Baltic
Dry Index. 1963 +16 Brent Crude 65.92
Spot Gold 4055 US 2 Year Yield 3.58 +0.01
US Federal Debt. 37.842 trillion
US GDP 30.318 trillion.
You have to choose between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the government. And, with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold.
George Bernard Shaw
That GREAT AI Bubble bubbles on, but for how much longer can dodgy circuitous contract deals, dot con style, keep the bubble expanding? What happens when the music stops and a chair disappears?
Besides, central banks and JP Morgan are starting to get seriously worried.
Back in the real economy, in the USA, new jobs are getting scarce, car sales are falling, retailers are finding it hard to sell off pre-tariff inventory.
In Europe look away now. German manufacturing is in recession; France is in political distress and the UK is heading to a socialist £30 billion increase in taxes next month, just before the Christmas shopping season.
AI bubble anyone?
S&P 500 futures are little changed after
benchmark rises to all-time high: Live updates
Updated Thu, Oct 9 2025 7:37 PM EDT
S&P 500 futures are up
slightly on Wednesday night after the benchmark index rose to all-time
highs.
Futures tied to the broad index traded
rose nearly 0.2%, while the Nasdaq
100 futures added more than 0.2% Dow Jones Industrial Average futures rose
60 points, or 0.1%.
With Wednesday’s gain, the S&P 500 notched its
eighth winning day of the last nine. The technology-heavy Nasdaq Composite climbed
more than 1% to end above the 23,000 mark for the first time ever.
The Dow, on the other hand, finished
slightly below flat as blue-chip stocks lagged. But Nvidia helped the 30-stock
index restrict losses, rising more than 2% after CEO Jensen Huang told
CNBC that computing demand has “gone up substantially” this year.
“There are reasons to be optimistic ahead,
but I wouldn’t be surprised to see some more volatility,” Kevin Mahn, investing
chief at Hennion & Walsh Asset Management, said on CNBC’s “Closing Bell Overtime.” “When
that volatility comes, money will come off the sidelines.”
There is no economic data releases of note
on Thursday due to the ongoing government shutdown.
However, investors will monitor morning
remarks from Federal Reserve Chair Jerome Powell at a community bank
conference, as well as speeches from other Fed officials such as Michelle
Bowman and Mary Daly throughout the day. These appearances come a day after the
Fed released
minutes for its most recent policy meeting showing divisions around
what to do next with interest rates.
Traders will also parse earnings reports
from Delta Air Lines and PepsiCo due before the bell.
Stock
market today: Live updates
The Fed Is Still Worried About Inflation
October 8, 2025 at 11:17 PM GMT+1
It’s true that the Federal Reserve appears
willing to lower interest rates further this year. But recent minutes from the
central bank’s September meetings reveal that many members have expressed
caution—driven
by concerns over percolating US inflation.
“Most judged that it likely would be
appropriate to ease policy further over the remainder of this year,” according
to minutes of the Federal Open Market Committee’s Sept. 16-17 gathering.
But the record of the meeting also showed “a majority of participants
emphasized upside risks to their outlooks for inflation.”
In a note to clients, Stephen
Stanley, chief US economist at Santander US Capital Markets, pointed to
“significant differences of opinion within the committee regarding just about
everything important.”
“We should not be surprised that there is
a wide range of opinion within the FOMC on what to do next,” he said. No
worries on Wall Street though, as investors Wednesday were still buying
everything in sight. Here’s Bloomberg Television’s closing
bell. —David
E. Rovella
The
Fed Is Still Worried About Inflation: Evening Briefing Americas - Bloomberg
In commodities news, what goes up often comes
down as supply rises and demand falls. The cure for high prices is high prices.
Cocoa prices plunge to 20-month low — but
investment banks warn ‘extreme’ sell-off could create problems
Published Wed, Oct 8 2025 9:00 AM EDT
Cocoa’s winning streak is faltering after
prices fell to an almost two-year low this week — but investment banks are
warning the commodity has become “extremely oversold.”
