Baltic Dry Index. 2331 -23 Brent Crude 113.12
Spot Gold 1827 US 2 Year Yield 3.04 +0.03
"For more than two thousand years gold's natural qualities made it man's universal medium of exchange. In contrast to political money, gold is honest money that survived the ages and will live on long after the political fiats of today have gone the way of all paper."
Hans F. Sennholz.
Dow rallies 800 points on Friday to cap big comeback week for stocks
The Dow Jones Industrial Average rallied more than 800 points on Friday, rebounding off the lows of the bear market last week and capping its first weekly advance since May.
The Dow rose 823.32 points, or 2.68%, to 31,500.68, with gains accelerating in the final hour of trading. The S&P 500 was 3.06% higher to 3,911.74. The Nasdaq Composite advanced 3.34% to 11,607.62.
The major averages wrapped up a big comeback week for stocks. The S&P 500 is up nearly 6.5% for the week, while the Nasdaq Composite gained 7.5%. The Dow is 5.4% higher.
Those moves followed the worst weekly decline for the S&P 500 since 2020. Last week, the broader market index closed down 5.8% for the week.
All three major averages snapped three-week losing streaks, as market participants deliberated whether markets have found a bottom. Still, many on Wall Street maintained a gloomy outlook.
“We believe that bounce in U.S. equity markets over the past three trading days has been a bear market rally off deeply oversold conditions,” Wolfe Research’s Chris Senyek wrote in a Friday note.
“While there may be some additional near-term follow through, we believe that our intermediate-term bearish base case remains intact and that the next leg down is going to be driven by rising recession risks and downward earnings revisions,” Senyek added.
The major averages leapt after a consumer sentiment reading that’s closely followed by the Federal Reserve showed a slight easing of inflation expectations.
Consumer sentiment hit a record low reading of 50 in June, according to the final reading from a University of Michigan survey released Friday morning. While on the surface that is not positive for the market, investors liked a figure inside the report which showed 12-month inflation expectations by consumers easing back to 5.3%.
A preliminary reading earlier this month that was pivotal in influencing the Fed to get more aggressive with its rate hike showed inflation expectations at 5.4%.
Putin is squeezing gas supplies. And Europe is getting seriously worried about a total shutdown
Published Fri, Jun 24 2022 3:34 AM EDT
BRUSSELS — European leaders are growing increasingly concerned about the possibility of a full shutdown of gas supplies from Russia, with Italy asking for a new meeting to debate the matter.
Gazprom, Russia’s state-backed energy supplier, has reduced its gas flows to Europe by about 60% over the past few weeks, prompting Germany, Italy, Austria and the Netherlands to all indicate they could turn back to coal once again.
It comes as Europe — which receives roughly 40% of its gas via Russian pipelines — tries to rapidly reduce its reliance on Russian hydrocarbons in response to the Kremlin’s nearly four-month-long onslaught in Ukraine.
“Russia is diminishing the supply of gas little by little — to some countries [by] almost 100%; to others, cutting 10, 15%,” Josep Borrel, the EU’s top diplomat, told CNBC Friday.
“I don’t think they are going
to cut the gas overnight, especially as we are going into the summer and during
the summer the gas is not a strategic weapon. But the winter could be difficult
and we have to be prepared in Europe.“
When asked if he was concerned that Russia could fully cut gas supplies,
Luxembourg Prime Minister Xavier Bettel told CNBC: “I’m fully aware that they
can. They can. It’s their choice, natural choice. They can close or open.”
----Recession concerns
Reduced gas flows have deepened concerns that the EU could be about to face a tough economic period. Analysts at Berenberg said this week that the latest cuts in gas meant their new base case for Europe was recession.
“Hit harder than the U.S. by the energy price shock, we project the euro zone economy to enter recession before the U.S.,” analysts at Berenberg said in a note Tuesday.
EU leaders have so far refused to talk about the possibility of a recession or a new economic crisis, but they have acknowledged that next winter will be complicated.
Speaking to CNBC Friday morning, Swedish Prime Minister Magdalena Andersson said she is ready for leaders to meet again next month, provided the bloc can announce steps to address the economic pressures.
“We are definitely in a difficult economic situation with the inflation and the shortages of gas and electricity,” she said.
The European Parliament’s Metsola agreed. “The next few months will be very difficult and we are concerned that we are facing a, let’s say, costly and difficult winter from an energy perspective.”
German economy minister warns of industry shutdown amid gas shortage -Spiegel
June 24, 2022 7:02 AM GMT+1
BERLIN, June 24 (Reuters) - Germany is heading for a gas shortage if Russian gas supplies remain as low as they are now, and certain industries would have to be shut down if there is not enough come winter, Economy Minister Robert Habeck told Der Spiegel magazine.
"Companies would have to stop production, lay off their workers, supply chains would collapse, people would go into debt to pay their heating bills, that people would become poorer," Habeck told Der Spiegel on Friday, saying it was part of Russian President Vladimir Putin's strategy to divide the country.
This is "the best breeding ground for populism, which is intended to undermine our liberal democracy from within," Habeck said, adding that Putin's plans must not be allowed to work out.
