US Inflation Day 1. Crude Soars. A Libyan Tragedy.

Baltic Dry Index. 1235 +26             Brent Crude 92.28

Spot Gold 1911                   US 2 Year Yield 4.98 +0.01

 

The problem is that you're creating [created] a system of bubble finance where interest rates are so low that people can speculate. An asset value goes up. You put it up as collateral. You borrow against it. You buy more of the asset. You then take the rising asset. You borrow against it again. This is the nature of what's going on in the world. This isn't an excess of real savings. This is an excess of artificial credit that's being [was] fueled by all the central banks.

David Stockman. [GI Edits.]

Today, more stock casino anxiety ahead of today’s US consumer inflation figure.

Oil prices are rising too, adding to the stock casino worries. 

What if the Fed and other central banks are forced to continue increasing interest rates?  What if the Goldilocks soft landing turns into a bears eat Goldilocks, hard landing?

 

Asia markets fall as investors watch Japan and South Korea data; U.S. inflation numbers ahead

UPDATED TUE, SEP 12 2023 11:38 PM EDT

Asia-Pacific markets fell across the board as investors assess key economic data out of Japan and South Korea.

South Korea’s unemployment rate in August came in at 2%, its lowest since June 1999. Meanwhile, corporate confidence in Japan fell in September, among both manufacturers and non-manufacturers, according the Reuters Tankan poll.

Confidence among large manufacturers slid to +4, from +12 in August. The non-manufacturers index dropped nine points to hit +23 in September.

Japan’s Nikkei 225 fell after a three-day winning streak, sliding 0.43%, while the Topix saw a smaller loss of 0.27%.

South Korea’s Kospi inched lower by 0.16% but the Kosdaq was down 1.16%. Australia’s S&P/ASX 200 slid 0.8%.

Hong Kong’s Hang Seng index reversed earlier gains and shed 0.25%, while mainland Chinese stocks also fell, with the CSI 300 down 0.92%

Overnight in the U.S., all three major indexes lost ground as traders braced for inflation figures out from the U.S. later on Wednesday.

The Nasdaq slid 1.04% to snap a three day losing streak, while the S&P 500 dropped 0.57%. Meanwhile, the Dow Jones Industrial Average declined 0.05%.

Asia stock markets today: Live updates (cnbc.com)

Stock futures are little changed as Wall Street awaits key consumer inflation data: Live updates

UPDATED TUE, SEP 12 2023 7:00 PM EDT

U.S. stock futures were little changed Tuesday night as investors looked toward the release of the consumer price index for more insights on inflation.

Futures tied to the Dow Jones Industrial Average inched lower by 6 points, or 0.02%. S&P 500 futures lost 0.02%, while Nasdaq 100 futures ticked up 0.04%.

The major averages all posted losses during Tuesday’s main trading session. The Nasdaq Composite was particularly hard-hit, declining 1% as tech names came under pressure. The S&P 500 fell nearly 0.6%, while the Dow ticked down less than 0.1%. Apple slipped 1.7%, weighing on the indexes, while Oracle notched its worst day in more than 20 years on the back of disappointing revenue and soft guidance.

Wall Street’s focus is now turning toward the August CPI report, due Wednesday morning. Economists are estimating a 3.6% year-over-year rise in inflation, according to Dow Jones. This would mark an increase from the prior month’s reading of 3.2%. Core CPI, which omits food and energy costs due to volatility, is forecasted to have risen 4.3% in August, compared to a 4.7% gain in July. 

Wall Street has mostly priced in a pause in rate hikes at the Fed’s next meeting. Fed funds futures pricing data indicate a 93% probability of rates remaining the same as of Tuesday evening, according to the CME FedWatch Tool. A particular focus will be put on inflation in the services segment of the economy, according to Matt Stucky, senior portfolio manager at Northwestern Mutual Wealth Management Company. 

“The market’s essentially pricing in an end to rate hikes from here on out. If there’s a higher-than-expected number, it kind of reaffirms the narrative that wage inflation is driving structural inflation in the overall economy,” Stucky said. 

There is currently a notable gap between where the central bank is comfortable with wage growth and the current level of inflation in the labor markets, he said. “So those are all kind of pieces that the market is going to try and figure out tomorrow,” Stucky added.

Stock market today: Live updates (cnbc.com)

Markets await U.S. inflation test, surging oil add to price jitters

By Stella Qiu  September 13, 20233:19 AM GMT+1

SYDNEY, Sept 13 (Reuters) - Asian shares were subdued after Wall Street wobbled overnight with markets bracing for key U.S. inflation data on Wednesday, while an oil price spike stoked anxiety about persistent price pressures, complicating the interest rate outlook.

The euro edged higher and markets moved to favour a hike from Europe's central bank on Thursday, following a Reuters report that the European Central Bank (ECB) expects inflation will stay above 3% next year in its updated forecasts, well above its target of 2%.

