Baltic Dry Index. 1592 +28 Brent Crude 97.08
Spot Gold 1785 US 2 Year Yield 3.23 -0.05
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 11/08/22 World 592,487,828
Deaths 6,446,278
Every day in every way, I’m getting better and better!
The US inflation report, with apologies to Frenchman Emile Coué who coined a phrase that could change your life [not.]
In the stock casinos, more bear market rally.
What’s not to like, US official inflation in July fell back from June’s
official 9.1 percent to a mere 8.5 percent largely on a drop in energy prices.
The US central bank can now stop raising
interest rates and get back to the “boom” in boom and bust, right?
Well not so fast. An official 8.5 is still
far above the Fed’s target rate of 2.0 percent, and anyway, China and the EUSSR
are in a race to see who can lead the world into the next global recession
first.
China has a burst property market going for
it, while the German led EUSSR has suicidal sanctions on Russia going for it,
plus a massive drought that’s about to shut down, probably tomorrow, Europe’s “Mississippi,”
the Rhine-Danube-canal river system.
My money’s on Germany beating China, but lately team Germany hasn’t been winning much of anything and anyway US politicians seem to be talking up confrontation with China, probably to distract from the cost of living crisis in the USA, which might yet result in a US “foreign adventure” forcing China into the lead.
Hong Kong’s Hang Seng leads gains, Asia stocks
rise after better-than-expected U.S. inflation report
SINGAPORE —
Asia-Pacific markets climbed on Thursday after a better-than-expected inflation
report in the U.S. sent stocks spiraling higher.
Hong Kong’s Hang
Seng index advanced 1.78%, with the Hang Seng Tech index rising 2.71%.
Mainland China
markets also ticked up. The Shanghai Composite gained 1.18% and
the Shenzhen Component climbed 1.55%.
Australia’s rose
0.91%.
The in South
Korea was 1.31% higher and the Kosdaq jumped 1.26%.
MSCI’s broadest
index of Asia-Pacific shares outside of Japan increased 1.39%.
Japan’s market is
closed for a holiday Thursday.
Consumer prices rose 8.5% in July compared to
the same period a year ago, a slightly better result than the 8.7% increase
that economists polled by Dow Jones were expecting.
The Dow Jones
Industrial Average leapt 535.10 points, or 1.63%, to close at 33,309.51. The
S&P 500 jumped 2.13% to 4,210.24, and the Nasdaq Composite soared 2.89% to
12,854.80.
“It’s
understandable that markets were pleased to see better inflation headlines
overnight. But while the change matters, central banks care more about the
level of inflation and there’s a long and uncertain path down that mountain,”
Brian Martin and Daniel Hynes of ANZ Research wrote in a Thursday note.
“We doubt very much
that one monthly data point will be sufficient to get the Fed to drop its
hawkish guard,” the note said.
PBOC report
The People’s Bank of
China, in its monetary policy report released Wednesday, highlighted the
inflation risk that lies ahead. Official data on Wednesday showed China’s
consumer price index hit a two-year high in July.
“The [PBOC monetary
policy report] proposed three drivers for elevated inflation pivot ahead: i)
the consumption recovery post Omicron wave; ii) the spillover effect from
global energy price fluctuation; iii) the swift turnaround of pork cycle,”
according to a Citi research report.
“We see evidently a
rising concern on inflation risk from the PBoC, which may be reflected in
easing decisions ahead,” the analysts wrote.
More
Asia
markets: Hong Kong, South Korea stocks up more than 1% (cnbc.com)
Consumer prices
rose 8.5% in July, less than expected as inflation pressures ease a bit
Prices that consumers
pay for a variety of goods and services rose 8.5% in July from a year ago, a
slowing pace from the previous month due largely to a drop in gasoline prices.
On a monthly basis,
prices were flat as energy prices broadly declined 4.6% and gasoline fell 7.7%.
That offset a 1.1% monthly gain in food prices and a 0.5% increase in shelter
costs.
Economists surveyed
by Dow Jones were expecting headline CPI to increase 8.7% on an annual basis
and 0.2% monthly.
Excluding volatile food and energy prices, so-called core CPI rose
5.9% annually and 0.3% monthly, compared with respective estimates of 6.1% and
0.5%.
