Baltic
Dry Index. 1818 +96 Brent Crude 85.61
Spot Gold 1636 US 2 Year Yield 4.20 +0.09
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 26/09/22 World 620,304,860
Deaths 6,540,465
“Once the principle is admitted that it is the duty of the
government to protect the individual against his own foolishness, no serious
objections can be advanced against further encroachments.”
Ludwig von Mises
It looks to be a scary week ahead for currencies, commodities and the stock casinos.
In the week ahead, will the Pound Sterling break parity to the US dollar, or will the BOE hit the markets with a surprise inter-meeting, interest rate hike?
In the emerging markets, with the dollar rising against all currencies, a currency crisis is brewing. For non-foodstuff commodities renewed selling pressure.
Will the global stock casinos stabilise or continue falling, repricing ahead of the damage from the new recession?
Just how inverted will the US Treasury market get before the recession eventually kills off inflation somewhere in 2023.
Will Typhoon Noru damage Vietnam’s coffee production? Vietnam is the second largest coffee producer after Brazil.
Nikkei, Kospi
fall 2%; Asia-Pacific markets drop as negative sentiment remains
UPDATED MON, SEP 26 2022 12:30 AM EDT
Shares in the Asia-Pacific fell sharply on
Monday as negative sentiment continues to weigh in on markets.
The Nikkei 225 in
Japan dropped 2.42%, and the Topix also slipped 2.4%. South Korea’s Kospi lost
2.67% and the Kosdaq shed 4.1%.
In Australia, the S&P/ASX 200 declined
1.21%. MSCI’s broadest index of Asia-Pacific shares outside Japan was 1.19%
lower.
Meanwhile, Hong Kong’s Hang Seng Index gained
0.17%, with the Hang Seng Tech Index bucking the trend and rising by 2.39%. In
mainland China, the Shanghai
Composite was fractionally lower and the Shenzhen Component was
up 0.647%.
The Reserve Bank of India’s
monetary policy committee is scheduled to meet later this week, and China is
expected to release data on factory activity at the end of the week.
Onewo, a subsidiary of property
developer China Vanke, is set to debut on the Hong Kong stock exchange this
week as well.
Bank of Korea sees the Fed raising rates by another 75 basis points, governor says
The Bank of Korea
expects the U.S. Fed to hike rates by another 75 basis points at its upcoming
meeting in November.
“We see the
Fed raising interest rates by 75 basis points at the next meeting,
and another shock could come from how much they’ll hike after that,” Bank of
Korea governor Rhee Chang-yong told lawmakers in Seoul.
Reiterating median
forecasts that show the Fed will hike rates to 4.4% by the end
of 2022, Rhee said, “Markets are still digesting the shocks from this
adjustment.”
“Nobody expected
the [Fed] terminal rate to rise this much.”
When asked about
reports of currency swap agreements between the U.S. and South Korea, Rhee said
“there have been exchanges of information” between the two countries, without
elaborating further.
Asia
markets: Stocks, economic data, currencies, oil (cnbc.com)
Stock futures
fall as investors prepare for the S&P 500 to test its June low
UPDATED MON, SEP 26 2022 12:50 AM EDT
U.S. equity
futures were lower Monday morning after surging interest rates and foreign
currency turmoil pushed the major averages to near their lows of the year.
Dow Jones Industrial Average
futures fell 0.5% or 148 points. S&P 500 futures shed 0.57% and Nasdaq 100
futures dropped 0.52%.
On Friday stocks ended a brutal
week with the blue-chip Dow finding
a new intraday low for the year and closing lower by 486
points. The broad-market S&P 500 temporarily broke below its June closing
low and ended down 1.7%. The tech-heavy Nasdaq Composite lost 1.8%.
Investors were reacting to the
Federal Reserve’s commitment to its rate hiking plan to help tame inflation. At
the conclusion of the FOMC meeting, chair Jerome Powell said the central bank
could raise rates as high as 4.6% before pulling back. The forecast also shows
the Fed plans to stay aggressive this year, hiking rates to 4.4% before 2022
ends.
