Baltic Dry Index. 1449 +34 Brent Crude 56.18
In central banking as in diplomacy, style, conservative
tailoring, and an easy association with the affluent count greatly, and results
far much less.
John
Kenneth Galbraith.
As expected the Fed’s talking chair left the
key interest rate unchanged, said to ignore all the hurricanes, and that the US
economy is strong enough to raise rates one more time this year, and three
times next year. Inflation will return at some point, it’s just that the
talking chair and all the other luminaries have no idea when, or how
strong. Markets everywhere yawned, and
remained complacently confident that nothing had altered. And so now on to
Sunday’s German election.
Below, yesterday’s big non-event. What could
possibly go wrong?
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.
Fed to Shrink Assets Next Month, Boost Rates by Year End
By Craig Torres
The Federal Reserve moved to dismantle a
pillar of crisis-era support for the world’s biggest economy and stuck with its
forecast to raise interest rates again this year, saying hurricane damage won’t
derail an otherwise healthy expansion.
“Hurricanes Harvey, Irma and Maria have devastated many communities,
inflicting severe hardship,” the Federal Open Market Committee said in its
statement on Wednesday following a two-day meeting in Washington.
“Storm-related disruptions and rebuilding will affect economic activity in the
near term, but past experience suggests that the storms are unlikely to
materially alter the course of the national economy over the medium term.”
In the statement, the Fed set October for the start of their previously
announced plan to shrink its $4.5 trillion balance sheet. As expected, policy
makers left the benchmark interest rate unchanged in a range of 1 percent to
1.25 percent.
“We continue to expect that the ongoing strength of the economy will
warrant gradual increases in that rate to sustain a healthy labor market and
stabilize inflation around our 2 percent longer-run objective,” Chair Janet
Yellen said during a press conference. She called this year’s inflation
undershoot a “mystery.”
Treasury prices fell and the dollar rose as investors weighed the Fed’s
plans to press ahead with gradual policy tightening. U.S. stocks were little
changed.
----“When the storm effects fade the economy will be as strong as before they hit, and that requires the gradual normalization of policy to continue,” Ian Shepherdson, chief economist at Pantheon Macroeconomics Ltd., wrote in an emailed note.
The announcement is a third big policy step by Yellen, now in the final year of her term as Fed chair: She has overseen the end of large-scale asset purchases; the liftoff of rates from zero; and now the pullback from an unprecedented balance- sheet buildup without disruption to financial markets or the economy so far.
Temporary Boost
While the storms will temporarily boost inflation thanks to higher prices for gasoline and other items, “apart from that effect, inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the committee’s 2 percent objective over the medium term,” the Fed said.----The decision to leave the target range for the federal funds rate unchanged and begin the balance-sheet runoff in October was unanimous. The Fed reiterated that interest rates are likely to rise at a “gradual” pace, though updated forecasts indicated that officials see the path as less steep than before.
In their new set of projections, Fed officials estimated three
quarter-point rate hikes would be appropriate next year -- the same number they
saw in June -- based on the median in the so- called dot plot of interest-rate
forecasts.
More
September 21, 2017 / 1:58 AM /
Updated 2 hours ago
Dollar shines, Asia shares slip after Fed signals December rate hike
TOKYO (Reuters) - The U.S. dollar shone while Asian shares slipped on
Thursday after the U.S. Federal Reserve announced a plan to start shrinking its
balance sheet and signalled one more rate hike later this year.
MSCI’s broadest dollar-denominated index of Asia-Pacific shares outside
Japan was down 0.4 percent, shrugging off slight gains on Wall Street.South
Korea’s Kospi was down 0.2 percent, while Australia shed 0.9 percent. Hong
Kong’s Hang Seng posted slim gains.
Japan’s Nikkei gained 0.8 percent as a rise in U.S. bond yields lifted
financial shares, while the yen’s fall against the dollar after the Fed’s
decision helped exporters. The Bank of Japan as widely expected left its policy
settings unchanged, with markets awaiting a news conference by its governor
later in the day (0630 GMT).
U.S. share prices recovered quickly from initial losses following the
Fed’s announcement, with the S&P 500 ending slightly higher, adding to a
string of closing records.
“While a rate hike is negative, the fact that the Fed’s confidence in
the economy is strong enough to expect a rate hike can be taken as supportive
of market sentiment,” said Soichiro Monji, chief strategist at Daiwa SB
Investments.
The Fed’s view also prompted rotation into financial shares, which
benefit from higher interest rates, from tech shares, he added.
----Fed
fund rate futures are now pricing in about a 65 percent chance of a rate hike
by December compared to around 50 percent before the latest meeting. Markets
expect the Fed move to coincide with revisions of its economic projections.
