Baltic Dry Index. 1110 +13 Brent Crude 84.40
Spot Gold 1955 US 2 Year Yield 4.87 -0.04
There can be few fields of human endeavour in which history
counts for so little as in the world of finance. Past experience, to the extent
that it is part of memory at all, is dismissed as the primitive refuge of those
who do not have the insight to appreciate the incredible wonders of the
present.
John Kenneth Galbraith.
It is the last trading day of July, time to dress up stocks one more time before what I suspect will be a stocks rout in the rest of H2 23. But this time it’s different, right?
In the USA, bank credit and deposits are falling as is the velocity of money. The yield curve has remained inverted for over a year. Some 40 million holders of student debt are about to start making payments again starting no later than October.
In the EU, paymaster Germany is leading the rest into recession led by manufacturing.
In the UK, a weak economy is about to get hit with another interest rate hike this week.
China’s manufacturing economy is already in recession, with the wider economy faltering.
All in all a good time to sit out the next
few months safely in money market funds finally delivering savers a real
interest rate in the USA, if not in the UK.
Asia markets rise as China’s factory
activity contracts for fourth straight month
UPDATED SUN, JUL 30 2023 10:52 PM
EDT
Asia-Pacific
markets rose on Monday as China’s factory activity for July remained in
contraction territory for the fourth straight month.
The official manufacturing
purchasing managers index came in at 49.3, higher than June’s figure of 49.0,
according to the national bureau of statistics.
The PMI for non-manufacturing
activity came in at 51.5, a slower rate of expansion compared to the 53.2 in
June.
Hong Kong’s Hang Seng index surged
over 1.71%, while the Hang Seng Tech index saw a larger climb of 4.84%. At
current levels, this would be the first time that the HSI breached the 20,000
mark in over a month.
Mainland Chinese markets were all
higher as well, with the Shanghai
Composite up 1.27% and the Shenzhen Component 1.16%
higher.
Japan’s Nikkei 225 popped
1.83%, while the Topix saw a larger gain of 1.52%. The country’s industrial
output for June came in lower than expected, registering a 2% growth month on
month compared to the 2.4% expected by economists.
South Korea’s Kospi advanced
0.88%, and the Kosdaq climbed 1.86%.
Australia’s S&P/ASX 200 also
rose 0.1%, as investors prepare for the Reserve Bank of Australia’s rate
decision on Tuesday, with economists polled by Reuters expecting a 25 basis
points hike in its benchmark policy rate to 4.35%.
On Friday in the U.S., all three major indexes
gained as June
data for the personal consumption expenditures price index continued
to show easing inflation. Core PCE gained 0.2% month-over-month, and core PCE
rose 4.1% from the year-ago period, lower than the anticipated 4.2%
The Dow rose 0.5%,
while the S&P 500 added
and the Nasdaq Composite advanced
1.90%.
Asia markets
rise as China's factory activity contracts for fourth straight month (cnbc.com)
Stock futures rise slightly as the market
is set to end July with solid gains: Live updates
UPDATED SUN, JUL 30 2023 6:51 PM EDT
Stock
futures rose slightly in overnight trading Sunday as the market is poised to
wrap up the month of July with strong gains.
Futures on the Dow Jones
Industrial Average inched up 34 points. S&P 500 futures rose 0.2% and
Nasdaq 100 futures were 0.4% higher.
The S&P is up 3% in July, on
pace for its fifth positive month in a row for the first time since its
seven-month streak ending August 2021. The tech-heavy Nasdaq Composite has
gained 3.8% month to date, also on track for its fifth straight winning month.
The blue-chip Dow is up 3.1% in
July. Last week, the 30-stock average posted a 13-day advance that matched the
index’s longest streak of gains going back to 1987.
“This bull market is no longer
just a mega-cap story. A new chapter of broadening participation has
developed,” said Adam Turnquist, chief technical strategist at LPL
Financial. ”Relatively
resilient economic data in the U.S., receding inflation pressures and
expectations for the end of the Federal Reserve’s rate-hiking campaign have
underpinned a notable expansion in market breadth since early June.”
The Fed hiked
rates to their highest level in more than 22 years after
passing a much-anticipated quarter-point hike. Fed Chair Jerome Powell
said the central bank will make data-driven decisions on a “meeting-by-meeting”
basis.
Investors will shift their focus
on the big jobs report this week. Economists polled by Dow Jones expect the
U.S. economy to have added 200,000 jobs in July. Nonfarm
payrolls increased 209,000 in June.
