Baltic
Dry Index. 1790 -09 Brent Crude 79.16
Spot Gold 2644 US 2 Year Yield 3.98 -0.01
People say nothing is impossible, but I do nothing every day.
A. A. Milne. (Me too. Ed.)
With the hurricane aftermath well covered in main stream media, we focus today on the stock casinos pinning their hopes and future on China coming to their rescue this weekend.
Over the weekend the US media will present a better picture of the physical and economic damage from hurricane Milton.
But unlike 2008-2010, can China actually rescue the global economy suffering from two endless wars, a mountain of unrepayable fiat money debt, a global economy entering recession, rising tariff protectionism and two economic cranks running for the US presidency?
My guess is that China can’t restart another Chinese property boom and without that 2025 turns into a massive year of global bust.
Up first, the stock casinos waiting on China’s Godot.
Asia-Pacific markets mostly higher after Wall
Street declines; investors assess BOK rate decision
Updated Fri, Oct 11 2024 10:55 PM EDT
SINGAPORE — Asia-Pacific markets mostly
rose Friday, breaking ranks with Wall Street’s overnight session which saw key
benchmarks slide as investors digested a sticky U.S. inflation report.
Investors in Asia assessed a rate decision
from the Bank of Korea, with the BOK cutting its benchmark interest rate by 25
basis points to 3.25%, its first rate cut since 2020. The decision marks the
end of a multi-year tightening cycle that sent the rates to a 15-year high in
2023.
The decision comes as inflation in South
Korea eased to 1.6% in September, the lowest level since early 2021 and below
the central bank’s medium-target of 2%.
Mainland China’s CSI 300 blue chip index
was down 2.1%, as the stimulus-fueled rally continues to lose steam. Hong Kong
markets were closed Friday for a public holiday.
China’s Ministry of Finance is scheduled
to hold a press conference on Saturday 10 a.m. local
time. The highly anticipated briefing session is expected to unveil fresh
fiscal stimulus package as Beijing attempts to boost its economy.
Oil prices retreated after climbing more
than 3% on Thursday as households and car owners increased fuel use ahead of
Hurricane Milton and concerns mounted that the Middle East conflicts could escalate risks for Iran’s oil sites.
Brent futures dipped 0.35%
to $79.11 a barrel, while the U.S. West Texas Intermediate crude
slid 0.34% to $75.6 a barrel.
Japan’s Nikkei 225 jumped 0.7% on
open while the broad-based Topix edged up 0.4%.
South Korea’s blue chip Kospi gained
0.6% and the small cap Kosdaq added 0.1%.
Australia’s S&P/ASX 200 slipped
0.1%.
Overnight in the U.S., the S&P 500 lost 0.21% to
settle at 5,780.05 while the Dow
Jones Industrial Average dropped 0.14% to finish at 42,454.12.
The Nasdaq Composite dipped
0.05% to end at 18,282.05.
The U.S. consumer price index rose 0.2% on
a monthly basis, bringing the annual inflation growth to 2.4% from the previous
year. The inflation figures were higher than forecasts of 0.1% monthly gain and
a 2.3% year-over-year rate, according to a Reuters poll.
While the annual inflation rate was the
lowest since February 2021, it added to concerns that the Federal Reserve might
slow the pace of future rate cuts.
Asia markets live: Stocks opened higher, investors parse BOK rate decision (cnbc.com)
Inflation rate hit 2.4% in September,
topping expectations; jobless claims highest since August 2023
Published Thu, Oct 10 2024 8:32 AM EDT
The pace of price increases over the past
year was higher than forecast in September while jobless claims posted an
unexpected jump following Hurricane Helene and the Boeing
strike, the Labor Department reported Thursday.
The consumer price index, a broad gauge
measuring the costs of goods and services across the U.S. economy, increased a
seasonally adjusted 0.2% for the month, putting the annual inflation rate at 2.4%. Both
readings were 0.1 percentage point above the Dow Jones consensus.
The annual inflation rate was 0.1
percentage point lower than August and is the lowest since February 2021.
Excluding food and energy, core prices
increased 0.3% on the month, putting the annual rate at 3.3%. Both core
readings also were 0.1 percentage point above forecast.
A separate report Thursday showed weekly
jobless claims hitting a 14-month high, indicating potential softness in the
labor market despite the big jump in nonfarm payrolls in September. However,
most of the surge could be tied to the hurricane and strike.
Much of the inflation increase — more than
three-quarters of the move higher — came from a 0.4% jump in food prices and a
0.2% gain in shelter costs, the Bureau of Labor Statistics said in the release.
That offset a 1.9% fall in energy prices.
Other items contributing to the gain
included a 0.3% increase in used vehicle costs and a 0.2% rise in new vehicles.
Medical care services were up 0.7% and apparel prices surged 1.1%.
