Baltic Dry Index. 1534 -78 Brent Crude 95.00
Spot Gold 1642 US 2 Year Yield 4.41 +0.11
Coronavirus
Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 31/10/22 World 635,472,882
Deaths 6,593,723
“Those who don't know history are destined to repeat it.”
Edmund Burke.
In the stock casinos, the last trading day of the month. Time to dress up stocks and stock indexes for the all important money manager month-end bonuses.
But with the Fed and Bank of England both about to raise their key interest rates this week and inflation still rising everywhere except Japan, it’s way to early to start bottom fishing in stocks.
Asia-Pacific
stocks rise despite China’s factory and services activity contracting
UPDATED MON, OCT 31 20221 2:33 AM
EDT
Shares in
the Asia-Pacific were mostly higher on Monday as China factory activity missed
expectations, and markets look ahead to the U.S. Fed meeting later this week.
Hong Kong’s Hang Seng index was
up 0.89% while gaming stocks rebounded following
news of an e-visa system for Chinese residents traveling to Macao. In
mainland China, the Shanghai Composite was
little changed and the Shenzhen Component gained
0.654%.
The Nikkei 225 rose
1.68%, and the Topix gained 1.41%. South Korea’s Kospi added
about 1% and the Kosdaq was 1.02% higher.
In Australia, the S&P/ASX 200 increased
1.04%. MSCI’s broadest index of Asia-Pacific shares outside Japan was 1.03%
higher.
China’s National
Bureau of Statistics released its Purchasing Managers’ Index data, with
the official manufacturing print coming in at 49.2, missing expectations.
Later this week,
the Federal Reserve will hold its policy meeting and announce its interest rate
decision. Several countries will report inflation data this week.
On Friday in the
U.S., major
stock indexes jumped 2% each on optimism that inflation may be
slowing.
Hong
Kong stocks volatile, Asia markets mixed; China PMI shrinks into contraction (cnbc.com)
Stock futures
slightly lower with Dow on track for best month since 1976
UPDATED MON, OCT 31 2022 12:19 AM
EDT
Stock
futures were slightly lower early on Monday morning ahead of the final day of
October, with the Dow Jones Industrial Average poised to clinch its best month
in decades.
S&P 500
futures were 0.12% lower, while Nasdaq 100 futures dipped 0.2%. Dow futures
ticked down 14 points, or less than 0.1%.
The Dow is up
14.4% in October, which would be its best month since 1976. The S&P 500 and
Nasdaq Composite are also up for the month, putting Wall Street on track to
snap a two-month losing streak.
The gains have
come despite a mixed third-quarter earnings season from major companies, which
has shown slowing growth and a few major disappointments from large tech
companies.
Earnings season
continues this week, with Uber, Pfizer and Advanced Micro Devices among the
biggest names to report.
Traders will be
preparing for the latest Federal Reserve meeting, which begins Tuesday. The
central bank is expected to hike rates by three quarters of a percentage again
on Wednesday, but many on Wall Street are looking for a signal from the
statement or chairman Jerome Powell’s press conference that the Fed could pause
its hikes in the near future.
“If J Powell
gives the green light next week and doesn’t deliver a Jackson Hole type
performance, there is very little to stop this move from a technical
standpoint. A body in motion stays in motion,” Matt Fleury of Goldman Sachs
wrote in a note on Saturday.
Goldman Sachs expects
Fed rates to peak at 5%
Economists at
Goldman Sachs expect the Federal Reserve funds rate to peak at 5%, after
raising its forecast for the central bank to hike 75 basis points in this
week’s upcoming meeting.
Economists led by
Jan Hatzius said in a Saturday note that they are adding another 25 basis
points to their forecasts — now calling for a 50 bps hike in December, a 25 bps
hike in February, and another 25 bps hike in March.
“Inflation is likely to remain uncomfortably high for a while, which could make continuing to hike in small increments the path of least resistance,” the note said.
Stock futures slightly lower with Dow on track for best month since 1976 (cnbc.com)
Finally, that food price crisis might soon become a food availability crisis for many. First this year, it was the Rhine disrupting shipping, now it’s the great Mississippi creating supply disruption.
Next, Russia says it will block an extension
of the soon to expire Ukraine grain deal? What will Russia do after November 19th?
How high will the wheat price rise?
Drought-stricken
Mississippi River creates woes across US region
October
28, 2022.
Adam Thomas starts harvesting
soybeans on his farm in the US state of Illinois when the dew burns off in the
morning. This year, dry weather accelerated the work, allowing him to start
early. His problem was getting the soybeans to market.
