Wednesday 31 August 2022

Dress Up Wednesday. Greater Fool Trading

Baltic Dry Index. 1017 -65    Brent Crude 100.01

Spot Gold 1725          US 2 Year Yield 3.46 +0.04

Coronavirus Cases 02/04/20 World 1,000,000

Deaths 53,100

Coronavirus Cases 31/08/22 World 607,318,274

Deaths 6,492,384

There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.

John Kenneth Galbraith

It is the last day of August, time to dress up the stock casinos again for the month-end.

Never mind reality, who cares if the central banksters will keep raing interest rates.

So what that the UK, Europe and probably the USA will all be in recession by Christmas.

Who cares that most of Europe can’t pay their winter heating bills assuming that there’s any gas and electric at all.

Buy more over-priced stocks, there will always be a greater fool along to buy them from you later at a higher price.

But will there? My guess is that this new bear market will last into the second quarter of 2023 if we’re lucky, into 2024 if we’re not.

 Stock futures rise after Wall Street’s sell-off stretches into third day

UPDATED WED, AUG 31 2022 12:31 AM EDT

Stock futures were higher early Wednesday after Wall Street’s losing streak stretched into its third day and endangered the market’s recent summer rebound.

Shares of Chewy tumbled more than 11% in extended trading after the pet products retailer issued weak revenue guidance. HP Inc’s stock dipped after the company missed revenue estimates.

Futures tied to the Dow Jones Industrial Average gained 178 points, or 0.56%. The S&P 500 also rose 0.56%, and Nasdaq 100 futures traded 0.65% higher.

Investors have sold off heavily since Friday after hawkish remarks from Federal Reserve Chair Jerome Powell. Most recently, New York Fed President John Williams called for “somewhat restrictive policy to slow demand.

The sell-off on Wall Street rolled into Tuesday, with the Dow Jones Industrial Average sliding 308.12 points, or nearly 1%, to 31,790.87. The Nasdaq Composite dropped 1.1%, to 11,883.14. The S&P 500 slumped 1.1% to 3,986.16, falling below the 4,000 mark for the first time since late July. All the major averages were on pace to finish August with losses.

All S&P 500 sectors finished the regular trading session in negative territory, led to the downside by energy, materials and industrials. As of Tuesday’s close, energy and utilities were the only sectors up year to date and on pace to end the month with gains.

Despite Tuesday’s sell-off and hawkish Fed remarks, some investors are hopeful that the rate hiking cycle could be nearing its end.

“We think we’re close to the end of this rate-hiking cycle, but it certainly depends on a lot of things,” Brenda Vingiello, chief investment officer of Sand Hill Global Advisors said on CNBC’s “Closing Bell: Overtime” on Tuesday. “No doubt the Fed’s gonna raise rates in September, and likely two more times this year, but they will have at that point done a lot and we will be in restrictive territory.”

Ahead of Friday’s closely watched August jobs data, more Fed speeches are slated for Wednesday. Chicago PMI and ADP employment data are also due out in the morning.

Stock futures rise after Wall Street's sell-off stretches into third day (cnbc.com)

 

China markets drop as factory activity shrinks; Asia stocks mixed

UPDATED WED, AUG 31 2022 12:31 AM EDT

China’s Shenzhen Component index led losses in mixed Asia-Pacific trade on Wednesday following a negative lead from Wall Street, and as investors digest China’s factory activity data.

The Shanghai Composite in mainland China dipped 1.18%, and the Shenzhen Component shed 1.74%.

China’s official manufacturing Purchasing Managers’ Index for August beat expectations slightly, coming in at 49.4, official data showed. The non-manufacturing PMI was at 52.6. Major cities in China, including Dalian and Shenzhen, also tightened Covid restrictions on Tuesday.

Hong Kong’s Hang Seng index pared some earlier losses and traded 0.39% lower, while the Hang Seng Tech index gained 0.78%.

The Nikkei 225 in Japan shed 0.49%, and the Topix index slipped 0.4%. Australia’s S&P/ASX 200 declined 0.2%.

In South Korea, the Kospi traded 0.36% higher while the Kosdaq was up 0.8%. MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed.

Overnight on Wall Street, major stock indexes fell for a third straight session.

The S&P 500 dipped 1.1% to 3,986.16, falling below the 4,000 level for the first time since July. The Nasdaq Composite dropped 1.1%, to close at 11,883.14, and the Dow Jones Industrial Average shed 308.12 points, or nearly 1%, to 31,790.87.

“Equity markets continued to be impacted by expectations central banks will keep their foot on the accelerator in terms of rate hikes,” Brian Martin and Daniel Hynes of ANZ Research wrote in a note Wednesday.

On Tuesday stateside, New York Federal Reserve President John Williams said he sees rates rising further and staying at those levels until inflation is subdued.

