Friday 24 June 2022

Recession Trumps Inflation (For Now.)

 Baltic Dry Index. 2354 +05   Brent Crude 110.17

Spot Gold 1824            US 2 Year Yield 3.01 -0.05

Coronavirus Cases 02/04/20 World 1,000,000

Deaths 53,100

Coronavirus Cases 24/06/22 World 547,438,751

Deaths 6,347,661

The man scarce lives who is not more credulous than he ought to be... The natural disposition is always to believe. It is acquired wisdom and experience only that teach incredulity, and they very seldom teach it enough.

Adam Smith.

In the stock casinos, more churn and burn as global recession worries start to replace soaring inflation as the main concern. And global central banks have hardly started raising interest rates yet.

If yesterday’s English byelections are any guide, most voters are most concerned about inflation and a lack of ethics in the governing Conservative Party. 

Below, Asia tries to follow America’s lead. More exit rally to me.

Hong Kong’s Hang Seng rises as Asia markets gain; logistics firm GoGoX pops in debut

SINGAPORE — Shares in the Asia-Pacific region were higher on Friday as investors weigh recession fears.

Hong Kong’s Hang Seng index jumped 1.47%, with the Hang Seng Tech index rising around 3%. SenseTime jumped 6.57% and Xpeng rose 9.21%.

Logistics company GoGoX rose as high as 23.15 Hong Kong dollars ($2.95) in its stock market debut in the city, and last traded at 22.40 Hong Kong dollars, up from the offer price of 21.50 Hong Kong dollars.

In Japan markets, the Nikkei 225 advanced nearly 1%, while the Topix climbed 0.56%.

Mainland Chinese markets rose. The Shanghai Composite gained 0.44%, and the Shenzhen Component was 0.92% higher.

South Korea’s Kospi gained 1.85%, and the Kosdaq advanced 4.43%.

The S&P/ASX 200 in Australia rose 0.26%. The New Zealand market is closed for a holiday on Friday.

MSCI’s broadest index of Asia-Pacific shares was up 0.92%.

Markets will find greater stability when leading indicators and inflation data starts bottoming out, said Viktor Shvets, head of global and Asian strategy at Macquarie Capital.

“Right now, the markets are petrified much more of recession than they are of inflation,” he told CNBC’s “Street Signs Asia.”

“I think in the next three to six months, we’re going to find what it is — whether we’re going to be skirting recession, or going much deeper than that,” he added.

Core consumer prices in Japan rose 2.1% for the month of May compared to a year earlier, in line with estimates, according to Reuters. That’s above the Bank of Japan’s target of 2% inflation. However, consumer prices only rose 0.8% if fresh food and energy was taken out, Reuters said.

----Overnight in the U.S., stocks rose in a late-day rally amid recession fears. Several large banks this week raised their expectations of a recession.

The Dow Jones Industrial Average climbed 194.23 points, or 0.64%, to 30,677.36. The S&P 500 advanced 0.95% to 3,795.73, and the Nasdaq Composite gained 1.62% to 11,232.19.

More

https://www.cnbc.com/2022/06/24/asia-markets-currencies-oil-wall-street-stock-debut.html

UK economy 'running on empty' as recession signals mount - PMI

  • UK composite PMI holds at 53.1, despite forecast for a fall
  • New orders slip to just above 50.0 level
  • Companies raising pay and prices
  • Sterling rises after worse euro zone survey
  • Other data show rising borrowing costs, consumer caution

LONDON, June 23 (Reuters) - Britain's economy is showing signs of stalling as high inflation hits new orders and businesses report levels of concern that normally herald a recession, a closely watched industry survey showed on Thursday.

S&P Global's Purchasing Managers' Index (PMI), covering services and manufacturing firms, also showed companies raising pay and passing higher costs on to clients, a worry for the Bank of England.

The PMI's preliminary composite index held at 53.1 in June, above the median forecast of 52.6 in a Reuters poll of economists and unchanged from May.

But its measure of new orders fell to 50.8, the lowest in over a year. Factory orders dipped below the 50.0 growth threshold to 49.6.

"The economy is starting to look like it is running on empty," Chris Williamson, chief business economist at S&P Global Market Intelligence, said.

More

https://www.reuters.com/markets/europe/uk-economy-running-empty-recession-signals-mount-pmi-2022-06-23/

Predatory lenders are making money off rising gas and food prices

By Nicole Goodkind, CNN Business June 23, 2022

New York (CNN Business)In the last few months, Yumekia Jones, a legal assistant at the Mississippi Center for Justice's Indianola office, has fielded an unusually high number of calls — a roughly 400% spike — from people in dire need of immediate financial assistance.

Most want to avoid payday loans, which offer quick cash against future paychecks without a credit check and come with an interest rate above 500%. But the rapidly increasing prices of food, fuel and rent gives them few options.

Inflation rates are at a 40-year high and unemployment is near a half-century low. To most economists those two realities spell out significant economic trouble.

