Monday, 31 October 2016

Halloween For Stocks?

Baltic Dry Index. 834 +36   Brent Crude 49.48

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

Eurasian Snow cover. (How bad will winter be?)

'You just never know. That unpredictability is the great thing about life. You change. The world changes. You live in a country where we are still blessed with enormous opportunity. Leave yourself open to the world of possibility. You have the ambition, you have the smarts and you have the toughness. So, turn the page on your biography - you have just started a new chapter in your lives.'

Lloyd Blankfein CEO of Goldman Sachs unintentionally backs Brexit in a US speech to graduates, mid 2016. Mr. Goldman “Sacks.”

While mainstream media went into overdrive at the weekend, following the FBI’s tilt into the US presidential election campaign apparently aimed at damaging Mrs. Clinton, more important yet under reported news came out of Vienna, where to little surprise in the oil industry, the OPEC talks held over two days led only to highlight OPEC’s internal problems.  Supposedly OPEC is to implement some sort of production cap agreement to take effect from this coming November 30th. That looks about as likely as the FBI having read all 650,000 “new” emails, allegedly found on Mrs. Clinton’s top aid’s estranged husband’s computer, before America votes on November 8th. 

Mr. Goldman says that he likes uncertainty, well now he’s got it in spades. If Mrs Clinton wins the presidency but a crime is uncovered in the emails, what then? If The Donald wins the presidency and a crime isn’t uncovered in the emails, did the FBI just steal the election from Mrs. Clinton? What then? What if OPEC somehow manages to patch some sort of deal out by November 30, how high will short covering push the oil price?  What if OPEC fails as usual, and the free for all in oil production continues, how low does oil fall and how many US frackers finally get to go under in a new wave of bankruptcies? No word yet from Mr. Goldman of life’s increasing uncertainties.
“A good politician is quite as unthinkable as an honest burglar.”
H. L. Mencken

OPEC Splits Prevent Deal With Other Producers to Curb Supply

October 29, 2016 — 4:53 PM BST Updated on October 30, 2016 — 12:21 PM GMT
OPEC’s internal disagreements over how to implement oil-supply cuts agreed to last month prevented a deal to secure the cooperation of other major suppliers.

More than 18 hours of talks over two days in Vienna yielded little more than a promise that the world’s largest oil producers would keep on talking. Discussions will continue in late November, just days before the Organization of Petroleum Exporting Countries is supposed to finalize the accord that lifted oil prices to one-year highs.

Non-OPEC nations ended talks with the group on Saturday without making any supply commitments, Brazil’s Oil and Gas Secretary Marcio Felix said after the meeting. Brazil won’t restrict its oil production, though it’s willing as early as next year to host future OPEC conferences with the world’s biggest producers, he said in a phone interview.

Azerbaijan’s Energy Minister Natiq Aliyev said the outcome of the process hinges on Iran and Iraq, two nations that are more interested in increasing production than reducing it. While Saturday’s meeting was a successful “first step,” oil-producing nations need to continue dialog and “come up with real numbers” before cuts can begin, Kazakhstan’s Deputy Energy Minister Magzum Mirzagaliyev said in an interview after the meeting.

A deal wasn’t possible because internal OPEC talks on Friday reached an impasse over the role of Iran and Iraq, both of which want to be exempt from any cuts. While non-member Oman said Saturday it was willing to cooperate in a supply deal, it couldn’t commit to a specific output cut until OPEC had its own agreement.
OPEC’s surprise agreement in Algiers to make the first supply cuts in eight years will only make a serious dent in a record oil surplus if producers outside the group join in. While the accord helped push oil prices to a 15-month high above $50 a barrel earlier this month, they have subsequently fallen as several members disputed the production estimates that would determine the size of cuts. Failure to implement last month’s accord will hurt oil producers, the organization’s top official warned.

In under reported dying EUSSR news, it was more of the same. The existing wealth and jobs destroying EUSSR is simply unreformable. It will eventually collapse from the inside.