Stock market futures moved lower following
the report while Treasury yields were mixed.
More
CPI data September 2024: Inflation rate at 2.4%, topping expectations (cnbc.com)
In China news, desperation sets in.
China’s ‘whatever it takes’ moment? Investors hope
for hundreds of billions in new stimulus
Published Thu, Oct 10 2024 11:47 PM EDT
Investors are on tenterhooks as Beijing
prepares to deliver fresh policies over the weekend that could jumpstart its
economy.
China’s Finance Minister Lan Fo’an is set
to hold a press conference at 10 a.m. on Saturday local time on “intensifying”
fiscal stimulus policies, the country’s State Council Information Office said.
With Beijing at risk of missing its full
year economic growth target of 5%, some analysts are confident that authorities
are ready to deliver major fiscal stimulus at the highly anticipated event,
while others remain skeptical.
Investors on edge
Investors had expected a fresh package to
be announced during the National
Development and Reform Commission’s press conference on Tuesday, which
was held shortly after markets reopened following a weeklong holiday.
During that event, the chair of NDRC
pledged a raft of actions to bolster the economy. But Zheng Shanjie stopped
short of announcing any new major stimulus plans.
The move underwhelmed investors and sent a
lengthy rally in the mainland Chinese markets into days of volatility.
With this second shot, the Chinese
government has now realized that it’s facing a “whatever it takes moment” and
it will do “whatever that is necessary to stop the bleeding of the economy, and
to get things moving,” Chen Zhao, chief global strategist at Alpine Macro, told
CNBC’s “Squawk Box Asia.”
Authorities are likely to affirm that at
the press conference on Saturday, Zhao said.
Before the Golden Week holiday, Chinese
officials unveiled
a flurry of stimulus policies, including interest rate cuts, lower cash
reserve requirements at banks, looser property purchase rules and liquidity
support for stock markets.
Many investors and analysts viewed the
move as a signal that Beijing was finally ready to take drastic action to
revive its ailing economy, following a barrage of disappointing data and amid a
slump in consumer confidence. At the time, Chinese major indexes began to
rally, surging over 25% as investors
cheered on the slate of stimulus measures.
Most economists expect some sort of
additional stimulus this weekend, but there are many differing views on its
size as well as the priorities of the package. Some have floated a
figure between two and three trillion yuan (the equivalent of $282.8 billion to
$424.2 billion), while others have suggested 10 trillion yuan ($1.4 trillion).
Speaking to “Street Signs Asia,” Chetan
Ahya, chief Asia economist at Morgan Stanley, said the package will likely be
focused on stimulating domestic demand, supporting recapitalization of banks,
as well as local government debt restructuring.
The consumer stimulus measures could be
targeted at social welfare spending, with an aim to free up more household
savings, he said. And a small portion of the package could be dedicated to
support consumer trade-in programs.
In a note, economists at Morgan Stanley
predicted that China’s Ministry of Finance will deliver a modest supplementary
fiscal package at the press conference — which they called “Beijing’s second
chance to convince the market” after it undershoot earlier this week. However,
the economists conceded that expectations are high.
“Higher size with clear consumption
stimulus portion, or clear forward guidance for next year’s expansionary
policy, would constitute a positive surprise,” the Morgan Stanley economists
wrote.
Forward guidance on 2025 is critical and
we expect another two to three trillion yuan widening in the augmented deficit
but don’t think the size will be announced before end of 2024, they added.
More
In other news a pour poor harvest in
England. Not that it will be much better in Scotland and Ireland or much of
northern and central Europe due to a year of rains.
Harvest in England the second worst on record
because of wet weather
10 October 2024
England has suffered its second worst
harvest on record – with fears growing for next year – after heavy rain last
winter hit production of key crops including wheat and oats.
The cold, damp weather, stretching from
last autumn through this spring and early summer, has hit the rapidly
developing UK wine industry particularly hard, with producers saying harvests
are down by between 75% and a third, depending on the region.
On staple crops, England’s wheat haul is
estimated to be 10m tonnes or 21% down on 2023, according to analysis of the
latest government data by the Energy and Climate Intelligence Unit (ECIU).
Winter barley was 26% down on last year,
and the winter oilseed rape harvest was down 32%, in data released by the
Department for Environment Food and Rural Affairs on Thursday.
The ECIU estimates that farmers could lose
£600m on five key crops – wheat, winter and spring barley, oats and oilseed
rape – where production was down 15% in total.
Tom Lancaster, a land, food and farming
analyst at the ECIU, said: “This year’s harvest was a shocker, and climate
change is to blame. While shoppers have been partly insulated by imports
picking up some of the slack, Britain’s farmers have borne the brunt of the
second worst harvest on record.
“It is clear that climate change is the
biggest threat to UK food security. And these impacts are only going to get
worse until we reduce our greenhouse gas emissions.”
