Monday 20 June 2022

The World Turning Left?

 Baltic Dry Index. 2578 +116   Brent Crude 112.88

Spot Gold 1844            US 2 Year Yield 3.17 +0.03

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

Deaths 53,100

Coronavirus Cases 20/06/22 World 544,313,024

Deaths 6,340,754

Nothing is so admirable in politics as a short memory.

John Kenneth Galbraith.

Another election, actually two, another hard left victory in Columbia and more importantly, France.

By dithering in the face of rampant inflation, pandering to the stock casinos rather than the real economy most of us live in, the world’s central banksters seem to have turned capitalism, or what little of it was still left, into a desperate reason to elect hard left populist socialists. Brazil next in October?

Euros anyone? 

Not that socialism ever works.  What’s yours is mine, only works for a short time, until nobody has anything left, of course.

Venezuela here we come.

South Korea drops more than 2%; China keeps benchmark lending rate unchanged

SINGAPORE — Shares in Asia-Pacific were mixed in Monday morning trade, as investors monitored market reaction to the release of China’s latest benchmark lending rates.

In South Korea, the Kospi led losses among the region’s major markets as it dropped 2.22%, with shares of industry heavyweight Samsung Electronics declining more than 2%.

The Shanghai Composite in mainland China sat slightly lower while the Shenzhen Component gained 0.824%.

China’s one-year and five-year loan prime rates were both left unchanged on Monday. That matched the forecast in a Reuters poll, where a vast majority of respondents had predicted no change to both the one-year or the five-year LPRs.

Hong Kong’s Hang Seng index dipped 0.43%. Shares of Alibaba shares in Hong Kong fell more than 2%, despite Reuters reporting Friday that China’s central bank has accepted Alibaba-affiliate Ant Group’s application to form a financial holding firm, reviving hopes for a potential public listing for Ant.

The Nikkei 225 in Japan traded 1.11% lower while the Topix index fell 0.96%.

Australia’s S&P/ASX 200 dipped 0.5%.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.44% lower.

Markets in the U.S. are closed on Monday for a holiday. The S&P 500 last week had its worst week since 2020 as investors grappled with the prospect of a potential recession ahead as major central banks like the U.S. Federal Reserve hike rates to fight inflation.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 104.661 after a recent bounce from levels below 104.

The Japanese yen traded at 135 per dollar, weaker as compared to levels below 132 seen against the greenback last week. The Australian dollar changed hands at $0.6932 after dropping late last week from above $0.70.

Oil prices were lower in the morning of Asia trading hours, with international benchmark Brent crude futures down 0.17% to $112.93 per barrel. U.S. crude futures dipped 0.11% to $109.44 per barrel.

https://www.cnbc.com/2022/06/20/asia-markets-china-loan-prime-rate-alibaba-currencies-oil.html 

In political news, is the whole world turning left under the pressures of inflation and wealth inequality, generated by the central banksters and the Great Nixonian Error of Fiat Money?

French election: Macron loses absolute majority in parliament in 'democratic shock'

PARIS, June 19 (Reuters) - French President Emmanuel Macron lost control of the National Assembly in legislative elections on Sunday, a major setback that could throw the country into political paralysis unless he is able to negotiate alliances with other parties.

Macron's centrist Ensemble coalition, which wants to raise the retirement age and further deepen EU integration, was on course to end up with the most seats in Sunday's election.

But they will be well short of the absolute majority needed to control parliament, near-final results showed.

A broad left-wing alliance was set to be the biggest opposition group, while the far-right scored record-high wins and the conservatives were likely to become kingmakers.

Finance Minister Bruno Le Maire called the outcome a "democratic shock" and added that if other blocs did not cooperate, "this would block our capacity to reform and protect the French."

A hung parliament will require a degree of power-sharing and compromises among parties not experienced in France in recent decades. read more

There is no set script in France for how things will now unfold. The last time a newly elected president failed to get an outright majority in parliamentary elections was in 1988.

"The result is a risk for our country in view of the challenges we have to face," Prime Minister Elisabeth Borne said, while adding that from Monday on, Macron's camp will work to seek alliances.

