Baltic Dry Index. 3369 +25 Brent Crude 112.71
Spot Gold 1856
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 24/05/22 World 528,280,106
Deaths 6,301,824
“The five marks of the Roman decaying culture:
Concern with displaying affluence instead of building wealth;
Obsession with sex and perversions of sex;
Art becomes freakish and sensationalistic instead of creative and original;
Widening disparity between very rich and very poor;
Increased demand to live off the state.”
Edward Gibbon, The Decline and Fall of the Roman Empire.
In the stock casinos, more exit rally. Whipsaw markets become the norm. But few make money in whipsaw markets. As losses mount, liquidity dries up making whipsaws even worse.
Due to war, inflation and most of all a switch from 40+ years of falling interest rates, ZIRP and in Europe NIRP, we have transitioned from buy the dip into sell the rally, but this change is not yet widely accepted.
Few
professional money managers today have experience of the wild west 70s and 80s.
Almost none remember America defaulting on August 15, 1971. The financialised fiat
currency system breaking down on October 19, 1987, requiring the first of
almost continuous central bank bailouts every few years, to prop up the banks
and stock markets at everyone else’s expense
Now, thanks to the Magic Money Tree forests discovered in March 2020 turning into a swamp, we are getting close to the end of the Great Nixonian Error of fiat money.
The dollar reserve system has been irretrievably weaponised.
Yesterday President Biden threatened war with China over Taiwan, albeit quickly walked back by saner heads in Washington, District of Crooks.
But such is the unstable “leadership” of the west.
Tomorrow will not be like today which was largely like yesterday.
Tomorrow, looks to be a world of food scarcity, social unrest, debt default, rapidly declining living standards.
Much of our financialised central bankster fuelled gambling economy is simply going to disappear.
Chinese stocks little changed as investors weigh possible U.S. tariff cut on China goods
SINGAPORE — Markets in Asia-Pacific were subdued in Tuesday trading, as investors weighed a possible thawing of U.S.-China trade relations as U.S. President Joe Biden floated the idea of tariff cuts on Chinese goods.
Chinese stocks were little changed in early trade. Hong Kong’s Hang Seng index was 0.43%. The Shanghai Composite was flat, while the Shenzhen Component declined 0.35%.
In Japan, the Nikkei 225 was down 0.42%, while the Topix was lower by 0.34%.
Japan’s manufacturing activity for May increased at the slowest pace in three months, as supply bottlenecks caused output to slow, according to Reuters.
In corporate news, Toyota Motor said Tuesday it will cut global production by around 100,000 to 850,000 in June, due to the semiconductor shortage. Shares of the Japanese automaker were up 0.29% in the morning.
South Korea’s Kospi was down 0.8%.
In Australia, the S&P/ASX 200 sat just above the flatline. MSCI’s broadest index of Asia-Pacific shares outside Japan was lower by 0.43%
U.S. markets offered some relief for investors as stocks rallied following a week of sharp losses. During Monday’s regular trading session, the Dow jumped 618 points, or nearly 2%, the S&P 500 rose 1.9% and the Nasdaq Composite gained 1.6%.
Sentiment appeared to have gotten a boost after U.S. President Joe Biden said he was considering cutting U.S. tariffs on Chinese goods, at a press confidence during his trip in Japan as part of his first Asia tour.
----“Markets seemed to take the news as indicative of a potential thawing of US-China trade tensions, though it isn’t the first time tariff reductions have been floated,” wrote Taylor Nugent, an economist at the National Australia Bank. ”While a cut to tariffs would help soften US inflation at the margin, reports suggest administration officials are concerned about appearing soft on China ahead of November congressional elections.”
In other trade news, the U.S. announced on Monday the Indo-Pacific Economic Framework with Asian partners including Australia, Japan and South Korea. The group wants to set international rules on the digital economy, supply chains, decarbonization and regulations applying to workers.
