Baltic Dry Index. 3104 -13 Brent Crude 111.15
Spot Gold 1812
“In a time of deceit telling the truth is a revolutionary act.”
George Orwell.
With the disgraceful police attack on a Christian funeral of an assassinated American, Al Jazeera journalist in Jerusalem yesterday, finally now well covered by mainstream media, I will only go on to say that I watched that sad unprovoked attack in real time. UK news TV at first ignored it, then falsified it, before too many films showed up on social media forcing a change in coverage. Armies, police, TV news outlets are now at the mercy of thousands of cell phone cameras.
On a positive note, I suspect that Israel just reached its Selma, Alabama 1965 moment, that might yet lead to a major positive attitude change.
In the markets, will Friday’s relief rally pause, lead to more exit rally opportunities, or renewed selling pressure ahead of the Fed’s next two interest rate hikes?
Time will tell, but the news in the inflation/stagflation section suggests stagflation is already occurring.
Wall Street Week Ahead: Signs of market bottom elude investors after steep selloff
May 13, 2022 11:09 PM GMT+1
NEW YORK, May 13 (Reuters) - Investors are studying an array of indicators for clues on how much further a brutal slide in U.S. stocks could run, with some signs suggesting the tumble in equities may not be over.
The S&P 500 (.SPX) extended its decline to nearly 20% from January’s record peak on Thursday before an end-of-week bounce, approaching the cusp of a bear market amid concerns that persistently high inflation will prompt more aggressive Federal Reserve interest rate increases that could undermine the economy. Declines have been even steeper in the tech-heavy Nasdaq Composite (.IXIC), which is down 24.5% year-to-date.
Despite those losses, many widely followed indicators do not yet show the pervasive panic, supercharged volatility and outright pessimism that have emerged in past market bottoms - a potentially worrisome signal for those looking to step in and buy on the cheap after the most recent selloff in stocks.
Indeed, stocks ripped higher on Friday, with some pandemic era favorites such as the ARK Innovation ETF (ARKK.P) showing double-digit percentage gains, albeit from depressed levels. read more
"I don’t think we are out of the woods yet on a near-term basis," said Mark Hackett, chief of investment research at Nationwide. "That being said, investor expectations have been reset dramatically."
For instance, the Cboe Volatility Index (.VIX), known as “Wall Street’s fear gauge,” now hovers around 30 compared with a long-term median of nearly 18. Past market bottoms, however, have coincided with an average level of 37, and the VIX climbed above 80 in March 2020 during a COVID-19-fueled market plunge after which the S&P 500 more than doubled from its lows on the back of unprecedented Fed stimulus. read more
----Hackett, of Nationwide, is watching options trading for a spike in the ratio between puts, which are typically bought for downside protection, and calls.
"Most of these indicators, put/call being one of them, are already very bad historically," Hackett said. However, he said, "we haven’t seen that capitulation where everything is flashing red."
Meanwhile, analysts at BofA Global Research on Friday shared their “capitulation” checklist, which showed that while some indicators, such as investor cash amounts, have hit critical territory, others have not met levels attained during the peak of past selloffs.
“Fear & loathing suggest stocks prone to imminent bear market rally but we do not think ultimate lows have been reached,” they wrote.
----Whether clear signs of a bottom emerge or not, stock sentiment could also be swayed by market expectations of how aggressively the Fed will need to raise interest rates in the remainder of the year. The central bank has already raised rates by 75 basis points since March and has signaled that a pair of 50 basis-point increases may be coming in its next two meetings. read more
"I think you are going to have to at least wait for two or three 50 basis-point rate hikes before you start to see any real signs of people coming back in,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management.
More
Finally, was unstablecoin UST a scam all along?
Terra’s Crypto Meltdown Was Inevitable
An epic crash in algorithmic stablecoins spells trouble for the entire industry.
May 12, 2022 3:14 PM
At a Mexican restaurant in North London a few weeks ago, a handful of small-time but remarkably discerning retail cryptocurrency investors predicted that terra and luna would crash. Several of them were scoffing at terra, or UST, a stablecoin whose price equivalence to the dollar is underpinned by algorithms and game theory rather than cash or collaterals, and at the notion that it would maintain its peg in the long run.
The “Ponzinomics” of the project, they informed me, were just too risky. Only one of the investors seemed optimistic, out of nihilism rather than trust in terra’s solidity: He said that at some point UST’s price would grow well above one dollar per unit, and the coin’s promoters would decide to just keep it there and rebrand the stablecoin as an “inflation-resistant cryptocurrency dollar.” Another shrugged but conceded that all bets were off. “So far,” he said, “this story has always followed the most humorous timeline.”
