Baltic Dry Index. 1564 -2 Brent Crude 96.09
Spot Gold 1790 US 2 Year Yield 3.28 +0.07
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 10/08/22 World 591,406,328
Deaths 6,442,201
August 10, 1585. The Treaty of Nonsuch was signed on 10 August 1585 by Elizabeth I of England and the Dutch rebels fighting against Spanish rule. It was the first international treaty signed by what would become the Dutch Republic. It was signed at Nonsuch Palace, England.
Today in the casinos, it’s all likely to be about the latest official US inflation figures. Not that anyone believes them, of course, but the casinos are expecting a slight pullback from June’s 9.1 percent.
Any pull back is a help, I suppose, supporting the idea that with a new recession looming, the Fed can start stopping raising interest rates sooner and start moving to lowering interest rates sooner as well.
Well anything’s possible I suppose, after all, who would ever have expected to see a party political raid on a US ex-presidents home in an effort to salvage the upcoming November US elections for the Democrat Party?
Between the war in Europe, the near war over Taiwan, a looming recession amidst roaring inflation, and the leader of the free world turning itself into a banana republic with nukes, we are living in most challenging and dangerous times.
Hong Kong’s Hang Seng drops around 2% as Asia markets slip; China’s inflation rises
PUBLISHED TUE, AUG 9 2022 7:39 PM EDT
SINGAPORE — Asia-Pacific shares fell on Wednesday as investors digest inflation data from China and look ahead to the U.S. CPI report.
Hong Kong’s Hang Seng index fell 2.07%, with the Hang Seng Tech index down 3.11%. Heavyweights Meituan and JD.com fell 4.2% and 4.29% respectively.
Heath care and consumer stocks also dragged the Hang Seng lower, according to Eikon data.
Mainland China markets slipped, with the Shanghai Composite 0.37% lower and the Shenzhen Component down 0.56%.
China’s producer price index for July rose 4.2% from a year ago, lower than the 4.8% increase predicted in a Reuters poll.
Consumer prices increased 2.7% in July compared with the same period in 2021, the most since July 2020. Analysts expected the print to stand at 2.9%.
“Underlying inflation pressures remain limited in China because sporadic lockdowns have weighed on consumer spending and overall economic activity,” Carol Kong, a senior associate, international economics and currency strategy at Commonwealth Bank, wrote in a Wednesday note ahead of the data release.
“China’s relatively subdued inflation impulse stands in contrast with the persistently strong U.S. inflation,” the note said.
Later Wednesday, the U.S. will be reporting inflation data as well. Economists predict that consumer inflation will come in at 8.7%, compared with 9.1% in June, according to Dow Jones.
Asia-Pacific markets dip
The Nikkei 225 in Japan fell 0.72%, while the Topix index slipped 0.29%.
In South Korea, the Kospi dipped 0.65% and the Kosdaq dropped 1.02%.
Australia’s S&P/ASX 200 lost 0.18%.
MSCI’s broadest index of Asia-Pacific shares outside of Japan shed 1.06%.
In company news, Toyota Motor announced that it would suspend some production operations due to positive Covid cases at work sites.
Cathay Pacific and Honda Motor are among the companies reporting earnings on Wednesday.
Overnight stateside, the Nasdaq Composite fell more than 1% to 12,493.93. The Dow Jones Industrial Average lost 58.13 points or 0.18% to 32,774.41, while the S&P 500 dipped 0.42% to 4,122.47.
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Asia markets: Stocks fall, China consumer inflation rises (cnbc.com)
Critical inflation report could show price increases have eased
PUBLISHED TUE, AUG 9 2022 4:06 PM EDT
Inflation may finally be cooling, thanks to falling gasoline prices and fading supply chain issues.
Economists expect July’s consumer price index rose 0.2%, down from 1.3% in June, according to Dow Jones. Year-over-year, the pace of consumer inflation in July is expected to fall to 8.7%, down from June’s 9.1%.
CPI is reported at 8:30 a.m ET Wednesday, and is expected to show that inflation has finally peaked. Investors are also closely watching the report for clues as to how aggressive the Federal Reserve might be in raising interest rates to fight rising prices.
“You have about four drivers of inflation right now. You have commodity prices. That’s going away. You have supply chain issues. That’s going away, but you’re still left with housing and the labor market, and that’s going to show up in services inflation,” said Aneta Markowska, chief economist at Jefferies. “You still have a problem with services inflation, and that’s driven by shortages in housing and labor. That’s not going away any time soon, until the Fed manages to destroy demand and that hasn’t happened.”
Excluding energy and food, CPI is expected to rise by 0.5% in July as rents and services prices rose, but that is down from 0.7% in June. Core CPI is still expected to be higher than June on a year-over-year basis, gaining 6.1% from June’s 5.9%.
“Everyone is primed for reasonably good news, so it’s got to be good news. If it’s not as good as people think, it’s going to be unusually bad news,” said Mark Zandi, chief economist at Moody’s Analytics.
Zandi said he expects headline inflation to rise just 0.1%. “That would put year-over-year at 8.7%, uncomfortably high, painfully high but moving in the right direction. I think the 9.1% inflation rate we suffered in June will be the peak...a lot of this depends on oil prices,” he said.
