Is That A Bell Ringing, I Hear.

Baltic Dry Index. 1536 +30 Brent Crude 63.46

They don’t ring a bell at the top, goes the old Wall Street saying, but I’m not so sure. To this old dinosaur markets watcher and follower, they are ringing bells, blowing whistles, sounding klaxons and firing maroons, at what looks to me like an increasingly unstable top forming in many markets. Run, don’t walk for the lifeboats.

November 30, 2017 / 12:48 AM

Asian stocks fall as tech bellwethers hit by fear boom has peaked

TOKYO (Reuters) - Asian shares fell on Thursday, weighed down by a plunge in high-flying technology shares, a move that some see as a healthy correction after a strong rally but others believe may herald the peak of a “super cycle” that has been boosting the sector.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.9 percent, with technology bellwether Samsung Electronics (005930.KS) falling 2.9 percent to two-month lows and Taiwan’s TSMC (2330.TW) down 1.9 percent.

Japan's Nikkei .N225 dipped 0.1 percent, led by a 2.0 percent fall in electronic machinery makers .IELEC.T.

In the U.S., the Nasdaq Composite .IXIC dropped 1.27 percent as investors shifted to financials and other sectors even as the S&P 500 .SPX was almost flat and the Dow Jones Industrial Average .DJI gained 0.44 percent.[.N]

Shares of Amazon.com (AMZN.O), Apple (AAPL.O), Google parent Alphabet (GOOGL.O) and Facebook (FB.O) fell between 2 percent and 4 percent. Among the year’s other high fliers, Netflix (NFLX.O) slid 5.5 percent.

Possibly weighing on them were concerns, sparked by a Morgan Stanley report earlier this week, that “super-cycle” in memory chip demand is likely to peak soon.

“It is true that if you look at the world’s semiconductor sales on chart, their year-on-year growth appears to be peaking out. Given the current high sales level, some market players would be naturally worried,” said Hiroshi Watanabe, economist at Sony Financial Holdings.

“But if you look at what’s driving demand, it’s not just smart phones and actually a lot of things, such as data centres. The world’s demand is likely to continue expanding in 2018 and I don’t see the need to be pessimistic now,” he said.

Some market players said selling in tech shares had more to do with profit-taking ahead of the end of the year.

“Tech shares have done so well over the past year. There are many shares that saw their prices doubling. So investors have been on guard. They have been looking for an opportune time to sell,” said Norihiro Fujito, senior investment analyst at Morgan Stanley.

The Nasdaq index is still up 26.8 percent so far this year, more than 9 percentage points above gains in the S&P.

The ex-Japan Asia-Pacific MSCI index is up more than 30 percent and is on course to log its 11th straight month of gains this month.

On the other hand, U.S. bond yields rose across the maturities and the dollar gained some traction after the U.S. third-quarter GDP growth was revised up to an annualised 3.3 percent USGDPP=ECI, from the initial estimate of 3.0 percent USGDPA=ECI.

More

https://uk.reuters.com/article/uk-global-markets/asian-stocks-fall-as-tech-bellwethers-hit-by-fear-boom-has-peaked-idUKKBN1DU02W

Goldman Warns That Market Valuations Are at Their Highest Since 1900

By Chris Anstey

November 29, 2017, 9:02 AM GMT

A prolonged bull market across stocks, bonds and credit has left a measure of average valuation at the highest since 1900, a condition that at some point is going to translate into pain for investors, according to Goldman Sachs Group Inc.

“It has seldom been the case that equities, bonds and credit have been similarly expensive at the same time, only in the Roaring ’20s and the Golden ’50s,” Goldman Sachs International strategists including Christian Mueller-Glissman wrote in a note this week. “All good things must come to an end” and “there will be a bear market, eventually” they said.

As central banks cut back their quantitative easing, pushing up the premiums investors demand to hold longer-dated bonds, returns are “likely to be lower across assets” over the medium term, the analysts said. A second, less likely, scenario would involve “fast pain.” Stock and bond valuations would both get hit, with the mix depending on whether the trigger involved a negative growth shock, or a growth shock alongside an inflation pick-up.

“Elevated valuations increase the risk of draw-downs for the simple reason that there is less buffer to absorb shocks,” the strategists wrote. “The average valuation percentile across equity, bonds and credit in the U.S. is 90 percent, an all-time high.”

