Baltic Dry Index. 937 -40 Brent Crude 74.66
Spot Gold 1980 US 2 Year Yield 4.33 -0.07
Coronavirus
Cases 01/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 02/06/23 World 689,748,743
Deaths 6,885,497
June 2, 1875 the first electrical sounds transmission.
With financial support from Sanders and Hubbard, Bell hired
Thomas Watson as his assistant,[N 13] and the two of them experimented
with acoustic telegraphy. On June 2, 1875, Watson accidentally
plucked one of the reeds and Bell, at the receiving end of the wire, heard the
overtones of the reed; overtones that would be necessary for transmitting
speech. That demonstrated to Bell that only one reed or armature was necessary,
not multiple reeds. This led to the "gallows" sound-powered
telephone, which could
transmit indistinct, voice-like sounds, but not clear speech.
Alexander Graham Bell - Wikipedia
To no one’s surprise, yesterday the US Senate voted through the compromise new US debt ceiling bill. President Biden will sign it into law, probably later today.
Now comes a flood of new US debt issues and probably a short lived relief rally in the stock casinos.
Short lived, because for the first time in
many years, interest rates on government bonds are high enough to compete for
funds against the stock casinos, and with Moody’s forecasting recessions ahead
for the USA and UK and with Germany already in recession, locking in yields over
the next few months looks like a safer investment than over priced stocks.
Senate passes
bill to raise debt ceiling, preventing first-ever U.S. default
WASHINGTON — The Senate late Thursday passed a House-approved bill
to raise the debt ceiling and cap government spending for two years, sending
the legislation to President Joe
Biden’s desk .
He is expected to sign it Friday
and address the nation at 7 p.m. ET, just three days before the U.S. risked its
first-ever sovereign debt default.
“No one gets everything they want
in a negotiation, but make no mistake: This bipartisan agreement is a big
win for our economy and the American people,” Biden said in a statement after the
vote.
Stock futures rose slightly Thursday
night as the U.S. averted potential economic chaos.
The compromise debt ceiling bill
passed the Senate by a 63-36 margin, enough support from Democrats and
Republicans to overcome the chamber’s 60-vote threshold to avoid a filibuster.
But the party breakdown was not
even. The majority of Senate Republicans, 31 senators, voted against
the debt ceiling bill, while just 17 GOP senators supported it. On the left,
only four Democrats and Vermont independent Sen. Bernie Sanders voted to sink
the bill, while the other 46 members of the Democratic caucus voted for it.
The vote was the final chapter in a
remarkable day of deal making and rapid-fire voting in the Senate, a body that
typically requires days, not hours, to deliberate over and amend House bills.
On Thursday night, the chamber voted down 11
proposed amendments to the Fiscal Responsibility Act passed by the
House, before ultimately passing the bill itself. In exchange for being allowed
to put their amendments up for a vote, several senators who had serious
objections to parts of the bill agreed not to delay the legislation with
procedural hold ups.
The driving force behind the turbo
votes was simple: The Treasury Department’s June
5 deadline for raising or suspending the debt ceiling was just
four days away.
---- In a statement after Thursday’s vote, Moody’s
said the resolution to the debt ceiling crisis was in line with its
expectation, and indicated that it was not considering a downgrade of U.S.
debt.
“The stable outlook
on the US’ Aaa sovereign credit rating reflects that expectation,” said William
Foster, senior vice president at Moody’s Investors Service.
The bill that passed
the Senate on Thursday was the product of intense, and at times bitter,
negotiations between House Speaker Kevin McCarthy’s allies and the White House.
The final deal handed conservatives several ideological policy victories in
exchange for their votes to raise the debt ceiling beyond next year’s
presidential election and into 2025.
Biden and McCarthy
both claimed the outcome as a victory: McCarthy, because he had passed new work
requirements for some federal aid, a two year government spending cap, and a
clawback of unspent COVID funds.
More
Debt ceiling: Senate passes debt ceiling bill, sends to Biden (cnbc.com)
In other news, now that the debt ceiling fight is over, now comes a tsunami of US debt issuance.
Big short in Treasurys? Speculators build up bets around a
debt-ceiling deluge of issuance.
June 1 2023
What comes after the deal-ceiling deal? Le
deluge.
Speculators have been building up a
“historically massive” short position in U.S. Treasury futures ahead of what
could be $1 trillion of new debt issuance on the heels of a debt-ceiling
resolution, according to Macquarie’s sales and trading global macro strategy
desk.
