October 24, 79 AD Mt.
Vesuvius erupts, burying the cities of Pompeii, Herculaneum, Oplontis and
Stabiae and killing thousands. New research in 2018 suggests the eruption
occurred at about this date, not the previously used 24 August.
With the UK Conservative Party Leadership
Comedy Caper well covered in global mainstream media, today we will focus instead
on how our market pricing mechanisms for stocks and commodities appears to be
breaking down.
Good luck to whichever unfortunate “winner” gets
to head up a fractious GB as Europe including GB, and most of the global
economy heads into the next recession.
In Asia, China’s economy is faltering due to all
the insane Covid-19 lockdowns plus China’s great property bubble bursting.
Elsewhere, the Great Magic Money Tree bubble
of March 2020 set off the Great Inflation and with it the end of the era of
Zero Interest Rate Policy and Negative Interest Rate Policy. Now we must
somehow get used to a sharply higher pricing of credit and money. But Joe
Public was told by the left wing media
free money could go on forever.
Russia’s disastrous and incompetent invasion
of Ukraine and the west’s proxy war on Russia and ill thought out sanctions,
has disrupted global commodity supply chains, leaving many on the verge of
international anarchy.
Never mind though, you’ll rarely hear or see
a word in mainstream media about just how close to collapse our financialised
G-20 trading world economy has travelled. Nor how ill equipped our bent
politicians and inept central banksters are to deal with the current crisis.
Buy now for Christmas before prices rise
again or supplies run out.
Hong Kong’s Hang
Seng down around 5% in mixed Asia trade; Japan’s yen weakens despite reports of
intervention
UPDATED MON, OCT 24 2022 12:16 AM EDT
Shares in
the Asia-Pacific were mixed Monday after U.S. stocks soared on Friday following a Wall Street Journal report that some
Fed officials are concerned about tightening policy too much.
Hong Kong’s Hang Seng index fell
around 5%, with the Hang Seng Tech index down more than 6%.
Tai Hui, JPMorgan Asset
Management’s APAC chief market strategist, said a combination of factors has
been driving the Hong Kong market recently, including higher U.S. Treasury
yields.
Investors may also have expected
policy measures to be announced during the Communist Party of China’s 20th
National Congress, which closed over the weekend with President Xi Jinping
loyalists tapped to form a core
leadership group.
“Since the meeting is mostly
about personnel changes, the economic recovery might not come as soon as we
have hoped,” Tai told CNBC in an email.
On Friday in the
U.S., the Dow Jones Industrial Average jumped 748.97 points, or 2.47%, to close
at 31,082.56. The S&P 500 added 2.37% to 3,752.75. The Nasdaq Composite
climbed 2.31% to 10,859.72.
Singapore, Malaysia
and India’s markets are closed for a holiday Monday. Later this week, the Bank
of Japan will meet, while Singapore and Australia are expected to release
inflation data.
Column:
London Metal Exchange Week: cocktails, canapés and crises
October
24, 2022 1:00 AM GMT+1
LONDON, Oct 21
(Reuters) - It's not the first time the 145-year-old London Metal Exchange
(LME) has found itself in crisis.
There
was the Tin Crisis of 1986, the Nickel Crisis of 1988 and what at the time was
dubbed "The Sumitomo Scandal" but could now better be described as
The 1996 Copper Crisis.
This
year, however, is still something of a stand-out with not one but two tsunamis
rocking the grand old dame of industrial metals trading.
March brought
Nickel Crisis II, a much scarier update of the original, and now we have the
unfolding Russian Metal Crisis.
Trading
volumes have been sliding sharply since the nickel blow-out and there's
lingering uncertainty as to the future of the exchange's iconic open outcry
trading ring.
As
metal traders gather for the annual LME Week festivities in London, it's likely
to be the state of the exchange as much as the markets that dominates the
agenda.
TURBULENT
TIMES
The
LME's near breakdown in March mirrors the chaos that has been playing out in
physical metal supply chains.
A highly
globalised industry has been fractured by COVID-19 lockdowns, the ensuing
turmoil in the global shipping sector and the geopolitical stress caused by
Russia's invasion of Ukraine.
Tin
was the first to turn wild in February last year, the LME cash premium over
three-month metal rocketing to an extraordinary $6,500 per tonne.
Copper
was next, the LME having to step in and impose backwardation
limits in October as available stocks fell to 14,150 tonnes, enough to feed
global demand for precisely five hours.
Such was the
troubled backdrop to the Feb. 24 launch of Russia's "special military
operation" in Ukraine, which triggered nickel's price melt-up and the near
meltdown of the LME clearing system.
The
status of Russian metal now poses a major dilemma for the LME, which has issued
a discussion paper on whether to suspend Russian brands.