Habeck held out the prospect of further relief for companies and people affected by the lack of gas but warned that it would not be possible to absorb all the effects, reported Der Spiegel.
Consumers could see a doubling or tripling of their energy costs, which in some cases are already between 30% and 80% higher due to price increases from last fall, Klaus Mueller, the head of Germany's Bundesnetzagentur network regulator, told broadcaster ARD on Friday.
The regulator has considered various scenarios, Mueller said, and most of them "are not pretty and mean either too little gas at the end of winter or already very difficult situations in autumn or winter."
Germany triggered Phase 2 of three of its emergency gas plan on Thursday, which kicks in when the government sees a high risk of long-term supply shortages of gas.
More
In other news, get ready for the big liquidity drain. What goes up and all that.
Analysis: Swiss policy pivot signals exit for big stock and bond investor
June 24, 20226:05 AM GMT+1
LONDON, June 24 (Reuters) - From Silicon Valley shares to U.S. and European government bonds, securities that are already under heavy pressure stand to lose a major buyer as Switzerland ends its long-standing policy of recycling euros and dollars into foreign markets.
The Swiss National Bank recently delivered a surprise half-point interest rate hike and for the first time in years omitted references in its statement to the franc being highly valued.
The shift is a momentous one, suggesting the SNB will no longer prioritise weakening the currency by purchasing foreign exchange - a policy that enabled it to build a reserve pile of nearly $1 trillion.
Unlike most central banks, it recycled these proceeds of intervention into world markets rather than holding them at home, making it a huge stock and bond investor. In recent years it ranked among the top shareholders in the likes of Apple, Amazon and Microsoft. read more
Any reduction in its purchases, or an eventual move towards selling - a possibility after the bank said it is also ready to check a weakening of the franc - risks heightening volatility on already shaky markets.
"The SNB's departure from its previous approach to keep the franc weak means they will unwind their large U.S. stock holdings, particularly in FAANGS, which should increase selling pressure on these mega-cap names," said Kaspar Hense, senior portfolio manager at Bluebay Asset Management, referring to the tech quintet of Facebook (Meta), Apple, Amazon, Netflix and Google.
The SNB had already cut back forex buying in recent weeks, as evidenced by a drop in "total sight deposits" at Swiss banks that are seen as a proxy for intervention. These deposits declined by 1.3 billion Swiss francs in the week ending June 17, versus a rise of 756 million francs a month earlier and an increase of nearly 6 billion francs in early April.
The SNB said it would seek to minimise the market impact whether it were to let existing bonds expire or actively sell assets, with the focus remaining on the overall liquidity of the portfolio.
More
Finally, so you really, really, really want to own tulips! Be careful where you store them and with whom.
$100 million worth of crypto has been stolen in another major hack
T
Hackers have stolen $100 million in cryptocurrency from Horizon, a so-called blockchain bridge, in the latest major heist in the world of decentralized finance.
Details of the attack are still slim, but Harmony, the developers behind Horizon, said they identified the theft Wednesday morning. Harmony singled out an individual account it believes to be the culprit.
“We have begun working with national authorities and forensic specialists to identify the culprit and retrieve the stolen funds,” the start-up said in a tweet late Wednesday.
In a follow-up tweet, Harmony said it’s working with the Federal Bureau of Investigation and multiple cybersecurity firms to investigate the attack.
Blockchain bridges play a big role in the DeFi space, offering users a way of transferring their assets from one blockchain to another. In Horizon’s case, users can send tokens from the Ethereum network to Binance Smart Chain. Harmony said the attack did not affect a separate bridge for bitcoin.
Like other facets of DeFi, which aims to rebuild traditional financial services like loans and investments on the blockchain, bridges have become a prime target for hackers due to vulnerabilities in their underlying code.
Bridges “maintain large stores of liquidity,” making them a “tempting target for hackers,” according to Jess Symington, research lead at blockchain analysis firm Elliptic.
“In order for individuals to use bridges to move their funds, assets are locked on one blockchain and unlocked, or minted, on another,” Symington said. “As a result, these services hold large volumes of cryptoassets.”
More
"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."
William F. Rickenbacker.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
"In the long run, the gold price has to go up in relation to paper money. There is no other way. To what price, that depends on the scale of the inflation - and we know that inflation will continue."
Nicholas L. Deak.
Britons, shaken by cost-of-living squeeze, cut back on shopping
June 24, 2022 8:23 AM GMT+1
- Retail sales -0.5% m/m in May vs Reuters poll -0.7%
- April rise in sales volumes revised down sharply
- Consumer confidence hits record low - GfK
- Stung by election losses, Johnson pledges more help
LONDON, June 24 (Reuters) - British consumers cut back on shopping in May in the face of fast-rising inflation, and a measure of their confidence sank to a record low this month, according to data that underscored the scale of the cost-of-living squeeze.
The Office for National Statistics said on Friday that sales volumes in May fell by 0.5% on the month, a slightly smaller decline than the 0.7% drop expected by economists polled by Reuters.
But the ONS also slashed its estimate for month-on-month sales volumes growth in April to 0.4% from an originally reported 1.4% after an annual review of its seasonal adjustments process.
