Baltic Dry Index. 1375 -01 Brent Crude 74.53
J. K. Galbraith.
The big story of
today and tomorrow, is the inter-Korean summit meeting taking place today between
the two Koreas leaders, in the DMZ between the vastly different Koreas. While
it’s hard to be optimistic over the outcome, North Korea seems to want to end
the current stalemate.
The other “informal”
summit taking place today and tomorrow in Wuhan China, is between the leaders
of China and India, the two most populous countries on the planet. While once
again it’s hard to be too optimistic about the outcome, both countries have
much the same domestic agenda, and much to gain from increased trade and environmental
cooperation. De-escalating border tensions ought to be easy, if there’s a will
on both sides.
If there’s a will on
both sides, in both summits, it could be a game changer for the coming Asian
century. Will April 27-28, 2018 go down in history as two of the 21st
century’s pivotal dates?
April 27, 2018 / 1:58 AM /
Updated 2 hours ago
Asian shares edge higher after U.S. tech shares bounce
SINGAPORE (Reuters) - Asian shares edged higher on Friday, after U.S. equities were buoyed by solid quarterly earnings and a rebound in technology stocks, while the euro languished near three-month lows after the European Central Bank kept interest rates unchanged.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4
percent, while Japan’s Nikkei gained 0.4 percent.
South Korea’s KOSPI briefly rose more than 1 percent and set a one-month
high, helped partly by hopes that a summit meeting between the leaders of North
and South Korea would end their decades-long conflict and ease tensions over
North Korea’s nuclear weapons program.
After paring some of their gains, South Korean equities were up 0.7
percent, while the South Korean won rose 0.3 percent against the dollar in
onshore trade.
“The easing of tension and the possibility of a peace treaty coming on
the horizon are bullish for the won and KOSPI,” said Mingze Wu, FX trader of
global payments for INTL FCStone Ltd in Singapore.
“However, it should be noted that prices did not have lasting weakness
in the past during the periods of escalation, hence it’ll be difficult to
imagine a new bullish trend emerging just from this,” Wu said.
The firmer tone of Asian equities came after each of Wall Street’s major
indexes rose 1 percent or higher on Thursday, while Amazon.com Inc shares
jumped more than 6 percent in after-market trading after the online retailer
reported a 43 percent surge in first-quarter revenue.
More
Live Now: Two Koreas Hold Historic Summit
North Korea’s economy is small, poor and backward, so it could see
enormous benefits if peace on the Korean peninsula were to materialize, write
Bloomberg Economics’ Justin Jimenez and Tom Orlik.
What the North has to offer: abundant natural resources and a relatively
young population - assuming it opens up to the global economy.
More
China, India leaders to hold summit after border row
Published 5 hours ago
BEIJING (AFP) - Chinese President Xi Jinping and Indian Prime Minister
Narendra Modi will seek to repair
strained ties at a summit on Friday (April 27) after an intense border
dispute marred relations last year.Xi will host Modi for what has been described as an "informal summit" in the central Chinese city of Wuhan on Friday and Saturday.
While last year's high-altitude standoff in the Himalayas has been resolved, the world's most populous countries have a long history of mistrust.
New Delhi has also raised concerns about Beijing's signature Belt and Road initiative, a global trade infrastructure programme that includes a major project through Pakistan-administered Kashmir, disputed territory that New Delhi claims is illegally occupied.
The summit "is New Delhi's well intentioned attempt to reach out to Beijing to see if the past can be put behind and if the relationship can be reset," Harsh Pant, international relations professor at King's College London, told AFP.
Xi and Modi have "a good working relationship and personal friendship," Chinese foreign ministry
spokesman Lu Kang said on Tuesday.
"The two sides agreed that an informal meeting would be a good idea so that the two leaders would make full and in-depth exchanges on major issues of common concern in a suitable atmosphere," Lu said.
Both nations say they are committed to solving long-standing border
disagreements through dialogue, but progress has been glacial.
India and China went to war in 1962 over Arunachal Pradesh, with Chinese
troops temporarily capturing part of the Himalayan territory.
The dispute remains unresolved, with India considering Arunachal Pradesh
one of its northeastern states while China stakes claim to about 90,000 square
kilometres of the area.
In February, Beijing lodged an angry protest with New Delhi over a trip
by Modi to the state.
Last year, Indian and Chinese troops faced off on the Doklam plateau, an
area high in the Himalayas claimed both by China and by India's ally Bhutan.
The dispute began in June when Chinese troops started building a road on
the plateau and India deployed troops to stop the project.
A crisis was averted in August when the two nuclear-armed nations pulled
back their troops.
"We have to step out of the shadows of the 1962 war," said
Wang Dehua, a South and Central Asia expert at the Shanghai Academy of Social
Sciences.
"The meeting will focus on avoiding the unhappy events we saw in
Doklam last year," Wang said.
Modi is expected to return to China in June for the summit of the
Shanghai Cooperation Organisation, a security bloc led by Beijing and Moscow.
More
In other news, America First seems to be triggering
all against all.
