Baltic Dry Index. 2349 -135 Brent Crude 109.65
Spot Gold 1834 US 2 Year Yield 3.06 -0.15
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 23/06/22 World 546,647,270
Deaths 6,345,737
It's a recession when your neighbor loses his job; it's a depression when you lose yours.
Harry S Truman.
In the stock casinos, more gloom as recession fears rise. Even Fed Chairman Powell admitted that a hard landing recession is possible as the Federal Reserve is serious about getting US inflation back down from officially 8 percent to its 2 percent target.
Well if he says so, he must mean it, I mean he wouldn’t lie about fighting inflation, would he?
Still that would mean the Fed raising its key interest rate far
closer to 8 percent, which will blow up many deeply over indebted firms and
businesses, wreak havoc on President Biden’s Democrats in the November mid-term
elections and probably turn President Carter Biden into yet another one
term president.
But if he says so, recession here we come.
Asia-Pacific markets mixed as oil falls around 2%
SINGAPORE — Shares in the Asia-Pacific were mixed on Thursday as investors continued to monitor recession concerns.
Hong Kong’s Hang Seng index rose nearly 1%, and the Hang Seng Tech index gained 1.42%.
Mainland Chinese markets struggled for direction initially, but last traded higher. The Shanghai Composite was up 0.58%, and the Shenzhen Component was 0.782% higher.
Japan’s stock indexes dipped. The Nikkei 225 was down 0.3%, and the Topix fell 0.25%.
South Korea’s Kospi gave up early gains to fall 1.46%, and the Kosdaq declined 3.76%.
In Australia, the S&P/ASX 200 was fractionally higher.
MSCI’s broadest index of Asia-Pacific shares outside Japan down 0.42%.
In economic data, Singapore is set to release its inflation numbers on Thursday.
After a bounce on Tuesday, U.S. stocks traded lower overnight.
The Dow Jones Industrial Average declined 47.12 points, or 0.15%, to 30,483.13. The S&P 500 slipped 0.13% to 3,759.89. The Nasdaq Composite was down 0.15% at 11,053.08.
Clifford Bennett, chief economist at ACY Securities, said there have been very strong attempts to buy the bottom, but the market has only been able to trade sideways.
“The daily percentage changes sound big to the upside when they happen, but this is a relativity game, and on that basis the rallies have remained modest to say the least,” he said.
“In the background, the true fundamental outlook continues to deteriorate,” he added.
----“Recession or hard landing fears have taken a firmer hold on most markets in the past 24 hours,” Ray Attrill, head of FX strategy at National Australia Bank, wrote in a note.
Oil futures declined in Asia trade. Brent crude futures, the international benchmark, fell 2.52% to $108.92 per barrel. U.S. crude futures fell 2.73% to $103.29 per barrel.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 104.124.
The Japanese yen traded at 135.34 per dollar, strengthening slightly after it weakened beyond 136 against the greenback earlier this week. The Australian dollar was at $0.6891 after falling from above $0.702 last week.
https://www.cnbc.com/2022/06/23/asia-pacific-markets-recession-fears-oil-prices-currencies.html
In other news away from the stock casinos, supply chain disruption continues to drag on the global economy. Recession looms.
World’s largest truck maker says it’s facing enormous supply chain pressure
Published Wed, Jun 22 2022 6:22 AM EDT Updated An Hour Ago
Supply chain disruptions are still rippling across the globe, and the head of the world’s largest truck maker has warned that parts shortages are slowing the production of thousands of its vehicles.
Daimler Truck CEO Martin Daum told CNBC Wednesday that the current supply chain squeeze is among the worst he’s seen in his more than 25-year career, resulting in major bottlenecks across the company’s suite of brands.
“We are facing enormous pressure on the supply chain,” said Daum, whose trucks are used for other vital industries such as logistics and construction.
“I would say it’s one of the worst years ever in my long career in trucking, where we sometimes have to touch a truck three, four times to add the missing parts,” he added.
The Mercedes-Benz Truck maker said earlier this month that there were signs that a prolonged chip shortage appeared to be easing. Microchips, or semiconductors, are a critical component of modern auto manufacturing, and they fell into short supply during the height of the Covid-19 pandemic and resultant factory closures.
