Baltic Dry Index. 1169 +14 Brent Crude 51.12
The wages of labour are the encouragement of
industry, which, like every other human quality, improves in proportion to the
encouragement it receives.Adam Smith. The Wealth of Nations, 1776.
The no new Korean War
relief rally over, Asian markets are marking time, awaiting further
developments from an increasingly erratic Washington. But if a new Korean war
is off again, does that make Venezuela on? Who knows? Who knows what will be on
today’s agenda, from the New York City northern White House, aka Trump Tower.
The old US joke goes that every family with a nut in the family, gives them the
bus fare to New York City. Strange things happen in NYC, so perhaps it’s best
if President Trump heads down south to Washington or Camp David.
Asian markets take a breather after early-week rebound
Published: Aug 15, 2017 11:19 p.m. ET
Asian equity markets lacked direction Wednesday following a rebound earlier
in the week, tracking a muted performance overnight on Wall Street.The Shanghai Composite Index SHCOMP, -0.17% was down 0.5% as trading kicked off, with large caps succumbing to selling pressure following recent strength. Stocks were higher in Hong Kong though, with the Hang Seng Index HSI, +0.64% up 0.5%.
“There is a bit of a pause for reflection really,” said Chris Weston, chief market strategist at IG Markets. In the U.S., the Dow Jones Industrial Average ended flat, while the Nasdaq was 0.1% lower.
Nonetheless, analysts expect strong corporate earnings in the region to provide some support to stocks in coming sessions.
Gains earlier this week came from the unwinding of short positions as tensions surrounding the Korean Peninsula eased, said Weston, though he noted that caution looms ahead of joint U.S.-South Korean military exercises next week.
Still, the Kospi SEU, +0.46% was off to a strong start as traders returned from a public holiday. The benchmark index was recently up 0.6% after opening 1% higher.
----On Tuesday, South Korean President Moon Jae-in called for renewed talks with the North. He said the U.S. would need Seoul’s consent for any military action on the Korean Peninsula, which helped to ease tensions.
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Stock Market Warning Siren is Blaring
by Wolf Richter •
“Adjusted” earnings growth is 10.2% year-over-year in the second
quarter, according to FactSet, based on the 91% of the companies in the S&P
500 that have reported results. The energy sector was a key driver, with 332%
“adjusted” earnings growth from the oil-bust levels of a year ago.
The sectors with double-digit earnings growth: information technology
(14.7%), utilities (10.8%), and financials (10.3%). The rest were single digit.
Earnings in the consumer discretionary sector declined.
Revenues grew 5.1%, also led by the energy sector. At the beginning of
Q2 last year, the WTI grade of crude oil traded at $35 a barrel. In Q2 this
year, WTI ranged from $42 to $53 a barrel.
So the Wall-Street hype machine is cranking at maximum RPM to propagate
the great news that earnings are soaring, and that this is the reason why
stocks should also be soaring, and forget everything else. The hype machine
carefully avoids showing the bigger picture which is dismal for earnings and
ludicrous for stock valuations.
Aggregate earnings per share (EPS) for the S&P 500 companies on a
trailing 12-months basis rose for the second quarter in a row. That’s the
foundation of the Wall Street hype. But here’s the thing with these EPS:
they’re now back where they had been in… May 2014.
Yep. More than three years of earnings stagnation. No growth whatsoever,
even for “adjusted” earnings. In fact, on a trailing 12-month basis, aggregate
EPS of the S&P 500 companies are down about 5% from their peak in Q4 2014.
And yet, over the same three-plus years of total earnings stagnation, the
S&P 500 index has soared 34%.
More
In
other news, the NAFTA combatants get to meet up today for round one. Round one
consists mostly of pleasantries, and psychologically head faking out the other
combatants.
It is the maxim of every prudent master of a family, never to
attempt to make at home what it will cost him more to make than to buy...What
is prudence in the conduct of every private family, can scarce be folly in that
of a great kingdom.
Adam Smith. The Wealth of Nations, 1776.
August 16, 2017 / 6:06 AM
As NAFTA talks begin, Trump's 'America First' agenda looms large
WASHINGTON (Reuters) - As the United States, Canada and Mexico kick off
negotiations on Wednesday to modernize the North American Free Trade Agreement,
the biggest uncertainty is whether a deal can pass President Donald Trump's
"America First" test.
