Baltic
Dry Index. 1144 +02 Brent Crude 87.48
Spot Gold 1917 US 2 Year Yield 4.79 +0.05
Inflation is taxation without legislation.
Milton Friedman.
In the stock casinos, a nervous wait on the US inflation data. Will the data cause the Fed to raise interest rates, pause, or eventually cut interest rates?
The expectation is for US inflation to start
rising again in H2 23 though largely for technical statistical reasons.
Asia markets mixed ahead of U.S. inflation
data
UPDATED THU, AUG 10 2023 12:27 AM
EDT
Asia-Pacific
markets were mixed as investors braced for July consumer price index data out
from the U.S. on Thursday.
Expectations from economists
polled by Reuters are the inflation rate will come in at 3.3%, slightly higher
from the 3% seen in June.
Japan’s Nikkei 225 climbed
0.67% and the Topix was up 0.72%. The country saw its July wholesale inflation
rate — which measures the price companies charge each other for goods and
services — slow to 3.6%, down from a revised figure of 4.3% in June.
Australia’s S&P/ASX 200 traded
0.18% up, while South Korea’s Kospi was
down 0.38% and the Kosdaq gained 0.17%.
Hong Kong’s Hang Seng index dropped
0.95%, while mainland Chinese indexes extended their losses and were all lower.
The Shanghai Composite was
0.26% down and the Shenzhen Composite fell
0.54%.
Overnight in the U.S., all
three major indexes lost ground, with the tech-heavy Nasdaq leading losses and
shedding 1.17%. The Dow Jones Industrial Average lost 0.54%, while the S&P 500 shed 0.7%.
Asia markets mixed
ahead of U.S. inflation data (cnbc.com)
Thursday’s inflation data may be low, but
don’t expect the Fed to declare ‘mission accomplished’ yet
Thursday’s consumer price index report likely will
show that the pace of price increases is easing, but not enough to get the
Federal Reserve to retreat on its inflation fight.
If the Wall Street consensus as
gauged by Dow Jones is correct, the closely watched consumer price index will
show a monthly increase of 0.2% for July and a 12-month rate of just 3.3%.
The latter number pales in
comparison to the
8.5% annual rate that the CPI registered a year ago, a reading
that was just off the highest level in more than 40 years. Excluding food and
energy, the monthly estimate also is 0.2%, though the 12-month rate is being
put at 4.8%.
If that all sounds
like at least marginally good news, it is. Multiple data points have indicated
that inflationary pressures have eased considerably from their 2022 levels.
But history has shown
that inflation is stubborn and can last longer than expected once it becomes
elevated and entrenched. And the current round is still making an impact on
consumers, evidenced by the CPI’s nearly 19% rise since bottoming in April 2020
during the early days of the Covid pandemic.
“We can feel
confident that inflation is moving in the right direction,” said Mark Zandi,
chief economist at Moody’s Analytics. “But I don’t think we should be overly
confident.”
Zandi goes along with
the consensus on the CPI estimate and sees inflation moving lower, perhaps even
meeting the Federal Reserve’s 2% annual target around this time in 2024.
---- But Zandi also sees danger signs: Health insurance costs,
for instance, are expected to start climbing now that a statistical adjustment
the Bureau of Labor Statistics uses expires. That adjustment has caused the
health insurance component of the CPI to show a 24.9% slide over the past year
that now should reverse.
Also, gas prices have soared this
summer as the cost of U.S. crude jumped nearly 16% in July.
A gallon of regular unleaded now
costs $3.82 on the national average, up more than 8%, or nearly 30 cents a
gallon, from the same time in July, according to AAA.
More
CPI inflation report for July: High prices are still a problem (cnbc.com)
In renewed anti-China trade war news, President Biden piles on the pressure. Expect China to hit back within days.
More trouble in China’s real estate sector.
China slams Biden’s order limiting U.S.
overseas tech investment
China criticized President Joe Biden’s long-awaited executive order regulating
fresh U.S. investment in technology — but stopped short of issuing immediate
counter measures.