More

https://www.reuters.com/world/europe/macron-faces-tough-battle-control-parliament-france-votes-2022-06-19/

Gustavo Petro: Leftist ex-rebel wins Colombia's presidential election

By Matt Murphy 20 June 2022

Gustavo Petro, the leftist former mayor of Bogota and ex-rebel fighter, has been declared the winner of Colombia's presidential election.

Mr Petro, a current senator, defeated right-wing construction magnate Rodolfo Hernández in Sunday's run-off election.

Figures showed he took 50.5% of votes, defeating his rival by more than 700,000 ballots to become Colombia's first left-wing leader.

The 62-year-old hailed what he called a "victory for God and for the people".

"May so much suffering be cushioned by the joy that today floods the heart of the homeland," Mr Petro wrote on Twitter. "Today is the day of the streets and squares."

His running mate Francia Marquez, a single mother and former housekeeper, will become the country's first black woman vice-president.

In a video posted to social media, Mr Hernandez, who ran a non-traditional campaign that relied heavily on TikTok and other social media, conceded to Mr Petro.

"Colombians, today the majority of citizens have chosen the other candidate. As I said during the campaign, I accept the results of this election," he said. "I hope that Mr Gustavo Petro knows how to run the country and is faithful to his discourse against corruption," he added.

President Ivan Duque, who was barred from seeking re-election by Colombia's term limits, said on Twitter that he has called Mr Petro to congratulate him and said they have "agreed to meet in the coming days to initiate a harmonious, institutional and transparent transition".

Mr Petro, a former member of the M-19 guerrilla movement, ran on a radical manifesto and pledged during the campaign to fight inequality by providing free university education, pension reforms and high taxes on unproductive land.

He has also pledged to fully implement a 2016 peace deal that ended a 50-year long conflict with the communist guerrilla group, Farc, and to seek negotiations with the still-active ELN rebels.

More

https://www.bbc.co.uk/news/world-latin-america-61860887

Finally, the price of tulips cryptos is collapsing. A from zero to zero round trip?

Cascading Liquidations Send Bitcoin Below $18,000 As Daisy-Chained Margin Call Contagion Sparks Record Selling

Sunday, Jun 19, 2022 - 02:38 AM

For crypto investors, June is the cruelest month ever and the pain just won't go away.

Bitcoin, and the broader crypto sector, are getting crushed - again - for a record 12th day in a row...

.. with the largest token tumbling below $20,000, below $19,000 and even below $18,000, tumbling as low as $17,629 on Saturday afternoon, having lost nearly 50% of all its value in just the past two weeks and plunging 75% from an all time high of $67,734 in November, taking out support after support, even the most important of all: the $19,511 high from the previous bull cycle (throughout its brief, 12-year trading history, Bitcoin has never dropped below previous cycle peaks... until today).

... as cascading liquidations become self-reinforcing and prompt wholesale deleveraging of the entire crypto sector, pushing Bitcoin to the most oversold weekly level in history!

Bitcoin's closest peer, Ethereum, broke below $1,000 for the first time since January 2021 and tumbled 19%, to a low of $884 before modestly reversing losses. According to data from Coinglass, total liquidations in the crypto market were $435 million in the past 24 hours, with Bitcoin and Ether at around $202 million and $144.5 million respectively. Altcoins also suffered the brunt of soured investor appetite, with every token on Bloomberg’s cryptocurrency monitor trading in the red. Cardano, Solana, Dogecoin and Polkadot recorded falls of between 12% and 14%, while privacy tokens such as Monero and Zcash lost as much as 16%.

The selloff which started in earnest about a month ago, when the collapse of the the Luna currency which was used to back up the value of Terra’s UST stablecoin, wiped out $60 billion in market cap and launched an unprecedented deleveraging shockwave within the crypto DeFi sector, accelerated last Sunday when the crypto shadow bank Celsius Network suspended withdrawals from depositors who had been drawn by the company's ridiculously high interest rates which, as always when someone offers double digit rates in a time of ZIRP, were too good to be true. By Friday, Hong Kong digital-asset lender Babel Finance also froze withdrawals; more are sure to follow.