Rajoy Masters the Art of Inaction to Win Back Power in Spain

October 31, 2016 — 4:00 AM GMT
Five days before December’s election in Spain, as candidates criss-crossed the country, the embattled government started up a high-speed rail link between Zamora and Olmedo in the north of the Castilian plain.

The economics of spending 750 million euros ($820 million) to run a state-of-the-art train between towns with less than 70,000 inhabitants in total and no real industry may have been questionable. But for Mariano Rajoy, fighting to cling to his job as prime minister, the politics proved to be spot on.

Fortifying his core vote in aging, conservative backwaters like Zamora with cheap money from the European 
Central Bank gave Rajoy a firewall against the rivals clamoring to oust him as younger, urban voters revolted against economic turmoil and widespread corruption. Despite historic losses, he held on to just enough seats to stop the other parties from pushing him out and, 10 months and another election later, clinched a second term in office with a vote in parliament on Saturday.

For the conservative leader, the Zamora rail link was a natural extension of the political habits of a lifetime -- keep down when the flack is flying, don’t rock the boat, and lavish your base with government largesse. Through the two election campaigns, he insisted his greatest achievement in government was resolving not to do something: seek a sovereign bailout.

“Rajoy has made the art of inaction into a way to exercise power,” Ivan Redondo, a political consultant who has advised candidates from both main parties, said in an interview. “This is an elderly society, in which towns prevail over big cities, and the transition from a dictatorship was not so many years ago. So a change of regime is very far from appealing for lots of people.”

We close with Asian markets nervous about what lies ahead in US politics. Fretting that Wall Street’s “man” may have cooked her goose. After months of nearly universal demonization of Donald Trump, is it Halloween time for stocks, without an All Saint’s Day?

Asia stocks shaky as FBI review of Clinton emails rattles markets

Mon Oct 31, 2016 | 2:45am EDT
Most Asian stocks struggled higher on Monday but investors were rattled by news that the FBI is planning to review more emails related to Democratic presidential candidate Hillary Clinton's private server, just a week before the election.

European markets also looked set for a shaky start, with financial spreadbetter CMC Markets expecting Britain's FTSE 100, France's CAC 40 and Germany's DAX <.GDAXI to all open down 0.1 percent.
Federal investigators have secured a warrant to examine newly discovered emails, a source familiar with the matter said on Sunday.

Clinton had opened a recent lead over her unpredictable Republican rival Donald Trump in national polls, but it had been narrowing even before the email controversy resurfaced. An ABC News/Washington Post poll released on Sunday showed Clinton with a statistically insignificant 1-point national lead.

The Mexican peso, which strengthens along with the chances for a Clinton win, remained weak, while the U.S. dollar edged up against other major currencies.

"There seems little doubt that a Trump victory would trigger selling in stock markets from current levels," Rick Spooner, chief market analyst at CMC Markets in Sydney, wrote in a note.

"This has traders nervous as they start the week assimilating fresh news on Hillary Clinton’s email problems."

MSCI's broadest index of Asia-Pacific shares outside Japan hit a six-week low on Monday before recovering 0.3 percent. It is set to end the month down 1.6 percent.

Japan's Nikkei, which touched a six-month high on Friday, closed 0.1 percent lower on Monday, but is up 5.9 percent in October.

Hong Kong's Hang Seng slid to a two-month low but revived to gain 0.2 percent, on track for a 1.35 percent loss in October. China's Shanghai Composite index fell 0.1 percent, paring gains this month to 3.2 percent.

On Friday, Wall Street and the dollar closed lower, after Federal Bureau of Investigation Director James Comey sent a letter to the U.S. Congress informing it that the agency is again reviewing emails related to the private server Clinton used when she was secretary of state.

At the Comex silver depositories Friday final figures were: Registered 29.99 Moz, Eligible 143.47 Moz, Total 173.46 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, when politics trumps objective policy. Two examples today from both sides of the Atlantic. The BOE’s Governor took sides in the UK’s Brexit referendum debate and ended up totally compromised and on the losing side. In America, was the head of the FBI’s hand forced by a FBI NY City uncompromising investigation that Washington could no longer cover up. Yea or nay, both parties now look past their sell by date, and lacking credibility for the new circumstances that have developed.
Oh, what a tangled web we weave. When first we practise to deceive!
Sir Walter Scott. Marmion.