A portfolio of 60 percent S&P 500 Index stocks and 40 percent 10-year U.S. Treasuries generated a 7.1 percent inflation-adjusted return since 1985, Goldman calculated -- compared with 4.8 percent over the last century. The tech-bubble implosion and global financial crisis were the two taints to the record.

Low inflation has prevailed in the current period, just as it did alongside economic growth in the 1920s and 1950s, according to the Goldman report. “The worst outcome for 60/40 portfolios is high and rising inflation, which is when both bonds and equities suffer, even outside recessions.” An increase in policy rates triggered by price pressures “remains a key risk for multi-asset portfolios. Duration risk in bond markets is much higher this cycle,” they wrote.

In the Goldman strategists’ main scenario of lower but positive returns, investors should “stay invested and could even be lured to lever up.” They suggested putting more in equities, with their greater risk-adjusted returns, and scaling back duration in fixed income.

Other findings in the report include:

more

https://www.bloomberg.com/news/articles/2017-11-29/goldman-warns-highest-valuations-since-1900-mean-pain-is-coming

In other news, it’s that OPEC time of year again. But is everything already priced in? Buy the rumour, sell the fact?

November 29, 2017 / 8:25 AM .

OPEC, Russia head for oil cut extension but wary of overheating market

VIENNA (Reuters) - OPEC and Russia look set to prolong oil supply cuts until the end of 2018 this week while signaling that they may review the deal when they meet again in June if the market overheats.

With oil prices LCOc1 rallying above $60 per barrel, Russia has questioned the wisdom of extending existing cuts of 1.8 million barrels per day (bpd) until the end of next year as such a move could prompt a spike in U.S. production.

Russia needs much lower oil prices to balance its budget than OPEC’s leader Saudi Arabia, which is preparing a stock market listing for national energy champion Aramco next year and would hence benefit from pricier crude.

Six ministers from OPEC and non-OPEC oil producers including Saudi Arabia and Russia met in Vienna on Wednesday - one day ahead of a full OPEC gathering - and recommended extending the cuts to the end of 2018. At present, the cuts expire in March.

“That’s one of the recommendations,” Kuwait’s Oil Minister Essam al-Marzouq told reporters when asked whether the committee had agreed on a nine-month extension, among other matters.

Russian Energy Minister Alexander Novak was, however, less certain about the duration.

“The market has not been fully balanced yet. Joint efforts are needed after April 1. Everybody has recommended that the agreement could be extended and tomorrow such concrete details will be discussed,” Novak said.

More

https://uk.reuters.com/article/us-opec-meeting/opec-russia-head-for-oil-cut-extension-but-wary-of-overheating-market-idUKKBN1DT0X9

Crooks and Scoundrels Corner

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

Today, Bitcoin, bubble, scam, or the next “big thing?”

Bitcoin Recovers From Sudden Selloff as Large Swings Persist

By Eric Lam

November 30, 2017, 5:56 AM GMT

Bitcoin rallied as much as 20 percent from its Wednesday low, easing concern that an abrupt selloff in the cryptocurrency might spiral into something deeper.

The digital currency climbed as high as $10,787.99 in Asian trading hours Thursday, after touching a nadir of $9,009.15, according to prices compiled by Bloomberg. The 21 percent slump on Wednesday, triggered in part by intermittent outages at cryptocurrency exchanges, came just hours after bitcoin had soared to a record.

Price swings in the world’s most popular digital currency are increasing as an 11-fold gain this year captivates everyone from mom-and-pop investors to high-frequency traders and Wall Street banks. While the frenzy has prompted bubble warnings from observers including Nobel laureate Joseph Stiglitz, interest among traders shows few signs of abating.

Coinbase, one of the largest bitcoin exchanges, tweeted on Wednesday that traffic on its platform reached an all-time high, even as some users reported service interruptions and delays.

Click the links below for more bitcoin coverage:

Bitcoin Mania Interrupted, for Now, as Outage Triggers Selloff
What Bitcoin Watchers Are Saying After the Surge Past $10,000
Bitcoin ‘Ought to Be Outlawed,’ Nobel Winner Stiglitz Says
Calling a Bitcoin Top? Options to Sell Short Are Risky, Pricey
Bitcoin Is Still Sucking Up All the Crypto Oxygen: Gadfly

https://www.bloomberg.com/news/articles/2017-11-30/bitcoin-recovers-from-sudden-selloff-as-large-swings-persist

This Is What Could Pop the Bitcoin Bubble

By Luke Kawa

November 29, 2017, 10:55 PM GMT

Bitcoin and bubble have become virtually synonymous in the minds of many skeptics during this year’s breathtaking rally. While the digital currency has defied doomsday prophesies, there’s a number of ways this party could end badly for the swelling ranks of bulls. 