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Critical inflation report could show price increases have eased (cnbc.com)
In other news Europe’s gas crisis grows. Has China’s property bubble burst?
Aluminium foundry fights for survival in European gas crisis
August 9, 2022 10:15 AM GMT+1
- Family-owned aluminium foundry trials new shift pattern
- Plan to maintain production and reduce gas usage
- Carmakers warn output cuts inevitable if suppliers close
- New gas-free technologies will take years to scale up
- Suppliers need more help to innovate, industry says
SOLTAU, Germany, Aug 9 (Reuters) - Shouting over the clanging of machinery, Gerd Roeders is reluctantly preparing for the temporary shutdown of his German aluminium foundry to survive Europe's growing gas crunch.
Roeders is hoping that by moving the 200-year-old plant to three weeks of 24-hour shifts followed by a one-week shutdown, he can maintain output while cutting his gas bill, which has doubled since last year to 12.3 million euros ($12.6 million).
Without tough choices, he fears this will triple or even quadruple in 2023.
The plan will save the cost of gas needed to fire up the ovens every morning, Roeders calculates, even if it means paying staff at family-owned G.A. Roeders more to work night shifts.
Survival for G.A. Roeders GmbH and Germany's 600 other foundries, most of which are small-to-medium enterprises with less than 250 staff, will mean cost cuts and tough talks with customers.
"We're laying out our prices to customers and telling them they have to pay more," 59-year-old Roeders told Reuters as workers prepared the plant for the first week of rest. "We can't deliver parts if we invest and don't earn anything back."
G.A. Roeders, with plants in Germany and the Czech Republic employing around 500 people, produces more than 1,000 parts. It serves auto makers like Volkswagen (VOWG_p.DE) and Continental (CONG.DE), airline manufacturers and medical technology firms, yielding annual revenues of 60 million euros.
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China property crisis: Why homeowners stopped paying their mortgages
By Suranjana Tewari 10 August, 2022
"Construction stops, mortgage stops. Deliver homes and get repaid!"
That was one of the chants disgruntled apartment buyers in China used at a protest in June. But their ire over unfinished homes didn't stop at signs and chants.
Hundreds of them stopped paying their mortgages - a radical step for China, where dissent is not tolerated.
A young couple who moved to Zhengzhou in central China told the BBC that after receiving the down payment last year, the developer withdrew from the project and construction stalled.
"I have imagined countless times the joy of living in a new home, but now it all feels ridiculous," the woman, who did not wish to be named, said.
A woman in her late 20s who also bought a home in Zhengzhou told the BBC that she too is ready to stop paying her mortgage: "After the project is fully resumed, I'll continue paying."
Many of them can pay but are choosing not to, unlike the US subprime mortgage crisis in 2007 when money was lent to high-risk borrowers who then defaulted.
They have purchased homes in roughly 320 projects around the country, according to a crowd-sourced estimate on Github where homeowners have been posting about their decision. But it's unclear how many actually stopped paying.
The boycotted loans could total $145bn (£120bn), S&P Global ratings estimates.
Other analysts say it could be even higher.
The revolt has rattled authorities, focusing attention on a market already under pressure from a slowing economy and a serious cash crunch.
More alarmingly, it has signalled a lack of confidence in one of the main pillars of the world's second largest economy.
"Mortgage boycotts, driven by deteriorating sentiment toward property, are... a very serious threat to the financial position of the sector," think tank Oxford Economics said in a recent note.
More.
China property crisis: Why homeowners stopped paying their mortgages - BBC 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.
Exclusive: Bank of England will probably need to raise rates again, Ramsden says
August 9, 2022 9:38 AM GMT+1
LONDON, Aug 9 (Reuters) - The Bank of England will probably have to raise interest rates further from their current 14 year-high to tackle inflation pressures that are gaining a foothold in Britain's economy, BoE Deputy Governor Dave Ramsden said.
Inflation's spread was now showing up in rising British pay and companies' pricing plans, having originally been triggered by the reopening of the world economy from COVID-19 lockdowns and then by Russia's invasion of Ukraine, Ramsden told Reuters.
Inflation is expected to return to the BoE's 2% target - down from above 9% now and a projected peak of 13% in October - as the economy goes into a recession and borrowing costs rise.
But there was also a risk of an inflation mentality developing, Ramsden said.
"For me personally, I do think it's more likely than not that we will have to raise Bank Rate further. But I haven't reached a firm decision on that," Ramsden said in an interview.
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Fuel prices slowly falling in the UK as recession fears outweigh 'war premium'
8 August, 2022 13:00
Petrol and diesel prices are slowly but steadily falling in the UK, latest figures show.
The average price for a litre of unleaded on Saturday, the latest figure available, was 177.46p, according to the RAC, while diesel cost an average of 188.23p.
On Thursday, the prices had been 178.93p and 189.3p respectively.
It comes as world oil prices fall, something analysts said was due to fears that tough economic times ahead could see a weakening in demand.
