The Drift Into World War Three? Sanity Or Insanity?

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I use throughout the term 'liberal' in the original, nineteenth-century sense in which it is still current in Britain. In current American usage it often means very nearly the opposite of this. It has been part of the camouflage of leftish movements in this country, helped by muddleheadedness of many who really believe in liberty, that 'liberal' has come to mean the advocacy of almost every kind of government control.

Friedrich August von Hayek.

It’s really anyone’s guess as to how this week plays out. If some sanity prevails, Israel, Iran and the USA pull back from starting World War three. But there’s little sign of sanity anywhere on planet Earth.

In Israel a desperate man is fighting for his political life. Trashing Israel in the process.

In the USA, two elderly, desperate men are fighting for the spoils of the Presidency.

In Iran, the best that can be said is that at least Iran gave America an early warning of their counter attack and largely restricted it to their 50 kg warhead drones, that travel at about 120 miles an hour. A warning shot, largely token response rather than a declaration of war. The USA denies being tipped off, but President Biden’s Joe Biden’s actions and talk last week suggest they were tipped off.

But as in 1914, the drift into a major war may be unstoppable.  Probably a good week to keep the car fully filled up.

Asia-Pacific markets fall as Israel-Iran tensions spike; spotlight on oil, gold and bitcoin

UPDATED MON, APR 15 2024 10:11 PM EDT

Asia-Pacific markets slipped Monday as traders weighed the impact of Iran’s massive drone and missile attacks on Israel over the weekend, with focus also on key economic data from China and Japan later in the week.

Iran launched more than 300 drones and missiles against military targets in Israel on Saturday in an attack that President Joe Biden described as “unprecedented.”

The U.S. intervened to directly help Israel shoot down nearly all of the incoming munitions, Biden said in a statement Saturday.

Oil prices were little changed on Monday morning, with Brent crude futures trading 0.14% down at $90.32 per barrel and U.S. West Texas Intermediate futures were trading 0.32% lower at $85.39.

India will release its wholesale inflation figures for March later in the day, while China will announce its first quarter GDP numbers on Tuesday. Japan will release its March trade data and inflation numbers on Wednesday and Friday, respectively.

apan’s Nikkei 225 fell 1.278, while the broad-based Topix was down 0.76%.

South Korea’s Kospi slid 1.19%, while the small-cap Kosdaq dropped 1.55%.

In Australia, the S&P/ASX 200 saw a smaller loss compared to other Asian markets and fell 0.67%.

Hong Kong’s Hang Seng index was 1.5% lower, while mainland China’s CSI300 bucked the trend and gained nearly 1%.

U.S. stock futures ticked higher Sunday as investors assessed Iran’s missile and drone strike on Israel, as well as a spike in equity market volatility that sent the Dow Jones Industrial Average to its worst week of the year last week.

Futures tied to the Dow Jones Industrial Average rose 90 points, or 0.2%. S&P 500 futures added 0.2% and Nasdaq-100 futures advanced 0.3%.

Gold futures pulled back slightly at $2,373 an ounce. Bullion hit a record level last week and is up 15% this year as investors seek safety from sticky inflation and geopolitical tensions.

Asia markets live updates: Iran attacks Israel, oil price, China GDP (cnbc.com)

 

Dow futures rebound from worst week of 2024 even as traders brace for Israel response to Iran attack: Live updates

UPDATED MON, APR 15 2024 10:26 PM EDT

U.S. stock futures managed to tick higher Sunday as investors dealt with a multitude of issues, including Iran’s missile and drone strike on Israel and a spike in equity market volatility that sent the Dow Jones Industrial average to its worst week of the year last week.

Futures tied to the Dow Jones Industrial Average rose 78 points, or 0.2%. S&P 500 futures added 0.25% and Nasdaq-100 futures advanced 0.28%.

Gold futures pulled back slightly to trade at $2,360 an ounce. Bullion hit a record level last week and is up 15% this year as investors seek safety from sticky inflation and geopolitical tensions.

