Baltic Dry Index. 1405 -40 Brent Crude 61.33
John
Kenneth Galbraith
Was that it? Did luck just run out on President
Trump? Has the “all news is good news” stock market bubble burst? Well not
according to the usual stock promoters and peddlers who all unanimously say this morning “don’t
sell, buy more,” but they would say that wouldn’t they. To this
old dinosaur market watcher, following commodity and stock markets since 1968,
this time is different, to use the stock peddlers favourite bull phrase.
That our markets have been rigged higher
since the 1987 Black Monday crash, and especially after the 2008 near melt down
of the whole corrupt financial system, on the Great Nixonian Error of fiat
money, communist money, isn’t in question. It’s just the Great Rig doesn’t seem
to work very well any more, and certainly not in the way the central banksters
expect. Rigging stock markets higher
doesn’t seem to be helping most of society. From America through Europe, the
desperate voters have given up on mainstream parties. Now ominously, the Great
Rig seems to have lost all its fizz and gone flat.
Below, just another wobble or the drift for
the exit before the Great Stampede? In bubbles, no one ever rings a bell at the
top. No one ever issues a “now is the time to panic” market call. But in
bubbles, getting out early beats getting carried out last. All the easy free central bank money is
priced in. All the US aspirational tax hopium is priced in. All the fraudulent
stock buybacks are priced in. Also priced in is a never ending economic “recovery”
that never quite matches its hype. Suddenly central bank hopium seems to have
lost its kick. So the big question now is, “was that it?”
There can be few
fields of human endeavor in which history counts for so little as in the world
of finance. Past experience, to the extent that it is part of memory at all, is
dismissed as the primitive refuge of those who do not have the insight to
appreciate the incredible wonders of the present.
John Kenneth Galbraith.
Losses Deepen for Global Stocks; Commodities Drop: Markets Wrap
By Adam Haigh and Andreea Papuc
Updated on November 15, 2017, 5:15 AM GMT
A global equity sell off deepened in Asia
amid signs of an oversupply in commodities and as concern grows that stocks
have become too expensive, while there remains uncertainty about U.S. tax
reform. The Australian dollar slid on weak wage data.
Mining, oil and metal stocks were among the biggest losers on the Topix
index, which is on track for its steepest slide since March as Japan’s
benchmarks retreated further from quarter-century highs reached last week.
S&P 500 Index futures declined following losses on the cash equity measure.
A Bloomberg commodities gauge added to its biggest drop in six months and crude
oil extended declines after the International Energy Agency cut its forecast
for demand and cautioned the global market will remain oversupplied. Strong
growth in Germany and Italy buoyed the euro, while the dollar traded near a
three-week low and Treasuries climbed. Nickel led declines in commodities.
“The Topix is still up 8 percent over the last three months,” James
Soutter, a portfolio manager at K2 Asset Management Ltd. in Sydney, said. You
have “concerns that tax reform will take longer in the U.S., which it will, and
some economic data that was slightly mixed. There is a little heat coming out,
but it should present an opportunity to reload soon.”
Morgan Stanley echoed a similar sentiment, advising staying overweight equities even as valuations appear stretched and to avoid the temptation to sell during pullbacks. Current indicators used by the New York-based bank’s cross-asset strategy team are showing strong macro-economic data, favoring a tilt to stocks, with low allocation to high-yield credit.
Stocks have made little headway this month as scant progress on U.S. tax reform and record high levels for many markets restrict appetite for risk-taking investments. Attention now turns to U.S. consumer prices and retail sales for clues on the strength of the world’s largest economy after the flattest American yield curve in a decade raised concern that growth will slow.
A record number of investors in a recent survey of global money managers from Bank of America Merrill Lynch said equities are overvalued. The investors are divided over the likely impact of the White House’s tax agenda next year, with one camp expecting it will yield no change to the economic outlook, and the other saying the reform will spur inflation.
----Here are some key events investors are watching this week:
- Bank of England officials address the bank’s future on Thursday, while European Central Bank chief Mario Draghi speaks Friday.
- A string of Fed appearances may further illuminate the FOMC’s commitment to a December hike.
- U.S. CPI and retail sales data will be released Wednesday morning.
Stocks
- The Topix lost 1.9 percent as of 2:11 p.m. Tokyo time. The Nikkei 225 Stock Average was down 1.5 percent.
- Australia’s S&P/ASX 200 Index declined 0.6 percent and the Kospi index in Seoul was down 0.2 percent.
