Tuesday, 24 October 2017

US Stocks. Pause Or Pullback?

Baltic Dry Index. 1586 +08   Brent Crude 57.46

Some foreigners with full bellies and nothing better to do engage in finger-pointing at us. First, China does not export revolution; second, it does not export famine and poverty; and third, it does not mess around with you. So what else is there to say?

Xi Jinping

Today, tired of covering collapsing Europe,  we take a look at the US stock market, while we await closing developments  from the Communist Party of China’s Congress, and tomorrow’s announcement of the CPC’s new Politburo. President Xi’s closing speech will be well covered later today, with Politburo watchers having a field day tomorrow. But first this, don’t mess with President Xi.

China's Communist Party Further Elevates Xi Jinping

By Ting Shi
China’s ruling Communist Party approved a revised charter that enshrined President Xi Jinping’s name under its guiding principles, elevating him to a status that eluded his two immediate predecessors.

The amended constitution voted on by the Communist Party in Beijing listed “Xi Jinping thought on socialism with Chinese characteristics for a new era” alongside the theories of Mao Zedong and Deng Xiaoping. While presidents Jiang Zemin and Hu Jintao also secured contributions to the document, neither was featured by name.

The revisions confirmed Xi’s rapid consolidation of power and will reinforce speculation that he might seek to stay on after his second term ends in 2022. No Chinese leader since Mao has managed to put his stamp on the party’s prevailing ideology in its foundational document before stepping down. 

“Enshrining ‘Xi Jinping thought’ in the Constitution will ensure that Xi Jinping is considered one of the great transformative leaders” of China, said Elizabeth Economy, director of Asia Studies at the New York-based Council on Foreign Relations. The move “again puts him on par with Mao Zedong and Deng Xiaoping.”

In US stock markets, complacency, and tax and future profit expectations have never been higher. The algo-trading computers are virtually all-in, and virtually all of them long. What could possibly go wrong?

Dow, S&P 500 snap 6-day win streak as investors wade through earnings deluge

Published: Oct 23, 2017 4:42 p.m. ET
The S&P 500 and the Dow snapped a six-day winning streak on Monday as investors weighed prospects for tax cuts while parsing the latest corporate earnings for clues on where stocks are headed in the near term.

The S&P 500 index SPX, -0.40%  dropped 10.23 points, or 0.4%, to close at 2,564.98. The Dow Jones Industrial Average DJIA, -0.23%  shed 54.67 points, or 0.2%, to 23,273.96.

Read: The S&P 500 just made stock market history—for doing almost nothing

The Nasdaq Composite Index COMP, -0.64%  fell 42.23 points, or 0.6%, to 6,586.83.

The latest decline comes after major indexes scored all-time closing highs on Friday, marking the 24th time in 2017 that all three benchmarks simultaneously closed at records. All three indexes also sat all-time intraday highs in early trade Monday before losing ground.

Nikkei pushes to extend win streak to 16 sessions even as Dow, S&P runs are halted

Published: Oct 23, 2017 11:58 p.m. ET
Japan’s benchmark Nikkei 225 Index NIK, +0.04% was pushing Tuesday toward a 16th consecutive rise, having posted a 0.17% gain to the 21,733.10 level.

The yen, meanwhile, rebounded against the U.S. dollar USDJPY, -0.05% overnight and gained a bit in the Asian session.

See: Japan’s Nikkei rises for a 15th straight session as Prime Minister Abe basks in electoral win

Also on the rise Tuesday in Asia were Hong Kong and Shanghai shares, with the Hang Seng HSI, +0.03% recently up 0.1% and the Shanghai Composite SHCOMP, +0.08% having risen slightly less.

A new Chinese leadership lineup is expected soon, as the Community Party congress wraps up. And more important for markets, U.S. President Donald Trump is expected to unveil his pick to lead the Federal Reserve “very, very” soon.

Here’s why one chart watcher says the stock market is finally ready for a pullback

Published: Oct 23, 2017 3:07 p.m. ET
There‘s no single technical indicator that reliably calls tops and bottoms. But when certain conditions begin to agree, it can offer a valid signal, according to analysts.

A confluence of technical considerations have formed a “perfect condition” for a mild pullback for stocks, according to Katie Stockton, chief technical strategist at BTIG. And such a pullback would help set the stage for a longer term run in record territory, she said.

