As Milton Friedman once
put it, if you’re spending your own money on yourself, you care about price and
quality. If you’re spending someone else’s money on yourself, you only care
about quality. If you’re spending your own money on someone else, you care only
about price. And if you’re spending someone else’s money on someone else, you
don’t care about either.
We are deep into the summer silly
season for news, but this summer, the news is anything but silly, except in
main stream media’s non-stop reporting of parochial party politics on both
sides of the Atlantic, and in the ever bubbly stock markets.
Up first, the bubbly stock markets
bubble on, but did the ECB trap itself into QE forever? If it did, the euro
will turn into the modern Italian lira.
There can be few fields of human endeavour in which history counts for
so little as in the world of finance. Past experience, to the extent that it is
part of memory at all, is dismissed as the primitive refuge of those who do not
have the insight to appreciate the incredible wonders of the present.
John Kenneth Galbraith.
July 14, 2017 / 12:32 PM / 8 hours ago
Dow, S&P notch record closes on dimmed rate hike prospects
(Reuters) - The Dow and S&P 500 hit record highs on Friday after weak economic data dulled prospects of more interest rate hikes this year.
A decline in financial shares limited the day's gains, even
though JPMorgan Chase & Co (JPM.N)
and other big banks delivered quarterly results that beat Wall Street
expectations.
Data showed consumer prices were unchanged in June and
retail sales fell for a second straight month, pointing to tame inflation and
subdued expectations of strong economic growth in the second quarter.
"The data is pointing to this continuation of fairly
accommodative policy, which has obviously served the market well over the last
few years. So as far as the market is concerned, it's sort of more of the
same," said Lee Ferridge, head of macro strategy for North America at
State Street Global Markets in Boston.
Chances
of a rate hike in December fell to 48 percent after the release of data, from
55 percent late Thursday.
Earlier
this week, the market rose after Federal Reserve Chair Janet Yellen said future
rate hikes could be gradual in the face of persistently low inflation.
The
S&P financials .SPSY, which benefit from a rising rate environment, fell 0.5
percent, and the group was the only one of the S&P 500 sectors down on the
day.
----The CBOE Volatility index .VIX closed at its lowest since December 1993.
For the
week, the Dow was up 1.1 percent, the S&P 500 was up 1.4 percent, and the
Nasdaq rose 2.6 percent.
The
Nasdaq's percentage gain for the week was its biggest so far this year.
More
July 14, 2017 / 10:17 AM / 15 hours ago
Exclusive - ECB wary of putting end-date on QE: sources
FRANKFURT (Reuters) - The European Central Bank is keen to keep its
asset purchases open-ended rather than setting a potentially distant date on
which bond-buying will stop, to retain flexibility in case the outlook sours,
three sources familiar with the discussion said.
By not
saying when its net bond purchases will fall to zero, the ECB hopes to
underline that there is no preset course for its stimulus programme, and that
any changes remain dependent on economic data, with a special focus on wages,
the sources added.
They held
up the Federal Reserve's exit from its asset buying in 2014 as a potential
blueprint, noting the U.S. central bank's unwillingness to publicly target an
end-date.
"The
Fed has done the most successful exit so it's the example for us to
study," said a source who asked not to be named. "The important thing
is not to pre-commit and keep it very gradual."
ECB
President Mario Draghi sent a shockwave through markets earlier this month when
he opened the door to potential tweaks to the quantitative easing programme.
That left investors scrutinizing any potential clues to the bank's next move,
which is expected to come at its Sept. 7 meeting.
ECB
policymakers also meet next Thursday.
More
July 14, 2017 / 3:23 PM / 5 hours ago
Draghi to speak softly after startling big stick at Sintra
LONDON
(Reuters) - No big changes are expected from the European Central Bank when it
meets on Thursday, but a bit of tweaking may be on the cards.
Policymakers
are likely to calibrate the language they use as they edge towards normalising
policy after years of huge post-crisis stimulus.
The bank
may drop a reference to its readiness to increase the size or duration of its
asset-purchase programme before announcing in the autumn how and when it will
start winding down its bond-buying.
But after
the reaction to his June 27 speech in Sintra, Portugal, hinting at the
possibility of changes to the central bank's aggressive stimulus, ECB President
Mario Draghi will be wary of sparking another "taper tantrum".
His
comments in Sintra sent the euro and bond yields sharply higher, and prompted
some rowing back.
"We
expect the gradual adjustments in Draghi's communication to continue next
week," Nordea analysts said in a note.
"So far
the ECB has had an implicit bias towards increasing the size of the
asset-purchase programme, but this stance could change to a more neutral one,
as the ECB will try to smooth the communication path towards the next tapering
announcement in the fall."
Noting
the nervous response to Draghi's Sintra speech and recent adjustments to the
U.S. Federal Reserve's language, they added: "It will be just as
interesting to see the market reactions before and after the meeting ... Draghi
will need to pave the way for a tapering announcement later on without scaring
the bond markets too much."
