Thursday, 18 August 2022

When Property Fails. Spectacular Errors.

 Baltic Dry Index. 1394 +07    Brent Crude 98.67

Spot Gold 1763         US 2 Year Yield 3.28 +0.03

Coronavirus Cases 02/04/20 World 1,000,000

Deaths 53,100

Coronavirus Cases 18/08/22 World 598,197,031

Deaths 6,463,879

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

In the stock casinos, more worry and rising concern. What if Mr. Bear returns with a sore head.

Call me old fashioned, unable to stay with modern times, but rising interest rates are never good for property sales anywhere and without a real estate boom, the national economy just about everywhere sooner or later, but often sooner than many expect, starts to falter.

Property is now in retreat in China, the USA, UK and those parts of Europe once favoured by Russian oligarchs.

I think the stock casinos are trading on borrowed time.

This morning there is a nasty rumour that the Rhine has become blocked by a barge. We will know later in the day if this is true or serious.

Asia-Pacific markets trade lower after Wall Street cools following Fed minutes

UPDATED THU, AUG 18 2022 12:16 AM EDT

Asia-Pacific markets opened lower across the board after the latest Wall Street rally cooled overnight and July minutes from the U.S. Federal Open Market Committee pointed to “little evidence inflation pressures were subsiding” at the time of the meeting.

The  in Australia fell 0.38%. Japan’s  dipped about 1% while the Topix index dropped 0.79%. In South Korea, the Kospi was down 0.52%.

Mainland China markets also took a dive. The Shanghai Composite slipped 0.26% and the Shenzhen Component lowered by 0.41%.

Hong Kong’s Hang Seng index fell 0.53%

Losses were felt across all industries. Australian coal producer , however, continued to stand out, posting just under 4% gains in early trade. The company has benefitted from surging coal prices.

MSCI broadest index of Asia-Pacific shares outside Japan was down 0.17%.

After hiking rates by 50 basis points Wednesday, Reserve Bank of New Zealand Governor Adrian Orr said on Thursday he was confident inflation was falling.

The Philippine central bank will meet on interest rates and is expected to raise rates by 50 basis points.

After the market closed Wednesday, Tencent posted its first ever quarterly sales fall. The company said its earnings were hurt by a lack of game approvals and regulations that limit playing time, pandemic lockdowns and a weak economy that hurt ad sales. Tencent shares have bounced by 3.1%.

Chinese developer Country Garden has issued a profit warning projecting its net profit for the first half of the year to fall below half of last year’s result.

It estimated its net profit to sit between 4,500 million yuan and 5,000 million yuan ($660 million and $730 million), down from last year’s 15 billion yuan ($2.21 billion).

The company attributes the fall in profit to a decrease in property sales, increased provision for impairment for property projects and foreign exchange losses.

More

Asia-Pacific markets trade lower after Wall Street cools following Fed minutes (cnbc.com)

European markets set to open higher but caution reigns after Fed minutes

UPDATED THU, AUG 18 2022 12:31 AM EDT

European markets are heading for another positive open on Thursday but are struggling to build on gains amid continuing market caution over the inflationary outlook.

Overnight, Asia-Pacific markets opened lower across the board after the latest Wall Street rally cooled on Wednesday following the release of July minutes from the U.S. Federal Open Market Committee, which pointed to “little evidence inflation pressures were subsiding” at the time of the meeting.

European markets pulled back on Wednesday after a rally on Wall Street, having struggled to build positive momentum so far this week.

Investors were tracking preliminary gross domestic product data from the euro zone for the second quarter, as well as unemployment figures for the single currency bloc, and the latest U.K. inflation figures for July, which showed the consumer price index hitting another 40-year high.

Economic growth in the euro zone for the second quarter was revised down on Wednesday from 0.7% to 0.6% quarter on quarter, and from 4% to 3.9% annually. Eurostat also revealed that employment across the 19-member common currency bloc rose 0.3% quarterly, for a 2.4% year-on-year increase.

European markets open to close, news, data, stocks, earnings (cnbc.com)

In other news, what happened to the Atlantic hurricane season? Are the missing hurricanes linked in some way to Europe’s Great Drought? It this only “transitory”?

After a quiet start, Atlantic hurricane season could ramp up into September

Matthew Cappucci  August 17, 2022

Despite nearly unanimous predictions that there would be above-average activity, it’s been an ominously quiet start to hurricane season — though that could still change in the coming weeks.

