Baltic Dry Index. 1080 -30 Brent Crude 84.41
Spot Gold 1923 US 2 Year Yield 4.98 -0.05
John Kenneth Galbraith. The Great Crash: 1929.
In the stock casinos, it’s still party time. Never mind that Chairman Powell took away the punch bowl months ago, or that the global economy seems to be fast rolling over from fading boom to outright bust.
With food price inflation entrenched virtually everywhere and wage price inflation just getting underway, what’s not to like about most major stocks priced at the apex of the central bankster's liquidity bubble?
As goes China’s property bust so goes the rest of China and much of Asia, swiftly followed by most of the rest of the world.
A hurricane’s headed towards Florida this week, with a financial hurricane headed towards global stocks.
Asia markets
rise as Wall Street comes off winning day; Japan unemployment higher than
expected
UPDATED MON, AUG 28 2023 11:22 PM
EDT
Asia-Pacific markets rose across the board as Wall Street came
off a winning day on Monday. Names like Meta and Apple traded slightly higher, while Nvidia added 1.8%. Shares of electric vehicle giant
Tesla inched up 0.1%.
Japan’s Nikkei 225 climbed
0.17% after leading gains in Asia on Monday, while the Topix was up marginally.
The country’s unemployment rate
for July also came in higher than expected, at 2.7% compared with the 2.5%
expected in a Reuters poll.
Australia’s S&P/ASX 200 rose
0.4%, while South Korea’s Kospi gained 0.29% and the Kosdaq was 0.59% higher.
Hong Kong’s Hang Seng index extended
gains and climbed 1.78%, while on mainland China, the CSI 300 advanced 0.7%.
Overnight in the U.S., all three major indexes
gained ground, with the Dow
Jones Industrial Average climbing 0.62% and the S&P 500 cup
0.63% limbed 0.63%. The Nasdaq
Composite advanced 0.84%.
Monday’s rally was broad: Ten of
the 11 sectors in the S&P 500 were positive. The only outlier was the
utilities sector, which ticked lower by 0.04%.
Toyota suspends
operations at a dozen Japan factories
Toyota has halted
operations in 12 assembly plants in Japan as a result of a system glitch, the
world’s largest automaker said, according to Reuters.
While the cause of
the problem has not been identified, it is most likely not from a cyberattack,
Toyota’s spokesperson said.
Toyota’s
shares last traded 0.39% lower.
Your Evening Briefing: Goldman Sells Unit Aimed at Mass-Affluent
Market
August
28, 2023 at 11:22 PM GMT+1
Goldman Sachs struck a deal to sell an investment-advisory
business aimed at the mass-affluent market. The bank agreed to sell the
business (with $29 billion in assets) that grew out of United Capital, a
registered investment adviser Goldman purchased for $750 million. The
offloading comes just four years after Goldman acquired it, an acquisition that
echoed Chief Executive Officer David Solomon’s star-crossed plan to broaden
Goldman’s reach beyond ultra-wealthy individuals. While the effort was separate
from Goldman’s troubled consumer-banking foray, it represented a similar pivot that sought to pitch the bank’s
offerings to Main Street. It is now undoing much of that strategic turn.
China’s
economy was meant to drive one
third of global economic growth this year, but it was not to be. Indeed, a
dramatic slowdown in recent months is sounding alarm bells across the globe.
Policymakers everywhere are bracing for a hit to their economies as China’s
imports of everything from construction materials to electronics slide. US
President Joe Biden has famously called China’s economic problems a “ticking time bomb.” Hoping to escape the blast radius,
global investors have already pulled more than $10 billion from
China’s stock markets, with most of the selling in blue chips. Goldman Sachs
and Morgan Stanley have cut their targets for Chinese equities, with the former
warning of spillover risks to the rest of the region. Asian economies are
taking the biggest hit to their trade so far, along with countries in Africa.
But even with that growing sense of fear across markets, it’s still not all doom-and-gloom.