More
https://www.cnbc.com/2022/05/24/asia-pacific-markets-us-china-tariffs-oil-and-currencies.html
Stock futures fall after Dow’s 600-point comeback
Stock futures fell early Tuesday morning as the markets struggled to sustain a comeback rally following weeks of losses.
Futures on the Dow Jones Industrial Average fell 149 points, or 0.47%. S&P 500 futures dipped 0.76% and Nasdaq 100 futures dropped 1.33%.
Zoom Video shares popped 6% in extended trading after sharing strong guidance for the second quarter while Snap shares plummeted more than 28% as the company said it’s bracing to miss earnings and revenue targets in the current quarter and warned of a hiring slowdown.
The moves came as the markets staged a rebound from last week’s steep market sell-off, which saw the Dow hit its first eight-week losing streak since 1923, and the S&P 500 briefly fall into bear market territory on an intraday basis.
Stocks rallied during Monday’s regular trading session as the Dow jumped 618 points, or nearly 2%, following a week of sharp losses. The S&P 500 rose 1.9%, and the Nasdaq Composite gained 1.6%.
The moves left investors wondering whether the bounce can hold or if it was yet another minor relief rally amid the relentless sell-off that has yet to reach a bottom.
“This kind of environment where you’ve got the whipsaw and ups and downs that are so big is a trading environment where it can feel on any given day like you were wrong yesterday and that is ripe for mistakes,” Sofi’s head of investment strategy Liz Young told CNBC’s “Closing Bell: Overtime.”
Bank stocks contributed to Monday’s gains led by JPMorgan, which jumped 6.2% after the company said it will reach key targets earlier than expected with the help of rising rates. VMware shares soared nearly 25% on news that Broadcom is reportedly in talks to acquire the clouder service provider.
Monday’s market rally was broad-based, with 11 sectors positive, led by financials. The sector added 3.23% and saw its best day since March 9.
Investors are looking ahead to new home sales and a speech from Fed Chair Jerome Powell at the National Center for American Indian Enterprise Development summit on Tuesday. Nordstrom, Best Buy, and Ralph Lauren are also slated to report earnings.
https://www.cnbc.com/2022/05/23/stock-market-futures-open-to-close-news.html
But.
Goldman Sachs expects more China real estate defaults, switches to bear case
BEIJING — Chinese real estate defaults have increased so much that Goldman Sachs analysts have shifted to their worst-case scenario for the riskiest part of the market.
Twenty-two China high-yield bond issuers, all related to the property sector, have either defaulted on their U.S. dollar-denominated bonds or deferred repayment with bond exchanges since the start of this year, analysts Kenneth Ho and Chakki Ting wrote in a report Friday.
“Given the pick up in stresses, we raise our FY22 China Property HY default rate forecast to 31.6% (from 19.0% previously), which was our previous bear case assumption,” the analysts said.
They also raised their estimate for the Asia high yield corporate default rate to 15.5%, up from 9.3% previously, since Chinese property dominates the category. The new forecast is slightly lower than the 17.8% default rate last year, according to the report.
Real estate and related industries account for more than a quarter of China’s economy, according to Moody’s estimates.
Beijing has tried to tamp down on speculation in its once-hot property market. In the last two years, regulators have focused specifically on reducing property developers’ reliance on debt for growth. Some companies have adjusted, but others like Evergrande have worried investors with the size of their debt and potential fallout from large-scale default.
“We are unlikely to see a broader recovery in China Property HY until property sales begin to show signs of a rebound,” the same Goldman analysts wrote in a separate report Friday.
“We believe further easing measures are likely required before property sales can recover, particularly with Covid restrictions in place across a number of cities in China,” they said, noting they expect stronger developers will perform much better than weaker ones in the current environment.
Since March, mainland China has faced its worst Covid outbreak in two years, resulting in travel restrictions and stay home orders in many parts of the country, especially the metropolis of Shanghai.
With agents and potential buyers unable to view properties — on top of an already weak market — sales have plunged.
