The Buffett (Stock) Indicator At All Time High. More Tariffs. Gold Soars.

 Baltic Dry Index. 2220 -39             Brent Crude 67.53

Spot Gold 3864                  US 2 Year Yield 3.65  -0.02

US Federal Debt. 37.544 trillion

US GDP 30.299 trillion.

“Give me a one-handed Economist. All my economists say 'on ONE hand...', then 'but on the other...”

Harry Truman

With the possible partial shutdown of the US federal government at midnight tonight well covered in mainstream media, today’s LIR will just cover the stock casino bubbles busy looking for a pin.

A prolonged US government shutdown would probably provide that pin, but a prolonged US government shutdown is very unlikely.

Asia-Pacific markets trade mixed as China manufacturing contracts for a sixth straight month

Published Mon, Sep 29 2025 7:41 PM EDT

Asia-Pacific markets traded mixed Tuesday as China’s official reading showed manufacturing activity contracted for a sixth straight month, albeit less than market estimates.

The Manufacturing Purchasing Managers’ Index came in at 49.8, data from the National Bureau of Statistics showed, compared with expectations for 49.6, according to a Reuters poll. While still in contraction, the latest reading was the strongest since March.

Meanwhile, private surveyor RatingDog’s manufacturing purchasing managers’ index came in at 51.2 for September, beating economists’ forecast for 50.2 in a Reuters poll, marking its highest level since May.

Mainland China’s CSI 300 was flat at the open.

Australia’s central bank expectedly held benchmark policy rates at 3.6% Tuesday as inflation in the country stays at its highest level in more than a year.

The move was in line with expectations from economists polled by Reuters, and comes after the country earlier this month reported headline inflation rate of 3% for August — highest since July 2024 — with housing, food and alcohol driving price growth.

“The Reserve Bank of Australia’s policy meeting on Tuesday is the key event in the Asia-Pacific region,” said Shier Lee Lim, lead FX and macro strategist of APAC in Convera.

“Any shift in tone or forward guidance could move AUD crosses, especially after recent volatility in building approvals, with August expected to show a 2.8% rise following July’s 8.2% drop,” she added.

Australia’s S&P/ASX 200 was little changed.

Japan’s Nikkei 225 fell 0.1% and Topix traded flat.

South Korea’s Kospi also traded flat, while the Kosdaq fell 0.34%.

Hong Kong’s Hang Seng index rose 0.45%, while the Hang Seng Tech Index added 1.01%. Shares of China’s Zijin Gold skyrocketed over 60% in their Hong Kong debut.

Overnight stateside, the three major averages closed higher. The S&P 500 rose as Wall Street regained some of its footing after a week in which the artificial intelligence trade lost a bit of steam.

The broad market index climbed 0.26% to finish at 6,661.21, and the Nasdaq Composite advanced 0.48% to close at 22,591.15. The Dow Jones Industrial Average settled up 68.78 points, or 0.15%, at 46,316.07.

Asia-Pacific markets: RBA, Nikkei 225, Kospi, CSI 300

‘Buffett Indicator’ for stock valuation passes 200%, beyond level he once said is ‘playing with fire’

Published Sun, Sep 28 2025 7:40 AM EDT Updated Sun, Sep 28 2025 10:57 AM EDT

Warren Buffett’s one-time favorite yardstick for stock market valuations has climbed to an all-time high, reviving fears that investors are once again testing the limits of market exuberance.

The gauge, dubbed as the Buffett indicator, measures the total value of publicly traded U.S. stocks (Wilshire 5000 index) against the nation’s gross national product. In a 2001 Fortune op-ed, Buffett called the indicator “probably the best single measure of where valuations stand at any given moment.” The indicator has also been referenced by famed investors including Paul Tudor Jones.

“If the percentage relationship falls to the 70% or 80% area, buying stocks is likely to work very well for you,” Buffett said in a 2001 speech excerpted by Fortune magazine after the indicator had neared 150% the year prior during the Dotcom bubble. “If the ratio approaches 200% — as it did in 1999 and a part of 2000 — you are playing with fire.”

At a whopping 217%, it now sits well above the peaks reached during the Dotcom Bubble, as well as the pandemic-era rally in 2021 when it topped 190%.

By that standard, the stock market today is in uncharted waters as equity values are now expanding far faster than the growth of the broader U.S. economy. The market rally has been fueled by megacap technology companies, which have plowed billions of dollars in development of artificial intelligence, as they are rewarded with rich multiples for the promise of this new era.

