Baltic Dry Index. 1166 +31 Brent Crude 84.64
Spot Gold 1904 US 2 Year Yield 4.92 -0.04
A broken clock is right twice a day.
Which
makes it far more accurate than most economists.
In the stock casinos, shock and awe from more US bank downgrades to come.
More pressure too, as JP Morgan raised its global emerging markets corporate high-yield default forecast.
Was that it for the Great Stocks Bubble of 2023?
While it’s probably still too early to tell, China’s
economy is fading so fast they just stopped publishing youth unemployment
figures. As goes China, so goes the rest
of the world?
Asia markets fall as bank stocks retreat
under pressure on Wall Street
UPDATED TUE, AUG 15 2023 11:20 PM
EDT
Asia-Pacific
markets fell on Wednesday mirroring moves on Wall Street after a decline in
U.S. banks.
Shares of JPMorgan Chase and Wells Fargo dropped
2%, and Bank of America dropped
3%. The action came after Fitch
warned it may have to downgrade credit rating dozens of banks,
including JPMorgan Chase.
Last week, Moody’s lowered its
rating on 10 U.S. banks while putting other
big institutions on a watchlist for potential downgrades.
In Asia, Japan’s Nikkei 225 slid
1.03% and the Topix was down 0.9%, despite business sentiment improving in
July, according to the Reuters Tankan survey.
South Korea’s Kospi came
back from a public holiday 1.28% down, while the Kosdaq saw a larger loss of
1.71%.
In Australia, the S&P/ASX 200 slipped
1.37%, on pace for its third day of losses in four days.
Hong Kong’s Hang Seng index fell
1.05%. while mainland Chinese markets were also lower with the CSI 300 index
0.35% down. China saw its house price index fall into contraction territory for
the first time since April, dropping 0.1% year on year.
Overnight in the U.S., all
three major indexes lost ground, with the S&P 500 falling 1.16% and ending the session below
its 50-day moving average. The Nasdaq Composite fell 1.14%, and the Dow Jones Industrial Average slid 1.02% and snapped a three-day positive streak.
Asia markets fall as
bank stocks retreat under pressure on Wall Street (cnbc.com)
Fitch warns it may be forced to downgrade
dozens of banks, including JPMorgan Chase
A Fitch Ratings analyst warned that the
U.S. banking industry has inched closer to another source of turbulence —
the risk of sweeping rating downgrades on dozens of U.S. banks that could even
include the likes of JPMorgan Chase.
The ratings agency cut its assessment of the industry’s health in
June, a move that analyst Chris
Wolfe said went largely unnoticed because it didn’t trigger
downgrades on banks.
But another one-notch downgrade of
the industry’s score, to A+ from AA-, would force Fitch to reevaluate ratings
on each of the more than 70 U.S. banks it covers, Wolfe told CNBC in an
exclusive interview at the firm’s New York headquarters.
“If we were to move it to A+, then
that would recalibrate all our financial measures and would probably translate
into negative rating actions,” Wolfe said.
The credit rating firms relied upon
by bond investors have roiled markets lately with their actions. Last week,
Moody’s downgraded 10
small and midsized banks and warned that cuts could come for another 17
lenders, including larger institutions like Truist and U.S. Bank.
Earlier this month, Fitch downgraded the
U.S. long-term credit rating because of political dysfunction and growing debt
loads, a move that was derided by
business leaders including JPMorgan CEO Jamie Dimon.
More
Fitch warns it may be forced to downgrade dozens of banks (cnbc.com)
Finally, as China’s economy stumbles, has China’s CCP lost the Mandate of Heaven? What happens next if they have? An invasion of Taiwan?
More in the Saturday weekend update.
JPMorgan hikes EM default forecast as
Country Garden drives China contagion fears
JPMorgan raised its global emerging markets
corporate high-yield default forecast, largely due to rising contagion fears in
China’s property sector from a possible Country Garden default.
The U.S.-based investment bank
raised its 2023 global forecast to 9.7% from 6% in a note dated Aug. 15. It
also raised its Asia high-yield default rate forecast to 10% from 4.1% — that
figure drops to just 1%, if China property is excluded.
