Baltic Dry Index. 1489 -51 Brent Crude 63.99
Spot Gold 3045 US 2 Year Yield 3.68 -0.03
US Federal Debt. 36.693 trillion!!!
You look up and down the bench and you have to say to yourself, 'Can't anybody here play this game?'
Casey Stengel
Thursday and Friday’s stocks casino crash is continuing this morning in Asia. The Great Everything Bubble has burst in bout of global wealth destruction of biblical proportions.
Normally, if things are ever normal in a stocks crash, the smart thing to do is to look for grossly oversold buying opportunities, but this stock casinos crash is different.
It was caused deliberately by the USA putting a 10 percent minimum tariff on nearly all exports to the USA with some countries tariffs rising to close to 50 percent.
China countered tariffed the USA with 34 percent tariffs starting this Thursday.
The EU is readying its own retaliatory tariffs too.
Unless the USA U-turns on tariffs almost immediately, there will be growing commercial carnage for months.
This time its different for even the central banks can’t rig a stocks casino relief rally. They simply don’t know which firms are solvent but will go bust. Which firms are already bust, but still trading. Where the trillions of lost global wealth will show up as a new global recession gets underway.
They also don’t know yet, which banks are in trouble.
For the next few weeks at least, it’s bunker time.
China stocks lead sell-off in Asia-Pacific markets
as trade war worries fuel risk-off sentiment
Updated Mon, Apr 7 2025 12:17 AM EDT
Asia-Pacific markets extended their
sell-off Monday as fears over a global trade war sparked by U.S. President
Donald Trump’s tariffs fueled a risk-off mood.
Hong Kong markets led losses in the
region, with the Hang Seng
Index declining 10.37%. Mainland China’s CSI 300 fell 6.31%.
Over in Japan, the benchmark Nikkei 225 lost 6.20% to
hit an 18-month low while the broader Topix index plummeted 6.50%.
Earlier in the day, trading in Japanese futures was suspended due the market
hitting circuit breakers.
In South Korea, the Kospi index was last down
4.74%, while the small-cap Kosdaq declined 4.01%.
Australia’s S&P/ASX 200 extended
losses to 3.87%. The benchmark slid into correction territory with an 11%
decline since its last high in February, in its previous session.
India’s benchmark Nifty 50 dropped 3.85% at
the open while the broader BSE
Sensex declined 5.29%.
U.S. futures
dropped as investors’ hopes of the Trump administration having
successful negotiations with countries to lower the rates were dashed.
Meanwhile, U.S. oil prices dropped below
$60 a barrel on Sunday stateside. Futures tied to U.S. West Texas intermediate crude fell
more than 3% to $59.74, their lowest
since April 2021.
Trump’s top economic officials dismissed any fears of inflation and recession,
declaring that tariffs would persist whatever markets may do.
Stocks in the U.S. sold
off sharply last Friday, after China retaliated with fresh
tariffs on U.S. goods, sparking fears of a global trade war that could
lead to a recession in the world’s largest economy.
The Dow Jones Industrial Average dropped
2,231.07 points, or 5.5%, to 38,314.86 on Friday, the biggest decline since
June 2020 during the Covid-19 pandemic.
The S&P 500 nosedived 5.97%
to 5,074.08, its biggest decline since March 2020.
Meanwhile, the Nasdaq Composite, which captures
many tech companies that sell to China and manufacture there as well, dropped
5.8%, to 15,587.79. This takes the index down by 22% from its December record,
representing a bear market in Wall Street terminology.
Asia
markets live: Stocks fall
Dow futures fall 900 points as Trump tariff market
collapse worsens: Live updates
Updated Mon, Apr 7 2025 9:20 PM EDT
U.S. stock futures dropped on Sunday
evening as the White House remained defiant even after a two-day historic stock
market rout that followed President Donald Trump’s rollout of shockingly high
tariff rates on most key U.S. trading partners.