More
In Korean news, something of a puzzle. Is
anyone serious about backing up President Trump’s bluster?
September 21, 2017 / 3:28 AM /
Updated 28 minutes ago
South Korea approves aid to North Korea, North calls Trump "barking dog"
SEOUL (Reuters) - South Korea approved a plan on Thursday to send $8
million (5.9 million pounds) worth of aid to North Korea, as China warned the
crisis on the Korean peninsula was getting more serious by the day and the war
of words between Pyongyang and Washington continued.
North Korea’s foreign minister on Thursday likened U.S. President Donald
Trump to a “barking dog”, after Trump warned he would “totally destroy” the
North if it threatened the United States and its allies.
Chinese Foreign Minister Wang Yi said the situation on the Korean
peninsula was getting more serious by the day and cannot be allowed to spin out
of control.
“We call on all parties to be calmer than calm and not let the situation
escalate out of control,” Wang said, according to a report from the state-run
China News Service on Thursday.
The decision to send aid to North Korea was not popular in South Korea,
hitting President Moon Jae-in’s approval rating, raised concerns in Japan and
the United States, and follows new U.N. sanctions against North Korea for its
sixth nuclear test earlier this month.
The South’s Unification Ministry said its aid policy remains unaffected
by geopolitical tensions with the North. The exact timing of when the aid will
be sent, as well as its size, will be confirmed later, the ministry said in a
statement.
The South said it aims to send $4.5 million worth of nutritional
products for children and pregnant women through the World Food Programme and
$3.5 million worth of vaccines and medicinal treatments through UNICEF.
“We have consistently said we would pursue humanitarian aid for North
Korea in consideration of the poor conditions children and pregnant women are
in there, apart from political issues,” said Unification Minister Cho
Myong-gyon.
More
September 20, 2017 / 12:14 PM /
Updated 5 hours ago
Exclusive: From Russia with fuel - North Korean ships may be undermining sanctions
MOSCOW (Reuters) - At least eight North Korean ships that left Russia
with a cargo of fuel this year headed for their homeland despite declaring
other destinations, a ploy that U.S. officials say is often used to undermine
sanctions.
Reuters has no evidence of wrongdoing by the vessels, whose movements
were recorded in Reuters ship-tracking data. Changing a ship’s destination once
underway is not forbidden and it is unclear whether any of the ships unloaded
fuel in North Korea.
But U.S. officials say that changing destination mid-voyage is a
hallmark of North Korean state tactics to circumvent the international trade
sanctions imposed over Pyongyang’s nuclear weapons programme.
Changing course and the complex chain of different
firms --many offshore -- involved in shipments can complicate efforts to check
how much fuel is supplied to North Korea and monitor compliance with a cap on fuel
imports under U.N. sanctions.
“As part of North Korea’s efforts to acquire revenue, the regime uses
shipping networks to import and export goods,” U.S. Assistant Secretary of the
Treasury Marshall S. Billingslea told the Congressional Foreign Affairs Committee
this month.
“North Korea employs deceptive practices to conceal the true origins of
these goods. Pyongyang has been found to routinely falsify a vessel’s identity
and documentation.”
More
In hurricane news, bankrupt Puerto Rico has
taken a direct hit. News of the damage will come out later in the day.
Maria Slams Ashore in Puerto Rico as a Category 4 Hurricane
By Brian K Sullivan
20 September 2017, 11:45 GMT+1 20 September 2017, 12:54 GMT+1
Hurricane Maria slammed into southeastern Puerto Rico as a Category 4 storm
with the potential to inflict $30 billion in damages just two weeks after Irma
ravaged the cash-strapped island.Top winds reached 155 miles (249 kilometers) per hour as Maria made landfall near Yabucoa at around 6:15 a.m. New York time, the National Hurricane Center said in an advisory. Hurricane-force winds extend as far as 60 miles from its center, the storm surge may reach 9 feet (2.7 meters) and as much as 25 inches of rain may fall in some areas.
Maria is the fourth major hurricane and 13th storm in an active Atlantic
season that’s wreaked havoc from Texas to the Caribbean and left dozens
dead. It could cause $30 billion in damage to Puerto Rico and the U.S.
Virgin Islands, according to Chuck Watson, a disaster modeler for Enki Research
in Savannah, Georgia. That’s on top of an estimated $143 billion in damage
in the U.S. alone from Hurricanes Harvey and Irma.
“The wind is going to be the main damaging issue,” said Jeff Masters,
co-founder of Weather Underground in Ann Arbor, Michigan. “When you sum up the
billions of dollars in damage this storm is going to do, wind is going to be
about half of that.”
