Baltic Dry Index. 1079 +05 Brent Crude 73.03
Spot Gold 1932 US 2 Year Yield 4.74 +0.07
Coronavirus
Cases 01/04/20 World 1,000,000
Deaths 53,103
Coronavirus Cases 15/06/23 World 690,345,361
Deaths 6,891,235
With most countries now only reporting weekly or monthly or not updating at all, the LIR will drop the daily Covid update at the end of this week.
Magna Carta Libertatum (Medieval Latin for "Great Charter of Freedoms"), commonly called Magna Carta (also Magna Charta; "Great Charter"),[a] is a royal charter[4][5] of rights agreed to by King John of England at Runnymede, near Windsor, on 15 June 1215.
To no one’s surprise, the US central bank blinked yesterday and left their key interest rate unchanged. To have done otherwise would have likely set off a panic in US stock markets where everyone and their dog had bet on the new stock bubble.
And so now on to today for the ECB interest rate decision. Another interest rate hike is widely expected even though EU paymaster Germany is already leading the EU into a US generated recession. By destroying the Nord Stream gas pipelines the USA also destroyed the German business model. In the long run, nothing good will come from that, as the rise of the AfD political party hints at.
Discouragingly, for US stock bubble bulls, Fed Chairman Powell sees more interest rate hikes ahead in 2023.
With a US presidential year in 2024, the Fed can hardly hike interest rates in 2024, so all/any other interest rate hikes must be crammed into what’s left of 2023.
I think the coming CMBS, commercial real estate bust will probably make more US interest rate hikes moot.
In the real US economy and wider global economy, bad times lie directly ahead.
Asia markets rise
as investors digest the Fed’s hawkish pause in rate hikes
UPDATED WED, JUN 14 202311:21 PM
EDT
Asia-Pacific markets rose after the U.S.
Federal Reserve held off on a rate hike while projecting that
another two quarter percentage point moves are on the way before
the end of the year.
The latest decision left the
Fed’s key borrowing rate in a target range of 5%-5.25%.The central bank
forecast it will raise interest rates as high as 5.6% before 2023 is over.
In Asia-Pacific, New Zealand fell
into a technical recession after its first-quarter gross
domestic product fell 0.1% year on year, after reporting a revised 0.7% decline in the
final quarter of 2022.
In Japan, the Nikkei 225 rose
0.34% and the Topix also advanced 0.3% as the Bank of Japan kicks off its
two-day monetary policy meeting.
South Korea’s Kospi inched down
0.30%, while the Kosdaq gained 0.37%.
China’s
central bank lowered its key medium-term lending rates on
Thursday. The country also released a slew
of economic data, including industrial output, retail sales and
house prices.
Hong Kong’s Hang Seng index rebounded
and climbed 0.73% after after snapping a five day winning streak, while
mainland Chinese markets also rose, with the Shanghai Composite up
0.23%, and the Shenzhen
Component climbed 0.92% higher.
In Australia, the S&P/ASX 200 climbed
0.29%, as the country saw unemployment fall slightly to 3.6% in May, compared
to the 3.7% expected by economists polled by Reuters.
Overnight in the U.S., the three
major indexes ended mixed after the Fed announcement, with the S&P 500 inching
up 0.08% and the Nasdaq
Composite climbing 0.39%. In contrast, The Dow Jones Industrial Average dipped
0.68%.
Asia markets rise as
investors digest the Fed's hawkish pause in rate hikes (cnbc.com)
European markets
head for negative open ahead of ECB rate decision
UPDATED THU, JUN 15 2023 12:17 AM EDT
European markets are heading for a negative open
as investors prepare for the
latest monetary policy decision from the European Central Bank.
The ECB is set to
increase its benchmark policy rate by another 25 basis points when it meets
Thursday, and is expected to say that future rate decisions will be
data-dependent as uncertainty weighs on the inflation and growth outlook.
Central bank action in Europe is
set to come after the U.S.
