Baltic Dry Index. 1382 +62 Brent Crude 56.92
All the best
stories in the world are but one story in reality - the story of escape. It is
the only thing which interests us all and at all times, how to escape.
Walter Bagehot.
In American news,
what did President Trump mean? If action against North Korea is coming up, why
warn them? If no action is coming up, who gains from constant sabre rattling,
with the increased chance of triggering a misstep? Certainly not the poor US
troops unfortunately timed to be on the front line.
“If
you're not gonna pull the trigger, don't point the gun.”
James
Baker. United States Secretary of the Treasury under President Ronald Reagan,
and U.S. Secretary of State and White House Chief of Staff under President
George H. W. Bush.
Trump Says Military Gathering Might Be 'Calm Before the Storm'
By Justin Sink
U.S. President Donald Trump offered cryptic remarks Thursday night while
posing for photos with military leaders, saying the gathering might represent
“the calm before the storm.”
He made the comments among senior military leaders and their spouses in
the White House State Dining Room ahead of a dinner expected to include the
discussion of a range of national security issues.
“You guys know what this represents?” Trump asked assembled members of
the media. “Maybe it’s the calm before the storm.”
Asked repeatedly by reporters to clarify his comments, Trump said, “You’ll find out.”
During a meeting with military leaders earlier in the afternoon, Trump said his administration was focused on “challenges that we really should have taken care of a long time ago, like North Korea, Iran, Afghanistan, ISIS, and the revisionist powers that threaten our interests all around the world.”
During those remarks, the president also appeared to issue a vague threat toward the regime in North Korea, which has antagonized the U.S. president with a series of nuclear and ballistic-missile tests.
“We cannot allow this dictatorship to threaten our nation or our allies with unimaginable loss of life,”
Trump said. “We will do what we must do to prevent that from happening. And it will be done, if necessary -- believe me.”
Trump’s latest remarks echoed comments he made in August, when he warned that North Korea will face a devastating military strike if it continues threatening the U.S.
“North Korea best not make any more threats to the United States,” Trump told reporters in Bedminster, New Jersey at the time. “They will be met with fire, fury and, frankly, power the likes of which this world has never seen before.”
More
In other US news, Puerto Rico is effectively broke.
Puerto Rico Is Running Out of Money
By Ezra FieserThe U.S. commonwealth’s bankrupt government is burning through the $1.6 billion it had on hand before Hurricane Maria ravaged the island, destroying decayed infrastructure and killing 34 people.
With widespread damage to telecommunications systems and the electricity grid, Maldonado doesn’t expect to begin collecting sales tax for at least another month, he said Wednesday.
“I don’t have any collections, and we are spending a lot of money providing direct assistance for the emergency,” he said in an interview in San Juan. “Without the assistance from Congress, Puerto Rico’s government will not be able to operate next month.”
While attention has focused on the commonwealth’s staggering $74 billion debt, Puerto Rico faces a more immediate crisis in the wake of the storm. It’s running short of money for fuel, salaries of recovery workers and food aid. Meanwhile, only 8.6 percent of customers have electricity, mobile-phone service is sharply curtailed and many mountainous rural areas remain inaccessible.
“You have conservatively over 100,000 homes that are destroyed here,” Governor Ricardo Rossello said an interview Wednesday.
“Essentially you’re looking at zero revenue for the next couple of
months,” he said. “While you have zero revenue, you still have expenditures,
plus emergency expenditures. That means the money is going to run out very
quickly."
Maldonado said he has requested between $6 billion and $8 billion in aid
from Congress to keep the government running for “a few months.”
The treasurer said he has set aside funds to make payroll and pension
payments in October. But if Congress fails to act, he said the island is facing
a "total shutdown” on Nov. 1 that would curtail essential services and the
distribution of aid.
More
In EUSSR news, Spain v Catalonia gets more fraught with each
passing day. As Catalonia’s banks prepare to move HQs out of Catalonia and into
Spain, to remain in EU jurisdiction and try to prevent a run, the bigger
question now is, just how safe are Spain’s banks? There’s no upside to Spain
trying to keep a hostile Catalonia by force. The downside for both is a major hit
to both economies and run on Spanish banks. Who wants to invest in a Spain that’s
about to tear itself apart in a return to Francoism?
