Baltic Dry Index. 2356 +49 Brent Crude 103.52
Spot Gold 1903
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 26/04/22 World 510,099,967
Deaths 6,245,628
Only when the tide goes out do you discover who's been swimming naked.”
Warren Buffett.
US stock casinos reversed yesterday, mostly on a Twitter buyout by Elon Musk. Dinosaur Graeme posits that this will likely go down in history as the Twitter Top.
In the real world of 40+ years of falling interest rates, a low to non-existent inflation ended back in March 2020 with the discovery of the Magic Money Tree forests and free money for nearly all.
Now the bill, inflation, for all that free Magic Money Tree fiat money has arrived and is looking for someone to pay it.
Worse, higher interest rates will quickly expose “who’s been swimming naked,” in the words of Warren Buffett.
After 40 years of an incoming tide, the tide is starting to flow out. A falling tide strands all boats.
I wonder if Elon would like to buy a bridge?
Chinese shares jump, turning around from declines amid Covid fears as Beijing expands mass testing
SINGAPORE — Chinese stocks turned around from early declines on Tuesday after plunging the previous day, despite Covid fears in China as Beijing expands mass testing.
The Shanghai composite was up nearly 1%, while the Shenzhen component jumped 1.31%. The CSI 300 rose 1.41%.
Hong Kong’s Hang Seng index jumped 1.86% , adding on to the morning’s gains after dropping more than 3% the previous day. The Hang Seng Tech index was up more than 5%.
Earlier, China’s central bank released comments from an interview with the Financial Times saying it has noticed recent “fluctuations” in the country’s stock markets, which it said were mostly caused by investor sentiment.
“At present, my country’s economic fundamentals are sound, the potential for endogenous economic growth is huge, and substantial progress has been made in preventing and defusing financial risks,” according to the English comments. The People’s Bank of China added that it will increase support for the economy, especially for industries severely affected by the pandemic.
Mainland and Hong Kong stocks had tumbled Monday as worries over a Covid surge and potential lockdowns in Beijing took hold. Beijing also announced late Monday that mass testing will be expanded to another 10 districts and one economic development area, according to Reuters.
“Markets reacted negatively to news that COVID is spreading more rapidly in China, prompting fears of additional lockdowns and reduced output. This directly impacted Asian markets and also rippled through global financial markets,” ANZ Research analysts Brian Martin and Daniel Hynes wrote in a Tuesday note.
Zhang Zhiwei, chief economist at Pinpoint Asset Management, said he sees risks that China’s GDP may shrink in the second quarter.
“Many high frequency indicators such as mobility, truck cargo, power plant coal utilization show negative growth. It is not clear where the bottom of this economic slowdown is without a change of the zero tolerance policy,” he said.
Japan’s Nikkei 225 rose 0.65%, while the Topix rose 0.37%. South Korea’s Kospi jumped 0.71%.
Australian stocks however fell as trading resumed from a holiday on Monday. The S&P/ASX 200 plummeted almost 2%.
----U.S. stocks were in negative territory earlier in the day, but recovered by the close. The Dow Jones Industrial Average cut a nearly 500-point intraday loss Monday, rising 238.06 points, or 0.7%, to 34,049.46. The S&P 500 ticked up 0.6% to 4,296.12. The tech-heavy Nasdaq Composite gained 1.3% at 13,004.85.
https://www.cnbc.com/2022/04/26/asia-markets-chinas-covid-fears-as-beijing-expands-mass-testing.html
Nasdaq ends sharply higher after Twitter agrees to be bought by Musk
April 25, 2022 11:58 PM GMT+1
April 25 (Reuters) - Wall Street rose on Monday, with the Nasdaq ending sharply higher after Twitter agreed to be bought by billionaire Elon Musk, sparking a late day rally in growth stocks.
Twitter (TWTR.N) ended up 5.6% after announcing it would be bought by Musk in a deal that will shift control of the social media giant to the world's richest person. read more
The S&P 500 traded in negative territory for much of the session but extended gains after Twitter's announcement. The S&P 500 growth index (.IGX) ended up over 1%, also bouncing back from an earlier decline.
