Baltic Dry Index. 1320 -70 Brent Crude 96.14
Spot Gold 1753 US 2 Year Yield 3.22 -0.06
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 19/08/22 World 599,121,538
Deaths 6,466,787
You have to
choose (as a voter) between trusting to the natural stability of gold and the
natural stability of the honesty and intelligence of the members of the
Government. And, with due respect for these gentlemen, I advise you, as long as
the Capitalist system lasts, to vote for gold.
George Bernard
Shaw. Socialist.
In
the stock casinos, the bear market short squeeze rally seems to be coming to
its end. What comes next is a new recession sell-off.
Someone
more talented than me needs to take a look at the trading in Bed Bath and
Beyond, if I didn’t know better, of course, I might get the impression
something illegal was going on.
Asia-Pacific
markets trade mixed following a quiet Wall Street
UPDATED FRI, AUG 19 2022 12:14 AM EDT
Asia-Pacific
markets were a mixed bag on Friday against a muted Wall Street looking to
revive its recent market rally.
The was
mostly flat but the fell
0.33%.
Hong Kong’s was
also 0.39% lower but there was positive action from , up 1.86% and , both in the
news this week over a denied Tencent offload of Meituan.
Japan’s increased
0.51% while the Topix index added 0.45% whereas the Kospi was slight down at
0.38%.
Japan’s July headline inflation has
risen to 2.6% from 2.4% in June. That was above expectations of
2.2% and higher than the Bank of Japan’s goal of 2.0%.
Compared to a lackluster start to
the week, Japanese stocks were buoyant. rose 1.49%, was up
1.07%, while Corp was
trading higher by over 2%. Electronics stocks , and were also
ahead by more than 1%.
The in
Australia is flat.
New Zealand posted slightly
higher exports in July at $6.68 billion New Zealand dollars ($4.17 billion)
from NZ$6.27 billion. But imports also rose to NZ$7.77 billion for July from
NZ$7.38 billion in June.
Malaysia will release its trade
figures for July later in the day.
After ’s second
quarter revenue slide earlier this week, fellow tech giant offered
the markets
a sweetener posting a nearly 13% year-on-year increase in its
second quarter net revenue, beating expectations.
On Thursday, both Goldman
Sachs and Nomura downgraded their forecasts for China’s GDP
growth citing weaker demand, uncertainties stemming from zero-Covid policy and
an energy crunch.
A slowdown in the
global semiconductor cycle is underway, ANZ Research said in a note.
“The electronics
manufacturing PMI suggests that while activity is still in expansionary mode,
it is past its peak and will slow down further,” ANZ Research Bansi Madhavani
said in the note on Friday.
“Asia’s
electronic-oriented economies are signaling weakness in activity.”
The big players
Taiwan and South Korea have softening Purchasing Managers Index or
manufacturing sentiment, and companies expect the industry to enter an
“inventory-rebalancing phase over the coming months”, Madhavani noted.
“Headwinds to Asia’s
electronics trade are rising in the coming months, but some segments will be
more affected than others. This is likely to bring about a soft landing for
Asia’s overall electronics trade,” Madhavani said n the note.
Asia-Pacific
markets trade mixed following a quiet Wall Street (cnbc.com)
Hedge funds are sitting on a record level of
bearish bets on the stock market
Hedge funds are
getting increasingly skeptical about this big rally that broke out in the
middle of a bear market.
Net short positions
against the S&P 500 futures by hedge funds have reached a record $107
billion this week, according to calculations by Greg Boutle, head of U.S.
equity and derivatives strategy at BNP Paribas. Shorting the S&P 500
futures is a common way to bet against the broader stock market but also could
be part of a hedging strategy.
The bearish bets
accumulated as the S&P 500 rallied for four straight weeks,
bouncing more than 17% off its 52-week low from June 16. Economic data pointing
to easing price pressures firmed the belief that Federal Reserve is getting
inflation under control.
“As powerful as the
market rally has been, it is being viewed with substantial skepticism,” said
Mark Hackett, Nationwide’s chief of investment research.
Given the massively
defensive positioning, some hedge funds have been forced to cover their short
bets as stocks continued to go higher, further fueling the rally in the near
term.
Since the S&P
500′s June low, short sellers ended up covering $45.5 billion of their short
positions, according to S3 Partners. The largest amount of short covering in
dollar terms occurred in the consumer
discretionary and technology sectors.