“A lot of traders expected hints
of a Fed pivot at Jackson Hole or at the September FOMC policy, but that never
happened,” said Edward Moya, senior market analyst at Oanda. “A hard landing is
becoming the base case scenario for many and that means more economic pain
along with a much weaker stock market is coming.”
Bond yields soared after the Fed
enacted another rate hike of 75 basis points. The 2-year and 10-year Treasury
rates hit highs not seen in over a decade. On Friday, Goldman Sachs slashed
its year-end target for the S&P 500 to 3,600 from 4,300.
“How far we go below the summer
lows is anyone’s guess,” said Oanda’s Moya. “It doesn’t seem like any economic
data release or Fed speak will convince markets that a downshift from this
aggressive tightening campaign will be happening anytime soon.”
Looking
ahead, traders are anticipating the release of personal consumption
expenditures data, the Fed’s preferred inflation gauge, on Friday. Durable
goods and consumer sentiment numbers will also come out this week.
A slew of Fed speakers —
including Fed Vice Chair Lael Brainard, St. Louis Fed President James Bullard,
San Francisco Fed President Mary Daly and Fed Governor Michelle Bowman — and
Chair Powell are also scheduled to speak at various events this week.
Stock
futures fall as investors prepare for the S&P 500 to test its June low
(cnbc.com)
Wall
St Week Ahead Investors wonder when vicious sell-off in U.S. stocks will end
September 24, 2022
2:29 AM GMT+1
NEW YORK, Sept 23 (Reuters) - A week of
heavy selling has rocked U.S. stocks and bonds, and many investors are bracing
for more pain ahead.
Wall Street banks are adjusting their
forecasts to account for a Federal Reserve that shows
no evidence of letting up, signaling more tightening ahead to fight
inflation after another market-bruising rate hike this week.
The S&P 500 is down more than 22%
this year. On Friday, it briefly dipped below its mid-June closing low of
3,666, erasing a sharp summer rebound in U.S. stocks before paring losses and
closing above that level.
With the Fed intent on raising rates
higher than expected, "the market right now is going through a crisis of
confidence," said Sam Stovall, chief investment strategist at CFRA
Research.
If the S&P 500 closes below the
mid-June low in the days ahead, that may prompt another wave of aggressive
selling, Stovall said. This could send the index as low as 3,200, a level in
line with the average historical decline in bear markets that coincide with
recessions.
A rout in bond markets added pressure
on stocks. Yields on the benchmark 10-year Treasury, which move inversely to
prices, recently stood at around 3.69%, their highest level since 2010.
Higher yields on government bonds can
dull the allure of equities. Tech stocks are particularly sensitive to rising
yields because their value rests heavily on future earnings, which are discounted
more deeply when bond yields rise.
Michael Hartnett, chief investment
strategist at BofA Global Research, believes high inflation will likely push
U.S. Treasury yields as high as 5% over the next five months, exacerbating the
selloff in both stocks and bonds.
"We say new highs in yields equals
new lows in stocks," he said, estimating that the S&P 500 will fall as
low as 3,020, at which point investors should "gorge' on equities.
Goldman Sachs, meanwhile, cut its
year-end target for the S&P 500 by 16% to 3,600 points from 4,300 points.
"Based on our client discussions,
a majority of equity investors have adopted the view that a hard landing
scenario is inevitable," wrote Goldman analyst David Kostin. read
more
More
Wall St Week Ahead
Investors wonder when vicious sell-off in U.S. stocks will end | Reuters
Sterling hits
record low against the dollar, as Asia-Pacific currencies also weaken
The British pound plunged
to a record low on Monday morning in Asia, following last week’s
announcement by the new U.K. government that it would implement
tax cuts and investment incentives to boost growth.
The sterling briefly fell 4% to an
all-time low of $1.0382 on Monday in Asia.
