Baltic
Dry Index. 1626 +127 Brent Crude 65.15
Spot Gold 3375 US 2 Year Yield 3.92 +0.05
US Federal Debt. 36.942 trillion
US GDP 30.053 trillion.
What do you call a trained professional paid to guess wrong things?
An economist.
That Trump called Xi says a lot about the disastrous global US tariff war on friend and foe alike.
Far from returning 50 years of outsourcing US manufacturing to China, something only made possible by the Great Nixonian Error of fiat money, the paused for now tariff wars are collapsing the just in time global supply chains and risking a return to the 1930s era depression, but this time round with a Pacific Ocean of consumer and national debt.
For now the stock casinos are still confident that President Trump will blink and fold before the tariff pause ends on July 8th or 9th. But with only a month to go before tariff Armageddon, an economic disaster looms either way.
If President Trump folds, he becomes a lame duck Republican liability President, with little prestige on the world stage. If President Trump doesn’t fold and puts into effect a massive shock to global trade, a 1930s similar trade collapse swiftly follows.
For today though, the US jobs report for May. Will the first of the DOGE firings start to show up? Will the first of the tariff uncertainty in new hirings start to show up.
We are
drinking in the last chance saloon on the RMS Titanic, 10 pm April 14th,
1912.
Asia-Pacific
markets mostly rise as investors digest Trump-Xi call
Updated
Fri, Jun 6 2025 12:36 AM EDT
Asia-Pacific
markets mostly rose as investors assessed the phone call between U.S. President
Donald Trump and Chinese President Xi Jinping.
Trump and
Xi spoke on Thursday and agreed that officials from the U.S. and China will
meet soon to continue negotiations aimed at ending the ongoing trade war.
The call,
which Trump described as “very good,” lasted for about 90 minutes, focusing
“almost entirely” on trade and yielded a “very positive conclusion for both
countries,” Trump wrote in a Truth Social post.
Japan’s
benchmark Nikkei 225 rose
0.31% and the Topix gained 0.4%. South Korea’s Kospi extended gains to jump
1.49%, and the small-cap Kosdaq added 0.8%.
Australia’s S&P/ASX 200 was 0.16%
higher.
Hong
Kong’s Hang Seng Index slipped
0.18% at the open, while mainland China’s CSI 300 traded flat.
“The U.S.‑China
agreement to de‑escalate tensions, and the recent phone call between Trump and
Xi, shows both countries have an economic ’pain threshold,” said Luke Yeaman,
chief economist and head of global economics and markets research at
Commonwealth Bank.
While the
call takes some severe downside scenarios off the table, tensions will remain
high and more bouts of escalation are still on the cards, Yeaman wrote in a
note published Friday. “In the longer term, both will continue to push for more
economic independence.”
U.S.
futures were mostly calm ahead of a key jobs report that is expected
to shed light on the health of the U.S. economy.
Overnight
stateside, the three major averages closed lower. The S&P 500 fell, spurred by
a drop in shares of electric vehicle maker Tesla. The broad market index
dipped 0.53% and closed at 5,939.30, while the Nasdaq Composite pulled back
0.83% to end at 19,298.45. The Dow
Jones Industrial Average dropped 108 points, or 0.25%, to settle at
42,319.74.
Asia
stock markets today: live updates for June 6 2025
European Central
Bank trims interest rates after inflation dips below target
Published
Thu, Jun 5 2025 8:15 AM EDT
The
European Central Bank on Thursday announced a 25-basis-point interest rate trim
taking the deposit facility rate to 2%, down from a mid-2023 high of 4%.
Ahead of
the announcement, traders had been pricing in an almost 99% chance of the
quarter-point cut according to LSEG data.
“In
particular, the decision to lower the deposit facility rate – the rate through
which the Governing Council steers the monetary policy stance – is based on its
updated assessment of the inflation outlook, the dynamics of underlying
inflation and the strength of monetary policy transmission,” the ECB said in
its statement.
Euro zone
inflation fell below the 2% ECB target rate in May, hitting a
cooler-than-expected 1.9% according to preliminary data published earlier this week.
