Baltic Dry Index. 2571 -110 Brent Crude 123.28
Spot Gold 1853
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 31/05/22 World 532,022,539
Deaths 6,311,923
AMP Capital chief economist Shane Oliver doesn’t see the recession writing on the wall either, at least not for another 18 months.
Never believe anything in economics until it’s been officially denied, has stood commodity traders test of time, so I think poor Mr. Oliver might be wrong in his timing.
Another month-end and time to dress up stocks and stock indexes? Well probably, but rising inflation and rising interest rates create a death spiral for nearly all stocks.
It might be hard this final day of May to get the usual dress up the markets stock rally. I suspect a whole lot of insiders are now looking to exit on rallies.
In the rump European Union, crude oil madness is driving up the global oil price. Impoverishing Europe’s poorest in pursuit of “saving” the Ukraine.
Bringing on the next global recession while contributing to the Anglo-American proxy war against Russia, in reality.
Time to add to physical, fully paid up, locally held gold and silver outside of the banking system.
As George W. Bush famously, so eloquently said back in 2008, “this sucker could go down.” Back then he was only talking about the stock casinos if money wasn’t “loosened up.”
Now, thanks to our new unnecessary European proxy war, risking a foodstuffs catastrophe later this year, the sucker that could go down is the current global order, financial and social.
Asia-Pacific stocks mixed; data shows China’s factory activity contracted again in May
SINGAPORE — Shares in Asia-Pacific were mixed in Tuesday trade as investors watched for market reaction to the release of official Chinese factory activity data for May. Oil prices rose after EU leaders agreed to ban 90% of Russian crude.
The Shanghai Composite in mainland China advanced 0.75% while the Shenzhen Component jumped 1.212%. Hong Kong’s Hang Seng index climbed 0.43%.
China’s official manufacturing Purchasing Managers’ Index for May came in at 49.6, an improvement over April’s reading of 47.4.
The May reading was above the 48.6 level expected from a Reuters poll but still below the 50-point mark that separates growth from contraction. PMI readings are sequential and represent month-on-month expansion or contraction.
“Things are … improving, but not good enough,” Bo Zhuang, senior sovereign analyst at Loomis Sayles, told CNBC’s “Street Signs Asia” on Tuesday.
The worst of the “growth shock” of the Covid wave in China may be behind, but the country is still seeing “a very gradual, slow progress of the normalization,” he said.
The Nikkei 225 in Japan sat close to the flatline while the Topix index declined 0.25%. Over in South Korea, the Kospi climbed 0.29%.
Australian stocks were lower as the S&P/ASX 200 fell 0.54%.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged 0.15% higher.
Markets in the U.S. were closed on Monday for a holiday.
Oil prices rise after EU agrees on Russia sanctions
Oil prices were higher during Asia trading hours, after European Union leaders agreed to ban most Russian oil by the end of 2022.
The agreement would “effectively cut around 90% of oil imports from Russia to the EU by the end of the year,” European Commission President Ursula von der Leyen said in a tweet.
International benchmark Brent crude futures gained 0.93% to $122.80 per barrel. U.S. crude futures jumped 2.77% to $118.26 per barrel.
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Finally, once you start a war strange things happen. You can never tell how things will turn out.
Russian-controlled Kherson region in Ukraine starts grain exports to Russia – TASS
May 30, 2022 10:27 AM GMT+1
May 30 (Reuters) - The Russian-controlled Ukrainian region of Kherson has begun exporting grain that was harvested last year to Russia, the TASS news agency cited a senior local official as saying on Monday.
"We have space to store (the new crop) although we have a lot of grain here. People are now partially taking it out, having agreed with those who buy it from the Russian side," said Kirill Stremousov, deputy head of the Military-Civilian Administration.
Stremousov was also cited as saying the administration was working on the supplies of sunflower seeds to local and Russian processing plants.
Ukraine has previously accused Russia of stealing its grain from the territories Moscow has occupied since launching what it calls a special military operation in February.
