Baltic Dry Index. 3127 -126 Brent Crude 114.48
Spot Gold 1846
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 26/05/22 World 529,737,290
Deaths 6,304,267
“Three
causes especially have excited the discontent of mankind; and, by impelling us
to seek remedies for the irremediable, have bewildered us in a maze of madness
and error. These are death, toil, and the ignorance of the future.”
Extraordinary Popular Delusions and the Madness of Crowds.
Another day and another central bank hiking interest rates. Though the stock casino shills and barkers won’t tell you, but our Magic Money Tree world of March 2020 to late 2021, is fast disappearing in the rear view mirror.
Rapidly appearing through the windscreen is rising stagflation and around the next corner, recession, scarcity, and by the end of the year a possible food price catastrophe, depending on the northern hemisphere outcome of the wheat and rice harvests.
Who knew that there’s far more to life than central banksters just goosing stock prices and bailing out bankrupt gambling banksters.
Oh, the uncertainty and ignorance of the future!
Asia-Pacific stocks mixed as Bank of Korea announces second straight rate hike
SINGAPORE — Asia-Pacific stocks struggled for direction in Thursday trade after U.S. Federal Reserve meeting minutes showed officials stressing the need to raise interest rates swiftly and potentially more than markets anticipated.
Mainland Chinese stocks recovered from earlier losses as the Shanghai Composite rose 0.65% while the Shenzhen Component gained 0.895%. Hong Kong’s Hang Seng index sat 0.13% by Thursday afternoon in the city.
In Japan, the Nikkei 225 climbed around 0.1% while the Topix index gained 0.33%. South Korea’s Kospi also advanced 0.18%.
The Bank of Korea announced Thursday a 25 basis points increase in its Base Rate to 1.75%, the central bank’s second straight rate hike.
The Korean won changed hands at 1,265.70 following the announcement, stronger than levels above 1,274 seen against the greenback seen last week.
The S&P/ASX 200 in Australia edged 0.43% lower.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.12%.
U.S. Fed minutes released Wednesday showed officials are prepared to move ahead with several 50 basis point interest rate hikes. The Federal Open Market Committee also said policy may have to move away from “neutral” and into “restrictive” territory.
----Shares on Wall Street rose following the release of the Fed minutes, with the S&P 500 climbing around 0.95% to 3,978.73. The Dow Jones Industrial Average advanced 191.66 points, or 0.6%, to 32,120.28. The tech-heavy Nasdaq Composite jumped 1.51% to 11,434.74.
“The FOMC Minutes revealed a broad consensus for the need to tighten the policy rate by 50bps over the next couple of meetings,” National Australia Bank’s Rodrigo Catril wrote in a Thursday note.
“The market found some relief on the notion that the Minutes revealed a broad consensus for 50bps hikes in June and July and the possibility for a pause later in the year,” Catril said.
More
https://www.cnbc.com/2022/05/26/asia-markets-us-federal-reserve-currencies-oil.html
Fed minutes point to more rate hikes that go further than the market anticipates
Federal Reserve officials earlier this month stressed the need to raise interest rates quickly and possibly more than markets anticipate to tackle a burgeoning inflation problem, minutes from their meeting released Wednesday showed.
Not only did policymakers see the need to increase benchmark borrowing rates by 50 points, but they also said similar hikes likely would be necessary at the next several meetings
They further noted that policy may have to move past a “neutral” stance in which it is neither supportive nor restrictive of growth, an important consideration for central bankers that could echo through the economy.
“Most participants judged that 50 basis point increases in the target range would likely be appropriate at the next couple of meetings,” the minutes said. In addition, Federal Open Market Committee members indicated that “a restrictive stance of policy may well become appropriate depending on the evolving economic outlook and the risks to the outlook.”
The May 3-4 session saw the rate-setting FOMC approve a half percentage point hike and lay out a plan, starting in June, to reduce the central bank’s $9 trillion balance sheet consisting mostly of Treasurys and mortgage-backed securities.
