Baltic Dry Index. 1205 +09 Brent Crude 51.52
As
economic theory prescribes, if the Eurozone is not an optimal currency area,
then the only way to absorb the asymmetric shock is to return to national
currencies.
In America some of
the heavy hitting pros are getting nervous. Suppose “the Donald” can’t
deliver? Sixty-one days in to his Presidency,
there’s not a whole lot to show for the new deal of flying on a wing and a prayer.
Below Mohamed El-Erian starts checking out the lifeboats on USS America. What
does the big “Mo” know that we don’t?
Exuberance can take the economy only so far
Published: Mar 20, 2017 10:15 a.m. ET
Trump must deliver on pro-growth promises soon, writes Mohamed El-Erian
LAGUNA BEACH, Calif. (Project Syndicate) — Financial markets seem convinced that the recent surge in business and consumer confidence in the U.S. economy will soon be reflected in “hard” data, such as economic growth, business investment, consumption, and wages. But economists and policy makers are not so sure. Whether their doubts are vindicated will matter for both the United States and the world economy.Donald Trump’s election as president has triggered a surge in positive economic sentiment, because he pledged that his administration would aggressively pursue the policy trifecta of deregulation, tax cuts and reform, and infrastructure construction. Republican majorities in both houses of Congress reinforced the positive sentiment, as they signaled that Trump would not face the kind of paralyzing gridlock that Barack Obama confronted for most of his presidency.
Also read: ‘Animal spirits’ aren’t firing up the economy just yet
The surge in business and consumer sentiment reflects an assumption that is deeply rooted in the American psyche: that deregulation and tax cuts always unleash transformative pro-growth entrepreneurship. (To some outside the U.S., it is an assumption that sometimes looks a lot like blind faith.)
Of course, sentiment can go in both directions. Just as a “pro-business” stance like Trump’s can boost confidence, perhaps even excessively, the perception that a leader is “anti-business” can cause confidence to fall. Because sentiment can influence actual behavior, these shifts can have far-reaching impacts.
In his groundbreaking “General Theory of Employment, Interest, and Money,” John Maynard Keynes referred to “animal spirits” as “the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism, rather than mathematical expectations, whether moral or hedonistic or economic.”
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Meanwhile back in the
EUSSR, Chancellor Merkel’s failed trip to Washington has German workers deeply
unsettled. America First, means everyone else second or worse. But second doesn’t
work for the EUSSR’s top dog. It doesn’t do much for dying Greece either.
Port Teeming With Porsches Fears Trump’s German Trade Stance
by Carolynn Look
17 March 2017, 05:01 GMT 17 March 2017, 11:46 GMT
When Michael von Harten started loading cars onto ships in the German
port of Bremerhaven 27 years ago, the facility handled some 700,000 vehicles a
year. That number has since surged to 2.1 million, fueled by a dramatic
increase in trade that has created thousands of jobs and shored up the local
economy.
In a town with few options, Von Harten is concerned Donald Trump could
threaten Bremerhaven’s main source of prosperity.
The new U.S. president has called on Germany to rein in its 253 billion
euro ($272 billion) trade surplus, saying he may impose stiff tariffs on
imported goods. As Angela Merkel prepares for a meeting Friday at the White
House -- the chancellor’s first encounter with Trump after months of verbal
sparring over trade issues -- Germans want her to push back against any
restrictions that would hurt their livelihood and threaten their country’s
economy.
“I worry about someone like Trump banging his drum and slapping tariffs
on our exports,” von Harten says as he surveys the Bremerhaven quays, where a
half-dozen ships the size of floating warehouses are being loaded with VWs,
Porsches, Audis, BMWs and other jewels of German manufacturing. “Of course we
would feel that.”
---- Even so,
Germany’s economy relies heavily on foreign trade, and Bremerhaven more than
just about any place in the country: a quarter of the people in the state
hold jobs directly or indirectly related to shipping, according to the local
port operator, Bremenports. Keeping those jobs intact is critical, with
unemployment more than double the national average in what by
some measures is Germany’s poorest
city.
The port which eventually evolved into a city was founded in 1827 after
the harbor at Bremen – 60 kilometers upriver – started to silt up. It grew
rapidly as German industry took off and everything from factory equipment and
textiles to beer and bananas crossed its docks.
For decades in the 19th century, it was also Germany’s primary port for
emigrants; On October 19, 1885, Donald Trump’s grandfather Friedrich Trump
embarked at age 16 in steerage on the Norddeutscher Lloyd Eider, sailing from
Bremerhaven to New York, local records show.
Cars
were first shipped from Bremerhaven in 1957, and the city has become Germany’s
biggest port for autos -- the country’s top export. The complex stretches
across an area the size of 240 football fields, a dense web of railway sidings,
docks, and parking garages where tens of thousands of vehicles await shipment
to markets from Seoul to Sydney to Seattle.
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Greece, lenders still divided, bailout talks to intensify: Dijsselbloem
Greece and its euro zone creditors
are still at odds over reforms required before new loans can be disbursed to
Athens, the head of euro zone finance ministers said on Monday after an
inconclusive meeting in Brussels.