Bond speculators have been taking up a large
number of short positions in 2-year, 5-year and 10-year Treasury futures,
according to the Macquarie team, which pinpointed the combined tally of
contracts at nearly 3 million as of late May, or the most since 2000.
The buildup matters because much of Wall
Street has been focused on the brief spike in yields on some Treasury bills due
in early June to above 7%, or climbing U.S. sovereign
CDS spreads as the U.S. teetered toward the brink of a default.
But Macquarie’s team thinks the more important
development tied to the debt-ceiling fight has been the significant number of
wagers in Treasury futures in the past three weeks.
A look at Commodity Futures Trading Commission
data shows an explosion of speculation taking hold in Treasury futures, which
Macquarie’s team led by Thierry Wizman pegged as the biggest buildup in short
interest in 10-year Treasury futures since 2000. So has been the combined short
interest in 2-year, 5-year and 10-year futures.
Short bets are a wager that prices for a stock
or bond will fall. Since bond prices and yields move in the opposite direction,
fixed-income speculators would be focused on the potential for yields to climb
when new Treasury supply outstrips demand.
The Macquarie team said the heavy positioning
likely reflect traders “attempting to hedge away or sidestep the inevitable
issuance of new bonds,” in a Wednesday trading desk note.
U.S.
weekly jobless claims rise modestly; layoffs increase in May
June 1, 20231:45 PM GMT+1
WASHINGTON, June
1 (Reuters) - The number of Americans filing new claims for unemployment
benefits increased modestly last week, suggesting the labor market remains
tight despite growing fears of a recession amid higher borrowing costs.
Initial claims
for state unemployment benefits rose 2,000 to a seasonally adjusted 232,000 for
the week ended May 27. Economists polled by Reuters had forecast 235,000 claims
for the latest week.
Claims remain
very low by historical standards despite 500 basis points worth of interest
rate increases from the Federal Reserve since March 2022, when the U.S. central
bank embarked on its fastest monetary policy tightening campaign since the
1980s to tame inflation.
Though the
employment growth has slowed from last year's robust pace, demand for labor
remains strong. The government reported on Wednesday that there were 10.1
million job openings at
the end of April, with 1.8 vacancies for every unemployed person, well above
the 1.0-1.2 range that is consistent with a labor market that is not generating
too much inflation.
Though there have
been high-profile lays offs in the technology sector and interest rate
sensitive industries like housing, employers have been generally hoarding
workers following difficulties finding labor in the aftermath of the COVID-19
pandemic.
----A separate report
from global outplacement firm Challenger, Gray & Christmas on Thursday
showed job cuts announced by U.S.-based employers increased 20% to 80,089 in
May. Companies have announced 417,500 layoffs this year, a 315% surge from the
same period last year. Excluding 2020, when the pandemic started, this is the
highest January-May total since 2009.
U.S. weekly jobless claims rise modestly; layoffs increase in May | Reuters
Finally, the Atlantic hurricane season
starts.
Near-record warm
Atlantic is a worry as hurricane season begins
June
1, 2023
With the calendar turning to June, the 2023
hurricane season in the Atlantic Ocean and Gulf of Mexico has officially begun.
Right on cue, the National Hurricane Center declared that a tropical depression formed in the gulf on Thursday afternoon and is expected to
bring unsettled, rainy weather to Florida into the weekend.
But this depression — which
could strengthen into Tropical Storm Arlene — is probably just a small preview
of what the coming months will bring, especially late August and September,
when the season peaks and the risk of severe storm damage escalates for both
coastal zones and even areas much farther inland.
Most
forecasts for the season are predicting near-average storm activity, but
conflicting atmospheric and ocean signals have made this year’s forecast more
challenging than usual.
Of
particular concern are abnormally warm Atlantic waters that can fuel rapidly
intensifying storms. But the effect of those warm waters may be tamed by a
developing El Niño, which tends to limit Atlantic storminess.
The past seven seasons have featured above-normal storm
activity. Hurricane Ian, which struck southwest Florida last year as one of the
costliest U.S. storms on record, became the seventh to attain Category 5 strength in
the past seven years, one of the two most active stretches for these top-tier
storms on record.
Because of warming waters caused by climate change, more hurricanes have been rapidly
intensifying in recent years, making them harder to forecast and
leaving less time to prepare for their impacts.
This year’s seasonal hurricane forecasts
Because of the very warm Atlantic waters, a team of researchers
at Colorado State University on Thursday increased the number of named storms
it is projecting from 13 to 15. Storms are named when their sustained winds
reach at least 39 mph.