U.S. cocoa futures for
December delivery moved 1.4% lower on Wednesday to trade at around $6,090 a
ton, extending losses that saw the contracts lose 10% of their value in the
week ended Oct. 3.
It marked a change in trajectory for
cocoa, which has seen prices remain elevated for the past two years. U.S.
futures hit a high of $12,931 in mid-December — but this week, prices touched
on their lowest levels since early 2024.
Challenging agricultural conditions, pest
infestations and West African export controls have pushed
the price of cocoa higher in recent years — but the upward trajectory
came to a halt over the past week as governments in the Ivory Coast and Ghana
hiked the minimum price payable to cocoa farmers.
‘Extremely oversold’
In a Monday note, analysts at investment
bank Citi said money managers were taking a “historically weak spec
[speculative] positioning” on cocoa — adding that their data showed “weak
momentum” and an “oversold signal” for the commodity.
Analysts at Societe Generale also said on
Monday that cocoa contracts traded in London had been “extremely oversold.”
“Money managers turned net short this
week,” they said in a note to clients. ”[Cocoa is] extremely vulnerable to
short covering … Money managers’ short positioning [has] increased to the
highest level since August 2022.”
In New York, they added, cocoa is also
vulnerable to short covering, although not to the same extremes as London
contracts.
----J.P. Morgan strategists wrote
in a note this week that signs of a recovery were already emerging.
“Cocoa markets sank sharply through the
week after farmgate prices were raised by the governments in the Ivory Coast
and Ghana, driving one of the sharpest weekly losses of the year … following
new crop producer sales,” they said.
But they added: “Aggregate futures and
options open interest across the cocoa market is rising off historic lows back
to levels of February 2025.”
Back in February, U.S. cocoa futures
periodically traded above the $10,000 mark.
Cocoa
prices plunge as investment banks warn of 'extreme' sell-off
Next, that GREAT US AI all in risky bet. What
could possibly go wrong?
Economic Idiocy With A Full Face Grin
david stockman Oct 07, 2025
The grinning nincompoop who passes for the
chief White House economist, Kevin Hassett, just said that the US economy is
peachy-keen under Trump-O-Nomics:
“The good news is the economy is booming.
Inflation has come down by 50%.”
Well, let’s see. Real GDP clocked in at
$23.587 trillion in Q4 2024 and $23.771 trillion in Q2 2025, generating a
modest $184 billion gain during the first six months of
the Donald’s second term. However, as we demonstrated last week, fully $140
billion of that gain, or 76%, was due to
the soaring spend-a-thon for AI equipment and R&D—none of which appears to
be generating a return on assets as we amplify below.
Instead, it’s a function of circular
capital flows in a speculation crazed stock market fueled by the Fed’s printing
presses. Accordingly, when you set aside the AI spending bubble, the gain in
all other sectors of the economy—-PCE, housing, government, net exports,
inventories, business structures, and non-AI equipment and R&D—-netted to a
mere +$44 billion in real terms. That annualizes to a
meager0.38% gain in real GDP, which by most definitions we
have encountered does not constitute a “boom”. Not by any means.
More, subscription required.
Economic Idiocy
With A Full Face Grin
Bank of England sounds alarm over AI bubble
8 October 2025
The Bank of England has warned that a
bubble in artificial intelligence (AI) stocks threatens to spark a major market
correction, posing a “material” danger to Britain’s economy.
A collapse in over-valued US tech stocks that bears echoes of the
dotcom bubble risks triggering a global shock, Threadneedle Street said in its
starkest warning on AI to date.
The Financial Stability Committee (FPC),
its panel of policymakers tasked with identifying what could spark the next
financial crisis, said: “On a number of measures, equity market valuations
appear stretched – particularly for technology companies focused on artificial
intelligence.”
It noted that the market share of the five
most valuable firms on the blue-chip S&P 500 index is greater than at any
point in 50 years, at near 30pc.