You can bet a lot of people do not feel like laughing today. UST has lost its peg to the dollar (at the time of writing, you can buy it on cryptocurrency exchanges for $0.58), and its sister asset luna has plummeted from $82 last week to $0.02. A big chunk of the investment of around $60 billion in these cryptocurrencies was pulverized overnight, and more of it will follow as people scramble to get rid of their diminished coins.
Meanwhile this week, the wider crypto market is in turmoil as bitcoin fell to $27,000 after bleeding 8 percent of its value in 24 hours, and many other cryptocurrencies are trailing its descent. Tether, the world’s largest stablecoin, dropped under $1 on Thursday.
With terra, we are witnessing the crumbling of a project predicated on the notion that you can create money—and assign it a specific value—if people are willing to go along with the pretense that money has the value that crypto companies assign it, akin to role-playing in a video game.
A small subsection of hardline crypto believers would retort that in the age of post-gold-standard fiat money, most currencies are indeed just a collective delusion. But the fact is that there is no government, central bank, economy, or actual usage underpinning terra matters. As Frank Muci, a policy fellow at the London School of Economics’ Growth Lab Research Collaboration, puts it, “It is similar to a bank run, except it's a run on nothing.”
More. Paywall.
Global Inflation/Stagflation Watch.
This weekend, more sign of global stagflation arriving?
USDA FORECASTS
LOWER CORN AND WHEAT, HIGHER SOYBEAN PRODUCTION
May 13, 2022
Hoosier Ag Today radio network reports:
The corn outlook calls for lower domestic use,
exports, ending stocks, and higher prices. The corn crop is projected at 14.5
billion bushels, 4.3 percent less than the USDA trend from February. Total corn
supplies will decline 2.7 percent to 15.9 billion bushels. The season-average
corn price is projected at $6.75 a bushel. The USDA cut corn yield to 177
bushels per acre.
The soybean outlook is for higher supplies, crush,
exports, and ending stocks this year. The soybean crop will be 4.64 billion
bushels, five percent higher than last year. Soybean supplies will be 4.89
billion bushels, up four percent from last year. The season-average soybean
price will be $14.40 a bushel, up $1.15 from last year.
U.S. all-wheat production is projected at 1.72
billion bushels, 83 million higher than last year. The all-wheat yield will be
46.6 bushels an acre, with the price at a record $10.75 a bushel.
https://www.agrimarketing.com/s/140882
India Bans Wheat Exports in Growing Wave of Food Protectionism
14 May 2022, 04:31 BST Updated on14 May 2022, 05:25 BST
India prohibited wheat exports that the world was counting on to alleviate supply constraints sparked by the war in Ukraine, saying that the nation’s food security is under threat.
Exports will still be allowed to countries that require wheat for food security needs and based on the requests of their governments, India’s Directorate General of Foreign Trade said in a notification dated May 13. All other new shipments will be banned with immediate effect.
The decision to halt wheat exports highlights India’s concerns about high inflation, adding to a spate of food protectionism since the war started. Governments around the world are seeking to ensure local food supplies with agriculture prices surging. Indonesia has halted palm oil exports, while Serbia and Kazakhstan imposed quotas on grain shipments.
Curbing exports would be a hit to India’s ambition to cash in on the rally in global wheat prices after the war upended trade flows out of the critical Black Sea breadbasket region. Importing nations had looked to India for supplies, with top buyer Egypt recently approving the South Asian nation as an origin for wheat imports.
Bloomberg News reported earlier this month that a record-shattering heat wave has damaged wheat yields across the South Asian nation, prompting the government to consider export restrictions.
----Shipments with irrevocable letters of credit that have already been issued will still be allowed, according to the latest notification. Traders have already contracted to export 4 million tons of wheat so far in 2022-23, the food ministry said on May 4. After Egypt, Turkey has also given approval to import wheat from India, it said.
More
Aluminum Inventories Hit a Record Low and Bears Didn’t Blink
· LME on-warrant stockpiles slump to lowest since at least 1997
· Prices have plunged by a third after hitting a record in March
By Mark Burton 13 May 2022, 09:16 BSTUpdated on13 May 2022, 10:18 BSTAluminum available for withdrawal in London Metal Exchange warehouses plunged to a record low, but the latest sign of supply shortages still isn’t enough to shake the bearish mood dominating metals markets as the demand outlook deteriorates.
