Baltic
Dry Index. 1902 -10 Brent Crude 83.09
Spot Gold 2405 US 2 Year Yield 4.49 +0.03
Don't expect to build up the weak by pulling down the strong.
Calvin Coolidge.
To no one’s great surprise, an increasingly fragile and confused President Biden dropped out of the 2024 Presidential race over the weekend. But did he leave it to late for the Democrats to have a realistic chance to win in the November elections?
In the stock casinos and commodity markets, uncertainty now rules. Generally, stock casinos and commodity markets don’t like, or react well to uncertainty.
Some will suggest, that one week of from a failed assassination attempt on Republican candidate for President, Donald Trump, Biden’s withdrawal is just a coincidence. Others will see a more sinister connection. I doubt we will ever know.
My guess is that a rapidly failing President Biden’s team feared a recession in late 2024-2025. One that an aged President Biden’s team didn’t want to face.
But, whatever the reason behind this long expected withdrawal, a new phase of the 21st century now gets underway.
History will likely remember President Biden for his American defeat in Afghanistan and his age.
Below, how the Asian stock casinos have reacted so far.
Asia stocks fall as Biden drops presidential bid;
China unexpectedly cuts interest rates
PUBLISHED SUN, JUL 21 2024 7:58 PM EDT
Asia-Pacific markets fell on Monday, as news emerged that U.S. President Joe Biden had dropped out of the presidential race and endorsed Vice President Kamala Harris as the Democratic nominee.
On Monday, China’s central bank unexpectedly cut rates, with the short term 7-day reverse repurchase rate lowered to 1.7% from 1.8%
The one-year and five-year loan prime rates were also trimmed by 10 basis points each to 3.35% and 3.85% respectively, surprising markets as economists were not expecting any change. The People’s Bank of China will also reduce collateral requirements for its medium-term lending facility from July. The current MLF rate stands at 2.5%.
A survey by Reuters last week showed that 64% of all respondents expected both the one-year and five-year LPR to stay unchanged.
The one-year LPR acts as the benchmark for most corporate loans, and the five-year LPR serves as a reference rate for mortgages.
Hong Kong’s Hang Seng index rose 0.8%
after the PBOC’s announcement, while the mainland Chinese CSI 300 lost 0.72%.
Investors will also assess the impact of the massive global IT outage late last week. Machines running Microsoft’s Windows operating system crashed Friday due to a glitch in an update issued by cybersecurity company CrowdStrike, causing its shares to plunge by 11%.
Microsoft said in a blog post on the weekend it estimated that 8.5 million Windows devices — or less than 1% of all Windows machines — were affected.
This week, investors will be looking out for GDP data from South Korea and the U.S., as well as factory activity data from around the region. South Korea and the the U.S will announce second-quarter advance GDP numbers on Thursday.
Other economic data this week include inflation numbers from the U.S. and Singapore on Friday and Tuesday, respectively.
The Taiwan Weighted Index led losses in the region, tumbling 2.7%, dragged by industrial and tech stocks.
Japan’s Nikkei 225 fell 1.11%, while the broad-based Topix was down 1%. This was the first time in three weeks that the Nikkei dipped below the 40,000 mark.
South Korea’s Kospi was 1.44% lower, while the small-cap Kosdaq saw a larger loss of 2.52%.
Australia’s S&P/ASX 200 dropped 0.66%.
On Wall Street, all three major indexes retreated on Friday and U.S. stock markets wrapped up the week defined by a rotation out of this year’s mega cap winners in favor of smaller names.
The S&P 500 dropped 0.71%,
while the tech heavy Nasdaq
Composite slid 0.81%. The Dow Jones Industrial Average fell
377.49 points, or 0.93%, to 40,287.53.
Asia stock markets: Biden drops out, China LPR (cnbc.com)
In other news.
Microsoft’s global sprawl comes under fire after
historic outage
July 21, 2024
A cascading computer outage that grounded planes, stymied hospitals and disrupted critical public services exposed the depth of the global economy’s dependence on a single company: Microsoft.
Regulators and lawmakers across the political spectrum raised alarm that the sprawling outage that knocked out Windows showcases the danger of so much power concentrating into one firm, which drives governments, businesses and critical infrastructure around the world.
The system failure ricocheted across the globe, as credit card systems went down in Australia, airlines in India handed out handwritten plane tickets, and courts in the United States delayed hearings, including one in the sex crimes case of Hollywood mogul Harvey Weinstein. And the impact reverberated across the giant’s many clients in the public sector, with the Social Security Administration closing its local offices through the weekend and the Federal Communications Commission reporting disruptions to the 911 call service that forced some local dispatchers to switch to analog phone systems.
