Baltic Dry Index. 2128 -85 Brent Crude 100.05
Spot Gold 1928
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 08/04/22 World 496,639,653
Deaths 6,195,628
When plunder becomes a way of life, men create for themselves a legal system that authorizes it and a moral code that glorifies it.
Frederic Bastiat.
In the stock casinos, more churn and burn. In the bond market, turmoil and carnage, according to bond expert Jim Bianco, as bond traders fear not just a coming hard landing by the US Fed, but something closer to a crash landing.
In commodities, thanks to the switch to the “green” economy and war in Europe the failure of diplomacy caused, a new multi-year super cycle is underway.
In food price inflation, don’t ask.
The only mildly positive news, the crude oil price is likely to be stuck around 100 dollars a barrel for as long as the USA is prepared to dump 180 million barrels from its strategic reserve.
The less positive news, there is a lot of doubt that the strategic reserve can actually release 1 million barrels a day let alone for 6 months on end. I have read experts suggest that the reserve will struggle to release half that number per day.
Chinese tech stocks in Hong Kong slip as investors watch Covid situation in China
There may be no escape from the bond market turmoil — even for stock investors.
Market researcher Jim Bianco warns critical Federal Reserve policies to control wild inflation will inflict widespread losses on Wall Street.
“Eventually, this is going to come back and hurt all financial assets,” the Bianco Research president told CNBC “Fast Money” on Thursday.
Bianco turned bearish on stocks late last year, primarily due to inflation risks. He blames the Fed for waiting too long to end its pandemic easy money policies and lift interest rates.
“The call last year that inflation would be well-contained and transitory is arguably one of the worst forecasts in Federal Reserve history,” said Bianco. “They are now stuck with this ultra-aggressive policy because they didn’t start raising rates at a very leisurely pace a year ago.”
He worries about the big catch-up’s costs.
“They don’t intend on creating a hard landing. But what they do intend on doing is reining in prices,” Bianco said. “They want lower inflation, and they’re going to raise rates til they get lower inflation. How are they going to do that? They’re going to slow demand down.”
According to Bianco, the Fed’s only solution is to boot interest rates quickly and get wealthy people to stop spending. The bond market is already discounting the central bank’s likely bold moves.
“The bond market gets it. The carnage is epic,” he wrote in a recent Twitter thread. “This is not only the worst bond market in our career (total return) but might be the worst of our lifetime.”
Bianco, who sees a 75% chance of inflation within the next two years, expects a 50 basis point hike at its next policy meeting on May 3 through May 4.
More
https://www.cnbc.com/2022/04/07/carnage-is-epic-in-bonds-due-to-feds-inflation-error-jim-bianco.html
Aircraft lessors see ‘horrendous’ hike in insurance costs
Thursday 07 April 2022 2:33 pm
Lessors are already seeing a “horrendous” hike in insurance costs as the Kremlin’s retaliation against Western sanctions start to bite, said BOC Aviation’s boss Robert Martin.
“Because there are going to be huge claims on these insurances this year for confiscation or theft if the aircraft aren’t given back, this will then have a knock on effect on insurance costs,” the chief executive told an aviation conference.
“This is one of the unforeseen circumstances that is going to hit us later this year and I’m hearing some horrendous numbers for some of the near term renewals due at the end of March.”
More than 400 leased planes worth $10bn are still in Russia as President Putin signed a law in March allowing Russian airlines to take ownership of foreign-leased planes in the country.
“As for leasing payments, let me remind you that a significant part of them were supposed to be paid to companies from so-called unfriendly countries, and they violated their contractual obligations,” Putin said last week.
The move could create a £10bn “nightmare scenario” for both lessors and insurers, as any disputes would likely be subjected to lengthy legal battles, City A.M. reported.
According to Martin and others such as David Warnock-Smith, professor of aviation management at Buckinghamshire New University, the situation could force the industry to completely rethink they way it does insurance coverages.
