Baltic Dry Index. 1279 -41 Brent Crude 95.49
Spot Gold 1745 US 2 Year Yield 3.25 +0.03
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 22/08/22 World 601,123,096
Deaths 6,472,203
“When it becomes serious, you have to
lie.”
Jean-Claude Juncker. Failed former
Luxembourg P.M., serial liar, failed former president of the European
Commission. Scotch connoisseur.
This
morning a mixed bag. China slightly
eased its interest rates again.
Rumours
out of the middle east that the US has agreed a new nuclear deal with Iran that
will allow Iranian crude back into the world market. If true, another sign of
waning US power following last year’s debacle in Afghanistan.
In
the stock casinos, fear of the Fed’s coming five star junket to Jackson Hole,
Wyoming.
Will
Fed Chairman Powell lie or try to tell the truth?
Asia markets
mixed as investors weigh concerns over Fed hikes; China cuts benchmark lending
rates
UPDATED MON, AUG 22 2022 12:50 AM EDT
Shares in the Asia-Pacific region were mixed on
Monday as concerns over aggressive Fed hikes reemerged.
Chinese markets rose after China cut
its benchmark lending rates. Hong Kong’s was
up around 0.2%.
The was
0.57% higher, and the gained
0.899%.
China’s central bank cut its
one-year benchmark lending rate by 5 basis points to 3.65% and its five-year
rate by 15 basis points to 4.3%.
“We think the asymmetric cuts …
aim to support long-term borrowing and in particular mortgages, as overall
credit supply remains ample while credit demand is sluggish,” analysts wrote in
a Goldman Sachs Economic Research note Monday.
Elsewhere in Asia,
the Nikkei 225 in Japan pared some losses but was down 0.57% and the
Topix index slipped 0.23%.
South Korea’s Kospi shed
1% and the Kosdaq lost 1.4%.
The S&P/ASX
200 in Australia dipped 0.9%.
MSCI’s broadest
index of Asia-Pacific shares outside of Japan was 0.48% lower.
“Recent Fed
speakers have been stressing the message that more rate hikes are coming given
the fight against inflation has not yet been won,” Rodrigo Catril, a currency
strategist at National Australia Bank wrote in a Monday note.
Investors are
looking ahead to the Fed’s annual Jackson Hole economic symposium which begins
Thursday stateside.
Policymakers in New Zealand want interest rates to
be “comfortably above neutral” to fight rising prices, Reserve Bank of New
Zealand Deputy Governor Christian Hawkesby said, according to Reuters.
The RBNZ
raised its cash rate by 50 basis points to 3% last week.
Hawkesby told Reuters the central bank considered 25 or 75 basis point hikes.
He said taking the official cash
rate above neutral would bring down inflation and “afford us some breathing
space to see how things are playing out.”
“Once we get the [official cash
rate] up into that 4%-4.25% level we’re seeing things evenly balanced from
there. So we’d put equal weight on having to put the OCR up as we would putting
it down,” he added.
Hawkesby said policymakers are
expecting the economy to cool and acknowledge that uncertainties lie ahead.
Asia
markets: Stocks mixed as rate hike fears rise, China cuts LPR (cnbc.com)
Stock futures
fall as Wall Street looks ahead to Jackson Hole
UPDATED MON, AUG 22 2022 12:24 AM
EDT
U.S. stock
futures fell on Monday morning following a halt
in the summer rally last week, as fears of aggressive interest rate
hikes returned to Wall Street.
Dow Jones Industrial Average
futures slid by 136 points, or 0.4%. S&P 500 and Nasdaq 100 futures dipped
0.41% and 0.49%, respectively.
On Friday, the S&P 500 closed
down 1.29%. The Dow Jones Industrial Average dropped 292 points, or 0.86%, and
the Nasdaq Composite dropped 2.01%.
Those moves come ahead of what
could be a volatile week of trading on Wall Street. Investors are anticipating
Fed Chairman Jerome Powell’s latest comments on inflation at the central bank’s
annual Jackson Hole economic symposium.
“We’ve written a couple of times
recently about wait and see trading ahead of key events/releases... and how
that can set the stage for greater volatility around the events themselves, and
we may see a bit of that play out next week as investors await the symposium,”
read a Friday note from Susquehanna’s Christopher Jacobson.
