Baltic Dry Index. 1896
+17 Brent Crude 86.15
Spot Gold 1664 U
S 2 Year Yield 4.20 +0.09
The Citigroup chief executive told the Financial Times that the
party would end at some point but there was so much liquidity it would not be
disrupted by the turmoil in the US subprime mortgage market.
He denied that Citigroup, one of the biggest providers of
finance to private equity deals, was pulling back.
“When the music stops, in terms of liquidity, things will be
complicated. But as long as the music is playing, you’ve got to get up and
dance. We’re still dancing,” he said in an interview with the FT in Japan.
July 2007. How Citigroup’s CEO danced himself out of a job.
UPDATED FRI, SEP 23 2022 5:06 PM
EDT
Stocks
tumbled Friday to cap a brutal week for financial markets, as surging interest
rates and foreign currency turmoil heightened fears of a global recession.
The Dow Jones Industrial Average tumbled
486.27 points, or 1.62%, to 29,590.41. The S&P 500 slid
1.72% to 3,693.23, while the Nasdaq Composite dropped
1.8% to 10,867.93.
The Dow notched a new low for the
year and closed below 30,000 for the first time since June 17. The 30-stock
index ended the day 19.9% below an intraday record, flirting with bear market
territory. At one point, the Dow was down more than 826 points.
The major averages capped their
fifth negative week in six, with the Dow giving up 4%. The S&P and Nasdaq
shed 4.65% and 5.07%, respectively. It marked the fourth negative session in a
row for stocks, as the Fed on Wednesday enacted another super-sized rate hike
of 75 basis points and indicated it would do another at its November meeting.
---- The British pound hit a fresh
more than three-decade low against the U.S. dollar after a new
U.K. economic plan that included a slew of tax cuts rattled markets that are
fearing inflation above all right now. Major European markets lost
2% on the day.
“This is a global macro mess that
the market is trying to sort out,” Krosby said.
Bond yields soared this week following the Fed’s
actions, with the 2-year and 10-year Treasury rates hitting highs not seen in
over a decade.
Goldman Sachs cut
its year-end S&P 500 target because of rising rates,
predicting at least a 4% downside from here.
Stocks positioned to suffer the
most in a recession led the week’s losses with the S&P 500′s consumer
discretionary sector falling 7%. Energy slumped 9% as oil prices dropped.
Growth stocks, including big technology names Apple, Amazon, Microsoft and Meta
Platforms fell on Friday.
“Based on our client discussions,
a majority of equity investors have adopted the view that a hard landing
scenario is inevitable and their focus is on the timing, magnitude, and
duration of a potential recession and investment strategies for that outlook,”
wrote Goldman Sachs’ David Kostin in a note to clients as he cut his outlook.
More
Dow
drops nearly 500 points to close at new low for 2022 on rising recession fears
(cnbc.com)
From the Fed to Europe’s currency crisis, here’s what’s
behind this selloff in financial markets
Stocks fell sharply, bond yields rose and the
dollar strengthened Friday as investors heeded the Federal Reserve’s signal
that its battle with inflation could result in much higher interest rates and a
recession.
The sell-off Friday was global, in a week where the
Fed boosted rates by another three-quarters of a point and other central banks
raised their own interest rates to combat global inflation trends.
Weak PMI data
on manufacturing and services from Europe Friday, and the Bank of England’s
warning Thursday the country was already in recession added to the negative
spiral. The U.K. government also shook markets Friday with the announcement of
a plan for sweeping
tax cuts and investment incentives to help its economy.
Fed ‘endorsing’ a recession
“Inflation and rising rates are not a U.S.
phenomena. That’s been a challenge for global markets as well,” said Michael
Arone, chief investment strategist at State Street Global Advisors. “It’s clear
the economy is slowing yet inflation is ramping and the central bank is
compelled to address it. Pivot to Europe, the ECB [European Central Bank] is
raising rates from negative to something positive at a time when they have an
energy crisis and a war in their backyard.”
The Fed also forecast unemployment
could rise to 4.4% next year, from 3.7%. Fed
Chairman Jerome Powell steadfastly warned the Fed will do what it needs to
do to crush inflation.
“By basically endorsing the idea of
a recession, Powell set off the emotional phase of the bear market,” said
Julian Emanuel, head of equity, derivatives and quantitative strategy at
Evercore ISI. “The bad news is you are seeing and you will continue to see it
in the near term in indiscriminate selling of virtually every asset. The good
news is that tends to be that the end game of virtually every bear market we’ve
ever witnessed, and it’s coming in September and October, where that has
historically been the normal state of affairs.”
