Baltic Dry Index. 1308 -20 Brent Crude 55.63
We must reject the idea that
every time a law's broken, society is guilty rather than the lawbreaker. It is
time to restore the American precept that each individual is accountable for
his actions.
Ronald Reagan.
For more on the idiocy
of some US gun laws, scroll down to the YouTube clips at the bottom. A copycat nutcase/terrorist’s
dream.
But first our never-ending
bubble markets. Is this the calm before the October storm? Do they ring a bell
at the top?
Dollar Slips, Stocks Mixed as Fed Chief Pick Looms: Markets Wrap
By Adam HaighThe Bloomberg dollar index and 10-year Treasury yields both retreated from recent highs as news emerged that Trump has been presented with a shortlist of Fed-chair candidates with a range of views on policy. Among them, ex-board member Kevin Warsh has criticized the central bank for trying to do too much with monetary policy. Current Governor Jerome Powell has voted in sync with Chair Janet Yellen, who’s term is up in February.
Also in the mix: remarks by a key Republican senator raising concerns about the fiscal-deficit implications of the Trump administration’s tax plans. With China’s markets on a week-long holiday, there was little on the docket in Asia likely to offer fresh global trading themes. India’s central bank is forecast to keep interest rates unchanged Wednesday.
"Markets rightly or wrongly came to the view late last week that Warsh was the front-runner, and viewed him -- rightly or wrongly -- as having more hawkish proclivities than Janet Yellen," said Ray Attrill, global co-head of foreign-exchange strategy at National Australia Bank Ltd. in Sydney. With news of Powell’s chances potentially rising and of headwinds to tax reform, "that’s seen the dollar giving back a little of the gains."
Hong
Kong equities added to yesterday’s surge on optimism about monetary loosening
in China, Japan’s shares rose and Australia’s dropped. Crude oil fell to $50 a
barrel, a two-week low, as the traders awaited U.S. inventory data. Markets in
South Korea and Taiwan are closed for a holiday. A number of Fed speakers are
on the schedule later this week, and Friday brings the monthly employment
report, though that might be a cloudier gauge than usual due to the impact of
hurricanes.
More
In other news, after
the Las Vegas massacre, where a lone gunman in effect took out a battalion of
innocent concert goers, get ready for a global wave of new intrusive security
measures. While this will boost
employment in the security sector, it will come at a cost to the wider economy. Just how much of a drag is impossible to
estimate right now, but I suspect that the drag will be large and comes at a
time when interest rates are “normalising.”
When you can't make them see
the light, make them feel the heat.
Ronald Reagan
Guests Scanned at the Wynn in Glimpse of Las Vegas’s Future
By Christopher Palmeri
At entrances to the Wynn resort in Las Vegas on Monday afternoon, guards
scanned visitors with metal-detector wands and inspected their bags, creating a
10-minute wait to get inside. The new security protocol, put in place after
Sunday’s mass shooting nearby, is likely to become the norm on the Strip and
possibly beyond.
Casinos and entertainment venues are going to have to take a more
holistic approach to security, thinking about rooftops and other potential
shooting perches -- considering the possibilities for an attack from all
angles, said David Shepherd, a former FBI special agent in counterterrorism who
later was the security director for Las Vegas Sands Corp.’s Venetian resort.
“We have to start thinking like the Secret Service -- start looking at
tall buildings,” said Shepherd, who co-authored a book called “Active Shooter.”
“How far do we have to take it?”
The additional security measures highlight the dilemma facing companies
in one of the nation’s top entertainment destinations, with a record 42.9
million visitors last year. How do businesses keep guests safe while not
imposing such drastic restrictions that the casinos, clubs and shopping
thoroughfares no longer feel fun?
One executive at another casino operator, who asked not to be identified
because security matters are sensitive, said the Wynn’s security check at the
door is probably the industry’s future because there’s no other way to screen
for people carrying weapons.
More
We close for today
with more on poor Puerto Rico. Paying over the odds on everything shipped in
from America. President Trump says Puerto Rico’s debt will have to be written
off. After Puerto Rico, Greece?
The most terrifying words in
the English language are: I'm from the government and I'm here to help.
Ronald Reagan
Taxing Puerto Rico to Save US Shippers
By Patrick Watson
October 3, 2017
In theory, capitalism is all about healthy competition, which makes producers
deliver quality goods and services at lower prices.
