Baltic Dry Index. 1387 -17 Brent Crude 9.830
Spot Gold 1779 US 2 Year Yield 3.25 +0.05
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 17/08/22 World 597,192,773
Deaths 6,459,873
Last Friday, the USDA's bigger-than-expected cut to domestic cotton crop stunned many on Wall Street. Crop output plunged to 12.57 million bales, the lowest in a decade. The cut also pushed down the US from the world's third-largest producer to the world's fourth.
Barbera said the
western Texas region (around Lubbock and Lamesa), the epicenter of America's
cotton-growing belt, has "literally nothing" in fields that are
just desert sand. He said fields that had drip irrigation were
harvestable, but ones that weren't weren't salvageable.
"Worst I've
Ever Seen": Cotton Prices Soar After Historic USDA Cut Amid Megadrought |
ZeroHedge
In cotton, it now all depends on India,
Brazil and China’s crop outcomes. This could become yet another big inflation
story for 2022 – 2023.
In
the stock casinos, after taking an early summer vacation, it looks to me like that
great Grizzly Bear is returning.
Higher
interest rates are back to stay. Plus Germany is leading the rump EUSSR into
recession.
China’s
property market is broken and property prices are falling in much of the USA
and the UK led by London.
Bunker
time.
European markets
head for positive open but struggle to build momentum
UPDATED WED, AUG 17 2022 12:31 AM EDT
European
markets are set to open higher on Wednesday, but are struggling to build on
positive momentum seen this week.
On Wednesday, investors will be
looking out for preliminary gross domestic product data from the euro zone for
the second quarter, as well as unemployment figures for the single currency
bloc, and the latest U.K. inflation figures for July.
European markets closed slightly
above the flatline Tuesday, with the pan-European index
ending the day up 0.2%, with basic resources adding 3.4% to lead gains while
health care slid 0.6%.
Elsewhere, U.S.
stocks were mostly lower Tuesday, while
stocks in Asia-Pacific also struggled to get off the ground.
Overnight, trading in Asia-Pacific was mixed, while U.S. stock futures were flat.
A strong rebound in U.S. equities has sparked hope that the market
has bottomed. But is the bear market truly behind us now?
European markets: Here are the opening calls
European stocks are
expected to open cautiously higher on Wednesday with the U.K.’s index
seen 18 points higher at 7,560, Germany’s 33
points higher at 13,944, France’s up
18 points at 6,616 and Italy’s up
42 points at 23,029, according to data from IG.
Data releases
include preliminary euro zone unemployment data for the second quarter as well
as second quarter gross domestic product. The latest U.K. inflation numbers for
July will be released as well as preliminary second quarter Dutch GDP.
More
European
markets head for positive open but struggle to build momentum (cnbc.com)
Reserve Bank of
New Zealand hikes rate; Chinese food giant Meituan rebounds
UPDATED TUE, AUG 16 2022 10:50 PM EDT
New Zealand raised its cash rate by another 50
basis points to 3%, the latest in a series of interest rate hikes in an effort
to curb inflation.
Elsewhere, Japan
stocks surged following better-than-expected export figures and Australian
wages rose.
Trading in
Asia-Pacific was mixed as mainland China and Hong Kong markets kick off. The is
down 0.16% but the was
up 0.11%. Hong Kong’s was
0.5% stronger.
Chinese food
delivery giant price
lifted 3.7% in morning trade. The move marks a rebound from the 9% plunge
Tuesday, which followed a report is
planning to sell the majority of its $24 billion stake in the company.
Japan’s increased
0.81% while the Topix index added 0.80% after the country reported better-than-expected
exports growth for July compared to a year ago. Its exports
growth of 19% beat the 18.2% expected by analysts in a Refinitiv poll, driven
by a strong recovery in car exports.
Elsewhere, the
Kospi has reversed after a positive start, falling 0.57% likely due to some
profit taking among the major stocks. Hyundai, Kia and Kanwha Aerospace lost
ground in the vicinity of 2%.
The in
Australia also tipped lower by 0.04% while the Australian dollar continues to
weaken.
Singapore’s key
exports grew at a slower pace in July due to softer shipments of non-electronic
goods.
Goldman Sachs says RBNZ could slow pace of rate hikes
Ahead of the latest
Reserve Bank of New Zealand decision, Goldman Sachs’ chief economist for
Australia and New Zealand Andrew Boak told CNBC’s “Squawk Box Asia” the RBNZ
could soon allow more “wriggle room” or breathing space for future moves.
