Baltic Dry Index. 2001 -54 Brent Crude 107.20
Spot Gold 1736 US 2 Year Yield 2.96 +0.02
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 28/07/22 World 578,768,455
Deaths 6,412,294
Jerome Powell said the Federal Reserve will press on with the steepest tightening in a generation to curb inflation while giving officials more flexibility on coming moves amid signs of a broadening economic slowdown. Policy makers raised the benchmark lending rate 75 basis points to a range of 2.25% to 2.5% and said they anticipate “ongoing increases” will be appropriate. Powell stepped away from the specific guidance he gave at the June meeting, though he didn’t take another similar-sized move off the table. Investors are betting rates will peak around 3.3% this year before the Fed starts cutting modestly in 2023.
Bloomberg.
As expected the US central bank raised its interest rate yesterday and forecast more rate hikes to come after its summer break.
According to the Fed, an interest rate of 2.25 to 2.50 percent is sufficient to see off official US inflation running at 9.10 percent. Well if they say so but that’s not the way to bet.
In the stock casinos a relief rally largely based on hopium and the Chairman Powell promise that the US economy is not in a recession.
My take is that bankster Powell is wrong again just as he was wrong about US inflation being “transitory”.
If technically the US economy is not yet in a declared recession it soon will be, as a snake bit EUSSR leads the global economy into recession from all their suicidal sanctions on Russia that have sent the price of EU natural gas into the stratosphere.
As for the relief rally, a fool and his money are soon parted. Look away from the rising price of crude oil now and the collapsing price of international freight shipping.
Below, yesterday’s casino action and an optimistic forecast from Morgan Stanley’s Mike Wilson, the firm’s chief U.S. equity strategist and chief investment officer.
The good news, the recession that isn’t will eventually end the ruinous inflation, but at what societal and monetary cost and was it necessary if the Fed had not mistaken inflation.
Asia-Pacific markets are mostly
higher after the Fed hikes rates
SINGAPORE — Shares in the Asia-Pacific region were
mostly higher on Thursday following the U.S. Federal
Reserve’s decision to raise rates by 75 basis points to fight inflation, a
move that was widely expected.
Among the major markets, only Hong
Kong shares slipped. The benchmark was
0.56% lower following a rate
hike by the central bank.
Australia led gains, with the 0.82%
higher.
The in South Korea advanced 0.81%, while the Kosdaq gained
0.36%.
Mainland China markets rose. The gained
0.57% while the was
0.69% higher.
Japan’s was
0.22% higher, while the Topix index was about flat.
MSCI’s broadest
index of Asia-Pacific shares outside of Japan rose 0.59%.
The
rate hike takes the Fed funds rate to its highest level since December 2018.
Fed Chair Jerome
Powell’s guidance about the central bank’s next moves boosted
U.S. stocks overnight.
“As the stance of
monetary policy tightens further, it likely will become appropriate to slow the
pace of increases while we assess how our cumulative policy adjustments are
affecting the economy and inflation,” he said.
With nearly two
months before the next Fed meeting, during which there will be two job reports
and two inflation reports, ING analysts pointed out in a note.
“A lot could happen
in that time so it is unsurprising that the Fed is being somewhat vague in its
forward guidance,” the analysts wrote.
“The immediate
priority is getting a grip on inflation, but we think the Fed will switch to
50bp hikes at the September and November FOMC meetings with a final 25bp hike
in December,” they added.
Expectations for a 50 basis point increase in
September were at 66% on Thursday morning in Asia, according to the CME Group’s FedWatch Tool. The Fed said it is
strongly committed to reducing inflation.
Powell also said he doesn’t
think the U.S. is currently in a recession.
But Mark Kiesel, chief investment
officer of global credit at Pimco, said the risks of recession have risen.
“Persistently high inflation has no
question caused global central banks to have to pivot. And that has raised the
recession risks,” he told CNBC’s “Street Signs Asia” on Thursday.
The Dow Jones Industrial Average
rose 436.05 points, or around 1.4%, to 32,197.59. The S&P 500 advanced
2.62% to close at 4,023.61 and the Nasdaq Composite popped 4.06% to 12,032.42 a
day after quarterly results from Alphabet and Microsoft.
