Baltic
Dry Index. 1852 +39 Brent Crude 78.80
Spot Gold 2369 US 2 Year Yield 4.72 -0.05
In
the run up to the UK General Election on July 4, the LIR will play its part.
When a man says he approves of something in principle, it means he hasn't the slightest intention of carrying it out in practice.
Otto von Bismarck.
Today we remember the brave men and women who 80 years ago this day invaded Normandy, relieving pressure on the Russian eastern front and began the end of the evil Hitler criminal German regime.
In the never-ending stock casinos bubble, it’s more Nvidia to infinity and beyond. What could possibly go wrong?
Well, pause for thought.
I think US bond yields are falling in anticipation of stagflation ahead, at best, a deep recession, at worst.
We open with a WSJ article suggesting/showing the US real estate sector going "Chinese", but at a time of rising non performing CRE and residential real estate loans. If the apartment boom is over, so is the boom for all the appliances, carpets, and all the other stuff that usually goes into new apartments. So is the apartment construction employment boom and all that went with it.
The FDIC says that unrealised losses on available for sale, held to maturity securities, increased by 39 billion in Q1 24 to 517 billion. The 9th consecutive quarter of increased losses. Over two years of increased losses.
Equally disturbing, delinquent CRE loans, 30 days or more late, tripled to 9.3 billion at the 6 biggest US banks last year, and now exceeds their reserves to cover them. I suspect regional and community bank to be in a similar position if not worse. Of course, all banks will be forced to add to coverage reserves over the summer, but that only adds to tightening credit.
In a wild US presidential election year, I would expect the Congress to panic, desperately trying to prevent voter anger on Guy Fawkes Day, November 5th.
The only "good" news is falling oil price, but it's only good, if it's not a sign of falling global demand for oil, itself signalling a possible global recession underway.
Developers Sit On Empty Lots After Historic Apartment Boom
Higher interest rates and flattening rents scuttle
projects
June 4, 2024 5:30 am ET
Subcription required.
Developers
Sit on Empty Lots After Historic Apartment Boom - WSJ
European
stocks set for higher open as markets anticipate first ECB rate cut since 2019
PUBLISHED THU, JUN 6 2024 12:20 AM EDT
European stocks are expected to open higher on
Thursday, with traders anticipating that the European Central Bank will cut
borrowing costs for the euro area for the first time since September 2019.
The U.K.’s FTSE index
is seen opening 27 points higher at 8,270, Germany’s DAX 75
points higher at 18,642, France’s CAC 40 up
28 points at 8,032 and Italy’s FTSE MIB 139
points higher at 34,711, according to data from IG.
Although the ECB is widely expected to cut
interest rates when policymakers meet, investors will be watching closely to
see whether a slightly higher-than-expected euro
zone inflation print released last Friday affects the central bank’s
decision-making.
In any case, the ECB meeting has
fired up markets elsewhere; Asia-Pacific
stocks rose overnight as investors awaited the central bank’s
rate cut, while softer U.S. labor market data on Wednesday fueled hopes that
the U.S. Federal Reserve might follow suit, boosting market sentiment.
U.S. stock futures were little changed in overnight trading after the S&P 500 notched a new record
closing high thanks to a rally in artificial intelligence
chip darling Nvidia.
European
markets: ECB interest rate decision watched closely (cnbc.com)
Nvidia passes
Apple in market cap as second-most valuable public U.S. company
Nvidia passed Apple in
market cap on Wednesday as
investors continue betting on the chipmaker behind the artificial intelligence boom.
It is now the second-most valuable public company, behind Microsoft.
Nvidia also hit a $3
trillion market cap milestone on Wednesday after shares rose
over 5%. At market close, Nvidia had a market value of $3.019 trillion, versus
Apple’s, which stood at $2.99 trillion. Microsoft is the most valuable publicly
traded company, with a market cap of $3.15 trillion, as of Wednesday.
Nvidia shares have risen more than
24% since the company reported
first-quarter earnings in May and have been on a tear since
last year. The company has an estimated 80% market share in AI chips for data
centers, which are attracting billions of dollars in spending from big cloud
vendors.
