Baltic Dry Index. 1087 +03 Brent Crude 65.47
Every
generation imagines itself to be more intelligent than the one that went before
it, and wiser than the one that comes after it.
George
Orwell.
Fight on! Currency
wars, trade wars, and the big one, bonds v stocks. On the side lines, cryptos v
tangibles, including commodities. The big question is not will the US 10 year
Treasury bond yield get to 3 percent, but when, and how much higher will it go?
Below, the markets
are nervous ahead of the return of US traders from the Presidents Day long
weekend.
Asian Stocks Fall; Dollar Rises With Bond Yields: Markets Wrap
By Cormac Mullen and Andreea Papuc
Updated on 20 February 2018, 05:26 GMT
Most Asian equity benchmarks declined with U.S. futures and the dollar
rose as Treasury yields climbed back toward recent four-year highs.
Japan’s Topix index dropped after staging its second-best performance
this year, while shares in Australia and South Korea also fell, taking their
cue from European markets as U.S. equities and Treasuries took a break for the
Presidents’ Day holiday. The MSCI Asia Pacific Index declined. Hong Kong shares
fluctuated after traders returned to their desks after a holiday.
Investor
focus now turns to the U.S. Treasury, which opens its auction floodgates
this week, beginning with $151 billion of short-term bills on Tuesday.
With little in the way of significant economic data on the schedule, the sales
will provide the clearest gauge yet of how steeply
bond yields may rise in the world’s largest economy. Traders will also be
parsing minutes from the Federal Reserve’s latest meeting.
Bank
of Japan Governor Haruhiko Kuroda did not discuss monetary policy during an
appearance in parliament. Speculation has been swirling about the possibility
the BOJ is scaling back its stimulus since the central bank reduced its
purchases of government bonds in January.
----Elsewhere,
oil climbed above $62 a barrel for the first time in more than a week as
an alliance of some of the world’s largest oil producers signaled further cooperation to
tighten supplies through the end of the year. Bitcoin broke above $11,000.
More
Tudor Veteran Says a Little More Inflation Could Rock Bonds
By Adam Haigh
Updated on 20 February 2018, 05:07 GMT
The
apparent stabilization in the bond market of the past couple weeks could just
mark the eye of the storm, according to a former Tudor Investment Corp. trader
whose bets on ructions in fixed income have been paying off.
Just
a small pick-up in inflation -- which has long undershot central banks’ targets
-- could send bonds tumbling anew, says Brett Gillespie, who’s lured about
A$370 million ($293 million) since July into a global macro fund he’s building
in Sydney at Ellerston Capital Ltd.
Gillespie’s institutional fund is up 6.9 percent since it started in December, helped by protection that he bought in January, when he warned to clients that markets were in the danger zone. He still thinks investors are underestimating the speed of U.S. monetary-policy tightening as inflation creeps higher, after the slide in Treasuries from September to early this month. And the risk premium for holding longer-dated notes is bound to rise, he says.
“We’re pretty convinced we’re in a solid bear market on rates,” Gillespie said by phone from Sydney, where he’s been building his fund after spending 11 years at the firm of the hedge-fund veteran Paul Tudor Jones. “We’re confident that wages are still making their trend improvement.”
Ten-year Treasury yields could easily reach 3.5 percent by the end of the year, he said in the interview last week. “We can get to 3.4 or 3.5 percent just by normalizing risk premium and having a modest rise in inflation or wages,” he said. They were at 2.90 percent as of 2 p.m. in Tokyo Tuesday.
More
February 19, 2018 / 11:47 AM
Commentary: After biggest short, speculators slash bearish US bond bets as supply deluge looms
LONDON (Reuters) - With the dust beginning to settle after a
tumultuous start to the year for the U.S. bond market, speculators are scaling
back their bets on higher yields. By quite a margin.
After building up a record short position in two-year Treasury futures
and historically large short positions across other maturities, a reversal was
always on the cards.
