Baltic Dry Index. 2933 -194 Brent Crude 117.62
Spot Gold 1854
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 27/05/22 World 530,350,724
Deaths 6,307,857
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
Friedrich August von Hayek.
In the stock casinos, fantasy’s back. And Bitcoin’s going to $100,000 too. It is almost the month end. Time to dress up the markets once again.
Hong Kong’s Hang Seng rises around 3%; Alibaba shares soar after earnings report
SINGAPORE — Shares in Asia-Pacific rose in Friday trade, with investors monitoring shares of Alibaba in Hong Kong after the Chinese tech giant posted better-than-expected fourth-quarter earnings on Thursday.
By Friday afternoon in Hong Kong, shares of Alibaba listed in the city surged 12.45% after it reported Thursday fourth-quarter earnings of 7.95 yuan ($1.18) per share, excluding items, on revenues of 204.05 billion yuan ($30.28 billion).
That was higher than analyst expectations for earnings of 7.31 yuan a share on CNY199.25 billion in revenue, according to StreetAccount.
Other Chinese tech stocks in the city also saw sizable gains, with Tencent rising 2.33% while Netease surged 3.53%. The broader Hang Seng index in Hong Kong climbed 2.77%.
Mainland Chinese stocks also edged higher, with the Shanghai Composite up 0.52% while the Shenzhen Component advanced 0.449%.
Chinese authorities held an unprecedented nationwide meeting via teleconference on Wednesday in a bid to bolster an economy battered by Covid, with Premier Li Keqiang warning of difficulties “even greater than the severe shock of the pandemic in 2020.”
“Premier Li’s directive for local [officials] to better balance COVID controls against economic growth, which has been cited as key to solving all problems, (from employment to livelihood and COVID containment), paves a path to a promising turnaround,” said Mizuho Bank’s Vishnu Varathan in a Friday note.
“Trouble is, this is an attempt at pain relief from, but not quite a panacea for, self-inflicted harm,” said Vishnu, who is head of economics and strategy at the firm.
The Nikkei 225 in Japan gained 0.56% as shares of conglomerate SoftBank Group surged 4.49%. The Topix index advanced 0.44%. South Korea’s Kospi also jumped 0.87%.
In Australia, the S&P/ASX 200 climbed 1%. Australia’s retail sales rose 0.9% in April to “another record level,” according to a Friday media release from the country’s Bureau of Statistics.
Following the data release, the Australian dollar changed hands at $0.7139, continuing to hold above the $0.705 level that it momentarily fell below earlier in the week.
MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 1.92%.
More
https://www.cnbc.com/2022/05/27/asia-markets-alibaba-australia-economy-currencies-oil.html
World shares climb, dollar falls on relief over Fed's flexible stance
May 26, 2022 10:30 PM GMT+1
NEW YORK, May 26 (Reuters) - World shares rose on Thursday and the U.S. dollar edged lower, a day after minutes from the U.S. Federal Reserve's May meeting indicated the central bank would remain flexible and might pause rate hikes later in the year.
Wall Street closed higher with the three main U.S. indices positioned for their biggest weekly gains since mid-March.
The MSCI's benchmark for global stocks (.MIWD00000PUS) was up 1.54% at 4:25 p.m. EDT (2025 GMT). Europe's pan-regional STOXX 600 (.STOXX) equity benchmark index rose 0.78%, while the MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.02%.
The Dow Jones Industrial Average .DJI rose 516.91 points, or 1.61%, to 32,637.19; the S&P 500 .SPX gained 79.11 points, or 1.99%, to 4,057.84; and the Nasdaq Composite .IXIC added 305.91 points, or 2.68%, to 11,740.65.
The three indexes were on track to snap their longest streak in decades of weekly declines. read more
The minutes of the Fed's May meeting, released on Wednesday, showed a majority of Fed officials supported the well-telegraphed rate hikes of 50 basis points each in June and July.
