Baltic Dry Index. 1371 +30 Brent Crude 67.72
John Kenneth Galbraith.
This morning Asia. While the UK Prime Minister dithers over whether to shake up her cabinet and whether anyone cares, Japan takes the day off, China tightens again, and South Korea frets over cryptocurrencies and its missing million barrels of oil. In America, the jury’s still out over whether President Trump really is “a stable genius.”
Below the start of
week two of 2018.
Asia Stocks Rise as Earnings Awaited, Won Weakens: Markets Wrap
By Adam Haigh
Updated on 8 January 2018, 05:08 GMT
Asian equities edged higher ahead of the start of the region’s earnings
season this week, with investors betting that the outlook for economic growth
and profits is strong enough to support record-high stock prices. The Korean
won declined.
Shares from Sydney to Bangkok climbed with markets in Tokyo closed
Monday for a holiday. Samsung Electronics Co. and a slew of Japanese
retailers and manufacturers are among companies giving profit updates this
week. South Korea’s currency reversed gains as authorities said they would take
action to stem one-sided moves in the won. Oil gained.
With risk assets enjoying a strong start to 2018, corporate earnings in Asia may dictate the next move for the region’s equity markets. The S&P 500 Index posted its best week since December 2016 as investors looked past weaker-than-forecast jobs figures, speculating that Republican tax cuts will lead to higher company profits. Inflation reports in the U.S. and China are due this week, and a host of addresses from U.S. policymakers may provide detail on the pace of monetary policy tightening in America.
Here are the main events to watch for this week:
- U.S. inflation data will probably show price pressures remain muted, giving hawks little reason to argue for faster tightening.
- San Francisco Fed President John Williams and head of the New York Fed Bill Dudley are among policy makers scheduled to speak.
- North Korea and South Korea are slated to hold talks Tuesday for the first time since 2015.
- China producer and consumer prices data is due Wednesday, while a reading on the country’s money supply is expected in coming days.
more
https://www.bloomberg.com/news/articles/2018-01-07/asia-stocks-point-higher-as-earnings-season-begins-markets-wrapChina Orders Banks to Limit Any Risk From Entrusted Loan Business
By Alfred Liu
Updated on 8 January 2018, 05:42 GMT
China took another step to clamp down on leverage in the financial system,
ordering banks to ensure they aren’t exposed to risks from their entrusted loan
business.Banks can only act as intermediaries when arranging entrusted loans, and must not provide guarantees or get involved in decision-making, according to new rules posted in a statement on the China Banking Regulatory Commission’s website over the weekend.
The CBRC’s measure is the latest attempt by China to curb the threat that excessive leverage in the financial system poses to the nation’s economy. President Xi Jinping and his senior economic officials have vowed to make controlling financial risks a top priority, a pledge renewed at the Communist Party’s twice-a-decade leadership congress in October.
----Entrusted loans contain higher credit risk because they are less regulated and often extended to risky areas, such as local government financing vehicles and property developers, according to Terry Sun, an analyst at RHB Securities Hong Kong Ltd. Higher yields offered by entrusted loans have prompted some non-financial corporates to put their spare cash in such offerings, he said.
“This would magnify system leverage and push up funding costs for the real economy,” Sun wrote in a note. The CBRC’s measure should therefore “reduce leverage and the circulation of capital within the financial system.”
The new CBRC rules will have limited impact on Chinese banks’ revenue because the entrusted loan business was already on the decline, following rapid growth in the three years to 2016, China International Capital Corp. analysts including Victor Wang said in a note. Investments through entrusted loans reached 7.4 trillion yuan ($1.14 trillion) at end 2016, the CICC analysts said.
More
January 8, 2018 / 5:38 AM
South Korea inspects six banks over clients' virtual currency accounts
SEOUL
(Reuters) - South Korea’s financial regulator said on Monday it is jointly
carrying out inspections on six local banks that offer virtual currency
accounts to institutions amid growing concerns increasing use of assets like
bitcoin could lead to a surge in crime.
The joint inspection by the Financial Services Commission (FSC) and
Financial Supervisory Service (FSS) will check if banks are adhering to
anti-money laundering rules and using real names for accounts, FSC Chairman
Choi Jong-ku told a press conference.