More
Bloomberg
Evening Briefing: Goldman Sells Unit Aimed at Mass-Affluent Market - Bloomberg
Chevron LNG Nearer to Strike
|
|
Another group of workers authorizes
walkout A
third group of workers at
Chevron’s major liquefied natural gas facilities in Australia just voted to
strike – joining two others that had already authorized such action – that
could disrupt the supply of the super-cooled fuel if the strike does take
place, as Lewis Jackson reports here. Chevron’s Gorgon and Wheatstone facilities in Western Australia, along with
Woodside Energy Group's projects in the same area, account for about 10%
global LNG supply. Australia is the world’s biggest exporter of the fuel,
which is used primarily in Asia and Europe for power and heating as many
nations attempt to reduce their reliance on coal or oil. The 37 workers at
the Wheatstone offshore platform that decided in favor of industrial action
now make it more likely a strike could take place. The Offshore Alliance (OA), which combines the Maritime Union of Australia
and Australian Workers' Union, now has the mandate to engage in stoppages –
though they are not obligated to do so. Last week, more than 99% of the 450
or so workers at Chevron's Gorgon LNG facility and Wheatstone's downstream
processing facility voted to allow unions to call strikes. |
Finally, has Europe lost its taste for wine, especially French wine?
A hurricane heads towards Florida.
France to spend €200m destroying wine as demand falls
August 26, 2023
The French government is allocating €200m (£171.6m) to destroy surplus wine and support producers.
It comes amid a cocktail of problems for the industry, including a falling demand for wine as more people drink craft beer.
Overproduction and the cost of living crisis are also hitting the
industry.
Most of the €200m will be used to buy excess stock, with the alcohol sold for use in items such as hand sanitiser, cleaning products and perfume.
In a bid to cut back on the overproduction, money will also be available for winegrowers to change to other products, such as olives.
In funnelling the money into the industry, the French government aims to stop "prices collapsing... so that wine-makers can find sources of revenue again", Agriculture Minister Marc Fesneau said.
Despite the financial help - an initial EU fund of €160m which the French government topped up to €200m - the wine industry needs to "look to the future, think about consumer changes ... and adapt", he added.
European Commission data for the year to June shows that wine consumption has fallen 7% in Italy, 10% in Spain, 15% in France, 22% in Germany and 34% in Portugal, while wine production across the bloc - the world's biggest wine-making area - rose 4%.
France to spend €200m destroying wine as demand falls - BBC News
Storm Idalia to
intensify into major hurricane ahead of Florida landfall
By Dave
Sherwood, Brendan
O'Brien and Rich
Mckay
GUANIMAR,
Cuba, Aug 28 (Reuters) - Tropical Storm Idalia lashed western Cuba and was
expected to strengthen into a major hurricane on Monday as it crawled toward
Florida's Gulf Coast, where officials ordered evacuations and urged residents
to prepare for an expected Wednesday landfall.
Idalia
was churning about 80 miles (130 km) off the western tip of Cuba as it barreled
north, packing maximum sustained winds of 70 mph (112 kph), the Miami-based
National Hurricane Center said in its latest advisory.
The
storm's growing intensity and its northerly track put some 14 million
Floridians under hurricane and tropical storm warnings along the Gulf of
Mexico.
Authorities
warned that the chief hazard to human life posed by the storm would be from
surging walls of seawater driven inland by high winds, inundating low-lying
coastal areas.
Storm
surge warnings were posted for hundreds of miles of Gulf Coast shoreline, from
the Sarasota area north through Tampa and stretching to the sport-fishing haven
of Indian Pass at the western end of Apalachicola Bay.
----
Idalia was forecast to reach hurricane strength late Monday and attain Category
3 force - classified as a major hurricane on the five-step Saffir-Simpson wind
scale - by the time it makes landfall in Florida on Wednesday. Hurricane center
forecasts showed Idalia's center on track to come ashore in Florida's Big Bend
area, where the state's Gulf Coast panhandle transitions into its peninsula
region.
Shannon
Hartsfield, who runs a fishing boat in Apalachicola Bay in Franklin County on
the panhandle, was heeding the warnings.
Hartsfield
and many of his fellow anglers had pulled most of their boats from the bay and
moved them to high ground, he said. Other fishermen who ran out of time and
left their crab traps behind must now wait until after the storm to assess the
damage.
"It
could jog a little west and come straight at us," Hartsfield said.
"Hopefully we won't catch the worst of it."
To
the south, Manatee County was one of a handful of jurisdictions to order
mandatory evacuations on Monday, telling residents to seek higher ground or
head out of the storm's expected track.
By
Tuesday, Florida's Gulf Coast, southeastern Georgia and eastern portions of
North and South Carolina could face torrential rains of 4 to 8 inches (10 to 20
cm) that could unleash scattered flooding. Along with the heavy rain, winds of
more than 110 mph (177 kph) could result in life-threatening storm surge, the
hurricane center warned.
School
districts across the region canceled classes starting on Monday afternoon.
Tampa International Airport planned to suspend commercial operations beginning
at 12:01 a.m. Tuesday.
Like
many beachfront communities along the coast, the city of Bradenton opened
sandbag stations on Monday and urged its 55,000 residents to stay vigilant.