The S&P 500 Index SPX, -0.40%  is traded 4 points, or 0.2%, lower to 2,570, after six straight weeks of gains, which culminated with a “gap” higher open on Friday. A gap occurs on a daily price chart when an asset opens above the previous session’s high.

It’s this gap, alongside technical indicators that are flashing significantly overbought conditions, that caught Stockton’s attention.

“Prolonged overbought conditions on their own do not indicate anything other than being overbought, and markets can stay overbought for some time,” said Stockton.

 “But when such a gap appears after prolonged overbought conditions, it is exhaustive in nature and suggests that the short-term momentum is likely to waiver,” Stockton said.

“Overly bullish sentiment, as seen by CNN’s Fear and Greed indicator also tends to lead to pullbacks. That indicator peaked in early October,” she said.

CNN’s Fear and Greed Index stands at 91 on a scale of 0 to 100, with the 100 being extreme greed and zero being extreme fear. On Oct. 5 it hit 94.

“If we close lower sometime this week, then, the downside risk will increase,” Stockton said.

The stats that show why Trump vowed to keep 401(k) plans safe

Published: Oct 23, 2017 4:22 p.m. ET
President Trump on Monday insisted 401(k) plans are untouchable amid reports suggesting Congress has floated the idea of slashing how much Americans can contribute to retirement.

Talk of changes to 401(k) plans has generated lots of negative press and a pushback from Wall Street. Some House Republicans reportedly considered cutting the limit on 401(k) contributions as part of an effort to help pay for massive tax cuts.

The contributions reportedly could be reduced to $2,400 a year from the current ceiling of $18,000 for people under 50, and $24,000 for those 50 and older. (The limit goes up to $18,500 to $24,500 in 2018.)

Yet such a move would undoubtedly be unpopular with voters, a fact the White House clearly grasps. Ditto for the Republican Party’s leadership. Not a single major Republican has stepped forward to confirm the proposal is being seriously considered.

Also Read: Time to worry? Trump promises ‘no change’ for 401(k) plans in tax overhaul

It’s easy to see why. More than 55 million Americans participate in active 401(k) plans and the number is growing rapidly. (Millions of others rely on Roth IRAs, traditional pension plans and other retirement vehicles).

Although very few Americans max out on their annual contributions, most 401(k) participants easily exceed the purported $2,400 cap.

The people who would be especially hurt would be the middle and upper-middle class, groups that helped carry Trump to an upset victory in 2016. He won the majority of voters who earn between $50,000 to $199,000 a year, exit polls show.

GE’s stock sinks to 4 1/2-year low after analyst throws in the towel

Published: Oct 23, 2017 4:16 p.m. ET
Shares of General Electric Co. sank Monday to close at a 4 1/2-year low, as another Wall Street analyst threw in the towel on the industrial conglomerate, saying liquidity concerns increase the likelihood of a dividend cut.

The stock GE, -6.34% plunged $1.51, or 6.3%, on heavy volume, and was the biggest decliner within the Dow Jones Industrial Average DJIA, -0.23% The stock closed at the lowest level since May 2, 2013, while suffering the biggest one-day percentage decline since August 2011.

Trading volume reached 184.5 million shares, more than triple the full-day average, and enough to make the stock the most actively traded on major U.S. exchanges, according to FactSet.

The stock’s weakness follows a boomerang session on Friday, when GE reported its first earnings miss in 2 1/2 years, and slashed its outlook. The stock initially tumbled as much as 6.3% in morning trade that day, then bounced sharply to close up 1.1%.

RBC Capital analyst Deane Dray said he believes the stock’s intraday recovery Friday, in the face of a “draconian” guidance cut and “brutal honesty” by new CEO John Flannery about GE’s troubles could be “the first sign of a cathartic bottoming” for the stock. Dray reiterated the outperform rating he’s had on the stock for at least the past three years.

But analyst Nigel Coe at Morgan Stanley said it is “false” logic to believe, after Flannery threw out the kitchen sink in his assessment of the company, that things can’t still get worse.

He downgraded GE to underweight, after being no worse than equal weight for at least the past three years, and cut his stock price target to $22 from $25. Coe is now the third of the 20 analysts surveyed by FactSet to rate GE the equivalent of sell.

Coe said his bearish outlook isn’t a reflection of the new CEO, who he believes is the right man for the mission at hand.

“However, the scale of the challenges that he and his new team face are greater than even we had imagined,” Coe wrote in a note to clients.