Asia markets mixed; China stocks fall as factory activity shrinks (cnbc.com)

In energy news, it’s bad news from Shell’s CEO and terrible news from EV man Elon Musk.

 

European gas shortages likely to last several winters, says Shell chief

Warning raises prospect of continued rationing, as Total boss says Europe has to plan for future without Russian supplies

Mon 29 Aug 2022 18.47 BST

Gas shortages across Europe are likely to last for several winters to come, the chief executive of Shell has said, raising the prospect of continued energy rationing as governments across the continent push to develop alternative supplies.

Cuts to the supply of Russian gas since the invasion of Ukraine have plunged European countries into a devastating energy crisis, driving up wholesale prices to leave consumers facing huge bills and the highest rates of inflation since the 1980s.

Speaking at a press conference in Norway on Monday, Ben van Beurden said the situation could persist for several years. “It may well be that we will have a number of winters where we have to somehow find solutions,” he said.

Van Beurden said solutions to the energy crisis would have to found through “efficiency savings, through rationing and a very, very quick buildout of alternatives”.

“That this is going to be somehow easy, or over, I think is a fantasy that we should put aside,” he added.

His comments come as Europe’s biggest economies brace for a tough winter of soaring inflation and the threat of recession, as record increases in gas and electricity bills pile pressure on households and businesses across the continent.

Russia, the major supplier of gas to most of the EU before the war in Ukraine, has throttled exports in response to western sanctions imposed since Vladimir Putin’s invasion six months ago. While not all EU countries are directly reliant on Russian supplies, competition for scarce resources has pushed wholesale European gas prices up by a factor of 12 compared with a year ago.

More

European gas shortages likely to last several winters, says Shell chief | Gas | The Guardian

 

'Civilisation would crumble' if sourcing oil and gas in the short term suddenly stops, claims Elon Musk

29 August, 2022

Elon Musk has claimed "civilisation would crumble" if the world stops drilling for gas and oil in the short term - but must continue "accelerating" sustainable sources of energy.

The Tesla chief was taking part in the Offshore Northern Seas conference in Norway on the future of the energy industry, including the role and development of new technologies.

Speaking to reporters, he also said another challenge the world is facing is the birth rate, claiming we must "make more babies" or "we will die with a whimper in adult diapers".

Asked whether we should be using oil and gas, the world's richest person said: "Realistically, we do need to use oil and gas in the short term, otherwise civilisation would crumble.

"For civilisation to continue to function, we do need oil and gas. Especially these days, with the Russia sanctions, we do need to provide oil and gas to keep civilisation running.

"I think any reasonable person would conclude that. While at the same time accelerating the advent of sustainable energy."

Asked if Norway should continue to drill for oil and gas, he said: "I think some additional exploration is warranted at this time.

"One of the biggest challenges the world has ever faced is the transition to sustainable energy and to a sustainable economy. That will take some decades to complete."

He said offshore wind power generation in the North Sea, combined with stationary battery packs, could become a key source of energy. "It could provide a strong, sustainable energy source in winter," he said.

More

'Civilisation would crumble' if sourcing oil and gas in the short term suddenly stops, claims Elon Musk (msn.com)

Next up, cryptocurrency scam news. One down, thousands more still to come.

Turkish Cryptocurrency Boss Arrested In Albania

By Remi BANET with Briseida MEMA in Tirana  08/30/22 AT 8:57 AM

The founder of cryptocurrency exchange Thodex, suspected of having fled Turkey with the assets of his clients, has been arrested in Albania, the Turkish interior ministry said on Tuesday.

Turkey issued an international arrest warrant in April last year for fugitive businessman Faruk Fatih Ozer, who fled with a reported $2 billion in investors' assets.

Tirana had informed Turkish Interior Minister Suleyman Soylu that Ozer, who was wanted by Interpol, "was arrested in Vlora, Albania", the ministry said.

It added that "extradition procedures to Turkey have been initiated."

The Istanbul-based Thodex exchange launched aggressive campaigns to lure investors.

It first pledged to distribute luxury cars through a flashy advertising campaign featuring famous Turkish models.

But the exchange suspended trading in April 2021 after having posted a mysterious message days earlier saying it needed five days to deal with an unspecified outside investment.

It went dark after running a promotional campaign that sold Dogecoins at one-fourth the price at which they were trading on other exchanges.

But the exchange locked in those investments and did not allow the coins to be either sold or converted into other cryptos.

Turkish security officials then released a photo of Ozer going through passport control at Istanbul airport on his way to an unspecified location.

Media reports said the exchange shut down while holding at least $2 billion from 391,000 investors and more than 60 people linked to the company were arrested.

In a statement Tuesday Albanian police said a 28-year-old Turkish national had been arrested at a hotel in Himara, a small town in southern Albania on the Ionian coast.