On the earnings front, traders
are expecting Palo Alto Networks and Zoom Video to report results Monday after
the bell.
More
Stock
futures fall as Wall Street looks ahead to Jackson Hole (cnbc.com)
In
rumour news, a new nuclear deal with Iran will soon bring some oil price
inflation relief, but at what cost?
Oil Prices Plummet as Iran Nuclear Deal
Appears ‘Imminent’
22
August, 2022
Investing.com-- Oil prices fell
sharply on Monday on reports suggesting that Iran and Western countries were
close to striking a deal that would lift sanctions on crude supply from the
West Asian nation.
West Texas Intermediate futures, the
U.S. crude benchmark, sank over 1% to $89.39 a barrel, while London-traded
Brent oil futures fell 0.5% to $95.59 a barrel by 20:01 ET (0002 GMT).
Qatar news organization Al Jazeera
reported over the weekend that an Iran Nuclear deal was ‘imminent,’ while other
reports said Tehran was ready to drop its demand that the Islamic Revolutionary
Guard Corps be removed from the U.S. State Department’s List of Foreign
Terrorist Organizations.
Iran’s
demand for the corps was a major sticking point for the deal, and had so far
impeded negotiations with the U.S., which were facilitated by the European
Union.
The signing of a deal will see the
lifting of sanctions on 17 Iranian banks and 150 economic institutions, Al
Jazeera reported. Tehran will also be permitted to export 50 million barrels of
oil per day in four months of signing the deal.
The move is expected to release over
1 million barrels of oil per day of supply immediately into the market- which
portends a negative reaction from oil prices.
But this increase in supply could
spur measures from the Organization of Petroleum Exporting Countries to curb
production. Speculation over supply cuts had boosted oil prices late last week,
although they still ended the week negative.
Concerns over slowing global economic
activity dragged oil prices to six-month lows in recent weeks, as traders
feared a demand crunch stemming from a recession. Signs of economic duress in
major importer China have been of particular concern for oil markets. The
Chinese economy is struggling to weather a series of COVID lockdowns this year,
stemming from Beijing's strict zero-COVID policy.
Still, U.S. crude inventory data last
week suggested that demand was recovering from a lull in the world’s largest
economy. But further tightening of monetary conditions by the Federal Reserve
could quash such a recovery.
Oil
Prices Plummet as Iran Nuclear Deal Appears ‘Imminent’ (msn.com)
In
other news, across Europe food price inflation looks likely to be replaced by
food unavailability no matter what the price. Whose idea was it to start a war
between Russia and Ukraine?
Britons facing prospect of
higher food prices after US firm rejects offer to save crucial manufacturing
plant
Luke Barr, Financial Mail On Sunday – 20 August, 2022
Britons are facing the prospect of
higher food prices after a US firm rejected an offer to save a crucial
manufacturing plant, an MP has warned.
The shutdown of CF Industries'
fertiliser factory in Ince, Cheshire, is all but complete after a UK-based
group of investors failed in a rescue bid. Hundreds of jobs have been lost at
the facility, and CF said that the restructuring had cost the company
£137million.
CF produces 60 per cent of Britain's
CO2 supplies as a by-product of agricultural fertiliser. The gas is crucial in
packing and preserving fresh food and salads.
The
closure means it now has just one UK factory, in Billingham, Teesside, which CF
also threatened to mothball earlier this year.
The company received a Government
bailout worth millions in 2021.
Labour MP Justin Madders, whose
constituency includes Ince, said the factory closure means CF has a
'stranglehold over fertiliser prices in the UK'.
He said: 'It means that we are far
more exposed to global shocks. The monopoly that CF has got is going to put
upward pressure on food prices.'
The Mail on Sunday previously
revealed that the former head of the Army, Lord Dannatt, was spearheading a
plan to snap up the plant.
A member of his consortium said he
was 'massively disappointed and very surprised' that CF did not want to
sell.
A CF spokesman said it had spoken
with several parties but no offer 'appeared likely to secure the long-term
future' of the facility.
