Baltic Dry Index. 1214 -05 Brent Crude 68.89
Ludwig
von Mises.
Inquiring minds are asking, “was that it?” In December the crypto mania broke. In
January, has the stock mania just broke? After a 35 year US bond bull market,
rigged by the Greenspan-Bernanke-Yellen market interventions, has that bull
market just ended, replaced by an outgoing tide of higher interest rates as
global inflation seems to be climbing like Dracula, out of its Rip Van Winkle
slumber?
Below, did Apple just kill the Golden Goose?
Is it time to exit the rigged casino? Is Ludwig von Mises right?
January 30, 2018 / 12:39 AM
Asia stocks off record highs as Wall St. flags, dollar firms on higher yields
TOKYO (Reuters) - Asian stocks retreated from record highs on Tuesday after a selloff in Apple shares knocked Wall Street lower, while the dollar found support as U.S. bond yields climbed to near four-year highs.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.5
percent after rising to an all-time high the previous day.
Australian stocks shed 0.4 percent, South Korea’s KOSPI lost 0.1 percent
and Japan’s Nikkei dropped 0.7 percent.
Hong Kong’s Hang Seng slipped 0.2 percent and Shanghai was down 0.3
percent.
The bearish sentiment in Asia followed a softer lead from Wall Street,
which has led a global equities rally over the past year thanks to strong world
growth fuelling higher corporate earnings and stock valuations.
On Monday, U.S. stocks pulled back from record highs, with the Dow and
the S&P 500 indexes marking their biggest one-day percentage declines in
about five months, weighed down by a slide in Apple shares. [.N]
The dollar, however, enjoyed a reprieve from some persistent selling in
the past few weeks.
Buoyed by higher U.S. bond yields, the dollar index against a basket of
six major currencies was 0.2 percent higher at 89.470, having bounced overnight
from a three-year low of 88.438 plumbed on Friday when peers like the euro
outshone the greenback.
The 10-year Treasury note yield stretched its overnight surge above 2.70
percent and reached its highest since April 2014 after comments from a European
Central Bank official added to expectations that central banks globally will
reduce stimulus as the economic outlook improves. [US/]
----Moreover, the bond market braced for potentially hawkish language from the Federal Reserve, which will begin its two-day policy meeting on Tuesday.
The focus was also on U.S. President Donald Trump’s State of the Union
address scheduled later in the global day, with attention on his views on an
infrastructure overhaul and trade.
More
Asian Stocks Fall With U.S. Futures as Bonds Drop: Markets Wrap
By Adam Haigh
Updated on 30 January 2018, 04:27 GMT
Equities fell across Asia and U.S. stock-index futures retreated as a
selloff in government bonds deepened and investors took profits after one of
the best starts to a year in recent history. The dollar steadied after Monday’s
decline and oil slid for a second session.
Stocks in Japan, Hong Kong and Australia retreated after the S&P 500
Index declined from a record high. Treasuries extended a retreat that’s taken
yields to the highest since 2014, as traders gear up for a hectic week of
economic data and the last Federal Reserve policy decision with Janet Yellen at
the helm. The yen climbed and sterling fell for a second day.
A wariness is creeping into equity markets as surging rates on
government bonds tests valuations for stocks. Still, strength in corporate
earnings, a pick up in economic growth and optimism over U.S. tax cuts has helped
drive up prices in many markets across the world to the highest on record this
month. Later this week there’s a slew of key data from China and the U.S. as
well as a State of the Union address from President Donald Trump and earnings
from the world’s biggest tech companies.
Elsewhere, oil fell, while metals pared Monday’s gains. Apple Inc. sank
2 percent Monday as the Nikkei reported a reduction in iPhone X output targets,
renewing concerns about demand for the company’s newest model just days before
its quarterly earnings report.
More
In other news, while we await President Trump’s
major speech to America later tonight, will he or won’t he step up his trade
and currency wars, geopolitical tensions are rising again. The huff and puff
President seems increasingly played out on the global stage. Events in the rest
of the world seem now to bypass Washington entirely. Turkey has now attacked with
impunity, the US supplied and funded Kurdish proxy in western Syria.
China Eastern Cancels Holiday Flights Amid Dispute With Taiwan
Bloomberg News
China Eastern Airlines Corp. and Xiamen Airlines
Co. canceled 176 additional flights to Taiwan after failing to gain approval
from the island’s authorities amid an escalating dispute between the two
governments.
