Baltic Dry Index. 1425 -51 Brent Crude 76.71
Spot Gold 1979 US 2 Year Yield 4.12 +0.06
Coronavirus
Cases 01/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 18/05/23 World 688,579,069
Deaths 6,876,409
“Once the principle is admitted that it is the duty of the
government to protect the individual against his own foolishness, no serious
objections can be advanced against further encroachments.”
Ludwig von Mises.
We open today with rare good news on the food price inflation front. The Ukraine grain export deal has been extended by another two months.
Ukraine war live updates: Turkey says grain deal
has been extended for Ukrainian shipping corridor
UPDATED WED, MAY 17 20233:19 PM
EDT
Russia appears to be doubling down on its
efforts to capture Bakhmut in eastern Ukraine. Ukraine’s armed forces said
Wednesday that Russian forces continue to concentrate their efforts on
capturing the besieged town and nearby areas around Lyman, Avdiivka and
Marinka.
In an operational
update, the general staff of Ukraine’s armed forces sectors said there had been
55 combat engagements recorded in those areas in the past 24 hours. “Bakhmut
and Marinka remain at the epicenter of hostilities,” Ukraine’s military staff
reported.
The Black Sea Grain
Initiative was extended by two months Wednesday, according to Turkish President
Recep Tayyip Erdogan. The deal, which kept Ukrainian agricultural shipping
lanes open from several major ports, was set to expire May 18.
Ukraine war live updates: Latest news on Russia and the war in Ukraine (cnbc.com)
Back in the stock casinos, no one believes that President Biden will be so dangerously reckless as to force the USA into a June debt default.
Did team Biden just cave in? From far away London that’s how it looks.
Expect a short lived relief rally when an all
round face saving debt ceiling compromise is announced.
Biden, McCarthy say U.S. won’t default as debt
talks inch forward
WASHINGTON — Top leaders from both sides of
the aisle reassured Americans on Wednesday that the U.S. won’t default on its
debt as tense negotiations over the debt ceiling continued.
“I think at the end of the day we
do not have a debt default,” House Speaker Kevin McCarthy told CNBC in a “Squawk Box” interview
Wednesday morning.
President Joe Biden echoed
that sentiment later in remarks from the White House, “We’re going to come
together because these is no alternative,” he said. “Every leader in the room
understands the consequences of failure.”
Biden spoke minutes before he departed
Washington for a truncated visit to Asia, where he plans to
attend the Group of Seven summit. He also said he would hold a news conference
Sunday upon his return to share the latest on the negotiations.
The House speaker’s and the
president’s remarks were the latest signs that negotiations, which had been
stalled for months, were now moving into a more serious and concrete phase, and
potentially closer to a deal.
Leaders are running out of time to
raise the debt ceiling before a June 1 deadline when the government is set to
run out of money. McCarthy met Tuesday with Biden at the White House alongside
Vice President Kamala Harris and other top congressional leaders in an attempt
to hammer out a deal before the president left for Japan.
McCarthy refrained from saying
Wednesday that he was optimistic about the state of the talks, but said he was
encouraged by Biden’s willingness to negotiate.
“The only thing I’m confident about is now we have a structure to find a
way to come to a conclusion,” McCarthy said. “The timeline is very tight. But
we’re going to make sure we’re in the room and get this done.”
Lifting the debt
ceiling is necessary for the government to cover spending
commitments already approved by Congress and the president — and prevent
default. Doing so does not authorize new spending. But House Republicans have
said they will not raise the limit if Biden and lawmakers do not agree to
future spending cuts.
McCarthy and House Minority Leader
Hakeem Jeffries in separate interviews Wednesday morning on “Squawk Box” agreed
that negotiations were moving forward, but the two remained entrenched in their
positions.
Jeffries called a Republican
request to attach work requirements to federal food benefits a “nonstarter” but
said he remains optimistic about negotiations.