Trump has blamed NAFTA for shuttering U.S. factories and sending U.S.
jobs to low-wage Mexico. The test will be whether negotiators can prove that a
new NAFTA agreement can alter that course.
The call from the U.S. business community in the run-up to the talks has
been "do no harm" amid concerns that a new agreement will unravel a
complex North American network of manufacturing suppliers built around NAFTA.
Trump, who made trade a centrepiece of his presidential campaign as he
promised to reinvigorate the manufacturing sector, pulled the United States out
of the Trans Pacific Partnership trade pact shortly after taking office in
January. But he has since backed off other trade threats, including declaring
China a currency manipulator and tearing up NAFTA, which he regularly calls a
disaster.
U.S.-Canada-Mexico trade has quadrupled since NAFTA took effect in 1994,
surpassing $1 trillion in 2015.
Derek Burney, a former Canadian ambassador to Washington who was
involved in the first NAFTA negotiations, said that in the previous NAFTA talks
there was a political commitment from all sides to reach a deal. That is not
the case now, he said.
"The question ... is, What will Trump accept as a success in these
negotiations?" said Burney. "To me that is the biggest wild card of
all."
Robert Holleyman, a former deputy U.S. trade representative during the
Obama administration, said the "toughest nut to crack" in the talks
will be whether changes meet Trump's goals to reduce the $64 billion U.S. trade
deficit with Mexico.
"We know where he wants to make changes to NAFTA. Whether those
changes lead up to something that actually reduces the trade deficit with
Mexico is wholly unclear," Holleyman said.
More
In
central bankster news, it’s almost time for the Great Central Banksters annual fly
fishing junket again. Of course if they
just stuck to fly-fishing our world would be safe for a little while longer, it’s
all of that other stuff they get up to, that causes all the big problems in the
Great Nixonian Error of fiat money. Which big shot central bankster will set
off an earthquake this year?
People of the same trade seldom meet together, even for
merriment and diversion, but the conversation ends in a conspiracy against the
public, or in some contrivance to raise prices…. But though the law cannot
hinder people of the same trade from sometimes assembling together, it ought to
do nothing to facilitate such assemblies, much less to render them necessary.
Adam Smith. The Wealth of Nations, 1776.
August 15, 2017 / 11:20 AM
Commentary: As Jackson Hole looms, central banks addicted to open mouth operations
LONDON (Reuters) - It is perhaps fitting that the biggest annual
gathering of central banking's great and good takes place at a fishing retreat:
financial markets are angling for the slightest hint on where monetary policy
is headed.
The Kansas City Federal Reserve's annual economic policy symposium,
attended by finance officials, policy experts and academics from around the
world, was first held at in Jackson Hole, Wyoming, in 1982 reportedly at the
behest of keen fly-fisher and then Fed chief Paul Volcker.
This year's jamboree will take place on August 24-26, and once again
investors will be on tenterhooks. But it wasn't always like this and many argue
central banks would do better to revert to quieter days.
Since the global crisis of 2007-09 markets have become so hooked on
central banks' "forward guidance" that they are now barely able to
work it out for themselves. Indeed, what was initially forward guidance has now
become "over guidance".
Almost every central banker has extolled the virtue of verbal guidance
to varying degrees, including Ben Bernanke, Mark Carney, Haruhiko Kuroda and
Mario Draghi. Fearful that silence will lead to greater market volatility,
constant signalling has become endemic.
Witness the scramble in June to clarify European Central Bank president
Draghi's remarks at the ECB policy forum in Sintra, Portugal, which is fast
becoming the European equivalent of Jackson Hole.
His speech on June 27 opened the door to tweaks in the bank's aggressive
stimulus policy, and investors moved to price in an announcement as soon as
September that QE would be reduced. Germany's 10-year bond yield had its
biggest rise since December 2015, and the euro its biggest jump in a year.
But the next day, sources familiar with Draghi's thinking said financial
markets had misinterpreted him. The speech was full of caveats, implying that
the ECB is still ready to ease policy if a stronger euro or higher yields end
up tightening financial conditions.
