Thursday, 3 August 2017

Dow 22,000. India’s “Chicken Neck.”

Baltic Dry Index. 993 +28.     Brent Crude 52.17

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.

The DJIA finally got its close above 22,000 but in anything but an impressive way. Dow Transports closed higher but well below its recent high. Asian markets seem unimpressed this morning. Could this be this bubbles top? After Apple, does it all go pear shaped? Since getting out early trumps getting carried out last in the markets, is a five percent summer correction what comes next?

Will a summer trade war, North Korea v USA, China v India, a Fed interest rate hike, and selling off some of its balance sheet, among other headwinds, bring a long overdue dose of reality into the stock markets? We are about to find out.

Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof.

John Kenneth Galbraith

Dow ends above 22,000 milestone with help from Apple

Published: Aug 2, 2017 4:37 p.m. ET
The Dow traded and finished above the 22,000 threshold for the first time on Wednesday, with sharp gains for Apple helping the blue-chip index to notch its seventh straight daily rise as the S&P 500 and the Nasdaq struggled.

Major indexes opened higher a day after Apple Inc. AAPL, +4.73%  posted stronger-than-expected quarterly earnings and iPhone sales that met expectations. Its stock rose 4.7% and hit a record.

The tech giant is the market’s largest stock by market value, which means it has an outsize weight on the overall moves of all three major indexes.

The Dow Jones Industrial Average DJIA, +0.24% rose 52.32 points, or 0.2%, to close at 22,016.24, with gains powered largely by Apple. Earlier, the average touched an intraday high of 22,036.10.

The S&P 500 SPX, +0.05% SPX, +0.05% ended with a gain of 1.22 points, or less than 0.1%, at 2,477.57. SPX, +0.05% Telecom shares shed 1.1% as shares of AT&T Inc. T, -1.57%  declined 1.6% and Verizon Communications Inc. VZ, -1.39%  lost 1.3%.

The Nasdaq Composite Index COMP, +0.00%  finished down 0.29 point at 6,362.65.

Wall Street remains solidly higher for 2017, with major indexes having hit a series of records. However, the rally has left valuations stretched.

“People are saying the move has been overdone, but they’ve been saying that for a while,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management. “Valuations do look stretched relative to historical norms, but investors are looking a little farther out, and valuations don’t look that bad in that context.”

Asia Stocks Fall After Stellar Run; Korea Tumbles: Markets Wrap

By Adam Haigh
Asian stocks fell after surging to the highest level in almost 10 years, with investors assessing the strength of company earnings before American labor-market data provides the latest clues on the health of global growth.

South Korean shares dropped by the most since November, leading the declines, after President Moon Jae-in announced plans to raise taxes on big corporations. Stocks from Japan to Australia retreated, dragging down the MSCI Asia Pacific Index from its highest since December 2007. The greenback held near a two-year low as Federal Reserve speakers expressed caution over further interest-rate increases. The euro, the best-performing Group-of-10 currency this year, maintained most of its surge against the dollar and the 10-year Treasury yield was at 2.26 percent.

Investors are also weighing a report that U.S. President Donald Trump’s administration is preparing to investigate China over what the administration perceives to be violations of intellectual property, a move that would not only impact trade ties between the world’s two biggest economies, but could have negative ramifications for the global economy.

Corporate results are dominating sentiment this week, while Friday’s report on the U.S. employment market may provide the next inflection point, as investors look for clues on the strength of the world’s largest economy and the Federal Reserve’s next policy move.

In EUSSR news, Germany’s dirty, killer diesel scandal, just runs and runs and runs. Below, Germany’s auto makers promise to fix 5 million killer diesels, honest they will, cross their hearts and hope to die. But will the software fix really clean up the killer pollution, and how much power will it sap from the engine?  Why would anyone want to part with hard to come by cash for an iffy motor, from a dodgy manufacturer with a proven track record of deceit?

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.

German diesel makers, with apologies to Cary Grant. To Catch A Thief.

VW, Daimler and BMW to Upgrade 5 Million Diesels in Rescue Pact

By Elisabeth Behrmann and Birgit Jennen
2 August 2017, 14:15 GMT+1
Volkswagen AG, Daimler AG and BMW AG agreed to upgrade more than 5 million diesel cars in Germany in a bid to salvage their beleaguered diesel technology and draw a line under an emissions scandal that shows no signs of abating after nearly two years.