Investors are also becoming more
comfortable that Nvidia’s huge growth in sales to a handful of cloud companies
can persist. For the most recent quarter, revenue in its data center business,
which includes its GPU sales, rose 427% from a year earlier to $22.6 billion,
about 86% of the company’s overall sales.
Meanwhile, Apple shares are up only
about 5% this year, as the iPhone maker’s sales growth has stalled in recent
months. In its most recent quarterly earnings report, Apple said overall sales
dropped 4% and iPhone sales fell 10% from the year-ago period. Apple faces
strategic questions and issues about demand in China, manufacturing and mixed
reactions to its new virtual reality headset, Vision Pro.
Apple was the first company to
reach a $1 trillion and $2 trillion market cap. It long held the title of most
valuable U.S. company but was passed by Microsoft earlier this year.
Microsoft has also benefited from investor demand for AI infrastructure.
Nvidia has been more volatile as a
stock than Apple. Founded in 1991, the company was primarily targeting gaming,
selling hardware to play 3D computer games. More recently, it sold
cryptocurrency mining chips and cloud subscription services.
Nvidia shares have gone parabolic
as its AI business has developed, rising more than 3,290% over the past five
years. The company announced a 10-for-1
stock split in May.
Nvidia
passes Apple in market cap (cnbc.com)
Brace for a 10% slide in the S&P 500 as stagflation makes the Fed unlikely to cut rates, Stifel says
Tue, 4 June 2024 at 10:30 pm BST
The investment bank warned of
weakness in stocks stemming from a mixed bag of economic conditions that will
make the Federal Reserve unlikely to cut interest rates as investors are
hoping.
Markets are pricing in a 57%
chance the Fed could cut rates at least 50 basis points this year, according to
the CME FedWatch tool, but central bankers are unlikely to ease monetary
policy at all in 2024, Stifel predicted, as the economy looks on track to see a
"moderate case of stagflation."
That's a tough scenario for the stock market, with sluggish economic growth and stubborn inflation
leading to tepid returns for investors. GDP has already cooled from last
year, with the economy growing
just 1.3% over the first quarter. Inflation, meanwhile, came in hotter than expected for the first three months of the year.
High prices limit the Fed's
ability to cut rates in 2024, the bank said, adding that it sees no cuts this
year at all.
"The no-landing (albeit with
soft growth) scenario and increased resource utilization with
stickier-than-expectation inflation limits the Fed (a mild form of
stagflation)," the note added.
Stocks also don't look like
they're in a bull market by historical standards. When adjusted for inflation,
the overall S&P 500 remains below its level at the end of 2021 — something
that could be "emblematic of underlying problems" in the market,
Stifel said.
"We continue to forecast the
S&P 500 corrects about -10% to ~4,750 before the end of 3Q 2024 from the
recent peak," strategists said in a note on Tuesday. "To be a
'Secular Bull Market' the requirement for over 100 years has been that the
S&P 500 continues to make higher highs adjusted for
inflation. When the inflation-adjusted S&P 500 transitions out of a Secular
Bull Market it historically enters a 'Secular Bear Market,' which is a much
more treacherous period for investors."
Other market commentators have
warned of a rocky road ahead for stocks, despite the S&P 500's series of
record-highs this year. By some metrics, stocks look highly overvalued, some investing veterans have said, warning of a steep correction on the horizon.
In other news.
World's richest have never been
so wealthy: study
Wed, Jun 5, 2024, 5:04 AM GMT+1
The world has never
had so many rich people and their investments in soaring stock markets have
made them wealthier than ever recorded, according to a study published on
Wednesday.
The number of
"high net worth individuals" (HNWI) -- defined as people with liquid
assets of at least $1 million -- rose by 5.1 percent last year to 22.8 million,
according to consulting firm Capgemini.
Their total wealth
reached $86.8 trillion in 2023, a 4.7 percent increase from the previous year,
according to the annual World Wealth Report.
The number of HNWI
and their total wealth are the highest since Capgemini began the annual study
in 1997.
