Baltic Dry Index. 2240 +54 Brent Crude 108.81
Spot Gold 1802 US 2 Year Yield 2.92 -0.14
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 01/07/22 World 552,749,134
Deaths 6,358,087
A Happy Canada Day to all those celebrating.
A bank is a confidence trick. If you put up the right signs, the wizards of finance themselves will come in and ask you to take their money.
House of All Nations. 1938.
In the stock casinos, most commodity markets, the bond markets, first half 2022 carnage. But thankfully, a falling crude oil price and US bond yields as the markets price in the next recession.
In the crypto Ponzi schemes, a possible round trip back to zero.
In Non Fungible Tokens, NFTs, complete collapse.
In Special Purpose Acquisition Companies, SPACs, a near total rout.
The good news over, America probably entered the next recession in the opening months of 2022.
As goes America, still largely goes the rest of the world with a few months delay.
With global trillions of phony central bankster “wealth” evaporated and delivered into central bankster hell, nothing good lies ahead in the remainder of 2022 unless somehow the northern hemisphere crops deliver a record harvest, Europe and China and North America get a global warming mild winter, and the tooth fairy shows up to give us a Cinderella ending.
But how likely is that?
More likely is a Hindenburg ending with a ton of new Lehman’s showing up over the next 12 months.
Japan leads losses in Asia markets; private survey shows China’s factory activity expanded
SINGAPORE — Asia-Pacific markets reversed earlier gains and fell on the first day of the new quarter as investors digested positive factory activity data from a private survey in China.
The Nikkei 225 in Japan fell 1.75%, and the Topix declined 1.48%. Fast Retailing slipped 3.45%.
Sentiment at Japan’s large manufacturers worsened in the April-to-June period, according to the Bank of Japan’s quarterly tankan business sentiment survey. The headline index for large manufacturers’ sentiment came in at 9, a decline from the previous quarter’s reading of 14.
“The manufacturers right now are facing a number of headwinds ranging from surging input costs to unsteady supply conditions,” said Stefan Angrick, senior economist at Moody’s Analytics.
“Much of that, of course, has to do with Russia’s invasion of Ukraine and Covid-19 lockdowns in China,” he told CNBC’s “Squawk Box Asia” on Friday.
In South Korea, the Kospi also reversed course to fall 1.4%, and the Kosdaq was 2.35% lower.
Australia’s S&P/ASX 200 bucked the regional trend and was 0.12% higher.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.91%.
China markets
Mainland China markets were lower despite positive data on the manufacturing front. The Shanghai Composite shed 0.18%, while the Shenzhen Component was 0.14% lower.
The Caixin/Markit manufacturing Purchasing Managers’ Index for June was released Friday. It came in at 51.7, above the 50-level that separates growth from contraction. That compared to last month’s reading of 48.1. Analysts polled by Reuters expected 50.1.
PMI readings are sequential and represent month-on-month expansion or contraction. The 50-level separates contraction from expansion.
The official PMI for June stood at 50.2, returning to growth after three months, according to data released Thursday.
Markets in Hong Kong were closed on Friday for a holiday as the city commemorates the 25th anniversary of its handover from the U.K. to China on Friday.
Chinese President Xi Jinping arrived in Hong Kong on Thursday. He presided over the inauguration of Hong Kong’s new chief executive, John Lee, on Friday.
This is Xi’s first trip outside mainland China since Covid hit. Lee will replace outgoing leader Carrie Lam.
On Wall Street, U.S. stocks closed the second quarter of the year lower. The S&P 500, which had its worst first half in more than 50 years, declined nearly 0.9% to 3,785.38.
Meanwhile, the Dow Jones Industrial Average slipped 253.88 points, or 0.8%, to 30,775.43, and the Nasdaq Composite pulled back by 1.3% to 11,028.74.
As the U.S. economy slows and consumers spend less, cash flow for companies will take a hit and stocks will likely fall further, according to Rebecca Patterson, chief investment strategist at Bridgewater Associates.
“Stocks will be challenged, we think, in the second half of the year in the U.S. We’re still quite bearish,” she told “Squawk Box Asia.”
This was the worst first half for the market in 50 years and it’s all because of one thing — inflation
A multitude of factors conspired to generate the stock market’s worst first-half since 1970, but they all emanated from one word: inflation.