“Virtual currency is currently unable to function as a means of payment
and it is being used for illegal purposes like money laundering, scams and
fraudulent investor operations,” said Choi.
“The side effects have been severe, leading to hacking problems at the institutions that handle cryptocurrency and an unreasonable spike in speculation.”
The six banks named by the regulator are NH Bank, Industrial Bank of Korea (024110.KS), Shinhan Bank [SHINBC.UL], Kookmin Bank [KOOKM.UL], Woori Bank (000030.KS) and Korea Development Bank [KDB.UL]. NH Bank and Shinhan Bank representatives declined to comment, while the other banks could not immediately be reached for comment.
Officials are also looking at ways to reduce risks associated with cryptocurrency trading in the country, which could include shutting down institutions that use such currencies, he said.
Bitcoin BTC=BTSP and other virtual coins have been extremely popular in South Korea, drawing wide investments from housewives and students. Government officials have broadly expressed concern over frenzied speculation, with South Korea's central bank chief warning of "irrational exuberance" in trading of virtual currency last month.
---- The world’s biggest and best-known cryptocurrency, bitcoin, stood at $15,994 as of 0551 GMT.
More
Iranian Oil Tanker on Fire Spurs S. Korea Supply Speculation
By Heesu Lee, Ann Koh, and Serene Cheong
7 January 2018, 07:46 GMT Updated
on 8 January 2018, 04:53 GMT
An Iranian oil tanker carrying 1 million barrels of supply for South Korea’s
Hanwha Total
Petrochemical Co. caught fire after colliding with another ship off China,
prompting speculation over how the cargo will be replaced.The tanker Sanchi was ferrying condensate -- a hydrocarbon liquid that’s used to make petrochemicals -- to Daesan, a spokesman for Hanwha Total said, asking not to be identified because of internal policy. The firm plans to use its stockpiles as a replacement for the supply, and is considering whether to make additional purchases, he said.
Meanwhile, the company issued a tender seeking naphtha -- another feedstock involved in petrochemical production -- for delivery next month. While Hanwha said it has enough supply in its stockpiles to compensate for the lost cargo, traders see its demand for naphtha increasing after the ship collision.
Hanwha Total plans to claim compensation for the cargo’s loss under its own insurance program, while the damages caused by the collision will probably be covered under the National Iranian Tanker Co.’s policy, according to the South Korean company’s spokesman.
Sanchi
collided with the Chinese cargo vessel CF Crystal about 160 nautical miles off
the coast of Shanghai on Saturday, and 32 crew members of the Iranian tanker
were missing, according to Shana, the news agency of the Middle East nation’s
oil ministry. It was still on fire as of Monday morning, and rescue teams are
continuing to search for crew, according to an
official at South Korea’s Coast Guard.
The Panamanian-flagged vessel is owned by state-run NITC and departed Assaluyeh port on Dec. 16 for Daesan in South Korea, according to data compiled by Bloomberg.
Iran, the third-largest oil producer in the Organization of Petroleum Exporting Countries, sells most of its crude oil and condensate to Asia, exporting about 2 million barrels a day. Condensate is a light oil produced along with natural gas, mainly at Iran’s offshore South Pars fields. The port of Assaluyeh is the main loading point for Iranian condensate.
We close for the morning with dramatic news from the EUSSR’s
Italy. Just when it seems like things couldn’t get any worse in Italy, the
polls suggest that they will. Euros anyone? How not to take a Viking cruise.
Berlusconi Could End Up Holding the Aces After Italy's Election
By Alessandra Migliaccio and Chiara Albanese
8 January 2018, 04:00 GMT
Silvio Berlusconi may be banned from running for office, but he could still
be the kingmaker in Italy after the March 4 election.While the former premier’s party Forza Italia is set to lose almost 2 million votes compared with its showing in 2013, he’s established the basis for a three-party alliance that is set to be the biggest group in the next parliament.
With infighting dogging the governing Democratic Party, the paradox of this election is that Berlusconi -- the man forced out of office at the height of the euro-area crisis as Italy struggle to avoid economic calamity -- may be the leader best placed to bring a modicum of stability.