There hasn’t been a named storm anywhere in the Atlantic basin since Colin, a pipsqueak swirl of gusty showers that scraped along the Carolina coastline on July 3 with minimal impact. Since then, it has been quiet despite the calendar nearing September, when hurricane season historically peaks in activity.

There are signs that, after a quiet week ahead, a reversal could be in the cards for the final few days of August. The National Hurricane Center has outlined one system to watch and indicated that a sudden uptick in activity is possible. It’s far from a guarantee, but it also stands to reason that the tropical slumber can’t last forever.

Warming oceans fuel earlier Atlantic hurricane seasons, study finds

The historic peak of hurricane season is around Sept. 15, but most of late August into mid-October is regarded as the busiest stretch of weeks when it comes to tracking the tropics. A given season averages 14 named storms, seven of which might be hurricanes, but NOAA forecasters have continued to echo earlier calls for 14 to 20 named storms, six to 10 hurricanes and three to five major hurricanes.

Even the quietest seasons have whipped up meteorological monstrosities.

For instance, there were only seven named storms in 1992, but the first was Category 5 Hurricane Andrew, which lay siege to South Florida and raked the National Hurricane Center headquarters with a wind gust to 163 mph. Conversely, what may have been busier seasons on paper have had comparatively lesser human impacts when storms have spent their lives over the open ocean.

But when it comes to tropical storms and hurricanes, it only takes one.

After a quiet start, Atlantic hurricane season could ramp up into September (msn.com)

Finally, what else can go wrong in 2022?

Asia gas prices surge to highest since war began on fuel crunch

The Asian benchmark spot LNG price jumped close to $60 per million British thermal units on Tuesday, the highest level since early March when Russia’s invasion of Ukraine upended energy markets. 

AUGUST 17, 2022 / 11:54 AM IST

A global rush to secure shipments of liquefied natural gas for winter catapulted Asian prices to the highest level in five months.

The Asian benchmark spot LNG price jumped close to $60 per million British thermal units on Tuesday, the highest level since early March when Russia’s invasion of Ukraine upended energy markets.

Russia’s move to curb gas shipments to Europe is sending prices of the power plant and heating fuel surging around the world. Utilities in Asia and Europe are accelerating efforts to secure LNG spot cargoes for delivery in winter, when consumption peaks, which is exacerbating a shortage and fueling the rally in prices.

Several Japanese utilities are currently in the market to procure more LNG shipments for delivery from December onward, according to traders with knowledge of the matter. Korea Gas Corp., one of the world’s top buyers of the fuel, is also seeking to scoop up more winter supply, traders added.

Meanwhile, supply disruptions from Australia to the US are curbing the amount of available LNG. Several companies, including Uniper SE and Marubeni Corp., were bidding for LNG shipments to Asia during S&P Global’s market on close process on Tuesday, traders said.

The Japan-Korea Marker jumped to $57.728 per million British thermal units on Tuesday, more than triple the level this time last year, according to S&P Global. European gas prices settled just below a record high on Tuesday amid scorching summer heat.

Pakistan PM Shehbaz Sharif likely to meet Chinese President Xi Jinping during SCO summit: Report (moneycontrol.com)

Chinese property developers’ cash flows have plunged by more than 20%

BEIJING — Chinese property developers’ cash flows — a sign of the companies’ ability to stay afloat — shrank this year after steady growth over the last decade, according to Oxford Economics.

Developer cash flows through July are down 24% year-on-year on an annualized basis, according to analysis from the firm’s lead economist, Tommy Wu.

That’s a sharp slowdown from growth for nearly every year since at least 2009, the data showed. Total funding as of July was 15.22 trillion yuan ($2.27 trillion) on an annualized basis, versus 20.11 trillion yuan in 2021.

The drop comes as credit demand in China missed expectations in July, and property developers’ struggles drag on.

About two years ago, Beijing started to crack down on developers’ high reliance on debt for growth. Notably, Evergrande defaulted late last year. Other developers like  have also defaulted, despite appearing to have healthier balance sheets.

While investors have turned cautious on Chinese property companies, developers now face the risk of losing another important source of cash flow: homebuyer pre-payments.

Homes are typically sold ahead of completion in China. But since late June, some homebuyers have protested apartment construction delays by halting mortgage payments.

“The crux of the problem is that property developers have insufficient cash flows – whether because of debt-servicing costs, low housing sales, or misuse of funds – to continue with projects,” Wu said in a report last week.

