Baltic Dry Index. 2718 +74 Brent Crude 112.39
Spot Gold 1884
Stocks take the escalator up, the elevator down.
Wall Street saying.
All of a sudden, reality arrived in the stock casinos. No one saw it coming, of course, stock promoters, politicians, central banksters, never do. After all, they make their living by peddling that everything is fine, propping up stocks, and that there is no recession in sight.
How else can they persuade the public to buy stocks, mutual funds, insurance policies, derivatives, etc., all the trimmings of our modern financialised bankster run economy.
Yet every now and again the central banksters screw up big time. March 2020 was just such a time.
That’s when the central banksters and western politicians discovered the Magic Money Tree forests and started printing trillions upon trillions of new free money and started dumping it into the global economy struggling with SARS.
Don’t worry there won’t be any inflation, they said, we know what we’re doing, everything is under control.
With mountains of Magic Money Tree money and a hefty push from the friends of the central banksters, stocks took off for the moon.
When inflation showed up, they said it was only “transitory,” don’t worry buy more stocks.
But inflation turned out to be anything but “transitory” and now the central banksters and bent politicians are caught out with only bad options.
Do nothing, and watch inflation soar into double digits, generating social unrest, and voters looking to vote in populist politicians.
Start raising interest rates, ending the free money, bursting the financialised stock casino bubble.
A mere 50 basis point US interest rate increase this week, tiny in comparison the US official inflation running at 8.5 percent, seems to have burst the central banksters latest stock casino bubble.
Now a whole lot of financial scandal and misdeed is about to come crashing back down to earth.
And it could get a whole lot worse if our continuing food inflation goes from supply crisis into food supply catastrophe.
Nasdaq records first five-week losing streak since 2012
The Nasdaq Composite declined for a fifth straight week — falling 1.40% to 12,144.66 on Friday — marking its longest weekly losing streak since 2012.
On Wednesday, the Federal Reserve raised interest rates by 0.5% and warned again of “much too high” inflation, which rattled markets. The Nasdaq gained in Wednesday afternoon trading after the announcement, but plunged over 5% on Thursday.
The tech-heavy index’s woes represents a significant shift in investor sentiment toward growth stocks, which consistently rose during 2020 and 2021. Inflation concerns, the central bank rate hikes and worries about deteriorating economic conditions affecting consumer spending are forcing investors to reassess some of the most high-flying stocks over the past few years.
The Nasdaq Composite peaked on Nov. 19 at 16,057.44, and it has lost nearly a quarter of its value since then.
Some of the biggest falls came from stocks that reported earnings during the week. Lyft plummeted 36% after providing weak guidance for the current quarter. Bill.com slumped 28% after reporting slowing revenue growth, Cloudflare fell 24% after forecasting a possible loss in the current quarter and Confluent declined 23% after growth underperformed expectations.
Some of the biggest names in tech also fell this week. Amazon was off over 6% and Microsoft lost just over 1%. Apple stock was a rare gainer; it edged up 0.29% after reporting that it was more concerned about supply shocks than consumer demand.
There have been 10 times in the past decade that the stock index has reported a losing streak of at least four weeks. In October and November of 2012, the Nasdaq dropped for six straight weeks.
The Nasdaq is also on pace for its worst quarterly performance since the last three months of 2018.
https://www.cnbc.com/2022/05/06/nasdaq-records-first-five-week-losing-streak-since-2012.html
Stocks could see more tumult next week, especially if bond yields continue to scream higher
After a week of extraordinary turbulence, stocks are likely to remain volatile as investors await fresh data on inflation and watch the course of bond yields.
The big report for markets is Wednesday’s April consumer price index. Economists expect a high inflation reading, but it should moderate from the 8.5% year-over-year pace of March. A second inflation report, the producer price index, which is a gauge of wholesale prices, is released Thursday.
“I think it’s going to be a hot number but not as sizzling as last month,” said Mark Zandi, chief economist at Moody’s Analytics. Zandi expects headline CPI to rise 0.3% for the month or 8.2% year-over-year.
----“I think the two big concerns for the market are inflation and how hawkish the Fed will be trying to get that under control,” said Art Hogan chief market strategist at National Securities. Hogan said investors are also concerned about China’s economy as it locks down to fight Covid and how that slowing could impact the rest of the world.