Policymakers fear that the surge of money
flowing into these firms may fail to deliver the expected returns – with markets
only pricing in potential upsides.
The FPC said: “The risk of a sharp market
correction has increased. A crystallisation of such global risks could have a
material impact on the UK as an open economy and global financial centre.”
It came as the managing director of the
International Monetary Fund (IMF) similarly warned that inflated share prices
posed a growing risk to financial stability.
Kristalina Georgieva said current market
valuations were “masking” fragilities as she compared the current situation to
the dotcom bubble in the early 2000s that ended in a stock market crash.
Speaking ahead of the IMF annual meetings
in Washington DC next week, Ms Georgieva said: “Today’s valuations are heading
toward levels we saw during the bullishness about the internet 25 years ago.
“If a sharp correction were to occur,
tighter financial conditions could drag down world growth, expose
vulnerabilities and make life especially tough for developing countries.”
The Bank also drew parallels to the dotcom bubble – when money poured
into tech stocks as investors bet the internet would transform the economy.
The subsequent disappointment over returns
triggered a major stock market sell-off, from which US equities took the best
part of a decade to recover before then being hit by the financial crisis.
More
Bank
of England sounds alarm over AI bubble
Investors make record retreat from shares as AI
crash fears rise
7 October 2025
Investors pulled record amounts of cash
out of equity funds during the third quarter amid concerns that an AI-fuelled
boom in share prices could be poised for an abrupt halt.
More than £3.6bn flowed out of equity
funds over the last three months, figures from Calastone show, with £1.2bn
withdrawn in September alone.
Investors ran scared of “sky-high stock
markets”, according to the data company’s latest Fund Flow Index.
The FTSE 100 and the S&P 500 ended
last week at fresh record highs despite the turmoil caused this year by Donald
Trump’s tariff campaign.
Excitement about the prospects of AI have
driven markets higher, particularly in the US. On Monday, ChatGPT maker OpenAI
announced a chip supply deal with AMD, sending the latter’s shares up 24pc.
Edward Glyn, head of global markets at
Calastone, said it was “really unusual to see markets reaching record highs
while investors are moving decisively for the exits across such a broad range
of funds”.
He said: “There is a structural bias
towards inflows over time as people save for their future so a prolonged period
of net selling is noteworthy.”
Global-focused equity funds suffered an
unprecedented fourth consecutive month of net selling as investors pulled
£203m.
Funds focused on the UK fared even worse,
shedding £692m.
The beneficiaries were bond and money
market funds, which gained £895m as investors sought out their perceived
safety.
Mr Glyn added: “UK funds continue to shed
capital, but selling has been more muted in the last four months in the context
of a general pull-back from equities.
“Doubtless, seeing the UK market reach
record levels while still not looking expensive has given some sellers pause
for thought.
“But the doom loop of negative commentary
on the UK economy with its dire fiscal position, soaring credit spreads, lack
of growth and impending tax rises may now be winning out. Outflows are on the
rise again.”
Europe defied the trend and attracted
modest net buying despite the recent turmoil surrounding France’s government.
Europe’s second-largest economy had just
announced a new prime minister during the time period covered by the Calastone
data.
Investors make
record retreat from shares as AI crash fears rise
In other news.
How Russia Recovered
What the Kremlin Is Learning From the War
in Ukraine
November/December 2025Published on
October 8, 2025
The story of Russia’s invasion of Ukraine
has been one of upset expectations and wild swings in performance. At the start
of the war, most of NATO saw Russia as an unstoppable behemoth, poised to
quickly defeat Ukraine. Instead, Russia’s forces were halted in their tracks
and pushed back. Then, outside observers decided the Russian military was
rotten, perhaps one counterattack away from collapse. That also proved
incorrect—Ukrainian offensives failed, and Moscow resumed its slow advance.
Now, plenty of people look beyond Russia to understand the state of the
battlefield, blaming Kyiv’s troubles on insufficient external backing instead.