Dow Jones Industrial average futures fell
979 points, or 2.5% Sunday evening, pointing to another brutal session ahead on
Monday. S&P 500 futures shed
2.9%. Nasdaq-100 futures lost
3.9% as investors continued to shed their one-time tech winners to raise cash.
This follows a market wipeout to end last
week:
- The
Dow posted back-to-back losses of more than 1,500 points for the first
time ever, including a 2,231-point shellacking on Friday.
- The
S&P 500 dropped 6% on Friday for its worst performance since the
outbreak of the pandemic in March 2020. The benchmark lost 10% in two
days, pushing it to more than 17% below its February record, perilously
close to a 20% bear market.
- The
Nasdaq Composite entered a bear market Friday — down 22% from its record —
after losses on Thursday and Friday of nearly 6% apiece.
Investors did not receive the news over
the weekend they were wishing for that the Trump administration was having
successful negotiations with countries to lower the rates, or at the very
least, was considering delaying the set of so-called reciprocal tariffs due to
take effect April 9. The initial unilateral 10% tariff went into effect
Saturday.
Instead the president and his key advisors
played down the sell-off:
More
Stock
market today: Markets plunge Monday
Tariffs spark US junk bond sell-off as recession
risk mounts
Corporate credit is ‘the canary in the
coal mine’ for a faltering economy, analysts warn
6 April 2025
Donald Trump’s “liberation day” tariff
blitz has sparked the biggest sell-off in the US junk bond market since 2020,
signalling growing angst among investors that an economic slowdown will hit
corporate America.
The premium investors demand to hold
speculative-rated corporate debt compared to that offered by US government
bonds — a proxy for default risk — has shot up by 1 percentage point to 4.45
percentage points since Wednesday, ICE BofA data shows. That is the biggest
rise since coronavirus triggered widespread lockdowns in 2020.
The sell-off in corporate bonds since
Wednesday, when Trump took US tariffs to their highest level in over a century,
highlights investors’ worries that the move will hit economic output and raise
unemployment, leaving weaker companies struggling to repay their debts,
analysts said.
“Credit is obviously a canary in the coal
mine,” said Brian Levitt, global market strategist at Invesco. “Credit
tends to go first . . . if the economy’s going to roll over, the odds of a
recession pick up and then you’re going to see spreads blow out.”
On Friday, JPMorgan slashed its US
economic forecasts, predicting a contraction of 0.3 per cent in 2025 — down
from an earlier growth estimate of 1.3 per cent. It also said the jobless rate
would rise to 5.3 per cent, from 4.2 per cent in March.
Companies in the household goods, retail
and automobile parts sectors are among those hardest hit by the rout in
lower-rated debt.
More
Tariffs spark US junk
bond sell-off as recession risk mounts
Hedge funds hit with steepest margin calls since
2020 Covid crisis
Banks ask clients to stump up additional
money as global market sell-off knocks value of holdings
5 April 2025
Hedge funds have been hit with the biggest
margin calls since Covid shut down huge parts of the global economy in 2020,
after Donald Trump’s tariffs triggered a powerful rout in global financial markets.
Wall Street banks have asked their hedge fund clients to
stump up more money as security for their loans because the value of their
holdings had tumbled, according to three people familiar with the matter.
Several big banks have issued the largest margin calls to their clients since
the beginning of the pandemic in early 2020.
The margin calls underscore the intense
turbulence in global markets on Thursday and Friday as Trump’s
tariffs announcement
was followed by retaliatory duties by China, and other countries readied their
own responses. Wall Street’s S&P 500 share index was set to post its worst
week since 2020, while oil and riskier corporate bonds have sold off heavily.
“Rates, equities and oil were down
significantly . . . it was the breadth of moves across the board [which caused
the scale of the margin calls],” said one prime brokerage executive, adding
that it was reminiscent of the sharp and broad market moves in the early months
of the Covid pandemic.
“We are proactively reaching out for
clients to understand [risk] across their overall books,” said a prime
brokerage executive at a second large US bank.