It's
perilous legal territory and would have a significant impact on LME price and
physical premiums. But the risk is that unsold Russian metal floods into the
market of last resort, transforming London pricing to Londongrad pricing.
The
arrival of 271,800 tonnes of aluminium in LME sheds since the start
of the month suggests a decision may have to be made sooner rather than later.
Turbulent times
have called for special measures in the form of lending caps and price move
limits across all the LME's deliverable contracts.
They
might be in place for a while.
The
last time Europe saw equivalent military conflict, the LME suspended trading in
1941. Full service only returned in 1953 with the lifting of government price
controls on zinc.
Given
our Magic Money Tree central banksters and our spendthrift politicians,
inflation now needs an entire section of its own.
Veteran economist
David Rosenberg warns the S&P 500 may plunge another 27%, says the worst is
yet to come for investors. Here are his 8 best quotes from a new interview.
October
22, 2022
David Rosenberg has warned
the S&P 500 could plunge another 27%, predicted long-dated bonds will surge
over 20% next year, and ruled out the stock market bottoming out anytime soon.
The veteran economist and
Rosenberg Research chief reflected on his experience as a Wall Street economist
on Black Monday — which happened almost exactly 35 years ago — during a RealVision interview released this week. He also accused the Federal
Reserve of pumping up asset prices, and issued a bleak outlook for 2023.
Here
are Rosenberg's 8 best quotes, lightly edited for length and clarity:
----4. "They want the stock market
to go down. They want home prices to go down. Why? Because there's not a
snowball's chance in hell they're going to get to their 2% holy grail consumer
inflation, without there being a period now of asset deflation. It is 100%
necessary." (Rosenberg was referring to the Fed trying to bring down
inflation from above 8% in September to around 2%.)
5. "In a recessionary bear
market, 83.5% of the previous bull market condition gets reversed. You're
looking at something like 2,700 on the S&P. That's where we're
heading." (Rosenberg's estimate suggests the benchmark stock index, down
23% this year at roughly 3,700 points, could slump another 27%.)
6. "You ain't seen nothing yet.
All the bad stuff is ahead of us for because of the lags. Next year is going to
be the year where we get the financial spasms. Next year will be the year where
the Fed — as it always does — will scream 'uncle' and say we are done."
(He noted the stock market has only reverted to its long-term average so far, and
there hasn't ben an earnings recession yet.)
Wall Street Warns of
Trouble Brewing in Auto Loans as Prices Dip
Fri, October 21, 2022 at 7:39 PM
(Bloomberg) -- The largest US banks are warning
of trouble ahead in auto loans as dropping prices for used cars risk leaving
borrowers underwater.
Wells Fargo & Co. said that
higher loss rates for loans it originated late last year contributed to an
increase in write-offs for the period. Ally Financial Inc., the country’s
second-largest auto lender, saw charge-offs for retail auto loans quadruple in
the third quarter. And Fifth Third Bancorp said it’s pulling back on
originations.
Used-car prices slumped 7% in the
third quarter, the worst decline since the depths of the global financial
crisis, according to data compiled by vehicle-auction company Manheim. The
risk, investors fear, is that if consumers end up owing more than their cars
are worth, they might stop making payments and let the vehicles be repossessed.
“There has been a real tightening in
margins on new-auto production, on one hand, and on the other there’s been a
decline in used-car prices,” Fifth Third Chief Executive Officer Tim Spence
said in an interview. “That has caused us to throttle a bit back on production”
of loans.
----When Wells Fargo first started to see signs of higher loss
rates on loans it originated just last year, the firm moved fast to tighten
underwriting standards. The changes, combined with the impact of continued
supply-chain constraints, caused auto-loan origination volumes to plummet 40%
in the third quarter from a year earlier.
Used-car prices jumped during the
early days of the Covid-19 crisis, forcing borrowers who bought then to pay
more -- and take out bigger loans -- for their vehicles. Those customers are
now reevaluating whether it’s worth remaining current on their payments,
something that could prove “challenging for the auto-finance sector going
forward,” KeyCorp CEO Chris Gorman said in an interview.
While used-car prices have since
declined, they remain elevated from pre-pandemic levels. Fifth Third is seeing
more consumers -- especially those with subprime credit scores, whom the
company doesn’t typically lend to -- try to win concessions from lenders so
they can keep their vehicles, Chief Credit Officer Richard Stein said.
“People, if they have a job, they
want to keep their car -- they don’t want to go buy new one,” Stein said.
“They’re doing a lot of things to keep their car and to stay current or work
through with the lenders.”
