Monday, 23 October 2017

A Critical Week.



Baltic Dry Index. 1578 -04   Brent Crude 57.82

It is the duty of Her Majesty's government neither to flap nor to falter.

Prime Minister Harold MacMillan

There’s a lot to cover this morning so we start with Asia.   In China home prices stalled as the property speculation restrictions bite. Prime Minister Abe large win in Japan will cause military worries in Beijing. 

I read a great number of press reports and find comfort in the fact that they are nearly always conflicting.

Prime Minister Harold MacMillan

China's Home Prices Rise in Fewest Cities Since January 2016

Bloomberg News
China home prices rose in the fewest cities since January 2016, adding to signs of a property slowdown as curbs on buyers bite.

New-home prices, excluding government-subsidized housing, in September rose in 44 of 70 cities tracked by the government, compared with 46 in August, the National Bureau of Statistics said on Monday. Prices fell in 18 cities from the previous month and were unchanged in eight.

Stabilizing home prices in the nation’s largest cities are a welcome sign for Communist Party leaders gathered in Beijing to map policy for the next five years. President Xi Jinping renewed a yearlong call that homes are built “to be inhabited’’ and not for speculation in his speech at the twice-a-decade Party Congress, inking the language in one of the nation’s top policy frameworks.

Data last week showed home sales last month fell from year-earlier levels for the first time since March 2015, declining 2.4 percent by value, and 5.7 percent by area, according to Bloomberg calculations. 

Xi’s speech showed “that instead of easing, we are more likely to see more tightening during or after the party congress,” Alan Jin, a property analyst at Mizuho Securities Asia Ltd. said before the data release.

Home prices fell 0.5 percent in southern Guangzhou, the second consecutive monthly fall. Values in Shanghai and in Beijing declined 0.1 percent and 0.2 percent respectively. In Shenzhen, prices were unchanged.
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October 23, 2017 / 5:35 AM / Updated 23 minutes ago

Japan's Abe to push pacifist constitution reform after strong election win

TOKYO (Reuters) - Prime Minister Shinzo Abe, buoyed by a huge election win for lawmakers who favour revising Japan’s post-war, pacifist constitution, is likely to push towards his long-held goal but will need to convince a divided public to succeed.

Parties in favour of amending the U.S.-drafted charter won nearly 80 percent of the seats in Sunday’s lower house election, media counts showed. Four seats remain to be called and final figures are expected later on Monday.

That left the small, new Constitutional Democratic Party of Japan (CDPJ) as the biggest group opposed to Abe’s proposed changes.

Formed by liberal members of the Democratic Party, which no longer exists in the lower house, it won 54 seats, a fraction of the ruling bloc’s two-thirds majority in the 465-member chamber.

Abe said he wanted to get other parties, including Tokyo Governor Yuriko Koike’s new conservative Party of Hope, on board and was not insisting on a target of changing the constitution by 2020 that he floated earlier this year.
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Nikkei Set for Record Streak as Abe Secures Election Win

By Eric Lam
Japanese stocks jumped after Prime Minister Shinzo Abe’s ruling coalition retained its two-thirds majority in an election victory Sunday that paves the way for continued easy monetary policy and stimulative fiscal spending. The Nikkei 225 Index gained 0.9 percent at 9:33 a.m. in Tokyo, headed for a record 15th straight day of gains. The benchmark Topix index meanwhile has rallied for 11 days, trading at a July 2007 high.

In European news, forget Brexit, this week it’s all about secession. While Catalonia v Spain is in for a critical week, separatism is rising in Italy. And there’s rising discontent in France.

Catalan Separatists Plot Response to Spain's Shock and Awe

By Charles Penty and Esteban Duarte
Catalan separatists meet Monday to craft their reply to Prime Minister Mariano Rajoy after the Spanish leader announced an unprecedented barrage of measures to stamp his authority on the rebel region.

Party leaders in the Catalan Parliament are scheduled to meet at 10:30 a.m. to discuss the timing and agenda for the chamber’s next plenary. Regional President Carles Puigdemont, set to be ousted by the Spanish government within days, wants the separatist groups who control the legislature to hold the session this week, a press officer for the regional executive said. Puigdemont has vowed to fight on, and his allies are signaling he could declare independence as soon as this week.

Rajoy on Saturday shocked many observers with plans to clear out the entire separatist administration in Barcelona and take control of key institutions including public media and the regional police force, known as the Mossos d’Esquadra. Spain’s chief prosecutor said that if Puigdemont declares independence he would face as much as 30 years in jail and signaled that he could be arrested immediately.