The outages were traced to a defective update from the cybersecurity company CrowdStrike, which was shipped to Windows systems across the globe, triggering the mass outages. In a blog post Saturday, Microsoft estimated that the update affected 8.5 million devices, which amounts to less than 1 percent of computers running Windows.
But the episode is resurfacing concerns that Microsoft’s grip over global systems is opening up federal agencies and businesses to unnecessary risk — raising questions about whether the power of one of the world’s most sophisticated political operators should be curtailed.
“These incidents reveal how concentration can create fragile systems,” Federal Trade Commission Chair Lina Khan, a Democrat whose agency is looking into consolidation among cloud computing services, said in a Friday post on X.
“The impact of today’s outages was defined by the reach of CrowdStrike; not the reach of Microsoft,” said Microsoft spokeswoman Kate Frischmann.
Microsoft’s email, cloud storage and video conferencing products have long been workplace staples nationwide, including within the federal government, for which the company is a major supplier. But prominent security lapses, coupled with mounting regulatory concerns about the tech giant’s power in our economy, are testing the company’s oftentimes friendly relationships in Washington.
The pervasiveness of Microsoft’s software in government IT systems reentered the spotlight earlier this year, after major hacks exposed federal officials’ emails, prompting lawmakers on Capitol Hill to haul in the company’s president, Brad Smith, to testify. A scathing report by the federal government’s Cyber Safety Review Board found that a “cascade of avoidable errors” and a security culture “that requires an overhaul” contributed to the events.
CrowdStrike CEO George Kurtz said Friday that the outages were “not a security or cyber incident” and that the company was “working with all impacted customers to ensure that systems are back up and they can deliver the services their customers are counting on.”
Microsoft CEO Satya Nadella said in a statement Friday that the company is “working closely with CrowdStrike and across the industry to provide customers technical guidance and support to safely bring their systems back online.”
But the flare-up is already fueling calls for the federal government to diversify the pool of vendors that conduct its daily operations, serving as a potential boon to Microsoft’s competitors.
The outage “is the result of a software monopoly that has become a single point of failure for too much of the global economy,” said George Rakis, executive director of NextGen Competition, whose group advocates for more stringent antitrust enforcement. He accused Microsoft of squelching competition by locking in customers and called for it to be “broken up.”
Spence Purnell, director of technology policy at the Reason Foundation libertarian think tank, said that while government officials often “ironically” complain about tech monopolies, “they help prop up Microsoft’s hold on government contracting through vendor lock-in.”
The outages are also poised to deepen
scrutiny of the company’s dominance on Capitol Hill.
More
Microsoft’s global sprawl comes under fire after historic outage (msn.com)
The CrowdStrike fail and next global IT meltdown
already in the making
PUBLISHED SAT, JUL 20 2024 11:20 AM EDT
When computer screens went blue worldwide on Friday, flights were grounded, hotel check-ins became impossible, and freight deliveries were brought to a stand-still. Businesses resorted to paper and pen. And initial suspicions landed on some sort of cyberterrorist attack.
The reality, however, was much more mundane: a botched software update from the cybersecurity company CrowdStrike.
“In this case, it was a content update,” said Nick Hyatt, director of threat intelligence at security firm Blackpoint Cyber.
And because CrowdStrike has such a broad base of customers, it was the content update felt around the world.
“One mistake has had catastrophic results. This is a great example of how closely tied to IT our modern society is — from coffee shops to hospitals to airports, a mistake like this has massive ramifications,” Hyatt said.
In this case, the content update was tied to the CrowdStrike Falcon monitoring software. Falcon, Hyatt says, has deep connections to monitor for malware and other malicious behavior on endpoints, in this case, laptops, desktops, and servers. Falcon updates itself automatically to account for new threats.
“Buggy code was rolled out via the auto-update feature, and, well, here we are,” Hyatt said.
Auto-update capability is standard in many software applications, and isn’t unique to CrowdStrike. “It’s just that due to what CrowdStrike does, the fallout here is catastrophic,” Hyatt added.
Even though CrowdStrike quickly identified the problem, and many systems were back up and running within hours, the global cascade of damage isn’t easily reversed for organizations with complex systems.
“We think three to five days before things are resolved,” said Eric O’Neill, a former FBI counterterrorism and counterintelligence operative and cybersecurity expert. “This is a bunch of downtime for organizations.”