More
Biden,
McCarthy say U.S. won't default as debt talks inch forward (cnbc.com)
Asia markets rise as Wall Street lifted by
hopes of debt ceiling deal
UPDATED THU, MAY 18 2023 12:33 AM
EDT
Asia-Pacific markets rose on hopes of U.S
President Joe Biden and congressional leaders inching
closer to a deal to raise the U.S. debt ceiling and avoid a
default.
House Speaker Kevin McCarthy said
that a “better process” is now in place for further talks, saying it’s “possible
to get a deal by the end of the week.” Biden shortened his trip
to Asia to focus on the negotiations, the White
House said.
In Japan, the Nikkei 225 rose
1.46% and the Topix was up 1.03% as investors further digested Japan’s trade
data for April – imports fell further than expected while exports also missed
forecasts by Reuters. South Korea’s Kospi gained
0.62% and the Kosdaq gained 0.11% in Asia’s morning trade.
Stocks in Australia also rose,
with the S&P/ASX 200 up
0.55% as the country’s unemployment rate came in at 3.7% in April, higher than
the 3.5% expected by economists.
“A second consecutive day of
softer domestic data will likely be enough to keep a hawkish Reserve Bank of
Australia from raising rates again when it meets in June,” IG analyst Tony
Sycamore said in an email.
Hong Kong’s Hang Seng index rebounded
after Wednesday’s late sell off, climbing 1.3% on Wednesday. Mainland Chinese
markets are also higher, with the Shenzhen Component gaining
0.18% and the Shanghai
Composite up 0.44%.
Stocks
on Wall Street closed higher on Wednesday, with all three major
indexes gained over 1%, with the Nasdaq Composite gaining
the most at 1.28%. The Dow
Jones Industrial Average climbed 1.24% and the S&P 500 gained
1.19%.
Asia markets rise as
Wall Street lifted by hopes of debt ceiling deal (cnbc.com)
European markets head for higher open as U.S.
debt ceiling talks make progress
UPDATED THU, MAY 18 2023 12:29 AM EDT
European
markets are heading for a higher open Thursday as U.S. debt ceiling talks make
progress.
Wall Street sentiment improved
Wednesday and Asia-Pacific markets rose overnight on hopes that U.S President
Joe Biden and congressional leaders were
inching closer to a deal to raise the U.S. debt ceiling and
avoid a default.
House Speaker Kevin McCarthy said
that a “better process” is now in place for further talks, saying it’s “possible
to get a deal by the end of the week.” Biden shortened his trip
to Asia to focus on the negotiations, the White
House said.
European markets live updates: stocks, news, earnings, debt ceiling (cnbc.com)
Back in the real world, in western Europe, a
summer of severe drought lies ahead, say the experts. Stock up on Christmas
food now?
Southern
Europe braces for climate change-fuelled summer of drought
May
17, 2023 10:43 AM GMT+1
BRUSSELS, May 17 (Reuters) - Southern
Europe is bracing for a summer of ferocious drought, with some regions already
suffering water shortages and farmers expecting their worst yields in decades.
As climate change makes the region
hotter and drier, years of consecutive drought have depleted groundwater reserves.
Soils have become bone dry in Spain and southern France. Low river and
reservoir levels are threatening this summer's hydropower production.
With temperatures climbing into
summertime, scientists warn Europe is on track for another brutal summer, after
suffering its hottest
on record last year – which fuelled a drought European Union researchers
said was the worst
in at least 500 years.
So far this year, the situation is most
severe in Spain.
"The situation of drought is going
to worsen this summer," said Jorge Olcina, professor of geographic
analysis at the University of Alicante, Spain.
There's little chance at this point of
rainfall resolving the underlying drought, either. "At this time of the
year, the only thing we can have are punctual and local storms, which are not
going to solve the rainfall deficit," Olcina said.
Seeking emergency EU assistance,
Spain’s Agriculture Minister Luis Planas warned that "the situation
resulting from this drought is of such magnitude that its consequences cannot
be tackled with national funds alone," according to an April 24 letter
sent to the European Commission (EC) and seen by Reuters.