The premier is trying to snuff out an independence drive that’s been gathering momentum since he took office in 2011. It’s now wounding the economy and dividing the nation. With Spain’s upper house set to give its seal of approval to his strategy by the end of this week, the focus is shifting to the mechanics of how Madrid can take charge of Catalonia’s institutions in the face of secessionist resistance.

“The big question for me, really, is how Madrid is actually going to implement its proposed actions in Catalonia,” said Caroline Gray, a lecturer in politics and Spanish at Aston University in the U.K. who specializes in nationalist movements. “Catalan government officials and many within the Mossos and Catalan media are not just going to stand down without a fight.”
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October 22, 2017 / 11:59 AM / Updated 6 hours ago

Italian regions vote in favour of autonomy in shadow of Catalonia crisis

MILAN (Reuters) - Two wealthy regions of northern Italy voted overwhelmingly on Sunday for greater autonomy in referendums that could fan regional tensions in Europe at a time when Spain is striving to prevent Catalonia from breaking away.

Millions of people in Lombardy and Veneto, both run by the once openly secessionist Lega Nord party, voted more than 90 percent for “yes”, according to preliminary results released just before midnight (2200 GMT). Ballots closed at 2100 GMT.

The party called the referendums to secure a mandate to negotiate a better financial arrangement with Rome, an ambition that mirrors Catalonia’s goal to claw back taxes from Madrid.

The preliminary turnout in Lombardy was above 40 percent, Lombardy President Roberto Maroni told journalists when announcing preliminary results. In Veneto, it reached 57 percent.

“We can now write a new page: The regions that ask for more power will get it,” Maroni told journalists in Milan.

“I am talking for example about the power to discuss about tax proceeds that normally go to Rome ... this is the first step in a path towards big reforms,” he added.

Unlike Catalonia’s Oct. 1 independence referendum, which Spain had declared unlawful, the Italian votes were held in line with the constitution. But they are not binding on Rome.

Lombardy, home to financial hub Milan, accounts for about 20 percent of Italy’s economy, which is in turn the euro zone’s third largest. Veneto, which includes the tourist magnet Venice, accounts for 10 percent.
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Macron Opponents Paint Him as ‘Anti-Robin Hood’ in Tax Uproar

By Mark Deen and Helene Fouquet
President Emmanuel Macron’s effort to scrap France’s wealth tax is overshadowing other government policies as opponents portray him as an “anti-Robin Hood” who is taking from the poor to give to the rich.

With his first budget now being scrutinized by lawmakers, Macron and his ministers are in the uncomfortable position of defending a cut in the tax on personal assets over 1.3 million euros ($1.5 million) while also having cut housing subsidies for the poor. Bruno Le Maire said Wednesday that the top 1,000 payers of the wealth tax -- known as the ISF -- will collectively benefit to the tune of 400 million euros under the new budget. That amount is equivalent to savings from lower housing benefits, the opposition says.

“There is a widening public debate about Macron being the president of the rich,” Adrien Quatennens, the 27-year-old lawmaker of the left-leaning France Unbowed, said on France 5 television on the first day of the budget debate.  “We believe it’s not just that; we think he’s the anti-Robin Hood, who is transferring wealth from the poor to the rich.”

The problem for Macron is that the charge is sapping his political capital at a time when his government is gearing up for its second-major economic reform -- this time an overhaul of the nation’s system of unemployment benefits. Despite ministers’attempts to explain the government’s reasons for the wealth tax cut, Macron’s popularity is suffering.

The president’s approval rating dropped 3 points to 42 percent, according to an Ifop poll published Sunday. A separate Elabe poll shows that Quatennens’s argument has traction: 69 percent of the French believe Macron’s plan to trim the wealth tax will increase inequality, while only 31 percent agree with the government’s argument that it will foster investment.

 “The wealth tax is a symbol, a marker of the politics of the right,” Raymond Soubie, one of France’s most respected specialists on social relations, said in an interview “By cutting it, you win symbolically but you create a lot of headaches.” If it comes at the same time as other budget cuts, the situation could become “explosive,” he added.
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In other EUSSR news, politically Europe’s becoming less stable.

October 22, 2017 / 12:44 PM / Updated 12 hours ago

Austria's likely next chancellor hopes to form government in 60 days - paper

ZURICH (Reuters) - Austria’s likely next chancellor, Sebastian Kurz, wants talks over a new government to last no more than two months, he said in a newspaper interview published in Sunday.
Austria’s president on Friday gave the green light to conservative leader Kurz, whose People’s Party (OVP) secured 31.5 percent of the vote in last week’s parliamentary election, to form a government.

