Saturday, 24 June 2023

Special Update 24/06/2023 Russia – Civil War? EU Recession.

 Baltic Dry Index. 1240 +24         Brent Crude 73.85

Spot Gold 1921            U S 2 Year Yield 4.71   -0.06  

"I see you don't understand, and I must explain it to you. Well, very long ago, on the spot where the Wild Wood waves now, before ever it had planted itself and grown up to what it now is, there was a city--a city of people, you know. Here, where we are standing, they lived, and walked, and talked, and slept, and carried on their business. Here they stabled their horses and feasted, from here they rode out to fight or drove out to trade. They were a powerful people, and rich, and great builders. They built to last, for they thought their city would last for ever."

Kenneth Grahame. The Wind in the Willows.

The big news this morning is what’s going on in Russia. The start of a civil war, an armed insurrection, a failed coup?

How this plays out might be the biggest event of 2023 or it might just be the end of the Wagner group of mercenaries. An end to the US led proxy war on Russia in Ukraine?

Wagner head suggests his mercenaries headed for Moscow to take on army leadership

LONDON, June 24 (Reuters) - Russian mercenary chief Yevgeny Prigozhin appeared to suggest he had sent an armed convoy on a 1,200-km (750-mile) charge towards Moscow on Saturday in an unlikely attempt to topple the military leadership.

Russian local officials said a military convoy was on the main motorway linking the southern part of European Russia, bordering Ukraine, with Moscow, and warned residents to avoid it.

Hours earlier, the Russian authorities had accused Prigozhin of staging an armed mutiny after he alleged, without providing evidence, that the military leadership had killed a huge number of his fighters in an air strike, and vowed to punish them.

The FSB domestic security service said it had opened a criminal case against Prigozhin for armed mutiny, a crime punishable with a jail term of up to 20 years.

The dramatic turn of events, with many details unclear, looked like the biggest domestic crisis President Vladimir Putin has faced since he ordered a full-scale invasion of Ukraine - something he called a "special military operation" - in February last year.

Prigozhin, whose Wagner militia spearheaded the capture of the Ukrainian city of Bakhmut last month, has for months been openly accusing Defence Minister Sergei Shoigu and Russia's top general, Valery Gerasimov, of rank incompetence and of denying Wagner ammunition and support in its battles in Ukraine.

As their feud appeared to come to a head, the ministry issued a statement saying Prigozhin's accusations were "not true and are an informational provocation".

More

Wagner head suggests his mercenaries headed for Moscow to take on army leadership | Reuters

Ukraine war live updates: Russian intelligence service calls for Wagner chief’s arrest after he vowed to ‘punish’ military leaders

UPDATED FRI, JUN 23 20237:50 PM EDT

Tensions continue to rise between Russian military leaders and Yevgeny Prigozhin, the head of the Wagner private military company. Prigozhin accused the Kremlin of deliberately bombing Wagner troops. The Russian Ministry of Defense denied the accusations, calling the mercenary chief’s messages on Telegram ‘informational provocation.’

Earlier, Prigozhin alleged that the Kremlin’s justification for invading Ukraine was based on lies.

Ukraine’s military said it shot down 13 Russian cruise missiles headed for a military airfield in the western region of Khmelnitskyi. In the areas of intense combat, Ukraine reported its forces advanced in the south and stopped a Russian offensive toward the eastern cities of Lyman and Kupiansk.

Russian authorities denied the claims of Ukrainian progress, and Russia’s forces still hold a large amount of territory in Ukraine’s east and south. Ukrainian military leaders admit that the most difficult fighting is yet to come as the country’s long-awaited counteroffensive has yet to make significant gains.

“We still have the main events ahead of us,” Ukraine’s Deputy Defense Minister Hanna Maliar told media. “And the main blow is still to come. Indeed, some of the reserves - these are staged things - will be activated later.”

Meanwhile, the EU has adopted its 11th sanctions package against Russia.

Live updates: Latest news on Russia and the war in Ukraine (cnbc.com)

In other, stock casino and real world news, more sign of a global recession arriving.

Europe stocks close lower at end of gloomy week; Siemens Energy down 37%

UPDATED FRI, JUN 23 2023 11:52 AM EDT

European stock markets closed lower Friday after four sessions of declines.

The Stoxx 600 index closed 0.3% lower, with most sectors in negative territory. Oil and gas stocks fell 2.2% as oil prices traded lower, and mining stocks dropped 1.7%. Health care and telecoms stocks led modest gains, each closing 0.7% higher respectively.

Siemens Energy, the spinoff of the German conglomerate, plunged 37% after ditching its profit outlook for the year because of issues in its wind turbine division.

Downbeat market sentiment has been reflected globally, with Wall Street heading for a losing week and Asia-Pacific markets largely lower, as investors process a variety of interest rate decisions from central banks and what they mean for growth.

The Bank of England delivered a hawkish surprise Thursday, hiking by 50 basis points after both wage growth and inflation figures came in hotter than expected.

