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Fed’s Bullard says tapering will start ‘very soon’

(Reuters) -The Federal Reserve may soon start to reduce the pace of its asset purchases if the economy continues to improve as expected, New York Federal Reserve Bank President John Williams said on Monday. It is clear there has been “substantial further progress” toward the Fed’s goal for inflation and there has also been “very good progress” toward maximum employment, Williams said in remarks delivered during a virtual event organized by the Economic Club of New York. He was referring to the threshold policymakers set for reducing the central bank’s bond purchases from the current pace of $120 billion a month. “Assuming the economy continues to improve as I anticipate, a moderation in the pace of asset purchases may soon be warranted,” Williams said, echoing the policy statement central bank officials issued after last week’s meeting.

While some policymakers, including Cleveland Fed Bank President Loretta Mester and Kansas City Fed President Esther George, say the standard for tapering bond purchases has been met, some officials have said they would like to see continued jobs growth.

Fed Chair Jerome Powell said after the conclusion of last week’s meeting that the economy is one “decent” monthly jobs report short of meeting the threshold for tapering and the Fed will likely begin to do so in November. Williams said he projects the economy will grow by between 5.5% to 6% this year and for inflation to come back down to 2% next year. He expects the U.S. labor market to see strong growth over the next year or so. While the benefits of fiscal aid may fade as those programs end, Williams said savings that some households accumulated during the pandemic may help to support consumer spending going into next year. He said it will be some time before the U.S. economy meets the requirements necessary for the central bank to lift interest rates from near zero levels, pointing to uncertainty in the outlook and the need for continued jobs growth. “There is still a long way to go before reaching maximum employment,” Williams said. “And over time it should become clearer whether we have reached 2% inflation on a sustained basis.” NN: The FED know that its got a great big problem and they could topple the debt house of cards they created. They are HOPING and PRAYING they can pull this off without a wipe out… THEY CAN’T! Like every other time they raised rates markets will crash. Credit and debt is the life blood of the stock market, bonds and real estate. They are hoping they can save the system…… THEY CAN’T!! They are trying to kinda of slowly ease rates higher and get out of the endless stimulus business. THEY CAN’T!  So they are dead meat. They cannot make rates any lower and they can’t stimulate the economy our of this. The only choice is to shut her down and hope they can pick up the pieces… THEY CAN’T!!!!!!!

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Europe mostly higher premarket with economy in focus….US higher in premarket with economy in focus

 

Shares in Europe traded mostly higher in the premarket on Wednesday ahead of several updates that will indicate the current economic outlook amid the coronavirus pandemic. European Central Bank President Christine Lagarde is set to give a speech later in the day. Earlier, German Finance Minister Olav Scholz and his French counterpart Bruno Le Maire both expressed optimism about the first half of 2021. Meanwhile, the European Union will see its results in industrial production in November. The DAX stood flat at 7:20 am CET. At the same time, the FTSE 100 increased by 0.12%, and the CAC 40 advanced by 0.20%. The euro went up by 0.09% against the dollar, selling for $1.22170 at 7:27 am CET. A minute later, the pound sterling rose by 0.10% against the greenback to change hands for $1.36788.

US higher in premarket with economy in focus

Equities in the United States traded higher in the premarket on Wednesday ahead of Federal Reserve Chair Jerome Powell’s newest speech on the current state of the economy, heavily influenced by the COVID-19 pandemic. The country will also post its latest results in pending home sales. Earlier, Fed Bank of St. Louis President James Bullard said the institution will start tapering its bond-buying “very soon.” Meanwhile, the country’s crude stockpiles reportedly went up by 4.12 million barrels in the week ending September 24. The Dow Jones Industrial Average gained 0.51% or 173 points at 4:30 am ET. At the same time, the Nasdaq 100 rose by 0.92%. The S&P 500 expanded by 0.67%. The euro lost 0.14% to the dollar at 4:27 am ET to sell for $1.16674. NN: at the present time this does not look like the wipeout i know will come for sure. Our greatest trade ever. It is imperative we keep our powder dry.

