Baltic Dry Index. 1485 +27 Brent Crude 57.78
John Kenneth Galbraith
Thirty years ago this week, the Great
Nixonian Error of fiat currency, went into meltdown. Fed chairman Alan
Greenspan rigged the stock market’s next day opening, and the central banks
have been rigging markets continuously ever since. But each decade now produces
an even bigger bust than the last crash. Our central banksters never quite seem
to get their rig to fix the latest bust right. The central bank cronies get
richer, everyone else stagnates or gets poorer.
We are now well overdue the next crash and bust. But what will be its
cause?
The Mount Everest of new unrepayable debt?
Rising interest rates? A new Korean war? The forever war in the Middle East?
Europe polarising between the politics of the far left and far right? Brexit?
Catalonia? Bankrupt Italian banks? The demise of Deutsche Bank? Japanese
corporate scandals? The rise of international trade bypassing the rigged US
dollar? Some combination of all, or a black swan?
Currently our global stock markets expect
nothing at all. The VIX index has never reflected greater complacency. Stock
market bubbles, will bubble on forever. There will never be another global
recession again. It doesn’t matter if the far left or far right gain power
anywhere on planet earth, our central banksters have it covered.
Below, 30 years on from the Great Stock
Market Crash of October 19, 1987, what’s not to like for our current central
bankster rigged serial stock bubbles?
It's Decision Time for Catalonia
By Ben Sills and Charles Penty
Catalan President Carles Puigdemont has until 10 a.m. Monday to tell the
Spanish government whether he did, indeed, declare independence last week.
If he says yes -- or even just ignores the deadline -- Prime Minister
Mariano Rajoy may start the process to seize control of the rebel
administration during the coming weeks. Catalan television station TV3, which
is controlled by the regional government, said Puigdemont will not give Rajoy a
clear ‘Yes’ or ‘No.’
Puigdemont is running out of options after he declared independence and immediately suspended it from taking effect, at a regional parliament session Oct. 10. That managed to rile both the government in Madrid and the radical separatists he needs to shore up his majority in the Catalan legislature. Rajoy ordered him to clear up his “deliberate” confusion, setting a deadline for just hours from now.
“The pressure building on Puigdemont is absolutely enormous,” Angel Talavera, an analyst at Oxford Economics in London, said by phone. “Anything that looks at all non-committal is going to make the government act” against his regional government.
Catalonia was a frequent topic for investors chatting on the sidelines of the International Monetary Fund conference in Washington that ended Saturday. Catalonia’s 2020 bonds rose last week, driving the yield down 43 basis points to 2.95 percent.
This week is shaping up to be a possible watershed for the region, a 212 billion-euro ($250 billion) economy that’s seen dozens of its largest companies announce they’ll move elsewhere in Spain rather than face the legal limbo of secession.
If Puigdemont, 54, states clearly he didn’t actually declare independence for Spain’s largest regional economy, his separatist alliance might start to unravel. That sets Catalonia on track toward early regional elections with an uncertain outcome to the balance of power, which currently runs in favor of separatism.
Should the journalist-turned-politicians assert he did declare independence, premier Rajoy is set to use Article 155 of the Spanish Constitution to take direct control of the Catalan administration and sideline Puigdemont and his team. In that scenario, Rajoy eventually would have to call regional elections himself in order to return to normality.
Spain’s largest banks have agreed not to recognize the government of Catalonia if it declares independence this week, El Mundo reported, citing unidentified people in the banking industry.
More
October 14, 2017 / 11:01 AM
Danger of war, Germany warns after Trump's move on Iran nuclear deal
BERLIN (Reuters) - If the United States terminates the Iran
nuclear deal or reimposes sanctions on Tehran it could result in Iran
developing nuclear weapons and raise the danger of war close to Europe,
Germany’s foreign minister said on Saturday.
U.S. President Donald Trump refused on Friday to formally certify that
Tehran was complying with the 2015 accord even though international inspectors
say it is. He warned he might ultimately terminate the agreement.
German Foreign Minister Sigmar Gabriel told Deutschlandfunk radio that
Trump had sent a “difficult and dangerous signal” when the U.S. administration
was also dealing with the North Korea nuclear crisis.
