Saturday 29 December 2018

Weekend Update 29/12/18 Stocks v Roulette? Whiplash Willie.

Baltic Dry Index 1271       Brent Crude 52.20

A very happy, healthy, safe and prosperous New Year to all LIR readers. The next daily LIR update will be on Wednesday January 2nd.

"I think it’s a tremendous opportunity to buy. Really a great opportunity to buy."

President Trump, Stock Bull. Christmas Day 2018.

This weekend, as we approach year-end and the start of a very challenging 2019, we pose the great burning conundrum of our age, is it more fun to bet on stocks in our great casinos, once also known as stock exchanges, or to head over to real casinos where the ply you with free drinks and food, while you bet on the uncertainties of roulette?

Given this week’s stock market action, I think I’d rather be in Monaco, Atlantic City, or Las Vegas. At least the weather is better in two of the three and with roulette, you know what the odds are before you bet.

Below, why the US Tort Bar is salivating over 2019.

"To the C students, I say you too can be president of the United States."

President George W. Bush 

UPDATE January 1, 2019

Hedge funds’ hopes for 2018 dashed amid closures

This year was supposed to be when rising volatility and yields brought back the glory days. Instead, returns fell and investors fled

December 24, 2018 Updated: December 31, 2018 3:10 p.m. GMT

A year ago, the hedge fund industry was full of optimism.

After years of performance trailing the stock market, fund managers saw the end of central banks’ quantitative easing — and, by extension, an end to what many perceived as artificial asset valuations pumped up by government intervention — as the chance to return to the glory days of colossal market-moving bets and double-digit returns. With interest rates and volatility on the rise, it would soon be time to crow about record-setting profits.

But one record set in 2018 was a landmark few hedge fund luminaries cared to dwell on. Last October, in what industry insiders believe to be a first, three US-based hedge funds shut in the course of the same week. Tourbillon and Criterion were among those to cease operations, following an inability to generate sufficient money and capital.

Other hedge funds to have bitten the dust in 2018 include Omega Capital, run by industry veteran Leon Cooperman, and Cerrano Capital, whose backers included activist investor Dan Loeb, but which failed to last a year in operation.

In the run-up to Christmas the Decca fund, run out of London-based fund firm City Financial, and New York-based hedge fund Latimer Light Capital also informed investors they were closing.

There are many theories but little consensus on why 2018 has been so miserable for many hedge funds. The one thing nearly everyone agrees on is that it has become harder to convince investors that the glory days are returning soon.
----Money is flowing out of the hedge fund industry. EVestment, the data provider, estimates there have been net outflows among European-domiciled hedge funds of $12.8bn this year, compared with inflows of of $28.9bn in 2017.



Here’s just how crazy this week was for the stock market, in one big chart

By Jessica Marmor Shaw and Terrence Horan  Published: Dec 28, 2018 4:52 p.m. ET
This Christmas week really was one for the history books. Whiplash, anyone?

On Monday, the Dow Jones Industrial DJIA, -0.33% , the S&P 500 SPX, -0.12% and the Nasdaq Composite COMP, +0.08% all booked their ugliest-ever plunges in the shortened Christmas Eve trading session. All three indexes rebounded Wednesday, only to sink early Thursday and then turn around in dramatic fashion to finish the session higher. The week finished Friday with an indecisive whimper, as stocks flipped back and forth between gains and losses all day long.

----The week’s sharp moves were attributed mostly to light holiday trading volume and computer-driven trading. But the ups and downs during a usually calm period are no doubt stoking investor anxiety about what’s to come.

As we gear up for one more day of 2018 trade and a (fresh?) start in the New Year, let’s revisit some of the most eye-popping stats and charts ...
Ugliest pre-Christmas trading day on record
On Monday, the Dow finished down 653 points, or 2.9%, representing its worst decline during a session prior to Christmas in the 122-year-old blue-chip gauge’s history, according to Dow Jones Market Data.
• The S&P 500 fell by 2.7%, marking the first session before Christmas that it booked a loss of 1% or greater — ever.