The Dow lost 476 points and the S&P 500 posted its worst day since January on Friday on lingering inflation concerns and a poor start to the first-quarter earnings reporting season. The losses caused the Dow to shed 2.4% last week for its worst week since March 2023 and its second down week in a row. The S&P 500 slid 1.5% for its worst week since October 2023. The Nasdaq Composite Index posted its third negative week in a row. 

Iran launched drones and missiles on Israel on Saturday night, marking the first direct attack on Israel from Iranian territory. While the majority of the threats were intercepted, concerns of retaliation remain. 

Oil prices, which have risen in the last few weeks prior to the attack on the rising Middle East tensions, were slightly lower Sunday.

“This remains a dangerous situation, but risks to oil and markets may be a bit less than feared Friday on the eve of the attack,” Krishna Guha, Evercore ISI senior managing director and head of the Global Policy and Central Bank Strategy Team, wrote in a Sunday note. 

Guha added that the a key question remaining is how Israel Prime Minister Benjamin Netanyahu will respond to the attack. The Biden administration has made it clear it does not want Israel to retaliate, noted Guha. 

“Provided that Netanyahu looks like he is willing to follow U.S. advice, there may be some element of a relief rally in markets Monday. However, our colleagues in the energy team do not expect a big retracement in the price of oil,” said Guha. 

More

Stock market today: Live updates (cnbc.com)

Below, the guess after Iran’s retaliatory hit on Israel, given in advance to the USA.

 

Wall Street Breakfast: The Week Ahead

Apr. 14, 2024 7:51 AM ET

Geopolitics will hold the focus of markets to start the week after Iran's attack on Israel. An Israeli military spokesman said the country is prepared to do "whatever is necessary" in its defense. Tehran said it would attack with greater force if there was retaliation.

Late Friday saw a flight to safety with money moving from equities to bonds and gold. Oil also gained on possibilities of production disruption in the Middle East.

The economic calendar will continue to garner attention following the recent spate of hotter-than-anticipated labor market and inflation indicators. Investors will be focusing on the March retail sales report scheduled for Monday and a reading on U.S. industrial production on Tuesday. Also on the docket will be housing starts and existing home sales data.

More

Wall Street Breakfast: The Week Ahead | Seeking Alpha

Below, the regular guess before Iran’s retaliatory strike back at Israel. Is this any way to be running the world in the 21^st century? Disaster for all, lies just one miscalculation away.

 

Wall St Week Ahead Surging US energy shares reflect robust growth, inflation worries

By Lewis Krauskopf  April 12, 2024 8:50 PM GMT+1

NEW YORK, April 12 (Reuters) - U.S. energy shares are soaring as investors benefit from rising oil prices and a stronger-than-expected economy, while seeking to protect their portfolios from a feared resurgence of inflation.

The S&P 500 energy sector (.SPNY), opens new tab is up about 17% in 2024, roughly doubling the broader index's (.SPX), opens new tab year-to-date return. Its gains have accelerated in recent weeks, making it the S&P 500's best performing sector in the past month.

One key driver is the price of oil: U.S. crude has risen 20% year-to-date due to an unexpectedly strong U.S. economy and worries over a broadening Middle East conflict.

Some investors also believe rising energy shares could hedge against U.S. inflation. Consumer price rises have proven more stubborn than expected this year, threatening to restrain the broader stock rally by undermining expectations for how much the Federal Reserve will cut rates in 2024.

"If inflation is going to pop up again ... the hedge is to have some commodities exposure," said Ayako Yoshioka, senior portfolio manager at Wealth Enhancement Group.

The portfolios she manages have been overweight in energy stocks, including those of oil majors Exxon Mobil (XOM.N), opens new tab and Chevron (CVX.N), opens new tab, as she noted more disciplined capital spending by energy companies.

Among the top energy sector performers so far this year were Marathon Petroleum (MPC.N), opens new tab, up 40%, and Valero Energy (VLO.N), opens new tab, up 33%.

Energy stocks have risen as a U.S. equities rally has broadened beyond the growth and technology companies that led gains last year. Investors' appetite for non-commodities-related sectors could take a hit, however, if inflation expectations keep rising and worries about a hawkish Fed grow.