The Chinese Commerce Ministry
issued a strong response early Thursday in Asia, hours after Biden signed off
on the measure targeting “countries of concern” on the basis of national
security.
“China expresses its grave concern
and reserves the right to implement measures,” the Chinese Commerce Ministry
said in the statement, according to a CNBC translation.
Biden’s order comes amid an escalating race for global technology
supremacy. Rather than an outright ban, the measures are aimed at limiting U.S.
investment and expertise in semiconductors and microelectronics, quantum
computing and certain artificial intelligence capabilities in China, Hong Kong
and Macao.
“This seriously deviates from the market economy
and fair competition principles that the U.S. has always advocated,” the
Chinese Ministry of Commerce added. “It affects the normal operation and decision-making
of enterprises, undermines the international economic and trade order, and
seriously disrupts the security of the global industrial and supply chains.”
In October, the
U.S. launched sweeping rules aimed at cutting
off exports of key chips and semiconductor tools to China,
lobbying major chipmaking nations such as Japan and the
Netherlands to do the same.
In July though, U.S. Treasury Secretary Janet
Yellen assured her Chinese counterparts during her visit to
Beijing, saying that any curbs on U.S. outbound investments would be
“transparent” and “very narrowly targeted.”
The wording on Biden’s executive
order appears similar to a
toned-down version of the initial Outbound Investment Transparency Act the
Senate recently introduced. Instead of an outright ban, the revised wording
requires U.S. firms to notify the Treasury when investing in advanced Chinese
technology on national security concerns.
“The message is quite
clear. Washington wants to use the national security imperative as a way of
trying to limit the transfers of technology and investments related to
technology to China, because there’s not just a national security angle, but
also quite frankly, a commercial angle,” Eswar Prasad, a professor in
international trade at Cornell University, told CNBC Thursday.
“The new technologies
including the ones that are covered by this executive order, which are going to
be subject to fairly intense competition on the economic front between the U.S.
and China,” he added.
More
China
slams Biden's order limiting U.S. overseas tech investment (cnbc.com)
China’s real estate market roiled by
default fears again, as Country Garden spooks investors
BEIJING — Two years after Evergrande’s
debt troubles, worries about China’s real estate sector are coming
to the forefront again.
Country
Garden, one of the largest non-state-owned developers by sales, has reportedly missed two coupon payments on
dollar bonds that were due Sunday. Citing the firm, Reuters said the bonds in
question are notes due in February 2026 and August 2030.
Country Garden
did not immediately respond to CNBC’s request for comment on the reports.
Meanwhile, Dalian Wanda saw its
senior vice president Liu Haibo taken away by police after the company’s
internal anti-corruption probe, Reuters reported Tuesday, citing a source
familiar with the matter. Dalian Wanda did not immediately respond to a CNBC
request for comment.
Hong
Kong-listed shares of Country Garden closed more than 1.7% lower on Wednesday,
after sharp declines earlier in the week.
“With
China’s total home sales in 1H23 down year-on-year, falling home prices
month-on-month across the past few months and faltering economic growth,
another developer default (and an extremely large one, at that) is perhaps the
last thing the Chinese authorities need right now,” according to Sandra Chow,
co-head of Asia Pacific Research for CreditSights, which is owned by Fitch
Ratings.
An investor relations
representative for Country Garden didn’t deny media reports on the missed
payments and didn’t clarify the company’s payment plans, Chow and a team said
in a note late Tuesday.
More
China
property market roiled by default fears, Country Garden spooks investors
(cnbc.com)
Finally, meet the weaponised dollar’s
replacement, maybe. But a lot of the world is now heavily incentivised to ditch
the increasingly weaponised US fiat dollar.
The
Future of Trade Finance Emerges on a Platform Called mBridge
August 9, 2023 at 12:00 PM
GMT+1
The world transacted about $32 trillion in trade of goods
and services last year, and about half was invoiced in one currency — the
dollar. Every day, trillions more flow through the global banking system to
settle payments, finance trade or move securities, and most of it also involves
the US currency.