----By the time Monday’s shortened trading session was over:
• Every S&P 500 sector was negative for the year.
• Utilities became the only S&P sector not in a correction or bear market.
• Many indexes hit bottoms, with the S&P Composite 1500 entering a bear market.
• The S&P 500 was just 0.02% shy of officially entering a bear market (an amount so negligible many simply called it for the bears — though lines do have to be drawn somewhere).

----Then Wednesday it was as if Christmas Eve had never happened, with stocks more than offsetting their staggering losses from the previous session:

• The Dow logged its first-ever 1,000-point single-session gain.
• The Dow and S&P 500 rose 5%, and the Nasdaq 5.8% — for all three indexes, that was good enough for the largest one-day percentage gain since March 23, 2009.
• The FAANG stocks — Facebook FB, -0.98%  , Apple AAPL, +0.05%  , Amazon AMZN, +1.12%  , Netflix NFLX, +0.20% and Google parent Alphabet GOOG, -0.65% GOOGL, -0.59% — posted the largest one-day market-cap gain on record, lifting their aggregate equity valuation by $163.7 billion.
• Retailers were big gainers, with Amazon soaring more than 9% after the company said it had registered another record holiday season.
Biggest one-day turnaround in years
• The Dow swung from a 2.67% decline at its Thursday session low to a positive finish, up 1.1% — its biggest such intraday swing since Oct. 4, 2011, when it recovered from a fall of 2.75% at its low.

----For the week, the Dow rose 2.8%, while the S&P 500 climbed 2.9% and the Nasdaq registered a weekly gain of 4%.
• All three indexes marked their first weekly gains after three straight weekly declines.

Take Five: The Year of the Bear! World markets themes for the week ahead

December 28, 2018 / 1:04 PM
LONDON (Reuters) - Following are five big themes likely to dominate thinking of investors and traders in the coming week and the Reuters stories related to them.


After swallowing markets from Germany to China, the bears reached U.S. shores in December.
Markets there are fighting back but the outlook is not great. For one, growing numbers of global indices have notched up the 20 percent peak-to-trough drop denoting a bear market. U.S. stocks, which seemed invincible until mid-year, have posted the worst December performance since the Great Depression. Second, the world economic outlook is steadily darkening and upcoming PMI data should confirm that.

---- In Europe, Germany’s DAX fell to the bears in early December and the euro zone bank and auto sectors are down a whopping 40 percent and 36 percent respectively from this year’s peaks. This week, the leading pan-European equity index confirmed it too had entered bear territory, following Wall Street’s Christmas Eve shakeout.


U.S. President Donald Trump had several things going in his favour as he headed into 2018, and the two he most frequently trumpeted were the roaring stock market and booming jobs market. As we leave the year, the picture has changed somewhat, with U.S. stocks enduring their worst month since the financial crisis. But ... he still has that strong jobs market. December’s non-farm payrolls data is due on Friday (it will be reported despite the government shutdown) and the 178,000 new jobs estimated to have been created will push total U.S. employment over the 150 million mark for the first time ever.

China’s stock drop this year reduces bubble worries, central bank official says


China’s financial markets are safer after this year’s stock market drop, a spokesman from the People’s Bank of China said Friday.

The local market is closed Monday, and the Shanghai composite ended the year Friday at 2,493.9, down nearly 25 percent for 2018 in its worst year since 2008. The index hit a high of 3,587 in January but tumbled as much as 31 percent from that level in October amid worries about an economic slowdown, a brewing trade war with the U.S. and corporate financing issues

“The extent of this drop is rather large,” said Zhou Xuedong, spokesman, director general of the general executive office, People’s Bank of China. “But the market hasn’t seen major panic, (stock) dumping, or a large number of listed companies going bankrupt. This is a natural process of the market adjustment. The market participants have become relatively more mature.”