"You can tell growth wanted to rally all day but the market was holding it down. The Twitter news came and that was just a green light to start buying some of the growth names. They have been oversold for a while," said Dennis Dick, a trader at Bright Trading LLC.
More
https://www.reuters.com/business/futures-extend-selloff-after-rough-week-2022-04-25/
IMF warns of 'stagflationary' risks in Asia, cuts growth outlook
April 26, 2022 2:07 AM GMT+1
April 26 (Reuters) - The Asian region faces a "stagflationary" outlook, a senior International Monetary Fund (IMF) official warned on Tuesday, citing the Ukraine war, spike in commodity costs and a slowdown in China as creating significant uncertainty.
While Asia's trade and financial exposures to Russia and Ukraine are limited, the region's economies will be affected by the crisis through higher commodity prices and slower growth in European trading partners, said Anne-Marie Gulde-Wolf, acting director of the IMF's Asia and Pacific Department.
Moreover, she noted that inflation in Asia is also starting to pick up at a time when China's economic slowdown is adding to pressure on regional growth.
"Therefore, the region faces a stagflationary outlook, with growth being lower than previously expected, and inflation being higher," she told an online news conference in Washington.
The headwinds to growth come at a time when policy space to respond is limited, Gulde-Wolf said, adding that Asian policymakers will face a difficult trade-off of responding to slowing growth and rising inflation.
"Monetary tightening will be needed in most countries, with the speed of tightening depending on domestic inflation developments and external pressures," she said.
The U.S. Federal Reserve's expected steady interest rate hikes also present a challenge to Asian policymakers given the region's huge dollar-denominated debt, Gulde-Wolf said.
More
Analysis: U.S. trucking downturn foreshadows possible economic gloom
April 25, 2022 5:48 PM GMT+1
April 25 (Reuters) - Craig Fuller monitors millions of transactions between U.S. truckers and their customers as chief executive of transportation data company FreightWaves - and he does not like what he is seeing.
There has been an unexpectedly sharp downturn in demand to truck everything from food to furniture since the beginning of March and rates in the overheated segment that deals in on-demand trucking jobs - known as the spot market - are skidding.
"It basically just dropped off a cliff," said Fuller, who is concerned that the United States is at the start of a trucking recession that could decimate truckers' ability to dictate prices and push some small trucking firms into bankruptcy.
Meanwhile, investors and financial analysts worry what will happen if the trucking slump deepens and spreads.
History has proven trucking to be a possible indicator for the U.S. economy. That is because when people buy less, companies ship less - and business activity slows. Economic recessions followed six of the 12 trucking recessions since 1972, according to an analysis by trucking data company Convoy.
Experts predicted trucking would soften a bit as pandemic-weary consumers shifted some spending from goods to services in response to the United States lifting COVID prevention measures. But they did not foresee Russia's invasion of Ukraine, which sent fuel prices to record highs, jolted already volatile stock markets, and forced shoppers to hit pause.
And now, trucking's most demand-sensitive sector - the spot market - is in correction territory.
"It is the proverbial 'canary in the mineshaft'," said Joseph Rajkovacz, director of governmental affairs for the Western States Trucking Association. The group represents small trucking companies that dominate the spot market, which handled as much as 30% of freight during the height of the pandemic.
More
“I insist on a lot of time being spent, almost every day, to just sit and think. That is very uncommon in American business. I read and think. So I do more reading and thinking, and make less impulse decisions than most people in business.”
Warren Buffett.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
UK factories hit by 1970s-style cost crunch in inflation surge warning
Monday 25 April 2022 12:06 pm
UK factories are having to swallow the quickest rise in input costs for five decades in a sign that the cost of living crunch gripping consumers is set to tighten, reveals fresh figures published today.
The cost of buying components has accelerated at the steepest pace since 1975, according to Britain’s top business group the Confederation of British Industry (CBI).
