Baltic Dry Index. 1264 -15 Brent Crude 70.00
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
Does history repeat?
Is 2018 merely the latest repetition of 1929? Well history never repeats exactly,
but it often gets uncannily close. Will
2018 get uncannily close to repeating 1929? To this old dinosaur market
follower since 1968, it’s getting uncomfortably close.
Below, damn the
torpedoes, full speed ahead. Buy more!
In any great organization it is far, far safer to be wrong with the majority than to be right alone.
John Kenneth Galbraith.
January 16, 2018 / 12:50 AM
Asian shares shrug off losses, euro near three-year top
TOKYO
(Reuters) - Asian shares pushed higher on Tuesday, erasing early modest losses
while the euro stood near a 3-year peak on rising expectations that the
European Central Bank could pare its monetary stimulus.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.4 percent.
U.S. markets were closed for a public holiday on Monday.
Australian shares slipped 0.3 percent, as miners were pressured by weaker Chinese iron ore prices. The materials and mining index .AXMM dropped as much as 0.8 percent, with mining giants BHP Billiton Ltd (BHP.AX) and Rio Tinto Ltd (RIO.AX) each falling over 1 percent.
Chinese iron ore futures tumbled 2 percent on Monday, as stockpiles of the steelmaking commodity at China’s ports surged to the highest since at least 2004, with weaker steel prices also adding pressure. [IRONORE/]
Japan's Nikkei stock index .N225 added 0.8 percent as the yen's recent surge took a breather, with expectations for strong corporate earnings underpinning sentiment.
The euro edged up slightly to $1.2261 EUR=, within sight of its Monday high of $1.2296, its loftiest peak since December 2014.
The euro blipped higher on Monday and German benchmark bond yields hit session highs after European Central Bank rate-setter Ardo Hansson said the central bank could end its bond purchase scheme in one go after September if the economy and inflation develop as expected.
Adding to the euro’s ascent, data showed the trade surplus in the 19-country euro area rose to its highest level in eight months, indicating companies were so far weathering the impact of a stronger currency.
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Bitcoin Frenzy Helps Crypto Hedge Funds Reap 1,100% Gains
By Bei Hu, Nishant Kumar, Hema Parmar, and Klaus Wille
16 January 2018, 03:08 GMT
While most of the world’s institutional investors watched from the
sidelines as cryptocurrencies surged last year, a small group of hedge fund
managers piled in.Call them visionaries or just plain lucky, but boy did they hit the jackpot.
The nine cryptocurrency hedge funds tracked by Eurekahedge Pte soared 1,167 percent as a group in 2017, according to preliminary figures. While that trailed the 1,403 percent gain in bitcoin, it comfortably trounced the 8 percent return by hedge funds globally.
The numbers provide an early look at how professional traders are faring in the world’s wildest investment boom. Even as luminaries from Warren Buffett to Ray Dalio call cryptocurrencies a bubble, a growing number of wealthy individuals, family offices and institutions are looking for ways to gain exposure.
Hedge funds offer investors more than just a wager on rising cryptocurrency prices; their strategies also include market making, early-stage equity investing and bitcoin lending. While those bets proved a drag on returns in 2017, they should help cushion funds against losses during market downturns.
Still, the products aren’t for everyone. Managers of the Altana Digital Currency Fund, which surged 1,496 percent last year after fees, warned clients in a November presentation that they should only invest a fraction of their net worth -- an amount they can afford to lose.
More
China Escalates Crackdown on Cryptocurrency Trading
Bloomberg News
Updated on 15 January 2018, 11:42 GMT
China is escalating its clampdown on cryptocurrency trading, targeting
online platforms and mobile apps that offer exchange-like services, according
to people familiar with the matter.While authorities banned cryptocurrency exchanges last year, they’ve recently noted an uptick in activity on alternative venues. The government plans to block domestic access to homegrown and offshore platforms that enable centralized trading, the people said, without being more specific about how policy makers define such platforms.
Authorities will also target individuals and companies that provide market-making, settlement and clearing services for centralized trading, the people said, asking not to be named because the information is private. Small peer-to-peer transactions aren’t being targeted, they said.