“After the stock market decline from 3,500 to 2,500, (with) valuations this low we are actually very safe,” Zhou said in Mandarin, according to a CNBC translation of his remarks to reporters in Beijing on Friday evening. “The fewer bubbles there are, the safer we are. When stocks are safe, the overall banking industry is safer.”

Chinese authorities have made a flurry of announcements in the past several months in support of stocks and the economy. Mainland trading is dominated by sentiment-driven retail investors rather than institutions, making market performance less tied to economic growth than stock indexes might be in other countries. But as an indication of how much uncertainty hangs over China, the Shanghai composite has barely recovered from a near-four-year low hit in October and remains half the level it hit in 2015.

Finally, staying with China,  President Trump’s unexpected U-turn on Iran oil export waivers is now getting scalps far from the US fracking sector. China’s Unipec trading arm of giant Sinopec seems to have bet wrong. The first of many yet to own up, I suspect. More will likely follow in January. Who would be a trader or decision maker, in the unstable era of President U-turn?

China’s Sinopec is said to suspend top officials at trading arm, shares sink

Chinese state oil major Sinopec has suspended the two top officials at its trading arm Unipec after the company suffered losses, sources with knowledge of the matter said on Thursday.

Unipec’s President Chen Bo, an industry veteran who helped the company become one of the world’s largest oil traders, has been suspended along with the senior Communist Party representative at the company, Zhan Qi, said five sources, who asked not to be identified due to the sensitivity of the issue.

“The government inspectors were looking into the company’s operations for the past few years ... one of the problems they found was the severe trading losses in the second half of this year because of wrong market judgement,” one of the sources said.

The sources did not refer to any wrongdoing on the part of the two men.

Sinopec, Asia’s largest refiner, has appointed two senior executives, Ling Yi Qun and Chen Gang, to manage Unipec, the sources said.

A spokesman for Sinopec had no immediate comment.

Oil prices have fallen more than 30 percent since hitting their highest in four years in October, hurt by oversupply concerns as major producers ramped up output while the United States unexpectedly issued waivers that allowed countries to continue importing Iranian oil.

"Harry Hinkle: Florida and Mustangs and foxes, how are you gonna pay for all of this?
Whiplash Willie Gingrich: Our credit is good.
Harry Hinkle: Well don't you think we better wait 'til we see some of that insurance money?
Whiplash Willie Gingrich: Wait? Who waits nowadays? Take the government. When they shoot a billion dollars worth of hardware into space, do you think they pay cash? It's all on the Diner's Club!"

The Fortune Cookie. 1966.

The monthly Coppock Indicators finished November.

DJIA: 25,538 +157 Down. NASDAQ: 7,331 +205 Down. SP500: 2,760 +129 Down. 
The indicators closed December.
DJIA: 23,327 +1135 Down. NASDAQ: 6,635 +152 Down. SP500: 2,5-7 +90 Down. 
Normally this would suggest more correction still to come, but with President Trump wanting to be judged by the performance of the stock market and his Treasury Secretary activating the Plunge Protection Team after the Christmas Eve Crash, will a politicised PPT cover the President’s back?  Probably the safest action here is to be long fully paid up synthetic double options on most of the major indexes.
Have a great New Year Everyone.
"We are ready for any unforeseen event that may or may not occur. "

President George W. Bush

Friday 28 December 2018

Day Two of the Plunge Protection Team

Baltic Dry Index. 1271       Brent Crude 53.08

All you need is faith, trust and a little bit of pixie dust.

The PPT, with apologies to Peter Pan.

Day two of President Trump’s re-election campaign was almost as spectacular as day one. The Dow Industrials swung from a 600 point decline to close with a 260 point gain. It’s amazing what HFT algo thieves frontrunning the Treasury Secretary’s Plunge Protection Team can accomplish. President Trump clearly wants to be judged by the performance of stocks.

One has to have great sympathy for the poor Democrats, just days away from taking over the House of Representatives and embarking on the persecution of President Trump, in the lead up to the Democrats either impeaching him for defeating Hillary Clinton, or forcing him not to stand at the next election.

Who knew President Trump had a secret nuclear team of stock resurrection men.