Analysts at Bank of America said the Fed could pause its tightening in September if the economy deteriorates. read more
Data on Thursday showed the number of Americans filing new claims for unemployment benefits fell more than expected last week as the labor market remained tight. A separate report confirmed the U.S. economy contracted in the first quarter. read more
"Jobs data is really going to drive the outlook of the Fed going forward," said Brian Overby, a senior options analyst at Ally. "If they do see the unemployment rate increase a little bit that could slow them down."
The U.S. dollar fell 0.284% against a basket of global currencies. If the Fed gets less aggressive on tightening, that would weaken the greenback's safe-haven appeal.
The euro was up 0.44% to $1.0727.
U.S. Treasury yields edged up after the benchmark 10-year note hit a six-week low, with signs of slower economic growth reducing inflation fears.
The yield on 10-year Treasury notes rose 2.7416% after falling to 2.706% early in the session.
More
https://www.reuters.com/markets/europe/global-markets-wrapup-1-2022-05-26/
But the reality is a little different. Crude oil is rising again. Inflation shows no sign of easing. A food scarcity or worse lies ahead. No one has any idea how to bring an end to the new European war, just the reverse, how to arm the Ukraine to widen it into NATO.
Interest rates, Russia excepted, are rising everywhere. President Biden, is leading the charge by Australia, Japan and the UK into a clash with China over Taiwan.
Ukraine war: World Bank boss warns over global recession
By Annabelle Liang Business reporter 26 May 2022
The head of the World Bank has warned that Russia's invasion of Ukraine could cause a global recession as the price of food, energy and fertiliser jump.
David Malpass told a US business event on Wednesday that it is difficult to "see how we avoid a recession".
He also said that a series of coronavirus lockdowns in China is adding to concerns about a slowdown.
His comments are the latest warning over the rising risk that the world economy may be set to contract.
"As we look at the global GDP... it's hard right now to see how we avoid a recession," Mr Malpass said, without giving a specific forecast.
"The idea of energy prices doubling is enough to trigger a recession by itself," he added.
Last month, the World Bank cut its global economic growth forecast for this year by almost a full percentage point, to 3.2%.
----Mr Malpass also said that many European countries were still too dependent on Russia for oil and gas.
That's even as Western nations push ahead with plans to reduce their dependence on Russian energy.
He also told a virtual event organised by the US Chamber of Commerce that moves by Russia to cut gas supplies could cause a "substantial slowdown" in the region.
He said higher energy prices were already weighing on Germany, which is the biggest economy in Europe and the fourth largest in the world.
Developing countries are also being affected by shortages of fertiliser, food and energy, Mr Malpass said.
Mr Malpass also raised concerns about lockdowns in some of China's major cities - including the financial, manufacturing and shipping hub of Shanghai - which he said are "still having ramifications or slowdown impacts on the world".
"China was already going through some contraction of real estate, so the forecast of China's growth before Russia's invasion had already softened substantially for 2022," he said.
"Then the waves of Covid caused lockdowns which further reduced growth expectations for China," he added.
Also on Wednesday, China's premier Li Keqiang said the world's second largest economy had been hit harder by the latest round of lockdowns than it had been at the start of the pandemic in 2020.
He also called for more action by officials to restart factories after lockdowns.
More
https://www.bbc.co.uk/news/business-61575387
Two investment banks cut their China GDP forecasts even lower
Published Thu, May 26 2022 4:45 AM EDT
BEIJING — Two investment banks cut their China GDP forecasts this week for a third time this year based on the toll of persistent Covid controls.
Both estimates are under 4% — well below the official target of around 5.5% growth for 2022.
UBS cut its forecast to 3%, down from 4.2% previously and the lowest among estimates tracked by CNBC.
JPMorgan slashed its forecast to 3.7% growth, down from 4.3%.