According to two people familiar with the
matter, Wall Street prime brokerage teams — which lend money to hedge funds —
came into the office early on Friday and held all hands on deck meetings to
prepare for the large amount of margin calls to clients.
----Selling was concentrated in sectors
including megacap technology, groups exposed to artificial intelligence across
software and semiconductors, high-end consumer, and investment banks.
The selling drove US long/short equity
fund net leverage, a measure of borrowing used to magnify bets, down to an
18-month low of about 42 per cent, the Morgan Stanley report said.
The pain so far would have been greater
had many hedge funds not been scaling back their stock positions and cutting
their leverage with banks in recent weeks in response to the trade war Trump
had been threatening.
In a further sign of the tumult across the
hedge fund sector, gold — a traditional safe haven for investors — dropped 2.9
per cent on Friday, despite the deep gloom among global investors.
Suki Cooper, a precious metals analyst at
Standard Chartered, suggesting the precious metal was being used to “meet
margin calls.”
Hedge funds hit
with steepest margin calls since 2020 Covid crisis
In other news.
The Race to Get Gold Bars Into the US Screeches to
a Halt
April 3, 2025 at 10:27 AM GMT+1 Updated on April 3, 2025 at 5:57 PM
GMT+1
A massive arbitrage trade that has drawn
tens of billions of dollars’ worth of gold and silver to the US came to an
abrupt halt with Wednesday’s announcement that precious metals would be exempt
from Donald Trump’s sweeping tariffs.
More, subscription required.
The Race to Get
Gold Bars Into the US Screeches to a Halt - Bloomberg
Consumers are boycotting US goods around the
world. Should Trump be worried?
Fri 4 April 2025 at 5:03 pm BST
As politicians around the world scramble
to respond to US “liberation day” tariffs, consumers have also begun
flexing their muscles. “Boycott
USA” messages
and searches have been trending on social media and search engines, with users
sharing advice on brands and products to avoid.
Even before Donald Trump announced
across-the-board tariffs, there had been protests and attacks on the
president’s golf courses in Doonbeg in Ireland
and Turnberry in Scotland
in response to other policies. And in Canada, shoppers avoided US goods after
Trump announced he could take over his northern neighbour.
His close ally Elon Musk has seen protests
at Tesla
showrooms across
Europe, Australia and New Zealand. New cars have been set
on fire as
part of the “Tesla take-down”, while Tesla sales have been on a deep downward
trend.
This has been especially noticeable in European countries where electric
vehicles sales have been high, and in
Australia.
This targeting of Trump and Musk’s brands
are part of wider boycotts of US goods as consumers look for ways to express
their anger at the US administration.
Denmark’s biggest retailer, Salling Group,
has given the price label of all European products a black
star,
making it easy for customers to avoid US goods.
Canadian
shoppers are
turning US products upside down in retail outlets so it’s easier for fellow
shoppers to spot and avoid them. Canadian consumers can also download the Maple Scan app that
checks barcodes to see if their grocery purchases are actually Canadian or have
parent companies from the USA.
Who owns what?
The issue of ostensibly Canadian brands
being owned by US capital illustrates the complexity of consumer boycotts – it
can be difficult to identify which brands are American and which are not.
In the UK, for example, many consumers
would be surprised to learn how many famous British brands are actually
American-owned – for example, Cadbury, Waterstones and Boots. So entwined are
global economies that attempts by consumers to boycott US brands may also
damage their local economies.
This complexity is also present in Danish
and Canadian Facebook groups that are dedicated to boycotting US goods.
Consumers exchange tips on how to swap alternatives for American products.
More
Consumers are
boycotting US goods around the world. Should Trump be worried?
Finally, can’t anyone here play this game?
UK county 'confused with remote Pacific island' in
Donald Trump tariffs blunder
5 April 2024
A tiny island between Australia and New Zealand
has been slapped with 29% tariffs by the US - in what appears to be a mix-up
with the UK county that shares its name. The 2,000-strong population of Norfolk
Island in the Pacific Ocean was left confused after being hit with hefty
tariffs by Donald Trump this week, 19% points higher than the rest of
Australia.