“The Austrians expect that there is quickly a strong and stable government which takes up work,” Kurz was quoted as saying by Austria’s Kronen Zeitung. “That means that negotiations should be concluded in less than 60 days.”

Kurz campaigned on a platform that combined a hard line on immigration similar to that of the far-right Freedom Party (FPO) with traditional conservative principles like slimming down the state and cutting taxes.
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October 22, 2017 / 2:29 PM / Updated 13 hours ago

Czech tycoon Babis to be named prime minister but may struggle to find partners

PRAGUE (Reuters) - Czech President Milos Zeman said on Sunday he would name Andrej Babis prime minister, but the tycoon leader of the anti-establishment ANO party may struggle to find coalition partners despite his emphatic election win.

ANO won 29.6 percent of the vote at the weekend’s polls, nearly three times as much as its closest rival, but many parties expressed reluctance or rejected outright any coalition with it while Babis fights off fraud charges.

Zeman said the charges were not an obstacle for Babis - the second richest Czech who has been compared to other tycoons-turned-political leaders Donald Trump and Silvio Berlusconi - to become prime minister.

“My aim is that when I appoint the prime minister, and that will be Andrej Babis, that there is certainty or at least high probability that this prime minister will be successful in a parliamentary vote of confidence,” Zeman said in a live interview on news website www.blesk.cz.

ANO will control 78 seats in the 200-seat lower house so still needs partners from the other eight factions to form a majority, but Babis’s stance as an anti-establishment force has made it difficult to forge alliances.

Opponents see Babis, worth an estimated $4 billion, as a danger to democracy because of his commanding leadership style and business and media power that they fear could pose conflicts of interest.

Police allege Babis hid ownership of one of his firms a decade ago to receive a 2 million euro EU subsidy that was meant for small businesses. He denies wrongdoing.
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Finally today, some good news from France. Bordeaux wine makers are optimistic on the quality of their 2017 brew. “There is no comparison with ’15 or ’16,” a reference to the past two critically acclaimed vintages in the region, “but it may be close in style to 2014.”” Quite. Some of us found the ’15 or ’16 too concentrated by far, but I’ll look out for the ’17 Angelus down at my local Aldi and Lidl.

Bordeaux Winemakers Optimistic on ’17 Quality After Frost Damage

By Guy Collins
October 21, 2017, 8:00 AM GMT+1
Bordeaux winemakers harvested healthy, ripe grapes this year even after the worst frosts in a quarter-century hit vineyards in April and significantly reduced the amount available for bottling, according to vintners interviewed this month.

Chateau Angelus, a Saint Emilion estate whose bottles have been featured in James Bond films and top vintages sell for $500, indicated earlier this year that up to 20 percent of plots devoted to its main wine had been affected by frost. Now it estimates the drop in output at more like 15 percent.

The estate is “happy in terms of quality,” owner Stephanie de Bouard-Rivoal said by phone from Bordeaux. “We had very healthy conditions for the grapes. There is no comparison with ’15 or ’16,” a reference to the past two critically acclaimed vintages in the region, “but it may be close in style to 2014.”

Across the country, French winemakers will produce the smallest vintage in 60 years, with the spring frost in Bordeaux and elsewhere combining with summer storms causing rot in Champagne and drought shriveling grape bunches further south.

While frosts reduce the quantity of grapes available for winemaking, they do not necessarily affect the quality of those that escape damage, and Bordeaux producers have noted that one of the most memorable vintages of the last century, 1945, was also badly hit by cold spring weather.

Production of the main Angelus wine, normally around 100,000 bottles, will this year be between 80,000 and 85,000 bottles, De Bouard-Rivoal said. “We consider ourselves as fairly lucky in this sad environment,” she said. “It’s important to put things in perspective.”

At Clos Fourtet, a vineyard on the edge of the medieval town of Saint Emilion, about 25 percent of the grapes were lost to frost, with small berries and lower-than-usual yields contributing to an overall decline of about 40 percent in volume produced, according to Matthieu Cuvelier, whose family owns the property.

Cuvelier, interviewed at a London tasting of the Union des Grands Crus de Bordeaux trade group, said 2017 was “a ripe vintage” with “a lot of freshness,” while describing it as “less concentrated than 2015 and 2016.”
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It is, of course, a trite observation to say that we live "in a period of transition." Many people have said this at many times. Adam may well have made the remark to Eve on leaving the Garden of Eden.