He said record rains in September got the
new season off to a poor start, forcing farmers to hold off on planting in some
parts of the country and losing out on the more productive winter harvest by
having to wait until the spring.
Colin Chappell, an arable farmer in
Lincolnshire, said: “We are now on a knife-edge. Last week we had almost two
inches of rain within 36 hours here and we’re not the worst off. Some farms in
southern England have lost their crops for the second year in a row. Many will
now be relying on spring wheat once again this year, which only produces about
half as much as winter wheat.
“We’re getting into a situation where
autumn planting is becoming unviable due to flooding and spring planting is
risky because of drought.”
Lancaster also called on the government to
use this month’s budget to support more sustainable farming that would build
resilience to the extreme weather the UK is now encountering.
----The concern for staple crops
comes as it emerged the British wine harvest could slump from last year’s cork-popping bumper crop to a light tipple
as the cold, wet summer has led to problems with mould, disease and fewer
grapes on vines.
Several independent growers told the
Guardian it had been a “challenging season”, with vineyards in the south-west
and north of England and parts of Wales particularly hard hit.
Harvests have suffered from the cold and
wet, while some suggested vines have been depleted after heavy production last
year.
Duncan Schwab, the head winemaker at
Sandridge Barton, which has 16 hectares (40 acres) in south Devon, said he
expected volumes to be 70% down on last year. He said many growers in the
south-west had experienced similar problems. “It’s kind of hunt the grape out
there,” he said.
Plumpton Wine Estate in Sussex said it was
picking only half the amount harvested last year as it was “facing challenges
with disease pressure due to constant rain”.
The mild, wet winter last year allowed
diseases to thrive in vineyards and then heavy rains in April and May made it
difficult to treat plants because equipment the boggy conditions limited use of
heavy equipment. Schwab said the rain in early summer “caused havoc with
flowering”.
Despite the problems, Schwab said wine
prices were unlikely to rise as many wine makers would have stocks held over
from last year’s record harvest, which would help iron out the ups and downs in
supply.
Harvest in England the second worst on record because of wet weather (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.
France's
new government launches austerity budget
10
October 2024
rance's
new centre-right government, led by Prime Minister Michel Barnier, has
introduced an austerity budget aimed at addressing the high national debt.
According
to an explanation provided by the government following a Cabinet meeting on
Thursday, the plan seeks to save and generate an additional €60 billion ($65.5
billion) next year.
Two-thirds
of this amount is expected to come from spending cuts, with the remaining third
from tax increases targeting high-revenue companies and high-income households.
Due
to an excessively high deficit, the European Commission is conducting a deficit
procedure against France. By the end of October, France must present a
consolidation plan to Brussels.
For
the current year, France expects a budget deficit of 6.1%, which is to be
reduced to 5% by 2025 and brought back below the European limit of 3% by 2029.
The
austerity budget is facing resistance in parliament. Even before its
presentation, there was a barrage of criticism from the left and right-wing
nationalists.
There
are also reservations within the government's own ranks, with members
dissatisfied with the budget cuts. Criticism also came from the High Council of
Public Finance, which evaluated the government's plans for sustainability. The
underlying growth forecasts were judged by the council to be too optimistic.
Since
the government does not have a majority in parliament, it might have to either
pass a heavily amended budget or force through its version using a special
article in the constitution bypassing lawmakers.
Shortly
after taking office, the budget negotiations could become a power struggle for
the government. Street protests can also not ruled out.
France's new government launches austerity budget (msn.com)
Shrinking German economy catches the flu from car sector’s cough
Wed,
October 9, 2024 at 6:22 PM GMT+1
Germany
reversed its growth forecast for this year and now expects its economy to
contract for the second straight year.
The
world’s third-largest economy is on track to shrink by 0.2%, economics minister
Robert Habeck said Wednesday. He had previously forecast a 0.3% economic
increase.
“The
situation is not satisfactory,” Habeck said. “Since 2018, the German economy
has not been growing strongly any more.”
Germany
— which is now facing a two-year recession, following a 0.3% contraction last
year — has been beset by high interest rates and energy costs, lagging consumer
spending, and heightened competition from China.
Just
two days ago, the country’s finance minister also issued a dour diagnosis: “The
German economy is treading water — we cannot be satisfied,” Christian Lindner
said. “We are experiencing structural change combined with a loss of
competitiveness.”
Berlin
faces industrial woes, conflicting coalition plans
Sources:
ING Bank, Handelsblatt
Germany’s
economic woes stem from a lack of innovation and lackluster industrial action,
with the country finally realizing “that the old macro business model of cheap energy and
easily accessible large export markets is no longer working,” a new ING
Bank analysis found. Meanwhile, the leaders of Berlin’s unpopular and
discordant three-party coalition government are each pursuing different paths
to help stimulate the economy, a Handelsblatt columnist wrote: “The result is
frustrating: there are three concepts … and
no common plan.”
