Baltic
Dry Index. 1558 +13 Brent Crude 75.71
Spot Gold 2024 US 2 Year Yield 3.92 +0.17
Coronavirus
Cases 01/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 08/05/23 World 687,803,066
Deaths 6,871,031
“If you’ve got
the power to raise prices without losing business to a competitor, you’ve got a
very good business. If you have to have a prayer session before raising the
price by 10%, then you’ve got a bad business.”
As expected, Asian stock casinos are largely following Wall Street’s relief rally on Friday, although in the real world things seem to be going from bad to worse.
A US debt default is now about three to four weeks off, but with the US Memorial Day holiday coming up at month-end, the US Congress has little time to pass a Senate version of the House Debt Ceiling hike, then the two different versions must somehow be “reconciled,” before eventually passing both parts of the Congress before being sent on to President Biden for signature or veto.
While a default still seems unlikely, given the elderly makeup of the US Senate, the polarisation between Republicans and Democrats, 3 to 4 weeks with one week off for a holiday, doesn’t leave any room for an unintended error.
In the US regional banking sector, up to another 200 banks are expected to be forced rescued, fire sold or fail over the next few months.
This week it’s The Old bag Lady of
Threadneedle Street’s turn to raise their key interest rate.
In food price inflation news, the Ukraine proxy war goes on endlessly, a serious fertiliser price and supply crisis is present. Droughts are deepening in Argentina and a large part of Spain, France and northern Italy. A large part of Asia from India to southern China are in record heatwaves, while a large part of Canada’s grain belt from British Columbia through Alberta and into Saskatchewan are suffering from exceptionally warm dry conditions generating large wildfires.
While none of this yet means a bad food production crisis turns dire, it seems unlikely that much relief to food price inflation will come from bumper northern hemisphere crops in 2023.
“Sell in May, go away,” looks about right for
2023, together with “run, do not walk for the wealth survival nuclear bunkers”
Asia markets
largely rise after Wall Street rebounds on Friday
UPDATED SUN, MAY 7 2023 11:57 PM EDT
Asia-Pacific
markets largely rose on Monday after Wall Street snapped a four-day losing
streak Friday.
The only outlier was Japan, which
saw the Nikkei 225 fall
0.66% and the Topix down 0.22% despite its services sector seeing a record pace
of expansion in April, the au Jibun Bank Japan services purchasing managers’
index showed.
Minutes from Japan’s March
monetary policy meeting showed board members were concerned over inflation
accelerating at a higher-than-expected pace.
The Shanghai Composite led
gains in the region and gained 1.9%, while the Shenzhen Component was
0.3% up.
In Australia, the S&P/ASX 200 rose
0.69% as financials and miners led gains. South Korea’s Kospi rose 0.84%
and the Kosdaq was up 0.21%.
Hong Kong’s Hang Seng index climbed
0.8%, powered by energy and healthcare stocks.
In the U.S., all three major indexes rebounded
Friday, ending largely higher as banks
rallied and Apple posted better-than-expected earnings. The Dow Jones Industrial Average up
1.65%. The S&P 500 climbed
1.85% and the Nasdaq
Composite saw the largest gains, advancing 2.25%.
The U.S. is also slated to report
its latest consumer price index data for the month of April.
Asia markets largely rise after Wall Street rebounds on Friday (cnbc.com)
Here’s a full
recap of everything Warren Buffett and Charlie Munger said at Berkshire’s
annual meeting
UPDATED SAT, MAY 6 2023 5:08 PM EDT
Despite the recent market volatility and worries
over the economy, Berkshire Hathaway CEO Warren
Buffett on Saturday provided a calm
and steady voice as he fielded questions from shareholders.
That’s not to say that Buffett doesn’t see some
turbulence ahead. He said commercial real estate could struggle with higher
borrowing rates and banks could face more pressure but noted that deposits were
safe. As for the economy, Buffett noted that his businesses will see lower
year-over-year earnings as economic activity slows down.
The Oracle of Omaha also said Berkshire Hathaway
wouldn’t take over Occidental Petroleum.
“There’s speculation about us buying control,
we’re not going to buy control. … We wouldn’t know what to do with it,” he
said.
The legendary investor sounded more optimistic
about the prospects of value investing, however.
“In the 58 years we’ve been running Berkshire, I
would say there’s been a great increase in the number people doing dumb things,
and they do big dumb things,” he said, meaning that there will be more
opportunities to make money down the road.
Buffett also doesn’t expect the U.S. dollar to
be dethroned as the world’s reserve currency anytime soon.
“We are the reserve currency, I see no option
for any other currency to be the reserve currency,” he said.