- Hong Kong’s Hang Seng Index fell 0.9 percent and the Shanghai Composite Index was down 0.8 percent.
- Futures on the S&P 500 decreased 0.3 percent. The underlying measure dropped 0.2 percent on Tuesday.
More
Next, a warning for UK voters flirting with
electing Comrade Corbyn’s New Communist Labour Party. If you think things are
bad under the shambles of Mrs May’s Not Quite the Conservative Party, just wait
until you get a government run by Comrade Corbyn, who thinks Venezuela is a role
model of good governance that Great Britain should copy.
“Adam Smith” aka George Goodman.
Venezuela Goes Bust
Another lesson in the price of lending to a socialist regime.
Nov. 14, 2017 6:48 p.m. ET
Milton Friedman once joked that if you put the government in charge of the
Sahara Desert in five years there would be a shortage of sand. He could have
been talking about Venezuela and its oil wealth. But it is no joke.On Monday Caracas missed interest payments due on two government bonds and one bond issued by the state-owned oil monopoly known by its Spanish initials PdVSA. Venezuela owed creditors $280 million, which it couldn’t manage even after a 30-day grace period.
Venezuela is broke, which takes some doing. For much of the second half of the 20th century, a gusher of oil exports made dollars abundant in Venezuela and the country imported the finest of everything. There were rough patches in the 1980s and 1990s, but by 2001 Venezuela was the richest country in South America.
Then in 2005 the socialist Hugo Chávez declared that the central bank had “excessive reserves.” He mandated that the executive take the excess from the bank without compensation. Today the central bank has at best $1 billion in reserves.
Falling oil prices are partly to blame, but the main problem is that chavismo has strangled entrepreneurship. Faced with expropriation, hyperinflation, price controls and rampant corruption, human and monetary capital has fled Venezuela.
As of Tuesday evening, the Investment Swaps and Derivatives Association still had not declared Venezuela in default. That matters because this will trigger the insurance obligations inherent in the credit default swaps. But S&P Global Ratings declared the country in default Monday. On Tuesday morning the Luxembourg Stock Exchange issued a suspension notice for the bonds with missed payments.
President Nicolás Maduro has formed a commission to restructure up to $150 billion of the debt and put Vice President Tareck El Aissami —who is under U.S. sanctions for drug trafficking—in charge. Mr. El Aissami called a meeting of creditors on Monday in Caracas, which most bondholders did not attend. Press reports said Mr. El Aissami delivered a monologue on Venezuela’s intention to pay and took no questions. He argued that Trump Administration sanctions make it difficult for the dictatorship to arrange refinancing.
The real problem is that restructuring assumes the country can grow again. That’s nearly impossible without a change in policy that will free the economy.
If Caracas doesn’t find a way to settle with bondholders, they will soon ask authorities to seize Venezuelan assets such as oil shipments at sea and Citgo facilities in the U.S. Such are the wages socialism.
Finally, in the global trade wars, the EUSSR
opens up a new front against China. Who knew that the EUSSR had an anti-fraud
office, given that EUSSR fraud is so widespread, the EU auditors haven’t been
able to sign off on the accounts for decades.
Below the EU joins America in taking on unfair Chinese steel exports.
November 14, 2017 / 4:21 PM
EU finds Chinese steel sent via Vietnam evaded tariffs
LONDON (Reuters) - The European Union’s anti-fraud office (OLAF) said it
has found Chinese steel was shipped through Vietnam to evade the bloc’s
tariffs.
Steelmakers are now awaiting a similar but more widespread U.S.
circumvention investigation involving China and Vietnam.
Trade tensions between Beijing and Western nations continue to simmer,
with the United States taking a tough line even though China, producer of half
the world’s steel, has cut excess capacity by a quarter and reined in its
exports of the alloy.
OLAF told Reuters roughly 8.2 million euros (£7.3 million) of
anti-dumping duties were evaded when organic coated steel from China was
shipped through Vietnam and given Vietnamese certificates of origin.
The amount involved is small and the case was concluded at the end of
2016, but market participants say Vietnam remains a hub not for fraud, but for
Chinese trade tariff circumvention involving large tonnages of steel.
Financial recommendations were sent to the customs authorities of
Belgium, Greece, Slovenia, Italy, Poland, Portugal, Lithuania, Romania and
Sweden for the recovery of roughly 8.2 million euros of antidumping and
countervailing duties.
