Baltic Dry Index. 1065 -21 Brent Crude 88.55
Spot Gold 1945 US 2 Year Yield 4.87 +0.02
Financiers are great mythomaniacs, their explanations and
superstitions are those of primitive men; the world is a jungle to them. They
perceive acutely that they are at the dawn of economic history.
Chistina Stead, House of All Nations. 1938.
In the Asian stock casinos, a relief rally as China rearranges the deck chairs on the China property version of the RMS Titanic.
With China’s official youth unemployment soaring above 21 percent before China stopped reporting it last month, unofficially thought to be closer to 40 percent, and with the Chinese economy already in a deepening manufacturing recession, plus an aging population that’s now starting to decline in total numbers, there’s a rapidly dwindling pool of new first-time buyers available for an already over built Chinese property market.
Any Chinese property shares bounce, is a last
chance property share exit bounce, in my opinion, but I wouldn’t have been a
buyer or holder of China’s property sector, since SARS-CoV-2 escaped from a
Wuhan virus laboratory and China introduced massive draconian economic
lockdowns.
Country Garden debt
deal, China property support measures trigger relief rally
September 4, 20235:20 AM GMT+1
HONG KONG/NEW YORK, Sept 4 (Reuters) - Country
Garden's (2007.HK) deal with creditors for
an extension on onshore debt payments worth 3.9 billion yuan ($537 million)
boosted shares in the developer on Monday and gave China's crisis-ridden
property sector some much-needed respite.
Shares in Country Garden jumped as much as 19%
to their highest level since Aug. 10 and were set for the biggest one-day
percentage rise since November. Hong Kong's Hang Seng mainland properties index (.HSMPI) rose
more than 9%.
But
while investors in the company may be heaving sighs of relief, it remains to be
seen whether a raft of government stimulus measures will soon help revive
demand, ease the sector's cash squeeze and lift the gloom over the wider
financial system.
Beijing on Monday added to its series of policy measures in
recent months to revive the world's second-largest economy, approving the
setting up of a special bureau to promote the development and growth of the
private economy.
The
private sector is responsible for 80% of new urban jobs, but has struggled to
attract investment amid a frail economic recovery over the first half of the
year, with business owners also constrained by weak domestic demand.
The
worsening financial woes of Country Garden have only further highlighted the
fragile state of the country's real estate industry which accounts for roughly
a quarter of the economy and has been in dire debt straits since 2021.
Considered
financially sound compared to peers, China's top private developer had not
missed a debt payment obligation, onshore or offshore, until coupon payments on
dollar bonds last month after slowing home demand hurt its cash flow.
Since then, Chinese authorities have rolled out
a number of measures, the
most significant being the lowering of existing mortgage rates and preferential
loans for first-home purchases in big cities.
"We
will see in the coming months if these supply-side measures are able to revive
homebuying demand, which is crucial for the fate of China's developers and
their ability to handle their upcoming debt maturities," said Tara
Hariharan, managing director at global macro hedge fund NWI Management in New
York.
She
noted that Country Garden and other developers face payments for sizeable
maturities this year.
In
the deal reached after a vote on its proposal late on Friday, Country Garden is
now allowed to repay the onshore debt in instalments over three years, instead
of meeting its obligations by Sept. 2.
---- The developer also has another impending
debt payment challenge - the ending of a grace period on Tuesday for last
month's missed coupon payments worth
a total of $22.5 million on two offshore dollar bonds.
That
it was able to avert an onshore default with the extension deal has raised
hopes it will be able to make the interest payments on those bonds, said three
of its offshore creditors.
The
bondholders declined to be named as they were not authorised to speak to the
media.
After
making the interest payments, the creditors said they expect Country Garden to
enter into restructuring negotiations for its entire offshore debt to avoid a
"hard default", similar to what it did with the onshore creditors.
Country
Garden did not immediately respond to a request for comment.
While
China's property industry may have gained some respite, some market
participants said they plan to stay away from the sector until there is a
rebound in home sales.
"We
sold all our Chinese real estate stocks in April 2020 and haven't bought back
any since," said Qi Wang, CEO of Hong Kong-based MegaTrust Investment.
"Wouldn't touch the private developers with a ten-foot pole right
now."
Country
Garden debt deal, China property support measures trigger relief rally |
Reuters
Hong Kong stocks lead gains in Asia;
Australia and China data closely watched this week
UPDATED SUN, SEP 3 2023 10:47 PM
EDT
Hong Kong’s Hang Seng index led
gains in the region on Monday, powered by a surge in property stocks as other
Asia-Pacific markets were mixed to start the week
The HSI popped 2.59%, while
mainland markets were also in positive territory, with the benchmark CSI 300 up
1.23%.