Below, Marketwatch covers yesterday’s Miracle on Wall Street. How it all ends is anyone’s guess, but my guess is that the ending won’t be pretty.
So come with me where dreams are born and time is never planned. Just think of happy things and your heart will fly on wings forever in never never land.

The PPT, with apologies to Peter Pan.

Stocks stage huge turnaround to end higher, with Dow swinging more than 800 points

By William Watts and Barbara Kollmeyer  Published: Dec 27, 2018 5:09 p.m. ET

Blue-chip gauge fell more than 600 points at session low

Volatility continued to reign Thursday, with stocks erasing heavy losses to end higher in a late-session turnaround that saw the Dow Jones Industrial Average end more than 800 points above its session low.

The rebound came after stocks initially struggled to build on the previous session’s sharp rally, which in turn was a snapback from the worst Christmas Eve performance in history.

The Dow Jones Industrial Average DJIA, +1.14%  rose 260.37 points, or 1.1%, to end at 23,138.82, after dropping as much as 611 points at its session low. The S&P 500 SPX, +0.86%  also erased a sharp decline to rise 21.13 points, or 0.9%, finishing at 2,488.83. The Nasdaq Composite COMP, +0.38% erased a loss of more than 3% to close at 6,579.49, a gain of 25.14 points, or 0.4%.

On a percentage basis, the Dow’s move from a 2.67% decline at its session low to a positive finish marked its biggest such intraday swing since Oct. 4, 2011, when it recovered from a fall of 2.75% at its low, according to Dow Jones Market Data. The Thursday turnabout was the largest such swing for the S&P 500 since May 25, 2010, and the largest for the Nasdaq since Nov. 18, 2008.

On Wednesday, the Dow ended with a gain of 1,086.25 points, or 5%, at 22,878.45. The S&P 500 soared 5% to end at 2,467.70 and the Nasdaq rose 5.8% to 6,554.36.

The Dow’s Wednesday rebound marked its largest-ever one-day point rise. On the more relevant percentage basis, all three major indexes logged the strongest one-day gains since March 23, 2009, and it was the best-ever day-after-Christmas performance for the equity gauges. It comes on the heels of a brutal selloff in a shortened Christmas Eve session Monday, which featured the lowest closes for all three indexes since 2017.

Light holiday trading volume and computer-driven trading have been blamed for extremely choppy December price action, which has seen a number of sharp daily moves and a rise in volatility. Stocks remain down sharply for the month and lower for the year, with the Nasdaq Composite in a bear market and the S&P 500 and Dow solidly in correction territory.

There has been little in the way of fresh fundamental catalysts. The rebound was broad-based, with the materials sector leading gains with a 1.8% rise, while the health-care, energy, consumer staples and industrials sectors rising more than 1%.

While investors got an assurance over Federal Reserve Chairman Jerome Powell’s job on Wednesday, there remains no resolution to other big issues, such a continuing government shutdown as Washington tussles over funding for President Donald Trump’s proposed border wall.

There was upbeat news for global trade, with the U.S. expected to send a delegation to hold talks with Chinese officials during the week of Jan. 7, according to Bloomberg News. It would mark the first meeting since the G-20 summit in Argentina earlier this month, which yielded a 90-day tariff truce.

However, trade optimism might be tempered by a report from Reuters that the Trump administration is moving closer to issuing an executive order in the new year that would ban U.S. companies from using telecommunications equipment made by China’s Huawei and ZTE 000063, -2.51% .

Investors likely took some comfort in the market’s ability to come back from the day’s initial decline as analysts sought to make sense of Wednesday’s surge.

“Such rallies are not uncommon in troubled times, and we have experienced many of them in past bear markets. To call for a bottom, we need at least a couple of days of strength, not just in price, but also in trading volume, breadth of the market, and fundamentally supported environment,” said Hussein Sayed, market strategist at FXTM, in a note.

West Texas Intermediate crude prices CLG9, +2.35%  fell nearly 3% to $44.86 a barrel, after snapping back by 8% on Wednesday.