Hogan said if the CPI comes in as expected that could bring some stability to both stocks and bonds, since it would then appear that inflation has peaked.
tocks were wildly volatile in the past week, notching big intraday swings in both directions. The S&P 500, closed at 4,123 and was down just 0.2% for the week. The Nasdaq was off 1.5% for the week
Energy was by far the best performing sector, rising 10% for the week. REITs were the worst performing, down more than 3.8%, followed by consumer discretionary, off 3.4%.
Stock investors have also been eyeing the bond market, where yields have been rising as bonds sold off.
The 10-year Treasury yield pushed through 3% for the first time since late 2018 in the past week. On Friday, the yield was at 3.13%, up from 2.94% the Friday before. The rising 10-year yield has had a stranglehold on stocks, particularly growth and tech, during its rapid move higher.
More
‘We are nowhere near the bottom,’ top economist says as global markets crater
Stock markets are set for more heavy selling this summer as central banks around the world ramp up interest rates to try to combat spiraling inflation, according to one economist.
Brunello Rosa, who is CEO and head of research at Rosa & Roubini, a consultancy he co-founded alongside well-known market bear Nouriel Roubini, believes there is much more monetary tightening to come from central banks, and more bad news on economic activity.
“Now it’s time for a reappreciation of the economic fundamentals around the world in terms of growth,” he told CNBC’s “Street Signs Europe” on Friday.
“It’s hard for markets to be totally optimistic when inflation is going up, growth is going down and interest rates are rising fast across the globe.”
----Rosa said investors initially welcomed the news that a 75 basis point hike is off the table, but he warned this means there would be several 50 basis point increases over the next few months. He also said that the Bank of England is the only central bank currently being realistic, after policymakers in London on Thursday warned of the recession risks that the U.K. economy is facing.
“It’s clear that all of them [central banks] are talking tough at this stage. But the reality is that lots of tightening will eventually lead to economic contraction,” he said.
“In the euro zone and in the U.S. they are nowhere near realizing that actually there will be some form of contraction of economic activity,” he later added.
Rosa said he expects the war in Ukraine to last much longer than many market participants are anticipating, adding to other headwinds such as supply chains issues, soaring inflation and rising interest rates.
The pan-European Stoxx 600 fell 1% on Friday morning, following the sell-off on Wall Street, and the benchmark is down more than 11% so far this year. In Asia on Friday, Hong Kong’s Hang Seng index led losses regionally as it dropped 3.81%. In mainland China, the Shanghai Composite slipped 2.16% while the Shenzhen Component shed 2.14% to 10,809.88.
My daughter asked me when she came home from school, "What's the financial crisis?" and I said, it's something that happens every five to seven years.
Jamie Dimon.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Why wheat prices remain red-hot
May 05, 2022
Wheat prices made another round of impressive inroads today, with July contracts for Chicago, Kansas City and Minneapolis sitting above the rarely seen $11 per bushel benchmark. From war in Ukraine to poor crop quality in the U.S. and a strengthening drought in France, there are plenty of reasons for traders to continue operating in a bullish environment. Corn and soybean prices followed suit, picking up modest gains of 0.25% to 0.5%.
Per the latest updates to the U.S. Drought Monitor, out Thursday morning and covering the week through May 3, drought’s footprint is steadily being erased in the Midwest, with just 11.3% of the region now affected. Compare that with three months ago, when 43.2% was affected. Some improvements were also noted in the High Plains, although 84.1% of the region is still affected.
NOAA’s latest 8-to-14-day outlook expects seasonally wet weather to extend through the Northern and Central Plains, along with much of the upper Midwest, between May 12 and May 18. Expect seasonally warm weather for the eastern half of the U.S. during this time.
More
https://www.farmprogress.com/market-reports/why-wheat-prices-remain-red-hot
Wheat Can’t Catch a Break Right Now
India’s giant heat wave is having ripple effects for the world’s food supply.
By Robinson Meyer May 4, 2022For the past few days, a heat wave of mind-boggling scale and intensity has gripped South Asia. More than 1 billion people in India and Pakistan have endured daytime highs of 40 degrees Celsius, or 104 degrees Fahrenheit.
