Saturday, 17 September 2022

Special Update 17/9/22 How And When Do Bear Markets Start.

 Baltic Dry Index. 1552 -59   Brent Crude 91.35

Spot Gold 1675        U S 2 Year Yield 3.85 -0.02

Covid-19 cases 02/04/20 World 1,000,000

Deaths 53,100

Covid-19 cases 17/08/22 World 616,617,830

Deaths 6,529,360

Note: Out of respect for the late Queen’s funeral and the Royal family, there will be no LIR update on Monday September 19.

The bear market started earlier this year, took a summer holiday and resumed this week. At least that’s my take on current events.

Everything from the US yield curve inverting, the FedEx warning about a rapidly slowing global economy, to consumer spending starting to decline, to a coming winter of sky high food and energy prices, suggests to me stocks will fall for the rest of the year.

Our next recession is/has arriving/arrived, but inflation seems likely to continue until the new recession finally kills it. My expectation for that is about March – April of next year.

Below, more on the declining appetite for stocks at current valuations.

Stocks close lower on Friday, extending sell off for worst week since June for S&P 500 and Nasdaq

UPDATED FRI, SEP 16 2022 5:17 PM EDT

Stocks fell Friday as Wall Street wrapped up one of its worst weeks in months and traders reacted to an ugly earnings warning from FedEx about the global economy.

The Dow Jones Industrial Average dropped 139.40 points, or 0.45%, to close at 30,822.42. The S&P 500 shed 0.72% to end the week at 3,873.33. The Nasdaq Composite slid 0.90% to finish at 11,448.40. It was the worst week for the S&P 500 and Nasdaq since June.

Shares of FedEx plunged 21.4%, their worst daily drop ever, after the shipments company withdrew its full-year guidance and said it will implement cost-cutting initiatives to contend with soft global shipment volumes as the global economy “significantly worsened.”

Transport stocks are typically seen as a leading indicator for the stock market as well as the economy, and FedEx pointed to weakness in Asia as one of the main reasons for its negative outlook. Shares of shipping rivals UPS and XPO Logistics dropped about 4.5% and 4.7%, respectively, and Amazon’s stock fell 2.1%.

FedEx’s announcement comes soon after a hotter-than-expected inflation report in the U.S. on Tuesday, which raised concerns that the Federal Reserve will be forced to cause a recession to cool prices. That data sparked a decline of more than 1,200 points for the Dow.

“There is a lot of nervousness about how the global economy can affect the U.S. economy now, while the U.S. economy is dealing with its own set of very serious issues. I think that dynamic is what people have woken up to,” said Callie Cox, U.S. investment analyst at eToro.

The three major averages suffered their fourth losing week in five, and the summer comeback rally looks increasingly like a bear market bounce. The Dow Jones Industrial Average declined 4.1% this week. The S&P 500 lost 4.8%, while the Nasdaq Composite dropped about 5.5%.

Stocks close lower on Friday, extending sell off for worst week since June for S&P 500 and Nasdaq (cnbc.com)

Meta shares plunged 14% this week, falling close to their pandemic low

PUBLISHED FRI, SEP 16 2022 4:43 PM EDT

Facebook hasn’t been this cheap since the beginning of the pandemic.

After plunging 14% for the week to close at $146.29, shares of Facebook parent Meta are at their lowest point since March 2020, and for a period on Friday, they had sunk even lower. Meta has lost 61% of its value over the past 12 months, by far the biggest slide among Big Tech stocks and more than double the drop in the Nasdaq Composite.

In sliding for five straight days, Meta is now trading just 28 cents above its closing price on March 16, 2020, when the early days of Covid-19 sent U.S. stocks reeling.

If Meta falls below $146.01, it will be the lowest since January 2019. That’s when Facebook was dealing with the aftermath of the Cambridge Analytica Scandal that tested consumer confidence in the social media company and led to a series of heated congressional hearings.

Still, Facebook managed to expand its active users in the U.S. that quarter, though by just under 1 percent.