This sets the market up nicely for what is shaping up to be a huge week
for bond investors, as the U.S. Treasury prepares to sell over a quarter of a
trillion dollars worth of new debt.
Two factors will have figured largely in the decision of hedge funds and
other speculators on the Chicago futures exchanges to cut their short positions
in U.S. bond futures: high yields and the explosion of volatility earlier this
month.
The biggest reversal was in two-year futures, the latest positioning
data from the Chicago futures markets show. In the week to Feb. 13, net short
positions were slashed by 76,772 contracts to 133,986.
That’s less than half the record net short of 329,066 contracts just two
weeks ago. The reduction in speculators’ net short positions of almost 200,000
contracts in that period is the second largest two-week fall in bearish bets
ever.
More
Next, cryptocurrency news. There’s none so blind as those
who will not listen. (?)
Ethereum chief warns cryptocurrencies could ‘drop to near-zero at any time’
Published: Feb 19, 2018 11:22 a.m. ET
The co-founder of Ethereum has put out a stark warning for crypto fans:
Don’t bet the farm on cyberassets, because prices could “drop to near-zero” at
any moment.
Vitalik Buterin took to Twitter over the weekend to caution people about
digital currencies, which delivered blockbuster rises in 2017, before taking a
beating at the start of this year.
“Reminder: Cryptocurrencies are still a new and hyper-volatile asset
class, and could drop to near-zero at any time. Don’t put in more money than
you can afford to lose,” the Russian-Canadian programmer said in his post
Saturday.
“If you’re trying to figure out where to store your life savings,
traditional assets are still your safest bet,” he said.
Over the course of 2017, the price of No. 1 crypto asset bitcoin BTCUSD, +3.36% rose about 1,400%, according to CoinDesk. Ethereum-based ether tokens, ranked second among cryprocurrencies by market cap, added an eye-popping 9,000% or so from their starting price of around $10.
But in mid-January, almost every one of the top 100 cryptocurrencies took a hammering after rumors of regulatory crackdowns spread fear among investors. Ethereum lost 20%, bitcoin dropped 18%, and ripple shed 30% of its value.
CryptoWatch: Check bitcoin and other cryptocurrency prices, performance and market capitalization — all on one dashboard
Read: Anonymous trader buys $400 million in bitcoin
Despite that history, most of the digital diehards were having none of Buterin’s warning. On Twitter, some said he was exaggerating the risk, while others vowed to keep plunging in, and the jokers just said “too late” — though some did thank the Ethereum pioneer.
More
Commodities Shipper Seeks $150 Million to Start Cryptocurrency
By Isis AlmeidaPrime Shipping Foundation, a partnership between Gibraltar-based Quorum Capital Ltd. and ship broker Interchart LLC, is looking to raise the funds by midyear in a so-called initial coin offering. Using its own cryptocurrency would ease conversions into and out of traditional currencies, speeding settlement, according to Chief Executive Officer Ivan Vikulov.
The company was the first to execute a freight deal in Bitcoin, shipping 3,000 tons of Russian wheat to Turkey at the end of last year. While the freight charges were billed in the cryptocurrency, using digital coins to pay for the actual commodities has proven to be difficult. That’s because their lack of liquidity makes it harder to convert higher-value deals quickly into fiat currencies, he said.
“The conversion in and out of Bitcoin can sometimes take one or two days, and that’s not fast enough,” Vikulov said. “Ours will take a few seconds.”
More
Venezuela's new bitcoin: an ingenious plan or worthless cryptocurrency?
Some analysts see the ‘petro’ as a desperate move to secure cash amid an economic meltdown brought about by President Nicolás Maduro’s policies
Mon 19 Feb 2018 07.30 GMT Last modified on Mon 19 Feb 2018 08.16 GMT
Is Venezuela’s new cryptocurrency an ingenious plan to evade U.S. sanctions? Or will it turn out to be a South American shitcoin?