That was the biggest rate increase in 22 years and came as the Fed is trying to pull down inflation running at a 40-year high.
----On the balance sheet issue, the plan will be to allow a capped level of proceeds to roll off each month, a number that will reach $95 billion by August, including $60 billion Treasurys and $35 billion for mortgages. The minutes further indicate that an outright sale of mortgage-backed securities is possible, with notice of that happening well in advance.
The minutes mentioned inflation 60 times, with members expressing concern about rising prices even amid confidence that Fed policy and the easing of several contributing factors, such as supply chain problems, combined with tighter monetary policy would help the situation. On the other hand, officials noted that the war in Ukraine and the Covid-associated lockdowns in China would exacerbate inflation.
----Along with their resolve to bring down inflation came concerns about financial stability.
Officials expressed concern that tighter policy could cause instability in both the Treasury and commodities market. Specifically, the minutes cautioned about “the trading and risk-management practices of some key participants in commodities markets [that] were not fully visible to regulatory authorities.”
Risk management issues “could give rise to significant liquidity demands for large banks, broker-dealers, and their clients.”
Still, officials remained committed to raising rates and reducing the balance sheet. The minutes stated that doing so would leave the Fed “well positioned later this year” to reevaluate the effect policy was having on inflation.
https://www.cnbc.com/2022/05/25/fed-minutes-may-2022.html
In energy news, high natural gas prices collapse yet another supplier. Have they stop teaching about hedging in business schools?
Global Gas Crunch Claims First Australian Trading Casualty
By May 25, 2022 Updated: May 25, 2022
MELBOURNE—A gas seller that supplied 7 percent of the eastern Australian market has collapsed due to soaring global gas prices, the first significant casualty in the country from the global gas supply crisis due to sanctions on Russia for its invasion of Ukraine.
The Essential Services Commission on Tuesday suspended private gas retailer Weston Energy from the wholesale gas market for failing to meet financial security requirements and said the company’s 184 large and medium-sized customers would be shifted to other suppliers.
The collapse of Weston Energy underscores energy price concerns set to face Australia’s new Labor government, as it pushes to rapidly expand renewable energy to replace gas and coal over the next eight years.
Weston Energy Managing Director Garbis Simonian said gas prices had nearly tripled since the start of the year due to Russia’s invasion of Ukraine, which Moscow calls a “special military operation”.
At the same time recent outages at Australian coal-fired plants have driven up demand for gas-fired generation.
“Rapidly rising energy prices have put hundreds of Australian businesses and thousands of jobs at risk,” Simonian said in a statement.
With the unprecedented surge in prices, Weston was unable to manage cash flow for its trading business, he said.
Weston Energy’s collapse has also hit Australia’s no.2 independent gas producer Santos Ltd, which had lined up Weston as a potential customer for 4 percent of the 75 petajoules a year of gas it plans to produce at its Narrabri project.
Santos had no immediate comment on Weston’s collapse.
Finally, with the Atlantic hurricane season almost here, America’s weathermen see a stormy season ahead.
Stormy repeat: NOAA predicts busy Atlantic hurricane season
Federal meteorologists are forecasting a record-shattering seventh straight unusually busy Atlantic hurricane season.
The National Oceanic and Atmospheric Administration predicted Tuesday that the summer in the Atlantic will produce 14 to 21 named storms, six to 10 becoming hurricanes and three to six turbo-charging into major hurricanes with winds greater than 110 mph. Even with normals shifting upwards to reflect more active storm seasons in recent decades, these predictions are above the 30-year average of 14 named storms, seven hurricanes and three major hurricanes.
The National Hurricane Center ran out of names for Atlantic storms in the last two years, with a record-setting 30 named storms in 2020 and 21 last year. In the past five years there have been more Category 4 and 5 hurricane landfalls in the United States than in the previous 50 years combined.
