Baltic
Dry Index. 2110 -26 Brent Crude 71.78
Spot Gold 2642 US 2 Year Yield 3.66 +0.11
Everyone who wants to know what will happen ought to examine what has happened: everything in this world in any epoch has their replicas in antiquity.
Niccolo Machiavelli.
In the stock casinos the Great Disconnect from the real world continues, but reality seems about to come crashing in.
Israel finally launched its long anticipated invasion of Lebanon to finish off Hezbollah. What happens in the next few days and weeks either ends in success or a wider Middle East war.
In the USA, an East coast and Gulf coast port strike got underway at midnight. How long it lasts and its cost, plus who it costs, risks bringing a harsh reality back into the US stock casinos.
The cost and disruption from Hurricane Helene continue to rise.
Asia-Pacific markets mixed after Powell signals
smaller rate cuts; China markets closed for holiday
Published Mon, Sep 30 2024 7:45 PM EDT
Asia-Pacific markets are mixed on Tuesday,
after Federal Reserve Chair Jerome Powell indicated
the recent outsized cuts enacted by the U.S. central bank should not
be interpreted as a sign that future moves will be as aggressive.
“This is not a committee that feels like
it’s in a hurry to cut rates quickly,” he said during a Q&A period
following his speech with Morgan Stanley economist Ellen Zentner. “If the
economy performs as expected, that would mean two more rate cuts this year, a
total of 50 [basis points] more.”
The current federal funds rate stands at
4.75%-5%, with the expected additional 50 basis points in cuts set to take the
Fed’s benchmark interest rate to 4.25%-4.5% at the end of 2024.
In Asia, traders will focus on the Bank of Japan’s third quarter Tankan survey, which
measures the level of business optimism among large Japanese companies.
Business optimism among large Japanese
manufacturers came in at +13, unchanged from the quarter before and in line
with forecasts from a Reuters poll.
Separately, sentiment among large
non-manufacturers in Japan improved, inching up to +34 from +33 in the second
quarter and beating Reuters expectations of +32. A positive figure indicates
that optimists outnumber pessimists, and vice versa.
The BOJ also released its summary of opinions for its Sept. 19-20 meeting, which
came a day after the U.S. Federal Reserve delivered a 50 basis points cut and
before the ruling Liberal Democratic Party election last week.
During that meeting, the BOJ did
not make any changes to its benchmark interest rate, with the summary
of opinions revealing that at least one board member thought that a rate hike
is “undesirable” as this would suggest that the bank was moving to a full
fledged tightening cycle.
Another BOJ board member was of the view
that “Japan’s economy is not in a situation where the Bank may fall behind the
curve if it does not raise the policy interest rate at a certain pace.” As
such, the member said, “the Bank will not raise its policy interest rate when
financial and capital markets are unstable.”
Japan also reported its unemployment rate for August eased to 2.5%, down from
2.7% in July and lower than the 2.6% is expected by economists polled by
Reuters.
Some Asian markets are closed for a public
holiday Tuesday, namely, South Korea, Hong Kong and mainland China. Mainland
China will be closed for the rest of the week, due to the Golden Week holiday.
Japan’s Nikkei 225 rebounded 1.73%,
after suffering a 4.8% fall on Monday, while the Topix was 1.43% higher
Tuesday.
Australia’s S&P/ASX 200 slipped
0.47%, retreating from an all-time high.
Overnight in the U.S., the S&P 500 rose to a record
close on Monday, concluding a winning month and quarter. The index recorded a
0.42% gain to close at 5,762.48.
The Dow Jones Industrial Average also
closed at a new record, gaining marginally to close at 42,330.15. The tech
heavy Nasdaq Composite advanced
0.38%
Asia markets: Japan Tankan, Powell inflation comments, Golden Week (cnbc.com)
In other news, that US port strike begins. If ended in just a day or two, very little disruption. If ended in a month or two????
