Baltic Dry Index. 1271 +01 Brent Crude 99.70
Spot Gold 1747 US 2 Year Yield 3.29 -0.03
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 24/08/22 World 602,586,773
Deaths 6,476,461
The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professionals, who feel that they must take home some money everyday, as though they were working for regular wages.
Jesse Livermore.
In the stock casinos, more bearish bets on recession.
But the big news yesterday was the fall in the euro taking it below parity to the dollar. The main reason, without cheap Russian natural gas, Germany’s business model is defunct.
Without paymaster Germany, the EUSSR is sunk. How long can the EUSSR stay afloat? It’s anyone’s guess, but I think it will come down to what happens in Europe over the coming winter.
A mild winter and the EUSSR can stumble on into the 2023 summer. A harsh winter, and Europe’s businesses and households will start to go broke trying to pay Europe’s exorbitant gas price.
I expect the unions and the general population will demand a massive bailout. But that, while possible, will further weaken the already shaky fiat currency euro.
Time to add a little fully paid up physical gold and silver.
How far can the euro fall against the dollar and other currencies is the great unknown. But without a fully functioning Germany, the unreformed EUSSR will probably split into two along a north-south divide.
If that happens, what happens to the euro then?
China’s Shenzhen
stocks leads losses in mixed Asia trade; EV maker Xpeng plunges 12%
UPDATED TUE, AUG 23 2022 11:31 PM EDT
Asia-Pacific shares
were mixed on Wednesday after the Dow Jones Industrial Average and S&P 500
posted their third day of losses in the U.S.
Mainland China
markets slipped. The Shenzhen Component led losses regionally,
falling 1.4%. The Shanghai Composite was 0.72% lower.
Hong Kong’s Hang
Seng index dropped 0.92%, with the Hang Seng Tech index dropping 1.8%.
Electric vehicle maker Xpeng plunged more than 12% after it reported a
quarterly loss that was bigger than expected.
Japan’s Nikkei
225 gave up early gains to fall 0.33% and the Topix index was fractionally
lower.
The S&P/ASX
200 in Australia added 0.67% while in South Korea, the Kospi was
up 0.11% and the Kosdaq advanced 0.22%.
Overnight in the U.S., the Dow slipped 154.02
points, or 0.47%, to 32,909.59. The S&P 500 dropped 0.22% to 4,128.73, and
the Nasdaq Composite was slightly lower at 12,381.30.
“Equity markets weakened
overnight on relatively light trading as poor manufacturing and housing data
weighed on risk sentiment,” ANZ Research said in a Wednesday note.
Federal Reserve Bank of
Minneapolis President Neel Kashkari pointed towards supply-side
shocks driving “half to two-thirds” of the nation’s high inflation.
“The more help we get from the
supply side, the less the Fed has to do, and the better we’re able to avoid a
hard landing,” he said, speaking at an event at the University of Pennsylvania.
He did add, however, there’s some evidence that supply chains are beginning to
normalize.
Chinese EV makers
slide in Hong Kong trade, Xpeng at new lows after missing estimates
Shares of electric
car makers listed in Hong Kong plunged after Xpeng reported a
wider-than-expected quarterly loss of 2.7 billion Chinese yuan ($394 million),
missing analyst estimates.
The print was also
worse than the 1.19 billion Chinese yuan loss reported in the second quarter of
2021.
stock plunged more than 13%, reaching new lows since
its debut in Hong Kong last year. Its U.S.-listed shares fell 10% during the
session on Tuesday.
More
Asia
markets: Stocks mixed, Shenzhen Composite falls, Xpeng down 12% (cnbc.com)
Stock futures are
lower following the S&P 500′s third straight losing day
UPDATED WED, AUG 24 2022 12:13 AM
EDT
Stock futures fell in early Wednesday morning as
investors await more guidance from Federal Reserve Chairman Jerome
Powell on the central bank’s tightening path.
Futures on the Dow
Jones Industrial Average were down 120 points. S&P 500 futures fell 0.4% and
Nasdaq 100 futures were down 0.49%.