Recession worries also sent the
commodities complex lower, with metals and agricultural commodities all selling
off across the board. West Texas
Intermediate oil futures fell
about 6% to just above $78 per barrel, the lowest price since early January.
More
Germany on the Brink
Inflation, a likely
recession and exploding energy prices: Germany is expecting tough years ahead
with diminishing prosperity, a shrinking middle class and growing inequality.
This is uncharted territory for the government and society, and both are facing
some difficult choices.
----Political
leaders in Berlin are also growing uncomfortable. When the German middle class
starts worrying about decline, things start getting dicey everywhere in the
country. Particularly for the government.
One doesn't have to look far for the
roots of the problem: high inflation, skyrocketing energy prices and a slowing
economy. Not to mention the challenges associated with tackling climate change.
And the situation wouldn't even improve
particularly quickly if the war in Ukraine were to come to a sudden, unexpected
end. On the contrary. Several different crises are coming together at the
moment to form a perfect storm.
That the German economy will slide into
recession this winter is no longer really a question. And there is growing
evidence that it could become particularly severe – with a tenfold increase in
the exchange electricity price, numerous corporate bankruptcies and a
permanently damaged economy. The losses in prosperity, says economist Michael
Fratzscher, will be permanent. Germany, according to the forecasts, is in
decline.
UK at risk of electricity
blackouts for 10 hours this winter
That could mean power
supplies failing to match demand for ten hours, it said, rising to 29 hours if
ministers had not already stepped in to keep coal-fired power plants open.
LCP’s analysis contrasts with
National Grid Electricity System Operator, which said in a provisional forecast
published early in July that electricity supplies are at risk of running short
for only six minutes this winter.
Unlike LCP, however, National
Grid’s analysis assumes that interconnectors with Europe are able to provide up
to 5.7GW when Britain needs it.
Critics immediately
questioned that assumption, given the stress on the European system. National
Grid is set to give a fuller outlook soon.
LCP’s analysis does not
necessarily mean blackouts will occur, as in times of stress National Grid ESO steps in to try
and balance the system.
But if its efforts fail,
National Grid would be “required to take drastic action and disconnect
customers, such as energy intensive industries, from the grid”, LCP warned.
The
analysis highlights the risks to the electricity system this winter due
to gas shortages caused by Russia's war on Ukraine, as well as
droughts
France
has been importing power from Britain due to outages on its nuclear fleet,
while Norway has warned it may have to curb exports due to falling hydropower
reserves.
Chris
Matson, partner at LCP, said: “As Europe baked during this summer’s heatwave,
it was simultaneously sowing the seeds for further pain this winter.
“As
a result of the extreme droughts and the lack of water that is hitting
hydroelectric systems in key interconnector markets like Norway, coupled by the
issues we are seeing in France with their nuclear reactors, there are
significant doubts about the availability of electricity coming into GB from
the continent which is critical to our security of supply.”
Electricity
traders are already factoring in tight supplies this winter, LCP warned, with
forward prices reflecting shortages of “up to 70 hours”.
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.
Steve Hanke says the chance of a U.S. recession just
shot up to 80%
PUBLISHED FRI, SEP 23 2022 3:15
AM EDT UPDATED 5 HOURS AGO
There’s an 80% chance of the U.S. falling into a
recession — much higher than previously predicted, according to Steve Hanke, a
professor of applied economics at Johns Hopkins University.
According to CNBC’s September Fed survey of economists, fund managers and strategists, those
surveyed said there’s a 52% chance that U.S. could enter into recession over
the next 12 months.
“The probability of recession, I think it’s much higher than 50% — I think
it’s about 80%. Maybe even higher than 80%,” Hanke told CNBC’s “Street
Signs Asia” on Friday.
“If they continue the quantitative tightening and move that growth
rate and M2 (money supply) into negative territory, it’ll be severe.”
Hanke was critical, and has been in the past,
of the Federal Reserve’s failure to manage inflation through keeping an eye on
the large supply of money sloshing around in the U.S. economy.
“They have really been searching for inflation and
the causes of inflation in all the wrong places. They’re looking at everything
under the sun, but the money supply,” Hanke said.
“And in fact, they’ve doubled and tripled down on
the argument that money has no relationship to economic activity or not a
reliable relationship to economic activity and inflation.”
He blamed the U.S. central bank for rising
inflation.
“The reason for that is because the Fed exploded
the money supply, starting early 2020 at an unprecedented rate and they don’t
want this length to be visible between the money supply and inflation.”
“Because if it is, the noose around their neck, and
that’s the real problem.”
An increase in money supply drives up prices as
consumers are willing to pay more for goods.