East and Gulf Coast ports strike, with ILA
longshoremen walking off job from New England to Texas, stranding billions in
trade
Published Tue, Oct 1 2024 12:07 AM EDT
Billions in trade came to a screeching
halt at U.S. East Coast and Gulf Coast ports after members of the International
Longshoremen’s Association (ILA) began walking off the job after 12:01 a.m. ET
on October 1. The ILA is North America’s largest longshoremen’s union, with
roughly 50,000 of its 85,000 members making
good on the threat to strike at 14 major ports subject to a
just-expired master contract with the United States Maritime Alliance (USMX),
and picketing workers beginning to appear at ports. The union and port
ownership group failed to reach agreement by midnight on a new contract in a
protracted battle over wage increases and use of automation.
In a
last-ditch effort on Monday to avert a strike that will cause
significant harm to the U.S. economy if it is lengthy — at least hundreds of
millions of dollars a day at the largest ports like New York/New Jersey — the
USMX offered a nearly 50% wage hike over six years, but that was rejected by the
ILA, according to a source close to the negotiations. The port ownership group
said it hoped the offer would lead to a resumption of collective bargaining.
The 14 ports where preparations
for strike have been underway are Boston, New York/New Jersey,
Philadelphia, Wilmington, North Carolina, Baltimore, Norfolk, Charleston,
Savannah, Jacksonville, Tampa, Miami, New Orleans, Mobile, and Houston.
New York Governor Kathy Hochul said in a
statement issued shortly after midnight that “the first large-scale eastern
dockworker strike in 47 years began at ports from Maine to Texas, including at
the Port Authority of New York and New Jersey. In preparation for this moment,
New York has been working around the clock to ensure that our grocery stores
and medical facilities have the essential products they need. It’s critical for
USMX and the ILA to reach a fair agreement soon that respects workers and ensures
a flow of commerce through our ports. In the meantime, we will continue our
efforts to minimize disruption for New Yorkers.”
Rhetoric from ILA leadership has been
aggressive in the weeks leading up to the strike, with ILA president Harold
Daggett, who was a union member the last time it went out on strike in 1977,
telling rank-and-file members — who unanimously
voted to authorize a strike — in a recent video message, “We’ll crush
them.”
In a video posted to an ILA Instagram
account, Daggett addressed union workers at Maher Terminals in
Elizabeth, New Jersey. “This is going down in history, what we’re doing here,”
he said. “They can’t survive too long,” he added.
For now, it is the supply chain and U.S.
economy which will take the immediate hit.
Shana Wray, principal solutions architect
for supply chain intelligence firm FourKites, tells CNBC the strike comes at
the worst possible time, with its impact on supply chain congestion to
exacerbate the devastation left behind from Hurricane Helene.
“Helene caused ports to delay openings at
the ports of Charleston and Savannah, as well as power losses at intermodal
facilities in Savannah, Charleston, and Atlanta,” said Wray. “This created
ocean, trucking, and rail carriers congestion across Southeast and Gulf ports.”
Both economists and logistics executives
say the impact of the strike depends on how long the work stoppage lasts.
“A disruption of a week or two will create
some backlogs but the broader consequences will be minimal outside of a handful
of very port-reliant areas, including Savannah,” said Adam Kamins, economist at
Moody’s Analytics. “But anything longer will lead to shortages and upward price
pressures,” he said.
The most significant issues would be faced
by food and automobile industries, Kamins said, as they rely especially heavily
on the ports that will be shut down. While a surge in inflation is highly
unlikely even with a longer strike, even a modest reacceleration could create
uncertainty and force the Federal Reserve to be more cautious about lowering
interest rates, which would weigh on the overall outlook for job growth and
investment.
A one-week strike could cost the U.S.
economy $3.78 billion, according to an analysis by The Conference Board, and cause supply chain
slowdowns through mid-November. In all, the ports threatened with strikes
handle $3 trillion annually in U.S. annual international trade.
Many industries are preparing for major
repercussions. Noushin Shamsili, CEO and president of Nuco Logistics, which
specializes in pharmaceutical imports and exports, said the strike comes at a
critical time for inventory replenishment for the pharma sector.
“Almost all of this industry is just on
time,” said Shamsili. “Raw materials are being brought in to complete drug
manufacturing. Medical supplies for clinics and hospitals are on these vessels.