Both the Dow and
the S&P 500 declined for a third straight session Tuesday amid relatively
thin trading volumes. The tech-heavy Nasdaq Composite finished Tuesday little
changed. The S&P 500 is about flat on the month after rallying more than 9%
in July.
The
three-day Jackson Hole economic symposium starts Thursday with
Powell slated to speak Friday morning. Fed watchers expect him to
reinforce the central bank’s goal of squashing inflation and keeping
expectations about future prices gains in check.
“Financial markets
will remain in choppy waters until Fed Chair Powell’s Jackson Hole speech on
Friday,” said Edward Moya, senior market analyst at Oanda. “He may
struggle to convince markets that he is comfortable with tightening policy and
triggering a recession. The economy is clearly slowing but it is still too
early for the Fed to signal that they will be less aggressive with tightening
policy.”
Investors will also
monitor incoming data to gauge the health of the economy. Durable goods and
pending home sales are on deck for Wednesday.
More
Stock
futures lower following the S&P 500's third straight losing day (cnbc.com)
Column:
Funds amass record wager on hawkish Fed as Jackson Hole looms
August 22, 2022 3:00 PM GMT+1
ORLANDO, Fla., Aug 22 (Reuters) -
As global markets' focus rests squarely on Fed chief Jerome Powell's keynote
address at Jackson Hole on Friday, hedge funds have built up their largest-ever
bet on higher U.S. interest rates.
Not only are they holding a
record short position in "SOFR" rates futures of almost 1 million
contracts, according to Commodity Futures Trading Commission data, but the pace
at which they have accumulated that wager has been startling.
Traders have pushed the Fed's
terminal rate implied by SOFR rates futures back up towards 3.70% from around
3.25% at the start of August. They now expect the fed funds rate to peak in
March next year.
The latest CFTC report shows that
speculators' net short position in three-month Secured Overnight Financing Rate
futures stood at a record 956,971 contracts in the week ending Aug. 16.
That is up from under 800,000
contracts the week before. The net short position has virtually doubled in the
past month.
A short position is essentially a bet that
an asset's price will fall, and a long position is a bet it will rise. In bonds
and rates, yields fall when prices rise, and move up when prices fall.
Some Fed officials are warning of the
dangers to growth from tightening policy too aggressively, inflation indicators
point to a peak in the rear-view mirror, and some economic activity indicators
have been much weaker than expected.
But funds are betting that the Fed will
not relent until it is certain that inflation is firmly on a path back down to
the central bank's 2% target. This is the stance they expect Powell to take at
the Kansas City Fed's annual policy jamboree in Wyoming.
More
Column: Funds
amass record wager on hawkish Fed as Jackson Hole looms | Reuters
Secured Overnight Financing Rate (SOFR) Futures
The Secured Overnight
Financing Rate (SOFR) is a broad measure of the cost of borrowing cash
overnight collateralized by Treasury securities. CME SOFR futures are the
leading source of SOFR price discovery, trading alongside deeply liquid Eurodollar,
Fed Fund and Treasury futures to offer seamless spread trading and unmatched
capital efficiencies through margin offsets.
More
Euro
zone business activity contracted for second straight month in Aug -flash PMI
August 23, 2022 9:05 AM GMT+1
LONDON, Aug 23 (Reuters) -
Business activity in the euro zone contracted for a second straight month in
August as the cost of living crisis forced consumers to cut spending while
supply constraints also hurt manufacturers, a survey showed on Tuesday.
S&P Global's flash Composite
Purchasing Managers' Index (PMI), seen as a good guide to overall economic
health, fell to 49.2 in August from 49.9 in July, just above the median
forecast in a Reuters poll for a bigger drop to 49.0.
A reading below 50 indicates a contraction
and August's preliminary estimate was the lowest since February 2021.
"The latest PMI data for the
euro zone point to an economy in contraction during the third quarter of the
year," said Andrew Harker, economics director at S&P Global.
A Reuters poll last month put
growth at 0.2% this quarter.