The cost of living started the year running at levels the U.S. had not seen since the early 1980s.
Worse, Federal Reserve officials, armed with full-year forecasts of “transitory” inflation that now seem almost comically inaccurate, fell behind the curve, endangering a market and economy still fragile from the Covid pandemic.
Six months later, the damage has been severe if something short of catastrophic: An S&P 500 down nearly 20%, a symbol of how risk investing across the spectrum, from crypto to IPOs and even some areas of the commodities market, has collapsed.
“It was inflation. That’s the Fed’s nemesis,” said Quincy Krosby, chief equity strategist for LPL Financial. “It was the Fed staying with its ‘transitory’ mindset of inflation easing. ... It was central bank largesse, it was government largesse. The Fed was surprised [about inflation] even just a few days before its last meeting. That’s how we got here.”
Supply chain constraints that the Fed thought would ease were behind much of inflation’s rise. Demand has simply overwhelmed shippers’ ability to get products to market, resulting in much higher prices. The Russia attack on Ukraine exacerbated some of those problems, driving up energy and food prices. Shopper confidence has crumpled and inflation expectations, among consumers if not in financial markets, have surged.
Missed signals, mass damage
After falling behind the inflation curve, the Fed has now been forced to play catch-up in the form of interest rate hikes worth 1.5 percentage points, with more to come. Many on Wall Street have questioned why the Fed hasn’t been even more aggressive.
Uncertainty about the path ahead has compounded the nettlesome impact of inflation running by one Labor Department measure at 8.6%, the highest since December 1981. As recently as December 2021, the Fed, which targets inflation at 2%, was projecting its preferred headline measure to run at 2.6% this year; new data Thursday showed it at 6.3%, with core inflation excluding food and energy even running at 4.7%.
Fed Chair Jerome Powell “needs to regain control of the inflation narrative ... now he’s losing total control,” Allianz economic advisor Mohamed El-Erian recently told CNBC. “He’s got to move because, if he doesn’t, he’s going to be chasing the market and he’s not going to get there.”
Besides the damage to the big stock market averages such as the S&P 500 and the Dow Jones Industrial Average, which is down more than 14% year to date, there has been carnage everywhere.
The Nasdaq, which has a stronger tech focus, has suffered losses approaching 30%. Bitcoin, the highest-profile cryptocurrency, has tumbled nearly 60%. Copper, often considered an economic bellwether, has fallen more than 15%, and cotton has slumped more than 13%.
Capital markets also have taken a beating.
Special purpose acquisition companies, which provide blank checks from investors and were all the rage last year, have fallen on hard times. CNBC’s Post SPAC Index, which follows the vehicles from their initial listing through either a merger target or live deal, is having its worst month since being introduced in November 2020, down nearly 25%.
More
Finally, in the world of trading tulips and unicorns, things are heating up. Looks to me like the crypto kings just suddenly ran out of greater fool buyers.
Crypto hedge fund Three Arrows Capital plunges into liquidation as market crash takes toll
Published Wed, Jun 29 2022 8:06 AM EDT Updated Wed, Jun 29 2022 12:55 PM EDT
Major cryptocurrency hedge fund Three Arrows Capital has fallen into liquidation, a person with knowledge of the matter told CNBC, marking one of the biggest casualties of the latest so-called “crypto winter.”
Teneo has been brought on board in the last few days to deal with the liquidation process, the person, who requested anonymity because they were not authorized to discuss the matter publicly, said.
Sky News first reported the liquidation story.
Three Arrows Capital, or 3AC as it is also known, did not respond to a request for comment when contacted by CNBC.
Teneo is in the very early stages of the liquidation process, the person said. The restructuring firm is taking steps to realize the assets 3AC has, then it will set up a website in the next day or two with instructions for how creditors can get in touch to make any claims, the source added.
3AC, co-founded by Zhu Su and Kyle Davies, is one of the most prominent crypto hedge funds (which focus on investments in digital assets like cryptocurrencies) around and is known for its highly leveraged bets. Zhu has extremely bullish views on bitcoin.
But a slump in digital currency prices, which has seen billions of dollars wiped off the market in recent weeks, has hurt 3AC and exposed a liquidity crisis at the company.