But daily, we also get to see just how irrelevant and
impotent the EUSSR institutions are. In Italy, well it’s Italy.
The whole history
of civilization is strewn with creeds and institutions which were invaluable at
first, and deadly afterwards.
Walter Bagehot.
Catalan Separatists Squeezed Further as Spain Tightens Its Grip
By Esteban Duarte and Charles Penty
Spanish Prime Minister Mariano Rajoy convenes his cabinet on Friday as
the financial and political squeeze on the separatist government in Catalonia
tightens.
After a week of political drama that rocked financial markets, Rajoy
will meet with his ministers in Madrid as events 600 kilometers (370 miles) to
the northeast in the Catalan capital Barcelona threaten to spiral still further
out of control.
The region’s president, Carles Puigdemont, risks economic damage and
European isolation if he pushes ahead with plans to declare Catalan
independence based on a referendum that breached Spain’s constitution.
CaixaBank SA, the symbol of the region’s financial strength, may follow Banc
Sabadell SA in abandoning Catalonia when its board meets Friday.
For his part, Rajoy and his minority government will be loathe to risk a
repeat of Sunday’s scenes of police beating peaceful voters that drew
international condemnation and inflamed the separatist cause.
With options to quell an increasingly bitter constitutional dispute fast
running out, events may come to a head on Monday. That’s when Puigdemont had
sought to evaluate the result of the independence vote at a session of the
regional parliament -- until it was suspended by the Spanish Constitutional Court.
That means Rajoy may again have to send in the police to enforce a court
ruling, and Puigdemont must decide if he’s ready to again defy the law.
“There will be some formula for the Catalan Parliament to convene and
hold its meeting as planned,” Jordi Sanchez, who heads the most powerful
group among the separatists, known as the Catalan National Assembly, said in an
interview in Barcelona. “There will be a plenary session.”
As anti-independence organizers plan rallies for this weekend in Madrid
and in Barcelona, Catalan separatist are seeking to avoid an immediate
declaration of independence. There’s a divide in the movement’s leadership,
with most leaders keen to delay that leap into the unknown to create more
time for a negotiated settlement, according to two people familiar with their
plans.
Puigdemont’s mainstream separatist group is concerned that a move
toward independence would send the economy into a tailspin, the people
said. But following Sunday’s illegal referendum on secession -- which the
regional government said won the support of 90 percent of 2.3 million voters --
hardliners from the anarchist party CUP are demanding a quick break with Spain,
according to the people, who asked not to be named because the conversations
are private. A spokesman for the Catalan government declined to comment.
More
Catalonia's Banks Prepare to Move Amid Fears of Customer Exodus
By Katie Linsell, Esteban Duarte, and Rodrigo OrihuelaBanco Sabadell SA confirmed late Thursday it will move its headquarters to the Spanish city of Alicante, while CaixaBank SA’s board will meet Friday to consider transferring its registered office to the Balearic Islands, said a person familiar with the matter, who asked not to be identified. No one at CaixaBank was immediately available to comment on the meeting when contacted by Bloomberg News.
The two lenders have spent years seeking to reduce the political risks of being located in Catalonia through expansion, but are once again being pulled into the region’s upheavals following an attempted independence vote Sunday that resulted in a police crackdown. Some of the heat was taken out of the situation Thursday as separatist leaders sought to avoid an immediate declaration of independence from Spain as officials in Madrid and business leaders in Barcelona ratcheted up pressure on the nationalist camp.
“The political situation is a pain in the neck for these banks,” said Cesar Molinas, founder of Multa Paucis, an investment-consultancy firm. “They don’t want clients in Madrid to see them as Catalan banks, nor clients in Barcelona to see them as Spanish banks. They’re treading on thin ice.”
----Shares of the
banks recovered some of this week’s losses following reports of the separatist
leaders’ more conciliatory stance. After tumbling Wednesday by the most in more
than a year, Sabadell climbed more than 6 percent while CaixaBank rallied
almost 5 percent. Spain’s IBEX 35 index jumped 2.5 percent, almost wiping out
the previous day’s declines.