Competition helps everyone, even producers. After all, if your
competitors keep knocking you down, that means the market is suggesting you try
something else.
While most business leaders give
lip service to the inherent fairness of free markets, in practice many try to
avoid competition. Brilliant people devote entire careers to building
innovative “moats” around themselves. The pharmaceutical industry, to name just
one, is highly adept at it.
That’s all fine—until those businesses enlist the government to help them. Government exists to promote the common interest, not any particular company or industry.
All that comes to mind in the aftermath of Hurricane Maria. Among other things, the storm exposed a century-old law that needs us to take a good, hard look at it.
Bringing Home the Nautical Bacon
Wesley Jones was a US senator from the state of Washington from 1909 until his death in 1932, a few days after losing his reelection bid.Even back then, politicians worked hard to bring federal spending to their states. Jones, for example, helped the state of Washington acquire the Puget Sound Naval Shipyard.
But what he’s best known for is the Merchant Marine Act of 1920, now known as the Jones Act.
The Jones Act requires that shipments between two US seaports travel only on US-flagged vessels, built in US shipyards, with American owners and crews.
The reason was to ensure the US kept a viable commercial shipping industry in case of war. World War I had just ended, so this need was evident at the time. Moreover, the act helped Seattle-based shipping lines pick up Alaskan freight business.
Today, the Jones Act gives a few US companies a legally enforced monopoly on cargo between the mainland US and Alaska, Hawaii, Puerto Rico, and Guam.
A 2012 New York Fed study found it costs twice as much to ship a freight container from the US East Coast to Puerto Rico than to nearby Haiti. That’s what happens when there’s little or no competition—and it shows up in the higher prices Puerto Ricans pay for ordinary goods.
Sometimes the Jones Act gets waived, for instance, when the Trump administration let foreign-owned tankers deliver fuel to Florida ports after Hurricane Irma last month.
When Maria struck Puerto Rico soon after, people wondered why the island territory didn’t get the same favorable treatment. The Department of Homeland Security said it wasn’t necessary—thousands of containers were already clogging San Juan’s docks for lack of trucks, drivers, and passable roads.
Still, calls for a Jones Act waiver continued. The president himself finally commented last week. Here’s how news reports described it (with my emphasis added).
“On Puerto Rico, Mr. President, why not lift
the Jones Act like you did in Texas and Florida?” a reporter asked as Trump
made his way to Marine One.
“Well, we’re thinking about that,” he
responded. “But we have a lot of shippers, and a lot of people—a
lot of people that work in the shipping industry that don’t want the Jones Act
lifted. And we have a lot of ships out there right now.”
That candid answer seemed to confirm the most cynical fears: that the shipping industry was protecting its bottom line rather than help suffering Americans in Puerto Rico.
Apparently realizing how bad this looked, the White House announced the next morning the Jones Act would be waived for 10 days.
----The Jones Act is a good example of well-intentioned laws that have outlived their usefulness. Businesses come to depend on them when they really should move on. Instead, they lobby Congress and often get their way.
When that happens, the economy stays less efficient for everyone. As
with a garden, occasionally you have to pull up the dead weeds to make room for
new growth.
Right now, the Jones Act is closer to getting yanked out than in
decades. We’ll know soon if it happens.
More
Puerto Rico’s debt will have to be wiped out, Trump says
Published: Oct 3, 2017 10:53 p.m. ET
Puerto Rico’s massive debt load will have to be wiped out, President
Donald Trump said Tuesday in an interview with Fox News.
“They owe a lot of money to your friends on Wall Street and we’re going
to have to wipe that out. You’re going to say goodbye to that, I don’t know if
it’s Goldman Sachs but whoever it is you can wave goodbye to that,” Trump said
in a pre-recorded interview with Geraldo Rivera that aired on Sean Hannity’s
show Tuesday night.
Puerto Rico has been mired in a deep recession since 2006. The island
was placed under court protection in May in the biggest-ever U.S. municipal
bankruptcy, owing $73 billion to creditors. The island’s state-owned power
utility has also been placed into bankruptcy protection.
Trump did not give details of how the debt might be erased.
Moody’s on Tuesday said the credit quality of Puerto Rico and the U.S. Virgin Islands — which is also financially stressed — face challenges according to a Reuters report, and estimated Puerto Rico’s total storm costs, including lost output, at $45 billion to $95 billion.
