Baltic Dry Index. 1139 -25 Brent Crude 68.59
Jamie Dimon, US CEO of JP Morgan Chase
In the stock markets,
the party continues on in full fling. Optimism Rules OK! Never mind that the Fed and others are
starting to dilute the punch bowl, with the US 10 year closing out yesterday at
an “interesting” 2.63. Never mind that crude oil remains stuck in the mid 60s,
just as inflation seems to be awakening in the world from its 21st
century coma. Never mind that the Baltic Dry (shipping) Index seems to have hit
an iceberg again. Never mind that on Tuesday, America’s “President Berlusconi” is
about to wreak havoc in Davos. Party on like it’s 2007 once again. Never mind
that the US government faces a funding shutdown at midnight tonight, if sanity doesn’t
return to the District of Crooks.
Below, the current mania
madness knows no bounds.
“Egol and Fabrice were way ahead of their time,” said one of the former Goldman workers.
“They saw the writing on the wall in this market as early as 2005.”
Asian Stocks Rise; Treasury Yields Edge Higher: Markets Wrap
By Adam Haigh and Colin Simpson
Updated on 19 January 2018, 04:26 GMT
Asian
equities rose to fresh highs Friday, heading for a sixth week of gains, even as
10-year U.S. Treasury yields reached their highest since 2016. The dollar
index declined for a second day, trading close to a four-month low.
The
MSCI Asia Pacific Index climbed, led by industrial and technology stocks, with
Japanese shares posting the largest gains. Equities in Hong Kong were little
changed, while those in Shanghai also rose. Treasuries edged lower as yields
rose above 2.63 percent. The greenback fell as investors continue to
monitor the possibility of a U.S. government shutdown, with federal spending
authority set to expire Friday. The yuan strengthened beyond 6.4 per dollar for
the first time since 2015, having climbed 1 percent this week.
The rise in bond yields comes as investor concerns mount about the pace of price rises in the American economy. Thursday’s sale of U.S. bonds that offer a hedge against faster inflation attracted strong demand. Together with China’s better-than-expected growth data, this added to the narrative of a global economic expansion that has helped drive equities to record highs this year.
Elsewhere, oil declined after a rally that has driven prices to the highest level in more than three years, as a rebound in U.S. crude output offset a ninth weekly stockpile drop. Bitcoin steadied above $11,000.
More
More than half of S&P 500 stocks are up 20% or more since Trump took office
Published: Jan 19, 2018 12:01 a.m. ET
It’s been about a year since President Trump took office Jan. 20, 2017. It’s
sometimes been contentious and even chaotic. But, for investors, it’s been
among the best of times.The S&P 500 Index SPX, -0.16% of the largest U.S. stocks has returned 26.3% since Jan. 19, 2017, the day before Trump’s inauguration. This next year could be more of the same, helped by economic growth at home and abroad, low U.S. unemployment and the biggest federal tax cut in a generation.
“There’s still meat on the bone,” said Bill McMahon, chief investment officer at Charles Schwab unit ThomasPartners.
He said in an interview that Wall Street analysts have not yet fully incorporated the tax cuts Trump signed into law on Dec. 22 into their earnings estimates. That means those estimates will be rising, reducing stocks’ price-to-earnings ratios and, therefore, supporting more share-price gains.
More
https://www.marketwatch.com/story/more-than-half-of-sp-500-stocks-are-up-20-or-more-since-trump-took-office-2018-01-19
House passes short-term funding bill, but uncertain Senate vote still looms
Published: Jan 18, 2018 11:58 p.m. ET
WASHINGTON — The House passed a one-month spending bill Thursday, but it
faces enough opposition to be derailed in the Senate, leaving lawmakers without
a clear path for avoiding a partial government shutdown this weekend.
In a 230-197 vote, the House approved a short-term spending bill that
would keep the government funded through Feb. 16. It also reauthorizes the
Children’s Health Insurance Program for six years and delays three Affordable
Care Act taxes. Six Democrats voted in favor of the measure; 11 Republicans
opposed it.
