Baltic Dry Index. 1395 +10 Brent Crude 69.14
"Stocks are cheap at current prices."
Calvin Coolidge, 30th United States President, spring 1929.
Is the end of the
world (as we know it) nigh? Is the buy everything mania dying? Has the multi-decade bond bull market finally
become the multi-decade long bear market?
Is/was January 2018 the top for
stocks, NAFTA, cryptocurrencies, and the start of the return of global
inflation? Was/is the rioting in Iran and Tunisia over food and energy price
increases the start of the return of global inflation? Was the CES power cut a sign of things to
come in the west? (Or perhaps more a sign that they should have invested or bought
some Tesla back up batteries.)
Of course, it’s still
too early to say, but when hopium greed turns to fear in manias, many of the
greedy get crushed in the stampede for the exits. That seems to be happening in
the cryptocurrencies, but is it about to start in vastly over priced stocks? Is
this the end for NAFTA?
Below, some of the interesting
developments.
"You
can have your cake and eat it too."
Stan
Laurel to Oliver Hardy.
Stocks Fall as Rally Loses Steam; U.S. Yields Dip: Markets Wrap
By Adam Haigh
Updated on 11 January 2018, 05:29 GMT
The stellar run for equities that ushered in the new year showed signs
of waning in Asia on Thursday as the yen remained near a six-week high and
traders dialed back their appetite for risky assets amid a jump in government
bond yields.Shares from Shanghai to Sydney retreated after the S&P 500 Index declined overnight. While a tad weaker on Thursday, the yen remains on course for its best week since mid November. Yields on 10-year Treasuries retreated after China said a news report on officials having recommended slowing or halting purchases of U.S. bonds might have cited a “wrong source.” Australia’s dollar rose after a strong retail sales report.
The best start to a year on record for Asian equities is being greeted with concern that rising yields may test stock valuations. This week’s climb in Treasury yields caused one key share-price measure to signal that conditions are the most overheated since 2010. Goldman Sachs Group Inc. has warned shifting expectations about the pace of U.S. monetary tightening may trigger a stock-market correction.
“It’s better to take some chips off the table -- markets do look a little frothy,” Mikio Kumada, Hong Kong based global strategist at LGT Capital Partners, told Bloomberg TV. “Eventually there will be a sell off or a correction that will offer better opportunities.”
More
Analysts worry ending Nafta could halt the bull market in stocks
Published: Jan 10, 2018 4:45 p.m. ET
The specter of increased trade protectionism was raised on Wednesday,
following a report suggesting President Donald Trump may announce a withdrawal
from the North American Free Trade Agreement. According to Reuters, which cited two Canadian government officials, Canada is increasingly convinced that President Donald Trump will announce that the U.S. will exit Nafta. The trade pact is currently being renegotiated with the latest round of talks scheduled for later this month in Montreal.
A pullout is seen as potentially disruptive to stock markets, which have been in rally mode for years, and haven’t experienced a pullback for a nearly unprecedented length of time.
“If the U.S. pulls out of Nafta, I do think that represents a definite risk to markets,” said Liz Ann Sonders, chief investment strategist at Charles Schwab.
Sonders distinguished between Trump wanting to withdraw and the U.S. actually doing it, noting that such a fundamental shift in policy would likely need congressional approval, which could be difficult to obtain given how controversial such an initiative would likely be. “There could be an announcement that we’re pulling out, and then there’s what actually has to happen for it to occur.
Either way there will be shock waves” in the market, she said.
Trump has been vocal about adhering to an America-first trade policy. In November, he said the U.S. “won’t be taken advantage of any more,” and that the U.S. wouldn’t enter into multilateral trade agreements that “tie our hands.”
The risk of protectionism has investors edgy, with some citing it as one of the primary risks facing equities in 2018.