European stock markets reopened Thursday with losses after an extended Christmas break.
In Asia, the Nikkei 225 index NIK, -0.37%  soared 3.9%, though China’s Shanghai Composite Index SHCOMP, +0.15%  eased 0.6%.

‘Completely Bizarre’ Stock Moves Leave Traders Scratching Heads

By Abhishek Vishnoi, Min Jeong Lee, and Matthew Burgess

Explaining moves is ‘exercise in futility,’ investor says
·         Some Asia traders decide to stay out of the stock market

Elsewhere, away from the magic of Wall Street, a grimmer reality prevails.

Nissan to cut China auto output over three months as demand slows - source

December 28, 2018 / 3:56 AM
TOKYO (Reuters) - Nissan Motor Co (7201.T) plans to cut vehicle production in China by 30,000 units in the coming months, a person briefed on the matter told Reuters, as global automakers grapple with falling demand in the world’s biggest car market.

After Ford Motor Co (F.N) and Hyundai Motor Co (005380.KS), Nissan becomes the latest automaker to cut production in the country, where slowing economic growth and a crippling trade war with the United States have pummelled vehicle sales in the past few months.

Nissan plans to cut production in China by a total of 30,000 units during the December-February period from its initial output plans, said the person who declined to be identified as the plans are not public.

Automakers set initial plans on how many vehicles to produce at each of their plants. These plans can be modified due to demand, supply chain issues and other factors. It was not known how much Nissan had planned to produce in the three months.

---- Japan’s Nikkei business daily reported late on Thursday that Nissan plans to cut production at three plants in China, including one in Dalian, where it produces the popular Qashqai and Infiniti QX50 SUV crossover models, and in Zhengzhou, where it makes the X-Trail SUV crossover, one of its top-selling models, and Venucia brand models.

A Nissan spokeswoman in Beijing declined on Friday to comment on future production plans.
China is Nissan’s second-largest market, accounting for roughly one-quarter of its annual global vehicle sales. It sold 1.5 million vehicles in China last year, and earlier this year said it planned to boost sales to 2.6 million units by 2022, making China its biggest market in terms of vehicle sales.

But a stretch of booming demand for cars in China seems to have come to an end, with the market on track to post a fall in annual sales for the first time since at least 1990. Nissan’s group sales in China rose 3.9 percent in the January-November period, slowing from a 12 percent jump a year ago.

ECB sees global economic slowdown in 2019

December 27, 2018 / 9:10 AM
FRANKFURT (Reuters) - The global economy is set to slow down in 2019 and stabilise thereafter, the European Central Bank said on Thursday, while still expecting prices to rise.

Investors have been bracing for a worldwide slowdown in economic growth, mainly driven by higher borrowing costs for dollar debtors and trade tensions between the United States and China.

The ECB threw its weight behind that expectation in its regular economic bulletin, but still saw “inflationary pressures” globally and in the euro zone.

“Looking ahead, global economic activity is expected to decelerate in 2019 and remain steady thereafter,” the ECB said.

“Global inflationary pressures are expected to rise slowly as spare capacity diminishes.”

The bulletin illustrated the ECB’s decision at its December meeting to end its 2.6 trillion euro ($2.96 trillion) bond-buying programme but continue reinvesting the money it receives from maturing paper for a long time after its first rate hike.

The decision was criticised by some as untimely given the weakening economy. But the ECB, whose sole objective is hitting its inflation target, reaffirmed its confidence that core prices would continue to rise in the euro zone.

“Underlying inflation is expected to increase gradually over the medium term, supported by the ECB’s monetary policy measures, the continuing economic expansion and rising wage growth,” the ECB said.

Sears may be down to its last 24 hours. Iconic retailer likely liquidates if no bid comes in tomorrow.

Sears, the 125-year-old icon, has 24 hours to survive.