Western steelmakers are hoping the EU will launch a similar
circumvention case to the one pending in the United States.
A European Commission source said there was no ongoing investigation
into that matter, but authorities would not hesitate to initiate a probe if
they were made aware of circumvention allegations.
“If the EU ultimately applied duties currently levied against Chinese
steel to imports from Vietnam, it would help close another loophole for Asian
steelmakers to access the euro market,” Jefferies analyst Seth Rosenfeld said.
The United States is due to rule shortly on whether Chinese steelmakers
subject to U.S. duties diverted their shipments to Vietnam for minor processing
into cold-rolled and corrosion-resistant steel, before selling them on to the
United States.
By some estimates, up to 90 percent of the value of the Vietnamese steel
shipped to the United States was produced in China.
The United States is also investigating a similar case involving 1
million tonnes of Chinese aluminium shipped to Vietnam and then on to Mexico
allegedly to evade U.S. duties. China produces half the world’s aluminium.
“The OLAF case will definitely raise, if not confirm, suspicions for
(the U.S.) Commerce (Department). Also it would not be a surprise if there is
an EU complaint already filed on circumvention via Vietnam,” said Laurent
Ruessmann, a partner at lawyers FieldFisher.
More
Henry Hazlitt
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Yes, you guessed it, it’s those lying, cheating, stealing, law breaking
banksters again. They can resist anything except the temptation to help
themselves to shed loads of other people’s filthy lucre. Why do these criminals
still have banking licences?
November 14, 2017 / 3:49 PM
HSBC pays 300 million euros to settle investigation of Swiss bank
ZURICH
(Reuters) - HSBC Holdings has agreed to pay 300 million euros ($353 million) to
settle a long-running investigation into tax evasion by French citizens via its
private bank in Switzerland, the lender said on Tuesday.
The agreement is a first under a French system introduced in 2016 to
allow companies to settle without any finding of guilt, HSBC said in a
statement, adding the fine had been fully provisioned.
“The investigation regarding HSBC Holdings has been dismissed,” HSBC
said in its statement.
Governments around the world are working to clamp down on tax evasion,
given public anger at the perception that the richest members of society may
not be paying their full dues.
The French financial prosecutor’s office also confirmed the settlement
ends proceedings against HSBC, provided that HSBC makes the payment.
It added, however, that two unnamed former directors of HSBC’s Swiss
private bank remained subject to possible legal action.
HSBC’s Swiss private bank was plunged into turmoil in 2008 when Herve
Falciani, a former IT employee, leaked client data that has spawned
investigations in several countries.
Falciani, a French citizen, has said he is a whistleblower trying to
help governments to track down citizens who used Swiss accounts to evade tax.
In 2015 a Swiss court sentenced him in absentia to five years in prison for
industrial espionage.
“HSBC has publicly acknowledged historical control weaknesses at the
Swiss private bank on a number of occasions and has taken firm steps to address
them,” the bank said.
The French investigation found that several French taxpayers had not
declared to tax authorities assets held in the books of the Swiss private bank,
which provided French clients with services used to conceal assets.
Swiss bank UBS has not agreed on a settlement in a similar case in
France and now faces trial after a long-running investigation into allegations
it helped wealthy clients to avoid taxes.
“The singular feature of the great crash of
1929 was that the worst continued to worsen. What looked one day like the end
proved on the next day to have been only the beginning. Nothing could have been
more ingeniously designed to maximize the suffering, and also to ensure that as
few as possible escaped the common misfortune. The fortunate speculator who had
funds to answer the first margin call presently got another and equally urgent
one, and if he met that there would still be another. In the end all the money
he had was extracted from him and lost. The man with the smart money, who was
safely out of the market when the first crash came, naturally went back in to
pick up bargains. …..The bargains then suffered a ruinous fall. Even the man
who waited out all of October and all of November, who saw the volume of
trading return to normal and saw Wall Street become as placid as a produce
market, and who then bought common stocks would see their value drop to a third
or a fourth of the purchase price in the next twenty-four months. The Coolidge
bull market was a remarkable phenomenon. The ruthlessness of its liquidation
was, in its own way, equally remarkable."
J. K. Galbraith. The Great Crash: 1929.
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?
Puget Sound Energy Adopts Primus Power Battery Storage System
Primus flow battery installed at renewable generation facility
November 13, 2017 18:54 ET
BELLEVUE,
Wash., Nov. 13, 2017 (GLOBE NEWSWIRE) -- Today Primus Power (“Primus”), a leader in stationary energy
storage systems, and Puget Sound Energy (“PSE”), Washington
state’s largest utility, announced the installation of a stationary energy
storage system at one of its renewable generation facilities.
