Tuesday, 1 August 2017

Another Dodgy Record On The Dow.

Baltic Dry Index. 946 +13.     Brent Crude 52.79

"Those who thought Black Monday on 1987 was the most frightening day of their lives are forgetting those first few hours of Terrible Tuesday, when the market as we know it simply ceased to exist.... In fact, the dirty little secret of that Tuesday morning is that the screens simply weren't functioning. It was like the Wild West out there. Anything you tried to buy simply went up ahead of you until you caught it and then it would come down so fast that you could lose hundreds of thousands of dollars in mere seconds. I retreated to the sidelines rather than endure that kind of punishment."

James J. Cramer, founder of theStreet.com

Global stock markets, fuelled by quantitative easing [QE] by the world’s central banksters, pushed on upwards in July, but to this old dinosaur market watcher, this was the most unimpressive up month yet. With the Fed set to raise its key interest rate later in the year, and to start selling off some of its balance sheet, or simply not rolling over its bonds as they mature, QE is about to get replaced with a technical tightening in the months ahead. My guess is that most of the professional money managers are all trying to figure out how best to front run the Fed as it tightens. Ordinary investors long ago forsook our current run of rigged stock markets.

When interest rates normalise, as they must, the Great House of Cards will collapse.

Dow logs record, but tech slump caps gains for broader market

Published: July 31, 2017 5:35 p.m. ET

All three major indexes book monthly gains

The Dow industrials finished at an all-time high on Monday, but the broader market’s gains were hobbled by losses in the technology sector.

The Dow Jones Industrial Average DJIA, +0.28% gained 60.81 points, or 0.3%, to close at 21,891.12, pulling back from its best levels after hitting an intraday record earlier in the session at 21,929.80.

The S&P 500 index SPX, -0.07% declined 1.80 points, or less than 0.1%, to 2,470.30, with financials advancing 0.6% and energy gaining 0.2% to help lead the benchmark’s 11 sectors; meanwhile, tech and materials traded at least 0.5% lower to top the worst performers.

The tech-laden Nasdaq Composite Index COMP, -0.42% fell 26.55 points, or 0.4%, to 6,348.12.

Kent Engelke, chief economic strategist at Capital Securities Management, said upbeat earnings from Dow-component Chevron Corp. CVX, +0.99%  and signs of strength in the housing market bolstered energy and banks shares.

----For the month, the Dow registered a 2.5% return, while the S&P ended up 1.9% and the Nasdaq climbed 3.4% in July. The Nasdaq, which lost ground in June, has post eight positive months out of the past nine.

Among the slumping tech sector’s worst performers were Facebook Inc. FB, -1.86% down 1.9%, while Alphabet Inc. GOOGL, -1.34% GOOG, -1.17%  closed off 1.2%. Among other internet names, Amazon.com AMZN, -3.16%  finished down 3.2%, while Netflix Inc. NFLX, -1.29%  wrapped with a decline of 1.3%.

Apple Inc. AAPL, -0.52%  may have sway on how the rest of the week plays out for tech stocks, and may be the larger market, with the iPhone maker due to report results Tuesday.

August 1, 2017 / 2:13 AM

Asia shares rise as investors look to burst of data for proof of 'goldilocks'

TOKYO (Reuters) - Asian shares ticked up on Tuesday as investors looked to a barrage of economic data around the world to confirm recent signs the global economy is in fine fettle with inflation staying well contained.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.5 percent, led by gains in financials and energy shares, while Tokyo's Nikkei rose 0.2 percent.

On Wall Street, the Dow Jones Industrial Average rose 0.28 percent to end at a record high of 21,891.12 but the Nasdaq Composite pulled back 0.42 percent after recent rallies.

MSCI ACWI, an index of the world's 47 stock markets, logged its ninth consecutive month of gains in July, the longest winning spell since 2003-04, on the back of expectations of solid global economic growth.

On the other hand, softening U.S. inflation in recent months prompted investors to bet the Federal Reserve will adopt a patient approach to further interest rate increases.