It did not help, O’Neill said, that the outage happened on a summer Friday with many offices empty, and IT to help to resolve the issue in short supply.
----The IT industry calls this a single-point failure — an error in one part of a system that creates a technical disaster across industries, functions, and interconnected communications networks; a massive domino effect.
----Ultimately, Friday’s meltdown wasn’t an indictment of Crowdstrike or Microsoft, but of how businesses view cybersecurity, said Javad Abed is an assistant professor of information systems at Johns Hopkins Carey Business School. “Business owners need to stop viewing cybersecurity services as merely a cost and instead as an essential investment in their company’s future,” Abed said.
Businesses should be doing this by building redundancy into their systems.
“A single point of failure shouldn’t be able to stop a business, and that is what happened,” Abed said. “You can’t rely on only one cybersecurity tool, cybersecurity 101,” Abed said.
While building redundancy into enterprise systems is costly, what happened Friday is more expensive.
“I hope this is a wake-up call, and I hope
it causes some changes in the mindsets of the business owners and organizations
to revise their cybersecurity strategies,” Abed said.
More
The CrowdStrike fail and next global IT meltdown already in the making (cnbc.com)
Ultra-rich entrepreneurs threaten to desert Britain
over tax
By Sinead Cruise July 19, 2024 3:06 PM GMT+1
LONDON, July 19 (Reuters) - For ultra-wealthy entrepreneur Bassim Haidar, living in London has become an expensive indulgence he can no longer justify.
While new British Prime Minister Keir Starmer settles into No. 10 Downing St, Haidar is searching for homes in Greece and Monaco, because a proposed inheritance tax revamp will make Britain a 'no go' zone for the rich, he says.
Starmer says the overhaul will make Britain's tax system fairer and raise funds for stretched public services.
While supportive of some reform, Haidar says the proposed changes could harm the economy if international business owners choose to quit Britain, or avoid moving here, undermining its reputation as an incubator for fledgling firms.
The recently ousted Conservative government outlined surprise plans in March to phase out Britain's centuries-old 'non dom' tax regime, which spares wealthy individuals from paying tax on income earned overseas.
But in the run-up to its July 4 election win, Starmer's left-leaning Labour party pledged, opens new tab to also scrap permanent reliefs 'non doms' born outside the UK could obtain if they put non-UK assets into a trust within 15 years of moving to Britain.
Now the dust has settled on Labour's
return to power, Haidar wants Starmer and finance minister Rachel Reeves to
rethink these plans, and to replace them with a new six-figure annual tax on
people with net worth in excess of 5 million pounds ($6.52 million).
More
Ultra-rich entrepreneurs threaten to desert Britain over tax | Reuters
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.
More
than 2,300 firms go bust as high interest rates and inflation take a toll
July 20, 2024
The toll on companies of high interest rates and inflation became clearer yesterday as official figures showed the third-highest number of corporate insolvencies in England and Wales since the 2009 financial crash last month.
A total of 2,361 company insolvencies were recorded last month, the Insolvency Service reported, up by 17 per cent on June 2023 and by 61.1 per cent in June 2019.
Compulsory liquidation numbers rose to their second-highest level since January 2021 – a sign that creditors are taking a much tougher stance this financial year. Construction, hospitality and retail continue to be among the hardest-hit sectors.
Scotland and Northern Ireland – which have different insolvency laws to England and Wales – reported a 4 per cent annual fall and 13 per cent annual rise in insolvencies respectively in June.
The high total partly reflects an increase in the overall number of companies. The percentage of companies declaring insolvency was slightly higher earlier in 2024 and is below rates in the years after the 2008/09 global financial crisis.
Another reason for the spike might be that many firms must pay rent on their properties in June.
John Cullen, insolvency partner at Menzies said: “Corporate insolvencies remain significantly higher than they were at the start of the year. This may well be due to the rent quarter day falling in June – if the company cannot afford to meet its property obligations it is a clear sign to directors that something is significantly wrong and filing for insolvency may be the next step.”
Lucy Trott, insolvency expert at Stevens & Bolton, said the figures demonstrate that high levels of company insolvencies have become the “new normal”. “It was widely anticipated we would see a vast “wave” of insolvencies in the immediate aftermath of the pandemic following the withdrawal of the government’s support measures.
“What we have seen instead is a steady stream of increased insolvencies, driven by high numbers of creditors’ voluntary liquidations, which reflects the tough trading conditions since the pandemic.
