Baltic Dry Index. 1164 -57 Brent Crude 69.34
Edmund Burke.
We open with Asia failing to follow through
on America’s lead. Some investors are getting nervous over the BOJ’s policy
going ahead. Will the BOJ join the Fed
in interest rate normalisation in late 2018?
And what does that mean for stock markets already in a melt up, flying
on fumes? China, as always, hits the number.
Asia Stocks Trade Mixed After Another Run at Highs: Markets Wrap
By Adam Haigh
Updated on 18 January 2018, 06:07 GMT
Asian stocks were mixed as investors took
stock of the stellar gains seen since the start of the year. Yields in
developed-market bonds stayed higher after a slide spurred in part by
expectations the U.S. will avoid a government shutdown, keeping fiscal spending
flowing.
Chinese shares in Hong Kong added to their 2018 surge, though benchmarks were down in Tokyo, and struggled to stay in the green in Seoul. The yen was little changed as traders sifted through news that some at the BOJ think at some point a discussion on normalization will be needed. Bitcoin bounced back above $10,000, having dropped below the threshold for the first time since Dec. 1. Oil held gains as OPEC shows determination to curb production.
Market focus now turns to a deluge of Chinese data scheduled for Thursday, including GDP, industrial production and retail sales. The latest sign of confidence in global growth came from Apple Inc., which climbed after saying it will bring hundreds of billions of dollars back to the U.S. from overseas to invest in jobs and facilities.
A firming outlook for global growth and bullish profit expectations will keep the bull run in stocks going until 2019 or beyond, according to a Bank of America survey of fund managers. At the same time, Pacific Investment Management Co.’s Joachim Fels warned that “the fact that the fear is gone is the main reason why we should be worried” about the market climb.
"It’s time for relative
caution but we’re still overall pro-equity," Lucy MacDonald, chief
investment officer for global equities at Allianz Global Investors, said on
Bloomberg Television. "The nominal returns in markets are liable to be
lower than they’ve been in the recent past."
----With the Japanese economy on a solid footing, investors have begun to wager that the BOJ is about to join its global peers and begin unwinding its extraordinary monetary stimulus, particularly after a tweak to the central bank’s purchases of long-dated bonds on Jan. 9.
Here’s what to watch out for this week:
- China releases fourth quarter GDP, December industrial production and retail sales Thursday afternoon.
- U.S. housing starts probably slipped in December for the first time in three months as frigid winter weather impeded work, forecasts show ahead of Thursday’s release.
- Central banks in Indonesia, Turkey and South Africa are all expected to stay on hold over the next day.
More
January 18, 2018 / 6:35 AM /
Updated 33 minutes ago
Nikkei ends lower after hitting new 26-year high
TOKYO, Jan 18 (Reuters) - Japan’s Nikkei share average ended lower on
Thursday, pulling back from a new 26-year high as investors turned cautious,
while real estate stocks and financial firms underperformed.
The Nikkei dropped 0.4 percent to 23,763.37, after hitting 24,084.42 in
early trade, the highest since November 1991.
Mitsubishi Estate declined 1.6 percent and Sumitomo Realty &
Development dropped 1.0 percent.
Insurers and banking stocks lost ground, with Dai-ichi Life Holdings and
T&D Holdings both declining 1.3 percent, while Mitsubishi UFJ Financial
Group shed 0.9 percent and Mizuho Financial Group fell 1.8 percent.
On the other hand, chip making equipment manufacturers jumped, with
Advantest surging 3.1 percent and Tokyo Electron soaring 2.8 percent after the
Philadelphia SE Semiconductor Index rose.
The broader Topix shed 0.7 percent to 1,876.86.
Some at BOJ Flag Need for Future Normalization Talks
By Toru Fujioka and Masahiro Hidaka
18 January 2018, 02:12 GMT Updated
on 18 January 2018, 03:06 GMT
A small shift is taking place in internal discussions among Bank of
Japan policy makers, with a minority raising the need to eventually start
discussing policy normalization, even though they agree the current stimulus
program must continue unchanged for some time, according to people familiar
with talks at the central bank.
Some of them think the change is natural given the improvement in the
economy, according to the people, who declined to be named because
discussions are private. Japan’s extended economic recovery and a slow but
steady rise in inflation are creating the need in the medium-term to at least
begin talking about normalization, the people said.