---- France is emerging from its driest
winter since 1959, with drought "crisis" alerts already activated in
four departmental prefects, restricting non-priority water withdrawals -
including for agriculture, according to government website Propluvia.
Portugal, too, is experiencing an early
arrival of drought. Some 90% of the mainland is suffering from
drought, with severe drought affecting one-fifth of the country - nearly five
times the area reported a year earlier.
In Spain, which saw less than half its
average rainfall through April this year, thousands of people are relying
on truck
deliveries for drinking water, while regions including Catalonia have
imposed water restrictions.
Some farmers have already reported crop
losses as high as 80%, with cereals and oilseeds among those affected, farming
groups have said.
"This is the worst loss of harvest
for decades,” Pekka Pesonen, who heads the European farming group Copa-Cogeca,
said of Spain. "It's worse than last year's situation."
Spain is responsible for half of the
EU's production of olives and one third of its fruit, according to the
Commission.
---- "Severe drought in Southern
Europe is particularly worrying, not only for the farmers there but also
because this can push up already very high consumer prices if the EU production
is significantly lower," Commission spokesperson Miriam Garcia Ferrer
said.
Similar struggles could emerge in
Italy, where up to 80% of the country’s water supply goes toward agriculture.
With this year’s thin mountain snow cover and low soil moisture, Italian
farmers are planning to cut back – sowing summer crops across an area 6%
smaller than last year’s planting area, according to national data on sowing
intentions.
After two years of water scarcity,
parts of northern Italy entered May with a 70% deficit in snow water reserves
and a 40% deficit of soil moisture, said Luca Brocca, a Director of Research at
Italy's National Research Council.
With the ground so parched, rain when
it does arrive fails to soak in, with devastating consequences.
Southern Europe
braces for climate change-fuelled summer of drought | Reuters
But, did northern Italy’s severe drought just
end in the worst possible way?
Northern Italy hit by deadly floods as heavy rains burst riverbanks
May 17, 2023
Floods caused
by heavy rains in Italy's northern Emilia Romagna region have killed two
people, authorities said on Wednesday, as local mayors warned residents they
were still in danger.
"At the
moment there are two dead... the emergency is still underway," the region
said in a statement, after desperate efforts overnight to save children and the
elderly from rising waters.
The victims
were a man in Forli, near Bologna, and one in Cesena, whose wife was also
missing, the region said.
A third victim
was found Wednesday on a beach in Cesenatico, according to media reports.
The
civil protection agency said 14 rivers had broken their banks across the region
between Tuesday and Wednesday, and 23 towns were flooded.
It
urged "maximum caution" on Twitter, as mayors warned people to stay
on high ground.
"About
5,000 people have been evacuated, but that number might rise," Civil
Protection Minister Nello Musumeci told Radio 24.
Photographs
showed streets transformed into rivers, and firemen moving people to safety in
rubber dinghies.
"We
absolutely must not lower our guards," Cesena mayor Enzo Lattuca said on
Facebook.
Residents
"must not under any account go into basements or cellars, and stay out of
ground floors if possible", he said.
Italian Prime Minister Giorgia Meloni on
Tuesday tweeted her support for those affected and said the government was
"ready to intervene with the necessary aid".
Northern Italy hit
by deadly floods as heavy rains burst riverbanks (msn.com)
Imola GP cancelled as
F1 bosses release statement after severe flooding causes mayhem
May 17, 2023
F1 have confirmed that the Emilia Romagna Grand Prix has been
postponed until further notice due to flooding in northern Italy which has
severely impacted the area surrounding the circuit. There had been calls to
cancel the event as talks were held at high-level on Wednesday, the second day
that F1 personnel were banished from the circuit.
Staff working at Imola prior to the GP had been told to leave
on Tuesday afternoon as a precautionary measure due to flooding in the nearby
Santerno River, they were then told to keep away on Wednesday amid heavy rain
that had continued into the next day.