This hurricane season “is going to be similar to last year and given that you need only one bad storm to dramatically affect your life, if you fail to plan around this outlook, you’re planning to fail,” NOAA Administrator Rick Spinrad told The Associated Press Tuesday. “You can take this outlook to the bank literally when it looks to protecting your property.”
Every weather factor pointed to a busier season, said Matthew Rosencrans, lead hurricane season outlook forecaster for NOAA’s Climate Prediction Center. He pointed to a multi-decade long trend to more storms in the Atlantic, an active monsoon season in West Africa, a La Nina — the natural and occasional cooling of parts of the equatorial Pacific that changes weather worldwide — and warmer than normal ocean temperatures, which scientists say are stoked by climate change.
Several outside hurricane experts agree with NOAA that the Atlantic conditions are ripe for yet another active hurricane season. They say La Nina reduces wind shear that could decapitate storms. The warmer water — about half a degree warmer (0.3 degrees Celsius) than last year in storm-forming areas, according to Rosencrans — serves as hurricane fuel. A reduction in pollution particles in the air has taken away artificial cooling in the Atlantic and a new study links that to increasing storms.
More
If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks.
John Bogle.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
China car sales up 34% on April but still weaker than last year - industry
May 26, 2022 4:41 AM GMT+1
SHANGHAI, May 26 (Reuters) - Chinese retail car sales data for May has added to a picture of a grinding economic recovery from severe anti-pandemic measures, with manufacturers selling more vehicles than last month but still fewer than a year before.
Releasing the data late on Wednesday, the China Passenger Car Association called for more government support.
Retail sales in the first three weeks of May, 780,000 vehicles, were up 34% on the same period in April. But, with measures to control COVID-19 outbreaks depressing incomes, the sales volume was 16% lower than 12 months earlier, the industry association said.
Movement and social activity was heavily restricted in cities across China last month. Rules vary from place to place but have been eased where they were strictest, such as Shanghai.
Automobile sales in the first quarter were 0.2% higher than a year before. For 2021, sales were up 3.8%.
The picture of a grinding and only partial economic recovery that appears in automobile sales is also seen in other near-real-time indicators.
Road freight transportation and express delivery from distribution centers last week were both stronger than a month earlier but still down sharply on last year, Nomura Global Economics said.
More
‘Markets are imploding’ because the Fed isn’t doing its job, says billionaire investor Bill Ackman
Last Updated: May 24, 2022 at 6:32 p.m. ET
‘How does this downward market spiral end? It ends when the Fed puts a line in the sand on inflation and says it will do “whatever it takes.”’
— Bill Ackman, founder and CEO, Pershing Square Capital
That’s hedge-fund billionaire Bill Ackman sounding off on Twitter Tuesday, blaming a timid Federal Reserve for not doing enough to signal to investors that it’s committed to getting inflation under control. The Fed must pledge to do “whatever it takes” and follow it up with a series of aggressive rate increases, he argued.
Ackman’s beef is that the Fed, despite raising rates by an outsize 50 basis points, or half a percentage point, earlier this month and signaling at least two more half-point hikes are in store at coming meetings, is set to remain well behind the curve.
“In the last day or so, various current and former Fed members have waffled and made dovish remarks proposing a modest increase in rates and a pause in the fall,” he said. “The Fed has already lost credibility for its misread and late pivot on inflation.”
Atlanta Fed President Raphael Bostic on Monday said a September pause in rate increases to reassess could make sense, according to news reports.
Pushing the fed-funds rate up by 300 basis points from near zero while inflation is running above 8% year over year and unemployment stands at 3.6% is a recipe for double-digit inflation that can otherwise “only be forestalled by a market collapse or a massive increase in rates,” Ackman said.
Ackman’s remarks came as stocks fell sharply Tuesday, seeing renewed pressure after a Monday bounce. The Dow Jones Industrial Average DJIA, +0.15% was down 330 points, or 1%, while the S&P 500 SPX, -0.81% slumped nearly 2% to trade just below 3,900 —- a finish below 3.837.25 would see the large-cap benchmark officially enter a bear market. The Nasdaq Composite COMP, -2.35%, which entered a bear market earlier this year, was down more than 3%.