What many policymakers and strategists
have missed is the extent to which Moscow has learned from its failures and
adapted its strategy and approach to war, in Ukraine and beyond. Beginning in
2022, Russia launched a systematic effort to examine its combat experience,
draw lessons from it, and share those lessons across its armed forces. By early
2023, Moscow had quietly constructed a complex ecosystem of learning that
includes the defense manufacturing base, universities, and soldiers up and down
the chain of command. Today, the military is institutionalizing its knowledge,
realigning its defense manufacturers and research organizations to support
wartime needs, and pairing tech startups with state resources.
The result has been new tactics on the
battlefield—codified in training programs and combat manuals—and better
weapons. Moscow has developed fresh ways of using drones to find and kill
Ukrainian soldiers and to destroy Ukrainian assets, turning what was once an
area of weakness into an area of strength. It has built better missiles and
created more rugged and capable armored systems. It is giving junior commanders
more freedom to plan. It has become a military that is capable of both evolving
during this war and readying itself for future, high-tech conflicts.
Because of these changes, Ukraine is
likely to face even greater destruction in the months ahead. It will have to
contend with faster and more numerous Russian drone attacks, resulting in more
harm to cities, civilians, and critical infrastructure. Larger numbers of
missiles will get through Ukraine’s defenses. The ten miles leading up to the
frontlines, already very hazardous, will become even more dangerous and
difficult to cross. These changes may not produce any dramatic breakthroughs
for Russia, thanks to Ukraine’s defenses and extensive drone and artillery
attacks. But they do mean Moscow can keep trading its soldiers’ lives for slow
gains in the Donbas while hoping that NATO tires of the conflict.
More
How Russia
Recovered | Foreign Affairs
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.
World
Bank flags slower East Asia growth amid global uncertainty, urges deeper
reforms
The
World Bank lifted its 2025 growth projection for East Asia to 4.8%, but warned
it could slow to 4.3% next year amid rising protectionism and domestic
headwinds.
08
Oct 2025 06:40PM
The
East Asia and Pacific region continues to outpace much of the world in economic
growth, but rising trade barriers, heightened global uncertainty and weaker
global growth could slow that momentum, the World Bank cautioned.
In
its East Asia and Pacific economic update released on Tuesday (Oct 7), the
lender raised its forecast for the region’s gross domestic product (GDP) growth
this year to 4.8 per cent, slightly below last year’s 5 per cent.
The
pace is expected to slow further, easing to 4.3 per cent in 2026 as rising
protectionism and domestic headwinds weigh on regional economies.
However,
the region should not view itself as a passive victim of global forces but
instead “try and forge their own growth path through deeper domestic reforms”,
World Bank’s East Asia and Pacific chief economist Aaditya Mattoo told CNA.
The
World Bank’s latest report found that while retail sales are increasing,
consumer confidence has yet to return to pre-COVID-19 levels.
Industrial
output remains strong, but business sentiment is subdued, it added. Exports in
the region accelerated ahead of recent tariff hikes, yet new export orders have
been weak.
CHINA’S
GROWTH REVISED UPWARD
The
World Bank in its report upgraded its economic growth forecast for China.
The
world’s second-largest economy is now expected to expand by 4.8 per cent this
year, up from 4 per cent projected in April.
The
revised forecast brings China closer to its own official target of around 5 per
cent.
Last
year, China’s economy grew by 5 per cent, fueled by strong exports, stimulus
measures and investment in high-tech industries.
More
World Bank flags
slower East Asia growth amid global uncertainty, urges deeper reforms - CNA
Retailers
Stockpiled to Avoid Tariffs. The Holidays Will Put That to the Test.
Stores
risk having to discount excess inventory if shoppers pull back on spending
Oct.
7, 2025 6:00 am ET
Retailers
are sitting on a pile of goods. Now the question is, will the U.S. holiday
shopper bite?
From Ralph Lauren to Levi Strauss and American Eagle
Outfitters,
retailers have bulked
up their inventory,
an intentional move to get goods before import tariffs went into effect. The
risk heading into the crucial holiday shopping season is that inflation-wary
shoppers won’t spend as much or will buy fewer items because prices are higher.