While Irma came close to Puerto Rico about two weeks ago, the only
Category 5 storm to make landfall on the island was the San Felipe Segundo
hurricane in 1928, Masters said. The last major hurricane to strike was Georges
in September 1998. About 3.4 million people live on Puerto Rico, with some
380,000 in San Juan, according to the U.S. Census Bureau.
----Relief and recovery efforts may be slowed by the island’s weak finances. Puerto Rico filed for bankruptcy in May after years of economic decline while a series of defaults has effectively left it unable to raise money in the capital markets. Its aging government-owned electric utility operates under court protection from creditors.
Puerto Rico’s emergency fund stood at about $32 million before Irma
passed through and tens of thousands remain without power after that
storm.
More
We close for today
with the equinox, which this year falls on the 22nd.
All you need to know: September equinox
2017’s
September equinox arrives on the 22nd. Happy autumn (or spring)!
The
September equinox arrives on September 22, 2017 at 20:02 UTC.
Although the equinox happens at the same moment worldwide, your clock times
will depend on your time zone. For time zones in the continental U.S., this
equinox comes at 4:02 p.m. EDT, 3:02 p.m. CDT, 2:02 p.m. MDT or 1:02 p.m. PDT. Translate
to your time zone. At the equinox, days and nights are approximately equal in length. For us in the Northern Hemisphere,
the sun is rising later now, and nightfall comes sooner. We’re enjoying the
cooler days of autumn. Meanwhile, south of the equator, spring is about to
begin. Learn more about this equinox by following the links below:
More
Nothing is so admirable in politics as a short memory.
John Kenneth Galbraith.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, bad news for the dying EUSSR, this time from
Spain. If Catalonia wasn’t going to vote for independence in the October 1
referendum, they probably will now. Euros anyone? Brexit now before the next wheel flies off
the EUSSR’s wonky wagon.
September 20, 2017 / 8:24 AM /
Updated 13 hours ago
M&A, Spain turmoil liven up Europe stocks
MILAN (Reuters) - Deal-making and political turmoil in Spain livened up a flat session in Europe’ stock markets on Wednesday as investors awaited pointers from the Federal Reserve on the U.S. interest rate outlook.
While caution dominated the broader market, Spanish stocks
were hit hard after police arrested Catalan government officials in a bid to
halt a banned referendum on independence.
“Market are starting to realize how deep the crisis is (in
Spain),” said Jesus Castillo, an economist covering Southern Europe for French
bank Natixis.
Madrid's blue chip index .IBEX,
the best performer among major European benchmarks so far this year, fell 0.8
percent, underperforming the pan-European STOXX 600 which ended flat.
Among the biggest fallers in Madrid were
Catalonia-headquartered banks Banco Sabadell (SABE.MC)
and Caixabank (CABK.MC),
which fell 3.8 and 1.9 percent respectively.
On the M&A front, Thyssenkrupp (TKAG.DE)
rose more than 2 percent after it and India’s Tata Steel TISC.N agreed to merge
their European steel operations to create the continent’s No.2 steelmaker.
More
http://uk.reuters.com/article/uk-europe-stocks/ma-spain-turmoil-liven-up-europe-stocks-idUKKCN1BV0RQ
Reports: 12 Catalan Officials Arrested Over Secession Vote
THE ASSOCIATED PRESS (ARITZ PARRA and CIARAN GILES)
20 September 2017, 09:11 GMT+1 20 September 2017, 11:12
GMT+1
Madrid (AP) -- Spanish police arrested 12 people Wednesday in raids on
offices of the regional government of Catalonia, news reports said,
intensifying a crackdown on the region's preparations for a secession vote that
Spain says is illegal.
It was the first time Spanish authorities have detained Catalan
officials since the campaign for a secession vote in Catalonia began to gather
momentum in 2011.
Spain's Europa Press news agency and other media outlets said the raids
mostly targeted Catalonia's economic and foreign departments as authorities
worked to halt all preparatory moves for the referendum planned for Oct. 1.
Hundreds of people immediately began gathering to protest the raids and
shout pro-independence slogans outside government offices in the region's
capital, Barcelona.
The Catalan regional government confirmed Josep Maria Jove, secretary
general of economic affairs, was among those arrested. Jove is number 2 to the
region's vice president and economy chief, Oriol Junqueras.
Police and judicial authorities declined to give details on the
operation because a judge has placed a secrecy order on it.
An Interior Ministry statement said only that Civil Guard police were
carrying out an operation to gather evidence as part of investigations into the
referendum's preparations.