More
Storm Idalia to intensify into major hurricane ahead of Florida landfall | Reuters
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.
Cover Story:
Clock ticking on Country Garden’s debt bomb
Country
Garden Holdings Co., which was China’s top developer in terms of sales for six
consecutive years starting in 2017, is now poised to become
the next casualty in the nation’s property crisis as it teeters
on the brink of its maiden bond default.
The
Guangdong-based developer faces imminent payments in September for three bonds
either to mature or with a put option due with a combined principal of 7.3
billion yuan ($1 billion), as it struggles to secure sufficient funds to meet
its debt obligation.
- Caixin
Explains: The roots of Country Garden’s debt woes
- Country
Garden signals lack of votes for $540.8 million bond
extension
- Country
Garden’s Malaysia project to get new tax breaks, PM says
CX
Daily: Clock Ticking on Country Garden’s Debt Bomb (mailchi.mp)
China’s
summer of climate destruction
August 28, 2023
China's
summer this year has seen both extreme heat and devastating floods.
And the flooding this time around has struck areas where such weather has been unheard of, with scientists - blaming climate change - warning that the worst is yet to come.
"I've never seen a flood here in my whole life," says 38-year-old Zhang Junhua, standing next to a vast patch of rice, now completely useless. "We just didn't expect it."
His family and friends are safe, he says, because they were given plenty of warning to get to higher ground, but everyone in his village now has some tough months ahead.
What's more, the devastation in north-east China's Heilongjiang Province has had a major impact on food supplies for the whole country.
This month, 40% of the area's famous Wuchang rice crop has been wiped out, visibly flattened by the volume and speed of the water. Places which should appear lush and green are today brown and dead.
"The fields where we planted our crops were all submerged. We can't plant again this year," says another farmer, Zhao Lijuan, as she smiles and tries to be philosophical about the impact on her community.
"The losses are incalculable. We have tens of thousands of acres of rice fields here," the 56-year-old says, adding: "When I saw the water come here, I cried. It laid waste to everything and I am scared the typhoons will be back."
At least 81 people have been killed in the recent floods, including some trying to rescue others.
But the economic pain has been much wider, in a country already struggling to recover following three years of strict coronavirus control measures.
And, if the government wants to measure the immediate cost of not addressing climate change urgently, it need look no further than its own statistics.
In a little over a decade, the number of floods being recorded in the country has increased tenfold.
In the summer of 2011, there were six to eight monthly floods listed in
China. Last year, more than 130 were recorded in July and 82 in August.
More
China’s summer of climate destruction - BBC News
China facing Japan-style
stagnation as nation gets old before it gets rich
August 28, 2023
Graduate job applicants in China
today fall into one of three categories, says Julia Zhu, director of recruiter
Robert Walters China.
Some have rare skills that are in
high demand in the tech or green energy sectors and are able to secure high
salaries. But a second group feels helpless. Their skills do not match the
economy’s needs. “There are things that they cannot control and the market is
going down,” says Zhu.
“There is another portion who
have just given up,” she adds. “They just stay at home and hang around and
accept that they will have this kind of gap year for two or three years.”
Their
prospects are in stark contrast to President Xi Jinping’s “Chinese dream” of
turning China into a high-income nation. Youth unemployment hit a record high of 21pc in June,
China’s growth model has broken and economists warn the nation is teetering on
the edge of a debt crisis.
“This economic downturn is unprecedented in
the last 40 years,” says Lance Gore, senior research fellow at the National
University of Singapore’s East Asian Institute.
Instead of meeting the 5pc GDP growth rate Xi is
targeting, China is starting to look increasingly like Japan did in the 1990s.
Back then, a bursting asset price bubble triggered Japan’s “lost decade”
resulting in a 30-year period of stagnation. Economic growth slumped from
averaging 4.5pc year-on-year through the 1980s to 1pc ever since.
Economists do not expect growth to fall quite so low in China.
Stephen Roach, senior fellow at Yale Law School’s Paul Tsai China Center, says
3pc is more likely. But the end result for China will be worse.
China is experiencing this pressure at much lower levels of per
capita income than Japan did, says Roach.
Although Japan’s economy slumped, it remained a wealthy nation.
China might be the world’s second-largest economy but its GDP per capita in
2022 was just $12,756 (£10,130), according to Capital Economics. That is
roughly a sixth of that in the US and barely above the global average.
If it stagnates now, China will be stuck in the middle-income
trap. Xi’s “Chinese dream” will die.
