Baltic Dry Index. 1240 -17 Brent Crude
49.50
Eurasian Snow cover. (How bad will
winter be?)
For
every complex problem there is an answer that is clear, simple, and wrong.
H.
L. Mencken
We open with worrying news for all, the
Trump bubble seems unstoppable. A rising
tide may lift all boats, but right now that tide is going out. Some economies
like Japan are already stuck on the bottom. Others like the EUSSR desperately
need to jettison antiquated rules and bring in long overdue reform. With a new
government coming to America starting January 20th, 2017, a new
broom promises to sweep clean. Meanwhile
the Trump bubble continues, and likely will continue out towards January 20.
That said, this old dinosaur commodities trader would cautiously begin scaling
in to fully paid up synthetic double options on the stock indexes. The logic;
either the Trump bubble will grow like Topsy out to the inauguration, or it
more likely hits its pin of reality of growing trouble from Asia to America.
Either way, I suspect that we are in for a wild ride in stocks.
As always, investors and potential investors,
or in this case speculators, should always do their own due diligence, and use
their best judgement if deciding on playing the Trump Bubble. It’s not for the
fainthearted nor for those unable to stand a loss.
Dow, S&P 500, Nasdaq all close at new record highs
By Anora Mahmudova and Barbara Kollmeyer Published: Nov
21, 2016 4:27 p.m. ET
U.S. stocks closed higher at fresh records Monday, aided by a
jump in oil prices and a pullback in the dollar, giving the Dow industrials,
S&P 500 and Nasdaq their third simultaneous all-time closing highs this
year.
The S&P 500 index SPX, +0.75% surged 16.28 points, or
0.8%, to close at a record 2,198.18, with its previous record reached on Aug.
15. Ten of the 11 main S&P 500 sectors finished in the green with energy
leading gains, up 2.2%, and the materials sector gaining 1.3%. The real-estate
sector was the only decliner, finishing down 0.2%.
The Dow Jones Industrial Average DJIA, +0.47% gained 88.76 points, or 0.5%, to
close at a record 18,956.69, led by gains in DuPont DD, +1.79% Apple Inc. AAPL, +1.52% and International
Business Machines Corp. IBM, +1.48%
The Nasdaq Composite Index COMP, +0.89% advanced 47.35 points, or
0.9%, to finish at 5,368.86, above its previous record of 5,339.52 set on Sept.
22.
The last time all three indexes closed at record highs at the same time
was two sessions back in mid-August, and before then had not occurred
since 1999.
More
Asian markets power ahead as oil prices rally
By Ese
Erheriene and Kosaku Narioka Published:
Nov 21, 2016 10:54 p.m. ET
Asian shares were broadly higher early Tuesday, with the
Australian market rising to a one-month high, as oil prices rallied on
expectations that key oil-producing countries will agree to a deal to slash
production.
The S&P/ASX 200 XJO, +1.16% gained 1.2%, while Hong
Kong’s Hang Seng Index HSI, +1.34% was up 1.3%, Korea’s Kospi SEU, +0.95% added 0.8%, and the
Shanghai Composite Index SHCOMP, +0.78% rose 0.2%.
Stocks in Japan were initially down slightly, following a 6.9-magnitude
earthquake that struck off the eastern coast of Japan early Tuesday, though the
impact appeared limited and the Nikkei Stock Average NIK, +0.29% later reversed to a gain of
0.4%.
Overnight, oil prices rose
to a three-week high as investors stuck to bets that the Organization of the
Petroleum Exporting Countries will reach a production deal at its meeting on
Nov. 30. Brent, the global crude oil benchmark, was recently up 1.1% at $49.42
a barrel.
“Reports of the OPEC technical committee making
progress in the first of their two-day meeting raised hopes of an output
agreement,” said Jingyi Pan, a market strategist at IG Markets, in a note.
“Jitters should nevertheless be expected ahead of the meeting at the end of the
month, as it represents a huge event risk.”