“We have increased our forecast and now call for a near-average
Atlantic Basin hurricane season in 2023,” the team wrote. “While
we anticipate a robust El Niño for the peak of the Atlantic hurricane season,
the tropical and subtropical Atlantic have continued to anomalously warm to
near-record levels.”
More
Near-record
warm Atlantic is a worry as hurricane season begins (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.
UK and US poised to fall into recession as interest rates
dampen growth
Moody’s report shows weak growth across G20 as central
banks move to reduce persistent high inflation
Wed 31 May 2023 14.44 BST
Stubbornly high inflation and higher borrowing costs are
poised to drive the economies of the UK, Germany and US
into recession, the leading rating agency Moody’s has warned.
In a downbeat forecast for growth across advanced G20
economies, it said a ramping up of interest rates by central banks on both sides of the Atlantic was
expected to weigh on economic growth this year.
“We expect very weak growth in key advanced economies in
particular, including mild recessions in the US, UK and Germany, and stagnant
economic activity in France and Italy,” Moody’s said in a report.
It comes as the world’s most influential central banks
attempt to squeeze high inflation out of the system through the toughest round
of rate increases in decades, amid concern over the potential for persistent
pressure on living standards.
Official estimates on Wednesday revealed a mixed picture
across the eurozone, underscoring the challenge facing the European Central
Bank, after French inflation eased to its lowest level in a year but Italy
overshot analyst expectations.
France’s annual inflation rate fell by more than expected
to 6% in May, down from 6.9% in April. However, inflation fell by significantly
less than anticipated in Italy to stand at 8.1% in May, down from 8.7% a month
earlier.
German inflation fell by more than expected to 6.3%, down
from 7.6% a month earlier. The figures followed a bigger-than-expected decline
in Spain, with a fall in inflation to 2.9%, raising hopes that price pressures
across the eurozone could cool rapidly this year. Official estimates for the
20-country bloc as a whole are due on Thursday.
Rory Fennessy, an economist at the consultancy
Oxford Economics, said: “With inflation surprising to the downside in
Germany and France, it is likely that eurozone inflation came down more than
expected in May, closer to 6% from 7% in April. If inflation in June surprises
to the downside, the chances of a July rate hike will diminish significantly.”
Revised official figures for
Germany revealed last week that the country slipped into
recession at the start of this year, while concern is also mounting over the
strength of the UK and US economies. The technical definition of a recession is
two consecutive quarters of shrinking gross domestic product.
----Economists
said last week that Britain’s stubbornly high levels of inflation were likely
to push the Bank of England to push interest rates above 5% in order to “engineer” the conditions for a recession to bring down inflation.
Moody’s said it expected Threadneedle Street to raise its
key base rate by “at least” another quarter-point to 4.75% when the Bank’s
policymakers next meet in June.
US consumer prices have been slowing in recent months,
dropping to an annual inflation rate of 4.9% in April.
However, analysts have warned the US Federal Reserve could be forced to keep
interest rates at high levels for longer than previously anticipated to squeeze
persistent inflation out of the system.
----Moody’s warned that recent turmoil in the US banking system had highlighted how the rate cycle could trigger
risks in the financial system. While strength in the US jobs market could delay
an economic downturn, it said this might also risk fuelling high inflation –
making it more likely for the US Federal Reserve to raise interest rates
further.
“Cooling economic activity and weaker labour market are
necessary conditions for inflationary pressures in the economy to ease. Too
much resilience for too long would require even tighter monetary policy,” the
report said.
UK and US poised to fall into recession as interest
rates dampen growth | Recession | The Guardian
Covid-19 Corner
This section will continue until it becomes unneeded.
Study Shows High
Accuracy in Dogs’ Ability to Sniff Out COVID-19
Thu, June 1, 2023 at
2:08 AM GMT+1
In a recent study, investigators analyzed the potential to use the highly
sensitive sense of smell in dogs to screen for COVID-19. Their conclusion
determined that dogs could sniff out SARS-CoV-2 (COVID-19) infections.
Study results indicate dogs can sniff out COVID-19
The development of the severe
respiratory syndrome coronavirus 2 (SARS-CoV-2) resulted in a catastrophic
global pandemic. Recently published in the Annals of Epidemiology, one study indicated great potential in the ability for
dogs to sniff out COVID-19 infections.
Dogs detect some diseases through
olfactory recognition of organic compounds. Trained dogs identify hypoglycemia
in diabetics, alert individuals to oncoming epileptic seizures, and detect the presence of malaria or cancer.
Additionally, trained dogs can recognize the presence of certain bacteria in
fecal and urine samples, including Clostridium difficile,
Staphylococcus aureus, Escherichia coli, and Klebsiella.