More
Asia-Pacific
markets are mostly higher after the Fed hikes rates (cnbc.com)
Market jump after
Fed rate hike is a ‘trap,’ Morgan Stanley’s Mike Wilson warns investors
Morgan
Stanley is urging
investors to resist putting their money to work in stocks despite the market’s
post-Fed-decision jump.
Mike Wilson, the firm’s chief U.S.
equity strategist and chief investment officer, said he believes Wall Street’s
excitement over the
idea that interest rate hikes may slow sooner than expected is
premature and problematic.
“The market always rallies once the
Fed stops hiking until the recession begins. … [But] it’s unlikely there’s
going to be much of a gap this time between the end of the Fed hiking campaign
and the recession,″ he
told CNBC’s “Fast Money” on
Wednesday. “Ultimately, this will be a trap.”
According to Wilson, the most pressing issues are
the effect the economic slowdown will have on corporate earnings and the risk
of Fed over-tightening.
“The market has
been a bit stronger than you would have thought given the growth signals have
been consistently negative,” he said. “Even the bond market is now starting to
buy into the fact that the Fed is probably going to go too far and drive us
into recession.”
Wilson has a 3,900 year-end price target on the , one of the
lowest on Wall Street. That implies a 3%
dip from Wednesday’s close and a 19% drop from the index’s
closing high hit in January.
His forecast also
includes a call for the market to take another leg lower before getting to the
year-end target. Wilson is bracing for the S&P to fall below 3,636, the
52-week low hit last month.
“We’re getting close to the end. I mean this
bear market has been going on for a while,” Wilson said. “But the problem is it
won’t quit, and we need to have that final move, and I don’t think the June low
is the final move.”
Wilson believes the
S&P 500 could fall as low as 3,000 in a 2022 recession scenario.
“It’s really
important to frame every investment in terms of ‘What is your upside versus
your downside,’” he said. “You’re taking a lot of risk here to achieve whatever
is left on the table. And, to me, that’s not investing.”
Wilson considers
himself conservatively
positioned — noting he’s underweight stocks and likes defensive
plays including , , and . He also
sees merits of holding extra and at the
moment.
And, he’s not in a
rush to put money to work and has been “hanging out” until there are signs of a
trough in stocks.
“We’re trying to
give them [clients] a good risk-reward. Right now, the risk-reward, I would
say, is about 10 to one negative,” Wilson said. “It’s just not great.”
Market
jump after Fed hike is ‘trap,’ Morgan Stanley warns investors (cnbc.com)
US home prices to plunge
‘substantially’ on ‘cratering’ demand: economist
By Thomas Barrabi July 26, 2022 2:49pm
US home prices are on the cusp of a major correction due
to “cratering” demand among cash-strapped buyers, a prominent economist warned
in a note to clients on Tuesday.
Ian
Shepherdson, a chief economist at Pantheon Macroeconomics, noted that
single-family home listings have surged by 40% in the last four months even as
unit sales plummet due to sky-high prices and rising mortgage rates.
Given
current conditions, US home prices are likely “about 15 to 20% overvalued”
compared to incomes, according to Pantheon’s calculations – setting the table
for major declines.
“The market
is adjusting to a new reality, with much lower sales volumes and far more
inventory. Prices, therefore, have to adjust to the downside, likely quite
substantially,” Shepherdson said.
Sales of new
single-family homes plunged by 8.1% to 590,000 units in June, Commerce
Department data showed on Tuesday. Sales have now fallen to their lowest level
since 2020, according to Reuters.
New home
sales figures “closely” follow the data on mortgage applications “which make it
clear that demand is cratering,” according to Shepherdson.
Shepherdson
also said clients should “ignore” the latest data from S&P CoreLogic
Case-Shiller National Home Price Index, which showed
a 1% month-to-month increase in prices on the national level in
May.
The economist noted that the Case-Shiller report utilizes
a three-month average and does not account for rapid changes in the US housing
market.
“The
sellers’ market of the early spring became a buyers’ market more or less
overnight, as large numbers of potential purchasers had their spending power
dramatically reduced—or were pushed out of the market altogether—by the surge
in mortgage rates,” Shepherdson said.