Bitcoin fell 1.2 percent to $13,580.50 at 11:36 a.m. in London, according to Bloomberg composite pricing.
The Chinese government’s rolling clampdown has roiled global markets for bitcoin and other digital tokens over the past few months. Regulators around the world are stepping up scrutiny of cryptocurrencies amid concerns over excessive speculation, money laundering and tax evasion.
Up until early last year, China was the most active market for bitcoin trading on exchanges. It’s still home to some of the biggest bitcoin miners, though they’ve begun looking elsewhere as local authorities call for curbs on the industry.
China’s central bank didn’t immediately respond to a faxed request for comment.
Finally, it’s coming round to that time in Switzerland
again. Now where did I leave my skis and private jet?
World Economic Forum Annual Meeting
23-26 January 2018 Davos-Klosters, Switzerland
Creating a Shared Future in a Fractured World
The global context has changed dramatically: geostrategic fissures have
re-emerged on multiple fronts with wide-ranging political, economic and social
consequences. Realpolitik is no longer just a relic of the Cold War. Economic
prosperity and social cohesion are not one and the same. The global commons
cannot protect or heal itself.
Politically, new and divisive narratives are transforming governance.
Economically, policies are being formulated to preserve the benefits of global
integration while limiting shared obligations such as sustainable development,
inclusive growth and managing the Fourth Industrial Revolution. Socially,
citizens yearn for responsive leadership; yet, a collective purpose remains
elusive despite ever-expanding social networks. All the while, the social
contract between states and their citizens continues to erode.
The 48th World Economic Forum Annual Meeting therefore aims to
rededicate leaders from all walks of life to developing a shared narrative to
improve the state of the world. The programme, initiatives and projects of the
meeting are focused on Creating a Shared Future in a Fractured World. By coming
together at the start of the year, we can shape the future by joining this
unparalleled global effort in co-design, co-creation and collaboration.
More
People of the same trade seldom meet together, even
for merriment and diversion, but the conversation ends in a conspiracy against
the public, or in some contrivance to raise prices…. But though the law cannot
hinder people of the same trade from sometimes assembling together, it ought to
do nothing to facilitate such assemblies, much less to render them necessary.
Adam Smith. The Wealth Of
Nations, 1776.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, China gets tough(er.) In effect tightens. That’s America and China
tightening and the ECB about to tighten. What happens next? Canada’s banks accused
of being derivatives manipulators? They wouldn’t do that, would they?
China Vows to Toughen Rules on $38 Trillion Banking Industry
Bloomberg News
15 January 2018, 02:37 GMT Updated
on 15 January 2018, 03:54 GMT
China’s banking regulator pledged to continue its crackdown on malpractice
in the $38 trillion industry in 2018, vowing to tackle everything from poor
corporate governance and violation of lending policies to cross-holdings of
risky financial products.The China Banking Regulatory Commission unveiled its regulatory priorities for the year in a statement on Saturday. They include:
- Inspecting the funding source of banks’ shareholders and ensuring they have obtained their stakes in a regular manner
- Examining banks’ compliance with rules restricting loans to real estate developers, local governments, industries burdened by overcapacity, and some home buyers
- Looking into banks’ interbank activities and wealth management businesses.
The “CBRC’s regulatory storm continues” with the weekend announcement covering almost all aspects of banks’ daily operations, Bocom International Holdings Co. analysts Jaclyn Wang and Hannah Han wrote in a note. “We believe challenges for smaller banks in the current regulatory environment remain high,” they wrote, noting that curbs on off-balance-sheet lending and interbank activities may drag on profitability.
Read more on China’s new year rules to reduce systemic risks
Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp. rose in Hong Kong on Monday morning, while smaller lenders including Huishang Bank Co. and Bank of Tianjin Co. fell.
While the CBRC will allow a grace period for rectifying some irregularities, any new business after May 1, 2017, must be corrected or the bank will face punishment, according to the statement. Banks are required to submit an initial self-inspection report on their 2017 operations by March 10, and another two reports by June and December detailing their progress.
