Baltic Dry Index. 1588 +02 Brent Crude 58.42
“The
U.N. is a place where governments opposed to free speech demand to be heard.”
Mad
Magazine
We open today with 21st century China,
where China’s politburo changes imply President Xi will try for at least a
third 5 year term next decade. All part of his plan to turn China into a
dominant super power by 2050, if not the world’s most dominant super power by 2050, if not sooner.
Europe is a molehill. All
great empires and revolutions have been on the Orient; six
hundred millions live there.
Napoleon. French Dictator.
China Unveils New Leaders With No Clear Xi Successor in Sight
By Ting Shi and Keith Zhai
Chinese President Xi Jinping unveiled a new leadership line-up that
included no clear potential heirs, breaking with a quarter-century-old
succession system and raising the chances that he might seek to stay in office
beyond 2022.
All five men appointed to join Xi and Premier Li Keqiang on the
Politburo Standing Committee will be too old to rule for a decade after Xi
finishes his second term. The official Xinhua News Agency said those promoted
were Xi chief of staff Li Zhanshu, 67; Vice Premier Wang Yang, 62; party
theorist Wang Huning, 62; party personnel chief Zhao Leji, 60; and Shanghai
party secretary Han Zheng, 63.
“We will work diligently to meet our duty, fulfill our ambition and be
worthy of their trust,” Xi said in remarks to reporters in Beijing.
The new lineup -- coupled with revisions to the party charter that
elevated Xi’s status -- lay the groundwork for him to influence the world’s
second-biggest economy for decades to come. Last week he laid out a vision to
turn China into a leading global power by 2050, with a thriving middle class,
strong military and clean environment.
During his first term, Xi looked to boost China’s global clout with an
Asia-to-Europe infrastructure initiative, and has reassured the world that his
nation wouldn’t seek hegemony as it grows more powerful. He has also sought to
avoid a conflict over North Korea with U.S. President Donald Trump, who is
scheduled to visit China next month.
----The group of leaders he announced on Wednesday raises questions about the future of a succession system that has underpinned China’s recent power transfers.
Established in 1992 as an aging Deng Xiaoping sought to ensure
stability following the bloody Tiananmen Square crackdown, the framework calls
for party chiefs to hand over power after two, five-year terms, and identify a
successor by the halfway point -- where Xi is now. It also set an unwritten
retirement age of 68.
----While Xi could still promote a successor at any point,
Wednesday’s announcement signaled a willingness to depart from the norms
established by Deng and return China to a personality-driven model that
allocates him even greater authority. On Tuesday, the party approved a revised
charter that put Xi’s contributions on par with those of Mao Zedong and Deng
and while declaring him the party’s “core” leader indefinitely.
More
Asian markets largely
yawned as it was a widely anticipated outcome.
More important into an over extended stock market bubble, how close are
the central banks to get on with real quantitative tightening, and how much ,
if any, of President Trump’s tax reductions will get on the statute books by
year end. As we approach the one year anniversary of President Trump’s
election, it’s mostly been governance by
Presidential decree, rather than getting legislation passed. In a now tired US stock
market bubble, there’s a nagging doubt that any of it will be enacted. Just don’t
let on to the stock markets leading stock peddlers.
"There
is no cause to worry. The high tide of prosperity will continue."
Andrew W. Mellon, US Secretary of the Treasury,
Sept. 1929.
Stocks in Asia Stall; Aussie at Three-Month Low: Markets Wrap
By Adam Haigh and Andreea Papuc
Gains in Asian equities stalled at recent highs, while optimism in the
world economy and encouraging earnings reports buoyed the dollar and bond
yields. The Australian dollar sunk to its lowest since July after inflation
data damped the outlook for higher interest rates.
Japan’s
stocks fluctuated with the yen. The Nikkei 225 Stock Average is poised for a
17th consecutive session of gains. Profit at Caterpillar Inc., a bellwether for
global growth, reinforced the view that the international economic expansion is
the most synchronized since the start of the decade. Alongside solid
manufacturing readings from Europe, Japan and the U.S., that helped pushed
10-year Treasury yields to 2.42 percent and lifted the greenback to the highest
level since July.
More indications of broadening global growth are coming as the Federal Reserve and other central banks start to pull back on emergency monetary stimulus. The European Central Bank is expected to announce a reduction in the size of its monthly stimulus spend at its policy meeting Thursday, the biggest scheduled event for markets this week.
In the U.S., an intensifying war of words between President Donald Trump and Republican U.S. Senator Bob Corker of Tennessee has muddied the prospects for tax reform. In a speech highly critical of Trump, Arizona Republican Jeff Flake announced he wouldn’t seek re-election to his Senate seat, raising further uncertainty about the overhaul’s fate.