Federal Reserve held off on a rate hike while projecting that
another two quarter percentage point moves are on the way before
the end of the year.
The latest decision left the
Fed’s key borrowing rate in a target range of 5%-5.25%.The central bank
forecast it will raise interest rates as high as 5.6% before 2023 is over.
European
markets live updates: ECB rate decision, Fed rate decision (cnbc.com)
Federal Reserve Keeps Interest Rates Unchanged, Leaves Door Open to More Rate Hikes
June 14, 2023 Updated: June 14, 2023
For the first time in more than a year, the Federal Reserve has left
interest rates unchanged but signaled that two more rate hikes are set to
happen this year.
The benchmark federal funds rate held steady at a range of 5–5.25
percent, effectively ending the streak of 10 consecutive rate hikes.
“Holding the target range steady at this meeting allows the Committee to
assess additional information and its implications for monetary policy,” the
Federal Open Market Committee (FOMC) stated.
FOMC members say the recent metrics show that economic activity is
expanding “at a modest pace.”
“Job gains have been robust in recent months, and the unemployment rate
has remained low. Inflation remains elevated,” the FOMC said.
“The U.S. banking system is sound and resilient. Tighter credit
conditions for households and businesses are likely to weigh on economic
activity, hiring, and inflation. The extent of these effects remains uncertain.
The Committee remains highly attentive to inflation risks.”
The rate-setting committee confirmed that it would continue decreasing
its holdings of Treasury and mortgage-backed securities.
In addition, Fed officials issued a new set of economic
forecasts.
The Survey of Economic Projections (SEP) shows
that officials anticipate the policy rate to rise to a median of 5.6 percent by
the end of 2023.
FOMC
members expect the median federal funds rate to come in at 4.6 percent in 2024,
up from 4.3 percent in the March SEP. The benchmark rate will then further ease
to 3.4 percent in 2025, up from the previous estimate of 3.1 percent. The longer-run
policy rate was left unchanged at 2.5 percent.
Looking
ahead to the broader economy, the Fed forecasts the economy will grow by 1
percent this year, up from the March projection of 0.4 percent. Officials
revised their 2024 real GDP forecast from 1.2 percent to 1.1 percent. The
economy will also grow by 1.8 percent, down from 1.9 percent in 2025, according
to SEP numbers.
More
In other news, China’s Covid recovery has
gone off the rails.
China’s youth
unemployment hits a fresh record high in May, major data disappoint
BEIJING — China’s
youth unemployment rose to a record in May, while major data missed
expectations, according to data released Thursday by the National Bureau of
Statistics.
The unemployment rate
for young people ages 16 to 24 rose to 20.8% in May, a record and above the
high set in April. The jobless rate for people of all ages in cities was 5.2%
in May.
Retail sales for May rose by 12.7% in May from a year ago, below
expectations for 13.6% growth forecast by a Reuters poll.
Industrial production
rose by 3.5% in May from a year ago, slower than the 3.6% expected by the
Reuters poll.
Analysts predicted a 4.4%
increase in fixed asset investment for the first five months of the year from a
year ago. Fixed asset investment for the first five months of the year rose by
4% from a year ago, slower than the 4.4% predicted by Reuters.
“The national economy
sustained the recovery momentum,” the statistics bureau said in a release in
English.
However, the bureau warned of persistent
challenges from the international environment and “mounting pressure” on the
“domestic structural adjustment,” without elaborating much.
Figures
for April had also missed analysts’ expectations, reflecting how
China’s economic recovery
from the pandemic was losing steam.
Statistics bureau spokesperson Fu
Linghui told reporters Thursday that second quarter growth is expected to be
faster than the first quarter, since the comparable base from last year was
low.
He said growth in the third and
fourth quarters would return to a “normal” pace. Fu said China could achieve
its full year growth target, set at around 5% GDP growth for 2023.
