China to Build Humanoid Robots by 2025

The country aims to produce its first humanoid robots by 2025, according to a blueprint laid out by the Ministry of Industry and Information Technology. The government will nurture more young companies focused on the field, set industry standards, develop talent and deepen international cooperation.

Shares of Chinese robotics companies surged after the policy guidance, which adds another dimension to a technological race between the world’s two biggest economies in chips and hardware. US companies such as Tesla Inc. and Boston Dynamics have so far enjoyed an edge in the technology.  READ MORE...

Fusion Energy - TOKAMAK

(Bloomberg) -- The executive in charge of the world’s biggest fusion-energy experiment is trying to rehire retired engineers, who possess knowledge that’s critical to advancing an unfinished reactor in southern France.

The 35-nation International Thermonuclear Experimental Reactor, or ITER, is seeking to reboot the fusion project after its supply chains were disrupted by war and pandemic. Delays mean ITER’s efforts to harness the mechanics of the Sun’s clean energy on Earth could be overtaken by more nimble startups.

“What it takes to integrate a facility like ITER and design it from scratch has been lost,” said Pietro Barabaschi, ITER’s director general. “The knowledge is available somewhere but it is not consolidated. We have to get some retired people on board again.”

ITER revealed the knowledge gap Monday at an International Atomic Energy Agency conference in London, where hundreds of scientists and engineers are convening to assess the state of an industry drawing investment from billionaires including Jeff Bezos and Bill Gates. 

It’s likely to pile more pressure on the star-crossed government project, now facing competition from dozens of privately funded startups.  READ MORE...

Guaranteed Recession in 2023

Federal Reserve Board Chair Jerome Powell testifies before the Senate Committee on Banking, Housing, and Urban Affairs on 'The Semiannual Monetary Policy Report to the Congress', at Capitol Hill in Washington on Tuesday, July 17, 2018. Jose Luis Magana/AP

From the central bank's latest rate hike to new developments in the ongoing bank crisis, a lot has happened in my absence.

Jerome Powell and co. indicated Wednesday that, financial turmoil or not, more rate hikes could be coming this year.

Markets, on the other hand, expect something else entirely. Futures are pricing in a minimal chance that the Fed's target rate will be the same or higher by 2024, according to CME's FedWatch tool.

This means the Fed and investors are on dramatically different pages (and only one can be correct).

And all the while, Jerome Powell's favorite bond-market indicator is quietly telling us that a recession is all but guaranteed this year.

1. Powell's preferred Treasury indicator is the spread between the yield on three-month Treasury bills and their expected yield in 18 months' time.

On Thursday, the spread inverted by a record 134 basis points. That's steeper than the previous record set in January 2001, two months before a recession struck, Bloomberg reports.

Talk of basis points, yield spreads, and other market jargon is obscuring the key message here: Markets think a recession is guaranteed in 2023.

Remember, an inverted yield curve suggests investors see more risk in the near term. It's a classic warning for a downturn.

Here's how Powell described the indicator last year:

"Frankly, there's good research by staff in the Federal Reserve system that really says to look at the short — the first 18 months — of the yield curve. That's really what has 100% of the explanatory power of the yield curve. It makes sense. Because if it's inverted, that means the Fed's going to cut, which means the economy is weak."  READ MORE...

BRICS Consider Exxpansion

(Bloomberg) -- The BRICS group of nations plans to decide this year whether to admit new members and what criteria they would have to meet, with Iran and Saudi Arabia among those who’ve formally asked to join, according to South Africa’s ambassador to the bloc.

Enlarging the group that includes Brazil, Russia, India, China and South Africa would benefit Beijing, as the world’s second-biggest economy tries to build diplomatic clout to counter the dominance of developed nations in the United Nations, International Monetary Fund, World Bank and other institutions.

China initiated the conversation about expansion when it was chair last year, triggering concern among other members that their influence will be diluted, especially if Beijing’s close allies are admitted. China’s gross domestic product is more than twice the size of all four other BRICS members combined.

The proposal to expand BRICS will be one of the economic bloc’s main focuses this year, said Ambassador Anil Sooklal. South Africa is the group’s current chair.