More
Dollar strengthens against peso, loonie on report that Trump will announce pullout of Nafta
Published: Jan 10, 2018 2:34 p.m. ET
The
U.S. dollar spiked against its Canadian counterpart USDCAD,
-0.0319% and the Mexican
peso USDMXN,
-0.1073% on a Reuters
report that Canada is increasingly convinced that President Donald Trump will
announce that the U.S. will exit the North American Free Trade Agreement. The
report cited two government sources. Nafta, the trade pact between the U.S.,
Canada and Mexico, is currently being renegotiated with the latest round of
talks scheduled for later this month in Montreal. Market participants agree
that a dissolution of Nafta would hit the Mexican economy the hardest.
One
dollar last bought C$1.2569, up from C$1.2464 late Tuesday. The buck meanwhile
bought 19.3485 pesos, up from 19.2404.
Cryptocurrencies Retreat Amid South Korea Clampdown Concerns
By Eric Lam and Shinhye Kang
11 January 2018, 05:14 GMT
Bitcoin slumped as South Korea’s justice ministry reiterated a proposed ban
on cryptocurrency venues, fueling concern that a government crackdown will
erode one of the world’s biggest sources of demand for digital currencies.The ministry is preparing a bill that would outlaw cryptocurrency trading via exchanges, Justice Minister Park Sang-ki told reporters today. The government disclosed a similar plan on Dec. 28. Separately, one of Korea’s biggest cryptocurrency exchanges, Bithumb, said it met briefly with tax officials on Wednesday. The exchange denied a Reuters report that its offices had been raided.
Bitcoin dropped 10 percent to $12,986.41 at 12:36 p.m. Hong Kong time, extending its decline from last month’s high to more than 30 percent, data compiled by Bloomberg show. Ripple fell 21 percent and ethereum slumped 8.7 percent.
“For the last few months the Korean government has been making it very clear they want to bring this speculative activity under control and this isn’t really too much of a surprise,” said Thomas Glucksmann, Hong Kong-based head of APAC business development with cryptocurrency exchange Gatecoin Ltd. “This short dip in price is really an immediate reaction to this news.”
Some investors may also be reacting to China’s crackdown on bitcoin mining operations, he said.
Governments around the world are increasing scrutiny of cryptocurrencies as surging prices attract everyone from individual investors to Wall Street banks. Korea has emerged as something of a ground zero for the speculative frenzy, with the nation’s prime minister warning recently that the boom might corrupt the nation’s youth.
The U.S. Senate will hold a hearing with the country’s top markets regulators to discuss risks posed by cryptocurrencies such as bitcoin, Reuters reported, citing an unidentified person with direct knowledge of matter.
More
Buffett on cryptocurrencies: 'I can say almost with certainty that they will come to a bad ending'
- Warren Buffett tells CNBC the recent craze over bitcoin and other cryptocurrencies won't end well.
- "When it happens or how or anything else, I don't know," the billionaire Berkshire Hathaway chief says.
- But he says he would not take a short position on bitcoin futures.
In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending," the chairman and CEO of Berkshire Hathaway said.
When it happens or how or anything else, I don't know," he added in an interview on CNBC's "Squawk Box" from Omaha, Nebraska. "If I could buy a five-year put on every one of the cryptocurrencies, I'd be glad to do it but I would never short a dime's worth."
Earlier Wednesday, the Omaha-based conglomerate announced the appointment of two new vice chairs. Gregory Abel, 55, will be vice chair of non-insurance businesses. Ajit Jain, 66, will be vice chair of insurance operations.
Buffett said he would not take a short position on bitcoin futures.
"We don't own any, we're not short any, we'll never have a position in them," he said.
"I get into enough trouble with things I think I know something about," he added. "Why in the world should I take a long or short position in something I don't know anything about."
Exchange operators such as CME Group and Cboe Global Markets have opened their platforms to allow bitcoin futures trading.
The price of bitcoin declined 3.69 percent to $13,907 Wednesday, according to data from industry website CoinDesk. The digital currency is up more than 1,500 percent in the past 12 months.
Buffett's comments came a day after J.P. Morgan Chase Chairman and CEO Jamie Dimon backpedaled his earlier criticisms of cryptocurrencies. In September, Dimon called bitcoin a fraud.