Other valuation gauges are flashing similar signals. The S&P 500′s price-to-sales ratio recently climbed to 3.33, an all-time high, according to Bespoke Investment Group. For comparison, the Dotcom peak in 2000 topped out at 2.27, and the post-Covid boom reached 3.21 before valuations cooled.

Still, some have argued that the Buffett Indicator may no longer carry the same message it once did. The U.S. economy has shifted dramatically over the past two decades, becoming less asset-intensive and increasingly powered by technology, software and intellectual property.

GDP and GNP may understate the value of an economy built on data networks and innovation rather than physical factories. Therefore, higher equity valuations may be justified for what remains the world’s most productive and innovative economy.

Buffett hasn’t commented on this indicator in years. But he has been building a cash fortress at Berkshire Hathaway the last two years as he gets ready to hand the CEO reins to Greg Abel. Second-quarter earnings showed a cash hoard of $344.1 billion and the conglomerate was a net seller of equities for a 11th quarter in a row.

Even if it is outdated, coupled with the Oracle of Omaha’s current positioning, the indicator at these extreme levels is sure to raise some eyebrows.

Buffett indicator stock market overvalued

In other news.

Donald Trump announces timber and furniture tariffs in national security probe

Latest levies to rise to as high as 50% for countries that do not strike trade deals with US

30 September 2025
Donald Trump has unveiled a new suite of tariffs on timber and wood furniture, as he escalated his trade war in the name of US national security and boosting domestic manufacturing. 

The US will apply levies of 10 per cent on softwood timber and lumber and 25 per cent on kitchen cabinets and upholstered wood furniture, beginning on October 14, according to a presidential notice released by the White House late on Monday. 

The duties are set to escalate from January next year, with furniture tariffs rising to 30 per cent and those on cabinets to 50 per cent, unless countries strike a deal with the US to lower them.

Some countries that have reached trade deals with the US in recent months will avoid the full force of the latest measures. Affected goods from the UK will not face the extra tariffs and will be capped at 10 per cent duties, while the EU and Japan will be capped at 15 per cent.

The tariffs were imposed under a law, known as section 232, that allows the US president to impose duties to counter a national security threat. 

The Trump administration has launched several similar probes to apply sectoral tariffs to imports including steel and aluminium, automobiles and copper. 

The White House statement said that the commerce department, which carried out the investigation, found that “wood products are being imported . . . in such quantities and under such circumstances as to threaten to impair the national security” of the US. The notice said that wood products were essential to the “national defense, critical infrastructure, economic stability, and industrial resilience” of the US.

A reliance on imports, however, has “weakened domestic manufacturing capacity”, the statement said, which in turn endangered “national security and economic stability”.

Wood products are used in “critical functions of the Department of War”, the text read, using the administration’s preferred name for the defence department, including in munitions and thermal-protection systems for nuclear re-entry vehicles.

The statement said the tariffs would “bolster industrial resilience, create high-quality jobs, and increase domestic capacity” as well as encourage investment in US industry.

More

Donald Trump announces timber and furniture tariffs in national security probe

Spain wins hat trick of credit upgrades as economy booms

Published Mon, Sep 29 2025 3:25 AM EDT

Spain’s government has received yet another boost from credit rating agencies, with Fitch and Moody’s joining S&P to raise their respective assessments of the country.

The hat trick of rating upgrades comes as Spain’s economy continues to outpace its European peers, with the country’s government and central bank recently upgrading their 2025 growth forecasts.

Fitch on Friday upwardly revised Spain’s long-term rating to “A,” from “A-,” citing Spain’s favorable growth prospects.

“Recent productivity gains, moderate wage growth and relatively low energy prices have boosted external competitiveness and strengthened private external balance sheets,” Fitch said in a statement.

The ratings agency added that it expects Spain’s economy to remain resilient, “helped by limited exposure to U.S. tariffs and ongoing net external deleveraging.”

Moody’s also raised Spain’s rating last week by one notch, to “A3” from “Baa1,” saying the decision reflects its view that Madrid’s economic strength is improving due to a more balanced growth model, labor market improvements and a more robust banking sector.

Spain’s economy has been going from strength to strength of late, bolstered by foreign investment, tourism and immigration.