While it was just one of several bizarre
territories singled out by the US President in his sweeping "Liberation
Day" levies - also including the penguin-inhabited
Heard and McDonald Islands - it appears that US officials confused Norfolk
Island with its namesake county in the UK, over 10,000 miles away. Trump's
administration seems to have misunderstood the origin of goods being shipped to
the US from an aquarium firm and engineering company based in Norfolk, UK, according
to The
Guardian's analysis of
the import data and shipping records used to calculate the tariffs.
The confusion reportedly stemmed from
erroneous listings on international trade documents, which recorded Norfolk
Island as the country of origin for shipments that actually came from the UK.
Among the businesses mistakenly linked to
the remote pacific island was OASE, a German aquarium based in the village of
Horsham St Faith, and US-owned glass and steel engineering firm Novum
Structures, based in the market town of Diss. There is no indication that
either of the firms were responsible for the paperwork mixup.
Norfolk Island administrator George Plant
told ABC Sydney that residents had been left "scratching their heads"
after the announcement - especially since the small community doesn't have a
trade relationship with the US, with an economy that's predominantly reliant on
tourism and exports of evergreen pine.
"I think they're as confused as I
am," Mr Plant said. "I've had a few calls from the community and we
really cannot understand it."
Australian Prime Minister Anthony Albanese
had a similar reaction - telling reporters: "I'm not quite sure Norfolk
Island, with respect to it, is a trade competitor with the giant economy of the
US, but that just exemplifies that nowhere on earth is exempt from this."
Meanwhile, trade minister Don Farrell had
a more blunt response, suggesting that the 29% tariff was "clearly a
mistake".
"I think it's an indication, to be
honest with you, that this was a rushed process," he added.
Meanwhile, Norfolk in the UK has got off
significantly lighter than its Pacific Ocean counterpart, with Trump only
charging a "baseline" 10% levy on goods entering the US.
The US leader's slew of tariff
announcements has already destabilised global financial markets, however, with
the prospect of retaliatory action fuelling fears of an all-out global trade
war.
The US Department of Foreign Affairs and
Trade has been contacted for comment.
UK county
'confused with remote Pacific island' in Donald Trump tariffs blunder
It has long been observed that
at or around the time of one of the two annual equinoxes, stock trends often
reverse course.
At the equinox, the length of
the day equals that of the night (12 hours each!) and essentially, the summer
days turn into autumn nights, and vice versa, twice a year.
Using that analogy, it seems
bull trends can turn into bear trends, as traders can flip their perceptions at
such times.
Chart of the week: do equinoxes really affect stock trends?
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.
Trump’s
Trade War Is Setting Up the Next Big Debt Default Wave
The
April 2 announcement tipped more than $43 billion of bonds and loans into
distress
April
5, 2025 at 3:17 PM UTC
Rising
Distress
Donald
Trump’s
global trade war is already priming financial markets for the next wave of
corporate defaults. A Bloomberg News measure of distressed debt worldwide
swelled the most in at least 15 months this week, sending more than $43 billion
of bonds and loans to levels that make it challenging to refinance.
The
president had telegraphed well in advance his intention to raise tariffs ahead
of the official April 2 announcement. But few had expected Washington to go
after so many
of its key trading partners with such high duties, especially
considering the risk of upending global supply chains that entire US industries
rely on.
After
rolling out a 10% base tariff on all exporters to the US and slapping
additional levies on about 60 countries including China, Vietnam and
Bangladesh, investors are scouring their holdings for companies likely to be
hit the hardest while sizing up the impact on consumer spending and industries
like travel and leisure.
In
a telling sign, the pile of distressed debt in the Americas region has now
surpassed that in Asia Pacific for the first time since August.
Steep
tariffs could directly hit retailers which depend on
Southeast Asian countries for their products.
“Retailers
are getting smacked,” said Robert Schwartz, a portfolio manager
at AllianceBernstein. “If you’re a retailer, you tried to diversify
into Vietnam or the Philippines. Those tariffs weren’t priced in until this
week.”
