Baltic Dry Index. 1413 +17 Brent Crude 63.16
“If
economists could manage to get themselves thought of as humble, competent
people on a level with dentists, that would be splendid.”
John Maynard Keynes.
First,
a happy Thanksgiving to all readers everywhere celebrating today. We in the
still prosperous west, have so much still to be thankful for.
It’s up, it’s down, it’s
up, it’s down, welcome to the world of the Fedster’s and other central
banksters rigged global economy. On the
Great Nixonian Error of fiat money, communist money, the wealth divide gets
ever wider, speculation gets rewarded and financially encouraged by the central
banksters, manufacturing, mining, farming and commerce get punished as so old
yesterday’s economics.
Below, hopium rules
again, but for how long?
“Beyond
this, the problem is universal. It is that governments are now held responsible
for the welfare of the people. The aspirations of the people can outrun their
ability to pay for them, and nobody has yet found a way to create answers to
the aspirations out of thin air.”
George
Goodman, aka Adam Smith, The Money Game. 1968.
November 23, 2017 / 12:24 AM
Dollar dumped, bonds buoyant on Fed inflation caution
SYDNEY (Reuters) - The dollar was on the defensive Thursday
after suffering its worst drubbing in five months while bonds celebrated a
comeback on speculation the Federal Reserve might not tighten U.S. policy as
aggressively as previously thought.
Moves in Asian share markets were mostly minor with Japanese markets closed for a holiday and the United States off for Thanksgiving. Spreadbetters pointed to a slightly easier opening for the major European bourses.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS eked out a fresh 10-year peak with a rise of 0.15 percent, as did
Hong Kong's main index .HSI.
The dollar’s rout came after minutes of the Fed’s last meeting showed
“many participants” were concerned inflation would stay below the bank’s 2
percent target for longer than expected.
That echoed comments from Fed Chair Janet Yellen that she was uncertain
about the outlook for inflation and led markets to pare back pricing for more
hikes next year.
While a move in December to between 1.25 and 1.5 percent is still almost
fully priced in, Fed fund futures <0> rallied to show rates at just
1.75 percent by the end of next year.
“The US dollar was already staggering into Thanksgiving when the FOMC
minutes gave it another shove,” said Sean Callow, a senior currency analyst at
Westpac. “The FOMC seems to be increasingly uneasy about ”ongoing softness“ in
inflation.”
“Investors can be forgiven for wondering why they should buy more U.S.
dollars if we are heading into a ”Powell pause“ in the first half of 2018,” he
added, referring to newly appointed Fed Chair Jerome Powell.
More
Fed Signals December Hike Even as Debate on Prices Persists
By Jeanna Smialek
Updated on November 22, 2017, 8:20 PM GMT
Federal Reserve officials meeting earlier this month saw an
interest-rate increase in the near term even as tepid inflation drove divisions
over the policy path and as financial stability concerns cropped up.
“Many participants thought that another increase in the target range for
the federal funds rate was likely to be warranted in the near term if incoming
information left the medium-term outlook broadly unchanged,” according to minutes
from their Oct. 31-Nov. 1 gathering, released in Washington on Wednesday.
Policy makers held rates steady at the meeting but
are expected to hike next month as they continue with gradual
tightening. Unemployment is at a 16-year low, although inflation remains well
beneath their 2 percent target.
The minutes showed that while Fed officials remain confident in the
labor market and above-trend economic growth, several are looking for stronger
signs that price gains will pick up. A few even want to see inflation on an
upward path before lifting rates again, underlining a persistent divide on the
policy-setting Federal Open Market Committee.
Stocks stayed lower, the dollar declined and yields on two-year Treasury
notes dipped after the minutes were released. With a December Fed rate hike
almost fully priced in, market-implied odds of another rate increase by March
held around 55 percent, based on trading in federal funds futures.
Officials have been projecting three rate increases in 2018, but that
outlook could be called into question if economic data fail to meet Fed
expectations. Analysts are watching closely for any signal that central-bank
officials will mark down their outlooks when they submit economic projections
at their Dec. 12-13 meeting.