“Directors have decided to close businesses due to a number of factors rather than insolvencies resulting purely from creditor pressure.”
Tom Russell, of R3, the UK’s insolvency and restructuring trade body, said small businesses were bearing the brunt of the insolvencies as they face cash flow problems and have limited access to finance.
More
More than 2,300 firms go bust as high interest rates and inflation take a toll (msn.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
British public were
failed by flawed planning for COVID pandemic, inquiry finds
By Michael
Holden July 19, 202412:12 AM GMT+1
LONDON, July 18 (Reuters)
- Britain let down its citizens by leaving the nation ill-prepared for the
COVID-19 pandemic because of significantly flawed planning and failures by
ministers and scientific experts, a public inquiry concluded in a scathing report
on Thursday.
Britain recorded more
than 230,000 deaths by December 2023, a similar death rate to the United States
and Italy but higher than elsewhere in western Europe, while the nation's
finances are still suffering.
"There were serious
errors on the part of the state and serious flaws in our civil emergency
systems. This cannot be allowed to happen again."
She said Britain had been
"dangerously mistaken" in believing, as others across the world had
also thought, that it was one of the best prepared countries globally,
Her report found there
had been a "lack of adequate leadership" with "groupthink"
clouding expert advice. Ministers had not been given a broad enough range of
opinions, and then had failed to sufficiently challenge what they did receive.
A flawed 2011 strategy,
which had underpinned the nation's preparations for such an emergency, had
prepared for only one type of pandemic - influenza.
It was outdated, had
focused on dealing with the impact of an outbreak rather than trying to prevent
its spread, and had not taken into account the economic and social impact, the
report said. That strategy was virtually abandoned on its first encounter with
COVID.
"The Secretaries of
State for Health ... who adhered to the strategy, the experts and officials who
advised them to do so, and the governments of the devolved nations that adopted
it, all bear responsibility for failing to have these flaws examined and
rectified," the report said.
More
British public were failed by flawed planning for COVID pandemic, inquiry
finds | Reuters
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.
Britain to
create EV battery material to power faster charging and longer range
July
19, 2022
A new
generation of electric car batteries using materials made in Britain could
extend the number of miles vehicles can travel after one charge.
Integrals
Power, which is based in Milton Keynes, is vying to supply gigafactories with
a breakthrough
material that it says will make batteries more powerful and last longer.
This
week, the company opened the UK’s only factory capable of producing lithium
iron phosphate (LFP) cathode powder, where it plans to produce small amounts
before scaling up. The cathode is the material used for the positive electrode,
determining the voltage and capacity of a lithium-ion battery.
So-called
range anxiety is often named as one of the biggest factors preventing drivers
from switching from a car with a standard combustion engine to an electric
model. A lack of charging points across the UK means cars with greater battery
range enable drivers to make longer, cross-country, journeys.
Behnam
Hormozi, founder and chief executive of Integrals Power, said: “The cathode is
the most critical part of the cell because it determines the battery’s overall
performance, cost and durability.
“That’s
why our breakthroughs in cathode active material will enable electric vehicles
to achieve longer range, faster charging and higher performance from smaller,
lighter battery packs.
“We
also source our raw materials from Europe and the US, so we can help cell
suppliers and vehicle manufacturers to develop a more robust, transparent
supply chain that mitigates geopolitical issues.”
It
comes as Western governments are trying to reduce their chronic dependence on
China, where 90pc of battery cathode material and 100pc of LFP materials are
currently made.
Rishi
Sunak’s government previously set out plans to “onshore” some of this
production, partly via relief on electricity costs, amid fears Beijing could
threaten supplies during a geopolitical crisis.
The
company’s factory will initially produce 20 tons per year of cathode material,
before scaling up to 1,000 tons over the next two years after securing its
first orders, Mr Hormozi said.
However,
he said the modular production methods being used meant that it could in theory
scale up to 100,000 tons, depending on demand. A big chunk of that is likely to
come from Europe-based companies that will soon be forced to source at least
70pc of the materials for electric car batteries either in the UK or on the
Continent.
Under
the post-Brexit “rules of origin” regime, these requirements will come into
force in 2027.
More
Britain to create EV
battery material to power faster charging and longer range (msn.com)
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Restricted
immigration is not an offensive but purely a defensive action. It is not
adopted in criticism of others in the slightest degree, but solely for the
purpose of protecting ourselves. We cast no aspersions on any race or creed,
but we must remember that every object of our institutions of society and
government will fail unless America be kept American.
Calvin
Coolidge.
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