Baltic Dry Index. 2002 -11 Brent Crude 100.23
Spot Gold 1729 US 2 Year Yield 3.13 +0.10
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 14/07/22 World 564,214,408
Deaths 6,379,604
“When the music stops, in terms of liquidity, things will be
complicated. But as long as the music is playing, you’ve got to get up and
dance. We’re still dancing,” he said in an interview with the FT in Japan.
Citigroup’s CEO Chuck Prince 2007.
Chuck Prince
may long ago have danced himself into ignominy and obscurity, but in the stock
casinos the dancing continues even as inflation and interest rates are rising
virtually everywhere and more and more nations are descending into chaos and
anarchy as the Great Nixonian Error of fiat money is now breaking down.
By my
rough count, inflation has set off social unrest in Albania, Argentina, Chile, Ecuador,
Holland, North Macedonia, Panama and most famously Sri Lanka.
But as
bad as that is, the central banksters no interest rate Magic Money Tree fiat
money now seems to have set off a banking crisis in China. Whether the banks
involved engaged in fraud remains to be seen, but more and more of the regional
banks seem unable to repay depositors their money.
This
needs very careful watching. Low
interest rates always sets off a scramble to chase riskier higher yield. All
too often that ends up in a disastrous scandal and gigantic bubble burst.
China stocks lead gains as Asia markets rise; Singapore tightens
monetary policy
SINGAPORE — Mainland China markets led gains in Asia-Pacific on Thursday as
Australia’s unemployment rate fell and Singapore tightened its monetary policy.
The Shenzhen Component reversed
losses to rise 1.259%, with energy stocks rising 3.68% according to Eikon data.
The Shanghai Composite was
up 0.31% and the CSI 300, which tracks the largest mainland-listed stocks,
gained 0.49%.
The Nikkei 225 in Japan
pared losses and rose 0.73% while the Topix index was 0.23% higher.
In South Korea, the Kospi was up 0.1%
and the Kosdaq advanced 0.46%.
Australia’s S&P/ASX 200 was
0.43% higher.
Australia added 88,400 jobs in
June, official data showed, much more than the 30,000 that analysts polled by
Reuters predicted.
The
country’s unemployment rate was at 3.5%, lower than the 3.8%
expected and a 48-year low, Reuters reported.
The Hang Seng index in
Hong Kong slipped in early trade, but was last 0.3% higher.
MSCI’s broadest index of
Asia-Pacific shares outside Japan rose 0.28%.
In economic data, Singapore’s Ministry of Trade
and Industry said advance estimates show the
country’s gross domestic product grew 4.8% in the second quarter of 2022 compared
to the same period a year ago. That’s up from 4% in the first quarter of the
year, but lower than the 5.2% growth that analysts in a Reuters poll expected.
The
Monetary Authority of Singapore tightened monetary policy in an
off-cycle move Thursday. The central bank said it will re-center the mid-point
of the exchange rate policy band, known as the Singapore dollar nominal
effective exchange rate, up to its prevailing level.
----U.S. inflation report
Consumer
prices rose 9.1% from a year ago, above the 8.8% Dow Jones
estimate. That’s the fastest pace since November 1981, and investors are
concerned about how aggressive the Fed will have to be to fight rising prices.
“Stubbornly high
inflation increases the risk that the FOMC continues to hike aggressively and
triggers a recession,” Kristina Clifton, an economist at Commonwealth Bank of
Australia wrote in a note Thursday.
Already, two
Wall Street firms are speculating that the Fed could go for a 100-basis-point
rate hike this month, which Canada’s
central bank did on Wednesday.
Overnight in the
U.S., stocks declined following the inflation report.
The Dow Jones
Industrial Average dropped 208.54 points, or 0.67%, to 30,772.79, while the
S&P 500 slid 0.45% to 3,801.78. The Nasdaq Composite fell 0.15% to close at
11,247.58.
The yield curve
inversion in U.S. Treasury, seen as a recession signal, widened on Wednesday
stateside. The 2-year yield last stood at 3.1983%, higher than 2.9558% for the
10-year note. Yields move inversely to prices.
More
Asia
markets: Singapore monetary policy, Australia unemployment rate (cnbc.com)
Your Evening Briefing: Full-Point Rate Hike In Play as Inflation Rises
July 13, 2022
at 11:03 PM GMT+1
US inflation hit a four-decade high last month, likely strengthening the Federal Reserve’s resolve to aggressively raise interest rates. The consumer price index rose 9.1% from a year earlier. The widely followed inflation gauge increased 1.3% from a month earlier.