May's fall was driven by weaker food sales, Heather Bovill, ONS deputy director for surveys and economic indicators, said.
"Feedback from supermarkets suggested customers were spending less on their food shop, because of the rising cost of living," she said.
Earlier on Friday, Britain's longest-running gauge of consumer confidence, the GfK survey, fell to its lowest since records began in 1974. read more
More
https://www.reuters.com/markets/europe/uk-retail-sales-fall-by-05-may-2022-06-24/
Column: Markets not braced for Japanese, Swiss cenbank liquidity drain
June 24, 2022 9:33 AM GMT+1
ORLANDO, Fla., June 23 (Reuters) - If estimates that world markets face a record $4 trillion liquidity drain over the next 18 months are even close to accurate, hold on to your hats.
That's how much analysts at Morgan Stanley reckon G4 central banks - the U.S. Federal Reserve, European Central Bank, Bank of Japan and Bank of England - will shrink their balance sheets by, via quantitative tightening (QT), by the end of next year.
The estimate does not include the Swiss National Bank (SNB), one of the world's biggest liquidity providers of the last decade.
Perhaps even more significant than the SNB's 50 basis point interest rate increase last week was its admission that the franc is reasonably valued, suggesting that currency market intervention of recent years has ended.
If this is the case, the SNB's role as a marginal but steady buyer of U.S. and euro zone bonds, and mega-cap Wall Street stocks, may be over.
The SNB's balance sheet stands at around $1 trillion, up from around $200 billion in 2010. That's an average of around $70 billion injected annually into world markets that could now disappear.
This is a strong signal that even the world's most dovish central banks are changing tack. While we're not there yet, an even bigger shock would be the Bank of Japan (BOJ) calling a day on its 'yield curve control' policy of buying unlimited government bonds to cap the 10-year yield at 0.25%.
In some ways, Morgan Stanley's $4 trillion liquidity drain estimate is even more remarkable in that it predicts the BOJ's contribution will essentially be zero.
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.
This week something different, Polio. Approx. 18 minutes.
Polio in England
https://www.youtube.com/watch?v=hoLxTyQOYRA
World Health Organization - Landscape of COVID-19 candidate vaccines. https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines
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 more useful Covid links.
Johns Hopkins Coronavirus resource centre
https://coronavirus.jhu.edu/map.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, I’ve added this section.
Atomic-scale quantum circuit marks major quantum computer breakthrough
Michael Irving June 23, 2022
Engineers in Sydney have demonstrated a quantum integrated circuit made up of just a few atoms. By precisely controlling the quantum states of the atoms, the new processor can simulate the structure and properties of molecules in a way that could unlock new materials and catalysts.
The new quantum circuit comes from researchers at the University of New South Wales (UNSW) and a start-up company called Silicon Quantum Computing (SQC). It’s essentially made up of 10 carbon-based quantum dots embedded in silicon, with six metallic gates that control the flow of electrons through the circuit.
It sounds simple enough, but the key lies in the arrangement of these carbon atoms down to the sub-nanometer scale. Relative to each other, they’re precisely positioned to mimic the atomic structure of a particular molecule, allowing scientists to simulate and study the structure and energy states of that molecule more accurately than ever before.
In this case, they arranged the carbon atoms into the shape of the organic compound polyacetylene, which is made up of a repeating chain of carbon and hydrogen atoms with an alternating pattern of single and double carbon bonds between them. To simulate those bonds, the team placed the carbon atoms at different distances apart.
Next, the researchers ran an electrical current through the circuit to check whether it would match the signature of a natural polyacetylene molecule – and sure enough, it did. In other tests, the team created two different versions of the chain by cutting bonds at different places, and the resulting currents matched theoretical predictions perfectly.
The significance of this new quantum circuit, the team says, is that it could be used to study more complicated molecules, which could eventually yield new materials, pharmaceuticals, or catalysts. This 10-atom version is right on the limit of what classical computers can simulate, so the team’s plans for a 20-atom quantum circuit would allow for simulation of more complex molecules for the first time.
“Most of the other quantum computing architectures out there haven't got the ability to engineer atoms with sub-nanometer precision or allow the atoms to sit that close,” said Professor Michelle Simmons, lead researcher on the study. “And so that means that now we can start to understand more and more complicated molecules based on putting the atoms in place as if they're mimicking the real physical system.”
The research was published in the journal Nature.
"The history of paper money is an account of abuse, mismanagement, and financial disaster."
Richard M. Ebeling.
This weekend’s music diversion. Approx. 8 minutes.
Fasch recorder concerto in F Major
https://www.youtube.com/watch?v=HJa3JdB-oX0
This weekend’s chess update. Approx. 13 minutes.
"I Am the Lord of All That is Golden" || Nepo vs Duda || FIDE Candidates (2022) R6
https://www.youtube.com/watch?v=1FZ7P9ro5SM
This week’s maths update. Approx. 8 minutes.
A Difficult Exponential Question
https://www.youtube.com/watch?v=Dbv22io00Zs
Alan Greenspan. June 28, 2016.
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