Friday, 19 May 2023

Debt Ceiling Three Card Monte.

Baltic Dry Index. 1402 -23        Brent Crude 76.39

Spot Gold 1962           US 2 Year Yield 4.24  +0.12

Coronavirus Cases 01/04/20 World 1,000,000

Deaths 53,103

Coronavirus Cases 19/05/23 World 688,668,272

Deaths 6,877,081

Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.

Adam Smith, Lecture in 1755.

In the central bankster fuelled stock casinos, party on like it’s 2019 all over again.

Peace has broken out in the District of Crooks, as lions lie down with sheep avoiding a US debt default. At least, that was the media spin all day yesterday.

Well maybe but maybe not, besides how much is this debt ceiling peace going to cost and who exactly is going to pay for it? Look away from that bizarre inverted US yield curve now.

With recession looming in H2 23 and social anarchy breaking out from Latin America to Pakistan, owning over priced stocks in an approaching bear market looks like the least of our worries for 2023-2024.

Japan stocks surge to highest since 1990 as G-7 meeting is underway

UPDATED THU, MAY 18 2023 11:24 PM EDT

Asia-Pacific markets largely rose as two of the three Wall Street’s major indexes hit record highs on Thursday night and House Speaker Kevin McCarthy says that he is confident a deal can be struck on the U.S. debt ceiling by next week.

The S&P 500 and Nasdaq Composite jumped on Thursday to notch their highest closing levels since August 2022 as Wall Street traders kept focused on debt ceiling negotiations.

Leaders from the Group of 7 will be gathering in Hiroshima, Japan for the G-7 summit that kicks off today.

Japan stocks were on course to seeing its best week since October as the Nikkei 225 rose 0.86%, maintaining the highest levels since 1990 and the Topix climbed 0.33% marking its sixth winning streak. Japan’s core inflation in April rose 3.4% year-on-year, maintaining levels above the central bank’s target.

Australia’s S&P/ASX 200 inched up 0.43%, while South Korea’s Kospi gained 0.56% and the Kosdaq was 0.27% higher.

Greater China markets meanwhile bucked the trend: Hong Kong’s Hang Seng index fell 1.49% and the Shanghai Composite slid 0.44% in mainland China. The Shenzhen Component was marginally lower.

Overnight in the U.S., all three major indexes were up for a second straight day, with the Nasdaq gaining 1.51% and hitting 52-week highs, while the S&P added 0.94%. The Dow Jones Industrial Average climbed 0.34%

Japan stocks surge to highest since 1990 as G-7 meeting is underway (

Biden's team reports 'progress' in US debt ceiling talks

HIROSHIMA, Japan, May 19 (Reuters) - Democratic negotiators told President Joe Biden on Friday that they are making "steady progress" in talks with Republicans aimed at avoiding a U.S. default, according to a White House official.

Biden received an update on the talks with aides to Republican House of Representatives Speaker Kevin McCarthy on Friday morning in Japan, where he is traveling for the Group of 7 (G7) summit, officials said.

"The president’s team informed him that steady progress is being made," according to one of the officials, who declined to be named.

"The president directed his team to continue pressing forward for a bipartisan agreement and made clear the need to protect essential programs for hardworking Americans and the economic progress of the past two years as negotiations head into advanced stages. He remains confident that Congress will take necessary action to avoid default."

Republicans have refused to vote to lift the debt ceiling past its $31.3 trillion limit unless Biden and his Democrats agree to spending cuts in the federal budget.

The U.S. government may default on some debts as early as June 1 unless Congress votes to lift the debt ceiling, and economists fear the country will slide into a recession.

Biden cut his trip to Asia short and now plans to return home on Sunday to finish the negotiations, eliminating stops in Papua New Guinea and Australia aimed at countering China's influence in the region.

In the meantime, White House adviser Steve Ricchetti, budget director Shalanda Young and legislative adviser Louisa Terrell are leading discussions for the administration.


Biden's team reports 'progress' in US debt ceiling talks | Reuters

In other news, difficult times lie ahead even after a US debt default is avoided.


Your Evening Briefing: Glimmers of Hope and a Warning on Debt Deal

18 May 2023 at 23:22 BST

There are some optimistic noises being made about the US debt-ceiling fight. But Wall Street is warning that even if disaster is avoided, the economy won’t escape damage from this spectacular own-goal by  Congress. Behind market fears of a historic default is the less-discussed risk of what would follow a deal. 


