Baltic Dry Index. 2159 -55 Brent Crude 113.60
Spot Gold 1811 US 2 Year Yield 2.92 -Thurs.
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 05/07/22 World 555,255,3744
Deaths 6,362,472
I do not think it is an exaggeration to say history is largely a history of inflation, usually inflations engineered by governments for the gain of governments.
Friedrich August von Hayek.
In the Asian stock casinos, timid gains. But more nervousness about rising interest rates and rising Covid infections in Macau and Hong Kong.
In the EUSSR, growing worry over whether Russia will or can supply enough natural gas to Europe due to all of the USA, EU, and others sanctions.
In America, another senseless mass shooting.
And so the second half of 2022 gets underway.
South Korea stocks lead broad gains in Asia; Reserve Bank of Australia decision ahead
SINGAPORE — Shares in the Asia-Pacific mostly traded higher as investors look ahead to the Reserve Bank of Australia’s rate decision.
South Korea’s Kospi increased 1.13%, and the Kosdaq advanced 2.96%. SK Hynix jumped 3.25% while Naver rose 3.19%.
The Nikkei 225 in Japan gained 0.67%, while the Topix index rose 0.2%.
Hong Kong’s Hang Seng index pared earlier gains to rise 0.57%.
In Australia, the S&P/ASX 200 was 0.22% higher.
The Reserve Bank of Australia is expected to raise interest rates by 50 basis points later today, a Reuters poll predicted.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.33%.
Mainland China markets bucked the trend. The Shanghai Composite slipped 0.19%, and the Shenzhen Component was down 0.7%.
U.S. Treasury Secretary Janet Yellen and China’s Vice Premier Liu He held a virtual call on Tuesday to discuss macroeconomic issues.
Elsewhere in the region, South Korean data released Tuesday showed the consumer price index in June rose 6% compared with the same period a year ago. That is slightly higher than the expected 5.9% increase and the fastest annual rise since November 1998, according to Reuters.
“Price pressures and a hawkish U.S. Fed, at a time when South Korea’s balance of payments is under pressure, strengthens the case for a 50bp rate hike at the [Bank of Korea’s] meeting on 13 July,” ANZ economist Krystal Tan wrote in a note on Tuesday.
Japan’s services activity expanded at the fastest pace since October 2013, according to the final au Jibun Bank Japan Services Purchasing Managers’ Index. The print rose to 54, compared to 52.6 in May.
The 50-point mark separates growth from contraction on a monthly basis.
China’s service sector activity also grew, according to the Caixin services purchasing managers’ index. The index rose to 54.5 in June compared to 41.4 in May as Covid measures were eased.
In company news, a group of lawmakers in the U.K. are reportedly calling for a ban on Chinese CCTV makers Hikvision and Dahua over alleged links to human rights abuses.
U.S. markets were closed overnight for a holiday.
More
https://www.cnbc.com/2022/07/05/asia-markets-rba-rate-decision-services-pmi-currencies-oil.html
South Korea’s June inflation hits 24-year high, raising expectations for a big rate hike
South Korea’s June inflation accelerated to the fastest pace since the Asian financial crisis, fanning expectations the central bank could deliver a 50 basis point rake hike for the first time next week to cool prices and curb capital outflows.
The consumer price index (CPI) rose 6.0% in June from a year earlier, government data showed on Tuesday, the fastest since November 1998 and exceeding the central bank’s 2% target for the 15th consecutive month.
The CPI also sped up from a 5.4% rise in the previous month and exceeded the 5.9% tipped in a Reuters poll.
Tuesday’s data comes after Bank of Korea Governor Rhee Chang-yong said he will keep the door open for a possible 50 basis point hike as he monitors key economic data before the bank’s next rate decision on July 13.
A half-percentage-point interest rate increase, if delivered, will be the first-time in the central bank’s history.
In a meeting held after inflation data release, BOK deputy governor Lee Hwan-seok said the bank “needs to be particularly vigilant against further strengthening of inflationary expectations,” adding current inflation trends will continue for the time being.
More
Up next, a warning from Dr. Copper.
With prices skirting a 17-month low, Dr Copper’s prognosis about the global economy is downbeat
Published: July 4, 2022 at 7:22 a.m. ET
Dr Copper has graded the global economy, and noted: “must do better.”