"The abundance of cheap money is perhaps a theme that is getting stale. Yet, that is the best explanation you could think of to explain the strength of shares and commodities today," said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management.

Even record highs can’t get stock bulls—or bears—to commit

Published: July 31, 2017 1:45 p.m. ET

A lot more investors are neutral on the stock market than in the past: AAII Investor Sentiment Survey

Major U.S. stock indexes are breaking records on a near-daily basis, but rather than viewing the market with enthusiasm or fear, many Wall Street analysts are offering up what amounts to shrugs.

Cautious optimism is perhaps the prevailing view of U.S. equities right now, with few analysts forecasting a steep drop from current levels, but even fewer expecting that the kind of gains seen over the past few years will persist over the coming ones. For every tailwind that’s seen supporting current valuations, there’s an equivalent headwind that indicates a need for caution.

----Want more? The regulatory environment seems more favorable for businesses, at a time when the government seems less able to pass the kind of legislation investors say is necessary. Central banks around the world remain accommodative, but the impact of the Federal Reserve unwinding its balance sheet—as it is expected to start doing later this year—is unclear. Volatility is at historic lows, but is that a sign of calm or complacency?

The result of all this isn’t an uniformly bearish outlook, but neither are the bulls sanguine. According to the AAII Investor Sentiment Survey, 41.2% of investors are neutral, up 2.5 percentage points from the previous week’s survey, and notably above the long-term average of 31%. Only 34.5% of investors are bullish, compared with the 38.5% average, while 24.3% are bearish, below the 30.5% that’s historically responded that way.

In other news, China like Russia is losing patience with President Trump’s erratic America. From America to GB to the rump-EUSSR, the west seems to be going all-in on weak governments.

July 31, 2017 / 2:49 AM

China hits back at Trump criticism over North Korea

BEIJING (Reuters) - China hit back on Monday after U.S. President Donald Trump tweeted he was "very disappointed" in China following Pyongyang's latest missile test, saying the problem did not arise in China and that all sides need to work for a solution.

China has become increasingly frustrated with American and Japanese criticism that it should do more to rein in Pyongyang. China is North Korea's closest ally, but Beijing is angry with its continued nuclear and missile tests.

North Korea said on Saturday it had conducted another successful test of an intercontinental ballistic missile that proved its ability to strike the U.S. mainland, drawing a sharp warning from Trump and a rebuke from China.

Japanese Prime Minister Shinzo Abe spoke with Trump on Monday and agreed on the need for more action on North Korea just hours after the U.S. Ambassador to the United Nations said Washington is "done talking about North Korea".

----China's Foreign Ministry, in a statement sent to Reuters responding to Trump's tweets, said the North Korean nuclear issue did not arise because of China and that everyone needed to work together to seek a resolution.

"All parties should have a correct understanding of this," it said, adding the international community widely recognised China's efforts to seek a resolution.

The essence of Sino-U.S. trade is mutual benefit and win-win, with a vast amount of facts proving the healthy development of business and trade ties is good for both countries, the ministry added.

Chinese Vice Commerce Minister Qian Keming, weighed in too, telling a news conference there was no link between the North Korea issue and China-U.S. trade.

"We think the North Korea nuclear issue and China-US trade are issues that are in two completely different domains. They aren't related. They should not be discussed together," Qian said.

China, with which North Korea does the large majority of its trade, has repeatedly said it strictly follows U.N. resolutions on North Korea and has denounced unilateral U.S. sanctions as unhelpful.

----"Pyongyang is determined to develop its nuclear and missile programme and does not care about military threats from the U.S. and South Korea," state-run Chinese tabloid the Global Times said on Monday.

"How could Chinese sanctions change the situation?" said the paper, which is published by the ruling Communist Party's official People's Daily.

China wants both balanced trade with the United States and lasting peace on the Korean peninsula, its official Xinhua news agency added in a commentary.

"However, to realise these goals, Beijing needs a more cooperative partner in the White House, not one who piles blame on China for the United States' failures," it added.