JPMorgan expects China property to
account for nearly 40% of all default volumes in 2023, followed by 35% from
Russian corporates and 12% from Brazilian issuers.
The magnitude of the increase in JPMorgan’s
default risk assessment underscores fears that a Country Garden debt default
will have a far broader ripple effect on the Chinese property sector and the
broader economy.
Country Garden has a far bigger and
broader portfolio of developments than China Evergrande
Group,
which fell
into default in 2021 and announced an offshore debt restructuring
program in March.
Country Garden, which used to be one of China’s
largest developers, has until early September to make coupon
payments it missed Aug. 7 on two dollar notes. Last week, it
also suspended trading in 11 domestic bonds and
issued a warning that it expects to post a
half-year annualized loss of up to 55 billion yuan ($7.5 billion).
In the same note, JPMorgan said a
Country Garden default could add $9.9 billion to the year-to-date global
emerging markets high-yield corporate default tally, taking the total default
volume for the Chinese property sector to $17 billion to date in 2023.
JPMorgan estimates a Country Garden
default could also lead to $8 billion worth of defaults among remaining smaller
Chinese property developers, and another $2 billion for “some liability
management exercise” from a spillover to other Chinese high-yield sectors.
Over $100 billion of
China property bonded debt has defaulted over the past two and a half years,
according to JPMorgan. Prior to Country Garden, China’s property sector already
chalked up $109 billion in defaults since the beginning of 2021, which is 94% of
total defaults in Asia during that period.
JPMorgan also raised
its default rate forecast for Latin America to 7.1% from 6.6% after Brazil’s
Odebrecht Engenharia e Construcao appears to be embarking another round of debt
restructuring that could affect $1.9 billion in dollar-denominated bonds.
The bank raised its
default forecast for emerging Europe to 23.4% from 15.7%, to reflect the
inclusion of Russian corporate bond defaults, which were mostly “technical”
since sanctions from Russia’s war in Ukraine prevented firms getting bond
payments to international investors.
JPMorgan
hikes EM default forecast as Country Garden drives China contagion fears
(cnbc.com)
China's new home
prices fall for first time this year, dimming economic outlook
August 16,
20234:51 AM GMT+1
BEIJING, Aug 16
(Reuters) - China's new home prices fell for the first time this year in July,
the latest in a string of downbeat data that points to a rapid loss in broader
economic momentum and underlines the urgency for more bolder policy support to
shore up activity.
The 0.2% fall
month-on-month came after June's flat reading, according to Reuters
calculations based on National Bureau of Statistics (NBS) data. Prices were
down 0.1% from a year earlier, after a flat result in June.
The
decline in home prices comes amid a worsening debt
crisis at major developers, sliding property investment and home
sales. Most analysts expect further downside in home prices and sales over
coming months, posing a challenge to policymakers as many sectors of the
economy face intensifying pressure amid weak demand.
Tuesday's data
adds to a raft of weak economic indicators over the past month or so, and has
raised calls from China observers for authorities to roll out bolder support
measures to arrest the downward slide growth.
China's property
sector, once a pillar of the economic growth, continues to struggle despite an
extension of financial support for developers and incentives for first-time
home buyers and upgraders.
Among 70 cities,
49 saw a fall in new home prices month-on-month in July from 38 cities the
previous month.
---- However, most economists expect the downside
trend in home sales and prices to persist for while.
"High
frequency data in early August does not suggest any meaningful improvement in
the property market," said Wang Tao, Head of Asia Economics and Chief China
Economist at UBS Investment Bank.
"Without
additional major policy easing and/or fiscal support, property sales and
investment may weaken further or stay at the bottom for longer than assumed in
our baseline," said Wang.
China's
new home prices fall for first time this year, dimming economic outlook |
Reuters
Shanghainese are so sad for the Decline and the Worst part is no hope! Why are foreigners leaving?
Approx.
17 minutes.
China’s
Walking Into A Food Apocalypse
Approx. 7
minutes.
China’s Walking Into A Food Apocalypse - YouTube
Shocking
corruption creates quality problems of high-speed rail/China's HSR aggravates
local debts
Approx. 19
minutes.