Serbia ignores EU sanctions, secures gas deal with Putin
BELGRADE, Serbia (AP) — As the war in Ukraine rages, Serbia’s president announced that he has secured an “extremely favorable” natural gas deal with Russia during a telephone conversation Sunday with Russian President Vladimir Putin.
Serbian President Aleksandar Vucic has refused to explicitly condemn Russia’s invasion of Ukraine, and his country has not joined Western sanctions against Moscow. Vucic claims he wants to take Serbia into the European Union but has spent recent years cementing ties with Russia, a long-time ally.
The gas deal is likely to be signed during a visit by Russian Foreign Minister Sergey Lavrov to Belgrade early in June — a rare visit by a ranking Russian official to a European country since the Russian invasion of Ukraine began Feb. 24.
Vucic said he told Putin that he wished “peace would be established as soon as possible.”
Serbia is almost entirely dependent on Russian gas, and its main energy companies are under Russian majority ownership.
“What I can tell you is that we have agreed on the main elements that are very favorable for Serbia,” Vucic, a former pro-Russian ultranationalist, told reporters. “We agreed to sign a three-year contract, which is the first element of the contract that suits the Serbian side very well.”
It is not clear how Serbia would receive the Russian gas if the EU decides to shut off the Russian supply that travels over its member countries. Russia has already cut off gas exports to EU members Finland,Poland and Bulgaria.
----Despite reports of the atrocities in Ukraine due to the invasion, Vucic and other Serbian leaders have been complaining of Western pressure to join sanctions against Russia. Serbian officials say the Balkan country must resist such pressure, even if it means abandoning the goal of joining the EU.
Under Vucic’s 10-year autocratic rule and relentless pro-Kremlin propaganda, Serbia has gradually slid toward aligning with Russia. Polls suggest a majority in the country would rather join some sort of a union with Moscow than the EU.
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"The world has a way of undermining complex plans."
Carl von Clausewitz.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
…. while the price of an 800 gram loaf of bread rose by 16% to 54 pence.
Maybe, but my white or wholemeal loaf only costs 34 pence at Morrison's, down from 36 pence last year.
Cost of pasta and bread surges for Britain's poorest
May 30, 2022 11:20 AM GMT+1
LONDON, May 30 (Reuters) - Britain's cheapest brands of pasta and bread have surged in price over the past year, but overall the cost of lower-priced food and drink staples has risen at a similar pace to average prices, the Office for National Statistics said.
Anti-poverty campaigners have pointed to sharp price rises in the cheapest categories of many food staples, and surveys have shown growing numbers of Britons skipping meals as they are squeezed by the highest consumer price inflation in 40 years. read more
Last week Britain's government announced 15 billion pounds of grants to households to pay soaring energy bills, on top of 22 billion pounds of support earlier this year. read more
The cost of the cheapest 500 gram (17.6 oz) pack of pasta at a British supermarket last month was 53 pence ($0.67), a 50% increase from 36 pence a year earlier, while the price of an 800 gram loaf of bread rose by 16% to 54 pence.
In cash terms, the biggest increase was in the cost of 500 grams of minced beef, which rose by 32 pence to 2.34 pounds, a 16% increase.
However, average prices for the cheapest brands of food and drink across 30 staple categories rose by 6-7%, the ONS said, the same as for food and drink overall.
"There is considerable variation across the 30 items, with the prices for six items falling over the year, but the prices of five items rising by 15% or more," the ONS said.
The cost of potatoes fell 14%, cheese prices were down 7% and pizzas cost 4% less than a year before.
The ONS described its analysis as "highly experimental" and said the results were sensitive to the exact goods chosen in particular categories.
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https://www.reuters.com/world/uk/uks-cheapest-groceries-rising-similar-pace-average-ons-2022-05-30/
German inflation hits record high of 7.9% in May
Updated / Monday, 30 May 2022 14:26
German inflation reached its highest level in nearly half a century in May, a result of energy and food prices that have only gone higher and higher since the start of the war in Ukraine.