More
Eurozone faces doom no matter how hard France and Germany try to save it, warns top investment bank
- Bank of America Merrill Lynch warns that the eurozone is falling apart
- It comes despite emergency bailouts from richer countries to those in crisis
- London-based banker Athanasios Vamvakidis said this has driven members apart and increased inequality
The eurozone is likely to break up no matter how
hard France and Germany try to save it, one of the world’s biggest investment
banks is warning.
A senior employee at Bank of America Merrill Lynch
says the single currency bloc has been gradually falling apart ever since it
was formed almost 20 years ago.
Although several countries including Greece and
Portugal received emergency bailouts during the financial crisis, richer
countries like Germany have failed to redistribute wealth on a permanent basis
to poorer countries in the eurozone.
London-based Athanasios Vamvakidis, who worked for
the International Monetary Fund for 13 years before joining the US bank, said
this has driven members apart and increased inequality.
Although that changed briefly during the global
financial crisis, he said ‘divergence seems to be the norm since the eurozone
was formed’.
Describing that as a ‘red flag for the
sustainability of the eurozone’, he warned poorer countries may decide to break
away from the bloc as they fall further into debt.
He said: ‘Wouldn’t such countries want to have
their own monetary policy at some point? Wouldn’t populism find the common
currency to be an easy target – which is already happening in some countries?’
He added: ‘Without growth, debt could prove
unsustainable in some countries and populism against the eurozone could find
support in some cases, leading to exit of a country left behind
More
http://www.dailymail.co.uk/news/article-4698426/Eurozone-faces-doom-no-matter-warns-investment-bank.html Now back to some of the real news, the Fake News Networks barely cover, if at all. In East Asia, is a war is getting ever closer? Has North Korea already achieved a deliverable nuclear deterrent? China toys with Japan.
July 14, 2017 / 2:04 PM / 9 hours ago
North Korea may have more nuclear bomb material than thought - U.S. think tank
WASHINGTON
(Reuters) - Thermal images of North Korea's main nuclear site show Pyongyang
may have reprocessed more plutonium than previously thought that can be used to
enlarge its nuclear weapons stockpile, a U.S. think tank said on Friday.
The
analysis by 38 North, a Washington-based North Korean monitoring project, was
based on satellite images of the radiochemical laboratory at the Yongbyon
nuclear plant from September until the end of June, amid rising international
concerns over North Korea's nuclear and missile programs.
The think
tank said images of the uranium enrichment facility at Yongbyon could also
indicate operation of centrifuges that could be used to increase North Korea’s
stock of enriched uranium, its other source of bomb fuel.
There
were signs too of at least short-term activity at North Korea’s Experimental
Light Water Reactor that could be cause for concern, 38 North said.
The
images of the radiochemical laboratory showed there had been at least two
reprocessing cycles not previously known aimed at producing "an
undetermined amount of plutonium that can further increase North Korea’s
nuclear weapons stockpile," something that would worry U.S. officials who
see Pyongyang as one of the world's top security threats.
----Experts
at 38 North estimated in April that North Korea could have as many as 20
nuclear bombs and could produce one more each month.
July 14, 2017 / 8:27 AM / a day ago
"Get used to it" China says as it flies bombers near Japan
BEIJING
(Reuters) - China told Japan on Friday to "get used to it" after it
flew six warplanes over the Miyako Strait between two southern Japanese islands
in a military exercise.
Japan's
defence ministry issued a statement late on Thursday describing the flyover by
the formation of Xian H-6 bombers earlier that day as "unusual",
while noting that there had been no violation of Japanese airspace.
The
Chinese navy and air force have in recent months carried out a series of
exercises in the Western Pacific, as they hone their ability to operate far
from their home shores.
The
Chinese defence ministry said it was "legal and proper" for its
military aircraft to operate in the airspace and that it would continue to
organise regular training exercises according to "mission
requirements".
"The
relevant side should not make a fuss about nothing or over-interpret, it will
be fine once they get used to it," the ministry said in a statement.
The
Miyako Strait is between Japan's islands of Miyako and Okinawa, to the
northeast of self-ruled Taiwan, which China claims as its own.
Taiwan's
Ministry of National Defense said on Thursday the Chinese bombers flew just
outside its air defence identification zone and that it had "closely
followed" the movements.
More
In another
high rise fire news, no cladding thankfully, but a lack of sprinklers in
Honolulu demonstrates just how dangerous older high rise buildings can be if a
fire takes hold. We need a 21st century rethink on fire rules and
regulations. Some older tower blocks might need major retro-fitting or even
demolition.