“My big concern is that what is happening in Iran or with Iran from the
U.S. perspective will not remain an Iranian issue but many others in the world
will consider whether they themselves should acquire nuclear weapons too given
that such agreements are being destroyed,” Gabriel said.
“And then our children and grandchildren will grow up in a very
dangerous world,” he said.
He said if the United States terminated the deal or if sanctions were
reimposed on Tehran, it would give Iranian hardliners, who are against
negotiations with the West, the upper hand.
“Then they might revert to developing nuclear weapons,” Gabriel said,
adding Israel would not tolerate that and “then we will be back where we were
10, 12 years ago with the danger of war relatively close to Europe”.
He urged the United States not to endanger the security of its allies
and its own people for domestic policy reasons.
Hailed by Trump’s predecessor Barack Obama as key to stopping Iran from
building a nuclear bomb, the deal was also signed by China, France, Russia,
Britain, Germany and the European Union.
European allies have warned of a split with Washington over the nuclear
agreement and say that putting it in limbo undermines U.S. credibility abroad.
Trump has given the U.S. Congress 60 days to decide whether to reinstate
economic sanctions on Iran that were lifted in 2016.
Austrian Vote Nudges Europe's Balance to Right as Populists Gain
By Boris Groendahl and Jonathan Tirone
Austrian
voters paved the way for the nationalist Freedom Party to enter government,
heralding a shift to the political right that’s likely to make the country a
more prickly ally for its European partners.
Projections after Sunday’s election put the populists within reach of second place behind the People’s Party of Foreign Minister Sebastian Kurz, 31, who claimed victory after a campaign built on outflanking the Freedom Party with a hard-line stance on migration. He now has a mandate to form a coalition, replace Social Democrat Christian Kern as chancellor and become the world’s youngest government leader.
With the Freedom Party poised to return to government
for the first time since 2005, congratulations poured in from European
nationalists including France’s Marine Le Pen and Geert Wilders in the
Netherlands, while the World Jewish Congress expressed concern. For German
Chancellor Angela Merkel, the result may chip away at a key ally’s pro-European
stance in the years ahead.
"There
won’t be a debate to leave the EU, but the Freedom Party is strong enough to
demand significant concessions” and may lead Austria to align more often with
eastern European countries that have challenged Merkel on issues including
migration, said Thomas Hofer, a political consultant in Vienna. “Austria has
mostly been an ally of Germany for decades, but that picture could change more
often now," Hofer said.
----Where Merkel and French President Emmanuel Macron may face increased resistance is on proposals to deepen European integration, maintaining economic sanctions on Russia and chastising eastern EU member countries seen as crimping democratic freedoms. Austria’s next government may also try to toughen EU policy toward Turkey.
While Sunday’s projected result doesn’t guarantee a coalition with the
Freedom Party, Kurz has a mandate to form a government after an early election
he triggered by breaking up a coalition with the Social Democrats this year.
The final tally may still be influenced by postal ballots, which will only be
counted on Monday.
“This is a strong mandate for us to bring about change in this country,”
Kurz told cheering supporters in Vienna as the results came in. “It’s about
establishing a new political style, a new culture.”
More
Merkel's Hand Weakened Ahead of Coalition Talks After State Loss
By Patrick DonahueThree weeks after Merkel’s CDU won the federal ballot, her party on Sunday posted its worst election result in Lower Saxony since 1959 and lost in the state to the Social Democrats. The SPD, which currently governs the state with the Green party, came from behind to secure 37.3 percent of the vote, compared with 33.4 percent for the CDU, according to projections published by public broadcaster ARD.
The late surge by the Social Democrats to become the largest party in the state for the first time in 19 years marked a reversal for the SPD, which suffered its worst result since World War II in the Sept. 24 national vote. The result saps confidence for the CDU as Merkel begins complex coalition talks at the national level with the pro-business Free Democratic Party and the Greens on Wednesday. The chancellor will discuss the results on Monday in Berlin.
“The debate about CDU losses will solidify just as she is about to enter difficult talks,” Carsten Nickel, a Brussels-based analyst at Teneo Intelligence, wrote in an email. “The backdrop will be noisy at times, but the goal remains firmly in sight” to form a multi-party government.
Merkel’s CDU has suffered losses as many voters turn to the insurgent far-right Alternative for Germany party, or AfD, adding to pressure on the chancellor -- particularly from her beleaguered Bavarian allies, the Christian Social Union -- to adopt more conservative stances. That could further complicate talks at the national level with the Greens.
