Wednesday, 11 January 2017

Trade Wars Minus 9.

Baltic Dry Index. 926 -23   Brent Crude 53.70

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

“I think we agree, the past is over.”

President George W. Bush.

With President Trump now just nine days away from taking office, all news continues to be good news for Asian stocks.  Expectations are running high for President-elect Trump’s press conference later today.

Asian markets off to the races, hoping Trump will reveal stimulus details

By Willa Plank Published: Jan 11, 2017 12:08 a.m. ET

Japanese companies look to gain from investments in U.S.; commodities drive Australian market

Asian stock markets broadly rose Wednesday on encouraging economic data and an impending press conference by U.S. President-elect Donald Trump, which traders hoped may contain details of his stimulus program.
“Can we get a little plan for fiscal stimulus?” said Christoffer Moltke-Leth, director of global sales trading at Saxo Capital Markets. “What will be coming for tax cuts? The composition, the time and potentially the size of his planned fiscal spending. That will have an impact on what the [U.S. Federal Reserve] is going to do.”
The press conference is scheduled for later in the global trading day.
Japan’s Nikkei NIK, +0.39%   was up 0.4%, Korea’s Kospi SEU, +1.46%   rose 1.5% and Australia’s S&P/ASX 200 XJO, +0.19%   gained 0.2%.
Data arrived Tuesday that small-business optimism in the U.S. hit its best level since 2004. The National Federation of Independent Business’ small-business optimism index reached 105.8 in December, surpassing expectations.
Elsewhere, Australian job vacancies rose 2.2% sequentially to 182,000 in the quarter through November, according to government data released Wednesday. The growth “certainly bodes well for hiring in coming months,” says CommSec senior economist Savanth Sebastian. “Overall, it is pretty clear that the job market remains in good shape.”

In trade war news, China’s no slam dunk say China watchers. Any trade war will quickly turn into a lose-lose trade war for both.

Trump’s game of chicken with China is a lose-lose situation

By Sue Chang Published: Jan 10, 2017 5:17 p.m. ET
Despite their shared history and geographic proximity, China is not Japan, something President-elect Donald Trump should remember when he attempts to bully China into submission, according to analysts.
Throughout his campaign, Trump had fired up his base with pledges to take China to task for unfair trade policies. The conventional wisdom among experts is that Trump will move aggressively against China with the aim of forcing the world’s biggest exporter to the negotiating table to win concessions, a ploy that worked with Japan in the 1980s.
However, the outcome of such heavy-handed tactics is expected to be vastly different.
China will not fold like Japan, said Helen Qiao, China and Asia economist at Bank of America Merrill Lynch. “We think China will push back against threatened trade restrictions,” she said in a recent report.
----The fight with China is likely to be much more hostile and, ultimately, detrimental to both sides.
“China could choose to respond via an ‘asymmetric trade war’ by selectively raising tariffs against the U.S., or employing measures such as restricting the purchase of U.S. goods and services if the U.S. imposes a tariff of 5% or 20%,” said Chetan Ahya, global co-head of economics at Morgan Stanley, in a research note.
A move by the Trump administration to erect trade barriers against China will weigh on the country’s economic growth at a time when fears about a precipitous slowdown in China continue to linger.
Chinese economic growth is projected to slow to 6.4% this year from 6.7% in 2016 and 6.9% in 2015, according to the Organization for Economic Cooperation and Development.
A 5% tariff against Chinese goods could lead to a 0.1 percentage-point drag on China’s GDP growth, while a 45% tariff could slow economic growth by as much as 1.4 percentage points, he said.
The U.S. is likely to suffer as well.
The World Bank on Tuesday warned that efforts by the new U.S. administration to raise tariffs and barriers could led to retaliation and burden the outlook for the U.S. economy.

North of the US border, Canadian officials fear a US – Canada trade war too. President Trump has pledged to dismantle or renegotiate US jobs destroying NAFTA. Mexico is already reeling from the impact of Trump’s tweets on US auto makers.

Top Canadian officials met Trump team for trade talks: paper

Mon Jan 9, 2017 | 12:16pm EST
Senior Canadian officials have met several times with advisers to U.S. President-elect Donald Trump in Washington in an effort to avert a possible trade war once he takes office this month, the Globe and Mail newspaper said on Monday.
Trump vowed during his election campaign to either scrap or renegotiate the North American Free Trade Agreement with Canada and Mexico, saying the two-decade old deal had been bad for American workers. This could have disastrous consequences for Canada, which sends 75 percent of its exports to the United States.
The Globe said Gerald Butts and Katie Telford - Prime Minister's Justin Trudeau's two top aides - had met Trump's son-in-law, Jared Kushner, and his chief strategist, Steve Bannon, and believed they had established a decent relationship.
The paper cited one official as saying the Trump administration "does not believe in free trade," which could pose challenges for Canada.
"They (the Trump team) think the basic problem in the world is that China has stolen a bunch of American manufacturing jobs that they are hell-bent on getting back," the official said.
Trudeau spokesman Cameron Ahmad, asked about the report, said "meetings have indeed been happening at every level" but gave no details.
The Trump transition team did not immediately respond to a request for comment on the report.