Classical economics, as put forward by Milton
Friedman and others, have pointed to money supply as the culprit
for out-of-control inflation, Hanke added.
More
There is an 80%
chance of the U.S. going into a recession: Steve Hanke (cnbc.com)
The pivotal quarter
ahead
Published on 22.09.2022
What is happening at present in the plastics
industry can hardly be surpassed in terms of drama and apparent hopelessness.
Since the founding of the Federal Republic of Germany, things have never been
as bad – either perceived or actual – for the companies in the industry as they
are at present.
It doesn’t take an economics research expert to
see how massively German and other national industries are suffering. Nor does
it require a crystal ball to know that things cannot go on like this if Germany
is not to end up in a mental and economic depression of unimagined proportions
– with effects not only on the economy but also on the entire social structure.
At the annual conference of Germany’s association for plastics packaging and
films Industrievereinigung Kunststoffverpackungen (IK) in
Constance, the growing uncertainty in the industry was tangible. As we know,
uncertainty is poison for companies, and panic, fatalism, and resignation are
extremely bad advisors.
Yet more and more converters, producers, and
recyclers are perplexed and desperate, asking themselves: How long can we carry
on? How long will we be able to take the absurd increases in energy prices (up
to 500% in individual cases)? When will we have to shut down production plants
and lay off staff because the costs of gas and electricity are making our
products exorbitantly expensive?
The longer the energy crisis continues and the
more it escalates, the more the failure to act in the past is becoming evident.
Although the Ukraine war was something nobody could have (or wanted to) reckon
with, the fact that Germany has been relying entirely on Putin’s cheap gas for
its energy supply over so many years was a big mistake. Yet putting the blame
entirely on politicians would be the easy way out and dishonest. After all,
industry also knowingly and willingly went along with this concentrated risk (a
mistake now possibly being repeated in dealings with China) and made good money
from it.
Almost more alarming than the misjudgement of
Russia is the fact that the often postulated turnaround in energy policy has
not advanced one iota for more than a decade. There is no explanation or excuse
for the fact that lobby associations, bureaucrats, and politically
disillusioned, enraged citizens have so far blocked and prevented this
mega-project, particularly against the background of the present dramatic
situation.
Since its reunification, Germany has – at least
among the general population – experienced a phase of enormous prosperity at a
high level. Yet affluence and luxury have made us lazy, ponderous, and
complacent. If somehow or other everything keeps bobbing along, the willingness
to make the necessary reforms fades. This approach is now taking its toll.
The war in Europe and the resultant distortions
in the economy have the destructive potential to also drive the plastics sector
to the edge of collapse (or even beyond). The mood within the industry’s
companies is as bad as it has been for a long time, and it’s common knowledge
that the real economic situation frequently follows the expectations of its
players in a kind of self-fulfilling prophecy.
The political parties may now be trying to
conceal their lack of a plan with half-baked ideas such as excess profits tax
and a gas levy. Yet this populistic posturing will not change anything as
regards the fact that, for the German plastics industry, the coming three
months from October to December will be pivotal – either for good or for bad.
Christian Preiser
KI Editor in Chief
EDITORIAL: The
pivotal quarter ahead | Plasteurope.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.
Yesterday
we covered President/Dr Biden saying the “pandemic was over.” Normally it would
be scientists/doctors at the WHO that would declare pandemics start or ending.
Just
possibly the scientists and doctors at the US Centers for Disease Control.
But
President/Dr Biden has no need for any scientists or doctors.
On
a short visit to the Detroit Auto Show everyone looked healthy to him, no one
was wearing a mask, so to the President/Dr of the United States declared on the
popular TV program 60 Minutes, that the pandemic is over and just in time for
the November mid-term elections, how lucky, not that anyone, apart from me, is
linking the two.
I
wonder if he’ll pontificate on this winter’s coming flu season as I’m sure all the
planet’s people would gratefully benefit from knowing what he thinks.
Of
course, if former President Trump had suddenly become a doctor and declared the
pandemic’ start or ending, the extreme left-wing BBC would have had a fit and gone
into panic mode. How Dare He! To quote someone who seems to have finally disappeared.
Still
with the pandemic over, all those extended voting procedures brought in for the
2019 elections are presumably not needed and American’s can now go back to
voting normally.
No, Mr. President, the COVID-19 pandemic isn't over – even if
your administration is over it
Wed,
September 21, 2022 at 9:47 PM
It has been a few days since
President Joe Biden infamously said during a primetime interview, "The pandemic is over."