“Rather than cooling down, inflation is heating up,” Sal Guatieri, senior economist at BMO Capital Markets, said in a note. “While a pullback in gasoline costs in July and reported retail discounting will help tamp down the flames, the broad pressure in the core rate, led by plenty of inertia in rents, suggests inflation may not peak for a while.”
Americans are furious over high prices and critics blame the Fed for its initial slow response. One Fed official conceded on Wednesday that the central bank may even consider a one percentage-point rate hike when officials meet this month. It would be the largest increase since the Fed started directly using overnight interest rates to conduct monetary policy in the early 1990s. According to Atlanta Fed President Raphael Bostic, “everything is in play.”
----Canada beat the US to the full-point punch. The Bank of Canada
boosted interest rates by a full percentage point, a surprise move that supercharges
efforts to withdraw stimulus amid fears four-decade-high inflation there is
becoming entrenched.
More
Bloomberg Evening Briefing: Full-Point Rate Hike In Play as Inflation Rises - Bloomberg
Finally, in crypto-land the news just keeps going from bad to worse.
This ‘crypto
winter’ is unlike any downturn in the history of digital currencies. Here’s why
The two words on every crypto investor’s lips
right now are undoubtedly “crypto winter.”
Cryptocurrencies have suffered a
brutal comedown this year, losing $2 trillion in value since the height of a
massive rally in 2021.
Bitcoin, the world’s
biggest digital coin, is off 70% from a November all-time high of nearly
$69,000.
That’s resulted in many experts warning of a
prolonged bear market known as “crypto winter.” The last such event occurred
between 2017 and 2018.
But there’s
something about the latest crash that makes it different from previous
downturns in crypto — the latest cycle has been marked by a series of events
that have caused contagion across the industry because of their interconnected
nature and business strategies.
From 2018 to 2022
Back in 2018,
bitcoin and other tokens slumped sharply after a steep climb in 2017.
The market then was
awash with so-called initial coin offerings, where people poured money into
crypto ventures that had popped up left, right and center — but the vast
majority of those projects ended up failing.
“The 2017 crash was largely due to the burst of
a hype bubble,” Clara Medalie, research director at crypto data firm Kaiko,
told CNBC.
But the current
crash began earlier this year as a result of macroeconomic factors including
rampant inflation that has caused the U.S. Federal Reserve and other central
banks to hike interest rates. These factors weren’t present in the last cycle.
Bitcoin and the
cryptocurrency market more broadly has been trading in a closely correlated
fashion to other risk assets, in particular stocks. Bitcoin posted its worst
quarter in more than a decade in the second quarter of the year. In
the same period, the tech-heavy Nasdaq fell more than 22%.
More
Why
the 2022 ‘crypto winter’ is unlike previous bear markets (cnbc.com)
New York judge
freezes assets of Three Arrows Capital as crypto firm’s founders remain
underground
PUBLISHED TUE, JUL 12 20228:31 PM
EDT
A federal judge in a
New York bankruptcy court has frozen the remaining assets of crypto hedge fund
Three Arrows Capital following the firm’s rapid fall from prominence.
The fund, founded
nearly a decade ago, managed $10 billion in assets just a few months ago. Now,
its two co-founders are in hiding from angry creditors, who are trying to
recoup some of their losses. Prior to the bankruptcy filing, a court in the
British Virgin Islands ordered the beleaguered fund to liquidate in order to
pay back its debts.
Judge Martin Glenn of
the Southern District of New York granted the emergency motion on Tuesday to
freeze Three Arrows’ assets. CNBC joined a court hearing, which covered next
steps in the bankruptcy process.
Glenn noted in the
written decision that only the assigned bankruptcy liquidators have the
authority to “transfer, encumber or otherwise dispose of any assets of the
Debtor located within the territorial jurisdiction of the United States.”
As part of Glenn’s
ruling, global advisory firm Teneo, which was assigned to manage the
liquidation, was also granted permission to subpoena Three Arrows co-founders
Zhu Su and Kyle Davies, as well as banks, crypto exchanges and other
institutions and firms that have done business with the firm.
The chief concern is that Three Arrows, also known
as 3AC, and its leadership team might be siphoning funds ahead of the formal
liquidation. Coindesk reported that Zhu is
looking to sell his $35 million Singapore property, and there are
reports of at least one other digital asset transfer of a non-fungible token held by
the fund.