The flow battery system, a Primus EnergyPod® 2, was installed in September 2017. Primus received partial funding for the installation through the Technology Innovation Project grant from the Bonneville Power Administration and the Office of Electricity Delivery and Energy Reliability at the U.S. Department of Energy (“DOE”).
“Our customers value the environment and so do we, so PSE is investing in clean energy and new technologies to provide a sustainable future for everyone,” said PSE Director of Strategic Initiatives Roger Garratt. “Energy storage systems, like the one installed by Primus, increases our understanding of clean energy. They will also allow us to evaluate cost savings that battery systems offer to our customers.”
Dr. Imre Gyuk, Director of Energy Storage Research at DOE’s Office of Electricity, puts grid-tied electrical energy storage in perspective: “The traditional grid works as a one-way flow from generation to load, and it is relatively predictable. Adding renewable energy to the grid will introduce fluctuations, but the energy storage systems buffer this variability, allowing easier integration of renewables. In particular, long duration storage is becoming an attractive alternative to deploying back-up diesel generators, allowing deferral of new substation construction.”
Primus has been working with PSE for several years. “We are incredibly fortunate to work with a forward thinking utility like PSE”, remarks Tom Stepien, Primus Power’s CEO. “PSE is the Pacific Northwest’s largest utility producer of renewable electricity, and America’s third-largest utility generator of wind power. They are a perfect partner for Primus: our multi-year relationship has increased our understanding of real-world renewable projects and helped strengthen our products and team.”
About Primus Power
Primus Power is a California-headquartered provider of low-cost, long-life and long-duration energy storage systems. The Company’s flow batteries are shipping to U.S. and international commercial/industrial, data center, microgrid, utility, and military customers. With technical innovations protected by 40 patents in 11 countries, the Company’s EnergyPod systems offer exceptional reliability, modularity, and energy density at an industry-low total cost of ownership. www.primuspower.com. Also follow us on Facebook and Twitter.
About Puget Sound Energy
Puget Sound Energy is proud to serve our neighbors and communities in 10 Washington counties. We’re the state’s largest utility, supporting 1.1 million electric customers and 800,000 natural gas customers. For more about us and what we do, visit pse.com. Also follow us on Facebook and Twitter.
Flow battery
A flow battery, or redox flow battery (after reduction–oxidation), is a type of electrochemical cell where chemical energy is provided by two chemical components dissolved in liquids contained within the system and separated by a membrane.[2][3] Ion exchange (accompanied by flow of electric current) occurs through the membrane while both liquids circulate in their own respective space. Cell voltage is chemically determined by the Nernst equation and ranges, in practical applications, from 1.0 to 2.2 volts.A flow battery may be used like a fuel cell (where the spent fuel is extracted and new fuel is added to the system) or like a rechargeable battery (where an electric power source drives regeneration of the fuel). While it has technical advantages over conventional rechargeables, such as potentially separable liquid tanks and near unlimited longevity, current implementations are comparatively less powerful and require more sophisticated electronics.
The energy capacity is a function of the electrolyte volume (amount of liquid electrolyte) and the power a function of the surface area of the electrodes.
More
Puerto Rico to Boost Wind, Solar to Bolster Grid, Rossello Says
By Daniel Flatley November 14, 2017, 4:21 PM GMT
Puerto Rico should boost its use of wind and solar electricity to
provide for as much as 25 percent of the island’s electricity, its governor
said Tuesday.
In the wake of Hurricane Maria, which wiped out the territory’s power,
the island’s grid needs to be transformed, Governor Ricardo Rossello told a
Senate panel.
Even before the storm, Puerto Rico’s decades-old energy system was known to be dirty, inefficient and vulnerable, with most of the production in the south and the demand in the northern part of the island. Tesla Inc. Chief Executive Officer Elon Musk exchanged messages with Rossello on Twitter after the storm about how best to restore power. Tesla, a maker of electric cars, also sells batteries to consumers to combine with rooftop solar systems.
"We certainly see a collaboration with the private sector," Rossello said, adding that the details still need to be "ironed out."
The monthly Coppock Indicators finished October
DJIA: 23,277 +233 Up. NASDAQ: 6,728 +284 Up. SP500: 2,575 +183 Up.
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