But Daum said that shortages of other parts are also continuing to slow the production of thousands of trucks across its international network of factories.
“We have, in a couple of factories, more than 10,000 trucks where one or two parts are missing and we desperately search the world for those parts,” he said.
Inflationary pressures, too, are weighing heavily on Daimler Truck’s production, as the costs of energy and raw materials are now significantly higher — with some price hikes easier to pass on than others.
“We are, at the moment, pushing those price increases on the raw materials side through, so we can at least hold our margins in that business,” he said. The company is also in negotiations over employee pay raises.
Still, the truck manufacturer, whose other brands include Freightliner, Western Star and Fuso, noted some bright spots. In the United States alone, Daum said, it sees pent-up demand for some 200,000 trucks as it continues to catch up with supply shortfalls through 2020 and 2021.
More
https://www.cnbc.com/2022/06/22/daimler-trucks-says-its-facing-enormous-supply-chain-pressure.html
Crypto fears now materialising, central bank body BIS says
June 21, 2022 12:18 PM GMT+1
LONDON, June 21 (Reuters) - Recent implosions in the cryptocurrency markets indicate that long-warned-about dangers of decentralised digital money are now materialising, the Bank for International Settlements has said.
The BIS, the global umbrella body for central banks, sounded the warning in an upcoming annual report, in which it also urged more effort in developing appealing central bank digital currencies.
BIS general manager Agustin Carstens pointed to recent collapses of the TerraUSD and luna 'stablecoins', and a 70% slump in bitcoin, the bellwether for the crypto market, as indicators that a structural problem exists.
Without a government-backed authority that can use reserves funded by taxes, any form of money ultimately lacks credibility."
"I think all these weaknesses that were pointed out before have pretty much materialised," Carstens told Reuters. "You just cannot defy gravity... At some point you really have to face the music".
Analysts estimate that the overall value of the crypto market has slumped more that $2 trillion since November as its troubles have snowballed. read more
Carstens said the meltdown was not expected to cause a systemic crisis in the way that bad loans triggered the global financial crash. But he stressed losses would be sizeable and that the opaque nature of the crypto universe fed uncertainty.
"Based on what we know, it should be quite manageable," Carstens said. "But, there are a lot of things that we don't know."
The BIS is a long-term sceptic of cryptocurrencies and its report laid its vision for the future monetary system - one where central banks utilise the tech benefits of bitcoin and its ilk to create digital versions of their own currencies.
Roughly 90% of monetary authorities are now exploring CBDCs as they are known. Many hope it will equip them for the online world and fend off cryptocurrencies. But the BIS wants to coordinate key issues such as making sure they work across borders.
The immediate challenges are mainly technological, similar to how the mobile phone world needed standardised coding in the 1990s. But there is also the geopolitical issue as relations between the West and countries such as China and Russia wane.
"This (interoperability) is a topic that has been on the G20 agenda for quite some time.. so I think there is a good chance for this to move forward," Carstens said, adding how there had been a number of "real-life" trials with different CBDCs over the last year.
More
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Powell tells Congress the Fed is ‘strongly committed’ on inflation, notes recession is a ‘possibility’
Federal Reserve Chairman Jerome Powell told congressional lawmakers Wednesday that the central bank is determined to bring down inflation and has the ability to make that happen.
“At the Fed, we understand the hardship high inflation is causing. We are strongly committed to bringing inflation back down, and we are moving expeditiously to do so,” the Fed chief said in remarks for the Senate Banking Committee. “We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses.”
Along with expressing resolve on inflation, Powell said economic conditions are generally favorable, with a strong labor market and persistently high demand.
But Sen. Elizabeth Warren, D-Mass., warned Powell that the continued rate hikes could “tip this economy into recession” without stopping inflation.
“You know what’s worse than high inflation and low unemployment is high inflation and a recession with millions of people out of work, and I hope you’ll reconsider that before you drive the economy off a cliff,” she said.
Though Powell said he believes the economy is strong now, he acknowledged a recession could happen.
“It’s certainly a possibility,” he said. “It’s not our intended outcome at all, but it’s certainly a possibility, and frankly the events of the last few months around the world have made it more difficult for us to achieve what we want, which is 2% inflation and still a strong labor market.”
