Baltic Dry Index. 1598 +68 Brent Crude 80.44
Spot Gold 1956 US 2 Year Yield 5.03 +0.10
Treasury yields lurched higher after declining for most of the past three weeks, propelled up in large part after a poorly received 30-year bond auction.
2024 Recession or depression?
With China dropping back into deflation again and Germany leading the EU into recession, I think, the USA, UK, EU plus others, may have already entered or are entering a new recession. Recessions are usually only made official long after they started and often near where the recession is close to ending.
After flattening for a few weeks, the US Treasury yield curve was inverting once again until yesterday’s bad 30 year bond auction.
According to the latest statistics released in the US this week, banks and credit unions, have tightened credit to restrictive, especially new car loans and new credit card applications. This as US EV demand, (and UK and German EV demand,) has plummeted. Both banks and Credit Unions are reporting credit demand is now falling.
Car loan delinquencies and credit card delinquencies are both rising in the USA.
In October, US banks reported a rise in unrecognised losses from commercial real estate problem loans. But due to much higher interest rates, plus other problems in cities like NY, SF and Chicago, plus tightened loan lending standards, much of US commercial real estate has already dropped into refinancing gridlock. I think this gets worse before it gets better.
While Europe, China, much of Asia have their own problems, as goes America so goes the world, is still an economic driving force to the global economy, even if now fading a little.
Lastly, Brent crude has fallen from about 95 dollars to 80 dollars in just a few weeks, largely due to falling demand rather than extra supply. Diesel usage in the USA is falling, suggesting to me at least, slowing or falling US commerce.
This time round, unlike after the 2008-2009 Great Financial Crisis, there will be no Chinese property miracle to generate the China boom that sped up the global recovery.
In the stock casinos, rising concern that the
punters have bet wrong and Fed Chairman Powell and his gang, just killed off
the Santa Claus rally. Maybe the three bears were only hibernating and not dead
after all.
South Korea leads weekly gains as Asia
markets fall on Powell comments
UPDATED THU, NOV 9 2023 11:17 PM
EST
Asia-Pacific markets fell on Friday, retreating
from small gains made in the previous session amid a downbeat tone set by U.S.
markets overnight, while South Korea’s benchmark index was set to outpace
regional peers for the week.
The U.S. benchmark S&P 500 index ended
an eight-day
winning streak as Treasury yields spiked and Federal Reserve
Chair Jerome Powell signaled more
work may be needed to bring down inflation.
South Korea’s Kospi saw
weekly gains of 1.42% after a strong start to the week when the country reimposed
a ban on short selling.
The Kospi fell
1% on Friday, while the Kosdaq shed 1.72% at open. The Kosdaq was up 7.34% on
Monday, but has fallen for four straight days since, wiping out nearly all
those gains and set to end the week barely 1% higher.
Japan’s Nikkei 225 fell
0.64%, after gains of nearly 1.5% in the prior session. The Topix dropped
0.41%.
Hong Kong’s Hang Seng index shed
1.53%, poised for weekly falls of 2.34%. The HSI is set to be the worst weekly
performer.
while China’s CSI 300 index
dropped 0.69%.
In Australia, the S&P/ASX 200 traded
0.51% lower in its final hour of trading.
Wall Street’s main indexes closed lower.
The S&P 500 fell 0.81%, ending an eight-day winning streak, as a
sharp jump in yields rattled investors.
The Nasdaq Composite lost
0.94% and the Dow Jones
Industrial Average dropped
0.65%.
Live
updates: South Korea leads weekly gains, Asia markets fall after Powell
comments (cnbc.com)
S&P
500 futures are little changed Thursday night after higher bond yields spur
sell-off: Live updates
UPDATED THU, NOV 9 2023 8:14 PM
EST
S&P 500 futures were little changed Thursday
night after the broad-market index ended an eight-day run of gains.
S&P
500 futures
slipped by 0.05%, while Nasdaq 100 futures
slid nearly 0.2%. Futures tied to the Dow Jones
Industrial Average flickered
near the flat line.