About 60 percent of the Midwest and
northern Great Plain states are in a drought. Nearly the entire stretch of the
Mississippi River — from Minnesota to the river’s mouth in Louisiana — has
experienced below average rainfall over the past two months.
As a result, water levels on the
river have dropped to near-record lows, disrupting ship and barge traffic,
which is critical for moving recently harvested agricultural goods such as
soybeans and corn downriver for export.
Although scientists say climate
change is raising temperatures and making droughts more common and intense, a
weather expert says this latest drought affecting the central United States is
more likely a short-term weather phenomenon.
The lack of rain has seriously
affected commerce. The river moves more than half of all US grain exports, but
the drought has reduced the flow of goods by about 45 percent, according to
industry estimates cited by the federal government. Prices for rail shipments,
an alternative to sending goods by barge, are also up.
“It just means lower income,
basically,” said Mike Doherty, a senior economist with the Illinois Farm
Bureau.
---- Thousands of
visitors last weekend walked across a typically submerged riverbed to Tower
Rock, a protruding formation about 160km (100 miles) southeast of St Louis.
It’s the first time since 2012 that people could make the trek and stay dry. On
the border of Tennessee and Missouri where the river is 0.8km (a half-mile)
wide, four-wheeler tracks snake across vast stretches of exposed riverbed.
In a badly needed break from the dry
weather, the region finally received some rain this week. “It is kind of taking
the edge off the pain of the low water, but it is not going to completely
alleviate it,” said Kai Roth of the Lower Mississippi River Forecast Center,
adding that the river needs several rounds of “good, soaking rain”.
Barges are at risk of hitting bottom
and getting stuck in the mud. This month, the US Coast Guard said there had
been at least eight such groundings.
Some barges touch the bottom but
don’t get stuck. Others need salvage companies to help them out. Barges are
cautioned to lighten their loads to prevent them from sinking too deep in the
water, but that means they can carry fewer goods.
More
Drought-stricken
Mississippi River creates woes across US region (msn.com)
U.N.,
Turkey, Ukraine press ahead with Black Sea grain deal despite Russian pullout
October 31, 2022 4:50
AM GMT
KYIV/NEW YORK,
Oct 31 (Reuters) - The United Nations, Turkey and Ukraine pressed ahead to
implement a Black Sea grain deal and agreed on a transit plan for Monday for 16
vessels to move forward, despite Russia's withdrawal from the pact that has
allowed the export of Ukrainian agricultural products to world markets.
Russia,
which invaded Ukraine on. Feb 24, on Saturday halted its role in the Black Sea
deal for an "indefinite term", cutting shipments from one of the
world's top grain exporters, because it said it could not "guarantee
safety of civilian ships" travelling under the pact after an attack on its
Black Sea fleet.
The move has
sparked an outcry from Ukraine, NATO, the European Union and the United States,
while the United Nations and Turkey, two main brokers of the July deal,
scrambled on Sunday to save it.
U.N.
Secretary-General Antonio Guterres was deeply concerned about Russia's move and
delayed a foreign trip to try and revive the agreement that was intended to
ease a global food crisis, his spokesperson said.
Following
Russia's move, Chicago wheat futures jumped more than 5 percent on Monday as
both Russia and Ukraine are among the world's largest wheat exporters, analysts
said.
More than 9.5
million tonnes of corn, wheat, sunflower products, barley, rapeseed and soy
have been exported since July. Under the deal, a Joint Coordination Centre
(JCC) - made up of U.N., Turkish, Russian and Ukrainian officials - agrees on
the movement of ships and inspects the vessels.
No
ships moved through the established maritime humanitarian corridor on Sunday. But
the United Nations said in a statement that it had agreed with Ukraine and
Turkey on a movement plan for 16 vessels on Monday - 12 outbound and 4 inbound.
More
U.N.,
Turkey, Ukraine press ahead with Black Sea grain deal despite Russian pullout |
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.
Bank of England set
to hike rates in blow for mortgages: Biggest interest increase for 30 years on
cards
29
October 2022
The Bank of England is set to
implement the biggest interest rate rise for 30 years this week in a new blow
to millions of borrowers.
As central banks around the world
step up their fight against inflation, rates in the UK are expected to jump
from 2.25 to 3 per cent. That would be the biggest increase since Black
Wednesday in September 1992, when the UK had to leave the European Exchange
Rate Mechanism. And it would push the cost of mortgages ever higher.
Borrowing costs have been rising for
nearly a year as the Bank battles to get rising prices back under
control.
Inflation
in the UK is at a 40-year high of 10.1 per cent – more than five times its 2
per cent target.
The
Bank's Monetary Policy Committee has raised rates at each of its last seven
meetings, taking them from a record low of 0.1 per cent in December to 2.25 per
cent now, though never by more than half a percentage point in one go.