“You have to hand it to the man, he’s 81, has a handful of votes, but he’s unified his coalition while others have been bickering,” said Sofia Ventura, a professor of politics at the University of Bologna. “Nobody will have enough votes to govern alone, so there will be a lot of negotiating and he’s likely to have a good hand.”
The latest poll by SWG in late December projected that Forza Italia and its right-wing allies the Northern League and Brothers of Italy will win 34 percent of the vote in March. The anti-establishment Five Star Movement, which has sworn off coalitions, is set to be the biggest single party at 26 percent, while the Democrats get 25 percent. Forza Italia on its own has just 15 percent.
The uncertainty surrounding Italy’s election has put equity and fixed-income markets under pressure in recent months. Within the euro area, only Greece’s 10-year bond yields eclipse Italy’s and Italian stocks have trailed Germany and France over the past three months.
Italy’s 10-year bond yields touched their highest level since October on Jan. 2. On Friday, they narrowed by 3 basis points to 1.99 percent.
More
‘This Is Not Going To End Well:’ Norwegian Cruise Sailed Through Thick Of Winter Storm
LI Family Recalls 'Scariest Moment' Of Their Lives In Exclusive CBS2 Interview
For 21 members of the Ross family, of Stony Brook, it was supposed to be the trip of a lifetime – cruising to the Bahamas for their patriarch’s 80th birthday. Instead, they returned Friday after what they called a nightmare onboard the Norwegian Breakaway.
“I thought I’d never be in a situation where I would say
that’s the scariest moment of my life. This was the worst moment of my life,”
said Karoline Ross, speaking exclusively with CBS2’s Carolyn Gusoff.
She and Del Ross spoke with CBS2 while they were en route to New York,
after they said their 4,000 passenger cruise
ship sailed right into the storm Tuesday night for two harrowing days in ocean
swells up to 30 feet. The seasoned boaters called it traumatic.
“When you’re on a boat in the middle of the ocean and water is pouring down the stairs, you’re thinking
‘this is not going to end well,” Karoline said.
“Our room was full on two inches of
water. The elevator shafts were dripping water everywhere,” Del said.
Water poured from the ceiling, as the ship began leaking. Passengers described panic and seasickness on social
media. Dozens huddled in the ship’s atrium to sleep.
“There were people crying, everyone was throwing up. it was a
nightmare,” said Olivia Ross. “It was so tilted I was shaking.”
The family said there was broken
glass everywhere and the showers were exploding.
“I’m completely traumatized. I’ll never go on any type of boat again in
my life after this,” fellow passenger Emma Franzese told CBS2’s Andrea Grymes
once the ship docked.
“I was holding on for dear life. I honestly wasn’t sure we were going to
make it through the night. The boat was tilted like crazy,” said passenger
Conor Vogt.
More
“It is
a curious fact, but nobody ever is sea-sick - on land. At sea, you come across
plenty of people very bad indeed, whole boat-loads of them; but I never met a
man yet, on land, who had ever known at all what it was to be sea-sick. Where
the thousands upon thousands of bad sailors that swarm in every ship hide
themselves when they are on land is a mystery.”
Jerome
K. Jerome, Three Men in a Boat
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, does the Fed’s favourite economic model still work? Did it ever work? On the one hand, economists
think it might be broken. On the other hand, it might work just not in the way
intended.
Economics is
extremely useful as a form of employment for economists.
John
Kenneth Galbraith
Fed's Monetary Policy Cornerstone Attacked at Economists' Gathering
By Rich MillerAt the Jan. 5-7 annual meeting of the American Economic Association in Philadelphia, economists questioned the usefulness of a cornerstone concept in mainstream economics that links changes in inflation to fluctuations in joblessness.
“The Phillips Curve is a terrible idea,’’ said Robert Hall, a professor at Stanford University in California who also heads the recession-dating committee of the National Bureau of Economic Research.
Skepticism about the Phillips Curve is significant because the Fed and other major central banks are counting on declines in unemployment to foster faster wage increases and lift inflation that they deem to be too low. Indeed, it’s the major rationale behind the U.S. central bank’s plan to keep raising interest rates. If the curve is broken, it’s unclear what lodestar monetary policy makers would adopt to help guide inflation back up to target.