In after-hours action, the Trade
Desk swooned nearly
30% after the digital ad company offered weak revenue guidance for the fourth
quarter. Elsewhere, hydrogen fuel cell company Plug Power cratered
25% on a wider-than-expected third quarter loss and a miss on revenue.
During Thursday’s trading, the S&P 500 slipped
0.8%, and snapped its longest winning streak since 2021. The Nasdaq Composite declined
by 0.9%, ending a nine-day string of wins — also its lengthiest run of gains in
two years. The 30-stock Dow dropped
nearly 0.7%.
Stocks sold off after Federal
Reserve Chair Jerome Powell said the central bank is “not
confident” it has done enough in the battle against
inflation.
“The Federal Open Market
Committee is committed to achieving a stance of monetary policy that is
sufficiently restrictive to bring inflation down to 2 percent over time; we are
not confident that we have achieved such a stance,” he said in prepared remarks
at an International Monetary Fund event.
Bond yields moved higher as
stocks fell on Powell’s speech.
“The bond market itself is
typically a lot smarter than the stock market when it comes to predicting
rates,” Kevin Simpson, Capital Wealth Planning founder and chief investment
officer said on CNBC’s “Closing
Bell” on Thursday.
The investor said he’s managing
his portfolios under the expectation rates will stay “higher for longer.”
“The Fed’s not cutting rates …
More
Stock
market today: Live updates (cnbc.com)
Powell says Fed is ‘not confident’ it has done
enough to bring inflation down
Federal Reserve
Chairman Jerome Powell said Thursday that he and his fellow policymakers are
encouraged by the slowing pace of inflation but are unsure whether they’ve done
enough to keep the momentum going.
Speaking a little
more than a week after the central bank voted to hold benchmark policy rates
steady, Powell said in remarks for an International Monetary Fund audience in
Washington, D.C., that more work could be ahead in the battle against high
prices.
“The Federal Open
Market Committee is committed to achieving a stance of monetary policy that is
sufficiently restrictive to bring inflation down to 2 percent over time; we are
not confident that we have achieved such a stance,” he said in his prepared speech.
The speech comes with inflation still well above
the Fed’s long-standing goal but also considerably below its peak levels in the
first half of 2022. In a series of 11 rate hikes that constituted the most
aggressive policy tightening since the early 1980s, the committee took its
benchmark rate from near zero to a target range of 5.25%-5.5%.
Those increases have coincided with
the Fed’s preferred inflation gauge, the core personal consumption expenditures
price index, to fall to an
annual rate of 3.7%, from 5.3% in February 2022. The more widely
followed consumer price index peaked above 9% in June of last year.
Powell said that inflation is “well
above” where the Fed would like to see it while describing policy as
“significantly restrictive.”
“My colleagues and I are gratified by this progress but expect that the
process of getting inflation sustainably down to 2 percent has a long way to
go,” he said. “We will keep at this until we succeed,” he later added, saying
the Fed is focused on whether rates need to go higher and how long they need to
stay elevated.
Stocks
headed lower after the speech, with the Dow Jones Industrial
Average down close to 200 points. Treasury yields lurched higher after
declining for most of the past three weeks, propelled up in large part after a
poorly received 30-year bond auction.
“Chairman Powell issued a warning to investors too giddy on the
prospect of rate cuts next year,” said Jeffrey Roach, chief economist at LPL
Financial. “The Fed will be true to its mandate and hike further should
inflation reaccelerate.”
More
Powell
says Fed is 'not confident' it has done enough to bring inflation down
(cnbc.com)
Liquidity gridlock worsens in US commercial real estate
sector
By Shankar
Ramakrishnan November 8, 2023 11:22 AM GMT
Nov 8 (Reuters) -
Private lenders, in pole position as high interest rates leave them as the sole
option for many in the commercial real estate market (CRE), are turning more
selective and worsening a liquidity gridlock in a sector facing trillions of dollars
of maturing debt.