“This may indicate
that institutions are looking at the recent upward market movements as a ‘bear
rally’ and are expecting a pullback in share prices across the broad market if
the recession continues or worsens and the Fed is forced to raise rates higher
or quicker than expected,” said Ihor Dusaniwsky, managing director of
predictive analytics at S3 Partners.
More
Hedge
funds are sitting on a record level of bearish bets on the stock market
(cnbc.com)
Activist
investor Ryan Cohen completes planned sale of Bed Bath & Beyond stake,
stock falls 44%
Activist investor Ryan Cohen has exited his
position in retailer ,
according to a securities filing released Thursday afternoon.
The filing shows that Cohen’s RC Ventures
dumped its stock on Tuesday and Wednesday at a range of prices between $18.68
per share and $29.22 per share. The firm also sold its call options. Cohen said
in a filing earlier this week that he intended to sell his holdings of the meme
stock.
Shares
of the stock fell 44.6% in extended trading, adding to a loss of nearly 20%
during Thursday’s regular trading session.
Cohen, who co-founded Chewy and is the chairman of , purchased more
than 7 million shares and call options of Bed Bath & Beyond earlier this
year. The company added board members of Cohen’s choosing and pushed
out its CEO after RC Ventures revealed its stake.
Cohen originally purchased his
shares of Bed Bath & Beyond at an average of roughly $15.34 per share.
According to CNBC calculations, Cohen made about $59 million, before brokerage
fees, on his trade of Bed Bath & Beyond common stock. He may have made additional
profits on the options.
In a statement Wednesday, Bed Bath
& Beyond said it had reached a “constructive agreement” with RC Ventures in
March and was exploring potential changes to its financial
structure.
Shares of Bed Bath & Beyond
have rocketed
higher this month, fueled in part by retail traders in an apparent revival
of the meme trading craze. Shares were up more than 200% in August
as of Thursday’s close.
Bed Bath & Beyond has seen
abnormally high trading volume this month, and the stock has become the
dominant topic of conversation on Reddit’s WallStreetBets page. The stock has
high short interest, or bets that it will decline made by hedge funds, which
was one of the main qualities of names that soared during the meme stock craze
of 2021.
The retail investor interest has
come despite the company’s fundamental struggles. Bed Bath & Beyond in June
reported that its first-quarter net sales were down 25% year over year, resulting
in a net loss of $358 million. The company also reported negative operating
cash flow of about $400 million.
Of top concern is that its
liquidity could be drying up, and the company must raise new capital in order
to stay afloat.
Bed Bath & Beyond reported
roughly $108 million in cash and equivalents in its fiscal first quarter, down
from $1.1 billion a year prior.
More
Investor
Ryan Cohen completes planned sale of Bed Bath & Beyond stake, stock falls
44% (cnbc.com)
In other news, the Bank
of England, which long ago ran out of talent, is now running out of road
because of the size of UK’s rising debt. But if you think GB has a debt problem
now, just wait for next years debt.
The Great Nixonian
Error of fiat money, August 15, 1971, is now unravelling everywhere as the
bills for the “free lunch” pour in. Soon we will all be Argentina or Turkey. At
worst Sri Lanka, but no one in Washington, London, Brussels or anywhere else
seems to care.
Historic
inflation surge to swell UK debt interest bill to over £200bn
THURSDAY 18 AUGUST 2022 8:02 AM
A historic inflation surge is set to
swell the UK’s debt interest bill to over £200bn, top economists have warned
today.
Britain’s public purse is set to come under intense pressure over the next two years that may cause the government to miss their borrowing fiscal rule, according to the Institute for Fiscal Studies (IFS).
The amount of money the UK pays holders of
government debt will climb to over £100bn this year and next, forcing policy
makers to ratchet up borrowing far above official forecasts published by the
Office for Budget Responsibility (OBR) at the March budget.
Interest payments are linked to the
retail price index (RPI) for around a quarter of government debt. They are
spread over decades.
The IFS said bigger than expected
government spending will push borrowing “about £16bn higher this year than
forecast in March, rising to £23bn higher next year”.
The UK’s debt interest bill is
forecast to top the around £75bn of spending on defence and transport. In the
financial year before Covid-19, the country’s debt interest bill was around
£48bn.