Suggesting there would be no
imminent turnaround, demand also fell for a second month. The new business
index came in at 47.7, just ahead of July's 47.6.
A PMI covering the bloc's
dominant services industry fell to 50.2 from 51.2, only just above breakeven
and below the 50.5 predicted in the Reuters poll.
Although services firms increased
their charges at a slower rate this month the output prices index remained well
above the long-term average. It's reading was 59.9, down from July's 62.1.
"Cost of living pressures
mean that the recovery in the service sector following the lifting of pandemic
restrictions has ebbed away, while manufacturing remained mired in contraction
in August," Harker added.
More
Euro zone business
activity contracted for second straight month in Aug -flash PMI | Reuters
War
hit to German economy will last years -economist
August 24, 2022 5:03 AM GMT+1
BERLIN, Aug 24
(Reuters) - The economic impact on Germany of Russia's invasion of Ukraine will
last years, influential economist Marcel Fratzscher of the German Institute for
Economic Research told Reuters, adding that it could cost 3 percentage points of
growth this year.
Fratzscher, whose
institute advises the government of Europe's largest economy on macroeconomic
policy, said the impact could last until 2025 when Germany expects to have
freed itself from all exposure to Russian gas.
Germany, which for decades
prospered from reliable flows of cheap Russian gas, is rushing to reorient
itself after the outbreak of war in February.
"The war in
Ukraine has done massive damage to the German economy," Fratzscher said in
an interview, adding that perhaps only 1.5% would remain of the 4.5% economic
growth he had expected at the start of the year.
The impact on
inflation, through high energy prices, would also be sustained for a similar
period, though he rejected suggestions that there was cause for wage restraint.
"Unions aren't as strong as they were in the 1970s,"
he said, noting that this year's forecast wage growth of 4.5% was well short of
inflation at some 8%. "Even in coming years I see no sign of us falling
into a wage spiral."
War
hit to German economy will last years -economist | Reuters
Euro
falls below parity with the dollar. What's the impact?
August 23,
2022
The euro has fallen below parity with the
dollar, diving to its lowest level in 20 years and ending a
one-to-one exchange rate with the U.S. currency.
It's a psychological barrier in the markets. But psychology is important,
and the euro's slide underlines the foreboding in the 19 European countries
using the currency as they struggle with an energy crisis caused by Russia's
war in Ukraine.
Here's why the euro's slide
is happening and what impact it could have:
WHAT DOES EURO AND
DOLLAR PARITY MEAN?
It means the European and
American currencies are worth the same amount. While constantly changing, the
euro has dropped just below a value of $1 this week.
A currency's exchange rate
can be a verdict on economic prospects,
and Europe's have been fading. Expectations that the economy would see a
rebound after turning the corner from the COVID-19 pandemic have been replaced
by recession predictions.
More than anything, high
energy prices and record inflation are to blame. Europe is far more dependent on Russian
oil and natural gas than the U.S. to keep industry humming and generate
electricity. Fears that the war in Ukraine will lead to a loss of Russian oil on global markets have pushed oil prices higher. And Russia has been cutting back natural gas
supplies to the European Union, which EU leaders described as
retaliation for sanctions and weapons deliveries to Ukraine.
Energy prices have driven euro-area inflation to a record
8.9% in July, making everything from groceries to utility bills more
expensive. They also have raised fears about governments needing to ration natural gas to industries like
steel, glassmaking and agriculture if Russia further reduces or shuts off the
gas taps completely.
The
sense of doom increased as Russia reduced the flows through
the Nord Stream 1 pipeline to Germany to 20% of capacity and
said it would shut it down for three days next
week for “routine maintenance” at a compressor station.
Natural
gas prices on Europe’s TTF benchmark have soared to record highs amid
dwindling supplies, fears of further cutoffs and strong demand.
“If
you think Euro at parity is cheap, think again," Robin Brooks, chief
economist at the Institute of International Finance banking trade group,
tweeted Monday. “German manufacturing lost access to cheap Russian energy &
thus its competitive edge."