Even with the
lower-than-expected numbers, inflation pressures remained strong.
The jump in the food
index put the 12-month increase to 10.9%, the fastest pace since May 1979.
Butter is up 26.4% over the past year, eggs have surged 38% and coffee is up
more than 20%.
Despite the monthly
drop in the energy index, electricity prices rose 1.6% and were up 15.2% from a
year ago. The energy index rose 32.9% from a year ago.
Used vehicle prices
posted a 0.4% monthly decline, while apparel prices also fell, easing 0.1%, and
transportation services were off 0.5% as airline fares fell 1.8% for the month
and 7.8% from a year ago.
Markets reacted positively
to the report, with futures tied to the Dow Jones Industrial Average up more
than 400 points and government bond yields down sharply.
“Things are moving in
the right direction,” said Aneta Markowska, chief economist at Jefferies. “This
is the most encouraging report we’ve had in quite some time.”
The report was good
news for workers, who saw a 0.5% monthly increase in real wages.
Inflation-adjusted average hourly earnings were still down 3% from a year ago.
Shelter costs, which
make up about one-third of the CPI weighting, continued to rise and are up 5.7%
over the past 12 months.
The numbers indicate
that inflation pressures are easing somewhat but still remain near their
highest levels since the early 1980s.
Clogged supply
chains, outsized demand for goods over services, and trillions of dollars in
pandemic-related fiscal and monetary stimulus have combined to create an
environment of high prices and slow economic growth that has bedeviled
policymakers.
The July drop in gas
prices has provided some hope after prices at the pump rose past $5 a gallon.
But gasoline was still up 44% from a year ago and fuel oil increased 75.6% on
an annual basis, despite an 11% decline in July.
More
Consumer
prices rose 8.5% in July, less than expected as inflation pressures ease a bit
(cnbc.com)
Finally,
more bad news for Germany, the Euro economy and the European economy generally.
Rhine
close to running dry in German energy nightmare
10 August, 2022.
Germany’s Rhine river will become impassable for barges carrying coal,
oil and gas later this week, in a devastating blow to factories upriver.
Levels at Kaub, a key point
along the waterway west of Frankfurt, are predicted to fall to below 40cm on
Friday, according to the German Federal Waterways and Shipping Administration.
At that chokepoint, the river
becomes effectively impassable for many barges, which use the Rhine to move a range of
goods including coal, oil and gas.
Water levels will then fall further
to 37cm on Saturday, officials warned.
The river runs from
Switzerland through France and Germany to the Netherlands, where it joins the
North Sea.
It is a vital supply line for several
major companies, providing transit and plentiful water for engine cooling. A
typical barge has the same capacity as more than 100 lorries. Rental rates for
the vessels have soared as navigation becomes more difficult.
These include BASF, the German
blue-chip chemicals giant which has a huge facility at Ludwigshafen,
electricity generator RWE and Swiss chemicals group Novartis.
Last week, Uniper, one of Germany’s
largest gas companies, warned there could be an “irregular operation” at one of
its coal-fired plants due to disruptions on the Rhine.
In 2018, a summer heatwave took Kaub
levels to a record low of 25cm in the autumn, taking 0.2 percentage point off
German growth. Economists warn this year could be even worse.
Deutsche Bank has warned this could deal a further economic blow
to Germany, which is already facing a recession as Moscow squeezes gas
supplies.
BASF
– which took a €250m hit from 2018’s low levels – has ordered a special barge
adapted for low water levels. Steel giant Thyssendrupp has put together a
crisis team, which is meeting daily to monitor the situation, according to
Bloomberg.
The
heatwave is also affecting other rivers across the continent. French energy giant EDF said last week
that output from two of its nuclear power stations would be knocked due to high
water temperatures, while the Danube – which slices from central Europe to the
Black Sea – is also drying up.
Rhine close to
running dry in German energy nightmare (msn.com)
The Rhine–Main–Danube Canal, in Bavaria,
Germany, connects the Main and
the Danube rivers across the European Watershed, running from Bamberg via
Nuremberg to Kelheim. The canal connects the North Sea and Atlantic Ocean to
the Black Sea, providing a navigable artery between the Rhine delta, and the
Danube Delta in south-eastern Romania and south-western Ukraine. The present
canal was completed in 1992 and is 171 kilometres long.