But GOP leaders’ victory could prove short-lived, since the stopgap bill
currently doesn’t have enough support to clear the Senate, just one day before
the government’s funding expires at 12:01 a.m. EST Saturday.
The Senate began considering the bill Thursday night. The first vote, to
open debate on the measure, was supported by Democrats to buy more time to
reach a better deal on immigration, a congressional aide said.
----The Senate adjourned without a final vote Thursday night, and will reconvene at 11 a.m. Friday.
https://www.marketwatch.com/story/republicans-appear-to-have-house-votes-for-funding-bill-but-shutdown-still-looms-2018-01-18
In Bitcoin mania news, to the crypto faithful even a 50 percent crash is “good news.” But from stocks to crypto currencies, our 2018 world seems dangerously close to running out of greater fools.
As Bitcoin Sinks, Crypto Bros Party Hard on a Blockchain Cruise
By Blake Schmidt
When 600 cryptocurrency enthusiasts set sail from Singapore on Monday
night for their second annual Blockchain Cruise, the price of Bitcoin was
hovering comfortably above $13,500.
By the time their 1,020-foot-long ship pulled into Thailand on
Wednesday, for an afternoon of bottomless drinks and crypto-focused talks on a
sun-soaked private beach, Bitcoin had cratered to $10,000.
The group consisted largely of young men, many of whom became wildly rich -- at least on paper -- as Bitcoin and other digital tokens skyrocketed last year. In all likelihood, they had just lost millions.
But if anyone was fazed, they didn’t show it. The party rolled on as the sangria and Red Bull flowed, Bitcoin-themed rap music blared and drones filmed it all from above.
“Nothing goes up in a straight line,” explained Ronnie Moas, the founder of Miami Beach-based Standpoint Research, who was one of the event’s speakers on Wednesday. In a best-case scenario, he said, Bitcoin could jump to $300,000 in as little as seven years.
For skeptics of the crypto craze, it’s hard not to see all this as another sign of runaway exuberance -- a repeat of the boosterish Las Vegas securitization conference, dramatized in The Big Short, that preceded the subprime mortgage meltdown of 2007. But the steadfast optimism on display at this week’s Blockchain Cruise also carries a warning for anyone betting on a cryptocurrency crash: It’s going to take more than a 50 percent drop in Bitcoin from its Dec. 18 high to drive out the diehards.
----The cruise’s eclectic list of speakers included Jose Gomez, a former aide to the late Venezuelan President Hugo Chavez; Kaspar Korjus, the head of Estonia’s e-residency program (which may issue its own cryptocurrency); and Jorg Molt, an early digital currency backer whose claim to hold 250,000 Bitcoins (worth $2.8 billion at the current price) couldn’t be verified.
But perhaps the biggest draw on the Blockchain Cruise was John McAfee, the anti-virus software pioneer with a checkered past. In 2012, while living in Belize, McAfee had run-ins with local police for alleged unlicensed drug manufacturing and weapons possession, but was released without charge. At one point, Belize police started a search for him as a person of interest in connection with the murder of his neighbor. McAfee said he was innocent and that he fled Belize because of persecution by corrupt officials.
More
https://www.bloomberg.com/news/articles/2018-01-19/as-bitcoin-sinks-crypto-bros-party-hard-on-a-blockchain-cruise
Hackers Have Walked Off With About 14% of Big Digital Currencies
By Olga Kharif
18 January 2018, 13:49 GMT
Digital currencies and the software developed to track them have become
attractive targets for cybercriminals while also creating a lucrative new market
for computer-security firms.In less than a decade, hackers have stolen $1.2 billion worth of Bitcoin and rival currency Ether, according to Lex Sokolin, global director of fintech strategy at Autonomous Research LLP. Given the currencies’ explosive surge at the end of 2017, the cost in today’s money is much higher.