The economy grew by only 3% in
2022, a year that saw the metropolis of Shanghai locked down in April and May
as part of measure to control Covid.
Beijing ended those controls in December, but an initial rebound
in growth has lost steam in recent months.
More
China's
youth unemployment hits a fresh record high in May, major data disappoint
(cnbc.com)
Finally, this is what happens to fiat money
in the Great Nixonian Error of Fiat Money. Don’t expect to hear anything about this in
the main stream media, central banksters or our bent politicians.
How the buying power of £2 coin has shrunk in 25 years since
launch
Opinion by By Vicky Shaw, PA
Personal Finance Correspondent June 14,
2023
A £2 coin
could have bought two pints of lager when it was first introduced a quarter of
a century ago, but it would purchase less than half a pint today typically,
according to analysis.
Inflation has
significantly eroded the purchasing power of the bi-metal coin since it
launched on June 15 1998, according to the research by M&G’s Investment
Office, the team behind the company’s flagship PruFund strategy.
Its research
indicates that, while someone could have got a round of drinks in for
themselves and a friend for £2 back in 1998, they may now struggle to buy a
lager just for themselves – as the coin is worth the equivalent of 0.4 pints of
lager typically.
M&G’s
analysis of Office for National Statistics (ONS) data indicates that a £2 coins
will buy significantly less in the supermarket than 25 years ago.
Shopping
basket essentials have taken a hit, with £2 only having sufficient purchasing
power to buy one loaf of bread typically, compared with four loaves 25 years
ago.
A £2 coin
could potentially buy about 1.4 litres of fuel at the petrol pump, whereas it
would have bought five litres of petrol 25 years ago, according to the
research.
The coin could
also be worth the equivalent of 65 home-brewed cups of tea, but in 1998
households could have quenched their thirsts with about 160 cuppas, according
to M&G.
It also
calculated that the value of a £2 left in a piggy bank for the past 25 years
would have eroded to just £1.07 in real terms.
The value
could potentially have increased to just over £6 over the same period if the
money had instead been invested in the FTSE All-Share Index, M&G
calculated.
The research
was released at a time when households are dealing with a multitude of rising
bills.
Parit Jakhria,
head of long-term investment at M&G said: “With huge rises in the
cost-of-living across the UK in recent years, we are all feeling how dramatic
the impact of inflation can be on our shopping baskets.
“However, it
is equally important to see the longer-term impact of how inflation can eat
away at your savings.”
How the buying
power of £2 coin has shrunk in 25 years since launch (msn.com)
The Battle of Carberry Hill took place on 15 June
1567, near Musselburgh, East Lothian, a few miles east of Edinburgh, Scotland. A number of Scottish lords objected to
the rule of Mary, Queen of Scots, after she had married the Earl of Bothwell, who was widely believed to have
murdered her previous husband Lord
Darnley. The Lords were
intent to avenge Darnley's death. However, Bothwell escaped from the stand-off
at Carberry while Queen Mary surrendered. Mary abdicated, escaped from prison, and was defeated
at the battle of Langside. She went to exile in England while her
supporters continued a civil war in
Scotland.
Battle of Carberry Hill - Wikipedia
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.
China opens a new
era of ‘proactive easing’ as the economic recovery turns sour
PUBLISHED WED, JUN 14 2023 2:02
AM EDT
A central bank move in Beijing this week is being
seen by economists as a starting gun on a new era of monetary policy as China’s
Covid-19 reopening fails to gather pace.
On Tuesday, the People’s Bank of China cut its seven-day reverse
repurchase rate from 2% to 1.9% — the
such first cut in nine months — as the economy loses momentum and hard data
starts to disappoint. Top China economists at Wall Street banks viewed the move
as the start of much more easing to come.
“This is the first cut since August 2022, and confirms further
that policymakers have switched to proactive easing from wait-and-see,” Citi
economists, led by Xiangrong Yu, said in a Tuesday research note shortly after
the PBOC’s announcement.