For a while importers did not bring in a lot of cargo because they were
overflowing with supplies post-Covid. Now they have started reordering medical
devices, gloves, syringes, and tubing.”
Shamsili also said the East Coast ports
are a gateway for generic medicine made in India. Approximately 48% of the
active pharmaceutical ingredients used in the U.S. are being imported from
India. Without these APIs, medications cannot be produced. APIs are also
manufactured in Europe, which also use the East Coast ports as U.S. points of
entry.
More
East Coast ports strike, ILA union work stop strands billions in trade (cnbc.com)
The Fed Isn’t in a Hurry to Cut Rates Again
September 30, 2024 at 10:43 PM GMT+1
Federal Reserve Chair Jerome Powell said the central bank will lower interest rates “over time,” while again emphasizing that the overall US economy remains strong. Powell also reiterated his confidence that inflation will continue moving toward the Fed’s 2% target, adding that economic conditions “set the table” for a further easing of price pressures. “Looking forward, if the economy evolves broadly as expected, policy will move over time toward a more neutral stance,” Powell said in a speech in Nashville, Tennessee at the annual meeting of the National Association for Business Economics. “But we are not on any preset course,” he said, noting that policymakers will continue to make decisions meeting by meeting based on incoming economic data. In other words, there doesn’t appear to be any rush. At least not right now.
-----The financial toll of
Hurricane Helene continues to climb, putting the storm that battered parts of
the US Southeast on course to be one of the country’s costliest. As of Monday morning, AccuWeather
estimates the total damage and economic loss from Helene may be as high as $160
billion. That’s up sharply from the $95 billion to $110 billion range it
forecast late last week, before the magnitude of the devastation became
apparent. If losses match those preliminary estimates, Helene will go down as
one of the nation’s top five most costly storms ever, the forecaster said.
Bloomberg Evening Briefing: The Fed Isn’t in a Hurry to Cut Rates Again - Bloomberg
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.
New
figures show UK economic growth weaker than first thought
30
September 2024
Growth
across the UK economy was weaker than previously thought over the spring,
according to official figures.
The
Office for National Statistics (ONS) said gross domestic product (GDP) increased by
0.5% between April and June, revised down from an initial estimate of 0.6%.
Growth
was driven by an increase in the services sector, while the manufacturing and
construction industries industry dragged on the headline figure, the ONS said.
The
figures show that the UK economy continued its recovery from recession at the
end of last year, albeit at a slightly slower pace than previously thought.
A
technical recession is defined as two consecutive quarters of negative growth.
GDP
increased by 0.7% over the first quarter, between January and March, unrevised
figures showed, marking the end of the shallow recessionary period.
Meanwhile,
the ONS said that GDP across 2023 is now estimated to have increased by 0.3%,
up from the first estimate of 0.1%.
Stronger
income data, including pay for employees and profits of businesses, helped
boost the overall figure.
Liz
McKeown, director of economic statistics for the ONS, said: “Today’s updated
GDP figures for 2023 and 2024 include new annual survey data, VAT returns and
updated information about the relative size of each industry for the first
time.
“However,
after taking on these improvements, the quarterly growth path across the last
18 months is virtually unchanged.
“Our
latest data show that household savings continue to increase and are now at
their highest rate since the Covid-19 lockdowns.”
More
New figures show UK economic growth weaker than first thought (msn.com)
France
considers tax increase for big companies, Le Monde reports
29
September 2024
PARIS
(Reuters) - France's new Prime Minister Michel Barnier is considering a
temporary increase in corporate tax on the country's biggest companies as well
as a tax on share buybacks as part of efforts to plug a gaping hole in public
finances, Le Monde newspaper reported on Sunday.
WHY
IT'S IMPORTANT
Barnier,
who took office earlier this month, already finds himself facing a growing
budget crisis as tax income is weaker than expected and spending higher than
planned.
France's
credibility with financial markets, where its borrowing costs have surged, and
its European Union partners is on the line.
BY
THE NUMBERS
Le
Monde says the 2025 budget could include an 8.5 percentage point increase in
corporate tax for companies whose annual turnover is at least 1 billion euros
($1.1 billion). The tax would be temporary and could yield 8 billion euros in
2025.