He now expects GE to announce a dividend cut at the Nov. 13 investor gathering, to reflect “substantially lower earnings power” and given the sharp increase in debt on its balance sheet over the past few years.

As economic globalization gathers momentum, China and the United States have become highly interdependent economically. Such economic relations would not enjoy sustained, rapid growth if they were not based on mutual benefit or if they failed to deliver great benefits to the United States.

Xi Jinping.

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

Today, more twists and turns in dieselgate. Who would want to buy a EU diesel vehicle?

October 23, 2017 / 11:30 AM / Updated 17 minutes ago

France probing possible Fiat obstruction over 'Dieselgate' affair - document

PARIS (Reuters) - Carmaker Fiat Chrysler (FCHA.MI) is subject of a French judicial inquiry over suspected obstruction of a French inquiry into the ‘Dieselgate’ affair, concerning devices used to cheat on tests over emissions, according to a document obtained by Reuters.

Fiat declined to comment on the matter when contacted for comment.

Volkswagen’s (VOWG_p.DE) diesel emissions-test cheating exposed by U.S. regulators in 2015 triggered global public outrage, dozens more investigations into test-rigging by the wider industry and a push by some lawmakers to ban diesel and eventually all combustion engines.

October 23, 2017 / 12:30 AM / Updated 30 minutes ago

London introduces vehicle pollution levy in new blow to diesel

LONDON (Reuters) - London brought in a new levy on the oldest and most polluting cars entering the city center from Monday, almost doubling how much motorists have to pay in the latest blow to diesel.

Drivers are already charged 11.50 pounds ($15) to enter the financial district and parts of west London under a congestion charge but those driving petrol and diesel vehicles typically registered before 2006 will need to pay an additional 10 pounds.

Since the 2015 Volkswagen (VOWG_p.DE) emissions cheating scandal, a number of major cities including Madrid, Paris and Athens have announced plans particularly focused on cutting diesel emissions including bans, fines and restrictions.

The new charge could further encourage motorists to switch to greener models in one of Europe’s biggest cities as Mayor Sadiq Khan hopes the new levy to reduce toxicity, known as the T-Charge, will help save thousands of lives each year.

“The air is bad, but it’s also a killer,” he told Reuters.

“There are children in London whose lungs are underdeveloped. There are adults who suffer a whole host of conditions caused by the poor quality air from asthma to dementia to suffering strokes.”

Although the tax also applies to older petrol cars, diesel has been particularly maligned over the last few years, with sales down 14 percent this year in Europe’s second-biggest car market as petrol demand continues to rise.

“There’s a budget coming up and the government’s got to step up and announce the diesel scrappage scheme to help families and businesses,” said Khan, a politician from Britain’s main opposition Labour Party.

Britain’s Conservative government said this year that sales of new diesel and petrol cars would be banned from 2040 but has stopped short of an immediate program to incentivize drivers to trade in their old models.

Whether 40,000 Uber [UBER.UL] drivers, one in three of all private hire vehicles working in the British capital, continue to operate will also have a major impact on London’s streets in the years ahead.

The city’s transport regulator shocked the Silicon Valley taxi app last month by stripping it of its license, but the company can continue to operate until an appeals process is exhausted, which could take several years.

Following discussions between Uber’s global Chief Executive Dara Khosrowshahi and Transport for London (TfL) Commissioner Mike Brown this month, Khan said further talks could take place.

Singapore to Stop Adding Cars to City From February 2018

By Sebastian Tong
October 23, 2017, 10:08 AM GMT+1 October 23, 2017, 10:55 AM GMT+1
Singapore, among the world’s most expensive places to own a vehicle, will stop increasing the total number of cars on its roads next year.

The government will cut the annual growth rate for cars and motorcycles to zero from 0.25 percent starting in February, the transport regulator said on Monday.

“In view of land constraints and competing needs, there is limited scope for further expansion of the road network," the Land Transport Authority said in a statement on its website. Roads already account for 12 percent of the city-state’s total land area, it said.

Smaller than New York City, land in Singapore is a precious commodity and officials want to ensure the most productive use of the remaining space. Its infrastructure is among the world’s most efficient and the government is investing S$28 billion ($21 billion) more on rail and bus transportation over the next five years, the regulator said.

Singapore requires car owners to buy permits -- called Certificates of Entitlement -- that allow holders to own their vehicles for 10 years. These permits are limited in supply and auctioned monthly by the government. At the most recent offering last week, the permit cost S$41,617 for the smallest vehicles.