Global
Food Crisis: 50 Per Cent Crop Loss Likely Due to Drought, German Farmers Say
19 Aug 2022
Crop losses of up
to 50 per cent are now expected in parts of Germany due to drought, farmers in
affected regions have claimed.
Up to half of the crops in parts of the German state
of Baden-Württemberg are likely to be lost due to drought, farmers in the
region have claimed, with problems to do with the prices of fuel, fertiliser, and
pesticides connected to the green agenda and war in Ukraine also reportedly
causing problems for those in the region.
With
the losses expected to materialise in the autumn, the farming chaos may end up
being another crisis facing Germany’s floundering political class as fuel
shortages combined with a freefalling economy hit a public already suffering
from officials’ poor handling of the COVID-19 pandemic.
According to a report by Bild, a serious lack of rainfall
has led farmers to fear that the likes of maize, sugar beet, potato, and
soybean crops could see losses of up to 50 per cent should rain not return
soon.
“If
there is no heavy rainfall in the near future, we expect considerable harvest
losses of up to 50 per cent for almost all crops,” state farmer president
Joachim Rukwied is reported as saying on Thursday, emphasising that crops
harvested in the autumn were likely to be the worse affected.
To make matters worse, livestock farmers in the region are also now
struggling, with many being forced to give animals feed meant to be kept for
the winter as the amount of edible grass on the ground quite literally has
dried up.
Fodder that might otherwise be imported from Russia or Ukraine is
proving hard to come by as a result of the former’s invasion the latter and the
West’s resulting sanctions war with Moscow.
For
farmers in Baden-Württemberg, this year’s drought is just the latest of
many crises that have disrupted their businesses, with the international trade
chaos caused in part by the Ukraine war seeing the cost of essential
fertilisers soar across Europe.
Sourcing alternatives outside of Russia has proven difficult in part thanks to the EU’s green agenda, with
plants producing the modern nitrogen fertilisers requiring natural gas as an
essential component.
More
Food Crisis: 50
Per Cent Crop Loss Likely Due to Drought - Farmers (breitbart.com)
Finally,
ding, ding, ding, seconds out. Round one in the Great Nickel fight is about to
begin.
Meltdown on London Metal Exchange: Legal
fight heats up after nickel fiasco, when billions of pounds of business was
cancelled after prices spiked
|
It is not often
the London Metal Exchange sets pulses racing to anyone outside The Ring, which
is not a Wagnerian opera cycle but Europe's last open outcry trading
floor.
Despite hosting
trillions of pounds worth of trades every year, the world's oldest and biggest
hub for industrial metals was seen as something of a backwater in the Square
Mile. But in the early hours of March 8 this year, the metals market
experienced some serious Sturm und Drang.
In what has become
known as the nickel trading fiasco, the LME, which is owned by Hong Kong
Exchanges and Clearing (HKEX), cancelled billions of pounds of business after
prices spiked by more than 50 per cent in a matter of hours.
This potentially
saved China's largest steel company, Tsingshan Holding Group. But, in the
process, it enraged the world's most feared hedge fund, Elliott Management, in
the process, and entangled investment banking giant JPMorgan.
The scandal has
sparked nearly £400million of legal claims against the LME from Elliott Management
and trading firm Jane Street. Both are asking for a judicial review of whether
the LME's actions were legal.
The Mail on Sunday
understands there may be more to come from other aggrieved hedge funds and
traders. Court documents and sources close to the matter have revealed the
severity of claims facing the LME, which has been accused of withholding
private conversations around its controversial suspension.
Questions are also
increasingly being asked of JPMorgan's role, the MoS understands. A series of
investigations have already been launched by groups including the Financial
Conduct Authority and the Bank of England to uncover the truth behind the
drama. The context for the chaos was a surge in nickel prices. A spike came
when Tsingshan had to buy contracts to cancel huge short positions.
The Chinese
buying, alongside supply chain pressures caused by Russia's war in Ukraine, led
to the price of nickel rocketing by 250 per cent in just two days to more than
£83,000 a ton.
The unprecedented
price surge landed huge profits for hedge funds and City firms, including
Elliott, while mammoth margin calls loomed for those on the losing side,
such as Tsingshan. Or so it seemed until the situation turned on its
head.