More
Two Biggest Risks Now Are China and Inflation, Market Veteran Says
By Adam Haigh“The second would be that despite little evidence of it happening, we in fact do get a surge in inflation” that could come from the U.S., Europe or Japan, he said in a Bloomberg TV interview in New York. “All areas where labor product markets are now at the points where previously we would have seen those developments. It is simply unanticipated in the markets.”
As strategists and professional prognosticators dust off their crystal balls with year-ahead forecasts, one pivotal question is whether 2018 may mark the turning point for markets as central banks wind back some of the extraordinarily high levels of stimulus that have helped fuel asset-price growth in recent years.
Hatheway, who joined UBS AG in 1992 and worked there until 2015 in roles including global head of asset allocation, arrived at GAM in 2015. He now sits on the firm’s management board, where he helps make decisions that affect where GAM’s $151 billion in client assets is invested. Investors have ultimately been able to overlook a range of concerns this year because earnings growth and economic activity are holding up, he said.
“It really comes down to the resilience of growth in a non-inflationary way,” Hatheway said. “In that environment we are seeing extraordinarily high levels of profitability.”
In other news, is oil
trading on borrowed time? Some rich Saudis escape from their Ritz Carlton 5
star luxury jail.
Oil Sets Itself Up for Fall If OPEC Can't Deliver Cuts Extension
By Grant Smith, Javier Blas, and Wael Mahdi
Updated on November 23, 2017, 12:01 AM GMT
Oil traders and analysts almost unanimously expect OPEC and Russia to
prolong their production cuts next week. However, behind the scenes Saudi
Arabia and Russia are still debating what course to follow.These high expectations, coupled with a recent surge in bullish bets on crude, amplify the risk to prices if the group can’t convince a hesitant Russia that it’s necessary to agree an extension right away.
“Anything but an extension supported by Russia would have a significant impact on the price,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. “Not least due to the near record-long oil bet, which has left little room for error in terms of the communication from the OPEC ministers.”
Oil climbed to a two-year high in New York on Wednesday in anticipation that the reduction in oil shipments from the Organization of Petroleum Exporting Countries and its allies would further diminish the glut that’s weighed on prices for three years. The cuts are a success, but the job isn’t done. To prevent the stockpile surplus expanding again, International Energy Agency forecasts indicate OPEC needs to maintain the cuts beyond their March expiry.
That’s what almost everyone expects to happen. All of the 36 analysts and traders surveyed by Bloomberg expected an extension, with another nine months of cuts the most popular prediction.
It’s also what OPEC’s largest and most powerful member wants. Last week, Saudi Arabia’s Energy Minister Khalid Al-Falih told Bloomberg television the group should announce an extension of the curbs in Vienna because surplus inventories won’t be eliminated by March.
Russian Reservations
Yet the dominant non-OPEC participant in the deal has reservations. Russia believes it’s too early to announce anything this month, two people with knowledge of matter said last week. Another issue was the duration of the extension, with options including an additional three months of cuts being considered, they said.Kuwait, the fifth largest OPEC producer and a member of the committee that oversees the accord, also believes the decision to extend should be taken closer to expiry, said people familiar with the matter. Ministers from both nations set out that position publicly at their last meeting in Vienna in September.
More
Saudi Graft Suspects Are Said to Start Payments for Freedom
By Matthew Martin and Glen Carey
November 22, 2017, 11:50 AM GMT
Saudi suspects being held as part of the kingdom’s crackdown on alleged
corruption are starting to make payments to settle cases in exchange for
freedom, according to people with knowledge of the matter.
Some businessmen and officials being detained at the Ritz-Carlton are
signing agreements with authorities to transfer a portion of their assets to
avoid trial, the people said, asking not to be identified because the
discussions are private. Some detainees have started to transfer funds from
personal accounts to government-controlled accounts, the people said.
The payments, less than a month since the detentions, show the
speed at which Saudi Arabia wants to settle the corruption probe that involved
the sudden arrests of royals and billionaires such as Prince Alwaleed bin Talal
this month. The purge -- while welcomed by some in Saudi Arabia -- has also
stirred political uncertainty in the kingdom at a time when Crown Prince
Mohammed bin Salman is seeking to attract international investment.
