Five days ago the Bank of Japan finally increased its interest rate from 0 to 0.25 percent. The famous carry trade, borrowing in Yen for near zero interest to invest in well paying U.S. dollar 'assets', started to unravel.

Worse than expected U.S. economic data, the Fed's unwillingness to lower interest rates and an escalating crisis in the Middle East, added to the insecurity.

All global markets are dropping or expected to drop. The most insincere 'assets' though are dropping the fastest:

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Source: Coinmarketcap

Top token Bitcoin traded 11% lower at $52,680 as of 8:39 a.m. in London, adding to a 13.1% drop last week that was the worst since the period when the FTX exchange imploded. Ether shed over a fifth of its value before paring some of the slide to change hands at $2,342. Most major coins nursed losses.

The declines come as a global stock selloff intensifies, reflecting concerns about the economic outlook and questions over whether heavy investment into artificial intelligence will live up to the hype surrounding the technology. Geopolitical tension is rising in the Middle East, adding to investor skittishness.
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Digital assets are a victim in part of the unwinding yen carry trade, as speculators adjust to higher interest rates in Japan, according to Hayden Hughes, head of crypto investments at family office Evergreen Growth.

“Those investors are also fighting a drastic increase in hedging costs based on the volatility in the US dollar-Japanese yen trading pair,” Hughes said.

Another hype that finally receives much deserved scrutiny are the glorified but unreliable machine learning algorithms currently marketed as 'Artificial Intelligence'. No profitable use-case has been made for billions of bad investments in these.

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Source: Sherwood

Pre-market NVIDIA shares are down 10%.

Another banking crisis is coming up in the U.S. where the value of commercial real estate has drastically decreased:

Banks are the largest lenders to commercial real estate (CRE) and have grown the business in the past decade. These loans are coming due amid decade-high interest rates and a drop in demand for office space stemming from hybrid work—upending a traditionally lower-risk business for banks. Financial institutions have yet to fully come to terms with their losses; the reckoning is coming.

Geopolitical risk has increased too. The 'West' is losing its proxy war in Ukraine. There is no chance for it to unsettle a Russia which is steadily gaining strength.

The conflict in the Middle East is threatening to develop into an escalating spiral of retaliation strikes and counter-strikes designed in part to pull the U.S. in:

Israel has been bracing for potential retaliation on multiple fronts since two incidents last week: Israel was blamed by Hamas and Iran for the killing of Ismail Haniyeh, Hamas’s top political leader, while an Israeli airstrike killed a Hezbollah senior commander and five other people in Lebanon. Israel has declined to comment on Haniyeh’s death.
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Israeli Prime Minister Benjamin Netanyahu held a meeting of his security cabinet on Sunday to discuss preparations for any counterstrike.

More retaliatory resistance strikes would follow those Israeli counter-strikes and on and on.

The market slump, as well as the geopolitical issues, have great potentials to explode.

News & views related to the war in Palestine …

News & views related to the war in Ukraine …

News & views not related to the wars in Ukraine and Palestine …

News & views related to the war in Palestine …

Due to my recent health issues I could not report on Ukraine for quite a while. This is my first attempt to catch up with the issue.

Given the huge size of Ukraine the changes in the front line between April 1 and August 1 seem minuscule.

April 1 2024

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August 1 2024

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But the small moves on the map disguise a rather large progress for the Russian forces.

Cont. reading: Ukraine SitRep: Catch up

The clown show continues:

U.S. says Maduro lost Venezuelan election, calls for talks, transition – Washington Post

CARACAS, Venezuela — The United States on Thursday said opposition candidate Edmundo González defeated President Nicolás Maduro in Venezuela’s presidential election and called for negotiations to ensure a peaceful transition of power.

Maduro claims that he won Sunday’s vote. The opposition, meanwhile, says that the government’s own records, as well as independent exit polls, indicate that González won twice as many as votes.

“Given the overwhelming evidence, it is clear to the United States and, most importantly, to the Venezuelan people that Edmundo González Urrutia won the most votes in Venezuela’s July 28 presidential election,” Secretary of State Antony Blinken said in a statement Thursday evening.

Did anyone inform "President" Juan Guaido?

Russia today released Wall Street Journal reporter Evan Gershkovich in a prisoner exchange with the U.S., Belarus and Germany:

Russia will soon release multiple political prisoners, including Wall Street Journal reporter Evan Gershkovich, according to Bloomberg News.
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Among those prisoners is Gershkovich, who was convicted in July of espionage and sentenced to 16 years on charges that both the Wall Street Journal and the US government reject as made-up.
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Gershkovich, 32, was arrested in March 2023 while on a reporting trip to the city of Yekaterinburg, where he was accused of spying for the US. He has been behind bars ever since.

Yekaterinburg is a major Russia weapon manufacturing center. According to his colleagues Gershkovich went there to interview local lawmakers  and random workers from weapon factories. As I analyzed at that time, Gershkovich's questions about Russian weapon production during a time of war did not seemed consistent with mere reporting:

[T]his was about more than just asking random workers:

The Wall Street Journal reporter Evan Gershkovich was interested in operation of military-industrial complex facilities in Yekaterinburg, Sverdlovsk Region Legislative Assembly deputy Vycheslav Vegner, whom the reporter interviewed earlier, told TASS Thursday.

"[During the interview, Gershkovich] started asking questions regarding the military-industrial complex of Yekaterinburg, he named one such enterprise – ‘Novator’- and so on," Vegner said.

According to the lawmaker, the reported cited the experience of other regions on industry conversion and asked about the Sverdlovsk Region experience – for example, whether the enterprises change their profile, how many shifts there are, and if they are appropriately staffed. Vegner noted during the interview that he is not authorized to answer such question.

Anything about weapon production numbers or related issues are of course state secrets, at least during times of war. What then do we call such inquiries if not espionage?

Novator, the company Gershkovich asked about, is a major designer and producer of Russia's long range air defense systems.

Russian authorities also claim that Gershkovich was caught while receiving secret data from a Russian source.

From the very beginning of the case the U.S. government had shown an extraordinary interest in it.

Meanwhile the Wall Street Journal kept insisting that Gershkovich was not spying on Russia.

How would they even know that?

Daniel McAdams @DanielLMcAdams – 4:30 UTC · Aug 1, 2024

Why won't the Wall Street Journal even make a cursory effort to refute the Russian charges? What was he doing there, meeting with Russian sources asking technical questions about Russian tank production? Was he Operation Mockingbird? Why won't our own side come clean?

Nahh – don't ever expect that to happen – unless, maybe 20 years from now.