Baltic Dry Index. 1477 -79 Brent Crude 98.15
Spot Gold 1802 US 2 Year Yield 3.25 +0.02
This is the way things are, and the Game has been
so successful that, like everything, it will get more and more successful until
it stops being successful.
George Goodman, aka Adam Smith, The Money
Game. 1968.
In
the stock casinos, everyone and his dog are now betting that inflation’s over
and the Fed can go back to putting the “boom” into boom and bust.
Well
maybe but maybe not.
US
official inflation is still running at 8.5 percent, or 5.9 percent by the preferred
way the Fedsters themselves like to look at it, both far above the Fed’s
official target of just 2 percent.
Besides,
inflation is falling because the US and global economy is going into recession,
never a good time to be long stocks but a good time to be in cash to pick up
bargains later in the crash. Look away from that Baltic Dry [shipping] Index now.
I
think this bull rally in a bear market is a good time to be exiting stocks for
what comes next after the summer of hopium is over.
Dow closes up 400 points, S&P 500 rises for fourth
straight week as investors warm to cooler inflation
UPDATED FRI, AUG 12 2022 5:26 PM EDT
Stocks rose
sharply on Friday, clinching the fourth straight positive week for the S&P
500 as investors celebrated signs that inflation may be peaking.
The Dow Jones Industrial Average
added 424.38 points, or 1.27%, to close at 33,761.05. The S&P 500 gained
1.73% to finish at 4,280.15, and the Nasdaq Composite surged 2.09% to
13,047.19.
The S&P 500 rose 3.26% on the
week, notching its longest weekly winning streak since November 2021. The Dow
was up 2.92% for the week, while the Nasdaq Composite moved higher by 3.08%.
For the Nasdaq, it was also the fourth positive week in a row.
The averages have been boosted by
positive news on the inflation front. The consumer price index was flat from
June to July, thanks in large part to falling gas prices, which lowered
headline inflation. The producer price index showed a surprise decline. On
Friday, import prices also fell more than expected.
This week’s moves have extended a market
rally off its mid-June lows. The S&P 500 has gained 16.7% since
the lows, and has cut its losses from the peak in half. The Dow had gained
nearly 13% and the Nasdaq Composite has rebounded 22.6%.
The positive news has bolstered
investor confidence, leading some to believe that the recent gains are more
than a typical bear market rally.
More
This was a good week for inflation numbers, but whether
it can last is the big question
There was more good news Friday for inflation, as
import prices fell more than expected and brought some much-needed relief for
consumers.
The
report capped off a relatively upbeat week for those worried
about rising prices — and “relatively” is the operative word — as the U.S. is
on pace this year to import just over $4 trillion of goods and services this
year, according to the latest Bureau of Economic Analysis data.
With Americans already paying huge bills for food, energy and a host of
other items in their daily lives, any respite is a welcome one. After all, the
monthly import price drop of 1.4% was just the first this year, and the
year-over-year increase is still more than 8.8%.
That news followed reports earlier in the week
that both wholesale
and retail price increases abated for the month. Producer
prices declined 0.5%, and consumer prices including food and fuel were flat,
both numbers owing largely to a sharp slide in most of the energy complex.
People are
noticing: A New York Federal Reserve survey
released Monday showed consumers are expecting inflation to
stay high but not by as much as previous months. On Friday, the University of
Michigan consumer sentiment survey — whose ups and downs tend to ride in tandem
with prices at the pump — was higher than expected, though still just off
record-low levels hit in June.
‘This is just one report’
Taken together, the
numbers are reason for at least a little optimism. But it’s probably wise to
put exuberance on hold.
The consumer price
index is still up
8.5% from a year ago, while the producer
price index has surged 9.8% during the same period.
Krishna Guha, who heads global policy and
central bank strategy for Evercore ISI, cautioned in a client note on CPI that,
“while the report is consistent with the notion that inflation pressures may
finally have peaked, this is just one report.”
Similar comments
came Friday from Richmond Federal Reserve President Thomas Barkin. The central
bank official told CNBC that the inflation news was “very welcome,”
but added that he didn’t see any reason to pull back on the interest rate
increases that some economists fear will drag the U.S. into a recession.
“There is a very
long way to go before the Fed will feel it has sufficient compelling evidence
that inflation is moderating to stop raising rates,” Guha added.
The Fed and
investors will get a look next week at how much of an impact inflation has made
on spending.