According to one estimate cited by the Bank of England, the
total value of cross-border payments — both retail and wholesale — might exceed
$250 trillion by 2027. That’s more than double the world’s annual GDP and a
jump of more than $100 trillion in the span of a decade.
So the stakes don’t get much larger than this arena, where
the American currency has long been the dominant force and is unlikely to be
dethroned any time soon.
But like a lot of other long-established channels for cross-border commerce these days, the world’s financial
circuitry is seeing incremental shifts that might eventually lead to a major
rewiring in the way money flows from country to country.
Linking Money Centers
Take mBridge, a public yet little-publicized platform for
moving money in digital forms of non-dollar currencies that’s in development at
the Bank for International Settlements. It’s been in the works for a several
years as a partnership between the central banks of China, Hong Kong, Thailand
and the UAE.
Here’s how it would work: A company in China could pay a
vendor in the UAE by having its bank issue a digital e-yuan token through the
People’s Bank of China on the mBridge blockchain, or ledger. There, this token
could within mere seconds be credited to the vendor’s bank in the UAE, which
would in turn credit the vendor’s account with dirham, the local currency.
No US-regulated correspondent bank or dollars are needed,
and it happens in seconds rather than days.
mBridge will likely have a basic working product ready by
year-end, Bloomberg News reports today. Some American and European officials
who monitor it are increasingly worried that it’ll help give Beijing a head
start using digital currencies to revolutionize wholesale payments across borders.
Supply Chain Latest: The Race to Develop Digital
Currencies - Bloomberg
China
Sprints Ahead in Race to Modernize Global Money Flows
The
digital yuan challenge to US dollar dominance in $7 trillion of daily FX flows
is dashing ahead thanks to blockchain-enabled mBridge project
August 9, 2023 at 5:00 AM GMT+1
Subscription required.
China's Digital Yuan mBridge Plan Challenges $7 Trillion Dollar Dominance - Bloomberg
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.
Rice prices soar to highest since 2008 on
rising threats to supply
Rice
is vital to the diets of billions of people in Asia and Africa, and the surge
in prices could add to inflationary pressures and boost import bills for buyers
August
9, 2023
(Bloomberg)
--Rice prices soared to the highest in almost 15 years in Asia on mounting
concerns over global supplies as dry weather threatens production in Thailand
and after top shipper India banned some exports.
Thai white rice 5% broken, an Asian benchmark, jumped to $648 a ton, the
most expensive since October 2008, according to data from the Thai Rice
Exporters Association on Wednesday. That brings the increase in prices to
almost 50% in the past year.
Rice is vital to the diets of billions of people in Asia and Africa, and
the surge in prices could add to inflationary pressures and boost import bills
for buyers.
The latest threat to supply comes from Thailand, the second-biggest shipper. Authorities are encouraging farmers to switch to crops that need less water as the nation braces for drier conditions with the onset of El Niño.
Cumulative rainfall in the key central growing region is 40% below
normal, and the move to curb planting is to conserve water for households. The
government previously asked growers to reap only one crop this year.
Last month, India widened its shipment ban to protect domestic supplies, spurring panic buying in some countries. The curbs exacerbated worries over a global shortage amid growing world consumption.
The price surge will aggravate stresses in global food markets that have
been rocked by wild weather and reduced grain supplies from the Black Sea
region because of Russia’s war in Ukraine.
Rice
prices soar to highest since 2008 on rising threats to supply
(business-standard.com)
UK inflation to
exceed BoE target for next 4 years: NIESR
August
8, 2023
LONDON
(Reuters) - The Bank of England will not succeed in returning inflation to its
2% target before 2028 at the earliest, according to forecasts from a leading
academic think-tank which warned the British economy was succumbing to stagnation.
The National
Institute of Economic and Social Research (NIESR) forecast inflation will fall
from 7.9% now to 5.2% by the end of 2023 but will be slower to drop thereafter,
averaging just above the BoE's 2% target in 2025, 2026 and 2027.
The economy
would grow by a meagre 0.4% this year and 0.3% in 2024 - little changed from
NIESR's growth forecasts three months ago of 0.3% and 0.6% for this year and
next.