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.
In
inflation hit UK, more interest rake hikes to come.
UK
unemployment ticks up but wage growth hits two-decade-high
TUESDAY 15 AUGUST 2023 7:38 AM
The rate of UK unemployment rose to
4.2 per cent in the three months to June from 3.9 per cent in the previous
three months, the Office for National Statistics said.
However, this was tempered by annual
growth in pay – excluding bonuses – up to 7.8 per cent in June. This is the
highest regular growth rate since records began in 2001.
----This was not all
bad news however, with wages increasing in real terms by 0.5 per cent, helping
to sooth Britons’ cost of living woes.
This comes after
the economy grew last Friday by 0.2 per cent according to the ONS.
The central bank
earlier this month notched up its 14th straight rate hike – with the next
meeting on 21 September.
Annual growth in regular pay (excluding
bonuses) was 7.8 per cent in April to June 2023, this is the highest regular
annual growth rate we have seen since comparable records began in 2001.
---- The latest ONS figures also showed there were 160,000
working days lost because of strike action in June, with more than half being
in the health and social care sector.
When it came to pay, there were 97,000
more Brits on the payroll, taking the total to over 30m, which is an increase
of more than 1.2m compared to February 2020
Experts warned that the increase is
likely to lead to another rate hike, as the Bank of England looks to tame
inflation, at 7.9 per cent.
There will also be pension
implications – with the ‘triple lock’ ensuring that the state pension moves in
line with average wage growth or inflation, whichever is higher.
Adrian Lowery, financial analyst at wealth manager Evelyn Partners, said “above-expectations wage growth will be watched nervously at the Treasury as it threatens to add fuel to the triple lock fire.”
“The wages element of the triple lock – annual earnings growth for May to July – won’t be
available until next month but this outcome suggests it could be significant.
Moreover, strong wage growth is likely to impair the retreat of inflation in
the coming months, and the Bank of England recently warned that the pace of
wage growth is a threat to its longer-term inflation target of 2 per cent”.
More
UK unemployment ticks up but wage growth hits
two-decade-high (cityam.com)
‘Completely out of
whack’: Winter storms in August have destroyed half of this French farmer’s
crops
August
14, 2023
Weeks of rainy weather followed by
storm Patricia in early August have destroyed crops in northern France.
In the town of Sangatte, farmer
Bertrand Baey has lost half of his oat crops to unseasonable weather.
"We've never seen anything like
it," says Bertrand, a sixth-generation farmer who has been
growing his crops since 2006. "We had a winter storm in the middle of
summer."
The oats, which had not yet reached harvest
maturity, lost a large proportion of their kernels, which fell to the ground
due to the strong winds.
France's north saw gusts of up to 80
kilometres per hour and heavy rains in recent weeks during a stormy summer
episode.
The autumn-like weather in the region
came amid recent heatwaves in countries like Spain and Italy and wildfires that
ravaged the Greek island of Rhodes.
While Bertrand usually harvests
around 3.2 tonnes of oats a year, he expects to harvest less than a tonne this
season due to the unusual weather.
The commune of Sangatte saw double
the usual amount of rain between September and March, says Bertrand.
"We couldn't drain the water
away to the sea, the fields were flooded, I had to resow," he recalls.
"And then in spring we had excessively dry weather and we
couldn't get the plants to emerge. It's true that the weather is completely out
of whack."
As a cattle breeder, Bertrand uses 50
per cent of his oat production to feed his cows. He usually sells
the other half, which provides him with additional income. This year, he barely
has enough to feed his animals.
He hopes to be able to benefit from
government aid and crop insurance to
compensate for his losses.
More
Covid-19 Corner
This
section will continue until it becomes unneeded.
Scientists unravel a major mystery behind the Covid-19 pandemic
Monday 14 Aug
2023 5:09 pm
Researchers
may have discovered why Covid-19 is
so adept at jumping between species, which could help better predict how the virus will evolve.
Early in the pandemic
scientists discovered the SARS-Cov-2 virus sweeping the globe infected humans
by ‘hijacking’ a receptor on the surface of cells. The
ACE2 protein affected is particularly numerous in cells lining the nose and
lungs.
