Baltic Dry Index. 1608 -32 Brent Crude 74.60
Spot Gold 2012 US 2 Year Yield 3.89 -0.01
Coronavirus
Cases 01/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 12/05/23 World 688,141,754
Deaths 6,873,514
John Kenneth Galbraith.
In the Asian stock casinos, good news is ignored as the prospect of a US debt default becomes the main concern.
Few actually expect a US debt default to happen, but if President Biden won’t negotiate with the Republican leadership, what if the USA blunders itself into what would quickly become an international financial panic?
With only about two to three weeks to go before Uncle Scam runs out of cash to pay his bills, according to US Treasury Secretary Yellin, President Biden and the Republicans are now playing a high stakes version of financial Russian roulette.
Asia markets
trade mixed as U.S. inflation shows more signs of easing
UPDATED THU, MAY 11 2023 11:51 PM EDT
Asia-Pacific markets are trading mixed after the
U.S. posted more data that showed inflation was easing.
The producer
price index for April, posted a year-on-year increase of 0.2%,
against a Dow Jones estimate for 0.3% and after declining 0.4% in March.
Excluding food and energy, core PPI also rose 0.2%.
Australia’s S&P/ASX 200 was
lower and slipped 0.2%, along with South Korean markets. The Kospi lost 0.62%
and the Kosdaq saw a smaller loss of 0.25%.
In Hong Kong, the Hang Seng index fell
0.39% ahead of its first-quarter GDP figures, while mainland Chinese markets
were all lower. The Shanghai
Composite fell 0.68%, and the Shenzhen Component inched
down 0.41%.
Japan’s Nikkei 225 bucked
regional trend rose 0.8%. The Topix also climbed 0.56% led by health care and
utilities stocks.
Overnight in the U.S., stocks
ended mixed, with the Dow Jones Industrial Average and S&P 500 slipping
0.66% and 0.17% respectively as Disney shares fell
more than 8% the day after the media giant released its fiscal second-quarter
results.
Concerns around regional banks
persisted as investors further digested economic data releases. In contrast,
the Nasdaq Composite posted
a gain of 0.18% as Alphabet shares
gained near their highest
level since August.
Asia markets trade
mixed as U.S. inflation shows more signs of easing (cnbc.com)
Biden,
McCarthy debt ceiling meeting postponed, spending cuts on table
May
12, 2023 2:32 AM GMT+1
WASHINGTON, May
11 (Reuters) - A debt limit meeting between U.S. President Joe Biden and top
lawmakers that had been scheduled for Friday has been postponed, and the
leaders agreed to meet early next week, a White House spokesperson said on
Thursday.
Aides
from both sides have started to discuss ways to limit federal spending, as
talks on raising the government's $31.4 trillion debt ceiling to avoid a
catastrophic default creep forward, people familiar with the discussions said.
"Staff will
continue working and all the principals agreed to meet early next week,"
the spokesperson said.
The
aides to Biden, Republican House Speaker Kevin McCarthy, Democratic Senate
Majority Leader Chuck Schumer, top Senate Republican Mitch McConnell and top
House Democrat Hakeem Jeffries and met Wednesday and Thursday to discuss
raising the debt ceiling, the White House said earlier.
McCarthy
told reporters at the Capitol that the delay was not a sign of trouble in the
talks but that he believed the staff negotiators who had been meeting this week
needed to continue to talk before the principals met again.
"I don't
think there's enough progress for the leaders to get back together," he
said. He also said one of the Congress members wasn't able to make the Friday
meeting.
White
House officials acknowledge that they must accept some spending cuts or strict
caps on future spending if they are to strike a deal, two sources said, while
insisting they must preserve Biden's signature climate legislation that passed
along party lines last year.
---- The two
sides are also debating how long to push out the next potential debt ceiling
showdown, sources said. Biden and Democrats would prefer a two-year window,
pushing any legislative action beyond the 2024 presidential election, but they
may have to accept larger spending cuts or stricter caps to get more time, the
sources said.