To predatory payday lenders, however, they signal happy days and good times ahead.

"Low unemployment plus inflation generally mean consumers may need loans for additional capital to manage through unexpected spikes and expenses while earning money to pay back these loans," said David Fisher, CEO of short-term, subprime lender Enova (ENVA) said during an earnings call in May. The company beat quarterly earnings estimates by 7.7%.

Given the economic dynamics at play, Fisher said his company has "meaningfully leaned into the demand with our marketing efforts," and spent more to attract new customers. That has paid off. About 44% of all loans were issued to new customers in the last quarter, he said.

That increase in first-time borrowers came as US consumer inflation reached its highest level in more than four decades and Americans struggled to put food on their tables and gas in their tanks.

The national average for a gallon of gas stands at just under $5, a 61% increase since last year. The jump comes just as many employers are requiring workers to return to in-person work. The federal minimum wage, meanwhile, still stands at $7.25 per hour, where it's been since 2009. Low-wage workers must labor for about 14 hours to fill up their tank.

About two thirds of Americans now live paycheck to paycheck, a June LendingClub survey found. That number jumps to 82% among workers earning less than $50,000.

The average credit score for low-earners in the US is also dropping, according to LendingClub data. About 40% of Americans earning less than $50,000 and living paycheck to paycheck have a subprime credit score of below 650 making it difficult for them to get a loan through a traditional lending institution or to qualify for additional credit. The average credit score in the US is 714, according to Experian.

More

https://edition.cnn.com/2022/06/23/business/money/payday-predatory-lending-inflation-gas/index.html 

Finally, so whose idea was it to have Russia declare war on Ukraine?

Global food crisis 'will kill millions' by disease, health executive warns

Issued on: 23/06/2022 - 07:26

Yogyakarta (Indonesia) (AFP) – The global food crisis sparked by the war in Ukraine will kill millions by leaving the hungriest more vulnerable to infectious diseases, potentially triggering the world's next health catastrophe, the head of a major aid organisation has warned.

A Russian naval blockade of Ukraine's Black Sea ports has stopped grain shipments from the world's fourth-largest exporter of wheat and corn, raising the spectre of shortages and hunger in low-income countries.

The knock-on effects of the food shortages mean many will die not only of starvation but from having weaker defences against infectious diseases due to bad nutrition, Peter Sands, executive director of the Global Fund to Fight Aids, Tuberculosis and Malaria told AFP this week.

More

https://www.france24.com/en/live-news/20220623-global-food-crisis-will-kill-millions-by-disease-health-executive-warns

The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with most unnecessary attention but assume an authority which could safely be trusted to no council and senate whatever, and which would nowhere be so dangerous as in the hands of man who have folly and presumption enough to fancy himself fit to exercise it.

Adam Smith. The Wealth of Nations, 1776. 

Global Inflation/Stagflation Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians,  inflation now needs an entire section of its own.

Norway central bank makes largest rate hike in two decades

OSLO, June 23 (Reuters) - Norway's central bank raised its benchmark interest rate by 50 basis points on Thursday, its largest single hike since 2002 and did not rule out making further increases of this size as the country seeks to control inflation.

Norges Bank's monetary policy committee raised the sight deposit rate to 1.25% from 0.75%, exceeding its own forecast made in March of a hike to 1.0%.

"Based on the committee's current assessment of the outlook and balance of risks, the policy rate will most likely be raised further to 1.5% in August," Governor Ida Wolden Bache said in a statement.

“A faster rate rise now will reduce the risk of inflation remaining high and the need for a sharper tightening of monetary policy further out."

Of the 20 economists polled by Reuters in advance of Thursday's announcement, 14 had predicted Norges Bank would hike by 25 basis points (bps) while six said a 50 bps increase to 1.25% was the most likely outcome.

For the rest of 2022, Norges Bank's plan is to raise rates by 25 bps at each of its four remaining policy meetings, although raising them in larger increments may also be an option, Bache told a news conference.

More

https://www.reuters.com/markets/europe/norway-central-bank-makes-largest-rate-hike-20-years-2022-06-23/

U.S. recession fears darken outlook for global growth

LONDON/TOKYO, June 23 (Reuters) - Manufacturing growth is slowing from Asia to Europe as China's COVID-19 curbs and Russia's invasion of Ukraine disrupt supply chains, while the growing risk of a recession in the United States poses a new threat to the global economy.

High prices in the euro zone meant demand for manufactured goods fell in June at the fastest rate since May 2020 when the coronavirus pandemic was taking hold, with S&P Global's headline factory Purchasing Managers' Index (PMI) falling to a near two-year low of 52.0 from 54.6.

A Reuters poll had predicted a more modest drop to 53.9 and the index nudged closer to the 50 mark separating growth from contraction.

"June's euro zone PMI surveys showed a further slowdown in the services sector, while output in the manufacturing sector now seems to be falling outright," said Jack Allen-Reynolds at Capital Economics.