It comes after the European Central Bank enacted a 25 basis point rate rise, while the U.S. Federal Reserve opted for a pause — though it stressed more hikes are likely.

China’s central bank last week lowered lending rates as the economy’s much-anticipated post-Covid rebound stutters.

Oil prices are on course for a more than 3% drop this week, according to Reuters, pulled down by demand concerns and the economic growth outlook.

On the data front, U.K. consumer confidence as measured in a GfK survey ticked higher for a fifth consecutive month and by more than expected despite intense cost-of-living pressures and concerns over a coming mortgage crunch.

Also out of the U.K., retail sales figures showed a 0.3% rise in May, following a 0.5% uptick in April.

In the euro zone, flash purchasing managers’ index data showed a fall from 52.8 to 50.3, representing a near-stalling of growth. A reading below 50 indicates a contraction.

European markets live updates: BOE fallout, UK consumer confidence (cnbc.com)

Eurozone economy slows sharply amid fresh recession fears

June 23, 2023 18:28

The eurozone economy has slowed sharply and will struggle to break out of recession, according to a closely watched survey of businesses.

Output across the bloc stagnated in June, according to the latest Purchasing Manufacturers’ Index (PMI) survey from S&P Global, driven by a sharp slowdown in France after the European Central Bank raised interest rates to their highest level since 2001.

The PMI reading came in at 50.3 – a steep drop from 52.8 in May and its lowest elvel in five months. Anything below 50 signals that private sector activity is declining.

Economists said that the data suggests the single currency area could shrink again this quarter.

It comes after official figures showed the 20-nation bloc slipped into a technical recession at the start of 2023, contracting by 0.1pc in the first three months of the year following a similar decline in the final quarter of 2022. Germany, Europe’s biggest economy, also fell into recession at the start of the year.

Carsten Brzeski, an economist at ING, said: “This is a severe slowdown. We are clearly heading for another weak quarter, with a possible flirtation with recession again.”

Others said rising wages and higher borrowing costs would “take their toll on services firms” after years of record low interest rates.

Chris Hare, an economist at HSBC, said: “The PMIs don’t always deliver a perfect steer on near term growth.

“But if these headwinds do prove to be having a material impact, that raises questions around the scope for a recovery from the eurozone’s mild winter recession in Q2 and beyond.”

S&P Global said the French economy was most at risk of shrinking in the current quarter, even though energy and supply chain worries have eased. Confidence across the bloc also deteriorated, with expectations for the year ahead declining markedly to a seven-month low in June.

Michael Kirker, an economist at Deutsche Bank, said the bloc was likely to stagnate for the foreseeable future.

More

Eurozone economy slows sharply amid fresh recession fears (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.

Deepening economic pain leaves ECB in policy dilemma

LONDON/FRANKFURT, June 23 (Reuters) - Euro zone business growth stalled this month as a manufacturing recession deepened and a previously resilient services sector barely grew, leaving the European Central Bank in a policy dilemma as it presses ahead with rate hikes to fight inflation.

HCOB's flash Composite Purchasing Managers' Index (PMI) for the 20 nations sharing the euro currency, compiled by S&P Global and seen as a good gauge of overall economic health, sank to a five-month low of 50.3 in June from May's 52.8.

That was barely above the 50 mark separating growth from contraction and below all forecasts in a Reuters poll that saw a modest decline to 52.5.

The figures suggest that the bloc's economy is at best stagnating after a recession in the previous two quarters and a recovery is nowhere on the horizon, even if robust holiday bookings suggest that the tourism sector could keep the bloc afloat in the near term.

"This speaks against a recovery of the economy in the coming months, which is expected by many," Commerzbank economist Christoph Weil said. "We see our assessment confirmed that the euro area economy will contract again in the second half of the year."

"The so far 400 basis points of ECB rate hikes are increasingly slowing down the economy," he added.

For the ECB, the data deepen a dilemma.

Inflation at just over 6% is far too high and the labour market is running hot, suggesting more price pressures ahead as workers enjoy improved bargaining power.

But economic activity is weak and the ECB has clearly failed in its goal of tightening policy just enough to contain price pressures without pushing the bloc into recession.

Another issue is that a recession would normally push up unemployment, making the bank's job easier.

But firms appear to be hoarding labour, keenly remembering how difficult it was to hire back workers after the pandemic and offering the ECB little relief.

Indeed, the jobless rate is at a historic low and nominal wage growth is at its highest in decades, even if wages are just catching up after inflation eroded their real value.

Friday's PMI data only confirm this trend, as firms still increased headcount this month, with the employment index at 54.1, somewhat below May's 54.6.

For now, policy hawks who fear inflation more than a recession, appear to be in a majority.

----The ECB has de facto promised a rate hike in July and quite a few policymakers have also put one more move, to 4%, on the table for September or October.

Friday's real surprise was that PMI data covering the services industry slumped to 52.4 from 55.1, well below a median forecast of 54.5.