Critics say those economic measures will disproportionately
benefit the wealthy and could see the U.K. take on high
levels of debt at a time of rising interest rates.
″[It] doesn’t seem
like the U.K. government is throwing the market a bone here in terms of having
a much more tempered fiscal trajectory, and so I think at this point right now,
the path of least resistance is going to remain lower,” Mazen Issa, senior
forex strategist at TD Securities, told CNBC before the pound hit a new low.
“Below $1.05, you
really look at parity,” he told CNBC’s “Squawk Box Asia.”
“We’ve seen the euro
dip below parity — I don’t see a reason why sterling can’t either,” he added.
It’s a “major
challenge” for the Bank of England to fight inflation while the government
tries to stimulate the economy, said Nicholas Ferres, chief investment officer
at Vantage Point Asset Management.
“The Bank of England
may even do an emergency policy meeting this week and hike rates, that wouldn’t
surprise me if that happened,” he said.
More
Sterling
hits record low against the dollar, as Asia-Pacific currencies also weaken
(cnbc.com)
BoE needs to hike rates
next week to calm markets - Deutsche Bank analyst
23
September 2022
LONDON (Reuters) - Britain's central bank needs to make a big
inter-meeting interest rate hike as early as next week to calm markets and
restore credibility, a Deutsche Bank analyst said on Friday.
British
bond yields surged by the most in a single day in more than three decades on
Friday and the pound slid 3% to a new 37-year low after UK finance minister
Kwasi Kwarteng laid out a series of major tax cuts that will be funded by
public borrowing.
In a research
note, Deutsche Bank's George Saravelos said the required policy response was
clear: "A large, inter-meeting rate hike from the Bank
of England as soon as next week to regain credibility with the
market."
A decision by
the BoE to reverse its planned sale of UK government bonds would make matters
worse, he said.
He added that
a strong signal by the BoE that it was willing to do "whatever it
takes" to bring inflation down quickly and move real yields into positive
territory would help.
BoE needs to hike rates next week to calm markets - Deutsche Bank analyst (msn.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.
German bakeries fight for
survival as costs spiral
Issued
on: 25/09/2022 - 06:04
Beelitz (Germany) (AFP) – Faced with exploding energy and ingredient costs, German baker Tobias Exner has installed new energy-efficient ovens, shortened his opening hours and even considered baking at lower temperatures.
But "it just doesn't taste the
same without a good crust", he said, adding that in any case such efforts
could do little to counter the existential crisis he and other bakers are
facing.
"If the conditions don't change,
then sooner or later a large share of bakeries in Germany will simply no longer
exist," Exner told AFP.
Bakeries in Germany have been among the
businesses hardest hit by the economic fallout from Russia's invasion of
Ukraine.
The war has sent energy prices
spiralling across Europe, but especially in Germany, which was previously
heavily dependent on Russian gas.
But "it just doesn't taste the
same without a good crust", he said, adding that in any case such efforts
could do little to counter the existential crisis he and other bakers are
facing.
"If the conditions don't change,
then sooner or later a large share of bakeries in Germany will simply no longer
exist," Exner told AFP.
Bakeries in Germany have been among the
businesses hardest hit by the economic fallout from Russia's invasion of
Ukraine.
The war has sent energy prices spiralling
across Europe, but especially in Germany, which was previously heavily
dependent on Russian gas.
Exner's business is relatively large
with 220 staff and 36 branches in Berlin and the surrounding area, leaving it
better placed than many to survive the crisis -- but even he is struggling.
Wheat is now 2.5 times more expensive
than before the crisis, he said, while the cost of a litre of oil has risen
from around 82 cents to more than three euros ($2.91).
More
German bakeries
fight for survival as costs spiral (france24.com)
Eurostar
future in doubt as inflation soars and losses climb
24
September 2022
Eurostar is facing an uncertain future as the cost of living crisis sparks
a downturn in bookings, raising
the spectre of the company being forced back into emergency talks with
investors.