April 26, 2018 / 12:53 PM
China, Russia and Saudi Arabia give EU trade reforms thumbs down at WTO
GENEVA (Reuters) - The European Union’s new rules against
countries dumping cheap goods on its market got a rough ride at a World Trade
Organization meeting, where China, Russia and Saudi Arabia led a chorus of
disapproval, a trade official said on Thursday.
The EU, which is in a major dispute with China about the fairness of
Chinese pricing, introduced rules last December that allow it to take into
account “significant distortions” in prices caused by government intervention.
A Chinese trade official told the WTO’s anti-dumping committee that
Beijing had deep concerns about the new methodology, saying it would damage the
WTO’s anti-dumping system and increase uncertainty for exporters, an official
who attended the meeting said.
China argued that the concept of “significant distortion” did not exist
under WTO rules, and the EU should base its dumping investigations on domestic
prices in countries of origin, such as China.
The EU reformed its rules in the hope they would allow it to keep
shielding its markets from cheap Chinese imports while fending off a Chinese
legal challenge at the WTO.
China says that when it joined the WTO in 2001, the other member
countries agreed that after 15 years they would treat it as a market economy,
taking its prices at face value.
But the United States and the EU have refused, saying China still
subsidises some industries, such as steel and aluminium, which have massive
overcapacity and spew vast supplies onto the world market, making it impossible
for others to compete.
China is suing both the United States and the EU at the WTO to try to
force them to change their rules.
Legal experts say the dispute is one of the most important in the
23-year history of the WTO, because it pits the major trading blocs against
each other with fundamentally opposing views of how the global trade rules
should work.
In the WTO committee meeting, Saudi Arabia said the new rules were very
concerning, and it challenged the EU to explain how EU authorities could ensure
a fair and objective assessment of “significant distortion”.
Russia said the EU rules violated the WTO rulebook and certain aspects
were unclear and created great uncertainty for exporters. Bahrain, Argentina,
Kazakhstan and Oman also expressed concerns.
More
"We
can also do stupid."
Jean-Claude Juncker. Failed Luxembourg Prime Minister and
ex-president of the Euro Group of Finance Ministers. Confessed liar. European Commission
President. Scotch connoisseur.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
If Bloomberg thinks this is 2007, does a 2008 come next? The next Lehman
is out there and getting closer one day at a time.
“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, a former A.I.G. executive, August 2007, on Credit
Default Swaps that
wiped out A.I.G in 2008.
Markets Today Have Much in Common With 2007
In their benign,
pre-crisis economic assessment, policy makers failed to appreciate the
fragility imposed by asset prices.
by Dean Curnutt 26 April 2018, 10:00 GMT+1
At
first glance, the burst of volatility in 2018 is difficult to square with
propitious micro and macro fundamentals. The backdrop is one of steady
economic growth, strong corporate earnings and low rates of unemployment,
inflation and default. None of these is a departure from 2017, a year when the
S&P 500 Index experienced the lowest level of realized volatility in more
than 50 years. Why, then, were the daily swings in the index during the
first quarter more than three times what they were during the fourth quarter?
Ten years after the financial crisis, there are important insights to be gained by studying the behavior of asset prices before 2008. It was in 2007 that cracks in the edifice of risk taking began to emerge, even as the backdrop of economic and corporate fundamentals remained optically healthy. In April 2007, U.S. Treasury Secretary Hank Paulson said, “All the signs I look at show the housing market is at or near the bottom. The U.S. economy is very healthy and robust." In June of 2007, Federal Reserve Chairman Ben S. Bernanke said, “Overall, the U.S. economy seems likely to expand at a moderate pace over the second half of 2007, with growth then strengthening a bit in 2008.”
In their benign, pre-crisis economic assessment, policy makers failed to appreciate the fragility imposed by asset prices. In the years preceding 2007, a bull-market in real estate not only made homeowners richer and more likely to consume but also generated tremendous wealth through the industry of shadow finance tied to mortgage credit.
While every risk cycle is unique, an appreciation for the warning signs flashed by financial markets in 2007 even as traditional economic variables provided no such reason for caution should be a critical input for investors in 2018. In mid-2007, both the Bear Stearns High Grade Structured Credit Fund and the Sowood Alpha Fund failed spectacularly. The firms cited a break-down in market liquidity as complicit in their demise. These unwinds were an early look at how exposed some large investors were to faulty assumptions about correlation, liquidity and mark-to-market risk in credit and mortgages. After many years of exceptional calm, investors simply misjudged risk because they failed to account for the role of asset prices as a destabilizing factor.
What is the lesson for today’s investors to heed? While the recent spike in equity market volatility owes in part to trade war concerns, the amplified swings may also be endogenous to the market, generated by the testing of long held assumptions that investors have used to underwrite risk in the post-crisis era. Chief among these assumptions is the belief, reinforced by the data, in the "risk on/risk off" regime.