“The easing of Covid restrictions will unlikely be as rapid as in 2020 given the nature of Omicron,” UBS economist Tao Wang and a team wrote in a report Tuesday.
“The lingering restrictions and lack of clarity on an exit strategy from the current Covid policy will likely dampen corporate and consumer confidence and hinder the release of pent-up demand,” the report said.
China was the only major economy to grow in 2020, with a revised GDP print of 2.2%, as the country was able to quickly resume production while much of the world remained under lockdown.
However, this year’s Covid outbreak stems from the more transmissible omicron variant. Many countries have shifted to a “living with Covid” strategy. Beijing has maintained a far more stringent “dynamic zero-Covid policy,” citing the risk of overwhelming its public health care system and a lower level of vaccination rates among the country’s elderly.
“Uncertainties related to economic forecasts are high,” JPMorgan’s chief China economist Haibin Zhu and a team wrote a report Monday.
----Economists are also concerned about the quality of China’s growth, given increased stimulus and spending on Covid testing.
JPMorgan’s Zhu estimates the cost for regular Covid testing will be 40 billion to 50 billion yuan ($5.97 billion to $7.46 billion), or 0.4% to 0.5% of GDP a year at a minimum.
“This does not include public health expenses, provision of community services during lockdowns and construction of test stations and quarantine centers,” the report said, noting that workers also need to take time out of their day to wait in lines for virus testing.
https://www.cnbc.com/2022/05/26/two-investment-banks-cut-their-china-gdp-forecasts-even-lower.html
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Kremlin says West is to blame for Ukraine grain crisis
May 26, 2022 12:06 PM GMT+1
LONDON, May 26 (Reuters) - The Kremlin on Thursday said the West only had itself to blame for a brewing food crisis due to problems getting Ukraine's grain out to world markets, demanding the United States and its allies scrap what it cast as illegal sanctions.
Besides the death and devastation sown by Russia's invasion of Ukraine, the war and the West's attempt to isolate Russia as punishment have sent the price of grain, cooking oil, fertiliser and energy soaring, hurting global growth.
The United Nations, which says a global food crisis is deepening, is trying to broker a deal to unblock Ukraine's grain exports though Western leaders have blamed Russia for holding the world to ransom by blockading Ukrainian ports.
Kremlin spokesman Dmitry Peskov rejected those accusations and said the West was to blame for the situation.
"We categorically reject these accusations and, on the contrary, accuse Western countries that they have taken a number of illegal actions that led to this," Peskov told reporters.
"They (the West) must cancel those illegal decisions that prevent the chartering of ships, that prevent the export of grain, and so on" so that supplies can resume, Peskov said.
Russia has captured some of Ukraine's biggest seaports and its navy controls major transport routes in the Black Sea, where extensive mining has made commercial shipping dangerous. Sanctions have also made it hard for Russian exporters to access vessels to move commodities to global markets.
Russia and Ukraine together account for nearly a third of global wheat supplies. Chicago wheat futures hit a record price in March on supply concerns, and are still up by 30% since Feb. 24.
Ukraine is also a major exporter of corn, barley, sunflower oil and rapeseed oil, while Russia and Belarus - which has backed Moscow in the war and is also under sanctions - account for over 40% of global exports of the crop nutrient potash.
Time is running out to get some 22 million tonnes of grain out of Ukraine ahead of the new harvest as Russia continues to blockade the country's Black Sea ports, Ukrainian lawmaker Yevheniia Kravchuk said on Wednesday.
"We have about maybe a month and a half before we start to collect the new harvest," she told Reuters on the sidelines of the World Economic Forum in the Swiss resort of Davos, adding there was not sufficient space to store the fresh harvest.
Ukraine has lost the ports of Kherson and Mariupol to Russian occupation, and fears Russia may try to seize a third, Odesa.
The Kremlin says Ukraine had made commercial shipping impossible by mining its waters.