That is the question facing Venezuela as it prepares for the pre-sale of its new bitcoin-like digital currency called the petro.
The launch on Tuesday comes amid a deep economic crisis and a crackdown on democratic freedoms that have left President Nicolás Maduro’s socialist government politically isolated and cut off from most international financing.
Maduro claims that each petro token will be backed by one barrel of the oil-rich nation’s petroleum, and claims that about 100 million petro tokens worth some $6bn will be issued.
The petro is designed to raise hard currency and to function as a payment method for foreign suppliers now that most transactions have been stymied by financial sanctions imposed by Washington last year.
But some analysts see the petro as a desperate move to secure cash amid an unprecedented economic meltdown brought about by Maduro’s socialist policies.
Venezuelans are now suffering from widespread food shortages, hyperinflation that could hit 13,000% this year according to the International Monetary Fund, and the collapse of the traditional currency, the bolívar.
Venezuela’s opposition-controlled congress has declared the petro illegal because, under the law, the legislature must approve any government borrowing, a step Maduro has ignored.
More
Finally, US pot calls
Russian kettle black. It looks like US warmongers can dish interference out,
but can’t take it back. Who’d have thought it? Officially according to the FBI,
13 very few, but very clever Russians, interfered in the US election,
convincing millions of incredibly dumb US voters to vote for Trump, thereby
stealing the US Presidency from the Queen of Wall Street and the Hollywood sex
offenders. You couldn’t make this sort of paranoia story-line up.
Russia Isn’t the Only One Meddling in Elections. We Do It, Too.
Bags of cash delivered to a Rome hotel for favored
Italian candidates. Scandalous stories leaked to foreign newspapers to swing an
election in Nicaragua. Millions of pamphlets, posters and stickers printed to
defeat an incumbent in Serbia.
The long arm of Vladimir Putin? No, just a small
sample of the United States’ history of intervention in foreign elections.
On Tuesday, American
intelligence chiefs warned the Senate Intelligence Committee that Russia
appears to be preparing to repeat in the 2018 midterm elections the same
full-on chicanery it unleashed in 2016: hacking, leaking, social media
manipulation and possibly more. Then on Friday, Robert Mueller, the special
counsel, announced the indictments of 13 Russians and three companies, run by a
businessman with close Kremlin ties, laying out in astonishing detail a
three-year scheme to use social media to attack Hillary Clinton, boost Donald
Trump and sow discord.
Most Americans are understandably shocked by what they
view as an unprecedented attack on our political system. But intelligence
veterans, and scholars who have studied covert operations, have a different,
and quite revealing, view.
“If you ask an intelligence officer, did the Russians
break the rules or do something bizarre, the answer is no, not at all,” said
Steven L. Hall, who retired in 2015 after 30 years at the C.I.A., where he was
the chief of Russian operations. The United States “absolutely” has carried out
such election influence operations historically, he said, “and I hope we keep
doing it.”
Loch K. Johnson, the dean of American
intelligence scholars, who began his career in the 1970s investigating the
C.I.A. as a staff member of the Senate’s Church Committee, says Russia’s 2016
operation was simply the cyber-age version of standard United States practice
for decades, whenever American officials were worried about a foreign vote.
“We’ve been doing this kind of thing since the C.I.A.
was created in 1947,” said Mr. Johnson, now at the University of Georgia.
“We’ve used posters, pamphlets, mailers, banners — you name it. We’ve planted
false information in foreign newspapers. We’ve used what the British call ‘King
George’s cavalry’: suitcases of cash.”
The
United States’ departure from democratic ideals sometimes went much further.
The C.I.A. helped overthrow elected leaders in Iran and Guatemala in the 1950s
and backed violent coups in several other countries in the 1960s. It plotted
assassinations and supported brutal anti-Communist governments in Latin
America, Africa and Asia.