Investors will look to key data from Australia
and China later in the week, such as the Reserve Bank of Australia’s rate
decision on Tuesday, while China is expected to release its trade balance for
August on Thursday and its inflation rate next weekend.
In Australia, the S&P/ASX 200 traded
up 0.52%, while Japan’s Nikkei 225 also
climbed 0.43% and the Topix was 0.64% higher.
South Korea’s Kospi traded
marginally below the flatline, while the Kosdaq was down 0.42%.
On Friday in the U.S., the three major indexes
ended mixed as traders weighed the latest
U.S. jobs report, which showed that unemployment ticked higher to
3.8% in August, reaching its highest level in more than a year. Economists had
expected it to remain at 3.5%.
The Dow Jones Industrial Average rose
0.33%, while the S&P
500 added roughly 0.18%. The Nasdaq Composite inched
down 0.02%.
Asia stock market
today: Live updates (cnbc.com)
Wall Street Breakfast: The Week
Ahead
Sep.
03, 2023 7:30 AM ET
The key
economic events for the holiday-shortened week will be releases on factory
orders, initial jobless claims, and consumer credit. Those releases will add to
the spotlight on the Federal Reserve, which may turn even brighter with several
FOMC speakers making the rounds with speeches and the Fed's Beige Book for
September scheduled to be released, and then broken down by analysts.
At
publication time, the CME FedWatch tool indicated a 6% probability of an
interest rate increase of 25 points at the next Fed meeting scheduled for
September 19-20, while trading on the fed funds contract implies a probability
of just under 35% that an interest rate hike of either 25 to 50 basis points
will take place before or at the November meeting.
Meanwhile,
the energy market could be jolted after details are released on Russia's new
OPEC+ supply cut agreement.
The corporate
calendar is very active in the week ahead, with the Goldman Sachs Communacopia
Technology Conference, Roblox (NYSE:RBLX) developer conference,
Citi Global Technology Conference, Barclays Global Consumer Staples Conference,
and Intuit (NASDAQ:INTU) Innovation Day some of
the key events. Notable names on the earnings calendar include Kroger (KR) (analysis) and DocuSign (DOCU) (preview).
More
Wall Street Breakfast: The Week Ahead | Seeking Alpha
In other news, will Panama’s drought push up
US inflation for Christmas?
The far-reaching
ramifications of a drought-hit Panama Canal
September 2, 2023
Built
as a shortcut between the Pacific and Atlantic oceans, the Panama Canal is a marvel of the modern world.
The
channel lets ships move from one side of the Americas to another in a matter of
hours, removing the need for a two-month, 8,000-mile detour around the southern
tip of Chile.
Yet
awe has given way to frustration among sailors more recently, as a queue of
boats waiting to transit the 40-mile system of locks and lakes stretches back
into the sea on both sides.
More
than 100 container vessels are waiting to pass through, according to official
figures, after a historic drought forced officials to restrict use of the vital
trade artery.
The
109-year-old canal relies on millions of gallons of fresh water, drawn from
nearby lakes, to move ships up and down as they pass between the Pacific Ocean
and the Caribbean Sea.
But
this year a longer-than-expected dry season, followed by a drier-than-expected
rainy season, has zapped water levels to unprecedentedly low levels, raising
the risk that ships could run aground.
With echoes of the 2021 disruption at the Suez Canal,
another of the world’s busiest waterways, experts say the drought may affect
supply chains ahead of Christmas.
Worse still, the problem could become a full-blown crisis by next
spring, the time of year when conditions are at their driest. It has raised
fears within the maritime industry that climate change will make such hold-ups
a more common and costly occurrence.
“We need to do something about it,” said Antonio Dominguez, managing
director for shipping giant Maersk, the canal’s biggest user, earlier this
month.
In response to the drought, the canal authority is attempting to
conserve water as much as possible while allowing passages to continue.
Each time a
ship makes the journey, 55 million gallons of water are used up – with almost
all of this being drained into the sea.
Water levels
at Gatun Lake, the main reservoir and one of the largest artificial lakes in
the world, stood at 79.5 feet on Friday. That was above the all-time record low
of 78.3 feet but below the historic average of 85.3 feet for this time of year.
The lake is
currently expected to dip lower to 79.3 feet before picking up in mid-September
– but the predictions are far from an exact science.
---- The limits have created a larger-than-normal backlog of container ships
waiting for passage, at around 130 compared to 90 normally, and are forcing
some large vessels to offload cargo or take alternative routes instead.