The LTA said the zero-growth target will affect vehicles in Categories A, B and D under its permit system -- these include cars and motorcycles. The existing vehicle growth rate of goods vehicles and buses will remain at 0.25 percent per annum until March 2021 to give businesses time to improve the efficiency of their operations and reduce the number of commercial vehicles they require, LTA said.

These changes are not expected to significantly affect the supply of permits since the quota is determined largely by the number of vehicle deregistrations, the regulator said. The limit on vehicle growth rate will be reviewed again in 2020.

Technology 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?

Today, hmmm, too clever by half.

Are those 80,000 pound trucks tailgating each other? Soon it may be perfectly normal — and safe

October 22 at 9:14 PM
If you look to the next lane and see two 18-wheelers roar past at 70 mph with just 10 yards between them, you’ll probably think they are dangerously close.

In this high-tech age, that may no longer be true. In fact, it might be just the opposite, and it might even end up saving you money.

A wave of new technology intended to make trucks safer — using radar, cameras and reflective light scanning — is sweeping the industry. By next year, much of it may be combined to put pairs of trucks on the road at a distance that before would not have been possible or safe.

One reason this matters to people who don’t drive tractor-trailers is found in the annual crash-death numbers from the National Highway Traffic Safety Administration: Of the 4,317 people who died in crashes involving large trucks last year, 72 percent of them weren’t in trucks, but rather passenger cars. An additional 11 percent were pedestrians, bicyclists, roadway workers or police officers standing beside the highway, according to statistics released this month.

Trucks are involved in 11 percent of fatal crashes, although they make up just 4 percent of vehicles on the road, according to the Federal Motor Carrier Safety Administration. Ten percent of truck fatalities are rear-end crashes — three times as many as rear-end collisions between two cars.

The pairing of tractor-trailers at a distance of 30 to 50 feet is called platooning. Here’s why it’s significant — and how it might save you money.

Fans of bike racing and NASCAR are acquainted with what it means to get into someone else’s slipstream. Whether in spandex or NASCAR fire-retardant suits, racers know they can save energy or fuel by tucking close behind another rider or race car.

Truckers know that, too.

Trucking companies spent about $90 billion on diesel fuel last year. Firms spend the most paying drivers, but buying diesel often is the second-biggest expense, sometimes amounting to 20 percent of operating costs.

A truck tucked in the slipstream of another tractor-trailer can save 10 percent on fuel. But the truck in front also will burn about 5 percent less fuel. Why? Part of the drag on a truck plowing into the wind is caused by turbulent air that tumbles off the top and sides of the trailer. When two trucks pair up closely, the air flows more smoothly from the first to the second, reducing that turbulence

---- Safety advocates, however, have several concerns about platooning trucks, said Jonathan Adkins, executive director of the Governors Highway Safety Association.

“The chief safety concern for passenger vehicles is how other drivers will react to platoons,” Adkins said. “How fast should platoons be permitted to travel? Will long platoons block exit lanes that were not designed for such circumstances? Can we limit platoons to only the right lane, rather than blocking multiple lanes of traffic? How can we prevent cars from trying to dangerously ‘cut in’ between platooning trucks?”

Adkins adds, “The good news is that the necessary research is being conducted.”

Two big truck manufacturing companies, Navistar and Daimler, are preparing to put platooning trucks on the road, but an upstart California firm called Peloton (named after the bike-racing practice of utilizing the slipstream) says it may leapfrog the big boys to have paired trucks on the road next year.

The monthly Coppock Indicators finished September

DJIA: 22,405 +223 Up. NASDAQ:  6,496 +274 Up. SP500: 2,519 +179 Up.

Monday, 23 October 2017

A Critical Week.

Baltic Dry Index. 1578 -04   Brent Crude 57.82

It is the duty of Her Majesty's government neither to flap nor to falter.

Prime Minister Harold MacMillan

There’s a lot to cover this morning so we start with Asia.   In China home prices stalled as the property speculation restrictions bite. Prime Minister Abe large win in Japan will cause military worries in Beijing. 

I read a great number of press reports and find comfort in the fact that they are nearly always conflicting.

Prime Minister Harold MacMillan

China's Home Prices Rise in Fewest Cities Since January 2016

Bloomberg News
China home prices rose in the fewest cities since January 2016, adding to signs of a property slowdown as curbs on buyers bite.