Trade-Off Challenged
In his 1967 presidential address to the economists’ annual convention, Friedman challenged the prevailing dogma of the time -- that central banks could micromanage the economy and choose to trade off higher inflation today for a permanently lower level of unemployment.
In
response to his criticisms -- and the stagflation that afflicted the U.S.
economy in the 1970s -- the Phillips Curve was modified to include the idea of
a natural rate of joblessness: if unemployment fell below that level, inflation
would continue to accelerate. The theorem also now includes a prominent role
for inflation expectations, the idea being that if consumers and businesses
expect price rises to pick up, they will act in ways that will bring that
about.
The trouble is that even the re-jigged version of the theory is so far
not panning out in practice. At 4.1 percent in December, the U.S. unemployment
rate was markedly below the 4.6 percent level that Fed policy makers reckon is
equivalent to its natural rate. Yet underlying inflation this year has
decelerated, not accelerated, and price gains remain below the Fed’s 2 percent
goal.
That’s led some inside the central bank to question the Fed’s strategy.
“I don’t really think we’re getting the kinds of Phillips Curve effects that
people still emphasize,” James Bullard, president of the Federal Reserve Bank
of St. Louis, said in a Jan. 5 Bloomberg Television interview with Michael
McKee on the fringes of the AEA meeting.
More
Economics is
extremely useful as a form of employment for economists.
John Kenneth Galbraith
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?
Study boosts hope for cheaper fuel cells
Researchers show how to optimize nanomaterials for fuel-cell cathodes
Date:
January 5, 2018
Source:
Rice University
Summary:
Simulations by scientists show how carbon nanomaterials may be optimized to
replace expensive platinum in cathodes for electricity-generating fuel cells.
Nitrogen-doped carbon nanotubes or modified graphene nanoribbons may be
suitable replacements for platinum for fast oxygen reduction, the key reaction
in fuel cells that transform chemical energy into electricity, according to
Rice University researchers.
The findings are from computer simulations by Rice scientists who set
out to see how carbon nanomaterials can be improved for fuel-cell cathodes.
Their study reveals the atom-level mechanisms by which doped nanomaterials
catalyze oxygen reduction reactions (ORR).
The research appears in the Royal Society of Chemistry journal Nanoscale.
Theoretical physicist Boris Yakobson and his Rice colleagues are among
many looking for a way to speed up ORR for fuel cells, which were discovered in
the 19th century but not widely used until the latter part of the 20th. They
have since powered transportation modes ranging from cars and buses to
spacecraft.
The Rice researchers, including lead author and former postdoctoral
associate Xiaolong Zou and graduate student Luqing Wang, used computer
simulations to discover why graphene nanoribbons and carbon nanotubes modified
with nitrogen and/or boron, long studied as a substitute for expensive
platinum, are so sluggish and how they can be improved.
Doping, or chemically modifying, conductive nanotubes or nanoribbons
changes their chemical bonding characteristics. They can then be used as
cathodes in proton-exchange membrane fuel cells. In a simple fuel cell, anodes
draw in hydrogen fuel and separate it into protons and electrons. While the
negative electrons flow out as usable current, the positive protons are drawn
to the cathode, where they recombine with returning electrons and oxygen to
produce water.
The models showed that thinner carbon nanotubes with a relatively high
concentration of nitrogen would perform best, as oxygen atoms readily bond to
the carbon atom nearest the nitrogen.
Nanotubes have an advantage over
nanoribbons because of their curvature, which distorts chemical bonds around
their circumference and leads to easier binding, the researchers found.
Morehttps://www.sciencedaily.com/releases/2018/01/180105124000.htm?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+sciencedaily%2Fmatter_energy%2Fgraphene+%28Graphene+News+--+ScienceDaily%29
Well,
fancy giving money to the Government! Might as well have put it down the drain.
Fancy giving money to the Government! Nobody will see the stuff again. Well,
they've not idea what money's for- Ten to one they'll start another war. I've
heard a lot of silly things, but, Lor'! Fancy giving money to the Government!
A. P.
Herbert. 1931 Too Much.
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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