Baltic Dry Index. 745 +21
Brent Crude 47.57
“When you develop your opinions on the basis of weak evidence, you will have difficulty interpreting subsequent information that contradicts these opinions, even if this new information is obviously more accurate.”
Nassim Nicholas Taleb, The Black Swan
Since it was
largely unreported, at least here in the UK mainstream media, today we focus on
the view of the world from President Putin’s perspective. Compared to the
American War Party in the District of Crooks, the view from Moscow seems sane
and balanced.
But first
this wobble from Germany and news from ever more bizarre Switzerland. Hanjin
Shipping’s problems grow.
German Factory Orders Undershoot Forecast as Momentum Cools
September 6,
2016 — 7:00 AM BST Updated on September 6, 2016 — 7:51 AM BST
German factory orders increased less than forecast in July as domestic
weakness damped a surge in investment-goods demand from the euro area.
Orders, adjusted for seasonal swings and inflation, rose 0.2 percent
from June, when they fell a revised 0.3 percent, data from the Economy Ministry
in Berlin showed on Tuesday. The median in a Bloomberg survey was for an
increase of 0.5 percent. Orders were down 0.7 percent from a year earlier.
The report follows a series of data signaling that economic momentum in
Europe’s largest economy has cooled. Business confidence slumped the most since
2012 in August and a gauge for private-sector activity fell to the lowest level
in 15 months. Still, the Bundesbank maintained in its last monthly report that
growth should pick up in the current quarter.
“Data suggest that in the summer the German economy won’t be able to
maintain the fast pace observed in the first half of the year,” said Stefan
Kipar, an economist at BayernLB in Munich. “We expect a slight economic
slowdown in the second half.”
More
Cash in a Box Catches On in Switzerland as Negative Rates Bite
September 6,
2016 — 9:33 AM BST
It’s a sign the world is getting used to negative interest rates when
what once seemed bizarre starts looking like the norm.
Consider Switzerland, where more and more companies are taking out
insurance policies to protect cash hoards from theft or damage.
“Because of the low interest rate level, we note increasing demand for
insurance solutions for the storage of cash,” said Philipp Surholt at Zurich
Insurance Group AG, among underwriters reporting a surge in such
requests. “We’re seeing demand for coverage for sums ranging from 100
million to 500 million francs.”
The Swiss National Bank imposed sub-zero rates in early 2015,
effectively charging banks for excess deposits. Many lenders including UBS
Group AG and Credit Suisse Group AG have passed on at least some of the charge
-- they don’t disclose how much -- to cash-rich clients like asset managers and
big companies.
While the central bank is seeking to rein in the franc, negative
interest rates have side effects that over time could outweigh the benefits.
That risk may be on the minds of SNB officials when they meet next week for
their scheduled quarterly monetary policy review. Economists expect they will
keep the rate steady at minus 0.75 percent, the lowest among major central
banks.
“The SNB’s dilemma is that it can’t make everyone happy,” said Alexander
Koch, an economist at Raiffeisen Schweiz. “In its attempt to get the best deal
for the Swiss economy, it also has created losers and collateral damage.”
Helvetia Holding AG said it charges about 1,000 francs ($1,020) a year to
insure 1 million francs. While that’s only a fraction of the 7,500 francs a
company would pay to park the same amount in a bank for a year -- assuming the
lender passes on the full charge -- it doesn’t include the cost of logistics
such as transport or security features like reinforced walls, guards and alarm
systems.Companies need to save a lot on bank fees for cash storage to be economical because, in addition to insurance, they have to assume the costs of managing the money, said Roberto Brunazzi, a spokesman for Baloise Holding AG. He said the company has long offered coverage for cash stores “but there has been a noticeable increase and now it’s becoming more commonplace.”
Switzerland’s continued use of high-denomination banknotes adds to the appeal of self-storage: About 1 million francs worth of 1,000-franc bills can fit in a small box.
More
Hanjin’s Ghost Ships Seek Havens With Food and Water Starting to Dwindle
September 7 2016
South Korea’s cash-strapped Hanjin Shipping Co. is adrift at sea -- and
in more ways than one.