On Monday, 3AC defaulted on a loan from Voyager Digital made up of $350 million in the U.S. dollar-pegged stablecoin, USDC, and 15,250 bitcoin, worth about $304.5 million at today’s prices.
3AC had exposure to the collapsed algorithmic stablecoin terraUSD and sister token luna.
The Financial Times reported earlier this month that U.S.-based crypto lenders BlockFi and Genesis liquidated some of 3AC’s positions, citing people familiar with the matter. 3AC had borrowed from BlockFi but was unable to meet the margin call.
More
https://www.cnbc.com/2022/06/29/crypto-hedge-fund-three-arrows-capital-plunges-into-liquidation.html
Crypto exchange CoinFlex claims ‘Bitcoin Jesus’ is the investor behind $47 million debt
Published Wed, Jun 29 2022 9:46 AM EDT
Digital asset exchange CoinFlex is locked in a public battle with long-time cryptocurrency investor Roger Ver over a $47 million debt, reflecting the latest saga to unfold amid the market crash.
On Tuesday, CoinFlex CEO Mark Lamb named Roger Ver, who earned the nickname “Bitcoin Jesus” for his evangelical views early on in the industry, as the investor who failed to pay $47 million of stablecoin USDC as part of a margin call.
USDC is a stablecoin pegged one-to-one with the U.S. dollar. A margin call is a situation in which an investor has to commit more funds to avoid losses on a trade made with borrowed cash.
CoinFlex paused withdrawals for customers last week. Lamb revealed on Monday that an individual investor’s account went into “negative equity.” The company would typically automatically liquidate that investor’s positions. But this particular investor had an agreement with CoinFlex that did not allow this to happen.
In return, the investor had pledged “stringent personal guarantees around account equity and margin calls in exchange for not being liquidated,” CoinFlex said.
At the time Lamb did not name the investor. But on Tuesday, the CoinFlex CEO claimed it was Ver who owed the company money. Lamb said Ver has been served with a notice of default.
“He had a long track record of previously topping up margin and meeting margin requirements in accordance with this agreement. We have been speaking to him on calls frequently about this situation with the aim of resolving it. We still would like to resolve it,” Lamb said in a tweet.
But Ver denied that he is the investor behind the debt. Ver said that a counterparty owes him “a substantial sum of money” and that he is currently “seeking the return” of his funds.
CoinFlex’s Lamb said the debt is “100% related” to Ver’s account and said the company “denies that we have any debts owing” to Ver.
“His statement is blatantly false. It is unfortunate that Roger Ver needs to resort to such tactics in order to deflect from his liabilities and responsibilities,” Lamb said.
---- On Monday, CoinFlex announced plans to issue a new coin called Recovery Value USD, or rvUSD in order to raise the $47 million shortfall. The company is offering 20% interest on the coin to entice investors.
The CoinFlex-Ver saga is the latest drama to unfold as a result of a slump in cryptocurrency prices over the past few weeks that has wiped billions of dollars of value off of the market in a period being dubbed a new “crypto winter.”
More
Grayscale sues SEC after rejection of bid to turn the largest bitcoin fund into an ETF
Published Wed, Jun 29 2022 11:47 PM EDT
Grayscale, which manages the world’s largest bitcoin fund, said it would sue the U.S. Securities and Exchange Commission after regulators turned down its bid to convert the investment vehicle into an exchange-traded fund.
The SEC on Wednesday rejected Grayscale’s application for a spot bitcoin exchange-traded fund, citing a failure by the investment manager to answer questions about concerns around market manipulation.
The watchdog is concerned investors would lack sufficient protections under the Grayscale proposal.
Grayscale filed to make its Bitcoin Trust, known as GBTC, an ETF back in October 2021, but the ruling faced multiple delays. Grayscale had piled pressure on the watchdog to side with it, including by giving people a way of quickly emailing in to express their support.
Soon after the SEC’s rejection, Grayscale filed a petition challenging the decision with the U.S. Court of Appeals for District of Columbia Circuit. The litigation is being led by Grayscale’s senior legal strategist Donald B. Verrilli Jr., a former U.S. solicitor general, and a team of attorneys at law firm Davis Polk & Wardwell.