According to one former central banker who has attended Jackson Hole,
Sintra was a communications "fiasco" for Draghi, and showed exactly
why central bankers should refrain from "open mouth operations".
It was the latest example of "unwise" speeches from central
bankers aimed at feeding the growing appetite in markets for statements that
anticipate future policy actions, particularly at set-piece events like Jackson
Hole or Sintra, he said.
"Markets make a living doing Kremlinology, looking for a comma, a
sneeze, or a hiccough as policy guidance. Saying less is more. He who
communicates least communicates best."
----Investors are building their hopes up for another Jackson Hole signal from Draghi next week, this time on when and how the ECB will wind down its QE programme. But will he deliver?
"I expect Jackson Hole to be a bunch of guys and gals sitting
around the campfire, singing happy songs. There will be very little hard policy
actions," quipped the ex-central banker.
More
We close for today
with more on that infamous, unnecessary, fatal London tower block fire. Below,
the NY Times skirts close to Fake News with a highly charged, political left-wing
class warfare spin, on that fatal fire. Unmentioned, how the London Fire
Brigade “advice” was wrong and greatly added to the final death toll. No
mention of a cover up over the LFB.s advice and competence. Just a Marxist,
them rich against us poor, political spin. Never let a good story get in the
way of the truth. Sadly the New York Times didn’t.
Grenfell Tower Fire Shows Double Standard at Work in One London District
LONDON — The Ferraris were driving people batty in
affluent South Kensington. Drivers revved
their engines and ripped past Harrods. Residents were already irritated by
the dust
and noise from superrich neighbors building underground swimming pools and
cinemas. Now came complaints about Middle Eastern “types” drag racing at night.
Up in North Kensington, a part of London that is home
to some of Britain’s poorest residents, the complaints were more elemental.
People were fighting plans to close a day care center, lease out a public
library and demolish a community college. At one public housing project,
Grenfell Tower, residents had complained
about fire safety issues for years: power surges that blew up television
sets and filled rooms with smoke, outdated fire extinguishers and the absence
of a communal fire alarm.
The very different complaints from the opposite ends
of Kensington received very different responses from the 50-member council
representing the Royal Borough of Kensington and Chelsea. The Ferraris
were debated in the council chamber. Fines
of up to 1,000 pounds were imposed on revving engines. Underground
construction projects were
restricted.
The concerns in North Kensington, particularly those
of Grenfell Tower residents, were mostly ignored. By last November, one
resident, Edward Daffarn, was so frustrated that he
predicted “only a serious fire” resulting in a “serious loss of life” would
make the council pay attention. The councilor in charge of housing, Rock
Feilding-Mellen, dismissed him as a ‘‘fantasist.’’
----“This
council does not represent the people of North Kensington,” Mr. Daffarn said.
----Kensington and Chelsea is a microcosm
of a divided Britain. The south is home to Kensington Palace Gardens,
better known as Billionaires’ Row, one of the most expensive streets in the
country. Roman Abramovich, the Russian billionaire, owns a mansion there
reportedly worth
£125
million ($163 million). And Kensington Palace is where Prince William and
the Duchess of Cambridge will be raising their children.
To the north, Golborne ranks as one of the two poorest
wards in London. Victorian-era diseases like tuberculosis and rickets have made
a comeback. Life
expectancy in parts of North Kensington is 20 years lower than in South
Kensington.
In recent years, the council has spent millions of
pounds subsidizing opera tickets and paying tax rebates to all except the
poorest at a time when services for youths and toddlers were reduced, and free
swimming classes for state-funded schools and older residents were canceled.
The contempt directed at those raising concerns about fire safety at Grenfell
Tower was not an exception, residents said, but the fire exposed the disconnect
between an elitist council and poor residents in the north.
----Of
the Kensington council’s 50 members, 46 are white and
37 are Conservatives. The cabinet, led by Ms. Campbell, is entirely white. One
of her fellow councilors is Lady Catherine Faulks. Another is Mr.
Feilding-Mellen,
the stepson of the Earl of Wemyss and March. Another is Prof. Sir Anthony
Coates, known locally as a man of letters — the letters being those he lists
after his name to highlight his credentials.