—Reuters contributed to this report.
Next as the CES
organisers blame the embarrassing big power cut on the wrong type of rain, more
disturbing news from America. Used against terrorists and organised crime, good. Used against “the man on the Clapham omnibus,”
bad, a police state.
“Just
because you're paranoid doesn't mean they aren't after you.”
Joseph
Heller, Catch-22
01.09.18 08:10 pm
How the Government Hides Secret Surveillance Programs
In 2013, 18-year-old Tadrae McKenzie robbed a marijuana dealer for $130 worth of pot at a Taco Bell in Tallahassee, Florida. He and two friends had used BB guns to carry out the crime, which under Florida law constitutes robbery with a deadly weapon. McKenzie braced himself to serve the minimum four years in prison.But in the end, a state judge offered McKenzie a startlingly lenient plea deal: He was ordered to serve only six months’ probation, after pleading guilty to a second-degree misdemeanor. The remarkable deal was related to evidence McKenzie’s defense team uncovered before the trial: Law enforcement had used a secret surveillance tool often called Stingray to investigate his case.
Stingrays are devices that behave like fake cellphone towers, tricking phones into believing they’re pinging genuine towers nearby. By using the device, cops can determine a suspect’s precise location, outgoing and incoming calls, and even listen-in on a call or see the content of a text message.
McKenzie’s lawyers suspected cops had used a Stingray because they knew
exactly where his house was, and knew he left his home at 6 a.m. the day he was
arrested. The cops had obtained a court order from a judge to authorize Verizon
to hand over data about the location of Mckenzie’s phone. But cell tower data
isn’t precise enough to place a device at a specific house.
The cops also said they used a database that lets law enforcement
agencies locate individuals by linking them with their phone numbers. But the
phone McKenzie was using was a burner, and not associated with his name. Law
enforcement couldn’t adequately explain their extraordinary knowledge of his
whereabouts.
The state judge in the case ordered police to show the Stingray and its
data to McKenzie’s attorneys. They refused, because of a non-disclosure
agreement with the FBI. The state then offered McKenzie, as well as the two
other defendants, plea deals designed to make the case go away.
The cops in McKenzie’s case had ultimately failed to successfully carry
out a troubling technique called “parallel construction.”
First
described in government documents obtained by Reuters in 2013, parallel construction is when law
enforcement originally obtains evidence through a secret surveillance program,
then tries to seek it out again, via normal procedure. In essence, law
enforcement creates a parallel, alternative story for how it found information.
That way, it can hide surveillance techniques from public scrutiny and would-be
criminals.
----“Parallel construction means you never know that a case could actually be the result of some constitutionally problematic practice,” says St. Vincent. For example, the constitutionality of using a Stingray device without a warrant is still up for debate, according to the Human Rights Watch report. Some courts have ruled that the devices do in fact violate the Fourth Amendment.
Hemisphere, a massive telephone-call gathering operation revealed by The New York Times in 2013, is one of the most well-documented surveillance programs that government officials attempt to hide when they use parallel construction. The largely secret program provides police with access to a vast database containing call records going back to 1987. Billions of calls are added daily.
More
In other CES style
news.
Lights out at CES: Giant trade show plunges into darkness, knocks out Samsung, LG, and other booths
by Nat Levy
on
UPDATE, 2:40 p.m.: CES officials say the power outage
at the Las Vegas Convention Center Wednesday morning was a result
of Tuesday’s rain storm. UPDATE, 1:40 p.m.: Power is now fully restored on the show floor at the Las Vegas Convention Center.
https://www.geekwire.com/2018/lights-ces-giant-trade-show-plunges-darkness-knocks-samsung-lg-booths/
January 10, 2018 / 12:08 PM
Cloud companies consider Intel rivals after security flaws found
SAN
FRANCISCO (Reuters) - Some of Intel Corp’s (INTC.O) data center
customers, whose thousands of computers run cloud networks, are exploring using
microchips from the market leader’s rivals to build new infrastructure after
the discovery of security flaws affecting most chips.