Hanjin is one of the world’s biggest shipping lines and filed for
bankruptcy protection last week in Seoul. That’s created a bizarre situation on
the high seas for 85 Hanjin ships that have been effectively marooned offshore
as ports in the U.S., Asia and Europe have turned the company’s ships away. The
worry is that Hanjin ships won’t be able to pay port fees or their contents
might be seized by creditors, which would disrupt port operations.
The South Korean shipping company operates 97 container ships, the giant
workhorses of global trade that deliver everything from cars and clothing to
televisions and toys. The global shipping disruption comes just as companies
are shipping merchandise to fill shelves and warehouses for the end-of-year
holiday season.
----On Tuesday, South Korean authorities rushed to piece together a capital injection. Hanjin Group will provide 100 billion won ($90 million), including 40 billion won from Chairman Cho Yang Ho, to help contain disruptions in the supply chain, the group said in an e-mailed statement. At the same time, South Korea’s ruling Saenuri Party asked the government to offer about 100 billion won in low-interest loans to the shipping line if Hanjin Group provides collateral, Saenuri lawmaker Kim Gwang Lim said in a statement.
South Korea’s Ministry of Oceans and Fisheries estimates Hanjin Shipping needs more than 600 billion won to cover unpaid costs like fuel, including about 100 billion won immediately for payments such as to port operators to unload cargo from stranded ships, Kim said in the statement.
The
company, meanwhile, has started providing food, water and daily necessities to
crews on six Hanjin ships anchored at ports including Rotterdam and Singapore.
About 70 container movers and 15 bulk ships are stranded at 50 ports in 26
countries, according to Hanjin.
More
Now back to
the under reported news from Russi. The view of the world from President
Putin’s perspective. The whole Bloomberg transcript is well worth the read.
Putin Discusses Trump, OPEC, Rosneft, Brexit, Japan (Transcript)
September 5, 2016 — 8:00 AM BST
Russian President Vladimir Putin talked with Bloomberg News Editor-in-Chief
John Micklethwait on Sept. 1 about the U.S. elections, accusations that Russia
was involved in the hacking of thousands of Democratic National Committee
emails and documents, a possible oil-freeze deal with OPEC, plans to sell a
stake in Rosneft PJSC, the relationship between Japan and Russia, and the
future of the euro area after the U.K.’s vote to leave the European Union.Click here to read the transcript in Russian.
(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
MICKLETHWAIT: President Putin, thank you very much for talking to Bloomberg. We’re here at Vladivostok, on the edge of the Pacific and on the eve of your second Eastern Economic forum. What do you hope to achieve at it?
PUTIN: It’s a way to capture the attention of our partners, potential investors in Russia’s Far East. In this sense, this event, this occasion is not much different from other regional forums of this kind. We hold a lot of them in Russia, such as the economic forum in St. Petersburg -- usually we hold that in the summer, at the beginning of summer -- or the economic forum in Sochi.
The Far East has particular importance for us, with priority given to the development of this region. In the past few years, let’s even say in recent decades, we have encountered many problems here. We paid little attention to this area, and it deserves far more because enormous riches and opportunities for Russia’s future development are concentrated here. Not only for the development of Russia itself, but the development of the whole Asia-Pacific region, because this land is very rich in natural and mineral resources.
Usually when we talk about the Far East, we have in mind the Far East proper: the Primorye region, the Khabarovsk region, Kamchatka, Chukotka. But it’s also the area called Eastern Siberia. Now, if we take them all together, these lands contain colossal resources -- oil, gas, say, 90 percent of Russia’s tin, 30 percent of Russia’s gold, 35 percent of its timber. Seventy percent of Russia’s fish are caught in these waters.
This is a region where the transport, rail infrastructure is well developed. And in recent years we have been busy developing the road network. There’s huge potential! Opportunities for the development of the aviation industry, space industry. If you noticed, we opened a new cosmodrome in one of the regions of the Far East. Traditionally, aviation, as I said, has been developed here, including military aviation, -- the world famous Sukhoi fighter jet is manufactured in the Far East of Russia.