Carney’s Future at BOE Overshadows U.K. Interest-Rate Decision

October 31, 2016 — 12:01 AM GMT
Mark Carney’s policy announcement may not be the most important one he makes this week.
With growth holding firm against Brexit and the pound’s plunge stoking fears of a surge in prices, economists say that means a once-planned interest rate cut is off the table on Nov. 3. But the Bank of England governor may also be about to announce how long he will stay in the role, a decision that has ramifications for the stewardship of the economy at a time of unprecedented change.

Over the weekend, multiple newspapers reported that Carney was preparing to leave in 2018 -- sticking to the five years in the role that he said he would do when he was appointed -- or serve a full term through 2021. The BOE declined to comment, saying only that he would declare his intentions by a self-imposed deadline of year-end. Amid the speculation, U.K. Business Secretary Greg Clark backed him on Sunday to stay in the job.

“I think Mark Carney has done a tremendous job, a fantastic job during his tenure,” Clark said on BBC Television. “I was the financial secretary to the Treasury when he was appointed, and I think it was a brilliant appointment.”

Carney, 51, has said any decision on his future would be for personal reasons. It would come at the end of a turbulent year that saw the Canadian central banker become embroiled in the bitter European Union referendum campaign, accused of political bias by some lawmakers and facing calls to resign. He could make an announcement about his term on Thursday, when he will hold a press conference to explain the BOE’s latest policy decision.

Clinton Allies Go After Comey as Probe Scrambles Campaign

October 31, 2016 — 4:00 AM GMT Updated on October 31, 2016 — 5:05 AM GMT
Hillary Clinton’s allies dramatically escalated attacks on FBI Director James Comey in a bid to stem political damage from his disclosure the agency is reviewing a new batch of files that may be related to an investigation of the former secretary of state’s e-mail practices.

Harry Reid, the Senate’s top Democrat, delivered an unusual rebuke to the FBI chief in a letter Sunday that said Comey may have broken the law by revealing the review so close to the election, and suggesting the agency is sitting on potentially damaging information about Republican presidential nominee Donald Trump.
Reid’s scorching letter -- typical of the combative Nevadan’s style -- was one of the most confrontational messages being delivered by Clinton supporters, who took to talk shows, newspaper opinion pages and social media to question the propriety of Comey’s disclosure.

Late Sunday, one Democratic member of the House Judiciary Committee, Steve Cohen of Tennessee, called for Comey’s resignation. Judiciary is among congressional committees that oversee the FBI, and Cohen is the top Democrat on a subcommittee with jurisdiction over matters involving ethics in government. 

The new probe led to a weekend of scrambling by both Clinton and Trump and put the U.S. presidential race in uncharted territory. The two campaigns responded, for now, by falling back on the familiar. After hitting back at Comey on Friday and Saturday, Clinton moved on by Sunday to reiterating her campaign’s themes, leaving the attacks on the FBI director to her proxies. Trump reinvigorated his assault on Clinton’s trustworthiness and found a new cue for his crowds to chant “Lock her up” as he ramped up his pace of campaigning.

I'm not going to have some reporters pawing through our papers. We are the president.

Hillary Clinton. December 1993

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?

Borophene Could Trump Graphene in Flexible Electronics Applications

October 28 2016 Robin Mitchell
Researchers at Rice University believe that a special atom-thick born structure called borophene may be a better alternative to graphene for flexible electronics.

Graphene vs Borophene

For the past few years, many researchers and engineers alike have been looking into materials such as graphene for their strength, flexibility, and conductivity. Graphene has been showing up in the news many times  recently for their growing popularity in research including graphene electronic applications, printed graphene in paper electronics, and applications in car batteries.

While graphene performs better on flexible devices than other materials such as indium-tin oxide, it may be too flat and difficult to stretch. This is due to the rigid hexagonal structure that graphene forms. But there exists a structure of boron known as “borophene” that may help to overcome the issues graphene has in flexible applications.