Many predict lawmakers will ultimately reach an agreement, but the bruising standoff and the Treasury’s efforts to return to business as usual will wreak significant collateral damage. Ari Bergmann, whose firm specializes in risks that are hard to manage, says investors should hedge for the aftermath. Here’s why

Here are today’s top stories


The fallout is already global. America’s sway over the world economy is being eroded by self-inflicted policy wounds—and not just of the debt-ceiling variety. From a slow-off-the-blocks Federal Reserve in 2021 to this year’s regional bank bonfire, the rest of the world is wondering if the dollar’s preeminent status in global trade and finance may be worth reconsidering.


Record-low unemployment in the US was even stronger than previously thought. Applications for benefits fell by the most since 2021 after fraudulent claims in at least one state had boosted numbers in previous weeks. Stocks climbed on hopes a default will be avoided and Treasury yields rose on speculation the Fed will need to keep interest rates higher for longer. Here’s your markets wrap.



Bloomberg Evening Briefing: Glimmers of Hope and a Warning on Debt Deal - Bloomberg

Another Debt Ceiling Crisis, Another Deficit Reduction Scam

May 18, 2023  DAVID STOCKMAN

Today’s stock market action was still another reminder that honest price discovery on Wall Street is deader than a doornail.

Apparently, as a result of some friendly-sounding PR gas-bagging this AM from both sides of the debt ceiling stand-off, the market rallied hard in the morning and stayed pinned at that level for the balance of the session.

----That is to say, we seriously doubt that there will be any signed deal before the so-called X-date of June 1. And if some Rube Goldberg device is patched together at the 11th hour, it will make hardly an iota of difference to the nation’s disastrous fiscal outlook.

Indeed, here’s a spoiler alert version of what is coming down the pike. With or without a deal, the Federal debt-to-GDP ratio is heading for record peacetime levels. And the alternate pathways shown in the graph below assume there will never again be another recession, war, Covid-type national emergency or any other deviation from CBO’s picture perfect projection of economic performance and Congressional adherence to the massive tax increases and outyear spending cuts already built into current law and the CBO baseline forecast.

The actual truth is that the current policy baseline already generates $20 trillion of new Federal debt over the 10-year budget window (FY 2024-2033). But that figure would be $25 trillion at minimum when adjusted for realistic economics and the virtual certainty that currently scheduled out-year tax increases and spending cuts will be cancelled at the last minute, like they always are.

In turn, that means the public debt will hit a minimum of $55 trillion by 2033 or nearly 150% of GDP.


Another Debt Ceiling Crisis, Another Deficit Reduction Scam (

Global debt nears record highs as rate hikes trigger ‘crisis of adaptation,’ top trade body says


The global debt pile grew by $8.3 trillion in the first quarter to a near-record high of $305 trillion as the global economy faced a “crisis of adaptation” to rapid monetary policy tightening by central banks, according to a closely-watched report from the Institute of International Finance.

The finance industry body said the combination of such high debt levels and rising interest rates has driven up the cost of servicing that debt, triggering concerns about leverage in the financial system.

Central banks around the world have been hiking interest rates for over a year in a bid to rein in sky-high inflation. The U.S. Federal Reserve earlier this month lifted its fed funds rate to a target range of 5%-5.25%, the highest since August 2007.

“With financial conditions at their most restrictive levels since the 2008-09 financial crisis, a credit crunch would prompt higher default rates and result in more ‘zombie firms’ — already approaching an estimated 14% of U.S.-listed firms,” the IIF said in its quarterly Global Debt Monitor report late Wednesday.

The sharp increase in the global debt burden in the three months to the end of March marked a second consecutive quarterly increase following two quarters of steep declines during last year’s run of aggressive monetary policy tightening. Non-financial corporates and the government sector drove much of the rebound.

“At close to $305 trillion, global debt is now $45 trillion higher than its pre-pandemic level and is expected to continue increasing rapidly: Despite concerns about a potential credit crunch following the recent turmoil in the banking sectors of the U.S. and Switzerland, government borrowing needs remain elevated,” the IIF said.

The Washington, D.C.-based organization said aging populations, rising health care costs and substantial climate finance gaps are exerting pressure on government balance sheets. National defense spending is expected to increase over the medium term due to heightened geopolitical tensions, which would potentially affect the credit profile of both governments and corporate borrowers, the IIF projected.

“If this trend continues, it will have significant implications for international debt markets, particularly if interest rates remain higher for longer,” the report noted.