Daily property transaction volume across 30 major cities was down 50% year-on-year in May, according to separate Goldman analysis released Monday.
More
Henry Kissinger says Taiwan cannot be at the core of negotiations between the U.S. and China
Veteran U.S. diplomat Henry Kissinger on Monday said that Washington and Beijing must seek to avoid putting Taiwan at the center of their tense diplomatic relationship, adding that the need for the world’s two largest economies to avoid direct confrontation is in the interest of global peace.
His comments come shortly after President Joe Biden said the U.S. would be prepared to intervene militarily if China invaded the democratic, self-governed island.
Biden’s remarks appeared to mark a break in Washington’s deliberate and long-held tradition of “strategic ambiguity” over Taiwan. The White House quickly sought to downplay the comments, saying they do not reflect a change in policy.
Speaking at the World Economic Forum in a rare springtime version of Davos, Kissinger said: “The United States should not by subterfuge or by a gradual process develop something of a ‘two-China’ solution, but that China will continue to exercise the patience that has been exercised up until now.”
“A direct confrontation should be avoided and Taiwan cannot be the core of the negotiations because it is between China and the United States.”
Earlier on Monday, Biden told reporters at a joint news conference with Japanese Prime Minister Fumio Kishida that the U.S. would be prepared to defend Taiwan if Beijing invaded.
The comments prompted a backlash from China’s Foreign Ministry, which expressed “strong dissatisfaction and firm opposition” to the remarks.
Under the “one China” policy, a cornerstone of diplomatic relations between Washington and Beijing, the U.S. diplomatically acknowledges China’s position that there is only one Chinese government.
However, the U.S. also maintains a “robust unofficial” relationship with Taiwan, and Washington supplies military equipment to the island in accordance with the 1979 Taiwan Relations Act. This act does not require the U.S. to intervene militarily to defend Taiwan if China invades, but makes it a policy to ensure the island has the resources to defend itself and to deter Beijing from unilaterally unifying the island.
China claims Taiwan is part of its own territory and has been putting pressure on the democratic island to accept its rule.
‘Important for overall peace’
“For the core of the negotiations, it is important that the United States and China discuss principles that affect the adversarial relationship that permits at least some scope for cooperative efforts,” Kissinger said.
“It is important for the overall peace of the world for the United States and China to mitigate their adversarial relationship,” he added.
More
Henry Kissinger: Ukraine must give Russia territory
Mon, May 23, 2022, 6:48 PM
Veteran US statesman Henry Kissinger has urged the West to stop trying to inflict a crushing defeat on Russian forces in Ukraine, warning that it would have disastrous consequences for the long term stability of Europe.
The former US secretary of state and architect of the Cold War rapprochement between the US and China told a gathering in Davos that it would be fatal for the West to get swept up in the mood of the moment and forget the proper place of Russia in the European balance of power.
Dr Kissinger said the war must not be allowed to drag on for much longer, and came close to calling on the West to bully Ukraine into accepting negotiations on terms that fall very far short of its current war aims.
“Negotiations need to begin in the next two months before it creates upheavals and tensions that will not be easily overcome. Ideally, the dividing line should be a return to the status quo ante. Pursuing the war beyond that point would not be about the freedom of Ukraine, but a new war against Russia itself,” he said.
He told the World Economic Forum that Russia had been an essential part of Europe for 400 years and had been the guarantor of the European balance of power structure at critical times. European leaders should not lose sight of the longer term relationship, and nor should they risk pushing Russia into a permanent alliance with China.
“I hope the Ukrainians will match the heroism they have shown with wisdom,” he said, adding with his famous sense of realpolitik that the proper role for the country is to be a neutral buffer state rather than the frontier of Europe.
The comments came amid growing signs that the Western coalition against Vladimir Putin is fraying badly as the food and energy crisis deepens, and that sanctions may have reached their limits.