Boron Bucky Balls

Back in 2014, a research team led by theoretical physicist Boris Yakobson at Rice University showed that a boron structure (B36) would be highly stable. Photoelectron spectroscopy of B36 showed that the structure was symmetrical, which is crucial for a repeating sheet-like structure.

At the same time, researchers also announced the creation of a 40-atom buckyball that consisted entirely of boron. It is these structural properties that make boron real contender in the future of electronics.

Borophene, Silver, and Its Applications

A team of researchers led by Boris at Rice University found that, when borophene is grown on a featureless surface (i.e. atomically flat), it forms a hexagonal structure that resembles graphene. However, if borophene is grown on a silver surface, it forms corrugations (like those found in an accordion) that suggests the borophene is much more flexible in this configuration.

But the relationship between borophene and silver is even more surprising because, when the borophene forms the corrugations, the silver reconstructs itself to match the waving pattern.

Once the borophene is formed, it can easily be removed as the bond between the silver and borophene is weak. This may allow atom-thick slices of borophene to be transferred to any substrate once it has been formed with the corrugations. Once transferred, the borophene should exhibit the same properties as when it was grown on the silver surface (flexibility, electrical characteristics, etc.)

And below, more on turbulent jet ignition system for internal combustion engines.

$2.5m DoE funding for MAHLE Powertrain

The US Department of Energy (DOE) has awarded up to $8.4 million
The US Department of Energy (DOE) has awarded up to $8.4 million, spread over the next three to four years, to four projects to improve performance levels of engines and powertrain systems for future vehicles. The projects will focus on developing and testing new cost-efficient technologies for engines and powertrain systems which will remove the technical barriers for broad commercial use of advanced engine technologies in the mass market.

MAHLE Powertrain LLC, will receive $2.5 million to develop a next-generation combined ignition/turbo-charging concept known as 'Turbulent Jet Ignition'. TJI facilitates the implementation of ultra lean-burn technology to gasoline engines, improving their efficiency and reducing the formation of pollutants such as nitrogen oxide.

The intent behind the DOE's effort is to ensure that automakers receive support from the government to focus on innovations to meet the latest emissions standards for passenger and commercial vehicles. In August this year, US president Barack Obama announced the first-ever fuel economy regulation for medium- and heavy-duty commercial vehicles, including semis, garbage trucks, buses, and three-quarter-tonne pick-ups and vans. In addition, Obama has announced mileage and emission standards suggestions for passenger and light trucks. The new standards would increase fuel economy to 54.5mpg fleet average by 2025--62mpg for cars and 44mpg for light trucks.
Specialists at MAHLE Powertrain have recently been developing a novel combustion system concept which offers significant fuel economy benefits without the need for expensive engine hardware.
MAHLE Powertrain’s Turbulent Jet Ignition (TJI) utilises a spark-initiated pre-chamber combustion process in an otherwise conventional gasoline engine to achieve fuel economy improvements of up 20% Engine-out NOx emissions are also virtually reduced to zero levels, negating the need for lean NOx after-treatment.
Existing jet ignition systems involve the creation of hot gas jets from a pre-chamber which are then introduced into the cylinder where they rapidly induce ignition of the main in-cylinder charge. MAHLE’s TJI system is characterised by auxiliary pre-chamber fuelling, small orifices connecting the main and pre-chamber combustion cavities and a very small pre-chamber volume. The smaller orifice size causes turbulence in the hot gas jets which then penetrate deeper into the main combustion chamber and cause a distributed ignition effect. This process then allows extension of knock limits and increased compression ratios (up to 14:1) combined with lower combustion temperatures and reduced throttling / pumping losses to achieve thermal efficiencies in the region of 45%.
MAHLE’s TJI unit replaces the conventional spark plug and can utilise the original PFI or DI fuel system in both naturally aspirated and turbocharged engines. The conventional engine control system can be retained and the system can be operated on readily available, commercial fuels. Strong synergies exist when coupling turbulent jet ignition with engine downsizing at both high and low engine loads through the use of modern variable valvetrain systems.
The ultra-high efficiency achievable with Turbulent Jet Ignition and the simplicity of the mechanical hardware and controls systems also offers unique opportunities to hybrid and range extender vehicle applications.