Prime Minister Harold MacMillan

Crooks and Scoundrels Corner

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

Today, continuing trouble in Asia’s commodity sector.

Noble Group Warns of Loss Topping $1 Billion

By Jack Farchy, Jasmine Ng, and Lianting Tu
Embattled commodity trader Noble Group Ltd. agreed to sell most of its oil-liquids business to Vitol Group to help pare down debt, while warning that it’s set to post a net loss of more than $1 billion for the third quarter as its access to financing remains constrained.

Proceeds from the sale would have been $582 million, an illustrative figure that’s based on first-half accounts, according to statements from the company on Monday. Noble Group also said that amount was derived from a starting sum that included proceeds from the earlier sale of its gas-and-power unit. Shares of the trader slumped the most in nearly three months.

Among highlights from the company’s two statements on Monday are:
  • A total net loss of $1.1 billion to $1.25 billion expected in the third quarter
  • That total figure includes an adjusted net loss from continuing operations of $50 million to $100 million, as well as exceptional losses including non-cash items of $1.05 billion to $1.15 billion
  • Lenders agreed to a two-month extension of a waiver related to a revolving-credit facility to Dec. 20
  • Proceeds from the oil sale and gas-unit sale are expected to be enough to retire the Noble Americas Corp. borrowing base revolving facility, and the Noble Clean Fuels Ltd. borrowing base revolving facility
Noble Group, once Asia’s largest commodity trader, has been rushing to sell its oil business to pay back lenders in a struggle to survive. The deal is the latest in a string of disposals as executives pursue a shrink-to-survive strategy to meet obligations. The company’s crisis spans the past two years and its shares have lost about 90 percent since early 2015 as Noble Group draws back to a largely Asian business focused on coal, iron ore, freight and LNG.

“The core of their business has changed to some degree, but they’re still fighting to survive,” Nicholas Teo, a trading strategist at KGI Securities (Singapore) Pte, said by phone. “Management has been selling assets to lighten the debt load, and this oil deal is quite significant in size.”

The trader’s shares, which were suspended on Friday ahead of the announcements, dropped as much as 12 percent to 33.5 Singapore cents, and traded at 34 cents at 12:24 p.m. The stock has collapsed about 80 percent this year amid concerns Noble Group will default.
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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?

Liquid metal discovery ushers in new wave of chemistry and electronics

A 'once-in-a-decade' discovery set to revolutionize the way we do chemistry

Date: October 19, 2017

Source: RMIT University

Summary: Researchers use liquid metal to create atom-thick 2-D never before seen in nature. The research could transform how we do chemistry and could also be applied to enhance data storage and make faster electronics.

Researchers from RMIT University in Melbourne, Australia, have used liquid metal to create two-dimensional materials no thicker than a few atoms that have never before been seen in nature.

The incredible breakthrough will not only revolutionise the way we do chemistry but could be applied to enhance data storage and make faster electronics. The "once-in-a-decade" discovery has been published in Science.

The researchers dissolve metals in liquid metal to create very thin oxide layers, which previously did not exist as layered structures and which are easily peeled away.

Once extracted, these oxide layers can be used as transistor components in modern electronics. The thinner the oxide layer, the faster the electronics are. Thinner oxide layers also mean the electronics need less power. Among other things, oxide layers are used to make the touch screens on smart phones.

The research is led by Professor Kourosh Kalantar-zadeh and Dr Torben Daeneke from RMIT's School of Engineering, who with students have been experimenting with the method for the last 18 months.

"When you write with a pencil, the graphite leaves very thin flakes called graphene, that can be easily extracted because they are naturally occurring layered structures," said Daeneke. "But what happens if these materials don't exist naturally?

"Here we found an extraordinary, yet very simple method to create atomically thin flakes of materials that don't naturally exist as layered structures.

"We use non-toxic alloys of gallium (a metal similar to aluminium) as a reaction medium to cover the surface of the liquid metal with atomically thin oxide layers of the added metal rather than the naturally occurring gallium oxide.

"This oxide layer can then be exfoliated by simply touching the liquid metal with a smooth surface. Larger quantities of these atomically thin layers can be produced by injecting air into the liquid metal, in a process that is similar to frothing milk when making a cappuccino."

It's a process so cheap and simple that it could be done on a kitchen stove by a non-scientist.
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It has been said that there is no fool like an old fool, except a young fool. But the young fool has first to grow up to be an old fool to realize what a damn fool he was when he was a young fool.

Prime Minister Harold MacMillan

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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