----This
broader history of election meddling has largely been missing from the flood of
reporting on the Russian intervention and the investigation of whether the
Trump campaign was involved. It is a reminder that the Russian campaign in 2016
was fundamentally old-school espionage, even if it exploited new technologies.
And it illuminates the larger currents of history that drove American electoral
interventions during the Cold War and motivate Russia’s actions today.
A Carnegie Mellon scholar, Dov H. Levin, has scoured the historical
record for both overt and covert election influence operations. He found 81 by the
United States and 36 by the Soviet Union or Russia between 1946 and 2000,
though the Russian count is undoubtedly incomplete.
“I’m not in any way justifying what the Russians did
in 2016,” Mr. Levin said. “It was completely wrong of Vladimir Putin to
intervene in this way. That said, the methods they used in this election were
the digital version of methods used both by the United States and Russia for
decades: breaking into party headquarters, recruiting secretaries, placing
informants in a party, giving information or disinformation to newspapers.”
----C.I.A. officials told Mr. Johnson in the late
1980s that “insertions” of information into foreign news media, mostly accurate
but sometimes false, were running at 70 to 80 a day. In the 1990 election in
Nicaragua, the C.I.A. planted stories about corruption in the leftist Sandinista
government, Mr. Levin said. The opposition won.
Over time, more American influence operations have
been mounted not secretly by the C.I.A. but openly by the State Department and
its affiliates. For the 2000 election in Serbia, the United States funded a
successful effort to defeat Slobodan Milosevic, the nationalist leader, providing
political consultants and millions of stickers with the opposition’s
clenched-fist symbol and “He’s finished” in Serbian, printed on 80 tons of
adhesive paper and delivered by a Washington contractor.
More
“I sometimes get the
impression that many U.S. media outlets work according to a principle which was
common in the Soviet Union. Back then, people used to joke that the newspaper
Pravda [Truth] had no truth in it, and the Izvestia [News] paper has no news in
it. I get the impression that many U.S. media operate in the same way.”
Russian Foreign Minister
Lavrov. May 2017.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Presented without need for comment.
“The
world is a place that’s gone from being flat to round to crooked.”
International
Bankster Times, with apologies to Mad Magazine.
February 19, 2018 / 12:12 PM
India bank hack 'similar' to $81 million Bangladesh central bank heist
NEW DELHI (Reuters) - Hackers who tried to steal nearly $2
million from India’s City Union Bank this month used tactics similar to those
employed in the unsolved cyber heist of $81 million (57.76 million pounds) from
Bangladesh’s central bank in 2016, City’s CEO said on Monday.
The unknown hackers disabled the City printer connected to
global payments platform SWIFT on Feb. 6, preventing the bank from receiving
acknowledgement messages for three fraudulent payment instruction sent that
evening until the next morning.
“Nobody suspected that it was an attack and thought it was a systemic
network failure,” N. Kamakodi told Reuters by phone. “The system department
people, everybody assembled, analysed the problem, rebooted, they closed shop
only around 10-10.30 in the night.”
The next morning, bank officials managed to reconcile the previous day’s
transactions and found out “three transactions which were not originated from
our bank”.
The bank had been able block only one of the transfers worth $500,000,
while attempts were under way to retrieve the rest, he said. It first disclosed
the heist on Saturday.
In the case of Bangladesh Bank, hackers infected the system with malware
that disabled the SWIFT printer. Bank officials in Dhaka initially assumed
there was simply a printer problem.
The hackers stole the money from Bangladesh Bank’s account at the
Federal Reserve Bank of New York using fraudulent orders on SWIFT. The money
was sent to accounts at Manila-based Rizal Commercial Banking Corp and then
disappeared into the casino industry in the Philippines.
Nearly two years later, there is no word on who was responsible and
Bangladesh Bank has been able to retrieve only about $15 million, mostly from a
Manila junket operator.