“Those companies with greater exposure may be the most likely to try to increase lease rates to try and compensate for losses in the short-term,” Warnock-Smith told City A.M recently.
https://www.cityam.com/aircraft-lessors-see-horrendous-hike-in-insurance-costs/
Finally, higher inflation yet again but this time very little to do with the war in Ukraine. This time there’s another self-inflicted madness at work. Destroying the environment to save it.
Copper, other metal costs on the rise as EV demand heats up
Ian Harvey April 6, 2022
hey may not take the shine off gold but metals and minerals like copper, iron ore, cobalt, nickel and lithium are getting the spotlight to themselves these days.
The soaring prices of the metals and minerals used in electric vehicle (EV) manufacturing and charging stations reflect the growing demand as government deadlines for phasing out new fossil fuel vehicles looms.
It’s going to cause a headache for the construction industry because it too depends on many of these metals, especially copper.
There was widespread shock during the COVID-19 pandemic as prices for copper wiring started to climb rapidly, reaching an all time high of US$490 per pound in May 2021 before adjusting slightly to $452 in December 2021 where it roughly remains with some spikes and valleys.
In 2006, where there was a previous surge, copper theft became an epidemic and police are starting to see the same trend.
This means higher security costs for construction companies to protect their assets. Thieves didn’t stop at yards. They also tried robbing electrical substations with tragic results and were stripping copper from church roofs.
As wiring prices climb for everything from powerlines to digital cabling, it has prompted discussions on alternates.
However, one of the most proposed substitutes is aluminum which at US$1.40 a pound is much more attractive.
There is huge pushback because it proved disastrous when it was first used in the 1970s. While proponents say it is safe, some insurance companies will not provide coverage for homeowners with aluminum wiring.
The question for estimators bidding on projects now becomes how high can copper wiring prices go?
Some analysts see average copper prices hitting US$6.80 per pound by 2025 which doesn’t bode well for wiring prices.
Part of the reason is supply chain shortages which might still linger for a couple of years but also the increased demand from the EV sector which is ramping up rapidly.
The International Copper Association says EVs use much more copper than Internal Combustion Engine (ICE) vehicles.
While an ICE uses about 23 kilograms of copper, hybrid electric vehicles (HEV) use 40 kilograms, plug-in hybrids (PHEV) use 60 kilograms, while battery electric vehicles (BEVs) use 83 kilograms of copper.
Hybrid electric buses use 89 kilograms of copper while battery-powered electric buses require 224 to 369 kilograms of copper depending on the size of the battery.
There’s silver in those clouds for the construction industry, however. While material costs may rise, there may be lots of work from the mining sector in building the infrastructure such as roads and processing plants, not to mention the mines themselves, as Canada ramp up its extraction sector.
More
February 7, 1968, American bombs, rockets and napalm obliterated much of the South Vietnamese town of Ben Tre — killing hundreds of civilians who lived there.
Later that day, an unidentified American officer gave Associated Press reporter Peter Arnett a memorable explanation for the destruction.
Arnett used it in the opening of the story he wrote:
“It became necessary to destroy the town to save
it,” a U.S. major said Wednesday.
He was talking
about the grim decision that allied commanders made when Viet Cong attackers
overran most of this Mekong Delta city 45 miles southwest of Saigon. They
decided that regardless of civilian casualties they must bomb and shell the
once placid river city of 35,000 to rout the Viet Cong forces.
After Arnett’s story was published in newspapers the next morning, February 8, 1968, the unnamed major’s remark became one of the most infamous war-related quotes in modern history.
Hmm. Wasn't that a war crime?
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
EUROPEAN ECONOMY
Eurozone inflation surges to record high / War drives energy prices / Little relief expected
March consumer prices in the euro area
increased at an unprecedented rate of 7.5% versus the same month last year,
according to preliminary data, and some analysts are predicting the growth
could soon be in the double digits.
The jump to the historic mark followed initial reports of unexpectedly strong
inflation in two of the currency area’s largest economies (see Plasteurope.com
of 31.03.2022).
The EU statistics office Eurostat said that along with the record annual
rate, March consumer prices grew 2.5% in just one month.