Finally, we have resumed the production of ships, especially for civilian use. Just today, I witnessed the start of work at one of the very promising platforms in this regard.
It’s also a very good opportunity for humanitarian exchanges with our neighbors. We’re proposing to develop musical activities, exhibitions, theatrical events here. Our outstanding musician and conductor Mr. Gergiev performed here very recently; we’re opening a branch of St. Petersburg’s Mariinsky Theater here. We also plan to open branches of St. Petersburg’s Hermitage Museum here and the Vaganova Ballet Academy.
---- MICKLETHWAIT: You seem to be more relaxed about territory on your Asian front. We mentioned the Kurils, you gave the island of Tarabarov back to China. You’re not, you wouldn’t consider giving Mrs. Merkel back Kaliningrad as a tribute?
PUTIN: We didn’t give anything away. These were territories that were
disputed, and we held negotiations with the People’s Republic of China about
them for 40 years and finally found a compromise. Part of the territory was
permanently assigned to Russia and part of the territory permanently assigned
to the People’s Republic of China. I want to stress that this was possible only
-- and this is very important -- against the backdrop of a very high level of
trust that had been developed between Russia and China by that time. And if we
can reach a similarly high level of trust with Japan, then we can find some
compromises.
But there’s a fundamental difference between the question connected with
the Japanese story and, let’s say, our negotiations with China. What is it?
It’s that the Japanese issue arose as a result of World War II and is set out
in international documents linked to the results of the Second World War. Our
discussions with our Chinese friends about border issues had nothing to do with
World War II or any military conflict. This is the first, or rather, I should
say, the second point.
Third, about the western part. You spoke of Kaliningrad.
MICKLETHWAIT: I meant it as a joke.
PUTIN: But I’ll tell you without joking: if someone wants to start
revisiting the results of World War II, well, let’s try to debate that topic.
But then we need to debate not only Kaliningrad but the whole thing, from the
eastern part of Germany to Lviv, which was part of Poland, and so on and so
forth. There’s also Hungary and Romania. If someone wants to open that
Pandora’s box and start to work with it, go ahead. Take up the flag and go for
it.
---- MICKLETHWAIT: Just listening to you
speak I wondered if you look back, you know, you became president first back in
2000. I wonder if you look back over that period whether you think Russia has
become a little bit more an Asian country and a little bit less a European one?
PUTIN: You know, it’s become a more developed country. You know, I don’t
want to draw a line between Asians and Europeans. The issue is on another
level, on the level of development. The size of the Russian economy grew by 70
percent, nearly doubled. And by purchasing-power parity, Russia’s economy is
now currently the fifth or sixth-largest in the world.
It’s completely clear that 10-15 years ago we couldn’t have responded to
the sanctions that were implemented against Russia with retaliatory measures,
say, in agriculture. We couldn’t have closed our market to agricultural goods
from countries that acted in such an unfriendly manner toward Russia because we
couldn’t have supplied the domestic market with food of our own. And now we
can. That’s the first point.
Secondly, the freeing of our market gives our farmers an opportunity to
increase production within the country. We had an overall decline in GDP
connected to a whole series of events, not only sanctions, but also purely
objective issues related to global economic trends; there’s been a slight
decline in GDP and industrial production. Yet agriculture is growing at 3
percent a year -- growing steadily. And that’s stable growth. This year it will
be 3 percent, maybe more, and next year too.
Therefore, if we’re talking about what took place over, let’s say, the
last 15 years, then it’s a lot. But that’s not the only thing. Another thing is
that the Russian economy has become significantly healthier. In 2000, we had
$12 billion in gold and foreign-currency reserves and more than $20 billion in
external debt.
Now Russia is among the top 10 countries with the healthiest ratio of
external debt to reserves. On the first of last month we had nearly $400
billion in reserves, $395 billion, and foreign debt of only about 13 percent of
GDP. That ratio is considered one of the best in the world.
