Baltic
Dry Index. 2017 -21 Brent Crude 66.21
Spot Gold 3350 US 2 Year Yield 3.72 -0.04
US Federal Debt. 37.225 trillion
US GDP 30.197
trillion.
“When the music stops, in terms of liquidity, things will be
complicated. But as long as the music is playing, you’ve got to get up and
dance. We’re still dancing,” he said in an interview with the FT in Japan.
Citigroup chief executive Chuck Prince, July 2007. Ex-CEO November 2007.
In the stock casinos, all news is great again. Stocks get priced to infinity and beyond.
But in reality, the US and global economy are increasingly struggling.
With the Trump funding cuts, just how accurate are today’s US government statistics? What happens to the latest stocks bubble if they’re just smoke and mirrors?
Japan's Nikkei 225 hits fresh high as Asia markets
track Wall Street gains on Fed rate-cut hopes
Updated Wed, Aug 13 2025 11:35 PM EDT
Asia-Pacific markets opened higher,
tracking gains on Wall Street after the latest
U.S. inflation data raised expectations that the Federal Reserve could
cut interest rates next month.
Chinese and Hong Kong stocks open higher
Chinese and Hong Kong stocks rose
Wednesday. As of 9:45 a.m. local time (9:45 p.m. ET Tuesday), the Hang Seng Index rose 1%,
while mainland’s CSI 300 added
0.33%.
The Shanghai Composite Index rose to the
highest intraday level since December 2021, data from LSEG showed.
— Lee Ying Shan
Japan’s Nikkei 225 hits fresh record high
Japan’s blue-chip Nikkei 225 extended its
gains and hit a fresh record high Wednesday.
Among the index’s top movers are Yokohama
Rubber, which gained 10% and Renesas Electronics, which rose over 7%. Tokyo
Electric Power Company Holdings jumped 5.26%.
“Recent Japanese asset appreciation
reflects positive steps the government is taking to improve capital markets and
corporate governance, especially corporate sensitivity to equity values,” said
Fitch Solutions’ analysts.
If the Liberal Democratic Party remains on
its positive policy trajectory in terms of opening its domestic market to
greater foreign investment and more foreign workers, “the effort to escape
deflation” will continue to make headway, the research firm said.
—Lee Ying Shan
Asia
markets live: Nikkei 225, Kospi, CSI 300
S&P 500, Nasdaq both notch record close as
inflation report gives Fed green light to cut rates
Updated Tue, Aug 12 2025 4:17 PM EDT
Both the S&P 500 and Nasdaq Composite closed at
fresh record highs on Tuesday after a tamer-than-expected
inflation report raised the possibility that the Federal Reserve could
cut interest rates next month.
The broad-based S&P ended the day up
1.13% at 6,445.76, while the tech-heavy Nasdaq finished up 1.39% at 21,681.90.
The Dow Jones Industrial
Average added 483.52 points, or 1.10%, to close at 44,458.61.
Tuesday’s fresh inflation data release
reassured investors, who have feared that President Donald Trump’s broad tariff
policies could spike prices in the U.S. economy.
The consumer price index rose 2.7% on an
annualized basis in July, while a Dow Jones estimate had called for a 2.8%
rise. So-called core CPI, which strips out volatile food and energy prices,
increased by 3.1% year on year — slightly more than the expected 3%.
Expectations for lower rates soared
following the report. Traders are now pricing in a 94% chance of a rate cut
next month, per trading data from the CME’s FedWatch Tool. That’s up from a 85% chance before the
data release. Traders also increased their bets on rate cuts in October and
December.
“It looks like a bit of Goldilocks right
now for the stock market,” said Tom Hainlin, national investment strategist at
U.S. Bank Asset Management Group. “More and more people are expecting a rate
cut in September. So, rates kind of on a downward bias, earnings on an upward
bias — that’s a pretty good environment for the broad stock market.”
Small caps, seen as a big beneficiary of
lower short-term borrowing rates, led the rally with the Russell 2000 up nearly triple
the gain in the S&P 500.