Puerto Rico is in dire need of federal relief after being battered by Hurricane Maria two weeks ago. The island’s 3.4 million residents are still mostly without power, and food, drinking water and fuel are in short supply. Late Tuesday, Puerto Rico Gov. Ricardo Rosello announced the death toll had risen from 16 to 34, and it is expected to rise even higher.
More
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
What happens if Spain and Catalonia split. It’s not
pretty however they split, but amicably beats anything else any day. Would the
EUSSR allow a Czech Republic – Slovakia type split? Probably not, although it’s the only thing
that makes any sense. And Germany still
has to find a coalition government that makes sense. Euros anyone?
Spanish debt will spin out of control if Catalonia declares independence
September 30, 2017What would happen to Spain in case of Catalonia’s secession? In terms of the debt sustainability parameters laid down by the Treaty of Maastricht, it’d be the Eurozone debt crisis 2.0. As Spain now maintains the second year of 3% GDP growth, an even bigger, immediate fiscal threat is looming. After multiple ineffective referendums in the previous years, this time the Catalan government is likely to finally assert independence. What will it look like against the background of the Maastricht financial requirements
Debt to GDP ratio
The Treaty of Maastricht says it should be 60%. Spain’s debt to GDP ratio was 39% in 2007, but after the financial crisis it gradually rose to 99.4% today. Should Catalonia leave, there are two possible scenarios:- Catalonia agrees to take a share of the Spanish total debt, as a “divorce bill”, because after all it benefited from the government spending in Catalonia itself;
- Catalonia leaves without taking any share of the total Spanish debt.
---- The second option is rather dramatic. Without Catalonia, Spanish GDP would automatically shrink by 20%, while having to service the entirety of the debt. The debt to GDP percentage ratio would go from 99.4% to 124% overnight.
Deficit to GDP percentage ratio
The Treaty of Maastricht says it should be 3%. Spain has been way outside it since te financial crisis, with a peak at 11% in 2011. For 2016 it was 4.5%.Here the problem is understanding how much more tax revenue Spain gets from Catalonia than it gives. Catalonia says 11.1€ billion, Spain says 8.5€.1)Either way, as the deficit is calculated as expenditure minus revenue, it would be a hole in the revenue of the Spanish government of 8.5 to 11.1€ billion. Last year the deficit/GDP ratio was 4.5%, corresponding to approximately 50€ billion. With the Catalan secession, assuming a 10€ billion hole for simplicity between the estimates of the Spanish and Catalan governments, Spain’s deficit would go up to 60€ billion2), while its GDP would shrink by 20%. Result? The deficit to GDP percentage ratio would be 6.7%, back to 2013.
Conclusion
The doomsday scenario would be Spain waking up with a debt equal to 124% of its GDP and growing, due to the 6.7% deficit, which would take another 4-5 years to be contained. The EU’s response to the possibility of Spanish bankruptcy would be predictable: more austerity. It is important to note that while Spain has been growing for the past two years and unemployment is also decreasing, the recipe chosen by the Spanish government, flexibility of the labour market in the form of temporary jobs, has exacerbated income inequality:3) as the OECD points out that temporary jobs are low-productivity and thus earn low wages; the precariousness of the job prevents improvements in productivity, thus improvement in wages. The poor remain poor, while the rich get richer and the gap widens.4)Boosting GDP and employment statistics with mini-jobs is thus masquerading an issue common to other Western countries: the collapse of the middle class. Catalan independence could prove to be the last nail in the coffin: either Spain goes bankrupt or is forced to implement even more austerity at the risk of facing a revolution from the economically displaced.
Each generation goes further
than the generation preceding it because it stands on the shoulders of that
generation. You will have opportunities beyond anything we've ever known.
Ronald Reagan.
Ronald Reagan unintentionally backs Brexit.
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?
Bloomberg Heralds New Headquarters as ‘World’s Most Sustainable Office Building’
A new building in London, having achieved the highest BREEAM score ever awarded to a major office development, may just be the world’s most sustainable office building. Bloomberg’ new European headquarters nabbed a 98.5% score and an “outstanding” rating. The building delivers a 73% savings in water consumption and a 35% savings in energy consumption compared to a typical office building.Bloomberg’s headquarters was designed to make use of waste products, respond to the building’s external environment, and adapt to its occupancy patterns, Bloomberg says.
