Baltic Dry Index. 1576 Fri. Brent Crude 79.30
Spot Gold 1983 US 2 Year Yield 4.14 +0.10
Coronavirus
Cases 01/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 02/05/23 World 687,225,609
Deaths 6,866,733
“This
sucker could go down.”
President George W. Bush. September 2008.
It is Fed day one and the central bank of Australia just upped the pressure on the US central bank to raise their key interest rate tomorrow.
Alarmingly, the US Treasury Secretary now thinks that the US will start defaulting on its debts and obligations as soon as June 1. This after last week Goldie’s top economists and entrail readers said Uncle Scam wouldn’t default until sometime in late July.
Not to worry though, default is still unlikely as the Dems have President Biden on the case and JP Morgan Chase’s CEO says that the latest US banking crisis is over.
Well,
if he says so, I suppose, but what if it isn’t. What if three US banks bust and
rescued, another self liquidating, is just the tip of an emerging US banking
iceberg?
Australia’s
central bank hikes rates by 25 basis points; Asia-Pacific markets mixed
UPDATED TUE, MAY 2 2023 12:38 AM EDT
The Reserve Bank of Australia unexpectedly hiked
its cash rate by 25 basis points to 3.85% after
holding its benchmark policy rate at steady at 3.6% in their
April meeting. The Australian dollar strengthened by 0.6% to 0.6677 against the
U.S. dollar after the move.
In Australia, the S&P/ASX 200 fell
0.7% as financial stocks led losses.
Asia-Pacific markets were largely
mixed on Tuesday as most markets returned after the long Labor Day weekend.
Japan’s Nikkei 225 erased
earlier gains and marginally fell and the Topix fell 0.35%.
South Korea’s Kospi rose 0.6% as
the nation’s inflation rate slowed to a 14-month low of 3.7%. The Kosdaq
climbed 1.34%.
Hong Kong’s Hang Seng index rose
0.1%, while the Hang Seng Tech index jumped rose 0.25%. Mainland Chinese
markets were closed for a holiday Tuesday.
Overnight in the U.S., stocks ended lower as JPMorgan Chase took
over First
Republic Bank after the biggest bank failure in the nation
since 2008. The deal came at a crucial
week for Wall Street ahead of the Federal Reserve’s key rate
decision meeting.
The Dow Jones Industrial Average inched
lower by 0.14%, the S&P
500 ticked down 0.04%, and the Nasdaq Composite fell
0.11%.
Australia's
central bank hikes rates by 25 basis points; Asia-Pacific markets mixed
(cnbc.com)
The U.S. could
hit the debt ceiling by June 1, much sooner than expected, Yellen warns
WASHINGTON — Treasury Secretary Janet Yellen
on Monday warned that the United States may run out
of measures to pay its debt obligations by June 1, earlier than the government
and Wall Street had been expecting.
In a letter
to House Speaker Kevin McCarthy, Yellen said new data on tax
receipts forced the department to move up its estimate of when the Treasury
Department “will be unable to continue to satisfy all of the government’s
obligations” to potentially as early as June 1, if Congress doesn’t
raise or suspend the debt limit before then.
This date is earlier than Wall
Street economists were expecting. Goldman Sachs’ latest estimate this week put
the deadline at some point in late July, though the bank’s economists
acknowledged that weaker-than-expected tax receipts could advance that
timeline.
On Monday, President Joe Biden called the “big
four” congressional leaders — Senate Majority Leader Chuck Schumer, Senate
Minority Leader Mitch McConnell, McCarthy and House Democratic Leader Hakeem
Jeffries — to invite them to a May 9 meeting at the White House to
discuss the debt limit, a White House official told NBC.
The Congressional Budget Office
also revised
its estimate for the so-called x-date on Monday.
“Because tax receipts through April
have been less than the Congressional Budget Office anticipated in February, we
now estimate that there is a significantly greater risk that the Treasury will
run out of funds in early June,” wrote CBO director
Phill Swagel.
While there is
technically a month between the date of the letter and the earliest x-date,
congressional calendars showed Monday that there are only eight legislative
days this month when both the House and Senate will be in session at the same
time.
This could
significantly impact any effort to hammer out a last-minute deal in person on a
debt-ceiling hike, one that could win enough support to pass in the
Republican-controlled House and the Democratic-led Senate.
McCarthy was in
Israel on Monday, where he delivered an address to the Knesset, the nation’s
parliament.
For the past two
months, the White House has refused to participate in talks with McCarthy on
the debt limit, insisting that House Republicans pass a debt-limit hike without
any strings attached. In exchange for voting to avoid a debt default, the House
GOP caucus has demanded sweeping cuts to federal spending.
More
U.S. could hit debt ceiling by June 1, Yellen warns (cnbc.com)
Finally,
yet another US bank collapses, but all’s well says the Fed, who never saw it
coming. Who’s next?
Opinion: The Fed says don’t worry about U.S. banks, but why
should anyone believe them?
