Baltic
Dry Index. 1901 +57 Brent Crude 88.83
Spot Gold 2383 US 2 Year Yield 4.98 +05
Inflation is probably the most important single factor in that vicious circle wherein one kind of government action makes more and more government control necessary. For this reason all those who wish to stop the drift toward increasing government control should concentrate their effort on monetary policy.
Friedrich August von Hayek.
As I write today’s LIR update, news of Israel’s retaliation against Iran’s Retaliation for Israel’s bombing of Iran’s consulate in Damascus on April Fool’s Day, is slowly coming in.
Even though early present details are imprecise, the stock casinos are taking the news poorly, while as expected crude oil and gold are rising.
Iran has already said it will retaliate to any Israeli retaliation, although whether they will probably depends on what Israel hit and how severely.
Not
unnoticed in the rest of the world is just how ineffective President Biden’s
Joe Biden’s global “leadership” has become. The prospect of another four years
of such global leadership, or four more years of the erratic, unpredictable Donald Trump, will weigh on the stock casinos
while fuelling oil and gold price rallies.
For
now though, we and the markets await more clarity over what just happened and
Iran’s possible response.
Asia markets tumble after Israel carries
out operation in Iran; oil and gold prices spike
UPDATED FRI, APR 19 2024 12:36 AM EDT
Taiwan’s Weighted Index led
losses in Asia on Friday, falling 3.44%, while Japan’s Nikkei dropped 3% before
paring losses, as most major markets in the region fell on the back of
escalating tensions in the Middle East.
Asian equities declined as a
person familiar with the matter told NBC News that Israel carried out an
operation in Iran. Stocks and risk assets tumbled, while safe havens rose.
Gold hit
an all-time high as the Japanese yen also
strengthened, while bitcoin plunged.
Oil
prices jumped more than 3% with global benchmark Brent crude futures
crossing $90 a barrel, before easing to just above $89. U.S.
stock futures dropped more than 1%, before also recovering
slightly.
Japan’s Nikkei 225 was
down 2.47%, paring earlier losses, while the broad based Topix fell 1.8%.
On Friday, Japan released its
March inflation data, with the headline inflation rate coming in at 2.7%, down
from the 2.8% seen in February.
The core inflation rate — which
strips out fresh food prices — stood at 2.6%, in line with expectations from
economists polled by Reuters.
South Korea’s Kospi was
1.76% lower after leading gains in Asia on Thursday, while the small-cap Kosdaq
slipped 1.59%.
In Australia, the S&P/ASX 200 fell
1.14%. Hong Kong’s Hang
Seng index was down 1.23%, while the mainland Chinese CSI 300
slipped 0.88%.
Overnight on Wall Street, all three major
indexes ended mixed, with the S&P 500 posting
five straight days of losses, its longest losing streak since last October. The
broad index lost 0.22%, while the Nasdaq Composite dropped
0.52%.
The Dow Jones Industrial Average added
0.06%, closing just above its flatline for 2024.
Asia markets: Japan
CPI, Iran explosions, Israel strikes (cnbc.com)
Stock futures drop 1% as Israel carries out
operation in Iran: Live updates
UPDATED FRI, APR 19 2024 11:04 PM EDT
Stock
futures plunged Thursday evening as conflict reignited between Israel and Iran.
A U.S. official told NBC News
that Israel is conducting an operation in Iran. Earlier, Iran’s Fars news
agency reported explosions were heard near the airport at the country’s central
Isfahan city, but the reason was unknown. Oil prices spiked more than 3% in
Asia morning trading, with global benchmark Brent crude futures
topping $90 a barrel.
Futures on the Dow Jones
Industrial Average slid
430 points, or 1.15%. S&P 500
futures lost
nearly 1.34%, and Nasdaq 100 futures were
down 1.62%.
Netflix shares
fell more than 4% in extended trading even after the
streamer reported quarterly earnings that beat on the top
and bottom line. Netflix’s subscribers jumped 16% from the previous year, but
it said it would no longer report paid memberships starting in 2025.
The S&P 500 is heading for
its worst week in almost six months. The S&P 500 has
fallen for five sessions in a row, bringing its week-to-date losses to 2.2%. It
would be the large-cap benchmark’s third straight negative week and its biggest
losing week since Oct. 27, 2023. The S&P 500 is now 4.8% off its 52-week
high.
The market pullback has been
largely driven by tempered expectations for a rate cut soon. Economists and
strategists now
see the Fed waiting until at least September to lower rates and
are increasingly entertaining the possibility of no reductions at all this
year.