The government’s Center for International Communication didn’t
immediately respond to requests for comment.
Authorities estimate they may be able to recover between $50 billion and $100 billion from settlement agreements with suspects, a senior official said this week. Suspects are being offered settlements to avoid trial, the Saudi official said. If they accept, talks are held with a special committee to work out the details. Payments are based on the amounts authorities believe suspects have amassed illegally, not their entire wealth, the official said.
The crackdown comes at a delicate time for Saudi Arabia, an absolute monarchy grappling with the worst economic slowdown since 2009 as well as political unrest in the region. Economists expect the investigation to slow already sluggish private investment in the kingdom and hit economic growth next year.
Wealthy Saudis are seeking to restructure their businesses to ring fence assets in case authorities widen the crackdown, according to people with knowledge of the matter. The purge has also prompted some Saudi billionaires and millionaires to sell investments in neighboring Gulf countries and turning them into cash or liquid holdings overseas to avoid the risk of getting caught up in the sweep, other people said.
“Egol and Fabrice were way ahead of their time,” said one of the former Goldman workers.
“They saw the writing on the wall in this market as early as 2005.”
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
"I am sure the
euro will oblige us to introduce a new set of economic policy instruments. It
is politically impossible to propose that now. But some day there will be a
crisis and new instruments will be created."
Romano Prodi, EU
Commission President. Financial Times, 4 December 2001
France, Italy Get EU Warning Over Debt Level, Spending Plans
By Viktoria Dendrinou
November 22, 2017, 11:07 AM GMT Updated
on November 22, 2017, 11:18 AM GMT
Budget plans by Italy, France and four other euro-area countries risk
violating the European Union’s spending rules, the bloc’s executive arm said,
while it delivered a warning to Rome about high government debt.
In a set of assessments presented by the European Commission as
part of the euro area’s fiscal framework, the 2018 spending plans for France,
Italy, Belgium, Austria, Portugal and Slovenia were found to be “at risk of
non-compliance” with the bloc’s rules.
Budget plans for these countries “might result in a significant
deviation from the adjustment paths towards the respective medium-term
objective," the commission said. For Italy, France and Belgium, debt
reduction was also projected to not be in line with the foreseen level.
In the case of Italy “the persisting high government debt is a reason of
concern,” the commission said. It added that its top economic officials sent a
letter to Italian authorities to inform them that “the commission intends to
reassess Italy’s compliance with the debt reduction benchmark in spring 2018.”
“I have just sent a letter to the Italian Finance Minister Padoan,”
European Commission Vice President Valdis Dombrovskis told reporters in
Brussels. “We stress that the adoption of the 2018 budget with no watering down
of its key provisions will be crucial, as will its subsequent strict
implementation to deliver a structural effort of at least 0.3% of GDP.”
The commission said that the 2018 budget plans submitted by 12 other
members were found to be compliant or broadly compliant with the rules. It also
recommended a “broadly neutral fiscal stance” for the euro area as a whole.
“Member States with current account deficits or high external debt
should seek to raise productivity, while Member States with current account
surpluses should promote wage growth and foster investment and domestic
demand,” the Commission said.
A World Without Merkel
After the collapse of
coalition talks, the German chancellor is looking weaker than ever.
By Marc Champion
November
22, 2017, 5:01 AM GMT
Angela
Merkel used to tell Germans “we can do it” when addressing the question of
integrating the million-plus refugees who have come to Germany since 2015. That
pragmatic attitude and her liberal approach have—after the election of Donald Trump and his “America First”
agenda—spurred many politicians and pundits to hail Germany’s motherly
chancellor as the de facto leader of the free world. But after a narrow election victory in September and
the collapse of coalition talks on Nov.
19, it’s beginning to look as if she may not be able to “do it” after all.
First elected chancellor in 2005, Merkel has been a stable presence on the global stage for so long that it’s hard to imagine Germany, or Europe, without her. Following September’s election, in which her conservative bloc of Christian Democrats and the Christian Social Union lost 65 seats in the Bundestag, Germany’s parliament, she has struggled to assemble the jigsaw of smaller parties needed to form a majority government, proving that, for all its economic strength, Germany is vulnerable to the same forces of populism and political fragmentation that have swept other democracies in recent years.