Apollo-owned Michaels,
an arts and crafts chain, had been working with its suppliers on pricing and
sourcing in preparation for the announcement. Last week, management told
investors it projected gross margins would expand in 2025, according to people
familiar with the matter.
This
week, its bonds due 2029 tumbled almost 10 cents on the dollar to trade at just
44 cents on the dollar.
The
list of companies set to take a direct hit from tariffs is long: among them
household goods chains like Wayfair, department store chain Nordstrom,
accessories brand Claire’s, and animal products manufacturer Petsafe.
The
owner of luxury department store chain Saks Fifth Avenue was
one of the biggest additions to the distressed universe. A $2.2 billion bond
that it issued less than four months ago to finance the acquisition of Neiman
Marcus Group is now trading at 73.5 cents on the dollar and yielding 16
percentage points more than Treasuries, according to data compiled by
Bloomberg.
Representatives
for Apollo, Claire’s and Wayfair declined to comment, while Nordstrom, Petsafe
and Saks didn’t respond to requests seeking comment.
More
Trump’s Trade War
Is Setting Up the Next Big Debt Default Wave - Bloomberg
‘Fewer
Choices and Higher Prices’: The Supply Chain of the Future
Tariff
increases are likely to be passed on to consumers while companies look for
cheaper locations
April
5, 2025 7:00 am ET
American
consumers should brace for price increases and fewer options in the store, say
people involved in the global networks that supply U.S. retailers.
The
companies that built up Asian supply chains over decades operate on slim
margins, and many say they have little choice but to pass on the cost of
President Trump’s higher
tariffs,
assuming he sticks by his plan. They say it is impossible to make many
labor-intensive products in the U.S., and shifting around production to ease
the tariff burden will be time-consuming and costly.
“The
supply chain of the future will look like a multiheaded dragon,”
said Bruno Jaspaert, the chief executive of the Vietnamese industrial-park
owner Deep C Industrial Zones. “The era of sourcing from one global
manufacturing base in the world is completely over,” said Jaspaert, whose sites
are home to tenants such as the tiremaker Bridgestone.
Others
such as Eric Zheng, the president of the American Chamber of Commerce in
Shanghai, said companies might sell less to the U.S. or pull out of the market
altogether. With the new tariffs, “You’d see fewer choices and higher prices,”
he said.
Ansell,
an Australian maker of protective gloves that has much of its business in the
U.S., said Friday it would raise prices to offset tariffs. It manufactures most
of its gloves in Asia and said it didn’t intend to move production to the
U.S.
Many
industry participants said they were taking a wait-and-see approach, believing
Trump would be willing to negotiate deals with countries to lower or lift the
levies.
More
‘Fewer Choices and
Higher Prices’: The Supply Chain of the Future - WSJ
Get
Ready for Stagflation. Trump’s Tariffs Mean Less Growth, More Inflation
April
4, 2025
The
reciprocal tariffs President Donald Trump unveiled Wednesday dramatically
increase the risk of the U.S. sliding into a phase where economic growth
stagnates while prices escalate.
Under
Trump’s plan, there will
be a minimum 10% tariff on all imports of foreign goods starting Saturday,
according to the White House. And then on Wednesday, the Trump administration
will impose higher,
individualized tariffs ranging from 48% to 10% on countries with which
the U.S. has the largest trade deficits.
Economists
estimate those levies would raise the effective tariff to above 25%, much
higher than the rate of less than 10% expected by markets.
Several
economists told Barron’s on Wednesday night that they expect the increases will
spur stagflation—a toxic combination of weak growth and high inflation—in the
U.S. That could make it difficult for Federal Reserve officials to address weak
growth with the usual medicine of cutting interest rates, lest that make
inflation worse.
Balancing
the two sides of the bank’s mandate—price stability and maximum employment—will
become far more difficult. But economists don’t believe the latest trade
actions will automatically set the U.S. economy up for a recession.