Stock
market today: Live updates (cnbc.com)
Contraction in China factory activity extends
into a fourth month
China’s factory activity contracted for a fourth
consecutive month in July, while non-manufacturing activity slowed to its
weakest this year as the world’s second-largest economy struggles to revive
growth momentum in the wake of soft global demand.
The official manufacturing
purchasing managers’ index came in at 49.3 in July — compared with 49.0 in
June, 48.8 in May and 49.2 in April — according to data from the National
Bureau of Statistics released on Monday. July’s reading was slightly better
than the 49.2 median forecast in a Reuters poll.
Monday’s figures also showed China posting its weakest official
non-manufacturing PMI reading this year, coming in at 51.5 in July — compared
with 53.2
in June, 54.5 in May and 56.4 in April. A PMI reading above 50
points to an expansion in activity, while a reading below that level suggests a
contraction.
“Although China’s
manufacturing PMI rebounded to 49.3% this month, some
enterprises in the survey reported that the current external environment is
complicated and severe, overseas orders have decreased, and insufficient demand
is still the main difficulty facing enterprises,” Zhao Qinghe, a senior NBS
official, wrote in an accompanying statement Monday.
These readings for July point to
the “tortuous”
economic recovery that China’s top leaders described last
Monday, which the Politburo attributed to insufficient domestic demand,
difficulties in the operation of some enterprises, many risks and hidden
dangers in key areas and a grim and complex external environment.
----More worryingly, business expectation among
the non-manufacturing sectors declined from the previous month.
A similar production
and business activity expectation index for manufacturing sectors, though, saw
an increase of 1.7 percentage points from the previous month, which
the NBS attributed to policy support to grow private enterprises and expand
domestic demand.
More
Contraction in China factory activity extends into a fourth month (cnbc.com)
Next expect more food price inflation to come, despite the northern hemisphere grain harvests now underway.
Russian missile attacks leave few options for Ukrainian farmers looking to export grain
July 30, 2023
AVLIVKA, Ukraine (AP) — The
summer winds carried the smell of burned grain across the southern Ukrainian
steppe and away from the shards of three Russian cruise missiles that struck the unassuming metal
hangars.
The agricultural company
Ivushka applied for accreditation to export grain this year, but the strike in
mid-July destroyed a large portion of the stock, days after Russia abandoned the grain deal that would have allowed the shipments across the
Black Sea without fear of attack.
Men shirtless and barefoot,
with blackened soles from ash, swept unburnt grain into piles and awaited the
loader, whose driver deftly steered around twisted metal shrapnel, bits of
missile and craters despite his shattered windshield.
They hoped to beat the next
rain to rescue what was left of the crop. According to the Odesa Regional
Prosecutor’s Office, Russia struck the facility July 21 with three Kalibr- and
Onyx-class cruise missiles.
“We don’t have a clue why
they did it,” explained Olha Romanova, the head of Ivushka. Romanova, who
worked in the debris alongside the others, wore a red headscarf and an
exhausted expression and was too frazzled to even estimate her losses.
----But Ivushka
wasn't the only target in Odesa. The main port also was struck, leaving Black Sea
shipping companies that relied upon the grain deal to keep them safe and food
supplies flowing to the world at a standstill.
The Black Sea handled about 95% of
Ukrainian grain exports before Russia’s invasion and the U.N.-brokered initiative allowed Ukraine to ship much of what
farmers harvested in 2021 and 2022, said Joseph Glauber, senior research fellow
at the International Food Policy Research Institute.
Ukraine, a major supplier of corn, wheat,
barley and vegetable oil, shipped 32.9 million metric tons (36.2 million U.S.
tons) of grain under the nearly yearlong deal designed to ease a global food
crisis. It has been able to export an additional 2 million to 2.5 million
metric tons (2.2 to 2.7 million U.S. tons) monthly by the Danube River, road
and rail through Europe.
Those are now the only routes to ship grain,
but have stirred divisions among nearby European
countries and generated higher costs to be absorbed by Ukrainian farmers, said
Glauber, former chief economist at the U.S. Department of Agriculture.
Russian
missiles strikes against the Danube port last
Monday also raised questions about how much longer that route will remain
viable.
That’s
a disincentive to keep planting fields already threatened by missiles and strewn with explosive mines.
Corn and wheat production in agriculture-dependent Ukraine is down nearly 40%
this year from prewar levels, analysts say.
From
the first of July last year until June 30 this year, Ukraine exported 68
million tons of grain, according to data from Mykola Horbachov, the president
of the Ukrainian Grain Association. Ukrainian farmers shipped 11.2 million tons
via railways, 5.5 million tons by road transport and around 18 million tons
through Danube ports. Additionally, nearly half of the total exported grain, 33
million tons, was delivered through seaports under the Black Sea Grain
Initiative.