"With the price indices remaining extremely strong, the euro zone appears to have entered a period of stagflation."

There is a roughly one in three chance of a recession in the bloc within 12 months, economists in a Reuters poll published earlier on Thursday predicted. They also said inflation - which hit a record high of high of 8.1% last month - was yet to peak.

More

https://www.reuters.com/markets/europe/global-economy-us-recession-fears-darken-outlook-japan-global-factories-2022-06-23/

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

https://www.zerohedge.com/markets/environmental-disaster-ev-battery-metals-crunch-horizon-industry-races-recycle

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.

Moderna booster candidate shows strong response against Omicron subvariants

Wed, June 22, 2022 at 12:32 PM

(Reuters) -Moderna Inc said on Wednesday that an updated version of its COVID-19 vaccine designed to target the Omicron variant also generated a strong immune response against the fast-spreading Omicron subvariants BA.4 and BA.5, which have gained a foothold in the U.S. in recent weeks.

The updated vaccine, which Moderna is hoping will be approved for use as a booster shot for the fall, is a bivalent vaccine, meaning it contains vaccine designed to target two different coronavirus variants - the original variant from 2020 and the Omicron variant that was circulating widely last winter.

Moderna said that while the shot elicited a weaker response versus BA.4 and BA.5 than it does against the BA.1 subvariant it was specifically designed to combat, the data suggests the new shot could produce "lasting protection against the whole family of Omicron variants."

----Moderna has been producing the updated vaccine on its own dime ahead of any regulatory approvals, and Chief Executive Stéphane Bancel said the company could begin supplying the shot in August.

The company plans to submit applications to regulators in the coming weeks to ask for approval of the shot - which it calls mRNA-1273.214 - for the fall season.

More

https://www.yahoo.com/news/moderna-booster-candidate-produces-strong-113235927.html

Next, some vaccine links kindly sent along from a LIR reader in Canada.

NY Times Coronavirus Vaccine Trackerhttps://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html

Regulatory Focus COVID-19 vaccine trackerhttps://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.

Organic bipolar transistor developed

Date:  June 22, 2022

Source:  Technische Universität Dresden

Summary:  Researchers have developed a highly efficient organic bipolar transistor. The work opens up new perspectives for organic electronics -- both in data processing and transmission, as well as in medical technology applications.

Prof. Karl Leo has been thinking about the realization of this component for more than 20 years, now it has become reality: His research group at the Institute for Applied Physics at the TU Dresden has presented the first highly efficient organic bipolar transistor. This opens up completely new perspectives for organic electronics -- both in data processing and transmission, as well as in medical technology applications. The results of the research work have now been published in the leading specialist journal Nature.

The invention of the transistor in 1947 by Shockley, Bardeen and Brattain at Bell Laboratories ushered in the age of microelectronics and revolutionized our lives. First, so-called bipolar transistors were invented, in which negative and positive charge carriers contribute to the current transport, unipolar field effect transistors were only added later. The increasing performance due to the scaling of silicon electronics in the nanometer range has immensely accelerated the processing of data. However, this very rigid technology is less suitable for new types of flexible electronic components, such as rollable TV displays or for medical applications on or even in the body.

For such applications, transistors made of organic, i.e. carbon-based semiconductors, have come into focus in recent years. Organic field effect transistors were introduced as early as 1986, but their performance still lags far behind silicon components.

A research group led by Prof. Karl Leo and Dr. Hans Kleemann at the TU Dresden has now succeeded for the first time in demonstrating an organic, highly efficient bipolar transistor. Crucial to this was the use of highly ordered thin organic layers. This new technology is many times faster than previous organic transistors, and for the first time the components have reached operating frequencies in the gigahertz range, i.e. more than a billion switching operations per second. Dr Shu-Jen Wang, who co-led the project with Dr. Michael Sawatzki, explains: "The first realization of the organic bipolar transistor was a great challenge, since we had to create layers of very high quality and new structures. However, the excellent parameters of the component reward these efforts!" Prof. Karl Leo adds: "We have been thinking about this device for 20 years and I am thrilled that we have now been able to demonstrate it with the novel highly ordered layers. The organic bipolar transistor and its potential open up completely new perspectives for organic electronics, since they also make demanding tasks in data processing and transmission possible." Conceivable future applications are, for example, intelligent patches equipped with sensors that process the sensor data locally and wirelessly communicate to the outside.

https://www.sciencedaily.com/releases/2022/06/220622130801.htm?utm_source=feedburner&utm_medium=email

Another weekend and no end in sight for Europe’s most unnecessary and useless war. Worse, no one anywhere knows how to stop it so no one is trying. Have a great weekend everyone and don’t forget to lookout for that planetary line up before dawn.

It is unjust that the whole of society should contribute towards an expence of which the benefit is confined to a part of the society.

Adam Smith.

 

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