Meanwhile,
ships are being encouraged to book ahead to avoid lengthy waits of nine to 10
days – compared to a more normal five days – and some are paying top dollar to
jump the queue in daily auctions.
One unnamed
company recently paid $2.4m (£1.9m), in addition to a standard transit fee of
around $400,000, to get a slot that would allow its vessel to move through more
quickly, shipping company Avance Gas claimed earlier this week.
“You can skip
the queue but it’s immensely costly,” said Oystein Kalleklev, Avance Gas’s
chief executive.
All these
extra costs are likely to be passed down the supply chain and to consumers
eventually, fears David Jinks, head of research at delivery firm ParcelHero.
More
The far-reaching
ramifications of a drought-hit Panama Canal (msn.com)
Next, “despite Brexit” as the extreme left
wing BBC always says, the EU free GB did quite well.
Doomsayers
‘proved wrong’: UK had third-fastest Covid recovery in G7, revised GDP data now
shows
FRIDAY 01 SEPTEMBER 2023 2:30 PM
The UK economy is no
longer thought likely to be an outlier among the G7 nations with the worst
post-pandemic recovery, after revised GDP figures were published.
Data from the Office
for National Statistics (ONS) had previously indicated the UK’s finances had suffered greatly from the impact of the
Covid-19 pandemic and the Ukraine war.
However, revised
figures today show the UK economy was in a better position than previously thought – with
gross national product (GDP) growth figures up 0.6 per cent on pre-pandemic
levels by the fourth quarter of 2021.
It means the UK at that point had the
third fastest G7 recovery, behind the US and Canada.
Chancellor Jeremy Hunt said: “The
fact that the UK recovered from the pandemic much faster than thought shows
that once again those determined to talk down the British economy have been
proved wrong.”
Craig McLaren, ONS head of national
accounts, said the “updated and indicative GDP estimates show the economy was
larger than we previously thought in 2020 and 2021”.
But he stressed estimates for UK
monthly and quarterly trends was “broadly unchanged”.
Unprecedented events including coronavirus and
the Russian invasion had seen “the biggest fall in GDP ever” and the fastest
price rises in four decades, McLaren explained.
Shock occurrences “added increased
levels of uncertainty” to initial projections, he said, as number crunchers had
less reliable data about firms’ costs, and had to rely on experimental VAT
figures for forecasts. But now yearly surveys are complete, more detail is
available.
The fresh information has indicated
that many manufacturers incurred higher costs than the ONS thought, while
wholesale and retail service prices were lower.
More health services were provided
than previously thought, and UK company stock levels or ‘inventories’ fell by
less than was estimated, which has reduced the scale of the GDP fall.
More
Finally, so you really, really, really want a Central Bank Digital Currency?
I have no idea if this is true, but I have no reason to believe it’s untrue.
Future Headline: Fed’s New
CDBC Hacked Just Six Days After Its Launch
FRIDAY, SEP 01, 2023 - 18:25
by
Simon Black via Sovereign Man
In a world full of unimaginable absurdity, we
spend a lot of time thinking about the future… and to where all of this
insanity leads.
“Future Headline Friday” is our satirical take
of where the world is going if it remains on its current path. While our satire
may be humorous and exaggerated, rest assured that everything we write is based
on actual events, news stories, personalities, and pending legislation.
September
1, 2029: Fed’s New CDBC “FedCoin” Hacked After Just Six Days
Neither the
Treasury Department nor Federal Reserve have commented on the issues with the
brand-new FedCoin system since it went offline over 36 hours ago.
But what we have
been able to gather so far is that the problems started six days after the
launch of the highly touted digital currency meant to replace the US dollar.
Rumors on the dark
web began to swirl that a hacker group calling itself Reserve Raiders had
infiltrated the FedCoin servers, and transferred itself $10 billion.
One alleged member
commented, “FedCoin’s security was equivalent to one of those spring locks you
can open by sliding a credit card between the door. It has eight-months-from-retirement written
all over it.”
Another added, “We
could have taken any amount we wanted— just kept adding zeros. We stopped at
$10 billion because we honestly just felt bad. And of course if we conjured too
much money out of thin air to steal, it would just hyper-inflate and be
worthless to us.”
Only a few hours
later, the entire FedCoin infrastructure stopped functioning.
That includes
checking and savings accounts, as well as FedCoin’s online bond marketplace.
The status of the already purchased bonds is unclear, but off-market indicators
suggest people are lining up to panic-sell them as soon as the system comes
back online.