More
Russian missile attacks leave few options for Ukrainian farmers looking to export grain (msn.com)
Finally, EVs using Lithium-ion batteries may
not be the answer to anything after all.
Focus: Ocean shippers
playing catch up to electric vehicle fire risk
By Lisa Baertlein and Anthony Deutsch July 28, 20235:29 PM GMT+1
LOS ANGELES/AMSTERDAM, July 27
(Reuters) - Electric vehicles are crisscrossing the globe to reach their eager
buyers, but the battery technology involved in the zero- emission automobiles
is exposing under-prepared maritime shippers to the risk of hard-to-control
fires, industry, insurance and emergency response officials said.
That risk has been
put under the spotlight by the burning
car carrier drifting off the Dutch coast. The Dutch coastguard said
the fire's cause was unknown, but Dutch
broadcaster RTL released a recording in which an emergency responder
is heard saying "the fire started in the battery of an electric car."
While all logistics companies deal with
the risk of EV lithium-ion batteries burning with twice the energy of a normal
fire, the maritime industry hasn't kept up with the developing technology and
how it creates greater risk, maritime officials and insurers said.
There were 209 ship
fires reported during 2022, the highest number in a decade and 17% more than in
2021, according to a report from insurer Allianz Global Corporate &
Specialty (AGCS) (ALVG.DE).
Of that total, 13 occurred on car carriers, but how many involved EVs was not
available.
The European Maritime Safety Agency
said in a March report the main cargo types identified as responsible for
"a large share of cargo fire accidents included ... lithium-ion
batteries."
There were 3,783 new
cars on board, including 498
electric battery vehicles, a spokesperson of ship chartering company
"K" Line said on Friday. Initial reports had put the number of
electric vehicles at just 25.
Japan's Shoei Kisen, which owns the
ship, said it was working with authorities to get control of the fire.
----One hazard in lithium-ion batteries
is "thermal runaway," a rapid and unstoppable increase in temperature
that leads to fires in EVs that are hard to extinguish and can spontaneously
reignite.
Fire extinguishing systems on the
massive ships that haul cars weren't designed for those hotter fires, and
shipping companies and regulators are scrambling to catch up, said Douglas
Dillon, executive director of the Tri-state Maritime Safety Association that
covers Delaware, Pennsylvania and New Jersey.
Recent fire-related losses are
resulting in increased insurance costs for automakers shipping cargo and costs
are likely to increase for vessel owners as well, said John Frazee, a managing
director at insurance broker Marsh. As ship owners seek to limit losses by
legally pursuing automakers whose vehicles are determined to have caused a
fire, automakers are buying additional liability protection, he said.
Exacerbating the risks is the business
model used by the companies that includes tightly packed ships. Auto carriers
like the burning ship are known as RoRos, which stands for roll-on/roll-off -
the way cars are loaded and unloaded.
RoRos are like floating parking garages
and can have a dozen or more decks carrying thousands of vehicles, industry
officials said. Unlike parking lots, however, cars are parked bumper-to-bumper
with as little as a foot or two of space overhead.
----The International Maritime
Organization, which sets regulations for safety at sea, plans to evaluate new
measures next year for ships transporting EVs in light of the growing number of
fires on cargo ships, a spokesperson told Reuters.
That could include specifications on
types of water extinguishers available on boats and limitations on the amount a
battery can be charged, which impacts flammability.
More
Focus: Ocean shippers playing catch up to electric
vehicle fire risk | Reuters
Industry groups, New York firefighters call
for stronger rules on lithium ion battery safety
Consumer
watchdog agency acknowledges current standards 'aren't enough' to prevent
deadly fires.
July 28, 2023 11:39 AM
Subscription required.
Automakers, FDNY want more safety regs on lithium ion batteries | Automotive News (autonews.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.
Property Pain From Canary Wharf to Mainhattan Has Only
Just Begun
From
London’s Canary Wharf to Paris’s La Defense, high-rise financial districts
have been hit hard and it’s about to get worse
By
Jack
Sidders 27 July 2023 at
05:00 BST Updated on27 July 2023 at 09:49 BST
In London’s Canary Wharf, HSBC is exiting
and Credit Suisse could
soon follow. DekaBank has
decided to leave its aging skyscraper in Frankfurt’s ensemble known as Mainhattan,
while Paris’s La Defense is losing one tenant after another.
Europe’s
high-rise financial districts have been hit hardest by the turmoil sweeping
office markets around the world, and with vacancy rates soaring and valuations
plunging, the pain is set to intensify.