“A key part of this motion is to put the world on
notice that it is the liquidators that are controlling the debtor’s assets at
this stage,” Adam Goldberg, an attorney representing Teneo, said in Tuesday’s
hearing.
Zhu and Davies didn’t respond to requests for
comment. Their lawyer, Christopher Anand Daniel of Singapore-based Advocatus
Law, also didn’t respond to CNBC’s request for comment.
More
New York judge freezes assets of Three Arrows Capital (cnbc.com)
“Fiat-money! Let the State 'create' money, and make the poor
rich, and free them from the bonds of the capitalists! How foolish to forego
the opportunity of making everybody rich, and consequently happy, that the
State's right to create money gives it! How wrong to forego it simply because
this would run counter to the interests of the rich! How wicked of the
economists to assert that it is not within the power of the State to create
wealth by means of the printing press!- You statesmen want to build railways,
and complain of the low state of the exchequer? Well, then, do not beg loans
from the capitalists and anxiously calculate whether your railways will bring
in enough to enable you to pay interest and amortization on your debt. Create
money, and help yourselves.”
Ludwig von Mises, The
Theory of Money and Credit.
Global Inflation/Stagflation Watch.
Given
our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its
own.
Copper prices are
signaling that investors are bearish on the economy, strategist says
Falling copper prices
suggest that investors are negative on the outlook for the economy, a commodity
strategist at ANZ bank said.
Copper is seen as a
leading indicator of economic health because of its use in many sectors.
At the moment, prices
are falling even though there’s little indication of demand falling sharply or
supply increasing, said Daniel Hynes of ANZ.
“In fact, it’s the exact opposite — we’re actually
seeing signs in China of that demand picture improving,” he said.
But investors have taken the view
that tightening monetary policy will lead to lower growth, and that’s being
reflected in the copper prices, he told CNBC’s “Street Signs Asia” on
Tuesday.
“It’s telling me that investors are
particularly bearish about the economic outlook,” he said.
The price of the red
metal logged its biggest quarterly drop since 2011 in the second quarter of
this year, according to Reuters.
Three-month copper on
the London Metal Exchange was at $7,341 per ton on Thursday morning in Asia,
having fallen sharply since early June.
----Chinese President Xi Jinping called
for an “all-out”
effort to construct infrastructure in April, and Reuters
reported that the country will set up a state infrastructure investment fund.
But James Kan, head of Asia basic
materials research at UBS, said Covid curbs in China could dampen demand for
industrial commodities despite Beijing’s plans to stimulate its economy through
infrastructure.
“Potentially, the mobility
restrictions will sort of weaken the paths of demand coming back,” he told
CNBC’s “Squawk Box Asia” on
Tuesday.
A speedy recovery in demand is not
the Swiss investment bank’s base case, Kan said.
More
Copper
prices are signaling investors are negative on the economy: ANZ (cnbc.com)
UK economy grows 0.5 per cent
in May
WEDNESDAY 13 JULY 2022 7:15
AM
The UK economy has seen gross
domestic product (GDP) grow by a little in May, following a slight decline in
April.
GDP was up 0.5 per cent in May,
according to the Office for National Statistics’ data published on Wednesday.
Services output swelled 0.4 per cent
in May due to a large increase in people booking appointments with their GPs
seeing human health and social work activities grow by 2.1 per cent.
The increase in appointments offset
the continued scaling down of the NHS Test and Trace and Covid vaccination
programmes.
Output in consumer-facing services
fell by 0.1 per cent, driven by a 0.5 per cent drop in retail trade.
UK
economy grows 0.5 per cent in May (cityam.com)
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.
Government braces to fund ‘substantial’
number of Covid-19 vaccine liabilities
WEDNESDAY 13 JULY 2022 5:45 AM
The government is bracing to fund a
“substantial” number of liabilities relating to negative impacts from Covid-19
jabs, having spent more than £34bn on the vaccine rollout so far.
The Department of Health and Social
Care told vaccine manufacturers at the start of the programme that it would
cover future claims against producers for any adverse effects of their vaccines
which “may add to the cost of the programme in the long term”, according to a
Public Account Committee report today.
