Baltic Dry Index. 1172 -43 Brent Crude 76.95
Spot Gold 1946 U S 2 Year Yield 4.54 +0.04
Politicians, finance ministers and
central banksters, “ are no good, lying bastards. They can lie out of both
sides of their mouth at the same time, and if they ever caught themselves
telling the truth, they'd lie just to keep their hand in ” To misquote Harry
Truman on Richard Nixon.
Treasury now says it could run out of money June 5, buying
time for debt ceiling talks
WASHINGTON — Treasury Secretary Janet Yellen said
Friday that the United States will likely have enough reserves to push off a
potential debt default until June 5.
“We now estimate that Treasury will
have insufficient resources to satisfy the government’s obligations if Congress
has not raised or suspended the debt limit by June 5,” Yellen wrote in a letter to House Speaker Kevin
McCarthy.
The new date Friday provided some
much needed breathing room for negotiations between
the White House and congressional Republicans that appeared to be closing in on
a compromise agreement Friday to raise the debt
ceiling for two years.
The last time the so-called “X date” was updated
was on May 1, when Yellen told Congress the United States had enough cash
available to meet its obligations until “early June, and potentially as early
as June 1.”
Friday’s letter marked the first
time since Yellen began sending regular updates to Congress in January that the
secretary did not caveat the date with a phrase like “as early as.”
Instead, Yellen explained that
Treasury would make more than ”$130 billion of scheduled payments in the first
two days of June,” leaving the agency with “an extremely low level of
resources.”
“During the week of June 5,
Treasury is scheduled to make an estimated $92 billion of payments and
transfers,” Yellen continued, and “our projected resources would be inadequate
to satisfy all of these obligations.”
To underscore just how low
Treasury’s reserves had fallen, Yellen said the agency was forced to deploy an
obscure measure on Thursday to move $2 billion from a civil service retirement
fund over to the government’s main borrowing institution, the Federal Financing
Bank.
The move was necessary because
“the extremely low level of remaining resources demands that I
exhaust all available extraordinary measures to avoid being unable to
meet all of the government’s commitments,” Yellen wrote.
Markets closed
higher Friday, buoyed in part by optimism that there would be a
deal passed by the House and Senate and signed by the president by June
1.
But as talks dragged on this week
with little more than vague claims of “progress” by those involved, optimism
faded that deal would be reached by the end of Friday.
Officials said Friday was widely
seen as the last possible day to reach a deal and still have enough time to
craft it into legislation, pass it in the House and then pass it in the Senate
before the previous “X-date” of June 1.
Yellen’s new date came amid growing
concerns around the world about the U.S. credit rating.
On Wednesday, the Fitch credit
rating agency announced it had placed the United States’ triple-A status on “rating
watch negative.”
On Friday, in a preliminary International Monetary
Fund annual assessment of the United States,
officials wrote that “brinkmanship over the federal debt ceiling could create a
further, entirely avoidable systemic risk to both the U.S. and the global
economy.”
Should the United States
technically default, even for just a few days, it could drive up interest rates
and undermine confidence in the U.S. dollar. Economists note that America’s
adversaries, and in particular Russia and China, are watching the current debt
limit standoff with delight, secure in the knowledge that an erosion of trust
in the U.S. dollar would accrue to their benefit.
Debt
ceiling: New X date is June 5, Treasury says (cnbc.com)
Your Evening Briefing: US Brinkmanship on Debt Deal Gets
More Time
26 May 2023 at 22:26 BST
Treasury Secretary Janet Yellen announced the department
expects to be able to make payments on US debt up until June 5, four days
longer than her previous estimate. While that gets the Treasury past a critical
June 2 date for Social Security payments, it may also be giving those
hashing out a debt limit deal incentive to make more demands despite
the risk of catastrophe.
That risk alone has already done damage to the US economy
and may earn a national credit downgrade. On Friday,
Democratic and Republican negotiators tentatively narrowed differences but
were still clashing on key issues. Of note was an intensifying Republican
insistence on “work requirements” for
millions of America’s poorest, if they want to avail themselves of help for
food or medical care. President Joe Biden has rejected the GOP condition for avoiding default.
Here are today’s top stories
A highly leveraged bond trade that’s become popular with hedge funds is drawing fresh
scrutiny three years after it blew up in
spectacular fashion. The US Securities and Exchange
Commission and the Federal Reserve are said to have questioned prime
brokers about leveraged trading in government bonds by their fast-money
clients. The dangers have been heightened as the game of chicken around
the debt ceiling has threatened to unleash chaos in
financial markets.