BOJ officials caution that the market’s expectations for policy
normalization have moved well ahead of their own. They see a long way to go
before the BOJ’s 2 percent inflation goal is reached, noting that excluding
energy prices, inflation is far weaker than even the 0.9 percent registered by
the core gauge in November, the people said.
More
Next, UK news, as Carillion collapse contagion
spreads, Her Majesty’s Government dithers. To bail out, or not to bail out,
that is the question, although as seen yesterday, HM’s G seemed to be trying to
bailout of all responsibility. It’ s
only fiat money, on the Great Nixonian Error of fiat money, which is why the
2008 bail outs were easier to implement. Putting in place a great
restructuring, wouldn’t be breaking any new ground. What would China do?
January 17, 2018 / 12:56 PM
Breakingviews - UK poorly placed to fight Carillion domino effect
LONDON (Reuters Breakingviews) - The UK
government is worried Interserve will follow Carillion into oblivion. A similar
threat in the banking sector would surely prompt the state to deploy familiar
tools to contain contagion. But the government’s dual role as client and
bailout-wary market promoter complicates matters in the construction and support-services
sectors.
Interserve, a British company which
manages incinerators and helps offenders get back to work, is on what the
government calls “financial health watch” after Carillion was forced into
liquidation on Monday, according to the Financial Times. Interserve’s share
price initially slumped by 8 per cent on the news. Despite staging a minor
recovery, the company’s mounting debt pile has made it a target of hedge funds
which are betting it will be the next domino to fall.
The cynicism is understandable. Like Carillion, Interserve was hired by
the UK government to fulfil a number of long-running contracts providing
installations like gasification plants for local councils that have left them
haemorrhaging cash. The company has said its end-of-2017 debt pile is 513
million pounds, nearly double what it was the previous year. This year alone
analysts expect the company’s debt to rise to 600 million pounds, making it 4.5
times EBITDA – a breach of its banking covenants. The embattled outsourcer now
has until the end of March to agree new terms with its banks.
In 2008, when dealing with tottering lenders, the UK government first
tried private solutions. With Interserve, this won’t be easy – JPMorgan says
stabilising the company’s leverage would require a rights issue of 292 million
pounds – against a current market capitalisation of less than 170 million
pounds.
If Interserve and other troubled groups can’t do this, the UK government
could theoretically keep them going by applying a state insurance wrapper
around their debt, thus keeping any Carillion contagion at bay. The Credit
Guarantee Scheme, another crisis-era tool, kept Royal Bank of Scotland alive a
decade ago by allowing the lender to keep issuing affordable debt. But RBS was
a bank whose collapse would have meant the implosion of the UK economy. Helping
out bust contractors – even ones for which it is a client – would hurt the
government’s status as a promoter of free markets.
The
good news is that Interserve’s smaller pension deficit and relatively upbeat
prospects this year mean a Carillion repeat may not happen. The bad news is
that a slew of bust contractors would still make a mess of the UK economy – and
the state has less flexibility to stop it.
Finally bitcoin news.
What is the point of bitcoin other than as a gambling chip of limited interest,
no intrinsic value, and no underlying utility?
Bitcoin Storms Back From Dip Below $10,000 in White-Knuckle Ride
By Randall Jensen and Camila Russo
17 January 2018, 02:51 GMT Updated
on 17 January 2018, 20:47 GMT
Bitcoin’s wild start to 2018 turned breakneck on Wednesday, with the largest
cryptocurrency plunging below $10,000 for the first time in six weeks before
staging a rally to trade virtually unchanged.The gyrations took the digital token across a trading range of more than $2,600 over 18 hours. Its tumble to a low of $9,186 pushed a monthlong rout past 50 percent and raised the specter that last year’s 1,400 percent rally was giving way to what many considered an inevitable bursting of the bubble.
Bitcoin rebounded $1,600 in the next four hours to trade at $10,780 as of 3:44 p.m. in New York, according to consolidated pricing data collated by Bloomberg.
The drama Wednesday was sparked by increased scrutiny from regulators around the world that spread across the digital-coin realm in recent days, wiping out more than $300 billion in value just since Jan. 13. Bitcoin’s losses reached $140 billion from its record of $19,511 on Dec. 18. It’s still higher by 1,000 percent in the past year.