More
Deutsche Bank: Trump Could Push the U.S. Economy and Stock Markets to New Records
The real economy and
financial markets will benefit from the new administration.
Luke Kawa November 21, 2016 — 9:43 AM EST
It's looking more likely that President-elect Donald Trump will preside
over a continuing U.S. expansion that could take its place as the
longest among American business cycles, according to Deutsche Bank
AG. And Chief U.S. Equity Strategist David Bianco predicts that by
the time the real estate mogul takes office in January, the S&P 500 Index
will eclipse 2,250.
Investors are under-appreciating the "much higher chance now of a
long lasting economic expansion that rivals the 10 year U.S. record," the
strategist writes "We're more confident now that the S&P will reach 2,500
in 2018 before suffering its next bear market."
The longest U.S. expansion on record stretched from 1991 until 2001, a
span of 120 months. That streak will be broken if the American economy makes it
until 2019 without a recession.
The structural decline in potential growth means that it doesn't take as
large a negative shock as it used to in order to precipitate a downturn in U.S.
activity. Conversely, the rising portion of retirees on Social Security
increases the stickiness of consumption, dampening the variability of the
largest component of GDP.
MoreGlobal Trade Is Slowing
“China had a great run, but it’s over.”
November 17, 2016 — 11:58 PM GMT
Until he takes office in January, President-elect Donald Trump won’t be
able to follow through on his pledges to scrap the Trans-Pacific Partnership,
renegotiate the North American Free Trade Agreement, or penalize Chinese
imports. Even without him, protectionism is rising, and world trade is slowing.
Responding to an outcry from local steelmakers, the European Union this
year has punished Chinese competitors for allegedly selling steel below cost.
The EU has announced antidumping duties as high as 81.1 percent on Chinese
steel. “Free trade must be fair, and only fair trade can be free,” European
Commission Vice President Jyrki Katainen said in a statement on Nov. 9, adding
that some 30 million European jobs depend on free trade.
Around the world, many companies that binged on easy credit after the
global financial crisis have excess capacity and are struggling to find buyers,
since economic growth in the U.S., Europe, and Japan is relatively weak, and
China’s economy is cooling. “The pie is growing more slowly, and that makes
domestic producers more defensive about their share of it and more willing to
fight when threatened,” says Tim Condon, chief Asia economist in Singapore with
ING. Bloomberg Intelligence chief Asia economist Tom Orlik points out that over
the past two decades, consumers and businesses have spent heavily on laptops,
tablets, and smartphones, but despite efforts by Apple and others to popularize
smart watches, there’s no new must-have device to boost global trade. Stagnant
income growth in the West also forces politicians to show they understand
voters’ worries. “The pressure grows for governments to appease those voices by
giving them the things they want,” says Orlik, “and the things they want are
trade restrictions.”
----Smaller nations are engaged in their
own trade spats. Malaysia in May announced penalties on Chinese, Korean, and
Vietnamese steel. Peru placed antidumping duties on imports of biodiesel from
Argentina in October.
In the five months leading up to mid-October, members of the world’s 20
major economies, the Group of 20, implemented an average of 17 trade
constraints a month, the World Trade Organization reported on Nov. 10. “The
continued introduction of trade-restrictive measures is a real and persistent
concern,” WTO Director-General Roberto Azevêdo said in a statement.
----Japan’s biggest shippers—Nippon
Yusen, Mitsui OSK Lines, and Kawasaki Kisen—expect combined operating losses of
85 billion yen ($780 million) for the fiscal year ending March 2017. The
industry is seeing the “highest ship-scrapping level ever,” Nicolás Burr, chief
financial officer of German container line Hapag-Lloyd, told a conference in
Hamburg on Nov. 10.
In Singapore, which relies heavily on trade, GDP shrank an annualized
4.1 percent in the third quarter from the previous three months. The city-state
has one of the world’s biggest ports, but shipping container movement fell 8.7
percent in 2015 and 1.7 percent in 2016 through October.
