Baltic Dry Index. 1566 +14 Brent Crude 58.10
Capitalism’s broken.
Alan Greenspan.
Today we are 30 years
on from Black Monday 1987, when the DJIA collapsed 22 percent. It was the first
of many signs of rising mayhem in the Great Nixonian Error of fiat money.
Everything has been one Great Central Bank rigging of markets since. Today we
have unprecedented rigging of interest rates, stock markets, currencies and
precious metals, all in an ever more dysfunctional attempt to keep the Great
Nixonian Error functioning. Along the way, the central banksters have massively
rewarded the one percent, at the expense of just about everyone else.
Today, a massive
bubble exists in stocks and bonds globally. From negative interest rates to
central banksters massively buying up government bonds and intervening in
stocks, our free markets are anything but free. But despite almost a decade of
unprecedented central bankster “emergency measures,” we never seem to get free
from the emergency of 2008.
One decade on from
the systemic meltdown of the 2008 crash, our banks are still on central bank
life support, the stock bubble is built on an unrepayable mountain of debt mostly used for stock buybacks,
and we are just the next Lehman away from a systemic disaster.
Exasperated, voters
everywhere are turning to the far left or far right. Something’s got to give,
but what? I suspect it will be democracy that gives,
Below, our rigged
markets 30 years on from Black Monday. I wonder if old “Bubbles” Greenspan had
this end in mind when he had the Fed rig the delayed opening on October 20,
1987?
“It is hard for us, without being flippant, to even see a scenario
within any kind of realm of reason that would see us losing one dollar in any
of those [CDS] transactions.”
Joseph J. Cassano, a former A.I.G. executive, August 2007, on Credit
Default Swaps that wiped out A.I.G in 2008.
Solid China Data Fail to Enthuse; Dollar Is Steady: Markets Wrap
By Adam Haigh and Andreea Papuc
Stocks rose in a number of Asian markets, though China was a
conspicuous standout even after economic data from the country showed a solid
pace of growth last quarter. The dollar marked time after small gains earlier
this week, and Treasury yields held above recent lows.
Equity benchmarks advanced in Tokyo and Sydney, though were flat in Hong
Kong and Seoul and down in Shanghai. Australia’s dollar jumped after
unemployment unexpectedly dropped last month, one of a series of positive data
points in the region. China reported its economy expanded 6.8 percent last
quarter, with retail sales and industrial output accelerating in September.
South Korea’s central bank raised its growth outlook. Japan’s exports climbed.
A benchmark for Asian stocks continues to flirt with a record high,
though after a 4 percent advance already this month, some investors may want to
take a pause. The S&P 500 index hit another all-time high overnight. Oil is
trading around $52 a barrel, and gold slipped.
China’s currency retreated even after data from the central bank
suggested that the country is now seeing capital inflows. Yuan foreign-exchange
positions on the People’s Bank of China’s balance sheet rose in September for
the first time since October 2015. Spanish assets remain in focus with a
Thursday deadline looming for Catalonia’s president to renounce his
independence claims or have Madrid take control.
In the U.S., a solid earnings season is coinciding with higher chances
of another Federal Reserve interest-rate increase by year-end. More than 80
percent of the 52 members of the S&P 500 Index that have already reported
earnings for the most recent quarter beat analysts’ forecasts. Fed funds
futures indicate a roughly 80 percent chance that U.S. policy makers will raise
rates at their December meeting, up from 72 percent Friday. By then, President
Donald Trump may have announced his choice for the next Fed chair, a decision
that’s expected in the next two weeks.
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October 19, 2017 / 12:12 AM /
Updated 38 minutes ago
China's third-quarter economic growth slows as expected, property measures bite
BEIJING (Reuters) - China’s economic growth slowed slightly
in the third quarter, as expected, as the government’s efforts to rein in
property market and debt risks tempered activity in the world’s second-largest
economy.
The economy grew 6.8 percent in the third quarter from a year earlier,
in line with the median estimate in a Reuters poll and down from 6.9 percent in
the second quarter, the National Bureau of Statistics said on Thursday.
In all, economic performance was solid and on track to comfortably beat
the government’s target of around 6.5 percent for this year.
While the numbers met economist forecasts, they raise questions about more
optimistic expectations flagged by the country’s central bank governor this
week. People’s Bank of China governor Zhou Xiaochuan on Sunday said gross
domestic product (GDP) could grow 7 percent in the second half of this year.
“The data show that some deleveraging is continuing and government
reforms are working but growth is still being supported at a reasonable rate,”
said Kaori Yamato, senior economist at the Mizuho Research Institute in Tokyo.
Analysts had penciled in a gradual GDP slowdown due to an expected
softening in property investment and construction as more cities try to cool
surging housing prices, while a government campaign against riskier lending
pushes up borrowing costs.