The Channel Tunnel train
operator said that reduced economic growth, a recession or “high levels of inflation
reducing the disposable incomes of potential customers” could leave Eurostar
experiencing financial difficulties, according to company filings.
Eurostar added that a “severe dampening
of demand” could lead to the company breaching promises to its lenders on
retaining a minimum level of cash reserves.
Breaching so-called banking covenants
such as this can have a domino effect that ends in insolvency proceedings.
There is no suggestion that such a scenario is on the horizon, however.
Nevertheless, the train operator said
in the event of breaching covenants, “Eurostar would be dependent on the
continued support of its lenders as well as its shareholders”.
The disclosures, contained with
Eurostar accounts filed this week, will spark fresh concerns about the company,
which narrowly averted collapse in early 2021.
More
Eurostar future in doubt as inflation soars and losses
climb (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.
New Study Shows
Lingering Neurological Effects of COVID-19
Posted September 25, 2022
·
An estimated 6.6 million people have suffered
brain impairments associated with COVID-19.
·
COVID-19 infection brings an increased risk of
stroke, cognitive and memory problems, depression, and anxiety.
·
Other neurological effects include migraine
headaches, movement disorders, hearing and vision problems, and Parkinson-like
disease.
·
Those with COVID-19 had a 77% increased risk of
developing memory problems and were 80% more likely to suffer from epilepsy or
seizures.
The link between COVID-19 and neurological
problems has been well-documented. However, most studies have been limited to
hospitalized patients, used a narrow selection of neurologic outcomes, and had
a follow-up duration of fewer than six months.
In the September 22 issue of Nature Medicine, a more
comprehensive analysis using federal health data shows that
in the first year after being infected with COVID-19 there is an increased risk
of stroke, cognitive and memory problems, depression, anxiety, migraine headaches,
movement disorders, hearing and vision abnormalities, balance and coordination
problems, and Parkinson-like disease.
“We evaluated 44 brain and other neurologic disorders among both
non-hospitalized and hospitalized patients, including those admitted to the
intensive care unit,” said senior
author Ziyad Al-Aly, M.D., a clinical epidemiologist at Washington University.
“The results show the devastating long-term effects of COVID-19. These are part
and parcel of long COVID. The virus is not always as benign as some people
think it is.”
The researchers analyzed about 14 million de-identified medical records of
patients of all ages, races, and sexes from a database maintained by the U.S.
Department of Veterans Affairs. The data predated delta, omicron, and other
COVID variants.
More
New Study Shows
Lingering Neurological Effects of COVID-19 | Psychology Today
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.
Cobalt Miners News For The
Month Of September 2022
Sep. 24, 2022 6:33 AM
ET
Welcome to the September 2022
cobalt miners news.
The past month saw some
improvement in the cobalt price and a quiet month for news. The August 2022
passing of the U.S. Inflation Reduction Act was a positive for North American cobalt projects as well as for projects in
U.S. free trade countries (details here). In September the European Commission revealed
they are working on their own version - The
Critical Raw Materials Act.
Cobalt price news
As
of September 23, the cobalt spot price rose slightly to US$23.25/lb,
from US$22.11/lb last month. The LME cobalt price is US$51,020/tonne.
LME Cobalt inventory is 178 tonnes, lower than 190 last month. More details on
cobalt pricing (in particular the more relevant cobalt sulphate), can be found
here at Benchmark
Mineral Intelligence or Fast
Markets MB
More + many charts
Cobalt Miners News
For The Month Of September 2022 | Seeking Alpha
“This was the argument put forward during the War [WW1] when the
expenditure on the army and navy had to be met; and this was the argument put
forward in Germany and Austria after the War when a part of the population had
to be provided with cheap food, the losses on the operation of the railways and
other public undertakings met, and reparations payments made. The assistance of
inflation is invoked whenever a government is unwilling to increase taxation or
unable to raise a loan; that is the truth of the matter.”
Ludwig von Mises, The Theory of Money and Credit
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