Russia’s 24 February invasion of Ukraine has roiled oil and natural gas
markets, and the results have become painfully apparent just over a month
later. Eurostat said preliminary data showed that March energy prices in the
euro area jumped 12.5% from February levels and spiked a dizzying 44.7% from a
year ago.
Analysts at ING
(Amsterdam; www.ing.com) said
the path forward will remain bumpy. “From here on, there are multiple factors
stemming from the war that are set to keep upward pressure on prices. First of
all, second-round effects are likely to occur somewhat quicker due to high
energy prices at the moment. Secondly, the war – together with Chinese
lockdowns – is causing supply chain disruptions to flare up again [see
Plasteurope.com of 31.03.2022]. This
keeps pressure on producer prices and subsequently on consumer goods inflation
for longer.”
And this could be an even tougher month for households as prices are expected
to continue their climb, ING predicted. “Our base case suggests an even higher
reading in April at least, on the back of lagged developments in consumer food
and gas prices. Even a double-digit inflation print cannot be ruled out at this
point.”
Published on 06.04.2022
Peru protests show the wide impact of Putin's war
Updated 0047 GMT (0847 HKT) April 7, 2022
An ongoing wave of violent protests in Peru shows how the Russian invasion of Ukraine is affecting markets around the world, sparking unrest and deepening political divides.
Rising fuel costs originally triggered the protests, which started last week, but quickly intensified into large anti-government demonstrations with marches and road blockades.
By Wednesday, at least six people had been reported dead over days of protests, according to Peruvian authorities, as officials called for calm and struggled to contain the situation. At least nine major roads in the country remained blocked by protesters.
Late Monday, President Pedro Castillo declared a state of emergency and placed the country's capital under a curfew, but backtracked and withdrew the curfew order on Tuesday afternoon as hundreds of protesters ignoring the measure took to the streets of Lima to demand his resignation.
"Peru is not going through a good moment," Castillo said Tuesday after leaving a meeting with lawmakers, "but we have to solve it with the powers of the state."
Blocks away, police in riot gear used tear gas to dispel protests and demonstrators threw stones, with at least 11 people injured in the clashes.
The Russian invasion of Ukraine -- and global leaders' consequential decision to isolate Russia from the world's oil markets -- sent the price of oil soaring.
And for Peru, the impact has been particularly severe.
Compared to other countries in the region, such as Argentina or Venezuela, Peru imports most of its oil. That left it more exposed to the recent spike, hitting the economy just as it was recovering from the impact of the Covid-19 pandemic and lockdowns.
As a result, Peru's inflation in March was the highest in 26 years, according to the country's Institute of Statistics. The segment most exposed was food and fuel, with prices up 9.54% since last year, the Peruvian Central Bank reported.
With prices rising so fast, it didn't take long before protests started spreading across the country. And on March 28, a group of transport workers and truck drivers' union called for a general strike to demand cheaper fuel.
More
Amid Potential Russian Export Complications, Wheat Prices Climb- GM Corn an Alternative For Lost Ukrainian Exports
---- “More sanctions may impede Russian grain exports, while the war is likely to prevent planting on a large amount of land in the east of Ukraine. Shipments from Ukraine are at a virtual standstill, with its Black Sea ports closed,” today’s article said.
“Agricultural products haven’t been directly targeted by sanctions on Russia so far. The country is one of the world’s biggest wheat shippers and has still been exporting at a rapid clip,” the Bloomberg article said; adding that, “Wheat futures in Chicago jumped 3.1% to $10.42 a bushel on Tuesday, bringing the advance over two days to almost 6%. Prices slumped about 11% last week, posting the worst weekly performance since 2011.”
In related news regarding Russian exports, Reuters writer Jonathan Saul reported yesterday that, “London’s marine insurance market on Monday added all of Russia’s waters to its list of areas deemed high risk, an advisory showed, which is likely to raise the cost of shipping and adds to the logistical pressures on Moscow.”
Meanwhile, yesterday’s Crop Progress report from the USDA’s National Agricultural Statistics Service indicated that the U.S. winter wheat condition was rated 30% good-to-excellent, down from 53% last year.