“I think they will
step down the pace of tightening in the final couple of meetings after today’s
50 basis point hike,” Boak said.
More tightening is
also on track for New Zealand’s neighbor, Australia which has the tightest job
market since 1974.
“The big picture
for Australia — domestic conditions warrants more tightening. We have a
fully employed market and a massive inflation overshoot on the Reserve Bank of
Australia’s own forecast, inflation just gets back to the very top of the 2% to
3%, not next year, but the second half of 2024,” Boak said.
RBNZ
hikes rate; Chinese food giant Meituan rebounds (cnbc.com)
3 big reasons why a 2022
recession would be like no other in history
Tue,
16 August 2022 at 6:00 pm
No two recessions are alike. But the
potential recession in 2022 is looking like the most unique one we’ve ever
seen.
Some traditional signs of an economic
slowdown are already upon us. U.S. GDP has shrunk for two quarters in a row —
the textbook definition of a technical recession.
Meanwhile, homebuilding activity has
plummeted while consumer confidence is at its lowest point since the pandemic
erupted. However, President Joe Biden said on Thursday that the nation remains
"on the right path."
Here are three big reasons why the
upcoming recession is different.
The labor market is robust
In most recessions, economic
output and employment decline simultaneously. Lower revenue compels businesses
to cut back on staff, which leads to higher unemployment. Ultimately, higher
unemployment leads to lower consumer spending and that creates a vicious cycle.
In 2022, however, unemployment is
still at a record low. The official unemployment rate in July was 3.5% –
matching a 50-year low reached just before the pandemic. A robust job market is
“historically unusual” during a recession, according to economists at Goldman
Sachs.
This unusually strong job market
could be deriving strength from another unusual source: corporate financial
strength.
Companies are cash-rich
Corporations see a decline in
sales and earnings during recessions. That process may have already started.
However, U.S. corporations are sustaining profits and sitting on an immense
cash hoard going into this recession.
The average U.S. corporation’s
after-tax profit margin is around 16% right now. In traditional recessions,
this rate drops down to single digits. Meanwhile, these corporations are
collectively sitting on over $4 trillion in cash. That’s a record level and
also highly unusual for a recessionary environment.
More
3 big
reasons why a 2022 recession would be like no other in history (yahoo.com)
Finally,
yet more crypto theft. Twice stolen Ponzi “money” perhaps?
£1.6
billion in cryptocurrency stolen as hackers exploit coding flaws
Simon Hunt – 16 August 2022
A record £1.6 billion worth of cryptocurrency
has been stolen in hacks of services in the year to July 2022 as organised
online criminals and nefarious state actors exploit vulnerabilities in
decentralised finance.
The sums are around 60%
higher than for the same period a year ago, according to data from blockchain
platform Chainalysis, and stand in stark contrast to overall criminal activity
online, which is down 15%, and online scam revenue, which fell 65%.
Hundreds of millions dollars
more have already been stolen from digital wallets since the start of August
alone. Hackers took some £150 million from crypto project Nomad Bridge at the start of the month,
while a further £6 million was taken from 8,000 wallets held with Solana.
Kim Grauer, director of
research at Chainalysis, told the Standard crypto scams have fallen because of
falling retail investor activity amid dwindling Bitcoin prices and because “law
enforcement have really picked up on the amount of activity to protect people
from scams.
“Hacking on
the other hand is going crazy — this has to do with all the vulnerabilities
associated with DeFi [decentralised finance], and the fact that we have these
really sophisticated nation state actors like North Korea realising
they can make billions of dollars looking for badly written protocols to
exploit.”
DeFi protocols are uniquely
vulnerable to hacking, according to Chainalysis, as their code is open source,
meaning it can be interrogated by any member of the public and examined for
flaws. North Korea-affiliated groups have stolen at least £800 million worth of
crypto currency through exploiting imperfect DeFi protocols.
£1.6 billion in
cryptocurrency stolen as hackers exploit coding flaws (msn.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.
Grocery prices in
Great Britain rise 11.6% as inflation hits highest level since 2008
16
August 2022
Supermarket bills in Great Britain will soar by £533, or more than £10 a
week, as grocery price inflation hits its highest level since at least 2008.
The price of a weekly shop
rose 11.6% in the four weeks to 7 August, compared with a year before,
according to the latest figures from Kantar. That represents the highest rate
of inflation since the market research group began tracking the sector 14 years
ago.