More
Stock market would see ‘setback’ if Trump tax package fails, says BlackRock’s Fink
Published: Oct 24, 2017 4:09 p.m. ET
The head of the world’s largest asset manager says stock market values don’t
yet reflect the prospects for corporate tax cuts and other measures that are
part of a proposed U.S. tax overhaul.“I think very little is baked in,” said Larry Fink, chairman and chief executive of BlackRock Inc. BLK, -0.14% which has $5.7 trillion in assets under management, in an interview with CNBC Tuesday.
Speaking on the sidelines of a conference in Riyadh, Fink said the stock market’s continued rally has been driven largely by global growth. He said investors are taking more of a “wait-and-see” attitude on tax plans put forward by the Trump administration and the Republican Congress, given earlier policy setbacks.
“Policy has proven to be disappointing so far,” he said, adding that he expects to see tax legislation pass in the fourth quarter of this year or first quarter of 2018.
If it does pass, “I think the market will see another leg up,” he told CNBC. “If we did not get tax reform, we would have a market setback.”
That’s because a defeat would underscore Washington’s inability to implement policy, weighing on market psychology, he said.
----Fink also told CNBC that investors should brace for annual returns of just 4% over the next decade in a balanced portfolio of stocks and bonds.
While 2017 will turn out better than that, thanks to this year’s continued equity rally, some years will be rough, he said.
“There are going to be some times where you’re going to have a market setback where you could lose 20, 30, to 40% of the market,” he said.
BlackRock isn’t alone in looking for low returns. Morgan Stanley has forecast 4.2% annual returns over the next decade for a traditional portfolio made up of 60% stocks and 40% bonds.
More
Elsewhere, Italy unlike
Spain, began to prepare for the inevitable. Better a compromise solution for
all, rather than an economic civil war, as Spain seems to be going for. Still
any substantive changes are unlikely before 2019. Still, it is a further sign
the old EUSSR is dissolving before our eyes. Without major reform and change,
the EU/EC has no future in its present wealth, and young people’s jobs
destroying form. In other coming trouble
for the EUSSR, Germany’s forming odd ball coalition government, seems intent on
enforcing austerity. Euros anyone?
The whole history
of civilization is strewn with creeds and institutions which were invaluable at
first, and deadly afterwards.
Walter Bagehot.
October 24, 2017
Italy ready to discuss calls for greater autonomy - Gentiloni
VENICE (Reuters) - The Italian government is ready to open negotiations
with Lombardy and Veneto after the two wealthy regions voted overwhelmingly for
greater autonomy, Prime Minister Paolo Gentiloni said on Tuesday.
Unlike a recent referendum on independence in Catalonia, which sparked a
political crisis in Spain, the Italian votes this weekend were legal, but not
binding on Rome.
Making clear he had no intention of making a drama out of the twin
ballots, Gentiloni said he was ready to discuss how Lombardy and Veneto wanted
to proceed.
“Here we are talking about how to make Italy work better. We are not
calling into question Italy and its unity,” Gentiloni said during a visit to an
oil refinery close to Venice, the capital of the northeastern Veneto region.
“The government is ready to look into the merits of this ... it will be
a complex discussion that can’t be done in five minutes,” he added.
Regional governments have the right to ask for greater oversight in 23
policy areas, including the environment, infrastructure, health and education.
The most delicate negotiations are likely to be over tax returns, with
Veneto demanding that it be allowed to spend 90 percent of all the taxes raised
on its own territory.
Among Italy’s 20 regions, Lombardy and Veneto account for just under a
third of its economic output and are home to around 25 percent of its
population.
Italy’s poorer, less developed southern regions are worried that they
will receive less funding in future if Lombardy and Veneto get to keep more of
their own tax take.
More
October 24, 2017 / 11:14 PM /
Updated 5 hours ago
German parties in coalition talks agree on no new debt
BERLIN
(Reuters) - Politicians from four German parties seeking to form a first-of-its-kind
coalition government agreed on Tuesday not to increase the country’s debt load
in order to fund sought-after tax cuts, subsidies and investments.
Chancellor Angela Merkel’s Christian Democrats (CDU), their Christian
Social Union (CSU) allies, the liberal Free Democrats and the Greens held a
second round of talks after an election last month that saw the far-right
Alternative for Germany (AfD) enter parliament for the first time.
The four parties are under pressure to find common ground on contentious
issues such as the future of the euro zone and immigration policy, as well as
fiscal policy.
A paper seen by Reuters that outlines their initial agreement on state
spending showed the potential coalition partners want to cut taxes for families
with children as well as lower- and middle-income people.
They also want to abolish the “solidarity tax”, introduced after
reunification to support poorer states in eastern Germany, which is due to
expire in 2019.
