Stocks, The Coming Deluge. LNG On Stike?

 Baltic Dry Index. 1141 +60             Brent Crude 89.41

Spot Gold 1925                  US 2 Year Yield 4.94 -0.07

September 8, 70 AD.  The Roman siege of Jerusalem ends with the fall of Jerusalem to Roman General Titus, who would go on to become Emperor.

In confusing news, some are reporting the talks continue, some are reporting the Great Aussie LNG strike is now underway.  Given that Australia is the world’s biggest LNG exporter,  even a short strike will have northern hemisphere importers scrambling for supplies ahead of winter.

Chevron Australia LNG workers to begin strikes on Friday

September 8, 2023

SYDNEY (Reuters) - Workers at Chevron's two major liquefied natural gas(LNG) projects in Australia will begin planned strike action on Friday, a union alliance said, after it had delayed work stoppages for roughly one day as mediation talks continued.

Australia is the world's biggest LNG exporter, and the ongoing dispute over wages and conditions had stoked volatility in gas prices. Gorgon and Wheatstone operations account for more than 5% of global LNG capacity.

"Despite the Offshore Alliance giving Chevron plenty of opportunity to sort out (bargaining agreements) ... they will finally be facing their day of reckoning," the union alliance said in a Facebook post. "It's game on, Chevron."

Chevron did not immediately respond to a request for comment.

Work stoppages that could reach up to 11 hours will begin from 1 p.m. Perth time (0500 GMT) on Friday and last through Sept. 14. A two-week total strike could then follow if the terms are not met, the union has said.

More

Chevron Australia LNG workers to begin strikes on Friday (msn.com)

In the Asian stock casinos this morning, more wobble except in Hong Kong, where yet another giant rainstorm closed the casino.

While (most) of the G-20, great and good, the not so good, plus a large gaggle of flunkies and non-entities, gather in Delhi for another G-20 photo op, the global economy seems to be picking up pace heading into a new global economic recession.

If the global economy does fall into recession, a deluge is about to hit the stock casinos.

Hong Kong, Shenzhen deluged by heaviest rain on record, 83 hurt

By Tyrone Siu and Farah Master September 8, 20235:57 AM GMT+1

HONG KONG, Sept 8 (Reuters) - The Asian financial hub of Hong Kong was drenched on Friday by the heaviest rain since records began 140 years ago, with 83 people hurt, three seriously, as unusually wet weather caused by typhoons brought more disruption to southern China.

Videos showed cascades of water surging down steep hillsides in the former British colony, flooding waist-deep in narrow streets, and inundating malls, metro stations and tunnels.

The extreme weather also brought chaos to the nearby Chinese city of Shenzhen, a tech hub of more than 17.7 million people, with business and transport links across the economically important Pearl River Delta severely hit.

The torrential rain was brought by Haikui, a typhoon that made landfall in the Chinese province of Fujian on Tuesday. Although it weakened to a tropical depression its slow-moving clouds have dumped huge volumes of precipitation on areas still soaked by rain from a super typhoon a week earlier.

More

Hong Kong, Shenzhen deluged by heaviest rain on record, 83 hurt | Reuters

Asia markets fall as Japan economy grows less than expected; Hong Kong cancels morning trade due to storm

UPDATED THU, SEP 7 2023 11:10 PM EDT

Asia-Pacific markets were lower on Friday as Japan released revised second quarter gross domestic product figures, and Hong Kong cancelled the morning trading session due to a storm warning.

Japan’s Nikkei 225 extended losses from Wednesday, and fell 0.9%,while the Topix was down 0.56%.

Japan’s economy grew 4.8% in the second quarter on a quarter-on-quarter annualized basis, a smaller growth than the 6% seen in the preliminary estimates and lower than the 5.5% expected in a Reuters poll.

Hong Kong’s exchange cancelled the morning trading session after a “black rainstorm” warning was issued.

Under Hong Kong Exchange guidelines, the morning session has been cancelled if the black rain signal is still in force after 9 a.m. If it is not lifted before 12 p.m., there will no trading for the day.

Mainland Chinese markets were in negative territory, with the CSI 300 down 0.29%.

In Australia, the S&P/ASX 200 were down 0.22%. South Korea’s Kospi slid 0.34%, and the Kosdaq fell 0.18%.

Overnight in the U.S., the Nasdaq Composite fell for a fourth session Thursday as concerns resurfaced over the Federal Reserve’s interest rate policy path, and whether policymakers will enact another hike this year.

The tech-heavy index sold off 0.89%, while the S&P 500 slipped 0.32%. The Dow Jones Industrial Average added 0.17%.