“There are over a dozen countries that have knocked on the door,” Sooklal said in an interview in Johannesburg last week. “We are quite advanced at looking at a further group of new members.”

Vote Imbalance
The potential repositioning of BRICS comes as developed nations in Europe and North America seek to bolster alliances to push back against the influence of an increasingly dominant and assertive China by forming new blocs and signing trade and security pacts. The so-called Quad, an alliance between the US, Japan, India and Australia, has gained in prominence since being resurrected in 2017 after standing dormant for almost a decade. And in 2021, Australia, the UK and the US entered into a security alliance known as AUKUS.

We are living in “the world between orders. We don’t know what the new order is going to be,” Sooklal said. “We believe we need to play a role in ensuring that we have a more equitable, inclusive, transparent, global architecture.”  READ MORE...

What Will A Recession in 2023 Look Like?

Recessions, like unhappy families, are each painful in their own way.

And the next one -- which economists see as increasingly possible by the end of next year -- will probably bear that out. A US downturn may well be modest, but it might also be long.

Many observers expect any decline to be a lot less wrenching than the 2007-09 Great Financial Crisis and the back-to-back downturns seen in the 1980s, when inflation was last this high. The economy is simply not as far out of whack as it was in those earlier periods, they say.

While the recession may be moderate, it could end up lasting longer than the abbreviated, eight-month contractions of 1990-91 and 2001. That’s because elevated inflation may hold the Federal Reserve back from rushing to reverse the downturn. READ MORE...

Third Term Begins with Problems

Shortly after President Xi Jinping took power in 2012, he outlined his “Chinese Dream” for national rejuvenation. A decade later, he’s entering his most challenging period yet for turning that vision into reality.

The Chinese leader emerged from the Communist Party’s secretive summer retreat on the Yellow Sea this week facing mounting problems at home and abroad. Xi has just a few months to make sure they don’t overshadow his greatest achievement yet: securing a precedent-breaking third term as leader at a party congress later this year.

With economic growth forecasts being slashed, Covid cases rising to a three-month high and the US pushing back over Taiwan, each week seems to bring a new crisis. That’s left Xi focused on reining-in risks and trying to project stability, rather than promoting his achievements and marching toward a coronation.  READ MORE...

Small Businesses Couldn't Pay Rent in October

The Ohio River stands in front of businesses in Pomeroy, Ohio.  Photographer: Ty Wright/Bloomberg





Rent delinquency rates among US small businesses increased significantly this month, a new report shows.

About 37% of small businesses, which between them employ almost half of all Americans working in the private sector, were unable to pay their rent in full in October. 

That’s according to a survey from Boston-based Alignable, a network of 7 million small business members. It’s up seven percentage points from last month and is now at the highest pace this year, the survey showed.

Chuck Casto, head of research, at Alignable, said that small business owners are resilient but incomes are “basically being eaten away by inflationary pressures.”  READ MORE...

Mortgage Rates Spike

US mortgage rates jumped to a 16-year high of 6.75%, marking the seventh-straight weekly increase and spurring the worst slump in home loan applications since the depths of the pandemic.

The contract rate on a 30-year fixed mortgage rose nearly a quarter percentage point in the last week of September, according to Mortgage Bankers Association data released Wednesday. 

The steady string of increases in mortgage rates resulted in a more than 14% slump last week in applications to purchase or refinance a home.  READ MORE..

China Conducts Anti-Ballistic Test

China successfully conducted a mid-range anti-ballistic missile test late Sunday, its defense ministry said.

The land-based test “achieved its expected objectives” and was defensive in nature and not targeted at any one country, according to the statement.


The country conducted a similar test in February 2021 and brings the tally of publicly announced Chinese land-based anti-ballistic missile technical tests to six, state media Global Times reported.


The test could add to tensions in an already volatile region, where Beijing and Washington are vying for influence. Neighboring North Korea has also ramped up its missile tests in recent months, prompting South Korea and the US to respond to its provocations.

Demand Destruction Coming

Pain at the pump has gotten so bad that demand for gasoline is dropping just as the summer driving season is about to begin.