The Wednesday advance report from the Commerce
Department is expected to show a modest 0.2% headline gain for July in retail
sales after a 1% increase in June, according to FactSet. The report is not
adjusted for inflation.
However, there is a wide range of opinion on where
the numbers could land.
Citigroup said its credit card data show a potential
1.1% decline for the month, while Bank of America said it sees a 0.2% decrease,
though control group spending — excluding a variety of volatile categories —
may have risen 0.9%.
Fed officials will be watching closely to see
larger trends in how inflation is impacting Main Street.
More
This
was a good week for inflation numbers, but whether it can last is the big
question (cnbc.com)
In other news, how will China’s burst
property bubble play out? No one knows of course, but CNBC takes up the case.
Here’s where China’s real estate troubles could spill
over
PUBLISHED THU, AUG 11 20228:18 PM
EDT
BEIJING — China’s real estate troubles could spill
into other major sectors if the problems persist — and three particular
businesses are most vulnerable, according to ratings agency Fitch.
Since last year, investors have worried that
Chinese property developers’ financial problems could spread to the rest of the
economy. In the last two months, many homebuyers’ refusal to pay their mortgages have
brought developers’ problems to the forefront again — while China’s economic growth slows.
“If timely and effective policy intervention does
not materialise, distress in the property market will be prolonged and have
effects on various sectors in China beyond the property sector’s immediate
value chain,” Fitch analysts said in a report Monday.
Under such a stress scenario, Fitch analyzed the
impact over the next 12 to 24 months on more than 30 kinds of businesses and
government entities. The firm found three that are most vulnerable to real
estate’s troubles:
1. Asset management companies
These firms “hold a sizeable amount of assets that
are backed by real estate-related collateral, making them highly exposed to
prolonged property-market distress,” the report said.
2. Engineering, construction firms (non
state-owned)
“The sector in general has been in difficulty since
2021. ... They do not have competitive advantages in infrastructure project
exposure or funding access relative to their [government-related] peers,” the
report said.
3. Smaller steel producers
“Many have been operating at a loss for a few
months and could face liquidity issues if China’s economy remains lacklustre,
especially given the high leverage in the sector,” the report said.
Fitch said construction accounts for 55% of steel
demand in China.
The slowdown in real estate has already dragged
down broader economic indicators like fixed asset investment and the furniture
sales component of retail sales.
Official data show residential housing sales fell
by 32% in the first half of this year from a year ago, Fitch pointed out. The
report cited industry research as indicating the 100 largest developers likely
saw even worse performance — with sales down by 50%.
Impact on other
sectors
While Fitch’s base case assumes China’s property
sales will return to growth next year, the analysts warned that “deterioration
in homebuyers’ confidence could stall the sales recovery momentum we saw in May
and June.”
More
Here's where China's real estate troubles could spill
over (cnbc.com)
In European news, Europe’s drought getting worse, if that’s possible.
European
drought dries up rivers, kills fish, shrivels crops
LUX, France (AP) — Once, a river ran through it. Now,
white dust and thousands of dead fish cover the wide trench that winds amid
rows of trees in France’s Burgundy region in what was the Tille River in the
village of Lux.
From dry and cracked reservoirs in Spain to falling water
levels on major arteries like the Danube, the Rhine and the Po, an
unprecedented drought is afflicting nearly half of the European continent. It
is damaging farm economies, forcing water restrictions, causing wildfires and threatening aquatic species.
There has been no significant rainfall for almost two
months in Western, Central and Southern Europe. And the dry period is expected
to continue in what experts say could be the worst drought in 500 years.
Climate
change is exacerbating
conditions as hotter temperatures speed up evaporation, thirsty plants take in
more moisture and reduced snowfall in the winter limits supplies of fresh water
available for irrigation in the summer. Europe isn’t alone in the crisis, with
drought conditions also reported in East Africa, the western United States and
northern Mexico.
As he walked in the 15-meter-wide (50-foot-wide)
riverbed in Lux, Jean-Philippe Couasné, chief technician at the local
Federation for Fishing and Protection of the Aquatic Environment, listed the
species of fish that had died in the Tille.
“It’s heartbreaking,” he said. “On average, about
8,000 liters (about 2,100 gallons) per second are flowing. ... And now, zero
liters.”
----The European Commission’s Joint Research Center warned
this week that drought conditions will get worse and potentially affect 47% of
the continent.
