Saturday 6 May 2023

Special Update 06/05/2023 The Great Coronation, Bank Bust Edition.

Baltic Dry Index. 1558 +13        Brent Crude 75.30

Spot Gold 2017            U S 2 Year Yield 3.92 +0.17  

Covid-19 cases 02/04/20 World 1,000,000

Deaths 53,100

Covid-19 cases 06/05/23 World 687,690,055

Deaths 6,870,704

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

Ludwig von Mises

It is Coronation Day in the UK and it’s been so long since the last one, no one knows how to make a coronation relevant in the 21st century, cost of living pressured modern Brexit Britain.

With heavy rain showers expected, plus anti-monarchist, anarchists disruption expected an interesting spectacle seems quite likely.

In the casinos, despite yesterday’s rebound rallies, few see anything but a summer of trouble and disruption ahead.

We are shortly to find out who has already gone bust, who is going to go bust, and who is still trying to operate on smoke and mirrors as the effect of rising interest rates increasingly takes over.

We are also about three months away from knowing whether the northern hemisphere crops will bring  the start of the end of rampant food price inflation. If not, be prepared for much more social unrest to come.

Dow jumps 500 points to break four-day losing streak as regional banks and Apple shares surge: Live updates


Stocks popped on Friday as regional bank shares climbed off their lows and market-darling Apple jumped after posting better-than-expected quarterly earnings.

The Dow Jones Industrial Average added 546.64 points, or 1.65%, to close at 33,674.38. The S&P 500 climbed 1.85%, ending the day at 4,136.25. The Nasdaq Composite advanced 2.25% and closed at 12,235.41.

Despite Friday’s rally, the Dow and the S&P 500 logged their worst week since March. The 30-stock Dow lost 1.24%, while the S&P 500 dropped 0.8%. The Nasdaq eked out a small weekly gain of 0.07%.

Stocks rose even as April’s jobs numbers came in hotter than expected. The U.S. economy added 253,000 jobs in April. Wall Street had expected 180,000 new jobs, according to Dow Jones.

Late Thursday, Apple posted beats on the top and bottom lines for the fiscal second quarter, propelled by iPhone sales. Apple shares gained about 4.7%.

The rebound for regional bank stocks was boosted by a note from JPMorgan, which upgraded Western Alliance, Zions Bancorp and Comerica to overweight. The firm said those three banks appear “substantially mispriced” in part due to short-selling activity. The SPDR S&P Regional Banking ETF (KRE) advanced more than 6%. PacWest — which is down sharply this week on news it’s considering strategic options that include a sale — popped 81.7%. Western Alliance also jumped 49.2%.

Shares of regional banking companies have been under pressure this week, as traders fear other institutions could suffer the same fate as Silicon Valley Bank and Signature Bank. Both banks collapsed in March.

Liz Young, head of investment strategy at SoFi, doesn’t believe the fallout in the regional banking sector is over despite Friday’s rebound. “When the whole news cycle started, it was sort-of explained away … as a unique circumstance for certain institutions. The reality is that liquidity is a universal challenge,” she said.

“The issue originally was that deposit flight was occurring. … But now that the pressure is no longer necessarily deposit flight. It’s this mark to market of the securities on all their books,” Young continued.

“So I don’t think that this news cycle isn’t necessarily over. … I also don’t think it dies of natural causes in the sense [that] it heats up and then just kind of cools down with no effect,” she added.

Stock market today: Live updates (

But, be prepared for much more devastation to come. The Great AI Disruption is just starting plus that US banking crisis is only going to get much worse.

Brace yourselves, the banking crisis is just getting started

May 5, 2023

----Having ridden to the rescue of California lender First Republic over the weekend, JP Morgan’s superstar boss had a message for financial markets: its shotgun takeover of First Republic heralded the end of the crisis. He should know better than to be drawn into the realms of speculation about things he has no control of but then Wall Street is so deferential to figures like Dimon that they start to believe they can walk on water.

Still, the speed with which Dimon’s words have come back to haunt him comes as a shock. A mere 48 hours later, and it looked as though the game was up for yet another regional American bank – the fourth since the end of March.

On Wednesday, shares in PacWest plunged by as much as 60pc in after-hours trading, prompting the bank to announce that it was seeking salvation either through an emergency cash call, or, like its stricken rivals, in the arms of a bigger competitor.

The following morning, Western Alliance was forced to deny it was exploring a fire sale despite its share price plummeting 40pc at one stage. Zions Bancorp and Comerica were also under the microscope as investors continued their frantic efforts to work out where the weakest links in the financial system lie hidden.