Tuesday’s moves come as traders weigh the
latest developments on the tariff front. Trump said Monday he’d extend
a 90-day pause on higher levies on Chinese goods.
Wall Street will also parse Thursday’s
producer price index report for a reading on wholesale inflation. Both reports
come ahead of the Fed’s Jackson Hole gathering at the end of August and the
central bank’s September policy meeting.
Stock
market news for Aug. 12, 2025
US Core Inflation Accelerates Amid Statistics
Bureau Upheaval
August 12, 2025 at 11:04 PM GMT+1
Underlying US
inflation accelerated in July, though the cost of tariff-exposed
goods didn’t
rise as much as feared, boosting expectations that Federal Reserve
officials will lower
interest rates when they meet next month. The core consumer price
index, which excludes the often volatile food and energy categories, increased
0.3% from June, the strongest pace since the start of the year.
The source of this information is
the Bureau of Labor Statistics—an arm of the US Department of Labor—and
its data was in line with economists’ forecasts, as was the overall CPI on
a monthly basis.
Nevertheless, whether the
attribution according to the Bureau of Labor Statistics still
carries the same weight with markets, economists and business owners may soon
be an open question. President Donald Trump fired the
BLS’s nonpartisan commissioner following a recent report
of deepening unemployment. Now he’s named to the post EJ
Antoni, former chief economist of the conservative Heritage Foundation
and a contributor to its far-right Project 2025 manifesto.
Antoni recently proposed ending the BLS’s
monthly jobs report. The agency’s work, in addition to that of other US
statistical offices now under Trump’s control, has a “gold
standard” reputation globally for being free of political influence—a
status which many
now fear is at risk. —Jordan
Parker Erb and David
E. Rovella
US
Core Inflation Accelerates Amid Statistics Bureau Upheaval: Evening Briefing -
Bloomberg
In other news.
Mood towards global economy remains sour
Monday 11 August 2025 7:45 pm
Fund managers are expecting inflation to
rise over the next year as the mood towards the global economy coarsens.
Over 40 per cent of fund managers believe
the global economy is set to weaken over the next 12 months, with US economic
policy and weaker consumer demand seen as the largest forces dragging it down,
according to the latest Bank
of America European
fund manager survey.
Just over a month ago, only 31 per cent
thought the global economy would diminish, but Trump’s sweeping and erratic
tariffs policies, and their disruption to the global trade order, has caused
sentiment to sour.
Now, 58 per cent see the US
administration’s policies as having a negative impact on growth while also
causing inflation to rise, up from 52 per cent last month, reflecting growing
worries of “stagflation”, a troublesome economic situation in which high inflation
and unemployment coupled with a stagnant economy stifles growth.
Expectations for inflation to rise hit 18
per cent, its highest since May when the market was dealing with the fallout of
Trump’s announcement of tariffs.
A trade war triggering a global recession
remains the biggest risk for causing significant losses in the market for
investors, but a growing number are also concerned stubborn inflation
could thwart a slash
to interest rates by
the Federal Reserve in September.
Hope in Europe
While the attitude towards global markets
worsen, 35 per cent of respondents are expecting to see stronger
European growth over
the coming year.
Similarly, 23 per cent see scope for
European inflation to decline over that period, showing hope for the market
amid global turmoil.
Many believe Germany’s recent fiscal
stimulus, which is anticipated to boost its stagnant economy, will be the main
driver for the economy and remains the most popular among investors.
Switzerland has become increasingly
unpopular in the wake of Trump slapping the country with a 39 per cent tariff.
Over 10 per cent believe the European
Central Bank easing the Eurozone economy will be a leading factor in boosting
European growth by lowering costs and injecting capital into banks.
Be bullish
While fund managers remain sceptical of
European equities in the short term, believing tariff shocks are not yet over,
many respondents are bullish for equities long term potential.
Almost nine in ten respondents are
optimistic in the long run for Europe equities, with financials expected to be
the best performing sector, with insurance close behind.
On the other hand, respondents believe
auto and retail will ultimately under perform in the market.
Mood towards
global economy remains sour
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.