The flights are a newest sticking point between China and Taiwan, which Beijing considers a province to be reunited with the mainland. Taiwanese President Tsai Ing-wen, whose ruling Democratic Progressive Party supports independence, this month protested China’s “reckless” decision to approve four new flight routes over the Taiwan Strait, which it sees as part of a Chinese campaign to undermine its sovereignty.
China’s unilateral decision to put the four routes -- M503, W121, W122, W123 -- into operation in early January affected Taiwan’s aviation safety and national security and added to challenges between the two sides, Mainland Affairs Council Minister Chang Hsiao-yueh said Monday in Taipei.
China Eastern needs to call off 106 round-trip flights for the Lunar New
Year because Taiwan refused to approve them, while Xiamen Air has to cancel 70,
the two carriers said in comments posted on their respective Weibo accounts.
China cut off communications with the island after Tsai took office in
May 2016 and refused to say both sides belonged to “one China.” In the absence
of cross-strait consultations, there was no room for Taiwan to allow Chinese
airlines flying those routes to operate charter flights during the Chinese New
Year holiday season, Chang said.
More
China and India: are war clouds gathering over Doklam again?
A fresh Chinese build-up in the Himalayan area
of a summer stand-off raises fears in Delhi that the August peace deal may be
unravelling, paving the way for an even bigger confrontation
Vinayak Bhat has been working hard these past months. The retired Indian colonel’s assiduous analysis of satellite images of Himalaya’s Doklam plateau has shredded the veil of peace laboriously woven by India and China since they pulled themselves back from the brink of war last summer, and is raising embarrassing questions for New Delhi on the deal it cut with Beijing to maintain peace in the Sikkim-Bhutan-Tibet “trijunction” area.
In graphic reports on the online publication ThePrint, Bhat has been detailing the heavy deployment of People’s Liberation Army (PLA) personnel close to last year’s site of confrontation and hectic build-up by the Chinese in North Doklam, including concrete posts, helipads, new trenches, and a concrete observation tower less than 10 metres from the Indian Army’s most forward trench. Fighting posts have been created on almost every hillock on the North Doklam plateau, according to his reports, confirming sporadic media reports of Chinese troops digging in rather than leaving the area.
“All
these structures have come up only after June 16, according to satellite
images,” the retired colonel, who served the Indian Army for 33 years,
told This Week in Asia. “China is trying to change the status quo
in North Doklam. India must object because the entire area is Bhutanese land
occupied by China.”
The
Indian government is doing nothing of the sort and is, instead, insisting all
is well. After the opposition Congress party last week cited the satellite
images to accuse the government of misleading the country and “snoozing” while
the Chinese plan “Doklam 2.0”, the government clarified that the status quo at
the site of last year’s face-off still held. It dismissed news reports such as
Bhat’s as “inaccurate and mischievous”, but added that it was using
“established mechanisms” to resolve misunderstandings over Doklam.
Addressing
the same concerns, Indian Army chief General Bipin Rawat said Chinese soldiers
are still present in the area, “although not in numbers that we saw them in
initially”, and that the PLA has “carried out some infrastructure development,
which is mostly temporary in nature”. But while stressing that “bonhomie”
(between India and China) had returned to pre-Doklam levels, Rawat also said
it’s time for India to “shift focus” from its western border with Pakistan to
its northern border with China, in what Chinese experts like Wang Dehua see as signs
of “border aggression from India”.
In an editorial headlined “Time for clarity”, The Hindu
newspaper this week noted that conflicting messages from the government pointed
to an unravelling of the agreement announced in August, and demanded Delhi “drop
the ambiguity” over Doklam and share details of just what’s going on there.
“The Chinese build-up appears to be of a different order of magnitude
than anything seen in the past and therefore should be a source of concern,”
opposition lawmaker Shashi Tharoor told This Week in Asia.
More
China has started building its third aircraft carrier, military sources say
Work on the vessel, which will use a hi-tech launch system, began at a Shanghai shipyard last year but it is not known when it will be completed
PUBLISHED : Thursday, 04 January, 2018, 9:02pm UPDATED :
Friday, 05 January, 2018, 2:30pm
China started building its third aircraft carrier, with a
hi-tech launch system, at a Shanghai shipyard last year, according to sources
close to the People’s Liberation Army.