“Markets are imploding because investors are not confident that the [Federal Reserve] will stop inflation,” he tweeted. And as a result, the market is doing the Fed’s job for it.
Finally, in economic warfare, why are the west’s “leaders” and the UK’s Defence Ministry acting surprised? All of this was entirely foreseeable when Biden/Blinken smashed President Macron’s attempt at diplomacy. The LIR covered it and continues to cover it.
Maybe European Commission President Ursula von der Leyen needs to start reading the LIR. It’s free and available usually six days a week.
Russian blockade of Ukrainian ports to increase global price of grain
May 25, 2022 / 8:48 PM
May 25 (UPI) -- Britain's Defense Ministry on Wednesday said that Russia's blockade of Ukrainian ports will likely increase global food prices.
Russia's naval blockade of key Black Sea ports has deterred the commercial shipping industry from operating in the region and there has been "no significant merchant shipping activity" in or out of the port city of Odessa, Ukraine, since the invasion began, the British Defense Ministry said on Twitter
"Ukraine's overland export mechanisms are highly unlikely to substitute for the shortfall in shipping capacity caused by the Russian blockade," the ministry added. "As a result, significant supplies of Ukrainian grain remain in storage, unable to be exported."
The ministry also noted that the war in Ukraine has placed "indirect pressure" on global grain prices and that shortfalls created by the blockade "will further increase the price of many staple products."
On Tuesday, European Commission President Ursula von der Leyen accused Russia of deliberately targeting Ukrainian grain warehouses, ports and other critical infrastructure to provoke a global food crisis.
"The consequences of these shameful acts are there for everyone to see," von der Leyen told the World Economic Forum in Davos, Switzerland. "Global wheat prices are skyrocketing. And it is fragile countries and vulnerable populations that suffer most.
"And on top of this, Russia is now hoarding its own food exports as a form of blackmail -- holding back supplies to increase global prices, or trading wheat in exchange for political support. This is using hunger and grain to wield power."
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.
Pfizer warns of ‘constant waves’ of Covid as complacency grows
Chief executive Albert Bourla launches plan to offer patented medicines at lower cost to poorer nations
Growing complacency about Covid-19 and politicisation of the pandemic response will cost lives as the world is hit by new waves of the virus in the coming months, Pfizer’s chief executive has warned.
Albert Bourla said people were growing “tired” of the measures introduced to slow the spread of the virus, while “politicians want to claim victory”. Compliance with authorities’ requests for people to get booster shots would fall even among those who are already vaccinated, he predicted.
This, combined with waning immunity from previous infections and vaccinations, was likely to lead to “constant waves” of Covid variants and deaths, he said.
“I feel when I discuss [Covid] with my friends, people are ready to compromise and lower the bar: maybe we can accept a few more old people dying, [rather] than have to work with a mask,” Bourla said in an interview in Davos, Switzerland, where he noted that few attendees at the World Economic Forum’s annual meeting were masked.
“What worries me is the complacency,” he said, adding that the consequences could be seen in three to six months.
Global demand for Covid vaccines, such as the one that Pfizer developed with Germany’s BioNTech, has halved since the start of the year, according to Airfinity. The health data group said people in rich nations were reluctant to take repeated booster shots, while vaccine hesitancy remained common in poorer nations.
Pfizer on Wednesday unveiled an initiative to offer all of its patent-protected medicines and vaccines, including the Covid jab, to 45 lower-income nations on a not-for-profit basis.
Ghana, Malawi, Rwanda, Senegal and Uganda were the first countries to sign on to the “Accord for a Healthier World”. The countries would help identify and resolve hurdles beyond the supply of medicines, Bourla said, such as the need to improve diagnosis, education, infrastructure and storage.
Pfizer has invited other pharmaceutical companies to join the initiative, which is partly funded by the Bill & Melinda Gates Foundation, and asked governments, global health authorities and philanthropists to provide public and private funding.