New-home prices, excluding government-subsidized housing, in September rose in 44 of 70 cities tracked by the government, compared with 46 in August, the National Bureau of Statistics said on Monday. Prices fell in 18 cities from the previous month and were unchanged in eight.

Stabilizing home prices in the nation’s largest cities are a welcome sign for Communist Party leaders gathered in Beijing to map policy for the next five years. President Xi Jinping renewed a yearlong call that homes are built “to be inhabited’’ and not for speculation in his speech at the twice-a-decade Party Congress, inking the language in one of the nation’s top policy frameworks.

Data last week showed home sales last month fell from year-earlier levels for the first time since March 2015, declining 2.4 percent by value, and 5.7 percent by area, according to Bloomberg calculations. 

Xi’s speech showed “that instead of easing, we are more likely to see more tightening during or after the party congress,” Alan Jin, a property analyst at Mizuho Securities Asia Ltd. said before the data release.

Home prices fell 0.5 percent in southern Guangzhou, the second consecutive monthly fall. Values in Shanghai and in Beijing declined 0.1 percent and 0.2 percent respectively. In Shenzhen, prices were unchanged.

October 23, 2017 / 5:35 AM / Updated 23 minutes ago

Japan's Abe to push pacifist constitution reform after strong election win

TOKYO (Reuters) - Prime Minister Shinzo Abe, buoyed by a huge election win for lawmakers who favour revising Japan’s post-war, pacifist constitution, is likely to push towards his long-held goal but will need to convince a divided public to succeed.

Parties in favour of amending the U.S.-drafted charter won nearly 80 percent of the seats in Sunday’s lower house election, media counts showed. Four seats remain to be called and final figures are expected later on Monday.

That left the small, new Constitutional Democratic Party of Japan (CDPJ) as the biggest group opposed to Abe’s proposed changes.

Formed by liberal members of the Democratic Party, which no longer exists in the lower house, it won 54 seats, a fraction of the ruling bloc’s two-thirds majority in the 465-member chamber.

Abe said he wanted to get other parties, including Tokyo Governor Yuriko Koike’s new conservative Party of Hope, on board and was not insisting on a target of changing the constitution by 2020 that he floated earlier this year.

Nikkei Set for Record Streak as Abe Secures Election Win

By Eric Lam
Japanese stocks jumped after Prime Minister Shinzo Abe’s ruling coalition retained its two-thirds majority in an election victory Sunday that paves the way for continued easy monetary policy and stimulative fiscal spending. The Nikkei 225 Index gained 0.9 percent at 9:33 a.m. in Tokyo, headed for a record 15th straight day of gains. The benchmark Topix index meanwhile has rallied for 11 days, trading at a July 2007 high.

In European news, forget Brexit, this week it’s all about secession. While Catalonia v Spain is in for a critical week, separatism is rising in Italy. And there’s rising discontent in France.

Catalan Separatists Plot Response to Spain's Shock and Awe

By Charles Penty and Esteban Duarte
Catalan separatists meet Monday to craft their reply to Prime Minister Mariano Rajoy after the Spanish leader announced an unprecedented barrage of measures to stamp his authority on the rebel region.

Party leaders in the Catalan Parliament are scheduled to meet at 10:30 a.m. to discuss the timing and agenda for the chamber’s next plenary. Regional President Carles Puigdemont, set to be ousted by the Spanish government within days, wants the separatist groups who control the legislature to hold the session this week, a press officer for the regional executive said. Puigdemont has vowed to fight on, and his allies are signaling he could declare independence as soon as this week.

Rajoy on Saturday shocked many observers with plans to clear out the entire separatist administration in Barcelona and take control of key institutions including public media and the regional police force, known as the Mossos d’Esquadra. Spain’s chief prosecutor said that if Puigdemont declares independence he would face as much as 30 years in jail and signaled that he could be arrested immediately.

The premier is trying to snuff out an independence drive that’s been gathering momentum since he took office in 2011. It’s now wounding the economy and dividing the nation. With Spain’s upper house set to give its seal of approval to his strategy by the end of this week, the focus is shifting to the mechanics of how Madrid can take charge of Catalonia’s institutions in the face of secessionist resistance.