Tory leadership candidates Liz Truss
and Rishi Sunak have promised to ramp up support for the poorest households to
shield them from the cost of living crisis.
Truss has backed cutting taxes, while
Sunak has pledged to step up cash transfers.
Any further support – either through
reducing taxes or additional spending – that is unfunded “would only act to
make this problem worse,” the IFS said.
“It is hard to square the promises
that both Ms Truss and Mr Sunak are making to cut taxes over the medium-term
with the absence of any specific measures to cut public spending and a presumed
desire to manage the nation’s finances responsibly,” Carl Emmerson, deputy
director of the IFS, said.
The warning comes as figures
published yesterday suggested inflation may top the Bank of England’s projected
more than 13 per cent peak.
Prices climbed 10.1 per cent annually
in July, the quickest acceleration since February 1982, far above the Bank and
City’s expectations. RPI hit 12.3 per cent.
A Truss campaign source told City
A.M. we “need to challenge the failing economic orthodoxy” by reducing
taxes to boost growth.
More
Historic inflation
surge to swell UK debt interest bill to over £200bn (cityam.com)
Finally,
how to lose a trillion dollars.
Three Arrows Capital. They knew what they
were doing — right?
---- Her buyers, Su Zhu and
Kyle Davies, two Andover graduates who ran a Singapore-based crypto hedge fund
called Three Arrows Capital, never got the chance to spray Champagne
across Much Wow’s bow. Instead, in July, the same month the boat
was set to launch, the duo filed for bankruptcy and disappeared before
making their final payment, marooning the unclaimed trophy in her berth in La
Spezia on the Italian coast. While she has not been officially listed for
resale, the intimate world of international super-yacht dealers has quietly
been put on notice that a certain Sanlorenzo 52Steel, the coveted Cayman
Islands flag billowing above her empty balconies, is back on the market.
The yacht has since become
the subject of endless memes and jokes on Twitter, the functional center of the
crypto universe. Pretty much everyone in that world, from the millions of
small-scale crypto holders to industry employees and investors, has watched in
shock and dismay as Three Arrows Capital, once perhaps the most highly regarded
investment fund in a burgeoning global financial sector, collapsed in
excruciating and embarrassing fashion. The firm’s implosion, a result of both
recklessness and likely criminal misconduct, set off a contagion that not only
forced a historic sell-off in bitcoin and its ilk but also wiped out a wide
swath of the cryptocurrency industry.
Crypto companies from New
York to Singapore were the direct victims of Three Arrows. Voyager Digital, a
publicly traded crypto exchange based in New York that once had a
multibillion-dollar valuation, filed for Chapter 11 in July, reporting that
Three Arrows owed it more than $650 million. Genesis Global Trading,
headquartered on Park Avenue, had lent Three Arrows $2.3 billion.
Blockchain.com, an early crypto company that provided digital wallets and
evolved into a major exchange, faces $270 million in unpaid loans from 3AC and
has laid off a quarter of its staff.
Among crypto’s smartest
observers, there is a widely held view that Three Arrows is meaningfully
responsible for the larger crypto crash of 2022,
as market chaos and forced selling sent bitcoin and other digital assets
plunging 70 percent or more, erasing more than a trillion dollars in value. “I
suspect they might be 80 percent of the total original contagion,” says Sam
Bankman-Fried, who as CEO of FTX, a major crypto exchange that has bailed out
some of the bankrupt lenders, has perhaps more visibility on the problems than
anyone. “They weren’t the only people who blew out, but they did it way bigger
than anyone else did. And they had way more trust from the ecosystem prior to
that.”
More
Inside the Crash
of Three Arrows Capital (nymag.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.
Norway’s central
bank hikes rates by 50 basis points in bid to tackle surging inflation
PUBLISHED THU, AUG 18 2022 4:06 AM EDT
Norway’s central bank
on Thursday hiked its benchmark interest rate by 50 basis points and flagged a
likely further hike in September as inflation soars.
The increase takes
the Norges Bank’s sight deposit rate to 1.75% from 1.25%, exceeding its prior
forecast in June. Norwegian inflation hit an annual 4.5% in July, up from 3.6%
in June and well ahead of consensus projections for 3.8%.
In its decision
notice, the Norges Bank monetary policy committee said activity in the Norwegian
economy remained high, with little spare capacity, while unemployment has
fallen further and is at a very low level.