July 31, 2017 / 8:50 PM

Trump fires communications director Scaramucci in new White House upheaval

July 31, 2017 / 11:54 AM

Amid Brexit squabbling, May's spokesman says EU free movement to end in 2019

July 31, 2017 / 2:24 PM / 11 hours ago

Poland vows to keep logging ancient forest despite EU court ruling

Next “Mish” explains the true state of Europe’s banks. Nothing is fixed. In Euroland, everyone now owes Germany a new record high of Euro 862 billion, and rising!  Everyone in Europe, including the UK, now needs a little physical gold and silver under their control for when the EUSSR’s Ponzi Scheme does its Madoff ending.

EU Deposit Insurance, a Bank Crisis in Italy and Greece, and the Coming Ban on Cash

Posted by Mish | July 31, 2017 4:51:59
Last week we investigated nonperforming EU loans and an EU proposal to freeze accounts if a run on a bank starts.

Today let’s investigate the EU’s deposit insurance scheme with the likely result being a ban on cash.

On July 19, with little media publicity, the EU Single Resolution Board issued a statement with this exact title: Press Release – Banking Union – Single Resolution Board collects €6.6 billion in annual contributions to the Single Resolution Fund, now reaching €17 billion in total.

For starters, there is no “banking union” to speak of. That aside, let’s explore the deposit insurance goal and where things are now.

---- That’s the entire press release, as written. The goal is to create an emergency “safeguard” that can only be used as a “last resort”.

The target goal is “at least 1% of assets” and it will take until 2023 to collect this reserve.


At hand right now the SRF has €17.4 billion in the emergency safeguard.

As noted last week, there are Over €1 Trillion Nonperforming EU Loans.

Italy alone has €276 billion in non-performing loans. Greece and Cyprus have NPL ratios of 46% and 45% respectively. Bulgaria, Croatia, Hungary, Ireland, Italy, Portugal, Slovenia, and Romania all have NPL ratios between 10% and 20%.

Spotlight Greece

46% of loans Greek bank loans are non-performing. The Greek sum is a very significant €115 billion.

On December 21, 2016, John Mauldin noted Greece’s Debt Problem Has Reached a Dangerous Point.

Here is the key sentence: “Nearly seven years, 13 austerity packages, and three bailouts (worth a running total of $366 billion) later, the Greek economy is still struggling.”

Bailouts? Who? Where?

Not Greek citizens. Not Greet banks.

Rather, $366 billion was used to bailout Greek creditors, primarily Germany.

It will take until 2060 to pay back that “bailout” according to the Wall Street Journal’s report of Greece’s Debt Due, published February 19, 2015 and updated July 28, 2017.

To pay back the alleged bailout, Greece is supposed to maintain a primary account surplus of 3% of GDP indefinitely. A primary account surplus means Greece will collect more in taxes than it spends, not counting interest on its debt.

The odds that will happen are roughly zero percent.

Even if the Single Resolution Fund threw its entire emergency fund of €17.4 billion at Greece, it would not do a damn thing for either Greek debt or Greek non-performing loans.

SRF is a Joke

Simply put, the SRF is a complete joke. It’s only purpose is to pretend that something meaningful is taking place when clearly it’s not.

Target 2

On top of it, a quick check of the Bundesbank Target2 Balance shows peripheral Europe owes Germany a new record high €860 billion!

Last week's markets reflected a massive shift in perceptions, not in a any of the fundamentals on which buyers and sellers base their actions. No new information concerning the nation's deficit or its balance of trade appeared; the dollar didn't move violently, and no unsettling pronouncements were made by the President, the Federal Reserve, or foreign leaders. In fact, the same economic backdrop, viewed differently just a few weeks ago, drove the stock market to unprecedented highs.

Advertisement placed by Drexel Burnham in the October 25, 1987 edition of the New York Times

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
In Brexit news, continental Europe is fighting like rats in a sack for the banksterism spoils of London. But which London banksters will be willing to swap cosmopolitan London, for dangerous Paris, backwater towns, or the Siberia of Luxembourg?