“The big question for me, really, is how Madrid is actually going to implement its proposed actions in Catalonia,” said Caroline Gray, a lecturer in politics and Spanish at Aston University in the U.K. who specializes in nationalist movements. “Catalan government officials and many within the Mossos and Catalan media are not just going to stand down without a fight.”

October 22, 2017 / 11:59 AM / Updated 6 hours ago

Italian regions vote in favour of autonomy in shadow of Catalonia crisis

MILAN (Reuters) - Two wealthy regions of northern Italy voted overwhelmingly on Sunday for greater autonomy in referendums that could fan regional tensions in Europe at a time when Spain is striving to prevent Catalonia from breaking away.

Millions of people in Lombardy and Veneto, both run by the once openly secessionist Lega Nord party, voted more than 90 percent for “yes”, according to preliminary results released just before midnight (2200 GMT). Ballots closed at 2100 GMT.

The party called the referendums to secure a mandate to negotiate a better financial arrangement with Rome, an ambition that mirrors Catalonia’s goal to claw back taxes from Madrid.

The preliminary turnout in Lombardy was above 40 percent, Lombardy President Roberto Maroni told journalists when announcing preliminary results. In Veneto, it reached 57 percent.

“We can now write a new page: The regions that ask for more power will get it,” Maroni told journalists in Milan.

“I am talking for example about the power to discuss about tax proceeds that normally go to Rome ... this is the first step in a path towards big reforms,” he added.

Unlike Catalonia’s Oct. 1 independence referendum, which Spain had declared unlawful, the Italian votes were held in line with the constitution. But they are not binding on Rome.

Lombardy, home to financial hub Milan, accounts for about 20 percent of Italy’s economy, which is in turn the euro zone’s third largest. Veneto, which includes the tourist magnet Venice, accounts for 10 percent.

Macron Opponents Paint Him as ‘Anti-Robin Hood’ in Tax Uproar

By Mark Deen and Helene Fouquet
President Emmanuel Macron’s effort to scrap France’s wealth tax is overshadowing other government policies as opponents portray him as an “anti-Robin Hood” who is taking from the poor to give to the rich.

With his first budget now being scrutinized by lawmakers, Macron and his ministers are in the uncomfortable position of defending a cut in the tax on personal assets over 1.3 million euros ($1.5 million) while also having cut housing subsidies for the poor. Bruno Le Maire said Wednesday that the top 1,000 payers of the wealth tax -- known as the ISF -- will collectively benefit to the tune of 400 million euros under the new budget. That amount is equivalent to savings from lower housing benefits, the opposition says.

“There is a widening public debate about Macron being the president of the rich,” Adrien Quatennens, the 27-year-old lawmaker of the left-leaning France Unbowed, said on France 5 television on the first day of the budget debate.  “We believe it’s not just that; we think he’s the anti-Robin Hood, who is transferring wealth from the poor to the rich.”

The problem for Macron is that the charge is sapping his political capital at a time when his government is gearing up for its second-major economic reform -- this time an overhaul of the nation’s system of unemployment benefits. Despite ministers’attempts to explain the government’s reasons for the wealth tax cut, Macron’s popularity is suffering.

The president’s approval rating dropped 3 points to 42 percent, according to an Ifop poll published Sunday. A separate Elabe poll shows that Quatennens’s argument has traction: 69 percent of the French believe Macron’s plan to trim the wealth tax will increase inequality, while only 31 percent agree with the government’s argument that it will foster investment.

 “The wealth tax is a symbol, a marker of the politics of the right,” Raymond Soubie, one of France’s most respected specialists on social relations, said in an interview “By cutting it, you win symbolically but you create a lot of headaches.” If it comes at the same time as other budget cuts, the situation could become “explosive,” he added.

In other EUSSR news, politically Europe’s becoming less stable.

October 22, 2017 / 12:44 PM / Updated 12 hours ago

Austria's likely next chancellor hopes to form government in 60 days - paper

ZURICH (Reuters) - Austria’s likely next chancellor, Sebastian Kurz, wants talks over a new government to last no more than two months, he said in a newspaper interview published in Sunday.
Austria’s president on Friday gave the green light to conservative leader Kurz, whose People’s Party (OVP) secured 31.5 percent of the vote in last week’s parliamentary election, to form a government.

“The Austrians expect that there is quickly a strong and stable government which takes up work,” Kurz was quoted as saying by Austria’s Kronen Zeitung. “That means that negotiations should be concluded in less than 60 days.”