One of the sources said Shanghai Jiangnan Shipyard Group
was given the go-ahead to begin work on the vessel after military leaders met
in Beijing following the annual sessions of China’s legislature and top
political advisory body in March.
“But the shipyard is still working on the carrier’s hull,
which is expected to take about two years,” the source said. “Building the new
carrier will be more complicated and challenging than the other two ships.”
China has been trying to build up a blue-water navy that
can operate globally and support its maritime security, but it so far has only
one aircraft carrier, the Liaoning – a repurposed Soviet ship it bought from
Ukraine that went into service in 2012.
Its first Chinese designed and built aircraft carrier,
the Type 001A, is expected to go into full service later this year.
More
January 30, 2018 / 2:09 AM
Russia says Su-27 fighter jet intercepted U.S. spy plane; U.S. protests
MOSCOW (Reuters) - A Russian Su-27 fighter jet intercepted a U.S.
surveillance plane over the Black Sea on Monday, prompting the U.S. State
Department to protest the maneuver as “an unsafe interaction.”
The encounter, first reported by Russia’s RIA news agency, cited the
defence ministry as saying the U.S. Navy aircraft, an ЕР-3E Aries II plane, did
not violate Russian air space.
In a statement, the State Department said the Russian jet “engaged in an
unsafe interaction with a U.S. EP-3 in international airspace, closing to within
5 feet (1.5 meters) and crossing directly in front of the EP-3’s flight path.”
“This is but the latest example of Russian military activities
disregarding international norms and agreements,” the statement said, calling
on Russia “to cease these unsafe actions.”
“After the surveillance plane of the U.S. Navy had changed its course to
move away from the border, the Su-27 returned to its base,” RIA quoted the
Russian defence ministry as saying.
Intense clashes between Kurdish and Turkish forces in Syria
Syria violence overshadows Russia-hosted talks
By Associated Press, The Associated
Press Posted: Jan 29, 2018 6:09 PM ET Last
Updated: Jan 29, 2018 6:09 PM ET
Intense clashes erupted Monday on a strategic hilltop in northwestern
Syria as Kurdish forces tried to enter the area a day after it was captured by
Turkish troops.
Turkish military officials cancelled a government-organized press tour
to Bursayah Hill, separating the Kurdish-held enclave of Afrin from the
Turkey-controlled town of Azaz, because of what they described as
"security concerns."
Separately, in the nearby rebel-held province of Idlib, suspected Syrian
government airstrikes killed at least 21 people and put a hospital out of
order.
The violence has overshadowed a peace conference hosted by Russia that
was due to open in Sochi on Monday. Russia, a key ally of President
Bashar al-Assad, says it invited 1,600 representatives to the Syrian
Congress of National Dialogue, but so far only the government and opposition
representatives tolerated by it have shown up. The main Syrian opposition body
has boycotted the talks.
The main Syrian Kurdish militia, which is fighting in Afrin and controls
some 25 per cent of Syrian territory, has also declined to attend, saying it
holds Russia responsible for the Turkish offensive.
Alexander Lavrentiev, Russia's envoy for Syria, downplayed the violence,
saying the situation in Afrin has "somehow stabilized" and expressing
hope that "potential provocations prior to and during the event won't
affect its outcome."
"We still hope that common sense will prevail and that the
leadership of the united Syrian opposition will still decide to attend the
congress. This possibility has not been ruled out, and the invitations remain
on the table," he said, according to Russian state agency Tass.
More
But the sea carried on rising as usual without
any reverence for his person, and soaked his feet and legs. Then he moving away
said: “All the inhabitants of the world should know that the power of
kings is vain and trivial, and that none is worthy the name of king but He
whose command the heaven, earth and sea obey by eternal laws”. Therefore King
Cnut never afterwards placed the crown on his head, but above a picture of the
Lord nailed to the cross, turning it forever into a means to praise God, the
great king.
Henry of Huntingdon's twelfth-century
Chronicle of the History of England.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today another cryptocurrency scam warning, this time from Europe’s
leading gambling bank.
Crypto Investors Risk ‘Total Loss,’ Deutsche Warns
By Stephan Kahl
29 January 2018, 05:00 GMT
(Machine translation provided by Google and reviewed by Bloomberg editors.)Deutsche Bank AG’s Wealth Management currently does not advise to invest in crypto-currencies, according to Markus Mueller, Global Head of Chief Investment Office. Problematic issues include high volatility, possible price manipulation and data loss or data theft, he told Bloomberg News in an interview.