Meanwhile,
one of the most reliable strategies in the hedge-fund world this century is
faltering. The trick? Buy stocks that are entering major indexes and sell those
that are exiting them. For Emmanuel Terraz, it has minted profits practically
his whole career. But something is changing, and the Frenchman’s Candriam Index
Arbitrage fund—which has gained in all but four of its 19 years, including through
the financial crisis and Covid—posted its worst-ever performance in 2022.
US inflation and
consumer spending accelerated last month, highlighting steady price pressures
and demand that might keep Federal Reserve policy makers tilted toward raising
interest rates rather than pausing. The
personal consumption expenditures price index and a core measure that excludes
food and energy, the Fed’s preferred inflation gauges, both exceeded projections.
The Commerce Department’s data also surprised with the strongest gain in
household spending since the start of the year.
More
Bloomberg Evening Briefing: US Brinkmanship on Debt Deal Gets More Time - Bloomberg
In
other fantasy news.
China’s gambling hub opens $2 billion resort with a
giant copy of London’s Big Ben
PUBLISHED FRI, MAY 26 2023 1:17
AM EDT
Tourists in Asia no longer have to take long haul
flights to visit the UK’s Big Ben or to snap a shot of London’s iconic red
double-decker bus.
They can now do the same in Macao, the so-called
Las Vegas of Asia.
The Londoner Macao, a British-themed luxury casino
resort in the Chinese gambling hub, held its grand opening ceremony on
Thursday.
And English football celebrity David Beckham was
there to grace the event.
The Chinese gambling city has added yet another
luxury casino resort along Cotai Strip, a term that Las Vegas Sands uses to
refer to an alley lined with hotel casinos, shopping centers and theaters.
“You can’t get a better hotel room than what we’ve
put in the Londoner. You can’t get better spa experience, you can’t get better
food experience,” Las Vegas Sands CEO Robert Goldstein told CNBC on Thursday.
----The resort has been operational for the last two years, but
its opening was delayed due to strict Covid-19 restrictions and travel
rules.
The $2 billion resort holds replicas of the UK’s
iconic buildings. They include the Palace of Westminster, the British prime
minister’s official residence on 10 Downing Street, and the Shaftesbury
Memorial Fountain, among other monuments in London.
Las Vegas Sands owns The Londoner Macao, along
with The Venetian Macao, The Parisian Macao, Sands Maco, and The Plaza Macao
& Four Seasons Hotel Macao — all located along the Cotai Strip, the company website showed.
Replicas of famous European landmarks like the
Eiffel Tower and Venice’s grand canal can be seen at the other hotels.
More
Macao opens $2 billion resort with a giant copy of
London's Big Ben (cnbc.com)
The tech trade is back, driven by A.I. craze and
prospect of a less aggressive Fed
Forget about the debt
ceiling. Tech investors are in buy mode.
The Nasdaq Composite
closed out its fifth-straight weekly gain on Friday, jumping 2.5% in the past
five days, and is now up 24% this year, far outpacing the other major U.S.
indexes. The S&P 500 is up 9.5% for the year and the Dow Jones Industrial
Average is down slightly.
Excitement surrounding chipmaker Nvidia’s blowout earnings report and its leadership position in artificial
intelligence technology drove this week’s rally, but investors also snapped up
shares of Microsoft, Meta and Alphabet, each of which have their own AI story to tell.
And with optimism
brewing that lawmakers are close to a deal to raise the debt
ceiling, and that the Federal Reserve may
be slowing its pace of interest rate hikes, this year’s stock
market is starting to look less
like 2022 and more like the tech-happy decade that preceded it.
“Being concentrated in these
mega-cap tech stocks has been where to be in this market,” said Victoria
Greene, chief investment officer of G Squared Private Wealth, in an interview
on CNBC’s “Worldwide Exchange” Friday morning. “You cannot deny the potential
in AI, you cannot deny the earnings prowess that these companies have.”
To start the year, the main theme in tech was layoffs and
cost cuts. Many of the biggest companies in the industry, including Meta,
Alphabet, Amazon and
Microsoft, were eliminating thousands of jobs following a dismal 2022 for
revenue growth and stock prices. In earnings reports, they emphasized
efficiency and their ability to “do
more with less,” a theme that resonates with the Wall Street
crowd.