Total debt in emerging markets hit a new record high of more than $100 trillion, around 250% of GDP, up from $75 trillion in 2019. China, Mexico, Brazil, India and Turkey were the largest upward contributors.


IIF: Global debt near record highs as the new monetary era triggers 'crisis of adaptation' ( 

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.

Today, telecoms trouble and more. Just wait until AI really starts replacing workers.

BT share price tumbles as firm announces tens of thousands job cuts

THURSDAY 18 MAY 2023 8:20 AM

BT has announced plans to slash its workforce by as much as 42 per cent over the next seven years in a bid to slash costs and become a “leaner business”.

The firm’s share price was down more than 9 per cent in early trading.

In its full year results today, the telecoms giant said it would look to cut its 130,000 headcount to between 75,000 to 90,000 by 2028 to 2030.

“By continuing to build and connect like fury, digitise the way we work and simplify our structure, by the end of the 2020s BT Group will rely on a much smaller workforce and a significantly reduced cost base,” said BT chief Philip Jansen. 

“New BT Group will be a leaner business with a brighter future.”

The scale of the job cuts represents one of the largest announced on the stock exchange in recent memory.

The update came as the firm said its “cost transformation” was “on track” with gross annualised cost savings of £2.1bn since April 2020 against a £3bn target, with a cost to achieve of £1.1bn against a target of £1.6bn

Revenues at the frim dipped one per cent to £20.86bn in the year to the end of March after a slowdown in its consumer, enterprise and global divisions. A four per cent boost in revenues in its Openreach unit helped cushion the blow, however.

Pre tax profits also fell 12 per cent to £1.73bn which bosses said was down to “increased depreciation from network build and specific items, partially offset by adjusted EBITDA growth”.

BT has been looking to revive its share price in recent months after an 18 per cent slide over the past year.

“We have delivered our outlook for FY23: this year we’ve grown both pro forma revenue and EBITDA for the first time in six years while navigating an extraordinary macro-economic backdrop. Over the last four years we have stuck firmly to our strategy and it’s working,” Jansen said.

The move comes just days after Vodafone announced 11,000 jobs would go.

BT share price tumbles as firm announces tens of thousands job cuts (

Soft Data Fading In Europe Leaves Equity Market On Bed Of Sand

THURSDAY, MAY 18, 2023 - 10:00 AM

Buoyant soft data has driven much of the recent optimism in Europe but it is now beginning to sour, leaving the equity market poised to begin underperforming after outpacing DM stocks for most of the past two years.

The German ZEW’s expectations component came in significantly weaker than forecast.

This gives a good six-month lead on the euro-zone’s composite PMI, and points to it weakening through the remainder of the year.

Expectations for growth in the euro-zone last year and this year were dismal. But a milder winter led to a less-bad-than-feared outcome, and soft, survey-based data like the PMI registered this optimism, helping fuel sentiment and a stock-market rally.

But all the hopium in the world won’t by itself change the hard data, which is what ultimately counts. Growth is barely above zero, retail sales are contracting, and credit is tightening.

Economic surprises have been rising, but they were driven primarily by soft data exceeding expectations. Hard data (apart from labor) consistently disappointed. Now soft data is disappointing as lofty expectations are coming up against reality and heading back to earth.


Soft Data Fading In Europe Leaves Equity Market On Bed Of Sand | ZeroHedge

Covid-19 Corner

This section will continue until it becomes unneeded.

A Plethora of Skin Symptoms Reported After COVID Vaccination, Solution Exists

Overlooked COVID Vaccine Adverse Events (Part 7)

May 16, 2023

Jeff Jackson, a man in his late 40s, is a father, son, and former construction worker who used to be self-sufficient.

Yet less than two years after developing a skin-related vaccine injury, Jackson has been cut off from friends and family and lives on social welfare and donations from strangers.

After getting a second dose of the COVID-19 mRNA vaccine at his local Walmart store, he was walking back to his apartment complex when his mother, walking behind him, noticed dark red shapes moving on the back of his head.

This occurred around 15 minutes after vaccination, Jackson said.

----Postvaccine Skin Reactions

Jackson is likely one of the worst-case scenarios for skin reactions to the vaccine. But unfortunately, no one has any answers for why he developed these symptoms.

However, most skin reactions reported in the literature have been relatively mild and self-resolving.


