Baltic
Dry Index. 1670 -13 Brent
Crude 79.66
Spot
Gold 2431 U S 2 Year Yield 4.05 +0.01
The trouble with our Liberal friends is not that they're
ignorant; it's just that they know so much that isn't so.
Ronald Reagan.
In
the stock casinos, extreme instability at the top. But very few make money in
unstable stock markets while more and more money exits the stock casinos for
the safety of US and other treasury markets.
Besides,
if the Fed and other central banks are on the cusp of cutting interest rates, safe
treasuries will soar in value. Who needs to be gambling in unstable toppy
stocks?
And
if a new US recession is just getting underway, most stocks sell off in
recessions, very few rise on a consumer pull back that now seems to be
gathering pace.
Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.
Warren Buffett.
Stocks
close higher, clawing back much of the week's losses in major recovery from
Monday's sell-off: Live updates
Updated
Fri, Aug 9 20244:42 PM EDT
Stocks
ticked up Friday as the stock market built on its incredible comeback from
Monday’s violent rout. The broad market index ended the week just shy of
completely reversing its weekly losses.
The S&P 500 advanced 0.47% to
finish at 5,344.16. The Nasdaq
Composite added 0.51% to close at 16,745.30. The Dow Jones Industrial Average inched
up 51 points, or 0.13%, to end at 39,497.54.
Week
to date, the broad market index was just 0.04% lower. During Friday’s session,
it had managed to briefly turn positive for the week before losing some of its
gains. Meanwhile, the blue-chip Dow and tech-heavy Nasdaq were down on the week
by 0.6% and 0.18%, respectively.
This
week marked the most volatile week of 2024 for the market. The Dow on Monday
tumbled 1,000 points, while the S&P 500 lost 3% for its worst day since
2022. Disappointing U.S. payrolls data from the prior week and concerns the
Federal Reserve was too late with rate cuts were the main culprits for the
selling, along with the unwinding of a popular currency trade by hedge funds.
However,
the major averages mounted a comeback, with Thursday’s encouraging weekly
jobless claims number helping alleviate investors’ concerns about the
U.S. economy. The S&P 500 advanced 2.3% on Thursday for its best
day since November 2022, while the 30-stock Dow surged roughly 683
points. The tech-heavy Nasdaq Composite added nearly 2.9%.
At
the Monday lows, the S&P 500 was down nearly 10% from its recent all-time
high. The Nasdaq Composite’s pullback reached full-fledged correction territory
of beyond 10%. The Cboe
Volatility Index — used by Wall Street to measure fear — reached
heights last seen during the onset of the Covid-19 pandemic and the Great
Financial Crisis.
But
investors stepped in to buy the dip on the notion another crisis or recession
was not on the horizon. The week’s earlier losses were tied more to hedge funds
unwinding a long-time bet on a cheap Japanese yen rather than fundamental
threats to the economy.
It
is not just equity markets that have had a volatile week. The 10-year Treasury
yield fell below 3.70% at one point, only to retake 4% on Thursday. It
traded around 3.94% on Friday.
Volatile
trading activity is on par for the late summer, when there is not much
information flow and earnings season starts to unwind, and is not indicative of
a worsening economy, said Infrastructure Capital Advisors CEO Jay Hatfield.
Much of the sell-offs in the market stemmed from a “hedge fund theme” rather
than longer-term investors, according to Hatfield.
Stock
market today: Live updates (cnbc.com)
European
stocks close volatile week higher as global markets rebuild
Published
Fri, Aug 9 2024 2:12 AM EDT
LONDON
— European stocks closed higher on Friday as global equity markets looked to
rebuild from the recent sell-off.
The
pan-European Stoxx 600 gained
0.57%, taking the index to 499.18 — above its level a week ago,
before a sharp downturn on Monday.
Technology
stocks were 0.22% lower as healthcare rose 1.77%.
Global
markets have been volatile this week as they have tried to shake off Monday’s
rout.
U.S.
stocks were initially lower Friday but climbed through the morning.
The S&P 500 on
Thursday saw
its best session since November 2022 as fresh
labor market data eased concerns about the state of the world’s
largest economy. The initial sell-off was in part triggered by separate U.S.
jobs data last week coming in weaker than expected.
Both
moves have led analysts to caution that markets may have outsize reactions to
data releases and central bank commentary through August — typically a volatile
month for stocks.
Asia-Pacific
markets were mostly higher on Friday.