In recent months,
banks looked to rework terms on maturing CRE debt to stave off loan defaults,
but they required additional infusion of equity capital allowing private
lenders an opportunity to provide rescue financing through mezzanine debt,
preferred equity or fresh common equity, industry sources said.
Initially those
workouts were focused on the office sector, but now are spreading to
multi-family, industrial and hotels. And those workouts are becoming
mathematically untenable even for private lenders. This is happening as rental
income, across sectors, is not keeping up with the increase in debt servicing
costs, said several industry players.
"Debt is
available, but not in the same amount as before and it is also meaningfully
more expensive. That leaves a few choices, and none of them are ideal,"
said Mike Comparato, president of Franklin BSP Realty Trust.
Borrowing costs
for the CRE market have risen more than income, a situation prompted by the
steepest jump in interest rates in decades. Exacerbating factors include
tighter lending standards after the March regional bank failures and falling
office occupancies post-COVID.
“It is a
fantastic time to be a private lender," said Jeff Holzmann, COO at
Texas-based RREAF Holdings, a real estate investor. "But that doesn't mean
that every opportunity that comes to you is a good one."
There are assets
that may never recover even with lower interest rates because they are in
cities where the market is deteriorating because of crime and declining
demographics. Some would also need large investments for a turn-around which
ate into returns, he said.
NO REAL OPTION
Rising caution
among private lenders will worsen the paucity of liquidity for property owners
who have no real exit option.
Two-year interest
rate caps that protected against rising rates mature in coming years, and new
caps that used to cost thousands now cost in the tens of millions of dollars,
said several industry players.
As property
valuations dropped on weaker fundamentals, borrowers also qualified for a
smaller senior refinancing loan at rates that were at least 500 basis points
higher.
More
Liquidity gridlock worsens in US commercial real
estate sector | Reuters
Oil set for third
weekly decline as Middle East conflict concerns ebb
By Sudarshan
Varadhan November 10,
2023 2:58 AM GMT
SINGAPORE, Nov 10 (Reuters) - Oil
prices were little changed on Friday after rising in the previous session but
are set to fall for a third week as concerns of supply disruptions from the
Israel-Hamas conflict have ebbed allowing demand worries to reassert
themselves.
Brent crude futures for January were
flat at $80.01 a barrel at 0157 GMT, while the U.S. West Texas Intermediate
(WTI) crude futures for December were at $75.67, down 7 cents.
Brent futures are down 5.7% this week while WTI has declined 5.9% since
last week. The three weeks of declines are the longest weekly losing streak for
both contracts since a four-week drop from mid-April to early May.
"The threat of disruptions to supplies from the Middle East
continues to fall," ANZ Research said in a note on Friday.
"The conflict remains well contained within Gaza, despite concerns
it would escalate as neighbouring Arab nations show their displeasure."
---- The sense supply disruptions from
the Israel-Hamas conflict are easing is occurring as concerns around demand,
especially from China, the world's largest oil importer, are rising.
Weak Chinese
economic data this week increased worries of faltering demand. Additionally,
refiners in China, the largest buyer of crude oil from the world's largest
exporter Saudi Arabia, asked
for less supply from Saudi Arabia for December.
More
Oil
set for third weekly decline as Middle East conflict concerns ebb | Reuters
Oil slumps nearly 3% to
3-month lows as demand concerns mount
November 8, 2023
NEW YORK
(Reuters) -Oil prices slid nearly 3% on Wednesday to their lowest in more than
three months on concerns over waning demand in the U.S. and China.
Brent crude
futures fell $2.14, or 2.6%, to $79.47 a barrel by 1:06 p.m. EST (1806 GMT).
U.S. crude lost $2.12, or 2.7%, to $75.25. Both benchmarks hit their lowest
since mid-July.
"The
market is clearly less concerned about the potential for Middle Eastern supply
disruptions and is instead focused on an easing in the balance," ING
analysts Warren Patterson and Ewa Manthey said in a note to clients, referring
to crude supply conditions.