"Gains triggered by the invasion of Ukraine have now been cancelled out, as rising interest rates and the subsequent cooling this is expected to have on global economies, outweigh previous questions about a lack of supply caused by the conflict."
Brent crude, the international benchmark, had shot up to more than $124 a barrel after the European Union announced in May that it would ban most oil imports from Russia as part of its sanctions package following the invasion.
UK wholesale prices had risen because of the wider scramble to secure more stocks, resulting in a litre of petrol hitting an average of 191.43p and diesel 199.07p at the beginning of July.
But on Monday Brent crude fell to $93.38 a barrel, having last week hit its lowest point since February, although it had risen slightly to $94.47 by 2.30pm UK time.
PVM analyst Stephen Brennock said: "Last week's price action left no doubt that recession-driven demand concerns have the upper hand over supply fears.
"One could even go as far as saying the war premium has evaporated."
Monday's fall came just days after the Bank of England warned that the UK was facing a 15-month recession, and as the UK and the US both try to tame high - and rapidly climbing - inflation.
The US economy contracted for a second consecutive quarter in figures published late last month.
This would meet the international criteria for a recession, but the world's largest economy has its recession defined by the National Bureau of Economic Research (NBER) - and it is yet to make such a judgement.
Fuel prices slowly falling in the UK as recession fears outweigh 'war premium' (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 end.
Under 60, healthy, vaccinated and boosted? 'You're in a pretty good place' with Covid-19
Elizabeth Cohen – August 8, 2022 12:51 PM
Data obtained by CNN from New York’s largest health-care provider indicates you’re very unlikely to become severely ill with Covid-19 if you’re under age 60, up to date on your Covid-19 vaccines and don’t have underlying health problems, backing up a government plan expected to be announced this week that will ease up on coronavirus restrictions.
If you’re young, healthy and vaccinated, “you’re going to be in a pretty good place,” said Dr. William Schaffner, a vaccine adviser to the US Centers for Disease Control and Prevention. “You’re going to be well-protected.”
The data from Northwell Health shows that of the nearly 2,000 people hospitalized there for Covid-19 in May, June and July, about 80% were over 60. Nearly 90% had an underlying health problem such as hypertension or diabetes.
Vaccination status was also critically important. The vast majority of hospitalized patients were not up to date on their Covid-19 vaccinations. Those who were up to date and still ended up in the hospital were mostly over 65.
This summer, the highly transmissible Omicron BA.5 variant has caused infections to soar, but because Omicron causes milder illness and a large proportion of the country has been vaccinated, previously infected or both, hospitalizations nationwide are lower than at many previous points in the pandemic.
Dr. Jill Kalman, Northwell’s chief medical officer, noted that when Covid patients do end up in the hospital, they fare much better than they once did.
“The mortality rate now is very low: It’s around 2%, and it was around 10 to 12% during Delta,” she said. “And if they do get into the ICU, they’re not staying as long. In the first wave, we were seeing patients in the ICU for 15, 20, 30 days, and it’s a fraction of that now.”
CNN shared the data with CDC Director Dr. Rochelle Walensky, who said it meshed with her recent statements that “we are in a much better place than we were.”
She added that national data from April through June shows hospitalizations were about four times higher among people over 50 compared with younger adults.
More
Under 60, healthy, vaccinated and boosted? 'You're in a pretty good place' with Covid-19 (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.
Conductive 3D prints with graphene in development by startups Graphmatech and Wematter
August 8, 2022
Swedish 3D printer manufacturer Wematter is partnering with Graphmatech, a leading graphene-solutions providers. Graphmatech enhances polymer powders with Graphene, which makes them electrically- and thermally conductive, improve processibility, and more.
Together, the two startups will develop an electrically conductive powder, tailored for Gravity – the SLS 3D printer by Wematter. The high-performance powder will enable Telecommunications, Aerospace, and Automotive manufacturers to print parts with improved or maintained mechanical properties whilst achieving electrostatic dissipative (ESD), shielding, or even lower resistivity, and performance.
Graphene enables material development for Additive Manufacturing at a new level. By utilizing Graphmatech’s novel method of incorporating graphene with polymer powders, this is the first time that a powder-based technology like SLS is used together with Polyamide 11-Graphene powder in an industrial way.
“With this new strategic partnership, Wematter and Graphmatech will be able to offer customers in the Telecommunications, Aerospace, and Automotive industries a competitive advantage”, Says Robert Kniola CEO & Co-Founder at Wematter. “We see a great potential in working with Graphmatech because they have a proven capability of developing cutting-edge graphene-based materials for SLS 3D printing.”
“The graphene-enhanced powder will meet the needs of some of the most demanding customers in the Telecommunications, Aerospace, and Automotive industries”, says Dr. Mamoun Taher – CEO & Founder of Graphmatech. “The Gravity system by Wematter is an appealing SLS system for printing our high-performing graphene-enhanced powders. The innovative powder handelling system developed by Wematter makes the Gravity system very user friendly, which is a key when introducing new powder products to the market.”
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“Under the gold standard, a free banking system stands as the protector of an economy's stability and balanced growth... The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit... In the absence of the gold standard, there is no way to protect savings from confiscation through inflation”
Alan Greenspan.
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