----"Following discussions between Formula 1, the President of the
FIA, the competent authorities including the relevant Ministers, the President
of the Automobile Club of Italy, the President of Emilia Romagna Region, the
Mayor of the City and the promoter the decision has been taken not to proceed
with the Grand Prix this weekend in Imola.
"The
decision has been taken because it is not possible to safely hold the event for
our fans, the teams and our personnel and it is the right and responsible thing
to do given the situation faced by the towns and cities in the region. It would
not be right to put further pressure on the local authorities and emergency
services at this difficult time."
The
race was due to be the sixth of the season but while authorities will attempt to
find a date, the BBC have claimed that it is unlikely that Imola will
make a return this season due to the crowded schedule.
More
Imola GP cancelled as F1 bosses release statement after severe flooding causes mayhem (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.
Japan's
export growth hits two-year low on weak China demand
May
18, 2023 3:13 AM GMT+1
TOKYO, May 18
(Reuters) - Japan's export growth hit its weakest pace in more than two years
in April as China-bound shipments slumped amid lingering worries about
faltering global economic demand.
Exports
rose 2.6% in April from a year earlier, Ministry of Finance data showed on
Thursday, slower than a 3.0% increase expected by economists in a Reuters poll
and a 4.3% rise in March. It also marked the weakest gain since February 2021
when exports declined 4.5%.
The world's No. 3
economy emerged from recession in the first
quarter, helped by a boost in consumer spending and tourism following the end
of COVID-19 pandemic restrictions, but weak exports are weighing on factory
activity and hampering a broader recovery.
Exports
have expanded every month since the February 2021 decline, helped in part by a
weaker yen that makes Japanese products competitive.
However,
gross domestic product data for January-March on Wednesday showed exports
slumped 4.2% in the period, the first quarterly decline in 18 months.
"Weakening
exports will put a drag on capital spending, which may sap domestic demand as
consumption lacks strength," said Takeshi Minami, chief economist at
Norinchukin Research Institute.
"The
global economy will slow further in the latter half of this year, so you cannot
count on either domestic or external demand, leaving Japan's economy in a soft
patch."
More
Japan's
export growth hits two-year low on weak China demand | Reuters
Euro
zone inflation ticks up in April
May
17, 2023 10:04 AM GMT+1
FRANKFURT, May 17 (Reuters) - Euro zone
inflation accelerated last month, Eurostat said on Wednesday, confirming
preliminary data pointing to increasingly stubborn price growth among the 20
nations sharing the euro.
Overall price growth accelerated to
7.0% in April from 6.9% a month earlier, as rising services and energy costs
offset a slowdown in food price growth.
Although underlying price growth, the
key focus of European Central Bank policymakers in recent months, slowed a
touch, the crucial services component continued to accelerate, pointing to
mounting wage pressures that could get inflation stuck above the ECB's 2%
target.
Excluding volatile food and fuel
prices, core inflation slowed to 7.3% from 7.5%, while an even narrower
measure, which excludes alcohol and tobacco, slowed to 5.6% from 5.7% in its
first decline since last June.
Inflation has been above the ECB's 2%
target for nearly two years and the bank has lifted interest rates by a
combined 375 basis points since last July to arrest runaway price growth.
But more hikes are likely as it could
be 2025 before inflation is back at target and the "last mile" of
disinflation, getting from 3% to 2%, could be especially difficult, taking
nearly 2 years.
Services
inflation, which is primarily driven by labour costs, accelerated to 5.2% from
5.1%, confirming policymaker fears that nominal wage growth could become
dangerously fast.
----
Unexpectedly generous wage deals in Germany, the bloc's biggest economy, also
raise the risk that labour costs could continue to rise especially quickly next
year, prolonging inflation.
