Baltic Dry Index. 2387 +103 Brent Crude 119.07
Spot Gold 1832 US 2 Year Yield 3.20 -0.25
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 16/06/22 World 542,520,420
Deaths 6,336,632
“Inflation can’t go down until it flattens out.”
Fed Chairman Powell.
And with that moronic statement from Fed Chairman Powell, the punters in the stock casinos trooped back in to try bottom fishing. Good luck with that.
Even with the Fed’s largest rate hike since 1994, not a good year for the Fed, the Fed is now at 1.50 to 1.75 percent, official inflation is at 8.60 percent, unofficial inflation at about 16.00 percent if calculated by the methodology of the 1970s and 80s.
The Powell Fed is completely out of touch with reality.
For more on the Fed’s delusion: “The committee’s statement painted a largely optimistic picture of the economy even with higher inflation.”
Asia-Pacific markets rise after largest Fed rate hike since 1994
SINGAPORE — Asia-Pacific markets rallied on Thursday tracking U.S. stocks after the Federal Reserve raised benchmark interest rates 75 basis points in a move that equates to the most aggressive hike since 1994.
The positive moves followed a tumble across the markets earlier this week following initial news of a strong move by the Fed and concerns of more Covid-related restrictions in mainland China mounted.
Japan’s Nikkei 225 rose 1.4% and it was a sea of green among the automakers and tech stocks. The Topix was up 1.26%.
Sony was up by more than 2%, Softbank Group rose by about 1.6% while Toyota jumped by 4%. Trade data released in the morning showed Japan ran a trade deficit after falls in the yen drove more imports.
In Hong Kong, the Hang Seng index fell by 0.5% with Tencent and Chow Tai Fook sinking by nearly 2 per cent in the first hour of trade.
In mainland China markets, the Shanghai Composite was muted, as it traded just below the flatline. The Shenzhen Component was up 0.36%.
In Australia, the S&P/ASX 200 was trading higher by about 0.5%. Rio Tinto, Fortescue Group and BHP were all pushing higher by nearly 2%.
Australia’s unemployment figures held steady at 3.9% in yet another signal that Australia’s Reserve Bank would, like the Fed and many other central banks, be staying on course to raise rates again. The unemployment rate has now been at 3.9% for three consecutive months but could fall to 3.5% at the end of the year, Capital Economics’ Ben Udy said.
Over in South Korea, the Kospi index also went up by 1.25% with big leaps by Samsung, Hyundai and Posco Holdings.
Following the rate hike in the U.S., Wall Street was volatile but market indexes rose to session highs after the Federal Open Market Committee took the level of its benchmark funds rate to a range of 1.5%-1.75% — the highest since just before the Covid pandemic began in March 2020.
Fed Chairman Jerome Powell also said during his afternoon press conference that, “either a 50 basis point or a 75 basis point increase seems most likely at our next meeting.”
The Dow Jones Industrial Average snapped a five-day losing streak, jumping 303.70 points, or 1%, to close at 30,668.53. The S&P 500 rose 1.46% to 3,789.99 while, the Nasdaq Composite gained 2.5% to end the day at 11,099.15.
The Fed said in a statement it was committed to bringing down inflation — currently at a high of 8.6 per cent — to 2%. It also said it would continue to reduce holdings of Treasury securities and agency debt and agency mortgage-backed securities.
More
https://www.cnbc.com/2022/06/16/asia-pacific-markets-fed-raises-rate-oil-prices-and-currencies.html
Fed hikes its benchmark interest rate by 0.75 percentage point, the biggest increase since 1994
The Federal Reserve on Wednesday launched its biggest broadside yet against inflation, raising benchmark interest rates three-quarters of a percentage point in a move that equates to the most aggressive hike since 1994.
Ending weeks of speculation, the rate-setting Federal Open Market Committee took the level of its benchmark funds rate to a range of 1.5%-1.75%, the highest since just before the Covid pandemic began in March 2020.
Stocks were volatile after the decision but turned higher as Fed Chairman Jerome Powell spoke in his post-meeting news conference.
“Clearly, today’s 75 basis point increase is an unusually large one, and I do not expect moves of this size to be common,” Powell said. He added, though, that he expects the July meeting to see an increase of 50 or 75 basis points. He said decisions will be made “meeting by meeting” and the Fed will “continue to communicate our intentions as clearly as we can.”
FOMC members indicated a much stronger path of rate increases ahead to arrest inflation moving at its fastest pace going back to December 1981, according to one commonly cited measure.
The Fed’s benchmark rate will end the year at 3.4%, according to the midpoint of the target range of individual members’ expectations. That compares with an upward revision of 1.5 percentage points from the March estimate. The committee then sees the rate rising to 3.8% in 2023, a full percentage point higher than what was expected in March.
