Baltic Dry Index. 1634 -08 Brent Crude 73.73
Spot Gold 3031 US 2 Year Yield 3.98 +0.02
US Federal Debt. 36.647 trillion!!
“Son, if you really want something in this life, you have to work for it. Now quiet! They’re about to announce the lottery numbers.”
Homer Simpson.
Is the global economy about to enter Great Depression 2.0? To this old dinosaur stock and commodities follower since 1968, I think the answer is yes!
Corporation, consumers and nations are already drowning in a Pacific Ocean of largely unserviceable debt, which excepting for Germany wasn’t the case in 1930.
Team Trump’s attempt to undo 80 years of Pax Americana since 1945 in less than one year is highly likely to fail in a giant repeat of the 1930s depression.
Asia-Pacific markets trade mixed
after Wall Street declines on Trump’s fresh tariffs on autos
Updated Thu, Mar 27 2025 1:22 AM EDT
Asia-Pacific markets traded mixed
Thursday, tracking losses on Wall Street as investors weighed U.S. President
Donald Trump’s 25% tariffs on auto imports.
Japan’s benchmark Nikkei 225 traded 1.01%
lower in its last hour while the broader Topix index dropped 0.53%.
Over in South Korea, the Kospi index declined 1.19%
while the small-cap Kosdaq fell 1.06%.
Hong Kong’s Hang Seng Index rose
0.87% while mainland China’s CSI
300 was up 0.4%.
India’s benchmark Nifty 50 started the day
0.42% higher while the broader BSE Sensex rose 0.48%.
Australia’s S&P/ASX 200 ended the
day 0.38% lower at 7,969.
U.S. futures
edged down after the three key
Wall Street indexes logged losses overnight.
The S&P 500 lost 1.12% and
ended at 5,712.20, while the Dow
Jones Industrial Average fell 132.71 points, or 0.31%, to close at
42,454.79. The tech-heavy Nasdaq
Composite shed 2.04% and closed at 17,899.01, as Nvidia shares dropped nearly
6%.
Major tech names such as Meta Platforms and Amazon dropped more than 2%,
while Alphabet lost
more than 3%. Tesla slid
more than 5%.
Asia
markets live: Stocks fall on Trump tariffs
Shares of Asia’s automakers fall as
Trump announces 25% tariffs on car imports
Published Wed, Mar 26 2025 9:38 PM
EDT
Shares of Asia’s automakers fell
after U.S. President Donald Trump announced he will impose tariffs on cars not
made in the country.
Japanese automakers Toyota and Honda fell 3.69% and
2.91% respectively. Nissan, which
has two plants in Mexico, declined 2.92%, and Mazda Motor lost over
6%. Mitsubishi Motor fell
4.9%.
South Korea’s Kia Motors, which has
a manufacturing plant in Mexico, dipped 2.76%. Shares of
Chinese automakers Nio and Xpeng fell 3.94% and 1.97% respectively.
These new tariffs will go into
effect April 2. White House aide Will Scharf explained that the tariffs will
apply to “foreign-made cars and light trucks,” in addition to existing
duties.
The full details of the proclamation
remain unclear, as most cars consist of parts from various countries.
These tariffs are also expected to
bring in over $100 billion of new annual revenue to the U.S., Scharf estimated.
“Every automaker that sells vehicles
in the U.S. depends on global supply chains for automotive parts, with many of
them coming from China,” said Karl Brauer, executive analyst at iSeeCars.
“That means even if Honda or Toyota
assembles a model in the U.S., the parts that come from China will raise the
cost of producing those vehicles,” he told CNBC via email, adding that these
costs will either reduce an automaker’s profit or be passed on to consumers in
the form of higher price.
Vehicles assembled in the U.S. will
also be impacted, though at a lower level, based on the makeup of its foreign
parts, said the analyst.
“No U.S. automotive retailer will
escape the impact of these tariffs,” said Brauer.
European Commission President Ursula
von der Leyen criticized the tariffs on
social media platform X and affirmed that the European Union will
continue seeking negotiated solutions “while safeguarding its economic
interests.”
“The fact that it’s a signed
executive order makes it a little stronger than we thought it would be,” said
Joseph McCabe, CEO and President of AutoForecast Solutions.
“Rolling it back before April 2
doesn’t seem to be likely. This is going to be in effect for most likely a
couple weeks if not a month, and then we’re going to see some some devastation
in that time frame,” he added.
