Baltic Dry Index. 1329 +20 Brent Crude 77.77
“If
money isn’t loosened up, this sucker could go down,”
President
G. W. Bush. 2008.
We have arrived at
the critical half year closing stock market numbers, and the traditional day to
dress up stock prices for those “critical” bonuses of the stock pedlars. This
year, barring a late St Peter and Paul Day miracle, very few stock pickers and
algo traders front running everyone else, are in line for any kind of bonus at
all.
Stock mania peaked
all the way back in January, following bitcoin’s peak back in December at
20,000. As of last night, bitcoin settled at 5,847.89, so if the market is
following bitcoin unicorns, stocks still have quite some downside to go.
Still unlike bitcoin,
most over priced stocks have some sort of real value, unlike bitcoin which has
no value at all. So while bitcoin can fall to zero, most stocks bottom out
above zero, unless they’re in the leveraged derivatives gambling business and
outside of the central bankster lifeboats, like Bear Sterns and Lehman Bros.
back in 2008, so there’s a pretty good
chance of a dress up, dead cat, stock bounce coming today.
June 29, 2018 / 2:01 AM
Asian shares rally on China rebound; trade worries linger
SHANGHAI
(Reuters) - Asian share markets rallied from nine-month lows on Friday, after
China eased foreign investment limits, but underlying sentiment was dampened by
worries over trade frictions a week before initial U.S. and Chinese tariffs
were set to take effect.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 1 percent
higher, while Australian shares were flat.
Japan’s Nikkei stock index was down 0.3 percent, and South Korea’s KOSPI
was down slightly.
After falling to fresh two-year lows on Thursday, shares in China
rebounded Friday. While analysts said the jump reflected technical factors, it
was helped by news that Beijing would ease foreign investment curbs on sectors
including banking, automobiles, heavy industry and agriculture.
The country’s central bank also said on Thursday that it would ensure
that market liquidity remained “reasonably ample.”
The blue-chip CSI300 index gained 1.5 percent, and the Shanghai
Composite index was 1.1 percent higher. Nevertheless, the CSI300 and Shanghai
Composite are the world’s two worst-performing major indexes this year, and are
set for their worst monthly performances since January 2016.
Hong Kong’s Hang Seng index rose 1.2 percent.
Despite the bump on Friday, analysts downplayed the impact of China’s
relaxing of investment curbs on broader trade issues.
“This may not be enough to ease current tensions, with the U.S. calling
for much greater market access and fairer competition for foreign enterprises.
The list affirms China’s stance that opening up will occur in its own
timeframe,” Everbright Sun Hung Kai analysts said in a note.
Elsewhere in the region, investors remained focused on concerns over
global trade, as the U.S. ambassador to China said Washington was not convinced
that China is willing to make fast progress on trade.
The U.S. administration is due to activate U.S. tariffs on Chinese goods
worth $34 billion on July 6, which is expected to prompt a tit-for-tat response
from Beijing.
“The trade war issue is coming up to a critical junction because of that
impending implementation of those tariffs,” said Shane Oliver, chief economist
and head of investment strategy at AMP Capital in Sydney.
More
The stock market is days away from setting a bearish record
Published: June 28, 2018 4:29 p.m. ET
The Dow and S&P 500 are 10 trading days away from their longest corrections since 1984
The U.S. stock market is a few days from hitting a notable milestone, but it isn’t one that investors will feel particularly good about.Both the Dow Jones Industrial Average DJIA, +0.41% and the S&P 500 SPX, +0.62% have been mired in correction territory for months, ever since Feb. 8, when concerns that inflation was returning to the economy sparked a selloff that led to their dropping 10% from record levels hit earlier in the year.
Amid months of rangebound trading, neither index has been able to fully recover and notch new records, which is what would be needed for them to exit correction territory (the Nasdaq Composite Index, which never officially corrected, hit a record earlier this month).
As of Thursday, both the Dow and the S&P have been in correction territory for 98 trading days. This stands as the longest such stretch since the financial crisis in 2008, when 108 days passed before the two exited corrections.