Two people suspected of having assisted him were also arrested, police said, with computers, mobile phones and bank cards seized.

More

Turkish Cryptocurrency Boss Arrested In Albania (ibtimes.com)

Finally, Ukraine’s grain is shipping again but at about a third of the monthly rate pre-war. Still it’s a start and hopefully things will get better.

Around 1.5 mln tonnes of food have left Ukraine under grain export deal

KYIV, Aug 30 (Reuters) - A total of 61 cargo ships carrying around 1.5 million tonnes of food have left Ukraine under a deal brokered by the United Nations and Turkey to unblock Ukrainian sea ports, the Ukrainian infrastructure ministry said on Tuesday.

The ministry said six ships with 183,000 tonnes of agricultural products left Ukrainian Black Sea ports on Tuesday.

Ukrainian grain traders union UGA said in a separate statement on Tuesday that corn dominated the overall export volume, accounting for 62%.

Wheat accounted for 17% and barley for 6%. Ukraine has also exported rapeseed, sunseed, soybean and other commodities.

Ukraine's grain exports slumped after Russia invaded the country on Feb. 24 and blockaded its Black Sea ports, driving up global food prices and prompting fears of shortages in Africa and the Middle East.

Three Black Sea ports were reopened under a deal signed on July 22 by Moscow and Kyiv and the ministry said these ports are able to load and send abroad 100-150 cargo ships per month.

Ukraine's Agriculture Minister Mykola Solsky told Reuters on Monday that the country's agricultural exports could rise to 6 million-6.5 million tonnes in October, double the volume in July, as its sea ports gradually reopen. read more

Around 1.5 mln tonnes of food have left Ukraine under grain export deal | Reuters

 

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.

Spain August 12-month inflation slows to 10.4% YoY; oil gives a break

Aug 30 (Reuters) - Spanish domestic consumer prices have eased despite remaining high, mainly due to lower fuel prices against a rise in power prices, preliminary data from the National Statistics Institute (INE) showed on Tuesday.

The figure stood at 10.4% year-on-year in August, down from 10.8% the previous month. The reading was lower than the 10.9% forecast by analysts polled by Reuters.

Core inflation, which strips out volatile food and energy prices, was at 6.4% year-on-year, the highest since January 1993 and up from 6.1% a month earlier, the INE data showed.

---- Although inflation has softened, it remains high mainly due to massive electricity prices and higher prices of food, restaurants and package tours, INE said.

In an attempt to curb inflation Spain said last month it will send a proposal to the European Union on limiting carbon emission permit prices in a bid to reduce the energy prices and their effects on inflation. read more

More

Spain August 12-month inflation slows to 10.4% YoY; oil gives a break | Reuters

Spain retail sales fall 0.5% y/y in July

August 30, 20228:20 AM GMT+1

Aug 30 - Spanish retail sales fell by 0.5% in July from a year earlier on a calendar-adjusted basis, the National Statistics Institute (INE) said on Tuesday.

The June figure was revised down to a +0.7% from a preliminary reading of +1.0%, INE said.

Spain retail sales fall 0.5% y/y in July | Reuters

Pubs and brewers at risk from energy crisis, warn UK’s biggest pub companies

TUESDAY 30 AUGUST 2022 6:00 AM

Pubs and brewers across the UK are at risk of closure within months amid price hikes upwards of 300%, industry bosses have warned.

Bosses of six of the UK’s biggest pub and brewing companies have signed an open letter to the Government urging it to act in order to avoid “real and serious irreversible” damage to the sector.

Greene King, JW Lees, Carlsberg Marston’s, Admiral Taverns, Drake & Morgan and St Austell Brewery all sounded the alarm on Tuesday.

Out of control gas prices following the invasion of Ukraine by Russia have contributed to rocketing energy bills for operators.

On Friday, regulator Ofgem confirmed that bills for an average UK household would surge by 80% in October when the new price cap comes into force.

However, businesses operate without a regulated price cap, with some pub owners warning that their bills have quadrupled or are struggling to even find suppliers willing to power their venues when contracts come up for renewal.

William Lees Jones, managing director of the JW Lees pub group, said: “We have publicans who are experiencing 300% plus increases in energy costs and some energy companies are refusing to even quote for supply.

“In some instances, tenants are giving us notice since their businesses do not stack up with energy at these costs.

“These are not just pubs but people’s homes and the hearts of the communities that they sit in.

“Government needs to extend the energy cap to business as well as households.”

Nick Mackenzie, chief executive officer of 2700-strong group Greene King, said one tenant has seen their energy bill jump £33,000 for the year.

He said: “While the Government has introduced measures to help households cope with this spike in prices, businesses are having to face this alone, and it is only going to get worse come the autumn.

More

Pubs' energy crisis: Landlords could be forced to call last orders as bills hit (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

https://www.zerohedge.com/markets/environmental-disaster-ev-battery-metals-crunch-horizon-industry-races-recycle

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.