More
Column: UK diesel shortage shows need for caution on sanctions
May 26, 2022 2:00 AM GMT+1
LONDON, May 25 (Reuters) - Like the east coast of the United States, Britain was experiencing a severe shortage of distillate fuel oil even before Russia's invasion of Ukraine, which sanctions now threaten to make much worse.
UK diesel and gas oil inventories had fallen to 1.57 million tonnes by the end of February, down from 2.23 million at the same point a year earlier, and the lowest seasonal level since 2014/15 and before that 2008.
The country's passenger vehicle fleet is split between diesel and gasoline but long-distance freight transport, local delivery services, small businesses and construction all rely on diesel.
(Chartbook: https://tmsnrt.rs/38g7vju)
Distillate consumption has rebounded much faster than gasoline, reflecting the resurgence in business activity and commercial journeys compared with commuting and leisure.
Distillate use was down by just 2% in February from the same month before the pandemic, compared with a 12% decline for gasoline, according to data from the Department for Business, Energy and Industrial Strategy (BEIS).
Diesel and gas oil inventories had fallen by almost 30% over previous twelve months compared with only 8% for gasoline ("Energy trends: UK oil and oil products", BEIS, April 28).
As a result, the ratio of distillate stocks to consumption has fallen to its second-lowest level for decades, a sign of how tight inventories have become.
The shortage has pushed retail diesel prices to a premium of 13-14 pence per litre (8-9%) over gasoline, the highest since 2008 ("Weekly road fuel prices," BEIS, May 24).
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.
WHO: COVID-19 cases mostly drop, except for the Americas
Thu, May 26, 2022, 3:34 PM
LONDON (AP) — The number of new coronavirus cases and deaths are still falling globally after peaking in January, the World Health Organization said.
In its latest weekly assessment of the pandemic, the U.N. health agency said there were more than 3.7 million new infections and 9,000 deaths in the last week, drops of 3% and 11% respectively. COVID-19 cases rose in only two regions of the world: the Americas and the Western Pacific. Deaths increased by 30% in the Middle East, but were stable or decreased everywhere else.
WHO said it is tracking all omicron subvariants as “variants of concern.” It noted that countries which had a significant wave of disease caused by the omicron subvariant BA.2 appeared to be less affected by other subvariants like BA.4 and BA.5, which were responsible for the latest surge of disease in South Africa.
Salim Abdool Karim, an infectious diseases expert at the University of KwaZulu-Natal, said it appeared that South Africa had passed its most recent wave of COVID-19 caused by the BA.4 and BA.5 subvariants; the country has been on the forefront of the pandemic since first detecting the omicron variant last November.
Karim predicted that another mutated version of omicron might emerge in June, explaining that the large number of mutations in the variant meant there were more opportunities for it to evolve.
More
https://www.yahoo.com/news/covid-19-cases-mostly-drop-143453229.html
You’re probably going to get COVID at least once a year
Wed, May 25, 2022, 8:00 PM
COVID is not a "one and done" thing—far from it.
Those who are unvaccinated and don't mask can expect to come down with COVID once a year or so—once every other year for the unvaccinated who regularly use a "good quality" mask in public, according to modeling by drug developer Fractal Therapeutics.
As for the vaccinated, both masked and unmasked, they can expect to get COVID "a lot less frequently," though it's impossible to say just how often, said Arijit Chakravarty, a COVID researcher and Fractal Therapeutics CEO.
"The bottom line is if you are planning not to use a mask and live your life as usual, expect to get infected at least once a year, if not more," he said. "If you're planning to mask everywhere but at home, that probably cuts the risk in half."
The team's latest models accounts for waning immunity from vaccines and prior infection, and a certain degree of immune evasion, as has been increasingly seen in Omicron subvariants. It also assumes that with each round of infection, a person gains some measure of protection against the sometimes deadly virus, albeit temporary.
It does not account for the possible evolution of a variant that completely evades immunity, he cautioned.