Ten years after the financial crisis, there are important insights to be gained by studying the behavior of asset prices before 2008. It was in 2007 that cracks in the edifice of risk taking began to emerge, even as the backdrop of economic and corporate fundamentals remained optically healthy. In April 2007, U.S. Treasury Secretary Hank Paulson said, “All the signs I look at show the housing market is at or near the bottom. The U.S. economy is very healthy and robust." In June of 2007, Federal Reserve Chairman Ben S. Bernanke said, “Overall, the U.S. economy seems likely to expand at a moderate pace over the second half of 2007, with growth then strengthening a bit in 2008.”
In their benign, pre-crisis economic assessment, policy makers failed to appreciate the fragility imposed by asset prices. In the years preceding 2007, a bull-market in real estate not only made homeowners richer and more likely to consume but also generated tremendous wealth through the industry of shadow finance tied to mortgage credit.
While every risk cycle is unique, an appreciation for the warning signs flashed by financial markets in 2007 even as traditional economic variables provided no such reason for caution should be a critical input for investors in 2018. In mid-2007, both the Bear Stearns High Grade Structured Credit Fund and the Sowood Alpha Fund failed spectacularly. The firms cited a break-down in market liquidity as complicit in their demise. These unwinds were an early look at how exposed some large investors were to faulty assumptions about correlation, liquidity and mark-to-market risk in credit and mortgages. After many years of exceptional calm, investors simply misjudged risk because they failed to account for the role of asset prices as a destabilizing factor.
What is the lesson for today’s investors to heed? While the recent spike in equity market volatility owes in part to trade war concerns, the amplified swings may also be endogenous to the market, generated by the testing of long held assumptions that investors have used to underwrite risk in the post-crisis era. Chief among these assumptions is the belief, reinforced by the data, in the "risk on/risk off" regime.
More
"We finished the
year, and we reported that we had $17 billion of cash sitting at the bank's
parent company as a liquidity cushion. As the year has gone on, that liquidity
cushion has been virtually unchanged."
Alan Schwartz, CEO Bear Stearns,
March 12, 2008. Bust March 16, 2008.
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?
Quantum radar to render stealth technologies ineffective
April
26 2018
Stealth
technology may not be very stealthy in the future thanks to a US$2.7-million
project by the Canadian Department of National Defence to develop a new quantum
radar
system. The project, led by Jonathan Baugh at the University of Waterloo's
Institute for Quantum Computing (IQC), uses the phenomenon of quantum
entanglement to eliminate heavy background noise, thereby defeating stealth
anti-radar technologies to detect incoming aircraft and missiles with much
greater accuracy.
Ever since the development of modern camouflage during the First World War, the military forces of major powers have been in a continual arms race between more advanced sensors and more effective stealth technologies. Using composite materials, novel geometries that limit microwave reflections, and special radar-absorbing paints, modern stealth aircraft have been able to reduce their radar profiles to that of a small bird – if they can be seen at all.
This stealthiness is compounded by modern radar jamming and deception technologies and by natural phenomena. In fact, one reason the Canadian Department of National Defence is pursuing the quantum radar project is that, in addition to Canada being at the frontier of any incoming strategic attacks directed against the West, it's also in a region that is extremely hostile to conventional radar.
"In the Arctic, space weather such as geomagnetic storms and solar
flares interfere with radar operation and make the effective identification of
objects more challenging," says Baugh. "By moving from traditional
radar to quantum radar, we hope to not only cut through this noise, but also to
identify objects that have been specifically designed to avoid detection."
Conventional radar suffers from a universal problem of all radio
communications and detection, which is the signal to noise ratio. That is, if
there is too much random noise mixed in with the signal you're trying to
detect, it doesn't' matter how much you turn up the volume. That only turns up
the noise as well.
Quantum radar, on the other hand, gets around this using something
called quantum illumination to filter out the noise by making the outgoing
photons that make up the radar signal identifiable. It does this by means of the
principle of quantum entanglement. This is when two photons are generated or
made to interact in such a way that their properties are linked together. When
this happens, if you can determine the position, momentum, spin, or
polarization of one photon, you can ascertain the complementary position,
momentum, spin, or polarization of its partner.
The
upshot of this is that by shooting one photon out of the radar dish and
retaining its pair, it's possible to filter out unpaired photons from the
returning beam. This way, background noise and electronic jamming is eliminated
and the radar image becomes clear enough to detect even the most advanced
stealth craft.
More
Another weekend,
another trade war blunder? Another Syria
blunder? Another Trump tweet/bimbo blunder?
Another wasted Brexit weekend? Another weekend closer to the Trump USA
reneging on it’s Iran deal. But if Uncle Sam’s deals aren’t worth the paper
they’re written on, who’s going to bother making deals with Uncle Sam? Have a great
weekend everyone.
I told Rex Tillerson, our wonderful Secretary of State,
that he is wasting his time trying to negotiate with Little Rocket Man...
The monthly Coppock Indicators finished March.
DJIA: 24,103 +272 Down
10. NASDAQ: 7,063 +300 Down 13. SP500: 2,641 +202 Down 10.
All
three slow indicators moved down in March. For some a new bear signal, for
others a take profits and get back to cash signal.
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