Their fortunes have
risen as stock markets have surged: New York's tech-heavy Nasdaq soared 43
percent in 2023 while the broad-based S&P 500 gained 24 percent.
The Paris CAC 40
grew 16 percent while the Frankfurt DAX advanced by 20 percent.
The number of HNWI
and their wealth had each fallen by more than three percent in 2022, a year of
macroeconomic uncertainty and geopolitical tensions, the report said.
The decline in
their wealth was the steepest in a decade as equities fell.
"However, 2023
brought economic growth and improved fortunes for major investment sectors to
reverse the falloff," the report said.
"Despite
ongoing interest rate uncertainty and rising bond yields, equities surged along
with the tech market, fueled by enthusiasm for generative AI and its potential
impact on the economy."
Rising wealth and
inequality in the world have fuelled debates on making the rich pay their fair
share of taxes.
More
World's
richest have never been so wealthy: study (yahoo.com)
Southern Germany saw once-in-a-century rainfall, initial
data shows
June 4, 2024
Several areas in southern Germany
have experienced levels of rainfall in recent days that typically only occur
once every 50 to 100 years, preliminary data from the German Meteorological
Service (DWD) suggests.
Heavy rains and severe flooding in
Germany's two southernmost states have caused massive disruption for days, with
tens of thousands of emergency service members in constant action since Friday
evening.
Thousands of people were evacuated
over the past few days, and more were set to leave their homes as southern
Germany was pounded by severe rainfall causing rivers to swell.
At least four people have died in the
floods and at least one firefighter is still missing.
DWD meteorologist Thomas
Deutschländer said that the rainfall could be described as a once-in-a-century
event, "certainly unusual, but not completely extraordinary."
"It's all a bit provisional, we
still have to check the data," Deutschländer said, adding that sometimes
stations failed or the measurements were too low.
A total of about 20 to 30 measuring
stations in southern Germany showed extremely high water levels. Some extreme
values are related to precipitation on one day, while others are related to precipitation
over three consecutive days, Deutschländer explained.
Southern Germany saw once-in-a-century rainfall,
initial data shows (msn.com)
Finally, some good follow up news. At least
they won’t ever suffer a Charge of the Light Brigade fiasco.
Army issues update on horses that ran loose in London ahead of King's event
June 4, 2924
Horses
seen running bloodied through the streets of London are
making “remarkable progress”, with three set to take part in the King's Birthday Parade later this month.
The
capital was shocked when the animals were seen running loose after rubble fell
close to where the Life Guards of the Household Cavalry Mounted Regiment (HCMR)
were on their daily morning exercises on April 24. Cavalry Black Trojan and
Cavalry Grey Vida were seen stampeding through the capital’s streets in images
broadcast worldwide. The animals were quickly caught and taken to vets for
checks.
In an update this afternoon, the British Army revealed Vida, Quaker, Trojan, Tennyson, and Vanquish were continuing to make great progress - as are the injured soldiers. Lieutenant Colonel Mathew Woodward, Commanding Officer HCMR, said: "All five of the horses injured during the incident on 24th April are recovering with remarkable speed and it is very likely Trojan, Tennyson, and Vanquish will participate in the King's Birthday Parade later this month.
“The remaining
two, Vida and Quaker, are enjoying a summer holiday in the Chilterns thanks to
The Horse Trust. They are expected to make a full recovery and we look forward
to seeing them back on duty in due course.
“Of the two
most seriously injured soldiers, one is continuing his recovery at home and the
other at the Defence Medical Rehabilitation Centre, Stanford Hall. They are
both considered likely to return to military service in the fullness of time.”
Three of the injured soldiers are back on duty and two are continuing to convalesce but are also expected to make a full return to service. In a statement, the Army and The Horse Trust said they were “overwhelmed” by the amount of public care and interest in the recovery of the soldiers and horses affected by the incident on 24th April.