Banks and other prime tenants are looking to make going to
the office more desirable as part of a post-pandemic reset, and instead of
giant glass and steel towers styled after Wall Street, they’re opting for
smaller sites in locations closer to shops and restaurants. It also
reflects the changing needs of banks as the shift away from wholesale
trading means there’s less need for the vast floors that proliferated
before the financial crisis.
The
trend means neighborhoods like London’s Mayfair and Paris’s 7th arrondissement
— home to the Eiffel Tower — are booming. By contrast, oversized financial
centers like Canary Wharf, La Defense and Frankfurt’s US-style downtown are
facing massive, high-risk investment to avoid becoming ghost towns.
Moody’s Corp. may be the next prime tenant to
vacate Canary Wharf. The ratings agency has appointed broker Cushman
& Wakefield Plc to advise on options for a new premises that would
likely be almost a third smaller than its current base, people with knowledge
of the process said.
“For these mono-cultural districts, we are going to have to see them change over time,” Kathleen McCarthy, global co-head of real estate at Blackstone Inc., said in an interview. They’ll need to appeal to a broader array of tenants and evolve into more of a mix of work, life and play, “that can take a long time and it can be a little bumpy for people that own those assets,” she said.
Revivals are becoming increasingly urgent for the high-rise
districts that had their heydays around the turn of the millennium. Vacancy rates
in La Defense — Europe’s largest purpose-built business district, located five
kilometers (three miles) from the Arc de Triomphe — hit 20% at the end of
the first quarter, compared to 3% in central Paris, according to CoStar Group. About 15% of the office space in Canary
Wharf is empty, well over double the 6% rate in
London’s West End, figures from the real estate data provider show.
It’s a similar situation in Frankfurt, where the vacancy
rate is twice that of Berlin and Munich. Over 1 million square meters of space
lies vacant in Germany’s financial center. That’s equivalent to more than eight
times the space in the Commerzbank tower,
Frankfurt’s largest office building. And the new Four complex, where Dekabank
will move, adds to the competition.
More
London, Paris, NYC's Empty Office Problem Is Only
Getting Worse - Bloomberg
Exodus from Canary
Wharf leaves it at its emptiest for 18 years
July 29, 2023
Canary Wharf is at its emptiest since 2005, according to new analysis,
compounding fears over the future of the financial
district as big names continue to abandon their offices.
Vacancy rates at Canary Wharf hit 14.8pc in the second quarter of this
year, a level last seen 18 years ago, according to data from the property
information provider CoStar.
This comes as an increasing number of financial services companies shrink
their offices to reflect more working from home.
A CoStar spokesman said: “With many large corporates cutting their office
footprints in the Docklands, this part of London has seen particularly high
vacancy rates, which we expect to continue to increase in the near-to-medium
term.
“These changes in office space requirements currently affecting the
Docklands have been prompted by the pandemic, which resulted in a high number
of companies adopting flexible working policies whereby organisations require
less office space.”
more
Exodus from Canary Wharf leaves it at its emptiest for 18 years (msn.com)
Covid-19 Corner
This
section will continue until it becomes unneeded.
Pediatrician
Fired After Raising Alarm on COVID-19 Vaccines During US Senate Event
7/29/2023 Updated: 7/29/2023
A medical
expert was terminated by one of her employers after raising concerns about the
safety of COVID-19 vaccines during an event held by a U.S. senator, according
to newly disclosed documents.
After Dr.
Renata Moon (who will appear on "American Thought Leaders"
premiering Mon. Aug. 30, 7:30pm ET) testified during the December 2022 event on Capitol Hill, Washington State University
officials told her that they were alerting a state medical commission because
she allegedly promoted misinformation, one of the documents shows.
The Washington
Medical Commission (WMC) has said that doctors who offer misinformation about
COVID-19 vaccines, treatments, and preventative measures "erode the public
trust in the medical profession and endanger patients," that people should
lodge complaints against doctors who allegedly provide misinformation, and that
it may revoke the licenses of doctors who are found to have spread
misinformation.
Drs. Jeff
Haney and James Record, Washington State University officials, referenced the
commission in a letter to Dr. Moon dated March 3, 2023.
"The WMC
has asked the public and practitioners to report possible spread of
misinformation. There are components of your presentation that could be
interpreted as a possible spread," they wrote. "As such, we are
ethically obligated to make a report to the WMC to investigate possible breach
of this expectation."
The university
informed Dr. Moon in June 2023 that it was effectively firing her by not
renewing her appointment as a clinical associate professor of medicine,
according to other documents reviewed by The Epoch Times.