But a 0.75 percentage point rise is
firmly on the cards on Thursday. In the wake of Kwasi Kwarteng's mini-Budget,
it was thought the Bank could raise rates by as much as 1 percentage point amid
chaos on financial markets.
The junking of tax cuts and the
stabilisation of the pound now make that unlikely.
More
European Central Bank
warns interest rate rises 'like a runaway train' as inflation soars
Daily Mail City & Finance Reporter – October 28,
2022
Europe's cost of living crunch
intensified as prices soared in Germany, France and Italy, sparking warnings
that interest rates will rise 'like a runaway train'.
On another bleak day for the
eurozone, inflation in its three biggest economies rose more than was
previously feared.
The figures came amid fresh warnings
from the European Central Bank (ECB) that more interest rate rises are coming
as it battles to put a lid on inflation.
The
ECB this week doubled interest rates – hiking them from 0.75 per cent to 1.5
per cent.
ECB official Peter Kazimir warned the
rises were 'like a runaway train' yesterday, adding: 'It will go even higher in
December and the first months of next year.'
Inflation in Italy hit 12.8 per cent
this month – the highest since current records began in 1996 – while in Germany
it was 11.6 per cent and France 7.1 per cent.
The figures sent borrowing costs
across Europe higher on expectations of further rises from the ECB.
'The truth is that the outlook of
rate hikes remains very uncertain as it is data-dependent,' Massimiliano
Maxia, of Allianz Global Investors, added.
'It wouldn't surprise me if the ECB
had to raise rates more than expected in December.'
European Central
Bank warns interest rate rises 'like a runaway train' as inflation soars
(msn.com)
Pending home
sales fell 10% in September, much worse than expected
PUBLISHED FRI, OCT 28 2022 10:00
AM EDT UPDATED FRI, OCT 28 2022 4:56 PM EDT
Pending home sales, a measure of signed contracts
on existing homes, dropped a much worse-than-expected 10.2% in September from
August, according to the National Association of Realtors.
Economists had predicted a 4% decline. Sales were
down 31% year over year.
This marks the lowest level on the pending sales
index since June 2010, excluding April 2020, when the Covid
pandemic was in its early days.
Realtors point squarely to sharply higher mortgage rates, which had
sat at record lows for the first two years of the pandemic. The average rate on
the popular 30-year fixed mortgage was right around 3% at the start of this
year, but then rose swiftly, crossing 6% in June, according to Mortgage News
Daily. It pulled back a bit in July and August, but then began rising again,
crossing 7% in September, when these contracts were signed.
More
Pending home sales fell 10% in September from August (cnbc.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.
CDC Pushed
for COVID-19 Boosters Without Clinical Trials: Emails
Oct 26 2022
The U.S. Centers for Disease Control and
Prevention (CDC) pressured U.S. regulators to
clear COVID-19 boosters without clinical trial data, according to newly
released emails.
CDC officials relayed to
counterparts at the Food and Drug Administration (FDA) in early August 2021
that they wanted authorization for Moderna and Pfizer boosters as data began
showing that the vaccines weren’t working as well as initially promoted.
The conversation took place on a
call that was described by Dr. Phil Krause, a top FDA official, to several
other FDA workers.
“Take a deep breath before reading
this next paragraph. On that call, the CDC evidently stated that they will
assemble all the data they are aware of on third dosing in this setting and
send it to us in the hope that we will (very soon) authorize the third dose for
immunocompromised as part of the EUA,” Krause wrote in the Aug. 5, 2021, email
(pdf).
EUA stands for emergency use authorization.
All of the COVID-19 vaccines were
authorized under emergency conditions at that time.
No boosters had been authorized
and no clinical data were available for the boosters.
The emails show that “the CDC
wanted the booster approved without a trial,” Dr. Jay Bhattacharya, a professor
of medicine at Stanford University, wrote on Twitter.
The CDC didn’t respond to a
request for comment.
Krause was responding to Doran
Fink, who also works for the FDA’s Center for Biologics Evaluation and
Research, charged with evaluating vaccines.
Fink sent along a post that had
been made to an infectious diseases forum regarding whether doctors should be
giving additional vaccine doses to patients with compromised immune systems
despite the lack of authorization.
Dr. Richard Nathan of Idaho had
written that other countries, including Israel, had cleared boosters.
“Pfizer recommends it and I trust
their guidance over the turmoil at our federal agencies. With millions of doses
of vaccine set to expire, you should do what you think is best for your
patients. I can’t believe you would get pushback from anyone. Keep in mind,
nearly everyone in this group is six to seven months out from the second dose
of the vaccine and many have significant daily exposure to the virus,” Nathan
wrote.