Over the course of the pandemic,
testing and vaccine technology advanced fairly quickly. Still, the viral
mutations caused some concern among scientists and medical professionals
regarding disease control. Controlling the evolving pandemic may require
additional measures. Research indicates the use of canines as a
non-pharmaceutical control may be an option.
The study points to the benefits
of canine medical detection. Screening for the presence of SARS-CoV-2 could be
rapid, taking only a few seconds. Additionally, the fast result time allows for
a larger testing volume.
Canine scent detection a useful tool for disease control
The systemic review evaluated
various studies and summarized the findings. As a result of the data analysis,
researchers determined the level of potential for dogs to be used for COVID-19
detection. Researchers assessed 27 studies from 13 countries using two
evaluation systems. The Quality Assessment of Diagnostic Accuracy Studies 2
(QUADAS-2) evaluated study and risk bias. Conversely, the other system surveyed
canine medical scent detection.
Of these 27 studies, four and six
were further assessed by each evaluation system. In conclusion, results from
both evaluations indicated dogs could detect, with high sensitivity and
specificity, infections from SARS-CoV-2. Some studies reported canine medical
detection to outperform standard PCR testing. Data points to the high potential
for the use of dogs in COVID-19 screening. As with other types of medical
detection dogs, training would be essential.
Study Shows High
Accuracy in Dogs’ Ability to Sniff Out COVID-19 (yahoo.com)
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.
Japan aims to beam
solar power from space by 2025
May 30, 2023
Japan is
aiming to become the first country in the world to beam solar energy
from space back to Earth to generate electricity at scale.
A
public-private partnership led by Japanese space agency JAXA will
see the first satellite transmitters set up by 2025, according to local
reports,
The
satellites will convert solar power into microwaves and send them to
ground-based receiving stations, which then convert it into electrical energy.
“If we
can demonstrate our technology ahead of the rest of the world, it will also be
a bargaining tool for space development with other countries,” Kyoto University
professor Naoki Shinohara told Nikkei.
The concept,
which was first theorised in 1968, has several advantages over terrestrial
solar power setups, notably being able to harvest solar energy for much longer,
unhindered by the Sun’s typical cycle.
Microwaves are
capable of passing through clouds, so the technology is also able to operate in
adverse weather conditions.
Japan has
already achieved several firsts in this field, having been the first to
transmit power via microwaves in space in the 1980s.
In
2015, JAXA scientists followed this up with another breakthrough that saw 1.8
kilowatts of power beamed down to an Earth-based receiver – roughly enough to
power an electrical kettle.
Several other countries and regions are also working on the
technology, with the European Space Agency unveiling a plan last year to test the viability of space-based
solar power.
----Among the concerns surrounding the technology are the
health impacts of low-power microwaves on humans, animals and plants.
“These are the kind of technical questions that
Solaris will look into, to explore further the feasibility of the concept,”
Sanjay Vijendran, ESA’s lead for the Solaris proposal, said last year.
Japan aims to beam
solar power from space by 2025 (msn.com)
Another
weekend and a happy no US debt default week ahead too. Back on Tuesday we
covered China’s economy possibly falling into deflation. Now Moody’s thinks the
USA and UK will join Germany in recession later this year.
Were
Moody’s to be correct, some 30 percent of global GDP would be in recession. Add
in China whose GDP is more problematic, and 45percent to 50 percent of global
GDP would be in recession. Were that to happen, I suspect Japan, Korea and
Taiwan would fall into recession or near recession too.
To
mitigate against this possibility, central banks need to stop raising interest
rates now and start planning on when to begin cutting interest rates.
Have
a great weekend everyone.
On March 10, 1876, three days after
his patent was issued, Bell succeeded in getting his telephone to work, using a
liquid transmitter similar to Gray's design. Vibration of the diaphragm caused
a needle to vibrate in the water, varying the electrical
resistance in the
circuit. When Bell spoke the sentence "Mr. Watson—Come here—I want to see
you" into the liquid transmitter,[88] Watson,
listening at the receiving end in an adjoining room, heard the words clearly.[89]
Although Bell was, and still is,
accused of stealing the telephone from Gray,[90] Bell
used Gray's water transmitter design only after Bell's patent had been granted,
and only as a proof of concept scientific experiment,[91] to
prove to his own satisfaction that intelligible "articulate speech"
(Bell's words) could be electrically transmitted.[92] After
March 1876, Bell focused on improving the electromagnetic telephone and never
used Gray's liquid transmitter in public demonstrations or commercial use.[93]
Alexander Graham
Bell - Wikipedia
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