More
Macro-Wars Pave Path for Trump as Axioms of World Economy Crack
November 21, 2016 — 5:00 AM GMT
Donald Trump has an invitation from economists to try something new.
Even before the election, Democrats such as Lawrence Summers and Jason
Furman helped put fiscal policy back in vogue. Central bank regimes are under
review, and there’s a sharper focus on economic losers after decades of
liberalization worsened income inequality.
Furman, current chairman of the White House Council of Economic
Advisers, said the old view of fiscal policy as an ineffective tool is
“shifting.” The reevaluation isn’t only happening in the U.S.: Koichi
Hamada, an adviser to Japanese Prime Minister Shinzo Abe, said he has changed
his view on the power of monetary stimulus.
Financial crises, weak recoveries, flat wages and populist backlashes in
western democracies have underscored doubts over economic beliefs held for a
generation. The insurrection in economics opens a window for Trump to push
policies that a few years ago would have seemed heretical to a profession
wedded to free trade, open capital borders, fiscal restraint and the primacy of
monetary policy.
“Practically everything related to monetary and fiscal policy will soon
be on the table,” said Andrew Levin, a Dartmouth University professor and
former adviser to Federal Reserve Chair Janet Yellen.
Monetary policy is on the back foot in the euro area, and in the U.K., the
political convulsions of Brexit have made short work of economic forecasters’
best-laid plans. Meantime, China’s success in weathering tepid global demand
with infrastructure
investment and the Bank of Japan’s failure to convincingly reflate the economy
by hoovering up ever more debt is adding to the field’s introspection.“What I worry about is that the economics profession has shot itself in the foot,” said William White, chairman of the economic and development review committee at the Organization for Economic Cooperation and Development, in Paris. “People have claimed to have solutions that are simple and effective when in reality the solutions that they’ve brought forward might or might not work.”
More
We close for the day with Brexit. How
do you negotiate anything with a fractious grand committee of 27?
How
can anyone govern a nation that has two hundred and forty-six different kinds
of cheese?
Charles
de Gaulle.
Brexit Banks Told to Relax: ECB Won’t Give First-Mover Advantage
November 21,
2016 — 5:00 AM GMT
Finance executives planning to shift operations out of the U.K. because
of Brexit have been told by European Central Bank officials not to rush as
there will be no first-mover advantage when it comes to gaining regulatory
approvals, according to people briefed on the discussions.
To avoid any potential bottlenecks in the process, policy makers are
considering allowing banks to use their U.K.-approved internal risk models for
an extended period until euro-area regulators are able to hire more staff and
perform their own assessments, said one of the people, who asked not to be
identified because the deliberations are private. No formal talks have taken
place and no decisions reached, the person said.
Banks are bracing for the worst -- the loss of their right to sell services
freely around the EU from London -- and are set to start the process of moving
operations to the euro zone within weeks of the government triggering Brexit,
which is scheduled to happen by the end of March. British Bankers’ Association
head Anthony Browne said last month that bankers’ hands are “quivering over the
relocate button.”The ECB’s Single Supervisory Mechanism, which began overseeing the currency bloc’s largest lenders two years ago, is preparing to deal with an influx of requests from global banks with their European headquarters in London, Sabine Lautenschlager, the vice chair of that organization’s supervisory board said Tuesday. Many banks have already reached out to the ECB, she said.
Grandfathering Precedent
We have “a task force which looks into all of the different scenarios, thinking about what does this mean with regard to passporting or no passporting, what does it mean with the whole question of authorizations and model approvals,” Lautenschlager said in Frankfurt, adding that supervisors are already in talks with the U.K.’s Prudential Regulation Authority.Spokesmen for the ECB and PRA declined to elaborate on the nature of these discussions.