Should the two primary market gauges stay in correction for another 11 days — through July 16, given the Fourth of July holiday next week — and exceed the length of the 2008 correction, that will mean they are in their longest such stretch since 1984. In that stretch, it took the S&P 122 days to emerge from correction territory, and the Dow 123 days, according to the WSJ Market Data Group.
Corrections of this length are extremely unusual. According to the data,
of the past 20 corrections (including the ongoing one), only two lasted longer
than 100 trading sessions. The average length is about 46 trading sessions.
Based on their Thursday closing levels, the Dow would need to rise about
9% to hit a new record and exit correction territory, while the S&P 500
would need to gain 5.5%.
Opinion: The next bear market in stocks will spark a retirement crisis
Published: June 28, 2018 10:29 a.m.
ET
A recession could decimate even substantial retirement portfolios, and Social Security and Medicare are facing shortfalls
Almost lost amid the torrent of recent news was a sobering item that will surely have far-reaching consequences.The U.S. government announced that for the first time since 1982, it is tapping into Social Security trust funds to pay current benefits to recipients and it is dipping into Medicare’s reserves to cover the costs of that program.
The trustees also projected that the trust fund will run out of money by 2034 and that Medicare’s fund for paying costly hospital bills will be depleted by 2026.
That may ultimately force a cowardly Congress to cut benefits, raise taxes, increase the eligibility age, or some combination of the three. For the 52% of Americans who rely on Social Security for more than half their retirement income and the 25% of retirees who get more than 90% of their income from the program, that would be a disaster.
But
the 10,000 baby boomers who will turn 65 every single day from now until 2029
face an even broader retirement crisis that could cause big social and
political fallout.
Over the next few years, we will almost surely confront a bear market and recession that could decimate even substantial retirement portfolios, not to mention financially dicey state and local pension plans and the federal government itself. And those governments will have few tools to fight it. Consider:
• We are in the 10th year of an economic recovery and bull market in stocks. The S&P 500 index SPX, +0.62% has more than quadrupled from its March 2009 bottom, for a compound annual growth rate of 17.5% during that time. Since the S&P 500 has averaged a 10% annual gain over the past 89 years, at some point there has to be a reversion to the mean.
More
Finally, in dying
EUSSR news, what is the point of the EUSSR anymore? Nine hour dinners and a
meaningless final statement, meaning all things to all men and nothing. Can Deutsche Bank survive the next recession?
The EUSSR warn Trump against imposing car tariffs. We’ll trigger mutual assured
destruction (MAD,) if you do, they threaten.
June 28, 2018 / 12:19 AM
EU struggles to bridge migration rift at tense summit
BRUSSELS
(Reuters) - European leaders struggled to overcome deep divisions on migration
at a tense EU summit that dragged into the early morning hours of Friday before
yielding vague pledges to strengthen external borders and explore new migrant
centres.
The
meeting in Brussels, dominated by a nine-hour dinner, underscored how Europe’s
2015 spike in immigration continues to haunt the bloc despite a sharp drop in
arrivals of people fleeing conflict and economic hardship in the Middle East
and Africa.
It took place in an atmosphere of political crisis, with German Chancellor
Angela Merkel under intense political pressure at home and a new eurosceptic
Italian government threatening to torpedo any deal that did not meet its
demands.
A bleary-eyed Merkel, speaking to reporters at 5 a.m. (0300 GMT), tried
to put a positive spin on the result, saying it was a good signal that leaders
had been able to agree a common text on the controversial migration issue.
But she acknowledged that the bloc still had “a lot of work to do to
bridge the different views.”
“Italy is not alone anymore,” said Italian Prime Minister Giuseppe
Conte.
French President Emmanuel Macron said European cooperation had “won the
day”.
In a final statement full of convoluted language meant to satisfy the
divergent views, the leaders agreed to set up joint asylum processing sites and
restrict migrant moves within the bloc, but they made clear that virtually all
of their pledges would be carried out on a “voluntary basis” by member states.
More
June 28, 2018 / 9:47 PM
Deutsche Bank fails Fed stress test while three U.S. lenders stumble
WASHINGTON/NEW
YORK (Reuters) - Deutsche Bank AG’s (DBKGn.DE) U.S. subsidiary failed on
Thursday the second part of the U.S. Federal Reserve’s annual stress tests due
to “widespread and critical deficiencies” in the bank’s capital planning
controls.