Kurz campaigned on a platform that combined a hard line on immigration similar to that of the far-right Freedom Party (FPO) with traditional conservative principles like slimming down the state and cutting taxes.

October 22, 2017 / 2:29 PM / Updated 13 hours ago

Czech tycoon Babis to be named prime minister but may struggle to find partners

PRAGUE (Reuters) - Czech President Milos Zeman said on Sunday he would name Andrej Babis prime minister, but the tycoon leader of the anti-establishment ANO party may struggle to find coalition partners despite his emphatic election win.

ANO won 29.6 percent of the vote at the weekend’s polls, nearly three times as much as its closest rival, but many parties expressed reluctance or rejected outright any coalition with it while Babis fights off fraud charges.

Zeman said the charges were not an obstacle for Babis - the second richest Czech who has been compared to other tycoons-turned-political leaders Donald Trump and Silvio Berlusconi - to become prime minister.

“My aim is that when I appoint the prime minister, and that will be Andrej Babis, that there is certainty or at least high probability that this prime minister will be successful in a parliamentary vote of confidence,” Zeman said in a live interview on news website www.blesk.cz.

ANO will control 78 seats in the 200-seat lower house so still needs partners from the other eight factions to form a majority, but Babis’s stance as an anti-establishment force has made it difficult to forge alliances.

Opponents see Babis, worth an estimated $4 billion, as a danger to democracy because of his commanding leadership style and business and media power that they fear could pose conflicts of interest.

Police allege Babis hid ownership of one of his firms a decade ago to receive a 2 million euro EU subsidy that was meant for small businesses. He denies wrongdoing.

Finally today, some good news from France. Bordeaux wine makers are optimistic on the quality of their 2017 brew. “There is no comparison with ’15 or ’16,” a reference to the past two critically acclaimed vintages in the region, “but it may be close in style to 2014.”” Quite. Some of us found the ’15 or ’16 too concentrated by far, but I’ll look out for the ’17 Angelus down at my local Aldi and Lidl.

Bordeaux Winemakers Optimistic on ’17 Quality After Frost Damage

By Guy Collins
October 21, 2017, 8:00 AM GMT+1
Bordeaux winemakers harvested healthy, ripe grapes this year even after the worst frosts in a quarter-century hit vineyards in April and significantly reduced the amount available for bottling, according to vintners interviewed this month.

Chateau Angelus, a Saint Emilion estate whose bottles have been featured in James Bond films and top vintages sell for $500, indicated earlier this year that up to 20 percent of plots devoted to its main wine had been affected by frost. Now it estimates the drop in output at more like 15 percent.

The estate is “happy in terms of quality,” owner Stephanie de Bouard-Rivoal said by phone from Bordeaux. “We had very healthy conditions for the grapes. There is no comparison with ’15 or ’16,” a reference to the past two critically acclaimed vintages in the region, “but it may be close in style to 2014.”

Across the country, French winemakers will produce the smallest vintage in 60 years, with the spring frost in Bordeaux and elsewhere combining with summer storms causing rot in Champagne and drought shriveling grape bunches further south.

While frosts reduce the quantity of grapes available for winemaking, they do not necessarily affect the quality of those that escape damage, and Bordeaux producers have noted that one of the most memorable vintages of the last century, 1945, was also badly hit by cold spring weather.

Production of the main Angelus wine, normally around 100,000 bottles, will this year be between 80,000 and 85,000 bottles, De Bouard-Rivoal said. “We consider ourselves as fairly lucky in this sad environment,” she said. “It’s important to put things in perspective.”

At Clos Fourtet, a vineyard on the edge of the medieval town of Saint Emilion, about 25 percent of the grapes were lost to frost, with small berries and lower-than-usual yields contributing to an overall decline of about 40 percent in volume produced, according to Matthieu Cuvelier, whose family owns the property.

Cuvelier, interviewed at a London tasting of the Union des Grands Crus de Bordeaux trade group, said 2017 was “a ripe vintage” with “a lot of freshness,” while describing it as “less concentrated than 2015 and 2016.”

It is, of course, a trite observation to say that we live "in a period of transition." Many people have said this at many times. Adam may well have made the remark to Eve on leaving the Garden of Eden.

Prime Minister Harold MacMillan

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

Today, continuing trouble in Asia’s commodity sector.