100 Years of Innovation & Technology

The monthly Coppock Indicators finished September

DJIA: 18308  +28 Up NASDAQ:  5312 +21 Up. SP500: 2168 +32 Up.

Saturday, 29 October 2016

Weekend Update 29/10/2016 – Getting It Wrong.

I was borrowing money from 30 leading banks. How could they all be so wrong? I’m only a simple businessman.

Sir Freddie Laker. The Laker Airways bankruptcy.

Did fired Tata Chairman Cyrus Mistry get it wrong when he said Tata Group’s net worth of USD 26 billion might be impaired by as much as USD 18 billion?  Bloomberg suggests it might depend on whether he wants to see his 18.4% stake in Tata Sons Ltd sold on to other investors. It’s a funny old world in high finance.

In any great organization it is far, far safer to be wrong with the majority than to be right alone.

John Kenneth Galbraith.

A Tata-Mistry Divorce May Cost $16 Billion

By Andy Mukherjee  Oct 28, 2016 2:25 AM EDT
This week's acrimonious separation between the chairman of Tata Group and its majority owners may now be heading for a divorce. Ratan Tata, who returned to head the conglomerate after ousting Cyrus Mistry, is looking for a partner to buy the ex-chairman's stake, Bloomberg News reported Thursday.

Should Mistry agree to sell, how much can he hope to get for his family's 18.4 percent of Tata Sons Ltd.?
India's Tata Group, which saw a boardroom coup this week, might look for a friendly buyer for ousted chairman Cyrus Mistry's 18.4 percent stake

Bear in mind that following his dismissal, Mistry raised some very serious allegations about both the holding company and several of its biggest publicly traded units. In hitting back at the board that fired him, Mistry said the group's net worth of $26 billion could be impaired by as much as $18 billion -- shrinking to just $8 billion -- should writedowns be needed at businesses like Tata Steel Ltd.'s European operations; Tata Motors Ltd.'s passenger car business (ex-Jaguar Land Rover, the jewel in the empire's crown); Indian Hotels Co.'s overseas Taj properties; one of Tata Power Ltd.'s plants; and a floundering wireless telecom venture with NTT Docomo Inc.

As a seller, Mistry is unlikely to behave anything like a spurned chairman trying to score debating points. To maximize value, he might say he overestimated the risk of Armageddon. He might even admit the possibility that Ratan Tata's return to a conglomerate he chaired for two decades will reinvigorate the operating companies. 

Maybe Tata can't repeat a near sevenfold increase in book value over the period 2004-2012, but if global steel demand stabilizes, there's a fair chance the group's assets could reach a book value of $28 billion after a year. In the base-case scenario, the coffee-to-cars-to-software conglomerate won't be any worse off, and its assets would be worth in 2017 what they are today: $26 billion.

Not That Pricey

Now suppose that status quo has a likelihood of 50 percent, while the probability of a massive writedown is 20 percent, and that of an improvement is 30 percent. That gives a one-year-forward book value of $23 billion.  Considering that General Electric Co. trades at three times its estimated book value for next year, and companies in the more diversified Tata Group sell at 4.8 times, Mistry could perhaps ask for a halfway-house multiple of 3.75 times, valuing his 18.4 percent stake at a little under $16 billion.

Only a patient investor who cares more about growth than current income would be willing to write that check. After all, the dividend received from operating companies yielded just 1.6 percent on Tata Sons' investment last year, according to the Economic Times. An investor who paid a multiple of 3.75 to relieve Mistry of his stake would earn a divided yield of 0.4 percent.

In under reported China news this week, American “bullying” in South East Asia is pushing yet more Asian governments towards China. President Xi became a “core” leader, similar to Mao. America’s next President needs to tread softly.

“China is a sleeping giant. Let her sleep, for when she wakes she will move the world.”