Shares of Asia's automakers fall as Trump announces 25% tariffs on car imports
China’s industrial profits slip at
start of the year as deflationary pressures, tariff risks mount
Published Wed, Mar 26 2025 9:38 PM
EDT
China’s industrial profits slipped
in the opening months of the year, official data showed Thursday, as enterprises navigate
persistent deflationary pressure and rising global trade tensions.
Profits at major industrial firms
dipped 0.3% in the first two months this year, after three consecutive years of
sharp declines, supported by improved profitability in manufacturing and raw
material sectors.
In December, profits rebounded 11%
year on year, snapping four consecutive months of declines, signaling Beijing’s
stimulus measures since late September have been trickling through the economy
though the latest data clouds the picture.
“The mood on Chinese economy is
definitely improving,” Robin Xing, chief China economist at Morgan Stanley,
told CNBC’s “Street
Signs Asia” on Thursday. The Wall Street bank has raised its forecast
for China’s economic growth this year to 4.5% from 4.0%.
“However, it is still showing a
mixed bag,” he said, adding that “corporate profit is still lagging and
consumer sentiment is still at subdued levels.”
State-backed industrial companies
saw their bottom-line grow 2.1% in the first two months and those with foreign
investments saw profits rise 4.9%, according to official data.
Profits in the manufacturing sector
and utilities industry — electricity, heat, gas and water supply — increased by
4.8% and 13.5% from a year earlier, respectively. However, profits at the
mining industry plunged 25.2% from a year ago.
Yu Weining, a statistician at the
National Statistics Bureau, attributed the smaller decline to the expansion of
Beijing’s consumer goods trade-in and equipment upgrade policy. “Profitability
improved in the corresponding industries and enterprises in those supply
chains,” Yu said, according to CNBC translation of the Chinese statement.
Yu cautioned that some operating
challenges still persist amid “a more challenging external environment.”
U.S. President Donald Trump has
imposed 20% additional tariffs on Chinese goods in just a little over two
months in office. He announced on Wednesday night stateside auto
tariffs of 25% on cars “not made in the U.S.,” starting April 2.
More
China’s
industrial profits slip at start of the year as deflationary pressures, tariff
risks mount
In other news, more and more red flags.
Prepare for 1930s 2.0!
Japanese Carmakers Face Catastrophic Profit Hit
From Trump's Auto Tariffs
Thursday, Mar 27, 2025 - 04:12 AM
As the fallout from Trump’s tariff plans
comes into relief, a harsh truth is emerging for the automotive industry: there
are lots of losers and not many winners. But foreign automakers, those without
US facilities, will be hit especially hard.
As Bloomberg notes, from South
Korea’s Hyundai to Germany’s Volkswagen, and to a lesser extent
America’s own General Motors, many of the world’s most prominent carmakers
will soon face higher costs from Trump’s new levies on auto imports and key
components. That's because about 46% of all new cars sold in the US are
imported.
“There are very few winners,” Sam Fiorani,
vice president of global vehicle forecasting for AutoForecast Solutions, said
in a phone interview. “Consumers will be losers because they will have reduced
choice and higher prices.”
One notable winner in the tariff chaos is
Elon Musk. His Tesla, which has large factories in California and Texas,
churns out all the electric vehicles it sells in the US, although as Elon noted
late on Wednesday, the company will also not remain unscathed.
Important to
note that Tesla is NOT unscathed here. The tariff impact on Tesla is still
significant.
— Elon Musk (@elonmusk) March
27, 2025
Ford could also face a less-severe impact
than some rivals, with about 80% of the cars it sells in the US being built
domestically.
Others will be less lucky: starting April
2, the new 25% tariffs will apply to all imported passenger vehicles and light
trucks, as well as key parts like engines, transmissions.
Not surprisingly, the tariffs give
automakers that heavily source parts in the US an edge, and Trump also allowed
an exemption: the new levies will only apply to the non-US share of vehicles
and parts imported under a free-trade agreement with Canada and Mexico. That
may soften the blow for vehicles whose supply lines zig-zag across the
continent.
Tariffs on parts from Canada and Mexico
that comply with the trade deal also won’t take effect until the US sets up a
process to collect those levies. The US neighbors could use that window to try
to stave off full implementation, even if it’s a long shot.