As of the beginning of the month,
1,984 vaccine-related damages claims have been received by the NHS Business
Services Authority, which describes itself as an arm’s length body of the
Department of Health and Social Care, managing over £35bn of NHS spend annually,
After hearing evidence from vaccine
injured people, including one 55-year-old who can no longer work following a
blood clot in their brain, the report said the weight of the claims underline
“the importance of having clear, prompt and adequate compensation, arrangements
for people in need.”
The Department told the Committee it
had a “substantial number of contingent liabilities” relating to vaccine
side-effects and has been “seeking to reduce their value.”
By the end of October 2021, the
government had spent £5.6bn on vaccines, less than many other parts of the
Covid-19 response, such as the £13.5bn on by NHS Test and Trace between 2020
and 2021 and the £15bn spent on PPE in the same period.
While the government is yet to reveal
Covid-19 spending for this year, it had initially set aside £37bn for the
contact tracing scheme, the equivalent of 20 per cent of the NHS’s entire
annual budget.
“It typically takes ten years to
develop a vaccine, approve it for use and roll it out to the public,” the
report added. “For Covid-19 vaccines, only eight months elapsed between setting
up the vaccine the Vaccine Taskforce to procure potential Covid-19 vaccines and
the start of the NHS rollout.
Government
braces to fund 'substantial' number of Covid-19 vaccine liabilities
(cityam.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.
Mahle's new SCT electric motor runs non-stop at over
90% of peak power
Loz Blain July 12, 2022
Tier-one auto parts supplier Mahle
has announced a groundbreaking "superior continuous torque" (SCT)
motor for electric vehicles, capable of continuously pounding out more than 90
percent of its peak power without overheating – and it'll work without magnets.
Electric motors, unlike combustion engines, are
often specified with separate peak and continuous (or nominal) power ratings.
That's because running them flat-out for long periods can generate enough heat
to damage components, so manufacturers build in thermal limiting systems that
reduce power output down to the continuous level when they start overheating.
The difference between the peak and continuous figures reflects the performance
of the motor cooling system.
Here are a couple of
examples. At the cheaper end of the scale would be something like the e-motor
in the Ox
Patagonia electric motorcycle. Peaking
at 11 kW, it's so badly cooled that it can only handle a continuous 6 kW – 55
percent of the peak power. Energica's
fancy new EMCE motor, on the other hand,
peaks at 126 kW, but can handle a continuous 110 kW (87 percent of the peak)
thanks to a very effective cooling system.
Mahle – a huge German parts
supplier consistently posting sales over US$10 billion a year – says its new
SCT motor takes things up a notch, with continuous power ratings over 90
percent of the peak. It uses an innovative oil cooling system that draws in oil
through a central intake, then uses the centrifugal force of the spinning rotor
to pump the oil up and around the stator coils surrounding it. The heat drawn
out can be harvested for use elsewhere around the vehicle if required, or
extracted through a radiator.
The result, says the company,
is an exceptionally compact, light and efficient electric motor capable of
handling sustained high-power situations that would previously have called for
much bigger motors with much higher peak power ratings. This, says Mahle, is a
motor that can haul a big electric truck up a long, steep mountain pass without
dropping power, or handle some serious racetrack abuse in a performance car.
Running smaller
motors results in other benefits, too – they require less materials to make,
dropping the price, and they weigh less, which boosts power-to-weight in sportscar
terms, but also load capacity on a heavy hauler. Mahle says the SCT motor
concept is suitable for passenger cars, commercial vehicles, construction
machines and tractors.
The current prototype SCT motors currently use
neodymium magnets, but Mahle says the concept will play well with its
magnet-free designs. We took a close look at Mahle's magnet-free motor innovations last year – they do away with rare
earth metals and instead use contactless induction to induce precisely tuned
electromagnetic fields in coils in the rotor. The company says they're cheap
and highly efficient, and significantly, they don't rely on a supply chain that
runs straight through China like nearly all rare earths. A magnet-free SCT
motor would require "slightly more assembly space" than a neodymium
version.
More
Mahle's new SCT electric motor runs non-stop at over 90% of peak power (newatlas.com)
But then, finally, the masses wake up. They become suddenly aware of
the fact that inflation is a deliberate policy and will go on endlessly. A
breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his
money against 'real' goods, no matter whether he needs them or not, no matter
how much money he has to pay for them. Within a very short time, within a few
weeks or even days, the things which were used as money are no longer used as
media of exchange. They become scrap paper. Nobody wants to give away anything
against them."
Ludwig von Mises, The Theory of Money and Credit
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