Thursday 19 April 2018

Distractions!


Baltic Dry Index. 1124 +72     Brent Crude 73.86

“We’re in the midst of a synchronized global recovery in growth and corporate profits are rising.” Trade wars, tariffs and inflation worries are just “distractions,”

Sandip Bhagat, chief investment officer at Whittier Trust Co.

It is a stock pedlar’s perfect dream world! Trade wars, tariffs and inflation are mere distractions, in Greater Fool Land. Never mind that inflation causes the price of money, interest rates, to rise, sucking money out of stocks towards bonds. Never mind that trade wars and tariffs generate winners and losers, but generally more losers than winners, and both generate lots of usually bad, unintended consequences.

Distractions, in our long in the tooth, central banks manipulated financial asset “recovery,” are very definitely not a positive, but a warning of bad times to come. You really couldn’t make this sort of Fake News up, unless perhaps you’re watching 
Bloomberg TV. Then again, why would anyone be foolish enough to watch Bloomberg TV?

Today, some distractions to sanity in modern money management that can be safely ignored.

Asia Stocks Push Higher, Dollar Pares Advance: Markets Wrap

By Adam Haigh
Updated on 19 April 2018, 04:29 GMT+1
With investor optimism on the economy being tested increasingly by the flattening yield curve, geopolitical tensions showed Asian stocks climbed to the highest in a month and measures of volatility continued to decline amid optimism that global growth can weather any impact from trade tensions. The dollar pared gains and oil extended its rise.

Shares from Sydney to Hong Kong rose. U.S. Treasury yields ticked lower after climbing to 2.87 percent Thursday in the wake of the Federal Reserve’s Beige Book report that showed a solid outlook for the economy despite trade concerns. Energy firms climbed in the U.S. and Asia after an industry report showed crude inventories fell. The yen slid amid the positive investor sentiment and as U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe agreed to work closely on bilateral trade.

“The biggest dynamic in the market right now is the growth story,” Sandip Bhagat, chief investment officer at Whittier Trust Co., told Bloomberg TV. “We’re in the midst of a synchronized global recovery in growth and corporate profits are rising.” Trade wars, tariffs and inflation worries are just “distractions,” he said.

----The U.S. said it’s already started direct talks with North Korea and Russian leader Vladimir Putin was said to be seeking to dial down tensions with America. Japan’s Abe said he agreed with Trump to start talks on trade deals with America as their summit in Florida ended.

Elsewhere, nickel surged to the highest in more than three years on the London Metal Exchange on worries that the metal used in stainless steel could be caught in the crossfire of any further sanctions against Russia. The Australian dollar fluctuated after employment in the country rose less than forecast in March, suggesting the central bank will need to keep interest rates on hold.
More

Odd Spike in Wall Street Fear Gauge Awakens Manipulation Debate

By Luke Kawa
The monthly settlement of the VIX has left investors feeling decidedly unsettled.

Pravit Chintawongvanich, head of derivatives strategy at Macro Risk Advisors, says the VIX, or Cboe Volatility Index -- a gauge of the implied volatility of the S&P 500 Index derived from out-of-the-money options -- was “gunned.” That is, it was intentionally pushed higher.

A massive bid for protection against a tumble in equities caused the prices of put options to soar in early trading on Wednesday, effectively forcing up the official settlement level of what’s known as Wall Street’s fear gauge. The trading had an outsized impact on which VIX options expired in the money or worthless this month.

READ: Billions in VIX-Rigging Profits? Bruised Index Takes New Hit (Feb. 14)

Cboe Global Markets Inc. declined to comment. Last month, Cboe CEO Ed Tilly said at a conference that “the integrity of our VIX products and markets is paramount. And, if our regulatory team were to uncover any manipulation, it would be rooted out, swiftly and decisively. Period.”

Cboe shares fell as much as 0.7 percent on Wednesday as the S&P 500 gained 0.3 percent.

The VIX typically moves inversely to the S&P 500 Index. But in the minutes before the open, both futures tied to the benchmark U.S. stock gauge and spot VIX were trading to the upside.