Philippines trade deficit grows in July, imports and exports fall

The Philippine trade deficit increased to $4.2 billion in July, a climb compared to the $3.9 billion deficit seen in June.

Exports in July fell 1.2% year-on-year, a reversal from the 0.9% growth in June. Imports to the country however, plunged 15.3% year-on-year in July, a steeper fall from the 15.0% contraction the previous month.

In July, the Philippines’ total external trade in goods amounted to $16.49 billion, which is 10.5% lower year-on-year.

Asia stock markets today: Live updates—Japan GDP, Hong Kong cancelled due to rain (cnbc.com)

Japan cuts Q2 GDP on weak spending, wages slide

By Leika Kihara and Yoshifumi Takemoto  September 8, 20232:21 AM GMT+1

TOKYO, Sept 8 (Reuters) - Japan's economy grew less than initially estimated in the second quarter and wages slumped in July, casting doubt over central bank projections that solid domestic demand will keep the country on course for a recovery.

Capital expenditure and private consumption both fell in the April-June period, revised gross domestic product (GDP) data showed on Friday, underscoring the fragile state of Japan's economy, which is already facing headwinds from weakening Chinese and U.S. growth.

 

Real wages adjusted for inflation fell in July for a 16th straight month in a sign households continued to feel the pinch from rising prices, separate data showed, boding ill for consumption.

"Weak exports to China may be making Japanese manufacturers cautious about investing. The hope is that service-sector firms will pick up the slack, though sluggish consumption could discourage them to spend money, too," said Takeshi Minami, chief economist at Norinchukin Research Institute.

Japan's economy grew an annualised 4.8% in April-June, the revised data showed, down from a preliminary estimate of 6.0% growth and below market forecasts for a revised 5.5% expansion.

The main factor behind the downgrade was a 1.0% drop in capital expenditure, compared with a preliminary flat reading, casting doubt on the BOJ's view that robust corporate spending will underpin Japan's post-pandemic economy. The revised decline was bigger than a median market forecast for a 0.7% fall.

Private consumption, which makes up more than half of the economy, fell 0.6% quarter-on-quarter in the April-June period, compared with a preliminary 0.5% decline.

Exports remained solid in April-June with net external demand contributing 1.8% points to GDP growth, unchanged from the preliminary reading.

But shipments to China slumped 13.4% in July to mark the 8th straight month of falls. Overall exports slid 5.0% year-on-year in the first half of August after a 0.3% decline in July, suggesting the global slowdown was taking a toll on the economy.

As weak domestic demand led to declines in imports, Japan's current account surplus logged a record amount for the month of July, separate data released on Friday showed.

More

Japan cuts Q2 GDP on weak spending, wages slide | Reuters

Up next, Uncle Sam wants more funny money for the IMF and World Bank, but doesn’t want to pay for it nor alter or rebalance the shareholdings that greatly favour America. Well it’s worth a try, I suppose.

Yellen says she will press for IMF, World Bank resources at G20 summit

September 8, 20235:37 AM GMT+1

Sept 8 (Reuters) - U.S. Treasury Secretary Janet Yellen said on Friday she will work at the G20 summit in India to build support to increase lending resources for the International Monetary Fund and the World Bank to help member countries deal with multiple global challenges, including new IMF quota resources.

Yellen said in prepared remarks at a news conference in New Delhi that she will seek to build G20 support for an "equi-proportional" increase in IMF quota funds paid-in by member countries, which would increase IMF lending resources, but not immediately change its shareholding structure.

On Thursday, Treasury Under Secretary Jay Shambaugh said in Washington that an IMF quota increase that keeps voting power unchanged would speed more resources to countries under financial stress, while IMF shareholders could take more time to work out a complicated new shareholding formula that gives greater weight to dynamic emerging market economies such as India, China and Brazil.

Yellen also said the United States has asked the U.S. Congress for permission to lend $21 billion to IMF trust funds, including one for the poorest countries, which "desperately needs more resources."

Yellen highlighted progress on efforts over the past year by the World Bank and other multilateral development banks to vastly expand lending resources and help tackle climate change, pandemics and other global crises.

Near-term balance sheet changes under consideration could unlock an additional $200 billion over the next decade, she said. More resources could come from medium-term steps recommended by a G20 capital adequacy review, including the use of callable capital that is pledged, but not paid-in, to back lending.

More

Yellen says she will press for IMF, World Bank resources at G20 summit | Reuters

Bank of Canada says interest rates may not be high enough

September 7, 20237:18 PM GMT+1

OTTAWA, Sept 7 (Reuters) - Bank of Canada Governor Tiff Macklem on Thursday said interest rates may not be high enough to bring inflation back down to target, sending a hawkish message after holding borrowing costs at a 22-year high a day earlier.