The red metal is wryly considered by commodity watchers to hold a Ph.D in economics, because its use in a range of sectors, including home appliances, power generation and cars, helps it predict the trajectory of global growth.
So, copper’s price initial drop on Monday to a fresh 17-month low was sending a worrying signal to some. The Nymex copper contract HG00, -0.54%, which was trading electronically despite the U.S. Independence Day holiday, flirted with sub-$3.50 per pound, its cheapest since February 2021. The London Metal Exchange copper contract, having suffered a similar retreat, recently exchanged hands below $8,000 a tonne.
Hopes that economic activity would pick up steam as COVID-19 restrictions were eased in China, alongside fears of supply disruption after Russia invaded Ukraine, helped push the price of the Nymex copper contract to a record just above $5 per pound in March. LME copper rose to $10,600 a tonne, and the cost of energy and agricultural commodities also surged.
But central banks’ determination to stymie such inflation by tightening monetary policy has raised concerns about a global economic slowdown. The latest manufacturing surveys from many developed economies point to declining activity.
In addition, recent reaffirmation that Beijing will continue to tighten COVID-19 curbs to tackle outbreaks leaves lingering worries about crimped demand.
More
Next, will EUSSR stupidity put Germany, the powerhouse and paymaster of the EUSSR, out of business? It’s starting to look that way and we’re not even in winter. You couldn’t make this sort of political stupidity up.
Top German Trade Union Head Warns Entire Industries May Collapse Amid Worsening Energy Crisis
Monday, Jul 04, 2022 - 11:35 AM
Last month, Russia reduced Nordstream natural gas flows by 60% because of an alleged disruption. German industries, heavily reliant on cheap Russian NatGas, face skyrocketing energy costs that have put many in danger of collapse.
"Because of the NatGas bottlenecks, entire industries are in danger of permanently collapsing: aluminum, glass, the chemical industry," Yasmin Fahimi, the head of the German Federation of Trade Unions, told the newspaper Bild am Sonntag.
Fahimi warned: "Such a collapse would have massive consequences for the entire economy and jobs in Germany."
Economics Minister Robert Habeck was quoted by Error! Hyperlink reference not valid. on Saturday saying the government is working to address surging energy costs for utilities and power costs for businesses and households. He warned weeks ago Germany should prepare for further cuts NatGas.
Germany recently triggered the "alarm stage" of its NatGas-emergency plan to address shortages as the energy crisis in Europe's largest economy is far from over.
Habeck had also likened the squeeze on Russian NatGas supplies and its damaging effects on industries to a catalyst that could spark a Lehman Brothers-like crisis.
Deutsche Bank's chief FX strategist George Saravelos told clients days ago he was becoming increasingly concerned about the unfolding energy crisis in Germany.
Saravelos pointed out that dwindling NatGas supplies to Germany and the resulting surge in electricity prices have created massive problems for industries and utilities.
The biggest blowup last week was German gas and power utility Uniper. Shares in the company crashed because it only received 40% of NatGas from Russia, and the rest had to be purchased in the open market (outside of long-term contracts), where prices have soared. This has created an immense strain on the utility, losing upwards of $30 million per day, or if annualized, could be an $11 billion loss.
More
Siemens Energy can't deliver turbine to Nord Stream 1 operator
June 14, 2022 4:25 PMUpdated 20 days ago
FRANKFURT (Reuters) - Siemens Energy on Tuesday said it was unable to hand back an aeroderivative gas turbine currently being overhauled in Canada to the operator of the Nord Stream 1 pipeline due to sanctions.
An absence of the equipment has been cited by Gazprom as the reason behind lower flows through the pipeline.
“Due to the sanctions imposed by Canada, it is currently impossible for Siemens Energy to deliver overhauled gas turbines to the customer,” the company said.
“Against this background we have informed the Canadian and German government and are working on a viable solution.”
https://www.reuters.com/article/ukraine-crisis-nordstream-siemens-energ-idUKKBN2NV1EU
In crypto land news, yet another player suspends service!
Singapore-based crypto lender Vauld suspends withdrawals
July 4, 202210:00 AM GMT+1
HONG KONG, July 4 (Reuters) - Singapore-based crypto lending and trading platform Vauld said on Monday it would suspend withdrawals and trading and seek new investors, the latest sign of stress in the embattled crypto industry.