“We can conceptualize vaccine reactions as both allergic and autoimmune,” Dr. Jonathan Kantor, professor of dermatology from the University of Pennsylvania, wrote to The Epoch Times.


Allergic reactions to the vaccine are probably rarer, while the autoimmune reactions are more common but tend to resolve over time, he continued.


Common Skin Reactions


COVID arm, which occurs as a rash appearing several days after injection, is a common side effect of the COVID-19 vaccine. The rash can become red and swollen, manifesting across most of the forearms. Most resolve after a few days with or without topical steroids and may not recur if the person is injected for a second time.


While research has documented these rashes as a potential vaccine allergic reaction, Dr. Kimberly Blumenthal, a clinical professor and allergist from Harvard University specializing in drug allergies, said they might actually be unexplained immune reactions.


Another common skin reaction is COVID toes. These reactions were first reported in acute COVID, where patients’ toes develop skin sores or bumps that typically occur after exposure to frigid temperatures. Similar presentations have also been reported after COVID-19 vaccinations.


Allergic Reactions


COVID-19 vaccines can trigger allergic reactions.

Urticaria, a type of itchy red rash, can appear acutely or as a chronic condition following vaccination. While not life-threatening, the itchiness and discomfort can discourage further immunization.


In a Harvard study that followed 271 patients who developed urticaria after COVID-19 vaccination, about 70 percent reported that they wouldn’t get additional doses even if recommended.


Reports of eczema after vaccination have also increased.


A Plethora of Skin Symptoms Reported After COVID Vaccination, Solution Exists (

Some other useful Covid links.

Johns Hopkins Coronavirus resource centre

Centers for Disease Control Coronavirus

The Spectator Covid-19 data tracker (UK)

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.

Environmental sustainability innovation: Leading companies in Graphene batteries for the automotive industry 

May 17, 2023

The automotive industry continues to be a hotbed of innovation, with activity driven by the need for increased electrode density, faster cycle times and improving the battery’s lifespan, and growing importance of technologies such as graphene enhanced lithium-sulphur battery and graphene enhanced polymer battery. In the last three years alone, there have been over 1.2 million patents filed and granted in the automotive industry, according to GlobalData’s report on Environmental sustainability in Automotive: Graphene batteries

However, not all innovations are equal and nor do they follow a constant upward trend. Instead, their evolution takes the form of an S-shaped curve that reflects their typical lifecycle from early emergence to accelerating adoption, before finally stabilising and reaching maturity. 

Identifying where a particular innovation is on this journey, especially those that are in the emerging and accelerating stages, is essential for understanding their current level of adoption and the likely future trajectory and impact they will have. 

290+ innovations will shape the automotive industry 

According to GlobalData’s Technology Foresights, which plots the S-curve for the automotive industry using innovation intensity models built on over 619,000 patents, there are 290+ innovation areas that will shape the future of the industry. 

Within the emerging innovation stage, EV discharge prediction, fuel cell ion exchange membranes, and hydrogen ICE fuel tanks are disruptive technologies that are in the early stages of application and should be tracked closely. V2G smart metering, silicon-air batteries, and zeolites for exhaust filtering are some of the accelerating innovation areas, where adoption has been steadily increasing. Among maturing innovation areas are HEV propulsion systems and wind-powered vehicles, which are now well established in the industry. 

---- Graphene batteries is a key innovation area in environmental sustainability 

Graphene batteries are an innovative technology that facilitates better electrode density and quicker cycle times, along with the ability to hold the charge longer thus enhancing the battery's lifespan.

GlobalData’s analysis also uncovers the companies at the forefront of each innovation area and assesses the potential reach and impact of their patenting activity across different applications and geographies. According to GlobalData, there are 10+ companies, spanning technology vendors, established automotive companies, and up-and-coming start-ups engaged in the development and application of graphene batteries. 


Who are the leading innovators in graphene batteries for the automotive industry? (

Another weekend and what news will be spun out of the G-7 meeting in US nuked Hiroshima Japan, and more importantly Washington District of Crooks? With US interest rates still soaring and the US yield curve grotesquely inverted. More bank failures lie ahead plus a massive US commercial real estate bust. Bunker time in spades. Have a great weekend everyone.

It is the interest of every man to live as much at his ease as he can; and if his emoluments are to be precisely the same, whether he does, or does not perform some very laborious duty, it is certainly his interest…either to neglect it altogether, or…to perform it in [a] careless and slovenly a manner.

Adam Smith, The Wealth Of Nations, 1776.


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