Baltic Dry Index. 1961 -31 Brent Crude 97.08
Spot Gold 1686 US 2 Year Yield 4.30 +0.07
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 10/10/22 World 626,673,837
Deaths 6,561,056
The only thing useful banks have
invented in 20 years is the ATM.”
Paul Volcker.
In the stock casinos, more bad news for the bulls. Last week’s pause in the new bear market was only a pause.
Besides, with the northern hemisphere winter
fast approaching, our next global recession is fast approaching with it. Bunker time.
Chinese chip
stocks in Hong Kong plunge on new U.S. export rules; Asia markets drop
UPDATED SUN, OCT 9 2022 11:23 PM EDT
Shares in
the Asia-Pacific fell on Monday, with Hong Kong’s Hang Seng leading losses as
Chinese chip stocks listed in the city plunged following new export rules from the U.S.
China’s largest chipmaker Semiconductor
Manufacturing International Corporation fell
as much as 5.23%, while Hua Hong
Semiconductor dropped
more than 10% and Shanghai
Fudan Microelectronics Company plunged as low as 24.6% during
morning trade.
The broader Hang Seng index was
2.55% lower, with the Hang Seng Tech index down 3.9%.
In mainland China, the Shanghai Composite lost
0.57% on its return to trade after the Golden Week holiday and the Shenzhen Component dropped
around 1.1%. The S&P/ASX 200 was
1.53% lower.
MSCI’s broadest index of
Asia-Pacific shares outside Japan traded 1.43% lower.
Markets in Japan, South Korea,
Taiwan and Malaysia are closed for holidays Monday.
Later this week, the Bank of Korea will announce
its benchmark interest rate decision, Singapore is set to announce its GDP
estimate for the third quarter and China releases inflation data.
Taiwan
Semiconductor Manufacturing Company and
Japan’s Fast Retailing will
report earnings and the U.S. will release inflation data for September.
On Friday in the U.S., major
stock indexes dropped more than 2% after data showed the unemployment rate
declined in September, sparking fear that the Federal Reserve would continue
hiking rates aggressively.
Asia
markets: China chip stocks plunge, Hang Seng index down 2% (cnbc.com)
Futures fall to
start week with key inflation data, earnings ahead
UPDATED MON, OCT 10 2022 12:41 AM
EDT
Stock
futures were lower Monday morning as the markets come out of a tumultuous week
and traders look ahead to key reports coming in the next week that can offer
insights into the health of the economy.
Futures connected to the Dow Jones Industrial Average slid
0.36% or 107 points. S&P 500 futures
dropped 0.42%, while Nasdaq 100 futures slipped 0.48%.
Market observers generally
consider the week ahead as the kickoff to earnings season, with four of the
world’s largest banks – JPMorgan, Wells Fargo, Morgan Stanley and Citi –
reporting Friday. PepsiCo, Delta and Domino’s are
also among companies reporting next week.
Inflation will also take center
stage as new monthly Consumer Price Index data comes Thursday morning.
It will follow a week of whiplash
for market participants. The first half brought a relief rally that pushed the
S&P 500 up more than 5% in its largest two-day gain since 2020.
But jobs data that economists say
will keep
the Federal Reserve on a path to continue raising interest rates and OPEC+’s
decision to slash oil supply rattled investors, diluting wins
later in the week. When day trading ended Friday, the S&P was up 1.5%
compared to where it started the week. The Dow and Nasdaq were up 1.5% and
0.7%, respectively.
Still, the Dow, S&P 500 and Nasdaq had
the first positive week in the last four. All remain down substantially so far
in 2022, however, and the Nasdaq is less than 1% away from its 52-week low.
Meanwhile, the 2-year Treasury yield rose
6 basis points, closing at 4.316%. One basis point is equivalent to 0.01%.
“The direction of the stock
market is likely to be lower because either the economy and corporate profits
are going to slow meaningfully or the Fed is going to have to raise rates even
higher and keep them higher for longer,” said Chris Zaccarelli, chief
investment officer at Independent Advisor Alliance, on Friday.
“Given the conditions that we are operating
under, we believe it’s prudent to begin preparing for a recession,” he added. “The
talk of a shallow recession that is now the narrative-du-jour strikes us as
eerily similar to the ‘inflation is transitory’ narrative of last year.”
Last week brought heightened
concerns that corporate earnings will show the ugly side of a surging dollar as Levi Strauss became
the latest to cut guidance due to sliding international sales.
Futures fall to start week with key inflation data, earnings ahead (cnbc.com)
In commodity news this year, what else could
go wrong?