In the property sector, growth in new construction slowed, while
property sales dropped for the first time in more than two-and-half years in
September.
“Unequivocally, the property boom has peaked,” said Rosealea Yao, a
property analyst at Gavekal Dragonomics.
More
Three reasons the next crash may be worse than 1987’s
Published: Oct 18, 2017 2:00 p.m. ET
Trading volume and speed make for a dangerous combination
Thirty years ago Thursday, the U.S. stock market had its worst day ever.
On Oct. 19, 1987, the Dow Jones Industrial Average lost 508 points, 22.6% of
its value.
It was early in my journalism career and I remember the fears that, like
Oct. 29, 1929, it would lead to a second Great Depression.
That didn’t happen, of course — the next recession began nearly three
years later, in July 1990 — and because of that, people dismiss the 1987 crash
as just a one-day blip.
Nothing could be further from the truth, as an excellent new book on the subject shows. “A First-Class Catastrophe: The Road to Black Monday, the Worst Day in Wall Street History,” by Diana B. Henriques, makes a strong case that 1987 wasn’t just a temporary crash but a painful bear market that lasted three months and included a nearly 1,000-point, or 35% loss, in the Dow. It was also a near-systemic crisis that was a precursor for much that came later.
“Black Monday was the contagious crisis that the system nearly didn’t survive,” Henriques wrote. “All the key fault lines that trembled in 2008 ... were first exposed as hazards in 1987.”
Nothing could be further from the truth, as an excellent new book on the subject shows. “A First-Class Catastrophe: The Road to Black Monday, the Worst Day in Wall Street History,” by Diana B. Henriques, makes a strong case that 1987 wasn’t just a temporary crash but a painful bear market that lasted three months and included a nearly 1,000-point, or 35% loss, in the Dow. It was also a near-systemic crisis that was a precursor for much that came later.
“Black Monday was the contagious crisis that the system nearly didn’t survive,” Henriques wrote. “All the key fault lines that trembled in 2008 ... were first exposed as hazards in 1987.”
More
In EUSSR news, it’s showdown time in Spain, as Europe’s leaders meet in Brussels. By the end of the day, democracy in Europe may never be the same again. But will Rajoy blink or send in the Army? Expectations are for something in between, at least while Europe’s “Great Leaders” are in conclave in Brussels. After that, the gloves are likely to come off in Madrid.
It’s Decision Day for Catalonia – and Spain
By Charles Penty and Esteban Duarte
Spanish Prime Minister Mariano Rajoy has been talking for months of how
he’ll stop Catalonia’s drive for independence.
The moment is approaching when he may have to act.
Rajoy has given Catalan President Carles Puigdemont until 10 a.m. Thursday to renounce his claims to independence for Spain’s biggest regional economy. Anything less, and the central government will start the process of taking direct control of the regional administration under Article 155 of the Constitution, Deputy Prime Minister Soraya Saenz de Santamaria told lawmakers in Madrid Wednesday. Rajoy is due to arrive in Brussels for a summit of European Union leaders around midday.
“It seems clear that the government has accepted that it will have to intervene in Catalonia,” said Lluis Orriols, a political scientist at Carlos III University in Madrid. “How exactly they go about doing that and what the consequences will be is still unknown.”
The prime minister has been resisting pressure from hardliners inside and outside his party to use the so-called nuclear option in the 1978 Constitution for the first time ever, wary of driving Catalan moderates into the separatist camp. But all other efforts have so far failed to reassert the authority of Spanish law in the rebel region.
Puigdemont managed to pull off an illegal referendum on Oct. 1 despite a violent police crackdown and claimed the support of more than 2 million voters. Last week he suspended the drive to secession, appealing to Rajoy for negotiations. Now he’s ready to declare independence, his foreign-policy chief Raul Romeva said Wednesday.
Even at this stage, Rajoy may soft pedal his response.
The Socialists in Madrid, who Rajoy has lobbied hard to back his efforts, are urging the prime minister to take a gradual approach to any intervention in Catalonia, according to three people familiar with their conversations. Rather than an immediate raid to seize control of all regional institutions, the central government may opt to begin a more measured process of debate and seek to intervene in key pressure points, such as the regional police force, the people said.
Socialist Leader Pedro Sanchez told reporters in Brussels Wednesday that he still hopes the Catalans will back down and avoid an intervention, Europa Press reported.
More
October 18, 2017 / 11:27 PM /
Updated 7 hours ago
Spain-Catalonia standoff set to intensify as leaders take hard lines
MADRID (Reuters) - Spain’s political showdown with Catalonia
is set to reach a new level on Thursday when political leaders in Madrid and
Barcelona are expected to make good on pledges made to their supporters to
stick to their tough positions over the region’s future.
