Tuesday, 17 April 2018

Waiting For The Next Shoe.


Baltic Dry Index. 1025 +11     Brent Crude 71.70

The whole history of civilization is strewn with creeds and institutions which were invaluable at first, and deadly afterwards.

Walter Bagehot.

We open today with mixed markets, even as China yet again beat its scripted economic numbers.  Stock pickers sense that all is still not well, and that after Saturdays missile attack on Syria, it’s not geopolitics as usual 2000 – 2017.

Below, a tetchy world gets tetchier. Facebook gets an in your face lawsuit.

“The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”

“Adam Smith” aka George Goodman.

Asian Stocks Mixed After China Data; Dollar Steady: Markets Wrap

By Adam Haigh
Updated on 17 April 2018, 05:02 GMT+1
Stocks in Asia fluctuated as investors parsed a mixed set of economic numbers out of China and sought fresh leads after weeks of volatility sparked by trade frictions and geopolitical conflict. The dollar traded at the lowest in two months against most peers.

Equity benchmarks fell in Japan and rose in Australia, while they swung from gains to losses in Hong Kong and China as S&P 500 Index futures climbed. The dollar weakened as U.S. President Donald Trump accused Russia and China of devaluing their currencies, contradicting an assessment from the Treasury Department. Treasury yields ticked higher and West Texas crude futures traded below $67 a barrel.

While geopolitical concerns linger, investor focus this week is back on corporate earnings and a slew of Federal Reserve officials who are due to speak, including the incoming head of the New York Fed, John Williams. Meanwhile, China’s economy expanded in line with estimates in the first quarter, retail sales came in stronger than expected in March, while industrial production missed estimates.

----Here’s what to watch out for this week:
  • Goldman Sachs Group Inc. and Morgan Stanley among companies reporting results
  • John Williams, soon to be president of the New York Fed, speaks on economic outlook in Madrid on Tuesday.
  • Trump welcomes Japan Prime Minister Shinzo Abe to Mar-a-Lago on Tuesday. North Korea and trade will probably be discussed.
  • Mining investors will get to take the pulse of the global industry this week, with Rio Tinto and BHP Billiton offering quarterly production reports.
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China's economy bucks forecasts with 6.8% growth

Published: Apr 16, 2018 11:16 p.m. ET
BEIJING--China's economy expanded at a faster-than-expected 6.8% in the first quarter, buoyed by robust sales at home and abroad and ramped-up industrial production.

The pace of growth matched the previous quarter's rate. It bucked some investors' and analysts' expectations that a slowdown would take hold amid a government debt cleanup that has begun to crimp investment in property, infrastructure and factories. Retail sales held up particularly well, up 9.8% for the quarter compared with the same period the previous year.

Unexpectedly strong exports, along with the resilient retail sales and factory output, helped lift growth. The steady performance suggests that simmering trade tensions between Washington and Beijing has so far had little impact on China, the world's second-largest economy.

"China's economy is off to a good start," Xing Zhihong, a spokesman at the National Bureau of Statistics, said at a press briefing Tuesday morning.

But there are signs that shipments overseas, home sales and industrial output--all cornerstones of China's economy-- are starting to weaken. Chinese factories are starting to produce fewer goods for foreign markets.

Economists say that slowdown is spurred by the anticipation of higher barriers to enter the U.S. market, and a softening of global demand after a year during which the world's major economies grew in rare harmony. Such synchronized expansions are "coming to an end," according to a new report by the Washington-based Institute of International Finance.
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April 17, 2018 / 1:12 AM

Faltering euro zone economy to suffer from U.S.-China trade dispute - Reuters poll

BENGALURU (Reuters) - Euro zone economic growth, already moderating in part from a stronger currency, will take a further hit from the ongoing trade dispute between the United States and China, according to a majority of economists polled by Reuters.

Still, that will not deter the European Central Bank from ending its asset purchases programme this year and hiking interest rates in 2019, even though inflation is expected to remain well below the central bank’s target until at least 2021.

While the consensus for growth in the latest Reuters poll of over 100 economists taken April 6-16 was little changed from a poll last month, private business surveys suggest euro zone growth momentum has peaked.

The range of forecasts in the latest poll showed lower highs and lower lows for growth in the region compared with last month.

“The start to 2018 has been disappointing for the euro zone economy, especially after such a strong 2017. While the outlook remains favourable, it does look like peak euro zone growth has already been reached and that 2018 will show some moderation,” said Bert Colijn, senior euro zone economist at ING.

Businesses across the euro zone have been hurt by a rising euro, ending the first quarter with their weakest expansion since the start of 2017.

---- In the latest poll, over 85 percent of 55 economists who answered an extra question said the trade spat between the U.S. and China will damage the euro zone economy, including one respondent who expects the impact to be significant.
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While President Trump fights his trade war with China and his missile war with Syria, Russia and Iran, a new currency war has broken out, at least according to President Trump. China reacts badly to Trump’s Syrian missile attack.