---- While core CPI is seen cooling to 4.3% year-on-year in August from 4.7%, rising energy costs are forecast to keep headline inflation hot. And the latest spike in oil prices to ten-month highs is unlikely to escape the Fed's attention.

"What's happening with oil and headline inflation is still too soon for the Fed to be signaling the all clear as far as the risks of some incremental tightening before they're done," said Ray Attrill, a currency strategist at National Australia Bank.

"When you have those sort of volatility in the food and energy components, the worry is that if it's persistent then it does tend to bleed into core inflation measures over time."

Oil prices extended gains on Wednesday. Brent crude futures settled at $92.24 per barrel, nearing a ten-month peak that it hit a session ago on persistent supply concerns. U.S. West Texas Intermediate crude futures were up 0.3% at $89.08.

More

Markets await U.S. inflation test, surging oil add to price jitters | Reuters

In other news, was it really a good idea for President Biden to call MBS and Saudi Arabia a “pariah”?  Think it, yes, say it privately, but discretely, yes, but publicly, grandstanding for the US media? Probably not. 

PRESIDENT JOE BIDEN: And I would make it very clear we were not going to, in fact, sell more weapons to them. We were going to, in fact, make them pay the price and make them, in fact, the pariah that they are. There's very little social redeeming value of the - in the present government in Saudi Arabia.

Biden has changed his tune on Saudi Arabia : NPR

Saudi Arabia ‘shows us who's boss'- new oil shock to drive inflation and slam house prices

September 12, 2023

Saudi Arabia has been slashing oil supply in cahoots with Russia, in a deliberate bid to force the price into triple digits. Prices surged last week after the two oil-rich nations extended existing production cuts for at least another three months, driving the oil price to a 10-month high of more than $90 for a barrel of Brent crude.

 

Goldman Sachs recently warned that unless Saudi tones down its supply cuts, the oil price could hit $107 next year.

Saudi is cutting output by one million barrels a day until the end of December, the biggest cut in years.

That's on top of a previously announced reduction in April 2023, which runs until the end of December next year. It now produces nine million barrels a day.

Saudi Arabia needs Brent crude to trade at around $81 a barrel to balance its budget and fund colossal vanity projects such as futuristic desert city Neom, but it's going far beyond that.

Vladimir Putin's Russia is looking to raise funds for its brutal war in Ukraine, and is extending its 300,000 barrels-a-day cut to the end of the year.

This means oil prices are rising even though the Chinese economy is slowing, Europe is on the brink of recession, and the mighty US economy falters.

Russia isn't part of the OPEC oil cartel, but it has joined forces with Saudi and other members in something called OPEC+ to make us all pay more for oil.

Deputy prime minister Alexander Novak said the decision was taken "to maintain stability and balance" in oil markets.

Nobody takes that seriously. There is nothing stable or balanced about Russian policy these days, while Riyadh no longer listens to Washington.

Last year, US president Joe Biden made it clear that he saw production cuts as a personal slight. The White House said they were a geopolitical move and would undermine the fight against Putin.

It made no difference.

The two dictatorships are flexing their muscles and Saudi Arabia is likely to be "fully content" with the results, according to Bjarne Schieldrop, chief commodity analyst at SEB. "It has shown the market yet again who's the boss."

More

Saudi Arabia ‘shows us who's boss'- new oil shock to drive inflation and slam house prices (msn.com)

Finally, the latest tragedy to hit Libya. Our sympathies and condolences go out to those affected.

No word yet if it affects or will affect Libyan oil production or exports.

 

Libya floods wipe out quarter of city, thousands dead

By Ayman Werfali and Ahmed Elumami  September 12, 202310:41 PM GMT+1

DERNA, Libya, Sept 12 (Reuters) - Thousands of people were killed and at least 10,000 were missing in Libya in floods caused by a huge Mediterranean storm that burst dams, swept away buildings and wiped out as much as a quarter of the eastern coastal city of Derna.

A senior medic in Derna told Reuters that more than 2,000 people were dead, while eastern Libya officials cited by local television were estimating a toll above 5,000.

Storm Daniel barrelled across the Mediterranean into a country divided and crumbling after more than a decade of conflict.

 

In Derna, a city of around 125,000 inhabitants, Reuters journalists saw wrecked neighbourhoods, their buildings washed out and cars flipped on their roofs in streets covered in mud and rubble left by a wide torrent after dams burst.

Mohamad al-Qabisi, director of the Wahda Hospital, said 1,700 people had died in one of the city's two districts and 500 had died in the other.

Reuters journalists saw many bodies laid out on the ground in the hospital corridors. As more bodies were brought to the hospital people looked at them, trying to identify missing family members.