Regulators — including the Fed — have failed
to keep the U.S. banking system safe, writes Joseph Stiglitz
The
aftershocks of the collapse of Silicon Valley Bank (SVB), while seemingly
fading, are still reverberating around the world. Although Federal Reserve
officials have taken pains to assure the public that the U.S. banking system is sound, it is unclear why anyone
should believe them. After all, Fed Chair Jerome Powell told Congress the same thing just days before
SVB’s collapse in March.
In the weeks since, it was reported that the vaunted
stress tests established by the 2010 Dodd-Frank financial reforms did not
foresee the drop in value of U.S. government bonds caused by
the Fed’s aggressive interest-rate hikes. A recent academic study found that “marked-to-market
bank assets have declined by an average of 10% across all the banks” following
the Fed’s rate increases, “with the bottom 5th percentile experiencing a
decline of 20%.”
While U.S. President Joe Biden has promised to hold accountable those responsible for SVB’s collapse,
such promises, too, should be greeted with a healthy dose of skepticism. After
all, the Obama administration, in which Biden served as vice president, never
held any bankers responsible for the 2008 financial crisis.
The fact is that regulators — including the Fed — have
failed to keep the banking system safe. Banks depend on trust: depositors need
to be confident that they can withdraw their money whenever they want. That has
always been true. What has changed is the ease with which billions of dollars
can be withdrawn in a nano-second online.
Even a whiff of danger that they will not be able to get
their money back is enough to cause rational people to withdraw uninsured
funds, and even insured amounts, if there is a risk of delay. The result is that
when a bank fails, the people left holding the bag are those who have not been
paying attention or, like many elderly customers, do not use digital banking
services.
With the current status quo, sophisticated depositors use
intermediaries to engage in regulatory arbitrage and guarantee that all of
their deposits are insured, or are prepared to withdraw funds above the insured
amount at a moment’s notice. That is no way to run a banking system. To
stabilize the sector, policymakers must establish comprehensive deposit
insurance, paid for by depositors based on the benefits they derive and the
systemic risks they pose. Until that is done, the banking system will remain
fragile.
Jamie Dimon says
‘this part of the crisis is over’ after JPMorgan Chase buys First Republic
The crisis that led to the downfall of three
regional U.S. banks in recent weeks is largely over after the resolution of First Republic,
according to JPMorgan Chase CEO
Jamie Dimon.
JPMorgan emerged as the winner of a weekend auction for
First Republic after regulators decided that time had run out on a private
sector solution. The Federal Deposit Insurance Corporation seized
the bank and New York-based JPMorgan announced early Monday
that it was acquiring nearly all of the deposits and most of the assets of
First Republic.
“There are only so many banks that were offsides this way,” Dimon
told analysts in a call shortly after the deal was announced.
“There may be another smaller one, but this pretty
much resolves them all,” Dimon said. “This part of the crisis is over.”
In the wake of the sudden
collapse in March of Silicon Valley Bank and Signature Bank,
investors have punished other lenders that had similar characteristics to SVB.
Companies with the highest percentage of uninsured deposits and losses on their
balance sheet were most scrutinized.
The March turmoil exposed poor
management by some midsized banks that essentially bet that interest rates
wouldn’t rise; when rates did rise, the banks were caught “offsides” with
unrealized losses from bonds on their balance sheet.
More
Dimon
on First Republic: 'This part of the crisis is over' (cnbc.com)
The First
Republic deal has come at a crucial point for the markets and economy
JPMorgan
Chase’s takeover
of First Republic likely ends the panic phase of the banking crisis, with the
fallout left to come in a pivotal week for markets and the economy.
Following an unsuccessful effort to
keep First Republic open, the largest U.S. bank by deposits reached
a deal to take over the 14th-largest financial institution. In
doing so, JPMorgan helped avert a destabilizing broad collapse in the sector,
but by no means solved all the banking problems likely to come.
“This is not the end,” said Gary Cohn, former chief
operating officer at Goldman Sachs, in an interview Monday on CNBC’s “Squawk Box.” “I don’t
think we’re going to get three and done. Crises don’t sort of end this easily.
There will be other issues out there in the banking world.”
With financial services covering such a wide swath
of activities in the $26.5 trillion U.S. economy, the failures
of Silicon Valley Bank, Signature Bank and now First Republic Bank
will reverberate.
Critical week ahead
The takeover kicks
off an important week on Wall Street, with a key decision on interest rates
looming along with earnings from Apple and
a jobs report that is expected to show a further deceleration in hiring.
Stocks nudged
higher Monday morning on hopes that the worst of a banking
crisis that began in early March has drifted into the rear view.
“The wall of worry
may ease,” said Wells Fargo banking analyst Mike Mayo in a note to clients.
“Resolving FRC should end the 7-week post SVB bank crisis phase.”
One of the first places markets can turn to
gauge the larger impact is this week’s Federal Reserve meeting. Traders on
Monday morning intensified their bets that the central bank would enact another
quarter percentage point interest rate hike as the First Republic resolution
provided some clarity to the question of regional bank health.