Personal wallets,
which the Fed airdropped $20 worth of FedCoin into for each user who downloaded
the wallet before the launch on August 25, are also offline.
“I figured I’d just
use the $20 to buy a pack of gum,” one user told us outside of a 7/11, “I was
able to open the app, but the transfer never went through. I just kept getting
a timeout error message.”
Early institutional
adopter JP Morgan swapped over $200 billion worth of deposits in traditional
USD for the same amount in FedCoin. Now bank customers are wondering how secure
the new digital currency is.
JP Morgan has told
customers that the Fed has privately assured them that all deposits are safe.
“And anyway,” the bank’s CEO commented, “if the money was somehow lost, the
government would simply print more to bail us out. We’ve been prime supporters
of their FedCoin project, they wouldn’t leave us hanging.”
More
Future Headline: Fed’s New CDBC Hacked Just Six Days After Its Launch | ZeroHedge
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.
Tech suppliers in China skip seasonal hiring rush amid weak
demand
Lack
of usually lucrative temp work this summer also blamed on shifting supply
chains
September
1, 2023
Normally
at this time of year, the manager of a speaker maker in Dongguan, China, says
he is scrambling to recruit temporary workers for the traditional peak
production season.
But
this is far from a normal year. The Amazon supplier has not had to make any
special recruitment efforts, and its hourly wage for temporary workers remains
at Rmb16 ($2.19), the minimum basic rate for the area in 2023.
“There is no need to hire any additional workers for the traditional peak
season,” said the manager, who asked not to use his name. “That’s
unusual . . . but demand is really weak this year.”
China’s
massive tech manufacturing industry usually ramps up hiring in summer,
recruiting hundreds of thousands of temporary workers to help handle the rush
of orders from Apple, Amazon, HP, Dell and others ahead of the year-end holiday
shopping season.
This
yearly race for labour is a boon for workers, who can command higher hourly
wages, signing bonuses and other perks. For suppliers, it represents a massive
cost, as they not only foot the higher wage bills but also pay fees to outside
recruitment companies.
The
unusually weak hiring stems from a combination of slumping electronics demand —
both globally and in China — and an ongoing shift of supply chains away from
the country. The lull is all the more notable for its contrast with artificial
intelligence, an area of the tech industry that is attracting massive
investment and high hopes for future growth.
“This
year it’s so easy to hire workers,” an executive at an Apple supplier told
Nikkei Asia. “And they are not expensive at all.”
An
executive at another Apple supplier said the company used to pay an additional
Rmb450mn or so to human resources agencies to help finding enough workers
during the summer surge. “But this year, we haven’t spent an extra penny on the
agencies,” the executive said. “Labor recruitment and the increasing wages
every year used to be a headache for us. But not this year.”
Foxconn,
a major Apple supplier, has offered wages of up to Rmb35 an hour plus extra
bonuses in previous years. The highest rate Nikkei Asia could find being
offered this year was just Rmb25 an hour, based on an analysis of multiple
online job recruitment ads. Some smaller tech manufacturers were offering less
than Rmb20 an hour in Dongguan and Suzhou, two important tech manufacturing
hubs in the country, sources said.
“Although
there are some rush orders, we still see demand being quite slow and uncertain
in China till the end of this year and next year,” an executive with chip
developer Sunplus told Nikkei Asia, adding that consumption and confidence had
yet to return.
“We
also find some of our clients — not only from the US but also Japan and South
Korea — want to have their products built out of China due to the geopolitical
risks,” the executive said. “That kind of push could also have impacts on the
country’s tech manufacturing industry and jobs.”
Apple,
Google, Microsoft, Amazon and others have all asked suppliers to build
additional capacity outside China, much of it in south-east Asia. Apple has
also unveiled ambitious plans for iPhone production in India.
More
Tech suppliers in China skip seasonal hiring rush amid
weak demand | Financial Times (ft.com)
Approx.
19 minutes.
China’s
Manufacturing Capital Is Doomed, Once Producing 1/4 of the World’s Smartphones
China’s Manufacturing Capital Is Doomed, Once
Producing 1/4 of the World’s Smartphones - YouTube
Covid-19 Corner
This
section will continue until it becomes unneeded.
Purplish Discoloration of the
Legs: An Unusual Long-COVID Symptom
Aug 30 2023
The Lancet’s Clinical Picture
published a paper in August detailing a rare case of a
33-year-old man in the United Kingdom with long COVID who developed a peculiar
bluish discoloration in his legs. The case report has since raised concerns
over unknown symptoms of the disease.
About six months ago, the
individual noticed that after a minute of standing, his legs would start to
darken and progressively turn purple, and his veins became more prominent.