The deal, hashed out at an emergency summit in Berlin on Wednesday, also includes a fund to promote sustainable transport in cities. The upgrades to Euro 5 and some Euro 6 models will rely on software patches rather than costly component fixes, with the aim of cutting emissions of smog-inducing nitrogen oxides by 25 percent to 30 percent on average, the German auto industry lobby VDA said in a statement. VW, Daimler and BMW shares traded higher as the carmakers dodged expensive hardware recalls.

“The automotive industry is aware that it has lost a massive amount of confidence,” the VDA said in the statement. “We must -- and will -- work to regain this confidence. This is a core concern of the industry, and in our own interest, in the interest of our customers and employees as well as in the interest of our country.”

Top executives from the German auto industry were summoned to face off with ministers and state leaders amid a steady drumbeat of negative news about diesel pollution, prompting threats of driving bans to improve urban air quality.

There’s a lot at stake for all sides. German automakers need diesel as a stop-gap technology to buy time to catch up with the electric offerings of Tesla Inc. and Nissan Motor Co. And with less than two months until a federal election, Chancellor Angela Merkel, whose ruling bloc runs the ministry overseeing carmakers, has to ward off criticism that the government is too lenient on carmakers while also not endangering the country’s 800,000 auto jobs.

August 1, 2017 / 12:58 PM

EU anti-fraud office send VW probe findings to German prosecutors

BRUSSELS (Reuters) - The European anti-fraud office investigating whether Volkswagen (VOWG.DE) used EU funds and European Investment Bank (EIB) loans to develop devices that cheated emission tests has sent its judicial recommendations to German prosecutors.

VW was plunged into the biggest business crisis in its 80-year history when the cheating scandal was exposed in September 2015. It has cost the company more than $25 billion (18.90 billion pounds) in fines, compensation and vehicle refits.

European anti-fraud office OLAF said it had investigated whether there was any link between funds VW received and the production of engines or devices that could be used to manipulate emission tests.
Volkswagen has denied misusing the funds and said they were used for their designated purpose.

"OLAF sent its final report and a judicial recommendation to the German national authorities, namely the public prosecutor's office in Braunschweig, Germany, as well as an administrative recommendation to the European Investment Bank," OLAF said.

It added it had recommended the EIB review the implementation of its anti-fraud policies.

The bank said it would study OLAF's findings and decide on how to proceed. It added it was also reviewing its relationship with VW and was not considering any new loans to the company for the time being.

In other news, China steps up the pressure on India’s “chicken neck.” With rising rhetoric on both sides, has a military skirmish become inevitable?

August 3, 2017 / 4:22 AM

China-India border spat casts shadow ahead of BRICS summit

BEIJING (Reuters) - China is taking an increasingly tough line on a border row with India amid a rising crescendo of nationalism in state media, and President Xi Jinping looks set for an awkward encounter with Prime Minister Narendra Modi at a multilateral summit next month.

Diplomats say Beijing would like to resolve the border issue before a summit of the BRICS nations - that also groups Brazil, Russia and South Africa - in the Chinese city of Xiamen in early September, and ensure nothing dampens what China wants to be a show of cooperation and friendship among developing countries.

But that could be tough. On Wednesday, China ramped up the rhetoric, accusing India of "concocting" excuses over the illegal entry of the South Asian nation's military into Chinese territory.

"China will take all necessary measures to safeguard its legitimate and lawful rights and interests," the Foreign Ministry said.

The two sides' troops are confronting each other close to a valley controlled by China that separates India from its close ally, Bhutan, and gives China access to the so-called Chicken's Neck, a thin strip of land connecting India and its remote northeastern regions.

Responding, India reiterated an earlier line that work by a Chinese road crew in the sensitive frontier area would have changed the status quo and urging "utmost restraint" by all sides.

"India considers that peace and tranquillity in the India-China border areas is an important pre-requisite for smooth development of our bilateral relations with China," New Delhi's foreign ministry said in a statement on Wednesday evening.

----Talks are happening behind the scenes, but with little apparent progress. Meantime, Chinese and India media have been taking a strident approach, with a Chinese state-run newspaper last week saying China could use force.

An Indian magazine's front cover last month showing a map of China shorn of Tibet and self-ruled Taiwan also ignited public anger on Chinese social media with thousands of angry posts.

"The problem is the media on both sides are whipping things up. This makes it hard for China or India to back down," said a Beijing-based source who is familiar with the discussions between the two sides.

----A source with ties to the military, who spoke recently to a senior Chinese officer involved in the stand off, said China has no appetite for conflict with India but could not be seen to be weak.

"Nobody wants to fight about this, but if India keeps making trouble then we'll have to show them what we're made of," the source said, citing the conversation with the senior officer.

China has repeatedly called on India to withdraw its forces.