“Around 9:15, suddenly a bid emerged for the extremely far downside options, pushing the early indication [of the VIX] up 1 point," Chintawongvanich said. “By 9:30, the early indication was around 17.50, up over 2 points from the 9:00 a.m. level, despite S&P futures remaining unchanged."

Roughly $2.1 million was spent bidding up put options with strike prices that had 50 percent downside from current levels, the strategist calculates.
More 
https://www.bloomberg.com/news/articles/2018-04-18/odd-spike-in-wall-street-fear-gauge-awakens-manipulation-debate 

U.S. Debt Load Will Be Worse Than Italy's by 2023, IMF Predicts  

By Vincent Del Giudice and Alexandre Tanzi

18 April 2018, 14:40 GMT+1
Mamma Mia!

In five years, the U.S. government is forecast to have a bleaker debt profile than Italy, the perennial poor man of the Group of Seven industrial nations.

The U.S. debt-to-GDP ratio is projected widen to 116.9 percent by 2023 while Italy’s is seen narrowing to 116.6 percent, according to the latest data from the International Monetary Fund. The U.S. will also place ahead of both Mozambique and Burundi in terms of the weight of its fiscal burden.

Japan, which has the world’s highest debt-to-GDP-ratio, is expected to narrow for the sixth year in a row but remain in top spot in 2023 at 229.6 percent.

April 18, 2018 / 12:07 PM

BoE expects big switch from Libor to start in earnest

LONDON (Reuters) - Financial markets should start accelerating efforts to ditch Libor in favour of the Bank of England’s revamped interest rate benchmark being launched next week, a senior BoE official said.

Banks have been fined around $9 billion for trying to rig Libor, or London Interbank Offered Rate, prompting the BoE and other central banks to come up with their own “risk free” substitutes that are harder to manipulate.

Last year, banks and other market participants in London backed the daily Sonia or Sterling Overnight Index Average as a substitute for sterling-denominated Libor to price trillions of pounds in swaps and derivatives contracts.

Sonia was run by a trade body in the past but from Monday it will be calculated and published by the BoE and based on transactions that represent about 90 percent of the market.

Sonia is based on actual transactions rather than quotes made by banks, which were open to manipulation.

It will be draw on about 50 billion pounds ($70.91 billion)worth of daily funding transactions between lenders and customers, three times the amount of transactions that underpin Sonia at present.

“This has been a long time coming,” Sarah John, head of the BoE’s sterling markets division, told Reuters.

Market participants have been waiting for the BoE to make Sonia more robust before ditching Libor and shifting trillions of pounds in liquidity.
More

April 18, 2018 / 11:47 AM

Mexico leftist opens up 22-point lead in presidency race -poll

MEXICO CITY (Reuters) - Mexican leftist Andres Manuel Lopez Obrador has widened his lead in the race to win the July 1 presidential election, opening up a gap of 22 percentage points, a poll by newspaper Reforma showed on Wednesday.

The April 12-15 voter poll showed Lopez Obrador winning 48 percent, a jump of six points from a February survey by Reforma. His nearest rival, Ricardo Anaya, who heads a right-left coalition, dropped by six points to 26 percent.

Running third was Jose Antonio Meade, candidate of the ruling Institutional Revolutionary Party (PRI), whose backing remained steady at 18 percent, the poll showed.

The figures for the three stripped out the 19 percent of respondents who expressed no preference. The poll surveyed 1,200 voters and had a margin of error of 3.7 percentage points. 

---- Lopez Obrador, a 64-year-old former mayor of Mexico City, has capitalized on widespread disenchantment with the PRI over political corruption, rising levels of violence and sluggish economic growth to consolidate his lead in recent weeks.

He says Mexico should reduce its economic dependence on foreign powers, and has vowed to put U.S. President Donald Trump “in his place” if he wins.
More

Finally, with business so good, some other distractions that can safely be ignored.

