
When Alexander the Great visited the philosopher Diogenes and asked whether he could do anything for him, Diogenes is said to have replied: ‘Yes, stand a little less between me and the sun.’ It is what every citizen is entitled to ask of his government.
Henry Hazlitt.
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