Baltic Dry Index. 2214 -26 Brent Crude 111.34
Spot Gold 1812 US 2 Year Yield 2.92 -Thurs.
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 04/07/22 World 554,419,117
Deaths 6,361,474
I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for ten years.
Warren Buffett.
In the stock casinos, more oily words from the stock barkers that the bottom is in. It isn’t, although every bear market gets bear market bull rallies.
When insiders start buying in depth, the bottom may be approaching, but until then a new global recession is approaching according to the commodity markets, while the stock casinos have to first overcome the reverse wealth effect.
I strongly suspect that the new global recession started in early 2022, but as always the official count lags reality by about six months.
With US stock casinos closed for the Independence Day holiday, today’s other stock casino action will most likely just be made up of noise.
Asia-Pacific markets are mixed as investors search for direction
SINGAPORE — Australian stocks rose more than 1% while Hong Kong and South Korean markets were lower on Monday ahead of Australia and Malaysia central bank decisions this week.
The S&P/ASX 200 advanced 1.26%, with banking and retail stocks in the green.
Japan and mainland China markets were also higher.
The Nikkei 225 in Japan pared earlier gains to trade 0.54% higher, while the Topix index climbed around 1%.
In China, the Shanghai Composite gained 0.14% and the Shenzhen Component rose 0.9%.
Hong Kong and South Korea stocks were down.
The Hang Seng index was closed on Friday and slipped as much as 1.8% in early trade on Monday. It was last down 0.59%.
Exchange-traded funds will be included in the stock connect scheme that links Hong Kong and mainland China from Monday.
South Korea’s Kospi initially struggled for direction and was last down 0.91%, while the Kosdaq shed 1.92%.
MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.13% lower.
In Southeast Asia, Indonesia’s Jakarta Composite dropped 2.54%.
Dan Fineman, co-head of Asia-Pacific equity strategy at Credit Suisse, said markets appear to have adequately priced in the amount of Fed hikes that are to come, but that the “very high risk of recession” means markets are unlikely to rally.
“I think that the worst is behind us. We probably will be bumping along the bottom, maybe a bit more downside from here, but I think the difficulties of the first half will not be repeated on the same scale in the second half,” he told CNBC’s “Street Signs Asia” on Monday.
In company news, Chinese property developer Shimao missed the interest and principal payment of a $1 billion offshore bond. Other real estate companies have also missed interest payments or defaulted on their debt.
The U.S. market is closed for a holiday Monday.
Looking ahead, results from a private survey on China’s services activity is due later this week, along with South Korean inflation data and several central bank decisions.
Last week, on the first day of the second half of the year, European stocks closed mixed, while markets stateside rallied. The first half of 2022 was marked by concern over inflation, rising interest rates and recession.
https://www.cnbc.com/2022/07/04/asia-markets-stock-connect-bonds-currencies-and-oil.html
A bear market in stocks has historically signaled a peak in inflation - but that doesn't mean the pain is over for investors, says a Wall Street investment chief
July 2, 2022
Investors have been waiting for high inflation readings to moderate for months on end, and now the ongoing bear market is likely to deliver that outcome.
That's according to The Leuthold Group's chief investment officer Doug Ramsey, who said in a note last week that 20% price declines in the S&P 500 usually "unleashed a powerful, disinflationary impulse."
That's because the wealth effect — or the idea that consumers feel wealthier when they see their investment portfolios rise — spurs them to spend more money on goods and services and help grow the economy. The exact opposite happens when stock prices decline by a considerable amount.
"The negative wealth effect certainly exists, and it is a powerful thing," Ramsey said. The S&P 500 has shed more than $9 trillion in market value during the current bear market, while crypto markets erased $2 trillion in value, so it's hard to see that not impacting the sentiment and spending habits of consumers.
Falling prices are already showing up in certain commodities, with lumber, copper, wheat, cotton, and natural gas in significant bear markets, even oil prices are down about 12% over the past month.
While falling prices would be welcomed by both investors and the Federal Reserve as it could point to fewer interest rate hikes going forward, it doesn't mean pain in the stock market is over, according to Ramsey. That's because falling prices signal the likelihood of an economic recession is even higher.