“It looks like crypto hacking is a $200 million annual revenue industry,” Sokolin said. Hackers have compromised more than 14 percent of the Bitcoin and Ether supply, he said.
All told, hacks involving cryptocurrencies like Bitcoin have cost companies and governments $11.3 billion through lost potential tax revenue from coin sales and illegitimate transactions, according to Susan Eustis, chief executive officer of WinterGreen Research. The blockchain ecosystem -- the decentralized “distributed ledgers” that track crypto transactions -- is also vulnerable.
Those losses could snowball as more companies and investors rush into the white-hot cryptocurrency market without weighing the dangers or taking steps to protect themselves.
Super-Secure?
Blockchain records are shared, making them hard to alter, so some users see them as super-secure. But in many ways they are no safer than any other software, Matt Suiche, who runs the blockchain security company Comae Technologies, said in a phone interview.And since the market is immature, blockchains may even be more vulnerable than other software. There are thousands of them, each with its own bugs. Until the field is winnowed to a few favorites, as happened with web browsers, securing them all will be a challenge.
“Each implementation is going to have its own problems,” Suiche said. “The more implementations, the harder it is to cover all of them.”
Blockchains can track identity information, property records and even digital car keys, not just cryptocurrency. But of course, they do that too, and stolen Bitcoins can be converted into hard cash.
So while hacking a blockchain may be harder than breaking into a retailer’s database, “the rewards are greater,” according to Andras Cser, an analyst at Forrester Research. “You have much more information you can steal.”
Exploiting Forks
Many blockchains started as forks that diverged from existing crypto ledgers, and as Taiwanese security researchers have pointed out, every fork gives hackers a new way to try to falsify data.In a Dec. 25 paper, researchers at the Institute of Electrical and Electronics Engineers outlined ways hackers can spend the same Bitcoins twice, the very thing blockchains are meant to prevent. In a Balance Attack, for instance, hackers delay network communications between subgroups of miners, whose computers verify blockchain transactions, to allow for double spending.
More
https://www.bloomberg.com/news/articles/2018-01-18/hackers-have-walked-off-with-about-14-of-big-digital-currencies
Finally, and on to Davos. As usual this year, my invitation got lost in the mail. In 2018, who will trump Trump? Who would want to?
As Trump Shreds Global Trade Deals, Xi Basks in ‘Davos Man’ Role
By Enda Curran and Nick Wadhams
18 January 2018, 23:00 GMT
If one needed a reminder of how surreal the globalization debate has become
in recent years, look no further than the talking salons of Davos.Donald Trump and Xi Jinping, whose countries account for about 40 percent of the global economy, are offering competing visions for the future of global trade, capital flows and economic integration in this age of widening income inequality and populist angst.
In an historic role reversal, it’s the leader of the Chinese Communist Party who has emerged as a defender of the Davos consensus, last year using his speech in the Swiss ski resort to defend globalization. And it’s an American president -- the main event this year -- insisting his country’s economic interests take precedence over gauzy visions of a more inter-connected world.
Trump comes to the World Economic Forum, set to kick off on Jan. 23, with a rap sheet in the eyes of the Davos true believers. In his first year in office, he’s withdrawn the U.S. from the Trans-Pacific Partnership free trade deal and the Paris Agreement on climate change. He’s threatened to renege on the Iran nuclear deal, a free-trade agreement with South Korea, and the North American Free Trade Agreement (NAFTA).
----"The
threats to global trade integration should not be underestimated," said
Eswar Prasad, a former chief of the International Monetary Fund’s China
division and now a professor at Cornell University in Ithaca, New York.
"The Trump administration has fomented uncertainty in the rules of the
game underpinning international trade."
As America withdraws, China’s global influence is growing. Xi has dispatched his trade negotiators to help formulate a new Asian trade pact in the wake of TPP. China’s ambitious Belt and Road Initiative, which calls for massive infrastructure investment and the development of new trade routes, is reshaping the terrain in the world’s most economically dynamic region.