After about 10 minutes, the discoloration became even more pronounced.
According to the patient, his legs would feel heavy, tingly, and itchy.
However, upon lying down, his leg color would return to normal, and the other
symptoms would subside.
The patient had previously
contracted COVID-19 twice. In the year following his recovery, he grappled with
unrelenting, treatment-resistant insomnia and fatigue. Other symptoms included
muscle pain, sleep disruptions, visual challenges, sexual dysfunction, and
brain fog. Two months before the case report, he was diagnosed with postural
orthostatic tachycardia syndrome (POTS), characterized by an abnormal increase
in heart rate upon standing, while blood pressure remained unchanged.
According to the UK National
Health Service, patients with POTS may experience symptoms such as dizziness or
lightheadedness, heart palpitations or chest pain, shortness of breath or
fainting, shaking and sweating, digestive issues, headaches, vision problems,
and purple discoloration in the hands and feet, fatigue, and brain fog.
Prior to contracting COVID-19,
this patient’s medical history included irritable bowel syndrome diagnosed at
the age of 18, pelvic pain since 21, attention-deficit hyperactivity disorder
(ADHD), and joint hypermobility at 31. Considering the patient’s medical
history and clinical indicators, the diagnosis pointed toward secondary
autonomic dysfunction associated with SARS-CoV-2 infection and linked to long
COVID. The discoloration of the legs is attributed to venous stasis and skin
ischemia.
According to the Stanford
University School of Medicine, autonomic dysfunction occurs when the autonomic
nervous system (responsible for regulating well-being and maintaining balance)
fails to function properly. Autonomic dysfunction can affect heart rate, blood
pressure, body temperature, sweat glands, and digestive, urinary, and sexual
functions.
Dr. Manoj Sivan, associate
clinical professor and honorary consultant in rehabilitation medicine at the
University of Leeds School of Medicine, told SciTechDaily: “This was a striking case of
acrocyanosis in a patient who had not experienced it before his COVID-19
infection. … Clinicians may not be aware of the link between acrocyanosis and
Long Covid.”
Long COVID is a multisystem
syndrome with a range of symptoms that can affect patients’ quality of
life. In addition to the common symptoms of long COVID, Dr. Janet Diaz,
the technical lead of the World Health Organization’s (WHO) Severe Acute Respiratory
Infection (SARI) Critical Care Training project, said that there have been
over 200 symptoms of long COVID reported.
More
Purplish Discoloration of the Legs: An Unusual
Long-COVID Symptom (theepochtimes.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.
Sedgeford: Massive solar farm gets go-ahead on appeal
September 3, 2023
The debate over whether
land should be used for growing food or producing green energy has been
reignited after a planning inspector over-ruled a council's decision to refuse
planning permission for a solar farm.
West
Norfolk Council turned
down proposals by Regener8 Power for 31,800 panels on 100 acres of land at
Sedgeford, near Heacham, in November, after councillors were warned it
would lead to the loss of valuable agricultural land.
The
decision has now been overturned at an appeal meaning the scheme, off Fring
Road, can go ahead.
The planning
inspector said the land was free-draining and drought-prone, which
"severely" affected its productivity.
Their report
said the site, which accounted for less than 10pc of the farm business,
produced lower yields than its other holdings.
It added:
"Use of the site for solar power generation would provide a more
predictable and steady income which would actually support the viability of the
farming operation as a whole."
Sheep would
continue to graze around the panels, meaning the fields would remain in
agricultural use.
But West
Norfolk Council leader Terry Parish said: "Leaving aside the more general
concern that planning inspectors can overturn a decision made by a
democratically elected body, I remain committed, in principle, to being against
the ever-growing acreage of farmland, capable of growing a crop, being covered
in solar panels.
"The
preferential place for such panels is on the roofs of properties,
domestic, commercial and public. On those they benefit the occupants, saving
them money."
The Campaign for the
Preservation of Rural England (CPRE) also objected to the application.
Mr Parish
said: "Solar farms are generally built and operated by companies
interested in long-term financial gain.
"They are
advertised as supplying electricity for X-thousand homes.
"They
don’t say where those homes are as electricity generated goes onto the national
grid.
"Energy
can be produced in a variety of ways, but food production generally needs
land."
Sedgeford: Massive solar farm gets go-ahead on appeal
| Eastern Daily Press (edp24.co.uk)
A bank is a confidence trick. If you put up the right signs, the
wizards of finance themselves will come in and ask you to take their money.
Christina Stead, House of All Nations. 1938.
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