The Fed board’s unanimous objection to Deutsche Bank’s U.S. capital plan marks another blow for the German lender, sending its shares down 1 percent after hours. Its financial health globally has been under intense scrutiny after S&P cut its rating and questioned its plan to return to profitability.
The Fed also placed conditions on three banks that passed the test. Goldman Sachs Group Inc (GS.N) and Morgan Stanley (MS.N) cannot increase their capital distributions and State Street Corp (STT.N) must improve its counterparty risk management and analysis, the Fed said.
Deutsche Bank last week easily cleared the Fed’s easier first hurdle that measures its capital levels against a severe recession, the strictest ever run by the Fed.
Thursday’s second test focuses on how the bank’s plan for that capital, such as dividend payouts and investments, stands up against the harsh scenarios.
“Concerns include material weaknesses in the firm’s data capabilities
and controls supporting its capital planning process, as well as weaknesses in
its approaches and assumptions used to forecast revenues and losses under
stress,” the Fed said in a statement.
While failing the U.S. stress test would not likely affect the bank’s
ability to pay dividends to shareholders, it will require Deutsche Bank to make
substantial investment in technology, operations, risk management and
personnel, as well as changes to its governance.
More
EU Warns Trump That Car Tariffs Would Prompt Retaliation
By Jonathan Stearns 29 June 2018, 03:51 GMT+1European government leaders pledge response to protectionism
EU summit stance highlights risks of escalating trade war
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
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Not the usual crooks
and scoundrels today. Today, are we busy creating another “plastics problem” in
the rush to switch over to EVs? Hopefully not, if we’re inventive enough.
Where 3 Million Electric Vehicle Batteries Will Go When They Retire
GM, Toyota and BYD are part of a potential $550 billion industry.
June 27, 2018, 5:00 PM EDT
The first batches of batteries from electric and hybrid vehicles are hitting
retirement age, yet they aren’t bound for landfills. Instead, they’ll spend
their golden years chilling beer at 7-Elevens in Japan, powering car-charging
stations in California and storing energy for homes and grids in Europe.Lithium-ion car and bus batteries can collect and discharge electricity for another seven to 10 years after being taken off the roads and stripped from chassis -- a shelf life with significant ramifications for global carmakers, electricity providers and raw-materials suppliers.
Finding ways to reuse the technology is becoming more urgent as the global stockpile of EV batteries is forecast to exceed the equivalent of about 3.4 million packs by 2025, compared with about 55,000 this year, according to calculations based on Bloomberg NEF data.
China, where about half the world’s EVs are sold, is implementing rules in August to make carmakers responsible for expired batteries and to keep them out of landfills. The European Union has regulations, and the industry expects the U.S. to follow.
General Motors Co., BMW AG, Toyota Motor Corp., BYD Co. and a clutch of renewable-energy storage suppliers are among those trying to create an aftermarket and extra profits for a device that only recently coalesced into its own market. Second lives generate second revenue streams for the same product, and those could help lower prices for EVs.
“The car manufacturers have an upcoming problem, and one that we are already starting to see: this massive volume of batteries,’’ said Johan Stjernberg, chief executive officer of Box of Energy AB, a Swedish company working with Porsche and Volvo Cars. “The market will be enormous for second-life applications with storage.’’
The decade-by-decade forecast by BNEF is staggering. By 2030, there will be a 25-fold surge in battery demand for EVs. Automobiles have overtaken consumer electronics as the biggest users of lithium-ion batteries, according to Paris-based Avicenne Energy.
By 2040, more than half of new-car sales and a third of the global fleet
–- equal to 559 million vehicles -- will be electric. By 2050, companies will
have invested about $550 billion in home, industrial and grid-scale battery
storage, according to BNEF.
“The logic behind this is the circular economy,” said Cecile Sobole,
program manager for Renault SA’s EV business. “The battery coming from the
electric vehicle will become more and more a part of the energy world.”