"Inflation,
political churn, a global economy slowdown, oil shocks, strikes - there are a lot
of nouns there that are resonant with the 1970s," NIESR director Jagjit
Chadha said.
"And
there's the re-emergence of 'the British disease'," he added, referring to
stagnant growth at a time of rising prices.
British economic output
is not on track to return to its pre-pandemic peak until late 2024,
representing zero growth over a five-year period, NIESR predicted.
By the end of
2024, there was even a 60% chance the economy would be back in recession as it
wrestled with problems including shortages of skilled workers, weak
productivity, a lack of public investment and underdeveloped regional
economies.
"Brexit
has done a great service by revealing even more clearly the underlying problems
in the British economy but has not yet located solutions," Chadha said.
NIESR's
near-term growth forecasts are similar to those announced by the BoE last week,
but its forecast for inflation is higher than the central bank's projections
for price growth to fall below its 2% target in 2025.
Unlike the
BoE, NIESR expects wage growth to hold at 6% next year as well as this year due
to a lack of candidates to fill vacancies, easing some of the squeeze on living
standards but pushing up costs for employers.
British
inflation is currently the highest of any advanced economy, but NIESR expects
the BoE to raise interest rates just once more to a peak of 5.5%, after last
week's rise to 5.25%.
More
UK inflation to exceed BoE target for next 4 years:
NIESR (msn.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
Growing Number of Leprosy Cases
Reported After COVID-19 Vaccination
August 9, 2023
A
growing number of leprosy cases are being reported after COVID-19 vaccination,
including two cases in the United Kingdom that researchers said may have been
caused by the vaccines.
The researchers examined records from the Leprosy
Clinic at the Hospital for Tropical Diseases in London. They found that of
the 52 people who went to the clinic in 2021, at least 49 were vaccinated.
The study definition of a leprosy adverse event
associated with a COVID-19 vaccine included developing leprosy or a leprosy
reaction within 12 weeks of receiving a dose and the person having no previous
history of leprosy or a leprosy reaction.
Two people met the case definition. One
developed borderline tuberculoid (BT) leprosy one week after a second
dose. The other experienced a reaction 56 days after a dose. Both doses
were Pfizer’s BNT162b2 vaccine. Pfizer did not respond to a request for
comment.
“The development of BT leprosy and a Type 1 reaction
in another individual shortly after a dose of BNT162b2 vaccine may be
associated with vaccine mediated T cell responses,” the researchers said.
The COVID-19 vaccines can provoke a response from
white blood cells, or T cells. The cells are believed to protect against
COVID-19.
T-cells can theoretically trigger Mycobacterium
leprae, a bacteria that causes leprosy, leading to leprosy or a leprosy
reaction, the researchers said.
Other vaccines have been shown to trigger leprosy or
leprosy reactions, including tuberculosis vaccines, and some people who receive
repeated COVID-19 vaccinations have been shown to have weakened
immune systems.
The paper was published on Aug. 4 by PLOS Neglected Tropical Diseases.
More
Growing
Number of Leprosy Cases Reported After COVID-19 Vaccination (theepochtimes.com)
Walgreens Shows Highest Covid-19 Test Positivity
Levels Since May 2021
August
8, 2023
Are you positive that
Covid-19 cases are on the upswing this Summer? With the lack of an accurate and
reliable national Covid-19 surveillance system, it may be hard to tell what the
heck is really happening with the severe acute respiratory syndrome coronavirus
2 (SARS-CoV-2) in the U.S. But there are several indications that yet another
Covid-19 surge may potentially be happening, including one indicator from the Walgreens Covid-19 Index website. This website shows the percentage of Covid-19 tests
performed at Walgreens locations each week that have turned out to be positive.
And that’s been trending upwards since hovering around 20% in April 2023. This
week it’s at 44.7%, which is up 3.4% from 41.3% the week prior.
In fact, this is the
highest positivity rate since Walgreens began posting such data in May 2021.
That’s not a very positive finding, assuming that you don’t like getting sick
and risking all the badness that comes with long Covid and other possible
Covid-19 complications. Yeah, increasing positivity is not always a good thing,
no matter what a life coach may tell you.