The Greens, who before the talks said they opposed sticking to a
balanced budget at any cost, appear to have conceded in exchange for a common
pledge for subsidies to home owners who make their domiciles more energy
efficient.
Merkel’s CDU and their Bavarian CSU allies lost support in the election
to the anti-immigrant AfD, as the party stole many conservative voters angry at
her 2015 decision to welcome more than one million migrants into Germany.
Weakened after the Sept. 24 vote, Merkel is now seeking to form a
four-way coalition untested at the national level that will secure her a fourth
term as chancellor.
----A report by Merkel’s CDU last week found that Germany’s next government would have less fiscal room than expected.
It also determined that the next government would have only 30 billion
euros ($35.29 billion) free for new projects over the next four years if there
is no new debt taken on - as has been the case since 2014.
The four parties’ demands amount to over 100 billion euros in additional
spending.
The initial fiscal blueprint agreed on Tuesday did not say how the
parties will fund their projects. It said they would explore fiscal flexibility
measures at later rounds of talks.
More
“Stock
prices have reached what looks like a permanently high plateau. I do not feel
there will be soon if ever a 50 or 60 point break from present levels, such as
(bears) have predicted. I expect to see the stock market a good deal higher
within a few months.”
Irving Fisher, Ph.D. in economics, Oct. 17, 1929
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today back to the banksters again. It’s really not
their fault. Just like modern politicians, they can resist anything except
temptation. Below what part of “front
running” didn’t HSBC understand?
“The
world is a place that’s gone from being flat to round to crooked.”
Mad
Magazine
HSBC Trader’s Conviction Will Echo Through $5 Trillion FX Market
By Lananh Nguyen and Patricia Hurtado
October 24, 2017, 5:00 AM GMT+1
Global currency traders and compliance officers who monitor them were put on
high alert after a New York jury convicted a former HSBC
Holdings Plc executive of fraud for front-running a large client order.The verdict is a victory for U.S. prosecutors in their first attempt to hold individuals accountable since a global currency-rigging probe that led to banks paying more than $10 billion in penalties. Mark Johnson faces a maximum sentence of 20 years in prison, although he’s likely to get much less.
Traders will almost certainly come under pressure to avoid conduct that could be seen as harming their clients and profiting unfairly at their expense, said Mayra Rodriguez Valladares, a former foreign-exchange analyst for the Federal Reserve Bank of New York.
"Front-running is a crime," she said. "This should be a lesson to senior executives that they should invest in more training of ethics for traders and more in systems to detect irregularities."
The verdict is likely to echo worldwide. Although Johnson, HSBC’s global head of foreign exchange in 2011, was in New York at the time of the transaction, the trade was executed primarily in London, where Johnson’s co-defendant, Stuart Scott, was overseeing it. Scott, the bank’s former head of currency trading in Europe, remains in the U.K. as he fights extradition to the U.S.
Ex-HSBC Currency Trader Is Convicted of Fraud for Front-Running
"This conviction will embolden the U.S. in other cases," said Peter Henning, a law professor at Wayne State University in Detroit. "The U.S. authorities have shown they’re able to police global markets.”
"At its very essence,” he added, “this was a theft case.”
Johnson, the first banker to go on trial following the investigation over foreign-exchange trading, was convicted of defrauding Cairn Energy Plc in what prosecutors said was a clear case of front-running the company’s $3.5 billion order. London-based HSBC wasn’t accused of wrongdoing, but the bank has been under investigation over currency trading and is in talks with the Justice Department and U.S. regulators to resolve the matters, according to a July 31 regulatory filing. Rob Sherman, a spokesman for HSBC, declined to comment.
Johnson was convicted on Monday on nine of 10 fraud and conspiracy counts after a month-long trial in Brooklyn, New York. He plans to appeal.
According to prosecutors, Johnson and Scott were among 11 currency traders feverishly buying pounds just before the Cairn transaction. The traders in New York and London jumped ahead, driving up the price of the pound to its highest in two days on Dec. 7, 2011, minutes before the 3 p.m. deal, according to the U.S. Prosecutors said the other traders were tipped by Johnson.
Johnson spent three days on the witness stand in his own defense, but it was his own words from six years ago that formed the most compelling parts of the prosecution’s case. The government played recordings of 29 phone calls, including one in which he said, “I think we got away with it." Jurors asked to re-hear several of these calls before delivering their verdict.
More
October 23, 2017 / 7:40 PM /
Updated 15 hours ago
Deutsche Boerse to review CEO's future after inquiry prolonged
FRANKFURT (Reuters) - Deutsche Boerse’s (DB1Gn.DE) supervisory board will meet on
Thursday to discuss the future of Carsten Kengeter after a court setback for
the CEO in an insider trading inquiry, a source close to the situation said.