But investors have shifted their
focus to AI now that companies are showcasing real-world applications of the
long-hyped technology. OpenAI has exploded after releasing the chatbot ChatGPT
last year, and its biggest investor, Microsoft, is embedding
the core technology in as many products as it can.
Google, meanwhile, is touting its rival AI model
at every opportunity, and Meta CEO Mark Zuckerberg would much rather tell shareholders about his company’s AI advancements than the
company’s money-bleeding metaverse efforts.
More
Tech
stocks are back, driven by A.I. craze, slowing rate hikes (cnbc.com)
Finally,
in food price inflation news, are food prices at or near the top?
Will
increased EU crop output in 2023 put pressure on grain prices?
May 25, 2023 10:30 am
European Union (EU) crop
output is expected to increase in 2023, despite the continuing threat of
drought across southern Europe.
This is the main
conclusion contained within forecasts published yesterday (May 24) by the EU’s
umbrella farming and agri cooperative body, Copa Cogeca.
This news may well act to
put further pressure on international cereal and oilseed prices.
A general increase of the
EU’s cereals, oilseeds, and protein crop production is predicted in 2023,
despite an anticipated serious decrease of production in Spain.
According to Copa Cogeca experts, the EU-27 cereal production should
reach 277Mt (+4.6% compared to the 2022 harvest). A similar positive trend is
expected for oilseeds (34.1Mt, +8.2%) and protein crops (3.9Mt, +5%).
Despite a reduction of the
area sown in 2023 (-3,8%), the expected high yields for cereals should ensure a
better outcome than that of 2022.
This trend is driven
partly by the higher yields expected for grain maize with a production that
should reach 62Mt (+21.7% compared to 2022).
Production within this sector was severely affected last year in some
eastern EU member states.
It is anticipated that
barley and durum wheat production may well face a drop of -2.3% and -7.1%
respectively.
However, feed and bread
wheat output should increase to 128Mt (+2.8% relative to 2022).
More
Will increased EU
crop output in 2023 put pressure on grain prices? (agriland.ie)
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.
Inflation rose 0.4% in April and 4.7% from a year ago,
according to key gauge for the Fed
Inflation stayed stubbornly high in April,
potentially reinforcing the chances that interest rates could stay higher for
longer, according to a gauge released Friday that the Federal Reserve follows
closely.
The personal consumption
expenditures price index, which measures a variety of goods and services and
adjusts for changes in consumer behavior, rose 0.4% for the month excluding
food and energy costs, higher than the 0.3% Dow Jones estimate.
On an annual basis, the gauge
increased 4.7%, 0.1 percentage point higher than expected, the Commerce Department reported.
Including food and energy, headline PCE also rose
0.4% and was up 4.4% from a year ago, higher than the 4.2% rate in March.
Despite the higher
inflation rate, consumer spending held up well as personal income increased.
The report showed
that spending jumped 0.8% for the month, while personal income accelerated
0.4%. Both numbers were expected to increase 0.4%.
Price increases
were spread almost evenly, with goods rising 0.3% and services up 0.4%. Food
prices fell less than 0.1% while energy prices increased 0.7%. On an annual
basis, goods prices increased 2.1% and services rose by 5.5%, a further
indication that the U.S. was tilting back toward a services-focused economy.
Food prices rose 6.9% from a year ago while
energy fell 6.3%. Both monthly PCE gains were the most since January.
Markets reacted
little to the news, with stock
market futures pointing higher as investors focused on
improving prospects for a debt
ceiling deal in Washington. Treasury yields were mostly higher.
Fed implications
“With today’s
hotter-than-expected PCE report, the Fed’s summer vacation may need to be cut
short as consumers’ vacations fuel spending,” noted George Mateyo, chief
investment officer at Key Private Bank. “Prior to today’s release, we believe
that the Fed may have been hoping to take the summer off (i.e., pause and
reassess), but now, it seems as if the Fed’s job of getting inflation down is
not over.”
The report comes
just a few weeks ahead of the Fed’s policy meeting June 13-14.
More
Inflation
rose 0.4% in April and 4.7% from a year ago, according to key gauge for the Fed
(cnbc.com)
Bank of England ‘under siege’ as ‘absolute flagship’ group
pulls out of UK debt market
May
26, 2023
The Bank of England is “under siege” after a
“flagship” group opted to voice its concern over Britain’s bond market,
according to GB News’ Economics and Business Editor, Liam Halligan.
It comes after Legal & General Investment
Management revealed they are staying away from long-term investments in gilts
as bond yields surge.