Economic
growth however has continued to be lacklustre even as interest rates have
eased. The latest estimate shows that in the first quarter of 2025, the euro
zone expanded by 0.3%.
The
central bank’s decision comes at a critical time for the euro zone economy as
businesses and policy makers face increasing uncertainty in the wake of rising
geopolitical tensions.
U.S.
President Donald Trump’s tariff policy is a main concern, with the duties
expected to weigh heavily on economic growth. Some of the sector-specific
tariffs in particular could hit Europe hard as key industries like steel and
autos are impacted.
The
impact of tariffs on inflation is less clear and could depend on if, and how,
the European Union strikes back, policymakers have said. Retaliatory measures
from the EU are currently on pause, but the bloc’s leaders have said they are
prepared to implement them if needed. Question marks also remain about how
plans to ramp up defense spending across Europe could impact the economy.
European Central
Bank decision, June 2025
In other
news.
Auto industry sounds the alarm as China’s rare
earth curbs start to bite
Published Thu, Jun 5 2025 1:10 AM EDT
Automotive industry groups are
increasingly worried about a rare earth shortage.
Several European auto supplier plants and
production lines have already been shut down due to China’s recent export controls, according to
Europe’s auto supplier association CLEPA, with the group warning of more
outages as inventories deplete.
Germany’s car industry and auto executives
have also sounded the alarm, saying the highly globalized sector is acutely
vulnerable to further supply chain disruption.
China’s Ministry of Commerce in early
April imposed export restrictions on several rare earth elements and magnets
widely used in the automotive, defense and energy sectors. The curbs came as
part of a response to U.S. President Donald Trump’s tariff increase on
Beijing’s products.
Some of the affected rare earth elements
are vital components to the production of both combustion engines and electric
vehicles.
CLEPA said Wednesday
that while hundreds of export license applications have been submitted to the
Chinese authorities since early April, only around 25% appear to have been
approved.
“With a deeply intertwined global supply
chain, China’s export restrictions are already shutting down production in
Europe’s supplier sector,” CLEPA Secretary General Benjamin Krieger said in a
statement.
For its part, the German Association of
the Automotive Industry (VDA), the country’s main car industry lobby, warned
that Beijing’s export restrictions could soon cause output to grind to a halt.
“The Chinese export restrictions on rare
earths are a serious challenge for the security of supply, and not just in the
automotive supply chains. Although some licences have now been granted, this is
currently not enough to ensure smooth production,” VDA President Hildegard
Müller told CNBC via email.
“A further problem arises from the slow
customs clearance of exports for which a valid export licence has been granted.
If the situation does not change quickly, production delays and even production
stoppages can no longer be ruled out,” she added.
Müller reiterated the VDA’s call for
German and European Union lawmakers “to raise this issue emphatically with the
Chinese side so that a solution to the situation can be found quickly.”
Demand for rare earths and critical
minerals is expected to grow exponentially in the
coming years as the clean energy
transition picks up pace.
China, meanwhile, is the undisputed leader of the
critical minerals supply chain, accounting for roughly
60% of the world’s production of rare earth minerals and materials. U.S.
officials have previously warned that this
poses a strategic challenge amid the pivot to more sustainable energy sources.
More
Auto groups sound
the alarm as China's rare earth curbs start to bite
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.
Cracks
Are Appearing in the Tariff-Era Economy. Think Stagflation.
June
4, 2025
People
watching the U.S. economy received a jolt of reality Wednesday through feedback
from the men and women closest to its key growth engine, and from company
bosses who manage the country’s 170 million-strong workforce.
The
message wasn’t great. The latest data suggest slowing economic growth with the
potential for faster inflation. It could be a toxic combination in that the
inflation risk could make it harder for the Federal Reserve to lower rates to
prop up the economy as it normally would.
Hiring
is slowing, consumers are spending less, and costs are rising in the broadly
defined services sector, which powers more than two-thirds of growth in gross
domestic product.
The
Institute for Supply Management’s benchmark reading of business activity in
May fell
below the 50-point mark that separates growth from contraction for the
first time in nearly a year. A reading of new orders, also in the report,
slumped to 46.4, the lowest since December 2022.