More

Chinese property developers' cash flows have plunged by more than 20% (cnbc.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.

It doesn’t get much uglier than this.

August 2022 Empire State Manufacturing Survey

Business activity declined sharply in New York State, according to firms responding to the August 2022 Empire State Manufacturing Survey. The headline general business conditions index plummeted forty-two points to -31.3. New orders and shipments plunged, and unfilled orders declined. Delivery times held steady for the first time in nearly two years, and inventories edged higher.

 Labor market indicators pointed to a small increase in employment, but a decline in the average workweek. While still elevated, the prices paid index moved lower, and the prices received index held steady. Looking ahead, firms did not expect much improvement in business conditions over the next six months

Headline Index Plunges

Manufacturing activity declined significantly in New York State, according to the August survey. The general business conditions index plunged forty-two points to -31.3, the second largest monthly decline in the index on record, and among the lowest levels in the survey’s history. Twelve percent of respondents reported that conditions had improved over the month, and forty-four percent reported that conditions had worsened.

The new orders index dropped thirty-six points to -29.6, and the shipments index plummeted nearly fifty points to -24.1, indicating a sharp decline in both orders and shipments. The unfilled orders index fell to -12.7, indicating that unfilled orders shrank for a third consecutive month. The delivery times index declined to around zero, indicating that delivery times held steady, the first month they have not lengthened in nearly two years. The inventories index fell to 6.4, signaling that inventories increased marginally

More.

Empire State Manufacturing Survey (newyorkfed.org)

US Housing Cools Further With Fewer Starts, More Canceled Deals

Tue, 16 August 2022 at 3:14 pm

(Bloomberg) -- The once-booming US housing market is sputtering.

Construction starts fell in July to the slowest pace since early 2021 as single-family homebuilding tumbled, according to government data released Tuesday. Meanwhile canceled deals rose as buyers continued to back away from the market amid rising mortgage rates, according to an analysis by Redfin Corp.

After a pandemic-related housing boom forced builders to scramble to make enough homes to satisfy demand, high mortgage rates, elevated inflation and a deteriorating economy are now tempering sales. That’s left builders with a sizable number of unsold properties.

The outlook continues to deteriorate. A report Monday showed homebuilder sentiment slid for an eighth-straight month in August, marking the worst stretch since 2007. While Home Depot Inc. reported better-than-expected earnings last quarter, it said customer transactions continue to fall.

More

US Housing Cools Further With Fewer Starts, More Canceled Deals (yahoo.com)

UK inflation hits 10.1% as cost of living soars

17 August, 2022

Prices are continuing to rise at their fastest rate for more than 40 years, with UK inflation passing double digits for the first time since 1982.

 

Inflation hit 10.1% in the 12 months to July, up from 9.4% in June, the Office for National Statistics (ONS) said.

 

The Bank of England has said inflation - the rate at which prices rise - could peak at more than 13%.

 

The figure was higher than economists expected, with rising food prices making the biggest contribution.

 

Energy, petrol and diesel costs are also contributing.

 

Soaring living costs are eating into household budgets, with prices rising faster than wages.

 

Food and non-alcoholic drinks were the largest contributor to rising prices in July, according to the ONS.

The price of bread, cereals, milk, cheese and eggs rose the fastest, while the cost of vegetables, meat and chocolate were also higher.

 

Prices also rose for other staples, such as toilet rolls, pet food and toothbrushes.

 

Transport costs were another big contributing factor, with air fares and international rail tickets particularly increasing. The price for package holidays also went up, as demand increased.

More

UK inflation hits 10.1% as cost of living soars - BBC 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

https://www.zerohedge.com/markets/environmental-disaster-ev-battery-metals-crunch-horizon-industry-races-recycle

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.

Today, something we first reported back in 2020.

BCG vaccine for tuberculosis protects diabetics from COVID-19: Study

The study, published in the journal Cell Reports Medicine on Monday, was conducted on 144 patients with type 1 diabetes at the start of the pandemic, much before COVID-specific vaccines were available. 

AUGUST 16, 2022 / 12:49 PM IST

A widely used tuberculosis vaccine protected people with Type 1 diabetes from COVID-19, according to a study that demonstrates the potential of multiple doses of the Bacillus Calmette-Guerin (BCG) preventive against SARS-CoV-2 and other viruses.

The study, published in the journal Cell Reports Medicine on Monday, was conducted on 144 patients with type 1 diabetes at the start of the pandemic, much before COVID-specific vaccines were available.