China's Xi anointed 'core' leader, on par with Mao, Deng

Thu Oct 27, 2016 | 8:59am EDT
China's Communist Party gave President Xi Jinping the title of "core" leader on Thursday, putting him on par with past strongmen like Mao Zedong and Deng Xiaoping, but it signaled his power would not be absolute.
A lengthy communique released by the party following a four-day, closed-door meeting of senior officials in Beijing stressed maintaining the importance of collective leadership.

The collective leadership system "must always be followed and should not be violated by any organization or individual under any circumstance or for any reason", it said.

But all party members should "closely unite around the Central Committee with Comrade Xi Jinping as the core", said the document, released through state media.

The "core" leader title marks a significant strengthening of Xi's position ahead of a key party congress next year, at which a new Standing Committee, the pinnacle of power in China, will be constituted.

Since assuming office almost four years ago, Xi has rapidly consolidated power, including heading a group leading economic reform and appointing himself commander-in-chief of the military, though as head of the Central Military Commission he already controls the armed forces.

Sri Lanka to sell 80 percent of southern Hambantota port to Chinese firm

Fri Oct 28, 2016 | 5:58am EDT
Sri Lanka will sell to a Chinese company 80 percent of a $1.5-billion port in its south, where China has also been offered an investment zone, in a bid to cut the country's debt burden, Finance Minister Ravi Karunanayake said.

The move follows an offer made by Prime Minister Ranil Wickremesinghe during a visit to China in April, to swap equity in Sri Lankan infrastructure projects against some of the $8 billion in debt the Indian Ocean island owes to China.

The Hambantota port was built with the help of Chinese loans and contractors in 2010 under former leader Mahinda Rajapaksa, as part of efforts to boost development of infrastructure after the conclusion of a 26-year-long civil war in 2009.

But the port, and a nearby airport, also Chinese-financed, had been seen as a white elephant because it was not financially viable, the current government has said.

"For somebody like the Chinese, it is the silk route transit point," Karunanayake told a meeting of the country's Foreign Correspondents Association late on Thursday.

China's interest in the port is seen as part of its ambitions to build a "Maritime Silk Route" to the oil-rich Middle East and onwards to Europe.

That makes some countries, including India and the United States, nervous, with Sri Lanka sitting near shipping lanes through which much of the world's trade passes en route to China and Japan.

Malaysia to buy navy vessels from China in blow to U.S.

Fri Oct 28, 2016 | 5:52am EDT
Malaysia will sign a contract to purchase Littoral Mission Ships from China when Prime Minister Najib Razak visits Beijing next week, according to a Facebook posting by the country's Ministry of Defence.
The text of a speech to be delivered by Malaysian defense minister Hishammuddin Hussein was posted on Facebook on Tuesday, but was later removed after Reuters asked a defense ministry spokesman for comment.

The purchase of the patrol vessels, if it proceeds, would be Malaysia's first significant defense deal with China and comes amid rising tensions in the South China Sea and as the United States and China compete for influence in the region.

China's foreign ministry spokesman Lu Kang said on Friday he was "unclear on the specifics of the situation". But responding to a Reuters question at the daily ministry briefing he noted China and Malaysia "continue to cooperate and communicate regularly across all spheres".

Malaysia's ties with the United States became strained after the Department of Justice filed lawsuits linked to a money-laundering investigation at state fund 1Malaysia Development Berhad (1MDB), which Najib founded and had overseen as chairman of its advisory council.

Najib is traveling to China on Sunday for a week-long visit.

"On November 5, 2016, the Defence Ministry will sign a contract for the procurement of Littoral Mission Ships (LMS) with SASTIND (the State Administration for Science, Technology and Industry for National Defense), which is an important part of the schedule during the Prime Minister's official visit to China," the Facebook post quotes Hishammuddin saying.

However, a video recording of the speech at the Malaysian defense ministry by Hishammuddin does not mention this contract.

A defense ministry spokesman declined to comment and the prime minister's office did not immediately respond to requests for comment.

Littoral Mission Ships are fast patrol vessels that can be equipped with a helicopter flight deck and carry missiles. They are primarily used for coastal security, maritime patrol and surveillance, but can also be deployed for disaster relief and search and rescue operations.