Demand on a four-week rolling basis has hit its lowest level during this time of year since 2013, excluding the pandemic-outbreak period in 2020, according to data from the Energy Information Administration compiled by Bloomberg. Compared with year-ago levels, demand is down roughly 5%.

Prices at gas stations across the US have hit record after record over the past two weeks, dashing some hopes for a driving season that approaches pre-COVID-19 levels, AAA previously predicted.

The average gallon of gas in the US hit $4.59 on Tuesday, about 51% higher than a year ago, according to AAA data. Regular gas prices have never hit this level. And in California, AAA data showed, prices can be over $6.  READ MORE...

Americans Avoid Going to Work

Elon Musk, the CEO of Tesla and SpaceX, said he expects China to produce "some very strong companies" because of the country's workforce.

"There's just a lot of super-talented, hardworking people in China who strongly believe in manufacturing," Musk said in an interview with the Financial Times on Tuesday.

"They won't just be burning the midnight oil. They will be burning the 3 a.m. oil," he continued. "They won't even leave the factory type of thing, whereas in America people are trying to avoid going to work at all."

Musk himself famously slept on the floor of Tesla's Fremont factory during the "production hell" for the Model 3.

"I wanted my circumstances to be worse than anyone else at the company," he told Bloomberg in 2018. "Whenever they felt pain, I wanted mine to be worse."

Last month, workers at Tesla's Shanghai Gigafactory were required to sleep at the facility as production resumed following a three-week shutdown, Bloomberg reported, citing people familiar with the matter. A memo, which Bloomberg reported, indicated that each worker would be provided with a sleeping bag and an air mattress and expected to work 12-hour shifts with one day off per week.

But workplace tides may be shifting in China after tech workers there protested the "996" schedule that had many working 72 hours per week, from 9 a.m. to 9 p.m. for six days.  READ MORE...

Top Problem is INFLATION Since 1985

The share of Americans who rate inflation as the top issue facing the country is at the highest in nearly 40 years, according to a Gallup poll released Tuesday.

About one in five Americans, or 17%, surveyed March 1-18 cited inflation as the nation’s most important problem. That’s up from 10% in February, and compares with 4% who pointed to fuel prices in particular.

U.S. consumer prices are rising at the fastest pace in four decades, outpacing wage gains and fanned further by Russia’s war in Ukraine. Gas prices are near record highs -- well over $4 a gallon nationwide -- especially straining lower-income families.

Among those polled -- a little over 1,000 U.S. adults -- 22% say the government is the top problem outside of the economy, while 9% cited the war in Ukraine. The share citing the coronavirus fell to the lowest level since the pandemic began.

Similar to a University of Michigan survey -- which showed U.S. consumer sentiment remained at a decade low in March -- inflation concerns diverge sharply from a political perspective. Nearly 80% of Republicans are worried about inflation, more than double the proportion of Democrats, according to Gallup.   SOURCE:  Bloomberg      READ MORE...

A Pacific NATO

Bloomberg News
China warned the U.S. against trying to build what it called a Pacific version of NATO, while declaring that security disputes over Taiwan and Ukraine were “not comparable at all.”

Foreign Minister Wang Yi told his annual news briefing Monday that the “real goal” of the U.S.’s Indo-Pacific strategy was to form Asia’s answer to the North Atlantic Treaty Organization. China has often accused the U.S. of trying to form blocs to suppress its growth, a complaint that’s likely to attract greater attention after President Vladimir Putin cited similar grievances before his invasion of Ukraine.

“The perverse actions run counter to the common aspiration of the region for peace, development, cooperation and win-win outcomes,” Wang added. “They are doomed to fail.”

Complaints about U.S. efforts to strengthen its alliance network in Asia were among several points of contention raised by Wang in the almost two-hour briefing on the sidelines of the National People’s Congress in Beijing. The senior diplomat repeatedly alluded to the U.S. as the source of problems with countries around the globe and issued some of China’s most pointed warnings yet against calls to expand U.S. ties with Taiwan.

“This would not only push Taiwan into a precarious situation, but will also bring unbearable consequences for the U.S. side,” Wang said on the sidelines of the National People’s Congress in Beijing, later adding: “Taiwan will eventually return to the embrace of the motherland.”  READ MORE...