Inflation fears have made markets more turbulent in recent weeks. Outside of equities, concerns over rising consumer prices have lifted gold, a popular inflation hedge, to record highs. Energy stocks were also thriving outside the U.S.

Shares of miners, steel firms and other commodity-linked companies have risen along with energy stocks.

More

Wall St Week Ahead Surging US energy shares reflect robust growth, inflation worries | Reuters

In other news, though it may not matter much if insanity prevails.

 

China's exports tumble 7.5% in March and imports also fall as demand slows

April 12, 2024

China’s exports contracted in March after growing in the first two months of the year, underscoring the uneven nature of the country's recovery from the pandemic.

Customs data released Friday show exports declined 7.5% in March from a year earlier, while imports slipped 1.9%. Both figures fell short of estimates.

In the January-February period, exports rose 7.1% year-on-year while imports climbed 3.5%.

China, the world’s second-largest economy, posted a trade surplus of $58.55 billion in March. The surplus in the first two months of the year was $125 billion.

The decline in exports partly reflected a higher base of comparison with March 2023, when exports jumped 14.8% as the economy reopened after languishing under strict COVID-19 controls.

The economy has slowed partly due to a crisis in the property industry brought on by a crackdown on excessive borrowing. Weakness in exports would be a further drag on growth.

“We think export volumes will rise more slowly this year, given that consumer spending in advanced economies is cooling and the tailwind from last years sharp drop in export prices is fading,” Zichun Huang, a China economist at Capital Economics, said in a note.

But she said imports would probably gain momentum as higher government spending boosts demand.

An official survey of factory purchasing managers in March showed manufacturing activity expanding for the first time in six months. The survey showed an expansion in new export orders for the first time in nearly a year.

China has set a target of around 5% for economic growth this year, an ambition that will require more policy support, economists say.

The latest data belie worries that China might ramp up its exports to help meet its growth target. Surging shipments of electric vehicles to Europe have raised alarm over whether Chinese-made EVs might crowd out those made by local manufacturers.

Exporters have been slashing prices to increase their sales abroad, but with losses mounting, the ability of manufacturers to cut prices is shrinking, Huang said.

China's exports tumble 7.5% in March and imports also fall as demand slows (msn.com)

I am so clever that sometimes I don't understand a single word of what I am saying.

Benjamin Netanyahu, with apologies to Oscar Wilde

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.

BlackRock’s Larry Fink sees Fed cutting rates twice this year but missing 2% inflation goal

PUBLISHED FRI, APR 12 2024 11:17 AM EDT

BlackRock CEO Larry Fink predicted Friday that the Federal Reserve likely will still cut interest rates this year but won’t meet its inflation target.

With markets on edge over the direction of monetary policy, the head of the world’s largest money manager said it’s unlikely the central bank will hit its 2% goal anytime soon. A report earlier this week showed inflation running at a 3.5% annual rate.

Still, Fink expects the Fed to do some reductions this year while it may have to concede that inflation will remain elevated.

“When everybody said we’re going to have six cuts earlier this year, from noted economists, I said maybe two,” Fink said during an interview on CNBC’s “Squawk on the Street.” “I’m still saying maybe two.”

Though that forecast was out of consensus in January and February, it’s consistent with the recalibrated market expectations since hot inflation readings became prevalent this year. Fed officials have expressed reluctance to start cutting until they see more convincing evidence that the pace of price increases is heading back to target.

But Fink said the central bank may have its sights set too high, or too low as the case might be for inflation.

“Inflation has moderated and we’ve always said inflation is going to moderate. But is it going to moderate to that terminal rate the Federal Reserve is looking for? I feel doubtful,” he said. “Do I believe that we could get a stable inflation between 2.8% and 3%? I’d call it a day and a win.”

Fink spoke the same day BlackRock reported quarterly earnings that topped Wall Street expectations both for profit and revenue. The company also said its assets under management hit a record of $10.5 trillion.

BlackRock's Larry Fink sees Fed cutting rates twice this year but missing 2% inflation goal (cnbc.com)

Risk of 1987-Style Meltdown Sparks Ruffer’s Record Cash Bet

Fri, April 12, 2024 at 12:22 PM GMT+1

(Bloomberg) -- Ruffer LLP, the £22 billion ($27.6 billion) UK-based asset manager, is making its biggest-ever bet on cash as shrinking US liquidity boosts the possibility of a violent market reversal.