Useless COVID-19 treatments worth millions were given to patients, study says

AUG. 29, 2022 / 4:24 PM

U.S. doctors administered more than 150,000 doses of useless monoclonal antibody treatments to COVID-19 patients early this year, spending loads of cash on therapies that had been deemed of no benefit, a new study has found.

The U.S. Food and Drug Administration deauthorized the use of two COVID-19 monoclonal antibody treatments in January, after it was found that the therapies did not work against the Omicron variant of SARS-CoV-2.

Despite this, COVID-19 patients received more than 158,000 doses of bamlanivimab/etesevimab and casirivimab/imdevimab well into 2022, potentially costing millions of dollars while providing little to no relief, according to the study by researchers at Beth Israel Deaconess Medical Center in Boston.

The proportion of COVID-19 cases for which the unauthorized treatments were deployed did not peak until late March, weeks after the FDA had said not to use them, the researchers found.

"Continued use of these treatments represents low value care and may reflect conflicting state government guidance or a lack of hospital awareness of deauthorization," said researcher Dr. Timothy Anderson of the BIDMC Center for Healthcare Delivery Science.

"Though the FDA clearly stated these treatments were no longer authorized for use, the FDA did not fully revoke their emergency use authorizations based on the possibility that they may work to treat future COVID-19 variants," he added in a BIDMC news release. "This could have led to confusion and misinterpretation."

Monoclonal antibodies are designed in the lab and are tailor-made to attack specific viruses. If a virus evolves enough, the treatments can be rendered ineffective.

More

Useless COVID-19 treatments worth millions were given to patients, study says - UPI.com

Next, some vaccine links kindly sent along from a LIR reader in Canada.

NY Times Coronavirus Vaccine Trackerhttps://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html

Regulatory Focus COVID-19 vaccine trackerhttps://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.

Is it cheaper to run an electric car than a petrol? With energy bills soaring from October will there still be a payback for switching to battery power...

29 August, 2022

With less than eight years before the Government bans the sale of new petrol and diesel cars from 2030, the push to get people to switch to greener vehicles is already well underway.

Ministers and EV-advocates have hailed the cheaper cost of recharging over filling up with petrol and diesel as one of the most compelling selling points for making the transition to a battery-powered model today, and demand for electric cars has been booming as a result.

However, with news that energy prices will soar again from October and predictions for further increases, this will undoubtedly put a dent in cost-saving benefits of running an electric vehicle versus a car with a petrol engine. But by how much?

Ofgem's announcement that the energy price cap will be increased from 1 October will mean spiralling household bills for Britons. And analysts have predicted that, without government intervention, they will continue to stay sky-high in 2023.

If you own an electric car or plan to buy one imminently, the running costs associated with a plug-in model will likely rise as a result. 

The regulator on Friday confirmed it is increasing the energy price cap on 1 October by £1,578 a year - or 80 per cent - from £1,971 to £3,549 for a household on a default tariff paying via direct debit.

Under the current price cap, electricity costs to the nearest pence is as high as 28p per kilowatt hour with a standing charge of 45p per day. 

October's hike will see this rise to 52p per kWh and the daily standing charge upped to 46p.

What does this mean for electric car charging costs for those who can - and those who can't - plug their zero-emission vehicles into sockets at home? 

For electric car owners who have an charger at home and use their domestic tariff to cover the cost of boosting their EV's battery, the impact of the increased price cap will depend on a number of different factors.

These include the EV they own and its battery size, how many miles they drive, their charging device, the type of energy tariff they have and time of day they generally charge up.

To put the rising cost of electricity into context, we have based our calculation on the charging costs for the popular Volkswagen ID.3 powered by the mid-level 58kWh battery, which in the UK is currently priced from £36,195. 

We have then compared it to the fuel costs for a similarly-sized VW Golf family hatchback with a 1.5-litre petrol engine, which starts from a more affordable £25,950.

More

Is it cheaper to run an electric car than a petrol? With energy bills soaring from October will there still be a payback for switching to battery power... (msn.com)

Deflation: Making Sure "It" Doesn't Happen Here

----The sources of deflation are not a mystery. Deflation is in almost all cases a side effect of a collapse of aggregate demand--a drop in spending so severe that producers must cut prices on an ongoing basis in order to find buyers.1 Likewise, the economic effects of a deflationary episode, for the most part, are similar to those of any other sharp decline in aggregate spending--namely, recession, rising unemployment, and financial stress.

-----The conclusion that deflation is always reversible under a fiat money system follows from basic economic reasoning

-----But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.

https://www.federalreserve.gov/boarddocs/Speeches/2002/20021121/default.htm

Lesson: always have some fully paid up gold and silver as insurance, held safely outside of the larcenous reach of Uncle Scam and John Bull….

 

 

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