Baltic Dry Index. 1080 -30 Brent Crude 84.48
Spot Gold 1915 U S 2 Year Yield 5.03 +0.05
The only way government bureaucrats know of keeping prosperity going is to inflate some more - to increase the deficit or to pump more money into the system.
Henry Hazlitt.
This long weekend, be sure to watch this weekend’s masterpiece YouTube presentation from Professor Boyle. The Panic of 1907.
In the US stock casinos, Chairman Powell’s message failed to get through.
The inflation fight is over, was the message the punters took from the Powell speech at Jackson Hole, buy more. Daring the Fed to go against the latest Wall Street stock mania.
“Don’t fight the Fed,” is one of Wall Street’s better sayings, but that’s exactly what Wall Street has now set out to do.
Wall Street’s professional gamblers either think that Chairman Powell was lying about continuing to fight inflation ahead or that he’s a washed out spent irrelevance. An interesting few months now lie ahead.
I think the US and global economy is about to get hit with recession, so Wall Street is probably guessing right about interest rates are near the top, with the next major move down, but that’s no reason to put money into stocks near the top of a bubble.
That’s
a reason to seek safety in bonds and money market funds leaving the stock
casinos to go after the last of the greater fool buyers.
Your Evening Briefing: Powell Signals
He’s Determined to Finish the Fight
August 25, 2023 at 11:00 PM GMT+1
As far as the
Fed is concerned, the message is stay the course. Chair Jerome Powell says the
US central bank is prepared to raise interest rates further if need be and intends to keep borrowing
costs high until inflation looks on track for 2%. “Although inflation has moved
down from its peak—a welcome development—it remains too high,” Powell said
Friday at the central bank’s annual conference in Jackson Hole, Wyoming. He
welcomed the slower price gains the US economy has achieved under tighter
monetary policy and loosening supply constraints. However, he cautioned that
the process “still has a long way to go, even with the more favorable recent readings.”
Bloomberg
Evening Briefing: Powell Signals He’s Determined to Reach 2% Inflation -
Bloomberg
S&P,
Nasdaq close higher, snap 3-week losing streak as Wall Street shakes off rate
hike fears: Live updates
UPDATED FRI, AUG 25 2023 4:50 PM EDT
Stocks rallied Friday as traders cheered
comments from Federal Reserve Chairman Jerome Powell at the annual central bank
conference in Jackson Hole, Wyoming, that point to stronger-than-expected
economic growth.
The Dow Jones Industrial Average closed
up 247.48 points, or 0.7% at 34,346.90, after being up more than 300 points at
session highs. The S&P 500 gained
about 0.7% to close at 4,405.71, while the tech-heavy Nasdaq Composite advanced
0.9% to 13,590.65, which was enough to help both indexes snap a three-week
losing streak. However, the Dow logged a second-straight week of losses.
The S&P 500 energy and
consumer discretionary sectors both rose at least 1% on Friday. Petroleum
company Valero Energy and
toymaker Hasbro were
among the day’s biggest gainers, advancing 2.8% and 5.7%, respectively.
“The economy may not be cooling
as expected. So far this year, GDP (gross domestic product) growth has come in
above expectations and above its longer-run trend, and recent readings on
consumer spending have been especially robust,” Powell said. “In addition,
after decelerating sharply over the past 18 months, the housing sector is
showing signs of picking back up.”
Given that Powell gave
no clear indication of which way he sees interest rates
heading, however, LPL Financial chief global strategist Quincy Krosby said the
trajectory of rising Treasury yields will be a key underpinning of market
direction.
“Regardless of the reason that yields move
higher, what they do is that they tighten financial conditions by themselves
because the cost of capital goes up,” Krosby said. The yield on the benchmark 10-year Treasury
note ended
Friday lower at 4.233%, after hitting highs earlier in the week.
Some investors expressed optimism
that the Fed is nearing the end of its rate-hiking cycle.
“Maybe there are one or two
left,” said Alex Petrone, director of fixed income for Rockefeller Asset
Management, referring to increases in the Fed’ benchmark lending rate.
Similarly, Timothy Chubb, CIO of
Girard, sees Friday’s comments from Fed officials beginning to give the
market confidence that future rate hikes may not be necessary.
“We’re getting the data that we
need to see as inflation moves from those 9% levels down to 3%. And I think at
this point, the question really just revolves around how much pain is the Fed
willing to further inflict on the economy to get inflation from 3% to 2%,” he
said.