“We’re seeing the worst of Europe,” said German vice-chancellor Robert Habeck in an angry outburst in Davos, accusing Hungary and other recalcitrant states of paralysing attempts by the rest of the EU to craft a full-fledged oil embargo.
More
https://www.yahoo.com/news/henry-kissinger-warns-against-defeat-174812366.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.
Economic outlook has 'darkened', business and government leaders warn in Davos
May 24, 2022 4:35 AM GMT+1
DAVOS, Switzerland, May 23 (Reuters) - Multiple threats to the global economy topped the worries of the world's well-heeled at the annual Davos think-fest on Monday, with some flagging the risk of a worldwide recession.
Political and business leaders gathering for the World Economic Forum (WEF) meet against a backdrop of inflation at its highest level in a generation in major economies including the United States, Britain and Europe.
These price rises have undermined consumer confidence and shaken the world's financial markets, prompting central banks including the U.S. Federal Reserve to raise interest rates.
Meanwhile, the repercussions on oil and food markets of Russia's invasion of Ukraine in February - which Moscow describes as a "special military operation" - and COVID-19 lockdowns in China with no clear end have compounded the gloom.
"We have at least four crises, which are interwoven. We have high inflation ... we have an energy crisis... we have food poverty, and we have a climate crisis. And we can't solve the problems if we concentrate on only one of the crises," German Vice Chancellor Robert Habeck said.
"But if none of the problems are solved, I'm really afraid we're running into a global recession with tremendous effect .. on global stability," Habeck said during a WEF panel discussion.
The International Monetary Fund (IMF) last month cut its global growth outlook for the second time this year, citing the war in Ukraine and singling out inflation as a "clear and present danger" for many countries. read more
IMF Managing Director Kristalina Georgieva, speaking in Davos on Monday, said the war, tighter financial conditions and price shocks - for food in particular - have clearly "darkened" the outlook in the month since, though she is not yet expecting a recession.
Asked at a panel whether she expected a recession, Georgieva said: "No, not at this point. It doesn’t mean it is out of the question."
European Central Bank (ECB) President Christine Lagarde, due to speak in Davos on Tuesday, has warned that growth and inflation are on opposing paths, as mounting price pressures curb economic activity and devastate household purchasing power.
"The Russia-Ukraine war may well prove to be a tipping point for hyper-globalisation," she said in a blog post on Monday.
More
27 million tons of grain planned for export stuck in Ukraine
By Iurii Mykhailov 5/22/2022
The world is facing a surge in food prices while some countries will encounter a shortage of food and even a hunger, according to UN officials. This is the consequence of the war in Ukraine, which has already lasted three months.
In 2021, Ukraine harvested 107 million tons of grain and oilseeds. Up until the war began, the country managed to export 43 million tons of the 70 million tons expected. This means 27 million tons of grain planned for export is stuck in Ukraine. It is believed that up to 4 million tons of grain and oilseeds are in the terminals and on ships stranded in ports.
Sea Export Stopped
Up to 95% of grain exported from Ukraine has been by sea. But now two ports on the Azov Sea, namely, Mariupol and Berdiansk, and the Port of Kherson on the Black Sea are under Russian control. The Port of Mykolaiv, also on the Black Sea, was severely damaged. Three ports of the so-called Greater Odessa are blocked and waterways are mined.
There remain four Ukrainian ports on the Danube River, namely, Ust-Danube, Kiliia, Izmail, and Reni. However, they are obsolete and of limited throughput and cannot handle more than 300,000 tons of grain per month. Also, there are not enough barges to ship the necessary volume of grain to the nearest Romanian Port of Constanta on the Black Sea.
Bottleneck on the Railroad
After the Ukrainian sea ports were blocked, grain exporters turned their eyes to the railroad.
Cargo can be transshipped or transferred to European countries through 13 railway border crossings: four with Poland, two with Slovakia, two with Hungary, three with Romania and two with Moldova.