The percentage of
tests performed that come back positive is a rough measure of how prevalent the
virus may be in the community. That’s why in early 2021 Walgreens coordinated
with lab testing company Aegis Sciences to develop a tool that tracks such test
positivity rates from Walgreens 5,000 or so retail locations. Unless you are
the virus, you want this test positivity rate number to be as low as possible.
Looking at the graph of this measure on the Walgreen’s website shows that this
number started off at 9.8% on May 7, 2021, and dropped to 3.1% the following
month before coronavirus-ing up to 17.1% in mid-August corresponding to the the
Summer 2021 Delta variant-fueled surge. This dropped back to 10.1% in late
October 2021 as the Delta variant-fueled surge subsided.
Since then, the test positivity curve has gone up and down along with the subsequent Summer 2022 and Winter 2022-2023 Covid -19 surges. This brings us to what’s been happening since late May, early June of this year—a steady rise upwards beyond all previous test positivity levels.
---- Nevertheless, the shape of the Walgreens
test positivity curve could still show the shape of things to come. A rise over
the past several weeks among a smaller sample is still a rise. Moreover, this
isn’t the only indication that the U.S. may be in the midst of a not-so-swell
Summer swell in Covid-19 cases. As I reported for Forbes on August 6, the number of Covid-19 hospitalizations and the
presence of the SARS-CoV-2 in wastewater around the country have been on the
rise in recent weeks as well. So while each of these measures is very flawed in
different ways, they are all going the same direction—the wrong direction,
again assuming that getting long Covid is not on your bucket list. In
combination, they suggest that a Summer Covid-19 upswing has already been
happening with an emphasis on the words “has already been happening.”
Walgreens Shows Highest Covid-19 Test Positivity Levels Since May 2021 (forbes.com)
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.
Graphene
Electronics Market Is Projected To Grow USD 1318.5 Million By 2029, at a
Compound Annual Growth Rate (CAGR) of 20.8%| Valuates Reports
08 Aug, 2023, 15:19 BST
BANGALORE, India, Aug. 8, 2023 /PRNewswire/
-- Graphene Electronics Market is segmented by type
(Graphene Transistors, Graphene Supercapacitors, Graphene Sensors, Graphene Ics
& Chips, Others), by application (Batteries and ultracapacitors, Display,
Sensors, Electro Mechanical Systems (EMS), Solar Cells, Others): Global
Opportunity Analysis and Industry Forecast 2023-2029. It is published in Valuates Reports under
the Engineering & Technology Category.
The
global Graphene Electronics market is projected to grow from USD 424.3 million in 2023 to USD 1318.5 million by 2029, at a Compound Annual
Growth Rate (CAGR) of 20.8% during the forecast period.
Major
Factors Driving The Growth Of Graphene Electronics Market
One of
the key factors promoting market expansion is anticipated to be the rising
demand for graphene in electronics. Vendors of graphene electronics are
seeing explosive growth due to the spike in demand for flexible, transparent,
and highly effective products for applications including electronic displays,
sensors, and solar cells, among others. The growing desire for electronic
devices with longer battery lives is also helping the market expand.
TRENDS
INFLUENCING THE GROWTH OF GRAPHENE ELECTRONICS MARKET
Supercapacitors
are being employed as energy storage systems more frequently. With its enormous
specific surface area, exceptional mechanical flexibility, and exceptional
electrical properties, graphene makes an excellent contender for the next
generation of high-performance wearable and portable gadgets. The
electrical conductivity of graphene is greater than that of lithium-ion
batteries. This makes it possible for cells to deliver extremely high currents
while also charging more quickly. This is very helpful for large automotive
batteries or quick device-to-device charging, for instance. Batteries that have
high heat conductivity also operate cooler, extending their life even in small
cases like a smartphone. This factor is expected to drive the Graphene
Electronics Market. Furthermore, compared to current lithium-ion cells,
graphene batteries are lighter and thinner. This translates to slimmer, more
compact gadgets or capacities that don't require more space.
More
By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
John Maynard Keynes.
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