2022 growth outlook cut
Officials also significantly cut their outlook for 2022 economic growth, now anticipating just a 1.7% gain in GDP, down from 2.8% from March.
The inflation projection as gauged by personal consumption expenditures also rose to 5.2% this year from 4.3%, though core inflation, which excludes rapidly rising food and energy costs, is indicated at 4.3%, up just 0.2 percentage point from the previous projection. Core PCE inflation ran at 4.9% in April, so the projections Wednesday anticipate an easing of price pressures in coming months.
The committee’s statement painted a largely optimistic picture of the economy even with higher inflation.
More
Finally, for once I agree with Bill Gates.
Bill Gates says crypto and NFTs are ’100% based on greater fool theory’
Published Wed, Jun 15 2022 4:05 AM EDT
Bill Gates is not a fan of cryptocurrencies or non-fungible tokens.
Speaking at a TechCrunch talk on climate change Tuesday, the billionaire Microsoft co-founder described the phenomenon as something that’s “100% based on greater fool theory,” referring to the idea that overvalued assets will go up in price when there are enough investors willing to pay more for them.
Gates joked that “expensive digital images of monkeys” would “improve the world immensely,” referring to the much-hyped Bored Ape Yacht Club NFT collection.
NFTs are tokens that can’t be exchanged for one another. They’re often touted as a way to prove ownership of digital assets like art or sports collectibles. But critics see them as overhyped and potentially harmful to the environment given the power-hungry nature of cryptocurrencies. Many NFTs are built on the network behind ethereum, the second-biggest token.
“I’m used to asset classes ... like a farm where they have output, or like a company where they make products,” Gates said.
As for crypto, “I’m not involved in that,” Gates added. “I’m not long or short any of those things.”
Cryptocurrencies tumbled sharply this week after Celsius, a crypto lending firm, paused all account withdrawals. The debacle has fueled fears of a looming insolvency event for Celsius — and possible knock-on effects for other parts of the crypto market. For its part, Celsius says it’s “working around the clock for our community.”
The battered crypto world was already licking its wounds following the collapse of UST — a so-called “stablecoin” that was meant to be worth $1 — and luna, its sister token. At their height, both cryptocurrencies were worth a combined $60 billion.
Bitcoin was last trading at $21,107 Wednesday, down 7% in the last 24 hours. The world’s biggest cryptocurrency has erased over half of its value since the start of 2022.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Column: Surging oil prices show business cycle slowdown is inevitable
June 15, 2022 2:00 AM GMT+1
LONDON, June 14 (Reuters) - Policymakers, economists and journalists often talk about the business cycle using the good-and-evil language of a fairy tale.
Booms are attributed to wise and enlightened policies while recessions are blamed on policy errors or the need to cleanse previous excess.
But the economy is not a morality play. Expansions are not a reward for virtuous and wise actions, and recessions are not a punishment for bad behaviour and mistakes.
Wrenching cycles in production, employment, prices and wages can be traced as far back in history as the data will allow economic performance to be reconstructed.
The “trade cycle” of booms and busts goes back at least as far as the early nineteenth century in Britain and North America.
Only the paucity of data on output and employment limits tracing it back into early modern and medieval Europe.
Cyclical volatility seems to reflect fundamental forces rather than blameworthy behaviour by central banks, finance ministries, markets, businesses and households.
There is no sign policymakers can stabilise the cycle if they have enough information and insight about the workings of the economy.
Long expansions in the 1990s, the early 2000s and the 2010s resulted in premature pronouncements about the end of the business cycle, only to be followed by recessions in 2001, 2008 and 2020.
SPARE CAPACITY
In the case of the oil market, spare production capacity, inventories and prices in both crude oil and refined products are closely correlated with the business cycle.
Prolonged business cycle expansions result in the progressive erosion of spare crude production and refinery capacity, as well as stocks, and eventually put strong upward pressure on crude prices and refining margins.
Recessions restore a higher margin of capacity and inventories in both crude and refining and result in downward pressure on prices and margins.
At present, the global economy is rapidly running out of spare capacity to produce more crude and turn it into refined fuels especially diesel.
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.
It also helps beat Covid infections too.
Vitamin D deficiency linked to increased dementia risk
Michael Irving June 14, 2022
Researchers at the University of South Australia have uncovered a link between vitamin D deficiency and an increased risk of dementia and stroke. The study found that a decent proportion of cases of dementia may be prevented by boosting levels of the hormone.
Vitamin D plays some important roles in the body, primarily helping with the uptake of calcium and phosphorus. The majority of a person’s vitamin D intake doesn’t come from food but the Sun, as the skin produces it in response to UV light exposure.