But be warned: many of the potential causes of death have surfaced during the past few years, and have proven unable to bludgeon bitcoin into oblivion thus far.

Knifed by a Fork

The multiple offshoots of bitcoin could cause the world’s largest digital currency by market value to cede its crown.

Divides among developers as to how to proceed with upgrades to bitcoin’s network have led to "forks," in which different versions of the currency are spun off from the original. Excessive fragmentation could prove a bug for bitcoin, just as it did for the U.S. financial system during the free banking era. When it comes to cryptocurrencies, hedge fund manager Mike Novogratz warned, "not everything can win" -- though that’s not enough to stop him from launching a $500 million fund to invest in the asset class.

Ether, the second-largest digital currency, has posted massive gains since the bitcoin forks began. But even that advance pales in comparison to the surges in bitcoin and bitcoin cash over the same span.

Strangled by Regulators

Given bitcoin’s checkered history as the means to purchase illicit materials, a vehicle for capital flight, and a victim of theft, it’s no surprise that regulators around the world have cast a watchful eye over the asset class. As such, the specter of a complete crackdown on cryptocurrencies remains an ever-present tail risk. The SEC has been keeping an eye on crypto and has given guidance saying some tokens may be securities, making them subject to their oversight.

UBS Group AG Chief Investment Officer Mark Haefele said the wealth manager wouldn’t dedicate funds to bitcoin because "all it would take would be one terrorist incident in the U.S. funded by bitcoin for the U.S. regulator to much more seriously step in and take action."

more

https://www.bloomberg.com/news/articles/2017-11-29/for-bitcoin-skeptics-the-question-is-what-will-pop-this-bubble

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 21^st century onwards? DC? A quantum computer next?

Ultrathin and flat graphene metalenses gain morace properties

Date: November 27, 2017

 

Source: Institute for Basic Science

 

Summary: Lenses made of graphene and precisely pierced gold sheets are able to concentrate terahertz beams to a spot, flip its polarization and modulate its intensity.

On the quest for miniaturization, scientists at the Center for Integrated Nanostructure Physics, within the Institute for Basic Science (IBS, South Korea), in collaboration with researchers from the University of Birmingham and the Korea Advanced Institute of Science and Technology (KAIST), develop credit card-thick, flat lenses with tunable features. These optical devices, made of graphene and a punctured gold surface, could become optical components for advanced applications, such as amplitude tunable lenses, lasers (i.e. vortex phase plates), and dynamic holography.

Metasurfaces are new 2D materials that can effectively control the electric and magnetic components of light (and other electromagnetic waves) and bend them to bespoken directions. Controlling the beam's direction can bring out interesting phenomena; the most incredible being the "invisibility cloak effect," where light waves bypass an object recreating the image beyond the object, as flowing water in a river would bypass a stone.

Published in Advanced Optical Materials, the study presents the properties of a metasurface which works as a convex lens. Specifically, it is made of a gold sheet pierced with micrometer-sized U-shaped holes and covered with graphene. As the shape of common convex lenses allows light to be concentrated on a spot (or focus), think about a magnifying glass which can concentrate a light beam and even start a fire, so the particular pattern of the tiny apertures of the metalenses works by focusing the incoming beam.

In addition, these microholes can also change light polarization. While natural light is generally unpolarized before being reflected, the team used circularly polarized waves, that is a light beam where the direction of the electric field is corkscrew spiraling. This metalens can convert the left-circular polarization wave (going counterclockwise if seen straight in front) to right-circular polarization (clockwise). The researchers managed to obtain a conversion rate of 35%. Converting circular polarization could be useful in a number of fields, for example biosensing and telecommunications.

More

https://www.sciencedaily.com/releases/2017/11/171127124731.htm?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+sciencedaily%2Fmatter_energy%2Fgraphene+%28Graphene+News+--+ScienceDaily%29

The monthly Coppock Indicators finished October

DJIA: 23,277 +233 Up. NASDAQ:  6,728 +284 Up. SP500: 2,575 +183 Up.