Policymakers also
noticed that price rises had broadened in recent months, and may signal that
inflation will remain high for longer than previously expected. The central
bank suggested that a faster rate rise now would reduce the risk of high
inflation becoming “entrenched,” which would necessitate a sharper tightening
of monetary policy further out.
“A markedly higher
policy rate is needed to ease the pressures in the Norwegian economy and to
bring inflation down towards the target,” says Governor Ida Wolden Bache.
Thursday’s report
also noted that there is a risk that “little spare capacity in the Norwegian
economy and persistent global price pressures will lead to a further
acceleration in price inflation.”
Yet the committee
acknowledged that while monetary policy tightening may cool the housing market
and limit household consumption faster, there is also a risk of a sharper
slowdown in global growth.
Norway's central
bank hikes rates by 50 basis points (cnbc.com)
Second smelter closes down
as industry grapples with soaring energy bills
Nicholas
Earl 17 August, 2022
The second European smelter in two days has
announced it will halt production because of rising energy costs, reflecting
the deepening nature of the gas crisis on the region’s industry.
The Slovalco aluminium smelter in
Slovakia – which is majority owned by Norsk Hydro -will will shut down primary
production by the end of September.
This follows a comparable decision
yesterday to cease output at a zinc smelter in the Netherlands.
The Budel smelter in the Netherlands,
which controlled by Trafigura Group’s Nyrstar will be placed on care and
maintenance from 1 September “until further notice,” according to a company
statement
Smelting ore to
produce metal one of most energy reliant industrial processes, and
its costs have frocketed in line with energy prices.
With Russia squeezing supplies into
Europe, sustained price rises and shortages are likely to put even more
pressure on heavy industry across the continent.
Second smelter
closes down as industry grapples with soaring energy bills (msn.com)
US retail sales were
flat in July as inflation takes a toll
WASHINGTON (AP) — The pace of sales at U.S. retailers was
unchanged last month as persistently high inflation and rising interest rates
forced many Americans to spend more cautiously.
Retail purchases were flat after having risen 0.8% in
June, the Commerce Department reported Wednesday. Economists had expected a
slight increase.
Still, Wednesday’s report contained some positive signs:
Excluding autos and auto parts, retail sales rose 0.4% in July.
Lower gas prices likely freed up money for people to
spend elsewhere. Gasoline sales slid 1.8%, reflecting the drop in pump prices.
“As gas prices fell, consumers had more money in their
pockets for other items such as furniture and electronics,″ said Jeffrey Roach,
chief economist at LPL Financial.
Sales of building supplies and garden equipment held up,
as did sales at electronics and appliance stores.
At the same time, consumers remained wary of spending
much on non-essentials: Sales were down 0.5% at department stores and 0.6% at
clothing stores.
Compared with 12 months ago, overall retail sales rose
10.3% in July.
America’s consumers, whose spending accounts for nearly
70% of U.S. economic activity, have remained mostly resilient even with year-over-year inflation near a four-decade high, rising economic uncertainties and the surging costs of mortgages and borrowing money. Still, overall spending has weakened, and it has
shifted increasingly toward things like groceries, and away less necessary
things like electronics, furniture and new clothes.
---- Inflation continues to pose a severe hardship for
many families. Though gasoline prices have fallen from their heights, food,
rent, used cars and other necessities have become far more expensive, beyond
whatever wage increases most workers have notched.
Despite a still-robust job market, the U.S. economy shrank in the first half of 2022, raising fears of a potential recession. Growth has been
weakening largely as a consequence of the Federal Reserve’s aggressive interest rate hikes, which are intended to cool the economy and tame high
inflation.
The impact of the Fed’s hikes has
been felt especially in the housing market. Sales of previously occupied homes
have slowed for five straight months as higher loan rates and high
sales prices have kept many would-be buyers on the sidelines.
More
US retail sales
were flat in July as inflation takes a toll | AP News
BofA
CEO: Struggling Americans feel they are in a recession
August 17,
2022
NEW YORK (AP) — The CEO of Bank of America said the
recent debate over whether the U.S. economy is technically in a recession or not is missing the point. What matters is that
current economic conditions are negatively impacting those who are most
vulnerable.
“Recession is a word. Whether we are in a recession or
not is really not the important thing. It’s what it feels like for the people
going through this,” Brian Moynihan told The Associated Press during an
interview at the Bank of America Tower in midtown Manhattan, where he talked
about inflation and the current state of the economy, as well as the health of
the U.S. consumer.