Demographers have long warned that the country could get old
before it gets rich.
More
China
facing Japan-style stagnation as nation gets old before it gets rich (msn.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
China to lift COVID-19
test requirement for incoming travelers, eases strict restrictions
China is set to lift the requirement for incoming travelers to provide a negative COVID-19 test result starting Wednesday. This move marks a significant milestone in the country's efforts to ease the stringent virus-related restrictions that have been in place since early 2020.
The announcement was made by Foreign Ministry spokesperson Wang Wenbin during a briefing on Monday.
China's previous "zero-COVID" policy, which included
strict lockdowns and mandatory quarantines for infected individuals, was only
abandoned in December. These measures had impacted the economy and led to some
social disruptions.
China Covid surge earlier this year
Earlier this year, China witnessed a massive surge in Covid
infection rate.
As per reports, in January, some 37 million people in China may
have been infected with COVID-19 in a matter of one week. This occurred as
Beijing discontinued restrictions that had contained the virus since the start
of the pandemic.
More
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.
Stanford and UC
Berkeley Collaborate on Investigation to Produce Superior Graphene Aerogel in
Space
By Keith
Cowing August 27, 2023
Graphene
aerogel is a remarkable lightweight material that is both thermally insulating
and electrically conductive. This makes it appealing for use in a wide variety
of applications—from improved energy storage in batteries to better oil spill
cleanup methods to next-generation space suits. A team of researchers from
Stanford University and the University of California, Berkeley are leveraging
the International Space Station (ISS) National Laboratory to produce
higher-quality graphene aerogel than is possible on Earth.
This week, the
Crew-6 astronauts onboard the space station completed work on the team’s
investigation, which was funded by the U.S. National Science Foundation (NSF).
Results could provide new insights into the underlying physics of graphene
aerogel synthesis and lead to the development of novel material products.
“Through the
microgravity environment of the space station, we can unlock a completely new
area of material science that we’ve never had access to,” said Jessica Frick, a
research engineer at Stanford.
Frick is part
of Stanford’s Extreme Environment Microsystems Laboratory, or XLab. Conceived
by Debbie Senesky, an associate professor in aeronautics and astronautics at
Stanford, the XLab focuses on making tiny but tough electronics that can work
in extreme environments—like space. For their investigation on the space
station, Frick and Senesky are collaborating with a research group from UC
Berkeley led by Roya Maboudian, a professor of chemical and biomolecular
engineering. The team aims to better understand the nature of graphene aerogel
and how microgravity affects its properties.
The
investigation, which will execute the first step of graphene aerogel synthesis
in microgravity, launched on Northrop Grumman’s 19th Commercial Resupply
Services mission (NG-19). Results could have implications for future in-space
manufacturing as well as deep space missions.
Producing
graphene aerogel is a two-step process. The first step is much like making
Jell-O. The research team combined graphene oxide flakes in an aqueous
solution, like you would combine gelatin powder and hot water for Jell-O. The
graphene oxide solution samples were then sent to the space station. Earlier
this week, crew members loaded the samples into a furnace, where the solution
will be heated to form graphene hydrogel. This process takes a few hours, and
once the hydrogel is formed, the astronauts will prepare the samples for return
to Earth.
When the
samples are back in the lab, the team will do the second step of the process,
which involves removing the liquid and leaving behind only air in the form of
graphene aerogel. The team will then examine the properties of the aerogel and
compare what they find with terrestrially produced graphene aerogel.
The first step
of the process is the most crucial, says Frick. On Earth, gravity can pull the
graphene flakes down unevenly, which can create cracks in the hydrogel. This
could affect the quality of aerogel produced, making it less electrically
conductive or have lower absorption rates.
“What we’re
expecting to see from the space-produced graphene hydrogel is a depression in
the effects of sedimentation that we see here on Earth,” said Senesky. The
graphene aerogel produced from the hydrogel will only be a few millimeters in
size, but if the team can show that the aerogel is of higher quality than its
terrestrial counterparts, production could be scaled up to create larger
graphene aerogels.
More
"Indeed the temporary breaks in the market which preceded the crash were a serious trial for those who had declined fantasy. Early in 1928, in June, in December, and in February and March of 1929 it seemed that the end had come. On various of these occasions the [New York] Times happily reported the return to reality. And then the market took flight again. Only a durable sense of doom could survive such discouragement. The time was coming when the optimists would reap a rich harvest of discredit. But it has long since been forgotten that for many months those who resisted reassurance were similarly, if less permanently discredited.”
J. K. Galbraith. The Great
Crash: 1929.
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