Whether Intel sees a slew of defectors or is forced to offer discounts, the company could take a hit to one of its fastest growing business units. Intel chips back 98 percent of data center operations, according to industry consultancy IDC.
Security researchers last week disclosed flaws, dubbed Meltdown and Spectre, that could allow hackers to steal passwords or encryption keys on most types of computers, phones and cloud-based servers.
Microsoft Corp (MSFT.O) said on Tuesday the patches necessary to secure the threats could have a significant performance impact on servers.
Intel will help customers find the best approach in terms of security, performance and compatibility, it said in a statement on Tuesday. “For many customers, the performance element is foremost, and we are sharply focused on doing all we can to ensure that we meet their expectations.”
Alternatives include Advanced Micro Devices (AMD.O), which shares with Intel a chip architecture called x86, or chips based on technology from ARM Holdings or graphics processing chips, which were developed for different tasks than Intel and AMD’s central processing units, or CPUs.
For Gleb Budman’s company, San Mateo-based online storage firm
Backblaze, building with ARM chips would not be difficult.
“If ARM provides enough computing power at lower cost or lower power
than x86, it would be a strong incentive for us to switch,” said Budman. “If
the fix for x86 results in a dramatically decreased level of performance, that
might increasingly push in favor of switching to ARM.”
Infinitely Virtual, a Los Angeles-based cloud computing vendor, is
counting on Intel to replace equipment or offer a rebate to make up for the
loss in computing power, Chief Executive Adam Stern said in an interview.
More
Finally, we close
today with commodities. Well Dr. copper, the world’s first industrial metal.
Below, 10 interesting things about the history of copper.
10 Ancient Mysteries In Copper
Copper is one of the first metals used by humans. Starting at roughly 5000 BC, the Copper Age, or Chalcolithic period, witnessed a radical transition from the primitive stone technology of the Neolithic to the metal-crazed Bronze Age. For millennia, copper was the principal engine of the world economy.The most abundant prehistoric metal artifacts, copper alloys provide archaeologists with windows into the ancient past. A soft metal, copper is poorly suited for weapons but ideal for jewelry and ornamentation. Into it, we have carved the story of civilization.
10 Lost Treasure Of The Copper Scroll
Discovered by an archaeologist on March 14, 1952, the enigmatic Copper Scroll stands in stark contrast to all other Dead Sea Scrolls of Qumran Caves. The material, author, script, language, and style all suggest that it was added to Cave 3 at a different date than the 14 other works made of parchment and papyrus. According to Professor Richard Freund, the Copper Scroll is “probably the most unique, most important, and least understood.”[1]In 1955, unable to unroll the corroded scroll, researchers had to break it apart to access its content. The language within bore little similarity to that of the other Dead Sea Scrolls. Dated between AD 25 and 100, the copper scroll contains a list of 64 locations where fabulous treasure could be found. It references enormous caches of gold, silver, tithing vessels, and priestly vestments worth over a billion dollars in today’s money.
More
"Liquidation
sometimes is orderly, but more frequently degenerates into panic as the
realization spreads that there is only so much money, not enough to enable
everyone to sell out at the top."
Charles
P. Kindleberger, author Manias, panics and crashes.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, back to those Crooked Central Banksters
again, who now find themselves over a barrel. Do nothing, and set off massive
inflation the next time they are forced into yet more quantitative easing,
probably crashing the Great Nixonian Error of fiat money. Raise rates now and
slim down their bloated balance sheet,and ....
"You
are the pits of the world! Vultures! Trash!"
John
McEnroe, Tennis Player, to the umpires, Wimbledon 1984
Monetary Policy Madness?
January 8, 2018
In a recent newsletter John Mauldin wrote: “It is monetary
policy madness to raise rates and undertake quantitative tightening at the same
time.” However, this is exactly what the Fed plans to do in 2018. Has the
Fed gone mad?If mad is defined as diverging in an irrational way from normal practice then the answer to the above question is no. The Fed is following the same rule book it has always followed.