More
Meanwhile back in Washington at the fat cats central
bankster annual junket, it was all business as usual. What could possibly go
wrong?
What Global Finance Chiefs Are Saying About the Economy
By Andrew Mayeda, Enda Curran, and Jeanna SmialekFor once the mood was upbeat. The IMF bumped up its forecast for global economic growth this year and next. Stocks are surging, credit spreads are tight and market volatility is low.
Still, the fund’s policy panel warned its 189 member countries that there’s "no room for complacency." The recovery is still a work in progress with inflation below target in most rich nations, productivity sluggish and many not feeling the benefits of stronger demand.
Here’s what was talked about in Washington:
Central bankers seized the opportunity to ready investors for tighter monetary policy as they predicted the improved expansion will finally ignite inflation.
Federal Reserve Chair Janet Yellen, potentially appearing at her final IMF meeting in office, said her “best guess” is prices will accelerate soon, a wager also made by European Central Bank President Mario Draghi and Bank of England Governor Mark Carney.
More
Finally, is a new war
starting in the middle east? And if it is, which side will President Trump
back?
Iraqi, Kurdish forces clash near oil-rich Kirkuk in wake of independence vote
Published: Oct 16, 2017 12:59 a.m. ET
Iraqi forces clashed with fighters from the Kurdish semiautonomous
region near the oil-rich province of Kirkuk early Monday, raising the stakes in
a standoff over Kurdish independence, Iraqi and Kurdish officials said.
Before dawn, units from Iraq’s Shiite-majority Popular Mobilization
Forces as well as elite Iraqi military units moved toward Kirkuk on the orders
of Prime Minister Haider al-Abadi. Kurdish Peshmerga troops reacted to the
advances, provoking clashes before sunrise.
An Iraqi military official said four Iraqi army vehicles were burned in
the clashes, and a number of injured had arrived at Kirkuk’s general hospital.
The Iraqi forces were passing through a village named Jerdaglu when an
explosion destroyed the vehicles, he said.
The clashes follow a referendum in which the Kurds, who run their own
semiautonomous region in northern Iraq, voted overwhelmingly in favor of
independence, defying Baghdad, regional powers and the U.S, which warned it
would distract from the final battles to defeat Islamic State.
In any great organization it is far, far safer to be wrong with the majority than to be right alone.
John Kenneth Galbraith.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Euros anyone?
Bridgewater Wagers $1.1 Billion Against Italian Companies
By Brandon Kochkodin, Nishant Kumar, and Sonia Sirletti
October
13, 2017, 1:37 PM GMT+1 October 13, 2017, 6:53 PM GMT+1
Ray
Dalio’s
Bridgewater
Associates,
the world’s largest hedge-fund firm, has mounted a $770 million wager against
Italian financial stocks, its biggest disclosed bearish bet in Europe, data
compiled by Bloomberg show.
The
investments, aimed at exploiting any declines in the shares, are spread over
five banks and one insurer and were disclosed in regulatory filings over the
past week. The Westport, Connecticut-based investment firm, which oversees
about $160 billion, is also shorting Milan-based Prysmian
SpA,
the world’s largest cable maker, and Enel SpA, Italy’s largest
utility. A regulatory filing posted Friday showed Bridgewater opened a
$311 million position against the utility. The hedge fund now has more than
$1.1 billion combined riding against Italian companies. A spokesman for
Bridgewater declined to comment.
Concerns that stricter rules from the European Central Bank will
hit Italian lenders, which are still struggling under piles of soured debt,
have encouraged investors to sell the shares of the nation’s financial
companies this month. This is rewarding hedge funds that shorted the stocks,
which entails selling borrowed shares to buy them back at lower prices.
Italian banks, which had more than 300 billion euros ($356 billion) of
gross non-performing loans at the end of last year, have been selling
portfolios and using securitization vehicles since then to reduce their
exposures. Including the transactions and agreements since the beginning
of the year, NPLs are down by about a quarter and bad debt is almost 40 percent
lower, according to analysis by Bloomberg Intelligence.
“It’s a very substantial bet by Bridgewater," said Nicolas
Roth, co-head of alternative assets at Geneva-based Reyl & Cie. “But it
seems that the hedge fund is coming late to the party of shorting Italian banks
as more NPL transactions are closing, cleaning slowly but surely bank’s balance
sheets."