Two-thirds of the money it oversees now sits in cash, a record allocation, according to fund manager Matt Smith. The income from that stash is being funneled into insurance policies in the form of credit default swaps and US stock options that will profit in the event of a big decline for Wall Street.

“It could be within the next three months, which is a time when Fed liquidity is going to be coming out,” said Smith. “This huge volatility-selling ecosystem could go reflexively in the other direction.”

Ruffer’s discretionary operation means it can lump all its money into one or two concentrated bets, rather than simply hugging industry benchmarks. While that included a successful wager on bitcoin in 2020, Ruffer will be keen to avoid a repeat of the more than 6% loss for its Total Return Fund in 2023 as global stocks soared and bond markets rallied.

Excessive optimism over US interest-rate cuts has left markets priced close to perfection, fueling Black Monday-style liquidity risks as the US central bank continues to wind down its bond-buying program, Smith said. Even as the latest hot US inflation print dims the outlook for US easing, Ruffer’s view is still among the most bearish in the market.

Black Monday refers to the sudden and severe stock market crash of Oct. 19 1987, which remains the worst daily percentage loss for the S&P 500 and Dow Jones Industrial Average on record. While its causes are debated, the lead-up to the plunge was characterized by a frothy bull market in risk assets, which Smith said he sees parallels to today.

Time for Caution

The time is right for the kind of caution that helped Ruffer return 16% to investors at the height of the global financial crisis in 2008, according to Smith.

“We have two investment objectives: One is capital preservation, and the second is to deliver a better return than cash, but it is a secondary objective,” he said in an interview. “We’re at a point in time where we think focusing on the former is the most important.”

To be sure, it’s a question of timing. The longer markets remain buoyant, the more Ruffer could miss out. The firm’s typical portfolio has produced an average return of 8.1% a year since inception, while Ruffer’s cash rate has averaged about 5% over its three-decade history.

Ruffer’s largest investments also include long-dated UK inflation-linked bonds and gold miners.

“We’ve had a regime change from a ceiling of 2% to a floor of 2% inflation,” Smith said. “That means structurally interest rates and inflation are headed higher.”

Risk of 1987-Style Meltdown Sparks Ruffer’s Record Cash Bet (yahoo.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

CDC Study Doesn’t ‘Debunk’ Link Between COVID-19 Vaccines and Sudden Deaths

Study falsely represented by reporters, while authors failed to note earlier findings.

4/13/2024 Updated: 4/13/2024

A new U.S. Centers for Disease Control and Prevention (CDC) study does not disprove a link between COVID-19 vaccines and sudden deaths among young people, contrary to claims.

The study, published by the CDC’s quasi-journal on April 11, analyzed death certificates from Oregon for people aged 16 to 30 who died between June 2021 and December 2022.

Among people who died with evidence of vaccination, three died within 100 days of a shot, Drs. Juventila Liko and Paul Cieslak with the Oregon Health Authority found.

None of those three deaths could be attributed to messenger RNA (mRNA) vaccination, or shots from Pfizer-BioNTech and Moderna, according to the doctors. Two of the deaths were attributed to underlying conditions while the cause of death for the third was “undetermined.”

“These data do not support an association between receipt of mRNA COVID-19 vaccine and sudden cardiac death among previously healthy young persons,” the doctors wrote.

The authors failed to note that a much larger, peer-reviewed study from South Korea confirmed vaccine-induced myocarditis caused eight sudden cardiac deaths (SCDs), all among people younger than 45. Myocarditis is a form of heart inflammation.

The new study “is at odds with a higher quality and peer-reviewed journal article published in the European Heart Journal,” Dr. David McCune, who was not involved with either paper, told The Epoch Times via email. “The study, from Korea, found a small but significant group of patients who had SCD and autopsy evidence consistent with vaccine-induced myocarditis.”

Multiple media outlets published stories on the new study, but none mentioned the South Korean article.