Xi won’t be attending Davos this year, with his top adviser on the economy set to represent China’s interests. The Chinese President’s speech last year was seen as a rebuttal against the protectionist threats of Trump, who was then just days away from taking office after a campaign littered with threats to take on China over trade issues.
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.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, here we go again with USA mortgage bundled
securities. The more things change and all that. Some people never learn. Now
if we can just get a US ratings agency to call them “triple-A.” Perhaps we can even write new credit default
swaps on them, you know it makes sense for the Great Vampire Squids! Lets just
blockchain them in version 2.0, but where will we find the brains to run the
new scheme?
Experience
is what makes you pause briefly before going ahead and making the same mistake.
Mad
Magazine.
Blockchain Eyed for Mortgage Bundling That Caused 2008 Crisis
By Matthew Leising
18 January 2018, 11:00 GMT
A group of big financial institutions wants to use the blockchain to help
resurrect the packaging of home mortgages into securities, a business that
almost destroyed the global banking system in 2008.Credit Suisse Group AG, U.S. Bancorp, Wells Fargo & Co. and Western Asset Management Co. said Thursday that they successfully tested the distributed ledger technology as a way to make it easier to track securitized home loans.
Before the 2008 crisis, bundling home loans together and then selling those baskets to investors was a huge profit center for banks. But this was the primary cause of the meltdown after many borrowers couldn’t repay their debt and the value of the securitized loans crashed, causing trillions of dollars in losses.
The business then shrank dramatically. There were about $823 billion of securitized private-label residential mortgage bonds outstanding in early 2017, according to the Securities Industry and Financial Markets Association, down from a peak of $2.7 trillion in 2007.
“Structuring securities is complex, involving many different parties,
manual processes, duplicated documents and data in different formats,” David
Rutter, chief executive officer of blockchain startup R3, which is organizing
the consortium, said in a statement Thursday. While the group is starting with
residential mortgages that aren’t backed by the U.S. government, it plans to
expand to other types of asset-backed securities. The next step is delivering a
commercially viable product, R3 said.
Distributed ledgers consist of a network of users or companies that
share access to a database to track things like Bitcoin payments or data
reconciliation that’s vital to securitized mortgages.
“Distributed ledger technology will increasingly improve security around
data, not just for capital markets but across numerous other industries,” Penny
Morgan, global securities operations manager at Western Asset Management, said
in the statement.
Blythe Masters
Blythe Masters (born 22 March 1969) is a former
executive at JPMorgan Chase.[1]
She is currently the CEO of Digital Asset Holdings,[2]
a financial technology firm developing distributed ledger technology for
wholesale financial services.[3]
Masters is widely credited as the creator of the credit default swap as a financial instrument.
Credit default swap
A credit default swap (CDS) is a financial
swap agreement that the seller of the CDS will compensate the buyer
(usually the creditor of the reference loan) in the event of a loan default
(by the debtor) or other credit event. That is, the seller of the CDS insures
the buyer against some reference loan defaulting. The buyer of the CDS makes a
series of payments (the CDS "fee" or "spread") to the
seller and, in exchange, receives a payoff if the loan defaults. It was
invented by Blythe Masters from JP Morgan in 1994.
“It is hard for us, without being flippant, to even see a scenario
within any kind of realm of reason that would see us losing one dollar in any
of those [CDS] transactions.”
Joseph J. Cassano, the former A.I.G. executive in charge of CDS, August
2007, on Credit Default Swaps that wiped out A.I.G in 2008.
