Tuesday, 13 June 2017

Uncertain Times.

Baltic Dry Index. 870 +21     Brent Crude 48.49

"Let's make sure that there is certainty during uncertain times in our economy.

George W. Bush.

Stock markets got a break yesterday after NASDAQ’s technology fright on Friday.  The NASDAQ volcano’s technology dome, merely settled back rather than blew-off in a “Black Monday” massacre.   But that’s not to say that it won’t still blow. The passive ETFs, all buy and sell together as a massive herd, and are now the dominant force in US stock markets. When the time comes for them to sell, “to whom, sir,” comes to mind.

Below, the “experts” in the world’s youngest, “oldest profession” talk up their book. To this old dinosaur market watcher, it’s time to head for the hills. “Bulls make money, bears make money, pigs get slaughtered,” goes the old saying. More politely, getting out early beats getting carried out last. With passive ETF investing now the dominant mover behind stock investing, what drove technology stocks relentlessly higher, works equally well in reverse, when technology becomes a sell.

“You can fool some of the people all the time, and those are the ones you want to concentrate on.”

George W. Bush
Tue Jun 13, 2017 | 4:17am BST

Asia stocks shake off U.S. tech slump, loonie jumps on rate hike prospect

Asian stocks mostly rebounded on Tuesday despite a further slide in U.S. tech shares, while the Canadian dollar soared on the possibility interest rates might go up sooner than expected.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.4 percent, recouping about half of the previous session's losses as regional tech shares regained their composure.

The MSCI Asia Pacific Information Technology index .MIAP0IT00PUS steadied, after sliding 1.4 percent on Monday.

Some analysts had predicted Asian tech shares would not see as intense a selloff as their U.S. peers as their valuations were less stretched.

Japan's Nikkei .N225 slipped 0.1 percent.

"The view that some U.S. tech shares are going through inevitable adjustments while retaining a positive outlook is also lessening the impact on the domestic market," said Hitoshi Ishiyama, chief strategist at Sumitomo Mitsui Asset Management in Japan.

----On Wall Street, tech giants including Apple (AAPL.O), Alphabet (GOOGL.O), Facebook (FB.O) and Microsoft (MSFT.O) were sold for the second consecutive day on Monday.

That dragged the Nasdaq .IXIC down 0.5 percent, the S&P 500 .SPX 0.1 percent and the Dow Jones Industrial Average .DJI 0.2 percent.[.N]

"I don't sit in the camp that we will see a prolonged pullback in U.S. tech, but there is a good chance this hot sector now underperforms and I had been suggesting increasing exposure to U.S. financials as a trade," Chris Weston, chief market strategist at IG in Melbourne, wrote in a note.

In currencies, the Canadian dollar CAD= extended Monday's strong gains, after a Bank of Canada official said the central bank would assess if it needs to keep interest rates at near-record lows as the economy grows.

That was a change in tone for the central bank, which said earlier this year that rate cuts remain on the table.

Just Five Stocks Account for Nearly 75% of the Nasdaq's Plunge

by Julie Verhage
When it comes to the ongoing technology beat-down in the stock market, it appears not all shares are created equal.

Indeed, just five names account for nearly 75 percent of the drop in the Nasdaq Composite Index, which has fallen more than 2.1 percent since June 7. Meanwhile, the Dow Jones Industrial Average and S&P 500 Index are roughly unchanged over the same time frame.

Much of this dynamic is due to giants like Apple Inc., Microsoft Corp. and Goggle parent Alphabet Inc. falling as much as 6.5 percent. Those companies account for nearly 30 percent of the index’s weighting, and their outsize impact has driven the gauge lower even though the bulk of the stocks are doing fine.

This selloff was “way overdue given the extreme out-performance and positioning in technology shares,” Morgan Stanley analyst Michael Wilson wrote in a note to clients Monday, Shares of Apple, for instance, are still up 25 percent this year, giving them room to fall.

But while Wilson expects the drubbing to continue in the short-term, he doesn’t think the market has seen a peak in tech shares.

