London Irvine Report: Special Update 17/05/2025 Moody’s Downgrades. Consr. Confidence Falls.

Baltic Dry Index. 1388 +83 Brent Crude 65.41

Spot Gold 3204 U S 2 Year Yield 3.98 +02

US Federal Debt. 36.859 trillion!!!

So, when the public debt crosses the $37 trillion mark in the next few months, it will be accurate to say that you haven’t seen anything yet. We will be well north of the $40 trillion debt mark sometime in 2025 and, when you add the GOP/Trump planned $10 trillion of new red ink to CBO’s latest optimistic baseline forecast, the public debt will be pushing $70 trillion by the mid-2030s.

David Stockman. Davidstockmancontracorner.

In the US stock casinos, more disconnect from the real economy as rating agency Moody’s downgrades Uncle Scam’s credit rating and US consumer confidence collapse to its second lowest reading ever.

Dinosaur Graeme expects a summer stock catastrophe lies ahead in the stock casinos.

S&P 500 posts fifth winning day, notches 5% weekly gain as U.S.-China trade tensions ease: Live updates

Updated Fri, May 16 2025 4:17 PM EDT

The S&P 500 rose Friday for a fifth session and posted a sharp weekly gain, as investors looked past the release of disappointing consumer sentiment data and persistent inflation worry.

The broad market index climbed 0.70% to end at 5,958.38, while the Nasdaq Composite gained 0.52% to close at 19,211.10. The Dow Jones Industrial Average gained 331.99 points, or 0.78%, settling at 42,654.74. Friday’s advance put the 30-stock benchmark into positive territory for 2025.

For the week, the S&P 500 surged 5.3%, and the Dow gained 3.4%. The Nasdaq Composite jumped 7.2% this week. Technology stocks also had a strong week. Shares of Nvidia gained about 16%, while Meta Platforms advanced 8%. Shares of Apple climbed 6%, while Microsoft popped 3%.

The major averages rose even after the University of Michigan’s consumer sentiment index came in at its second-lowest level on record. Consumers also see prices rising 7.3% over the next year, up from 6.5% last month.

Stocks have made a strong comeback since U.S. and Chinese officials earlier this week agreed on a 90-day truce in their tariff measures, which eased investors’ fears of escalating global trade tensions and rising risk to the economy.

“Markets are repricing the stagflation risk right now — what was once the base case for folks who were sure that tariffs were going to shoot inflation skyward immediately, really hasn’t been supported in the data,” said Jamie Cox, managing partner at Harris Financial Group. “The U.S. consumer may say he/she is worried, but they aren’t spending like they are. Consumption trumps all once you filter out all the noise.”

Wall Street is also hoping that there will be more clarity on the trade front in the weeks ahead.

President Donald Trump said Friday that his administration will send letters to many countries detailing new tariff rates, possibly over the next two to three weeks. Those letters would take the place of trade negotiations with countries where the U.S. doesn’t have time to meet.

Stock market today: Live updates

Moody’s downgrades United States credit rating, citing growth in government debt

Published Fri, May 16 2025 4:52 PM EDT

Moody’s Ratings cut the United States’ sovereign credit rating down one notch to Aa1 from Aaa, the highest possible, citing the growing burden of financing the federal government’s budget deficit and the rising cost of rolling over existing debt amid high interest rates.

“This one-notch downgrade on our 21-notch rating scale reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns,” the rating agency said in a statement.

The decision to lower the United States credit profile would be expected, at the margin, to lift the yield that investors demand in order to buy U.S. Treasury debt to reflect more risk, and could dampen sentiment toward owning U.S. assets, including stocks. That said, all the major credit rating agencies continue to give the United States their second-highest available rating.

The yield on the benchmark 10-year Treasury note climbed 3 basis points in after-hours trading, trading at 4.48%. The iShares 20+ Year Treasury Bond ETF — a proxy for longer term debt prices — fell about 1% in after hours trading, while the SPDR S&P 500 ETF Trust that tracks the benchmark index for U.S. stocks dropped 0.4%.

Moody’s had been a holdout in keeping U.S. sovereign debt at the highest credit rating possible, and brings the 116-year-old agency into line with its rivals. Standard & Poor’s downgraded the U.S. to AA+ from AAA in August 2011, and Fitch Ratings also cut the U.S. rating to AA+ from AAA, in August 2023.

“Successive U.S. administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs,” Moody’s analysts said in a statement. “We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration.”