----There is precedent for the so-called grandfathering of model approvals. When the ECB assumed its oversight role in 2014 it didn’t initially authorize models, relying instead on the previous judgments of national supervisors. It only began a review -- still ongoing -- of the thousands of risk models nearly two years ago.
"Grandfathering the risk models would be the most logical
approach," said Jan Putnis, a partner at law firm Slaughter and May in
London. "There is no real alternative in the short term. But this will
require close co-operation between regulators, not least because the models
might require adjustment during the grandfathering period. These arrangements
could become very complicated."
Poland’s President Wants Leaders to Cool Off About Brexit
November 20,
2016 — 11:00 PM GMT Updated on November 21, 2016 — 9:27 AM GMT
As European politicians from Rome to The Hague vent frustration with the
British government’s preparations for Brexit, U.K. Prime Minister Theresa May
may have a friend in the block’s biggest ex-communist nation.Poland is concerned that inflammatory remarks will lead to looser cooperation between the European Union and the U.K. following the country’s exit from the club, which would be detrimental to the economic prospects of both, President Andrzej Duda said in an interview. He urged a more measured approach toward the negotiations after a week of heavy criticism of May’s government, whose strategy for Brexit was described as chaotic by an Italian minister and as “impossible” by a Dutch politician.
“I propose a glass of cold water to cool emotions, so that in the end it doesn’t turn out that we all lose -- both the EU and the U.K.,” Duda told Bloomberg on Thursday. He said there was danger that a “group of obstinate politicians” will “attempt to punish the British people, or the U.K., for daring to leave the EU.”
Frustration has been building around the continent as May’s government hasn’t detailed how it plans to keep access to the EU’s single market and tighten immigration control without running foul of the block’s rules on free movement of labor. While Poland wants to lure back immigrant workers, including about 1 million in the U.K., Duda said it’s “fundamental” that their rights and benefits continue to be respected while they reside in Britain.
“It would be a great loss for the EU if it got cut off from the U.K. economy and the ties of good, open cooperation between the two were severed,” Duda said.
More
'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, “Mr. Goldman Sacks," CEO of
Goldman Sachs unintentionally backs Brexit in a US speech to graduates, mid
2016.
At the Comex silver depositories Monday
final figures were: Registered 30.91 Moz, Eligible 147.28 Moz,
Total 178.19 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, what are economists good for? Economist J.
K. Galbraith has the answer.
Economics is extremely
useful as a form of employment for economists.
John Kenneth
Galbraith.
The Rebel Economist Who Blew Up Macroeconomics
November 18,
2016 — 10:00 AM GMT
Paul Romer says he really hadn’t planned to trash macroeconomics as a
math-obsessed pseudoscience. Or infuriate countless colleagues. It just sort of
happened.
His intention actually had been to write a paper that would celebrate
advances in the understanding of what drives economic growth. But when he sat
down to write it in the months before taking over as the World Bank’s chief
economist, Romer quickly found his heart wasn’t in it. The world economy wasn’t
growing much anyway; and the math that many colleagues were using to model it
seemed unrealistic. He watched a documentary about the Church of Scientology,
and was struck by how groupthink can operate.
So, Romer said in an interview at the Bank’s Washington headquarters, “I
just thought, OK, I’m going to say what I think. I don’t know if I’m the right
person, but no one else is going to say it. So I said it.”The upshot was “The Trouble With Macroeconomics,” a scathing critique that landed among Romer’s peers like a grenade. In a time of febrile politics, with anti-establishment revolts breaking out everywhere, faith in economists was already ebbing: They got blamed for failing to see the Great Recession coming and, later, to suggest effective remedies. Then, along came one of the leading practitioners of his generation, to say that the skeptics were onto something.