----Some
of the Catalan banks’ wealthy clients have already started moving money to
lenders outside the region or inquired about doing so, according to an
executive at a firm that received calls from prospective customers. Managers at
CaixaBank private banking in Madrid have been calling customers to dispel their
concerns, according to one client, who asked not to be identified discussing
the matter.
----One
concern with Catalan independence is whether the region would be able to join
the European Union, either straightaway or sometime later. In Strasbourg on
Wednesday, Manfred Weber, leader of the biggest group at the European
Parliament, warned Catalans that “who leaves Spain, leaves the European Union,”
including the euro zone and the single market.
More
October 5, 2017 / 4:20 PM /
Updated 12 hours ago
Exclusive: Italy's central bank asks ECB to soften bad-loan plans - source
ROME (Reuters) - Italy’s central bank is calling on the European Central
Bank to soften new requirements for banks to set aside more capital to cover
newly classified bad loans, a source told Reuters.
Italian banks hold nearly 30 percent of the euro zone’s 915 billion
euros (838.54 billion pounds) of problematic debts and investors are concerned
new ECB guidelines announced on Wednesday will lead to further writedowns of
soured loans.
The source, who is close to the Bank of Italy, said it wanted secured
loans to be exempted from the new rules, challenging one of the main planks of
the ECB guidelines, which are the subject of a public consultation until Dec.
8.
Italian bank shares fell for a second straight day on Thursday following
the proposals, which several analysts said bode ill for the country’s lenders.
“This is a crazy and suicidal choice,” former prime minister Matteo
Renzi, who heads the ruling centre-left Democratic Party, said in a letter
posted on his Web site.
“With the mechanism they want to force on us, it will be almost
impossible to lend to small- and medium-sized companies. And it will hurt other
banks, other account holders, other savers,” he said.
The ECB’s guidelines say that starting on Jan. 1, banks will have at
most two years to set aside funds to cover 100 percent of their newly
classified non-performing unsecured debt and seven years to cover all secured
bad debt.
Secured loans account for nearly half of the worst kind of bad debts
weighing on Italian bank balance sheets.
The Bank of Italy also wants to make sure that existing bad loans are not
affected by the new rules, the source said.
More
In market news it was still bubble on. “What do I care about
the news. Wars, hurricanes, Spain on the wrack. Italian banks bust? Buy more!”
October 6, 2017 / 2:00 AM /
Updated 3 hours ago
Asia stocks up after tax reform optimism lifts Wall Street, dollar buoyant
TOKYO (Reuters) - Asian stocks rose on Friday after optimism over U.S.
tax reform plans lifted Wall Street shares to new highs, and the dollar hovered
near a seven-week peak as new indicators pointed to solid economic growth.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS
gained 0.3 percent, poised for a 1.6 percent gain on the week.
Japan's Nikkei .N225 climbed 0.25 percent after setting a new two-year high, Australian stocks rose 0.8 percent and South Korea's KOSPI .KS11 advanced 0.9 percent.
The S&P 500 .SPX
posted its sixth straight record high close on Thursday, its longest run since
1997, as investors cheered increased prospects for a tax overhaul with Congress
moving closer to agreement on a budget resolution. [.N]
“We have the very first step where Congress passed the
budget details, so you’re one step nearer to tax reform,” said Heng Koon How,
head of markets strategy for United Overseas Bank (UOB) in Singapore.
Data out on Thursday showed the number of Americans filing
for unemployment benefits fell more than expected, the trade deficit narrowing,
and evidence of strong orders for core capital goods.
The latest boost in U.S. economic optimism lifted Treasury yields and helped take the dollar index against a basket of major currencies to the seven-week high.
U.S. data released this week has been solid on the whole, with investor
focus now turned to the closely-watched nonfarm payrolls report due at 1230
GMT.
Of key interest to the financial markets was how hurricanes Harvey and
Irma may have affected the labour market in September.
More
In a
time of universal deceit, telling the truth is a revolutionary act.
George
Orwell.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, a little Bloomberg realism in President Trump’s rush to start the
world’s second nuclear war.