However, SARS-Cov-2 has
shown the ability to bind with other proteins, prompting a team from the
University of Virginia to investigate whether they could infect cells without
ACE2 receptors.
The results showed they could,
offering a possible explanation as to how the virus was able to so easily
infect other species. Domestic dogs and
cats are among the many animals to have contracted the disease, while the virus
swept through mink farms in Denmark, resulting in millions of the animals being killed.
Co-author Dr Peter Kasson likened the new pathway to Covid-19 using a
back door.
‘The virus that causes Covid-19 uses ACE2 as the front door to infect
cells, but we’ve found that if the front door is blocked, it can also use the back
door – or the windows,’ he said.
‘This means the virus can keep spreading as it infects a new species
until it adapts to use a particular species’ front door. So we have to watch
out for new viruses doing the same thing to infect us.’
Covid-19 has killed almost seven million people
globally. Cases in both the UK and US have been increasing
in recent weeks, and a new strain, Eris, has been labelled a ‘variant of interest’ by the World Health Organization.
More
Scientists unravel a major mystery behind the Covid-19
pandemic | Tech News | Metro News
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.
Today, so you really, really, really
want driverless taxis. Coming soon to a gridlocked town near you.
Ten Cruise Robotaxis
Brick On San Fran Streets Causing Massive Traffic Jam
TUESDAY, AUG 15, 2023 - 10:45 AM
Turns out that
driverless robotaxis still may not be ready for primetime.
A shining example
of this revelation came from California this week where, one day after the
state implemented a massive expansion of the robotaxis, it was faced with a
10-car driverless traffic jam in San Francisco.
The 10 taxies
"blocked two narrow streets in the center of the city’s lively North Beach
bar and restaurant district", according to a report from Yahoo
Finance, which said the robotaxis "might as well have been boulders"
because nobody knew how to move them.
The jam clogged up Vallejo Street and two corners on Grant,
as human drivers were unable to maneuver around the automated vehicles, the
report says. The robotaxis sat with their parking lights flashing for 15
minutes before "waking up" and eventually moving on.
"Our houses in
North Beach are made of sticks," said Aaron Peskin, who represents
North Beach on the San Francisco Board of Supervisors. He tried to allay his
fears that robotaxis could jam the streets close in the event of a major
emergency or fire where people needed to evacuate an area.
Cruise, who oversees
the project, blamed cellphone carriers for the problem. Government affairs
manager Lauren Wilson told Peskin: “As I understand it, outside lands
impacted LTE cell connectivity and ability for RA advisors to route cars.”
The California
Public Utilities Commission on Thursday voted 3 to 1 to allow the robotaxi
expansion. The vote didn't come without controversy, however, as the report
notes there was significant pushback on the idea from the mayor's office, which
claims that Cruise has a laundry list of fixes it must implement before the
taxis are ready for primetime. For now, it looks as though the skeptics have a
point...
Peskin has said
that officials are "pursuing 'every means' to have the CPUC decision
reversed" after the incident.
He concluded: “If
you’re looking for an example of regulatory capture, you’re seeing it now. It's
unethical and immoral but legal. Bottom line, this all goes to Gov. Gavin
Christopher Newsom.”
Ten Cruise Robotaxis Brick On San Fran Streets Causing
Massive Traffic Jam | ZeroHedge
A man is laying in the hospital, waiting to be the first person in history to receive a brain transplant...
A
doctor comes in and says "Congratulations! But unfortunately since this is
a new procedure your insurance isn't going to cover it all. So we're going to
give you 3 choices for brains and you can decide which you can afford"
The man says to the doctor "Ok, what are they?"
The doctor says "well, first there's engineer
brain, that's $100 an ounce. Then there's astrophysicist brain, that'll cost
you $200 an ounce. Finally there's economist brain. That's the most expensive
at $1000 an ounce."
The man looks at the doctor, surprised. "that's
absurd! Why is the economist brain so expensive?"
The doctor turns to him and says "sir, do you
have any idea how many economists it takes to get an ounce of brain?"
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