---- Pointing to soft economic figures from China,
including credit data, Citi economists said “stimulus seems to be underway with
the weak readings.”
China’s new bank loans for the month of May rose
by 11.4% to 1.36 trillion yuan ($190 billion), missing estimates from a Reuters poll and strengthening the case for further stimulus, as
the economy continues to see tumbling industrial profits on soft demand and falling exports.
Barclays economists, writing in a Tuesday
note titled “Entering a rate cut cycle,” predict China will deliver a cut
for every quarter until early 2024. The bank predicts a 10 basis-point cut in
the medium-term lending facility rate on Thursday, as well as a cut to its loan
prime rate next week (two monetary levers the PBOC uses).
“In the next nine months, based on our economic
analysis and reasoning, we now expect the central bank to continue its monetary
easing cycle with additional 30bp [basis point] policy rate cuts in total, 50bp
RRR cuts and 60-80bp mortgage rate cuts for both new and existing home loans,”
Barclays economists led by Jian Chang said in a note.
More
China opens a new era of 'proactive easing' as the
economic recovery turns sour (cnbc.com)
China’s real
estate slump predicted to last for years, threatening to spill into the wider
region
PUBLISHED TUE, JUN 13 2023 8:11
PM EDT
Weakness in China’s real estate sector could be a
drag on the economy for years to come and could even impact countries in the
wider region, Wall Street banks have warned.
“We see persistent weaknesses in the property
sector, mainly related to lower-tier cities and private developer financing,
and believe there appears no quick fix for them,” Goldman Sachs economists led
by China economist Lisheng Wang said in a weekend note.
Goldman’s economists said the property market is
expected to see an “L-shaped recovery” — defined as steep declines followed by a slow recovery
rate.
---- “Based on our estimates, the property weakness will likely
be a multi-year growth drag for China, but it could be less painful in 2023
than in 2022.”
Data from May showed
China’s property sector is still struggling to turn around, despite signs of
recovery earlier this year.
Market watchers predict China will likely support the real estate sector
through fiscal stimulus policies, expected
to be released as the economy struggles to regain momentum after reopening from Covid-19.
Hong Kong-listed Chinese property stocks jumped
Tuesday after the People’s Bank of China cut its seven-day reverse
repurchase rate by 10 basis points
from 2% to 1.9% — it was the first such cut since August.
On Tuesday, property developer Logan
Group jumped as much as 4.5%
and Country Garden rose
4% on hopes of further stimulus and policy easing ahead.
Goldman Sachs economists also noted there are expectations for
China’s government to introduce more housing stimulus packages to support the sector.
---- Another concern for the property sector is a wide divergence
between government-owned property businesses and private companies in the
industry, JPMorgan’s Asia Chief Market Strategist Tai Hui said.
“I think that recovery is going to be slow, but I think there also
a huge divergence between the state-owned developers which have done better in
this current rebound versus the more private sector developers, who are still
struggling,” Hui told CNBC’s “Squawk Box Asia”
on Tuesday.
---- Morgan Stanley, in its mid-year outlook
report, warned that further weakness in the property sector will likely bring
more headwinds for China’s growth.
“If the challenges in
the property sector deepen and bring risk aversion in the financial system and
affect consumer confidence, this will cause a deeper slowdown in China,” Morgan
Stanley’s chief economist Chetan Ahya wrote.
Should monetary
easing measures fail to support the ailing property sector, it will also lead
to concerns of a spillover effect in the rest of the Asia-Pacific region, the
firm’s economists said.
A
“downside risk would be if China’s property sector does not stabilize even with
the easing we expect,” they said. “In that scenario, confidence and financial
conditions will tighten in China, which will have direct implications for China’s
growth but also will negatively spill over to the region.”