China claims most of the South China Sea as its territory. But Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have rival claims to parts of the waterway, which commands strategic sea lanes which carry some $5 trillion worth of trade a year.

Ties between Malaysia and China reached a new peak in December when China came to Najib's rescue with a $2.3 billion deal to buy assets of scandal-hit state fund 1MDB, helping ease Najib's concern over the firm's mounting debt.

Najib is traveling with dozens of government leaders and business people to China. In a statement on Wednesday, he said Malaysia was committed to strengthening friendship with China and pushing ties to "new highs".

Philippines says China vessels have left Scarborough Shoal

Fri Oct 28, 2016 | 7:41am EDT
Chinese ships are no longer at the disputed Scarborough Shoal in the South China Sea and Philippine boats can resume fishing, the Philippine defense minister said on Friday, calling the Chinese departure a "welcome development".

Philippine fishermen could access the shoal unimpeded for the first time in four years, Defence Secretary Delfin Lorenzana said, capping off a startling turnaround in ties since his country rattled China in 2013 by challenging its maritime claims at an international tribunal.

The departure of the Chinese coastguard comes after President Rodrigo Duterte's high-profile visit to Beijing and follows his repeated requests for China to end its blockade of the shoal, a tranquil lagoon rich in fish stocks.

"Since three days ago there are no longer Chinese ships, coastguard or navy, in the Scarborough area," Lorenzana told reporters.

    "If the Chinese ships have left then it means our fishermen can resume fishing in the area."

Though the Scarborough Shoal is comprised of only a few rocks poking above the sea some 124 nautical miles off the Philippine mainland, it is symbolic of the country's efforts to assert its maritime sovereignty claims.

Lorenzana did not explain the circumstances of the Chinese vessels leaving the shoal, which was the centerpiece of a case Manila filed in 2013 at the Permanent Court of Arbitration in the Hague.

Asked on Friday about the return of Philippine fishermen to the shoal, China's Foreign Ministry spokesman Lu Kang made no mention of a coastguard withdrawal.

The two countries "were able to work together on issues regarding the South China Sea and appropriately resolve disputes," Lu told a regular briefing.

The Hague court in July declared that despite the Scarborough Shoal being located within the Philippines' 200 nautical mile exclusive economic zone, no one country had sovereign rights to it, so that all claimants may fish there.

China has refused to recognize the case or the award, which also invalidated the nine-dash line on Chinese maps denoting its claims to most of the South China Sea.

China seized Scarborough Shoal - claimed by Beijing as Huangyan island and by Manila as Panatag - in 2012.

The previous administration's pursuit of the case infuriated China, but it appears to have changed its stance since Duterte took office and started praising Beijing, often in the same sentences as his perplexing verbal attacks on longtime ally the United States.

Reuters exclusively reported on the eve of Duterte's visit to China that Beijing would consider granting Philippine fishermen conditional access to the shoal.

Australia’s largest private trade delegation to visit China

More than 200 delegates will be on the visit to Shanghai aimed at building on the A$160 billion trade relationship between Australia and China
October 29, 2016

SYDNEY: Australia’s largest ever private trade delegation was due to arrive in China on Sunday.
More than 200 delegates, including Queensland state ministers, agricultural producers and exporters will be on the visit to Shanghai aimed at building on the A$160 billion (Dh441 billion; $120 billion) trade relationship between Australia and China.

“We have brought together businesses from banks to exporters and freight companies,” Ben Lyons, the group’s leader, said in a statement.

Among the high profile members of the “AccessChina” delegation are Qantas Airways Ltd and both National Australia Bank and Australia and New Zealand Bank’s agri-business units.

Qantas Freight, which is looking to expand capacity in Asia, is hosting a networking dinner that Lyons said would help “educate the Shanghai business community on our regional capability when combined with an international freight provider”.

The group left from Wellcamp Airport, a new A$200 million privately built air freight facility in Queensland, which will begin weekly freight-only flights next month. Cathay Pacific will operate the service from Wellcamp and Hong Kong.