Andrea Toreti, a senior researcher at the European
Drought Observatory, said a drought in 2018 was so extreme that there were no
similar events for the last 500 years, “but this year, I think, it is really
worse.”
For the next three months, “we see still a very
high risk of dry conditions over Western and Central Europe, as well as the
U.K.,” Toreti said.
The current situation is the result of long periods
of dry weather caused by changes in world weather systems, said meteorologist
Peter Hoffmann of the Potsdam Institute for Climate Impact Research near
Berlin.
More
European
drought dries up rivers, kills fish, shrivels crops | AP News
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.
Argentina hikes interest rate by 950 basis points to
69.5% as inflation hits 20-year high
PUBLISHED THU, AUG 11 2022 8:42
PM EDT
Argentina’s central bank raised its benchmark interest rate by 950 basis
points on Thursday as the country struggles to keep a lid on spiraling
inflation that rose to a 20-year high of 71%, according to new data.
The central bank raised the benchmark “Leliq” rate for the 28-day term
to 69.5% from 60%, a rate the bank set just two weeks ago when it hiked the
rate by 800 basis points and the government shuffled its Cabinet to install a
new economy “superminister.”
New inflation data on Thursday underscored the urgency driving economic
policy: Prices rose 7.4% in July, above expectations and pushing annual
inflation to a 20-year high of 71%. The month saw the resignation of President
Alberto Fernandez’s longtime finance minister followed by the ouster of his replacement.
The numbers dashed hopes that this week’s
optimistic inflation reports in the United States and Brazil, where prices fell
a record 0.68% in July, might portend good news for the Southern Cone’s largest
economy.
In Mexico, the central bank on Thursday also
raised the country’s benchmark interest rate three-quarters of a percentage
point to 8.5%, its highest level since the bank’s current regime was put in
place in 2008. Mexico’s annual inflation climbed last month to 8.15%, a level
not seen since December 2000.
Argentina’s central bank in a statement said that
its decision “will help reduce inflation expectations for the remainder of the
year and consolidate financial and exchange stability.”
The bank also said the decision aims to bring rates
closer “to a positive terrain in real terms.”
A positive real interest rate is one of the points
agreed between Argentina and the International Monetary Fund (IMF) in a recent
$45 billion debt deal.
Reducing inflation, which is predicted to hit 90% by
the end of the year, as well as Argentina’s crippling debt and chronic
overspending, are at the top of the agenda for the country’s latest economy
minister, Sergio Massa, who has also assumed powers over manufacturing and
agriculture.
More
Argentina hikes
interest rate by 950 basis points to 69.5% (cnbc.com)
With inflation running at a 40-year high, 36% of U.S. adults
tapped their savings to cover living expenses: Survey
PUBLISHED THU, AUG 11 2022 1:05
PM EDT UPDATED THU, AUG 11 2022 3:01 PM EDT
More than a third of U.S. adults are dipping into
their savings accounts to help them afford higher prices, new research shows.
In the face of high inflation, 36% of people say
they have withdrawn an average of $617 from their savings during the first six
months of this year, according to New York Life’s latest Wealth Watch survey. In that same time period, the U.S. personal savings rate
fell to 5.1% in June from 8.7% in December 2021, according to the most recent measurement from the Federal Reserve Bank of St. Louis.
By age group, Gen Xers (people born from 1965
through 1980) have taken the most from savings for everyday expenses: an
average of $644, according to the survey.
High inflation has continued pinching consumers’
budgets, although it may be easing somewhat. The July measurement — released
Wednesday — shows prices up 8.5% from
a year ago, but not as high as the 9.1% year-over-year increase posted in
June.
Income, however, isn’t keeping up: The latest
reading of hourly wages showed a 5.2% increase in
July from a year earlier, which means inflation has generally wiped out the
boost in income.
In an effort to combat high inflation, the Federal Reserve raised
its target interest rate by another 0.75 percentage points, marking the second
consecutive increase in that amount. Another
increase is expected in September when the Fed’s
rate-setting committee meets again.
More
Inflation has
caused more than a third of adults to tap their savings (cnbc.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.
Did you
ever wonder why modern media got Covid-19 so wrong. Here’s part of the answer.
Dr. Chris Martenson fact checks the fact check censors. Approx. 14 minutes.
Facebook's
Censorship Exposed: Chris takes on Meta
Facebook's
Censorship Exposed: Chris takes on Meta - YouTube
World
Health Organization - Landscape of COVID-19 candidate vaccines. https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines
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 more useful Covid links.