Noble Group Warns of Loss Topping $1 Billion

By Jack Farchy, Jasmine Ng, and Lianting Tu
Embattled commodity trader Noble Group Ltd. agreed to sell most of its oil-liquids business to Vitol Group to help pare down debt, while warning that it’s set to post a net loss of more than $1 billion for the third quarter as its access to financing remains constrained.

Proceeds from the sale would have been $582 million, an illustrative figure that’s based on first-half accounts, according to statements from the company on Monday. Noble Group also said that amount was derived from a starting sum that included proceeds from the earlier sale of its gas-and-power unit. Shares of the trader slumped the most in nearly three months.

Among highlights from the company’s two statements on Monday are:
  • A total net loss of $1.1 billion to $1.25 billion expected in the third quarter
  • That total figure includes an adjusted net loss from continuing operations of $50 million to $100 million, as well as exceptional losses including non-cash items of $1.05 billion to $1.15 billion
  • Lenders agreed to a two-month extension of a waiver related to a revolving-credit facility to Dec. 20
  • Proceeds from the oil sale and gas-unit sale are expected to be enough to retire the Noble Americas Corp. borrowing base revolving facility, and the Noble Clean Fuels Ltd. borrowing base revolving facility
Noble Group, once Asia’s largest commodity trader, has been rushing to sell its oil business to pay back lenders in a struggle to survive. The deal is the latest in a string of disposals as executives pursue a shrink-to-survive strategy to meet obligations. The company’s crisis spans the past two years and its shares have lost about 90 percent since early 2015 as Noble Group draws back to a largely Asian business focused on coal, iron ore, freight and LNG.

“The core of their business has changed to some degree, but they’re still fighting to survive,” Nicholas Teo, a trading strategist at KGI Securities (Singapore) Pte, said by phone. “Management has been selling assets to lighten the debt load, and this oil deal is quite significant in size.”

The trader’s shares, which were suspended on Friday ahead of the announcements, dropped as much as 12 percent to 33.5 Singapore cents, and traded at 34 cents at 12:24 p.m. The stock has collapsed about 80 percent this year amid concerns Noble Group will default.

Technology 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?

Liquid metal discovery ushers in new wave of chemistry and electronics

A 'once-in-a-decade' discovery set to revolutionize the way we do chemistry

Date: October 19, 2017

Source: RMIT University

Summary: Researchers use liquid metal to create atom-thick 2-D never before seen in nature. The research could transform how we do chemistry and could also be applied to enhance data storage and make faster electronics.

Researchers from RMIT University in Melbourne, Australia, have used liquid metal to create two-dimensional materials no thicker than a few atoms that have never before been seen in nature.

The incredible breakthrough will not only revolutionise the way we do chemistry but could be applied to enhance data storage and make faster electronics. The "once-in-a-decade" discovery has been published in Science.

The researchers dissolve metals in liquid metal to create very thin oxide layers, which previously did not exist as layered structures and which are easily peeled away.

Once extracted, these oxide layers can be used as transistor components in modern electronics. The thinner the oxide layer, the faster the electronics are. Thinner oxide layers also mean the electronics need less power. Among other things, oxide layers are used to make the touch screens on smart phones.

The research is led by Professor Kourosh Kalantar-zadeh and Dr Torben Daeneke from RMIT's School of Engineering, who with students have been experimenting with the method for the last 18 months.

"When you write with a pencil, the graphite leaves very thin flakes called graphene, that can be easily extracted because they are naturally occurring layered structures," said Daeneke. "But what happens if these materials don't exist naturally?

"Here we found an extraordinary, yet very simple method to create atomically thin flakes of materials that don't naturally exist as layered structures.

"We use non-toxic alloys of gallium (a metal similar to aluminium) as a reaction medium to cover the surface of the liquid metal with atomically thin oxide layers of the added metal rather than the naturally occurring gallium oxide.

"This oxide layer can then be exfoliated by simply touching the liquid metal with a smooth surface. Larger quantities of these atomically thin layers can be produced by injecting air into the liquid metal, in a process that is similar to frothing milk when making a cappuccino."

It's a process so cheap and simple that it could be done on a kitchen stove by a non-scientist.

It has been said that there is no fool like an old fool, except a young fool. But the young fool has first to grow up to be an old fool to realize what a damn fool he was when he was a young fool.

Prime Minister Harold MacMillan

The monthly Coppock Indicators finished September

DJIA: 22,405 +223 Up. NASDAQ:  6,496 +274 Up. SP500: 2,519 +179 Up.