As with those that failed before it, two things stand out with PacWest. Firstly, this is a bank that had already shored up its balance sheet by raising a $1.4bn lending facility from Apollo-backed investment firm Atlas SP Partners. And yet, that clearly wasn’t enough to assuage concerns about its true financial state.

When that failed, it resorted to old-fashioned words: “Our cash and available liquidity remains solid,” the bank said. That also fell on deaf ears. Events followed a similar pattern at Signature Bank, Silicon Valley Bank, and First Republic before all three ended up in the hands of the US banking regulator.

Dimon can take some comfort in the fact that other major names have offered similarly ill-judged and premature reassurances.

On Wednesday night it was the turn of Federal Reserve chairman, Jerome Powell: The banking system is “sound and resilient” he declared, presumably to the bewilderment of PacWest shareholders who will almost certainly be wiped out if the Federal Deposit Insurance Corporation is forced to step in again.

----The reality is that the establishment is in no position to offer any guarantees. Such reassurances are founded on the same rigid metrics that regulators judge all big banks upon but the experience of Credit Suisse showed that those measures are far from fool-proof.

The Swiss giant met all of the strict capital requirements that were imposed on the industry after the financial crash. According to the rules, it had sufficient capital, ample liquidity, and was adequately funded but in the end it was crushed by sentiment and fear.

The problem is that once investors lose confidence, it is desperately difficult to regain, and regulators quickly become helpless bystanders. Similarly, for all the regulation that was ushered in following the financial crash of 2008, when customers take fright, bank runs are practically impossible to stop.

In an era of social media, smartphones, and online banking, the system is arguably more vulnerable than ever despite the intense scrutiny that followed the financial crash.

This is particularly true of America’s sprawling mid-tier banking sector, which has managed to escape the same oversight as its more muscular rivals after regional lenders successfully persuaded the Fed and the FDIC that they were not systemically important.

They also claimed that over-burdensome regulation would be a brake on growth and competition. Is it any wonder then that so many appear to have indulged in such reckless lending?

Meanwhile, for every optimist, it is just as easy to find a pessimistic one such as Robert Kaplan, the former president of the Dallas Federal Reserve who thinks “we’re in the early stages, not the late stages” of a banking crisis. Ditto Warren Buffett’s right-hand man Charlie Munger, who has warned that US banks are “full of” bad, yet unrealised commercial property loans.


Brace yourselves, the banking crisis is just getting started (

The banking crisis isn’t over. But how bad will it get?

May 4, 2023

NEW YORK (AP) — Uncertainty continues to pummel the banking industry, despite assurances from financial regulators and bankers such as Jamie Dimon this week that the worst of the recent crisis is over and the health of the banking system remains strong.

Bank shares have sold off on Wall Street this week following the government seizure and subsequent sale of First Republic Bank to JPMorgan. It was the second-largest bank failure in U.S. history and the third failure of a midsize lender in two months.

While many thought the sale of First Republic “would stop the ‘who’s next?’ conversations, investors are clearly continuing to focus on remaining players that are deemed the weakest” analysts at UBS wrote in a note to clients.

A renewed sell-off Thursday focused on PacWest Bancorp and Western Alliance Bancorp, two smaller regional banks whose shares have been under pressure since Silicon Valley Bank failed in mid-March and set off the current crisis. PacWest fell 51% after acknowledging it was considering putting itself up for sale.

PacWest was targeted because of a high concentration of large, uninsured deposits from venture capital and tech clients, the same type of customers who triggered bank runs at Silicon Valley and First Republic. The UBS analysts estimate that about 23% of PacWest's deposits come from the venture capital and tech space.

But even Midwest regionals such as Comerica and KeyCorp are down more than 20% this week. That could reflect growing concerns about large amounts of real estate loans, particularly in the office property market, which continues to suffer the effects of the pandemic.

----“The underlying issue, particularly at these banks, is their asset and deposit mix isn’t sustainable. Deposits keep running out the door or banks are having to pay hefty prices for them,” said Chris Caulfield, a banking industry consultant with West Monroe who has worked with many of the regional banks in trouble.

In another sign of potential trouble, a major deal in the banking sector was called off Thursday. TD Bank Group and First Horizon Corp. said they called off a planned merger, citing regulatory hurdles. Toronto-Dominion Bank had said in February that it was buying regional bank First Horizon in a $13.4 billion all-cash deal.