The stories also included false or misleading claims.

U.S. News and World Report’s story said that it was an “incorrect idea that COVID-19 vaccines are linked to death in young people.”

NBC’s article said that the study “debunks widespread misinformation that the mRNA shots were connected to sudden cardiac death in young athletes.”

NBC reporter Berkeley Lovelace Jr. also wrote that “there is no evidence that COVID vaccines cause fatal cardiac arrest or other deadly heart problems in teens and young adults, a CDC report finds.”

“I don’t think that is close to an accurate assessment of the CDC paper or the overall level of knowledge we have about vaccine risk,” Dr. McCune said.

The reporters who wrote the articles for U.S. News and World Report, NBC, The Hill, and Medpage Today did not respond to requests for comment.

Other papers that support a link between deaths among young people and COVID-19 vaccination include a study that analyzed post-vaccination deaths in Qatar and determined there was a “high probability” that eight sudden cardiac deaths, including one person aged 11 to 20, were caused by the vaccination. Some death certificates have also described COVID-19 vaccine-induced myocarditis as a cause of death for sudden deaths, including the certificate for an American college student who died suddenly after receiving a Pfizer shot.

More

CDC Study Doesn’t ‘Debunk’ Link Between COVID-19 Vaccines and Sudden Deaths | The Epoch Times

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.

Wafer-thin, stretchy and strong as steel: could ‘miracle’ material graphene finally transform our world?

Sat 13 Apr 2024 17.00 BST

The material, discovered in 2004, was meant to be revolutionary. But only now is the technology coming of age

Twenty years ago, ­scientists announced they had created a new miracle material that was going to transform our lives. They called it graphene.

Consisting of a single layer of carbon atoms arranged in a hexa­gonal pattern, it is one of the strongest materials ever made and, for good measure, it is a better conductor of electricity and heat than copper.

The prospects for revolutionising technology seemed endless and a new generation of ultra-fast processors and computers was predicted. Reports said it could allow batteries to charge five times faster, and make concrete 35% stronger.

It was even put forward as the solution to potholes; just mix it with traditional surfacing material and the curse of modern driving would be eradicated, it was claimed.

The Manchester University scientists who discovered it, Andre Geim and Konstantin Novoselov, were awarded the Nobel prize in physics in 2010 and a National Graphene Institute was established at the university.

But the hype over this miracle material has waned significantly. Graphene has yet to trigger an electronics revolution; potholes are still with us.

So what happened to the graphene revolution? Why has it not transformed our world? Sir Colin Humphreys, professor of materials science at Queen Mary University of London, has a straightforward answer: “Graphene is still a very promising material. The problem has been scaling up its production. That is why it has not made the impact that was predicted.”

----As a result, the graphene revolution was put on hold, although recently there have been encouraging signs that the technology may soon regain much of its original promise.

Humphreys believes the market could soon be re-energised thanks to breakthroughs in the manufacture of graphene-based devices. A key development in this drive has been made by Humphreys and his colleagues, who realised the technology used to make gallium nitride electronic components could be exploited to make graphene on a large scale.

“We used some of the first graphene we manufactured this way to make a sensor which can detect magnetic fields,” said Humphreys, who has since set up a spin-off company, Paragraf, with his team.

Based in the Cambridgeshire village of Somersham, it has now become one of the first companies in the world to mass-produce graphene-based devices. Two reactors – shaped like pizza ovens – are now producing enough graphene to make 150,000 devices a day.

These are being used by Paragraf in two ways: first, to make sensors that measure magnetic fields. These can be used to detect malfunctioning batteries in e-bikes and e-scooters, preventing fires.

More

Wafer-thin, stretchy and strong as steel: could ‘miracle’ material graphene finally transform our world? | Materials science | The Guardian

Finally, our latest new section, the world global debt clock. Nations debts to GDP compared.

World Debt Clocks (usdebtclock.org)

The world runs on individuals pursuing their self interests. The great achievements of civilization have not come from government bureaus. Einstein didn't construct his theory under order from a bureaucrat. Henry Ford didn't revolutionize the automobile industry that way.

Milton Friedman.