"The action that troubles us the most is the setback in the CRB Raw industrials Index, because we think it is about as close as one can get to a daily version of the ISM Manufacturing Survey," he said.
The ISM Manufacturing Index is a monthly economic indicator that measures new orders, production, employment, deliveries, and inventories of more than 300 manufacturing firms.
In other words, a decline in commodity prices suggests a decline in economic activity, which could mean a further decline in stock prices is possible if a recession materializes. And while commodity prices have been falling, initial unemployment claims have been on the rise in recent weeks, suggesting that the job market could be getting weaker.
"If inflation were contained and the unemployment rate was still, say, near 5%, the [Boom-Bust] Barometer's weakness might be consistent with a mid-cycle slowdown. But for months on end, we've catalogued the list of economic and market developments that are screaming late cycle," Ramsey said.
More
Finally, another day and another alleged crypto fraud. Is there anything honest about cryptos?
U.S. CFTC charges South African company with record $1.7 billion bitcoin fraud
July 1, 2022 8:32 AM GMT+1
WASHINGTON, June 30 (Reuters) - The U.S. commodities regulator announced on Thursday it had filed civil charges against a South African man and his company for operating a fradulent commodity pool worth over $1.7 billion in bitcoin.
The Commodity Futures Trading Commission (CFTC) said the fraud scheme, which saw the firm solicit bitcoin online from thousands of people to purportedly operate a commodity pool, was the largest it had ever pursued involving the cryptocurrency. The CFTC filed charges against Mirror Trading International Proprietary Limited and its CEO, Cornelius Johannes Steynberg.
Steynberg had been a fugitive from South African law enforcement but was recently detained in Brazil on an INTERPOL arrest warrant, the CFTC said. He could not be immediately reached for comment.
The CFTC said in its complaint that the company claimed to have proprietary software that would realize significant trading gains for investors who pooled their bitcoin with it, but in reality no such "bot" existed.
In reality, only a small portion of the pooled bitcoin was ever invested, at a loss, and the rest was "misappropriated," according to the CFTC. The company ultimately filed for bankruptcy in 2021, shortly after which South African authorities launched a fraud investigation.
The CFTC said approximately 23,000 Americans invested in the pool.
Life is a dead-end street.
H. L. Mencken.
Global Inflation/Stagflation Watch.
Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.
Opinion: Stocks could drop 50%, Nouriel Roubini argues. Things will get much worse before they get better.
Last Updated: July 2, 2022 at 12:16 p.m. ET
By Nouriel Roubini
The global economy may get the worst of the 1970s and the Great Recession: A stagflationary debt crisis that would confound central banks and fiscal authorities
NEW YORK (Project Syndicate)—The global financial and economic outlook for the year ahead has soured rapidly in recent months, with policy makers, investors, and households now asking how much they should revise their expectations, and for how long.
That depends on the answers to six questions.
Six questions
First, will the rise in inflation in most advanced economies be temporary or more persistent? This debate has raged for the past year, but now it is largely settled: “Team Persistent” won, and “Team Transitory”—which previously included most central banks and fiscal authorities—must admit to having been mistaken.
The second question is whether the increase in inflation was driven more by excessive aggregate demand (loose monetary, credit, and fiscal policies) or by stagflationary negative aggregate supply shocks (including the initial COVID-19 lockdowns, supply-chain bottlenecks, a reduced labor supply, the impact of Russia’s war in Ukraine on commodity prices, and China’s “zero-COVID” policy).
While both demand and supply factors were in the mix, it is now widely recognized that supply factors have played an increasingly decisive role. This matters because supply-driven inflation is stagflationary and thus raises the risk of a hard landing (increased unemployment and potentially a recession) when monetary policy is tightened.
Hard or soft landing?
That leads directly to the third question: Will monetary-policy tightening FF00, +0.00% by the Federal Reserve and other major central banks bring a hard or soft landing? Until recently, most central banks and most of Wall Street occupied “Team Soft Landing.” But the consensus has rapidly shifted, with even Fed Chair Jerome Powell recognizing that a recession is possible, and that a soft landing will be “challenging.”