Delhi, the world’s second-largest city, has suffered through back-to-back days of 110-degree Fahrenheit heat. And Nawabshah, Pakistan—a city of nearly 230,000 people in the country’s desert south—came within half a degree of 50 degrees Celsius (122 degrees Fahrenheit), the temperature at which the human body starts to cook.
---- The heat wave will also have an economic cost—one that will ripple beyond the subcontinent. As I’ve written about before, the world is suffering through a shortage of crucial commodities, including keystone cereal crops such as wheat. When Russia invaded Ukraine, it scrambled an already strained global wheat market—Russia is the world’s largest wheat exporter; Ukraine, the world’s sixth largest—and sent prices soaring. India, which has enjoyed five straight years of record wheat crops, jumped in and offered to export more than usual.
The heat wave has, for now, thrown those plans into doubt. Some Indian farmers have estimated that 10 to 15 percent of their crop has died, according to Monika Tothova, an economist at the Food and Agriculture Organization, a United Nations agency. But it’s too early to know exactly how the heat wave will shape the crop.
More
Tokyo consumer prices rise at fastest pace in 7 years
May 6, 2022 3:09 AM GMT+1
TOKYO, May 6 (Reuters) - Core consumer prices in Tokyo, considered a leading indicator of Japanese price trends, rose 1.9% in April from a year earlier, marking the fastest annual pace in seven years, government data showed on Friday.
The increase in inflation, driven mostly by food costs and the dissipating effect of past cellphone fee cuts, underscores a common view among economists that Japan will see price rises accelerate to the central bank's 2% target in coming months.
"The nationwide (core) inflation may rise above 2% in April-June...as the picture has been the same in recent months - food price hikes have been widening," said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.
"Meanwhile, it may not keep accelerating further as the pace of the energy price inflation is slowing."
The rise in the Tokyo core consumer price index (CPI) was faster than a median market forecast for a 1.8% gain and followed a 0.8% increase for March. The index excludes fresh food, which is a volatile factor, but includes energy items.
That marked the fastest gain since March 2015, when the index rose 2.2%.
More
Column: U.S. gas prices soar as Europe and Asia scramble for LNG
May 6, 2022 3:37 PM GMT+1
LONDON, May 6 (Reuters) - U.S. gas prices have surged to the highest level in real terms since the financial crisis in 2008 as strong demand for LNG from buyers in Europe and Asia puts pressure on inventories.
Front-month futures for gas delivered to Henry Hub in Louisiana are trading at almost $9 per million British thermal units, up from just over $3 at the same point last year and less than $3 in 2019.
Front-month futures have surged into a record backwardation of almost $4 above futures for delivery one-year from now, as traders anticipate inventories will remain under pressure through the rest of the year.
Working gas stocks in underground storage are 335 billion cubic feet or 18% below the pre-pandemic five-year seasonal average for 2015-2019.
Inventories have remained low despite a fairly mild winter, with population-weighted heating demand this winter in the Lower 48 states around 7% below the average.
Domestic gas production has recovered to its pre-pandemic peak, according to data from the U.S. Energy Information Administration.
But exports especially in the form of LNG have risen sharply, which is keeping inventories low and putting upward pressure on prices.
In recent months, LNG exports have been equivalent to 10-12% of domestic dry gas production, up from around 4% in early 2019.
Exports have become a big enough share of the market they have started to enforce a partial convergence with prices in Europe and Asia.
More
https://www.reuters.com/markets/commodities/us-gas-prices-soar-europe-asia-scramble-lng-2022-05-06/
China’s Covid lockdowns are hitting more than just Shanghai and Beijing
Published Thu, May 5 2022 10:40 PM EDT
BEIJING — While the bulk of China’s new Covid cases are in Shanghai and Beijing, data show the impact of business restrictions is more widespread.
For one, nearly 60% of European businesses in the country said they were cutting 2022 revenue projections as a result of Covid controls, according to a survey late last month by the EU Chamber of Commerce in China. More than half of those cuts were by 6% to 15%, the chamber said Thursday.
Among Chinese businesses, monthly surveys released in the last week showed sentiment among manufacturing and service businesses fell in April to the lowest since the initial shock of the pandemic in February 2020. Official and third-party versions of the survey, known as the purchasing managers’ index, pointed to further contraction in business activity from March.