Rhine–Main–Danube
Canal - Wikipedia
There can be few fields of human endeavour in which history
counts for so little as in the world of finance. Past experience, to the extent
that it is part of memory at all, is dismissed as the primitive refuge of those
who do not have the insight to appreciate the incredible wonders of the
present.
John Kenneth Galbraith.
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.
If economists could manage to get themselves thought of as humble, competent people on a level with dentists, that would be splendid.
John Maynard Keynes.
A Worrying Signal From Oil Traders Of A European Recession
Wed, August 10,
2022 at 1:00 AM
Recession has always been a politically sensitive word.
Today, it has become so sensitive that some economists and politicians are
trying to redefine it to make it lose some of its sting. The reality of a
recession, however, is impossible to redefine.
In Europe in particular,
consumers are feeling the slowdown in economic growth in their wallets, and so
are traders. There is one big difference between the two though. When a
recession is looming, consumers curb spending. Traders, on the other hand,
begin selling.
Reuters’ John Kemp reported in his latest hedge fund column that hedge funds
and other institutional traders sold the equivalent of 1 million barrels of
European gas oil futures over the past three weeks. While this may not sound
like a lot, over the last six weeks, total sales have
added up to 20 million barrels. A significant reduction in the net position of
traders.
Across the Atlantic, hedge funds
and money managers have been buying U.S. diesel futures and options, increasing
their position by 13 million barrels over the last three weeks. Kemp suggests
this is a signal that the economic outlook of U.S. traders is brighter than
that of their European peers.
It might be that U.S. traders are
simply looking to profit from the diesel shortage Kemp himself wrote about earlier this month. He noted that U.S. distillate fuel inventories
have fallen to critical levels, and it would take a recession to remedy things
by destroying demand. Otherwise, diesel prices will only continue rising and
traders would buy diesel futures.
Be that as it may, the danger of
recession in Europe is certainly a lot more serious from an energy perspective.
Unlike the U.S., which is rather self-sufficient when it comes to natural gas,
Europe has revealed itself to be as embarrassingly dependent on imports of the commodity. A dash for gas has followed, where
Europe is scouring the world for friendly gas, under a spot contract, if
possible. It has not always been possible.
As a result of this, Europe is
now diverting cargoes from Asia, which is not making it any friends there, and
trying to consume less energy. Thanks to excessive prices, it is consuming less
energy. Germany is preparing for energy rationing for industrial users and
encouraging household austerity. Spain is mandating air-conditioners be kept at
27 degrees or above. And Norway just announced that it would curb its electricity exports to the
EU.
More
A Worrying Signal
From Oil Traders Of A European Recession (yahoo.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 end.
MIT
develops rapid at-home test to measure COVID immunity
Rich Haridy August 09, 2022
An innovative new test developed by researchers at MIT
promises to offer people the ability to quickly and easily measure their
COVID-19 immunity. The test tracks levels of neutralizing antibodies in a drop
of blood, helping a person evaluate their susceptibility to SARS-CoV-2
infection.
Following vaccination or SARS-CoV-2 infection, measuring
levels of neutralizing antibodies in blood samples has proven to be a useful
way of quantifying a person’s immunity. Traditionally it takes specialized lab
equipment to measure antibody levels in a given blood sample but early on in
the pandemic a team of MIT researchers wondered if an easy at-home test could
be developed to do the same job.
The researchers looked to lateral flow test technology, the same system
used in now popular at-home rapid COVID-19 tests. Unlike the currently
available rapid antigen COVID tests, this new antibody test requires a tiny
blood sample.
The prototype test kit presented in a new study comes with a
finger-prick device to obtain a drop of blood that is then transferred to a
dropper containing specific reagents. These reagents contain SARS-CoV-2 viral
proteins tagged with microscopic gold particles.
The idea is that antibodies in a person's blood sample will
interact with these gold-tagged viral proteins, so when drops of the mixed
sample are placed on a test strip those proteins captured by antibodies will
light up a positive line.