"
We do not recommend that. It’s only for investors who invest speculatively," he said. "There is a realistic risk of total loss." According to Mueller, recent price increases reflect a lot of imagination, driven by the current situation in the market. There is hardly any return scope left in other asset classes such as fixed income, he said.
Mueller is not the only person warning against crypto-currencies. Bank of Spain Governor Luis Maria Linde said crypto-currencies are an asset that carries enormous risks. And Austria’s Financial Planners Association compared bitcoin investments with a "casino visit".
In order to establish crypto-currencies as some kind of asset class in the future, more regulation, security and transparency, for example via official trading venues, are required, according to Mueller. "Important issues such as liability and documentation are unclear," he said. "We are still at the very beginning."
The price of Bitcoin had fluctuated sharply in recent weeks. Crashes of more than 20 percent in a single day have occurred. There were concerns about possibly tough crackdowns by regulators in Asia, among other factors.
Japan’s financial regulator is in no hurry to follow the U.S. and enable the listing of futures contracts linked to crypto-currencies, according to a senior Financial Services Agency official with direct knowledge of the matter.
Müller said companies that issue crypto-currencies should work together with regulators. "When security and trust are created, crypto-currencies can be assessed like established asset classes. It is possible that the governance required will exist in five to ten years from now."
He does not understand why so many followers of crypto-currencies see something negative in regulation. Regulation protects against abuse and crime, he said.
He also pointed out that traditional money is supported by the underlying economic power of a country. Gold is a bit more abstract, but at least of a physical nature, he said. Crypto-currencies, on the other hand, would only function as a store of value if the issuing companies have a sustainable business model, Mueller said.
However, the underlying technology, the blockchain, is already interesting, Mueller said. "Crypto-currencies make transactions even easier and more cost-effective". There is the potential to revolutionize some industries from the ground up, according to Mueller.
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?
This Physics Breakthrough Could Help Save the World
Turbulence wastes a lot
of energy. New research shows how we might reduce it.
by Mark Buchanan 29 January 2018, 06:00 GMT
If humans want to avoid boiling the oceans, we’ll have to find ways to
use energy more efficiently. This, in turn, requires solving a problem that
people don’t typically connect to climate change: the turbulence created when
we pump air, water, oil, gas and other substances through countless miles of
ducts and pipes. Thanks to its confounding effects, fully 10 percent of all the
electrical energy produced on Earth gets wasted.
Fortunately, some recent breakthroughs in the realm of physics might
point the way to a solution.
Physicists have long been perplexed by turbulence -- the way fluids and
gases, if moving fast enough, inevitably dissolve into a messy chaos of whirls
and eddies. It’s theoretically tricky because it's erratic and intermittent,
and often can't be captured with the smooth mathematics used in most of
science. Even the concept of velocity makes little sense: Movements grow so
tangled and mixed up that any tiny parcel will have parts flowing in different
directions. When, back in the 1920s, weather prediction pioneer Lewis
Richardson wrote a paper titled “Does the wind have a speed?” he asked the
question seriously.
Yet even the hardest problems can succumb to persistent investigation, as two recent discoveries demonstrate. One clarifies how smooth flows fall apart into turbulence. The other shows how that undoing can sometimes be avoided in clever and somewhat bizarre ways.
There seems to be a fairly sharp threshold at which fluid flowing smoothly in a pipe becomes turbulent, yet the precise mechanics have long been a mystery. Does it happen all at once, or in stages? In a series of landmark experiments, German physicist Bjorn Hof and colleagues offer new insight: Turbulence emerges in the form of little puffs -- tiny regions of confused, disorganized flow -- which can then split, creating more puffs. Below a certain speed of flow, the puffs die out more quickly than they split: Even if you create some turbulence by putting your finger in the flow, it will soon subside. But above a critical speed, the splitting happens faster than the dying out, causing the turbulence to spread. Weirdly, it seems to grow following precisely the same mathematics as diseases.
This discovery alone is a major breakthrough. But Hof and colleagues went further, exploring how turbulence might be controlled. They investigated, for example, the effect of extra stirring from rotors placed inside a pipe, or by the injection of jets of fluid along the pipe walls. Intuition suggests that these would increase turbulence, and they do, but in both cases the flow downstream quickly returns to the smooth state. More important, the interventions can reduce the overall friction associated with turbulence by as much as 90 percent, something few researchers would have expected.
More
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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