Trump Blasts China, Russia for FX Devaluation as Fed Hikes

By Brendan Murray, Simon Kennedy, and Katherine Greifeld
16 April 2018, 14:02 GMT+1 Updated on 16 April 2018, 15:21 GMT+1
President Donald Trump accused China and Russia of devaluing their currencies, opening a new front in his argument that foreign governments are taking advantage of the U.S. economy to support their own expansions.

Just three days after the U.S. Treasury ruled no country is manipulating its exchange rate, Trump took to Twitter to declare that China and Russia are playing what he called a “currency devaluation game” at a time when the U.S. Federal Reserve is raising interest rates.

“Not acceptable!,’’ Trump wrote.

The attack adds fuel to the brewing trade dispute between the U.S. and China, while also targeting Russia, which the White House recently imposed sanctions on and clashed with over Syria. The Bloomberg Dollar Index slipped to its lowest level since March 27 following Trump’s tweet, while Treasuries fluctuated.

“It’s another implicit signal of the administration’s desire for a weaker U.S. dollar -- especially against major trading partners,” said Viraj Patel, a London-based currency strategist at ING Groep NV. “These weak dollar expectations will remain entrenched in currency markets, especially if the administration continues its mercantilist policy focus.”

Trump has repeatedly blasted Beijing for failing to reduce its trade surplus and open its markets to American investment. China’s yuan, though, has gained about 10 percent against the dollar over the past 12 months, climbing in March to the strongest level since August 2015.

The ruble has weakened almost 10 percent against the dollar in the past year, with much of the decline following the U.S.’s introduction of sanctions on dozens of Russian tycoons, companies and key allies of President Vladimir Putin.

Trump’s suggestion that a currency war is on the horizon comes as central bankers and finance ministers from around the world prepare to gather in Washington for the Spring meetings of the International Monetary Fund this week.

The U.S. Treasury Department’s semi-annual foreign currency report on Friday ratcheted up criticism of China’s failure to correct its trade imbalance with America and said the increasingly “non-market direction” of China’s economy presented a risk to global growth. Russia, however, isn’t among the 12-largest trading partners and Switzerland that are assessed in the report. The Treasury said on Friday it was considering expanding the number of economies tracked in the study.
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US, allies risk Russian retaliation in Syrian attack

Source:Global Times Published: 2018/4/14 12:59:53
US President Donald Trump announced on Friday he ordered strikes on the Syrian regime in response to a chemical attack last weekend. He said the strikes were in coordination with France and the United Kingdom. Syrian President Bashar al-Assad said his country is being "invaded" by the three countries. The Russian Embassy in the USA said in a statement that "insulting the President of Russia is unacceptable and inadmissible."

In a sensational statement, Trump asserted the Bashar Assad government used chemical weapons on civilians. He said "The evil and the despicable attack left mothers and fathers, infants and children thrashing in pain and gasping for air. These are not the actions of a man. They are crimes of a monster instead."Trump also warned "Russia must decide if it will continue down this dark path or if it will join with civilized nations as a force for stability and peace."

The facts cannot be distorted. This military strike was not authorized by the UN, and the strikes targeted a legal government of a UN member state. The US and its European allies launched strikes to punish President Bashar al-Assad for a suspected chemical attack in Duma last weekend. However, it has not been confirmed if the chemical weapons attack happened or if it did, whether government forces or opposition forces launched it. International organizations have not carried out any authoritative investigation.

The Syrian government has repeatedly stressed that there is no need for it to use chemical weapons to capture the opposition-controlled Duma city and the use of chemical weapons has provided an excuse for Western intervention. The Syrian government's argument or Trump's accusations against the "evil" Assad regime, which one is in line with basic logic? The answer is quite obvious.

The US has a record of launching wars on deceptive grounds. The Bush government asserted the Saddam regime held chemical weapons before the US-British coalition troops invaded Iraq in 2003. However, the coalition forces didn't find what they called weapons of mass destruction after overthrowing the Saddam regime. Both Washington and London admitted later that their intelligence was false.

Washington's attack on Syria where Russian troops are stationed constitute serious contempt for Russia's military capabilities and political dignity. Trump, like scolding a pupil, called on Moscow, one of the world's leading nuclear powers, to abandon its "dark path." Disturbingly, Washington seems to have become addicted to mocking Russia in this way. Russia is capable of launching a destructive retaliatory attack on the West. Russia's weak economy is plagued by Western sanctions and squeezing of its strategic space. That the West provokes Russia in such a manner is irresponsible for world peace.

The situation is still fomenting. The Trump administration said it will sustain the strikes. But how long will the military action continue and whether Russia will fight back as it claimed previously remain uncertain. Western countries continue bullying Russia but are seemingly not afraid of its possible counterattack. Their arrogance breeds risk and danger.
“If we went back on the gold standard and we adhered to the actual structure of the gold standard as it existed prior to 1913, we’d be fine. Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the United States, and that was a golden period of the gold standard. I’m known as a gold bug and everyone laughs at me, but why do central banks own gold now?” 

Alan Greenspan. June 28, 2016.

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

Today, Facebook again. Is there any kind of data they won’t steal?