Luxembourg denies 'race to the bottom' for UK financiers

31 July 2017 • 12:01am
Luxembourg has hit back at claims that it is giving finance firms easy ­access to the EU by allowing “brass plate” operations to list an address in the Duchy even though they have no real presence there.

Luxembourg’s officials took offence at accusations by Eoghan Murphy, Ireland’s former finance minister, that some countries had engaged in “very aggressive” behaviour including “creeping regulatory arbitrage”.

“As long as we can get those sorts of false accusations out of the debate, I think all the other competitive elements are just a normal occurrence of business,” said Nicolas Mackel, chief executive of Luxembourg for Finance.

He also gave strong hints that the eurozone finance centres should not row over their methods of competing for ­finance firms.

“We make it a point never to talk negatively about our competitors, unlike some of them,” Mr Mackel said. Ireland has been criticised for seeking to attract business to the Republic with its headline corporation tax rate of 12.5pc.

The policy has been successful.

The row came as MUFG, Japan’s biggest bank, was reportedly poised to choose Amsterdam as its new investment banking base after Brexit.

However, sources told the Financial Times “fewer than 100” jobs would initially be affected by the move, less than 5pc of its 2,100 staff based in London.

Analysis by Oxford Economics also showed London's economy was set to outpace rivals Frankfurt and Paris for the next five years even as the cities attempt to grab business from the British capital.
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?

Experimental protein reactors produce basic food from carbon dioxide and electricity

TAKE one serve of carbon dioxide. Apply high voltage. Wait a few weeks ... and you’ve got a high-protein meal. Could this be the food of our future?
Jamie Seidel July 31, 20179:36am

TAKE one serve of carbon dioxide. Apply high voltage. Wait a few weeks ... and enjoy a meal of single-cell protein. It may not be a culinary delight, but it could feed our future.

The creation of artificial food out of thin air - with a few added microbes - is the result of a study by research groups in Finland.

And they say the Food from Electricity program is 10-times more energy efficient than the photosynthesis of plants.

Such protein powder is not about to garnish our plates.

But it may soon be reducing the strain on our crops by providing an alternative source of fodder for animal feeds.

Ultimately, protein ‘reactors’ have the potential to create the building blocks of meals aboard long-duration space flights and as a rapid-response counters to famine.

“In the long term, protein created with electricity is meant to be used in cooking and products as it is,” says Juha-Pekka Pitkänen, principal scientist at VTT. “The mixture is very nutritious, with more than 50 per cent protein and 25 per cent carbohydrates. The rest is fats and nucleic acids.”

The protein’s greatest selling point is in its ingredients.

Sunlight. And carbon dioxide.

“In practice, all the raw materials are available from the air,” Pitkänen says. “In the future, the (solar powered) technology can be transported to, for instance, deserts and other areas facing famine. One possible alternative is a home reactor, a type of domestic appliance that the consumer can use to produce the needed protein.”

The United Nations estimates about one in nine of the world’s population — or 795 million — are undernourished. Such technology could help alleviate this growing crisis.

It could do this by reducing livestock demand for grains. This also may help keep meat affordable as the world’s crops come under increasing pressure.

It takes four times as much energy to feed a chicken than the protein value carried in its flesh. When it comes to cattle, that ratio is 54:1, lamb 50:1, 14:1 for milk, 17:1 for pork and 26:1 for eggs.

So taking grains out of the equation represents a major freeing-up of food stock for human consumption.

The Finnish researchers say they also hope the technology will help reduce the need for land clearance, and allow existing crop zones to be reforested.

“Compared to traditional agriculture, the production method currently under development does not require a location with the conditions for agriculture, such as the right temperature, humidity or a certain soil type,” says Professor Jero Ahola of LUT.

The monthly Coppock Indicators finished July

DJIA: 21,891 +207 Up. NASDAQ:  6,348 +250 Up. SP500: 2,470 +171 Up.

No comments:

Post a Comment