But Cohn, who was
the National Economic Council director under former President Donald Trump, said the
broader impact of the Fed’s
rate-hiking cycle will continue to be felt. If the Fed follows
through on the increase, it will mark 5 percentage points worth of hikes in a
14-month period, the fastest tightening cycle since the early 1980s.
“The unintended
consequences of that on banks and balance sheets is fairly substantial. We will
see something in the commercial real estate market,” he said. “But that’s what
we’re talking about. What you learn in the banking industry is it’s usually the
problem you’re not talking about.”
---- “The seizure and subsidized on-sale of First
Republic completes the obvious unfinished business from the initial acute phase
of the bank stress,” Krishna Guha, head of global policy and central bank
strategy for Evercore ISI, said in a client note.
“But we think this is
only the very early stages of the chronic phase and that for every First
Republic or Silicon Valley Bank there will be hundreds of smaller and mid-sized
US banks that will act more conservatively in the months ahead in order to
minimize any risk that they end up in the same situation,” he added.
More
The First Republic deal has come at a crucial point for the markets and economy (cnbc.com)
The
market, like the Lord, helps those who help themselves. But, unlike the Lord,
the market does not forgive those who know not what they do.
Warren Buffett.
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.
World’s
Industrial Engines Struggle to Find Recovery Gear
By Brendan Murray 1 May 2023 at 12:00 BSTThe world’s major industrial engines are struggling
to emerge from an economic rut.
The lack of traction was evident
in new figures from Asia. Data released on Monday showed South Korea’s shipments abroad fell 14.2% in
April, steeper than economists’ expectations for a 12.2% decline.
Korean exports are a bellwether
for international trade because the nation sells a lot of essentials for supply
chains — like semiconductors, computer monitors and refined oil. Exports
of chips dropped 41% last month from a year earlier after sliding 34.5% in
March, pointing to still-anemic tech sector demand.
South Korea’s Export
Slump
Optimists saw a silver
lining: Korea’s exports adjusted to smooth out calendar
quirks (April 2023 had one fewer working days than the same month last year)
fell 10.4% from a year earlier, the smallest decline since December.
China’s Slump
China’s recovery looks
patchy, too, with fresh indicators pointing to a contraction in
manufacturing. Purchasing managers’ indexes released Sunday showed
an unexpected
decline in factory activity in April, weighed
down by weaker demand for exports.
“The key factory sector
is shrinking despite strong government spending and robust demand in pockets of
the services industries,” Chang Shu and David Qu of Bloomberg
Economics wrote in a research note.
“Bottom line: The recovery is probably too narrow to be sustainable — and risks
losing steam.”
Last week, figures
released from Vietnam showed exports dropping 17.1% in April from a year
earlier, the fifth decline in the past six months.
US and Europe
In the US, a metal manufacturer in Texas said “most
customers, when pressed, think the recession will start in summer. We are
getting ready for our second layoff in the last four months,” according to
the latest
survey from the Dallas Fed.
More
Supply Chain
Latest: Global Economy Struggles to Emerge From Slowdown - Bloomberg
Covid-19 Corner
This section will continue until it becomes unneeded.
Today, something different. More research needed. Try some research in combination with Ivermectin too. Approx. 21 minutes.
Cannabidiol
and covid
Cannabidiol
and covid - YouTube
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.
Autonomous electric ferry to begin commercial
operation in Stockholm
Paul Ridden April 28, 2023
Norwegian
shipping company Torghatten AS is due to launch what's billed as the world's
first commercial autonomous and electric passenger ferry, which will start
making regular trips between islands in central Stockholm, Sweden, later this
year.
The
autonomous tech at the heart of the Zeam ferry has been in
development for a number of years at the Norwegian
University of Science and Technology in Trondheim, which successfully launched
a ferry
trial as part of its Autoferry project last year.
The setup
is now being made commercially available by spin-out company Zeabuz, which
Torghatten AS co-owns, and is made up of radar and LiDAR to keep track of – and
avoid – other objects on the water, infrared and vision cameras to assist the
AI-based "digital captain" in understanding what's going on around
the ferry, ultrasonic sensors to facilitate automatic docking maneuvers, and
GPS for positioning.
The
autonomous catamaran ferry is being built by Brødrene Aa and will measure 12 x
5 m (39.3 x 16.4 ft), with enough space to carry 25 passengers (plus half a
dozen bicycles) between the islands of Kungsholmen and Södermalm in Stockholm.
A 188-kWh battery bank supplied by ZEM will be charged up by a 7.7-kW
solar-panel array up top and propulsion comes courtesy of an electric motor.
The Zeam ferry is expected to
begin operating from June, running every 15 minutes for up to 15 hours per day.
Torghatten AS is hoping that Stockholm will be the first of many cities to
adopt the initiative.
Sources: Torghatten AS, Zeabuz
Autonomous
electric ferry to begin commercial operation in Stockholm (newatlas.com)
Why did I take up stealing? To
live better, to own things I couldn't afford, to acquire this good taste that
you now enjoy and which I should be very reluctant to give up.
Cary Grant. To Catch A Thief.
No comments:
Post a Comment