Apr 16, 2018 @ 09:05 AM 23,282

These Ex-Spies Are Harvesting Facebook Photos For A Massive Facial Recognition Database

When Mark Zuckerberg appeared before the House Energy and Commerce Committee last week in the aftermath of the Cambridge Analytica revelations, he tried to describe the difference between "surveillance and what we do." "The difference is extremely clear," a nervous-looking Zuckerberg said. "On Facebook, you have control over your information... the information we collect you can choose to have us not collect."

But not a single member of the committee pushed the billionaire CEO about surveillance companies who exploit the data on Facebook for profit. Forbes has uncovered one case that might shock them: over the last five years a secretive surveillance company founded by a former Israeli intelligence officer has been quietly building a massive facial recognition database consisting of faces acquired from the giant social network, YouTube and countless other websites. Privacy activists are suitably alarmed.

That database forms the core of a facial recognition service called Face-Int, now owned by Israeli vendor Verint after it snapped up the product's creator, little-known surveillance company Terrogence, in 2017. Both Verint and Terrogence have long been vendors for the U.S. government, providing bleeding-edge spy tech to the NSA, the U.S. Navy and countless other intelligence and security agencies.

As described on the Terrogence website, the database consists of facial profiles of thousands of suspects "harvested from such online sources as YouTube, Facebook and open and closed forums all over the globe." Those faces were extracted from as many as 35,000 videos and photos of terrorist training camps, motivational clips and terror attacks. That same marketing page was online in 2013, according to internet archive the Wayback Machine, indicating the product is at least five years old. The age of the product also suggests far more than 35,000 videos and photos have been raided by the Face-Int technology by now, though Terrogence co-founder and research lead Shai Arbel declined to comment for this article.
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Facebook Photo-Scanning Suit Is a Multibillion-Dollar Threat

By Joel Rosenblatt
Updated on 17 April 2018, 03:06 GMT+1
Facebook Inc. may have to pay a real price for claims it invaded users’ privacy: billions of dollars.
A federal judge ruled Monday that millions of the social network’s users can proceed as a group with claims that its photo-scanning technology violated an Illinois law by gathering and storing biometric data without their consent. Damages could be steep -- a fact that wasn’t lost on the judge, who was unsympathetic to Facebook’s arguments for limiting its legal exposure.

The case dates back to 2015, long before Facebook became mired in controversy over revelations that millions of its users’ private information fell into the hands of British consulting firm Cambridge Analytica. It’s rare for consumers to win class-action status in privacy cases. In Facebook’s history, most such cases don’t get that far.

Facebook has for years encouraged users to tag people in photographs they upload in their personal posts and the social network stores the collected information. The company has used a program it calls DeepFace to match other photos of a person. Alphabet Inc.’s cloud-based Google Photos service uses similar technology and Google faces a lawsuit in Chicago like the one against Facebook in San Francisco federal court.

Illinois Law

Both companies have insisted in court that gathering data on what you look like isn’t against the law, even without your permission. But under the Illinois Biometric Information Privacy Act of 2008, the companies could be fined $1,000 to $5,000 each time a person’s image is used without consent.
Shawn Williams, a lawyer for the users, said it’s not clear yet whether the lawsuit might prompt changes in the way Facebook uses biometric data.
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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?

Dubai inks deal for £4bn China-funded solar plant

16 April 2018 | By GCR Staff

Dubai officials yesterday signed off the contract to build a 700MW concentrating solar power (CSP) plant that will have the tallest CSP tower in the world, at 260m.

Chinese banks are lending 80% of the $3.87bn needed to build the facility, which is the fourth phase of Dubai’s Mohamed bin Rashid Solar Park, billed as the largest thermo-solar power plant in the world.

Equipment supplier Shanghai Electric and Saudi energy developer ACWA Power will build the plant for Dubai Electricity and Water Authority (DEWA) as a public-private partnership, in which they’ll recoup their investment by selling electricity to DEWA.

It will generate power by using mirrors in parabolic troughs to focus sunlight onto the tower, where molten salt stores the extreme heat to drive a steam turbine.

According to the agreement signed yesterday in Shanghai, ACWA will sell the electricity to Dubai for what it called a “record low” 7.3 cents (US) per kilowatt hour.

Lacking its own big reserves of oil or gas – unlike its neighbouring emirate, Abu Dhabi – Dubai wants 75% of its energy to be renewable by 2050.

Each year, this fourth phase of the Mohammed Bin Rashid Solar Park will Dubai save 2.4 million tons of CO2 and half a million tons of natural gas, said ACWA, eliminating the need to use foreign currency to import gas.

Eighty percent of the cash for the phase is coming from a group of Chinese banks: the Silk Road Fund, Industrial and Commercial Bank of China (ICBC), Bank of China, Agricultural Bank of China and China Minsheng Bank.

ACWA called it flagship project for ICBC, and said it would help major Chinese power equipment suppliers such as Shanghai Electric to break into the the international power market.

"On the whole human beings want to be good, but not too good, and not quite all the time.”

George Orwell

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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