Fink said the post “accurately
reflects more widespread thinking that I am hearing in other forums as well,”
including among doctors who advise the CDC on vaccines.
“Providers are losing confidence
in FDA/CDC to do the right thing for their patients,” Fink said.
Less than two weeks later, the
FDA authorized boosters for certain people, including
immunocompromised persons.
More
CDC Pushed for
COVID-19 Boosters Without Clinical Trials: Emails (theepochtimes.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.
The tough calculus of emissions and the
future of EVs
From
materials and batteries to manufacturing, calculating the real carbon cost of
EVs is just getting started
Investors
and politicians embracing a vision of an all-electric car future believe that path
will significantly reduce global carbon dioxide emissions. That’s far from
clear.
A growing
body of research points to the likelihood that widespread replacement of
conventional cars with EVs would likely have a relatively small impact on
global emissions. And it’s even possible that the outcome would increase emissions.
The issue is
not primarily about the emissions resulting from producing electricity.
Instead, it’s what we know and don’t know about what happens before an EV is
delivered to a customer, namely, the “embodied” emissions arising from the
labyrinthine supply chains to obtain and process all the materials needed to
fabricate batteries.
All products entail embodied emissions
that are “hidden” upstream in production processes, whether it’s a hamburger, a
house, a smartphone or a battery. To see the implications at the macro level,
credit France’s High Climate Council for a study issued
last year. The analysis found that France’s claim of achieving a national
decline in carbon dioxide emissions was illusory. Emissions had in fact
increased and were some 70% higher than reported once the embodied emissions
inherent in the country’s imports were counted.
Embodied emissions can be devilishly
difficult to accurately quantify, and nowhere are there more complexities and
uncertainties than with EVs. While an EV self-evidently emits nothing while
driving, about 80% of its total lifetime emissions arise from the combination
of the embodied energy in fabricating the battery and then in “fabricating”
electricity to power the vehicle. The remaining comes from manufacturing the
non-fuel parts of the car. That ratio is inverted for a conventional car where
about 80% of lifecycle emissions come directly from fuel burned while driving,
and the rest comes from the embodied energy to make the car and fabricate
gasoline.
Virtually every feature of the fuel
cycle for conventional cars is well understood and narrowly bounded,
significantly monitored if not tightly regulated and largely assumption-free.
That’s not the case for EVs.
---- The goal for any vehicle is to
have the fuel system take as small a share of total weight as possible, leaving
room for passengers or cargo. Lithium batteries, as revolutionary and Nobel
Prize worthy as they are, still constitute a distant second place in the metric
of merit for powering untethered machines: energy density.
The inherent
energy density of lithium-class chemicals (i.e., not a battery cell, but the
raw chemical) can be theoretically as high as about 700 watt-hours per kilogram
(Wh/kg). While that’s roughly fivefold greater than the energetics of lead-acid
battery chemistry, it’s still a small fraction of the 12,000 Wh/kg available in
petroleum.
---- Earlier this year, the agency issued a major report on
the challenges of supplying ETMs to build batteries as well as solar and wind
machines. The report reinforces what others have
earlier pointed out. Compared to conventional cars, EVs require using, overall,
about 500% more critical minerals per vehicle. Thus, the IEA concludes that
current plans for EVs, along with plans for wind and solar, will require a 300%
to 4,000% increase in global mine output for the necessary suite of key
minerals.
The fact that an EV uses, for example,
about 300% to 400% more copper than a conventional car has yet to impact global
supply chains because EVs still account for less than 1% of the total global
auto fleet. Producing EVs at scale, along with plans for grid batteries as well
as for wind and solar machines, will push the “clean energy” sector up to
consuming over half of all global copper (from today’s 20% level). For nickel
and cobalt, to note two other relevant minerals, “transition” aspirations
will push clean
energy use of those two metals to 60% and 70%, respectively of global demand,
up from a negligible share today.
More, much,
much more.
The tough calculus
of emissions and the future of EVs | TechCrunch
A
permanent Governor of the Bank of England [your central bank here] would be one
of the greatest men in England [your country here.] He would be a little
'monarch' in the City; he would be far greater than the 'Lord Mayor.' He would
be the personal embodiment of the Bank of England; he would be constantly
clothed with an almost indefinite prestige. Everybody in business would
bow down before him and try to stand well with him, for he might in a panic be
able to save almost anyone he liked, and to ruin almost anyone he liked. A day
might come when his favour might mean prosperity, and his distrust might mean
ruin. A position with so much real power and so much apparent dignity would be
intensely coveted.
Walter
Bagehot. Lombard Street. 1873.
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