The 99-year-old Charlie Munger, Buffett’s
right-hand man, also commented on artificial intelligence. He said that, while
“going to see a lot more robotics in the world,” he remains “skeptical of some
of the hype in AI.”
Here are some of the highlights:
More
Live Updates:
Warren Buffett at Berkshire Hathaway Annual Meeting 2023 (cnbc.com)
Warren Buffett
says letting Silicon Valley Bank customers go under would’ve been
‘catastrophic’
PUBLISHED SAT, MAY 6 2023 12:27 PM
EDT UPDATED SAT, MAY 6 2023 2:09 PM EDT
Berkshire Hathaway CEO Warren Buffett said
Saturday that regulators avoided a financial disaster by making sure that
Silicon Valley Bank customers didn’t lose money in the firm’s collapse.
The sudden
downfall of SVB in March forced the Federal Deposit Insurance Corp.
to seize the bank, selling some of its assets to First Citizens weeks
later.
The FDIC protected SVB customers in the process by
invoking the systemic risk exception during the March tumult, allowing the
regulator to make all depositors whole, even if their accounts exceeded the
$250,000 coverage threshold.
“It would’ve been catastrophic” if regulators
hadn’t done that, Buffet said during his annual shareholder meeting.
Allowing uninsured
depositors to lose money would’ve “started a run on every bank in the country,”
he said.
So the move, which
brought criticism because it protected venture capital investors, startups and
other sophisticated players, was “inevitable” in Buffett’s view.
Protecting uninsured
depositors contributed to the estimated $20 billion hit that the FDIC’s Deposit
Insurance Fund took in the SVB receivership. The biggest U.S. banks are
expected to cover the economic cost of that through special fees.
Fears over finances
of almost 200 US banks: Leading think-tank warns of risk of further failures
after a week of turmoil grips American lenders
May 6, 2023
More American
banks were teetering on the brink of collapse this weekend as a leading US
think-tank raised fears over the financial strength of almost 200 lenders.
The Bank of
England, meanwhile, is preparing to lift the cost of borrowing for the 12th
time in a row as it tries to tame double-digit inflation. This follows further
rate increases in the US and Europe.
Experts at the
Hoover Institution think-tank say the global surge in interest rates has caught
banks on the hop and left many of them nursing huge losses on some of their
investments.
Officials are
also concerned about the speed of recent bank runs, fuelled by social media.
Three of the four biggest bank failures in US history have occurred in the last
two months.
First Republic
was seized by officials last week and most of its business was sold to banking
giant JP Morgan. Its collapse followed the sudden demise of tech lender Silicon
Valley Bank and also Signature, a smaller bank.
The future of three
other regional banks – California-based PacWest, Arizona's Western Alliance and
Memphis-based First Horizon – hang in the balance after their share prices
tanked, dashing hopes that the crisis was over despite rallying on Friday.
Savings are
guaranteed up to £200,000 in the US – far higher than the UK's £85,000 limit.
But uninsured
American depositors worried that their money is not safe have been withdrawing
their cash in droves as they seek higher returns elsewhere, causing bank runs.
Hoover's
analysis found that if half of uninsured savers withdrew their cash, then 186
US banks with total assets of £240 billion would be at 'potential risk of
impairment'. That means the banks in question would technically be in breach of
regulators' rules on capital.
----'There are several potentially insolvent banks lurking in the system,'
warned Amit Seru, finance professor at Stanford University and one of the
Hoover report's authors.
While most of
the bank runs have been in the US, there are fears that panic could spread.
More
Your Weekend Reading: GOP Debt Limit
Threat Looms Over Markets
6 May 2023 at 12:30 BST
---- More threatening than lingering inflation and any credit crunch is the US debt ceiling crisis and the specter of a GOP-induced default. Such a calamity could kill millions of American jobs, crush the stock market by 45% and GDP by 6.1%, the White House estimated.
Director of National Intelligence Avril Haines warned that China and Russia would likely seek to exploit a default and spread global doubt about the value of the dollar, US leadership and institutions. With the US Treasury just weeks away from running out of money to pay US debt, Republicans are nevertheless demanding a ransom of unrelated cuts that would likely slash funding for the climate fight, education and potentially veterans.
The Fed has
made clear that it would not be able to protect the economy if the unthinkable happens. “I have one
message for those observing or involved in the standoff over raising the US
federal debt limit: Be afraid, be very afraid,” writes Bill Dudley for Bloomberg Opinion.
Bloomberg
Weekend Reading: GOP Debt Limit Threat Looms Over Markets - Bloomberg
Yellen warns of
‘economic chaos’ unless Congress raises the debt ceiling
Treasury Secretary Janet Yellen on Sunday said
that failure to raise the debt ceiling will cause a “steep economic downturn”
in the U.S., and she reiterated her
warning that the Treasury Department may run out of measures to
pay its debt obligations by June.