European markets: stocks, news, data and earnings (cnbc.com)
Investor
Behind Record $2.7 Billion Bond Bet Says Recession Near
August
8, 2024 at 4:13 PM GMT+1 Updated on August 8, 2024 at 7:48 PM GMT+1
Back
in June, a mystery investor made a
record wager on
long-dated Treasuries, creating waves in the ETF market where trading pros seek
clues about sentiment on Wall Street. Now the firm behind that bet has revealed
itself, and says its recession call is finally coming to fruition.
On
Tuesday, Northwestern Mutual Wealth Management’s Brent Schutte said
it was his company that poured $2.7 billion into BlackRock’s 20+ Year Treasury
Bond exchange-traded fund (ticker TLT) on June 24, an
unprecedented inflow for the largest long-bond ETF, which debuted in 2002.
Schutte,
the roughly $300 billion money manager’s chief investment officer, said the
plan is to hold the position across retail portfolios for at least a year, on
the view that a cooling labor market will spark a recession.
His
projection comes as a Treasuries rally in recent weeks vindicates his June
move. Discouraging economic
data and
global turbulence fueled the bond gains – which have pared somewhat the past
few days. The tumult, however, has cemented the view that the Federal Reserve
will start lowering borrowing costs next month.
“It’s
taking longer to get to a recession because of all the excesses that were
pumped in the economy — the liquidity, the excess savings, the lower
interest-rate environment that had allowed corporations and consumers to
refinance,” Schutte said. “You’re starting to see those things wear off.”
The
job market, he added, “is usually the last thing to break.”
Schutte
pointed to a raft of economic figures that he says back up his case, including
the rising US unemployment rate. Meanwhile, JPMorgan Chase & Co. says it
now sees a 35% chance that the US economy tips into a recession this year, up
from 25% at of the start of last month.
“We
are going to find out in the next 3-6 months on whether or not we have one, and
the reality is we may already be in one,” Schutte said about the timing of a
possible recession.
The
$58 billion TLT fund has gained about 1% since June 24, after paring its
advance the past few days as a relative sense of calm returned to markets. It
sank Thursday as fresh
labor-market data alleviated
some worries about the economy.
Schutte
said the ETF is performing as expected, and the risk-reward set-up was
attractive for owning exposure to duration, a measure of bonds’ sensitivity to
interest-rate movements.
At
the time of the TLT trade, the 10-year Treasury yielded roughly 4.2%, and it
has since dropped to around 4%. By his calculation, if rates had risen 100
basis points from that June level in the roughly 12-month holding period he
anticipates, he would have lost about 2%, but if they dropped 100 basis points,
he’d reap around a 12% total return in that timespan.
More
Northwestern
Mutual Wealth Made $2.7 Billion June TLT Purchase on Recession Bet - Bloomberg
Credit
Card and Auto Loan Rates Drop for the First Time in Years
Total
outstanding US consumer debt stood at $5.08 trillion for the first quarter of
2024, increasing at an annualized rate of 2.46% (seasonally adjusted),
according to the Federal Reserve’s
G.19 Consumer Credit Report. From the second quarter of 2023 to the second
quarter of 2024, the total increased by 1.84%. This year-over-year (YoY) growth
rate is the lowest observed since the first quarter of 2021.
Of
the total outstanding US debt in the first quarter of 2024, the nonrevolving
share is 74%, with revolving at 26%. Nonrevolving debt (primarily student and
auto loans) stands at $3.73 trillion (SA) for the second quarter of 2024.
Revolving debt (mainly credit card debt) stands at $1.34 trillion.
The
pace of growth has slowed for both nonrevolving and revolving debt as
households’ pandemic-era savings have dwindled. In terms of YoY growth, both
nonrevolving and revolving debt peaked in the fourth quarter of 2022 at 15.10%
and 5.34% respectively. In the second quarter of 2024, the YoY growth rate for
nonrevolving debt decreased to 6.12%, from 7.99% in the first quarter, while
the growth rate for revolving debt increased from 0.14% to 0.39%. This was the
sixth consecutive quarterly decline in YoY growth for nonrevolving debt while
revolving debt saw its first uptick in the YoY rate in five quarters.
Breaking
down the components of nonrevolving debt, student loans account for 47%, and
auto loans make up 42% (the G.19 report excludes real estate loans).
Collectively, the other loans make up the remaining 11% of nonrevolving debt.
Student
loans in the second quarter of 2024 totaled $1.74 trillion (non-seasonally
adjusted), marking the fourth consecutive decrease in the YoY rate at -0.96%,
following an annual decrease of -1.22% in the previous quarter. The third
quarter of 2023 marked the first YoY decrease for student loan debt since the
data was first reported.