“We would be surprised if this is the end for technology stocks given the very strong earnings growth we are witnessing,” he wrote.

Analysts now believe performance in technology will depend on the economic outlook. And if conditions change, finance will be the likely beneficiary.
In Europe, it’s more of the rise of political uncertainty. The voters are disillusioned with the old status quo, but haven’t yet settled on a new order. Below, will the BOE and the UK Treasury be used to buy off the UK’s young voters? Deutsche Bank thinks that’s a yes. Sterling anyone? In France, Macron’s parliamentary win, might be very much less than it’s spin. In Italy, anything can still happen at the next general election.

Mon Jun 12, 2017 | 11:52am BST

UK election makes 'helicopter money' more likely - Deutsche Bank analysts

"Helicopter money" - giving people more cash in the hope they will spend it - is more likely after last week's shock election results in Britain, Deutsche Bank analysts said on Monday.

Signs of strong turnout from young voters in Thursday's snap election, which left the ruling Conservative party without a parliamentary majority, could have major repercussions for politics and markets in Britain and possibly beyond, Deutsche analysts Jim Reid and Sukanto Chanda said.

They said in a note that young voters making their voices felt suggests economic policy may be more focussed on wealth redistribution. At the same time, an unwillingness to alienate older voters means politicians will struggle to tax the old while helping the young.

"In short, governments can possibly be forced to spend more across the developed world until bond markets rebel at the high level of debts that this implies and then central banks would be forced to monetise this debt," Reid and Chanda said in Deutsche Bank's daily fixed income note.

"Thursday's election makes helicopter money more likely ... This is different from QE (quantitative easing) as it's central banks buying bonds that are attached to fresh spending rather than independent of it."

Helicopter money is a form of policy easing envisaged by U.S. economist Milton Friedman, using the metaphor of a helicopter dropping money, and has gained attention in recent years as a possible tool to fight deflation.

It would be funded by a permanent increase in the money supply, not a temporary boost by bond issues that eventually have to be paid back.

The idea of central banks printing money for government spending in a "people's QE" was a prominent part of the 2015 leadership election campaign for British Labour Party leader Jeremy Corbyn.

Mon Jun 12, 2017 | 5:58pm BST

Record low turnout hangs over Macron's expected win in parliament

President Emmanuel Macron and his supporters will seek to "restore the trust" of the French people after a record low turnout in the first round of the parliamentary election, Macron's government spokesman said on Monday.

Fewer than half of all registered voters cast a ballot on Sunday, unprecedented in France's post-war Fifth Republic, prompting some of Macron's opponents to cast doubt on the strength of the likely mandate of the president, who wants to quickly introduce economic reforms.

Pollsters blamed voter fatigue, disillusion with politicians and projections that Macron would secure a commanding majority for the high abstention rate.

Macron's party is still poised to win comfortably in the second round.

"It is a failure of this election," government spokesman Christope Castaner, who is also minister for parliamentary relations, told France 2 television. "We have to take note, we have to restore trust."

Other senior Republic on the Move (LREM) officials echoed Castaner, in an apparent bid to draw the sting out of criticism that might later complicate or tarnish the social and labour reforms that Macron wants to enact.

LREM president Catherine Barbaroux said the weak turnout would be a "key challenge for the government in the weeks to come". She said that as encouraging as Sunday's result was, more voters needed to get out in the second round.

----Jean-Luc Melenchon, the hard-left's failed presidential candidate, has warned voters against concentrating power in the hands of a single party loyal to a president who received less than one in every four votes in the opening round of the presidential election.

"The huge abstention rate shows that there is no majority in this country in favour of destroying the labour code, nor for reducing liberties ...nor to pander to the rich, all things that feature in the president's programme," Melenchon said late on Sunday night.

If forecasts that LREM and Modem win 390-445 seats prove correct, it would be France's biggest majority in decades, and would effectively leave only the powerful trade union movement as a potential obstacle to the former banker's reforms.