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Evergrande jumps 12% after selling bank stake

HONG KONG (Reuters) – Cash-strapped China Evergrande Group left its offshore bondholders guessing whether it would pay interest on a bond coupon due Wednesday despite agreeing to settle debt with a Chinese bank in a $1.5 billion stake divestment deal. With liabilities of $305 billion, Evergrande has sparked concerns its woes could spread through China’s financial system and reverberate around the world – a worry that has eased with the Chinese central bank vowing to protect homebuyer interest. Evergrande said in an exchange filing that it would sell a 9.99 billion yuan ($1.5 billion) stake it owns in Shengjing Bank Co Ltd to a state-owned asset management company. The bank, one of Evergrande’s main lenders, demanded all net proceeds from the sale go towards settling the developer’s debts with Shengjing. As of the first half last year, the bank had 7 billion yuan in loans to Evergrande, according to a report by brokerage CCB International, citing news reports.

The move underscores how Evergrande, once China’s top-selling developer and now expected to be one of the largest-ever restructurings in the country, is prioritising domestic creditors over offshore bondholders. It also highlights the role state-owned enterprises may play in Evergrande’s denouement. NB: China is more concerned that the masses will rise up then protest to credit rating agencies and by powerless foreign creditors to do anything…….

The company is due on Wednesday to make a $47.5 million bond interest payment on its 9.5% March 2024 dollar bond. The company missed a payment deadline on a dollar bond last week, a day after its main property business in China said it had privately negotiated with onshore bondholders to settle a separate coupon payment on a yuan-denominated bond. Evergrande’s silence on its offshore payment obligations has left global investors wondering if they will have to swallow large losses when 30-day grace periods end for coupon payments due on Sept. 23 and Sept. 29. A spokesperson for Evergrande did not immediately respond to Reuters request for comment. “We are in the wait-and-see phase at the moment. The creditors are organising themselves and people are trying to figure out how this falling knife might be caught,” said an advisor hired by one of the offshore Evergrande bondholders. “They failed to pay last week, I think they will probably fail to pay this one. That doesn’t mean necessarily they’re not going to pay … they’ve got the 30-day grace period,” said the advisor declining to be named due to sensitivity of the issue. Once the face of China’s frenzied building boom, Evergrande has now become the face of a crackdown on developers’ debts that has spurred volatility in global markets and left large and small investors sweating their exposure. Evergrande’s troubles slammed global stock markets earlier this month. In the weeks since, some global investors have shifted their focus to political wrangling in Washington over the U.S. debt ceiling and a rise in Treasury yields that has pressured stocks. Beijing is prodding government-owned firms and state-backed property developers such as China Vanke Co Ltd to purchase some of Evergrande’s assets, people with knowledge of the matter told Reuters. Authorities are hoping that asset purchases will ward off or at least mitigate any social unrest that could occur if Evergrande were to suffer a messy collapse, they said, declining to be identified due to the sensitivity of the matter.  On Monday, China’s central bank vowed to protect consumers exposed to the housing market, without mentioning Evergrande in a statement posted to its website, and injected more cash into the banking system. Those moves have boosted investor sentiment towards Chinese property stocks in the last couple of days, with Evergrande stock rising as much as 17% on Wednesday. The stock was up around 11% in the afternoon trade. NN: Evergrande is old news. China has decided it will be a controlled wind down. US bankruptcies are also handled in house to mitigate spread…… Remember everone is trying to keep the house of cards the international debt orgy alive for another day…..

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Wall Street stumbles on rising Treasury yields, inflation worries