More

https://www.zerohedge.com/markets/cascading-liquidations-send-bitcoin-below-18000-daisy-chained-margin-call-contagion-sparks

Global Inflation/Stagflation Watch.

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

U.S. economy has 40% chance of being in recession next year, Bank of America says

NEW YORK, June 17 (Reuters) - BofA Securities economists see roughly a 40% chance of a U.S. recession next year, with inflation remaining persistently high.

They expect U.S. Gross Domestic Product growth to slow to almost zero by the second half of next year "as the lagged impact of tighter financial conditions cools the economy," while they see just a "modest" rebound in growth in 2024, according to a research report Friday.

"Our worst fears around the Fed have been confirmed: they fell way behind the curve and are now playing a dangerous game of catch up," Ethan Harris, global economist at BofAS wrote, adding that the firm expects the Fed to hike interest rates to "above 4%."

They see the risk of a recession for this year as low.

The Fed on Wednesday approved its largest interest rate increase in more than a quarter of a century to stem a surge in inflation. The move raised the target federal funds rate by three-quarters of a percentage point to a range of between 1.5% and 1.75%. read more

Also, BofA Global economists lowered their global growth projections, citing inflation, the war in Ukraine and COVID-related lockdowns in China.

More

https://www.reuters.com/business/us-economy-has-40-chance-being-recession-next-year-bofa-2022-06-17/

Column: Full force of central banks siphoning world liquidity

LONDON, June 17 (Reuters) - Coordinated or not ahead of this month's G7 summit, global central banks are accelerating interest rate hikes but also actively draining the giant pool of cash swilling around world markets and buoying currencies to stymie imported inflation.

You don't have to be a strict monetarist or liquidity obsessive to see how the scale of this will affect stocks and bonds over the remainder of the year at least.

For many who do focus on the lockstep impact of world liquidity on asset prices, the process has already been underway since late last year and has been the driver of the 20-30% drop in major stock indices since December. (.SPX)(.IXIC), (.MIWD00000PUS)

The worrying bit for investors is that it may only be about half-way through and the aggressive tightening unveiled this week shows little trepidation among policymakers right now.

This week's headline grabbing interest rate rises from the U.S. Federal Reserve, Bank of England and Swiss National Bank show new-found determination to get across decades high inflation as quickly as possible while unemployment rates are near historic lows and labour markets remain tight.

The European Central Bank grappled with how to rein in ballooning euro sovereign risk premia as it prepares to raise rates next month for the first in more than a decade. But agreement on the "anti-fragmentation" backstop was seen as a quid pro quo for steeper policy rate rises and markets now price almost 2 percentage points of hikes by the year-end.

The Fed's outsize 75 basis point rate rise was its biggest move in 28 years, with markets now expecting its key rate to more than double from new target range of 1.50-1.75% within a year. Even grappling with a much weaker economy, the Bank of England is also expect to almost double rates to more than 2% from here.

More

https://www.reuters.com/markets/europe/full-force-central-banks-siphoning-world-liquidity-mike-dolan-2022-06-17/

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.

Macao shuts most businesses, restaurants amid mass COVID-19 testing; casinos stay open

20 Jun 2022 10:27AM

HONG KONG: The world's biggest gambling hub Macao began its second day of mass COVID-19 testing on Monday (Jun 20), with banks, schools, government services and other businesses shut, but casinos remaining open.

The testing of Macao's roughly 600,000 residents is expected to end on Tuesday and comes after dozens of locally transmitted cases were discovered over the weekend.

The Chinese-ruled former Portuguese colony adheres to China's "zero COVID" policy which aims to eradicate all outbreaks, at just about any cost, running counter to a global trend of trying to co-exist with the virus.

Most residents are asked to stay at home, restaurants will be shut for dine-in and border restrictions have been tightened, meaning casino revenues are likely to be close to zero for at least a week and likely the coming weeks, analysts said.