Verrilli said the SEC is “failing to apply consistent treatment to similar investment vehicles, and is therefore acting arbitrarily and capriciously in violation of the Administrative Procedure Act and Securities Exchange Act of 1934.”
---- Grayscale argues the SEC’s position is inconsistent in light of previous decisions to greenlight other bitcoin-based ETFs, including those based on futures markets and one that allows investors to short — or bet against — the cryptocurrency.
Crypto bulls had pinned their hopes on the SEC approving the first U.S. spot bitcoin ETF, a move that would potentially open the cryptocurrency up to more institutional investment.
The move to deny Grayscale’s bitcoin ETF application adds to a slew of negative news around crypto lately. Earlier this week, embattled crypto hedge fund Three Arrows Capital collapsed into liquidation.
More
"No one ever made enough money," says Jules Bertillon
House of All Nations. 1938.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Natural gas wise, it looks like being a long cold winter in continental Europe, unless we get some global warming winter relief.
Pace of house price growth slows as average price hits new record of £271.6k
Thursday 30 June 2022 7:32 am
House prices saw a slight slowdown in growth this month as the price tag of an average UK home hit a new record of £271,613.
According to the Nationwide House Price Index, published on Thursday morning, UK annual house price growth slowed annual UK house price growth to 10.7 per cent in June.
This was a subdued pace of growth compared to 11.2 per cent in May, while last month average prices increased by £26,000.
London continued to be the weakest performing UK region, with annual price growth slowing to six per cent, from 7.4 per cent in the previous quarter.
Analysts warned intensifying household pressures on finances could result in a dampened market in the months to come.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Even though prices are not rising quite as rapidly as they have been, property market resilience continues to defy the laws of economic gravity.”
Activity was “more determined by lack of choice than recent cost-of-living and interest rate rises,” Leaf added.
He said: “There is no question that increasingly-stretched affordability is holding back some, as well as slowing house price growth and the number of transactions. But there is still demand for correctly-priced properties, underpinned by low unemployment and a race for space which is still not satisfied.”
Borrowers have seen rate increases in recent months, with mortgage products now around three to four per cent typically.
EU draws record gas supplies from UK as National Grid reveals emergency plan to cut flows to Europe
Wednesday 29 June 2022 9:00 pm
The UK has exported record amounts of gas to the continent since March as European Union (EU) member states scramble to fill their gas reserves ahead of winter, to protect against further disruption in resources from Russia.
The National Grid, which oversees the countries energy supplies, revealed to news agency Reuters that around 75m cubic metres per day have been flowing from the UK into Europe.
Member states are targeting 80 per cent capacity heading into winter, with EU storage levels currently sitting at 57.6 per cent.
The company’s spokesperson revealed that if flow rates continued until September, they could account for around 15 per cent of Europe’s strategic gas storage.
The UK often has gas to spare during the lower demand summer months alongside very little storage – making it a popular vendor of gas into Europe via its pipelines into Belgium and Netherlands – known as interconnectors.
It also imports large volumes of gas from the continent at the height of winter – as it lacks the capacity to store large volumes of gas for extended periods of time since the closure of its storage site in Rough, Yorkshire four years ago.
Centrica has since applied to re-open the site, but it is unlikely to be operational this winter.
The revelations of record gas sales follow media reports the UK could halt gas supplies into Europe under emergency plans if it suffers severe supply shortages this winter.
The Financial Times has revealed the National Grid would shut off its pipelines into Europe if there was loss of pressure in the gas system.
The measure would be an early step under the UK’s four-stage emergency plan to ensure the country’s energy needs were met.
---- The UK will stress-test its emergency gas shortage plan in September.
National Grid told the newspaper its test was an annual event, but that the latest exercise would “reflect the circumstances” as Russia curtails gas exports to Europe.
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.
What’s wrong with this? Just about everything.
Pfizer signs new $3.2 billion COVID vaccine deal with U.S. government
Manas Mishra and Michael Erman Wed, June 29, 2022 at 10:00 PM
(Reuters) -Pfizer Inc and partner BioNTech SE said on Wednesday they signed a $3.2 billion deal with the U.S. government for 105 million doses of their COVID-19 vaccine, which could be delivered as soon as later this summer.
