Baltic
Dry Index. 1827 +49 Brent Crude 84.16
Spot
Gold 1822 US 2 Year Yield 5.03 -0.02
“You have equities falling like
it’s a recession, rates climbing like growth has no bounds, gold selling off
like inflation is dead,” said Benjamin
Dunn, a former hedge fund chief risk officer who now runs
consultancy Alpha Theory Advisors. “None of it makes sense.”′
In the Asian stock casinos, fantasy rules for now. But higher
interest rates burst all fantasy bubbles eventually.
Getting out early always beats getting carried out last.
The big question going into this October weekend, how big are the
losses so far? Followed by a second question almost as important as the first, where
are the losses piling up?
Hong Kong’s
Hang Seng index rises 2%, leading gains in Asia ahead of key U.S. jobs report
UPDATED THU, OCT 5 2023 11:07 PM
EDT
Hong Kong’s Hang Seng index jumped
over 2%, leading gains in the wider Asia-Pacific region as investors look ahead
to U.S. jobs data that could set the tone for the Federal Reserve’s next move
for interest rates. The index was last trading 2.1% higher.
Australia’s S&P/ASX 200 traded
0.34% higher. South Korea’s Kospi added
0.53% and the Kosdaq rose 0.98% in its first hour of trade.
In Japan, the Nikkei 225 and
Topix slipped 0.14% and 0.09% respectively.
China’s markets remain closed for the weeklong
holiday.
Overnight
in the U.S., all three major indexes slipped slightly as the Dow Jones Industrial Average shed
9.98 points, or 0.03%, to close at 33,119.57. The S&P 500 dipped 0.13%
at 4,258.19, and the Nasdaq
Composite traded down 0.12% to end at 13,219.83.
Hang
Seng index rises 2% ahead of key U.S. jobs report (cnbc.com)
Stocks climb in calm
before potential US payrolls storm
By Tom Westbrook October 6, 20236:01 AM GMT+1
SINGAPORE, Oct 6
(Reuters) - A lull in bond selling has stretched into Friday, but may not last
the day as investors waited on U.S. jobs data that could add to the case for
keeping interest rates high for some time.
Oil's flip from
surging to sliding has also provided respite, with Brent crude futures at
$84.50 a barrel, some $13 or 13.5% cheaper than last week's 11-month high.
MSCI's
broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.9%. Tokyo's Nikkei (.N225) was flat and currency markets were
similarly steady, though the bond rout has the dollar headed for a record 12th
straight week of gains.
Ten-year U.S.
Treasury yields were mercifully steady at 4.72% through the Asia session, but
have climbed 55 basis points in a five-week-long selloff that has dragged on
bond markets and appetite for risk-taking around the world.
"The recent
sharp sell-off has the paradoxical power to sow the seeds of its own
reversal," said analysts at Rabobank, since tighter financial conditions
will weigh on demand, and increase the likelihood that policy rates are peaking
and not pausing.
Nobody was
placing big bets, however, before the publication of U.S. non-farm payrolls data
at 1230 GMT.
Economists
polled by Reuters' expect it to show 170,000 U.S. jobs (USNFAR=ECI) were added last month, though
estimates range as high as 256,000.
"It's hard
to disentangle where people are sitting, but the market won't want to see a
strong number for sure," said Jason Wong, strategist at BNZ in Wellington.
More
Stocks climb in calm before potential US payrolls storm | Reuters
Back in the real world, lookout below. Where are the losses piling
up? Where is the next Lehman hiding?
Why
borrowing costs for nearly everything are surging, and what it means for you
Violent moves in
the bond market this week have hammered investors and renewed fears of a
recession, as well as concerns about housing, banks and even the fiscal
sustainability of the U.S. government.
At the center of the storm is the
10-year Treasury yield,
one of the most influential numbers in finance. The yield, which represents
borrowing costs for issuers of bonds, has climbed steadily in recent weeks and
reached 4.8% on Tuesday, a level last
seen just before the 2008 financial crisis.
The relentless rise in borrowing
costs has blown past forecasters’ predictions and has Wall Street casting about
for explanations. While the Federal
Reserve has been raising its benchmark rate for 18 months, that
hasn’t impacted longer-dated Treasurys like the 10-year until recently as
investors believed rate cuts were likely coming in the near term.
That began to change in July with signs of economic strength
defying expectations for a slowdown. It gained speed in recent weeks as Fed
officials remained steadfast that interest rates will remain elevated. Some on
Wall Street believe that part of the move is technical in nature, sparked by
selling from a country or large institutions. Others are fixated on the
spiraling U.S. deficit and political dysfunction. Still others are convinced
that the Fed has intentionally caused the surge in yields to slow down a
too-hot U.S. economy.