Macao's government relies on casinos for more than 80 per cent of its income, with most of the population employed directly or indirectly by the casino industry.

The latest outbreak came suddenly and has been spreading rapidly with the source still unknown, Macao's chief executive Ho Iat Seng said in a statement on the government's website.

Macao's previous coronavirus outbreak was in October last year. An outbreak in the neighbouring Chinese territory of Hong Kong this year saw more than 1 million confirmed infections, and more than 9,000 deaths, swamping hospitals and public services.

Macao only has one public hospital with its services already stretched on a daily basis.

Macao's legislature is this week due to approve an ammended gaming law which will lay the groundwork for what is required from the multibillion dollar casino operators to continue operating.

"Depending on how quickly Macao is able to get the newest outbreak under control, there is risk of delay to finalisation of the gaming law amendments and subsequent concession tender process," said Vitaly Umansky, analyst at Sanford C Bernstein.

https://www.channelnewsasia.com/asia/macao-shuts-most-businesses-restaurants-amid-mass-covid-19-testing-casinos-stay-open-2757656

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.

Next gen television and computer screens: Creating optically active polymers

Date:  June 17, 2022

Source:  University of Tsukuba

Summary:  A University of Tsukuba researcher describes a new method for obtaining conjugated polymers in a helical configuration. By using twisted liquid crystals as a template, the resulting polymers were found to be able to convert linearly polarized light into circularly polarized light. This work may be used for next-generation television and computer screens.

A scientist from the Faculty of Pure and Applied Sciences at the University of Tsukuba developed a method for producing electrically conductive polymers that assume a helical configuration. By using a liquid crystal as a template, he was able to produce optically active polymers that can convert light into a circular polarization. This approach may help lower the cost of smart displays.

Walking into an electronic store these days can be an overwhelming experience if you happen to wander into the television aisle. The sizes of TVs have significantly expanded in recent years, while the prices have dropped. This is mainly due to the adoption of organic light emitting devices (OLEDs), which are carbon-based polymers that can glow at tunable optical wavelengths. These conjugated polymers, which have alternating single and double bonds, are both electrically conductive, and have colors that can be controlled by chemical doping with other molecules. Their oxidation state can also be rapidly switched using an electric voltage, which affects their coloration. However, future advancement may require new materials that can take advantage of other kinds of optical properties, such as circular polarization.

Now, a researcher from the University of Tsukuba has introduced a technique for creating polymers locked into a helical configuration, using a sacrificial liquid crystal template. "Polymers that both have optical activity and luminescent function can emit circularly polarized light," author Professor Hiromasa Goto says. For this process, the liquid crystal molecules were originally in a straight configuration. The addition of monomer molecules caused the liquid crystals to twist into a helical configuration. This imprints a "chirality" or handedness to the structure, making it oriented either clockwise or counterclockwise. An electric voltage was applied, which triggered polymerization of the monomers. The liquid crystal template was then removed, leaving a polymer frozen in a helical shape. By breaking the mirror symmetry, the polymer has the ability to convert linearly polarized light into a circular polarization. The furan rings in the polymer not only contribute to the electrical conductivity, they also help stabilize the helical structure. "The pi-stacking interactions between the rings allows the polymer to aggregate into a highly ordered chiral system," Professor Goto says. The resulting polymer was tested using circular dichroism absorption spectroscopy and was found to have strong optical activity at visible wavelengths. Future applications of this process may include cheaper and more energy efficient electronic displays.

https://www.sciencedaily.com/releases/2022/06/220617101849.htm?utm_source=feedburner&utm_medium=email

The whole gospel of Karl Marx can be summed up in a single sentence: Hate the man who is better off than you are. Never under any circumstances admit that his success may be due to his own efforts, to the productive contribution he has made to the whole community. Always attribute his success to the exploitation, the cheating, the more or less open robbery of others. Never under any circumstances admit that your own failure may be owing to your own weakness, or that the failure of anyone else may be due to his own defects - his laziness, incompetence, improvidence, or stupidity.

Henry Hazlitt. [That’s more than a single sentence, Henry.]

 

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