We had a third of the population living below the poverty line, more
than 40 million people. That number has now fallen by nearly two-thirds. Over
the past year or year and a half, unfortunately, it has increased a bit given
the economic difficulties and the overall decline in the population’s wages,
but it’s still incomparable to what it was 15 years ago.
For example, pensions have increased
several times over, real wages have grown, they’re incomparable to what they
were. These components got us to what we were fighting for, which is at the
core of every state’s development: demographics. In the early 2000s it seemed
that we wouldn’t be able to reverse the negative demographic trend. The
population of Russia was declining by nearly 1 million people annually, 900,000
each year. Now over the last three years we’ve observed natural population
growth. We have the lowest…
MICKLETHWAIT: You’ve encouraged romance.
PUTIN: To our credit, we now have the lowest level of infant mortality
and maternal mortality in our recent history, and I think even going back to
the Soviet period. We’ve set a goal to increase life expectancy. Over the past
five years it’s grown at a much higher rate than we planned. All of this gives us
reason to believe that we were on the right track. Of course there’s a lot we
could and should still do and we probably could have attained greater results
but on the whole we’re moving in the right direction.
More
At the Comex silver depositories Tuesday final figures were: Registered
28.20 Moz,
Eligible 134.72 Moz, Total 162.92 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, what’s wrong with this? China’s Anbang: an
insurance company or a Chinese laundry?
Behind China’s Anbang: Empty Offices and Obscure Names
In the center of Beijing’s booming commercial
district, with soaring office towers, gleaming shopping malls and luxury
apartment complexes, sits a shabby, four-story building with an office that
houses stupendous wealth.
To get there, visitors must first pass through an
unmarked entrance next to a gray-tiled post office, then pass through a maze of
carelessly strung phone and power lines. On the fourth floor, down a hallway
where black scuff marks on the walls indicate years of neglect, is the Hujialou
Concentrated Office Zone, an officially sanctioned domicile for shell companies.
According to government records, that office is home
to two companies with a total stake that accounts for more than $15 billion in
assets of one of China’s biggest financial
conglomerates: the Anbang Insurance Group.
Prying visitors are not welcome. A woman at the
office, who did not give her name, grew angry when a journalist told her that
two companies there controlled a large share of Anbang.
“We’re just a private company, helping others register
with the State Administration for Industry and Commerce,” she said, referring
to the keepers of China’s corporate database. “It is none of our business
whether they are shell companies.”
Another Anbang shareholding firm — one that controls
$5.6 billion in assets — lists its address a few blocks away from the Hujialou
building, at an office tower’s empty 27th floor.
Near the Temple of Heaven, the former imperial
religious complex in Beijing, the listed address of yet another shareholding
company turns out to be another empty office. The directory downstairs lists
the former tenant: a shoe seller.
A group of 39 companies control Anbang, which was once
a sleepy insurance company and now has $295 billion in assets and a reputation
as an ambitious global deal maker. Many of those companies are in turn owned by
a welter of shell companies, many with similar names and addresses or common
owners.
Ultimately, as The
New York Times reports, they are controlled by about 100 people, many of
whom hail from a county called Pingyang on China’s east coast. Pingyang County
is the home county of Anbang’s chairman, Wu Xiaohui.
In any major country, the shareholders of marquee
companies are often household names themselves. General Electric counts major
institutional investors such as the Vanguard Group and BlackRock as top owners.
Berkshire Hathaway’s biggest shareholder is its chairman, Warren E. Buffett.
China is no exception. Dalian Wanda Commercial
Properties, for example, led by China’s richest man, Wang Jianlin, may match
Anbang in the breadth of its political
connections, but many of its biggest shareholders are easily recognizable
Chinese companies like China Life Insurance.
Anbang is different. The companies that own it, and
the people who back them, are almost all obscure. Two state-owned companies
that collectively own less than 2 percent of Anbang are the only exceptions. I
first started writing about Chinese companies 16 years ago and have never seen
a similar ownership structure at a major company.