Car
sector has a cough, so Berlin has the flu
Sources:
CNBC, Local.de, DPA
Germany’s
auto sector is especially feeling the weight of the likely recession.
Traditionally the crown jewel of German industry, car production and demand
have suffered this year: New car sales fell
again in September.
Last month, Volkswagen said it wasn’t able to rule out plant closures in
Germany. “When the German automotive sector has a cough, Germany
has the flu,”
the global automotive head at KPMG told CNBC. In a sign of the government’s
desire to revive the sector in any possible way, economy minister Habeck is
betting on self-driving cars, calling them a “huge opportunity” for carmakers.
China
competition looms large
Sources:
Nikkei Asia, Table.Media
Competition
from China, especially on electric vehicles, is central to the industry’s
challenges. Germany last week was in the minority of European Union states to
vote against a plan to hike tariffs for EVs imported from China. German
automakers worry
that any repercussions — namely, retaliatory tariffs — would
outweigh the short-term benefits. China is a strong export market for German
cars that are already facing domestic competition in the Chinese market. At the
same time, high labor and energy costs in Germany are making China a more
attractive business location for some firms, in a further blow to Berlin’s
growth outlook. German chemical giant BASF, for example, plans to increase
its investment in China, despite the volatile geopolitical environment and
calls to “derisk.”
Shrinking German economy catches the flu from car sector’s cough (yahoo.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
COVID-19
Increases Heart Attack, Stroke Risk Even 3 Years Later: Study
10
October 2024
Coronavirus
could be a powerful risk factor for heart attacks and strokes for as long as
three years of infection, a new study has found. The research, published in the
peer-reviewed medical journal Atherosclerosis, Thrombosis and Vascular
Biology (ATVB), analysed medical records from nearly a quarter of a million
people from the UK. Researchers identified more than 11,000 people who had a
positive lab test for COVID-19 documented in their medical records in 2020, out
of which nearly 3,000 were hospitalized for their infections (severe cases).
These people were then compared to over 2,22,000 people in the same database
who didn't get infected by coronavirus.
The
study found that people infected with coronavirus, before there were vaccines
to blunt the infection, had twice the risk of a major cardiac event like a
heart attack, stroke or death for almost three years after their illness,
compared with the people who didn’t test positive. Moreover, if a person had
been hospitalized for their infection, pointing to a more severe case, the risk
of a major heart event was even greater – more than three times higher – than
for people without Covid in their medical records. Additionally, for people who
needed to be hospitalized, COVID appeared to be a potent risk factor for future
chronic diseases like heart attacks, strokes, diabetes or peripherial artery
diseases (PAD).
It
is pertinent to note that the elevated heart risks from coronavirus infection
did not appear to diminish over time. While the study couldn't find the risk,
previous studies have shown that the coronavirus can infect the cells that line
the walls of blood vessels. The virus has also been found in sticky plaques
that form in arteries that can rupture and cause heart attacks and strokes.
Researchers in the study theorized that the COVID-19 virus could be doing
something to the artery walls; destabilizing the plaques that build inside the
artery walls and makig them prone to rupturing.
COVID-19 Increases Heart Attack, Stroke Risk Even 3 Years Later: Study (msn.com)
Technology
Update.
With events happening fast in the
development of solar power and graphene, among other things, I’ve added this
section. Updates as they get reported.
SSE begins construction
of largest battery storage project in North Yorkshire
The
320MW facility can potentially supply power to over half a million homes for up
to two hours
SSE has
officially launched construction on its largest battery storage project to
date, a 320MW battery energy
storage system (BESS) located at Monk Fryston in North Yorkshire.
This
facility is among the largest of its kind in the UK and is expected to power
over 533,000 homes for up to two hours during periods of peak demand.
A
ceremony to celebrate the beginning of construction took place on Tuesday,
attended by representatives from SSE Renewables, principal contractors Morrison
Energy Services and energy storage supplier Sungrow.
Heather
Donald, Director of Onshore Wind, Solar & Battery, SSE Renewables, said:
“It’s fantastic to have construction underway on our largest battery storage
project at Monk Fryston, and to have been joined by our project partners
Morrison Energy Services and Sungrow to mark the occasion.
“To be
building a battery project of this size and scale is a huge testament to how
far we have come in such a short space of time, with our first 50MW battery
asset at Salisbury already entering full operations earlier this year.”
SSE begins
construction of largest battery storage project in North Yorkshire - Energy
Live News
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Another weekend and a weekend of
damage assessment in Florida and a weekend of hope in the stock casinos that
China will pull a rabbit out of the stock casinos bubble’s top hat. Have a
great weekend everyone.
Always borrow money from
a pessimist. He won't expect it back.
Oscar Wilde.
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