The Federal Reserve's fight against inflation has played a key role in the banking turmoil. The Fed on Wednesday raised its key interest rate by a quarter-point to the highest level in 16 years as part of that campaign, its tenth consecutive rate hike.

The higher rates have prompted depositors to move money into higher-paying certificates of deposit and money market funds. They also played a role in the slowdown in the tech industry, which had major implications for West Coast banks such as Silicon Valley.


The banking crisis isn’t over. But how bad will it get? (

In other news, stormy weather is forecast, but where, when?

Forecasters: 2023 Will Be a 'Very Active' Hurricane Season

MAY 3, 2023 10:47 AM ET

Forecasters expect a hurricane season similar to 2017, one of the worst and most costly on record.

After two years of relatively mild hurricane seasons, 2023 will see above-average hurricane activity, researchers predict.

The forecasters expect the number of major hurricanes this year to be similar to 2017, which saw the extremely intense hurricanes Harvey, Irma, and Maria.

Since 2014, hurricane activity has been accurately predicted by a model created by Xubin Zeng, a professor of hydrology and atmospheric sciences at the University of Arizona, and his former graduate student Kyle Davis.

“We are not expecting this to be as damaging as 2017,” Zeng says. That said, he emphasizes that “people should get prepared.”

“This will be a very active hurricane season. That’s our message,” says Zeng, adding that the East Coast and Gulf Coast are typically the regions where hurricanes have the greatest impacts.

he researchers are forecasting nine hurricanes this year, five of which are expected to be major hurricanes. Historically, the average number of hurricanes per year has been seven. In 2017, there were 10 hurricanes, six of which were very damaging, Zeng says. The good news this year, is that fewer hurricane landfalls are expected compared to 2017.

This year is particularly interesting, Zeng says, because there will be a fight between two big ocean basins over which will have greater influence on hurricane activities, thanks to the rising eastern Pacific Ocean sea surface temperature compared to previous years.

“We expect a good, nice El Niño to come back after a few years of La Niña,” Zeng explains.

El Niño and La Niña are two opposite extremes of sea surface temperatures, rainfall, surface pressure, and atmospheric circulation happening across the equatorial Pacific Ocean. While El Niño represents an above-average temperature of the sea surface over the eastern Pacific, La Niña refers to the periodic cooling of sea surface temperature. This year, due to the activity of El Niño, or the warm phase, less hurricane activity would be expected over the North Atlantic.

But at the same time, the ocean surface temperature over the Atlantic this year will also be very warm, and that tends to increase hurricane activities, Zeng adds.

The forecasting team is not yet certain which ocean basin will be the “winner” in the battle and will update its predictions in June.


Forecasters: 2023 Will Be a 'Very Active' Hurricane Season - Nextgov

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.

ECB policymakers promise more hikes to beat inflation

May 5, 2023

FRANKFURT (Reuters) -The European Central Bank will continue raising interest rates until inflation is under control, two ECB policymakers said on Friday as surveys showed the fight against rising prices was far from over.

French central bank governor Francois Villeroy De Galhau and his Lithuanian peer Gediminas Simkus reaffirmed the ECB's intention to further increase borrowing costs, multiple times if needed, which financial markets are still doubting.

"The essence of the effort has been done, although there will probably be a few more rate hikes," Villeroy told French broadcaster Radio Classique.

The central bank for the 20 countries that use the euro hiked its key deposit rate on Thursday for the seventh consecutive time but the 25 basis point rise was smaller than previous increases.

Money market prices showed investors were putting a high likelihood on another 25 bp increase in the deposit rate next month, which would take it to 3.50%, but were less convinced the ECB would hike again after that.

Villeroy explained Thursday's smaller rate increase by saying higher rates were beginning to have an effect on inflation. The ECB has raised the deposit rate by an unprecedented 375 basis points since last July.

Data on Friday showed retail sales in the euro zone fell more than expected in March, evidence of demand cooling.

And two ECB surveys also published on Friday showed economists had cut their inflation forecasts for this year and the next - to 5.6% and 2.6% respectively - and that companies were moderating the pace of price hikes.

But the surveys, which were presented to policymakers at this week's meeting, also showed inflation was seen holding slightly above the ECB's 2% target in 2025 and that companies were concerned about surging wages.

That is likely to have cemented the ECB's determination to keep tightening monetary policy in the coming months, albeit by smaller increments.


ECB policymakers promise more hikes to beat inflation (

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

Mines, Minerals, and "Green" Energy: A 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.

