Baltic Dry Index. 1143 -07 Brent Crude 65.85
Hayek
observed that interest rate stimulus interfered with economic calculations,
causing managers to invest in projects that would not otherwise have appeared
profitable. Losses can subsequently materialise as customer demand fails to
meet forecasts that were, in retrospect, optimistic. Long-term projects are
highly sensitive to interest rates and are therefore more susceptible to such
distortions. Pension obligations and long-term, capital-intensive projects are
at high risk of miscalculation based on artificially low rates.
The big news this week will likely come from the Federal
Reserve meeting and the first press conference afterwards by new Fed Chairman
Jerome Powell. Will he give guidance on 3 or 4 interest rate hikes this year?
Will there be any noticeable tone difference to the previous Fed?
Behind the Fed, will we get an outline of
regulation coming to cryptocurrency trading from the G20 Finance Ministers
meeting in Argentina?
March 19, 2018 / 12:32 AM
Shares mixed, yen firm as anxious markets await Fed
SYDNEY
(Reuters) - Asian share markets traded mixed on Monday as caution gripped
investors in a week in which the Federal Reserve is likely to hike U.S.
interest rates and perhaps signal that as many as three more lie in store for
the rest of the year.
Japan's
Nikkei .N225
extended early losses to drop 0.9 percent as exporters were undermined by
recent broad-based strength in the yen.
MSCI's broadest
index of Asia-Pacific shares outside Japan .MIAPJ0000PUS eased 0.35 percent,
but China .CSI300
managed to eke out some gains.
The
guarded mood was not confined to Asia, with the June contract for E-Minis
futures on the S&P 500 ESc1 down 0.3 percent and FTSE futures FFIc1 off 0.2
percent.
While Wall Street
had bounced on Friday, the major indices still ended lower for the week. The
Dow .DJI
lost 1.57 percent, the S&P .SPX 1.04
percent and the Nasdaq .IXIC
1.27 percent.
The decline was
somewhat surprising given figures from Bank of America Merrill Lynch showed a record
$43.3 billion of inflows into equities last week, outpacing bond flows for the
first time since 2013.
For the year so far, $9.8 billion has gone into tech stocks and $7.3
billion into financials, while $41 billion has flowed into emerging markets and
$31 billion into Japan.
Whether the cash continues to flow could depend on what the Fed decides
on Wednesday. All 104 analysts polled by Reuters expected the Fed would raise
rates to between 1.5 percent and 1.75 percent on Wednesday.
More
Cryptos again. Regulation later this week?
March 18, 2018 / 10:58 AM
Bundesbank's Buch adds to calls for cryptocurrency regulation
BERLIN (Reuters) - Regulation of cryptocurrencies must be
considered, Bundesbank vice president Claudia Buch told Reuters, even though
she does not believe they pose a threat to financial stability.
Buch
said that speculation on volatile virtual tokens does not pose a systemic
threat because it is not financed through credit, but she said that regulators
should look at introducing rules to protect consumers, given that such
speculation could prove costly for investors.
“The role of crypto tokens in money laundering and criminal activity must also
be closely examined,” Buch said.
“I don’t see a threat for financial stability at the moment as the
speculations are generally not financed with loans and the relevant markets are
rather small.”
The issue of how to regulate cryptocurrencies is likely to be high on
the agenda at a March 19-20 meeting of Group of 20 finance leaders in
Argentina.
International Monetary Fund Managing Director
Christine Lagarde has urged governments and central banks to develop
regulations for such assets to prevent them from becoming a new vehicle for
money laundering and terrorist financing.
Japan has also urged its G20 partners to act on
preventing cryptocurrencies from becoming a vehicle to finance criminal
activities.
In other news, as expected Mr Putin romped home to
a landslide victory. US businesses get
cold feet over a trade war with China. Germany dumps the EU to pursue its own
deal in Trump’s trade war.
March 17, 2018 / 9:51 PM /
Updated 12 hours ago
Putin easily wins another six-year term, firms grip on Russia
KEMEROVO, Russia (Reuters) - Russian President
Vladimir Putin won a landslide re-election victory on Sunday, extending his
rule over the world’s largest country for another six years at a time when his
ties with the West are on a hostile trajectory.
Putin’s thumping victory will extend his total time in office to nearly
a quarter of a century, until 2024, by which time he will be 71. Only Soviet
dictator Josef Stalin ruled for longer. Putin has promised to use his new term
to beef up Russia’s defences against the West and to raise living standards.