3 confirmed dead, 16 injured in 5-alarm blaze at Honolulu highrise
Saturday, July 15th 2017, 2:27 am BDT
MOILIILI, OAHU (HawaiiNewsNow)
Some 100 firefighters from 30 battalions battled the difficult fire, which raged for five hours before being declared "under control" about 7 p.m.
Officials said the fire started on the 26th floor and spread to at least the 28th floor.
With the elevators down, firefighters were using human chains to get equipment to crews on high floors.
Resident Ron Chiaritino said he lives in a unit about 30 feet from where the blaze was centered and could see black smoke billowing from affected apartments. "I heard three women screaming, screaming," he said, through tears. "And then i didn't hear them."
When the blaze was still going, a number of people were trapped in their units, told to stay put because they couldn't be evacuated safely. A special team of firefighters was going door to door to check for tenants who couldn't evacuate.
"As far as how the conditions are, we had to evacuate our firefighters about two or three times," Honolulu Fire Department Manuel P. Neves told reporters. "It's very difficult."
Fire Capt. David Jenkins said at least 12 people were treated at the scene, and four were taken to the hospital. Two were in serious condition.
----The three killed were on the 26th floor.
Residents
of the building described a chaotic scene after the blaze started about 2:30
p.m.
Flames
spread quickly and debris was raining down on the ground and on lower floor
balconies, causing secondary fires.
"I started
smelling smoke and this woman was screaming 'help' and I looked out on the
lanai and even though the fire is on the mauka side, the entire floor was
engulfed in smoke," said resident Mitch Silva, who lives on the 29th
floor.
The fire
raged for hours, and flames and thick, black smoke could be seen for miles.
It's
unclear how many units were involved in the blaze or its cause.
Building
didn't have sprinklers
Neves, of
HFD, did confirm that the Marco Polo does not have fire sprinklers.
With
them, said Neves, the blaze could have been put out quickly.
"Without
a doubt, if there was sprinklers in this apartment, the fire would be contained
to the unit origin," Neves said.
Caldwell
reiterated that message, saying that the blaze underscores the importance of
fire sprinklers.
Marco
Polo was build before sprinklers were required in Oahu highrises.
More
We
end for the week, with more on the true cost of the Bush-Bliar disastrous, regime
change, discretionary war in Iraq. A virtual wipe-out of the Christian
communities that had existed in the region since the first days of
Christianity. Why both men aren’t on trial at the Hague isn’t apparent.
Exodus The Uncertain Fate of Iraq's Largest Christian City
Before Islamic State invaded, Qaraqosh was home to Iraq's largest Christian community. Now liberated after three years of occupation, little remains and former residents are considering whether its worth rebuilding in a country with an unclear future.
July 13, 2017 02:28 PM
Ayouka had a pure heart and he loved his country, the priest says as he
walks across a ravaged cemetery in northern Iraq, preparing to recover the dead
man's body. The man was strangled by Islamic State (IS) fighters simply because he was a Christian,
like the cleric.The priest, whose name is Roni, wears his black cassock tightly over his shoulders, his eyes are lowered and he silently climbs over what's left of smashed crosses. Now and then, the thud of mortar shells can be heard from nearby Mosul, where Islamic State is still holding on.
Our route leads past graves whose inscriptions and crosses were destroyed by IS and Father Roni steps over broken vases and a destroyed Madonna statue. The dead man is lying on the left side of the cemetery, at its outer edge. The jihadists threw him into a two-meter deep burial chamber as if he were just a piece of trash.
Now Ayouka's body has been wrapped in a felt blanket. Next to him lie the bodies of a woman and a man, which are also wrapped in gray blankets. "IS killed them because they considered them to be infidels," says the priest, who knew them from Qaraqosh where they lived.
Qaraqosh was once considered the cradle of Christianity in Iraq. Located some 35 kilometers southeast of Mosul along the Nineveh plains, 40,000 people lived here until three years ago - no other city in the country was home to so many Christians. The city was built in Mesopotamia, which is traversed by the Euphrates and Tigris rivers, and its history stretches back to biblical times.
Until about eight months ago, Islamic State ruled Qaraqosh - expelling and murdering its Christians, desecrating their churches and, in the end, burning down their homes.
----With Mosul liberated, the Christians of Iraq will soon be able to return to their homeland. But who will govern the region after the IS defeat? Will Christians ever feel safe here again after some of their Muslim neighbors so brutally turned against them?
Qaraqosh
currently looks like a ghost town. Islamic State bored some 30 tunnels beneath
it, some ending in buildings while others are thought to stretch all the way to
Mosul. There's a four-meter (13-foot) deep hole in the ground near the cemetery
leading to a tunnel that snakes its way for hundreds of meters through the
hills. Mattresses and crumpled blankets can still be found in the dark and cool
tunnels, where IS fighters slept only a short time ago. An abandoned bomb
factory is located next to the exit.
More
“You talk to your
enemies, not just your friends.”
James Baker. US
Secretary of State, President George H. W. Bush.
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