Spanish Prime Minister Mariano Rajoy's conservative government is waging
myriad legal battles to halt the referendum called by the pro-independence
coalition ruling Catalonia.
Backed by most Spanish opposition parties, the government says the
referendum violates the constitution and that if Catalonia wants a vote it must
work to change the constitution first.
The Constitutional Court has ordered the vote to be suspended as it studies
its legality, but Catalan officials say they will press ahead regardless.
Catalonia represents a fifth of Spain's 1.1-trillion-euro economy.
September 19, 2017 / 3:04 PM /
Updated 14 hours ago
Catalan mayors exercise right to remain silent in referendum questioning
BARCELONA (Reuters) - The first of hundreds of Catalan mayors summoned
to answer questions on why they have backed a banned Oct. 1 referendum on
independence from Spain appeared before the state prosecutor on Tuesday amid
cheers and chants from supporters.
The first three mayors to declare exercised their right to remain
silent, the Association of Municipalities for Independence (AMI) said.
Years of separatist feeling in the industrial northeastern region will
come to a head in less than two weeks as the fiercely pro-independence regional
government calls a referendum on splitting from Spain.
Madrid has declared the referendum illegal and the Constitutional Court
has suspended the vote that was approved by the regional government earlier
this month.
On Tuesday, police continued their search for ballot boxes, voting
papers and campaign leaflets, raiding the offices of Spain’s biggest private delivery
company Unipost in several Catalan cities and clashing with protesters.
So far, 745 of 948 municipal leaders have said they will provide venues
for the referendum.
“Voting is not a crime,” said Marc Solsona, mayor of the town of
Mollerussa, one of nearly 750 mayors facing charges of civil disobedience,
abuse of office and misuse of public funds, as he left the state prosecutor’s
office in Barcelona.
“I‘m just the mayor and I have to serve my people. I am committed to the
people being able to vote on Oct. 1 in accordance with the law passed by the
Catalan parliament and what happens to me is not important,” he said.
More
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?
Graphene and other carbon nanomaterials can replace scarce metals
Date:
September 19, 2017
Source:
Chalmers University of Technology
Summary:
Scarce metals are found in a wide range of everyday objects around us. They are
complicated to extract, difficult to recycle and so rare that several of them
have become "conflict minerals" which can promote conflicts and
oppression. New research shows that there are potential technology-based
solutions that can replace many of the metals with carbon nanomaterials, such
as graphene.
They can be found in your computer, in your mobile phone, in almost all
other electronic equipment and in many of the plastics around you. Society is
highly dependent on scarce metals, and this dependence has many disadvantages.
Scarce metals such as tin, silver, tungsten and indium are both rare and
difficult to extract since the workable concentrations are very small. This ensures
the metals are highly sought after -- and their extraction is a breeding ground
for conflicts, such as in the Democratic Republic of the Congo where they fund
armed conflicts.
In addition, they are difficult to recycle profitably since they are
often present in small quantities in various components such as electronics.
Rickard Arvidsson and Björn Sandén, researchers in environmental systems
analysis at Chalmers University of Technology, have now examined an alternative
solution: substituting carbon nanomaterials for the scarce metals. These
substances -- the best known of which is graphene -- are strong materials with
good conductivity, like scarce metals.
"Now technology development has allowed us to make greater use of
the common element carbon," says Sandén. "Today there are many new
carbon nanomaterials with similar properties to metals. It's a welcome new
track, and it's important to invest in both the recycling and substitution of
scarce metals from now on."
The Chalmers researchers have studied the main applications of 14
different metals, and by reviewing patents and scientific literature have
investigated the potential for replacing them by carbon nanomaterials. The
results provide a unique overview of research and technology development in the
field.
According to Arvidsson and Sandén the summary shows that a shift away
from the use of scarce metals to carbon nanomaterials is already taking place.
"There are potential technology-based solutions for replacing 13
out of the 14 metals by carbon nanomaterials in their most common applications.
The technology development is at different stages for different metals and
applications, but in some cases such as indium and gallium, the results are
very promising," Arvidsson says.
"This offers hope," says Sandén. "In the debate on
resource constraints, circular economy and society's handling of materials, the
focus has long been on recycling and reuse. Substitution is a potential
alternative that has not been explored to the same extent and as the resource
issues become more pressing, we now have more tools to work with."
The research findings were recently published in the Journal of
Cleaner Production. Arvidsson and Sandén stress that there are significant
potential benefits from reducing the use of scarce metals, and they hope to be
able to strengthen the case for more research and development in the field.
More
The monthly Coppock Indicators finished August
DJIA: 21,948 +215 Up. NASDAQ: 6,429 +266 Up. SP500: 2,472 +174 Up.
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