For some retailers, this could mean deep discounting to work through excess
inventory, which would ultimately hit margins.
As
companies start to report on this year’s third quarter, analysts are looking
for signs of trouble in the form of inventory growth that is outpacing sales
growth. For some companies, this is already
happening. Lululemon
Athletica’s inventory
was up 21% for the three months ended Aug. 3 compared with a year earlier,
primarily because of higher tariff rates and foreign exchange, executives said
last month. Units were up around 13%. The athletic apparel brand expects sales
growth between 3% and 4% in its next quarter.
At
Ralph Lauren, net inventory was up 18% for the three months ended June 28
compared with a year earlier, which Chief Financial Officer Justin
Picicci described as high. Sales were up 14% for the quarter. Excluding
foreign-currency impacts and early imports to mitigate tariff costs, inventory
was up around 7%, he said. Tariff-related actions accounted for roughly 6
percentage points of the net inventory level.
The
decision to stockpile some goods wasn’t made lightly, particularly in the
current consumer environment, said Picicci. “Nothing can derail a brand
elevation journey like too much inventory,” he said.
Inventory
for apparel brands was up an average of 6.2% in the second quarter of 2025
compared with a year earlier, according to a review of companies by research
firm Telsey Advisory Group. Inventory was also up in other categories: by 4.8%
for footwear companies, 11.5% at discount chains, and 8.4% in specialty apparel
businesses, according to the firm, which looked at data from FactSet.
Retailers
are familiar with inventory surpluses. Coming out of the Covid-19 pandemic,
many stockpiled everything
from electronics to kitchen appliances and casual clothes to contend with
supply-chain disruptions and consumer demands. Some ended up with an inventory
pileup just as shoppers pulled
back their
spending, leaving companies to discount goods and take a hit on their margins,
analysts said.
So
far, a big difference now is that shoppers’ spending has held up well in recent
months, with retail sales increasing
at a solid clip in
July and August. But a summertime
hiring slowdown has
raised worries about the health of the U.S. labor market. Inflation also
remains higher than the
Federal Reserve wants, and tariffs are expected to push some prices
higher.
“The
big question is whether spending will continue at the same pace when the prices
of products across most categories go up, which is in the process of being
sorted out right now,” said Rick Patel, a managing director of equity
research at Raymond
James.
Across footwear, apparel and accessories, Patel predicts mid-single-digit price
increases this fall, with the potential for further increases in early 2026.
Inventory sitting in warehouses ties up capital and if demand doesn’t shape up
as planned, having to discount hurts margins, he said.
Consumers
surveyed by PricewaterhouseCoopers said they expect their holiday spending this
year to decline on average by 5% compared with last year, the first notable
drop since 2020. Eighty-four percent of consumers expect to cut back in the
next six months, the firm said.
More
Retailers
Stockpiled to Avoid Tariffs. The Holidays Will Put That to the Test. - WSJ
September,
typical boom month for shipping, looks more like freight recession this year
October
7, 2025
September,
a key month for shipping ahead of the holiday season, is usually a boom one
inside the freight business and supply chain, with products moving from
warehouses to stores or consumers.
Not
this year.
The
latest Logistics
Managers' Index,
which tracks inventory levels, warehouse costs, transportation capacity, and
pricing, shows the lowest reading it has ever recorded for transportation
utilization in the month of September.
The
strong growth usually seen due to shipments of holiday merchandise, "we
are not seeing that," said Dale Rogers, a professor in the supply chain
management department at Arizona State University and one of the authors
of the LMI.
The
LMI score is a combination of eight key metrics in the logistics supply chain
covering warehousing, transportation, and inventory. Any reading above 50.0
indicates that logistics is expanding; a reading below 50.0 is indicative of a
shrinking logistics industry.
The
Logistics Managers' Index was at 57.4, down 1.9 points from August, and at its
lowest reading since March.