Massive deficit

The U.S. is running a massive budget deficit as interest costs for Treasury debt continued to rise due to a combination of higher rates and more principal debt to finance. The fiscal deficit in the year that began October 1 is already running at $1.05 trillion, 13% higher than a year ago. Revenue from tariffs helped shave some of the imbalance last month.

In its statement accompanying the downgrade, Moody’s analysts wrote that, “If the 2017 Tax Cuts and Jobs Act is extended, which is our base case, it will add around $4 trillion to the federal fiscal primary (excluding interest payments) deficit over the next decade.”

“As a result, we expect federal deficits to widen, reaching nearly 9% of GDP by 2035, up from 6.4% in 2024, driven mainly by increased interest payments on debt, rising entitlement spending and relatively low revenue generation,” Moody’s said. ″We anticipate that the federal debt burden will rise to about 134% of GDP by 2035, compared to 98% in 2024.″⁣

The Moody’s downgrade came as the GOP-led House Budget Committee on Friday rejected a sweeping tax cut package as part of President Donald Trump’s economic agenda, including extending tax cuts first enacted in 2017.

Moody's lowers U.S. credit rating to 'Aa1'

In other news.

How UK state pension compares to the rest of Europe

UK pays out up to £802.32 per month, ranking 16th on a list of 30 European countries when comparing income against the cost of living

Spanish pensioners enjoy the most comfortable retirement in Europe, with their maximum monthly state pension almost three times higher than in Britain despite the cost of living being higher in the UK.

The UK pays out a maximum £802.32 per month to retirees, according to data by financial advisers Almond Financial, ranking 16th on a list of 30 European countries on the pension breakeven index, which compares state pension income against the cost of living in each country.

The data released in September was calculated on the basis that most pensioners in these countries are mortgage-free.

The estimated monthly cost of living, including food shopping and energy bills but excluding rent, for a single person in the UK was £688.04 at the time, according to Numbeo, a comparison website that provides crowdsourced data of the cost of living in major cities.

How UK state pension compares to the rest of Europe

The first requisite of a sound monetary system is that it put the least possible power over the quantity or quality of money in the hands of the politicians.

Henry Hazlitt

Global Inflation/Stagflation/Recession Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians, inflation/recession now needs an entire section of its own.

Consumer sentiment slides to second-lowest on record as inflation expectations jump after tariffs

Published Fri, May 16 2025 10:08 AM EDT Updated Fri, May 16 2025 12:43 PM EDT

U.S. consumers are becoming increasingly worried that tariffs will lead to higher inflation, according to a University of Michigan survey released Friday.

The index of consumer sentiment dropped to 50.8, down from 52.2 in April, in the preliminary reading for May. That is the second-lowest reading on record, behind June 2022.

The outlook for price changes also moved in the wrong direction. Year-ahead inflation expectations rose to 7.3% from 6.5% last month, while long-term inflation expectations ticked up to 4.6% from 4.4%.

However, the majority of the survey was completed before the U.S. and China announced a 90-day pause on most tariffs between the two countries. The trade situation appears to be a key factor weighing on consumer sentiment.

“Tariffs were spontaneously mentioned by nearly three-quarters of consumers, up from almost 60% in April; uncertainty over trade policy continues to dominate consumers’ thinking about the economy,” Joanne Hsu, director of the Surveys of Consumers, said in the release.

Inflation expectations are closely watched by investors and policymakers. Federal Reserve Chair Jerome Powell has said the central bank wants to make sure long-term inflation expectations do not rise because of tariffs before resuming rate cuts.

Even with the pauses on import levies against China and other countries, the effective tariff rate for goods entering the United States is still significantly higher today than it was before President Donald Trump’s inauguration in January. Economists on both sides of the aisle mostly agree that tariffs could lead to a short-term rise in prices, though the extent of that increase and whether it would fuel long-term inflation remains unclear.

Recent inflation data has not shown a tariff bump, as both the consumer price index and producer price index for April came in below consensus estimates.

A final consumer sentiment index for the month is slated to be released on May 30, and will likely be closely watched to see if the tariff pause led to an improvement in sentiment.

Consumer sentiment slides to second-lowest on record as inflation expectations jump after tariffs

Technology Update.

With events happening fast in the development of solar power and graphene, I’ve added this section.

Breakthrough shrinks fusion power plant and expands practicality

By David Szondy May 10, 2025

Commercial fusion power plants may be cheaper and easier to build thanks to a breakthrough by TAE Technologies that allows reactors to generate their own containment fields without the need for massive magnetic coils and other systems.

