Baltic Dry Index. 961 Friday Brent Crude
56.21
“What
me worry?”
Mad
Magazine.
We open today with follow up news to
yesterday’s Reuters report that the USA was about to supply the anti-Assad
terrorists with “Manpads.” As we wrote
then: “Supplying
“manpads” to anyone in Syria is USA madness. They’ll quickly get sold on and
fired at commercial planes all across Europe and North Africa.”
Yesterday the US State Department denied it
was supplying Manpads. Over now to the
CIA and US Department of Defense who both have their own arms supply programs
to terrorist factions in Syria. We’ll know the truth soon enough when/if the
first commercial airliner gets shot down
in Europe or North Africa, or the first Turkish plane or helicopter gets shot
out of the sky by the Kurds over Syria or Iraq. But by then Kerry and Obama
will probably be long gone.
"War is Peace" "Freedom is Slavery" "Ignorance
is Strength."
George Orwell. 1984
U.S. says not providing portable missiles to Syrian rebels
The U.S. State Department said on Tuesday the United States was not
providing any shoulder-fired anti-aircraft missiles to the Syrian opposition.
Russia said on Tuesday that a U.S. decision to ease restrictions on
arming Syrian rebels had opened the way for deliveries of shoulder-fired
anti-aircraft missiles, a move it said would directly threaten Russian forces
in Syria.
"The fact is that we're not providing any kind of MANPADS ... to
the Syrian opposition," State Department spokesman Mark Toner said.
"Our position on MANPADS has not changed, we would have very deep concern
about that kind of weaponry getting into Syria."
Up
next, anything the CIA and Mossad can do, like Stuxnet, we can do too, say the
Russians. What’s good for the goose is good for the gander. Reminds me of the
“good old days” of the Great Powers of
Europe 1870 to 1914. I thought we’d learnt that lesson, but apparently not. Of
course, it might just be more fake news as support cover for the storyline, “it
was Putin’s Russian hackers what won it for Trump.” After all, who funds
CrowdStrike and why?
Russian hackers tracked Ukrainian artillery units using Android implant: report
A hacking group linked to the Russian government and high-profile cyber
attacks against Democrats during the U.S. presidential election likely used a
malware implant on Android devices to track and target Ukrainian artillery
units from late 2014 through 2016, according to a new report released Thursday.
The malware was able to retrieve communications and some locational data
from infected devices, intelligence that would have likely been used to strike
against the artillery in support of pro-Russian separatists fighting in eastern
Ukraine, the report from cyber security firm CrowdStrike found.
The findings are the latest to support a growing view among Western
security officials and cyber security researchers that Russian President
Vladimir Putin has increasingly relied on hacking to exert influence and attack
geopolitical foes.
The hacking group, known commonly as Fancy Bear or APT 28, is believed by
U.S. intelligence officials to work primarily on behalf of the GRU, Russia's
military intelligence agency.
Both the CIA and FBI believe that Fancy Bear and other Russian hackers
were responsible for hacks during the election that were intended to help President-elect
Donald Trump defeat Hillary Clinton, according to two senior government
officials.
Russia has repeatedly denied hacking accusations, and Trump has also
dismissed the assessments of the U.S. intelligence community.
The malware used to track Ukrainian artillery units was a variant of the
kind used to hack into the Democratic National Committee, CrowdStrike
co-founder Dmitri Alperovitch said in an interview. That link, in addition to
the high rate of losses sustained by the type of Ukrainian artillery units
targeted by hackers, creates high confidence that Fancy Bear was responsible
for the implant, he said.
"This cannot be a hands-off group or a bunch of criminals, they
need to be in close communication with the Russian military," Alperovitch
said.
The implant leveraged a legitimate Android application developed by a
Ukrainian artillery officer to process targeting data more quickly, CrowdStrike
said.
More
CrowdStrike
U.S. appeals court revives Clinton email suit
n a new legal development on the
controversy over former Secretary of State Hillary Clinton's emails, an appeals
court on Tuesday reversed a lower court ruling and said two U.S. government
agencies should have done more to recover the emails.
The ruling from Judge Stephen Williams, of the U.S. Court of Appeals for
the District of Columbia Circuit, revives one of a number of legal challenges
involving Clinton's handling of government emails when she was secretary of
state from 2009 to 2013.