2017 certainly promises to be feisty.

In financial news, tomorrow will not be like today, let alone yesterday, at least according to those speaking at and attending the Fintech Ideas Festival in San Francisco.  Reading between the lines it probably means more automation and computerisation, i.e. less jobs, bigger executive bonuses.

Blockchain, cognitive computing and cloud to shape future of finance

Tue Jan 10, 2017 | 4:30am GMT
Jan 9 Blockchain, cognitive computing and cloud are some of the technologies that will shape the finance industry the most in the digital age, banking and technology chief executives told a financial conference on Monday.
IBM Corp's president and chief executive Ginni Rometty said that cognitive computing, or computer systems that can mimic the way the human brain works, will be the "ultimate way" finance firms will become more competitive in the future. "I think the advantage is going to go to who has the best insights," Rometty told delegates.
Over the past few years financial institutions have been struggling to take advantage of vast amounts of data that they store, which is held unevenly across their numerous databases.
"We all have mounds and mounds of data, but getting data to produce insight, that is the holy grail", Cathy Bessant, chief operations and technology officer at Bank of America Corp, told Reuters on the sidelines of the Fintech Ideas Festival.
Financial institutions have also been ramping up investment into developing blockchain technology, the distributed data-base system that first emerged as the software underpinning cryptocurrency bitcoin.
"Blockchain is so profound it will do for trusted transactions what the internet did for information," IBM's Rometty said, describing it as one of the most transformative technologies for finance.
Biometrics and cloud computing were also among the technologies cited as having the most impact for the sector.
Tim Sloan, chief executive of Wells Fargo & Co, said the bank was moving away from passwords and adopting technology such as voice recognition to identify customers. He also called for greater adoption of cloud technology to "test projects through, much more quickly."

electronic bond platform

BNP Paribas, Soc Gen, Credit Suisse and BAML among those involved with launch of new bond platform.

By Hayley McDowell January 09, 2017 11:27 AM GMT
Six investment banks have partnered with FinTech firm Origin to launch an electronic trading platform for the €1 trillion private placement bond market.
BNP Paribas, Bank of America Merrill Lynch, Societe Generale and Credit Suisse are among the banks involved with the project, which is currently in the beta-version launch phase.
Origin said its platform simplifies issuance in the medium-term note private placement market by acting as a central information source.
It allows dealers to receive targeted funding levels from issuers on a single platform and allows users to foster new relationships through cloud-based technology and bank-grade security.
“[Issuers] can optimise their funding using the built-in cross-currency pricer, comparing their funding levels to their own and their peers' levels in the secondary markets,” Origin said.
Joakim Holmstrom, head of funding at Municipality Finance, explained the platform makes the medium term note process more efficient and provides access to a broader pool of dealers.
Ben Powell, head of funding for IFC, added that Origin’s platform “simplifies what was once a manual process prone to inefficiency. It allows us to manage our dealer communication in one central place."
The firm’s chief executive officer, Raja Palaniappan, added a healthy pipeline has already built up for 2017 and the platform’s full launch is expected later this year. 

FinTech Ideas Festival

January 9th - 10th, 2017
The Bently Reserve
San Francisco, California

In EUSSR news, hell has frozen over. Russia is exporting record amounts of gas.

Freezing Weather Threatens Power Supplies in Southeastern Europe

by Ladka Mortkowitz Bauerova and Slav Okov
The chill that has gripped southeastern Europe has left some Balkan countries struggling to ensure uninterrupted power supplies.

Bulgaria, where temperatures fell to as low as minus 20 degrees Celsius (minus 4 Fahrenheit), declined emergency requests for power from Greece and Turkey amid heavy snowfall, Energy Minister Temenuzhka Petkova said Tuesday in the capital Sofia. The country was itself turned down by Romania two days ago and Greece said it would stop electricity exports to Bulgaria from noon on Wednesday.

“We’re receiving information that neighboring countries are limiting electricity exports to neighbors,” Petkova said. “This is a system where we all operate in parallel and if we don’t receive scheduled imports from neighboring countries we’ll have to analyze the situation and may have to stop exports.”

From Croatia to Turkey, southeastern Europe has been hit by below-average temperatures that will persist throughout the week, according to MDA Weather Services. The power shortage in the region was further exacerbated by an outage at Romania’s Cernavoda-1 nuclear reactor, which had to be disconnected on Jan. 6 after blizzard damaged a high-voltage power line.

Prices around Europe have risen amid the cold, with the French contract for next week jumping as much as 99 percent on Tuesday and Slovak day-ahead prices rising to the highest since December 2008, according to broker data compiled by Bloomberg.