Fraser McKevitt, the head of
retail and consumer insight at Kantar, said: “As predicted, we’ve now hit a new
peak in grocery price inflation, with products like butter, milk and poultry in
particular seeing some of the biggest jumps.”
The price rises will pile
pressure on households already struggling to cope with rising energy bills and
petrol prices. More than one in eight UK households fear they have no further way to make cuts to afford a sharp increase in annual energy bills
expected this autumn.
Discounters Aldi and Lidl both
increased sales by double-digit percentages in the three months to 7 August as
shoppers sought ways to reduce their bills. Kantar found that together Lidl and
Aldi have gained 1.8 percentage points of British grocery sales over this
period, representing a £2.3bn annual shift in spending. The home-grown
discounter Iceland also increased sales by almost 3%.
Aldi is close to overtaking Morrisons
to become the UK’s fourth largest supermarket. Its market share rose 0.9
percentage points to 9.1%, a fraction behind Morrisons on 9.3%.
Waitrose, Morrisons and independent
stores all saw sales fall back, as the overall grocery market rose 2.2% in the
three months.
The summer weather pushed up sales of
mineral water, ice-cream and summer clothing which rose 23%, 18% and 163%
respectively.
Grocery prices in
Great Britain rise 11.6% as inflation hits highest level since 2008 (msn.com)
German recession fears deepen as economy is hit by ‘perfect
storm’
Closely watched ZEW poll adds
to gloomy mood as energy prices surge to fresh high
Investors are now more pessimistic about the German
economy than they have been at any time since the eurozone debt crisis more than
a decade ago, worrying that a sharp fall in Russian natural gas supplies and
soaring energy prices will plunge the country into recession.
The ZEW Institute’s gauge of investor expectations
about Europe’s largest economy has sunk to its lowest level since 2011,
dropping from minus 53.8 to minus 55.3, underlining the deepening gloom about
the economic fallout from Russia’s invasion of Ukraine.
The think-tank’s survey of financial market
participants provides an early indicator of economic sentiment after Russia
reopened the Nord Stream 1 pipeline following a maintenance break last month,
but kept the main conduit for delivery of gas to Europe operating at only a
fifth of capacity.
Economists have slashed their estimates for growth in
Germany and the wider eurozone this year, while raising their inflation
forecasts and warning that an end to Russian energy supplies would force Berlin
to ration gas supplies for heavy industrial users.
On Tuesday, German baseload power for delivery next
year, the benchmark European price, rose over 5 per cent to a record €502 per
megawatt hour, according to the European Energy Exchange. This is six times
higher than the price a year ago — driven upwards by the sharply higher cost of
gas used to generate electricity and the prolonged European heatwave that has
disrupted generating capacity.
The surging price of energy has driven up the cost of imports for Germany and
other eurozone countries, sending the bloc’s trade deficit up to €24.6bn in
June, compared with a surplus of €17.2bn for the same month a year earlier,
according to data from Eurostat, the European Commission’s statistics bureau.
The value of exports from the bloc rose 20.1 per cent in June from a year ago,
but imports were up 43.5 per cent.
---- Carsten Brzeski, head of macro research at Dutch
bank ING, said the German economy was “quickly approaching a perfect storm”
caused by “high inflation, possible energy supply disruptions, and ongoing
supply frictions”.
A heatwave and dry spell has reduced water levels on
the Rhine below the level at which barges can be loaded fully, restricting
important supplies for factories, which Brzeski estimated was likely to knock
as much as 0.5 percentage points off German growth this year.
More
German recession
fears deepen as economy is hit by ‘perfect storm’ | Financial Times (ft.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.
Shanghai Covid: Ikea
shoppers flee attempt to lock down store
By Melissa Zhu
15 August, 2022
There were chaotic scenes at an
Ikea store in Shanghai on Saturday, with shoppers trying to escape as
authorities tried to quarantine them.
Health
officials were attempting to lock the store in Xuhui district down as a
customer had been in close contact with a positive Covid case.
Videos show the
guards closing the doors at one point, but a crowd forced them open and made
their escape.
Shanghai
endured a severe two-month lockdown earlier this year.
Since then, in
line with the country's strict "zero-Covid" strategy, the city of 20
million people has ordered flash lockdowns of areas where positive cases or
their close contacts have been detected.
Many have been
locked down in unusual locations - including hot pot restaurants, gyms and
offices.