Digital Asset is the leading provider of Distributed Ledger Technology to regulated financial institutions
CEO
Blythe joined Digital Asset in 2015 after 27 years at J.P.Morgan Chase
where she rose to Managing Director at the age of 28. She was a member of the
firm’s Executive Committee and the Investment Bank’s Operating Committee and
served in numerous senior positions including Head of Global Commodities, CFO
of the Investment Bank, and Head of Global Credit Portfolio and Credit Policy
and Strategy. She served as the Chair of SIFMA and the GFMA, trade associations
promoting public trust and confidence in financial markets. Blythe is currently
on the board of The Breast Cancer Research Foundation and is co-Chair of the
Global Fund for Women. She is also Group Senior Advisor on Blockchain for Banco
Santander and Chair of Governing Board of Hyperledger at the Linux Foundation.
Ebenezer Squid, with apologies to W. C. Fields.
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?
Semiconductor breakthrough may be game-changer for organic solar cells
Date:
January 17, 2018
Source:
University of Michigan
Summary:
In an advance that could push cheap, ubiquitous solar power closer to reality,
researchers have found a way to coax electrons to travel much further than was
previously thought possible in the materials often used for organic solar cells
and other organic semiconductors.
In an advance that could push cheap, ubiquitous solar power closer to
reality, University of Michigan researchers have found a way to coax electrons
to travel much further than was previously thought possible in the materials
often used for organic solar cells and other organic semiconductors.
"For years, people had treated the poor conductivity of organics as
an unavoidable fact, and this shows that that's not always the case," said
Stephen Forrest, the Peter A. Franken Distinguished University Professor of
Engineering and Paul G. Goebel Professor of Engineering at U-M, who led the
research.
Unlike the inorganic solar cells widely used today, organics can be made
of inexpensive, flexible carbon-based materials like plastic. Manufacturers
could churn out rolls of them in a variety of colors and configurations, to be
laminated unobtrusively into almost any surface.
Organics' notoriously poor conductivity, however, has slowed research.
Forrest believes this discovery could change the game. The findings are
detailed in a study published Jan. 17 in Nature.
The team showed that a thin layer of fullerene molecules -- the curious
round carbon molecules also called Buckyballs -- can enable electrons to travel
up to several centimeters from the point where they're knocked loose by a
photon. That's a dramatic increase; in today's organic cells, electrons can
travel only a few hundred nanometers or less.
Electrons, moving from one atom to another, make up the electric current
in a solar cell or electronic component. Materials like silicon, used in
today's inorganic solar cells and other semiconductors, have tightly bound
atomic networks that make it easy for electrons to travel through the material.
But organic materials have much looser bonds between individual
molecules, which can trap electrons. This has long been an Achilles' heel of
organics, but the new discovery shows that it may be possible to tweak their
conductive properties for specific applications.
The ability to make electrons move more freely in organic semiconductors
could have far-reaching implications. For example, the surface of today's
organic solar cells must be covered with a conductive electrode that collects
electrons at the point where they're initially generated. But freely moving
electrons can be collected far away from their point of origination. This could
enable manufacturers to shrink the conductive electrode into an invisible grid,
paving the way for transparent cells that could be used on windows and other
surfaces.
----Forrest cautions that widespread use of the discovery in applications like solar cells is theoretical at this point. But, he is excited by the discovery's larger implications for understanding and exploiting the properties of organic semiconductors.
"I believe that ubiquitous solar power is the key to powering our
constantly warming and increasingly crowded planet, and that means putting
solar cells on everyday objects like building facades and windows,"
Forrest said. "Technology like this could help us produce power in a way
that's inexpensive and nearly invisible."
The study is titled "Centimeter-Scale Electron Diffusion in
Photoactive Organic Heterostructures." The research was supported by the
U.S. Department of Energy SunShot Program and by the Air Force Office of
Scientific Research.
More
Another weekend, and the final weekend before the
Davos elite get a lecture on making “America Great Again” from you know who.
But will any of the Davosinians dare to take on “the Donald?” Next week looks like being fun. Have a great
weekend everyone.
"Amigo! Amigo!"
George W. Bush, calling out to Italian
Prime Minister Silvio Berlusconi in Spanish at the G-8 Summit, Rusutsu, Japan,
July 10, 2008
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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