"Bodies are lying everywhere - in the sea, in the valleys, under the buildings," Hichem Abu Chkiouat, minister of civil aviation in the administration that controls the east, told Reuters by phone shortly after visiting Derna.

"I am not exaggerating when I say that 25% of the city has disappeared. Many, many buildings have collapsed."

The local al-Masar television said the eastern administration's interior minister had said more than 5,000 people died.

Other eastern cities, including Libya's second biggest city Benghazi, were also hit by the storm. Tamer Ramadan, head of a delegation of the International Federation of the Red Cross and Red Crescent Societies, said the death toll would be "huge".

"We can confirm from our independent sources of information that the number of missing people is hitting 10,000 so far," he told reporters via video link.

The United Nations Office for the Coordination of Humanitarian Affairs said emergency response teams had been mobilised to help on the ground.

More

Libya floods wipe out quarter of city, thousands dead | Reuters

A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank.

Ron Paul.

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.

UK wage growth points to another rate hike but jobless rate rises

By Andy Bruce and David Milliken  September 12, 20239:40 AM GMT+1

LONDON, Sept 12 (Reuters) - Another record month for British pay growth put the Bank of England on track to raise interest rates once again, perhaps for the last time in the current cycle, as data on Tuesday also pointed to a cooling labour market.

Average weekly earnings growth in the three months to July rose to 8.5% in annual terms, up from 8.4% a month earlier and marking a new high, excluding distortions during the COVID-19 pandemic, in records dating back more than 20 years, the Office for National Statistics (ONS) said.

Most investors think this will prompt the BoE to raise interest rates again on Sept. 22, to 5.5% from 5.25%, as it tries to tame the highest rate of inflation among major advanced economies.

But other labour market gauges underlined caution about the economic outlook among many of the BoE's top officials.

The unemployment rate rose, the number of people in work fell sharply and vacancies dipped below 1 million for the first time in two years.

"The bigger question is about the path thereafter," said Hugh Gimber, global market strategist at J.P. Morgan Asset Management. "The Bank will be reluctant to keep tightening if they've watched other central banks around the world hit pause.

"Yet if incoming data doesn't turn definitively, another hike to a terminal rate of 5.75% is absolutely on the table."

Last week, BoE Governor Andrew Bailey said the central bank is "much nearer" to ending its run of rate increases but that borrowing costs might still have further to rise because of stubborn inflation pressures.

The unemployment rate rose to 4.3% in the three months to July from 4.2% a month earlier, its highest since the three months to the end of September 2021, the ONS said.

The jobless rate is already higher than the 4.1% the BoE had pencilled in for the third quarter as a whole, when it published its last set of forecasts in early August.

More

UK wage growth points to another rate hike but jobless rate rises | Reuters

Gas markets are becoming ‘extremely difficult’ to predict. It’s a big problem for Europe this winter

PUBLISHED TUE, SEP 12 2023 3:43 AM EDT

Energy analysts are warning of more gas market volatility and higher prices as Europe races to prepare for another winter heating season.

European gas markets have been constantly fluctuating in recent months, owing to extreme heat, maintenance at gas plants and, most recently, industrial action at major liquefied natural gas (LNG) facilities in Australia.

Workers at U.S. energy giant Chevron’s Gorgon and Wheatstone natural gas projects in Western Australia went on strike last week, after a protracted dispute over pay and job security. Work stoppages of up to 11 hours are scheduled to continue through to Thursday, at which point the action is poised to ramp up to a total strike of two weeks.

At present, no further talks are scheduled to resolve the dispute, exacerbating fears that a prolonged halt to production would squeeze global supplies.

Australia is a major player in the global LNG market — and even though most of its exports are destined for Japan, China and South Korea, disruption from the strikes is likely to result in Asia and Europe competing for LNG from other suppliers.

The front-month gas price at the Dutch Title Transfer Facility (TTF) hub, a European benchmark for natural gas trading, traded 1.4% higher on Tuesday morning at 36.3 euros ($38.91) per megawatt hour. The TTF contract rose to around 43 euros last month amid fears of strike action.

“The fear of an unbalanced gas supply and demand seesaw has dominated markets,” Ana Maria Jaller-Makarewicz, energy analyst at the Institute for Energy Economics and Financial Analysis, a U.S.-based think tank, said in a research note.

She said the combination of lower gas consumption and Europe filling up its storage facilities ahead of schedule had helped to prevent gas prices from skyrocketing to last summer’s extraordinary peak of 340 euros.

However, given the uncertainty over how the situation in Australia will unfold, Jaller-Makarewicz said Europe should brace itself for more volatility and an increase in prices.

More

Russia energy: Europe faces prospect of higher gas prices this winter (cnbc.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

Is this wise?