The fresh figures underline the severity of the inflation crunch that is sweeping throughout the economy and looks set to chill UK growth this year.
In response to soaring costs, factories are going to launch the quickest wave of price hikes since 1977 in a bid to protect their margins.
Goods and services produced by factories are used throughout the UK production process, meaning higher prices for their products will strengthen incentives among consumer goods businesses to raise prices as well.
Inflation is already running at a 30-year high of seven per cent, but may reach double-digits in the autumn when the energy watchdog hikes the cap on bills again.
Russia’s invasion of Ukraine has intensified cost pressures in the UK manufacturing sector as a result of it choking supplies of raw materials such as oil, gas, nickel and steel.
“The war in Ukraine is exacerbating the Covid-related supply crunch, with cost increases and concerns over the availability of raw materials at their highest since the mid-1970s,” Anna Leach, deputy chief economist at the CBI, said.
“It’s little wonder that sentiment has deteriorated sharply over the past three months and manufacturers are now scaling back their investment plans,” she added.
https://www.cityam.com/uk-factories-hit-by-1970s-style-cost-crunch-in-inflation-surge-warning/
EXCLUSIVE Germany to hike 2022 inflation forecast to 6.1% - document
April 25, 2022 10:29 AM GMT+1
BERLIN, April 25 (Reuters) - The German government is set to hike its inflation forecast for this year to 6.1% due to the impact of the war in Ukraine, up from 3.3% it had forecast in January, according to government document seen by Reuters.
German annual inflation rose to its highest level in more than 40 years in March as prices of natural gas and oil products soared following Russia's invasion of Ukraine and is expected to have held at that level in April as well. read more
Berlin, which is due to present its spring economic forecasts on Wednesday, sees consumer price growth easing to 2.8% in 2023, the document showed.
Consumer spending is expected to jump by 9.7% this year, 0.6 percentage points more than the government had forecast in its January projections. In 2023, consumer spending will grow more slowly at a rate of 4.8%, the document showed.
A source had told Reuters on Friday already that the government was set to cut in its spring forecasts its growth expectations for Europe's biggest economy for 2022 to 2.2% from 3.6%, and saw growth picking up slightly to 2.5% in 2023. read more
German business morale unexpectedly rose slightly in April, following a big drop in March, as companies were less pessimistic after the economy appeared resilient following the initial shock of the war in Ukraine. read more
Indonesia to Allow Key Palm Oil Exports, Sparking Price Swings
Anuradha Raghu & Eko Listiyorini 08:02 AM IST, 25 Apr 2022 03:50 PM IST
(Bloomberg) -- Palm oil slumped on prospects that top producer Indonesia’s surprise ban of cooking oil exports will not be strict as feared.
Indonesia will only halt exports of bulk and packaged RBD palm olein, a higher value product that has been processed. Exports of crude palm oil and RBD palm oil will still be allowed, according to people familiar with the matter. RBD olein accounts for 30% to 40% of Indonesia’s total palm oil exports.
Benchmark futures
initially rallied after Indonesia said Friday that a shipment halt on all
cooking oil will start from April 28 and last until the government deems a
domestic shortage resolved. The announcement came as a shock to the market as a
complete ban would worsen global food inflation and aggravate volatility in
crop market as a complete ban would worsen global food inflation and aggravate
volatility in crop markets still reeling from the war.
Palm oil for July delivery tumbled as much as 4.1% to 6,097 ringgit ($1,399) a
ton in Kuala Lumpur after jumping 7% in early trade. Prices closed 2.1% lower.
Soybean oil, palm’s closest rival, retreated from all-time highs in Chicago.
“Details are still scant for now, and traders are reacting on speculation that
the impact of the Indonesian ban may be less than initially thought,” said
David Ng, senior trader at IcebergX Sdn. in Kuala Lumpur. It will be a slight
reprieve for the ban to be limited to olein and not other products, he added.
more
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.