Government borrowing costs are rising as a result
of gilt prices slumping, resulting in traders growing increasingly confident of
another interest rate rise.
Halligan says this spells bad news for the Bank of
England, telling GB News: “It does seem a bit of a moment when an absolute
flagship of the financial community in the UK, actually says something
publicly.
“You do get a sense that the Bank of England is now
under siege. This is what happens when you spend months and months that
inflation is going to be transitory when pundits like me are saying it’s not
going to be.
“You look at the numbers and you see this mismatch
bursting out into the real world.
“Nationwide, the friendly lender, they’re
increasing their mortgage rates by .45 in one bound.”
It follows inflation data released on Wednesday
which shows core inflation surged to a. 31-year high of 6.8 per cent.
Chancellor Jeremy Hunt has backed the hike in interest rates,
put in place to calm soaring inflation, despite the risk of the UK being pushed
into recession.
More
Bank
of England ‘under siege’ as ‘absolute flagship’ group pulls out of UK debt market
(msn.com)
Retail sales up in April but analysts
warn on implications of further rate hikes
FRIDAY 26 MAY 2023 7:42 AM
Retail
sales volumes recovered slightly by 0.5 per cent in April as the
sector was lifted by the Easter holidays, however high inflation and strains on household finances
continue to hinder spending.
Non-food stores sales volumes rose by 1.0 per cent during the month, data from the ONS shows, following a fall of 1.8 per cent in March, when a particularly rainy start to spring deterred shoppers.
As grocery inflation remains
at record highs of circa 17.1 per cent, food stores sales volumes rose by 0.7
per cent in April 2023, following a fall of 0.8 per cent in March 2023.
However
volumes were 2.7 per cent below their pre-coronavirus February 2020 levels, as
households continue to spend cautiously when doing their weekly shop.
Moreover,
online shopping rose 0.2 per cent during the month, following a 1.4 per cent
fall in March.
The
figures show the impact of inflation, which is currently sat at 8.7 per cent,
on Brits spending habits. When compared with their pre-coronavirus level in
February 2020, total retail sales were 16.5 per cent higher in value terms, but
volumes were 0.8 per cent lower – as the nation gets less for what they pay
for.
Dee
Corsi, chief executive at New West End Company, said: “After a challenging few
months, it is positive to see that retail sales are up 0.5 per cent from last
month.
“April
spend was undoubtedly boosted by the Coronation weekend, seeing the arrival of
thousands of international tourists. With inflation hitting domestic spending
power, the importance of international visitors has never been greater.”
----
Analysis by PwC suggested that the “positive momentum” was welcome but could be
thrown off by rising interest rates.
More.
Top City investor: Rate hikes and gilt spike WILL throw UK
economy into recession
May
26, 2023
A top Square Mile economist has warned that further
rate hikes and the increasing price of government debt means the UK will
struggle to avoid recession.
Speaking to the BBC’s Today programme this morning,
Abrdn’s investment director Luke Hickmore said that incomes were set to come
“under a lot of pressure” after the Square Mile upped its consensus forecast on
interest rates.
Whilst many as recently as a month ago had not
expected the Bank to push the rate beyond 5 per cent, some now expect an
additional 50 basis points on top as a result of stickier than expected ‘core’
inflation.
Though the headline inflation number fell in April,
core inflation was at its highest since the early 1990s. The Bank of England
has been criticised for over-confidence at the beginning of this inflationary
cycle, when it was warned a failure to move quickly would likely result in
rates staying higher for longer.
Hickmore told the BBC: “This higher interest rate
profile from the Bank of England, higher mortgage rates and still high
inflation (means) it is going to be increasingly hard to avoid a recession.”
The Abrdn exec’s prediction
swims slightly against the tide, with the IMF earlier this week predicting the
UK would in fact avoid a technical recession – two consecutive quarters of
negative economic growth.
However the surprise inflation readout earlier this week has spooked a
number of City number-crunchers.
Hickmore
said he feared recession at the end of this, or the start of next year.
The
stickiness in core inflation suggests at least a fraction of that wage/price
setting dynamic is gathering momentum.
The
stickiness in core inflation suggests at least a fraction of that wage/price
setting dynamic is gathering momentum.
This
morning the Chancellor backed moves by the Bank of England to tamper inflation.
More.
Top
City investor: Rate hikes and gilt spike WILL throw UK economy into recession
(cityam.com)
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
https://media4.manhattan-institute.org/sites/default/files/R-0319-MM.pdf
Mines,
Minerals, and "Green" Energy: A Reality Check
https://www.manhattan-institute.org/mines-minerals-and-green-energy-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.