Vauld CEO Darshan Bathija said in a blog post that it was facing "financial challenges" due to: "the volatile market conditions, the financial difficulties of our key business partners inevitably affecting us, and the current market climate which has led to a significant amount of customer withdrawals in excess of a $197.7 million since June 12."
The crypto industry has been shaken by a series of collapses in recent months including the failure of so-called stablecoin TerraUSD, large U.S.-based lender Celsius network pausing withdrawals and Singapore-based crypto hedge fund Three Arrows Capital entering into liquidation. read more
Crypto lenders have been particularly affected and crypto exchange FTX has signed a deal with an option to buy embattled crypto lender BlockFi for up to $240 million, the company said last week. read more
Bitcoin , the world's largest cryptocurrency, has lost around half its value since early May, and was last trading at just under $20,000.
Vauld said it had appointed legal and financial advisers, was in discussions with potential investors, and would also apply to the Singapore courts for a moratorium that would have any proceedings against it halted to give it time to carry out a restructuring.
Vauld did not immediately respond to an emailed request for comment.
Singapore-based crypto lender Vauld suspends withdrawals | Reuters
Finally, so you really, really, really want a Tesla EV.
German road traffic agency says 59,000 Tesla vehicles have software glitch
Published Sun, Jul 3 2022 1:40 PM EDT
Germany’s road traffic agency said it was recalling Tesla models Y and 3 because of a fault in the automatic emergency call system that affects 59,000 vehicles globally.
The KBA watchdog said on its website dated June 29 that a software flaw was causing a breakdown of the eCall, which is designed to automatically contact emergency responders in the event of a serious accident.
German regional broadcaster Rundfunk Berlin-Brandenburg, which serves the region that is home to Tesla’s German model Y and battery production site near Berlin, first reported the recall on Saturday.
KBA said 59,129 vehicles were affected globally but did not specify how many of those were registered in Germany.
The software glitch is an added headache for Chief Executive Officer Elon Musk after Tesla on Saturday said it delivered 17.9% fewer electric vehicles in the second quarter than the previous quarter, as China’s Covid-19-related shutdown disrupted its production and supply chain.
Musk said last month that Tesla’s new factories in Texas and Berlin are “losing billions of dollars” as they struggle to increase production because of a shortage of batteries and Chinese port issues.
The U.S. National Highway Traffic Safety Administration (NHTSA) early in June upgraded its probe into 830,000 Tesla vehicles with the advanced driver assistance system Autopilot, a required step before it could seek a recall.
Tesla was not immediately available to comment.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Swiss Inflation Hits 29-Year High on Ukraine War, Supply Chains
July 4, 2022
(Bloomberg) -- Inflation in Switzerland accelerated to the fastest pace in nearly three decades, hitting 3.4% in June.
The pace is up from 2.9% in May, and well above the Swiss National Bank’s 2% target. Based on the European Union-harmonized measure, it was at 3.2%, compared with 8.6% in the surrounding euro area.
Russia’s war with Ukraine has been a “significant factor” in the acceleration of prices in Switzerland, as are persistent supply-chain bottlenecks, according to the SNB.
The development comes two weeks after the central bank unexpectedly raised its monetary policy rates to -0.25% in order to help counter increased inflationary pressures. SNB chief Thomas Jordan said then that inflationary pressures remain high and officials may have to hike again.
The central bank’s June forecast for inflation is 2.8% this year, 1.9% in 2023 and 1.6% in 2024.
Swiss Inflation Hits 29-Year High on Ukraine War, Supply Chains - BNN Bloomberg
Turkey’s annual inflation soars to almost 79%, hitting highest level in 24 years
Published Mon, Jul 4 2022 4:03 AM EDT
Inflation in Turkey rose close to 79% last month, the highest the country has seen in a quarter of a century.
The annual inflation rate was 78.62% for June, according to the Turkish Statistical Institute, surpassing forecasts. That’s the country’s highest annual inflation reading in 24 years. The monthly increase was 4.95%.
Soaring consumer prices have hit the population of 84 million hard, with little hope for improvement in the near term as a result of the Russia-Ukraine war, high energy and food prices, and a sharply depreciated lira, the national currency.
Transportation prices jumped 123.37% from the previous year, and food and non-alcoholic beverage prices climbed 93.93%, according to government data.