More
Biden,
McCarthy debt ceiling meeting postponed, spending cuts on table | Reuters
Jamie Dimon warns
panic will overtake markets as U.S. approaches debt default
JPMorgan
Chase CEO Jamie Dimon said
Thursday that markets will be gripped by panic as the U.S. approaches a
possible default on its sovereign debt.
An actual default would be
“potentially catastrophic” for the country, Dimon told Bloomberg in a televised
interview. Dimon said he expects that worst-case scenario will be avoided,
however, because lawmakers will be forced to respond to growing concern.
“The closer you get to it, you will have panic” in the form of
stock market volatility and upheaval in Treasurys, he said.
Dimon joined a host of business figures and
administration officials making dire predictions about the consequences of
failing to raise or suspend the U.S. debt limit and allowing the world’s
largest economy to default on its bonds. Treasury Secretary Janet Yellen has
said the idea that the country could default should be “unthinkable”
and would lead to economic disaster.
“If it gets to that
panic point, people have to react, we’ve seen that before,” Dimon said.
But “it’s a really
bad idea, because panic becomes something that is not good,” he added. “It
could affect other markets around the world.”
War room
JPMorgan, the
biggest U.S. bank with about $3.7 trillion in assets, has been
preparing for the risk of an American default, Dimon said.
Such an event would ripple through the financial
world, impacting “contracts, collateral, clearing houses, and affect clients
definitely around the world,” he said.
The bank’s
so-called war room has been gathering once weekly, a rate that will shift to
daily meetings around May 21 and then three meetings daily after that, he said.
He exhorted
politicians from both major U.S. parties to compromise and avoid a ruinous
outcome.
“Please negotiate a
deal,” Dimon said.
More
JPM's
Jamie Dimon warns of market panic as U.S. nears default (cnbc.com)
German minister
calls for maturity on U.S. debt ceiling talks: ‘We have to avoid further risks’
PUBLISHED THU, MAY 11 2023 5:19
AM EDT
German Finance Minister Christian Lindner hopes
American lawmakers will be “mature” over the debt ceiling negotiations to avoid
further headwinds for the global economy.
U.S. Congress is trying to find a compromise on
the debt limit —
which refers to the maximum amount of money that the two chambers allow the
federal government to borrow. Democratic leaders want the limit to be raised
but Republican lawmakers have called for spending cuts to be agreed before
anything is approved.
Time is running out for an agreement, with U.S.
Treasury Secretary Janet Yellen warning earlier this month that without a deal,
the largest economy in the world could default by June 1.
“There is a high
level of uncertainty, we have to stabilize the economic development, we have to
further fight inflation and in this situation everyone has to be responsible,
we have to avoid further risks, especially risks which are in our hands to
decide on,” Christian Lindner, the German finance minister, said at the
sidelines of a G-7 meeting in Japan.
“I cannot comment on
domestic politics in other countries, but I hope everyone is mature in this
situation and avoids further risks for the global economic development,” he
told CNBC’s Martin Soong.
Speaking earlier
Thursday at a press conference, also at the G-7 meeting, Yellen said a U.S.
default would threaten the global economy. U.S. President Joe Biden had
previously warned that differences with the Republican Party over the debt
ceiling risk a recession.
More
US needs to be
'mature' over debt ceiling negotiations, Germany's Lindner says at G-7
(cnbc.com)
Yellen
warns US default would threaten global economy, undermine US leadership
May 11, 2023 6:36 AM GMT+1
NIIGATA, Japan, May 11 (Reuters) - U.S.
Treasury Secretary Janet Yellen on Thursday urged Congress to raise the $31.4
trillion federal debt limit and avert an unprecedented default that would
trigger a global economic downturn and risk undermining U.S. global economic
leadership.
Yellen issued the latest in a series of
increasingly stark warnings in remarks prepared for a press conference ahead of
a meeting in Japan with her counterparts from the Group of Seven (G7) rich
nations, as well as India, Indonesia and Brazil.