That is remarkable, given Anbang’s increasing size and
prominence. Earlier this year, Anbang came
close to executing what would have been the biggest takeover ever of an
American company by a Chinese company, offering more than $14 billion for
Starwood Hotels & Resorts.
In China, the company not only sells auto and life
insurance, but also controls a major bank in southwestern China, is the largest
shareholder of one of the country’s biggest financial conglomerates, China
Minsheng Banking Corporation, and is the second-largest
shareholder in another, China Merchants Bank.
But China is not an offshore haven like the Cayman
Islands or the British Virgin Islands. The country’s online corporate records
system allows those with patience to find the names behind the holding
companies, even if — as with Anbang — the corporate shareholders frequently
change names, addresses and owners.
After more than three months of combing through
thousands of pages of records, The Times was able to piece together a corporate
history for those 39 shareholders. One clear pattern emerged. At least 35 of
the companies, collectively owning more than 92 percent of Anbang, can trace
all or part of their ownership to relatives of Mr. Wu or to his wife, Zhuo Ran,
who is the granddaughter of the former Chinese leader Deng Xiaoping; or to Chen
Xiaolu, the son of one of China’s most famous marshals, who helped Mao’s
Communists to victory in 1949. Those relatives are either current or former
owners or directors of those companies, or current or former owners of
predecessor firms.
More
“If you hear a "prominent" economist
using the word 'equilibrium,' or 'normal distribution,' do not argue with him;
just ignore him, or try to put a rat down his shirt.”
Nassim Nicholas Taleb, The Black Swan
Solar & Related Update.
With events
happening fast in the development of solar power and graphene, I’ve added this
section. Updates as they get reported. Is converting sunlight to usable cheap
AC or DC energy mankind’s future from the 21st century onwards? DC?
A quantum computer next?
For first time, carbon nanotube transistors outperform silicon
Date:
September 2, 2016
Source:
University of Wisconsin-Madison
Summary:
For decades, scientists have tried to harness the unique properties of carbon
nanotubes to create high-performance electronics that are faster or consume
less power. Now, for the first time, materials engineers have created carbon
nanotube transistors that outperform state-of-the-art silicon transistors.
For decades, scientists have tried to harness the unique properties of
carbon nanotubes to create high-performance electronics that are faster or
consume less power -- resulting in longer battery life, faster wireless
communication and faster processing speeds for devices like smartphones and
laptops.
But a number of challenges have impeded the development of
high-performance transistors made of carbon nanotubes, tiny cylinders made of
carbon just one atom thick. Consequently, their performance has lagged far
behind semiconductors such as silicon and gallium arsenide used in computer
chips and personal electronics.
Now, for the first time, University of Wisconsin-Madison materials engineers
have created carbon nanotube transistors that outperform state-of-the-art
silicon transistors.
Led by Michael Arnold and Padma Gopalan, UW-Madison professors of
materials science and engineering, the team's carbon nanotube transistors
achieved current that's 1.9 times higher than silicon transistors. The
researchers reported their advance in a paper published Friday (Sept. 2) in the
journal Science Advances.
"This achievement has been a dream of nanotechnology for the last
20 years," says Arnold. "Making carbon nanotube transistors that are
better than silicon transistors is a big milestone. This breakthrough in carbon
nanotube transistor performance is a critical advance toward exploiting carbon
nanotubes in logic, high-speed communications, and other semiconductor
electronics technologies."
This advance could pave the way for carbon nanotube transistors to
replace silicon transistors and continue delivering the performance gains the
computer industry relies on and that consumers demand. The new transistors are
particularly promising for wireless communications technologies that require a
lot of current flowing across a relatively small area.
As some of the best electrical conductors ever discovered, carbon
nanotubes have long been recognized as a promising material for next-generation
transistors.
Carbon nanotube transistors should be able to perform five times faster
or use five times less energy than silicon transistors, according to
extrapolations from single nanotube measurements.
More
The monthly Coppock Indicators finished August.
DJIA: 18401
+18 Up NASDAQ: 5213 +16 Up. SP500: 2171 +18 Up.
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