Practical fusion power has been touted as only 25 years in the future ever since 1945, but there are some bright spots on the horizon that suggest that it could come to pass as soon as the next decade.

Part of the problem has been that the tokamak reactor, the front-runner design for a fusion power plant, has become a bit like that home extension that got out of hand and sucked up a lot more time and money than originally budgeted for until you wish you'd never started it in the first place.

First conceived of by Igor Tamm and Andrei Sakharov in the 1950s, tokamaks use a toroidal magnetic field to contain the hydrogen plasma to help keep it at the sun-like pressure and temperature needed to ignite fusion. The problem is that over decades of development tokamak designs have become gigantic, with huge, complicated superconducting magnetic coils to generate the containment fields along with equally complex and huge electromagnetic heating systems.

The result is that the largest tokamak weighs in at 23,000 tonnes and is still a long way from being practical.

Using a different type of fusion reaction combined with a new reactor design, TAE says that it's come up with a simpler, more efficient way to build a commercial reactor compared to a tokamak. It does this by dumping the toroidal field in favor of a linear one that is based on what is called the Field-Reversed Configuration (FRC) principle.

Essentially, FRC does away with the massive magnetic coils by making the plasma produce its own magnetic containment field. After accelerating high-energy ions of hydrogen and then giving them an electrically neutral charge, these are injected as a beam into the plasma. On colliding with the plasma, the beam particles are re-ionized, while the collision energy heats the plasma.

The clever bit is that this sets up toroidal currents in the plasma. As these intensify, the magnetic field used initially to contain the plasma inverts and the plasma starts generating its own containment field. This field can be configured in real-time for stability and adjusting the pressure as required.

According to TAE, an FRC reactor can produce up to 100 times more fusion power output than a tokamak based on the same magnetic field strength and plasma volume. This allows for a surprisingly simple linear reactor design that is cheaper to build and operate. Using a new neutral beam injection system, the company says that it has been able to improve on a previous experimental reactor, reducing the machine’s size and complexity while slashing the costs by 50%.

In addition, FRC allows a reactor to run on proton-boron aneutronic fusion. That is, a fusion reaction that fuses a hydrogen nucleus and a boron-11 atom instead of two atoms of the hydrogen isotopes deuterium and tritium. It's called aneutronic because instead of producing a neutron, the reaction p+¹¹B→3α+8.7MeV produces three alpha particles (helium-4 nuclei) plus a lot of energy.

This is attractive because the fewer neutrons the less damage is done to the reactor, the energy being released as charged particles is easier to harness, less shielding is required, and boron-11 is relatively abundant and is not radioactive.

The new reactor is called Norm because it's significantly shorter than Norman, its predecessor. This is because the new FRC system allowed the engineers to dump the long quartz tubes at either end of the chamber that were used for plasma creation through supersonic collisions during plasma injection.

The data from Norm will be used to inform construction of the next reactor, Copernicus, which will lead to Da Vinci (never mind that Vinci was where Leonardo was from, not his name, but there you are), TAE's commercial prototype that is expected to enter service in the next decade.

"With Norm, we have mastered the remaining complexities of the FRC, and through its successful operation, TAE has materially de-risked Copernicus," said TAE CEO Michl Binderbauer. "The NBI-only achievement is an inflection point for TAE’s fusion R&D, charting a path for streamlined devices that directly addresses the commercially critical metrics of cost, efficiency and reliability. This milestone significantly accelerates TAE’s path to commercial hydrogen-boron fusion that will deliver a safe, clean and virtually limitless energy source for generations to come."

The research was published in Nature Communications.

Source: TAE Technologies

Fusion power breakthrough promises cheaper and simpler reactors

Next, the world global debt clock. Nations debts to GDP compared.

World Debt Clocks (usdebtclock.org)

This weekend’s music diversion. Approx. 9 minutes.

Johann Christoph Förster (1693-1745) - Concerto ex Dis dur

Johann Christoph Förster (1693-1745) - Concerto ex Dis dur

This weekend’s tariff and shipping diversion. US shipping fraud on China. Approx. 13 minutes.

China REJECTS 300,000 Tons Of U.S Soybeans Disguised As Argentine! $200 MILLION Trade Fraud EXPOSED

China REJECTS 300,000 Tons Of U.S Soybeans Disguised As Argentine! $200 MILLION Trade Fraud EXPOSED - YouTube

Next, what happened to those Trijets? Approx. 14 minutes.