Turkey has enjoyed rapid growth in previous years, but President Recep Tayyip Erdogan has for the last few years refused to meaningfully raise rates to cool the resulting inflation, describing interest rates as the “mother of all evil.” The result has been a plummeting Turkish lira and far less spending power for the average Turk.
Erdogan instructed the country’s central bank — which analysts say has no independence from him — to repeatedly slash borrowing rates in 2020 and 2021, even as inflation continued to rise. Central bank chiefs who expressed opposition to this course of action were fired; by the spring of 2021, Turkey’s central bank had seen four different governors in two years.
The country’s interest rate was gradually reduced to 14% last fall and has remained unchanged since. The lira fell 44% against the dollar last year, and is down 21% against the greenback since the start of this year.
More
https://www.cnbc.com/2022/07/04/turkeys-annual-inflation-soars-to-almost-79percent.html
Home sellers are realizing it's no longer their housing market
Sun, July 3, 2022 at 9:01 PM
The housing market has rapidly changed. Sellers, once in the driver’s seat at the start of the year, are much more accommodating to complete a home sale as borrowing costs skyrocket for buyers.
A growing number of home sellers have been forced to readjust their home prices in recent weeks. According to Redfin, an estimated 6.1% of homes for sale during the four weeks leading to June 19, asked for a price drop – a record high as far back as the data goes, through the start of 2015.
That comes as mortgage rates hit 5.70% last week and are nearly 2.5 percentage points higher than the beginning of 2022, relegating some buyers to the sidelines with busted budgets.
“If you overprice your home in any market, you're going to feel resistance,” Lizy Hoeffer, owner and mortgage broker at Cross Country Mortgage LLC, said. “In the last three years, sellers have been able to get basically whatever they want for their house. We're just not in a market like that right now.”
‘Buyer budgets don’t stretch as far as they used to’
The dream of homeownership is slipping out of grasp for many would-be buyers as costs rise.
“Homeowners thinking about moving should know that while recent sellers have enjoyed favorable housing conditions that included high prices and fast sales, the tide is shifting,” Realtor.com Chief Economist Danielle Hale, told Yahoo Money. “Higher rates and home prices mean that homebuyer budgets don’t stretch as far as they used to.”
According to Realtor.com, rising mortgage rates have increased the monthly mortgage payment on a median-priced home an estimated 60% more than last year. The median monthly mortgage payment has jumped by $513 from the start of the year through May, according to a recent report from MBA.
More
https://www.yahoo.com/news/home-sellers-housing-market-200114132.html
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.
Macau COVID outbreak hits more than 900 as infections spread
July 5, 2022 3:44 AM GMT+1 Last Updated 2 hours ago
HONG KONG, July 5 (Reuters) - Macau reported 89 new coronavirus cases on Tuesday, taking the total to more than 900 infections since mid-June, as authorities in the world's biggest gambling hub race to contain its largest outbreak since the pandemic began.
More than 13,000 people are under quarantine in the Chinese special administrative region, which has effectively shut down to limit the spread of coronavirus.
The city's more than 600,000 residents are subject to three citywide COVID-19 tests this week, with people also required to take rapid antigen tests in between.
While the former Portuguese colony has not introduced a full scale lockdown seen in mainland Chinese cities like Shanghai, most facilities are shut and restaurants can only provide takeaway.
Only Macau's casinos have been allowed to stay open in a move to ensure job security. The government relies on the industry for over 80% of its tax revenue with most of the population employed directly or indirectly by the casino resorts.
While casinos are physically open, there are hardly any gamblers inside and very few staff working, with many employees asked to stay at home, as per the government's request.
The stringent measures come after Macau has been largely COVID-free since an outbreak in October 2021. It still has an open border with mainland China, with its economy firmly hinged to the inflow of Chinese visitors.
Macau 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.
More
Who’s most at risk of developing long COVID? Experts think these 6 groups of people might be
Sun, July 3, 2022 at 2:44 PM
COVID just got a lot more complicated.
With cases rising in the U.S. and globally yet again, fueled by subvariants known to evade immunity, questions abound.
How many times will I get COVID?
Do I have long COVID—and if not, what are the chances I’ll get it eventually?