Achieving a “soft landing,” in which policy tightens without severe economic circumstances such as a recession, will be difficult, he added.
More
UK inflation hits new 40-year high of 9.1% as food and energy price surge persists
Published Wed, Jun 22 2022 2:08 AM EDT Updated 4 Hours Ago
LONDON — U.K. inflation hit 9.1% year-on-year in May as soaring food and energy prices continue to deepen the country’s cost-of-living crisis.
The 9.1% rise in the consumer price index, released Wednesday, was in line with expectations from economists in a Reuters poll and slightly higher than the 9% increase recorded in April.
Consumer prices rose by 0.7% month-on-month in May, slightly above expectations for a 0.6% rise but well short of the 2.5% monthly increase in April, indicating that inflation is slowing somewhat.
In its communications alongside the figures on Wednesday, the U.K.’s Office for National Statistics said its estimates suggested that inflation “would last have been higher around 1982, where estimates range from nearly 11% in January down to approximately 6.5% in December.”
The largest upward contributions to the inflation rate came from housing and household services, primarily electricity, gas and other fuels, along with transport (mostly motor fuel and second-hand cars).
The Consumer Prices Index including owner occupiers’ housing costs (CPIH) came in at 7.9% in the 12 months to May, up from 7.8% in April.
“Rising prices for food and non-alcoholic beverages, compared with falls a year ago, resulted in the largest upward contribution to the change in both the CPIH and CPI 12-month inflation rates between April and May 2022 (0.17 percentage points for CPIH),” the ONS said in its report.
The Bank of England last week implemented a fifth consecutive hike to interest rates, though stopped short of the aggressive hikes seen in the U.S. and Switzerland, as it looks to tame inflation without compounding the current economic slowdown.
The main bank rate currently sits at a 13-year high of 1.25% and the Bank expects CPI inflation to exceed 11% by October.
The U.K.’s energy regulator increased the household energy price cap by 54% from April 1 to accommodate a surge in wholesale energy prices, including a record rise in gas prices, and has not ruled out further increases to the cap at its periodic reviews this year.
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.
With Covid-19 starting to become only endemic, this section is close to coming to its end.
Only major news will be reported.
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.
Toyota will recycle electric vehicle batteries with Tesla co-founder’s project
Redwood Materials wants to contribute to EV production
Toyota is partnering with Redwood Materials, a battery recycling company helmed by Tesla co-founder JB Straubel, to collect and recycle vehicle batteries. The plan is to take old, worn-out batteries and either refurbish them or break them down so their materials can be used to create new batteries.
Redwood specifically plans on producing materials for anodes and cathodes — two major components of a battery cell. The company’s ultimate goal is to create a “closed-loop supply chain for electric vehicles,” meaning that it takes batteries from old EVs and turns them into batteries for new cars.
While Toyota is currently launching its first long-range battery-electric vehicle, newer cars aren’t the current focus of the partnership’s efforts, given that their batteries are still relatively new.
Instead, Toyota and Redwood are focusing on “the first wave of battery-electric vehicles,” which are over 20 years old and nearing their end of life. Mostly, that means first-generation Toyota Priuses in California. Redwood says that in the future, it wants to have some operations near “Toyota’s recently announced North American battery plant” on the East Coast, likely referring to the one in North Carolina.
Notably, Redwood’s tech and methods for recycling vehicle batteries aren’t exactly tried-and-true. The company just launched its program to deal with end-of-life electric vehicles in February, with Ford and Volvo as partners. While Redwood’s been planning to handle batteries from vehicles for a while, its capacity to do so at scale is relatively untested.
On Tuesday, the company says it receives around six gigawatt-hours worth of batteries a year for recycling — it hopes to be producing 100 GWh worth of components by 2025 and five times that by 2030.
Those plans seem ambitious, to say the least. But as Bloomberg points out, there’s a lot of incentive. Making EV batteries is extremely expensive, and some companies are struggling to do it at scale, which hampers their ability to make EVs. It doesn’t seem like that process is going to be getting cheaper any time soon, so there is definitely incentive for automakers to look for and help fund recycling efforts.
People stop buying things, and that is how you turn a slowdown into a recession.
Janet Yellen.
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