The Ikea
store's sudden shutdown was ordered because a close contact of a six-year-old
boy who tested positive after returning to Shanghai from Lhasa in Tibet had
visited, Shanghai Health Commission deputy director Zhao Dandan said on Sunday.
He did not say
when the close contact was believed to have been at the store.
Those who were
at the Ikea store and related areas must quarantine for two days followed by
five days of health monitoring, Mr Zhao said.
By Sunday
nearly 400 close contacts of the six-year-old boy - who is asymptomatic - had
been traced while 80,000 people had been ordered to undergo PCR testing,
according to Shanghai Daily.
Ikea's customer
service said on Sunday that the store was shut due to Covid curbs.
The flagship
Xuhui store, opened in 1998, was the Swedish furniture retailer's first outlet
in China. It now has 35 outlets across the country.
China has stuck
to its zero-Covid approach to slowing the spread of the coronavirus despite its
huge impact on the economy and increasingly vocal objection from the public.
The scenes of
panic at Ikea follow videos last week showing people in another part of
Shanghai running out of a building over rumours of an abnormal Covid test
result.
Shanghai's
citywide lockdown earlier this year saw widespread reports of food shortages
and poor living conditions in quarantine centres.
Frustrated
residents were filmed engaging in heated arguments with pandemic staff and
screaming from windows in protest against the restrictions during this time.
Shanghai Covid: Ikea shoppers flee attempt to lock
down store - BBC News
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.
Solar
facade designed to exceed office building's electricity needs
Adam Williams August 15, 2022
Australian
firm Kennon has revealed plans for an ambitious new project in Melbourne. Named
550 Spencer, the eight-story office building will produce more electricity than
it requires using a cutting-edge solar facade made up of 1,182 solar panels.
To be
clear, 550 Spencer's design isn't a case of simply mounting standard solar
panels to the facade, like Copenhagen's
International School. Instead, its solar facade
will look like glass but will harvest energy from the Sun's rays using the
1,182 integrated solar panels. Though they're not
unheard of, solar facades still aren't common, and Kennon
said the project will be the first building with a solar facade in Australia.
The firm had to go to great lengths to make it happen, tasking German
firm Avancis to
provide the panels as none were available locally.
"At the time I
had been researching glazing products in operation in Europe that embody
photovoltaic cells within a facade glass screen that didn't look like the
typical and ugly solar panels you see on rooftops," explained studio
founder Pete Kennon. "We started discussions with a number of
manufacturers soon learning they didn't have a presence in Australia. We
designed a building facade with the product and I pitched the concept to the
client. We partnered with a local glass distributor George Fethers & Co and
flew the executives of the product out from Germany to meet with us. We mapped
the solar performance from different facade alterations optimizing the
electricity production."
There was
another challenge, too: the solar facade tech hadn't received an Australian
building safety certificate. Not to be discouraged, Kennon set about shipping
over 40 panels. With the help of construction fire safety expert Red Fire
Engineers, the firm built a replica of the facade and then set it on fire to
test its performance, documenting the process carefully. Proof of fire
performance in hand, the project moved ahead and is now under construction.
Once in operation,
the solar facade system will generate 142 kWp (kilowatt peak - or how much
electricity it produces under ideal conditions, like a clear sunny day), which,
to put it into perspective, compares to around 3 - 6 kWp on a standard solar
panel setup for a house. According to Kennon, this will be sufficient to
produce more electricity than the building requires and, furthermore, will
eliminate 70 tonnes (78.4 US tons) of carbon dioxide emissions every year.
Another benefit is that putting all the solar panels on the facade frees up the
rooftop for some garden space for the office workers to enjoy.
Naturally, we'll be
keen to follow up and see how these figures stack up once the project is
completed. On that note, 550 Spencer is expected to be finished in mid-2023
Solar facade
designed to exceed office building's electricity needs (newatlas.com)
Modern money is inherently worthless, but everybody accepts it as real. Paul Seabright, a professor of economics, identified two traits that underpin systems of trust including money: the capacity to weigh up the costs and benefits of trusting others and the instinct to return favors in kind or seek revenge when trust is betrayed. When it is working well, the system enables strangers to deal with each other safely. When the fragile trust fails, people
withdraw their money from banks, and they seek the refuge of cash. Ironically, in times of crisis, people seek paper money that has no intrinsic worth, illustrating the power of the monetary illusion.
Satyajit Das. Extreme
Money. Masters of the Universe and the Cult of Risk.
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