It’s hard to say who’s at risk for a condition that’s yet to be well defined, experts tell Fortune. But just as researchers and practitioners have their theories about long COVID’s root causes, they have educated guesses about who might be most at risk.
An enigmatic condition
Long COVID is, quite possibly, the great enigma of our time.
It’s “a very big umbrella term,” Dr. Alba Miranda Azola, co-director of the Post-Acute COVID-19 Team Program at Johns Hopkins University School of Medicine, tells Fortune.
“It’s patient defined, patient created,” she says of the condition federal officials say could affect up to 23 million Americans. “Thus, the patients define themselves as having long COVID, and the term is very inclusive.”
As research into the nascent condition expands, it seems that almost anything and everything could be a symptom—from ear numbness, a sensation of “brain on fire,” and erectile dysfunction to irregular menstrual periods, constipation, and peeling skin, according to a landmark study published last summer in British medical journal The Lancet.
Recently scientists have attempted to categorize long COVID patients into subgroups, hypothesizing that the disease isn’t one thing, but many.Dr. Alexandra Brugler Yonts—an infectious disease specialist at Children’s National Hospital in Washington, D.C., and the head of its new Pediatric Post-COVID Program—tells Fortune she divides long COVID into five categories, grouped by causes: long-term direct effects of the virus, inflammation, dysautonomia (a disorder of the autonomic nervous system that can cause symptoms like abnormal heart rate), ongoing viral activity, and altered immune response.
More
https://www.yahoo.com/news/most-risk-developing-long-covid-134443077.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.
Switzerland’s 20 million kWh ‘water battery’ is now operational
It is the equivalent of 400,000 electric car batteries.
By Ameya Paleja Jul 04, 2022
A 900 MW 'water battery' that cost Switzerland €2 billion and was under construction for 14 years, is now operational, Euronews reported. The battery is located nearly 2,000 feet (600 m) underground in the Swiss Alps.
With the world focused on harnessing its energy from renewables, there is also the need to store this energy which is produced intermittently depending on weather conditions and the time of the day. While dense battery packs are a solution to this problem, these storage devices also need minerals like nickel, cobalt, and lithium, which need to be mined and are not environment-friendly.
Scientists worldwide have been experimenting with other energy storage ideas, such as using carbon dioxide or even tapping into the carrying capacity of elevators in high rises in urban areas for rapid energy dissipation when demand peaks. While these are largely still experimental, a water battery is something that is well known to work.
How does a water battery work?
A water battery consists of two large pools of water located at different heights. When power production is high, excessive power is used to move water from the lower pool to the pool at a higher height, which is similar to charging a conventional battery.
When power demand increases, the water at the higher level can be released and, as it heads to the lower pool, it passes through turbines that generate electricity and can be used to power the grid.
The concept might sound new but has been in use in Switzerland for centuries. The U.S. has also been using this method for nearly a century now, while China recently decided to build 270 GW of storage capacity by 2025.
The water battery that recently went operational in Switzerland has a storage capacity of 20 million kWh, the equivalent of 400,000 electric cars, and is aimed at helping stabilize the energy grid in Switzerland and other connected grids in Europe. The plant has six turbines that can generate 900 MW of power, Euronews revealed.
Why did it take Switzerland 14 years to build it?
The battery has been built between the reservoirs of Emosson and Vieux Emosson in Valais, a canton in the southwestern part of Switzerland. Located nearly 2,000 feet (600 m) underground, the vast engine room of the plant measures about 650 feet (200 m) long and is over 100 feet (32 m) wide.
To move the building materials to the site, the engineers had first to carve out tunnels through the Alps. The length of the tunnels dug for the project extends to about 11 miles (18 km). Once these tunnels were in place, building material and prefabricated buildings could be moved into the mountain, a process that took 14 years.
To increase the energy storage capacity of the battery, the height of the Vieux Emosson dam was also increased by 65 feet (20 m). After all this hard work, the battery is now operational and at its peak is capable of powering 900,000 homes at a time.
https://interestingengineering.com/switzerlands-water-battery-operational
The real cost of the State is the prosperity we do not see, the jobs that don’t exist, the technologies to which we do not have access, the businesses that do not come into existence, and the bright future that is stolen from us. The State has looted us just as surely as a robber who enters our home at night and steals all that we love.
Frederic Bastiat.
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