----One night in
May 2013, the light in Mr. Daffarn’s Grenfell Tower living room started
flickering wildly. Soon his stereo stopped working and his television box blew
up. Some of his neighbors reported sparks flying from their light fittings and
smoke coming from their toasters.
The complaints were mostly ignored until three weeks later, when entire
rooms were filling with smoke. Residents marched to the tenant management office,
and the electrical wiring was eventually repaired.
Mr. Daffarn, a social worker who has lived in Grenfell Tower since 2001,
has meticulously documented the grievances of residents in seven years of email
correspondence with the council. Some 350 blog items he wrote with a fellow
resident are being archived by the British Library.
“I wanted to create a resource for anyone, who in 30 years’ time wants
to study how London ended up like this, with only rich people left,” he said.
But the Grenfell Tower fire has changed his motivation. “Now, it’s
evidence,” Mr. Daffarn said, alluding to the criminal inquiry. He hopes the
investigation will bring convictions and also document “the institutionalized
contempt” for poor people.
More
By
means of glasses, hotbeds, and hotwalls, very good grapes can be raised in
Scotland, and very good wine too can be made of them at about thirty times the
expense for which at least equally good can be brought from foreign countries.
Would it be a reasonable law to prohibit the importation of all foreign wines,
merely to encourage the making of claret and burgundy in Scotland?
Adam Smith. The Wealth of Nations, 1776.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, because some
things are worth sharing.
This Gold Coin Built the Smithsonian
All but two of 104,960 sovereigns from a learned Englishman with no birthright were reminted in the U.S. to fund the “increase and diffusion of knowledge”
May 1996 | Updated: August 10, 2017
Their value isn't intrinsic: after all, they are merely two British gold sovereigns, with Queen Victoria as a teenager on one side, the royal coat of arms on the other. About the size of a nickel, they were worth only a pound sterling each a century and a half ago when they were in circulation. But to the Smithsonian, which keeps them in its National Numismatic Collection (one is now traveling with the "America's Smithsonian" exhibition), they have a significance beyond any monetary value.
Their value isn't intrinsic: after all, they are merely two British gold sovereigns, with Queen Victoria as a teenager on one side, the royal coat of arms on the other. About the size of a nickel, they were worth only a pound sterling each a century and a half ago when they were in circulation. But to the Smithsonian, which keeps them in its National Numismatic Collection (one is now traveling with the "America's Smithsonian" exhibition), they have a significance beyond any monetary value.
The story begins in 1826 with the writing of a will by an Englishman
named James Smithson. Born in 1765 and educated at Oxford, Smithson studied
chemistry and mineralogy and became a notable amateur scientist. He chemically
analyzed minerals and plants, and was the first to distinguish between zinc
carbonate and zinc silicate, both then called calamine. Since 1832, zinc
carbonate has been known as smithsonite. In 1787, only a year out of college,
he was elected to the Royal Society of London "for Improving Natural
Knowledge."
Smithson was also a highborn bastard, and a man with ambitions as well
as a large grievance. His father was a wealthy Yorkshire baronet who became the
Duke of Northumberland. His mother was a descendant of Henry VII. Alas, because
these two illustrious parents never got married — at least to each other —
James Smithson had no chance of inheriting his father's title, fortune or dukedom.
The fact continued to rankle. One of Smithson's lifelong aims became the spread
of knowledge, which, he said, allows learned people to "see a lot where
others see nothing." He wanted, he wrote, to ensure that the Smithson name
would "live in the memory of man."
Eventually he inherited a good deal of money, mainly from his mother,
and decided to leave it all to his illegitimate 20-year-old nephew — but with a
remarkable stipulation attached. If the nephew died childless, the fortune
would go toward "an Establishment for the increase & diffusion of
knowledge among men." Not in England. Not at all. Smithson was not about
to do that. The money was to go to the United States of America. The eventual
result was the Smithsonian Institution.
James Smithson died at 64, in 1829, three years after making the will.