Consumer
prices rise 2.7% annually in July, less than expected amid tariff worries
Published
Tue, Aug 12 2025 8:31 AM EDT
A
widely followed measure of inflation accelerated slightly less than expected in
July on an annual basis as President Donald Trump’s tariffs showed mostly
modest impacts.
The
consumer price index increased a seasonally adjusted 0.2% for the month and
2.7% on a 12-month basis, the Bureau of Labor Statistics reported Tuesday. That
compared to the respective Dow Jones estimates for 0.2% and 2.8%.
Excluding
food and energy, core CPI increased 0.3% for the month and 3.1% from a year
ago, compared to the forecasts for 0.3% and 3%. Federal Reserve officials
generally consider core inflation to be a better reading for longer-term
trends.
A
0.2% increase in shelter costs drove much of the rise in the index, while food
prices were flat and energy fell 1.1%, the BLS said. Tariff-sensitive New
vehicle prices also were unchanged though used cars and trucks saw a 0.5% jump.
Transportation and medical care services both posted 0.8% moves higher.
“The
tariffs are in the numbers, but they’re certainly not jumping out hair on fire
at this point,” former White House economist Jared Bernstein said on CNBC.
Bernstein served under former President Joe Biden.
The
report comes at both a critical time for the economy and the BLS itself, which
has come under Trump’s criticism for what he has charged is political bias
against him. Trump fired the prior BLS commissioner after a surprisingly weak
July nonfarm payrolls report earlier this month, and on Monday said he would
nominate E.J. Antoni, a critic of the bureau, as the new chief.
While
the political jockeying has occurred, Fed officials have been watching
inflation measures closely as they weigh their next interest rate decision in
September.
More
CPI inflation
report July 2025:
Wall
Street is concerned about the reliability of government inflation data on eve
of CPI
Published
Mon, Aug 11 2025•3:36 PM EDT
This
week’s inflation data will be huge for markets, and not just for the numbers.
Beneath the Bureau of Labor Statistics’ reports on consumer and producer prices
will be simmering questions over the data’s validity. Those concerns have
accelerated as budget cutbacks have forced the agency to change the way it
collects data. On top of that, President Donald Trump’s decision to fire the
BLS commissioner after the July nonfarm payrolls release raised worries that
the bureau could be politicized. Doubt over the accuracy and integrity of the
data is a serious issue considering how much BLS work is used to formulate
policy, calculate Social Security payments and inform any number of other
political and economic decisions.
“I
feel like this data that is coming out is getting much less reliable, and this
has been building for a long time,” DoubleLine CEO Jeffery Gundlach said last
week on CNBC. Staffing and funding is one issue. Trump’s decision earlier this
month to fire Erika McEntarfer as the BLS chief is another. The move “has
raised questions about whether and by how much the quality of official data
produced by official U.S. government agencies could be compromised,” Morgan
Stanley economist Michael Gapen said in a note. “Official U.S. data has never
been perfect, but has been of high quality, compiled impartially, and useful in
the setting of policy.” Questions on multiple fronts Gapen’s sentiments mirror
those around Wall Street, where written commentary has broken down the various
issues the BLS has already faced in terms of budget cuts that have pushed it to
alter the way it is collecting some data.
Also,
notable revisions the BLS has applied to its critical monthly payrolls count
have raised concerns, including accusations from Trump that the McEntarfer-led
BLS was manipulating the data for political purposes. BLS officials weren’t
immediately available to respond to CNBC requests for comment. Outside of
political circles, there are few on Wall Street who place credence in the
notion that the BLS is doing anything nefarious with the data. However, the
bureau’s often primitive way of collecting jobs data — largely through phone
calls and written surveys — has fed into caution about the reliability of
pre-revisions data releases. Survey response rates have been steadily sliding,
forcing the BLS into bigger revisions. “Significant downward revisions to job
growth and increased imputation for CPI have raised questions about the
reliability of the official statistics,” Bank of America senior U.S. economist
Aditya Bhave wrote. “We argue the data remain reliable, though we would
recommend being careful with the initial jobs data.”