Researchers at Massachusetts General Hospital (MGH) in the US found that 12.5 per cent of placebo-treated individuals and 1 per cent of BCG-treated individuals had confirmed COVID-19, yielding a vaccine effectiveness of 92 per cent.

The BCG-vaccinated group also displayed protective effects against other infectious diseases, including fewer symptoms, lesser severity and fewer infectious disease events per patient.

No BCG-related systemic adverse events occurred, according to the researchers. BCG's broad-based infection protection suggests that, in addition to COVID-19, the vaccine may potentially provide protection against new SARS-CoV-2 variants and other pathogens, they said.

The researchers are hoping the results will pave the way for a large scale study of the effects of the BCG vaccine in patients with type 1 diabetes, considered among the most vulnerable groups to COVID-19.

The BCG vaccine is an avirulent tuberculosis strain Mycobacterium bovis historically given to protect against tuberculosis and, since its introduction in 1921, has been the most widely administered vaccine in the history of medicine.

Considered to be extremely safe, BCG is on the World Health Organization's List of Essential Medicines and is given to roughly 100 million children per year globally, the researchers said.

More

BCG vaccine for tuberculosis protects diabetics from COVID-19: Study (moneycontrol.com)

Next, some vaccine links kindly sent along from a LIR reader in Canada.

NY Times Coronavirus Vaccine Trackerhttps://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html

Regulatory Focus COVID-19 vaccine trackerhttps://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.

17-Year-Old Boy’s Electric Motor Design Could Revolutionize EVs

August 16, 2022

Sansone’s synchronous reluctance motor takes top prize at the 2022 Regeneron International Science and Engineering Fair.

What were your major accomplishments at 17? Getting accepted into your dream college? Securing your first job? In Robert Sansone’s case, he could be on the verge of revolutionizing a new way to power electric vehicles (EV). The 17-year-old from Fort Pierce, Florida, recently claimed the George D. Yancopoulos Innovator Award at the 2022 Regeneron International Science and Engineering Fair for his novel synchronous reluctance motor design.

Sansone has always been a tinkerer. Despite his youth, the prolific inventor already has animatronic hands, high-speed running boots, and high-powered go-karts to his name. When Sansone stumbled upon a video illustrating the rare metals required to produce modern EV motors, he set out to find a more environmentally- and financially-friendly approach.

As opposed to the permanent magnet motors commonly used today, Sansone turned to a synchronous reluctance motor design, which is often found in fans and pumps. However, these motors don’t generate enough torque to power an electric vehicle. At least, not yet.

Permanent magnet motors leverage the attraction between a spinning electromagnetic field and magnets attached to a rotor to drive the motor. A synchronous reluctance motor does away with the magnets. The design typically features a steel rotor with several slots cut into the disc. As the rotor rotates, the difference in magnetism, or saliency ratio, between the steel and air-filled gaps helps produce torque.

Sansone’s novel synchronous reluctance motor takes a different approach, though. Instead of cutting slots into the rotor, Sansone introduces another magnetic field into the fold. The young inventor doesn’t disclose the specifics out of concerns for potential patent protection, but it seems like his theory works in practice.

Constructed from 3-D printed plastic, copper wires, and a steel rotor, Sansone’s prototype increased torque by 39 percent and efficiency by 31 percent at 300 rpm. Efficiency grew to 37 percent at 750rpm, but the prototype’s 3D-printed plastic melted at higher revolution rates. Sansone’s findings secured him the 2022 George D. Yancopoulos Innovator Award, yet he isn’t resting on his laurels.

For the Florida native's next prototype, he plans to utilize 3-D modeling and stouter materials. If Sansone achieves higher rpm and performance figures with his upcoming design, he will consider initiating the patent process and approaching automotive companies.

“Rare-earth materials in existing electric motors are a major factor undermining the sustainability of electric vehicles,” noted Sansone. “Seeing the day when EVs are fully sustainable due to the help of my novel motor design would be a dream come true.”

While the materials required to build synchronous reluctance motors are more cost-effective, the design complexity and manufacturing costs still pose a barrier to widespread use in electric vehicles. Still, with advances in additive technologies like 3D printing, Sansone’s design could shape the industry in the future.

17-Year-Old Boy’s Electric Motor Design Could Revolutionize EVs (msn.com)

If all else fails, immortality can always be assured by spectacular error.

John Kenneth Galbraith.

 

 

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