Also weighing
on the market, U.S. crude oil stocks rose by almost 12 million barrels last
week, market sources said late on Tuesday, citing the American Petroleum
Institute's figures. [API/S]
That would be
biggest build since February, compared with government data. However, the U.S.
Energy Information Administration (EIA) has delayed the release of its weekly
oil inventory data, usually on Wednesdays, until Nov. 15 to complete a planned
systems upgrade.
Meanwhile,
U.S. crude production will rise this year by slightly less than previously
expected but petroleum consumption will fall by 300,000 barrels per day (bpd),
the EIA said on Tuesday, reversing its previous forecast of a 100,000-bpd
increase.
Data from
China, the world's biggest crude oil importer, showed its total exports of
goods and services contracted faster than expected, feeding worries about the
energy demand outlook.
In the euro
zone, data showing falling retail sales also highlighted weak consumer demand
and the prospect of recession.
"The
meltdown we've seen in prices is reflecting two things: concerns about the
global economy hitting a brick wall based on data out of China and also a sense
of confidence that the war in Israel and the Gaza Strip is not going to impact
supply," said Phil Flynn, analyst at Price Futures Group.
Still, China's
October crude oil imports showed robust growth and its central bank governor
said that the world's second-biggest economy is expected to hit its gross
domestic product growth target this year. Beijing has set a target of about 5%
growth.
More
Oil slumps nearly 3% to 3-month lows as demand concerns mount (msn.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.
Falling pork prices drags China back into deflation
November 9, 2023
China’s recovery from the Covid lockdowns faced another blow as the
economy slipped back into deflation in October.
New figures from the National Bureau of Statistics showed that the
consumer price index dropped 0.2 per cent compared to last year and was down
0.1 per cent from the month before.
Producer prices meanwhile
fell for the 13th consecutive months, falling 2.6 per cent on the year before.
The headline rate of consumer
inflation was dragged lower by falling pork prices, which dropped over 30 per
cent year-on-year.
Deflation
refers to falling prices for goods and services. It can be hugely damaging for
an economy as it encourages consumers to delay spending, putting further
downward pressure on prices.
The figures point to the
problems the Chinese government has faced in generating a sustainable recovery
from its draconian Covid lockdowns.
China has slipped into
deflation once this year already in July and
has struggled to generate any meaningful economic momentum.
The slowing rate of core
inflation in today’s figures, which climbed 0.6 per cent year-on-year, points
to the widespread deflationary pressures facing the world’s second largest
economy.
More
Falling pork prices drags China back into deflation
(msn.com)
EU will be in
recession by the end of the year, warns former ECB president
8 November 2023 • 6:02pm
The former president of the
European Central Bank has said the EU will be in recession by the end of the
year amid surging energy costs.
Mario Draghi, the former Italian
prime minister, said the continent’s economy is also struggling with low
productivity and a lack of skilled labour.
He added that the EU will not
survive beyond being an economic bloc without further integration.
He told the FT’s Global
Boardroom conference: “To have an economy capable of supporting an ageing
society at the rhythm we have in Europe, we have to have much higher
productivity.
“Where we need to get our act
together is energy. We are going nowhere paying energy twice or three times
what it costs in other parts of the world.”
Mr Draghi’s comments come as the
EU struggles to recover from the pandemic and the energy price shock caused by
Russia’s invasion of Ukraine.
He said: “Either Europe acts
together and becomes a deeper union, a union capable of expressing a foreign
policy and a defence policy, aside from all the economic policies . . . or I am
afraid the European Union will not survive other than being a single market.”
He added: “It is almost sure we
are going to have a recession by the year-end. It is quite clear the first two
quarters of next year will show that.”