“CBRC’s
new rule basically covers every corner of the banking system and shows their
increasingly tougher stance toward financial turbulence," China Securities
Co. analysts led by Huang Wentao wrote in a note. “Banks, especially smaller
ones, should proactively adjust their business models.”
Six Canada Banks Accused of Manipulating Derivatives Benchmark
By Doug Alexander and Kartikay Mehrotra
15 January 2018, 22:19 GMT Updated
on 16 January 2018, 05:00 GMT
A Colorado-based pension fund accused Canada’s six biggest banks and three
foreign lenders of conspiring to manipulate a Canadian interest rate benchmark
to boost “illegitimate profits" on derivatives trades for several years
until 2014.The Fire & Police Pension Association of Colorado alleged in a New York court filing that the banks sought to boost their earnings from derivatives trades by manipulating the Canadian Dealer Offered Rate, or CDOR, a benchmark lending rate. The alleged violations, including conspiracy under the U.S. Sherman Act and manipulation of the Commodity Exchange Act, took place for almost seven years, according to the filing.
The proposed class-action dispute names Toronto-Dominion Bank, Royal Bank of Canada, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce and National Bank of Canada, as well as HSBC Holdings Plc, Bank of America Corp. and Deutsche Bank AG. All the banks declined to comment on the matter.
The fund, which manages about $4.66 billion, claims banks “reduced the amount of interest owed,” resulting in investors paying more or receiving less than the amount generated through trading derivatives based on CDOR. The pension fund said it made $1.2 billion in CDOR-based derivatives trades over the period.
“Defendants conspired to suppress CDOR by making artificially lower submissions that did not reflect the true rate at which they were lending Canadian dollars in North America," according to the Jan. 12 filing in U.S. District Court for the Southern District of New York. “Economic analyses show that defendants consistently made CDOR submissions well-below prevailing Canadian dollar money market rates, inexplicably offering to lend for less than what it cost them to borrow funds."
The banks held on average more than $1 trillion in CDOR-based swap contracts with U.S. counterparties during the period covered by the class-action suit, according to the filing.
Representatives for the Canadian Bankers Association, the Investment Industry Regulatory Organization of Canada and the Office of the Superintendent of Financial Institutions declined to comment.
More
To widen the market and to narrow the competition,
is always the interest of the dealers…The proposal of any new law or regulation
of commerce which comes from this order, ought always to be listened to with
great precaution, and ought never to be adopted till after having been long and
carefully examined, not only with the most scrupulous, but with the most
suspicious attention. It comes from an order of men, whose interest is never
exactly the same with that of the public, who have generally an interest to
deceive and even oppress the public, and who accordingly have, upon many
occasions, both deceived and oppressed it.
Adam Smith. The Wealth Of
Nations, 1776.
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?
Panasonic Ramps Up Solar Cell Production as Tesla Starts Making Solar Roofs at Gigafactory 2
Tesla confirms solar tile production began at the Buffalo Gigafactory in December, and the first Solar Roofs are now reaching non-employee homeowners.
Julia
PyperJanuary
09, 2018
In December 2016, Panasonic and Tesla finalized an agreement to begin
manufacturing solar PV cells and modules at the "Gigafactory 2" in
Buffalo, New York.Under the arrangement, Panasonic agreed to cover the capital costs associated with the factory and Tesla agreed to purchase Panasonic's custom-manufactured solar products.
"These high-efficiency PV cells and modules will be used to produce solar panels in the non-solar roof products," according to Tesla's statement. "When production of the solar roof begins, Tesla will also incorporate Panasonic's cells into the many kinds of solar glass tile roofs that Tesla will be manufacturing."
Production of Tesla's Solar Roof product did not begin for months after the initial announcement. But one year later -- following delays and a brief trial run -- Panasonic reports that cell manufacturing for the solar roof is now officially underway.
“Panasonic is already inside that factory making solar panels. That started in October of last year," said Peter Fannon, vice president of technology policy at Panasonic Corporation of North America, in an interview at CES. "Also, we are just now beginning to manufacture cells.”
The Japanese multinational made an initial $260 million investment in the Buffalo facility, where it makes HIT (heterojunction with intrinsic thin layer) solar cells for Tesla. With the plant now up and running, Panasonic is prepared to invest more.
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