Bourla said the initiative was not linked to Pfizer’s opposition to a proposal led by India and South Africa at the World Trade Organization to provide nations with the flexibility to waive patents on Covid vaccines. “I don’t connect the two at all. Frankly, I think it is something that is the right thing to do,” he said.
Nancy Jecker, professor of bioethics at the University of Washington School of Medicine in Seattle, said that while Pfizer’s plan was welcome news, it should not be left to for-profit companies to set policy during global health emergencies.
“Instead, governments must act to ensure health equity,” she said. In the US, meanwhile, Bourla said he was concerned that Congress’s failure to approve the Biden administration’s request for $22.5bn in funds for Covid vaccines and treatments could leave the nation short of supply.
More
https://www.ft.com/content/8244af52-26ba-4676-961a-c57f1d4892e8
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
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.
Charging a green future: Latest advancement in lithium-ion batteries could make them ubiquitous
Scientists add a specific polymer composite to the silicon anode of lithium-ion batteries, which significantly increasing their lifetime
Date: May 19, 2022
Source: Japan Advanced Institute of Science and Technology
Summary: Lithium-ion batteries (LIBs) power electric vehicles and electronics. With the prevalence of these set to increase, efforts have been directed towards improving the performance and longevity of LIBs. Now researchers have shown that adding a specific polymer composite binder to the silicon anode of LIBs can improve its structural stability significantly, making it viable for much more powerful, long-lasting LIBs, and changing the future of the technologies it drives.
Think of a battery, and the term lithium-ion most likely comes to mind. Because of its light weight, high-energy density, and ability to deliver three times as much current as other types of rechargeable batteries, lithium-ion batteries (LIBs) have become the dominant type of battery in both low-power consumer electronic devices, such as mobile phones, and high-power applications, such as electric vehicles and energy storage.
Any typical lithium-ion battery today consists of a positive electrode (cathode) made up of a lithium-containing compound, a negative electrode (anode) made up of graphite, and electrolyte -- the layer in between the electrodes through which ions flow. When a battery is charged, lithium ions flow from the cathode to the anode, where they are stored. During the discharge process, the lithium is ionized and moves back to the cathode.
Recently, there has been a growing interest in using silicon as the anode material because it is more abundant, and therefore cheap, and has a higher theoretical discharge capacity than graphite. However, it has a key disadvantage: repeated charging and discharging causes the silicon particles to expand and rupture. This results in the formation of a thick solid-electrolyte interface (SEI) between the electrolyte and the anode, which hinders the movement of lithium ions between the electrodes.
To improve the performance of silicon anodes in LIBs, a team led by Professor Noriyoshi Matsumi, and also including Dr. Agman Gupta and Senior Lecturer Rajashekar Badam, from Japan Advanced Institute of Science and Technology (JAIST), has developed a binder for the silicon particles, which can improve their stability and maintain a thin SEI layer. Now, in contrast to a thick SEI layer, a thin one is beneficial because it prevents the anode and electrolyte from spontaneously reacting with each other. The results of the study are published in ACS Applied Energy Materials.
----The results demonstrate that the addition of the binder can improve the characteristics of the silicon anode and make it practically feasible. "The design and application of novel polymer composites comprising n-type conducting polymers (CPs) and proton donating polymers with hydrogen bonded networks, like P-BIAN/PAA, hold a promising future in high-capacity electrode materials," says Prof. Matsumi.
As the demand for lithium-ion batteries increases, silicon, which is the eighth-most abundant material on earth, will be a promising environment-friendly alternative to graphite. The improvements to its structural stability and its conductivity with the use of binders will make it more suitable for use in future lithium-ion batteries. "This composite binder design principle will enable wider diffusion of EVs, creation of other battery driven vehicles, and drones, which requires a higher energy density for advanced performance," says Prof. Matsum
Story Source:
Materials provided by Japan Advanced Institute of Science and Technology. Note: Content may be edited for style and length.
Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.
Paul Samuelson.
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