On Wednesday, the Bank of Canada (BoC) kept its key rate at 5%, noting the economy had entered a period of weaker growth, but said it could hike again should price pressures persist.

Inflation has remained above the bank's 2% target for 27 months.

In a speech to the chamber of commerce in Calgary, Alberta, Macklem said one possible reason for inflation staying above target was that it might be taking longer for rates to work, but the other possibility "is that monetary policy is not yet restrictive enough to restore price stability".

He added: "And unfortunately, the longer we wait, the harder it's likely to be to reduce inflation."

The central bank hiked rates by a quarter point in both June and July in a bid to tame stubbornly high inflation. However Macklem said that now "there is little downward momentum to underlying inflation".

Canada's gross domestic product unexpectedly shrank an annualized 0.2% in the second quarter, a sign the economy could have already entered a recession as higher rates sink in. But inflation accelerated in July to 3.3% and core measures remained at about 3.5%.

"We don't want to raise our policy rate more than we have to," Macklem said, adding that persistently high inflation would be worse for Canadians than high borrowing costs. "We need to stay the course."

The tone of the speech clashed with the message coming from Canadian politicians in recent days. 

More

Bank of Canada says interest rates may not be high enough | Reuters

Finally, how did Europe’s economy drop into recession? To use Earnest Hemmingway’s famous quip about bankruptcy, “gradually, then suddenly.”

 

European private loan market falters as corporate credit stress mounts

By Naomi Rovnick and Chiara Elisei  September 7, 20236:12 AM GMT+1

LONDON, Sept 7 (Reuters) - Direct lending, a key but expensive source of credit for riskier European firms that banks often shy away from, is running out of steam, a fresh sign that aggressive interest rate rises may be starting to cause funding stress and exacerbate economic pain.

Fundraising and deal-making have dropped sharply at European private debt funds, new data shows.

The European private credit industry, which flourished after the 2008 financial crisis as capital-constrained banks cut lending, has raised 26.1 billion euros ($28.02 billion) of new investment so far in 2023, according to data provider Preqin.

That represents a 34% drop on the same period last year and follows a record 2022 for capital raised by the sector.

Private lending is declining as euro zone banks cut loan creation and business activity falters.

The M3 broad measure of euro zone money supply declined in July for the first time since 2010. The Bank of England is concerned about a funding squeeze in non-bank lending.

"We think that in the next two quarters, financial conditions will deteriorate meaningfully," said Francesco Sandrini, head of multi-asset strategies at Amundi, Europe's largest asset manager.

The European Central Bank has delivered 425 basis points (bps) of tightening this economic cycle and the BoE more than 500 bps. Now, those moves are beginning to bite.

Direct lenders, which overwhelmingly fund private equity-backed and mid-market businesses, closed just 111 transactions in the second quarter of 2023, new data from Deloitte shows, down 48% from the same quarter last year and the lowest since Q3 2020.

European private loan market falters as corporate credit stress mounts | 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.

China and Germany slowdown fuels fears of global recession

September 7, 2023

Storm clouds are gathering over the global economy amid mounting fears over China and Europe – and in particular Germany.

Official figures published in Beijing yesterday showed exports from China – often seen as the workshop of the world – were 8.8 per cent lower in August than in the same month last year.

It was the fourth month of decline in a row amid weak global demand for Chinese goods as consumers cut back on electronics purchases.

In Germany, another manufacturing powerhouse, industrial output fell 0.8 per cent in July.

‘Dark clouds continue to hang over industry,’ said Alexander Krueger, chief economist at Hauck Aushauser Lampe. 

The weak global economy and high energy prices will keep the outlook gloomy.’

Separate data published by official statistics agency Eurostat showed no growth at all across the EU in the second quarter of the year. 

That compares with 0.5 per cent expansion in the US and 0.2 per cent in the UK.

The Italian economy shrank by 0.4 per cent in the quarter while output in Germany was flat after two quarters of decline.

Fears are mounting that Germany faces a double-dip recession, returning to contraction in the second half of the year after a winter downturn ended in the spring.

The IFO economic institute in Munich expects the German economy to contract by 0.4 per cent across 2023.

More

China and Germany slowdown fuels fears of global recession (msn.com)

German industrial output falls more than expected in July

September 7, 2023

BERLIN (Reuters) -German industrial production fell by slightly more than expected in July, the federal statistics office said on Thursday, underlining the challenges faced by the sector after a winter downturn in Europe's largest economy.