Column:
Both U.S. grain exporters and China lose out over river logistics snafu
October 7, 2022 12:30 PM GM
NAPERVILLE, Ill.,
Oct 6 (Reuters) - Post-harvest U.S. soybean exports have yet to ramp up during
what is normally the busiest month for shipments which is bad news for top
importer China, already facing tight soymeal supplies after importing lighter
bean volumes earlier this year.
Prolonged
dry weather has significantly reduced water levels in the Mississippi River,
the main transport vein to the U.S. Gulf, and the forecast does not favor
near-term replenishment. Fewer barges at a time can now navigate
the waters and with less cargo aboard, boosting freight rates to all-time
highs.
Based on U.S.
export inspection data, the United States exported roughly 145 million tonnes
of grain and oilseeds in calendar year 2021. Some 56% of this volume left the
U.S. Gulf while 28% departed off the Pacific coast, similar shares as in 2020.
Corn
was the most dependent on the Gulf, handling 62% of last year’s shipments,
while 55% of soybeans and 30% of wheat also sailed from the Louisiana
coastline.
But soybeans are
the most jeopardized by the recent transportation issues since about half the
year’s exports usually depart between October and December versus 20% of corn,
and October usually features the highest soy volumes.
In
2021, some 42% of October-December soybean shipments to China left from the
U.S. Gulf versus 52% from Pacific ports, though the Gulf share was 58% in 2020.
Southbound
barge tonnages on the Mississippi River have been reduced by more than 20% and
the number of barges per tow reduced by 17-38%, according to the U.S.
Department of Agriculture’s weekly transportation report published on Thursday.
That has pushed
freight rates considerably higher in the latest week. For example, a southbound
barge from St. Louis now costs 81% more per tonne than it did in the prior
week, nearly four times more expensive than the three-year average.
Barged
grain movement hit a five-week high through Oct. 1, up 44% on the week but 36%
below last year, when shipments started slowly following hurricane damage at
Gulf ports.
Barges
are traveling back from the Gulf at a slow pace, which could further restrict
grain flow toward the port. The number of barges moving upriver last week was
among the lowest 3% of all weeks in the last 17 years and down 42% from the
three-year average.
More
Column:
Both U.S. grain exporters and China lose out over river logistics snafu |
Reuters
In other news, China’s leader for life is
about to get a new team.
China’s top
leaders are set for a reshuffle. Here are the names to watch
BEIJING — China is poised to reshuffle the top
officials surrounding President Xi
Jinping at a highly anticipated congress meeting this month.
The ruling Communist Party of China
is expected to kick off its 20th National Congress — held once every five years
— on Oct. 16.
About a week later, the names of the new team are due to be announced.
The composition of
the team will reflect the political sway Xi and his associates have, and how
much support the president wields for ideas — such as preferences for greater
state control in the economy.
Xi, who is
69, is widely expected to further consolidate his power after being head
of the party for 10 years. This month’s congress is expected to pave the way
for him to stay on for an unprecedented third five-year term.
But forecasts for which officials will step down
or take on new roles remain speculative.
“Chinese politics
have always been opaque, but it seems as if absolutely no light whatsoever is
escaping from this black box,” said Scott Kennedy, senior advisor and trustee
chair in Chinese business and economics at the U.S.-based Center for Strategic
and International Studies.
“Hence, one hears much less speculation now
compared to previous leadership transitions,” he said.
“The irony of this
mystery is that Chinese officials regularly lecture foreigners about how little
they understand China,” Kennedy said. “Part of the problem is how little
information is actually made available to us.”
Here’s what’s
publicly known — and some of the names that analysts are watching in the
upcoming reshuffle:
Political structure
This month’s
congress decides which officials will become leaders of the ruling Communist
Party of China.
About 2,300 party
delegates are set to gather in Beijing to select a new central committee —
consisting of about 200 full members.
That committee then
determines the core leadership — the Politburo and its standing committee.
The current
Politburo, or political bureau, has 25 members, including Liu He. Liu was at
the forefront of trade negotiations with the U.S. in 2020 and 2021. In China,
he heads the central government’s financial stability committee.
However, Liu is not
part of the Politburo’s standing committee, the highest circle of power. It
currently has seven members — including Xi and Premier Li Keqiang.
Xi holds three key
positions: General Secretary of the Chinese Communist Party, Chairman of the
Central Military Commission, and President of China.
He is expected to
retain the first two titles at this year’s party congress. State positions such
as president and premier won’t be confirmed until the next annual meeting of
the Chinese government, typically held in March.