"Some key issues" still remain to be sorted out, Jeroen Dijsselbloem
told a news conference after the meeting.
"The outcome of today's meeting is that we have agreed talks will
continue and will intensify in coming days in Brussels," Dijsselbloem
said, giving no date for a possible deal.
The next regular meeting of euro zone finance
ministers is on April 7, he added: "But there is no promise all the work
will be done by then."
Greece and its euro zone lenders still need to agree on tax, pension and
labor market reforms, Dijsselbloem said, noting there has been some progress in
the discussions.
Once there is agreement on the reforms, euro zone ministers can start
discussing the sustainability of Greek public finances in the future -- how big
the country's primary surplus has to be and for how many years and whether Athens
should get more debt relief once it finishes all the bailout reforms in 2018.
Such a comprehensive deal would then pave the way to unblock new loans
to Greece, without which the country could have problems servicing its debts
when large repayments come in July.
It would also pave the way for the International Monetary Fund to join
the latest Greek bailout, now shouldered by euro zone governments alone.
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Two thirds the way through “OPEC
and Friends” crude oil production cuts, and so far only Russia and American
frackers can call it something of a success.
Oil Drops as U.S. Drilling Growth Threatens to Counter OPEC Cuts
by Rakteem Katakey and Heesu Lee
19 March 2017, 23:19 GMT 20 March 2017, 13:04 GMT
Oil fell as U.S. drilling continued to rise, undermining the potential
for even an extended OPEC output-reduction deal to rebalance the market.
Futures lost as much as 1.9 percent in New York after gaining 0.6
percent last week. Producers added more oil rigs to U.S. fields, extending a
drilling surge into a 10th month, Baker Hughes Inc. said on Friday. Saudi
Arabia is ready to extend cuts if supplies stay above the five-year average,
Energy Minister Khalid Al-Falih said in an interview on Bloomberg
Television last week.
U.S. oil this month dropped below $50 a barrel for the first time this
year as the nation’s near-record crude stockpiles and increasing production
weighed on the output reductions by the Organization of Petroleum Exporting
Countries and its allies. While OPEC won’t decide until May whether to prolong
the curbs, energy ministers including Russia’s Alexander Novak will meet
this weekend in Kuwait to discuss the deal’s progress.
“The solid weekly gain in U.S. oil rigs continues and the market sees
that,” said Bjarne Schieldrop, chief commodities analyst at SEB AB in Oslo. “OPEC
can easily shoot itself in the foot if the cuts lift the long-dated WTI price,
which will drive U.S. shale yet higher and stronger.”
---- U.S. drillers
boosted the rig count by 14 to 631 last week, data from Baker Hughes showed.
They have added 106 machines to fields this year. The nation’s crude output has
climbed to 9.1 million barrels a day, the most since February last year,
according to the Energy Information Administration.
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Finally, Scotland. Go on Scotland, make England’s day! IndyRef2!
Flodden Field 2! And not a single
Englishman in sight!!!
You
will find that Scotland is the kind of organization which, though it does big
things badly, does small things badly, too.
With
apologies to J. K. Galbraith.
Independent Scotland faces JUNK credit rating, warns Moody's
SCOTLAND'S credit rating could be classed as 'junk' if it were to split from Britain amid a huge hole in its finances thanks to falling oil prices, top rating firm Moody's has warned.
By Lana
Clements 10:37, Mon, Mar 20,
2017 | UPDATED: 11:05, Mon, Mar 20, 2017
Edinburgh would be left with a massive budget deficit if it were to go
it alone, Colin Ellis, Moody’s chief credit officer for Europe, the Middle East
and Africa told the Sunday Times.
Oil values have more than halved since Scottish referendum in 2014 from
more than $100 a barrel to around $50 today.
If Scotland had then voted to leave the UK it would probably have been
rated between A to Baaa, according to Mr Ellis.
But now an independent state would be set for a credit par with the
likes of Azerbaijan and Guatemala, with a sub-investment grade rating of Ba or
lower - known as junk - compared to Aa1-rated Britain.
Mr Ellis said: “In 2014 we said that, even if you took an optimistic
view on the division of oil revenues when it was $100 a barrel, Scotland would
inherit a starting fiscal position that was no better than the UK’s.”
“The big thing that’s changed is oil prices are now around $55.
"Nobody can predict oil prices but even if you take an optimistic
view the fiscal position for Scotland has clearly worsened.
“That means you would be starting from a high fiscal imbalance that the Scottish government would immediately need to address.
“That means you would be starting from a high fiscal imbalance that the Scottish government would immediately need to address.
"You would need to raise taxes or cut spending. If not, that would
put the normal downward pressures on ratings.”
----Polls show if a vote were held now, the majority
of Scotland would vote to stay in the UK.
The latest figures show that Scotland’s economic growth was just a third
of UK's headline rate, largely because of lower oil prices.
If all
else fails, immortality can always be assured by spectacular error.
John
Kenneth Galbraith.