More
Euro
falls below parity with the dollar. What's the impact? (msn.com)
Finally,
a little power relief for the coming UK winter, provided the wind keeps
blowing. Very little for the coming winter until next year.
Scotland's largest
offshore windfarm starts producing electricity - this is how many homes it will
power
23
August, 2022.
Scotland's biggest offshore windfarm, Seagreen, has started
generating electricity, its operators have confirmed.
Standing 16 miles off the Angus
coastline, the first turbine powered up on Monday morning, with the rest
expected to be up and running by next July.
The £3 billion Seagreen project will
be the world's deepest fixed-bottom wind farm, anchored 59m (193ft) deep,
according to French company TotalEnergies, which has partnered with SSE
Renewables on the project.
When fully operational, the 114
turbines will generate 1.1 gigawatts (GW) of electricity, enough to power about
1.6 million homes - equivalent to two-thirds of Scotland's housing stock.
"We often talk about key
milestones along a project's journey... but to see this turbine turning in the
North Sea and to have reached first power safely, is a fantastic
achievement," said Paul Cooley, director of offshore wind at SSE
Renewables.
SSE said the Seagreen project will
play a significant role in Britain achieving its renewable energy targets.
The cost of electricity from wind has
plummeted by 44-78% from its peaks between 2007 and 2010, thanks to the falling
costs of wind turbines.
Since 2009, electricity generation
from wind power has increased by at least 715%.
Vincent Stoquart, senior vice
president of renewables at TotalEnergies, said the project will help the fossil
fuel major meet its target of generating 35GW of renewable electricity capacity
worldwide by 2025.
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.
Ukraine's
key food exports have fallen by almost half since Russian war
August 23, 2022 7:22 AM GMT+1
KYIV, Aug 23 (Reuters) - Exports
of key Ukrainian agricultural commodities have fallen by almost half since the
start of the Russian invasion earlier this year compared to the same period in
2021, data from the agriculture ministry showed late on Monday.
Russia began its attack on
Ukraine on Feb. 24, calling it a "special military operation", and as
a result of the fighting, Ukrainian seaports were blocked, leaving a vast
amount of crops either unharvested or destroyed.
Agricultural exports between Feb.
24 and Aug. 15 this year fell to 10 million tonnes from around 19.5 million in
the same period last year, the ministry data showed.
The 2022 grain harvest in Ukraine
is forecast to fall to around 50 million tonnes from a record 86 million tonnes
in 2021.
From Feb. 24 to Aug. 15 this
year, Ukraine has exported 3.8 million tonnes of corn, 1.4 million tonnes of
sunflower seeds, almost 1 million tonnes of sunflower oil and around 640,000
tonnes of wheat, the ministry data showed.
The country, whose food production,
according to the government, is capable of feeding up to 400 million people,
also exported barley, soy beans and oil, sunflower and soybean meals.
At the end of July, three Ukrainian
Black Sea ports were unblocked under a deal between Moscow and Kyiv, brokered
by the United Nations and Turkey. read
more
But even with the ports opened,
Ukraine's agricultural exports are significantly lower than before the
conflict, when Ukraine exported up to 6 million tonnes of grain a month.
More
Ukraine's key food
exports have fallen by almost half since Russian war | Reuters
Around
720,000 tonnes of food have left Ukraine under grain export deal
August 23, 2022 8:26 AM GMT+1
KYIV, Aug 23 (Reuters) - A total
of 33 cargo ships carrying around 719,549 tonnes of foodstuffs have left
Ukraine under a deal brokered by the United Nations and Turkey to unblock
Ukrainian sea ports, the Ukrainian agriculture ministry said on Tuesday.
The Joint Coordination Centre in
Turkey that monitors implementation of the agreement put the total amount of
grain and foodstuffs exported from three Ukrainian Black Sea ports since the
deal was reached at 721,449 tonnes.
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 unblocked
under the deal signed on July 22 by Moscow and Kyiv. read
more
In addition to the vessels that have
already left Ukraine, the agriculture ministry said a further 18 were now
loading or waiting for permission to leave Ukrainian ports.