The employer of more than 68,000 filed for bankruptcy in October. Its last shot at survival is a $4.6 billion proposal put forward by its chairman, Eddie Lampert, to buy the company out of bankruptcy through his hedge fund, ESL Investments. ESL is the only party offering to buy Sears as a whole, people familiar with the situation tell CNBC. Without that bid or another like it, liquidators will break the company up into pieces.

But as Lampert stares down a deadline of Dec. 28 to submit his offer, he is quickly running out of time. As of Thursday afternoon, Lampert had neither submitted his bid, nor rounded up financing, the people familiar said. Should Lampert submit a bid, Sears’ advisors would have until Jan. 4 to decide whether he is a “qualified bidder.” Only then, could ESL take part in an auction against liquidation bids on Jan. 14.

It is possible Lampert, Sears’ largest investor, secures financing in time to meet the deadline, these people said. The hedge fund manager turned retailer has managed last-minute feats before. Due to requirements by the Securities and Exchange Commission, Lampert will be required to make his bid public. That stipulation that could sway him to prolong the filing until its exact deadline of 4:00 p.m. ET Friday.

Oh, the cleverness of me.

The PPT, with apologies to Peter Pan.

Crooks and Scoundrels Corner

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

Today, “deficits don’t matter,” famously said Vice President Cheney, until suddenly one day they do.

The U.S.'s interest payments are about to skyrocket. Does it matter?

The Fed's interest rate hikes are doing more than hitting consumers in the credit cards. They're also making it much more expensive for the U.S. to carry its debt load.

While they're not currently a subject of President Trump's Twitter outrage, America's interest payments have become a point of concern for some on Wall Street. Those payments are projected to triple to more than $600 billion by 2023, reflecting rising interest rates as well as the exploding deficit. That figure approaches the amount the U.S. spends on national defense every year, and dwarfs what it spends on agriculture, Medicaid, income security and veterans' programs, to name just a few.

"Rarely have deficits risen when the economy is booming. And never in modern U.S. history have deficits been so high outside of a war or recession (or their aftermath)," the Committee for a Responsible Federal Budget wrote in a recent blog post.

In the first full year of Donald Trump's presidency, the federal deficit rose to its highest level in six years. Next year, it's projected to rise even higher.

Is this historic abnormality a problem? Some economists think so. The Congressional Budget Office warned about the debt in its latest budget projection. "[H]igh and rising debt would have serious negative consequences for the budget and the nation," the CBO wrote, adding that high debt makes a fiscal crisis more likely and leaves less room for lawmakers to change tax and spending policies to help solve a crisis.

Former Trump White House Economic Adviser Gary Cohn echoed these fears last week. "We have a huge debt and deficit problem," Cohn said on "CBS This Morning," while claiming the deficit was unrelated to the substantial tax cuts he orchestrated last year.

A recent Moody's analysis noted that persistent high debt, among other factors, would lead to "persistent deterioration in the U.S.'s fiscal strength over the next 10 years." Because it's the world's largest economy and the dollar is the world's favorite reserve currency, the U.S. is better positioned to withstand debt levels that might send a smaller economy reeling, William Foster, senior credit officer at Moody's, told CBS MoneyWatch. But it still wouldn't be great for the country's long-term financial health.

"We don't know how that would impact the U.S., but it would impact the [credit] rating itself, potentially," Foster said.

Clinton Treasury Secretary ups chances of recession before 2020

December 26, 2018

The markets aren't looking good, but former Treasury Secretary Lawrence Summers says not to panic ... yet.

Amid a month of falling stocks, Summers cautioned that "weak markets" don't necessarily mean "economic disaster is around the corner." Still, he's increasing his prediction of a recession from "a bit less than 50 percent" to 60 percent, he tweeted Wednesday.

Summers served as former President Bill Clinton's Treasury Secretary and directed the National Economic Council under former President Barack Obama. In tweets Wednesday, he cited the assertion of Robert Rubin, his predecessor at the Treasury Department, that "markets go up, markets go down" to describe slumping stocks. President Trump shouldn't have claimed credit for August's roaring markets, Summers said. But seeing as "one can see essentially no trace of even the 1987 crash in economic data," Summers said we should remember "markets are noisy, flawed predictors of the economy."