Since officially changing its name to Meta last October, the news for CEO Mark Zuckerberg and company has been almost all bad. Apple’s iOS privacy update made it more difficult for the company to target ads and the increased popularity of social media rival TikTok has drawn users and advertisers away from the app. Meanwhile, an economic slowdown has caused many companies to pull back on their online marketing spend.

In July, Meta said it was expecting a second straight period of declining sales as it reported second-quarter earnings that missed on the top and bottom lines.

Meta shares plunged 14% this week, falling close to their pandemic low (cnbc.com)

Finally in other news, the west is fighting a proxy war with Russia. Russia is fighting an economic war with the west.  Yet another reason to be out of stocks.

Putin tells Europe: if you want gas then open Nord Stream 2

SAMARKAND, Uzbekistan, Sept 16 (Reuters) - President Vladimir Putin on Friday denied Russia had anything to do with Europe's energy crisis, saying that if the European Union wanted more gas it should lift sanctions preventing the opening of the Nord Stream 2 pipeline.

Speaking to reporters after the Shanghai Cooperation Organisation summit in Uzbekistan, Putin blamed what he called "the green agenda" for the energy crisis, and insisted that Russia would fulfil its energy obligations.

"The bottom line is, if you have an urge, if it's so hard for you, just lift the sanctions on Nord Stream 2, which is 55 billion cubic metres of gas per year, just push the button and everything will get going," Putin said.

Nord Stream 2, which lays on the bed of the Baltic Sea almost in parallel to Nord Stream 1, was built a year ago, but Germany decided not to proceed with it just days before Russia sent its troops into Ukraine on Feb. 24.

European gas prices more than doubled from the start of the year amid a decline in Russian supplies.

This year's price surge has squeezed struggling already consumers and forced some industries to halt production.

Europe has accused Russia of weaponising energy supplies in retaliation for Western sanctions imposed on Moscow over its invasion of Ukraine. Russia says the West has launched an economic war and sanctions have hampered Nord Stream 1 pipeline operations.

More

Putin tells Europe: if you want gas then open Nord Stream 2 | Reuters

 

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.

Retail sales continue year-long downward spiral amid cost of living crisis

FRIDAY 16 SEPTEMBER 2022 7:25 AM

Retail sales fell last month, according to official figures, as the cost of living crisis prompts Brits to dial back spending.

Sale volumes fell by 1.6 per cent in August, continuing a downward trend since summer 2021.

Both food and non-food stores, as well as non-store retailing and fuel forecourts all saw lower sales over the past month, the Office for National Statistics found last month.

More

Retail sales continue year-long downward spiral amid cost of living crisis (cityam.com)


Inflation is turning hyper

Sep 15, 2022·Alasdair Macleod

Money supply took off during covid lockdowns. It is now about to take off again to pay everyone’s energy bills. But that is not all.

Demands for currency and credit to be conjured out of thin air to pay for everything will be coming thick and fast. Expectations that energy prices, including European electricity, have peaked are naïve. Putin has yet to put the winter and spring screws on Europe and the world fully. It will be surprising if global oil and natural gas prices in Europe are not significantly higher on a twelve-month view. And Europe has messed up its electricity supplies — that is where the energy costs will rise most.

Bankers are trying to reduce their loan exposure to rising interest rates, undermining GDP. Besides paying for everyone’s energy bills, rescuing troubled banks, collapsing tax revenues, and difficulties in selling government debt on rising yields, governments are expected to apply economic stimulus to support both their economies and financial markets.

Furthermore, this article points to evidence as to why the expansion of central bank credit has a far greater impact on prices than contracting bank credit. The replacement of commercial bank credit by central bank credit will have a far greater inflationary impact than the deflation from bank credit alone.

Attempts to rescue the American, European, and Japanese economies by replacing commercial bank credit with central bank credit will probably be the coup de grace for fiat.

We can begin to anticipate the path to the destruction of purchasing power for all fiat currencies, not just those of Zimbabwe, Turkey, and Venezuela et al. A global hyperinflation is proving impossible to avoid.