The ministry said Ukrainian grain
exports could reach 4 million tonnes in August, compared with 3 million tonnes
in July.
In a separate statement, the ministry
said exports of key Ukrainian agricultural commodities had fallen by almost
half since the start of the Russian invasion compared to the same period in
2021. read
more
Around 720,000
tonnes of food have left Ukraine under grain export deal | Reuters
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.
Can
you go to work with Covid?
23 August, 2022.
Ever since the British government ended all legal Covid-19 restrictions
earlier this year, cases numbers have continued to fluctuate.
Even as Boris Johnson published
his Living with Covid plan in February, ending mandatory masks,
social distancing and self-isolation measures, the arrival of the contagious
Omicron BA.2 sub-variant quickly drove the infection rate up before it fell
away in spring, a pattern of ebb and flow that has continued ever since.
About one in every 17 people
in the UK had coronavirus at
the peak of the most recent wave in July, according to the Office for National
Statistics (ONS), since which time the case numbers have mercifully fallen to
just 120,000 per day.
The Living with Covid plan
brought an end to the legal requirement for employees to tell their employers
when they have tested positive for the virus and need to self-isolate.
But with the threat from
Covid still very real, is going to work when sick really such a good idea?
Can
I go to work with Covid?
Yes, you can go to work even
after testing positive for Covid and there is no legal obligation to tell your
employer if you are infected.
However, workers are
encouraged to follow the government’s guidance for people who become infected
with the virus and self-isolate for seven days.
Do
I have to test for Covid before going to work?
No, you
don’t have to test for Covid before going anywhere, including to work.
Most
people in England are no longer advised to get tested and can no longer get
free lateral flow tests from the NHS unless you are one of a small number of
people who are eligible.
Those
who want to get tested must buy a Covid-19 test from pharmacies and other
retailers.
More
Can you go to work
with Covid? (msn.com)
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.
Graphene
efficiently recovers gold from waste electronics
Michael Irving August 21, 2022
Discarded
electronics can be a gold mine
– literally. Researchers have developed an efficient new way to use graphene to
recover gold from electronic waste, without needing any other chemicals or
energy.
Beyond its superficial uses in jewelry, gold is prized for
use in electronic components thanks to its high electrical conductivity and
ease to work with. But electronic devices have a high turnover, and recovering
gold and other precious metals is a process that’s often fiddly, inefficient, and
requires chemicals or high heat.
But now, researchers at the University of Manchester, Tsinghua
University and the Chinese Academy of Sciences have developed a much simpler
method to recover gold from electronic waste. All it takes is some graphene.
First the e-waste is ground up, then dissolved in a solution. A membrane
made of reduced graphene oxide is added, and within a few minutes pure gold
begins to accumulate on the membrane surface. Just 1 gram of graphene is enough
to extract almost twice that amount of gold, attracting over 95% of the gold in
a given sample even at concentrations as low as one part per billion.
Importantly, it doesn’t attract other metals in the e-waste mixture, and
afterwards the graphene membrane can be burned off, leaving behind the pure
gold.
“This
apparent magic is essentially a simple electrochemical process,” said Dr. Yang
Su, lead author of the study. “Unique interactions between graphene and gold
ions drive the process and also yield exceptional selectivity. Only gold is
extracted with no other ions or salts.”
The
team says the technique could help reduce the amount of gold that goes to
waste, as well as cutting back on the growing environmental problem of e-waste.
Other scientists have tackled the problem by using solvents made largely
of vinegar or other mild
acids, or designing circuit
boards that fall apart when placed in hot water.
The new research was published in the journal Nature
Communications. The team demonstrates
the technique in the video below.
Video.
Graphene
efficiently recovers gold from waste electronics (newatlas.com)
I knew something was wrong
somewhere, but I couldn’t spot it exactly. But if something was coming and I
didn’t know where from, I couldn’t be on my guard against it. That being the
case I’d better be out of the market.
Jesse
Livermore.
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