Minneapolis Fed
President Neel Kashkari, who’s not voting on rate decisions this year,
told Fox
News Thursday that the central bank needs to be patient as long
as it takes before cutting rates and the first move may not take place until
2025.
“The stock market’s biggest worry
right now is inflation, which is re-accelerating and throwing cold water on the
idea of any rate cuts in 2024, let alone one or two,” said Michael
Landsberg, chief investment officer at Landsberg Bennett Private Wealth
Management.
The blue-chip Dow and
the tech-heavy Nasdaq Composite are
also poised for a losing week, falling 0.6% and 3.6% so far,
respectively.
More
Stock
market today: Live updates (cnbc.com)
Oil jumps 3%, spot gold
hits record high after Israel launches strike in Iran
Oil prices jumped more than 3% on Friday in Asia
after Israel launched strikes on Iran, triggering fears of an expanding war in
the Middle East.
A U.S. official
confirmed with NBC News that Israel is conducting an operation in Iran.
Global
benchmark Brent traded 3.63% higher at $90.27 a barrel, while
the U.S. West Texas Intermediate rose
3.66% to $85.76 per barrel.
Safe haven assets
also rose. Spot gold prices surged to a fresh all-time high of 2,411.09
per ounce, while the yen strengthened 0.45% to 153.93 against the
U.S. dollar.
Iran’s Fars news
agency reported that explosions were heard near the airport in the Iranian city
of Isfahan, and that flights to Tehran, Isfahan and Shiraz airports have been
suspended.
Flight tracking
site Flight Radar 24 showed that multiple flights were diverted over Iranian
airspace early Friday.
‘Shadow war’ is over
Israel on Sunday
vowed to “exact
a price” from Iran in response to the weekend’s large-scale
aerial assault on the Jewish state. A day earlier, Iran struck military targets
inside Israel, launching more than 300 missiles and drones in an unprecedented
attack on Israeli soil.
“With Israel’s apparent strikes on Iran today,
retaliating for Iran’s attack on Israel last Sunday, we now have a direct
nation-on-nation hot war,” said Rapidan Energy’s Director of Global Oil
Service, Clay Seigle.
“The ‘shadow war’
chapter has come to an end,” he added.
While Washington
has pledged an “ironclad” commitment to Israel, President
Joe Biden has also told Israeli Prime Minister Benjamin Netanyahu the
U.S. will not join any offensive operations against Iran, a senior
administration official told NBC News.
“The U.S. should
avoid further entrapment in Israel’s efforts to drag U.S. military forces into
a broader war with Iran,” said Sarah Leah Whitson, executive director of
Democracy for the Arab World Now, or Dawn.
Israel’s decision
to attack Iran in spite of pleas from its primary backers is a “clear indicator
of how irresponsible and unaccountable the Israeli government is,” she added.
Seigle maintained
that’s it’s still too early to determine what could happen next.
More
Oil
and gold prices jump after Israel launches strikes on Iran (cnbc.com)
Israel attacks Iran,
sources say, drones reported over Isfahan
By Humeyra Pamuk, Phil Stewart and Parisa Hafezi
April 19,
2024 5:42 AM GMT+1
WASHINGTON/DUBAI, April 19 (Reuters) - Israel has
attacked Iran, three people familiar with the matter said, as Iranian state
media reported early on Friday that its forces had destroyed drones, days after
Iran launched a retaliatory drone strike on Israel.
One source told Reuters the U.S. was not involved
but was notified by Israel before the attack.
Iran's Fars news agency reported three explosions
were heard near an army base in the central city of Isfahan. An Iranian
official told Reuters there was no missile attack and the explosions were the
result of the activation of Iran's air defense systems.
Iranian state TV said that
shortly after midnight "three drones were observed in the sky over
Isfahan. The air defense system became active and destroyed these drones in the
sky."
The broadcaster later said the situation in Isfahan was normal
and no ground explosions had occurred.
The Israeli military had no comment on the reports.
Israel had said it would retaliate against Iran's weekend
attack, which involved hundreds of drones and missiles, in response
to a suspected Israeli strike on its embassy compound in Syria. Most of the
Iranian drones and missiles were downed before reaching Israeli territory.
Analysts and observers have
raised concerns about the risks of the Israel-Gaza war spreading into
the rest of the region.
Iranian President Ebrahim Raisi had warned Israel before
Friday's strike that Tehran would deliver a "severe response" to any
attack on its territory.
Iran told the United Nations Security Council on Thursday that
Israel "must be compelled to stop any further military adventurism against
our interests" as the U.N. secretary-general warned that the Middle East
was in a "moment of maximum peril."
More
Israel attacks Iran, sources say, drones reported over Isfahan | Reuters
Finally, in normal news, another warning on
debt from the IMF. But no one is listening or cares.