Tesla
cuts prices in China by up to 9% as softer demand, price war loom
October
24, 2022 4:03 AM GMT+1Last Updated 2 hours ago
SHANGHAI, Oct 24
(Reuters) - Tesla (TSLA.O) has slashed starter prices for
its Model 3 and Model Y cars by as much as 9% in China, reversing a trend of
increases across the industry amid signs of softening demand in the world's
largest auto market as analysts warn of a price war.
The
price cuts, posted in listings on the electric vehicle (EV) giant's China
website on Monday, are the first by Tesla in China in 2022, and come after
Tesla began offering insurance incentives to buyers last month.
The move to
reduce some prices by nearly a tenth comes after Tesla Chief Executive Elon
Musk said last week that "a recession of sorts" in China and Europe
was weighing on demand for its electric cars.
Data
on Monday showed retail sales in the world's no. 2 economy grew 2.5% in
September, below the expected 3.3% rise and less than half August's 5.4%
growth. Analysts are warning of growing inventory glut in China, where auto
sales growth slowed in September while EV sales rose at their slowest pace in
five months. read more
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
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.
Researchers
who reverse-engineered Starlink to work as a backup for GPS found a security
flaw in the system — using a video of tennis star Rafael Nadal — that could be
exploited in Ukraine
October
22, 2022
After SpaceX declined to continue researching
Starlink as a possible military alternative to GPS in 2020, a group of
researchers found a way to do it without the help of Elon Musk — or his company
that created the constellation of internet satellites.
For the past two years,
Professor Todd Humphreys has led a group of researchers at the University of
Texas in reverse-engineering signals from the satellite internet constellation
with the hope of forming a new navigation system that would operate separately
from the Global Positioning System and its European, Russian, and Chinese
equivalents, MIT Technology Review reported.
In a non-peer-reviewed study, Humphreys claims the group has created a
comprehensive characterization of Starlink's signals without breaking its
encryption or accessing any user data coming from satellites.
"The
Starlink system signal is a closely guarded secret," Humphreys told MIT Technology Review. "Even in our early discussions, when SpaceX
was being more cooperative, they didn't reveal any of the signal structure to
us. We had to start from scratch, building basically a little radio telescope
to eavesdrop on their signals."
Starting with a Starlink unit programmed to transmit
high-definition YouTube videos of Spanish tennis player Rafael Nadal, the group
began tracking the satellite's synchronization sequences and detected their
patterns of transmission — about four sequences every millisecond. These
sequences — repeating patterns of signals beamed down to Earth by the satellite
— help receivers coordinate with them, leaving clues to the satellite's
distance and velocity.
The
earthbound receiver, using the timing of the signals received from the
satellite and information publically available about its orbit, can then
calculate the distance to the satellite and approximate a location within 30
meters, Humphreys told MIT Technology Review. With tweaking,
the geolocating capabilities could become as accurate as GPS', which tends to
be accurate to about 16 feet in commercial use.
The
discovery, while a potential breakthrough for geolocation services, also
revealed a possible security concern about Starlink signals — which are
currently key to keeping Ukrainian communication services running as
Russia has invaded the country — if used as a navigation system.
"Humphreys
has done a big service to the navigation community identifying these
sequences," Mark Psiaki, an aerospace professor at Virginia Tech and GPS
expert told MIT Technology Review. "But any
navigation system working on open-source sequences could definitely be spoofed,
because everyone will know how to spot those signals and create fake
ones."
Starlink
has become such an integral part of wartime communications in Ukraine that
recent outages were described as "catastrophic" by officials.
Musk tweeted this week Russia is
"actively working" to destroy the satellites, but Humphreys'
discovery — that the signals are predictable and replicable — highlights the
possibility for intentional disruption of Starlink.
"As
time goes on and their dependence on Starlink deepens, Ukraine and its allies
in the West are coming to appreciate that they have little control over
Starlink and know little about it," Humphreys told MIT Technology Review. "But now many
millions have a vested interest in Starlink security, including its resilience
to jamming. Assessing that security starts with a clear understanding of the
signal structure."
SpaceX,
Musk, and Humphreys did not immediately respond to Insider's requests for
comment.
Black
Thursday is October 24, 1929, the first day of thestock market crash of 1929. That was the worststock
market crashin U.S. history. It kicked off theGreat Depression.
What
Happened
Even
before theNew York Stock Exchange (NYSE)opened, investors were panicky.The
stock market had already fallen 21% since its record close of 381.2 on
September 3, 1929. On October 3, 1929, theWashington Postexclaimed,
"Stock Prices Crash in Frantic Selling." The next day, the New York
Times warned, "Year's Worst Break Hits Stock Market.
Following the markets on both sides of the Atlantic since 1968. A dinosaur, who evolved with the financial system as it was perverted from capitalism to banksterism after the great Nixonian error of abandoning the dollar's link to gold instead of simply revaluing gold. Our money is too important to be left to probity challenged central banksters and crooked politicians.
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