Auto
loan debt for the second quarter of 2024 was $1.57 trillion (NSA). Auto loan
YoY growth has steadily decelerated over the past six quarters. The fourth
quarter of 2021 saw a high of 13.74% YoY growth compared to the second quarter
of 2024 YoY growth rate of 1.95%. This slowdown partially reflects the
relatively high interest rate on auto loans, which have increased from 4.52% in
Q1 2022 to 8.20% in Q2 2024 (60-month new car loans). However, this car loan
rate experienced its first (albeit slight) decline in over two years, falling
from 8.22% in the previous quarter.
The
interest rate on credit cards saw its first decrease since the fourth quarter
of 2021. The interest rate for the second quarter of 2024 was 21.51%,
falling from 21.59% in the previous quarter. Before this quarter, the rate
experienced nine consecutive quarterly increases, with a dramatic increase of
2.8 percentage points from Q3 2022 to Q4 2022. This aligns closely with the
Federal Funds Effective Rate increasing 1.47 percentage points during the same
period, the highest
increase since the 1980s.
Credit
Card and Auto Loan Rates Drop for the First Time in Years (eyeonhousing.org)
Market
chaos to continue
Friday
August 9 2024
The turmoil in global
markets could last for months, a Wall Street bank has warned, amid
efforts to close so-called “carry trades” which have been
heavily squeezed.
Analysts at Bank of New York Mellon (BNY) said major investors
face further pain as the Japanese yen will
likely strengthen further.
Stocks have faced huge volatility this week amid fears of a recession in
the US and a squeeze on major investors grappling with the
recent surge in the yen.
The currency has risen after the Bank of Japan unexpectedly increased
interest rates for only the second time in 17 years last week.
This squeezed margins on carry trades invested in the yen and
forced investors like hedge funds to dump stocks in a race to meet their risk
requirements.
Prepare for more
market chaos, says Wall Street Bank (telegraph.co.uk)
When BNY opines, I take notice if only because BNY should know better than most. BNY clears and settles tri-party and general collateral repo transactions in SOFR, the Feds Secured Overnight Financing Rate.
Global Inflation/Stagflation/Recession
Watch.
Given our Magic Money
Tree central banksters and our spendthrift politicians, inflation/recession now needs an entire
section of its own.
Analysis-Investors expect market selloff
will slow, stretch and spread
8 August, 2024
NEW
YORK/SINGAPORE (Reuters) - This week's huge selloff in global markets,
triggered by an unwinding of yen-funded trades, is far from over and could
eventually spread to credit markets, impair some banks and possibly hurt the
U.S. dollar, fund managers say.
By Thursday,
market volatility had subsided but stock markets struggled for direction and
investors tried to guess how many more yen-funded leveraged trades remained to
be unwound.
The market
mayhem since last Friday - which pushed Japan's Nikkei index into bear market
territory and caused the benchmark U.S. S&P 500 to crumble 6% in five
trading days - was triggered by a Bank of Japan rate rise last week, that
gutted billions of dollars worth yen-funded trades as the yen soared 10% in a
month.
"I think
we've seen the panic stage of forced liquidation etc, but going forward I'm
sure there will still be investors that are now looking to at least reduce
exposure," said Khoon Goh, head of Asia research at ANZ.
The problem is
no-one knows what will be unwound and how much is at stake.
Hundreds of
billions of yen found their way into juicy carry trades over more than a decade
when Japanese interest rates were at zero. And on top of that, there are carry
trades funded in cheap Swiss francs and China's yuan.
Trades worth
even larger sums could be at risk, assuming hedge funds and leveraged investors
amplified their bets with cheap borrowings.
UNDER PRESSURE
”The concern is
if anything blows up and loans can’t get paid back," said Quincy Krosby,
chief global strategist for LPL Financial.
"One of the
things we’re watching is if any banks are under pressure right now, because
they’ve been lending too much, either to hedge funds or retail investors. It’s
buried under the larger equation of how we look at the carry trade."
Measures of the
yen carry trade, which is at the crux of this week's rout, vary widely. Some
analysts use Japan's foreign portfolio investments, which are near $4 trillion,
as a rough gauge.
Analysts at TS
Lombard narrow it down to the total overseas borrowing from Japan since the end
of 2022, and Japanese investment in foreign securities over that period.
"Investors may need to find up to $1.1 trillion to pay off yen carry-trade
borrowing," they said in a note.