Going one step further than simply delivering a positive or
negative signal, this antibody test is also hoped to give users the ability to
quantify their immune response. Using an accompanying smartphone app, the
researchers propose to measure the intensity of the line, allowing for antibody
levels to be quantified in a given sample.
Of course, a crucial point to note is that neutralizing
antibodies are just one part of a complex and multifaceted immune system
response to viral infections. While research over the last couple of years has
effectively found antibody levels to be a decent correlate of protection from
infection, this metric does not offer insights into protection from severe
disease.
Antibody responses often rapidly drop in the months after
vaccination or natural infection but that doesn’t mean a person is not
protected from severe disease. From this standpoint, the new MIT test will only
really be useful in a limited number of contexts. Hojun Li, one of the lead
investigators on the project, says the primary use target will be tracking
immune responses in vulnerable populations, such as those undergoing
chemotherapy or suffering from autoimmune disease.
More
MIT develops rapid at-home test to measure COVID
immunity (newatlas.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.
Dow, X-energy to drive carbon emissions reductions
through deployment of advanced small modular nuclear power
08/09/2022
- Dow and X-energy
collaborate on intent to provide process heat and power at one of Dow's
U.S. Gulf Coast facilities by ~2030
- Dow is first manufacturer
to announce intention to develop small modular nuclear technology options
- Dow intends to take a
minority equity stake in X-energy
MIDLAND, Mich. and ROCKVILLE,
Md., Aug. 9, 2022 /PRNewswire/ -- Dow (NYSE: DOW), the world's
leading materials science company, and X-energy, a nuclear energy
innovation company, today announced that they have signed a letter of intent
which will help Dow advance its carbon emissions reduction goals through the
development and deployment of X-energy's advanced small modular nuclear
technology in the U.S.
Dow and X-energy will collaborate with the intent to
deploy X-energy's Xe-100 high-temperature gas reactor technology at one of
Dow's U.S. Gulf Coast sites – which is expected to be operational by
approximately 2030. The Xe-100 reactor plant would provide cost-competitive,
carbon free process heat and power to the Dow facility. Dow also intends to
take a minority equity stake in X-energy, working with the company to deploy
small modular nuclear technology.
"Advanced small modular nuclear technology is going
to be a critical tool for Dow's path to zero-carbon emissions and our ability
to drive growth by delivering low-carbon products to our customers,"
said Jim Fitterling, Dow chairman and chief executive officer.
"X-energy's technology is among the most advanced, and when deployed will
deliver safe, reliable, low-carbon power and steam. This is a great opportunity
for Dow to lead our industry in carbon neutral manufacturing by deploying
next-generation nuclear energy."
X-energy's Xe-100 is a Generation IV, high-temperature
gas reactor built on decades of research, development and operating experience.
Each reactor is engineered to operate as a single 80 megawatts (MW) electric
unit and is optimized as a four-unit plant delivering 320 MW
electric. The reactor can provide clean, reliable and safe baseload power to an
electricity system or support industrial applications with 200 MW thermal
output per unit of high pressure, high temperature steam. Click here to see how the Xe-100 reactor works.
"Nuclear energy has always offered the promise of
broad economy-wide decarbonization. Today's announcement marks an important
step in turning that aspiration into reality," said Clay Sell, X-energy
chief executive officer. "Dow has a remarkable 125-year history of
bringing innovative solutions to the market, and their leadership is a critical
driver in meeting decarbonization goals in the energy intensive industrial
sector. X-energy is proud to combine our leading nuclear technology with Dow's
production capabilities to deliver a global materials supply chain that is
safer, cleaner, and greener than ever before."
The United States Department of Energy has recognized that advanced small modular nuclear
reactor technology is a key part of the Department's goal to develop safe, clean and affordable nuclear power
options. In 2020, X-energy was selected by the U.S. Department of Energy's
Advanced Reactor Demonstration Program to deliver a four-unit Xe-100 plant in
Washington state, which will make it among the first operational grid-scale advanced
reactor plants in North America.
More
In central banking as in diplomacy, style, conservative
tailoring, and an easy association with the affluent count greatly and results
far much less.
John Kenneth Galbraith.
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