Dow Jones writer Kirk Maltais reported yesterday that, “A largely dry forecast ahead for the next two weeks in winter wheat areas looks to provide support for higher wheat futures.”
In other developments, Bloomberg News reported yesterday that,
European farmers are set to buy more genetically modified animal feed from the U.S. and South America after Russia’s invasion cut off corn shipments from Ukraine.
“The war in Ukraine is already pushing companies to turn to alternatives to sunflower oil, and that shift in trade flows is also likely to include corn, which is mainly used as animal feed. Ukraine’s non-GM corn accounts for about half the European Union’s imports. However, 92% of U.S. corn is GM, according to the Center for Food Safety, with similar levels in Brazil.”
“The price of corn and other grains have surged in the wake of Russia’s invasion. Ukraine had exported about 6.6 million tons of corn to the EU by the end of March, compared with a five-year average of 7.2 million tons,” the Bloomberg article said.
Reuters writer Pavel Polityuk reported yesterday that, “Ukraine’s agriculture minister said on Monday he expects ‘quite a large harvest’ this year and hopes Ukraine will be able to export grain, but warned that continuation of the war would mean higher prices for all countries.
“The minister, Mykola Solskyi, said the situation was ‘difficult’ with fuel, which is needed for spring fields.”
Also yesterday, Bloomberg’s Megan Durisin, Pratik Parija, and Irina Anghel reported that, “Across Ukraine’s farm belt, silos are bursting with 15 million tons of corn from the autumn harvest, most of which should have been hitting world markets.”
“Before Russia’s attack, Ukraine’s corn would have made its way to Black Sea ports like Odesa and Mykolaiv by rail and loaded on to ships bound for Asia and Europe. But with the ports shuttered, small amounts of corn are creakily winding their way westward by rail through Romania and Poland before being shipped out. An added aggravation: wheels on the wagons have to be changed at the border because unlike European rails, Ukrainian train-cars run on wider, Soviet-era tracks.”
Yesterday’s article pointed out that, “India, which historically kept its huge wheat harvests at home — thanks to a government-set price — is jumping into the export market, hawking record amounts across Asia. Brazil’s exports of wheat in the first three months have far surpassed those in all of last year. U.S. corn cargoes are heading to Spain for the first time in about four years. And Egypt is considering swapping fertilizer for Romanian grain and holding wheat talks with Argentina.
“Even those efforts may not be good enough, said Dan Basse, president of AgResource, an agriculture markets research firm.
“‘We can move the deck-chairs around today,’ he said. But if the conflict stretches into the summer, when wheat exports from the Black Sea usually accelerate, ‘then you start running into problems. That’s when the world starts to see shortfalls,’ Basse said.”
Below, why a “green energy” economy may not be possible, 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
Covid-19 Corner
This section will continue until it becomes unneeded.
Covid: Blood clot risk higher for six months after having virus
By Philippa Roxby 7 April, 2022
After a Covid infection, there is an increased risk of developing a serious blood clot for the next six months, a study from Sweden suggests.
The research found people with severe Covid, and those infected during the first wave, had the highest clot risk.
This highlights the importance of being vaccinated against the virus, the researchers say.
Blood clots can also occur after vaccination but the risk is far smaller, a major UK study found.
People who have had Covid-19 are more likely to develop a blood clot - particularly patients who have needed hospital treatment. Scientists wanted to find out when that risk returns to normal levels.
The researchers tracked the health of just over one million people who tested positive for Covid between February 2020 and May 2021 in Sweden, and compared them with four million people of the same age and sex who had not had a positive test.
After a Covid infection, they found an increased risk of:
- blood clots in the leg, or deep vein thrombosis (DVT), for up to three months
- blood clots in the lungs, or pulmonary embolism, for up to six months
- internal bleeding, such as a stroke, for up to two months
When the researchers compared the risks of blood clots after Covid to the normal level of risk, they found that:
- four in every 10,000 Covid patients developed DVT compared with one in every 10,000 people who didn't have Covid
- about 17 in every 10,000 Covid patients had a blood clot in the lung compared with fewer than one in every 10,000 who did not have Covid
The study, published in the BMJ, said the raised risk of blood clots was higher in the first wave than later waves, probably because treatments improved during the pandemic and older patients were starting to be vaccinated by the second wave.