The nephew died, childless, six years later. Shortly thereafter, word of the
Smithson will reached President Andrew Jackson and Congress. At first, there
were doubts about accepting any money at all from Great Britain, a country
still seen by many Americans as a bully and a territorial threat. The will
seemed pretty vague, too. "Increase and diffusion of knowledge"
sounded all right. After all, George Washington himself, in his "Farewell
Address" to the nation, had asked his countrymen to promote
"institutions for the general diffusion of knowledge." But what kind
of an institution would we have to create, anyway? A few Congressmen suggested
we not bother with it at all. Otherwise, one complained, "every whippersnapper
vaga-bond would send a gift to the United States in order to immortalize his
name."
Nevertheless, in July 1836 Congress voted to accept the Smithson
bequest. Richard Rush was dispatched to London to get it. A diplomat, recent
Vice Presidential candidate and son of the eminent Dr. Benjamin Rush — a signer
of the Declaration of Independence — Rush seemed a perfect Galahad to snatch
Smithson's bequest from the toils of England's notoriously slow-moving Court of
Chancery.
Rush was soon embroiled in British red tape, fighting off assorted
claims on Smithson's will. After two years it looked as if he might have to
face a decade or so of legal thumb-twiddling. Then, suddenly, with a little
backstairs help from a Dickensian law firm — Clark, Fynmore & Fladgate,
Solicitors of Craven Street — the Smithson bequest got jumped ahead of some 800
other cases. On May 9, 1838, the court turned over Smithson's fortune to Rush.
It came to 92,635 pounds, 18 shillings and ninepence. Rush still had to pay off
one family claimant — Madame de la Batut, mother of Smithson's nephew — who got
£5,015. That left roughly £87,620 to be converted from stocks and annuities
(called "Consols") into hard cash. Paper transactions were so
unreliable in those days that Rush decided the best way of bringing the money
home to America was in British gold sovereigns.
He wisely waited to sell at the top of the market. "Consols had not
brought so high a price for nearly eight years," he wrote home cheerfully
on June 13, 1838. There were storage and packing charges, of course, legal
fees, insurance and a sales commission of about £800. Small change in the
amount of eight shillings and sevenpence was carefully placed in the last bag
of gold. In the end Rush was able to put 104,960 sovereigns aboard the packet
ship Mediator, bound for New York. Each sovereign weighed about eight
grams. They were stuffed into 105 sacks (cost: sixpence apiece), each sack
holding 1,000 gold sovereigns (except for one with 960). They were packed into
11 boxes, 10 sacks to the box, each box weighing 187 pounds. The lot was simply
addressed to "the United States."
More
A nation is not made wealthy by the childish accumulation of shiny metals, but it enriched by the economic prosperity of it's people.
Adam
Smith.
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?
Tesla’s ‘tiny house’ hits the road in Australia to show off solar power potential
Tesla has a new way to demonstrate the possibilities of its home solar products to potential customers – using a ‘tiny house’ on wheels, which it can tow on a rolling tour with a Tesla Model X. The Tesla Tiny House made its official debut in Australia (via Electrek), where it will welcome visitors at Melbourne’s Federation Square, before taking off for a cross-country Australian tour.The towable Tiny House is reminiscent of the mobile design studio it introduced last September, which was a reconfigured Airstream that let people build their own Tesla vehicle as a kind of mobile virtual studio. These solar-focused demonstration trailers also feature mobile design studios and configurators within, but for Tesla’s solar products, including solar panels and its Powerwall energy storage battery for the home.
The Tiny House has actual siding this time around, which is made up of sustainable timber with not artificial chemical treatments. It weighs 2 tonnes (around 4,400 pounds) and has 2kW solar generation capacity using 6 panels, which can feed the single Powerwall battery mounted on the side.
Tesla’s touring the country with destinations at ever major Australian
city, but residents can also request it swing by and pay a visit to smaller
towns along the way, too. Tesla doesn’t yet offer solar installations in
Australia, but it clearly wants to prime the pump, and it does sell Powerwall
batteries for use with solar installations from other providers.
This model seems likely to be applied to other markets, too, should the
Tiny House prove effective in swaying Australian customers. On the commercial
side, Tesla is also building a huge renewable power storage facility using its
Powerpack batteries, which will be the largest such facility in the world once
it’s complete.
The monthly Coppock Indicators finished July
DJIA: 21,891 +207 Up. NASDAQ: 6,348 +250 Up. SP500: 2,470 +171 Up.
Nice blog with a good Free Stock Tips
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