“What me worry?”

Mad Magazine.

Crooks and Scoundrels Corner

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

Below, more follow up from the London Grenfell Tower fire. The adults have finally taken over from the sensationalist red rag media, and shameless New Communist Labour Party politicians trying to build party careers on the tragedy and appalling untimely deaths. Still no inquiry into the disastrous, reckless, fatal advice from the London Fire Brigade. No apology by the LFB, or their boss London’s Mayor Khan. Both seem to think that by silence they can make the massive, fatal, LFB error just go away.

August 1, 2017 Updated 14 hours ago

Grenfell: Full-scale fire tests underway

Simon Robinson
London — A combination of polyisocyanurate (PIR) insulation with an unmodified polyethylene-filled ACM cladding panel has failed the first large-scale fire resistance test of insulation following the Grenfell Tower Fire in late June.

The British Rigid Urethane Foam Manufacturers Association (BRUFMA) has responded to the test carried out by the UK BRE organisation saying that the result is ‘as expected.’

BRUFMA said ‘this combination of materials does not meet building regulations and would never be recommended or approved for use by the members of BRUFMA in a real building.’ BRUFMA added that it is ‘advisable to wait until all six tests are complete before any meaningful conclusions can be drawn and solutions proposed.’

The organization said that a full analysis of all the results should be conducted together and ‘from this, clear guidance will be issued as to which combinations of insulation and cladding are acceptable in relation to the current regulations. Only in this way, will the government be able to demonstrate the safety of buildings and provide an accurate picture to the owners and residents across the country.’

Simon Storer, BRUFMA chairman, said "the result is as expected and therefore it is worrying that a number of buildings have been identified with this combination, indicating a lack of compliance to existing rules and regulations."

The United Kingdom Department for Communities and Local Government (DCLG) said that currently 82 buildings in the U.K. are known to have the combination of PIR board and non-fire retardant polyurethane/metal cladding combination of materials in their wall cladding systems and 47 of which are local authority or housing association owned or managed.

According to the DCLG, which is responsible for the tests, each test involves building a nine-meter-high demonstration wall with a complete cladding system including panels, insulation and cavity barriers. This is then subjected to a replica of a severe fire inside a flat as it spreads out of the window to see whether it meets the requirements to resist vertical fire spread. The tests, are being carried out at BRE, formerly the Building Research Establishment and are looking at the flame retardancy of systems which include:

• ACM with unmodified polyethylene filler with PIR.
• ACM with a fire-retardant polyethylene filler with PIR; and finally.
• ACM with limited combustibility filler with PIR.

The tests are being repeated with mineral wool in place of PIR insulation.

DCLG said that the tests will result in a series of data that will determine whether the wall systems pass requirements of building requirement regulation BR135. If the combination fails the test then then that specific combination of materials would not meet current building regulations guidance and is unlikely to be safe for use on high-rise buildings.

DLCG hopes to have all of the six tests completed in the week of Aug. 14.
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?

Chemists make laser-induced graphene from wood

Date: July 31, 2017

Source: Rice University

Summary: Scientists have made a form of graphene that can be cut with a table saw. They turned pine into laser-induced graphene and used it to make proof-of-concept electrodes for water splitting and supercapacitors.

Rice University scientists have made wood into an electrical conductor by turning its surface into graphene.
Rice chemist James Tour and his colleagues used a laser to blacken a thin film pattern onto a block of pine. The pattern is laser-induced graphene (LIG), a form of the atom-thin carbon material discovered at Rice in 2014.

"It's a union of the archaic with the newest nanomaterial into a single composite structure," Tour said.

The discovery is detailed this month in Advanced Materials.

Previous iterations of LIG were made by heating the surface of a sheet of polyimide, an inexpensive plastic, with a laser. Rather than a flat sheet of hexagonal carbon atoms, LIG is a foam of graphene sheets with one edge attached to the underlying surface and chemically active edges exposed to the air.

Not just any polyimide would produce LIG, and some woods are preferred over others, Tour said. The research team led by Rice graduate students Ruquan Ye and Yieu Chyan tried birch and oak, but found that pine's cross-linked lignocellulose structure made it better for the production of high-quality graphene than woods with a lower lignin content. Lignin is the complex organic polymer that forms rigid cell walls in wood.

Ye said turning wood into graphene opens new avenues for the synthesis of LIG from nonpolyimide materials. "For some applications, such as three-dimensional graphene printing, polyimide may not be an ideal substrate," he said. "In addition, wood is abundant and renewable."

The monthly Coppock Indicators finished July

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

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