"A default would threaten the
gains that we've worked so hard to make over the past few years in our pandemic
recovery. And it would spark a global downturn that would set us back much
further," she said. "It would also risk undermining U.S. global
economic leadership and raise questions about our ability to defend our
national security interests."
U.S. President Joe
Biden on Wednesday said failure by Congress to act before Treasury
runs out of money to pay the government's bills - something that could happen
as early as June 1 - risked throwing the U.S. economy into a recession.
Yellen said Republican brinkmanship on
the issue amounted to a "crisis of our own making" and that just the
threat of a default could lead to a downgrade of the U.S. government's credit
rating, as occurred during a debt ceiling fight in 2011.
It could drive interest rates higher on
mortgages, auto payments and credit cards, Yellen said, noting that rates were
already spiking on debt due around June 1.
Biden, a Democrat, insists that
Congress has a constitutional duty to raise the debt ceiling, which reflects
previously spent federal money, without conditions, but Republicans who control
the House of Representatives have tied any increase in the debt limit to
sweeping budget cuts.
Unlike most developed countries, the
U.S. sets a ceiling on how much it can borrow. Because the government spends
more than it takes in, lawmakers must periodically raise that cap.
More
Yellen warns US
default would threaten global economy, undermine US leadership | Reuters
John Kenneth Galbraith. The Great Crash: 1929.
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
ditches any threat of recession in biggest GDP upgrade since 1997 independence
May
11, 2023
Any threat of
a recession in Britain this year and over the medium term has today been
scrapped by the Bank of England in what was the largest upgrade to the central
bank’s GDP projections since it was made independent in 1997.
The UK economy
is now tipped to broadly flatline this year and start growing in the final six
months, leading the Bank to raise its 2023 GDP projections 0.7 percentage
points compared to February.
Output growth
was also hiked to 0.9 per cent next year from a 0.3 per cent contraction and to
0.7 per cent from 0.2 per cent in 2025.
While still
pretty bleak, the Bank’s forecasts now project no quarter of negative growth
over the next three years, a sharp turnaround from the fifteen straight months
of contraction it outlined in November.
“The improved
outlook reflects stronger global growth, lower energy prices, the fiscal
support in the Spring Budget, and the possibility that a tight labour market
leads to lower precautionary saving by households,” the Bank said.
Inflation
though is poised to be higher and stick around for longer than the Bank
previously expected, mainly due to surging food prices and accelerating wages.
It reckoned
back in February the rate of price increases would slim to 3.9 per cent by the
end of the year. That figure has been bumped up to around 5.2 per cent.
“Almost all of
the upside news in CPI inflation data since the February Report has been
accounted for by developments in food and other goods,” the central bank said
in its monetary policy report.
Food prices
have surged around 19 per cent over the last year, according to the Office for
National Statistics, the fastest increase in about four decades.
Inflation
doesn’t return to near the Bank’s two per cent target until the start of 2025
and then remains below that level, possibly opening the door to Governor Andrew
Bailey and co cutting rates toward the back end of next year to stimulate
demand.
Inflation in
March reached 10.1 per cent in March, shocking experts, despite the Bank
raising interest rates 415 basis points at that time, the fastest tightening
cycle since the 1980s.
Today it
backed a twelfth straight increase, lifting borrowing costs 25 basis points to
4.5 per cent, their highest level since October 2008.
Unemployment
has also been slashed in response to the much better-than-feared GDP outlook,
with the rate staying below four per cent for the whole of this year and
peaking at 4.54 per cent in the middle of 2026.
A sharp
reduction in energy bills, compounded by decent pay growth, means UK households
are poised to dodge the severe living standards shock the Bank thought was
coming down the road.
Covid-19 Corner
This
section will continue until it becomes unneeded.