Yet as many companies dive in, the biggest U.S. electric-car maker
-– Tesla Inc. –- stays on the sidelines. The Palo Alto,
California-based company said its batteries probably won’t be suitable for a
new task after 10 to 15 years of use, and it’s focusing on recovering the raw
materials.
Repurposing efforts may slow if it becomes more profitable to extract
materials like cobalt and simply make new batteries.
Declining performance for an EV battery is evidenced by fewer miles of
driving per charge and more frequent plug-ins by owners. The components
typically will be swapped out after about a decade in family cars and four
years in harder-working buses and taxis.
While those replaced batteries can’t run a passenger vehicle, they’re ideal
for less-demanding tasks such as storing electricity from solar panels and wind
turbines, and hoarding power from a regular grid connection when prices are
low.
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?
Graphene forms electrically charged crinkles
Date:
June 27, 2018
Source:
Brown University
Summary:
Gently compressed stacks of graphene form sharp crinkles that carry an electric
charge, which could be useful in nanoscale self-assembly and other
applications.
Researchers from Brown University have discovered another peculiar and
potentially useful property of graphene, one-atom-thick sheets of carbon, that
could be useful in guiding nanoscale self-assembly or in analyzing DNA or other
biomolecules.
A study published in Proceedings of the Royal Society A demonstrates
mathematically what happens to stacks of graphene sheets under slight lateral
compression -- a gentle squeeze from their sides. Rather than forming smooth,
gently sloping warps and wrinkles across the surface, the researchers show that
layered graphene forms sharp, saw-tooth kinks that turn out to have interesting
electrical properties.
"We call these quantum flexoelectric crinkles," said Kyung-Suk
Kim, a professor in Brown's School of Engineering and the paper's senior
author. "What's interesting about them is that each crinkle produces a
remarkably thin line of intense electrical charge across the surface, which we
think could be useful in a variety of applications."
The charge, Kim says, is generated by the quantum behavior of electrons
surrounding the carbon atoms in the graphene lattice. When the atomic layer is
bent, the electron cloud becomes concentrated either above or below the layer
plane. That electron concentration causes the bend to localize into a sharp
point, and produces a line of electrical charge roughly one nanometer wide and
running the length of the crinkle. The charge is negative across the tip of an
upraised ridge and positive along the bottom of a valley.
That electrical charge, Kim and his colleagues say, could be quite
useful. It could, for example, be used to direct nanoscale self-assembly. The
charged crinkles attract particles with an opposite charge, causing them to
assemble along crinkle ridges or valleys. In fact, Kim says, particle assembly
along crinkles has already been observed in previous experiments, but at the
time the observations lacked a clear explanation.
----Similarly, strange behaviors have been seen in experiments with biomolecules like DNA and RNA on graphene. The molecules sometimes arrange themselves in peculiar patterns rather than flopping out randomly as one might expect. Kim and colleagues think that these effects can be traced to crinkles as well. Most biomolecules have an inherent negative electrical charge, which causes them to line up along positively charged crinkle valleys.
It might be possible to engineer crinkled surfaces to take full
advantage of the flexoelectric effect. For example, Kim envisions a crinkled
surface that causes DNA molecules to be stretched out in straight lines making
them easier to sequence.
"Now that we understand why these molecules line up the way they
do, we can think about making graphene surfaces with particular crinkle
patterns to manipulate molecules in specific ways," Kim said.
More
Another weekend with more retaliatory anti-Trump
trade war tariffs set to kick in on July 1st, July 6th for the next
round of US tariffs. But for most of the world, another World Cup weekend of
diversion, beer and burgers. Have a great weekend everyone. Ignore for now that
Captain Trump just hit an iceberg.
“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 [Credit Default Swap] transactions.”
Joseph J. Cassano, former head
of A.I.G. Financial Products, London, August 2007. AIG was bailed out with 85
billion September 2008, after Cassano’s riskless CDS blew up.
https://en.wikipedia.org/wiki/Joseph_Cassano
The monthly Coppock Indicators finished May.
DJIA: 24,416 +201 Down. NASDAQ:
7,442 +276 Down. SP500: 2,705 +180 Down.
All
three slow indicators moved down in March and have continued down in April and
May. For some a new bear signal, for others a take profits and get back to cash
signal.
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