Unfortunately, it’s thought that as many as a billion people worldwide are vitamin D deficient. Not only can that lead to weaker muscles and bones, but an increasingly long list of other conditions, such as some cancers, autoimmune diseases and opioid addiction. Studies even suggest that pregnant women who are vitamin D deficient may raise the likelihood of their child developing schizophrenia or autism later in life.
In the new study, Australian researchers have now added new illnesses to that list. The team analyzed data from 294,514 participants in the UK Biobank project, comparing vitamin D levels with incidences of dementia and stroke. They used a technique called nonlinear Mendelian randomization to examine whether variation in genes had a causal effect on the illnesses, while accounting for factors like age, sex, ethnicity, lifestyle and other health conditions.
The team found that low levels of vitamin D – defined as under 25 nmol/L, or half that considered a healthy amount – was associated with lower brain volumes as measured through neuroimaging, as well as increased risks of dementia and stroke. The genetic analyses suggested a causal link between vitamin D deficiency and dementia, with the risk of the disease 54 percent higher for patients at 25 nmol/L than those at 50 nmol/L.
“Our study is the first to examine the effect of very low levels of vitamin D on the risks of dementia and stroke, using robust genetic analyses among a large population,” said Professor Elina Hyppönen, senior investigator of the study. “In some contexts, where vitamin D deficiency is relatively common, our findings have important implications for dementia risks. Indeed, in this UK population we observed that up to 17 percent of dementia cases might have been avoided by boosting vitamin D levels to be within a normal range.”
The new study adds yet more reasons to keep your vitamin D levels up with regular, controlled sunlight exposure – or perhaps in the near future, from genetically engineered tomatoes.
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.
New, highly tunable composite materials--with a twist
Date: June 14, 2022
Source: University of Utah
Summary: Mathematicians have found that they can design a range of composite materials from moiré patterns created by rotating and stretching one lattice relative to another. Their electrical and other physical properties can change --sometimes quite abruptly, depending on whether the resulting moiré patterns are regularly repeating or non-repeating.
Watch for the patterns created as the circles move across each other. Those patterns, created by two sets of lines offset from each other, are called moiré (pronounced mwar-AY) effects. As optical illusions, moiré patterns create neat simulations of movement. But at the atomic scale, when one sheet of atoms arranged in a lattice is slightly offset from another sheet, these moiré patterns can create some exciting and important physics with interesting and unusual electronic properties.
Mathematicians at the University of Utah have found that they can design a range of composite materials from moiré patterns created by rotating and stretching one lattice relative to another. Their electrical and other physical properties can change -- sometimes quite abruptly, depending on whether the resulting moiré patterns are regularly repeating or non-repeating. Their findings are published in Communications Physics.
The mathematics and physics of these twisted lattices applies to a wide variety of material properties, says Kenneth Golden, distinguished professor of mathematics. "The underlying theory also holds for materials on a large range of length scales, from nanometers to kilometers, demonstrating just how broad the scope is for potential technological applications of our findings."
With a twist
Before we arrive at these new findings, we'll need to chart the history of two important concepts: aperiodic geometry and twistronics.
Aperiodic geometry means patterns that don't repeat. An example is the Penrose tiling pattern of rhombuses. If you draw a box around a part of the pattern and start sliding it in any direction, without rotating it, you'll never find a part of the pattern that matches it.
----This kind of abrupt transition from electrical conductor to insulator reminded the researchers of yet another Nobel-winning discovery: the Anderson localization transition for quantum conductors. That discovery, which won the 1977 Nobel Prize in Physics, explains how an electron can move freely through a material (a conductor) or get trapped or localized (an insulator), using the mathematics of wave scattering and interference. But Golden says that the quantum wave equations Anderson used don't work on the scale of these twisted bilayer composites, so there must be something else going on to create this conductor/insulator effect. "We observe a geometry-driven localization transition that has nothing to do with wave scattering or interference effects, which is a surprising and unexpected discovery," Golden says.
The electromagnetic properties of these new materials vary so much with just tiny changes in the twist angle that engineers may someday use that variation to precisely tune a material's properties and select, for example, the visible frequencies of light (a.k.a. colors) that the material will allow to pass through and the frequencies it will block.
"Moreover, our mathematical framework applies to tuning other properties of these materials, such as magnetic, diffusive and thermal, as well as optical and electrical," says professor of mathematics and study co-author Elena Cherkaev, "and points toward the possibility of similar behavior in acoustic and other mechanical analogues."
In central banking as in diplomacy, style, conservative tailoring, and an easy association with the affluent count greatly and results far much less.
John Kenneth Galbraith.
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