The issue of whether the U.S. economy is in recession has
become politicized heading into the 2022 mid-term elections. While inflation is
at a level not seen since the early 1980s and U.S. consumer confidence is
falling, other measures of the economy, such as the monthly jobs report, are
still strong. In response to high consumer and wholesale prices, the Federal
Reserve has been raising interest rates aggressively in hopes of taming
inflation while not causing too much economic damage.
Moynihan, who has been BofA’s CEO
since 2010, would not say the U.S. economy is in recession, saying that
declaration will have to come from “a bunch of people in Cambridge,
Massachusetts,” a reference the National Bureau of Economic Research, the
nonpartisan organization that determines when recessions begin and end.
However, Moynihan cited two major issues negatively
impacting average Americans — gas prices and rent — as reasons to be concerned.
The national average for a gallon of gasoline ballooned to just over $5 in June
before falling back below $4 last week. Moynihan appeared more concerned about
the rising cost of rents, tend not to fluctuate like gas prices.
“Gas prices are coming back down, but rents are going up
10, 12, 15 percent. And rent can end up taking 40% of these households’ income,”
Moynihan said. Rent accounts for about one-third of the government’s Consumer
Price Index, which showed a year-over-year increase of 8.5% in July.
“We are worried about, for the U.S. broad-based consumer,
is the increased rents as we go into the natural turn of rents (typically in
the fall with school year),” he added.
More
BofA CEO: Struggling Americans feel they are in a
recession | AP News
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.
|
Neurological and
psychiatric risk trajectories after SARS-CoV-2 infection: an analysis of 2-year
retrospective cohort studies including 1,284,437 patients
Maxime
Taquet, Rebecca Sillett, Lena Zhu, Jacob Mendel, Isabella Camplisson, Quentin
Dercon, Paul J Harrison
Summary Background COVID-19 is
associated with increased risks of neurological and psychiatric sequelae in the
weeks and months thereafter. 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
More
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.
Germany: 1 dead, 9 injured after test car veers into
traffic
BERLIN (AP) — A test car with autonomous steering
capability veered into oncoming traffic in Germany, killing one person and
seriously injuring nine others, police said Tuesday.
A spokesman for police in the southwestern town of
Reutlingen said the electric BMW iX with five people on board, including a
young child, swerved out of its lane at a bend in the road, triggering a series
of collisions involving four vehicles Monday afternoon.
After brushing an oncoming Citroen, the BMW hit a
Mercedes-Benz van head-on, resulting in the death of a 33-year-old passenger in
that vehicle.
The 70-year-old driver of the Citroen lost control of her
car and crashed into another vehicle with two people on board, pushing it off the
road and causing it to burst into flames.
Reutlingen police spokesman Michael Schaal said four
rescue helicopters and dozens of firefighters responded to the incident and the
injured were taken to several hospitals in the region. They included the 43-year-old
driver of the BMW, three adults aged 31, 42 and 47, and a 18-month-old child
who were all in the test vehicle.
Schaal said police hadn’t yet had an opportunity to
interview those involved in the crash.
“The crash vehicle was an autonomous electric test car,”
police said in a statement. “Whether it was being steered by the 43-year-old
(driver) or not is the subject of investigation.”
BMW confirmed that one of its test vehicles was involved
in a collision near Reutlingen, but denied that the vehicle was fully
autonomous.
“The vehicle has a level 2 driving assistance system that
is already incorporated in production vehicles today and which can support the
driver on demand,” the company said. “With level 2 vehicles the driver always
retains responsibility.”
BMW added that the vehicle was required to be marked as a
test car for data protection purposes, because it was recording footage.
“We are in the process of investigating the exact
circumstances (of the crash),” BMW said. “Of course we are in close contact
with authorities.”
Germany: 1 dead, 9 injured after test car veers into traffic | AP News
Another weekend and an increasingly
expensive weekend for most in the UK and EU. In the Ukraine, yet more death,
pain and destruction and for what?
Because Washington, London and NATO Brussels
thought Russia wouldn’t dare attack Ukraine with only 190,000 forces and so
would deny Russia any security guarantees.
Have a great weekend everyone.
Gold would
have value if for no other reason than that it enables a citizen to fashion his
financial escape from the state.
William F.
Rickenbacker.
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