“Our current projection is that in
early June, a day will come when we’re unable to pay our bills
unless Congress raises the debt ceiling, and it’s something I strongly urge
Congress to do,” Yellen told ABC’s “This Week.”
Yellen said the U.S. has already been using “extraordinary measures” to
avoid default, and it’s not something the Treasury Department can continue to
do. She said Congress needs to take action to avoid “economic calamity.”
“It’s widely agreed that financial and economic
chaos will ensue,” Yellen said.
Lawmakers have been trying to find
a path forward to raise or suspend the debt ceiling, which would enable the
U.S. to pay its bills on time. But they’re currently at an impasse, raising the
prospect of default.
Yellen has called for decisive
action, and quickly. In a letter to House Speaker
Kevin McCarthy, R-Calif., Monday, 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. This date is earlier than Wall Street
economists were expecting.
More
Yellen
warns of 'economic chaos' unless Congress resolves debt ceiling (cnbc.com)
Vietnam reports
record high temperature
May
7, 2023
Vietnam on
Saturday reported a record high temperature with a north-central weather
station measuring 44.1 degrees Celsius, officials said.
This broke the
previous high set in 2019.
South Asia has
been sweltering under a heatwave for much of April, with neighbouring countries
also registering record temperatures.
Vietnam’s
weather varies from north to south, but the entire country is now entering its
hottest summer months.
The record
temperature of 44.1 degrees Celcius was measured Saturday afternoon at indoor
Hoi Xuan station in north-central Thanh Hoa province, the National Centre for
Hydro Meteorological Forecasting said.
The figure
broke the country’s previous high of 43.4 degrees Celsius, recorded April 20,
2019, at Huong Khe District in central Ha Tinh Province.
“This is a
worrying record in the context of climate change and global warming,” climate
change expert Nguyen Ngoc Huy told AFP from capital Hanoi.
“I believe
this record will be repeated many times,” he said.
More
Vietnam reports record high temperature (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.
Wall
St Week Ahead: US consumer price data to test feared stagflation scenario
May
5, 2023 11:35 PM GMT+1 Last Updated May 6.
NEW YORK, May 5 (Reuters) - Fears of
stagflation are percolating on Wall Street, as investors await data that could
shed light on whether the Federal Reserve is succeeding in tamping down
inflation without badly hurting growth.
Stagflation - a combination of stagnant
growth and persistent inflation that dogged the U.S. in the 1970s - dims the
appeal of both equities and bonds, leaving investors fewer places to earn
returns.
While far from assured, the scenario
has loomed large in investors' minds as last year’s inflation surge forced the
Fed to launch an aggressive monetary policy tightening cycle that many expect
to bring on a recession. Some also believe the recent banking sector tumult
will hurt lending and further constrain growth, forcing the Fed to cut rates
before inflation is tamed.
April’s survey of global fund managers
from BoFA Global Research showed stagflation expectations near historical
highs, with 86% saying it will be part of the macroeconomic backdrop in 2024.
Next week’s consumer price data for
April, due on Wednesday, May 10, could offer a clearer picture of whether the
Fed’s interest rate increases are cooling inflation. A strong number could
weigh on a rally that has lifted the S&P 500 nearly 8% this year.
“Stagflation is a growing concern,”
said Phil Orlando, chief equity market strategist at Federated Hermes.
“Inflation is a lot higher than the Fed thought it would be, and it’s coming
down at an extraordinarily slow pace while we think the economy has already hit
its high water mark for the year.”
U.S employment
data on Friday showed hourly wages grew in April at an annual rate of
4.4%, too strong to be consistent with the Fed's 2% inflation target. Growth
remained robust, however, with job creation accelerating and the unemployment
rate falling to a 53-year low.
Still, bets in futures markets
continued to show traders pricing interest rate cuts later this year.
Policymakers have insisted they will keep rates at around current level for the
remainder of 2023 after raising
them another 25 basis points this week.
More
worldometer
coronavirus - Search (bing.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
Is Covid really over? WHO’s
announcement sounds more like surrender than victory
Robin McKieObserver
science editor
Although
the acute phase of the pandemic may have passed, experts agree that the virus’s
effects will remain profound
Sun 7 May 2023 08.00 BST
The global public emergency caused by Covid-19 may be
officially over but the pandemic will still be with us for many years. Nor is
it clear that governments have learned sufficiently from the outbreak to be
ready to fight off new emerging microbes that could trigger worse calamities.
These are the stark conclusions of scientists reacting
to last week’s news that
the World Health Organization (WHO) no longer considers Covid-19 – which has
killed more than 7 million people over the past three years – to be a public
health emergency of international concern.