----He said SWIFT was helping it investigate the matter, and that the hack
happened despite the bank adding new security measures days before.
“It’s a cat and mouse game,” he said.
SWIFT said it did not comment on individual customers or entities.
Russia’s central bank said last week that unknown hackers stole 339.5
million roubles ($6 million) in an attack on the SWIFT international payments
messaging system in Russia last year.
Bitcoin Thieves Threaten Real Violence for Virtual Currencies
SAN FRANCISCO — The currency they were after was virtual, but the guns
they carried were anything but.
In the beach resort of Phuket, Thailand, last month, the assailants
pushed their victim, a young Russian man, into his apartment and kept him
there, blindfolded, until he logged onto his computer and transferred about
$100,000 worth of Bitcoin to an online wallet they controlled.
A few weeks before that, the head of a Bitcoin exchange in Ukraine was
taken hostage and only released after the company paid a ransom of $1 million
in Bitcoin.
In New York City, a man was held captive by a friend until he
transferred over $1.8 million worth of Ether, a virtual currency second in
value only to Bitcoin.
The rich have always feared robbery and extortion. Now, big holders of
Bitcoin and its brethren have become alluring marks for criminals, especially
since the prices of virtual currencies entered the stratosphere last year.
Virtual currencies can be easily transferred to an anonymous address set
up by a criminal. While banks can stop or reverse large electronic transactions
made under duress, there is no Bitcoin bank to halt or take back a transfer,
making the chances of a successful armed holdup frighteningly enticing.
Thieves have taken advantage of this system in a startling number of
recent cases, from Russia, Ukraine and Turkey to Canada, the United States and
Britain.
“This is now becoming more pervasive and touching more law enforcement
divisions that deal with organized crime and violent crime on a local level,”
said Jonathan Levin, the founder of Chainalysis, which has worked with several
law enforcement agencies on virtual currency crimes.
Mr. Levin’s company specializes in tracking criminal transactions on the
blockchain, the computerized ledger where every Bitcoin transaction is publicly
recorded.
Chainalysis has helped police attempt to track down criminals in several
recent cases, including some that have not been made public, according to Mr.
Levin.
But even when a transaction can be tracked, the design of Bitcoin means
that criminals do not have to associate their identity with their Bitcoin
address — as is necessary with most traditional bank accounts. That has stymied
police in several cases.
“This is now becoming more pervasive and touching more law enforcement
divisions that deal with organized crime and violent crime on a local level,”
said Jonathan Levin, the founder of Chainalysis, which has worked with several
law enforcement agencies on virtual currency crimes.
Mr. Levin’s company specializes in tracking criminal transactions on the
blockchain, the computerized ledger where every Bitcoin transaction is publicly
recorded.
Chainalysis has helped police attempt to track down criminals in several
recent cases, including some that have not been made public, according to Mr.
Levin.
But even when a transaction can be tracked, the design of Bitcoin means
that criminals do not have to associate their identity with their Bitcoin
address — as is necessary with most traditional bank accounts. That has stymied
police in several cases.
More
February 19, 2018 / 5:03 AM
India's government says PNB fraud points to supervisory failure at central bank: media
MUMBAI/NEW DELHI (Reuters) - India’s government has said the
$1.77 billion fraud at state-run Punjab National Bank (PNBK.NS)
was a “manifestation of supervisory failure” at the country’s central bank,
local media reported on Monday.
In a letter to the Reserve Bank of India (RBI), the government said the
failure to detect the fraud, the biggest ever in India’s banking sector, raised
questions about the central bank’s “efficacy of supervision to detect and check
systemic failure”, NewsRise and other local media reported.
“Either the framework designed by RBI to prevent and detect such frauds
is inadequate or RBI is unable to ensure its effective implementation,” they
quoted the letter as saying.
The RBI did not immediately respond to a request for comment on Monday,
which was a holiday in Mumbai. A finance ministry spokesman declined comment.