The Caixin services PMI out Thursday was the latest release, with a drop to 36.2 in April. That’s far below the 50 line that indicates contraction or expansion.
Expectations for future output did improve slightly, a press release said. But there were “some concerns over how long it may take to fully contain the virus and to return to more normal business conditions.”
Other data depict a similarly broad impact from Covid restrictions in China.
Power generation rose in the first two months of the year, but slowed to zero growth in March, according to figures cited by Larry Hu, chief China economist at Macquarie. He expects a drop in power generation in April.
In the massive real estate sector, Hu noted that lockdowns also make it “physically impossible to buy property,” sending sales in the top 30 cities down 54% in April from a year ago.
---- Since March, mainland China has faced its worst Covid outbreak since early 2020 — using the same zero-Covid strategy of swift lockdowns that had helped the country quickly return to growth back then. Manufacturing areas from the northern province of Jilin to the southern city of Shenzhen were among those initially forced to lock down.
However, the length of restrictions has varied greatly by region. Shanghai, China’s largest city, essentially remained locked down for all of April. The capital city of Beijing began tightening travel and business restrictions toward the end the month to control a spike in Covid cases.
With China’s two largest cities by GDP under Covid controls for the five-day holiday that ended Wednesday, national tourism revenue for the period only recovered to 64.68 billion yuan ($9.95 billion) — 44% of pre-pandemic levels, official figures showed.
---- Lockdowns are affecting “consumers’ ability to reach stores, grocery stores, department stores,” American household products giant Procter & Gamble said in an earnings call last month. “Even online shopping is significantly constrained due to the inability to deliver.”
The company said the market for its products in China didn’t grow in value in the first three months of the year, and that “with the continued lockdown and difficulties in the market, we would expect April to be flat to negative.”
---- This week, among smaller cities tightening Covid controls, the city of Zhengzhou ordered residents to work from home and for schools to move online through the end of Tuesday. Zhengzhou is home to a major factory for iPhone supplier Foxconn, which did not immediately respond to a request for comment.
Factories, as is the case in Zhengzhou, typically can maintain at least limited production if they meet the government’s Covid requirements such as keeping workers in a bubble around the industrial plant.
Yum China, which operates KFC and Pizza Hut in the country, warned this week of “stronger headwinds” in the second quarter that would likely result in an operating loss for the period. Other than Shanghai, large cities such as Fuzhou, Suzhou, Tianjin, Shenzhen and Xi’an were partially locked down in April, the company said.
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.
But first this worrying news from America. When man plays God it doesn’t always work out.
Virus found in pig heart used in human transplant
Researchers trying to learn what killed the first person to receive a heart transplant from a pig have discovered the organ harbored an animal virus but cannot yet say if it played any role in the man’s death.
A Maryland man, 57-year-old David Bennett Sr., died in March, two months after the groundbreaking experimental transplant. University of Maryland doctors said Thursday they found an unwelcome surprise — viral DNA inside the pig heart. They did not find signs that this bug, called porcine cytomegalovirus, was causing an active infection.
But a major worry about animal-to-human transplants is the risk that it could introduce new kinds of infections to people.
Because some viruses are “latent,” meaning they lurk without causing disease, “it could be a hitchhiker,” Dr. Bartley Griffith, the surgeon who performed Bennett’s transplant, told The Associated Press.
More
The 60-Year-Old Scientific Screwup That Helped Covid Kill
All pandemic long, scientists brawled over how the virus spreads. Droplets! No, aerosols! At the heart of the fight was a teensy error with huge consequences.
May 13, 2021 6:00 AM
Early one morning, Linsey Marr tiptoed to her dining room table, slipped on a headset, and fired up Zoom. On her computer screen, dozens of familiar faces began to appear. She also saw a few people she didn’t know, including Maria Van Kerkhove, the World Health Organization’s technical lead for Covid-19, and other expert advisers to the WHO. It was just past 1 pm Geneva time on April 3, 2020, but in Blacksburg, Virginia, where Marr lives with her husband and two children, dawn was just beginning to break.
Marr is an aerosol scientist at Virginia Tech and one of the few in the world who also studies infectious diseases. To her, the new coronavirus looked as if it could hang in the air, infecting anyone who breathed in enough of it. For people indoors, that posed a considerable risk. But the WHO didn’t seem to have caught on. Just days before, the organization had tweeted “FACT: #COVID19 is NOT airborne.” That’s why Marr was skipping her usual morning workout to join 35 other aerosol scientists. They were trying to warn the WHO it was making a big mistake.