China’s real estate slump predicted to last for years, threatening wider region (cnbc.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
First People Sickened By COVID-19 Were Chinese
Scientists At Wuhan Institute Of Virology, Say US Government Sources
The three scientists were engaged in
“gain-of-function” research on SARS-like coronaviruses when they fell ill
MICHAEL SHELLENBERGER, MATT TAIBBI, AND ALEX GUTENTAG
13 JUN 2023
After
years of official pronouncements to the contrary, significant new evidence has
emerged that strengthens the case that the SARS-CoV-2 virus accidentally
escaped from the Wuhan Institute of Virology (WIV).
According
to multiple U.S. government officials interviewed as part of a lengthy
investigation by Public and Racket, the first people infected by the virus,
“patients zero,” included Ben Hu, a researcher who led the WIV’s
“gain-of-function” research on SARS-like coronaviruses, which increases the
infectiousness of viruses.
More
than three years after the pandemic’s outbreak, many around the world had given
up on learning the origin of SARS-CoV-2, the highly infectious respiratory
virus that has killed
millions, and the response to which shut down businesses and schools,
upended societies, and caused enormous collateral damage.
Public
officials in the U.S. and other countries have repeatedly suggested that
uncovering the pandemic’s origin may not be possible. “We may never know,” said
Anthony Fauci, the former director of the National Institute of Allergy and
Infectious Diseases, who oversaw pandemic response for two administrations.
Now,
answers increasingly look within reach. Sources within the US government say
that three of the earliest people to become infected with SARS-CoV-2 were Ben
Hu, Yu Ping, and Yan Zhu. All were members of the Wuhan lab suspected to have
leaked the pandemic virus.
As
such, not only do we know there were WIV scientists who had developed
COVID-19-like illnesses in November 2019, but also that they were working with
the closest relatives of SARS-CoV-2, and inserting gain-of-function features
unique to it.
When
a source was asked how certain they were that these were the identities of the
three WIV scientists who developed symptoms consistent with COVID-19 in the
fall of 2019, we were told, “100%”
More
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.
Megawatt electrical motor
designed by engineers could help electrify aviation
Technology
demonstrations show the machine's major components achieve the required
performance
Date: June 9, 2023
Source: Massachusetts Institute of Technology
Summary: Aerospace engineers designed a 1-megawatt
electrical motor that is a stepping stone toward electrifying the largest
aircraft.
Aviation's
huge carbon footprint could shrink significantly with electrification. To date,
however, only small all-electric planes have gotten off the ground. Their
electric motors generate hundreds of kilowatts of power. To electrify larger,
heavier jets, such as commercial airliners, megawatt-scale motors are required.
These would be propelled by hybrid or turbo-electric propulsion systems where
an electrical machine is coupled with a gas turbine aero-engine.
To meet this
need, a team of MIT engineers is now creating a 1-megawatt motor that could be
a key stepping stone toward electrifying larger aircraft. The team has designed
and tested the major components of the motor, and shown through detailed
computations that the coupled components can work as a whole to generate one
megawatt of power, at a weight and size competitive with current small
aero-engines.
For all-electric
applications, the team envisions the motor could be paired with a source of
electricity such as a battery or a fuel cell. The motor could then turn the
electrical energy into mechanical work to power a plane's propellers. The
electrical machine could also be paired with a traditional turbofan jet engine
to run as a hybrid propulsion system, providing electric propulsion during
certain phases of a flight.
"No
matter what we use as an energy carrier -- batteries, hydrogen, ammonia, or
sustainable aviation fuel -- independent of all that, megawatt-class motors
will be a key enabler for greening aviation," says Zoltan Spakovszky, the
T. Wilson Professor in Aeronautics and the Director of the Gas Turbine
Laboratory (GTL) at MIT, who leads the project.
Spakovszky and
members of his team, along with industry collaborators, will present their work
at a special session of the American Institute of Aeronautics and Astronautics
-- Electric Aircraft Technologies Symposium (EATS) at the Aviation conference
in June.
More
June 15th,
1775 George Washington appointed commander-in-chief of the Continental Army one
day after Congress established it.
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