Rajeev Kumar, the top government bureaucrat overseeing banks, told
Reuters in New Delhi the finance ministry had written to the country’s banks to
take effective steps to avoid a repeat of a PNB-like fraud. Kumar declined to
comment if the government had written to the RBI.
The government action comes as federal police briefly locked down the
PNB branch in south Mumbai that was at the heart of the scam and continued
searches on Monday to gather evidence. The bank would have been closed on
Monday anyway because of the holiday.
More
A large Bank is exactly the place where a vain and shallow person
in authority, if he be a man of gravity and method, as such men often are, may
do infinite evil in no long time, and before he is detected. If he is lucky
enough to begin at a time of expansion in trade, he is nearly sure not to be
found out till the time of contraction has arrived, and then very large figures
will be required to reckon the evil he has done.
Walter Bagehot. Lombard Street. 1873
Walter Bagehot. Lombard Street. 1873
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?
Hidden talents: Converting heat into electricity with pencil and paper
Date:
February 16, 2018
Source:
Helmholtz-Zentrum Berlin für Materialien und Energie
Summary:
Thermoelectric materials can use thermal differences to generate electricity.
Now there is an inexpensive and environmentally friendly way of producing them
with the simplest of components: a normal pencil, photocopy paper, and
conductive paint are sufficient to convert a temperature difference into
electricity via the thermoelectric effect.
The thermoelectric effect is nothing new -- it was discovered almost 200
years ago by Thomas J. Seebeck. If two different metals are brought together,
then an electrical voltage can develop if one metal is warmer than the other.
This effect allows residual heat to be partially converted into electrical
energy. Residual heat is a by-product of almost all technological and natural
processes, such as in power plants and every household appliance, and the human
body as well. It is one of the largest underutilised energy sources in the
world -- and usually goes completely unused.
Tiny effect
Unfortunately, as useful an effect as it is, it is extremely small in
ordinary metals. This is because metals not only have high electrical
conductivity, but high thermal conductivity as well, so that differences in
temperature disappear immediately. Thermoelectric materials need to have low
thermal conductivity despite their high electrical conductivity. Thermoelectric
devices made of inorganic semiconductor materials such as bismuth telluride are
already being used today in certain technological applications. However, such
material systems are expensive and their use only pays off in certain
situations. Flexible, non-toxic, organic materials based on carbon
nanostructures, for example, are also being investigated for use in the human
body.
HB pencil and co-polymer varnish
A team led by Prof. Norbert Nickel at the HZB has now shown that the
effect can be obtained much more simply: using a normal HB-grade pencil, they
covered over a small area in pencil on ordinary photocopy paper. As a second
material, they applied a transparent, conductive co-polymer paint (PEDOT: PSS)
onto the surface.
What transpires is that the pencil traces on the paper deliver a voltage
comparable to other far more expensive nanocomposites that are currently used
for flexible thermoelectric elements. And this voltage could be increased
tenfold by adding some indium selenide to the graphite from the pencil.
Poor heat transport explained
The researchers investigated graphite and co-polymer coating films using
a scanning electron microscope and spectroscopic methods (Raman scattering) at
HZB. "The results were very surprising for us as well," explains
Nickel. "But we have now found an explanation of why this works so well:
the pencil deposit left on the paper forms a surface characterised by unordered
graphite flakes, some graphene, and clay. While this only slightly reduces the
electrical conductivity, heat is transported much less effectively."
Outlook: Flexible Components printed right on paper
These simple constituents might be able to be used in the future to
print thermoelectric components onto paper that are extremely inexpensive,
environmentally friendly, and non-toxic. Such tiny and flexible components
could also be used directly on the body and could use body heat to operate
small devices or sensors.
The monthly Coppock Indicators finished January
DJIA: 26,149 +282 Up. NASDAQ: 7,411 +310 Up. SP500: 2,824 +212 Up.
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