The country’s government said earlier this month that it expects gross domestic product (GDP) to expand by 2.7% this year, up from a previous forecast of 2.6%, and significantly above expectations of 1.2% growth seen for the broader euro area.

Earlier this month, S&P Global also gave Spain a rating upgrade, citing “notable improvement” in the country’s balance sheet and an improved resilience to economic shocks.

‘Structural reforms will be the true test’

Judith Arnal, senior fellow at the Elcano Royal Institute, a think tank in Madrid, said Spain has emerged as the clear growth leader among the euro area’s largest economies in recent years.

“Spain’s growth has relied not only on booming tourism but also on dynamic non-tourism services, such as business, telecoms and IT services. This marks a shift in the country’s growth pattern, showing that Spain has competitive firms able to export beyond traditional sectors,” Arnal told CNBC by email.

“Growth has also been closely linked to demographic dynamics and job creation. More than half of the jobs created since 2020 have been taken up by immigrants, which has supported overall GDP expansion but meant that GDP per capita has advanced less strongly. This reflects a more extensive than intensive growth model,” she added.

Looking ahead, Arnal said that while political uncertainty has not prevented Spain from leading euro area growth, the country’s economic performance could be even better with stronger stability.

“The government of Spain is keen to showcase this period of high growth, but fiscal consolidation and structural reforms will be the true test over the medium term,” Arnal said.

Spain wins triple credit rating boost on improving economic outlook

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.

Cleveland Fed’s Hammack warns of ‘challenging time’ amid inflation worries

Published Mon, Sep 29 2025 4:03 AM EDT

Cleveland Federal Reserve President Beth Hammack on Monday said the U.S. central bank faces challenges as it attempts to balance fighting stubborn inflation or protecting jobs.

“On the inflation side right now, I continue to be worried about where we are from an inflation perspective,” Hammack told CNBC’s “Squawk Box Europe.”

“We have been missing our mandate on the inflation side, our objective of 2%, for more than four-and-a-half years and I continue to see that we have pressure in inflation both in the headline, in the core, and particularly, where I am worried about it, is I’m seeing it in the services,” she added.

Asked whether it is mistake for the Federal Reserve to be cutting interest rates given the economic backdrop, Hammack described it as “a challenging time for monetary policy,” saying the U.S. central bank was facing pressure on both sides of its mandate.

Her comments come shortly after stronger-than-expected economic data appear to have dented Wall Street’s hopes for sharp monetary easing.

The Fed approved a widely anticipated rate cut earlier this month, lowering its benchmark overnight lending rate by a quarter percentage point to a range of 4.00%-4.25%, and signaled two more were on the way before the end of the year.

A robust batch of economic data since, however, has prompted investors to dial back their expectations for rapid rate cuts.

U.S. core inflation was little changed in August, according to data published Friday. The personal consumption expenditures price index posted a 0.3% gain for the month, putting the annual headline inflation rate at 2.7%, the Commerce Department reported late last week.

Excluding food and energy, the more closely followed core PCE price level was 2.9% on an annual basis after rising 0.2% for the month.

Hammack has previously suggested she would be hesitant about lowering interest rates as long as inflation remains a threat.

Indeed, more recently, Federal Reserve Chair Jerome Powell warned of a tricky path ahead on interest rates.

“Near-term risks to inflation are tilted to the upside and risks to employment to the downside — a challenging situation,” Powell said on Sept. 23 during a speech to business leaders in Providence, Rhode Island.

“Two-sided risks mean that there is no risk-free path,” he added.

Cleveland Fed's Beth Hammack on interest rates, inflation and tariffs

UK job postings fall, firms downbeat about outlook, surveys show

29 September 2025

LONDON (Reuters) -Britain's labour market is showing more signs of cooling and businesses remain negative about their prospects in the coming months, according to surveys published on Monday.

Job search website Adzuna said online job adverts fell by 1.3% in the 12 months to August - the first such drop since February - and by 2.1% in month-on-month terms.

However, vacancies remained higher than in January, typically a peak hiring month, which suggested the jobs market is "cooling, not collapsing," Adzuna said.

Advertised salaries rose 0.2% in monthly terms in August to 42,367 pounds ($56,589.60), and by 8.9% from a year earlier, underscoring the dilemma facing the Bank of England which is worried about a hiring slowdown but also inflation pressures.