It added: “On the same day Trojan, Tennyson, and Vanquish
left the Chilterns to return to Hyde Park Barracks, Vida and Quaker – the two
most severely injured horses – were pronounced fit to travel and arrived at The
Horse Trust for their respite care, having been discharged from veterinary care
in London.”
More
Army issues update on horses that ran loose in London ahead of King's event (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.
Interest rate cuts edge closer after ‘very
encouraging’ inflation news
WEDNESDAY 05 JUNE 2024 10:08
AM
The Bank of England
received encouraging news on the persistence of inflation today after a closely
watched business survey showed cost pressures were decisively easing.
S&P’s closely
watched purchasing managers’ index (PMI) showed that the rate of input cost
inflation faced by UK services companies increased at its slowest pace since
February 2021.
This also fed through into weaker output price inflation, which eased to its weakest level in over three years. Inflation in the services sector, which is still hanging around six per cent, is a major concern for the Bank of England.
April’s inflation figures, released last month,
showed services inflation coming in well above expectations, raising concerns
about the persistence of inflation.
Following today’s
release, Rob Wood, chief UK economist at
Pantheon Macroeconomics, said April’s worryingly high inflation figures were a
“flash in the pan”.
Joe Hayes, principal
economist at S&P Global Market Intelligence, said the survey was “very
encouraging to the Monetary Policy Committee and suggests the trajectory of
services prices is moving in the right direction.”
However, Hayes still
warned that services inflation was well above its pre-pandemic trend, “which
may give more weight to those suggesting the Bank of England hold out until
August to loosen policy.”
More
Interest rate cuts edge closer after 'very
encouraging' inflation news (cityam.com)
Chick-fil-A nuggets and Chipotle burrito cost thanks to inflation
June 4, 2024
Talk about super-sized prices!
Americans heading for a quick bite,
or a guilty pleasure, are seeing sticker shock when they visit their favorite
fast-food joint thanks to inflation. Many restaurants, such as McDonalds,
Chipotle and others, have raised prices in recent years because of rising
costs. Overall, the cost of eating out is up about 22 per cent in the last
year, according to federal data, and fast food has not been immune.
Fast-food prices also
outpaced inflation, rising 41 per cent since 2017. The consumer price index has
risen by 35.9 per cent during the same period.
“It’s so
upsetting because it goes against what we are expecting and what we have grown
to love about fast food,” Kimberly Palmer, a personal finance expert at Nerd
Wallet, told USA Today.
Recently, the president of
McDonald’s USA Joe Erlinger told customers that the average menu price at its
franchises is up 40 per cent since 2019, not the 100 per cent jump some have
claimed to see.
“Americans across the country
are making tough calls about where to spend their hard-earned money,” Erlinger
said. “And while we’ve been working hard to make sure our fans have great
reasons to visit us, it’s clear that we — together with our franchisees — must
remain laser-focused on value and affordability.”
Chiplote
officials this year said customers haven’t been scared by its 7 per cent rise
in prices, as sales have increased by the same amount, according to Quartz.
Here is a look at how much some fast-food menus
have increased their prices in recent years:
McDonald’s
In 2019, a Big Mac at
McDonald’s cost $3.99. According to McDonald’s, the average price of a Big Mac
now is $5.29, though franchise owners have the autonomy to set prices based on
their location, which resulted in one store offering an $18 Big Mac.
To help combat rising prices
at McDonald’s the chain announced plans to offer a $5 value meal to help consumers.
More
Covid-19 Corner
This section will continue until it becomes unneeded.