On-warrant aluminum inventories dropped 9.7% to 260,275 tons, surpassing a previous low set in 2000, to hit a record in data going back to 1997. Stockpiles have slumped 63% this year, heading for a record annual decline, with robust demand and a slew of smelter curtailments pushing the market into a deepening deficit.
Despite the shrinking stocks, the aluminum price wiped out earlier gains after the inventory data, signaling that the focus of attention remains squarely on the risks to demand.
The mood in metals markets has shifted dramatically in the past few weeks, with worries about the persisting tight supply giving way to concerns about the state of the global economy and that Covid lockdowns will hit demand in top consumer China. Aluminum has plunged 33% from a record high in March, wiping out its gains for the year in the process.
“The rally in aluminum was relentless, and now we’re seeing a pretty strong correction,” Geordie Wilkes, head of research at Sucden Financial Ltd., said by phone from London. “The demand outlook is pretty weak across the globe, but the supply risk is still very evident.”
More https://www.bloomberg.com/news/articles/2022-05-13/aluminum-warehouse-stocks-plunge-to-record-low-amid-tight-supply?srnd=markets-vpWith floods and electricity shortages, South Africa’s economy is threatening to go into reverse
Published Fri, May 13 2022 1:14 AM EDT
South Africa’s economy picked up momentum in the first quarter of the year, but historic flooding in a key province and the threat of unprecedented power cuts are putting the brakes on its recovery.
The port city of Durban and the wider KwaZulu-Natal province in eastern South Africa were besieged by the country’s worst flash flooding for decades in April, which killed hundreds and throttled freight operations at sub-Saharan Africa’s busiest port.
The Absa/BER manufacturing PMI — having soared to a record high of 60.0 in March — slumped to 50.7 in April, its lowest reading since the violent riots following former President Jacob Zuma’s arrest in July last year.
KwaZulu-Natal, South Africa’s second-most populous province, was also the center of the country’s worst riots since the end of apartheid.
The S&P Global composite PMI also fell to a four-month low, and in a note last week, Capital Economics highlighted that high frequency data indicates that the recovery in mobility has stalled.
The figures for the first quarter paint a mixed picture, according to JPMorgan economists Sthembiso Nkalanga and Sonja Keller, but point to a seasonally adjusted quarterly GDP growth of 3.5%.
However, April’s dismal PMI showing poses downside risk to JPMorgan’s 1.5% GDP growth projection for the second quarter. Alongside the global backdrop of the war in Ukraine, soaring inflation and Chinese supply struggles, South Africa is also dealing with the domestic shocks of flooding and electricity rationing.
Much of the decline in the manufacturing PMI was concentrated on port and manufacturing activity in KwaZulu-Natal, where manufacturing activity dropped from 60.5 in March to 39.6 in April.
Load shedding — the deliberate shutdown of power in parts of an electricity system to prevent its failure when overburdened — scaled up significantly in April, with electricity cuts this year projected to exceed the already substantial quantities seen in 2021.
More
GM agrees 8.5% raise with Mexico union in test of new trade deal
May 12, 2022 11:40 PM GMT+1
MEXICO CITY, May 12 (Reuters) - U.S. automaker General Motors has agreed a 8.5% wage hike with a new, independent union at its pick-up truck plant in the central Mexican city of Silao, labor representatives said on Thursday, one of the highest recent raises in the country's auto industry.
The deal with union SINTTIA also marks the first major raise since the start of a new trade deal, the United States-Mexico-Canada Agreement (USMCA), which aims to reduce the vast wage gap between U.S. and Mexican workers.
"It's a victory, a step in the right direction," said Gaspar Rivera Salgado, director of the Center for Mexican Studies at the University of California Los Angeles. It remains to be seen if such raises can be easily duplicated, he added.
Following a vote closely watched by U.S. officials, SINTTIA this year became the first independent union in the GM Silao plant's history, in an early test of USMCA labor rules. read more
SINTTIA said alongside wages, the deal comprises bigger bonuses, a 14% increase in grocery vouchers and a mandatory day off on Christmas Eve.
The new contract also stipulates GM and the union will form working groups to negotiate work schedules; a protocol for dealing with sexual harassment cases; and a program to push back against inflation in the coming years.
The contract is good for two years, although salaries will be up for review in a year, said Alejandra Morales, SINTTIA's secretary general.
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.