The deal includes supplies of a retooled Omicron-adapted vaccine, pending regulatory clearance, according to Pfizer.
Drugmakers have been developing vaccines to target the Omicron variant that became dominant last winter.
The average price per dose in the new deal is over $30, a more than 50% increase from the $19.50 per dose the U.S. government paid in its initial contract with Pfizer.
Some of the vaccine earmarked for adults included in the contract will be in single-dose vials, which are more expensive to manufacture but reduce waste of unused shots from open vials.
"We look forward to taking delivery of these new variant-specific vaccines and working with state and local health departments, pharmacies, healthcare providers, federally qualified health centers, and other partners to make them available in communities around the country this fall," U.S. Health and Human Services (HHS) official Dawn O’Connell said in a statement.
Advisers to the U.S. Food and Drug Administration on Tuesday recommended a change in the design of COVID-19 booster shots for this fall in order to combat more recently circulating variants of the coronavirus.
The U.S. government also has the option to purchase up to 195 million additional doses, bringing the total number of potential doses to 300 million, the companies said.
The new contract should boost 2022 vaccine sales for Pfizer and BioNTech, which share profits from the shots. Pfizer has forecast COVID-19 vaccine sales of $32 billion this year. Analysts, on average, have forecast 2022 sales of around $33.6 billion for the shots.
More
https://www.yahoo.com/news/pfizer-signs-3-2-billion-210047641.html
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.
First perovskite solar cell to cross 30-year expected lifespan
Michael Irving June 29, 2022
Perovskite is poised to become a major material for solar cells, but before then it needs to overcome a major durability issue. Engineers at Princeton have unveiled a new perovskite solar cell design that tests suggest could last as long as 30 years of real-world use.
Silicon has been the go-to material for solar cells for decades, but in the last 15 years or so perovskites have been quickly catching up. They’re approaching the efficiency of silicon but are cheaper to make, lighter and more flexible.
The problem, however, is that perovskites aren’t very stable and tend to break down when exposed to the elements. Fixing that problem has been the focus of plenty of past work, with scientists experimenting with adding bulky molecules, old pigments or quantum dots.
In the new study, the Princeton team addressed the stability issue by adding an ultra-thin capping layer between the light-absorbing perovskite layer and the charge-carrying layer. Just a few atoms thick, this capping layer was made of carbon disulfide, lead, iodine and chlorine, and served to protect the device from burning out within a few weeks.
Other teams have added 2D layers to extend the lifespan of perovskite solar cells, but not to the degree of this new one. By the team’s estimate, perovskite solar cells made with this capping layer could last up to 30 years of outdoor operation, making it the first of its type to cross the commercial threshold of a 20-year lifetime.
The researchers calculated this lifespan using a new accelerated aging technique they developed to test the durability of solar cells. Batches of the solar cells were placed in experimental chambers where they were exposed to bright light and various temperatures, from a hot summer’s day of 35 °C (95 °F) right up to an extreme 110 °C (230 °F). From this data, the team could extrapolate to a lifetime of three decades under standard environmental conditions.
The team says that not only does the study provide a new way to make more durable perovskite solar cells, but the accelerated aging technique will help scientists test the durability of all kinds of solar cells.
The research was published in the journal Science.
Source: Princeton University
Another weekend but no end in sight for Europe’s most useless war. Washington and a belligerent expanding NATO are prepared to fight to the last Ukrainian. Russia to the last Russian.
Like when Matilda fought Stephen for the throne of England back in 1138-1153, “when God and his Angels slept”, in the end neither party really won. Stephen became King but Matilda’s son Henry succeeded him as Henry II.
Have a great weekend everyone.
Financiers are great mythomaniacs, their explanations and superstitions are those of primitive men; the world is a jungle to them. They perceive acutely that they are at the dawn of economic history.
House of All Nations. 1938.
House of All Nations
The novel portrays the inner workings of the financial world of a bank in Paris in the early 1930s. The bank is populated by a cast of shady characters who are manipulative, unsavory schemers. The owner of the Bertillon Brothers bank, Jules Bertillon, exemplifies all that is bad about the bank and will stop at nothing to achieve his sole aim of making as much money as he can.
https://en.wikipedia.org/wiki/House_of_All_Nations
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