----Puigdemont told members of his Catalan Democratic Party on Wednesday night that not only he would not back down but that he would press ahead with a more formal declaration of independence if Rajoy suspends Catalonia’s political autonomy.
It is not yet clear how and when this declaration would take place and
whether it would be endorsed by the regional assembly, though many
pro-independence lawmakers have openly said they wanted to hold a vote in the
Catalan parliament to make it more solemn.
If Rajoy invokes Article 155 of the 1978 constitution, which allows him
to take control of a region if it breaks the law, it would not be fully
effective until at least early next week as it needs previous parliamentary
approval, offering some last minute leeway for secessionists to split
unilaterally.
This prospect has raised fears of social unrest, led the euro zone’s
fourth-largest economy to cut its growth forecasts and rattled the euro.
Puigdemont has already defied Rajoy once this week, when he ignored a
first deadline to drop the independence campaign and instead called for talks.
Both sides have traded blame for the stand-off for more than a month.
----Puigdemont says a violent police crackdown on the referendum and arrests of pro-independence leaders on charges of sedition show the Spanish state has become authoritarian.
Some further uncertainty could come from the terms of Article 155, which
are vague.
Madrid can in theory sack the local administration and install a new
team, take control of police and finances, and call a snap election.
But some members of the Catalan government have already questioned this
interpretation of the constitution, suggesting the stand-off could extend for
at least several more days.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Presented without need for comment.
"We finished the
year, and we reported that we had $17 billion of cash sitting at the bank's
parent company as a liquidity cushion. As the year has gone on, that liquidity
cushion has been virtually unchanged."
Alan Schwartz, CEO Bear Stearns,
March 12, 2008. Bust March 16, 2008.
Why Have Investigations of Wall Street Disappeared from Corporate Media?
By Pam Martens and Russ Martens: October 16, 2017
Hurricanes, wildfires, the multiple investigations of Russia’s involvement
in the 2016 presidential election and the calamity-du-jour in the Trump White
House are gobbling up an outsized share of digital and print news pages at
corporate media. What’s gone missing is intrepid, in-depth investigations of
Wall Street’s latest scam against the public – even at corporate media outlets
purporting to focus on Wall Street.Consider today’s front page of the Wall Street Journal: there’s an article on health care; central banks and stimulus; Iraqi forces and Kurdish fighters; how Blackstone Group is on the prowl for retail investors; and a curious report on long-haul truckers cooking up jambalaya and Thai peanut pork (you can’t make this stuff up). There is nothing about an investigation of a mega Wall Street bank; the dangers these behemoths continue to pose to taxpayers and the U.S. economy; nothing about Wall Street’s return to its jaded ways that led to the epic financial crash of 2008 – despite the fact that all of this is happening and timely and the public has a right to be reading about it in a paper whose beat is ostensibly Wall Street.
Rupert Murdoch’s News Corp. bought Dow Jones & Company in late 2007 after a century of ownership by the Bancroft family. The purchase just happened to come at a time when the Federal Reserve had secretly begun to funnel what would end up totaling $16 trillion in cumulative low-cost loans to bail out the Wall Street mega banks and their foreign counterparts.
In 2011, the Pew Research Center released a study on how front page coverage had changed since the News Corp. purchase of the Wall Street Journal. Pew found that “coverage has clearly moved away from what had been the paper’s core mission under previous ownership—covering business and corporate America. In the past three and a half years, front-page coverage of business is down about one-third from what it had been in 2007, the last year of the old ownership regime.”
What is not down but “up” at the Wall Street Journal is its defense of the Wall Street banking giants’ indefensible practices on its editorial and opinion pages.
One of the most striking examples of the changing face of corporate media coverage of Wall Street was an October 20, 2013 editorial in the Wall Street Journal headlined:“The Morgan Shakedown.” The unsigned editorial began with this:
“The tentative $13 billion settlement that the Justice Department appears to be extracting from J.P. Morgan Chase needs to be understood as a watershed moment in American capitalism. Federal law enforcers are confiscating roughly half of a company’s annual earnings for no other reason than because they can and because they want to appease their left-wing populist allies.”
Actually, there was a very good reason for the $13 billion settlement – but the intrepid investigative reporting on that subject would be done by Matt Taibbi for Rolling Stone – not by the paper still calling itself the “Wall Street” Journal. Taibbi revealed that the U.S. Justice Department had actually settled on the cheap and had failed to reveal to the public that it had the most credible of eyewitnesses to mortgage fraud at JPMorgan Chase – a securities attorney who worked there and had reported the fraud to her supervisors. The attorney, Alayne Fleischmann, told Taibbi that what she witnessed in JPMorgan’s mortgage operations was “massive criminal securities fraud.”
Taibbi’s in-depth report on the matter made the editorial board at the Wall Street Journal appear naïve or captured by Wall Street. It raised the added embarrassing question as to why the Wall Street Journal was out of touch with the details of the Justice Department’s investigation.