UBS Japan macro strategist
James Malcolm reckons the trade is worth about $500 billion and less than half
has been unwound so far; Nikolaos Panigirtzoglou and other analysts at J.P.
Morgan put the yen carry trade at $4 trillion.
"While yen
positions swung from oversold to overbought territory, the broader yen carry
trade ... has likely seen much more limited unwinding," they said.
Goldman Sachs
global head of hedge fund coverage Tony Pasquariello also notes that the
bank's prime brokerage data "curiously" does not show a lot of
selling. "Is the entire trading community fully cleansed of risk? Of
course not," Goldman said in a note.
More
Analysis-Investors expect market selloff will slow, stretch and spread
(msn.com)
Covid-19
Corner
This section will
continue until it becomes unneeded.
Severe COVID-19 infection might cause changes in
brain metabolism, study finds
7 August, 2024
A neuroimaging study in
Serbia found that individuals who survived a more severe COVID-19 infection had
lower levels of creatine and N-acetylaspartate levels in several regions of the
brain. The ratio of choline and creatine levels was heightened in survivors of
more severe COVID-19 infections. The research, published in the Journal of Clinical Medicine, sheds light on the potential long-term
neurological impacts of severe COVID-19 infections, highlighting changes in
brain metabolism that could contribute to cognitive and neurological symptoms
observed in patients post-recovery.
COVID-19 is an infectious
disease caused by the coronavirus SARS-CoV-2. This infection in humans emerged
in late 2019 and quickly spread around the world, causing a global pandemic.
While many individuals experienced a COVID-19 infection with few or almost no
symptoms, the infection proved deadly for many others. Estimates indicate that
it infected over 700 million people worldwide, killing around 7 million during
the 2020-2022 pandemic.
Symptoms of COVID-19
range from mild to severe and life-threatening. They can include fever, cough,
difficulty breathing, fatigue, and loss of taste or smell. Aftereffects, often
referred to as “long COVID,” can include lingering fatigue, respiratory issues,
cognitive impairments, and other health problems. Studies have indicated that
the virus responsible for the infection invades many different organs,
including the nervous system. In many cases, individuals recovering from
COVID-19 developed various neurological and psychiatric symptoms.
Study author Jelena Ostojić
and her colleagues wanted to investigate whether COVID-19 affects specific
brain metabolism markers and whether the severity of the COVID-19 infection is
associated with this effect. They focused on the subcortical white matter,
anterior cingulate cortex, deep frontal white matter, and posterior cingulate
cortex regions of the brain, applying magnetic resonance spectroscopy.
Magnetic resonance
spectroscopy is a non-invasive diagnostic technique that uses magnetic fields
and radio waves to measure the concentration of specific chemicals, or
metabolites, within tissues, providing detailed information about their
biochemical composition. The authors of this study focused on levels of brain
metabolites N-acetylaspartate, choline, and creatine, and their relative
concentrations.
N-acetylaspartate is a
marker of neuronal health and function, with decreased levels indicating
neuronal loss or dysfunction. Elevated choline can indicate increased cell
membrane turnover or malignancy. Creatine levels are typically stable and serve
as a reference for other metabolites.
----Results showed that levels of N-acetylaspartate and creatinine were lower
in all studied regions of the brain in individuals who went through a more
severe COVID-19 infection compared to participants who only had a mild form of
COVID-19. Ratios of choline to creatine concentrations were increased.
“Both in grey and white
matter, the decrease in NAA [N-acetylaspartate] suggests the neuronal loss
and/or dysfunction following direct neuronal injury caused by virus per se or
indirect neuronal loss caused by the neuroinflammatory processes triggered by
systemic inflammation. One of the most interesting findings is the instability
of Cr [creatine], with detected decrease reflecting the severity of the
clinical condition possibly indicating an increased risk of neurological
complications such as dementia following severe COVID-19 infection,” the study
authors concluded.
“Finally, we observed
relatively stable or even decreasing Cho [choline] in the more severe clinical
presentations potentially speaking in favor of neuroplasticity in observed
voxels [areas of the brain]. The alterations in brain metabolites observed in our
study may be attributed to a combination of direct viral effects, systemic
inflammation, oxidative stress, mitochondrial dysfunction, and hypoxia.”
The study sheds light on
the likely aftereffects of COVID-19 infections on neural health. However, it
should be noted that the study authors did not have participants’ data from
before COVID-19. Therefore, it remains unknown whether these brain metabolism
alterations developed as a consequence of the infection or if these individuals
had altered brain metabolism even before that.