In a widely-expected result, an exit poll by pollster VTsIOM showed
Putin, who has already dominated the political landscape for the last 18 years,
had won 73.9 percent of the vote. Backed by state TV, the ruling party, and
credited with an approval rating around 80 percent, his victory was never in
doubt.
None of the seven candidates who ran against him posed a threat, and
opposition leader Alexei Navalny was barred from running. Critics alleged that
officials had compelled people to come to the polls to ensure that voter
boredom at the one-sided contest did not lead to a low turnout.
Russia’s Central Election Commission recognised that there were some
irregularities, but were likely to dismiss wider criticism and declare the
overall result legitimate.
Putin loyalists said the result was a vindication of his tough stance
towards the West.
More
Dozens of U.S. Business Groups Warn Trump Against China Tariffs
By Mark Niquette
The U.S. Chamber of Commerce and 44 other associations are urging
President Donald Trump not to impose sweeping tariffs in response to China’s
trade practices, warning the action would “trigger a chain reaction of negative
consequences for the U.S. economy.”
The business groups wrote a letter to Trump on Sunday acknowledging
“serious concerns” regarding what they described as China’s theft of trade
secrets and other practices and policies, but they urged a measured response
that avoided tariffs. The groups represent companies such as Apple Inc.,
Google, and Walmart Inc.
“The Administration should not respond to unfair Chinese practices and
policies by imposing tariffs or other measures that will harm U.S. companies,
workers, farmers, ranchers, consumers, and investors,” the groups said in the
letter.
Trump has announced he would impose tariffs of 25 percent on steel and 10 percent on aluminum, with some exclusions and exceptions, to curb cheap imports from China and other countries. The administration is also considering clamping down on Chinese investments in the U.S. and imposing tariffs on a broad range of its imports to punish Beijing for alleged theft of intellectual property, according to people familiar with the matter.
Higher Prices
Sweeping tariffs would provoke retaliation, stifling U.S. exports and raising costs for U.S. businesses and consumers, the groups said in their letter to Trump. They highlighted the potential impact, including higher prices for electronics, apparel and other products, and harming U.S. companies that sell component pieces of final products exported from China.U.S. manufacturers would face more expensive product components and disrupted supply chains, affecting jobs, the letter said. Manufactured products comprised more than 85 percent of exported goods from the U.S. in 2017, totaling $1.3 trillion, the trade associations said.
Tariffs that result in reduced consumption of products would also depress financial markets, the groups said. They urged the administration to work with them to find effective, alternative responses to Chinese trade practices.
More
Germany Steps Up Push to Foil Tariffs With Talks in Washington
By Birgit Jennen and Rainer Buergin
Updated on 19 March 2018, 05:40 GMT
German Chancellor Angela Merkel is intensifying efforts to thwart a trade
war with the U.S., sending a close ally to Washington for critical talks aimed
at defusing a tit-for-tat on tariffs that could undermine the European
country’s export-driven economy.Peter Altmaier, Germany’s economy minister and a long-time confidante of Merkel, headed to Washington Sunday for discussions this week with Commerce Secretary Wilbur Ross and “anyone in Washington who is willing to talk,” he said in an interview with public broadcaster ARD.
“What’s dangerous about the current situation is that it threatens a spiral of one-sided measures that contradict the idea of free trade,” Altmaier said. “That would counter what we’ve done for the past 60 years and that’s why we need to talk.”
The trip marks the first high-level talks between the U.S. and Germany
since President Donald Trump announced plans to levy tariffs on steel and
aluminum earlier this month, sparking threats of retaliation by the EU.
Germany’s export strength has been a frequent target of Trump’s ire over U.S.
trade imbalances.
Altmaier’s trip is a sign that Merkel’s response is gathering momentum
after drawn-out efforts to build a governing coalition ended last week with her
inauguration to a historic fourth term. While Altmaier is U.S.-bound,
German Finance Minister Olaf Scholz is meeting his American counterpart Steven
Mnuchin at a gathering of Group of 20 finance chiefs in Buenos Aires to lobby
for free trade.
More
The whole history
of civilization is strewn with creeds and institutions which were invaluable at
first, and deadly afterwards.
Walter Bagehot.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Below, London banksterism 21st century style. No wonder all the
world’s crooked banksters flock to London.
From a $126 Million Bonus to Jail: The Fall of a Star Trader
By Suzi Ring, Gavin Finch, and Franz WildThe 46-year-old former star banker pleaded guilty in a London court on March 2 to conspiring to rig the interest-rate benchmark known as Euribor. He’s in custody and will be sentenced after a related trial ends this summer. A court lifted reporting restrictions on his plea Thursday.