EU will be in recession by the end of the year, warns former ECB president (telegraph.co.uk)
UK Treasury's Griffith says recession is 'not where
the UK is' now
November
8, 2023
NEW YORK (Reuters) -Britain is not facing a recession at the moment, but there is more work to do to see its economy grow at a significantly higher rate and combat inflation, UK Treasury Economic Secretary Andrew Griffith said in New York on Wednesday.
Griffith told
the Reuters NEXT conference that Britain's biggest focus was to continue
driving down inflation and that clearly involved choices.
Asked whether
Britain was headed for a recession, Griffith said: "That's not where the
UK is. There's more work to do, don't get me wrong. The point is to grow at a
significantly higher rate than the UK has grown."
He said
Britain was one of the fastest growing Group of Seven (G7) economies in Europe,
calling that a "good start."
He said
Britain's objective was to halve inflation this year, and forecasts showed it
was on track to do that.
"We're
now in November, so we'll see how the next few weeks and months go," he
said
He said he was
concerned about the geopolitical challenges and human tragedy occurring in the
Middle East, and he said Britain was using its voice in the United Nations to
"look for containment and restraint."
Griffith's
underscored his government's commitment to a dynamic low-tax economy with
high-quality public services, but said the higher priority at the moment was to
reduce inflation, bolster growth and see debt falling over time.
More
UK Treasury's Griffith says recession is 'not where the UK is' now (msn.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
Today, why is the UK NHS deliberately misleading the UK public, if not actually lying to them? Approx. 13 minutes.
NHS
... information
Safe
and effective (Approx. 14 minutes.)
Oxford AstraZeneca Covid jab was ‘defective’, claims landmark legal case
November 8, 2023
The Oxford-AstraZeneca
Covid-19 vaccine has been branded “defective” in a multi-million pound landmark
legal action that will suggest claims over its efficacy were “vastly overstated”.
The pharmaceutical giant is
being sued in the High Court in a test case by Jamie Scott, a father-of-two who suffered a significant permanent brain injury that has left him unable to work as a result of a
blood clot after receiving the jab in April 2021. A second claim is being
brought by the widower and two young children of 35-year-old Alpa Tailor, who
died after having the jab made by AstraZeneca, the UK-based pharmaceutical
giant.
The test cases could
pave the way for as many as 80 damages claims worth an estimated £80 million
over a new condition known as Vaccine-induced Immune Thrombocytopenia and
Thrombosis (VITT) that was identified by specialists in the wake of the
AstraZeneca Covid-19 vaccine rollout.
Independent studies show the
AstraZeneca vaccine was incredibly effective in tackling the pandemic, saving
more than six million lives globally in the first year of the rollout. Last
year, the World Health Organisation said the vaccine was “safe and effective
for all individuals aged 18 and above” and that the adverse effect that has
prompted the legal action was “very rare”.
The vaccine, which was
heralded at its launch by Boris Johnson as a “triumph for British science”, is no longer used in the UK.
The Government recommends three other vaccines for its autumn booster
programme.
In the months following the rollout,
the potential serious side effect of the AstraZeneca jab was identified by
scientists. Following this, it was recommend it no longer be given to the
under-40s in the UK because the risk of receiving the jab outweighed the harm
posed by Covid.
AstraZeneca last night told the
Telegraph that patient safety was its “highest priority”, that its vaccine,
called Vaxzevria, had “continuously been shown to have an acceptable safety
profile”, and that regulators around the world “consistently state that the
benefits of vaccination outweigh the risks of extremely rare potential side
effects”.
---- Official figures
obtained under a Freedom of Information request show that out of 148 payouts
made by the Government under the Vaccine Damage Payment Scheme, which provides compensation to those injured by vaccines or to bereaved next-of-kin, at least 144
went to recipients of the AstraZeneca vaccine. Fewer than five people under the
scheme received vaccines other than AstraZeneca.
Families complain the amount
paid out under the scheme – a fixed tax-free sum of £120,000 – is insufficient,
prompting them to bring the legal cases in the High Court against AstraZeneca.