Other
possible measures include a tax on share buybacks.
CONTEXT
The
new government lacks a parliamentary majority, and getting the budget adopted
will be tough. Even parties that are in government don't agree on whether tax
increases are an option.
The
previous government had planned to cut the fiscal shortfall to 3% of GDP by
2027, but weak tax revenues and budget overruns have put that target all but
out of reach.
WHAT'S
NEXT
Barnier
needs to finalise the 2025 draft budget in days and hand it over to lawmakers
by mid-October at the very latest.
THE
RESPONSE
The
prime minister's office and finance ministry could not immediately be reached
for comment.
France considers tax increase for big companies, Le Monde reports (msn.com)
Covid-19 Corner
This section will continue until it becomes unneeded.
NHS
issues Covid advice on how to stay safe from new XEC strain as cases rise by
31%
The
most up-to-date data shows cases of Covid increased in England by 530 in just
one week
By Fiona Callingham, Health Reporter
specialising in medical studies, symptoms of diseases and conditions, real life
stories and the latest public health issues.
10:45,
Mon, Sep 30, 2024 | UPDATED: 10:46, Mon, Sep 30, 2024
The
NHS has urged people to follow two simple steps to protect themselves
against COVID-19 this autumn as
cases of the illness are spiking in England. More people are becoming infected
with the virus again as experts warn that a new highly transmissible strain
could become dominant.
According
to the latest data from the UK Health Security Agency (UKHSA), cases of Covid increased by
31.5 percent in England in just one week.
In
the seven days up to September 18, there were 2,213 recorded cases of Covid - an
increase of 530 from the week prior.
It
comes as health experts have said that the new XEC variant could trigger a
spike in cases this winter.
The
variant was first found in Germany and has already been detected in 27
countries across Europe, Asia, and North America, with more than 600 cases
reported globally. And in the UK, 82 cases have been confirmed.
Scientists
said that XEC carries mutations that may help it spread this autumn. Speaking
to the LA
Times,
Eric Topol - director of the Scripps Research Translational Institute, in
California, warned that XEC is "just getting started".
"And
that's going to take many weeks, a couple of months, before it really takes
hold and starts to cause a wave," he said. "XEC is definitely taking
charge.”
With
this in mind, the NHS has issued advice on how to protect yourself from
infection. The health body said that COVID-19 spreads “very
easily” through close contact with people who have the virus.
It
explained: “When someone with COVID-19 breathes,
speaks, coughs or sneezes, they release small droplets containing the virus.
“You
can catch it by breathing in these droplets, or by touching surfaces covered in
them and then touching your eyes, nose or mouth. You are more likely to catch
it indoors and in crowded places.”
Therefore
it said the two things you should do are:
·
Wash
your hands with soap and water or use hand sanitiser regularly throughout the
day
·
Try
to avoid touching your eyes, nose or mouth if your hands are not clean.
More
NHS issues Covid advice on how to stay safe from new XEC strain as cases rise by 31% | Express.co.uk
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.
The coal-fired
power station being turned into a giant battery
By Mike Marshall 30th
September 2024
With
the closure of the last coal-fired power station in the UK, it raises questions
about how old fossil fuel infrastructure can be repurposed. One option is to
use them to store energy from renewables.
It's
an unassuming place for a major era of British history to come to an end.
Surrounded by farmland drenched by recent rains and trees with leaves starting
to turn ahead of the autumn – all within earshot of the thundering traffic from
the M1 motorway – the UK's last coal-fired power station is shutting down for
good. As of 30 September 2024 the turbines at the Ratcliffe-on-Soar power plant
in Nottinghamshire will fall silent while smoke and steam will cease to belch
from the chimney and cooling towers that dominate this part
of the landscape.
The
power station, which has been operating since
1967, is to undergo a two-year
decommissioning and demolition process.
It's a
symbolic moment, a marker along the UK's journey to decarbonisation and
net-zero. For centuries, coal was the main source of energy in the UK. It was
the life-blood of the industrial revolution – providing the fuel for steam
engines and then generating much of the country's electricity. By the
1960s, nearly 90% of the
UK's electricity relied upon coal.