More
Euro zone
inflation ticks up in April | Reuters
Bank
of England governor Andrew Bailey warns of uncertainty over inflation drop
WEDNESDAY 17 MAY 2023 11:49 AM
The risk of inflation staying higher for longer
than the Bank of England’s two per cent target than it expects is mounting due
to the slow reduction of wage pressures and price rises, the Governor of the
central bank warned today.
Speaking at the British Chambers of Commerce’s (BCC) annual conference, Andrew Bailey warned the Bank thinks the likelihood of inflation topping its projections are “skewed significantly to the upside”.
Economists on Threadneedle Street have
arrived at that judgement because “the unwinding of second-round effects may
take longer than it did for them to emerge”.
Our commitment to the two per cent inflation target
is unwavering,” Bailey said, however.
Inflation has consistently breached the central
bank’s projections, including in March when it hit 10.1 per cent, 0.8
percentage points over its prediction.
Bailey said if further inflation shocks emerge,
“then further tightening in monetary policy would be required”.
The Bank’s base case scenario assumes interest
rates will need to rise to the market’s expected peak of 4.75 per cent for
inflation to eventually dip below the two per cent.
The Governor, alongside six other members of the
nine-strong monetary policy committee (MPC), last week backed a twelfth
straight interest rise, voting for a 25 basis points increase to 4.5 per cent,
taking them to their highest level since October 2008.
Core inflation, a more accurate measure of
underlying inflation pressures, also firmed in March, suggesting UK inflation
is beginning to be driven by home-grown factors such as pay growth instead of
international energy prices soaring after Russia’s invasion of Ukraine.
Those upside inflation shocks reflect “the
possibility of more persistence in domestic wage and price setting,” Bailey
said.
Last week, the Bank hiked its medium term inflation
forecasts from its February projection.
It now thinks the rate of price increases will
still be around five per cent by the end of the year, up from 3.9 per cent, and
that it won’t return to its two per cent target until 2025.
More
BoE Gov Andrew
Bailey warns of uncertainty over inflation drop (cityam.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
Johnson & Johnson COVID-19
Vaccine Becomes Unavailable in US
May 15, 2023 Updated: May 16, 2023
One of the four COVID-19 vaccines authorized in the
United States is no longer available, the nation’s public health agency says.
The Johnson & Johnson COVID-19 vaccine “is no
longer available in the U.S.,” the U.S. Centers for Disease Control and
Prevention (CDC) stated in a recent update.
That’s due to the vaccine expiring on May
7. Health care workers were advised to dispose of any remaining doses in
accordance with regulations.
The CDC and Johnson & Johnson didn’t respond to
requests for comment.
U.S. regulators first cleared the jab in February
2021, giving Americans an alternative to the messenger RNA-based Moderna and
Pfizer COVID-19 vaccines. Johnson & Johnson’s vaccine became popular in
part because it’s only a single dose. The messenger RNA vaccines each have a
primary series of two doses.
But uptake slowed after U.S. authorities paused
recommending the vaccine because of concerns about a reported link to a
combination of blood clotting and low platelet levels, a condition called
thrombosis with thrombocytopenia syndrome (TTS) that can cause
death. About 15 percent of the post-vaccination TTS cases have been fatal.
Regulators limited the availability of the vaccine in 2022
because experts determined it caused TTS.
Since March, recipients have also been warned that
they face an increased risk of myocarditis, or heart inflammation, and a
related condition called pericarditis. All four COVID-19 vaccines authorized in
the United States present an increased risk of myocarditis, primarily for young
males.
More
Johnson &
Johnson COVID-19 Vaccine Becomes Unavailable in US (theepochtimes.com)
COVID-19's total cost
to the economy in US will reach $14 trillion by end of 2023 – new research
May
16, 2023
The economic toll of the
COVID-19 pandemic in the U.S. will reach US$14 trillion by the end of 2023, our team of economists, public policy researchers and other experts have estimated.