The designed throughput of these 13 railway border crossings is about 3,400 cars per day. This corresponds to approximately 220,000 tons of various cargo, of which 731 wagons or approximately 50,000 tons of grain can be transferred daily. Yet, only 20,000 tons of grain cross the border per day now.
The principal problem is that Ukrainian and European railroads use completely different gauges. For example, the Ukrainian railroad gauge is 1,520 mm (4 ft 1127/32 in) while European railroads use the standard 1,435 mm (4 ft 8.5 in) gauge. Therefore, Ukrainian and European gauge and rolling stock are completely different both in dimensions and parameters. And it isn’t possible to simply exchange cargo and goods and move rolling stock across the border. Thus, the transshipment from the Ukrainian cars to European cars in points where Ukrainian gauge 1,520 mm and European gauge 1,435 mm are adjacent isn't feasible.
The second way is to change wheel sets on the Ukrainian car. There are five wheel set change points, but they are not used much due to the difference in dimensions of Ukrainian and European cars. Each time it is necessary to match the route on which Ukrainian cars with the changed wheel sets can move. There are only a few such routes. Therefore, this method of changing wheel sets is of limited use.
There are also three other problems. First, exporters use the existing border crossings unevenly. Of the 13 railway border crossings, only five operate at full capacity. These are Izov at the Polish border crossing, Uzhgorod, Chop, and Romanian border crossings. These five border crossings are fully loaded because exporters prefer to send cargo to these locations. The remaining eight border crossings are loaded only at 30% to 50% of their capacity. Exporters, therefore, should build new logistics chains outside the territory of Ukraine to fix with European carriers the movement of grain along the new routes.
The second problem is that the European infrastructure and carriers were not ready for a sharp increase in the volume of grain cargo transportation. European carriers did not have a sufficient number of grain cars with a gauge of 1,435 mm. They also don't have enough locomotive fleet to handle this additional flow of Ukrainian grain. And, of course, they have infrastructural limitations. For example, in Romania and Moldova sections have weight restrictions for the train, thus the weight of the train there must not exceed 2,700 tons while in Ukraine such trains run with a weight of 5,400 tons.
More
https://www.agriculture.com/news/crops/27-million-tons-of-grain-planned-for-export-stuck-in-ukraine
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.
Why China will likely recover more slowly from the latest Covid shock
BEIJING — China’s economy won’t be snapping back quickly from the latest Covid outbreak, many economists predict.
Instead, they expect a slow recovery ahead.
When the pandemic first hit in 2020, China bounced back from a first-quarter contraction to grow in the second quarter. This year, the country faces a far more transmissible virus variant, overall weaker growth and less government stimulus.
The latest Covid outbreak that began in March has hit the metropolis of Shanghai the hardest. About a week ago, the city announced plans to emerge from lockdown — and fully reopen by mid-June.
“For China, the main story here is we have seen the light at the end of the tunnel. The worst of supply chain dislocations in China from Covid lockdown looks to be over,” Robin Xing, Morgan Stanley’s chief China economist, said during a webinar Friday.
“But we also think the road to recovery will likely be slow and bumpy,” Xing said.
It’s a process of fits and starts. Over the weekend, a downtown Shanghai district again banned residents from leaving their apartment complexes to conduct mass virus testing. More parts of the capital city of Beijing ordered people to work from home as the local daily case count rose — reaching 83 on Sunday, the highest for the city’s latest outbreak.
Case in point: German automaker Volkswagen, which has factories in two of this year’s hardest-hit regions, said Wednesday its China production sites were up and running, but Covid controls were disrupting supply chains.
The automaker said it was unable to provide a specific figure on production levels as the factories are joint ventures operated with local partners.
Although the national Covid case count has fallen over the last month, pockets of new cases ranging from Beijing to southwest China have prompted stay-home orders and mass testing. Freight volumes remain below normal.
“Many regions and cities have tightened restrictions at the first sign of local cases,” Meng Lei, China equity strategist at UBS Securities, said in a note last week.