And while NAFTA, pardon USMCA, nations
will do everything in their power to be loopholed out, foreign brands heavily
reliant on imported vehicles are fresh out of luck. South Korea’s auto giant
Hyundai risks being among the hardest hit: although the carmaker and its
affiliate Kia have plants in Alabama and Georgia, and just yesterday announced
a $21 billion US expansion plan, it imported more than a million
vehicles to the US last year, accounting for more than half of its sales in the
country, according to figures from Global Data.
More
Japanese
Carmakers Face Catastrophic Profit Hit From Trump's Auto Tariffs | ZeroHedge
Five Spring Statement charts you need to see:
Weaker growth, higher debt costs and fewer interest rate cuts
26 March 2025
Fresh forecasts on the outlook for the
British economy were published on Wednesday alongside Chancellor Rachel
Reeves' Spring Statement.
The Office for Budget Responsibility's
latest figures reflect bleaker economic prospects for the UK and globally since
its last projections in Autumn.
Forecasts for economic growth, public
debt, inflation and other key measures have been revised and
reflect the impact of adjustments outlined by the Chancellor earlier
today.
Reeves told the House of Commons on
Wednesday: 'Since autumn, the world has changed.
'Europe is now facing a generational
challenge to its collective security.
'Global economic uncertainty has increased
sharply, growth has slowed in many of Britain’s major trading partners, and
borrowing costs have risen across most advanced economies.
'As an open trading economy, the UK is not
immune to these challenges.'
This is Money highlights the key data from
the OBR's latest projections and how the outlook has changed.
Growth forecasts downgraded
The OBR halved its October GDP growth
forecast for 2025 from 2 to 1 per cent as the watchdog highlighted a
'structural weakness' it says is 'concentrated in productivity', which it also
cut forecasts for.
It also pointed to 'cyclical, temporary,
factors' such as higher interest rate expectations, increases in gas prices and
'elevated uncertainty'.
The OBR now expects growth to average 1.75
per cent a year over the rest of the decade.
Debt costs set to climb
further
The Chancellor's Spring Statement took
place in the shadow of elevated government borrowing costs, which are taking up
an ever-greater share of the Treasury's outgoings.
But the OBR said on Wednesday it now
expects longer-term borrowing costs to continue rising over the next five years
- even as interest rates fall.
Yields on 10-year gilts - the interest
paid on public debt - have risen roughly 25 basis points since October
alongside similar moves in many other advanced economies.
The OBR now expects 10-year yields to
average 4.8 per cent over the next few years to 2030, up from 4.4 per cent in
October.
More
FedEx Executive Issues Economy Warning
March 25, 2025
An executive at FedEx has issued a gloomy
warning for the U.S. economy, which is already grappling with fears over an
impending recession.
Last week, John Dietrich, executive vice
president and chief financial officer for the delivery and logistics
company, said: "I think
it's reasonable to assume that the macro-environment is not going to
significantly improve at least for the first half of [financial year]
2026."
Dietrich's comments came following the
release of FedEx's third-quarter
results,
as the company lowered its full-year earnings and revenue guidance to reflect
"continued weakness and uncertainty in the U.S. industrial economy."
Why It Matters
Economists and financial
institutions have
been voicing increasingly urgent concerns about the overall health of the U.S.
economy, with many suggesting that the country is on the brink of a major
economic downturn.
FedEx's guidance revision suggests that
these warnings are being heeded by corporations themselves and that some of the
country's largest firms are now pricing in the possibility of a recession in the near
future.
What To Know
On Thursday, FedEx released its quarterly
results for
the period ending February 28. Despite posting increases in both revenue and
profit, the company lowered its revenue and earnings forecasts for the full
year, now projecting revenue to range from flat to slightly declining
year-over-year, compared to its previous expectation of this remaining
"approximately flat."
"Our revised earnings outlook
reflects continued weakness and uncertainty in the U.S. industrial economy,
which is constraining demand for our business-to-business services," said
Dietrich.
FedEx's CFO is not alone in his
predictions. According to a recent survey by CNBC, 60
percent of U.S. CFOs now expect a recession to occur in the second half of
2025, while an additional 15 percent believe this will take place in 2026.
Seventy-five percent of respondents expressed being "somewhat
pessimistic" about the U.S. economy, while 95 percent stated that policy
uncertainty from the administration was affecting their decision-making.
Last week, Moody's chief economist Mark
Zandi told CNN that it felt
like the country was being "pushed
into a recession."
The chances of this occurring, he added, were "uncomfortably high" as
a result of President
Trump's
tariff policies.
This pessimism has continued to spread
into the consumer space, according to data released on Tuesday morning.