Clinton, the 2016 Democratic presidential nominee, used a private email
server housed at her New York home to handle State Department emails. She
handed over 55,000 emails to U.S. officials probing that system, but did not
release about 30,000 she said were personal and not work related.
The email case shadowed Clinton's loss to Republican Donald Trump in the
Nov. 8 presidential election. Trump, who had repeatedly said during the
bruising campaign that if elected he would prosecute Clinton, said after the
election he had no interest in pursuing investigations into Clinton's email
use.
While the State Department and National Archives took steps to recover
the emails from Clinton's tenure, they did not ask the U.S. attorney general to
take enforcement action. Two conservative groups filed lawsuits
to force their hand.
A district judge in January ruled the suits brought by Judicial Watch
and Cause of Action moot, saying State and the National Archives made a
"sustained effort" to recover and preserve Clinton's records.
But Williams said the two agencies should have done more, according to
the ruling in the U.S. Court of Appeals for the District of Columbia Circuit.
Since the agencies neither asked the attorney general for help nor showed such
enforcement action could not uncover new emails, the case was not moot.
"The Department has not explained why shaking the tree harder -
e.g., by following the statutory mandate to seek action by the Attorney General
- might not bear more still," Williams wrote. "Absent a showing that
the requested enforcement action could not shake loose a few more emails, the
case is not moot."
More
In regular LIR type news, back in the EUSSR Germany has ordered Italy to play by the bail-in rules and not turn the bail-in into a hidden state bail-out. This being Italy, they will probably just do “whatever it takes,” to borrow words from a famous Italian in European banking, to protect the junior bondholders and depositors from loss. In return, the bailed-out will probably vote to keep in the present unelected Italian government, should there be an election next year. "These rules must not be circumvented," the [German] spokesman said. Italians have been circumventing rules for over 2000 years. Why should they change for the Germans? Brexit now! Asian markets follow Wall Street.
Asian stocks slide following Wall Street losses
By Willa Plank Published:
Dec 28, 2016 10:35 p.m. ET
Toshiba plummets again; financials weigh on Hong Kong index
Major Asian markets were broadly lower Thursday following declines on
Wall Street.
“It’s largely a response to a negative U.S. session [but] volumes are so
thin it’s hard to read into any particular move,” said Alex Furber, sales
trader at CMC Markets.
Australia’s S&P/ASX 200 XJO, +0.25% was off 0.1% and Taiwan’s
Taiex Y9999, -0.53% was lower by 0.1%.
Overnight, the S&P 500 fell 0.8% and the Dow Jones Industrial
Average was 0.6%, falling further away from the 20,000 milestone.
“The decline in the U.S. markets weighed on sentiment today,” said
Alexander Lee, a strategist at DBS Vickers in Hong Kong.
Japan’s Nikkei NIK, -1.32% was down 1% as the yen
strengthened 0.3% against the U.S. dollar. A stronger yen hurts Japan’s exporters.
Shares of Toshiba 6502, -16.98% were down 15%, hit by
continuing concerns about write-downs in the nuclear business.
Tomoichiro Kubota, senior market analyst at Matsui Securities, says the
shares were falling because it’s unclear how much write-down Toshiba would have
to record and how much Toshiba would need to raise to restore its capital base.
Toshiba said the write-down could amount to several hundred billion yen, or
several billion dollars.
Toshiba is on a Tokyo Stock Exchange watch list because of its
accounting scandal in 2015, when the firm was found to have overstated
operating profits by at least 151.8 billion yen between 2008 and 2014.
The fact it is on a watch list makes it difficult to raise funds by
issuing new shares to the public, market participants say. Japanese media also
reported that Toshiba was going to discuss possible financial support with its
banks, including a debt-for-equity swap.
Korea’s Kospi SEU, +0.04% was down 0.2% as South
Korea’s government cut its growth forecast for next year. The 2017 gross
domestic product growth estimate for South Korea was lowered to 2.6% from an
earlier projection of 3%.
Toshiba Falls by Record as Ratings Cut on Looming Writedown
by Stephen Stapczynski
Toshiba Corp. plunged by the most on record in intraday trade after the
company’s credit ratings were cut following an announcement it may write
down billions of dollars of an acquisition made by U.S. unit Westinghouse
Electric.