It’s a seminal moment for U.K. prosecutors in their six-year investigation. Bittar, famous for receiving multi-million dollar bonuses, is one of the highest-profile traders to be convicted in the global rate-rigging probe.
“It wouldn’t be right to comment on this at the moment," David Savell, Bittar’s lawyer at Locke Lord LLP in London, said by telephone Thursday.
When the scandal first engulfed the business world after the global financial crisis a decade ago, the initial focus was on banks, which paid about $9 billion in fines for manipulating the London interbank offered rate and its euro counterpart. Then prosecutors started homing in on the traders behind the behavior, including big shots such as Bittar and former UBS Group AG trader Tom Hayes, who was the first person convicted in the U.K. probe.
Deutsche Bank, for one, was fined $2.5 billion by global regulators in 2015 for failing to prevent attempts to rig benchmark rates and Bittar featured prominently in the penalty notices. Identified only as "Manager B" in the U.K. Financial Conduct Authority’s settlement notice and “Trader Three” by the U.S. Department of Justice, he was accused of colluding on Euribor submissions.
But Bittar was already famous in London’s financial district long before his role in the rate-rigging scandals became widely known.
His
legend loomed large after he made a fortune for Deutsche Bank during the
upheaval of 2008, by betting on short-term interest rates. One trading strategy
involved wagering the cost of borrowing in euros for three and six months would
rise more quickly than one-month rates. That paid off after Lehman Brothers Holdings Inc.
collapsed that September and banks refused to lend to each other for all but
the shortest periods. That year alone Bittar earned a 90 million-pound bonus.
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?
Plasmons triggered in nanotube quantum wells
Scientists create platform for unique near-infrared devices
Date:
March 16, 2018
Source:
Rice University
Summary:
A novel quantum effect observed in a carbon nanotube film could lead to the
development of near-infrared lasers and other optoelectronic devices, according
to scientists.
A novel quantum effect observed in a carbon nanotube film could lead to
the development of unique lasers and other optoelectronic devices, according to
scientists at Rice University and Tokyo Metropolitan University.
The Rice-Tokyo team reported an advance in the ability to manipulate
light at the quantum scale by using single-walled carbon nanotubes as plasmonic
quantum confinement fields.
The phenomenon found in the Rice lab of physicist Junichiro Kono could
be key to developing optoelectronic devices like nanoscale, near-infrared
lasers that emit continuous beams at wavelengths too short to be produced by
current technology.
The new research is detailed in Nature Communications.
The project came together in the wake of the Kono group's discovery of a
way to achieve very tight alignment of carbon nanotubes in wafer-sized films.
These films allowed for experiments that were far too difficult to carry out on
single or tangled aggregates of nanotubes and caught the attention of Tokyo
Metropolitan physicist Kazuhiro Yanagi, who studies condensed matter physics in
nano materials.
"He brought the gating technique (which controls the density of
electrons in the nanotube film), and we provided the alignment technique,"
Kono said. "For the first time we were able to make a large-area film of
aligned nanotubes with a gate that allows us to inject and take out a large
density of free electrons."
----Their combined technologies let them pump electrons into nanotubes that are little more than a nanometer wide and then excite them with polarized light. The width of the nanotubes trapped the electrons in quantum wells, in which the energy of atoms and subatomic particles is "confined" to certain states, or subbands.
Light then prompted them to oscillate very quickly between the walls.
With enough electrons, Kono said, they began to act as plasmons.
"Plasmons are collective charge oscillations in a confined
structure," he said. "If you have a plate, a film, a ribbon, a
particle or a sphere and you perturb the system (usually with a light beam),
these free carriers move collectively with a characteristic frequency."
The effect is determined by the number of electrons and the size and shape of
the object.
Because the nanotubes in the Rice experiments were so thin, the energy
between the quantized subbands was comparable to the plasmon energy, Kono said.
"This is the quantum regime for plasmons, where the intersubband
transition is called the intersubband plasmon. People have studied this in
artificial semiconductor quantum wells in the very far-infrared wavelength range,
but this is the first time it has been observed in a naturally occurring
low-dimensional material and at such a short wavelength."
----The
researchers believe the phenomenon could lead to advanced devices for
communications, spectroscopy and imaging, as well as highly tunable
near-infrared quantum cascade lasers.
More
The monthly Coppock Indicators finished February
DJIA: 25,029 +283 Up 01. NASDAQ: 7,273 +313 Up 03. SP500: 2,714 +212 Flat.
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