NEW YORK (Reuters) – Wall Street stocks ended sharply lower on Tuesday in a broad sell-off driven by rising U.S. Treasury yields, deepening concerns over persistent inflation, and contentious debt ceiling negotiations in Washington. All three major U.S. stock indexes slid nearly 2% or more, with interest rate sensitive tech and tech-adjacent stocks weighing heaviest as investors lost their risk appetite. The S&P 500 index and the Nasdaq Composite index were on track for their largest monthly declines since September 2020. “The big picture is the sudden surge in the past week of yields, which has led to a ‘sell first, ask questions later’ mentality,” Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina. Factors weighing on sentiment today,” Detrick added. “The back-and-forth in Washington with the debt ceiling and the spending bill and potential higher taxes have weighed on overall investor psyche and has led to a pretty good sized sell-off.” The benchmark index was also setting a course for its weakest quarterly performance since the COVID pandemic brought the global economy to its knees. Weakness pervaded across most asset classes, including gold, suggesting widespread risk-off sentiment. NN: I want you understand two things. Its over, we have the greatest bubbles EVER. And we are about to see the biggest crash ever in stocks, bonds and real estate. The powers that run the show know this. Not to be confused with the talking heads you see om public media. But the real power brokers. All they are doing is buying time and positioning themselves to survive the coming chaos. The global plague threw them a curve ball they were not expecting. Remember China wants to be a player to and is a competitor. They are All  afraid of one things. The masses rising up in open rebellion… that’s why they got to keep them SCARED and sleeping…. And blaming the plague for what is coming is in their play book. That is why they are fesding the antivaccers full of shit… These folks insure the plague stays among us and keeps mutating.

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US in touch with OPEC over energy prices – Psaki

White House spokeswoman Jen Psaki stated on Tuesday that the United States government is engaged with OPEC members over increasing energy prices and is looking at every means to address the cost of oil products. “We continue to speak to international partners, including OPEC, on the importance of competitive markets and setting prices and doing more to support the recovery,” Psaki stated. She also added that the White House is closely monitoring the developments on energy markets and has already asked the Federal Trade Commission to use all of its tools to address any illegal activity related to gas price increases.

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Grantham magnificent equity bubbles

“There are examples of large scale craziness and meme investing etc… for which there is simply no parallel in 1929 or 2000. 2000 had Pets.com’s and they were kind of glorious, but they were scores of millions or a few hundred millions (of dollars), but we have crazy things now that are billions and in some cases tens of billions…”

“The thing about the (economic) underpinnings is they always look terrific. In 1929, the market didn’t peak because when they thought the underpinnings were terrible. They peaked when the market’s enthusiasm for the underpinning was approximately the highest it had ever been in history. In 2000, in March, the world, including the boss of the Federal Reserve, Alan Greenspan, they all thought that the system had never been better. At the top of the Housing Bubble in 2007, Bernanke and the boys thought that the US Housing market had never declined… They have never gotten it right. The Federal Reserve in particular has never had a clue about asset bubbles. They don’t even address it. They act as if they don’t exist, expect on the upside they occasionally take credit for the wealth effect helping the economy along… What they never did was they never took dis-credit for the reverse side. The market is a mean reverting mechanism and eventually it goes back to a fair price…”

“This time we are really playing with fire because we have an overpriced bond market. Jim Grant would argue the most overpriced in 4,000 years. We have, in my opinion… the most overpriced US equity market in history. We have a US housing market that three weeks ago reached the same multiple of median family income as it did in 2006 at the peak of the housing bubble, and we have commodities that have recently run amuck such that the Goldman Sachs index of non-energy, which is food and metals…, has just equaled the peak of 2011 which is said to be one of those commodity super-cycle events. So, this is the first time we’ve ever risked three and a half asset classes bubbling at the same time. If and when we reach a period of pessimism, the potential unraveling in terms of perceived wealth is much greater this time than it will ever have been before…”

So long as the Federal Reserve is ‘printing’ $120 billion a month and buying financial assets, simultaneously increasing the supply of capital hungry for any yield it can get and removing the lowest risk yielding assets from financial markets, who knows how much more ridiculous this bubble can get?

Every single major bear market in the US since at least the 1920s has been preceded by a Fed tightening cycle. In 1989, the last year of the infamous Japanese Nikkei bubble, the Japanese central bank raised benchmark rates from 4% to over 6%, and they kept raising rates for over a year after the market peaked and then halved.

The Fed can’t even commit to a timeframe for developing a timeframe to slow the record pace of QE. For years, they’ve used low official inflation as an excuse for round after round of QE and accommodative policy. Now that the Fed itself has forecast that Core PCE inflation, the lowest of all inflation measures, will average 3.4% for all of 2021, well above their 2% target, they’ve decided they don’t care about inflation anymore.