Remember that there is nothing stable in human affairs; therefore avoid undue elation in prosperity, or undue depression in adversity.


At the Comex silver depositories Tuesday final figures were: Registered 29.20 Moz, Eligible 152.69 Moz, Total 181.89 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Up today, the Bankster FX Cartel. Will the swamp be drained?
Why did I take up stealing? To live better, to own things I couldn't afford, to acquire this good taste that you now enjoy and which I should be very reluctant to give up.

Ebenezer Squid, with apologies to Cary Grant. To Catch A Thief.

FX ‘Cartel’ Traders Said to Face U.S. Rigging Charges

by David McLaughlin, Suzi Ring, and Tom Schoenberg
10 January 2017, 10:21 GMT 10 January 2017, 11:58 GMT
Prosecutors are poised to charge the currency traders at the heart of one of the biggest U.S. market-rigging investigations, according to people familiar with the matter.

The imminent criminal charges are against members of ‘The Cartel’ chat group, the people said. These traders used instant messages to coordinate the rigging of foreign-exchange benchmarks by sharing confidential customer information, prosecutors have said in antitrust cases that led to guilty pleas by five banks in 2015.

The senior dealers who participated in The Cartel were Richard Usher, formerly of JPMorgan Chase & Co., Rohan Ramchandani, formerly of Citigroup Inc. and Chris Ashton, formerly global head of spot trading at Barclays Plc. Another member, Matt Gardiner, formerly of UBS Group AG, has been helping prosecutors build cases against the traders, people familiar with the matter have told Bloomberg News.

Lawyers for Ashton, Gardiner and Ramchandani declined to comment. Usher’s lawyer didn’t immediately respond to phone and e-mail requests for comment.

The men are located outside of the U.S., meaning they would have to be extradited, a process that can take months, if not years. They are probably going to fight back against the charges, one of the people said.
Justice Department spokesman Mark Abueg declined to comment on the potential charges.

The charges would make good on the government’s long-running promise it would hold individuals to account in the case. As far back as September 2014, then-Attorney General Eric Holder said charges against traders were imminent. Those efforts were hampered by issues of evidence and lack of cooperators, people familiar with the matter told Bloomberg last year. Bloomberg published a series of articles in 2013 exposing how the world’s biggest banks were colluding to rig foreign exchange rates.

Some prosecutions are moving forward. Over the past six months, two currency traders were charged and a third pleaded guilty to rigging allegations. This summer, Gardiner and Ashton were banned from the U.S. banking industry for life by the Federal Reserve, which also imposed a $1.2 million fine on Ashton.

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?

Imperial researchers collaborate on project to supply solar power to UK trains

by Neasan O'Neill 09 January 2017
Imperial College London and 10:10 have announced the Renewable Traction Power project to investigate using track-side solar panels to power trains.
Currently Network Rail is investing billions in electrifying the UK’s train lines, this combined with increased renewable energy generation means train travel could be significantly decarbonised by 2050. However in many rural areas the electricity grid has reached its limit in both integrating distributed energy generation and supplying power to the train companies.
“What is particularly galling is that peak generation from solar and peak demand from the trains more or less match but we can’t connect the two,” says Leo Murray of 10:10, who is leading the Renewable Traction project. “I actually believe this represents a real opportunity for some innovative thinking.”
The team’s plan is certainly innovative and completely unique, connecting solar panels directly to the lines which provide electricity to trains. This will bypass the electricity grid so that the panels can provide power precisely when needed most. Although this sounds quite easy the team are the first to try it, it is not being done anywhere else in the world.
The work could have a wide impact with commercial applications on electrified rail networks all over the world. It would also open up thousands of new sites to small and medium scale renewable developments by removing the need to connect to the grid.
Initially the project will look at the feasibility of converting “third rail systems”. These supply electricity to the locomotive through a power line running close to the ground. They have the advantage of matching the way electricity is supplied by solar panels as direct current and using a similar voltage to the rail network of 750V DC. This system is only used on about a third of the UK’s tracks but the team feels that keeping it simple to begin with will pay dividends in the long run.
“Many railway lines run through areas with great potential for solar power but where existing electricity networks are hard to access,” explains Professor Tim Green, Director of Energy Futures Lab at Imperial College London. “I think that focusing on the basics of integrating distributed energy generators into a railway’s system with the third-rail network brings a lot of benefits.”
---- The Renewable Traction project will start on 1 February 2017. It is a collaboration between 10:10, Turbo Power Systems, Community Energy South and Energy Futures Lab. It is funded through Innovate UK’s Energy Game Changers programme. It will release the results of their feasibility study in Late 2017.

The monthly Coppock Indicators finished December

DJIA: 19763  +74 Up NASDAQ:  5383 +70 Up. SP500: 2239 +75 Up

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