Economic policy: Who will replace Premier Li?
One of the most
closely watched changes in the political reshuffle is the future of Premier Li Keqiang, who turned 67 this year.
While top-level
economic policy in China is largely set by Politburo members, Li has been an
official face and leader of implementation in his role as premier and the head
of the State Council, China’s top executive body.
Li said in March
that this year marks his last as premier, a position he’s held since 2013.
However, he could remain a standing committee member, JPMorgan analysts said,
pointing to a precedent at the 15th party congress.
More
China Party Congress: Names to watch as Xi prepares for leadership change (cnbc.com)
Finally, in crypto news, why am I not
surprised?
Hackers Steal Over
Half a Billion Dollars From World's Largest Crypto Exchange
October 8, 2022
Binance, the world's largest
crypto exchange in trading volume, has been hacked yet again — and this time, the losses are genuinely
staggering.
Hackers got away with around
$570 million worth of the exchange's own BNB token, CNBC reports.
"The issue is contained
now," Binance CEO Changpeng Zhao tweeted late
on Thursday. "We apologize for the inconvenience and will provide further
updates accordingly."
The vulnerability was
seemingly a bridge allowing customers to move their BNB holdings to other
blockchains. The BNB chain is made up of both the BNB Beacon Chain and BNB
Smart Chain.
"An exploit on a
cross-chain bridge, BSC Token Hub, resulted in extra BNB," Zhao wrote in
his tweet.
"We have asked all validators to temporarily suspend BSC."
Hackers got away with two
million BNB tokens, collectively worth around $570 million at the time of
writing.
It's the latest in a string
of hacks targeting cross-chain bridges. Earlier this year, hackers looted a bridge called Nomad in what experts called a
"frenzied free for all," getting away with $190 million.
According to an August report
by blockchain analytics firm Chainalysis, hackers had at that point gotten away with $1.4 billion in 2022 alone.
Needless to say, none of this
bodes well, especially considering the industry has had an absolutely rotten year so far.
Hackers Steal Over Half a Billion Dollars From World's Largest Crypto Exchange (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.
The
race to defuse the time bombs lurking in the financial sector
Helen Cahill, Simon Foy, Patrick Mulholland – 9 October,
2022
"Yes there's stress, yes it's going to get
worse, and yes there's going to be failure,” is the frank assessment of the
state of the financial sector from Keith Skeoch, a City grandee and former
chief executive of investment giant Standard Life Aberdeen.
"If you go back and look at
previous crises, you see the first signs of stress and it's quite a slow fuse.
This stuff can take months or even years and we are in the early
days."
Russia’s invasion of Ukraine has
prompted a headline-grabbing energy crisis but the problems caused by the shock
aggression run far deeper.
Soaring global inflation, fuelled by
the war, is forcing interest rates around the world higher, threatening recession
and cutting off the supply of cheap money that has kept markets afloat for the
last decade.
The speed and scale of rate
rises is sending shocks through the financial system, raising alarm that
financial systems could be heading for a fresh crunch.
A bout of volatility in the
UK government debt market in recent weeks forced the Bank of England into a
multi-billion pound intervention to prevent a crisis that could have spiralled
out of control and threatened the entire economy.
Speedy
action by the Bank has helped avert a crisis but has prompted concern about
risks in the system.
City
heavyweights and former Prime Minister Gordon Brown are beginning to sound the
alarm on the hidden time bombs lurking in the financial system.
The
question now is: can we defuse them before they go off?
'Excessive and sudden'
Warning
lights are flashing in three corners of the financial markets, Skeoch says:
pension funds, property funds, and large financial institutions.
Pensions
were at the heart of the crisis that forced the Bank of England to act in
recent weeks. A product called liability driven investments (LDIs) blew up when
government bond prices started plummeting in the wake of Chancellor Kwasi
Kwarteng's mini-Budget.
Funds
were soon facing huge cash calls and the scale of the LDI sector, which totals
£1.5 trillion, meant pensions were forced into a fire sale of assets.
The
Bank of England stepped in and pledged to pump up to £65bn into the market to
stop a crash. Without action, pension funds holding vast sums on behalf of
retired people across the country would have collapsed.
Jon
Cunliffe, the Bank's deputy governor for financial stability, said pension
schemes were at risk of going bust and this would have rippled through to other
areas of the financial system. It could have triggered an "excessive and
sudden" drop in lending into the real economy, akin to the credit crunch
that his after 2008. In short, it could have been a disaster.