Beijing districts placed under lockdown as COVID cases mount
April 25, 2022
BEIJING (AP) — China’s capital Beijing began testing millions of residents and shutting down residential and business districts Monday amid a new outbreak of COVID-19.
While only 70 cases have been found so far in the city of more than 21 million since the outbreak surfaced Friday, authorities have implemented extreme measures to prevent a further spread of the virus.
Residents were staying home and stocking up on food as a safeguard against the possibility that they could be confined indoors, as has happened in multiple cities including the financial hub of Shanghai.
Shanghai, which has been locked down for more than two weeks, reported more than 19,000 new infections and 51 deaths in the latest 24-hour period, pushing its death toll from the ongoing outbreak to well over 100.
Long lines formed in supermarkets in central Beijing. Shoppers snapped up rice, noodles, vegetables and other food items, while store workers hastily restocked some empty shelves. State media issued reports saying supplies remained plentiful in Beijing despite the buying surge.
Shoppers appeared concerned but not yet panicked. One woman, carrying two bags of vegetables, eggs and frozen dumplings, said she is buying a little more than usual. A man said he isn’t worried but is just being cautious since he has a 2-year-old daughter.
Beijing health officials said 29 more cases had been identified in the 24 hours through 4 p.m. Monday, raising the total to 70 since Friday.
The city has ordered mass testing across sprawling Chaoyang district, where 46 of the cases have been found. The more then 3 million residents of Chaoyang, as well as people who work in the district, need to be tested on Monday, Wednesday and Friday.
Testing sites were set up overnight and in the early morning at residential complexes and office buildings around Chaoyang district.
More
https://apnews.com/article/covid-business-health-china-beijing-04f6bab983b14f9ff89459d2e3c99fdf
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, among other things, I’ve added this section. Updates as they get reported.
Today something a little different. Energy history explained.
The History of Energy Transitions
April 7, 2022
Over the last 200 years, how we’ve gotten our energy has changed drastically.
These changes were driven by innovations like the steam engine, oil lamps, internal combustion engines, and the wide-scale use of electricity. The shift from a primarily agrarian global economy to an industrial one called for new sources to provide more efficient energy inputs.
The current energy transition is powered by the realization that avoiding the catastrophic effects of climate change requires a reduction in greenhouse gas emissions. This infographic provides historical context for the ongoing shift away from fossil fuels using data from Our World in Data and scientist Vaclav Smil.
Coal and the First Energy Transition
Before the Industrial Revolution, people burned wood and dried manure to heat homes and cook food, while relying on muscle power, wind, and water mills to grind grains. Transportation was aided by using carts driven by horses or other animals.
In the 16th and 17th centuries, the prices of firewood and charcoal skyrocketed due to shortages. These were driven by increased consumption from both households and industries as economies grew and became more sophisticated.
Consequently, industrializing economies like the UK needed a new, cheaper source of energy. They turned to coal, marking the beginning of the first major energy transition.
As coal use and production increased, the cost of producing it fell due to economies of scale. Simultaneously, technological advances and adaptations brought about new ways to use coal.
The steam engine—one of the major technologies behind the Industrial Revolution—was heavily reliant on coal, and homeowners used coal to heat their homes and cook food. This is evident in the growth of coal’s share of the global energy mix, up from 1.7% in 1800 to 47.2% in 1900.
The Rise of Oil and Gas
In 1859, Edwin L. Drake built the first commercial oil well in Pennsylvania, but it was nearly a century later that oil became a major energy source.
Before the mass production of automobiles, oil was mainly used for lamps. Oil demand from internal combustion engine vehicles started climbing after the introduction of assembly lines, and it took off after World War II as vehicle purchases soared.
Similarly, the invention of the Bunsen burner opened up new opportunities to use natural gas in households. As pipelines came into place, gas became a major source of energy for home heating, cooking, water heaters, and other appliances.
More
https://elements.visualcapitalist.com/the-history-of-energy-transitions/
“Investors should remember that excitement and expenses are their enemies.”
Warren Buffett.
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