Most researchers welcomed the decision because it
reflects the fact that the acute phase of the Covid-19 outbreak is now over. At
its peak, in January 2021, the global death rate reached more than 100,000
people a week. Last week it had dropped to about 3,500.
However, health officials and scientists also pointed out
that immunity to the disease remains short-lived, while there has been
considerable slackening in restrictions previously imposed to prevent people
from infecting each other. Future waves of infections are therefore inevitable,
they warned.
---- Many scientists
told the Observer that the legacy of
the pandemic – although it is past its peak – will be profound and
long-lasting. Its cause, the SARS-CoV-2 virus, is still killing one person
every three minutes, while many survivors are suffering the debilitating impact
of long Covid, which can leave them incapacitated for months. The virus also
poses a continued threat to elderly people and those with health conditions,
adding a new annual danger to seasonal ailments such as influenza and other
respiratory diseases that strike in winter.
“We now have a new human coronavirus that will continue
to blight human populations into the future,” said Professor Andrew Lee of
Sheffield University.
In short, the pandemic’s impact will be felt for a long
time, both in terms of new cases and those already suffering from long Covid.
More
COVID-19 Vaccine Effectiveness Drops Near Zero Within Months:
Study
Booster
doses were also shown to lose effectiveness over time
May 5, 2023 Updated: May
6, 2023
The effectiveness of COVID-19 vaccines fell below 20
percent a few months after vaccination, with booster shots seeing effectiveness
drop below 30 percent.
The review, published in the JAMA Network journal on May 3,
analyzed 40 studies estimating vaccine effectiveness (VE) over time against
laboratory-confirmed COVID-19 infection and symptomatic disease. The studies
were selected from 799 original articles, 149 reviews published in
peer-reviewed journals, and 35 preprints. The review found that the vaccine
effectiveness of a primary vaccination cycle against the Omicron infection and
symptomatic disease was lower than 20 percent at 6 months from the
administration of the last dose.
Booster doses restored vaccine effectiveness to
levels similar to those seen after administration of the primacy cycle dose.
However, nine months after the booster dose, vaccine effectiveness against
Omicron was found to be lower than 30 percent against infection and symptomatic
disease.
“The half-life of VE against symptomatic infection was estimated to be
87 days for Omicron compared with 316 days for Delta. Similar waning rates of
VE were found for different age segments of the population.”
“These findings suggest that the effectiveness of COVID-19 vaccines
against laboratory-confirmed Omicron or Delta infection and symptomatic disease
rapidly wanes over time after the primary vaccination cycle and booster dose,”
the study said.
“Putting together the bulk of available evidence on the waning of VE
over time against COVID-19 variants has crucial implications for future
interventions and vaccination programs.”
Vaccine effectiveness against Omicron infection was 44.4 percent a month
after the completion of the primary vaccination cycle. This fell to 20.7
percent at six months and then to 13.4 percent at nine months. Vaccine
effectiveness was found to be higher against the Delta variant as compared to
the Omicron variant.
“Pooled estimates of VE after any primary vaccination cycle against
symptomatic disease after Omicron infection show a marked waning over time,”
the study stated.
Effectiveness against symptomatic disease fell from 52.8 percent a month
after completion of the primary vaccination cycle to 14.3 percent at six months
and 8.9 percent at nine months.
More
COVID-19 Vaccine Effectiveness Drops Near Zero Within
Months: Study (theepochtimes.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.
Electric bike battery
explodes in Puri, close shave for family
Fortunately,
the family members present in the house had a narrow escape in the mishap.
PUBLISHED:
SATURDAY, 06 MAY 2023 LAST
UPDATED: 06 MAY 2023, 02:53 PM IST
Some furniture were gutted after a
battery of an electric bike (e-bike) reportedly exploded in a house in
Kathuaredi village under Brahmagiri block in Puri district on Friday night.
Fortunately, the family members
present in the house had a narrow escape in the mishap.
As per reports, after plugging in the
charger to the battery of the electric bike, all the members of the family were
asleep inside their house. However, while getting charged, the battery exploded
with a huge sound around midnight.
The family members woke up to the
loud sound and found to their utter shock that the battery of the electric bike
has exploded. In a bid to save their lives, they rushed out of their house.
Later, they found that some of the
furniture inside the house have been gutted.
As per experts, most of the battery
explosions of electric bikes are happening due to overheating. Heat makes the
battery expand, which leads to explosions and fires. The heat also produces
sparks which further lead to fires.
Electric bike
battery explodes in Puri, close shave for family (odishatv.in)
“Risk comes from not knowing what you're
doing.”
Warren Buffett.
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