This Fed doesn’t want to tighten. Someday that will change, if only momentarily. Presumably, Mr. Grantham will have the last laugh, but until then, the madness continues raging.  NN: I believe we are going to make so much money they will investigate us for the rest of our lives:

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US tumbles deeper into red, Dow down over 350 pts

Major stock indexes in the United States fell further below the flatline on Tuesday with Treasury Secretary Janet Yellen’s and Federal Reserve Chair Jerome Powell’s testimony in focus. The Dow Jones Industrial Average dropped 1.00%, losing 348 points at 10:11 am ET, while the Nasdaq 100 crashed 2.04% or 309 pts. The S&P 500 slid 1.43% at the same time, surrendering 63.64 pts. The euro was down 0.16% against the greenback at 10:13 am ET, selling for 1.16765 dollars.

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China energy crunch triggers shutdowns, pleas for more coal

https://youtu.be/bAfn0rQqu7g

SHANGHAI (Reuters) – China faces mounting pressure to ramp up coal imports and ensure supplies to keep lights on, factories open and water flowing as a severe power crunch roils the northeastern industrial heartland.

With electricity shortages sparked by coal shortages crippling large sections of industry https://www.reuters.com/world/china/chinas-power-crunch-begins-weigh-economic-outlook-2021-09-27, the governor of Jilin province, one of the hardest hit in the world’s no.2 economy, called for a surge in coal imports, while a power company association said supply was being expanded “at any cost”.

News organisations and social media carried reports and posts saying the lack of power in the northeast had shut down traffic lights, residential elevators and 3G mobile phone coverage as well as triggering factory shutdowns.

A utility in Jilin even warned power shortages could disrupt water supplies at any time, before apologising for causing alarm.

For the second straight day, the main state grid operator sought to reassure customers, saying it would work to guarantee coal supply and strictly control power use by high-energy consuming and polluting sectors, and ensure power supply to residents during the October holidays and winter heating season.

Cities such as Shenyang and Dalian – home to more than 13 million people – have been hit, with disruption at factories owned by suppliers to global companies like Apple and Tesla. Jilin is one of more than 10 provinces forced to ration power https://www.reuters.com/world/china/what-is-behind-chinas-power-crunch-2021-09-27 as generators feel the heat of soaring coal prices that they can’t pass on to consumers.

Speaking to power firms on Monday, Han Jun, the governor of Jilin province, home to nearly 25 million people, said “multiple channels” needed to be set up to guarantee coal supplies, and China should source more from Russia, Mongolia and Indonesia.

Han said the province would also urgently send teams to secure supply contracts in the neighbouring region of Inner Mongolia, according to Jilin’s official WeChat social media account.

Goldman Sachs estimated that as much as 44% of China’s industrial activity has been hit by power shortages, potentially causing a one-percentage-point decline in annualised GDP growth in the third quarter, and a two-percentage-point drop from October to December.

It said in a Tuesday note that it was cutting its 2021 GDP growth forecast for China to 7.8%, from the previous 8.2%.

‘AT ANY COST’

The power crunch has taken hold https://www.reuters.com/world/china/what-is-behind-chinas-power-crunch-2021-09-27 as a shortage of coal supplies, toughening greenhouse gas emissions standards and strong demand from industry have pushed coal prices to peaks.

China’s thermal coal futures hit a record high at 1,330 yuan ($205.68) per tonne on Tuesday.

Rationing has been implemented during peak hours in many parts of northeastern China since last week, triggering state media reports of power supply disruptions in many cities and stoking concern on social media.

As some shops in the northeast operated by candlelight and malls shut early, posts on China’s Twitter-like Weibo expressed concern about water after a utility in Jilin warned users that power shortages could hit supplies at any time.

Jilin governor Han urged companies to fulfil their “social responsibilities” and “overcome the difficulties” caused by coal price rises.

The China Electricity Council, which represents power suppliers, said on Monday that coal-fired power companies were now “expanding their procurement channels at any cost” in order to guarantee winter heat and electricity supplies.