Consumer prices, harmonised to make them comparable with inflation data from other European Union countries (HICP), increased an annual 8.7%, the Federal Statistics Office said today.
The last time inflation had been similarly high in Germany was during the winter of 1973/1974, when mineral oil prices spiked as a result of the first oil crisis, said the office.
The figure, which beat the 8% predicted by analysts in a Reuters poll, marks a second month in a row of record highs, after April's rise of 7.8% was the biggest in four decades.
According to the office, energy prices rose by 38.3% in May compared to the same month last year, while food prices also rose at an above-average rate of 11.1%.
Holger Schmieding, chief economist at Berenberg Bank, said there is still some inflationary pressure in the pipeline for goods affected by supply bottlenecks and food before the situation eases from autumn.
https://www.rte.ie/news/business/2022/0530/1302017-record-german-inflation-rate/
Global recession? Not yet, economists say — but brace for high prices, low growth
Published Mon, May 30 2022 12:58 AM EDT
A global recession is not imminent, but brace for rising costs and slower growth, economists say.
“There will be no sudden ‘after’ of stagflation,” said Simon Baptist, global chief economist at the Economist Intelligence Unit, referring to a surprise recession after a period of stagflation.
As the war in Ukraine and pandemic disruptions continue to wreak havoc on supply chains, stagflation — marked by low growth and high inflation — will stick around “for at least the next 12 months,” Baptist told CNBC last week.
“Commodity prices will start to ease from next quarter, but will remain permanently higher than before the war in Ukraine for the simple reason that Russian supplies of many commodities will be permanently reduced,” he added.
The pandemic as well as the war in Ukraine have stifled supply of commodities and goods and upended efficient distribution through global supply chains, forcing up prices of everyday goods such as fuel and food.
But, while higher prices will cause pain for households, growth in many parts of the world, while slow, is still ticking over and job markets have not collapsed.
Unemployment levels across many economies have reached their lowest in decades.
So, consumers — while wary of a repeat of the last global recession brought on by the U.S. subprime crisis over 10 years ago — need not start preparing for a recession.
“For almost all economies of Asia, a recession is fairly unlikely, if we’re talking about successive periods of negative GDP,” Baptist told CNBC’s Street Signs on Thursday.
Even if the global economy is at risk of a recession, many consumers have ample savings and have stocked up on household durables, the economist said.
“So to an extent, it won’t feel as bad as the immediate numbers look,” he said.
AMP Capital chief economist Shane Oliver doesn’t see the recession writing on the wall either, at least not for another 18 months.
“Yield curves or the gap between long-term bond yields and short-term rates have yet to decisively invert or warn of recession and even if they do now the average lead to recession is 18 months,” he said in a note.
He takes the view that a deep bear market can be avoided in the U.S. and in Australia.
At the same time, central banks across the globe are tightening up interest rates to combat inflation.
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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.
Today, more on the madness in Communist China, although it’s probably being taken as a blueprint for Australia, Canada and New Zealand next pandemic.
Beijing man sends 5,000 people into quarantine after breaking Covid isolation
Actions spark angry reactions amid growing frustration with China’s zero-Covid policy though some restrictions begin to ease
Mon 30 May 2022 06.16 BST Last modified on Mon 30 May 2022 06.17 BST
A Beijing man is under criminal investigation after he skipped out on mandated home isolation, prompting authorities to send his more than 5,000 neighbours into home or government quarantine. The actions by the man, who later tested positive, come as the Chinese capital and Shanghai begin to ease restrictions.
On Monday officials said the man, in his early 40s, had been told to isolate at home after he entered a shopping plaza deemed a risk area on 23 May. They alleged that during his period of isolation he “went out many times, and moved in the community, risking the spread of the epidemic”, before he and his wife tested positive five days later. In response, authorities ordered 258 people who lived in his building to go to government quarantine centre, and the more than 5,000 others who lived in the residential community to stay at home.