It should first be understood that earlier rate-hiking campaigns were always accompanied by quantitative tightening (QT). Otherwise, how could the Fed have caused its targeted interest rate (the Fed Funds rate) to rise? The Fed is powerful, but not powerful enough to command the interest rate to perform in a certain way. Instead, it has always manipulated the rate upward by reducing the supply of reserves to the banking system via a process that also reduces the money supply within the economy; that is, via QT. In other words, far from there being something unusual about the Fed simultaneously raising rates and undertaking QT, it is standard procedure.
What’s unusual about the current cycle is the scale. Having created
orders of magnitude more money and bank reserves than normal during the easing
part of the cycle the Fed must now implement QT on a much larger scale than
ever before. At least, that’s what the Fed must do if it follows its rule book.
A plausible argument can be made that the Fed should now deviate from
its rule book, but the argument isn’t that the economy is too weak to cope with
tighter monetary policy. The correct argument is that the damage in the form of
misdirected investment and resource wastage was done by the earlier
quantitative easing (QE) programs and this damage cannot be undone or even
mitigated by deflating the money supply. In effect, the incredibly loose
monetary policy of 2008-2014 has made a painful economic denouement inevitable.
At this point, reducing the money supply — as opposed to stopping the inflation
of the money supply, which would be beneficial as it would prevent new
mal-investment from being added to the pile — would exacerbate the pain for no
good reason.
In other words, the damage done by monetary inflation cannot be subsequently undone by monetary deflation.
A plausible argument can also be made that for the first time ever the Fed now has the option of hiking interest rates without doing any QT. This is due to its ability to pay interest on bank reserves. This ability was acquired about 9 years ago solely for the purpose of enabling the Fed to hike its targeted interest rate while leaving the banking system inundated with “excess reserves” (refer to my March-2015 blog post for more detail). That is, this ability was acquired so that the Fed would not be forced to undertake QT at the same time as it was hiking rates.
However, the Fed is not going to deviate from its rule book. This
is mainly because the Fed’s leadership believes that a new QE program will be
required in the future.
To explain, a Fed decision not to implement QT would create an
expectations-management problem in the future. Specifically, an announcement by
the Fed that it was going to maintain its balance sheet at the current bloated
level would be a tacit admission that QE involved a permanent addition to the
money supply rather than a temporary exchange of money for securities. If the
Fed were to admit this then the next time a QE program was announced there
would be a surge in inflation expectations.
There has been monetary policy madness in spades over the past two
decades, but within this context there is nothing especially mad about the
Fed’s plan to raise rates and undertake quantitative tightening at the same
time.
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?
Fisker to launch solid-state battery tech in 2023
American EV manufacturer Fisker claims a 500-mile range and greater performance for its advanced new battery tech
Fisker has unveiled patents for its potentially industry-changing solid-state battery technology at this year’s Consumer Electronics Show (CES) in Las Vegas. The American manufacturer claims the new battery tech has the ability to power a car for over 500 miles and aims to introduce it to its model line-up in 2023.Energy density from solid-state batteries is said to be 2.5 times greater than traditional lithium-ion batteries (like those used in the Nissan Leaf) while Fisker is claiming the tech could cost a third of the price of today's batteries by 2023. It should also allow faster charging and better performance in cold temperatures.
• New all-electric Fisker EMotion revealed at CES
Development of solid-state batteries for vehicle use has been slow, due to the lack of supply chains for the specific raw materials needed to assemble the battery pack.
As well as claiming its solid-state-powered EV’s could have a range of over 500 miles on a single charge, Fisker says charging times could be as low as one minute. However, the brand does not specify whether the battery can be fully or partly charged in the space of 60 seconds.
Fisker’s flexible solid-state battery intentions were made at CES alongside its new EMotion, a 161mph four-door electric saloon with a range of 400 miles, which will rival the market-leading Tesla Model S.
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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