Amid pervasive news of Queen Elizabeth II's funeral and a devastating hurricane hitting Puerto Rico, Biden's statement has still been national news, with
outraged doctors and health officials pushing back like never before during
this administration.
To be fair, the president
said COVID-19 is still "a problem." Even so, he pointed to a lack of mask
wearing and doubled down a second time, saying, "But the pandemic is
over."
The next day, Health and Human
Services Secretary Xavier Becerra was in far from walk-back mode. "The president is right," he said firmly.
I was shocked. Not by the
words – we’ve heard them before – but by the people saying them.
Pandemic is 'over'? Then Biden should follow through
and end national 'emergency'
What happened to follow the
science?
This is an administration that
ran and won on the promise that they wouldn't wave a white flag. They said they'd protect the vulnerable and
marginalized and follow the science. Yet it seems they've determined none
of this is doable or politically practical.
Infection rates are similar now to what they were two years ago.
The pandemic wasn't over then, and it's not over now.
My concern goes beyond
politics. Statements like these, from people like these, are
hurtful and harmful and just plain wrong.
More than a million people have died from COVID-19 in the United States, most of them during the
current administration's tenure. More than 350 people – enough to fill
most seats in a typical Boeing 747 jet – are dying each day. Many more have
long COVID symptoms, jeopardizing our workforce and the economic recovery
the president so badly wants.
For a president who ran on his
compassion, it’s a slap in the face to these people and their families to
declare the pandemic over, especially while still requiring strangers
around him to be vaccinated, and/or mask and test.
---- Real public health and
political harm comes from the president’s declaration. Transmission rates
remain high or substantial in more than 90% of the country, and such
statements set a national tone that becomes even more antagonistic to places
that determine some mitigation is still warranted.
The majority of the country
is still not up to date on their vaccinations, and the president's comments
undermine efforts to get more people vaccinated
and boosted. Legislators are already using the president’s words as
proof that all remaining vaccine mandates need to be
abolished, and you can rest
assured the courts will consider such statements during any judicial
challenges.
More
covid 19 news -
Search (bing.com)
World
Health Organization - Landscape of COVID-19 candidate vaccines. https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines
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 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.
How the Ukraine drone war is
changing the game on the battlefield
David Szondy September 22, 2022
The recent
turnabout in Ukraine that saw the Ukrainian forces unexpectedly recapturing a
claimed 6,000 km² (2,317 miles²) of territory as the Russian lines collapsed shows
that this is a war full of surprises. Not the least of these is that the
conflict is shaping up as the first true drone war, giving new insights into
the battlefield of the future.
Though they
may seem like something quintessentially 21st century, UAVs or drones have been
around for well over a hundred years. During the First World War, the United
States and Britain experimented with radio-controlled aircraft and aerial bombs
that were explosive-laden airplanes with detachable wings. In the Second World
War, Germany deployed the notorious V-1, which was history's first jet-powered
cruise missile.
By the time of the Vietnam
war, American drones were being used for the first time for counter-insurgency
operations, and cruise missiles were evolving as part of the strategic and
tactical arsenals of the major powers. When the invasions of Afghanistan and
Iraq occurred, the public saw increasingly sophisticated drones being used not
only for reconnaissance, but also for targeting terrorists with air-to-surface
missiles.
Today,
drones are used by over 100 countries as well as private groups and
individuals. Where drone warfare once consisted almost entirely of an American
Predator UAV flying alone over the deserts of the Middle East, there is now a growing
and diverse group of drones appearing in more and more roles on the battlefield
and beyond.
Modern
military drones come in a bewildering variety, but they can be placed in several categories, which can be described as running from large, high, and
fast to small, low, and slow. At one extreme are tiny drones that can fit in
the palm of a soldier's hand and are basically designed to provide an extra set
of eyes to look over walls and around corners. At the other end are large,
uncrewed, jet-propelled aircraft with wingspans of 131 ft (40 m) that can
cruise at an altitude of 60,000 ft (18,000 m).
More
How
the Ukraine drone war is changing the game on the battlefield (newatlas.com)
This weekend’s music diversion, Handel again.. Approx. 14 minutes.
Georg
Friedrich Händel: Concerto Grosso in A major, Op. 6 No. 11, HWV 329 – Bremer
Barockorchester
This
weekend’s chess update. Approx. 10 minutes.
Hans
Niemann LITERALLY Destroys a 2750+ Super GM
(1)
Hans Niemann LITERALLY Destroys a 2750+ Super GM - YouTube
This
week’s maths update. Approx. 11 minutes.
Problems
with Powers of Two – Numberphile
(1)
Problems with Powers of Two - Numberphile - YouTube
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
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