"Salary growth remains one of the few constants, still outpacing inflation, but hiring appetite is uneven and increasingly shaped by a mix of sector-specific swings and the growing role of AI within the UK labour market," Andrew Hunter, co-founder of Adzuna, said.

The BoE held interest rates this month and investors are fully pricing only one 25 basis-point reduction in borrowing costs by the end of 2026 as the central bank worries about inflation pressures from the jobs market.

Employers have reduced their hiring after an increase in April in their social security contributions, announced in finance minister Rachel Reeves' first budget last October, and a rise in the minimum wage.

Businesses are concerned about further tax rises in Reeves' next fiscal statement on November 26.

Official data published earlier this month showed vacancies rose in the three months to August and wage growth cooled slightly in the May-to-July period.

A survey published on Monday by the Confederation of British Industry showed British companies expect a drop in activity over the coming three months, partly reflecting the impact of the higher social security contributions for employers.

The CBI said expectations measures in its surveys of manufacturers, retailers and other services industries fell to -20 for the three months to December. The CBI's gauge of business activity was -32 in the three months to September.

"A persistent climate of global economic uncertainty is further hampering decision-making," CBI chief deputy economist Alpesh Paleja said.

"This is now accompanied by renewed nervousness around the November budget, with businesses concerned about being asked to again shoulder the burden of fixing the public finances."

UK job postings fall, firms downbeat about outlook, surveys show

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.

More government subsidies for “green” energy.

‘Super battery’ schemes will store green power and save consumers money – Ofgem

Tue 23 September 2025 at 11:48 am BST

Dozens of “super battery” projects to store green power and save consumers money have progressed to the final stage of a financial support scheme.

Energy regulator Ofgem said 77 long duration electricity storage schemes had entered the final assessment stage of a Government-driven support programme to stop green energy going to waste and boost growth.

Long duration energy storage technology captures excess renewable power when wind and solar are generating more than is needed and then releases it back to the grid when there is not enough to meet demand.

This saves consumers money, as there is less need to pay wind and solar farm operators to stop generating on particularly windy or sunny days when there is more power than the grid needs, or pay gas power stations to switch on when there are not enough renewables to meet demand, Ofgem said.

It will support the transition to clean energy as more solar and wind farms are added to the grid and are powering green technologies such as electric vehicles and heat pumps.

Lithium ion battery storage projects lead the way among the 77 schemes – out of 171 which applied – progressing to final assessment for support under a “cap and floor” scheme.

The list includes other battery technologies, compressed air energy storage and pumped hydro schemes, with a capacity totalling 28.7 gigawatts.

Britain currently has 2.8 gigawatts of long duration energy storage across four pumped hydro schemes in Scotland and Wales, using excess power to pump water uphill where it is stored and released to flow down through turbines and quickly generate electricity when needed.

Successful schemes will secure support under a cap and floor arrangement in which they will be assured a minimum revenue from consumers from the project, to deliver a return on investment, and will have to pay money back to bill payers if they make more than a set maximum revenue.

Beatrice Filkin, director of major projects infrastructure for Ofgem, said renewables were “the key” to taking control of the energy system and ending a costly reliance on the turbulent wholesale gas market.

“That’s why we need to boost our ability to store as much homegrown energy as we can to let the turbines keep turning when the wind is at its strongest – and on the days when the gusts drop and the sun doesn’t shine that reserve of excess clean power can be called upon.

“There’s lots of different ways you can do this – with batteries, compressed air or pumped hydro storage – and we’ll consider them all, as this technology is vital for a modern energy system.

“Through Ofgem’s cap and floor process we are beginning to identify the projects that we think are best placed to capture and make the most of our precious natural resources, so that we can have safe, secure and good value-for-money power,” she said.

The scheme is driven by the Government, which pledged to build major new long duration energy storage schemes for the first time in 40 years.

Energy minister Michael Shanks said storage was a “technology that will see Britain take back control of its energy supply and protect bill payers for good”.

“By scaling this up, we can transform the way electricity is supplied in this country when demand is high – using stored up low-cost, homegrown solar and wind power to help end our reliance on costly fossil fuel markets once and for all,” he said.

Successful projects will be confirmed in summer 2026.

‘Super battery’ schemes will store green power and save consumers money – Ofgem

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

World Debt Clocks (usdebtclock.org)

I remember when I first came to Washington. For the first six months you wonder how the hell you ever got here. For the next six months you wonder how the hell the rest of them ever got here.

Harry S. Truman