Production fell by 0.8% in July compared to the previous month. Analysts polled by Reuters had predicted a 0.5% decline.

"Dark clouds continue to hang over industry," said Alexander Krueger, chief economist at Hauck Aushaeuser Lampe.

"The weak global economy and high energy prices will keep the outlook gloomy. On the production side, it already looks like another quarterly loss," he added.

In the less volatile three-month comparison, production between May and July was 1.9% lower than the previous three months, the data showed.

Germany's manufacturing sector has had a difficult year so far due to dwindling orders, sluggish output and high prices, with the HCOB final Purchasing Managers' Index (PMI) for manufacturing falling for a sixth consecutive month in July.

Industrial production (manufacturing excluding energy and construction) decreased by 1.8% in July compared to June, while the production of capital goods fell by 2.9% and the production of consumer goods decreased by 1.0%, the data showed.

Jens-Oliver Niklasch of LBBW said Thursday's data underscored "the continued crumbling of the economy" and predicted the third quarter would bring a decline in economic output.

German industrial output falls more than expected in July (msn.com)

House prices fall at fastest rate since 2009 – and it’s worst in London

THURSDAY 07 SEPTEMBER 2023 7:40 AM

House prices in August 2023 were 4.6 per cent lower than the same month a year earlier, the worst since 2009 and the financial crisis.

New figures from Halifax show roaring mortgage rates have continue to pile on the misery for the UK’s housing sector.

The figure drops down from -2.5 per cent when compared to July as a summer of continued interest rates from the Bank of England sent buyer confidence plummeting.

The average home now costs £279k, with £5,000 knocked off its value since July, returning to the level seen at the start of last year. 

During the month, London homes saw the most dramatic fall in price of any region in cash terms, tumbling 4.1 per cent to £529k as sellers slashed the value of their pads in order to sell. 

However, the capital remains the most expensive place in the UK to purchase a home. 

Despite mortgage rates slowly edging down from their mid summer peak, buyers have remained cautious about securing a sale on their home. 

“Market activity levels slowed during August, and while there is always a seasonality effect at this time of year, it also isn’t surprising given the pace of mortgage rate increases over June and July,” Kim Kinnaird, director, Halifax Mortgages, said. 

Kinnaird said she expects further downward pressure on property prices to continue through to the end of this year and into next.

She added: “The market will continue to rebalance until it finds an equilibrium where buyers are comfortable with mortgage costs in a higher range than seen over the previous 15 years.”

House prices fall at fastest rate since 2009 - and it's worst in London (cityam.com)

 

 

Covid-19 Corner

This section will continue until it becomes unneeded.

New ‘Pirola’ COVID Variant Emerging: Here’s What We Know

Sep 6 2023

While “Eris” EG.5 is still the dominant variant in the United States, scientists are weighing in on a new strain of the COVID-19 virus, BA.2.86.

 

Unofficially dubbed “Pirola,” a blend of the Greek letters Pi and Rho, this BA.2.86 variant of omicron was initially detected in Denmark in July and surfaced in the United States in August.

 

International health officials have not yet classified Pirola as a variant of concern but have been closely monitoring it since Aug. 17. The World Health Organisation (WHO) is currently tracking three variants of interest and seven variants under monitoring while continuing to call for better surveillance, sequencing, and reporting of COVID-19 as this virus continues to circulate and evolve.

 

Pirola Has Far More Mutations

 

Notably, Pirola has more than 30 mutations in its spike protein. The virus uses the spike protein to infect human cells.

 

The substantial number of mutations initially raised concerns among virologists, who feared this variant might partially evade earlier immunity from previous exposure, whether from natural infection or prior vaccination.

 

“Such a high number of mutations is notable,” infectious diseases specialist Dr. Scott Roberts told Yale Medicine, adding that it is similar to the number of mutations that differed between delta, one of the early COVID-19 strains, and omicron.

 

In contrast, there were only one or two mutations from XBB.1.5 to EG.5, he said, which was expected. XBB.1.5—or “Kraken”—is another variant of omicron that was a dominant strain in the United States before being overtaken by the Eris variant.

 

As case numbers are low, it is unclear whether there are any distinctive and unique symptoms of the new variant, apart from those caused by previous strains, including runny nose, coughing, sneezing, headache, sore throat, fatigue, aches, and altered senses of smell and taste.

People who are older, have compromised immune systems, or suffer from multiple other conditions are at higher risk for more severe effects, including chest pain and shortness of breath.

 

How Dangerous Is Pirola?