"At this
time, the needs of the college are moving in a different direction and your
participation is no longer required," Drs. Haney and Record wrote.
More detailed
reasoning was not provided.
"This is
not about my personal situation with the school. This is about freedom of
speech for all Americans," Dr. Moon told The Epoch Times in an email.
"We must create an ethical healthcare system that is concerned only with
the well being of individual patients and not the financial interests of
massive corporations. We are dealing with conflicts of interest that are larger
than any of us ever imagined."
More
Pediatrician Fired After Raising Alarm on COVID-19
Vaccines During US Senate Event | The Epoch Times
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.
|
Researchers
find a way to easily bypass guardrails on OpenAI’s ChatGPT and all other A.I.
chatbots |
|
July 28,
2023 |
Hello and welcome to July’s special edition of
Eye on A.I.
Houston, we have a problem. That is what a lot
of people were thinking yesterday when researchers from Carnegie Mellon
University and the Center for A.I. Safety announced that they had found a way to successfully overcome the
guardrails—the limits that A.I. developers put on their language models to
prevent them from providing bomb-making recipes or anti-Semitic jokes, for instance—of
pretty much every large language model out there.
The discovery could spell big trouble for anyone
hoping to deploy a LLM in a public-facing application. It means that attackers
could get the model to engage in racist or sexist dialogue, write malware, and
do pretty much anything that the models’ creators have tried to train the model
not to do. It also has frightening implications for those hoping to turn LLMs
into powerful
digital assistants that can perform actions and complete tasks
across the internet. It turns out that there may be no way to prevent such
agents from being easily hijacked for malicious purposes.
The attack method the researchers found worked,
to some extent, on every chatbot, including OpenAI’s ChatGPT (both the GPT-3.5
and GPT-4 versions), Google’s Bard, Microsoft’s Bing Chat, and Anthropic’s
Claude 2. But the news was particularly troubling for those hoping to build
public-facing applications based on open-source LLMs, such as Meta’s LLaMA
models.
That’s because the attack the researchers
developed works best when an attacker has access to the entire A.I. model,
including its weights. (Weights are the mathematical coefficients that determine
how much influence each node in a neural network has on the other nodes to
which it’s connected.) Knowing this information, the researchers were able to
use a computer program to automatically search for suffixes that could be
appended to a prompt that would be guaranteed to override the system’s
guardrails.
These suffixes look to human eyes, for the most
part, like a long string of random characters and nonsense words. But the
researchers determined, thanks to the alien way in which LLMs build statistical
connections, that this string will fool the LLM into providing the response the
attacker desires. Some of the strings seem to incorporate language people
already discovered can sometimes jailbreak guardrails. For instance, asking a
chatbot to begin its response with the phrase “Sure, here’s…” can sometimes
force the chatbot into a mode where it tries to give the user a helpful
response to whatever query they’ve asked, rather than following the guardrail
and saying it isn’t allowed to provide an answer. But the automated strings go
well beyond this and work more effectively.
Against Vicuna, an open-source chatbot built on
top of Meta’s original LlaMA, the Carnegie Mellon team found their attacks had
a near 100% success rate. Against Meta’s newest LlaMA 2 models, which the
company has said were designed to have stronger guardrails, the attack method
achieved a 56% success rate for any individual bad behavior. But if an ensemble
of attacks was used to try to induce one of any number of multiple bad behaviors,
the researchers found that at least one of those attacks jailbroke the model
84% of the time. They found similar success rates across a host of other
open-source A.I. chatbots, such as EleutherAI’s Pythia model and the UAE
Technology Innovation Institute’s Falcon model.
Somewhat to the researchers’ own surprise, the
same weird attack suffixes worked relatively well against proprietary models,
where the companies only provide access to a public-facing prompt interface. In
these cases, the researchers can’t access the model weights so they cannot use
their computer program to tune an attack suffix specifically to that model.
More
Wikipedia:Large language models
Large language
models (LLMs) are natural
language processing computer
programs that use artificial
neural networks to generate
text. Some notable ones are GPT-3, GPT-4, LaMDA (Bard), BLOOM, and LLaMA. LLMs
power many applications, such as AI chatbots and AI search engines. They are
used for a growing number of features in common applications, such as word
processors, spreadsheets, etc. In this policy, the terms "LLM" and
"LLM output" refer to all such programs and applications and their
outputs.
LLM-generated content is
often an outright
fabrication, complete with fictitious
references, which are emblematic
of hoaxes.
More
Wikipedia:Large language models - Wikipedia
In any
great organization it is far, far safer to be wrong with the majority than to
be right alone.
John Kenneth
Galbraith.
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