The
pension fund squeeze was a near miss but there are signs of stress elsewhere in
the system.
Many
property funds have been forced to put limits on how much people can withdraw
in recent months as investors try to cash out. A rush to the exit could spark a
fire sale of property assets and push prices down across the sector. That would
ultimately lead to losses for those invested in the sector.
Most
property funds invest in commercial assets, such as offices and shopping
centres, but a snarl-up in the mortgage market is also threatening the housing
market. Mortgage deals have been pulled at record rates and interest on deals
that are still available has shot up. Some analysts are now predicting a 15pc
crash in prices next year.
More
The race to defuse
the time bombs lurking in the financial sector (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.
COVID-19 cases in UK
leap by 25% with big rise among over-70s in England
7 October, 2022
COVID cases have jumped by a quarter in just a week, according to the
latest official estimates.
Data released by the Office
for National Statistics (ONS) show that in the week ending 26 September
1,327,900 people in the UK are estimated to have been infected with coronavirus.
That is an increase of
267,400 on the week before, a rise of 25%.
It is the highest UK total
since the week to 16 August, but is still some way below the 3.8 million weekly
infections in early July.
COVID-19 rates have been increasing since the start of September
in the predicted autumn wave.
But while cases have risen in
England and Northern Ireland, the trend in Scotland and Wales is described by
the ONS as "uncertain".
There has also been a
"marked" rise in infection among the over-70s in England, up from
infections among one in 60 people to one in 40.
Sarah Crofts, ONS deputy
director for the COVID-19 infection survey, said: "Infections have
continued to increase in England, reaching levels last seen in mid-August.
"The rest of the UK is a
mixed picture, with uncertain trends in Wales and Scotland and a recent
increase in Northern Ireland.
"Amongst the over-70s there has
been a marked increase in infections in England this week, a trend which we
will closely monitor as the winter months progress."
In England, the number of people
testing positive for coronavirus was 1.1 million, or around one in 50, up from
857,400 or one in 65, in the previous week.
This is the first time the figure for
England has been above one million since mid-August.
Northern Ireland has also seen a
rise, where the latest estimate for infections is 46,100, or one in 40 people,
up from 23,100, or one in 80.
In Scotland, 113,000 people probably
had COVID-19, or around one in 45, compared with 117,100, or one in 45, the
previous week.
And in Wales, the latest estimate is
63,400, or one in 50, is close to the 62,900 previously.
More
COVID-19 cases in
UK leap by 25% with big rise among over-70s in England (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.
Single-use
paper circuit board can be burnt to ash when discarded
Ben Coxworth October 06, 2022
Single-use
electronic devices pose a challenge, as the heavy metals and other toxic
materials in them shouldn't just be released into the environment, yet those
substances are difficult to reclaim. Scientists have developed what could be a
solution, in the form of a paper circuit board.
Led by
Prof. Seokheun Choi, a team from the State University of New York at Binghamton
started by printing a pattern of wax channels onto a single sheet of filter
paper. That paper was then baked in an oven, causing
the wax to melt and soak into the underlying paper – but only in the areas
where that wax had been applied.
Next, the
researchers applied conductive and semi-conductive inks to the paper. Those
inks only soaked into the areas of the paper not already saturated with wax,
forming circuits. A silver-based ink and other conductive metal components were
then screen-printed onto those circuits, after which a gel-based electrolyte
was applied over the circuitry.
What resulted was
an inexpensive yet functional amplifier-type circuit board, complete with
resistors, capacitors and a transistor. It was thin and flexible, "just
like paper," plus it quickly and thoroughly burnt to ash when lit on fire.
The scientists state that the paper circuit board could also be left to degrade
once no longer needed – although what would happen to the metals in it, in that
scenario?
"Although silver or
other metals may be oxidized by microorganisms for biodegradation, it may take
time and be harmful to the environment," Choi told us. "Obviously,
our entire paper electronics will be much better than the conventional
technique of using off-the-shelf non-biodegradable electronic components in
terms of eco-friendliness [...] My next work is to replace those
non-biodegradable metals with biodegradable ones."
A paper on the research was
recently published in the journal ACS
Applied Materials & Interfaces.
Source: American
Chemical Society via EurekAlert
Single-use paper
circuit board can be burnt to ash when discarded (newatlas.com)
“A nation’s exchange rate is the
single most important price in its economy; it will influence the entire range
of individual prices, imports and exports, and even the level of economic
activity. So it is hard for any government to ignore large swings in its exchange
rate...”
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