The shares fell as much as 26 percent, the most since 1974, according to
available data, to 232 yen in Tokyo on Thursday. The stock plunged a day
earlier after Toshiba issued a statement saying that while the final writedown
was yet to be determined, it would affect earnings. That was followed by
Moody’s Investors Service, Rating and Investment Information Inc.
and S&P Global Ratings all cutting their ratings on Toshiba’s credit.
The
potential loss is related to a dispute over the value of a nuclear
construction unit acquired by Westinghouse that was geared toward completing
the newest generation of reactors at two U.S. facilities, which are behind
schedule and over budget. Toshiba’s financial standing could come under further
strain, according to a statement from S&P. Toshiba’s market value has
declined by about 800 billion yen ($6.8 billion) this week.
More
Germany says Italy must stick to European rules on Monte Paschi
"The European Central Bank and European Commission must check and make sure that Italian authorities stick to the European rules," a ministry spokesman told Reuters when asked about Monte dei Paschi.
He also said a precautionary state recapitalization of banks can only be part of a solution in exceptional cases and under strict conditions and that owners and creditors must be among the first to suffer losses. The bank must be solvent, he added and state money must not be used to cover losses.
"These rules must not be circumvented," the spokesman said.
In
shipping news, has shipping steamed past the bottom?
Baltic Dry Index Winding Up 2017 on a Positive Note
While there was no Baltic Dry Index pricing update on Monday with the
markets closed in observation of Christmas, the BDI closed at 961 points on
Friday, with the index is up significantly from 478 points it was at one year
ago.
There is cautious optimism heading into 2017 with the BDI’s price up
significantly from a year ago due to increased demand to transport goods.
Through the first part of 2017, the BDI should remain supported by China’s
continued infrastructure development, which will increase demand to ship raw
materials. There is also some optimism over economic growth in other regions of
the country.
When it comes to shipping demand, there could be a slowdown in the
second half of the year, but shippers are not expecting the BDI to see a
drop-off in demand like it did late last year. That demand collapse resulted in
the BDI hitting a record-low price in February 2016.
While demand expectations are optimistic, the major downside risk for
the BDI is the oversupply of ships. There are currently too many ships
available to hire and that is depressing rates. The oversupply situation was
created when a large amount of ships were built during the last economic growth
cycle. While these ships were built when economic growth was expected to
continue to accelerate, by the time they came in service the economy had
collapsed.
Economic growth has now returned, but
the rate of growth has not been enough to require all the ships put into
service. Shipping companies have been good at accelerating their ship scrapping
rates and keeping some boats out of service, but if they see demand continue to
grow they may add more boats into service. This is a big risk that the BDI
faces in 2017.
Source: Economic Calendar
Source: Economic Calendar
We close with trade war news. Apparently
it’s time to start picking which side wins.
China Would Outlast U.S. in Trade War, Billion-Dollar Fund Says
by Bei Hu 29 December 2016, 02:12 GMTChina would outlast the U.S. in a trade war, which is a “distinct possibility” next year after President-elect Donald Trump takes office, a commentator wrote in the $1 billion Pine River China Fund’s investor letter.
China’s government would be better placed than the U.S. to marshal state resources to cushion the impact on exporters, wrote James Wang, a City University of Hong Kong professor who pens a monthly commentary for the fund. Privately-owned Chinese exporters would be worse hit than state-controlled peers because they have less political clout in Beijing, he said.
“By design, decision-makers in a democracy face difficulties coordinating a relief effort and must eventually face a political backlash from impacted domestic producers,” Wang wrote. “On this basis, the Chinese may have more runway to play the long game in a trade war.”
During his campaign, Trump pledged to brand China a currency manipulator and impose a 45 percent tariff on Chinese imports. His protocol-breaking phone call with Taiwan President Tsai Ing-wen and his attacks on China on Twitter have sparked further friction between the world’s two biggest economies before he takes office next month.
Trump’s electoral victory capped a year of rising populism that Wang likened to the aftermath of World War I, which ushered in an age of discontent and protectionism.
“The balance of power worldwide is much more diffuse compared to the early 20th century, and players like China and India have emerged to create new political centers of gravity,” Wang wrote. “However, as economic and political paralyses spread across the developed world, the most likely outcome is a trade war.”
More
Nothing good comes from a trade war, it’s
lose, lose all round.