FDA Clears New COVID-19 Vaccines in Bid to Counter Waning Effectiveness

9/11/2023 Updated:  9/11/2023

U.S. drug regulators on Sept. 11 cleared new COVID-19 vaccines to try to counter the poor effectiveness provided by the current options.

The U.S. Food and Drug Administration (FDA) cleared shots from Moderna and Pfizer that will be available to Americans as young as 6 months old later this month.

"Vaccination remains critical to public health and continued protection against serious consequences of COVID-19, including hospitalization and death," Dr. Peter Marks, a top FDA official, said in a statement. "We very much encourage those who are eligible to consider getting vaccinated."

The FDA approved the Moderna and Pfizer vaccines for people aged 12 and older. Regulators granted emergency authorization for the shots for people aged 6 months to 11 years.

There was no mention of Novavax, whose vaccine is also currently available in the United States.

The shots target XBB.1.5, a subvariant of the Omicron virus variant. That subvariant has already largely been displaced by newer strains, including EG.5, according to the U.S. Centers for Disease Control and Prevention (CDC).

The authorizations came despite a dearth of data from clinical trials.

Moderna stated that in a trial, its new shot induced immune responses against EG.5, also known as Eris, and other newer variants.

Pfizer stated that preclinical data have shown that antibodies generated by its new vaccine "effectively neutralize" EG.5.

The new shots were authorized based on studies on neutralizing antibody levels that appeared to show "a similar magnitude to the extent of neutralization observed with prior versions of the vaccines against corresponding prior variants against which they had been developed to provide protection," the FDA stated. "This suggests that the vaccines are a good match for protecting against the currently circulating COVID-19 variants."

The CDC plans to meet with its advisers on Sept. 12 to consider which populations it should recommend receive the new vaccines. If the panel recommends a vaccine, the federal government must pay for it.

Many countries have suggested that younger, healthy people not receive COVID-19 vaccinations as the disease has died down.

The United Kingdom, for instance, in August, said that vaccination this fall was recommended only for select groups, including people designated as at-risk.

More

FDA Clears New COVID-19 Vaccines in Bid to Counter Waning Effectiveness | The Epoch Times

‘Lot of Red Flags’: Florida Surgeon General Warns Against New COVID-19 Vaccines

9/10/2023 Updated:  9/11/2023

Florida’s Surgeon General, Dr. Joseph Ladapo, warned that there was “no evidence” of the upcoming COVID-19 vaccines being safe for human beings and suggested that people may be better off not getting these new jabs.

“We all know there's a new vaccine that's coming around the corner, [a] new mRNA COVID-19 vaccine. And there's essentially no evidence ‘for it. There's been no clinical trial done in human beings showing that it benefits people, there's been no clinical trial showing that it is a safe product for people. And not only that, but then there are a lot of red flags,” Dr. Ladapo said on Thursday during a news conference with Governor Ron DeSantis.

According to the U.S. Centers for Disease Control and Prevention (CDC), the 2023–24 COVID-19 vaccine will be made available beginning mid-September.

More

‘Lot of Red Flags’: Florida Surgeon General Warns Against New COVID-19 Vaccines | The Epoch Time

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.

New invention could herald ‘battery revolution’, scientists say

September 12, 2023

Researchers have invented a new battery that they claim could have profound implications for the future of energy storage and renewable technologies.

The lithium-based redox-flow battery, developed by a team at the University of Cincinnati, could prove crucial for wind and solar operations, where large-scale batteries are needed to store energy during times of overproduction and release it when production drops off.

“Energy generation and energy consumption is always mismatched,” said Jimmy Jiang, who led the research at the University of Cincinnati.

“That’s why it’s important to have a device that can store that energy temporarily and release it when it’s needed.”

The novel design removes the membrane that separates the positive and negative sides of the battery, which is one of the most expensive parts of this type of battery and has previously hindered development.

The membrane-free battery exhibited high voltage and energy density that could potentially meet the demands of large-scale green energy operations at an economically viable cost for the first time.

“This design significantly decreases material costs,” said Soumalya Sinha, a visiting professor at the University of Cincinnati who was involved in the research.

“We’re trying to achieve the same performance at a cheaper cost.”

The team has submitted patent applications for the design, which Dr Jiang said will herald a “battery revolution” within the next 20 years.

“I am confident about that,” he said. “There is a lot of intense research going into pushing the boundaries of battery performance.”

The research was detailed in a paper, titled ‘Development of high-voltage and high-energy membrane-free nonaqueous lithium-based organic redox flow batteries’, published in the journal Nature Communications.

New invention could herald ‘battery revolution’, scientists say (msn.com)

When you own gold you're fighting every central bank in the world. That's because gold is a currency that competes with government currencies and has a powerful influence on interest rates and the price of government bonds. And that's why central banks long have tried to suppress the price of gold. Gold is the ticket out of the central banking system, the escape from coercive central bank and government power.

James Rickards.