Editorial: The
COVID-19 pandemic emergency is over, but virus is still here
May 11, 2023
After three long and
difficult years, the federal COVID-19 public health emergency ends Thursday. The World Health Organization declared the coronavirus emergency was over globally the week before, and
earlier this year California ended its pandemic state of emergency.
But make no mistake: The
emergency response may have ended, but COVID-19 is still with us. The virus
that has officially killed
about 7 million people worldwide
(and very likely many more unofficially), and more than 1.1 million people in the United States, is still sickening thousands
every day. People are still dying. Millions are still suffering from the loss
of loved ones, opportunities and finances. A new, more infectious Omicron
subvariant, Arcturus, is circulating in Los Angeles, along with a brand-new symptom: pink eye.
Now we are shifting into the
next phase, in which we manage the waves of infection that are likely to
continue for the foreseeable future, while seeking new medications and
therapies to reduce transmission, treat infection and help the many people
still suffering from infections they contracted months, even years earlier.
It's not
certain how many people have the condition known as long COVID, though health
experts estimate it may be in the millions. A study by the Centers for Disease
Control and Prevention last year found that nearly one-fifth of Americans who had COVID over
the previous two years were still experiencing symptoms, which include fever,
dizziness, cognitive dysfunction and heart palpitations.
More
Editorial: The COVID-19 pandemic emergency is over,
but virus is still here (msn.com)
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.
Graphene-based conductive hydrogels show promise for implantable
bioelectrodes
10 May 2023
Researchers in
South Korea have developed graphene-based conductive hydrogels possessing
injectability and tuneable degradability, an advance claimed to further the
design and development of advanced implantable bioelectrodes.
Implantable bioelectrodes are electronic devices that can
monitor or stimulate biological activity by transmitting signals to and from living
biological systems. Such devices can be fabricated using various materials and
techniques, and selection of the right material for performance and
biocompatibility is crucial. To date, conventional metal-based bioelectrodes
are associated with painful incision, tissue inflammation, inefficient signal
transduction, and uncontrolled stability in living biological systems.
Conductible hydrogels have gained traction due to their
flexibility, compatibility, and excellent interaction ability, but the absence
of injectability and degradability has limited their convenience of use and
performance in biological systems.
Now, a team led by Professor Jae Young Lee from the Gwangju Institute of Science and Technology (GIST)
has developed graphene-based injectable conductive hydrogels (ICHs) that
overcome these challenges. The team’s findings are detailed in Small.
In a statement, Prof Lee said:
“Traditional implantable electrodes frequently cause several problems, such as
large incision for implantation and uncontrolled stability in the body. In contrast,
conductive hydrogel materials allow minimally invasive delivery and control
over the bioelectrode’s functional in vivo lifespan and are thus highly
desired.”
To synthesize the ICHs, the researchers
used thiol-functionalised reduced graphene oxide (F-rGO) as the conductive
component due to its large surface area and desirable electrical and mechanical
properties. They selected dimaleimide (PEG-2Mal)- and diacrylate
(PEG-2Ac)-functionalised polyethylene glycol as prepolymers to facilitate the
development of ICHs that are stable and hydrolysable, respectively. These
prepolymers were then subjected to thiol-ene reactions with poly (ethylene
glycol)-tetrathiol (PEG-4SH) and F-rGO.
More
The
Engineer - Graphene-based conductive hydrogels show promise for implantable
bioelectrodes (1)
Another weekend and another weekend closer to
debt default by Pakistan and just possibly President Biden’s Uncle Scam!
While I consider a US default highly
unlikely, Pakistan avoiding a debt default is equally highly unlikely.
While Pakistan’s default will greatly damage
Pakistan and the south Asian economy to a lesser extent, a US debt default would
be like a severe earthquake to the global economy.
For that reason I think some sort of US debt
ceiling raise compromise is more likely, but with Washington politics so bitter
and extreme at present, the chance for spectacular error can’t be entirely
ruled out.
If all else fails, immortality
can always be assured by spectacular error.
John Kenneth
Galbraith.
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