Symptoms linger two years for some; inflammatory protein patterns may provide long COVID clues
Nancy Lapid Thu, May 12, 2022, 8:51 PM
(Reuters) - The following is a summary of some recent studies on COVID-19. They include research that warrants further study to corroborate the findings and that has yet to be certified by peer review.
COVID-19 symptoms still afflict many two years later
Half of the COVID-19 patients discharged from a Chinese hospital in early 2020 still have at least one symptom two years later, a new study shows.
Overall, regardless of initial disease severity, the 2,469 COVID-19 survivors in the study had improvements in physical and mental health over time. Nearly 90% of those who were employed returned to their jobs within two years. But the survivors had a "remarkably" lower health status than the general population at two years, and their burden of symptoms from after-effects "remained fairly high," the researchers reported on Wednesday in The Lancet Respiratory Diseases. At two years, 55% still had at least one COVID-19 after-effect, according to the report. Fatigue or muscle weakness were the most frequently reported symptoms during the study. Patients who had required mechanical ventilation for critical illness still had high rates of lung impairments at two years.
"Our findings indicate that for a certain proportion of hospitalized COVID-19 survivors, while they may have cleared the initial infection, more than two years is needed to recover fully from COVID-19," the researchers said.
Protein "patterns" may help classify long COVID patients
Patterns of inflammatory proteins in the blood of people with long COVID may someday help guide individualized treatment, new findings suggest.
Researchers studied 55 people with long COVID who had been only mildly ill with COVID-19 and found that roughly two-thirds had high levels of inflammatory proteins in their blood, with the ongoing inflammation most likely to be found in individuals with the highest burden of long COVID symptoms. "While earlier research has shown high levels of such proteins in long COVID patients, we provide the first evidence that more than half" have a specific signature, or pattern, while others do not, the researchers reported on Tuesday on bioRxiv ahead of peer review.
"At least two different patterns of inflammatory proteins were detected," said study leader Troy Torgerson of the Allen Institute for Immunology in Seattle. The existence of these patterns suggests the immune system is being activated in specific ways that could be responsive to treatment with existing anti-inflammatory or immunosuppressive medicines, Torgerson said. "Measurement of these proteins in blood could help to identify long COVID patients who may be good candidates for treatment studies using these drugs or possible future treatments."
More
https://www.yahoo.com/news/symptoms-linger-two-years-inflammatory-195154441.html
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.
Goodyear launching waste-haul tire with soybean oil
May 11, 2022 04:13 PM
Goodyear debuted the tire at the 2022 Waste Expo, held May 9-12 in Las Vegas but said production won't start until the third quarter.
The soybean oil used is sourced from leftover food applications.
Goodyear said this represents another step toward its goal of replacing petroleum-derived oils by 2040.
"Producing the new Endurance WHA tire lineup with a sustainable soybean oil compound will help waste-haul fleets pursue their sustainability goals while delivering the long hours to removal that the Endurance WHA tire is known for," Jessica Julian, commercial product marketing manager, Goodyear North America, said.
"In each new Endurance WHA tire, soybean oil will replace almost 16 liquid ounces of free-flowing petroleum oil — almost as much as a 16-ounce red plastic party cup. When you multiply that by a moderately sized regional waste-haul fleet of around 500 trucks, it could decrease petroleum-based products by the equivalent of almost 15 barrels of oil," she said.
The Endurance WHA offers a dual-layer tread compound that optimizes treadwear, as well as lower rolling resistance and a 24/32nds-inch skid depth.
Buyers also can order the WHA with an optional DuraSeal Technology inner liner layer designed to seal tread punctures to reduce fleet downtime, repairs and premature removal of a tire.
https://www.tirebusiness.com/news/goodyear-makes-waste-haul-tire-soybean-oil
This weekend’s musical diversion. Vivaldi and an interesting supporting bassoon. Approx. 10 minutes.
Concerto Del Vivaldi / RV 94 in D major (Autograph score)
https://www.youtube.com/watch?v=aSFNqT_Cdio
This weekend’s chess update. Blunders. Approx. 10 minutes.
Faster Than You Can Say Checkmate
https://www.youtube.com/watch?v=-J2e8OlBdPs
This week’s maths update. Logarithms (powers.) Approx. 18 minutes.
The History of the Natural Logarithm - How was it discovered?
https://www.youtube.com/watch?v=habHK6wLkic
Finally, Avocados. Approx. 10 minutes.
The Strange History of Avocados
https://www.youtube.com/watch?v=BYCdTORhlLk
“On the whole human beings want to be good, but not too good, and not quite all the time.”
George Orwell.
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