It said China needed to increase production and supply of coal while guaranteeing safety and environmental protection. More medium- and long-term contracts needed to be signed to raise power plant inventories ahead of winter.

Coal traders said finding fresh import sources may be easier said than done.

“Russia has to first meet demand from Europe, Japan and South Korea,” said one northeast China based trader. “Indonesia’s export shipments have been curbed by rainy weather the last couple of months and Mongolia’s exports, mostly by trucks, are small.”

David Fishman, China energy policy researcher and manager at the Lantau Group consultancy, said flaws in China’s pricing system were ultimately to blame.

“In the short term, the only relief policies that make sense are digging more coal out of the ground, which is bound to be an unpopular idea, or make end-users pay more for their power,” Fishman said.

Policymakers had previously warned that China needed to build more coal plants in order to offset potential power shortages over the 2021-2025 period, but utilisation rates at existing plants remain low.

Lauri Myllyvirta, lead analyst with the Helsinki-based Centre for Research on Energy and Clean Air, said northeast China currently had 100 gigawatts of coal-fired capacity, which would be more than enough to meet demand if plants had the incentive to buy more coal.

“Not a single grid region has reported peak loads that would be even close to exhausting available generating capacity,” he said.

(Reporting by David Stanway; Additional reporting by Chen Aizhu in Singapore and Emily Chow in Shanghai; Editing by Kenneth Maxwell and Nick Macfie)

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OPEC: Oil to remain dominant fuel until 2045

Secretary General of the Organisation for Petroleum Exporting Countries, OPEC, Mohammad Barkindo, yesterday, disclosed that despite its current anaemic outlook, crude oil would continue to be relevant in the foreseeable future, up to 2045. In his address at the Crescent Ideas Forum, Barkindo stated that in absolute terms, oil demand is expected to rise by almost 10 million barrels per day, bpd from 2019’s levels to around 109 million bpd in 2040, and then begin to plateau. According to him, non-member countries of the Organisation for Economic Cooperation and Development, OECD, will be the growth powerhouse, accounting for around 68 per cent of overall oil demand by 2045, with the economic tigers of India and China leading this growth. He said: “In absolute terms, we expect oil demand in the developing and emerging economies rising by 22.5 million bpd to around 74 million bpd in 2045. “The outlook for crude oil may look anemic now, but we anticipate a gradual normalization of demand growth as the world recovers from the COVID-19 shock. Our analysts foresee global oil demand returning to relatively robust annual growth and reaching nearly 104 million bpd by 2025. “In the longer term, there are a number of factors that will drive consumption, such as population and economic growth, especially in developing and emerging economies. We expect the global economy to more than double from 2019 to 2045, to $258 trillion, and the population to grow by at least 20 per cent, to 9.5 billion. “Simply put, our world will continue to thirst for energy. The World Oil Outlook anticipates that oil will remain the dominant fuel in the global energy mix for the foreseeable future, accounting for a nearly 28 per cent share in 2045, followed by gas at around 25 per cent.

“It is important to point out that it is the mainstream consensus of the leading reporting agencies is that oil and gas will retain their prominence in the energy mix for the foreseeable future.”