Still, Summers went on to say that before December's tanking market he predicted a "bit less than 50 percent" chance of a recession starting next year. He's now increased those odds to 60 percent.

Stock markets are still on track for their worst December performance since the Great Depression, especially after an unprecedented Christmas Eve drop.

“Dreams do come true, if only we wish hard enough. You can have anything in life if you will sacrifice everything else for it.”

President Trump, with apologies to Peter Pan.

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?

Chinese Researchers Claim Wind Resources Are Dwindling

“The results show that surface wind speeds were decreasing in the past four decades over most regions in the Northern Hemisphere.”
Jason Deign

The amount of wind power available to onshore turbines appears to have dropped across the Northern Hemisphere, Chinese research unveiled this month.

A team from the Beijing-based Chinese Academy of Sciences, along with a researcher from Purdue University in the U.S., analyzed data from more than 1,000 weather stations worldwide and found 67 percent had experienced a significant decrease in wind power potential since 1979.

The effect was strongest in Asia, where the team estimated about 80 percent of locations had seen a 30 percent drop or more in available hub-height wind power.

In Europe, roughly half of all locations had seen a similar drop, while in North America around 30 percent of sites had seen a 30 percent fall in wind.

“The results show that surface wind speeds were decreasing in the past four decades over most regions in the Northern Hemisphere,” said the team in a paper published in Energy in November and announced by the Chinese Academy of Sciences this month.

In China, which has the world’s largest installed wind energy capacity, the regions with the strongest decrease tended to be those with the most abundant resources and “where a number of gigantic commercial wind farms were built,” said the paper.

Corresponding author Dr. Gang Huang told GTM the team is now conducting a follow-up study to investigate possible reasons for the drop.

Factors such as land use and surface cover changes could be to blame, he said. The expansion of cities could be affecting wind speeds in developing countries such as China and India. “Those are all assumptions, though,” he said.

In a Chinese Academy of Sciences press release, lead author Qun Tian said the study compared observed long-term changes in wind energy against those predicted by global climate models.

“The climate models have a notable deficiency in simulating wind energy,” Tian said.

Nevertheless, a simulation-based study published in Nature Geoscience a year ago did predict that increases in carbon dioxide emissions would lead to decreases in wind power across the Northern Hemisphere mid-latitudes.

The study, led by Kristopher Karnauskas of the Department of Atmospheric and Oceanic Sciences at the University of Colorado in Boulder, predicted there would also be increases across the tropics and Southern Hemisphere, with substantial regional variations.

The Global Wind Energy Council and the European wind industry body WindEurope both declined to comment on the Chinese study.

But Geoffrey Taunton-Collins, senior analyst at specialist renewable energy insurance provider GCube, said: “It should be of particular concern to operational wind farms whose financials are based on resource estimates which don’t factor in lower future wind speeds.”

Once again, another year draws to a close and it’s time for my annual appeal. If you are one of the regular LIR readers of this usually six days a week update, that helps support my efforts with the occasional donation via the Paypal button, once again I sincerely thank you. A special thanks this year to the very kind reader that so generously helped me with my vet bills for the operation on my late border collie Rosie. After 12 years, Christmas won’t be the same without Rosie.
If you are a regular reader who finds the LIR informative, interesting, occasionally amusing or entertaining, please consider making a small donation via the Paypal button on the right of the LIR website. For obvious reasons in our new age of mainstream media fake news, I want to keep the LIR advertising free. But in any event thank you for reading and sending along helpful articles and suggestions.

The monthly Coppock Indicators finished November.

DJIA: 25,538 +157 Down. NASDAQ: 7,331 +205 Down. SP500: 2,760 +129 Down. 
All three slow indicators are signalling more correction to come, although not necessarily ahead of the year-end. However, if a tidal wave of stock fund redemptions hits in December, 2018 could end in a great rising wave of panic selling into a generally thin markets trading year-end.