 

New experiments worldwide are examining how well the antibodies of those infected might be able to fend off Pirola.

 

Researcher Yunlong Cao, who holds a doctorate in physical biochemistry from Harvard, discovered in experiments that Pirola is antigenically distinct compared to XBB.1.5. This means it “can significantly escape” antibodies induced by XBB-infection or vaccination.

 

However, Pirola’s ability to cause infection may be much lower than that of XBB.1.5 and Eris, he added.

 

Researchers at the Karolinska Institutet in Sweden have different thoughts.

 

“Overall, it doesn’t appear to be nearly as extreme a situation as the original emergence of Omicron,” wrote principal researcher Benjamin Murrell in a post on X (formerly Twitter) on Sept. 1. “It isn’t yet clear whether BA.2.86 (or its offspring) will outcompete the currently-circulating variants, and I don’t think there is yet any data about its severity, but our antibodies do not appear to be completely powerless against it.”

 

The U.S. Centers for Disease Control and Prevention (CDC) has indicated that an updated vaccine will be available in mid-September.

More

New ‘Pirola’ COVID Variant Emerging: Here’s What We Know (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.

ZF formulates world's most compact magnet-free EV motor

By C.C. Weiss  September 06, 2023

Several companies around the globe have been hard at work innovating and refining magnet-free electric motors to make them a more viable option for the fast-growing EV industry. ZF Friedrichshafen has taken a similar wireless inductive path to fellow German automotive supplier Mahle, but with its own unique configuration. By integrating its inductive transmitter into the rotor itself, ZF saves space and creates a particularly compact magnet-free motor it says performs comparably to the permanent-magnet synchronous motors (PSMs) that dominate contemporary EV engineering.

By swapping out the magnets on a motor's rotor in favor of electrical windings, manufacturers can eliminate the cost, ecological damage and potential supply chain disruption involved in the mining of rare-earth materials needed for those magnets. However, traditional magnet-free designs introduce added physical elements like the sliding rings or brushes needed to run electrical current into the rotor windings, adding size and weight while introducing more friction and potential for wear and tear. So EV makers tend to go the path of least resistance – literally and figuratively – relying on permanent-magnet motors.

Contactless induction is one promising solution that sends electricity to the rotor coils without physical brushes or rings, eliminating the disadvantages thereof. To further this tack along, ZF has integrated its inductive transmitter inside the rotor shaft at the center of the coils, eliminating the extra 3.5 inches (90 mm) of axial space it estimates physical solutions like brushes take up, while offering power and torque density comparable to a PSM.

ZF calls this design the In-Rotor Inductive Excited Synchronous Motor (I²SM), and the idea is that an automaker could replace a PSM with this new type of motor without sacrificing anything in terms of packaging or output. ZF further says that at continuous high-speed operation, such as when driving on the highway, the I²SM will operate more efficiently than a PSM.

ZF's inductive transmitter does look to be more compact than alternatives such as Mahle's (below), which uses two larger-diameter discs around the outside of the rotor shaft. Of course, it's impossible to compare the two prototypical systems in a definitive way, or to make heads or tails of ZF's "world's most compact and torque-dense e-motor without magnets or rare-earths" claim based merely on initial illustrations. We'll need to wait for concrete specs like dimensions, weight and output numbers for that.

For now, ZF says it plans to continue development toward production maturity with the aim of integrating the I²SM units into 400-V and 800-V electric drive platforms for supply to passenger car and commercial vehicle manufacturers. It revealed its initial I²SM work at this week's IAA Mobility Munich show.

Source: ZF Friedrichshafen

ZF formulates world's most compact magnet-free EV motor (newatlas.com)

Another weekend and only 16 shopping weekends until Christmas. With oil prices rising, food price inflation showing little sign of ending and now rampant wage price inflation arriving, it might be a good time to buy ahead for Christmas 2023.  Have a great weekend everyone.

September 8, 1565. St. Augustine, Florida, the oldest continuously occupied settlement of European origin in the continental United States, was founded in 1565 by Spanish admiral Pedro Menéndez de Avilés. The Spanish Crown issued an asiento to Menéndez, signed by King Philip II on March 20, 1565, granting him various titles, including that of adelantado of Florida, and expansive privileges to exploit the lands in the vast territory of Spanish Florida, called La Florida by the Spaniards.^[1] This contract directed Menéndez to explore the region's Atlantic coast and report on its features, with the object of finding a suitable location to establish a permanent colony from which the Spanish treasure fleet could be defended and Spain's claimed territories in North America protected against incursions by other European powers.

History of St. Augustine, Florida - Wikipedia