He expressed optimism that the promising vaccine developments, apart from the hope that they can quickly be brought to market to save lives, first and foremost, can also help reboot the global economy. “Nonetheless, the oil market today is overshadowed by the resurgence of COVID-19 and a slower pace of economic recovery than we had envisioned in the second half of the year.  In this respect, our OPEC outlook for 2020 oil demand is now slightly above 90 million bpd,” he stated. Barkindo added that OPEC’s outlook showed that petrochemicals and transportation would drive demand for crude oil going forward, noting, however, that electricity generation is the only area expected to see a decline, as oil gives way to renewables and natural gas. He said: “Road transportation will be the real driver of oil needs, just as it is today, and will account for 43% of total demand by 2045. We again see the growth shift to emerging and  developing economies as the use of alternative powertrains rises in the OECD countries. “Aviation fuel consumption nosedived this year, falling by almost 50 per cent, but we expect it to recover and be a primary driver of oil demand going forward, growing by 2.8 million bpd by 2045. “On the supply side, non-OPEC liquids are likely to recover from pandemic-related shut-ins over the medium term. Further down the road, however, non-OPEC liquids are expected to decline from a peak of nearly 72 million bpd by the end of this decade to around 65 million bpd in 2045, similar to levels in 2019. “OPEC liquids will increase from nearly 34 million bpd in 2019 to 44 million bpd in 2045. By the end of our outlook period, OPEC member countries will account for 40 per cent of global liquids supply, up from 34 per cent last year.”  NN: Despite Thungburg Climate hysteria, reality is their are not enough greenieeewinniee renewable sources of energy to heat homes, lite up the grid and power transportation systems, That is the reality. Even the battery car “revolution” has a unfortunate reality. Its a ugly nasty coal fired car with a battery in the middle. Get this in Europe and England they are opening up COAL powered generation plants and delivering coal to heat homes this winter. Why coal? The answer is its cheap, burns hot, plentiful and England and Europe are sitting on mountains of the stuff. And its reliable and not weather reliant. OPEC is right their is no alternative to fossil fuels.  And the best alternative is clean burning abundant GODS GAS natural gas. If you stop fracking and pipelines you do not force grennieewinnieee renewables, You force people to use coal!!!  we they sit in their houses freezing and pay 30 cents a kilowatt for electricity and $10 a gallon for gasoline they will not be greenieewinniees anymore.

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Pfizer seeks FDA clearance for COVID-19 vaccine in younger children

 

On September 20, Pfizer announced that the COVID-19 vaccine it is designing to be administered to children has been proven to be safe — and moreover yielded a robust immune response in children between the ages of 5 and 11. The announcement came after the company released its Phase 2 and 3 results for children in this age group. Following this much-anticipated announcement, the company’s next step is to seek emergency authorization from the U.S. Federal Drug Administration and submit their findings. If authorization is given swiftly, children as young as five could be eligible for Pfizer’s COVID-19 vaccine by Halloween. “We are eager to extend the protection afforded by the vaccine to this younger population, subject to regulatory authorization, especially as we track the spread of the Delta variant and the substantial threat it poses to children,” said Albert Bourla, Chairman and Chief Executive Officer of Pfizer in a press release. “Since July, pediatric cases of COVID-19 have risen by about 240 percent in the U.S. – underscoring the public health need for vaccination. These trial results provide a strong foundation for seeking authorization of our vaccine for children 5 to 11 years old, and we plan to submit them to the FDA and other regulators with urgency.” The trial included data from 2,268 participants ages 5 to 11 who used a two-dose regimen of the vaccine administered 21 days apart, similar to the process for people who are 12 and older. Researchers measured the childrens’ immune response by looking at neutralizing antibody levels in their blood and comparing those levels to a control group of 16- to 25-year-olds who were given a two-dose regimen with a larger dose. There is one big difference between the vaccine for people over the age of 11, and those between five and 11: the amount of vaccine administered. Pfizer used a 10-microgram dose for 5 to 11-year-olds, which is far smaller than the 30-microgram dose that has been used for those 12 and older. Pfizer said this smaller dosage demonstrated a “strong immune response in this cohort of children one month after the second dose.” In the case of the Pfizer vaccine, researchers found that a lower dosage was best.”In this case, a decrease was effective because of the robust immune response that children have,” Blumberg said. “So, the 10 microgram dose, the 1/3 the dose seems to hit the sweet spot.” As far as reported side effects go, they are similar to those experienced by the 12 and older set. “The common side effects are soreness at the site of injection, fever, headache, fatigue,” Blumberg said. “These generally last for 24 to 48 hours and then resolve on their own. NN: This is good new BUT the question is the roll out. Children are now 25% of new infections, Thousands are hospitalized and we are still in the early stages. THE WORST IS YET TO COME. My concern is by the time we get enough school children immunized it will be UNTIL WELL AFTER the great super spreader time of the year… The holiday seasons] which starts from Halloween to New Year.  More and more schools are closing down,,, And deservedly so over 250 teachers who are not vaccinates are getting infected and paying the stupid tax… death. I can only hope they will close the schools until EVERYONE is vaccinated.