“Bitcoin was overbought and sentiment was ecstatic,” said Ari Paul, chief investment officer of BlockTower Capital Advisors. “This is an overdue correction triggered by South Korean regulation fears.”
In South Korea, a hotbed of trading, regulators warned they may shut down cryptocurrency exchanges completely after limiting their operations. China is said to have intensified its curbs on trading of the digital coins, extending restrictions to over-the-counter and peer-to-peer platforms after banning exchanges last year. In the U.S., the Securities and Exchange Commission asked at least 15 funds to pull applications this month for bitcoin-related exchange-traded funds.
For more Bitcoin news:
Did Bitcoin Just Burst? How It Compares to History’s Biggest Bubbles
Bitcoin Resilience Tested as Traders Ponder What May Pop Bubble
Bitcoin Fall Extends to 25% as Fears of Crypto Crackdown Linger
BitConnect Closes Exchange as States Warn of Unregulated Sales
More
5 key reasons bitcoin, other cryptocurrencies have lost a stunning $370 billion in 10 days
Published: Jan 17, 2018 3:58 p.m. ET
The No. 1 digital currency and its cohort continued to
unravel Wednesday, extending a downturn that has seen the entire sector cough
up a whopping $370 billion since Jan. 7, or more than 40% of their total value.
For its part, bitcoin BTCUSD, -1.82% has shed almost half its value since a single bitcoin traded at an all-time high just below $20,000 in late December.
What’s dragging down a sector that had enjoyed stratospheric gains (bitcoin alone is up about 1,100% since last January) even compared against the Dow Jones Industrial Average DJIA, +1.25% the S&P 500 index SPX, +0.94% and the Nasdaq Composite Index COMP, +1.03% which boasts returns between 22% and 30% over the past 12 months?
Read: 7 cryptocurrencies to watch in 2018 if you’re on the hunt for the next bitcoin
Here’s a quick rundown of the factors contributing to the carnage:
More
There can be few fields of human endeavour 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.
J. K. Galbraith.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, more on those seriously bent, Davos elite,
mostly men, with a few token “Davos Dolls” in attendance, trying to adjust to
the pending arrival of Republican President Trump, and his America First
agenda. According to the Trump Doctrine, “what’s good for Trump’s America, is
good for all.” Is there such a thing as a Davos Trump Tower? Would they like
one or two? After the GW Bush, “Yo Blair” greeting of St Petersburg last
decade, I wonder what “the Donald” has up his sleeve? Davos hasn’t hosted a US
President since it fawned all over President Clinton.
"Do you have
blacks, too?"
G. W. Bush –to Brazilian
President Fernando Cardoso, Washington, D.C., November 8, 2001
A Year After Trump, Davos Elite Fear Cyberattacks and War
By Stephen Morris
17 January 2018, 09:00 GMT
The threat of large-scale cyberattacks and a “deteriorating geopolitical
landscape” since the election of U.S. President Donald Trump have jumped to the
top of the global elite’s list of concerns, the World Economic Forum said ahead
of its annual meeting in Davos, Switzerland.
The growing cyber-dependency of governments and companies, and the
associated risks of hacking by criminals or hostile states, has replaced social
polarization as a main threat to stability over the next decade, according to
the WEF’s yearly assessment of global risks, published Wednesday at Bloomberg
LP’s new European headquarters in London. The Davos forum starts Jan. 23 in the
Swiss ski resort.
While the economic outlook has improved, nine in 10 of those surveyed
said they expect political or trade clashes between major powers to worsen.
Some 80 percent saw an increased chance of war.
“Cybersecurity is the issue most on the minds of boards and executives,
given the visibility of state-sponsored attacks in an environment of increasing
geopolitical friction,” John Drzik, president of global risk at Marsh USA Inc.,
which contributed to the study, said in an interview. “Businesses are
increasingly dependent on technology and are aware that the openings hackers
have are growing. As they invest in things like artificial intelligence, they
are widening their attack surface.”
Drzik said recent high-profile security breaches that have fueled
this perception include the WannaCry ransomware attack, which infected more
than 300,000 computers across 150 countries, and NotPetya, which caused two
companies losses in excess of $300 million. The cost of cyber-crime to firms
over the next five years could reach $8 trillion, the WEF said.
Similarly, thousands of attacks every month on critical infrastructure
from European aviation systems to U.S. nuclear power stations
show state-sponsored hackers are attempting to “trigger a breakdown in the
systems that keep societies functioning,” the WEF said.