The trend is a reversal from the third quarter, when Italian banks were among Europe’s best performers as the rescue of Banca Monte dei Paschi di Siena SpA and the liquidation of two smaller regional lenders reduced the systemic risk of the nation’s financial system. Italy’s FTSE Italia All-Share Banks Index has dropped 5 percent since the ECB said Oct. 4 that it plans to hold lenders to tough new provisioning standards on bad loans starting next year.
Bridgewater’s largest bearish bet against financials is Intesa Sanpaolo SpA, followed by UniCredit SpA and insurer Assicurazioni Generali SpA. Spokesmen for Generali, Intesa Sanpaolo and Banco BPM SpA, another shorted lender, declined to comment, while spokesmen for UniCredit, BPER Banca SpA and Unione di Banche Italiane SpA couldn’t immediately be reached.
Intesa Sanpaolo CEO Carlo Messina said in an interview with CNBC Friday that Dalio was going to lose money with Bridgewater’s bet against the company.
Marshall Wace and Oceanwood Capital Management are among other hedge funds shorting Italian lenders, according to data compiled by Bloomberg. Spokesmen for the firms declined to comment.
If all
else fails, immortality can always be assured by spectacular error.
John Kenneth
Galbraith.
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?
A new miniature solution for storing renewable energy
Novel two-dimensional, metal organic hybrids efficiently move charge, eventually storing renewable energy
Date:
October 12, 2017
Source:
University of Southern California
Summary:
In a first for metal-organic frameworks, scientists have demonstrated their
metallic conductivity.
Scientists have long searched for the next generation of materials that
can catalyze a revolution in renewable energy harvesting and storage.
One candidate appears to be metal-organic frameworks. Scientists have
used these very small, flexible, ultra-thin, super-porous crystalline
structures to do everything from capturing and converting carbon into fuels to
storing hydrogen and other gases. Their biggest drawback has been their lack of
conductivity.
Now, according to USC scientists, it turns out that metal-organic
frameworks can conduct electricity in the same way metals do.
This opens the door for metal organic-frameworks to one day efficiently
store renewable energy at a very large, almost unthinkable scale.
"For the first time ever, we have demonstrated a metal-organic
framework that exhibits conductivity like that of a metal. The natural porosity
of the metal-organic framework makes it ideal for reducing the mass of
material, allowing for lighter, more compact devices" said Brent Melot,
assistant professor of chemistry at the USC Dornsife College of Letters, Arts
& Sciences.
"Metallic conductivity in tandem with other catalytic properties
would add to its potential for renewable energy production and storage"
said Smaranda Marinescu, assistant professor of chemistry at the USC Dornsife
College.
Their findings were published July 13 in the Journal of the American
Chemical Society.
An emerging catalyst for long-term renewable energy storage
Metal-organic frameworks are so porous that they are well-suited for
absorbing and storing gases like hydrogen and carbon dioxide. Their storage is
highly concentrated: 1 gram of surface area provides the equivalent of
thousands of square feet in storage.
Solar has not yet been maximized as an energy source. The earth receives
more energy from one hour of sunlight than is consumed in one year by the
entire planet, but there is currently no way to use this energy because there
is no way to conserve all of it. This intermittency is intrinsic to nearly all
renewable power sources, making it impossible to harvest and store energy
unless, say, the sun is shining or the wind is blowing.
If scientists and industries could one day regularly reproduce the
capability demonstrated by Marinescu, it would go a long way to reducing
intermittency, allowing us to finally make solar energy an enduring and more
permanent resource.
Metal or semiconductor: why not both?
Metal-organic frameworks are two-dimensional structures that contain
cobalt, sulfur, and carbon atoms. In many ways, they very broadly resemble
something like graphene, which is also a very thin layer of two-dimensional,
transparent material.
As temperature goes down, metals become more conductive. Conversely, as
the temperature goes up, it is semiconductors that become more conductive.
In the experiments run by Marinescu's group, they used a cobalt-based
metal-organic framework that mimicked the conductivity of both a metal and
semiconductor at different temperatures. The metal-organic framework designed
by the scientists demonstrated its greatest conductivity at both very low and
very high temperatures.
John Kenneth Galbraith.
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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