As
The Post reported last week, the volume of mortgage loan
applications recently hit a 22-year low as prospective homebuyers face the dual
pressure of surging inflation and high interest rates.
More
US
home prices to plunge 'substantially' on 'cratering' demand (nypost.com)
Global Inflation/Stagflation/Recession
Watch.
Given
our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its
own.
European
gas price rise accelerates as Russia cuts flows
David
Sheppard in London and Amy Kazmin in Rome 27 July, 2022
European gas prices jumped
further on Wednesday after Russia followed through on its threat to make
further cuts in gas supplies to the region.
Gas prices rose 12 per cent early on
Wednesday and have risen by more than third this week from already extremely
elevated levels as Europe struggles to fill gas storage sites ahead of the
winter.
The European benchmark TTF contract
has reached €220 a megawatt hour, leaving it on track to hit a new record
closing high, exceeding the previous peak in the immediate wake of Russia’s
invasion of Ukraine. The surge has left gas prices at roughly 10 times the
level it traded at prior to the start of Russia’s squeeze on supplies last
year.
Gascade, Germany’s gas network
operator, said flows on Nord Stream 1 had roughly halved to 20 per cent of
capacity as of Wednesday morning.
The key pipeline, which connects
Russia with Germany, was first cut to 40 per cent of capacity in June, leading
European politicians to accuse Russia of weaponising gas supplies in
retaliation for sanctions imposed following its invasion of Ukraine.
Russia blamed the reduction of flows
on Nord Stream 1 on problems with turbines that it said had been exacerbated by
western sanctions. But the country’s state-owned gas export monopoly, Gazprom,
has not made up the shortfall on alternative routes.
More
European gas price rise accelerates as Russia cuts
flows (msn.com)
China’s property sales are set to plunge 30%
— worse than in 2008, S&P says
Published Wed, Jul 27 2022 3:13 AM EDT
BEIJING — China’s property sales are set to plunge this year by more than
they did during the 2008 financial crisis, according to new estimates from
S&P Global Ratings.
National property sales will likely drop by about 30% this year — nearly two
times worse than their prior forecast, the ratings agency said, citing a growing
number of Chinese homebuyers suspending their mortgage payments.
Such a drop would be worse than in 2008 when sales fell by roughly 20%,
Esther Liu, director at S&P Global Ratings, said in a phone interview
Wednesday.
Since late
June, unofficial tallies show a rapid increase in Chinese homebuyers refusing
to pay their mortgages across a few hundred uncompleted projects — until
developers finish construction on the apartments.
Most homes
in China are sold before completion, generating an important source of cash
flow for developers. The businesses have struggled to obtain financing in the
last two years as Beijing cracked down on their high reliance on debt for
growth.
Now, the
mortgage strike is damaging market confidence, delaying a recovery of China’s
real estate sector to next year rather than this year, Liu said.
As property
sales drop, more developers will likely fall into financial distress, she said,
warning the drag could even spread to healthier developers “if the situation is
not contained.”
There’s also
the potential for social unrest if homebuyers don’t get the apartments they
paid for, Liu said.
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.
These Vaccines Will Take Aim at
Covid—and Its Entire SARS Lineage
Scientists are developing vaccines to target the virus
family that spawned Covid-19. Their efforts could thwart future variants, or
even new related viruses.
EARLY IN
THE pandemic,
vaccination or a bout with Covid-19 seemed to ward off the risk of another infection.
But now, new viral variants are increasingly able to dodge that hard-earned protection. Keeping track of those variants and
how they escape immune protection is an exhausting game, one that scientists
would like to squelch with a new type of vaccine the virus hasn’t managed to
out-evolve.
Scientists have tried several routes to attack the
problem. The narrowest starts with the existing Covid mRNA vaccines and seeks
to create updated boosters that target the
virus’s most recent variants, an effort that drugmakers Moderna
and Pfizer are attempting with Omicron’s progeny. The broadest, most ambitious
route is to invent a vaccine that would target the entire coronavirus
family, including the merbecoviruses that cause MERS, the embecoviruses
responsible for ordinary colds, and the sarbecovirus subgenus that gave rise to
both Covid and the original SARS virus that broke out in 2002.