Stock
market today: Live updates (cnbc.com)
European
markets close mixed after Powell’s Jackson Hole speech; Watches of Switzerland
down 20%
UPDATED FRI, AUG 25 2023 11:51 AM EDT
LONDON — European markets
closed mixed on Friday as traders reacted to comments from Federal Reserve Chair Jerome Powell at the annual Jackson
Hole symposium.
The pan-European Stoxx 600 ended
flat for the session, paring earlier gains, with sectors and major bourses
pointing in opposite directions.
The continental
blue chip index closed the Thursday session down 0.4% as global momentum on the
back of U.S. chipmaker Nvidia’s
blowout earnings faded throughout the day.
Shares in Asia-Pacific retreated
across the board on Friday, with Japan’s Nikkei 225 leading
losses as markets prepared to hear from a host of Fed speakers at the central
bank’s Jackson Hole symposium.
In prepared
remarks for his keynote address at the meeting, Fed Chair Jerome Powell warned
that further interest rate increases could be necessary in the fight against
inflation.
“We are prepared
to raise rates further if appropriate,” Powell said,
before adding that the U.S. cental bank intends “to hold policy at a
restrictive level until we are confident that inflation is moving sustainably
down toward our objective.”
Europe markets open to close: Fed's Jackson Hole symposium in focus (cnbc.com)
In other US news, US labour wants a far bigger share of the pie. Chairman
Powell is now battling wage price inflation ahead.
UAW votes overwhelmingly to authorize strike at Detroit Three
automakers
By Joseph
White, David
Shepardson and Shivansh
Tiwary
Aug 25 (Reuters)
- The United Auto Workers (UAW) union on Friday said members voted
overwhelmingly in favor of authorizing a strike at the Detroit Three automakers
if agreement is not reached before the current four-year contract expires on
Sept. 14.
The
authorization was approved by 97% of voting members at General Motors (GM.N),
Ford Motor (F.N) and Stellantis (STLAM.MI),
said UAW President Shawn Fain, who leads the union that represents about
150,000 workers.
Fain
reiterated that the union did not plan to extend the deadline to get a new
labor contract. "The deadline is Sept. 14. We have a lot of options that
we are looking at but extension on the contract is not one of them."
Separately,
President Joe Biden, who met with Fain last month, told reporters in Nevada he
is concerned about a potential UAW strike.
"I think
that there should be a circumstance where jobs that are being displaced are
replaced with new jobs" for UAW members "and the salaries should be
commensurate."
Some
senators want national UAW agreements to cover jobs
at battery joint ventures that currently pay less.
Fain said
workers had made numerous concessions over the last two decades including
giving up wage hikes, defined benefit pensions and post-retirement health care
benefits.
"We're fed
up," Fain said, listing a series of demands. "We've sat back for
decades while these companies continue to just take and take and take from
us."
Fain
has outlined an ambitious
set of demands, including wage hikes of 46%, an end to the tiered wage
system that pays new hires less than veterans, reinstating cost-of-living
adjustments and restoring defined-benefit pension plans for new hires that the
automakers ended in 2007. At Stellantis, just 30% of hourly U.S. workers are
eligible for defined benefit pensions.
Fain said he
expected the Detroit Three to come to the bargaining table next week with
counter proposals to the UAW demands. He said talks were "still going
slow" after opening in July. Analysts estimate a more than 50% chance of a
strike.
It was not
clear how long it would take a strike to significantly reduce Detroit Three
inventories. Through July, Stellantis U.S. Ram, Jeep, Chrysler and Dodge each
had more than 100 days’ inventory but many specific popular models have less.
More
UAW votes overwhelmingly to authorize strike at Detroit Three automakers | 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.
India expands curbs on rice exports with 20% duty on
parboiled grade
By Rajendra
Jadhav August 25, 20238:18 PM
GMT+1
MUMBAI, Aug 25
(Reuters) - India has imposed a 20% duty on exports of parboiled rice with
immediate effect, a move that could further reduce shipments from the world's
largest exporter and lift global rice prices, which are already trading near
their highest levels in 12 years.
Last
month, India surprised buyers by imposing
a ban on exports of widely consumed non-basmati white rice, following a ban
on broken rice exports last year.
The ban prompted
some buyers to increase purchases of parboiled rice and lifted its prices to
record highs, said a Mumbai-based dealer with a global trade house.
"With this
duty, Indian parboiled rice would become as expensive as supplies from Thailand
and Pakistan. There is hardly any option for buyers now," the dealer said.