IMF chief quotes Churchill as she
warns of global chaos
April 18, 2024
The head of
the International Monetary Fund has urged countries to cut debt and slash red
tape to revive growth as she warned the world was becoming more vulnerable to
economic shocks.
Kristalina
Georgieva invoked wartime prime minister Sir Winston Churchill as she urged
governments to prepare for the next global crisis.
“There is
plenty to worry about,” she told reporters at the IMF Spring Meetings in
Washington.
It came as
Megan Greene, a policymaker at the Bank of England, warned that Threadneedle
Street risks plunging the UK back into recession if it cuts interest rates too
soon.
Ms Greene, who
echoed comments earlier in the week by the IMF, said a “stop-start” approach to
setting interest rates “doesn’t tend to end well”.
The IMF said
“backpedaling” on rates would potentially be more damaging for financial
markets and the wider economy.
Ms Greene
added that interest rates in the UK were likely to remain at 5.25pc “for a
while”.
She said: “Do
I think it’s worse to do too much or too little [on interest rates]?
“I think doing
too little is the bigger risk because you end up having to hike rates even
higher and could end up triggering an even bigger recession.”
Ms Georgieva
urged countries to rebuild their rainy day funds and get debt down as she
warned that the medium term prospects for global growth were at their lowest in
decades.
She said: “In
a world where crises keep coming, countries must urgently build fiscal
resilience.”
She added: “In
a world of more frequent shocks, we know we will be tested again.”
Quoting
Churchill, she added: “This is no time for ease and comfort. It is time to dare
and endure.”
Churchill made
the comment in a speech in 1940 during the Second World War.
Ms Georgieva
warned that global debt levels were far higher than before the pandemic and
compared the trajectory of global growth to a “Swiss ski slope” with prospects
dimming every year.
More
IMF
chief quotes Churchill as she warns of global chaos (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.
There are 3 reasons the US hasn't seen a recession
yet, according to top economist David Rosenberg
April 17, 2024
The US has avoided a long-called-for recession for three reasons, but it doesn't mean a near-term downturn has been taken off the table, according to economist David Rosenberg.
"Well,
no asset class is priced for a recession — in fact, the corporate bond market
and the S&P 500 now have zero chance of an economic downturn being
discounted. Nothing is ever 0%, and nothing is ever 100%, but the current level
of complacency is definitely unsettling," Rosenberg said in a note on
Wednesday.
Taking a step back,
besides higher-than-expected inflation, unemployment is going down, particularly in the state
and local government sectors. Non-education employment is seeing the fastest
growth rate since the late 1970s, and construction expenditures are up by 17%
year over year.
Such a booming landscape
doesn't make Rosenberg drop his recession call, but he said there are three
reasons the US has been able to navigate the uncertainty so far.
First,
he highlighted the historically low levels of debt refinancing in 2020 and
2021, which have so far prevented the Fed's aggressive tightening measures from
being fully felt in the broader economy.
"This made the economy less
sensitive to the interest rate shift, to be sure, but that only bought time. In
the next three years, especially in the business sector, it is going to be time
to 'pay the piper' as an epic $7 trillion of corporate debt will be refinanced
and likely at much higher interest rates than at the time of origination,"
he said.
Second, Rosenberg said that the
government's spending via the Inflation Reduction Act and the CHIPS and Science
Act has propelled manufacturing facility construction by 32%, even while
industrial production has been stagnant.
"The bull market in economic
growth boils down to the heavy hand and generosity of Uncle Sam," he said
in the note.
The third factor supporting his
argument is the expansion of consumer spending, boosted by the "wealth
effect" of rising real estate prices. Rosenberg notes that personal
savings rates are now less than half the pre-pandemic norm as Americans keep
spending.
"The boom in real estate and equities has
pushed the level of household net worth up an incredible $11.6 trillion (+8%) over the past year, and this stash of wealth has encouraged consumers to spend
more and more out of current income. Highly reminiscent of what happened in the
late 1990s," he added.
Covid-19
Corner
This section will continue until it becomes unneeded.
COVID-19 Not Associated With Asthma Development in Children
April
17, 2024
Although respiratory viral infections early in life are known to
be a risk factor for asthma, new
research suggests that COVID-19 is not linked to asthma development in
children.
This
retrospective cohort study was published in American Academy of Pediatrics.1
“During the
early days of the pandemic, we could isolate the effects of COVID-19 from other
viruses and follow these patients long enough to observe the onset of asthma,”
said first study author James P. Senter, MD, MPH, an attending physician in the
Department of Pediatrics at Children’s Hospital of Philadelphia (CHOP), in a statement.2 “We were also testing so frequently that we
had a built-in control group to compare asthma symptoms and whether COVID-19
was a critical factor.”