“Our case studies of Shanghai, Jilin, Xi’an and Beijing show logistical and supply chain disruptions are the biggest pain points that affect production resumption,” Meng said. “Therefore work resumption is likely to be gradual rather than happening overnight.”
More
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.
Long-hypothesized 'next generation wonder material' created
Scientists have successfully synthesized graphyne, which has been theorized for decades
Date: May 21, 2022
Source: University of Colorado at Boulder
Summary: New research fills a longstanding gap in carbon material science, potentially opening brand-new possibilities for electronics, optics and semiconducting material research.
For over a decade, scientists have attempted to synthesize a new form of carbon called graphyne with limited success. That endeavor is now at an end, though, thanks to new research from the University of Colorado Boulder.
Graphyne has long been of interest to scientists because of its similarities to the "wonder material" graphene -- another form of carbon that is highly valued by industry whose research was even awarded the Nobel Prize in Physics in 2010. However, despite decades of work and theorizing, only a few fragments have ever been created before now.
This research, announced last week in Nature Synthesis, fills a longstanding gap in carbon material science, potentially opening brand-new possibilities for electronics, optics and semiconducting material research.
"The whole audience, the whole field, is really excited that this long-standing problem, or this imaginary material, is finally getting realized," said Yiming Hu, lead author on the paper and 2022 doctoral graduate in chemistry.
Scientists have long been interested in the construction of new or novel carbon allotropes, or forms of carbon, because of carbon's usefulness to industry, as well as its versatility.
----However, these methods don't allow for the different types of carbon to be synthesized together in any sort of large capacity, like what's required for graphyne, which has left the theorized material -- speculated to have unique electron conducting, mechanical and optical properties -- to remain that: a theory.
But it was also that need for the nontraditional that led those in the field to reach out to Wei Zhang's lab group.
Zhang, a professor of chemistry at CU Boulder, studies reversible chemistry, which is chemistry that allows bonds to self-correct, allowing for the creation of novel ordered structures, or lattices, such as synthetic DNA-like polymers.
After being approached, Zhang and his lab group decided to give it a try.
Creating graphyne is a "really old, long-standing question, but since the synthetic tools were limited, the interest went down," Hu, who was a PhD student in Zhang's lab group, commented. "We brought out the problem again and used a new tool to solve an old problem that is really important."
Using a process called alkyne metathesis -- which is an organic reaction that entails the redistribution, or cutting and reforming, of alkyne chemical bonds (a type of hydrocarbon with at least one carbon-carbon triple covalent bond) -- as well as thermodynamics and kinetic control, the group was able to successfully create what had never been created before: A material that could rival the conductivity of graphene but with control.
"There's a pretty big difference (between graphene and graphyne) but in a good way," said Zhang. "This could be the next generation wonder material. That's why people are very excited."
More
“Lenin
is said to have declared that the best way to destroy the capitalist system was
to debauch the currency. By a continuing process of inflation, governments can
confiscate, secretly and unobserved, an important part of the wealth of their
citizens. By this method they not only confiscate, but they confiscate
arbitrarily; and, while the process impoverishes many, it actually enriches
some. The sight of this arbitrary rearrangement of riches strikes not only at
security but [also] at confidence in the equity of the existing distribution of
wealth.
Those to whom the system brings windfalls, beyond their deserts and even beyond
their expectations or desires, become "profiteers," who are the
object of the hatred of the bourgeoisie, whom the inflationism has
impoverished, not less than of the proletariat. As the inflation proceeds and
the real value of the currency fluctuates wildly from month to month, all
permanent relations between debtors and creditors, which form the ultimate foundation
of capitalism, become so utterly disordered as to be almost meaningless; and
the process of wealth-getting degenerates into a gamble and a lottery.
Lenin was certainly right. There is no subtler, no surer means of overturning
the existing basis of society than to debauch the currency. The process engages
all the hidden forces of economic law on the side of destruction, and does it
in a manner which not one man in a million is able to diagnose.”
JThe Economic Consequences of the Peace.
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