“The
risk of stagflation just took off like a rocket, particularly if you factor in
retaliation by most trading partners,” said Olu Sonola, head of U.S. economic
research at Fitch Ratings. “This is a generational shift. I hope an off-ramp is
used sooner than later.”
If
Trump imposes the latest tariff hikes at this level for a year or more, that
would to raise inflation by at least one percentage point, says Joseph Gagnon,
international macroeconomist at the Peterson Institute for International
Economics.
More
Get Ready for
Stagflation. Trump’s Tariffs Mean Less Growth, More Inflation
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.
Researchers
Turn ‘Moon Dust’ Into Solar Panels That Could Power Future Space Cities
April
4, 2025
A team
of researchers has unveiled a creative solution to one of space exploration’s
biggest hurdles—how to generate power on the Moon. Now, a new study shows that
“moonglass” can be fabricated from lunar dust and used to make solar panels
more efficiently and cheaply than transporting them from Earth.
“The
solar cells used in space now are amazing, reaching efficiencies of 30% to even
40%, but that efficiency comes with a price,” says lead researcher Felix Lang
of the University of Potsdam, Germany. “They are very expensive and are
relatively heavy because they use glass or a thick foil as cover. It’s hard to
justify lifting all these cells into space.”
Solar
Panels Made From Lunar Dust Could Cut Launch Costs by 99 Percent
Instead
of packing bulky panels and glass in rocket cargo bays, the team proposes
melting lunar regolith—the Moon’s loose, dusty surface—to create “moonglass.”
By pairing this moonglass with a crystal mineral called perovskite,
which efficiently converts sunlight into electricity, their solar cells offer a
potentially revolutionary alternative for powering future lunar outposts.
One of
the biggest advantages is the dramatic weight reduction. According to the
paper, using moonglass in place of Earth-sourced glass could cut launch mass by
99.4%, slash 99% of transport costs, and make long-term lunar settlements more
feasible. These figures are from tests in which the scientists melted a
substance designed to simulate Moon dust into moonglass and used it to build a
new kind of solar cell.
“If
you cut the weight by 99%, you don’t need ultra-efficient 30% solar cells, you
just make more of them on the Moon,” Lang said. “Plus, our cells are more
stable against radiation, while the others would degrade over time.”
Space
is a harsh environment, especially on the Moon, where there is no protective
atmosphere. Solar cells must withstand constant bombardment by radiation.
Moonglass shows an advantage in this department as well. Unlike standard
Earth-made glass, which gradually darkens under radiation and blocks vital
sunlight, moonglass begins with its own natural tint that resists further
browning. This means that over time, the Moon-based panels maintain their
performance better than conventional ones.
“Our
cells are more stable against radiation, while the others would degrade over
time,” Lang said.
Another
plus is that making moonglass, even in low lunar gravity, is relatively
straightforward. Concentrating sunlight can generate enough heat to melt the
dust, and the resulting glass does not need complex purification to be used
effectively. Paired with thin perovskite layers, which are cheaper and easier
to produce than traditional photovoltaic materials, the new approach offers a
realistic way to power a future Moon habitat.
Although
more work needs to be done, primarily to test the process in lunar conditions,
the researchers remain optimistic that the technique will prove practical. With
space agencies and private companies pushing toward a permanent presence on the
Moon, innovations like these could make life there more attainable.
“From
extracting water for fuel to building houses with lunar bricks, scientists have
been finding ways to use Moon dust,” Lang said. “Now, we can turn it into solar
cells too, possibly providing the energy a future Moon city will need.”
Researchers Turn ‘Moon Dust’ Into Solar Panels That
Could Power Future Space Cities
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Government
has three primary functions. It should provide for military defense of the
nation. It should enforce contracts between individuals. It should protect
citizens from crimes against themselves or their property. When government-- in
pursuit of good intentions tries to rearrange the economy, legislate morality,
or help special interests, the cost come in inefficiency, lack of motivation,
and loss of freedom. Government should be a referee, not an active player.
Milton Friedman
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