“The bond market is telling us that
this higher cost of funding is going to be with us for a while,” Bob Michele, global head of fixed income for JPMorgan Chase’s asset
management division, said Tuesday in a Zoom interview. “It’s going to stay
there because that’s where the Fed wants it. The Fed is slowing you, the
consumer, down.”
The ‘everything’ rate
Investors are
fixated on the 10-year Treasury yield because of its primacy in global finance.
While
shorter-duration Treasurys are more directly moved by Fed policy, the 10-year
is influenced by the market and reflects expectations for growth and inflation.
It’s the rate that matters most to consumers, corporations and governments,
influencing trillions of dollars in home and auto loans, corporate and municipal bonds,
commercial paper, and currencies.
“When the 10-year moves, it affects everything;
it’s the most watched benchmark for rates,” said Ben Emons, head of fixed income at NewEdge
Wealth. “It impacts anything that’s financing for corporates or people.”
The yield’s recent moves have the stock market on
a razor’s edge as some of the expected correlations between asset classes have
broken down.
Stocks have sold off since yields
began rising in July, giving up much of the year’s gains, but the typical safe
haven of U.S. Treasurys has fared even worse. Longer-dated bonds have lost 46%
since a March 2020 peak, according to Bloomberg, a precipitous decline for
what’s supposed to be one of the safest investments available.
“You have equities falling like
it’s a recession, rates climbing like growth has no bounds, gold selling off
like inflation is dead,” said Benjamin
Dunn, a former hedge fund chief risk officer who now runs
consultancy Alpha Theory Advisors. “None of it makes sense.”′
Borrowers squeezed
But beyond
investors, the impact on most Americans is yet to come, especially if rates
continue their climb.
That’s because the
rise in long-term yields is helping the Fed in its fight against inflation. By
tightening financial conditions and lowering asset prices, demand should ease
as more Americans cut back on spending or lose their jobs. Credit card
borrowing has increased as consumers spend down their excess savings, and
delinquencies are at their highest since the Covid pandemic began.
“People have to
borrow at a much higher rate than they would have a month ago, two months ago,
six months ago,” said Lindsay
Rosner, head of multi sector investing at Goldman Sachs asset
and wealth management.
“Unfortunately, I
do think there has to be some pain for the average American now,” she said.
More
Why
borrowing costs for nearly everything are surging (cnbc.com)
Fed’s Bid to Avoid Recession Tested by Yields Nearing 20-Year Highs
Thu, October 5, 2023 at
4:25 PM GMT+1
(Bloomberg) -- The
Federal Reserve may be putting its hoped-for soft landing of the economy at
risk by tacitly accepting a run-up in long-term interest rates to the highest
levels since 2007.
The surge —
10-year Treasury yields rose more than half a percentage point the past month
to surpass 4.7% — heightens the danger in the near-term of a financial blowup
akin to the regional bank breakdown in March. Longer run, it threatens to
undercut the economy by markedly raising borrowing costs for consumers and
companies.
“Ultimately,
the feedback effect starts to fuel fears that you’re going to have a hard
landing,” said R.J. Gallo, a senior portfolio manager for Federated Hermes,
with about $669 billion in assets under management.
What may have
a particularly strong impact is the rise in so-called real rates, which remove
the impact of inflation. Yields on 10-year inflation-linked Treasuries have
soared in recent weeks to levels rarely seen over the past two decades.
Fed leadership
has so far not shown much, if any, inclination to resist the rise in long-term
rates. While New York Fed President John Williams suggested last week the US
central bank may be finished raising rates, he also said policymakers would
keep them high “for some time” to bring inflation down to their 2% goal.
“Fed officials
have had a chance at various appearances — and they’ve not really taken that
opportunity to push back against this,” former Vice Chair Richard Clarida said
on Bloomberg Television on Wednesday.
The rise in
yields “actually does some of the Fed’s job for it” by slowing economic growth
and helping to contain inflation, added Clarida, who is now a global economic
adviser for Pacific Investment Management Co.
----Other
Headwinds
“There’s a
potential near-term disruptive effect to worry about,” said Bruce Kasman, chief
economist for JPMorgan Chase & Co.
The rise in
rates is also occurring at a time when the economy is already facing a number
of headwinds — from a resumption of student loan payments to a strike by
autoworkers. Indeed, Bloomberg Economics chief US economist Anna Wong says the
US economy is probably on the verge of tipping into a recession.