Moreover, a model used by the Federal Reserve Bank of New York shows a high probability of a hard landing, and the Bank of England has expressed similar views. Several prominent Wall Street institutions have now decided that a recession is their baseline scenario (the most likely outcome if all other variables are held constant). In both the United States and Europe, forward-looking indicators of economic activity and business and consumer confidence are heading sharply south.
The fourth question is whether a hard landing would weaken central banks’ hawkish resolve on inflation. If they stop their policy tightening once a hard landing becomes likely, we can expect a persistent rise in inflation and either economic overheating (above-target inflation and above potential growth) or stagflation (above-target inflation and a recession), depending on whether demand shocks or supply shocks are dominant.
Most market analysts seem to think that central banks will remain hawkish, but I am not so sure. I have argued that they will eventually wimp out and accept higher inflation—followed by stagflation—once a hard landing becomes imminent, because they will be worried about the damage of a recession and a debt trap, owing to an excessive buildup of private and public liabilities after years of low interest rates.
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.
Scientists keeping an eye on new COVID variant BA.2.75
The new variant has nine mutations on its spike protein and has spread to at least eight countries.
By TZVI JOFFRE Published: JULY 3, 2022 05:13 Updated: JULY 3, 2022 08:27
Scientists are keeping their eyes on a new SARS-CoV-2 (novel coronavirus) variant descended from the Omicron variant that has an unusual nine mutations on its spike protein and has spread to countries across the globe somewhat faster than other such variants.
The new variant, identified as BA.2.75, was first found in a sequence taken in India in early June. Since then, the variant has been spotted in Australia, Canada, Japan, Germany, New Zealand, the United Kingdom and the US. In just a matter of weeks, the variant has been detected in over 80 sequences around the world.
While it is still unclear if BA.2.75 will be able to compete with BA.5, the dominant variant in many countries at the moment, the number of mutations and its seemingly fast spread across a wide geographic area have scientists keeping an eye on it.
----Fleishon explained in a Twitter thread that recent months have seen a trend of variants based on Omicron lineages with mutations in the S1 section of the spike protein and specifically in the part of the spike protein which the virus uses to connect to and gain entry into cells, on a level not seen in second-generation variants from other variants of concern.
Up until now, however, these second-generation variants have only been found in a few cases within one region. This is the first time a second-generation variant from Omicron has spread to multiple regions.
More
https://www.jpost.com/health-and-wellness/article-711033
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.
Today, when smart technology isn’t.
Swarm of malfunctioning driverless taxis brings traffic to a halt for hours
More than a dozen driverless taxis caused a gridlock in one of the first public trials of the technology
1 July 2022 • 12:06pm
A swarm of driverless taxis held up traffic for hours at a junction after one of the first public trials of the technology went wrong.
More than a dozen autonomous vehicles operated by driverless car company Cruise in San Francisco came to a halt for around two hours before employees made it to the scene on Wednesday.
The company has not revealed what caused the vehicles to stop or why multiple cars suffered the fault at the same place. Several were stationary at the entrance to the crossroad junction, while others were stopped at the exit.
Cruise, backed by General Motors, started charging passengers for driverless taxi rides in San Francisco last week.
It is one of the first real-world robot taxi services in a major city. Vehicles do not have a safety driver in the front seat.
Under the company’s licence, it may only operate the taxis between 10pm and 6am and the cars are restricted to particular streets. Cruise, seen as a leader in self-driving technology, had been offering free rides to the public for several months before launching a paid service.
“We had an issue earlier this week that caused some of our vehicles to cluster together,” Cruise said. “While it was resolved and no passengers were impacted, we apologise to anyone who was inconvenienced.”
In April, police officers stopped a Cruise vehicle after it was found driving without headlights on after dark. After initially being confused when they found there was no driver in the car to question, they contacted the company.
Last year, cars operated by Waymo, Google’s self-driving car spin-off, were found repeatedly travelling up and down an otherwise quiet cul-de-sac in a street in San Francisco, with residents claiming that more than 50 a day were arriving.
An investment in knowledge pays the best interest.
Benjamin Franklin.
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