While Germany, the bloc's biggest economy, outperformed on services, France was a big drag with a services PMI at 48.

More

Deepening economic pain leaves ECB in policy dilemma | Reuters

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

https://www.zerohedge.com/markets/environmental-disaster-ev-battery-metals-crunch-horizon-industry-races-recycle

Covid-19 Corner

This section will continue until it becomes unneeded.

Federal Agency Issues Advisory on Symptoms Linked to ‘Long COVID’

June 22, 2023

The U.S. Department of Health and Human Services (HHS) issued an advisory Wednesday about mental health symptoms linked to “long COVID,” or suspected long-lasting symptoms caused by COVID-19.

 

Long COVID occurs when people recover from the COVID-19 virus but then experience symptoms that last more than three months, including fatigue, headaches, sleep problems, coughing, and cognitive impairment. While some medical professionals believe it’s largely exaggerated, HHS has signaled that it’s a real phenomenon.

 

“Long COVID has a range of burdensome physical symptoms, and can take a toll on a person’s mental health. It can be very challenging for a person, whether they are impacted themselves, or they are a caregiver for someone who is affected,” HHS Secretary Xavier Becerra said in a release on June 21. “This advisory helps to raise awareness, especially among primary care practitioners and clinicians who are often the ones treating patients with Long COVID.”

Another HHS official, Miriam E. Delphin-Rittmon, said that individuals with “long COVID” should be “properly identified” and referred for treatment. They should be screened for “mental health conditions” along with their physical symptoms, she said.

According to the HHS news release, about 10 percent of all people who have previously come down with COVID-19 have suffered at least one symptom of long COVID. But the HHS advisory found mental health symptoms and conditions linked to long COVID such as anxiety, psychosis, depression, and other mental issues.

“Long COVID can have devastating effects on the mental health of those who experience it, as well as their families, due to a number of factors, including chronic illness (both physical and mental), social isolation, financial insecurity, caregiver burnout, and grief, according to the advisory issued today,” the release says.

More

Federal Agency Issues Advisory on Symptoms Linked to ‘Long COVID’ (theepochtimes.com)

Technology Update.

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

Siemens Energy scraps profit outlook as wind turbine troubles deepen

June 22, 2023

FRANKFURT (Reuters) -Siemens Energy, which supplies equipment and services to the power sector, scrapped its 2023 profit outlook after a review of its wind turbine unit exposed deeper than expected problems that could cost more than 1 billion euros ($1.1 billion).

Issues at the company's Siemens Gamesa unit have been a drag on the parent, and the announcement marks the latest blow to Siemens Energy's efforts to get these under control following a full takeover of the business.

Frankfurt-listed Siemens Energy shares were down 12.8% at 1849 GMT after the announcement, which follows the initial discovery of faulty components at Siemens Gamesa in January that caused a charge of nearly half a billion euros.

Siemens Energy said that an extended technical review of Siemens Gamesa's installed turbine fleet and product designs was launched following that is says was a substantial increase in failure rates of components.

The company, which was spun off from Siemens, said the review suggests that it will be significantly more expensive than initially thought to reach the desired product quality of certain onshore turbines.

This, it said, would incur costs of more than 1 billion euros.

"We are also reviewing assumptions critical to the existing business plans given productivity improvements are not materializing to the extent previously expected," Siemens Energy said.

"In addition, we continue to experience ramp up challenges in Offshore."

Problems at Siemens Gamesa had already caused Siemens Energy to tone down its profit outlook last month, expecting its profit margin before special items at the lower end of its 1%-3% target range for the fiscal 2023 year.

However, the company, which makes and services gas turbines and builds large power transmission stations, kept its sales outlook, which forecasts revenues to grow by 10%-12%.

Siemens Energy scraps profit outlook as wind turbine troubles deepen (msn.com)

This weekend’s music diversion. This weekend, a long forgotten, once famous Austrian court composer, as famous as the baroque greats, who manages to cram 21 individual pieces into just over 16 minutes. Maybe not quite as good as the last three weekends, but you be the judge?

Johann Joseph Fux: 'Concentus Musico-Instrumentalis' Op.1 Serenada in C major K.352

Johann Joseph Fux: 'Concentus Musico-Instrumentalis' Op.1 Serenada in C major K.352 - YouTube

This weekend’s chess update. Approx. 13 minutes.

2 Queens Can't Stop Gukesh!

2 Queens Can't Stop Gukesh! - YouTube

No weekend maths update this week. This weekend, the strange case of China’s abandoned EVs.    Approx. 10 minutes.

China is Throwing Away Fields of Electric Cars - Letting them Rot!

China is Throwing Away Fields of Electric Cars - Letting them Rot! - YouTube

“It was all down, down, down, gradually--ruin and levelling and disappearance. Then it was all up, up, up, gradually, as seeds grew to saplings, and saplings to forest trees, and bramble and fern came creeping in to help.”

Kenneth Grahame. The Wind in the Willows.

 

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