Putting a price tag on all
the pain, suffering and upheaval Americans and people around the world have
experienced because of COVID-19 is, of course, hard to do. More than 1.1 million people have died as a result of COVID-19 in the U.S., and
many more have been hospitalized or lost loved ones. Based on data from the first 30 months of the pandemic,
we forecast the scale of total economic losses over a four-year period, from
January 2020 to December 2023.
To come up with our
estimates, our team used economic modeling to approximate the revenue lost due
to mandatory business closures at the beginning of the pandemic. We also used
modeling to assess the economic blows from the many changes in personal
behavior that continued long after the lockdown orders were lifted – such as
avoiding restaurants, theaters and other crowded places.
Workplace
absences, and sales lost due to the cessation of brick-and-mortar retail
shopping, air travel and public gatherings, contributed the most. At the height
of the pandemic, in the second quarter of 2020, our survey indicates that
international and domestic airline travel fell by nearly 60%, indoor dining by
65% and in-store shopping by 43%.
We
found that the three sectors that lost the most ground during
the first 30 months of the pandemic were air travel, dining, and health and
social services, which contracted by 57.5%, 26.5% and 29.16%, respectively.
These
losses were offset to a degree by surges in online purchases, a series of
large fiscal stimulus and economic relief packages and
an unprecedented expansion of the number of Americans working from home –
and thus were able to keep doing jobs that might otherwise have been cut.
From
2020 to 2023, the cumulative net economic output of the United States will
amount to about $103 trillion. Without the pandemic, the
total of GDP over those four years would have been $117 trillion – nearly 14%
higher in inflation-adjusted 2020 dollars, according to our analysis.
More
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.
Something different today. Today out
with the old and in with the new.
East Ayrshire farm gets okay
to install 1,000 solar panel modules on historic ironworks site
Auldhouseburn
Farm will install the 200kW system adjacent to Furnace Road after East Ayrshire
Council planning officers gave the go ahead
May
17, 2023
An East
Ayrshire farm has been given the go ahead to install 1,000 solar
panel modules on land which was home to the area’s first ironworks in the
1700s.
Alan Blackwood, of Auldhouseburn Farm, applied to install the 200kW
of ground mounted panels which will be laid out in rows alongside Furnace Road
right at the edge of the Muirkirk boundary.
While there were no objections, the West of Scotland Archaeology Service
pointed out the historic value of the site and stressed the need to monitor it
for finds during development.
They stated: “The application lies on top of Muirkirk ironworks. This is
recorded as the location of the first ironworks in the area being established
in 1787 and is a significant industrial archaeological site.
“Any ground disturbance involved in the application could reveal buried
remains of significance associated with the ironworks.
“A simple watching brief during the main pieces of proposed ground
disturbance is advised.
---- Muirkirk Iron Works were built in 1787, opening the following
year. A canal ran east from the iron works and served a number of coal mines.
The ironworks were located just beyond the end of the Muirkirk 1st rail
line which opened in 1848, connecting it with Ayr Harbour.
The works finally closed in 1923 following a strike where the blast
furnaces had been left to cool with iron inside them. However, the works were
only demolished in the 1960s, leaving little in the way of remains.
The report concluded: “The proposed ground mounted solar array is not
considered to have a negative of significant impact on adjacent uses of
residential properties. The proposed location will mitigate the visual impact
with minimal visibility from the public domain.
“In conclusion and noting the above assessment, the proposed installing
of ground mounted solar panels is considered to be acceptable under the terms
of the relevant policies.
“The champions of socialism call themselves progressives, but
they recommend a system which is characterized by rigid observance of routine
and by a resistance to every kind of improvement. They call themselves
liberals, but they are intent upon abolishing liberty. They call themselves
democrats, but they yearn for dictatorship. They call themselves
revolutionaries, but they want to make the government omnipotent. They promise
the blessings of the Garden of Eden, but they plan to transform the world into
a gigantic post office. Every man but one a subordinate clerk in a bureau.”
Ludwig
von Mises.
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