First it was covid, now it is energy… 

More

Inflation is turning hyper - Research - Goldmoney

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.

World Health Organization - Landscape of COVID-19 candidate vaccineshttps://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines

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 more useful Covid links.

Johns Hopkins Coronavirus resource centre

https://coronavirus.jhu.edu/map.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, I’ve added this section.

World's first direct air electrolyzer makes hydrogen from humidity

Loz Blain  September 14, 2022

Australian researchers have developed and tested a way to electrolyze hydrogen straight out of the air, anywhere on Earth, without requiring any other fresh water source. The Direct Air Electrolyzer (DAE) absorbs and converts atmospheric moisture – even down to a "bone-dry" 4% humidity.

Such a machine could be particularly relevant to a country like Australia, which has ambitions as a clean energy exporter, along with enormous solar energy potential – but also widespread drought conditions and limited access to clean water. Decoupling hydrogen production from the need for a water supply could allow green hydrogen to be produced more or less anywhere you can ship it out from – and since water scarcity and solar potential often go hand in hand, this could prove a boon for much of Africa, Asia, India and the Middle East, too.

Chemical engineers at Melbourne University came up with what they describe as a simple design: an electrolyzer with two flat plates acting as anode and cathode. Sandwiched between the two plates is a porous material – melamine sponge, for example, or sintered glass foam. This medium is soaked in a hygroscopic ionic solution – a chemical that can absorb moisture from the air spontaneously.

Hook it up to an energy source, expose it to the air, and hydrogen starts being released at the cathode, and oxygen at the anode, simple as that. The researchers believe this is the first time hydrogen has been pulled directly from the air, and note that it works down to 4% humidity, where even dry areas in Australia's Red Centre, such as Alice Springs, tend to have around 20% humidity.

The researchers tested various different hygroscopic liquids, porous media, thicknesses and other parameters, eventually achieving a faradaic efficiency around 95%. Hooked up to a paperback-sized solar panel, the team found the DAE was able to generate 3.7 cubic meters(131 cu ft) of high-purity hydrogen per day, per square meter (10.7 sq ft) of cathode.

The team describes the technology as technically and structurally viable, and low-maintenance, and says the next steps are to test it in a range of harsh conditions and temperatures, and to scale way up.

"We are in the process to scale up the DAE, from a five-layer stack to one meter square, then 10 meters and so on," says Dr. Kevin Gang Li, lead researcher on the paper. "And we can simulate a dry climate in lab, but that's not a real desert. So, we want to take it to Alice Springs and spend a couple of weeks, see how it goes."

The research is open access in the journal Nature Communications.

Source: University of Melbourne

World's first direct air electrolyzer makes hydrogen from humidity (newatlas.com)

 

This weekend’s music diversion.  Approx. 9  minutes.  

Antonio Lucio VİVALDİ: Concerto (Il Proteo ò il Mondo al Rovescio) İn F Major RV.572, Freiburger BO

Antonio Lucio VİVALDİ: Concerto (Il Proteo ò il Mondo al Rovescio) İn F Major RV.572, Freiburger BO - YouTube

 This weekend’s chess update. Approx. 12 minutes.

Blunders Love Company

Blunders Love Company - YouTube

 This week’s maths update. Approx. 14 minutes.

Gauss's magic shoelace area formula and its calculus companion

Gauss's magic shoelace area formula and its calculus companion - YouTube

 

At each step of the transition from commodity to paper to credit, money became more unreal, and detached from the real goods and services that money can be exchanged for. Money transformed itself from a mechanism for trade into an object in its own right. Modern technology—digital money—further stripped money of corporeality. Money exists as pure information, with no intrinsic value. It is nothing and everything. Making money, lending it, borrowing money, and making money from money is central to human existence and activity.

Satyajit Das. Extreme Money. Masters of the Universe and the Cult of Risk

http://ptgmedia.pearsoncmg.com/images/9780132790079/samplepages/0132790076.pdf

 

No comments:

Post a Comment