As recently as two months ago, the Wall Street Journal’s editorial board was again attempting to write a revisionist history of the criminal conduct on Wall Street that led to the 2008 financial crisis – the greatest economic bust in America since the Great Depression. Under the subhead “Bankers haven’t gone to jail because they haven’t committed crimes,” the editorial board wrote:
“Politicians and journalists have made careers of lamenting that too few bankers have been convicted of crimes. They overlook that, at least in America, to prove a crime you have to have enough evidence and that a mistake is not necessarily criminal.”
Again, the Wall Street Journal is seriously out-of-touch with its beat. In order “to prove a crime,” the U.S. Justice Department has to actually use one of the many weapons in its arsenal – like subpoenas and wiretaps. That didn’t happen because President Barack Obama put the wrong men in charge at the Justice Department. Again, that intrepid reporting didn’t make its way into the public domain via the Wall Street Journal but via the PBS program, Frontline, and producer Martin Smith. The 2013 program indicated that there wasn’t even a pretense of a real investigation by the Justice Department against the biggest Wall Street banks. The relevant portion of the transcript reads as follows:
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If the financial
system goes down, our business is going down and, trust me, yours and everyone else's is going down, too.
Lloyd
Blankfein’s CEO Goldman Sachs, threat 2008. “Mr. Goldman Sacks.”
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?
Become a blockchain expert in 1,384 words
Tama Churchouse, Stansberry Churchouse
Research Oct. 14, 2017, 2:24 PM
The blockchain revolution is coming… And it’s going to fundamentally change how businesses operate.
Make no mistake… this revolution is at least as significant as the one brought about by the Internet. It will disrupt every single business on the face of the earth.
That’s why it’s vital that you learn to understand this technology. It will offer countless investing opportunities in the years ahead… and it will play a central role in future years in how you (and, without question, your children) work, do business, play, and operate in society.
I know that sounds like a lot. But bear with me as I explain a bit…
---- “Blockchain” is one of those words that has the power to confuse even the smartest people. And the media is completely clueless about how this technology actually works.
For starters, blockchain is the technology behind cryptocurrencies like
bitcoin.
The Bitcoin blockchain allows us to transfer the bitcoin currency person
to person without any intermediary. When I transfer U.S. dollars to you, we
either have to do it in person – with me handing you cash – or through the
banking system, which involves me telling my bank to send money to your bank
account.
(Bitcoin with a capital “B” refers to the blockchain, whereas bitcoin
with a lowercase “b” refers to the cryptocurrency.)
But how does this actually work?
Think of the Bitcoin blockchain as a giant Excel spreadsheet that shows
the complete transaction history and location of every bitcoin.
Every 10 minutes the spreadsheet gets updated as an additional “block”
of new transactions is added to the spreadsheet.
Everyone can have their own copy of the spreadsheet. It’s completely
transparent.
Let’s say Jim sends 1 bitcoin to Sally. When the transaction is
processed by the blockchain, the spreadsheet is updated. Jim’s balance is
decreased by a bitcoin, and Sally’s is credited one.
But who updates the spreadsheet? And how do we stop people from trying
to make false updates to the spreadsheet, awarding themselves more bitcoin, or
trying to send the same bitcoin to two different people at the same time?
That’s the job of what are called nodes, which are also known as miners.
Nodes are the computers or large computer systems that support the Bitcoin
network and keep it running smoothly. Nodes are run by individuals or groups of
people who contribute money towards buying powerful computer systems, known as
mining rigs.
There are two types of nodes, full nodes and lightweight
nodes.
Full nodes keep a complete copy of the blockchain (i.e., the giant Excel
spreadsheet). This is a record of every single transaction that has ever
occurred. This is currently around 150 gigabytes in size. (For reference, the
largest USB thumb drives usually max out at about 128 gigabytes.)
Lightweight nodes, on the other hand, only download a fraction of the
blockchain. Lightweight nodes are used by most folks for bitcoin transactions.
A lightweight node will communicate to a full node when it wants to transact.
So the full nodes (or miners) run the spreadsheet, but how do they keep
the spreadsheet synchronised between them all? This is the key, considering there’s
no limit to the number of people who can run their own full node.
How do nodes process transactions?
Let’s go back to Jim and Sally. Jim wants to send 1 bitcoin to Sally.Sally creates a bitcoin wallet. Anyone can create a bitcoin wallet in a couple of minutes (we wrote a complimentary report outlining how to do this, which you can access by clicking here). When you create your wallet, there are two pieces of information created for you:
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“The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”
“Adam Smith” aka George Goodman.
The monthly Coppock Indicators finished September
DJIA: 22,405 +223 Up. NASDAQ: 6,496 +274 Up. SP500: 2,519 +179 Up.
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