Rogers
says the underlying data corresponds to a declining rate of growth for future
freight logistics orders and rising
inventory,
which increases warehouse pricing. What he described as a "slight negative
freight inversion" that began in August continued in September. And he
added that while transportation prices are still expanding, that is
"barely" the case.
"This
is the lowest rate of growth we have tracked for this metric since April 2024,
which was the last month of the most recent freight recession," Rogers
said.
The
headwinds are most clearly seen in the companies involved in the upstream part
of the supply chain, he said, where raw materials are sourced, acquired, and
transported to manufacturing facilities. Upstream firms reported very marginal
transportation price expansion at 51.4.
"Respondents
at the manufacturing and wholesale level have been relatively stagnant in terms
of new inventories because so many of them front-loaded goods early in the
year," Rogers said.
Based
on the LMI data, a lot of the front-loaded
products ahead of the tariffs are still in the warehouses. Now,
frontloaded items are racking up costs. Warehouse capacity is tight, and pushed
inventory levels over 54.2, leading to higher inventory costs.
More
September, typical boom month for shipping, looks more like freight recession this year
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.
Solar and Battery Costs Plummet, Making Clean Energy Cheaper Than
Gas and Coal
Oct 7 2025
Solar energy has become so affordable that, in the sunniest
regions, generating one unit of electricity can cost as little as £0.02, making
it cheaper than power from coal, gas, or even wind. That’s according to a new
study from the University of Surrey.
Published in Energy and Environment Materials, the
research from Surrey’s Advanced Technology Institute (ATI) highlights solar photovoltaic
(PV) technology as a leading force in the global shift toward clean, renewable energy. The
findings suggest that continued investment in solar could significantly
accelerate efforts to reduce carbon emissions and lower energy costs worldwide.
Even here in the UK, a country that sits 50 degrees north of the
equator, solar is the cheapest option for large-scale energy generation.
Globally, the total amount of solar power installed passed 1.5 terawatts in
2024 – twice as much as in 2020 and enough to power hundreds of millions of
homes. Simply put, this technology is no longer a moonshot prospect but a
foundational part of the resilient, low-carbon energy future that we all want
to bring to reality.
Ravi Silva, Study Co-Author, Professor and Director, Advanced
Technology Institute, University of Surrey
The researchers also noted a dramatic drop in the cost of
lithium-ion batteries, down 89 % since 2010, which has made solar-plus-storage
systems as affordable as gas-fired power plants. These hybrid setups, which
pair solar panels with battery storage, are now widely adopted in many regions.
By storing excess energy and releasing it when needed, they turn solar into a
more reliable, dispatchable power source capable of helping balance supply and
demand on the grid.
However, the study also highlights some pressing challenges. Chief
among them is integrating large volumes of solar power into existing
electricity networks. In areas like California and China, for instance, high
levels of solar generation have led to grid congestion and energy being wasted
when supply outpaces demand.
Connecting growing levels of solar power to electricity networks
is now one of the biggest challenges. Smart grids, artificial intelligence
forecasting, and stronger links between regions will be vital to keep power
systems stable as renewable energy use rises.
Dr. Ehsan Rezaee, Study Co-Author, University of Surrey
“With the integration of energy storage and
smart grid technologies, solar is now capable of delivering reliable,
affordable, and clean power at scale. Innovations in materials such as
perovskite solar cells could boost energy output by up to 50% without
increasing land use,” added Professor Silva.
“However, progress will depend on consistent, long-term
policy support. Initiatives such as the Inflation Reduction Act in the US, the
EU’s REPowerEU plan, and India’s Production Linked Incentive scheme show how
clear direction can drive investment and innovation. Sustained commitment and
international collaboration will be essential if we are to accelerate the
world’s transition to a clean and reliable energy system,” concluded
Professor Silva.
Clean Energy
Revolution: Solar Beats Gas and Coal Prices
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt Clocks (usdebtclock.org)
A government that robs Peter to pay Paul can always depend on the support of Paul.
George Bernard Shaw
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