"If there is no debate in parliament it will take place in the street," said conservative candidate Nathalie Kosciusko-Morizet who faces a run-off in her constituency against a LREM candidate.

Mon Jun 12, 2017 | 5:36pm BST

Italy local vote sounds warning for 5-Star, but far from death knell

Sunday's performance in Italian local elections was a disappointment for the anti-establishment 5-Star Movement, but not one that will necessarily beat back its prospects in the national election due next May at the latest.

The movement failed to make the run-off in any of the main 25 cities up for grabs on Sunday, when nine million Italians were called to the polls.

But the mayoral elections may have been a case of "all politics is local" - not about the great national issues.

"I don't think there is any connection between this local vote and what will happen in the general election, so it doesn't hurt 5-Star's prospects," said sociologist Luca Ricolfi, one of Italy's most prominent political commentators.

"Mayoral elections are about local candidates, national ones are about fear and hope," he said. "Fear of the unknown will hurt 5-Star, while hope for change will help it. It's impossible to say which sentiment will be strongest when the time comes."

Five-Star, which was founded nine years ago by comedian Beppe Grillo, has struggled in previous local elections due to its loose organisation and lack of high profile candidates.

Its triumphs in mayoral contests last year in Rome and Turin were stunning exceptions, not the rule. Its subsequent problems in governing those cities, especially Rome, have raised questions about its capacity to run local administrations.

"Today shows that a year after its victory in Rome, the verdict on its ability to govern at a local level is negative," said Matteo Ricci, head of local affairs for the ruling centre-left Democratic Party (PD).

At parliamentary elections, on the other hand, voters are more influenced by policy pledges and well-established national leaders than by on-the-ground networking and the profile of local candidates, political analysts say.

The party is putting much emphasis on its commitment to introduce a "citizens wage" to help Italy's army of unemployed, and is promising a referendum on membership of the euro currency blamed by many for years of economic underperformance.

We close for today with more on America’s seditious civil war.

Comey admitted single Trump leak, but were there others?

By Cody Derespina Fox News
President Trump’s legal team may be prepared to show a trail of leaks to The New York Times by former FBI Director James Comey – dating back to at least March – in a pair of complaints set to be filed to the Justice Department inspector general and Senate Judiciary Committee, a source close to the team told Fox News.

An independent Fox News review of The New York Times’ reporting dating back to January reveals a host of stories sourced from top FBI and DOJ officials – or those privy to their conversations – that either paint Comey in a positive light or push a message he was unable to personally disclose.

Though Comey told the Senate Judiciary Committee on May 3 he’d never been -- or directed another FBI official to be -- an anonymous source for news reports about the Trump and Hillary Clinton investigations, the then-FBI chief did not deny orchestrating leaks using, for instance, an old friend who works at Columbia University, or providing the information to a wide enough group to ensure it would leak.

And in reference to a separate case, he acknowledged sending his infamous letter to lawmakers last fall announcing a revival of the Clinton email probe knowing full well what they'd do: "Did I know they were really going to leak it? Of course, I know how Congress works.”

Comey, who was fired by Trump in May, was open about at least one leak in testimony last Thursday.

He admitted to using an ex-U.S. attorney, later identified as Columbia University Prof. Daniel Richman, to leak to The Times the contents of alleged memos Comey wrote about his one-on-one interactions with Trump. He was not asked if he had ever used Richman on other occasions; however, Richman is mentioned in 151 results in a New York Times search dating back to 1993, with 11 of those articles also featuring Comey and six of them being authored by Michael S. Schmidt – who later wrote the “Comey memos” story which Comey told Congress he directed Richman to leak.

"I'll be long gone before some smart person ever figures out what happened inside this Oval Office."

G. W. Bush, Washington, D.C., May 12, 2008

Crooks and Scoundrels Corner

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

Today, seriously bent goings on in the nickel market. The M F Global, and  Qingdao port, scandals 2.0. As with the gold bullion market, how much bullion is real and how much fake?  Happily for all involved, the sum at stake is a trivial rounding error, to a real bankster’s bonus. Most wouldn’t cross the street for a mere $2 million.