According to The
Conference Board,
consumer confidence retreated for its fourth straight month in March, dropping
to its lowest level since February 2021. The Expectations Index, which reflects
consumers' short-term outlooks for income, business, and labor market
conditions, fell to 65.2—its lowest level in 12 years and below the 80-point
threshold that the research firm identifies as a signal of an impending
recession.
More
FedEx Executive
Issues Economy Warning
Treasury Department is set to lay off a
‘substantial’ number of employees, official says
Published Wed, Mar 26 2025 7:56 AM EDT
The Treasury Department is planning to
furlough a “substantial” level of its workforce in conjunction with Elon Musk’s efforts to shrink the
size of the federal government, according to a court document.
As part of a complaint in a related case,
Trevor Norris, the department’s deputy assistant secretary in human resources,
indicated that the layoffs will be coming as part of the Department of
Government Efficiency’s ongoing moves to cut the federal employee rolls.
In a sworn statement, Norris said the
Treasury is wrapping up plans to comply with President Donald Trump’s executive order
backing DOGE’s activity. The Treasury currently has more than 100,000
employees.
“These plans will be tailored for each
bureau, and in many cases will require separations of substantial numbers of
employees through reductions in force (RIFs),” Norris said in an affidavit.
The case involves a complaint by the state
of Maryland to get a stay on the layoffs. In recent days, three judges have
issued restraining orders putting temporary halts on DOGE’s efforts to hit
several departments.
“The Treasury Department is considering a
number of measures to increase efficiency, including a rollback of wasteful
Biden-era hiring surges, and consolidation of critical support functions to
improve both efficiency and quality of service,” a Treasury spokesperson said
in a statement. “No final decisions have yet been made, and any current
reporting to the contrary is false.”
Treasury Department is set to lay off a 'substantial' number of employees, official says
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.
Moody's
Says US Fiscal Strength on Course for Continued Decline
By Reuters March 25, 2025, at 10:02 a.m.
NEW
YORK (Reuters) -Ratings agency Moody's said on Tuesday that the U.S.' fiscal
strength is on track for a continued multi-year decline as budget deficits
widen and debt becomes less affordable.
The
agency said in a report that the country's fiscal health deteriorated further
since Moody's lowered its outlook on the U.S. triple-A rating in November 2023.
The
report comes amid heightened uncertainty in U.S. financial markets as President
Donald Trump's decision to impose punitive tariffs on key trading partners has
sparked investor fears of higher price pressures and a sharp economic slowdown.
"Even
in a very positive and low probability economic and financial scenario, debt
affordability remains materially weaker than for other Aaa-rated and highly
rated sovereigns," Moody's said.
It
projects debt to gross domestic product, a key ratio in assessing a country's
finances, will rise to around 130% by 2035 from nearly 100% in 2025. Debt
affordability will worsen at a faster rate, with interest payments accounting
for 30% of revenue by 2035 from 9% in 2021, it said.
Moody's
is the last among major ratings agencies to keep a top, triple-A rating for
U.S. sovereign debt, though it lowered its outlook in late 2023 due to wider
fiscal deficits and higher interest debt payments.
Fitch
cut the U.S. sovereign rating by one notch to AA+ from AAA in 2023, citing
fiscal deterioration and repeated down-the-wire debt ceiling negotiations that
threaten the government’s ability to pay its bills. It was the second major
rating agency to strip the United States of its top triple-A rating, after
Standard & Poor's did so after the 2011 debt ceiling crisis.
Investors
use credit ratings to assess the risk profile of companies and governments when
they raise financing in debt capital markets. Generally, the lower a borrower's
rating, the higher its financing costs.
Moody's
said on Tuesday that lower U.S. debt affordability has meant that the central
role of the dollar and the Treasury market in global financial markets has
become more critical in supporting the triple-A rating.
However,
the potential negative economic impact of tariffs as well as the prospect of
unfunded tax cuts complicates the picture.
"We
see diminished prospects that these strengths will continue to offset widening
fiscal deficits and declining debt affordability," it said.
Republicans
are pushing a $4.5 trillion tax cut extension, but its impact on deficits
remains uncertain without major spending cuts, which could clash with Trump’s
pledges to protect social programs.
Moody's
said large spending cuts that require bipartisan support in Congress will be
politically difficult to implement.
Other
spending cuts, such as the ones spearheaded by the newly established Department
of Government Efficiency, led by Elon Musk to reduce wasteful spending, are
minor compared to mandatory expenditures and are unlikely to generate
substantial savings in the short term.