The modeling focuses on the unvaccinated because "vaccines are not currently providing protection against infection" for the majority of the U.S. population, though they are providing protection against severe illness and death, Chakravarty said.
The percentage of Americans who've received one booster is small—46.5%, according to the CDC—and smaller yet for a second booster: 19.7%. Regardless, "boosters only provide a short duration of protection against infection," he said. Immunity, whether from vaccine or prior infection, is thought to wane after three or four months, though it varies by person.
----While few would want to deal with a jab and current vaccine side effects every eight weeks or so, more might be willing to take a readily available nasal-mist vaccine, which may cause fewer side effects.
Variants are outpacing current vaccine technology, potentially rendering it completely ineffective in the future. But "we haven't fully explored the range" of what that technology can provide in the way of protection, Chakravarty said—not yet.
"More research needs to be done on this—in addition to coming up with vaccines that work better against the current viral variants, vaccines that can be used nasally—exploring how often vaccines can be given, and how much of a boost to our neutralizing antibodies we could get from frequent administration.”
Such research might not require full clinical trials, but could start by looking at neutralizing antibody titers and asking the question, "What course of vaccine doses provide higher titers while still being acceptable from a safety standpoint?" Chakravarty said.
"It's a relatively low-cost thing to fund and could yield benefit, even as we're exploring next-generation vaccines."
https://www.yahoo.com/news/not-taking-precautions-prepared-covid-090000513.html
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.
Recycled tires make for roads that last twice as long in hot sunshine
Michael Irving May 25, 2022
Roads always seem to be in need of repair, but changing up the recipe could help them last longer. Researchers in Australia have now shown yet another advantage of adding rubber from old tires to asphalt – extra Sun protection that could help roads last up to twice as long before cracking.
Anyone who’s ever touched a road on a hot day knows that those things hold heat. And despite being out in the elements all day, every day, nothing is added to protect them against Sun damage, leading to the cracks and potholes every driver is familiar with.
In a new study, researchers at Australia’s RMIT University have found an environmentally friendly way to shore up roads against the onslaught of the Sun’s rays. The key is to add crumb rubber, a form of ground-up material made from waste rubber products like old tires. It’s already shown promise in making concrete stronger and more heat resistant, and the researchers wondered whether it could protect asphalt from UV light degradation.
To test out the idea, the team added crumb rubber into the top layer of asphalt, at three different concentrations – 7.5 percent, 15 percent and 22.5 percent. Then, these samples were placed in a machine that exposed them to high levels of UV light for a month and a half, an accelerated aging process that’s the equivalent of what local roads would endure over the course of a year. Finally, changes in the chemical and mechanical properties of the asphalt were measured.
The team found that the samples with the highest concentration of rubber showed half the UV damage of regular asphalt. However, putting too much in might start to detract from the road’s resistance to mechanical damage.
“We found adding between 18 percent and 22 percent of crumb rubber generates an ideal balance in terms of improving rut and fatigue resistance to traffic loads, while resisting UV aging,” said Filippo Giustozzi, lead author of the study. “This acts so effectively as a sunscreen for roads that it actually makes the surface last twice as long as regular bitumen. We knew that UV would be a factor in road degradation, but not by what degree or how to protect against it, as nobody has really been looking at this aspect.”
The other advantage of the technique is that it gives old tires a new lease on life. These waste products are a major environmental hazard that keeps building up, so useful ways to recycle them are welcome.
The research was published in the Journal of Cleaner Production.
Source: RMIT University
Another weekend and sadly another weekend of needless European war. A holiday weekend in America though a weekend overshadowed by the tragedy in Texas.
For motor race fans, the Monaco Grand Prix and later on Sunday, the Indy 500. Traditionally, for many, the start of the summer season. Have a great weekend everyone.
'Emergencies' have always been the pretext on which the safeguards of individual liberty have been eroded.
Friedrich August von Hayek.
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