A settlement deal that would have ended the probe was blocked by a court
on Monday, leading Deutsche Boerse supervisory board chairman Joachim Faber to
break off a trip to China and return to Frankfurt, the person said on Tuesday.
Kengeter, who denies any wrongdoing, made share purchases worth 4.5
million euros shortly before formal merger talks between Deutsche Boerse and
the London Stock Exchange were announced in early 2016.
Deutsche Boerse and Kengeter have said he was authorised to buy the
shares as part of his pay scheme at a fixed time, between Dec. 1 and Dec. 21,
2015.
“Faber is back and there will be a discussion on Thursday about what
happens next,” the source, who spoke on condition of anonymity due to the
sensitivity of the matter, added.
Deutsche Boerse’s shares extended losses to nearly 2 percent on Tuesday,
making them the weakest performer in the 30-share DAX Index. The exchange
operator is also due to report its quarterly results on Thursday.
Deutsche Boerse said on Monday a Frankfurt court had refused to ratify a
settlement between the prosecutors, the exchange and Kengeter, whereby Deutsche
Boerse had agreed to pay 10.5 million euros ($12 million) in fines, while
Kengeter would pay 500,000 euros personally.
Frankfurt’s public prosecutor said after the ruling that its
investigation into Kengeter, which started early this year, could extend beyond
next March.
More
What is 'Front Running'
Front running is the unethical practice of a broker trading an equity in his personal account based on advanced knowledge of pending orders from the brokerage firm or from clients, allowing him to profit from the knowledge. It can also occur when a broker buys shares in his personal account ahead of a strong buy recommendation that the brokerage firm is going to make to its clients.BREAKING DOWN 'Front Running'
In the context of stock trading, front running is the practice of stepping in front of orders placed or about to be placed by others to gain a price advantage. For example, a broker receives an order from a client to buy 500,000 shares of XYZ Company. He holds it until he executes the purchase of a smaller order of the same stock in his own account. He then executes the client’s larger order, which drives up the share price. The broker can then sell his share, making a profit at the direct expense of the client. That form of front running is not only unethical, it is illegal.Cary Grant. To Catch A Thief.
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?
Extreme light trapping
Date:
October 19, 2017
Source:
Rensselaer Polytechnic Institute (RPI)
Summary:
Physicists have built a nanostructure whose crystal lattice bends light as it
enters the material and directs it in a path parallel to the surface, known as
"parallel to interface refraction."
With such an advance in mind, Shawn-Yu Lin, professor of physics,
applied physics, and astronomy at Rensselaer Polytechnic Institute, has built a
nanostructure whose crystal lattice bends light as it enters the material and
directs it in a path parallel to the surface, known as "parallel to
interface refraction." The structure is built of overlapping nanotubes and
resembles a three-dimensional grid made of Lincoln Logs. Photonic nanocrystals
built using his process enable extreme "light trapping" and could
have applications from thin-film solar cells to photo-chemical functions like
sensing and water splitting.
"These results prove that this effect exists, that if you follow my
guidelines of simple cubic symmetry, you can bend light by 90 degrees. The
photonic crystal forces light to bend in a deterministic manner, rather than
random scattering or surface effects," said Lin. "This is a new type
of light-matter interaction that lies at the heart of what light trapping is
intended to do."
In experimental results, which appear in Nature Scientific Reports,
Lin created a photonic crystal using titanium dioxide, a material with weak
visible light absorption, to prove the success of the effect. Results using a
900-nanometer thick titanium dioxide photonic nanocrystal showed absorption
enhanced by one to two orders of magnitude greater than a reference film of the
same material for some regions. Lin built the nanocrystal -- first in silicon,
now in titanium dioxide -- based on the theoretical predictions of his
collaborator, Sajeev John, a physicist at the University of Toronto.
Light trapping describes the process of confining light to a given
space, usually with the intent of converting it to other forms of energy. In
one approach, materials are designed to slow light, so that it spends more time
in the material. In the approach Lin used, the light is bent away from its
given path, making it travel a longer distance within the material, in this
case, the full width of a titanium dioxide wafer.
Light always bends somewhat as it enters a material with a different
optical index, something easily seen as light enters water. In water, and many
other materials, the light bends only slightly. The arrangement of atoms in the
titanium dioxide crystal Lin created matches the scale of visible light
wavelengths, scattering light at multiple points in space simultaneously as it
moves into the lattice.
As a consequence, light cannot move as it does through
space or any continuous medium. Instead, it is bent at an obtuse angle -- a
phenomenon known as "negative refraction" -- and channeled along the
width of the material.
More
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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