The claim is being brought by
Mr Scott under the Consumer Protection Act 1987 and argues that the AstraZeneca
vaccine was “defective” in that it was not as safe as individuals were entitled
to expect.
More
Oxford AstraZeneca Covid jab was ‘defective’, claims
landmark legal case (msn.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.
Bill Gates backs novel device promising wind energy
at 1/3 the cost
Loz Blain November 07, 2023
It looks
nothing like a typical "fan on a stick" wind turbine, but this oval
track with evenly spaced wing blades could be an enormously disruptive addition
to the renewable energy mix, since it slashes the cost of wind power to
unprecedented lows.
Wyoming's
Airloom Energy has come out of stealth mode with a new CEO fresh out of
Google[x], US$4 million in seed funding, led by Bill Gates's Breakthrough
Energy Ventures fund, and a radically different technical approach that it says
fundamentally upends the financial equation for wind farms.
Wind turbines are getting
absolutely enormous, with some new designs standing taller
than the Eiffel tower, as some of the
largest moving machines in history . And they'll continue getting bigger,
because the bigger they get, the greater the energy incentive becomes to make
the blades even longer.
But their sheer size
increases cost at every step; the materials, manufacturing, transport,
logistics, construction and maintenance budgets all take a severe hit when
you're dealing with long blades, tall tower structures, and massive generators
that have to live at the top of them and support the blades.
Airloom's approach
makes everything much smaller and much closer to the ground. A 2.5-MW Airloom
setup would use a number of 25-m (82-ft) poles to suspend an oval-shaped track,
into which a series of 10-m (33-ft) wing blades are set, joined by a cable.
Like sailboats,
which can harvest motion energy from wind in any direction except dead-ahead or
straight behind, these blades harvest wind energy as they travel around the
track, which is oriented such that its long sides are angled for maximum wind
capture and its short ends are spaces where the blades can change direction as
the rest of the blades haul them around.
Power takeoffs
harvest linear motion from the cable to run generators. Where a regular wind
turbine gets maximum torque from the tips of its blades and very little from
the bits closest to the hub, the full length of each of the Airloom system's
blades will contribute to hauling the whole loop around, with effectively a
short break twice per revolution as they turn around at the ends.
Thus, a 2.5-MW Airloom track
will fit on a single truck, it won't require enormous turbine tower cranes (or
indeed the remarkable climbing
cranes that are starting to pop
up), the parts can be built in relatively small factories, from non-specialist
materials, and every part of installing and maintaining them becomes easier,
cheaper and safer.
Compared with a regular
turbine, for example this 2.5-MW-rated GE unit –
a 100-m-diameter (328-ft) fan supported by a hub held 85 m (279 ft) high on a
tubular steel tower – Airloom says a wing track will be less than 10% of the
cost, at somewhere under US$225,000. Add in the land requirements and whatnot,
and a full wind farm setup promises to be less than 25% of the capital cost, at
less than $6 million for a 20-MW wind farm.
And at the brass-tacks level,
Airloom claims its design will bring the Levelized Cost of Energy (LCoE) of
wind energy down to about one third of what it costs today per kilowatt-hour,
somewhere around 1.3 cents per kilowatt hour – making one of the cheapest forms
of renewable energy much, much cheaper.
More
Bill Gates backs novel device promising wind energy at
1/3 the cost (newatlas.com)
Another weekend and “Remembrance
Weekend” in GB, originally held to remember the dead of WW1, “the war to end
all wars,” now unfortunately to remember many more wars.
In Gaza and the Ukraine, never ending
war goes on, no one seems to know how to stop either, though no one anywhere is
actually trying. Across much of the world’s great cities, thousands will turn
out to demonstrate against mainly the Gaza war. None will have any effect. Have a great weekend everyone.
"There is no means of avoiding the final
collapse of a boom brought about by credit expansion. The alternative is only
whether the crisis should come sooner as the result of voluntary abandonment of
further credit expansion, or later as a final and total catastrophe of the
currency system involved."
Ludwig
von Mises.
No comments:
Post a Comment