Looking
for inflation clues On the market’s plate this week, though, are the two key
inflation readings, first with the consumer price index on Tuesday, then the
producer price measure, considered a gauge of costs at the wholesale level, on
Thursday. At issue for the BLS is its move to stop collecting CPI data from
several cities due to staffing limitations, as well as the growing use of
imputed data, or estimating price movements in areas where it can’t get exact
information. In those cases, the BLS will try to use data from another source,
preferably somewhere near to the locale it is surveying, but sometimes it has
to use prices from other urban areas as assumptions. When the imputed data
comes from a local source it has a higher degree of reliability. But Gapen and
other economists worry that if the BLS has to rely on “different cell”
imputation, the chances for higher variance increase. Estimates are that some
35% of BLS data for its price reports is affected in some way by imputing. Bank
of America estimates that a combination of different-cell imputation and the
varied impact of tariffs likely will alter the headline CPI reading by only a
basis point or two — 0.01 or 0.02 percentage point. It’s still a consideration,
though. “In more normal times, that may be too small to matter, but in today’s
environment every basis point counts,” Bhave said. “Still we do not think the
BLS’ decision to reduce the CPI sample is enough to warrant alarm over the
signal from the inflation data.”
Impact
on Fed moves Indeed, precision will matter as the Federal Reserve closely
monitors inflation data and charts its monetary policy course. Economists
surveyed by Dow Jones expect the all-items CPI to show a 0.2% increase for
July, putting the 12-month inflation rate at 2.8%, up 0.1 percentage point from
June. Excluding food and energy, the respective forecasts for core inflation
are 0.3% for the month and 3.1% for the year, the latter up 0.2 percentage
point from a month ago. The Fed targets inflation at 2%.
Beyond
those numbers, Wall Street will be poring through the data for readings on
tariff-sensitive items. Should those goods and services not point significantly
higher, it would encourage the Fed to cut rates in September. However, higher
readings could keep policymakers in the wait-and-see posture that has dominated
the year so far. “Sequential firming in inflation is one key factor behind our
view that the Fed will remain on hold at the September meeting despite recent
employment data that point to a sharp slowdown in labor demand,” Morgan
Stanley’s Gapen wrote.
Traders
widely expect the central bank to cut the fed funds in September, then at least
once more before the end of the year, but Wall Street economists are in
multiple camps. For instance, Morgan Stanley and Bank of America both see no
cuts this year, while JPMorgan Chase anticipates three — equal to one at each
of the remaining meetings.
Wall Street frets
about reliability of government data on eve of CPI
Is
It Time to Rethink Inflation? Why Housing Data Could Be the Catalyst for Change
With
core government surveys under strain and new alternative data sources emerging,
the future of inflation tracking—and its impact on rates—may center on how we
measure housing.
By Todd
Tomalak August 5, 2025
At
Zonda’s Builder 100 event in May, I spoke about the Bureau of Labor Statistics
and challenges with data collection as part of a discussion on “10 Industry Shifts
No One’s Talking About (Yet).”
Now
that the Bureau and the quality of its data are being widely discussed, it’s worth
examining the issue more closely.
Within
the next 12 months, a new Fed Chair will be appointed. It’s quite likely that
this new appointee will face a weaker set of economic (and housing) data and
face increased pressure to cut short-term rates. What’s not being discussed
(yet) is the increasingly likely scenario that problems with Bureau data
collection also prompt this new Fed Chair to potentially review 2% inflation
target over the next 5 years (perhaps earlier), with housing data at the
forefront.
Challenges
with the Bureau’s data are real. This spring, William Beach, the former
Commissioner of Labor Statistics and Head of the US Bureau of Labor Statistics,
publicly stated, “Our surveys are dying… decaying.”