The paper, “Decreased Cerebral Creatine and N-Acetyl
Aspartate Concentrations after Severe COVID-19 Infection: A Magnetic Resonance
Spectroscopy Study,” was authored by Jelena
Ostojić, Dusko Kozić, Sergej Ostojić, Aleksandra DJ Ilić, Vladimir Galic, Jovan
Matijašević, Dušan Dragićević, Otto Barak, and Jasmina Boban.
Severe COVID-19 infection might cause changes
in brain metabolism, study finds (msn.com)
Technology Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
ChatGPT is as (in)accurate at diagnosis as ‘Dr Google’
By Paul McClure August 06, 2024
ChatGPT is mediocre at diagnosing medical conditions, getting it
right only 49% of the time, according to a new study. The researchers say their
findings show that AI shouldn’t be the sole source of medical information and
highlight the importance of maintaining the human element in healthcare.
The convenience of access to online technology has meant that some
people bypass seeing a medical professional, choosing to google their symptoms
instead. While being proactive about one’s health is not a bad thing, ‘Dr
Google’ is just not that accurate. A 2020 Australian
study looking at 36 international mobile and web-based symptom
checkers found that a correct diagnosis was listed first only 36% of the time.
Surely, AI has improved since 2020. Yes, it definitely has.
OpenAI’s ChatGPT has
progressed in leaps and bounds – it’s able to pass
the US Medical Licensing Exam, after all. But does that
make it better than Dr Google in terms of diagnostic accuracy? That’s the
question that researchers from Western University in Canada sought to answer in
a new study.
Using ChatGPT 3.5, a
large language model (LLM) trained on a massive dataset of over 400 billion
words from the internet from sources that include books, articles, and
websites, the researchers conducted a qualitative analysis of the medical
information the chatbot provided by having it answer Medscape Case Challenges.
Medscape Case
Challenges are complex clinical cases that challenge a medical
professional’s knowledge and diagnostic skills. Medical professionals are
required to make a diagnosis or choose an appropriate treatment plan for a case
by selecting from four multiple-choice answers. The researchers chose
Medscape’s Case Challenges because they’re open-source and freely accessible.
To prevent the possibility that ChatGPT had prior knowledge of the cases, only
those authored after model 3.5’s training in August 2021 were included.
A total of 150 Medscape cases were analyzed. With four
multiple-choice responses per case, that meant there were 600 possible answers
in total, with only one correct answer per case. The analyzed cases covered a
wide range of medical problems, with titles like "Beer, Aspirin Worsen
Nasal Issues in a 35-Year-Old With Asthma", "Gastro Case Challenge: A
33-Year-Old Man Who Can’t Swallow His Own Saliva", "A 27-Year-Old
Woman With Constant Headache Too Tired To Party", "Pediatric Case
Challenge: A 7-Year-Old Boy With a Limp and Obesity Who Fell in the
Street", and "An Accountant Who Loves Aerobics With Hiccups and
Incoordination". Cases with visual assets, like clinical images, medical
photography, and graphs, were excluded.
----To ensure consistency in the input provided to ChatGPT, each
case challenge was turned into one standardized prompt, including a script of
the output the chatbot was to provide. All cases were evaluated by at least two
independent raters, medical trainees, blinded to each other’s responses. They
assessed ChatGPT’s responses based on diagnostic accuracy, cognitive load (that
is, the complexity and clarity of information provided, from low to high), and
quality of medical information (including whether it was complete and
relevant).
Out of the 150 Medscape cases analyzed, ChatGPT provided correct
answers in 49% of cases. However, the chatbot demonstrated an overall accuracy
of 74%, meaning it could identify and reject incorrect multiple-choice options.
More
ChatGPT is as (in)accurate
at diagnosis as ‘Dr Google’ (newatlas.com)
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt Clocks (usdebtclock.org)
This
weekend’s music diversion. Approx. 15 minutes.
Johann
Georg Pisendel Violin Concerto in D major, Straumer / Guttler
Johann Georg
Pisendel Violin Concerto in D major, Straumer / Guttler (youtube.com)
This
weekend’s chess update. Approx. 12 minutes.
This
Day Belongs To Hans Niemann!
This Day Belongs
To Hans Niemann! - YouTube
This
weekend’s final diversion. Next weekend, the Statue of Liberty. Approx. 6 minutes.
What's
inside of the Eiffel Tower?
What's inside of
the Eiffel Tower? (youtube.com)
"Do not despair: one of the thieves was saved; do not
presume: one of the thieves was damned."
St. Augustine.
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