Bon-Ton to close its remaining department stores, putting 24,000 out of work

Published: Apr 18, 2018 7:13 p.m. ET

Bankruptcy judge OKs liquidation plan to shut more than 250 stores

Cohen could turn if charged, adviser warned Trump

Published: Apr 18, 2018 9:19 p.m. ET

Jay Goldberg warned president not to trust Michael Cohen

Investors Are Getting Worried About an Inverted Yield Curve

By Brian Chappatta
Updated on 18 April 2018, 22:17 GMT+1
  • Treasuries spread from 5 to 30 years hits narrowest since 2007
  • Bullard says central bank should debate yield curve issue now

"Border relations between Canada and Mexico have never been better."

George W. Bush, in a press conference with Canadian Prime Minister Jean Chretien. Sept. 24, 2001

Crooks and Scoundrels Corner


The bent, the seriously bent, and the totally doubled over.
Today, Trump unleashes America’s sanctions bull, into the global commodities china shop. When the trade wars and sanctions are finally ended, I suspect a whole lot of global ill will is headed America’s way.

Metals Gripped by Turmoil as Rusal's Sanctions Fallout Spreads

By Mark Burton
18 April 2018, 14:02 GMT+1 Updated on 18 April 2018, 14:18 GMT+1
The U.S. sanctions against United Co. Rusal are setting off explosions across global metals markets.

Consumers, manufacturers and traders are scrambling to secure supply cut off by Rusal, the largest aluminum producer outside China. Aluminum reached a six-year high and nickel jumped the most since 2009. Alumina, a raw material needed to make aluminum, notched a fresh record.

"It really is unprecedented in terms of the turmoil it’s unleashed,” Robin Bhar, a metals analyst at Societe Generale SA, said by phone from London. “It’s amazing to watch.”

The U.S. sanctions are threatening to upend the global supply chain for aluminum, which is used in planes made by Boeing Co. and Ford Motor Co.’s F-150 pickup truck. Rusal produces about 6 percent of the world’s aluminum and operates mines, smelters and refineries across the world from Guinea to Ireland, Russia to Jamaica.

QuickTake: How U.S. Sanctions on Russian Aluminum Shook Markets

Aluminum

The metal climbed as much as 5.2 percent to $2,530 a metric ton, the highest since August 2011. Goldman Sachs Group Inc. said prices could spike to $3,000 in the near term.

Rio Tinto Group flagged it may need to cut production in the wake of sanctions. The company is working with customers to minimize disruption and remains in the process of declaring force majeure on some contracts, it said Wednesday.

Alumina is being particularly affected because Rusal is a key producer, with plants in places such as Ireland and Jamaica. Before the sanctions, supply was already constrained by output cuts at Norsk Hydro ASA’s Alunorte refinery in Brazil, the world’s biggest.

A 30,000-ton cargo of alumina, the crushed ore feedstock which smelters use to produce aluminum, fetched $800 a ton, according to CRU Group analyst Anthony Everiss. The previous record for CRU’s index of alumina prices was $610 a ton in 2006.

Nickel

Nickel surged as traders speculated that other Russian companies could be targeted by U.S. sanctions. Bullish sentiment was also boosted after production slumped 18 percent at Vale SA and BHP Billiton Ltd. forecast higher demand for electric vehicles.
Prices jumped as much as 11 percent to $15,730 a ton.
More

Trump’s Trade War Hits Another Red State

What’s the matter with Kansas? It’ll be hardest hit by new Chinese tariffs.
By Joshua Green 17 April 2018, 23:04 GMT+1
President Donald Trump’s trade war with China has already sparked promises of retaliatory tariffs on U.S. exports, including soybeans, that will hit such Trump-friendly Midwestern states as Iowa, Indiana, North Dakota, and Nebraska—if they take effect. In March, U.S. Trade Representative Robert Lighthizer said “there is hope” they can be forestalled.

Sorghum growers aren’t so lucky. On Tuesday, China’s Ministry of Commerce announced it would impose a 178.6 percent duty on sorghum imports from the U.S. that will take effect almost immediately. The news puts an additional Trump-friendly state (and Republican leader) squarely in the crosshairs: Kansas is the largest sorghum producer in the U.S., and its senior senator, Pat Roberts, chairs the Senate Agriculture Committee.

“It’s extremely frustrating and very disappointing,” says Jesse McCurry, executive director of the Kansas Grain Sorghum Commission. “Half of Kansas sorghum or more was going to China, and that probably stops, at least for now.”