China has imposed harsh curbs on its population as it works to eliminate outbreaks of the highly transmissible Omicron variant of Covid-19. China’s zero-Covid policy has come under criticism for its significant negative impact on the economy and people, particularly in Shanghai, but the country’s leader, Xi Jinping has doubled down on demands that it continue, and succeed.
The strict measures have sparked widespread frustration and exhaustion among residents, but with reported case numbers now dropping and restrictions beginning to ease, online people reacted angrily to the actions of the Beijing man.
“It’s been two days since it’s been cleared, what is this man doing? Doesn’t he want to clear the epidemic in Beijing? Does he have to come out and harm people when the situation is almost stable?” said one commenter.
“The community and the patient each share 50% responsibility, as the community did not install a door magnetic alarm … and there was a management responsibility which the community should shoulder,” said another.
On Sunday authorities reported 122 new community cases across the country, outside quarantine settings and including 102 asymptomatic carriers. In Beijing just 12 locally transmitted cases were reported on Sunday, and libraries, museums, theatres and gyms were allowed to reopen in areas where there had been none for at least seven days.
Beijing authorities had sought to avoid a mass lockdown but instead imposed travel curbs, enforced working from home in some districts, closed public venues, and conducted targeted lockdowns of individual buildings and areas.
In Shanghai, a months-long lockdown is set to end on Wednesday, and the government has announced a swathe of economic stimulus measures designed to address damage. At an unprecedented meeting with more than 10,000 officials last week, premier Li Keqiang warned the economy was at a “critical point”, and there would be dire consequences if officials did not act swiftly, and balanced Covid controls with economic growth.
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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.
GEIC partner Watercycle Technologies secures funding for lithium extraction process
25 May 2022
Watercycle Technologies, a spin-out from The University of Manchester, has secured initial funding for an innovative technology that uses advanced graphene-based membranes and systems to extract lithium and other minerals from brines and water solutions.
Direct lithium extraction (DLE) is a vital process in the push towards self-sufficiency for the UK and Europe in lithium, a key component in modern battery technology.
Led by Sebastian Leaper, a former PhD student from the Department of Materials at Manchester, Watercycle Technologies has taken Tier 2 membership of the Graphene Engineering Innovation Centre (GEIC), with lab space and access to advanced 2D materials facilities and expertise in prototyping.
The pre-seed funding round has been led by Aer Ventures, an investor focused on innovations around sustainability.
Recovery from battery recycling
Watercycle Technologies has already demonstrated that its solutions can extract lithium from UK-based brines and can recover it from lithium batteries during the recycling process. This investment will allow the business to further develop their prototype solutions and test them at scale at live extraction and recycling locations.
The technology also shows the potential to refine the lithium up to battery-grade, which will allow the processing of battery-grade lithium to occur at production sites around the world. Together, these capabilities could significantly improve the environmental footprint of lithium production for EVs.
Dr Sebastian Leaper, CEO of Watercycle Technologies Limited, explains: “Our lives are increasingly dependent on the ebb and flow of lithium ions. They store and transport an ever-greater portion of the energy we need for our devices, cars and power grid and enable us to transition away from fossil fuels.
“Access to significant quantities of low-cost, low-carbon lithium is fundamental to tackling climate change and we at Watercycle Technologies are striving to make this possible,” he adds. "We are very grateful for the support of Aer Ventures in this journey, as they share our ambition to help build a sustainable, circular economy for future generations to enjoy."
Chris Rowley, Managing Partner of Aer Ventures, said: “Watercycle Technologies is exactly the type of business we exist to support. With a sustainable vision and a proven technology, the business has the potential to solve one of our major environmental problems – the need for critical minerals to support the transition to Net Zero.
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"The difficulty of accurate recognition constitutes one of the most serious sources of friction in war, by making things appear entirely different from what one had expected."
Carl von Clausewitz.
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