Now,
for the first time, the UK will not use any coal to generate electricity.
It's
not clear what the Ratcliffe-on-Soar site will become. There have been
suggestions it could house a prototype fusion
reactor or some other green industry.
Regardless, as fossil fuel power plants are shuttered in many parts of the
world, the question of what to do with them will keep coming up.
One
promising option is to turn old fossil power plants into battery storage sites.
The
intermittency problem
Renewable
energy sources like wind and solar are the mainstay of the net-zero transition.
They don't emit greenhouse gases, so the more they replace fossil fuels like
coal and gas the closer we come to net-zero emissions.
The
share of energy coming from renewables is rising steadily. According to a report by the International Energy
Agency published in January 2024, renewables will
generate 33.5% of global electricity this year and
could account for 41.6% by 2028.
However,
using renewables comes with challenges for power grids. Coal and gas plants can
be turned on and off at will, so they can supply more energy when it is needed:
they are "dispatchable", in the jargon of the field. By contrast,
renewable sources are intermittent and less controllable: the Sun doesn't shine
at night and the wind doesn't always blow (and sometimes can blow too much).
"With
renewables, we have less dispatchable power," says Grazia Todeschini, an
electrical engineer at King's College London in the UK.
To
some extent, the intermittency problem can be managed by having a diverse
selection of renewable sources: that way, if one doesn't generate enough,
another can pick up the slack. Nuclear power, which is zero-carbon, also offers
a steady supply.
Alongside
this, though, countries are investing heavily in energy storage. When lots of
electricity is generated but isn't needed, it can be stored – then when there
is a shortage it can be released. "The main point is to be able to match
generation and demand," says Todeschini.
For
many decades, the most important form of energy storage was pumped hydropower.
Excess electricity was used to pump water uphill, so that it could be released
to drive turbines and generate electricity when needed. However, this won't be
enough for the renewable era, and hydropower has its
own emission problems too. "That capacity
pretty much is saturated everywhere, in Europe at least," says Todeschini.
"There is no space to build any more."
That's
why many countries are turning instead to battery energy
storage systems (BESS). A BESS site is simply an array of batteries: big
ones, about the size of shipping containers. Excess electricity from renewable
sources can be dumped into the batteries, ready to be discharged when
demand is high.
"In
the last 20 years, this technology has improved a lot," says Todeschini.
"The control is more precise, and also the cost has decreased."
All of
which explains why one of the UK's defunct coal plants is being turned into a
BESS site.
Ferrybridge
Near
Ferrybridge in West Yorkshire sit the remains of a trio of coal-fired power
plants. Between them they operated for almost a century, the first one turning
on in 1927 and the last being decommissioned in 2016. The third station,
Ferrybridge C, passed into the ownership of energy company SSE in 2004, which
ran it until the site's closure and demolition.
Now
SSE is building a BESS on
the site of Ferrybridge C. It will have a capacity of 150
megawatts, which SSE estimates will be enough to power 250,000 homes. Construction began
in August 2023, and in June 2024 the first
batteries arrived. The following month, the last of the
136 battery units were installed.
"We're
now at the point all the kit's on site," says Heather Donald of SSE
Renewables, where she is director of onshore wind, solar and battery for Great
Britain and Ireland. "We're just about to go into the commissioning phase
and we're hoping to switch on early next year."
Building
an array of batteries on the site of an old coal-fired power station has
multiple advantages, says Donald. "First and foremost, there's a grid
connection there," she says. That means linking the BESS to the grid is as
straightforward as it can be. "Access to grid connections and grid
capacity's at such a premium now."
The
site also proved to have a lot of useful materials and infrastructure.
"We've been able to use some of the existing concrete foundations, we've
been able to repurpose some of the concrete on site," says Donald. This
meant the company did not need to import many materials, apart from the
batteries themselves.
"It's
a great reuse of a site like this," says Donald.
More
The coal-fired
power station being turned into a giant battery - BBC Future
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
The
first method for estimating the intelligence of a ruler is to look at the men
he has around him.
Niccolo Machiavelli.
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