In the preview, which would suggest Davos attendees are in for one of
the bleaker forums in recent memory, almost two-thirds of global leaders saw
risks intensifying from 2017. Climate change and extreme weather remained the
greatest concerns of those surveyed. Economic worries receded as a unified
pickup in growth and stocks at record highs suggest the world may finally be
recovering from the financial crisis, a decade on.
Donald Trump’s appearance at the WEF’s annual meeting -- the first for a
sitting U.S. president since Bill Clinton in 2000 -- is sure to dominate
proceedings, as well as ruffle feathers. Treasury Secretary Steve Mnuchin has
said Trump and his advisers will use the event to talk about the President’s
“America First” agenda, arguing that an economy that’s good for the U.S. is good
for everyone else.
However “America First” is interpreted, Marsh’s Drzik said “unilateral,
protectionist policies and nationalism are another key risk” that Davos
attendees have identified, and one that clashes with the WEF’s core philosophy.
More
"We
shouldn't pour cold water on everything.
We, the eight or nine players in global investment banking, have a very
good future."
Deutsche
Bank, CEO Josef Ackermann. Davos, January 2007.
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?
New catalyst for hydrogen production is a step toward clean fuel
Carbon-based nanocomposite with embedded metal ions yields impressive performance as catalyst for electrolysis of water to generate hydrogen
Date:
January 16, 2018
Source:
University of California - Santa Cruz
Summary:
A nanostructured composite material has shown impressive performance as a
catalyst for the electrochemical splitting of water to produce hydrogen. An
efficient, low-cost catalyst is essential for realizing the promise of hydrogen
as a clean, environmentally friendly fuel.
A nanostructured composite material developed at UC Santa Cruz has shown
impressive performance as a catalyst for the electrochemical splitting of water
to produce hydrogen. An efficient, low-cost catalyst is essential for realizing
the promise of hydrogen as a clean, environmentally friendly fuel.
Researchers led by Shaowei Chen, professor of chemistry and biochemistry
at UC Santa Cruz, have been investigating the use of carbon-based
nanostructured materials as catalysts for the reaction that generates hydrogen
from water. In one recent study, they obtained good results by incorporating
ruthenium ions into a sheet-like nanostructure composed of carbon nitride.
Performance was further improved by combining the ruthenium-doped carbon
nitride with graphene, a sheet-like form of carbon, to form a layered composite.
"The bonding chemistry of ruthenium with nitrogen in these
nanostructured materials plays a key role in the high catalytic
performance," Chen said. "We also showed that the stability of the
catalyst is very good."
The new findings were published in ChemSusChem, a top journal
covering sustainable chemistry and energy materials, and the paper is featured
on the cover of the January 10 issue. First author Yi Peng, a graduate student
in Chen's lab, led the study and designed the cover image.
Hydrogen
has long been attractive as a clean and renewable fuel. A hydrogen fuel cell
powering an electric vehicle, for example, emits only water vapor. Currently,
however, hydrogen production still depends heavily on fossil fuels (mostly
using steam to extract it from natural gas). Finding a low-cost, efficient way
to extract hydrogen from water through electrolysis would be a major
breakthrough. Electricity from renewable sources such as solar and wind power,
which can be intermittent and unreliable, could then be easily stored and
distributed as hydrogen fuel.
---- In the new composite material developed by Chen's lab, the ruthenium ions embedded in the carbon nitride nanosheets change the distribution of electrons in the matrix, creating more active sites for the binding of protons to generate hydrogen. Adding graphene to the structure further enhances the redistribution of electrons.
"The graphene forms a sandwich structure with the carbon nitride
nanosheets and results in further redistribution of electrons. This gives us
greater proton reduction efficiencies," Chen said.
The electrocatalytic performance of the composite was comparable to that
of commercial platinum catalysts, the authors reported. Chen noted, however,
that researchers still have a long way to go to achieve cheap and efficient
hydrogen production.
More
"You work three jobs?
… Uniquely American, isn't it? I mean, that is fantastic that you're doing
that."
G. W. Bush –to a
divorced mother of three, Omaha, Nebraska, February 4, 2005
The monthly Coppock Indicators finished December
DJIA: 24,719 +265 Up. NASDAQ: 6,903 +297 Up. SP500: 2,674 +199 Up.
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