Over Zoom, they laid out the case. They ticked through a growing list of superspreading events in restaurants, call centers, cruise ships, and a choir rehearsal, instances where people got sick even when they were across the room from a contagious person. The incidents contradicted the WHO’s main safety guidelines of keeping 3 to 6 feet of distance between people and frequent handwashing. If SARS-CoV-2 traveled only in large droplets that immediately fell to the ground, as the WHO was saying, then wouldn’t the distancing and the handwashing have prevented such outbreaks? Infectious air was the more likely culprit, they argued. But the WHO’s experts appeared to be unmoved. If they were going to call Covid-19 airborne, they wanted more direct evidence—proof, which could take months to gather, that the virus was abundant in the air. Meanwhile, thousands of people were falling ill every day.
On the video call, tensions rose. At one point, Lidia Morawska, a revered atmospheric physicist who had arranged the meeting, tried to explain how far infectious particles of different sizes could potentially travel. One of the WHO experts abruptly cut her off, telling her she was wrong, Marr recalls. His rudeness shocked her. “You just don’t argue with Lidia about physics,” she says.
Morawska had spent more than two decades advising a different branch of the WHO on the impacts of air pollution. When it came to flecks of soot and ash belched out by smokestacks and tailpipes, the organization readily accepted the physics she was describing—that particles of many sizes can hang aloft, travel far, and be inhaled. Now, though, the WHO’s advisers seemed to be saying those same laws didn’t apply to virus-laced respiratory particles. To them, the word airborne only applied to particles smaller than 5 microns. Trapped in their group-specific jargon, the two camps on Zoom literally couldn’t understand one another.
---- The books Marr flipped through drew the line between droplets and aerosols at 5 microns. A micron is a unit of measurement equal to one-millionth of a meter. By this definition, any infectious particle smaller than 5 microns in diameter is an aerosol; anything bigger is a droplet. The more she looked, the more she found that number. The WHO and the US Centers for Disease Control and Prevention also listed 5 microns as the fulcrum on which the droplet-aerosol dichotomy toggled.
There was just one literally tiny problem: “The physics of it is all wrong,” Marr says. That much seemed obvious to her from everything she knew about how things move through air. Reality is far messier, with particles much larger than 5 microns staying afloat and behaving like aerosols, depending on heat, humidity, and airspeed. “I’d see the wrong number over and over again, and I just found that disturbing,” she says. The error meant that the medical community had a distorted picture of how people might get sick.
More
World Health Organization - Landscape of COVID-19 candidate vaccines. https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines
NY Times Coronavirus Vaccine Tracker. https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html
Regulatory Focus COVID-19 vaccine tracker. https://www.raps.org/news-and-articles/news-articles/2020/3/covid-19-vaccine-tracker
Some more useful Covid links.
Johns Hopkins Coronavirus resource centre
https://coronavirus.jhu.edu/map.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.
No update this weekend. Normal service next weekend.
This weekend’s musical diversion. Vivaldi again played by one of the world’s outstanding leading fiddlers. Approx. 14 minutes.
Vivaldi Concerto for violin in C major, RV 191 Giuliano Carmignola at the Enescu Festival Venice B
https://www.youtube.com/watch?v=qiT3q_CBkgk
This weekend’s chess update. Approx. 15 minutes.
May The Fork Be With You!
https://www.youtube.com/watch?v=TeVr2iBB-M0
This week’s maths update. Approx. 10 minutes.
Mathematical Foundations of Quantum Mechanics — Ch. 1 Introduction: Why Linear Algebra?
https://www.youtube.com/watch?v=PkYJAZqzjhU
Finally, Approx. 20 minutes.
Native American Castaway Gives First Description of Closed Japan (1848) Ranald MacDonald´s Adventure
https://www.youtube.com/watch?v=GV0MnMBRyRo
If a government resorts to inflation, that is, creates money in order to cover its budget deficits or expands credit in order to stimulate business, then no power on earth, no gimmick, device, trick or even indexation can prevent its economic consequences.
Henry Hazlitt.
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