Market
participants have identified a variety of triggers for the surge in yields —
which moderated slightly Wednesday. Among them: investor concern about
burgeoning US budget deficits, slackening demand for Treasury securities from
foreign investors including China and expectations that Japan will exit its
ultra-loose monetary policy in coming quarters.
Some
economists and investors have also cited what they see as a muddled message
from the central bank regarding its stance on real interest rates.
Real Rates“We’ve
gotten conflicting signals from the Fed,” MacroPolicy Perspectives LLC founder
and former central bank economist Julia Coronado said. In an environment where
bond yields were already rising, that “basically just gave the market
permission to keep marching higher.”
More
Fed’s Bid to Avoid Recession Tested by Yields Nearing 20-Year Highs (yahoo.com)
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.
Rising long-term interest rates are posing the latest threat to a US economic ‘soft landing’
Updated 11:30 AM GMT+1, October 5, 2023
WASHINGTON (AP) — Surging
interest rates are intensifying the challenges for the U.S. economy and
threatening to derail the Federal Reserve’s drive to tame inflation without
causing a deep recession.
Since mid-summer, the yield on
the 10-year Treasury note, a benchmark for many loans, has steadily climbed,
causing a spillover rise in other borrowing costs. The costs of mortgages, auto
loans and credit card debt have all risen in response. The collective impact of
higher rates across the economy could also weaken the government’s own
finances.
The jump in longer-term rates
coincides with other threats, from higher gas prices and this week’s resumption of student loan payments to autoworkers’
ongoing strike and the risk of a government shutdown next month, all of which
could leave consumers with less money to spend to power the economy.
The strike by
the United Auto Workers, now in its third week with no resolution in sight,
could reduce vehicle sales in coming months. And the threat of a government
shutdown, narrowly averted this past weekend,
looms large, especially given the chaos over the leadership of the House of
Representatives. Far-right Republican House members deposed their leader, Rep.
Kevin McCarthy, on Tuesday for working with Democrats to temporarily avoid a
shutdown.
The economy is coming off a
robust summer, fueled by strong consumer spending on travel, concert tours and
movie blockbusters. The economy is estimated to have grown at a healthy 3.5%
annual rate in the July-September quarter, according to economists at Goldman
Sachs.
Yet growth will likely slow to a meager 0.7% annual rate in
the final three months of the year, Goldman estimates. With borrowing rates
high and inflation still relatively elevated, consumers, who drive about 70% of
economic growth, are expected to spend more cautiously.
On Friday, the government will
provide a snapshot of how employers are factoring the turmoil into their hiring
plans when it issues the September jobs report. Economists have forecast that
it will show that employers added a solid 162,000 jobs last month and that the
unemployment rate dipped to 3.7%, near a half-century low, from 3.8%.
But the substantial rise in
borrowing costs could intensify the economy’s slowdown. The yield on the
10-year Treasury touched a 16-year high of 4.8% on Tuesday, up from 3.3% in
April. Last week, the average 30-year fixed rate mortgage hit 7.3%, the highest
rate in 23 years, according to mortgage buyer Freddie Mac.
More
Covid-19 Corner
This section will continue until it becomes unneeded.
Because of its importance and to expose UK politicians absolute contempt of the voters, I will leave this link up all week.
The Great British Parliament Scandal. MPs gross contempt of the voters over excess deaths. Approx.14 minutes.
Excess
deaths debate in parliament
Psychosis, Panic Attacks, Hallucinations: Bizarre Psychiatric Cases Among the COVID Vaccinated
Oct 03, 2023 Updated: Oct 04, 2023
---- Beginning in
late 2020 with the COVID vaccine rollout, some doctors have seen an increase in
unusual psychiatric illnesses.
Psychiatrist Dr. Amanda
McDonald noticed a wave of psychiatric destabilization among her stable
patients. They experienced flare-ups, often manifesting with worsened or new
psychiatric symptoms.
"I couldn't figure out
why," Dr. McDonald told The Epoch Times. "My patients typically stay
stable." But many stable patients were suddenly arriving at her
office with insomnia, depression, and anxiety "without any sort of rhyme
or reason."
She increased some patients’
medication doses or added new drugs to their regimen, but it had little effect.
A recurring pattern Dr.
McDonald sees is atypical panic attacks, which can feel like having a heart
attack. Brought on with no apparent trigger, symptoms typically escalate as the
evening progresses and climax at night. A typical panic attack can occur
anytime throughout the day but often has triggers, and it is easy to treat if
patients can avoid these triggers.
After spending over a year
following her patients, Dr. McDonald realized that COVID-19 vaccines may
be linked to their psychiatric illnesses.
"I already had an existing
patient population when the pandemic hit that I knew very well. What I saw was
manifestations in that patient population,” Dr. McDonald added.