The new Chinese measure is a response to the tariffs Trump slapped on solar panels and washing machines earlier this year. China began a probe of sorghum imports in early February, shortly after Trump’s announcement. “We knew this was hanging over our heads,” says Kurt Winter, a sorghum farmer in Sedgwick County, Kansas, just outside Wichita. “But when we heard the news this morning, it was still just devastating to us. It’s really going to put the hammer to our price prospects.”
More

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?

Spikes of graphene can kill bacteria on implants

A tiny layer of graphene flakes becomes a deadly weapon and kills bacteria, stopping infections during procedures such as implant surgery

Date: April 16, 2018

Source: Chalmers University of Technology

Summary: A tiny layer of graphene flakes becomes a deadly weapon and kills bacteria, stopping infections during procedures such as implant surgery.

A tiny layer of graphene flakes becomes a deadly weapon and kills bacteria, stopping infections during procedures such as implant surgery. This is the findings of new research from Chalmers University of Technology, Sweden, recently published in the scientific journal Advanced Materials Interfaces.

Operations for surgical implants, such as hip and knee replacements or dental implants, have increased in recent years. However, in such procedures, there is always a risk of bacterial infection. In the worst case scenario, this can cause the implant to not attach to the skeleton, meaning it must be removed.

Bacteria travel around in fluids, such as blood, looking for a surface to cling on to. Once in place, they start to grow and propagate, forming a protective layer, known as a biofilm.

A research team at Chalmers has now shown that a layer of vertical graphene flakes forms a protective surface that makes it impossible for bacteria to attach. Instead, bacteria are sliced apart by the sharp graphene flakes and killed. Coating implants with a layer of graphene flakes can therefore help protect the patient against infection, eliminate the need for antibiotic treatment, and reduce the risk of implant rejection. The osseointegration -- the process by which the bone structure grow to attach the implant -- is not disturbed. In fact, the graphene has been shown to benefit the bone cells.

Chalmers University is a leader in the area of graphene research, but the biological applications did not begin to materialise until a few years ago. The researchers saw conflicting results in earlier studies. Some showed that graphene damaged the bacteria, others that they were not affected.

"We discovered that the key parameter is to orient the graphene vertically. If it is horizontal, the bacteria are not harmed" says Ivan Mijakovic, Professor at the Department of Biology and Biological Engineering.

The sharp flakes do not damage human cells. The reason is simple: one bacterium is one micrometer -- one thousandth of a millimeter -- in diameter, while a human cell is 25 micrometers. So, what constitutes a deadly knife attack for a bacterium, is therefore only a tiny scratch for a human cell.

"Graphene has high potential for health applications. But more research is needed before we can claim it is entirely safe. Among other things, we know that graphene does not degrade easily" says Jie Sun, Associate Professor at the Department of Micro Technology and Nanoscience.

Good bacteria are also killed by the graphene. But that's not a problem, as the effect is localised and the balance of microflora in the body remains undisturbed.

"We want to prevent bacteria from creating an infection. Otherwise, you may need antibiotics, which could disrupt the balance of normal bacteria and also enhance the risk of antimicrobial resistance by pathogens" says Santosh Pandit, postdoc at Biology and Biological Engineering.
More
https://www.sciencedaily.com/releases/2018/04/180416085929.htm?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+sciencedaily%2Fmatter_energy%2Fgraphene+%28Graphene+News+--+ScienceDaily%29

Last month, a world-wide telephone survey was conducted by the UN.
The only question asked was:-

"Would you please give your honest opinion about possible solutions to the food shortage in the rest of the world?"

The survey was a complete failure because:

In Eastern Europe they didn't know what "honest" meant.
In Western Europe they didn't know what "shortage" meant.
In Africa they didn't know what "food" meant.
In China they didn't know what "opinion" meant.
In the Middle East they didn't know what "solution" meant.
In South America they didn't know what "please" meant.
In the USA they didn't know what "the rest of the world" meant.
And in Australia, New Zealand and Britain everyone hung up as soon as they heard the letters UN.

Anon.

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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