Despite Merkel’s legendary skills as a backroom negotiator, honed at countless European Union and global summits during her dozen years in power, coalition talks broke down over the vexing question of immigration as well as economic concerns—the first time since before World War II that a German election has failed to produce a government. Although there are as many ways for her to stay in power as to be forced out, and she says she’s prepared for another election, a world without Merkel as chancellor has become a real possibility.
“Merkel was a historic figure as far as Europe’s concerned, but her time has come and gone,” says Ashoka Mody, a former World Bank economist just finishing a book about Merkel’s handling of Europe’s currency crisis. Even if she remains as chancellor, Merkel is now so badly weakened that she would be a different kind of leader. “Merkel mark 2 would be very different from Merkel mark 1,” Mody says.
----Merkel’s declining influence is “very bad news for the European Union,” Le Monde wrote in a gloomy editorial on the collapse of talks in Berlin. The French daily newspaper pointed to the wider roller-coaster narrative of European populism this year. Hopes that the center might hold, raised after Emmanuel Macron won the French presidency with an unashamedly pro-Europe, liberal message, have now been “suspended,” the paper wrote.
Macron had been counting on Merkel’s support to secure sweeping change to the EU, proposing deeper cooperation on defense, taxes, immigration, and—crucially—a common budget for the 19-nation euro area. That’s looking much more difficult as the compromises he needs from Merkel would be politically costly for any chancellor. Other than Merkel, “no one here has the grasp or the popular trust to enable Germany to make the concessions needed,” says Jan Techau, director of the Richard C. Holbrooke Forum at the American Academy in Berlin.
More
“Europe exemplifies
a situation unfavourable to a common currency. It is composed of separate
nations, speaking different languages, with different customs, and having
citizens feeling far greater loyalty and attachment to their own country than
to a common market or to the idea of Europe".
Professor Milton Friedman, The Times 19 November
1997.
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?
UK, China 'natural partners' in graphene research
By Angus Mcneice in London | China Daily |
Updated: 2017-11-22 07:37
Scientists in the United Kingdom and China are working to create a
future built on graphene, the "super material" that may soon be used
for a range of things, including charging smartphones in seconds and filtering
salt out of seawater.
At the first UK-China graphene conference last week in the southwestern
Chinese city of Chongqing, British scientists demonstrated the latest
breakthroughs in the commercialization of the highly conductive, incredibly
strong two-dimensional material made of carbon.
Researchers from the Manchester-based National Graphene Institute
demonstrated the filtration capabilities of ultrathin, graphene-oxide
membranes. The technology could be used to separate particles from solvents in
the manufacture of medication, and to transform seawater into clean drinking
water.
Graphene could play an important role in the development of wearable
electronics, and scientists at the conference demonstrated the use of graphene
in flexible, battery-like devices printed directly onto textiles.
Researchers around the world are using graphene in a number of
developing technologies, including smartphone batteries that charge in less
than a minute, and ultrathin antennas that transfer a terabyte of data in a
second.
China's interest in British research into the commercial application of
the material was highlighted by President Xi Jinping's visit to the National
Graphene Institute during his 2015 state visit to the UK.
At the conference, UK Trade Minister Rona Fairhead and Tian Shihong, director-general
of the standardization administration of China, agreed to work together to
establish an international organization for standardization in graphene
research.
Creating common standards for scientific research increases efficiency
and cooperation in international study, said Rebecca Jiang, science and
innovation officer at the UK Foreign and Commonwealth Office.
"Collaborating on graphene standards will therefore reduce
technical barriers to trade and joint research and development in an area that
is a strength for both countries, with huge market potential," Jiang said.
She noted that China and the UK are "natural partners" when it
comes to graphene research and commercialization.
More
"The modern mind dislikes gold because it blurts out unpleasant truths."
Joseph Schumpeter
The monthly Coppock Indicators finished October
DJIA: 23,277 +233 Up. NASDAQ: 6,728 +284 Up. SP500: 2,575 +183 Up.
No comments:
Post a Comment