Tariffs
may offer temporary revenue support, but over time, persistently high tariffs
are likely to hinder growth, counteracting their positive effect on revenues,
it said.
Moody's Says US Fiscal Strength on Course for Continued Decline
Covid-19
Corner
This
section will continue only occasionally when something of interest occurs.
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.
Why are a
growing number of airlines banning power banks on flights?
26
March 2025
Several
airlines in Asia are tightening rules on carrying lithium batteries on planes
following a series of overheating and fire incidents on board.
A
portable power bank with a lithium battery has been found to be a possible
source of a fire that engulfed
an Air Busan plane in January while waiting for
takeoff, South Korea’s transport ministry said in a press release, citing the
investigation committee and forensic services.
Investigators
found “multiple electrical melting marks from the remains of a power bank,” the
release said.
Travelers
often pack lithium-ion battery power banks to charge their phones, tablets,
laptops and cameras on the go. The pocket-sized devices keep gadgets fueled to
play games or watch downloaded movies to stay entertained on long-haul flights.
But
manufacturer issues, misuse and aging can heighten
the risk from the batteries, which use flammable materials,
potentially posing a fire danger on flights. More than 500 in-flight lithium
battery incidents involving smoke, fire, or extreme heat have been recorded by
the US
Federal Aviation Administration (FAA) in the past two
decades.
Which
airlines have changed their rules?
South
Korea implemented nationwide
restrictions that took effect this month, banning passengers from storing
power banks and e-cigarettes in overhead cabins on all of the country’s
airlines. Passengers can store power banks either in the seat pocket or under
the seat.
Charging
a power bank on the plane by plugging it into the seat’s USB outlet is also
prohibited, according to the new regulations.
“Sockets
of a power bank should be covered with friction tape or put in a protective
pouch or a plastic bag (eg. zipped bag) so they don’t touch other metals,” the
country’s transport ministry said.
Thai
Airways announced passengers are no longer allowed to use or charge
power banks on flights from March 15, following “incidents of in-flight fires
on international airlines, suspected
to be linked to power bank usage.”
Starting
in April, Singapore
Airlines is banning passengers from using power banks to charge
phones and personal devices in-flight. Power banks are also not allowed to be
charged using aircraft USB ports.
Low-cost
carrier Air
Asia said it will require passengers to store power banks under
the seat or in the seat pocket, and prohibit charging portable electronic
devices throughout the flight.
Taiwan’s
major carriers, EVA Air, China Airlines, and Uni Air, have also banned the use
of portable chargers in-flight.
Hong
Kong’s aviation regulator said it
will prohibit passengers from using power banks during flights and from storing
lithium batteries in the overhead cabins from April 7. The change comes after
a Hong
Kong Airlines flight from the Chinese city of Hangzhou
was forced to divert after a portable charging device reportedly triggered a
fire in an overhead compartment.
More
Why are a growing
number of airlines banning power banks on flights?
Passenger’s
lost phone causes Air France flight to cut short nine-hour journey
26
March 2025
An Air
France flight was forced to make a U-turn to Paris mid-air
after a missing phone sparked safety concerns in the cabin.
Flight
AF750 from Paris Orly to
Pointe-a-Pitre, Guadeloupe, was over an hour into the almost nine-hour journey
when a passenger reported a lost mobile phone on
Friday (21 March).
According
to an AirLive report, the Air France flight
departed Paris at 11.51am CET before turning around and starting to circle at
31,000ft over the west coast of France.
The
crew decided to return the aircraft to Paris Orly as a “precautionary measure”
after a passenger's mobile phone could not be located despite extensive search
efforts, said the outlet.
The
Boeing 777-300ER, with 375 passengers and 12 cabin crew onboard, safely landed
back in the French capital at 3.25pm, two hours and 16 minutes after it had
taken off.
Maintenance
teams were reportedly deployed to locate the missing phone, and the aircraft
departed for Guadeloupe just 20 minutes later.
----Lithium-ion batteries commonly found in smartphones and
power banks pose a fire risk to aircraft and confined cabin spaces if they are
damaged or overheated.
For
this reason, you cannot typically check power banks in your luggage due to
safety concerns – these must be carried in cabin baggage only.
The
Independent has contacted Air France for comment.
Passenger’s lost
phone causes Air France flight to cut short nine-hour journey
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
“Facts
are meaningless. You could use facts to prove anything that’s even remotely
true!”
Homer
Simpson.
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