CDC’s Rochelle Walensky resigns, citing pandemic transition

May 5, 2023

NEW YORK (AP) — Dr. Rochelle Walensky, the head of the Centers for Disease Control and Prevention, submitted her resignation Friday, saying the waning of the COVID-19 pandemic was a good time to make a transition.

Walensky’s last day will be June 30, CDC officials said, and an interim director wasn’t immediately named. She sent a resignation letter to President Joe Biden and announced the decision at a CDC staff meeting.

Walensky, 54, has been the agency’s director for a little over two years, and the announcement took many health experts by surprise. In her letter to Biden, she expressed “mixed feelings” about the decision and didn’t explain exactly why she was stepping down, but said the nation is at a moment of transition as emergency declarations come to an end.

---- The World Health Organization said Friday that COVID-19 no longer qualifies as a global emergency, and the U.S. public health emergency will expire next week. Deaths in the U.S. are at their lowest point since the earliest days of the coronavirus outbreak in early 2020.

The CDC, with a $12 billion budget and more than 12,000 employees. is an Atlanta-based federal agency charged with protecting Americans from disease outbreaks and other public health threats.


CDC's Rochelle Walensky resigns, citing pandemic transition | AP News

World Health Organization - Landscape of COVID-19 candidate vaccines

NY Times Coronavirus Vaccine Tracker

Regulatory Focus COVID-19 vaccine tracker

Some more useful Covid links.

Johns Hopkins Coronavirus resource centre

The Spectator Covid-19 data tracker (UK)

Technology Update.

With events happening fast in the development of solar power and graphene, I’ve added this section.

Cero Generation and Enso Energy open UK's first transmission-connected solar farm

May 4, 2023

A 49.9MW solar farm, owned and operated by Cero Generation and Enso Energy, will be the first in the country to feed electricity directly into the transmission network.

European specialist Cero Generation together with its UK development partner Enso Energy will open the solar farm alongside a 49.5MW battery energy storage system, maximising the efficiency of the site and allowing a greater output of clean energy.

Located just outside of Bristol, in South Gloucestershire, this project will provide a clean, secure and cheaper power source for the local community and has a biodiversity net gain, providing shelter and food for a range of protected species.

The first-of-its-kind co-located solar and battery project, in Iron Acton, marks a significant step towards creating a secure, home-grown energy system for the UK and its 2035 decarbonisation targets.

As the first to connect to the higher-voltage transmission network, the Larks Green solar farm will allow clean energy to be transported over greater distances across the country and open a gateway for larger projects to connect to the grid It will generate over 73,000MWh annually – enough to power 17,000 homes – and will displace 23,000 tons of CO2 each year compared to traditional energy production.

The project follows installation of new switchgear at the site by Cero and Enso in collaboration with National Grid, and the running of a high voltage cable between the substation and solar farm, which has enabled National Grid to successfully connect the 49.9MW Larks Green solar farm to its Iron Acton substation near Bristol.


Cero Generation and Enso Energy open UK's first transmission-connected solar farm (

This weekend’s music diversion. Prague’s the “last baroque composer.” Surprisingly he lived in the late 20th and early 21st century. Cantata to St. John of Nepomuk. Approx. 20 minutes.

František Xaver Thuri (1939-2019) - Kantáta ke sv. Janu Nepomuckému

František Xaver Thuri (1939-2019) - Kantáta ke sv. Janu Nepomuckému - YouTube

This weekend’s chess update. Approx. 9 minutes.

Stockfish 15.1 (4K Elo) Sacrificed Everything against Magnus Carlsen | Stockfish vs Magnus | chess

Stockfish 15.1 (4K Elo) Sacrificed Everything against Magnus Carlsen | Stockfish vs Magnus | chess - YouTube

This weekend’s maths update.   Approx. 4 minutes.

Very difficult for most students

Very difficult for most students - YouTube

Finally this coronation weekend, more on so you really, really, really want an electric car. Approx. 5 and 6 minutes.


Electric Cars: Inconvenient Facts, Part One

Electric Cars: Inconvenient Facts, Part One - YouTube


Electric Cars: Inconvenient Facts, Part 2

Electric Cars: Inconvenient Facts, Part 2 - YouTube

“Other inflationists realize very well that an increase in the quantity of money reduces the purchasing power of the monetary unit. But they endeavour to secure inflation none-the-less, because of its effect on the value of money; they want depreciation, because they want to favour debtors at the expense of creditors and because they want to encourage exportation and make importation difficult.”

Ludwig von Mises, The Theory of Money and Credit.



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