More
London Metal
Exchange legal fight heats up after nickel fiasco | This is Money
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.
Europe
on the brink: the states battling to stave off recession
Richard Partington and Larry Elliott – 20 August, 2022
Almost six months after Vladimir Putin ordered
Russian troops into Ukraine, the extent of the damage to the European economy
is becoming clear. The red lights of recession are flashing.
The eurozone’s big four economies – Germany,
France, Italy and Spain – have all had their growth forecasts for 2023
downgraded by the International Monetary Fund, as a combination of the war and
higher interest rates put a brake on activity.
In the UK, inflation is above 10% for the first time in 40 years as households
struggle with rising energy bills. The Bank of England forecasts inflation will
peak above 13% in autumn after a fresh increase in energy costs, while the
economy will fall into a lengthy recession.
While Britain is contending
with additional pressures from Brexit, the impact of soaring energy prices,
supply chain disruption, shortages of workers and drought are also hitting the
rest of Europe. Analysts at the Economist Intelligence Unit say the pain could
go on for some time, because countries must wean themselves off Russian
hydrocarbons, and building up renewables as an alternative will take time.
“In the
near term we expect a recession in Europe in the winter of 2022-23 as a result
of energy shortages and sustained elevated inflation”, the EIU said. “The
winter of 2023-24 will also be challenging, and so we expect high inflation and
sluggish growth until at least 2024.”
Here
we assess the chances of recession in the EU – and Russia.
Germany
Europe’s
largest economy is in the centre of the storm, as the energy crisis, months
without rainfall, and a breakdown in global trade batter its manufacturing
base. Economic growth slowed to stall speed in the second quarter and is likely
to turn negative in the coming months.
“It
will need an economic miracle for Germany not to fall into recession in the
second half of the year,” said Carsten Brzeski of the Dutch bank ING. “The fact
that the entire German economic business model is currently up for renovation
will also weigh on growth prospects in the coming years.”
More
Europe on the
brink: the states battling to stave off recession (msn.com)
Strike
at UK’s biggest port threatens supply chain disruption
Philip Georgiadis in
London – 21 August, 2022
Supply chains in the UK face disruption this
week as industrial action spreads from the public transport network to the
country’s busiest container port.
More than 1,900 members of the Unite
union began an eight-day strike at Felixstowe on Sunday in a dispute over pay.
The port handles 40 per cent of the UK’s container trade, equivalent to 4mn
containers a year.
The Russell Group, an analytics company,
estimated that as much as $800mn of trade could be affected by the walkout,
with clothing and electronics expected to be worst hit.
The port’s management said it had put
contingencies in place to try to continue operating but warned that daily throughput
would depend on how many workers turned up.
The strikes at Felixstowe come after
three days of disruption for passengers as unions staged another series of
strikes that affected the railways and London’s public transport network in
long-running disputes over pay.
Members of the RMT and TSSA staged a
second 24-hour strike in three days on Saturday in a dispute with Network Rail,
which owns and operates the UK’s rail infrastructure, and with train operating
companies. Staff had previously walked out on Thursday, leaving about a fifth
of normal services running.
----As a result of the Felixstowe industrial action, Maersk, the world’s
second-largest container shipping group, has already diverted three ships away
from the port to other northern European destinations and said it was
monitoring a further 11 vessels that could be affected by the strikes.
While the walkout will inevitably
prove disruptive and exacerbate supply chain stresses, industry executives said
the UK’s logistics industry had been extremely resilient over the past two
years and that problems were likely to be manageable.
Natalie Chapman, an executive at
industry body Logistics UK, said the strike was unlikely to have a noticeable
impact on consumers as most of the freight that supplies retailers moves
through the Port of Dover.
More
Strike at UK’s
biggest port threatens supply chain disruption (msn.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 e
COVID-19 associated with
increased risk of brain disorders 2 years after infection: study
Sat,
August 20, 2022 at 2:38 PM
A study published on Wednesday
shows a history of COVID-19 infection is associated with an increased risk of
neurological aftereffects.