But there’s a middle path: a vaccine that would attack
just the sarbecoviruses, meaning the Covid virus and all of its future
offspring, as well as any new SARS-CoV siblings that might appear in the
future.
More
These Vaccines Will Take Aim at Covid—and Its Entire
SARS Lineage | WIRED
Wearable
system detects COVID two days before symptoms appear
Rich Haridy July 26, 2022
What if a fitness tracker sitting on your wrist could detect
COVID-19 before you even developed symptoms? An impressive new study claims
this is not only possible, but preliminary investigations found infections can
be detected nearly 48 hours before symptoms appear.
The new research began in early 2020, soon after the pandemic
kicked off. A team of researchers wondered whether data from a wrist-worm
health tracker could be leveraged to pick up small changes in a person’s vital
signs that precede the onset of COVID-19.
Around 1,000 young
participants were recruited from an ongoing observational health study and
supplied with a commercially available wrist-worn device known as the Ava
bracelet. The device is worn at night and every 10 seconds it measured heart
rate, breathing rate, skin temperature, heart rate variability and blood flow.
It is generally used as a fertility monitor due to its ability for tracking
real-time changes to these five health measures.
Over the course of
a year-long study 11% of the cohort came down with a lab-confirmed case of
COVID-19. Around half of those COVID-positive subjects had a month of good
wearable data preceding their infection, helping the researchers develop an
algorithm that can detect small changes across the earliest stages of illness.
Noticeable changes
in the days before COVID symptoms appeared were detected across all five
measures recorded by the wearable. In particular, changes to heart rate, heart
rate variability and wrist skin temperature were the most significant early
features of COVID-19, preceding noticeable symptoms.
A novel
machine-learning algorithm was trained on 70% of the COVID-positive cohort and then
tested on the remaining 30%. Remarkably, the algorithm accurately caught 68% of
the positive COVID cases two whole days before any symptoms appeared.
More
Wearable system detects COVID two days before symptoms
appear (newatlas.com)
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, a UK technology abuse update.
'Orwellian'
facial recognition cameras in UK stores challenged by rights group
July 26, 20229:24 PM GMT+1
LONDON, July 26
(Reuters) - Shoppers at a supermarket chain in southern England are being tracked
by facial recognition cameras, prompting a legal complaint by a privacy rights
group.
Big Brother Watch
said Southern Co-operative's use of biometric scans in 35 stores across
Portsmouth, Bournemouth, Bristol, Brighton and Hove, Chichester, Southampton,
and London was “Orwellian in the extreme” and urged Britain's Information
Commissioner's Office (ICO) to investigate whether it breaches data protection
legislation.
The complaint
claims the use of the biometric cameras “is infringing the data rights of a
significant number of UK data subjects”.
It outlines how the
facial recognition system, sold by surveillance company Facewatch, creates a
biometric profile of every visitor to stores where the cameras are installed,
enabling Southern Co-operative to create a "blacklist" of customers.
If a customer on the list enters the store, staff are alerted.
“Our legal
complaint to the Information Commissioner is a vital step towards protecting
the privacy rights of thousands of people who are affected by this dangerously
intrusive, privatised spying," Silkie Carlo, director of Big Brother
Watch, said.
Southern
Co-operative, which trades from just under 200 stores, said it would welcome
any constructive feedback from the ICO.
"We take our
responsibilities around the use of facial recognition extremely seriously and
work hard to balance our customers' rights with the need to protect our
colleagues and customers from unacceptable violence and abuse," Southern
Co-operative said.
It said it uses the
facial recognition cameras only in stores where there is a high level of crime
to protect staff from known offenders and does not store images of an
individual unless they have been identified as an offender.
"The purpose
of our limited and targeted use of facial recognition is to identify when a
known offender enters one of our stores," it said.
More
'Orwellian' facial
recognition cameras in UK stores challenged by rights group | Reuters
The natural effort of every
individual to better his own condition...is so powerful, that it is alone, and
without any assistance, not only capable of carrying on the society to wealth
and prosperity, but of surmounting a hundred impertinent obstructions with
which the folly of human laws too often encumbers its operations.
Adam Smith. The Wealth Of Nations, 1776.
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