We do not err because truth is difficult to see. It is visible
at a glance. We err because this is more comfortable.
Alexander Solzhenitsyn
At the Comex silver depositories
Wednesday final figures were: Registered 36.21 Moz, Eligible 147.31 Moz,
Total 183.52 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, the bent and totally doubled over world of
Juncker’s tax evasion Luxembourg. Brexit now!!
Luxembourg to sharpen tax rules for intra-group financing
Luxembourg on Tuesday said it would sharpen its corporate
tax rules, making it more difficult for large corporations to avoid tax by
channelling funds through the small European country, a practice exposed in
media reports known as "LuxLeaks".
The rules, entering into force on Jan. 1, firm up the "arm's length
principle", meaning financing between different units of the same company
should be carried out as if they were unrelated firms.
Tax rulings made before the new law enters into force will no apply after
the 2016 tax year, Luxembourg's tax authorities said.
Tax rulings by which officials assured multinationals of advantageous
treatment of funds moving through Luxembourg, created outrage in 2014 when the
"LuxLeaks" reports unveiled how such deals were brokered for global
companies.
Those reports overshadowed the start of Jean-Claude Juncker's term as EU
Commission President, as he was Luxembourg's Prime Minister for almost two
decades before taking office in Brussels.
Luxembourg on Tuesday said it would sharpen its corporate
tax rules, making it more difficult for large corporations to avoid tax by
channelling funds through the small European country, a practice exposed in
media reports known as "LuxLeaks".
The rules, entering into force on Jan. 1, firm up the "arm's length
principle", meaning financing between different units of the same company
should be carried out as if they were unrelated firms.
Tax rulings made before the new law enters into force will no apply after
the 2016 tax year, Luxembourg's tax authorities said.
Tax rulings by which officials assured multinationals of advantageous
treatment of funds moving through Luxembourg, created outrage in 2014 when the
"LuxLeaks" reports unveiled how such deals were brokered for global
companies.
Those reports overshadowed the start of Jean-Claude Juncker's term as EU
Commission President, as he was Luxembourg's Prime Minister for almost two
decades before taking office in Brussels.
Last
year, the Commission ordered Luxembourg to recover 20 to 30 million euros
($21-$31 million) from Italy's Fiat (FCHA.MI), saying the
carmaker had benefited from illegal tax deals with the Grand Duchy.
"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice."
Henry Hazlitt
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?
2016 was the year solar panels finally became cheaper than fossil fuels. Just wait for 2017
Solar and wind is now the same price or cheaper than new fossil fuel capacity in more than 30 countries, the WEF reported in December (pdf). As prices for solar and wind power continue their precipitous fall, two-thirds of all nations will reach the point known as “grid parity” within a few years, even without subsidies. “Renewable energy has reached a tipping point,” Michael Drexler, who leads infrastructure and development investing at the WEF, said in a statement. “It is not only a commercially viable option, but an outright compelling investment opportunity with long-term, stable, inflation-protected returns.”
Those numbers are already translating into vast new acres of silicon and glass. In 2016, utilities added 9.5 gigawatts (GW) of photovoltaic capacity to the US grid, making solar the top fuel source for the first time in a calendar year, according to the US Energy Information Administration’s estimates. The US added about 125 solar panels every minute in 2016, about double the pace last year, reports the Solar Energy Industry Association.
The
solar story is even more impressive after accounting for new distributed
solar on homes and business (rather than just those built for utilities), which
pushed the total installed capacity to 11.2 GW.
But global investment in renewable energy still lags far behind levels needed to avoid potentially catastrophic global warming, according to the United Nations. Global renewable investment last year was $286 billion, or 25% of the $1 trillion goal set by nations at the Paris climate change accord. Barriers to investment are mostly political rather than economic: Contracts are not standardized, regulatory uncertainty remains, and financial institutions have not created an asset class with a public, standardized track record that will reassure mainstream investors, reports the WEF (pdf, p 12).
But prices are eventually expected to win the day. Solar is
projected to fall to half the price of electricity from coal or natural gas
within a decade or two. That milestone has already been reached in some
locales.
More
The monthly Coppock Indicators finished November
DJIA: 19124
+53 Up NASDAQ: 5324 +41 Up. SP500: 2198 +58 Up
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