US study
finds 1 in 10 get long COVID after omicron, starts identifying key symptoms
May 25, 2023
WASHINGTON (AP) — About 10% of people appear to suffer
long COVID after an omicron infection, a lower estimate than earlier in the
pandemic, according to a study of nearly 10,000 Americans that aims to help
unravel the mysterious condition.
Early findings from the National Institutes of Health’s study highlight a dozen symptoms that most distinguish
long COVID, the catchall term for the sometimes debilitating health problems
that can last for months or years after even a mild case of COVID-19.
Millions worldwide have had long COVID, with dozens
of widely varying symptoms including fatigue and brain fog. Scientists still don’t know what causes it, why it only
strikes some people, how to treat it -– or even how to best diagnose it. Better
defining the condition is key for research to get those answers.
“Sometimes I hear people say, ’Oh, everybody’s a little
tired,’” said Dr. Leora Horwitz of NYU Langone Health, one of the study
authors. “No, there’s something different about people who have long COVID and
that’s important to know.”
The new research, published Thursday in the Journal of the American Medical Association, includes more than 8,600 adults who had COVID-19 at
different points in the pandemic, comparing them to another 1,100 who hadn’t
been infected.
By some estimates, roughly 1 in 3 of COVID-19 patients
have experienced long COVID. That’s similar to NIH study participants who
reported getting sick before the omicron variant began spreading in the U.S. in
December 2021. That’s also when the study opened, and researchers noted that
people who already had long COVID symptoms might have been more likely to
enroll.
But about 2,230 patients had their first coronavirus
infection after the study started, allowing them to report symptoms in real
time -– and only about 10% experienced long-term symptoms after six months.
Prior research has suggested the risk of long COVID has
dropped since omicron appeared; its descendants still are spreading.
The bigger question is how to identify and help those who
already have long COVID.
The new study zeroed in on a dozen symptoms that may help
define long COVID: fatigue; brain fog; dizziness; gastrointestinal symptoms;
heart palpitations; sexual problems; loss of smell or taste; thirst; chronic
cough; chest pain; worsening symptoms after activity and abnormal movements.
The researchers assigned scores to the symptoms, seeking
to establish a threshold that eventually could help ensure similar patients are
enrolled in studies of possible long COVID treatments, as part of the NIH study
or elsewhere, for apples-to-apples comparison.
More
US study finds 1
in 10 get long COVID after omicron, starts identifying key symptoms | AP News
Some more useful Covid links.
Johns Hopkins Coronavirus
resource centre
https://coronavirus.jhu.edu/map.html
The Spectator
Covid-19 data tracker (UK)
https://data.spectator.co.uk/city/national
World Health Organization - Landscape of COVID-19 candidate
vaccines. https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines
NY
Times Coronavirus Vaccine Tracker. https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html
Regulatory Focus COVID-19 vaccine tracker. https://www.raps.org/news-and-articles/news-articles/2020/3/covid-19-vaccine-tracker
Technology Update.
With events happening fast in the
development of solar power and graphene, I’ve added this section.
This weekend, something a little
different, a visit to the past of technology in history. The nautical steam
turbine that changed shipping. Approx. 11 minutes.
Incredible
Speed: Turbinia | HISTORY
Incredible
Speed: Turbinia | HISTORY - YouTube
This weekend’s music diversion. Germany’s
greatly underrated Johann Friedrich Fasch.
Approx. 11 minutes.
Fasch
- Concerto for 3 Trumpets in D major, FWV L: D3 | Il Gardellino
Fasch - Concerto
for 3 Trumpets in D major, FWV L: D3 | Il Gardellino - YouTube
This weekend’s chess update. Approx. 8
minutes.
Magnus,
The Dragon Slayer
Magnus, The Dragon Slayer - YouTube
This weekend’s maths update. Approx. 4 minutes.
Ramanujan's
Pi Formula
Ramanujan's Pi
Formula - YouTube
A large Bank is exactly the place where a vain and shallow
person in authority, if he be a man of gravity and method, as such men often
are, may do infinite evil in no long time, and before he is detected. If he is
lucky enough to begin at a time of expansion in trade, he is nearly sure not to
be found out till the time of contraction has arrived, and then very large
figures will be required to reckon the evil he has done.
Walter Bagehot. Lombard Street, 1873.
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