Managers
polled in the survey reported a spike in the prices they had to pay for
components. While slowing demand might mean they are reluctant to pass those on
to their customers, the fact that they are paying more still represents an
inflationary risk.
An
early read on employment, meanwhile, suggests some weakening on that front.
Payroll
processing group ADP’s National Employment report showed
the softest private-sector hiring in two years, with 37,000
roles added in May. That said, salaries are holding up, with people remaining
in jobs getting an average boost of 4.5% in wages and those landing a new role
seeing gains of 7%.
Bill
Adams, chief economist for Comerica Bank in Dallas, said the ADP numbers were
weak, but not poor enough to persuade the Federal Reserve to lower interests
rates in the short term.
“The
job market has downshifted in the second quarter,” he said. “The Fed will take
notice, but labor force growth will be slower due to less immigration, so less
job growth is needed to hold the unemployment rate steady.”
Both
the ISM reading and the ADP jobs numbers could highlight that the economy is in
a difficult position in terms of monetary policy. Growth is slowing, but not
enough to trigger a response, especially because there are underlying inflation
pressures that have yet to materialize.
---- Traders are
hedging their bets. The CME
Group’s FedWatch tool
still puts the first Fed rate cut of the year in September, but pegs the odds
of a quarter-point reduction at no more than 58%.
The
next risk, argues Louis Navellier of Navellier Calculated Investing, is the
worst of both worlds. “The follow-through concern is that a spike in inflation
will impact spending and employment and lead to stagflation,” he said.
“Currently, the market is dismissing that potential as it marches toward new
highs.”
The
S&P 500, fresh
off its best May performance since 1990, is less than 3% from the record closing
high it notched on Feb. 19.
More
Cracks Are
Appearing in the Tariff-Era Economy. Think Stagflation.
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.
Laser-induced
graphene enables greener, flexible hybrid circuit manufacturing
June
4, 2025
Boise
State University researchers have unveiled a cutting-edge approach to
manufacturing flexible hybrid circuits—reducing costs, waste, and environmental
impact. Their work leverages the properties of laser-induced graphene and was
recently featured on
the cover of Advanced Materials Technologies.
Laser-induced
graphene uses a single-step laser manufacturing process that converts
carbon-rich materials into a 3-dimensional conductive and porous structure with
some regions of atomically thin graphene. This technique is scalable,
cost-effective, and patternable, making it ideal for applications in
electronics, sensing, and energy storage.
In
this work, the researchers used palladium (Pd) nanoparticles embedded in a
polymer matrix to form Pd functionalized laser-induced graphene. These Pd
nanoparticles act as seed crystals for the electroless deposition of copper on
the LIG scaffold, thus forming copper interconnects for flexible printed
circuit boards (f-PCBs) through a laser-enabled additive manufacturing process.
The
interconnects are then used with discrete microelectronics components to form a
flexible hybrid operational amplifier capable of sensing resistance changes
while undergoing cyclic bending—highlighting the potential of the approach for
various sensing applications.
"Additive
manufacturing of printed circuit boards can help advance electronics
manufacturing by reducing waste, cutting costs, and enabling rapid
prototyping," said Attila Rektor, lead author of the journal publication.
"Our approach helps eliminate harmful chemicals and excessive material
waste, to help make PCB fabrication more environmentally sustainable."
The
global PCB market is valued at around $90 billion USD and projected to grow to
over $150 billion USD in the next decade. A large driver of this growth is the
increasing demand for flexible PCBs which offer space-saving designs, reduced
weight, and increased durability and comfort for wearable IoT applications.
More
Laser-induced
graphene enables greener, flexible hybrid circuit manufacturing
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Another weekend and another weekend closer to the end
of the tariff pause. Will President Trump extend the tariff pause against China
and the EU, or crash much of the global economy with fifty percent tariffs?
Have a great weekend everyone.
In tomorrow's LIR, everything you need to know about EV fires and EV fire research.
Before
you react, think. Before you spend, earn. Before you criticize, wait. Before
you quit, try.
Ernest Hemingway
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