India exported
7.4 million tons of parboiled rice in 2022.
In
July, the United Nations food agency's rice
price index jumped to its highest level in nearly 12 years as prices
in key exporting countries jumped on strong demand after India imposed
restrictions on the exports.
India
accounts for more than 40% of world rice exports, and low inventories with
other exporters mean any cut in shipments could inflate food prices already
driven up by Russia's invasion of Ukraine last year and by erratic weather.
More
India
expands curbs on rice exports with 20% duty on parboiled grade | Reuters
Global recession looms as
cost of living crisis crushes post-Covid rebound
August 24, 2023
A global recession is looming as rising interest
rates and the cost of living crisis eat away at the remaining strength of the
post-Covid rebound, economists have warned.
Britain’s economy is suffering its biggest slump in
more than two and a half years amid an “increasingly severe” downturn in
manufacturing and people having less money to spend on services, leading
economists to warn the nation is at risk of recession.
Dwindling demand led to the services sector
shrinking in August, as it contracted for the first time since January,
according to S&P Global’s purchasing managers’ index (PMI), an influential
survey of businesses.
James Smith, an economist at ING, said: “The
economy does appear to be turning from a state of very modest growth to
stagnation and perhaps even modest recession.”
At the same time the eurozone economy is in even
worse shape, according to the survey, while top economists warned the US also
faces recession.
Combined with China’s slowdown it means there is a
growing risk of a global recession, as the recovery from Covid has petered out.
The eurozone is also facing a deeper crunch as the
PMI points to the currency area’s worst private sector performance since 2020,
led by Germany.
Rory Fennessy at Oxford Economics said the dire
numbers will force the European Central Bank to stop raising interest rates for
fear of recession.
“With the eurozone composite PMI now in
contractionary territory for three consecutive months, and emerging signs that
the slowdown is becoming broader, there is an increasing risk that the eurozone
could slip into a contraction in the third quarter,” he said.
Economists at Citi said the US has to face a
downturn to get prices back under control: “Getting inflation back to 2pc will
require a recession and higher unemployment. That is a clear lesson we glean
from past episodes of high inflation.”
Freya Beamish, chief economist at TS Lombard, said
a global recession is now on the cards.
“We expect a global recession. Hopes of recovery in
China are misplaced and the European data are grim. These two blocks interplay
heavily so the bulk of Eurasia is going to be in recession,” she said, adding
that the US is likely to fall into recession next year as interest rate rises
overcome the resilience of the American consumer.
Investment bank Nomura predicts recessions in the
US and Japan, and warns that the UK and eurozone are looking increasingly shaky
too.
“It could be that we are staring down the barrel of
a global downturn. It may be that has been generated by the pace and size of
the rate hikes we have seen,” said economist Goerge Buckley.
“It may be that the world economy has spent the
last 30 years gearing itself up to ever-lower interest rates, all to be
undermined in a very very short space of time by substantially higher interest
rates.”
More
Global recession looms as cost of living crisis
crushes post-Covid rebound (msn.com)
Covid-19
Corner
This section will continue until it becomes unneeded.
CDC Says New COVID-19 Variant Could Cause Infections in Vaccinated
People
August 23, 2023
The U.S. Centers for Disease
Control and Prevention (CDC) stated on Aug. 23 that the new BA.2.86 COVID-19
lineage may cause infection in people who received vaccines or previously had
the virus.
The CDC stated that it’s too
soon to know whether this might cause more severe illness than previous
variants. But because of the high number of mutations detected in this
lineage, there are concerns about the effectiveness of immunity from vaccines
and previous infections, according to the agency.
“The large number of mutations in
this variant raises concerns of greater escape from existing immunity from
vaccines and previous infections compared with other recent variants,” the CDC
stated in its assessment. “For example, one analysis of mutations
suggests the difference may be as large as or greater than that between BA.2
and XBB.1.5, which circulated nearly a year apart.”
But it also stated that “virus
samples are not yet broadly available for more reliable laboratory testing of
antibodies, and it is too soon to know the real-world impacts on immunity.”
The agency noted that it detected
at least two cases with the BA.2.86 variant in the United States, although few
other details were provided. It was also found in Israel, the UK, South Africa,
and Denmark.
One of the BA.2.86 cases was found
in a person detected via the CDC’s traveler surveillance system, while it noted
that cases being found in several countries is evidence of international
transmission.