In the wake of
the COVID-19 pandemic, many families worried about the long-term effects of
COVID and whether it might trigger an asthma diagnosis in their children.
Therefore, this study aimed to address these concerns by determining whether
COVID infection modified pediatric incident asthma risk.
The study
included children aged 1 to 16 years who received polymerase chain reaction
(PCR) testing for COVID-19 between March 1, 2020, and February 28, 2021. All
patients were considered unvaccinated during this exposure window.
Additionally,
all patients were required to have at least 1 ambulatory child visit in the
year preceding the PCR test and at least 1 CHOP Care Network (CCN) visit at any
time during an 18-month follow-up period after their first positive or last
negative PCR test. The 18-month follow-up began 30 days after the PCR test to
provide a reasonable separation between the exposure and outcome.
Sex, age, race,
and insurance status was included in the analysis for all patients.
A total of
27,423 patients were included in the study, with 3147 (11.5%) individuals in
the COVID-19–positive group and 24,276 (88.5%) individuals in the
COVID-19–negative group. Patients in the COVID-19–positive group tended to be
older (aged ≥ 12 years, 31.5% vs 22.7%), Black (24.9% vs 20.8%), Medicaid
insured (31% vs 25.6%), among lower childhood opportunity index quintiles (very
low, 23.4% vs 18.2%), and have a higher body mass index (19.3 vs 18.4) than
patients who were COVID-19–negative.
----However, the
researchers noted some limitations to the study. Since the study focused solely
on pediatric patients, more research is needed to confirm there is no
relationship between COVID-19 and the development of asthma. Additionally,
because the study’s exposure window preceded the evolution of several COVID-19
variants, it is possible these later COVID-19 strains may influence asthma risk
differently.
Despite these
limitations, the researchers believe that COVID-19 positivity does not confirm
an additional risk of asthma diagnosis within the first 18 months after PCR
testing.
More
COVID-19 Not Associated With Asthma Development in Children (ajmc.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.
There’s a graphene called ‘goldene’ and it could
enable gold semiconductors to make green hydrogen
April
17, 2024
Researchers in
Sweden have cracked the code to making goldene, which is just like graphene,
except it’s made from gold – and it has the potential to be a genuine
gamechanger in many, many ways.
With an announcement that’s kinda
flown under the radar this week, science people at Sweden’s Linköping
University are reporting that they have finally cracked a golden puzzle that’s
been stymying the lab coats for ages – and, in the process, turned humble
old golf into a potential semiconductor.
And all it
took was the application of a centuries-old technique, perfected by Japanese
blade makers to create their most eye-catching deadly weapons.
The importance
of this breakthrough is hard to understate, as it has the potential to open up
an entirely new use case for gold in applications such as hydrogen production,
carbon dioxide scrubbing, communication and much more.
Here’s how a
chance discovery and the combined work of Lars Hultman, professor of thin film
physics at Linköping, and Shun Kashiwaya, researcher at the university’s
Materials Design Division has led to a major breakthrough for semiconductor
tech.
“If you make a
material extremely thin, something extraordinary happens – as with graphene,”
explains Kashiwaya. “The same thing happens with gold.”
Graphene, as a
quick refresher, is an allotrope of carbon, made up of a single layer of atoms
arranged in a hexagonal lattice nanostructure.
It’s awesome
for stuff like electronics, energy storage, biomedical devices and a bunch of
other stuff that’s nowhere near as sexy as the ones I listed.
Oh – it’s also
super-important in the production of “green hydrogen”, using electrodes doped
with graphene to reduce the amount of power required to produce the gas, thanks
to its semiconductor properties.
“As you know,
gold is usually a metal, but if single-atom-layer thick, the gold can become a
semiconductor instead,” Kashiwaya says.
But getting
gold to behave properly as a single-atom thick coating has been beyond the
abilities of researchers, as Hultman explains, as gold – like other metals
– has a tendency to ‘clump’, rather than organise itself into nice, ultra-thin
sheets.
More
Finally,
our latest new section, the world global debt clock. Nations debts to GDP
compared.
World Debt
Clocks (usdebtclock.org)
Another weekend and what? A wider Middle East leading up to World War Three? Are we in the last few week's of global peace? Have a great weekend everyone. Enjoy peace while we still have it.
Liberty not only means that the individual has both the opportunity and the burden of choice; it also means that he must bear the consequences of his actions. Liberty and responsibility are inseparable.
Friedrich August von Hayek.
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