Johns Hopkins Coronavirus
resource centre
https://coronavirus.jhu.edu/map.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, I’ve added this section.
Something a little different again
this week. While everyone is busy saving Ukraine by forcing the world back on
to generating electricity from coal and oil, no one anywhere is trying to save
planet Earth from ourselves.
The Arctic is heating up nearly four times faster than
the whole planet, study finds
August 11, 2022 11:04 AM ET
The Arctic is heating up nearly four times faster than the Earth
as a whole, according to new research. The findings are a reminder that the
people, plants and animals in polar regions are experiencing rapid, and
disastrous, climate change.
Scientists previously estimated that the Arctic is heating up
about twice as fast as the globe overall. The new study finds that is a
significant underestimate of recent warming. In the last 43 years, the region
has warmed 3.8 times faster than the planet as a whole, the authors find.
The study focuses on the period between 1979, when reliable
satellite measurements of global temperatures began, and 2021.
"The Arctic is more
sensitive to global warming than previously thought," says Mika Rantanen
of the Finnish Meteorological Institute, who is one of the authors of the study published in the
journal Communications
Earth & Environment.
There have been hints in recent years that the Arctic is heating
up even more quickly than computer models predicted. Heat waves in the far North
have driven wildfires and jaw-dropping ice melt in the circumpolar region that
includes Alaska, Arctic Canada, Greenland, Scandinavia and Siberia.
"This will probably be a bit of a surprise, but also kind
of extra motivation perhaps," says Richard Davy, a climate scientist at
Nansen Environmental and Remote Sensing Center in Norway, who was not involved
in the new study. "Things are moving faster than we could have expected
from the model projections."
There are many reasons why the Arctic is heating up more quickly
than other parts of the Earth. Changes in the amount of air pollution coming
from Europe and natural multi-decade climate variations likely play a role. But
human-caused global warming is the underlying reason that them Arctic, and the
planet as a whole, are heating up.
Loss of sea ice is one of the
clearest drivers of Arctic warming. The Arctic Circle is mostly ocean, which
used to be frozen for most or all of the year. But permanent sea ice is steadily
shrinking,
and seasonal ice is melting earlier in the year and re-forming later.
That means more open water. But while ice is bright and reflects
heat from the sun, water is darker and absorbs it. That heat helps melt more
ice, which means more water to trap more heat – the loop feeds on itself,
accelerating warming in the Arctic.
More
Climate change is causing rapid Arctic warming : NPR
This
weekend’s music diversion. Time for
another Heinichen. Dresden’s long forgotten music maestro. Approx. 9 minutes.
Heinichen
Dresden Concerto in F Seibel 233
Heinichen
Dresden Concerto in F Seibel 233 - YouTube
This
weekend’s chess update. Approx. 13 minutes.
Abdusattorov is Afraid of No One
Abdusattorov
is Afraid of No One - YouTube
This
week’s maths update. Approx. 15 minutes.
The
secret of the 7th row - visually explained
The secret of the 7th row - visually explained - YouTube
The laws of
gambling at the quantum level are very different than at the macro scale, but a
form of gambling called a Punter-Greenspan concentrate somewhat bridges the
gap. This state is formed when punters and quasi punters clump together and
begin to behave as one entity, known as a bubble.
Excitons are a type of punter
formed in a bubble. When a punter on the edge of a semi bubble’s Greenspan’s band
gets excited, it can cross the greed gap into the fear band, which is empty.
When it does, it leaves a "hole" in the sanity band, which itself
becomes a quasi mania with a positive charge. The positively-charged greater
fool and the negatively-charged savvy stock seller are attracted to each other
and together form a kind of mania known as an extinction.
Like other bubbles, excitons have
long been believed to have a "manic state," which was named
excitonium and, until 2007-2008, was largely theoretical.
"Ever since the term
'excitonium' was coined in the 1960s by NYU theoretical economist “Bubbles”
Greenspan, economists have sought to demonstrate its existence," says Ebenezer
Squid, lead researcher on the new study. "Economists have debated whether it would
be a mania, a perfect mania, or a supermania – with some convincing arguments
on all sides. Since the 1970s, many experimental economists have published
evidence of the existence of excitonium, but their findings weren't definitive
proof , until the March 2020 - December 2021 supermania."
With apologies to Michael Irving,
New Atlas.
https://newatlas.com/excitonium-new-form-matter/52550/
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