At the Comex silver depositories Monday
final figures were: Registered 38.80 Moz, Eligible 149.46 Moz,
Total 188.26 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
The US dollar is our
currency but your problem.
John Connolly.
The Fed's Global Dollar Problem
March 19, 2017 4:00 PM EST
The Federal Reserve might be doing the right thing for the U.S. economy by
moving to bring interest rates back up to normal. But for foreign companies and
governments that have borrowed trillions of U.S. dollars, the adjustment could
be painful.Thanks in large part to a prolonged period of extremely low U.S. interest rates, borrowers around the world have gone on a dollar binge over much of the past decade -- making them more vulnerable to the Fed's policy decisions than ever before. As of September, non-bank companies and governments outside the U.S. had some $10.5 trillion in dollar-denominated debt outstanding, according to the Bank for International Settlements. That's more than triple the level of September 2004, the last time the Fed was about this far into a cycle of rate increases. Here's a chart:
---- If the Fed sticks
with its plan of raising rates
more than a percentage point by the end of next year, the increased interest
costs could stunt growth and weigh on borrowers' finances in places as far
flung as the U.K. and China. It could also mean losses for investors holding
the debt, particularly given that the duration of dollar-denominated bonds -- a
measure of their price sensitivity to changes in interest rates -- is close to
its highest point in at least two decades. An increase of one percentage point,
for example, would take $500 billion off the value of the bonds included in the
Bank of America Merrill Lynch U.S. Dollar Global Corporate and High Yield
Index. Here's a chart showing how that number has changed over the years (thanks
to a combination of increased dollar debt and increased duration):
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John Connally
John Bowden Connally, Jr. (February 27, 1917 –
June 15, 1993), was an American politician. As a Democrat he served as Secretary of the Navy under President John
F. Kennedy, as the 39th Governor
of Texas, and as Secretary of the Treasury under President
Richard
Nixon. While Governor of Texas, he was seriously wounded when President Kennedy
was assassinated. As Treasury Secretary,
Connally is best remembered for removing the U.S.
dollar from the gold standard in 1971, an event known as the Nixon
shock.
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? DC? A quantum
computer next?
Quantum movement of electrons in atomic layers shows potential of materials for electronics and photonics
Date: March 15, 2017
Source: University of Kansas
Summary: A research team has observed the counterintuitive
motion of electrons during experiments in KU's Ultrafast Laser Lab. Because
this sort of 'quantum' transport is very efficient, it could play a key role in
a new type of humanmade material that could be used someday in solar cells and
electronics.
Common sense might dictate that for an object to move from
one point to another, it must go through all the points on the path.
---- Not so for electrons in the quantum world, which don't follow such common-sense rules for the most part.
"Electrons can show up on the first floor, then the third floor,
without ever having been on the second floor," Zhao said.
Zhao, along with KU physics graduate student Frank Ceballos and Self
Graduate Fellow Samuel Lane, has just observed the counterintuitive motion of
electrons during experiments in KU's Ultrafast Laser Lab.
"In a sample made of three atomic layers, electrons in the top
layer move to the bottom layer, without ever being spotted in the middle
layer," said the KU researcher.
Because this sort of "quantum" transport is very efficient,
Zhao said it can play a key role in a new type of humanmade material called
"van der Waals materials" that could be used someday in solar cells
and electronics.
Their findings were just published in Nano Letters, a premier
journal on nanoscience and nanotechnology.
The KU research team fabricated the sample by using the "Scotch
tape" method, where single-molecule layers are lifted from a crystal with
tape, then verified under an optical microscope. The sample contains layers of
MoS2, WS2 and MoSe2 -- each layer thinner than one nanometer. All three are
semiconductor materials and respond to light with different colors. Based on
that, the KU researchers used a laser pulse of 100 femtosecond duration to
liberate some of the electrons in the top MoSe2 layer so they could move
freely.
"The color of the laser pulse was chosen so that only electrons in
the top layer can be liberated," Zhao said. "We then used another
laser pulse with the 'right' color for the bottom MoS2 layer to detect the
appearance of these electrons in that layer. The second pulse was purposely
arranged to arrive at the sample after the first pulse by about 1 picosecond,
by letting it travel a distance 0.3 mm longer than the first."
The team found electrons move from the top to the bottom layer in about
one picosecond on average.
"If electrons were things that followed 'common sense,' like
so-called classical particles, they'd be in the middle layer at some point
during this one picosecond," Zhao said.
The researchers used a third pulse with another color to monitor the middle
layer and found no electrons. The experimental discovery of the
counterintuitive transport of electrons in the stack of atomic layers was
further confirmed by simulations performed by theorists Ming-Gang Ju and Xiao
Cheng Zeng at the University of Nebraska-Lincoln, who co-authored the paper.
According to Zhao, the verification of quantum transport of electrons between
atomic layers connected by van der Waals force is encouraging news for
researchers developing new materials.
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The monthly Coppock Indicators finished February
DJIA: 20,812
+133 Up. NASDAQ: 5,825 +120 Up. SP500: 2,364 +115 Up.
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