COVID-19 pandemic: ‘Our World in
Data’ estimates of January 2020 to December 2022
Introduction
Excess
mortality is internationally recognised as an accurate measure for monitoring
and comparing health crisis policies across geographic regions.1–4 Excess
mortality concerns the number of deaths from all causes during a humanitarian
emergency, such as the COVID-19 pandemic, above the expected number of deaths
under normal circumstances.5–7 Since the
outbreak of the COVID-19 pandemic, excess mortality thus includes not only
deaths from SARS-CoV-2 infection but also deaths related to the indirect
effects of the health strategies to address the virus spread and infection.1–4
The burden of
the COVID-19 pandemic on disease and death has been investigated from its
beginning. Numerous studies expressed that SARS-CoV-2 infection was likely a
leading cause of death among older patients with pre-existing comorbidities and
obesity in the early phase of the pandemic, that various containment measures
were effective in reducing viral transmission and that COVID-19 vaccines
prevented severe disease, especially among the elderly population.1 8–14
Although
COVID-19 containment measures and COVID-19 vaccines were thus implemented to
protect citizens from suffering morbidity and mortality by the COVID-19 virus,
they may have detrimental effects that cause inferior outcomes as well.1 2 15 It is
noteworthy that excess mortality during a crisis points to a more extensive
underlying burden of disease, disablement and human suffering.16
----In
conclusion, excess mortality has remained high in the Western World for three
consecutive years, despite the implementation of COVID-19 containment measures
and COVID-19 vaccines.
This is
unprecedented and raises serious concerns. During the pandemic, it was
emphasised by politicians and the media on a daily basis that every COVID-19
death mattered and every life deserved protection through containment measures
and COVID-19 vaccines. In the aftermath of the pandemic, the same morale should
apply.
Every death
needs to be acknowledged and accounted for, irrespective of its origin.
Transparency towards potential lethal drivers is warranted. Cause-specific
mortality data therefore need to be made available to allow more detailed,
direct and robust analyses to determine the underlying contributors. Postmortem
examinations need to be facilitated to allot the exact reason for death.
Government
leaders and policymakers need to thoroughly investigate underlying causes of
persistent excess mortality and evaluate their health crisis policies.
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.
Designer
Joe Doucet is launching a wind turbine wall made of helixes spinning in unison.
March
18, 2024
In
late 2021, designer Joe Doucet unveiled a concept for an extraordinary wind turbine that looked nothing like the
typical turbine dotting our landscapes. Instead of a monumental dandelion, it
was shaped like a sculptural wall that could harness wind power. Now, that
concept has become a reality with the launch of a company named Airiva.
Airiva is the culmination of two and
half years of research, design iterating, engineering, and wind tunnel testing.
At its core, it consists of eight vertical wind turbines set within a frame
that is about twice the size of an average person. Each turbine is shaped like
a helix, and together with the other turbines spinning in sync, the system
looks a bit like a curtain rippling in the wind.
The new version looks quite different from the
original concept, which resembled a kinetic mosaic made up of small, spinning,
square panes. While the old version was less obvious in its intent, the new
version is unmistakably a wind turbine, which arguably loses some of the magic.
But an intriguing concept can’t always be made into
a viable solution, and the goal of Airiva is to offer a product that is viable,
modular, and beautiful. Jeff Stone, who joined as co-founder and CEO in early
2022, recalls Doucet repeating a line over and over again throughout the
process: “If it’s not beautiful, we have failed.”
A pretty wind turbine is just a sculpture if it
isn’t efficient. To find the perfect balance between beauty and efficiency, the
team experimented with 16 blade configurations before narrowing their selection
to four, and testing those in a facility outside of Seattle. Of those four, two
designs prevailed, and were further tested in a wind tunnel at the University
of Washington and a larger wind tunnel on the East Coast. Of those two, the
helical version came out on top.
Helical wind turbines aren’t new to the market, but
Airiva is more than the sum of its parts. As Doucet explains, the team spent a
long time calculating the right distance between each helix to get a net
benefit from all turbines operating contiguously. When arranged in a precise
configuration, one unit (one frame with eight helical turbines) can produce
about 2200 kilowatt hours per year.
For reference, the average onshore wind turbine can
produce over 6 million kilowatt hours of electricity every year, but Airiva
isn’t trying to compete with utility-scale wind power. They’re competing with
distributed wind power, whereby electricity from wind turbines is generated
close to where the energy is consumed, like residential, commercial,
agricultural, or industrial sites.
More
This new wind turbine is efficient and beautiful
(fastcompany.com)
Next, our
latest new section, the world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Since a politician never believes what he says, he is quite surprised to be taken at his word.
Charles de Gaulle.
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