Australia has been pushing to become the “delicatessen of Asia”, tapping its favourable climate to send crates of produce such as figs and edible flowers to store shelves across the increasingly affluent region.

But finding space on flights has proven a headache for some Australian producers, who say freight export capabilities are not keeping up with growing demand for products from Asia’s middle class.

“They couldn't hit an elephant at this distance."

Union General John Sedgwick just before he was shot dead. May 1864.

We close for the week with Jason in California musing on the effect of October’s falling US auto sales on the presidential election, although this morning candidate Clinton seems to have a bigger problem with the FBI and emails again. The next few days look interesting.

U.S. October Auto Sales Forecast By JD Power to Materially Decline Y.O.Y,  With Potential Election Impacts
N. Jason Jencka October 28th, 2016 8:15 pm ET
The automotive industry in the U.S. is one that occupies a cultural space greater than beyond its certainly broad macro-economic impact. From the politically charged debates of 2008-2009 over the Federal bailouts of General Motors and Chrysler to the constant and combative lobbying surrounding fuel economy targets, the auto industry is uniquely politicized. In the 2016 Presidential race, the Trump campaign has repeatedly chastised Ford for planning to end passenger car production in the U.S. (largely in favor of Mexico) and used this move as evidence of a broken trade framework.

This set of circumstances adds particular importance to developments within the auto industry leading up to the November 8th election. It happens that October auto industry sales figures are expected to drop ~7% from the record levels of 2015. Should this forecast be realized in the coming days, the Clinton campaign may face difficulties in promoting the automotive recovery as an example of an Obama-era success to be built upon by electing their candidate. This dynamic is of particular impact in the industrial “rust belt” states of Ohio and Michigan. Ohio has historically been an electoral bellwether as no Presidential candidate has been elected without winning the state since John F. Kennedy defeated Richard Nixon in 1960. The 2016 outcome is, of course, yet to be determined but the relationship between the auto industry and politics is one that is certainly worth watching.

The American Presidency Project, The University of California-Santa Barbara

N. Jason Jencka is presently studying Finance and Economics at Sierra Nevada College, located near the shores of Lake Tahoe on the border of California and Nevada.His interests include the interplay between world markets and the global political sphere, with a focus on developments of both sides of the Atlantic in North America and Europe.In his leisure time he enjoys connecting with those people that have an interesting story to tell and a genuine desire to make an impact in the world.

Clinton Urges FBI to Swiftly Explain Fresh Probe of E-Mails

October 28, 2016 — 6:15 PM BST Updated on October 29, 2016 — 3:27 AM BST
Hillary Clinton demanded that the FBI immediately explain its decision to reopen an investigation into her use of private e-mails as secretary of state and said she’s confident that the renewed inquiry will show no wrongdoing.

“The American people deserve to get full and complete facts,” Clinton told reporters in Des Moines, Iowa, hours after her presidential campaign was rocked by a letter from FBI Director James Comey telling lawmakers of the revived inquiry. “If they’re going to be sending this kind of letter that is only going originally to Republican members of the House, they need to share whatever facts they have with the American people.”

The politically explosive development came less than two weeks before the presidential election, providing a boost to Republican nominee Donald Trump as most national polls showed him lagging behind. Comey said he can’t say how long the review would take -- raising the possibility that Clinton could go into Election Day with the new probe unresolved and still hanging over her campaign.

The Federal Bureau of Investigation acted after investigators unearthed new e-mails through a separate probe of Clinton aide Huma Abedin’s estranged husband, former Representative Anthony Weiner. The bureau is probing illicit messages that Weiner allegedly sent to a 15-year-old girl in North Carolina.

That inquiry gave it access to a computer believed to have been used by both Weiner and Abedin, according a U.S. official who asked not to be identified discussing a pending investigation. Now the FBI is looking into whether Abedin’s e-mails are work-related and whether they contain classified information.

The more than 1,000 e-mails included exchanges between Abedin and Clinton, the Washington Post reported, citing a law enforcement official it didn’t identify.

I am not a crook.

President Nixon. November 17th 1973.