A North Korea Nuclear Strike on Tokyo, Seoul Could Kill 2.1 Million
By Andy Sharp
5 October 2017, 06:13 GMT+1
As U.S. President Donald Trump threatens to destroy North Korea, even some
of his closest aides have warned of the potentially disastrous effects of a
war. New research published on the 38 North website
points to just how catastrophic the impact might be on the regime’s neighbors.If Kim Jong Un were to launch a nuclear attack on Seoul and Tokyo -- both within striking distance of his weapons -- as many as 2.1 million people could die and another 7.7 million could be injured, according to the 38 North report.
The analysis by Michael J. Zagurek Jr., a consultant specializing in databases and computer modeling, is based on North Korea’s current estimated weapons technology and bomb strength. Zagurek assumes Kim has a baseline arsenal of 20-25 warheads and the capacity to put them on ballistic missiles.
Concerns about a nuclear conflict in North Asia have increased as Kim
accelerates his program of acquiring weapons capable of hitting the continental
U.S., and as Trump threatens preemptive military action. While the chance of a
direct attack on U.S. allies Japan and South Korea remains slim, Zagurek said
history was replete with miscalculation by “rational actors” during crisis
situations.
North Korea’s foreign minister last month said the regime’s possible
next steps include testing a hydrogen bomb over the Pacific Ocean.
North Korea’s older warheads have yields in the 15-25 kiloton range,
around the size of the bombs that devastated Hiroshima and Nagasaki in 1945.
Fatality estimates rise significantly if North Korea were able to strike with
bombs similar to the one it tested on Sept. 3, which had a likely yield of
108-205 kilotons, Zagurek said.
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?
Solar Grew Faster Than All Other Forms of Power for the First Time
By Anna Hirtenstein
4 October 2017, 08:00 GMT+1 4 October 2017, 14:59 GMT+1
Solar power grew faster than any other source of fuel for the first time in
2016, the International Energy Agency said in a report
suggesting the technology will dominate renewables in the years ahead.The institution established after the first major oil crisis in 1973 said 165 gigawatts of renewables were completed last year, which was two-thirds of the net expansion in electricity supply. Solar powered by photovoltaics, or PVs, grew by 50 percent, with almost half of new plants built in China.
“What we are witnessing is the birth of a new era in solar PV,” Fatih Birol, executive director of the IEA, said in a statement accompanying the report published on Wednesday in Paris. “We expect that solar PV capacity growth will be higher than any other renewable technology through 2022.”
This marks the sixth consecutive year that clean energy has set records for installations. Mass manufacturing and a switch by governments away from fixed payments for renewables forced down the cost of wind and solar technology.
The IEA expects about 1,000 gigawatts of renewables will be installed in the next five years, a milestone that coal only accomplished after 80 years. That quantity of electricity surpasses what’s consumed in China, India and Germany combined.
The surge of photovoltaics in China is largely due to government support for renewables, which are being demanded by a population concerned about air pollution and environmental degradation that has led to deadly smogs. The country is seeking to reduce its reliance on coal and has become the world’s largest market for renewables, particularly solar.
“The solar PV story is a Chinese story,” said Paolo Frankl, head of the IEA’s renewable energy division. “China has been for a long time the leader in manufacturing. What’s new is the share in the market. This year, it was equivalent to the total installed capacity of PV in Germany.”
The U.S. and India are among other nations pushing renewables. They along with China are projected to make up two-thirds of the clean-energy expansion worldwide. Despite President Donald Trump’s vow to bolster coal’s position in the power market, the U.S. is expected to be the second-largest market for renewables.
Read How Solar Energy Was Transformed From Nutty to Normal:
The IEA also expects biofuels to take a larger role in the transportation industry, surpassing gains by electric vehicles.
“A lot of attention has been given in recent months to electric vehicles, and rightly so. They are increasingly globally, exponentially,” Frankl said. “But I have to say, we should not forget the biofuels, which at the end of 2016 represented 96 percent of total renewable transport.”
More
Another weekend and
the calm before the storm, whatever that means. Since it’s peak sweet edible chestnut
season here in my part of “Middleton Country,” my countryside walks with Rosie
my Border Collie, should be productive. On to the storm next week I presume. Have a
great weekend everyone.
"Too
bad ninety percent of the politicians give the other ten percent a bad
reputation."
Henry
Kissinger.
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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