--- The researchers can't prove that Covid caused the blood clots in this study but they have several theories on why it happens.
It could be the direct effect of the virus on the layer of cells which line blood vessels, an exaggerated inflammatory response to the virus, or the body making blood clots at inappropriate times.
Vaccines are very effective against severe Covid, but offer less protection against infection, particularly with the Omicron variant - meaning repeat infections with symptoms are common as countries work out how to live with Covid.
Frederick K Ho, public health lecturer from the University of Glasgow, said this study "reminds us of the need to remain vigilant to the complications associated with even mild [Covid] infection, including thromboembolism".
The risk of blood clots goes up after vaccination, but "the magnitude of risk remains smaller and persists for a shorter period than that associated with infection", he adds.
https://www.bbc.co.uk/news/health-61010090
Next, some vaccine links kindly sent along from a LIR reader in Canada.
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.
What Is a Graphene Battery, and How Will It Transform Tech?
Sydney ButlerApr 5, 2022, 9:00 am EDT |
Batteries are at the heart of our most important daily technologies. Your phone, your laptop, and eventually your car and home, all rely on storing energy in batteries. Current battery technology is great, but graphene batteries could solve their shortcomings.
There’s a good chance you’ve heard about graphene in the media before. Every few years there are breathless predictions of how this wonder material will transform various technologies. What you may not know is that graphene is just carbon. The same stuff life on earth is based on and an incredibly abundant element on earth.
Graphene is a one-atom-thick crystalline lattice of graphite, which is essentially crystalline carbon. This sounds like something incredibly fancy, but you can make flakes of graphene with a pencil and some sticky tape. The Nobel prize for doing so, though, has already been awarded.
Graphene has several properties that make it very exciting as a potential part of future technology. It has high thermal and electrical conductivity. So if you want to move electricity or heat with high efficiency, it’s a promising choice.
Graphene also exhibits a high level of hardness and strength. It’s very flexible and elastic. It’s also transparent and can be used to generate electricity from sunlight.
This all sounds wonderful, but there’s a big roadblock. Although it’s trivial to create graphene flakes or small sheets for research in a lab, mass production is proving difficult. If it weren’t for the challenges of mass-producing this nanomaterial reliably, it would have been in products ages ago.
The good news is that there are several promising avenues to mass production that could make graphene cheaper enough to hit the mass market. Graphene-infused fiber can now be made in reasonable quantities. Graphene can also be produced using solvents, although these are highly toxic. Researchers have been looking into safer solvents and that seems promising as well.
Graphene is currently often made using chemical vapor deposition. Here the graphene forms as a layer on a substrate material. The problem with this is that the defect rate in the graphene is high. New research using liquid (with its perfectly flat surface,) as a substrate might solve the defect rate problem. So assuming that we eventually crack graphene mass production, why do we want it in batteries?
Lithium batteries are the most energy-dense battery you can find in consumer electronics. They make devices like smartphones, drones, and electric cars possible. However, lithium. batteries are volatile and need extensive safety circuitry to keep them stable.
They also degrade with every recharge, there’s a limit to how much power they can deliver at once, and they have to be charged slowly lest the battery overheat and explode.
Batteries enhanced with graphene can fix or mitigate many of these issues. Adding graphene to current lithium batteries can increase their capacity dramatically, help them charge quickly and safely, and make them last much longer before they need replacement.
More
https://www.howtogeek.com/788344/what-is-a-graphene-battery-and-how-will-it-transform-tech/
Another weekend and still the unnecessary war goes on. For most Christians next week is Holy Week but it’ll be anything but for the population of Ukraine. Another election weekend too, this time in France, where President Macron is still expected to win. Have a great weekend everyone.
When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe.
Frederic Bastiat.
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