Going Backwards
“For more than three decades, macroeconomics has gone backwards,” the paper began. Romer closed out his argument, some 20 pages later, by accusing a cohort of economists of drifting away from science, more interested in preserving reputations than testing their theories against reality, “more committed to friends than facts.” In between, he offers a wicked parody of a modern macro argument: “Assume A, assume B, ... blah blah blah ... and so we have proven that P is true.”What’s at stake far exceeds hurt feelings in the ivory tower. Central banks and other policy makers use the models that Romer says are flawed. The idea that consumers and businesses always make rational choices pervades mainstream economics. Romer thinks that’s not only wrong, but may lead to the misleading conclusion that government action can’t fix big problems.
That debate goes back at least to John Maynard Keynes, who thought
policy makers needed to take bolder action to address the deep shortfall in
demand that was prolonging the Great Depression. By the 1970s, Keynes’s ideas
were mainstream -- but the policies they spawned had failed to prevent high
unemployment and inflation.
Economists trying to understand what went wrong came up with the
theories of rational expectations and the “real business cycle” -- the ones
Romer dismantles. They argued that Keynesian models didn’t account for the way
consumers and businesses recalibrate their behavior to take account of policy
shifts.
More
If
economists could manage to get themselves thought of as humble, competent
people on a level with dentists, that would be splendid.
John
Maynard Keynes
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?
Carbon nanotubes couple light and matter
Date: November 15, 2016
Source: Heidelberg, Universität
Summary: Scientists are working on the basics of new light sources
from organic semiconductors, outlines a new report.
With their research on nanomaterials for optoelectronics, scientists
from Heidelberg University and the University of St Andrews (Scotland) have
succeeded for the first time to demonstrate a strong interaction of light and
matter in semiconducting carbon nanotubes. Such strong light-matter coupling is
an important step towards realising new light sources, such as electrically
pumped lasers based on organic semiconductors. They would be, amongst other
things, important for applications in telecommunications. These results are the
outcome of a cooperation between Prof. Dr Jana Zaumseil (Heidelberg) and Prof.
Dr Malte Gather (St Andrews), and have been published in Nature
Communications.
Organic semiconductors based on carbon are a cost and energy-efficient
alternative to conventional inorganic semiconductors such as silicon.
Light-emitting diodes consisting of these materials are already ubiquitously
found in smartphone displays. Further components for application in lighting
technology, data transmission and photovoltaics are currently at the prototype
stage. So far, however, it has not been possible to produce one important component
of optoelectronics with organic materials -- the electrically pumped laser. The
main reason is that organic semiconductors have only limited capacity for
charge transport.
Prof. Zaumseil explains that research over the past few years has
increasingly focused on laser-like light emission of organic semiconductors
based on light-matter coupling. If photons (light) and excitons (matter) are
brought to interact sufficiently, they couple so strongly that they produce so
called exciton-polaritons. These are quasi-particles that also emit light.
Under certain conditions, such emissions can take on the properties of laser
light. Combined with sufficiently fast charge transport, exciton-polaritons
could bring the production of an electrically pumped carbon-based laser within
reach, according to Jana Zaumseil who is the head of the Nanomaterials for
Optoelectronics research group at the Heidelberg University's Institute for
Physical Chemistry.
Thanks to the cooperation between Prof. Zaumseil and Prof. Gather, it
was possible for the first time to demonstrate the formation of
exciton-polaritons in semiconducting carbon nanotubes. Unlike other organic
semiconductors, these microscopically small, tube-shaped carbon structures
transport positive and negative charges extremely well. PhD student Arko Graf,
the first author of the study, explains that exciton-polaritons also display
extraordinary optical properties. The scientists in Heidelberg and St Andrews
see their research results as an important step towards realising electrically
pumped lasers on the basis of organic semiconductors. Prof. Zaumseil
emphasises: "Besides the potential generation of laser light,
exciton-polaritons already allow us to vary the wavelength of the light emitted
by the carbon nanotubes over a wide range in the near-infrared."
The monthly Coppock Indicators finished October
DJIA: 18142
+32 Up NASDAQ: 5189 +31 Up. SP500: 2126 +46 Up.
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