Sustainability Brings Savings during Construction
A spokesperson from BRE Global, the organization that operates the BREEAM environmental assessment, said a “relentless focus on innovation” was what led them to be able to take such a successful, integrated approach to sustainable construction and design.
Bloomberg says that building a sustainable office structure brings savings even during the construction phase. Using LED lights during the construction process, for example, saved the company 500,000 KWhr and more than $106,000, the company told Environmental Leader.
Design Elements of the ‘World’s Most Sustainable Office Building’
Some of the innovations built into the Bloomberg building include:Integrated Ceiling Panels: custom-made ceiling panels combine heating, cooling, lighting and acoustic functions. The system incorporates 500,000 LED lights and uses 40% less energy than a typical fluorescent office lighting system.
Water Conservation: Rainwater from the roof, cooling tower blow-off water, and grey water sources, like basins and showers, is captured, treated and recycled to serve vacuum flush toilets. These use net zero mains water for flushing. Overall, water conservation systems will save 25 million liters of water each year.
Natural Ventilation: When ambient weather conditions are temperate, the building’s bronze blades can open and close, allowing the building to operate in a “breathable” natural ventilation mode. Reducing dependency on mechanical ventilation and cooling equipment significantly reduces energy consumption.
Smart Airflow: Smart CO2 sensing controls allow air to be distributed according to the approximate number of people occupying each zone of the building at any given time. The ability to dynamically adjust airflow in response to occupancy hours and patterns is expected to save 600-750 MWhr of power per annum, reducing CO2 emissions by approximately 300 metric tons each year.
Combined Heat & Power: An on-site Combined Heat and Power (CHP) generation centre supplies heat and power in a single, efficient system with reduced carbon emissions. Waste heat generated from this process is recycled for cooling and heating and, in use, is expected to save 500-750 metric tonnes of CO2 each year.
Global Commitment to Sustainability Leads to Super Savings
Bloomberg says its sustainability commitments have helped the company save $95 million in operating costs since 2008. The company has eliminated nearly 700,000 metric tons of CO2 and, with the addition of the new London building, now has 34 LEED or BREEAM-certified projects globally. By the end of 2017, nearly 70% of the company’s 19,000 employees will occupy a sustainable office building.Bloomberg has been a zero-landfill operation in London since 2010; waste is recycled, composted or converted to energy. The company says this commitment will continue at the new site, with better waste streaming to enable a greater proportion of waste products to be reused and recycled. Globally, Bloomberg currently diverts 75% of its total waste away from landfills and is targeting 90% diversion by 2020.
Bloomberg’ Sustainable Office Building Stats
Located between the Bank of England and St Paul’s Cathedral, the new European headquarters occupies 3.2 acres. The headquarters includes approximately 1.1 million square feet of office and retail space, three new public plazas, two featuring specially commissioned works of art, a dining arcade lined with independent restaurants, a new entrance to Bank Underground Station and an anticipated cultural space that will restore the ancient Roman Temple of Mithras to its original site.The building will open on Oct. 27.
In closing today, the
idiocy of some US gun laws. Bump stock automatic guns and 100 round military
style “clips.” Every copycat nutcase or terrorists, dream.
Gunman Had 'Bump-stock' Device That Could Speed Fire
THE ASSOCIATED PRESS (The Associated Press)
(AP) -- The gunman who unleashed hundreds of rounds of gunfire on a
crowd of concertgoers in Las Vegas had two "bump-stocks" that could
have converted semi-automatic firearms into fully automatic ones, officials
said.
The devices have attracted scrutiny in recent years from authorities.
California Sen. Dianne Feinstein has long railed against them. Several
years ago, she told The Associated Press she was concerned about the emergence
of new technologies that could retrofit firearms to make them fully automatic.
"This replacement shoulder stock turns a semi-automatic rifle into
a weapon that can fire at a rate of 400 to 800 rounds per minute," she
said.
A semi-automatic weapon requires one trigger pull for each round fired.
With a fully automatic firearm, one trigger pull can unleash continuous rounds
until the magazine is empty.
More
Bump stock “semi”
automatics.
The monthly Coppock Indicators finished September
DJIA: 22,405 +223 Up. NASDAQ: 6,496 +274 Up. SP500: 2,519 +179 Up.
• Tata Motors - JLR reports strong US sales for September; Total sales rise 16.9% to 9,703 units vs 8,29.capitalstars
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