Mon Jun 12, 2017 | 12:03pm BST

Natixis sues Marex Spectron over metals warehouse receipts

French bank Natixis (CNAT.PA) has sued metals broker Marex Spectron for $32 million over alleged fraudulent receipts for nickel stored at warehouses in Asia run by a unit of commodities giant Glencore (GLEN.L), a court filing showed.

In the legal action, filed in London's High Court, Natixis said it would seek damages from Marex because the bank provided finance based on fake receipts in a deal arranged by the broker.

Marex rejected the claim and said it had issued a counterclaim against Glencore unit Access World because the warehouse operator had verified the receipts as being authentic.

"We vigorously contest Natixis' claim," Marex said in a statement. "Access World needs to explain how receipts that it had authenticated were subsequently cancelled."

Natixis acknowledged it had filed a lawsuit against Marex but declined to make any further comment. Access World's owner Glencore declined to comment.

Access World said on Jan. 21 that it has become aware of fake warehouse receipts circulating in its name and urged holders to seek authentication.

The legal action revolves around three trades in nickel warehouse receipts in late 2016 and early 2017.
Marex said it had the receipts authenticated by Access World and also had the physical metal inspected by Alfred H. Knight, an specialist metals inspection firm.

Alfred H. Knight did not reply to requests for comment.

Marex said the fraud was uncovered when it sought to verify a fourth trade and Access World said the receipts were fraudulent as well as the previous receipts from the other three trades.

"The $30 million of receipts in Natixis' claim represents the full extent of Marex's involvement in the receipts business. If there is any larger fraud, it involves other market participants and not Marex Spectron," Marex said.

Metals markets were rocked about three years ago by a $3 billion fraud at Qingdao port in China, when a firm allegedly duplicated warehouse certificates to pledge metal as collateral for multiple bank loans.

Following the more recent fraud, some global banks briefly froze credit lines for Singapore metal traders, people familiar with the matter said at the time.
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?

Graphene electrodes offer new functionalities in molecular electronic nanodevices

Date: June 9, 2017

Source: University of Bern

Summary: An international team of researchers has revealed a new way to tune the functionality of next-generation molecular electronic devices using graphene. The results could be exploited to develop smaller, higher-performance devices for use in a range of applications including molecular sensing, flexible electronics, and energy conversion and storage, as well as robust measurement setups for resistance standards. 

An international team of researchers led by the University of Bern and the National Physical Laboratory (NPL) has revealed a new way to tune the functionality of next-generation molecular electronic devices using graphene. The results could be exploited to develop smaller, higher-performance devices for use in a range of applications including molecular sensing, flexible electronics, and energy conversion and storage, as well as robust measurement setups for resistance standards.

The field of nanoscale molecular electronics aims to exploit individual molecules as the building blocks for electronic devices, to improve functionality and enable developers to achieve an unprecedented level of device miniaturization and control. The main obstacle hindering progress in this field is the absence of stable contacts between the molecules and metals used that can both operate at room temperature and provide reproducible results. Graphene possesses not only excellent mechanical stability, but also exceptionally high electronic and thermal conductive properties, making the emerging 2D material very attractive for a range of possible applications in molecular electronics.

A team of experimentalists from the University of Bern and theoreticians from NPL (UK) and the University of the Basque Country (UPV/EHU, Spain), with the help of collaborators from Chuo University (Japan), have demonstrated the stability of multi-layer graphene-based molecular electronic devices down to the single molecule limit. The findings, reported in the journal Science Advances, represent a major step change in the development of graphene-based molecular electronics, with the reproducible properties of covalent contacts between molecules and graphene (even at room temperature) overcoming the limitations of current state-of-the-art technologies based on coinage metals.

The monthly Coppock Indicators finished May

DJIA: 21,009 +157 Up. NASDAQ:  6,199 +219 Up. SP500: 2,412 +161 Up.

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