“Notably, the amount of genomic
sequencing of SARS-CoV-2 globally has declined substantially from previous
years, meaning more variants may emerge and spread undetected for longer
periods of time,” the assessment reads. “It is also important to note that the
current increase in hospitalizations in the United States is not likely driven
by the BA.2.86 variant. This assessment may change as additional data become
available.”
The CDC noted that most of the
U.S. population has COVID-19 antibodies from a previous infection, vaccination,
or both and stated that it’s likely that the antibodies will provide some
protection against the variant.
More
CDC Says New COVID-19 Variant Could Cause Infections
in Vaccinated People (theepochtimes.com)
Technology Update.
With events happening fast in the
development of solar power and graphene, I’ve added this section.
This weekend something different, improved HGVs.
How Loughborough University researchers came up with a design to
cut HGV blind spots and make our roads safer
August 23, 2023
Researchers at Loughborough University have helped
shape worldwide legislation to help reduce HGV blind spots and cut the number
of pedestrians and cyclists killed in accidents.
A team at the Leicestershire university has helped
draw up a legal standard for new HGV designs which is being adopted by 29
countries – including every EU member state and Japan. As a result of the
changes new trucks will have noticably different windscreens and wider fields
of vision.
The legislation means all new HGV designs will have
to meet what is called the Direct Vision Standard (DVS) from 2026 – while every
HGV on the road in the countries applying the ruling will have to comply from
2029.
The legislation will lead to design changes which
improve the ability of drivers to see cyclists and pedestrians directly –
instead of relying on the use of six mirrors – and represents 13 years of work
by the university’s Design Ergonomics Research Group.
Over the years the research has included using
computers to model HGV blind spots and led to a new minimum vision requirement
for HGVs in and around London in 2021 which – if not met – results in six extra
safety features being fitted to HGVs. A UN standards has now been created.
Dr Steve Summerskill, programme director for
Product Design & Technology, who helped draw up the standard, said: “For
years we have been focussed on highlighting just how poor current HGV driver
vision is and the risk it poses to vulnerable road users.
"Thanks to organisations such as TfL we were able to
drive change in London, which has ultimately led to a new European standard.
----One of the early adopters
of the new DVS is Volta Trucks, which has worked closely with Loughborough
University to ensure its all-electric Volta Zero medium-duty truck provides new
safety features for drivers, pedestrians, and other road users.
Ian Collins, chief product officer at Volta Trucks,
said: “With the design of the Volta Zero we had the chance to start from a
blank sheet of paper.
“We wanted to produce an electric vehicle, but we
also wanted to address the safety issues that we see every day when HGVs are
operating in built-up environments.
“In electrifying the vehicle, we were able to use a
much more compact power source and free up space at the front of the vehicle.
This has enabled us to bring the driver right down into the eye line of
vulnerable road users.
“From the very start of the project to create the
Volta Zero, we have been very much informed by Loughborough's research. We are
pleased to see that this is now being adopted as an industry standard across
Europe.”
Geoff Lee’s wife Hilary was killed in a collision
with a HGV in 2012 whilst cycling, aged 66. Since then, he has worked with the
charity Road Peace to raise awareness of the issue of driver vision.
More
This weekend’s music
diversion, another mostly forgotten German oldie. Approx. 13 minutes. How did
Germany manage to go from Endler, Fasch and Pisendel to Kaiser Bill and Hitler?
Johann
Samuel Endler (1694-1762) - Sinfonia D-Dur
Johann Samuel Endler (1694-1762) - Sinfonia D-Dur -
YouTube
Due to LIR length, no weekend chess
update this week. Back again next weekend.
Having
skipped a math's update or two, this weekend the math's update is back. Approx.
30 minutes of Mathologer fun.
Why
don't they teach simple visual logarithms (and hyperbolic trig)?
Why don't they teach simple visual logarithms (and hyperbolic trig)? - YouTube
It being a bank holiday, long weekend in England and Wales, a bonus YouTube watch for those lazy Brits. How JP Morgan ended the Panic of 1907. Professor Patrick Boyle at his informative best. Someone get a copy to Jamie Dimon at JP Morgan ASAP, just in case!
How
JP Morgan Saved the US Economy.
How JP
Morgan Saved the US Economy. - YouTube
The consequences of inflation are malinvestment, waste, a wanton redistribution of wealth and income, the growth of speculation and gambling, immorality and corruption, disillusionment, social resentment, discontent, upheaval and riots, bankruptcy, increased government controls, and eventual collapse.
Henry Hazlitt.
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