He
was specifically referring to the Current Population Survey, which measures
unemployment, labor force participation, income, and other related factors. In
other words, what is ‘decaying’ is the process used to measure key indicators
of the Fed’s progress towards its dual mandate of maximum employment and price
stability. Some examples include:
Inflation
The
Bureau tracks thousands of prices each month, but the quality of those measures
is getting worse. Estimated data in CPI inflation calculation has tripled since
Q1 and is up 6-7x above 2019 levels. This means that roughly 1/3 of prices
measured in CPI are educated approximations (or imputations) by staff. Fine for
a stopgap, but certainly a challenge for longer-term monitoring of housing and
the economy. This summer, the Bureau ceased measuring CPI for Buffalo, NY,
after cutting inflation measures for Provo, UT, and Lincoln, NE a few months
earlier (due to higher costs and ongoing difficulty collecting data).
More
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.
A good idea for used EV batteries?
Probably, until the first fire.
How
EV Batteries Could Power the Grid – And Why That’s a Big Deal
August
11, 2025
Old Tesla Batteries Find New Life
Yesterday’s worn-down Model 3 battery is no junk-yard
relic—it’s busy running a power grid in Texas right now. Thanks to some smart
reinvention and an assist from artificial intelligence, second-life EV
batteries are shifting from garage scraps to grid heroes. At a wind farm in
West Texas, former EV packs now help balance the grid’s ups and downs, saving
utilities millions and keeping the grid stable in a way that feels straight out
of a sci-fi flick—except it’s happening live, not in the future.
Core Performance: AI Optimizes Real-World, Ragged Packs
A repurposed EV battery has character: leftover
capacity, bits of wear, and a personality shaped by years on the road. Managing
hundreds of mixed-condition cells would overwhelm any human. Enter
reinforcement learning: researchers recently published a study proving that “soft actor-critic” deep learning models make the
difference when operating fleets of used batteries for charging stations and
grid storage. These AI models process mountains of data—electricity demand,
price signals, battery health, grid conditions—to optimize charging and
discharging in real time, achieving lower costs and smoother operations than
older, rules-based systems. This is not lab theory: Texas now runs a 53 MWh storage project using these recycled packs, making it the world’s largest grid-scale
second-life battery plant, all while working with the quirks inherent in old
hardware.
Results
from these smart deployments? They react faster to the grid’s instant needs and
wring more usable kWh out of aged batteries compared to traditional brute-force
strategies. Their reliability and speed in grid services, especially during
peak demand, are closing the gap with new cells. With AI calling the shots,
it’s not about old batteries limping along—it’s about used packs being
tactically tuned for their next race.
Real-World Usability: Affordable Storage, No Lab Coats
Required
These second-life grid batteries aren’t boutique
experiments. Commercial projects like Element Energy’s Texas install have lowered energy storage costs by stacking modules salvaged from
all kinds of EVs, leveraging remote monitoring and dynamic software control for
everyday grid support. For utilities, the price beats buying new cells, with up
to 40% savings versus fresh battery systems. There’s no fussy manual: the
design is modular and remotely managed—techs swap packs in shipping containers
and monitor performance on simple dashboards.
Compared
to classic gas peaker plants (the old-school grid “backups”), used EV batteries
are cheaper, cleaner, and less maintenance-intensive. Instead of humming gas
engines, you get quiet arrays that buffer solar and wind output, keeping the
grid steady even as more renewables come online. Some suppliers, like B2U
Storage and Element Energy, have proven that regular utilities and grid
operators can safely run these second-life arrays at scale. That means
lower rates for homeowners and fewer blackouts when the weather turns.
More
How EV Batteries
Could Power the Grid – And Why That’s a Big Deal
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
-----The conclusion that deflation is always reversible under a
fiat money system follows from basic economic reasoning
-----But the U.S. government has a technology, called a printing
press (or, today, its electronic equivalent), that allows it to produce as many
U.S. dollars as it wishes at essentially no cost. By increasing the number of
U.S. dollars in circulation, or even by credibly threatening to do so, the U.S.
government can also reduce the value of a dollar in terms of goods and
services, which is equivalent to raising the prices in dollars of those goods
and services. We conclude that, under a paper-money system, a determined
government can always generate higher spending and hence positive inflation.
Fed Chairman Ben Bernanke., November 21, 2002.
https://www.federalreserve.gov/boarddocs/Speeches/2002/20021121/default.htm
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