“COVID-19 is associated with increased
risks of neurological and psychiatric sequelae in the weeks and months
thereafter,” reads the study, titled “Neurological and psychiatric risk trajectories
after SARS-CoV-2 infection: an analysis of 2-year retrospective cohort studies
including 1,284,437 patients.”
Sequelae are conditions resulting
from a prior illness or incident.
“How long these risks remain,
whether they affect children and adults similarly, and whether SARS-CoV-2
variants differ in their risk profiles remains unclear,” the study, published
in The Lancet Psychiatry journal, continues.
The study examined de-identified
data from more than a million patients using an international health records
network that drew from the U.S., Australia, the U.K., Spain, Bulgaria, India,
Malaysia and Taiwan. Most patients considered by the study were American.
The records of patients who had
been diagnosed with COVID-19 between Jan. 20, 2020, and April 13, 2022, were
evaluated for 14 neurological and psychiatric diagnoses.
The study found that COVID-19
infection was linked to a higher instance of mood and anxiety disorders that
declined after 1-2 months.
It also found that COVID-19
infection was associated with an increased risk of dementia, psychotic
disorders, epilepsy or seizures and cognitive deficit, or “brain fog,” that
remained elevated two years after patients were first diagnosed with the virus.
The risks of those aftereffects
varied for different age groups, according to the study.
“A sizeable proportion of older
adults who received a neurological or psychiatric diagnosis, in either cohort,
subsequently died, especially those diagnosed with dementia or epilepsy or
seizures,” the study reads.
Children were not found to be at
increased risk of mood or anxiety disorders in the six months after infection,
but did see an increased risk of “cognitive deficit, insomnia, intracranial
haemorrhage, ischaemic stroke, nerve, nerve root, and plexus disorders,
psychotic disorders, and epilepsy or seizures.”
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.
Farmers are embracing
solar power to beat soaring energy bills
By Dave Harvey
Business
Correspondent, BBC West 8 August, 2022
A solar power firm has reported record demand from farms as the price of electricity has risen.
MyPower, based in the Cotswolds, has installed 27,000 panels in the past year, up from 7,000 in the previous 12 months.
Its managing director Ben Harrison said he believed energy price increases were behind the dramatic sales growth.
"Farms are facing rising electricity bills, and making your own power can help reduce that impact," he said.
Adam Henson was their most recent customer.
He runs the Cotswold Farm Park and is known for his reports on BBC One's Countryfile.
Mr Henson explained: "Dad started the farm park in 1971 and he farmed in a very environmentally-friendly way.
"So having solar is a step in the right direction towards a greener business."
But in an energy crisis solar panels may also save cash, as well as carbon emissions.
Unlike domestic households, farms use a lot of power in the daytime for things like milking machines, dairy chillers, heaters to warm baby chicks and lighting in dark sheds.
They often have big sheds with rooftops that are easy to access and can easily support solar panels.
And while individual energy consumers are protected by the price cap on energy, businesses are not.
In the past year, commercial electricity prices have gone from 15p per kWh to 45p/kWh.
Adam Henson said: "The solar is costing us four to five pence a unit, so the return on our investment is only three to four years."
---- Ten miles from Adam Henson's farm I meet Clive Slatter, who runs 600 dairy cattle high on the Cotswolds near Northleach.
Two years ago
he took the plunge and covered a cowshed with solar panels.
"It's
saving me about £1,000 a month," he tells me.
Renewable
robots
The panels produce about 40% of the electricity his farm uses.
Mr Harrison can
analyse exactly when the power is made and used.
Until recently,
he did not recommend solar for dairy farms, because they used to milk the cows
early in the morning, and late in the day.
The sun was low
in the sky then, so the energy-hungry milking machines had to be fed by mains
power.
Robots have
changed all that.
Hill House Farm
may look like a traditional Cotswold farm, with muddy sheds and old stone
walls, but it is home to new agri-tech.
A robot milking
machine operates 24/7.
When a cow
feels full of milk, she wanders along to the dairy machine, lasers line up her
teats and the robot draws down the milk.
It means
steady, all-day power demand, perfect for solar production.
More
Farmers are embracing solar power to beat soaring
energy bills - BBC News
Fisher
Ames.
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