Dr. Diane Counce, neurologist
and neuroradiologist, observed an increase in severe anxiety and worsened mood.
"People also talk about
how their personality has changed," she told The Epoch Times. In cases
where a family member has brought in a patient, "[The family] will say,
‘they're just different.'"
More
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 oxide reduces the toxicity of Alzheimer’s proteins
A probable early driver of
Alzheimer's disease is the accumulation of molecules called amyloid peptides.
These cause cell death, and are commonly found in the brains of Alzheimer’s
patients. Researchers at Chalmers University of Technology, Sweden, have now
shown that yeast cells that accumulate these misfolded amyloid peptides can
recover after being treated with graphene oxide nanoflakes.
Alzheimer’s disease is an
incurable brain disease, leading to dementia and death, that causes suffering
for both the patients and their families. It is estimated that over 40 million
people worldwide are living with the disease or a related form of dementia.
According to Alzheimer’s News Today, the estimated global cost of
these diseases is one percent of the global gross domestic product.
Misfolded amyloid-beta
peptides, Aβ peptides, that accumulate and aggregate in the brain, are
believed to be the underlying cause of Alzheimer’s disease. They trigger a
series of harmful processes in the neurons (brain cells) – causing the loss of
many vital cell functions or cell death, and thus a loss of brain function in
the affected area. To date, there are no effective strategies to treat amyloid
accumulation in the brain.
Researchers at Chalmers
University of Technology have now shown that treatment with graphene oxide
leads to reduced levels of aggregated amyloid peptides in a yeast cell model.
“This effect of graphene
oxide has recently also been shown by other researchers, but not in yeast
cells”, says Xin Chen, Researcher in Systems Biology at Chalmers and first
author of the study. “Our study also explains the mechanism behind the effect.
Graphene oxide affects the metabolism of the cells, in a way that increases
their resistance to misfolded proteins and oxidative stress. This has not been
previously reported.”
Investigating the
mechanisms using baker’s yeast affected by Alzheimer’s disease
In Alzheimer’s disease, the amyloid aggregates exert their neurotoxic effects
by causing various cellular metabolic disorders, such as stress in the
endoplasmic reticulum – a major part of the cell, in which many of its proteins
are produced. This can reduce cells’ ability to handle misfolded proteins, and
consequently increase the accumulation of these proteins.
The aggregates also affect
the function of the mitochondria, the cells’ powerhouses. Therefore, the
neurons are exposed to increased oxidative stress (reactive molecules called
oxygen radicals, which damage other molecules); something to which brain cells
are particularly sensitive.
The Chalmers researchers
have conducted the study by a combination of protein analysis (proteomics) and
follow-up experiments. They have used baker's yeast, Saccharomyces
cerevisiae, as an in vivo model for human cells. Both cell types have very
similar systems for controlling protein quality. This yeast cell model was
previously established by the research group to mimic human neurons affected by
Alzheimer’s disease.
“The yeast cells in our
model resemble neurons affected by the accumulation of amyloid-beta42, which is
the form of amyloid peptide most prone to aggregate formation”, says Xin Chen.
“These cells age faster than normal, show endoplasmic reticulum stress and
mitochondrial dysfunction, and have elevated production of harmful reactive
oxygen radicals.”
High hopes for graphene
oxide nanoflakes
Graphene oxide nanoflakes are two-dimensional carbon nanomaterials with unique
properties, including outstanding conductivity and high biocompatibility. They
are used extensively in various research projects, including the development of
cancer treatments, drug delivery systems and biosensors.
The nanoflakes are
hydrophilic (water soluble) and interact well with biomolecules such as
proteins. When graphene oxide enters living cells, it is able to interfere with
the self-assembly processes of proteins.
“As a result, it can
hinder the formation of protein aggregates and promote the disintegration of
existing aggregates”, says Santosh Pandit, Researcher in Systems Biology at
Chalmers and co-author of the study. “We believe that the nanoflakes act via
two independent pathways to mitigate the toxic effects of amyloid-beta42 in the
yeast cells.”
More
Graphene oxide reduces the toxicity of Alzhei | EurekAlert!
Another
weekend and tricky weekend for the stock casinos. The blow up in the bond
markets generated winners and losers. But how to tell which from which? October
is always a difficult month for stock manias. Have a great weekend everyone. An
interesting month lies ahead.
“People have to borrow at a much higher rate than they would have a month ago, two months ago, six months ago,” said Lindsay Rosner, head of multi sector investing at Goldman Sachs “Unfortunately, I do think there has to be some pain for the average American now,” she said.
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