Baltic Dry Index. 1697 -12 Brent Crude 75.86
Lenin was certainly right. There is no
subtler, no surer means of overturning the existing basis of society than to
debauch the currency. The process engages all the hidden forces of economic law
on the side of destruction, and it does it in a manner which not one man in a
million is able to diagnose.
J. M. Keynes
In stocks,
complacency rules for now. But for how much longer? Will an embattled President
Trump seek relief in a foreign escapade? Has the Trump trade war already done
too much damage to a slowing global economy?
August 27, 2018 / 1:56 AM
Asian shares rise on Fed reassurance, China yuan strengthening
SHANGHAI (Reuters) - Asian shares rose on Monday, boosted by record Wall
Street highs on Friday after reassuring comments from the Federal Reserve’s
chairman, and as stock markets in China gained after the country’s central bank
tweaked its management of the yuan.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 1.1 percent, while Japan's Nikkei stock index .N225 gained 0.9 percent.
Helping to brighten the mood, U.S. and Mexican trade negotiators are seen as close to reaching a common position on the North American Free Trade Agreement (NAFTA), with Mexican Economy Minister Ildefonso Guajardo saying on Sunday talks have “continued to make progress”.
A prospective trade deal with Mexico “takes a little bit of global trade war risk off the table,” said Robert Carnell, chief economist and head of research, Asia-Pacific at ING.
----In China, the Shanghai Composite index .SSEC added 1.4 percent and the blue-chip CSI300 index .CSI300 rose 1.9 percent, after the People's Bank of China late on Friday revived a "counter-cyclical factor" used to set the midpoint of the daily trading band of the yuan, in a bid to support it.
The move raised hopes that a yuan recovery could boost companies with significant dollar-denominated costs, such as airlines. China Southern Airlines (600029.SS) gained 4.2 percent and Air China (601111.SS) rose 3.7 percent.
The yuan hit a two-and-a-half-week high against the U.S. dollar in early trade on Monday as the PBOC set the day's midpoint CNY=PBOC at a stronger-than-expected level.
At 0341 GMT, the yuan CNY=CFXS was trading at 6.8110 per dollar, 80 pips stronger than Friday's onshore close of 6.8190.
“China just seems to be stabilising its currency and we’re getting used to that fact now, so we’re not looking at an ever-weaker CNY, which could raise issues,” said Carnell, adding that “it reduces the scope for outflows.”
More
August 27, 2018 / 2:53 AM
China's July industrial profit growth cools for third straight month
BEIJING
(Reuters) - Profit growth for China’s industrial firms cooled for a third
straight month in July in a further indication that demand in the world’s
second-biggest economy is cooling even as U.S. trade pressure mounts.
Weakening consumption , rising credit defaults, high financing costs and
escalating Sino-U.S. trade tensions will likely pressure China Inc’s profit
growth even further in coming months, analysts at Nomura said in a note.
“We expect the economy to get worse before it gets better,” they said,
noting it will take some time for recent government stimulus and policy easing
measures to kick in.
Industrial profits in July rose 16.2 percent from a year earlier to
515.12 billion yuan ($74.94 billion), easing from a 20 percent pace in June and
the slowest since March, data from the National Bureau of Statistics (NBS)
showed on Monday.
Profit growth slowed in July as producer price inflation moderated,
bureau spokesman He Ping said in a statement accompanying the data.
For the first seven months of the year, industrial firms have reported
profits of 3.9 trillion yuan, up 17.1 percent from the same period last year.
But the strong headline figure is being driven largely by producers and
refiners of raw materials like oil companies and steel mills, which account for
roughly two-thirds of the gains. Smaller firms are facing much tougher business
conditions that are squeezing profit margins.
----A spate of weaker data in the last few months has shown investment growth has slowed to a record low and consumers are turn more cautious about spending. Industrial output growth has also remained soft.
China’s factory price inflation cooled in July amid a slowdown in
economic growth, although economists expect punitive Chinese tariffs on U.S
goods to add to wider price pressures in months ahead.
----The slowdown in China’s industrial profits could translate into a weakening in investment in the manufacturing sector, according to Betty Wang, Senior China Economist at ANZ.
“Downside risks (to fixed-asset investment growth) still outweigh the
upside risks,” said Wang, adding that a low base from last year should have
provided support to Monday’s data.
China’s investment growth may slow even further in the future and
authorities should continue to make good use of fiscal and financial policy,
the state planner said on Monday.
More
In other news, did President Trump just load another bullet
in the chamber in his game of Russian roulette with the rest of the world?
North Korea seems to think that he did.
August 26, 2018 / 12:33 PM
North Korea newspaper blasts 'double-dealing' U.S. after Pompeo's trip canceled
(Reuters) - North Korea’s state-controlled newspaper on Sunday accused
the United States of “double-dealing” and “hatching a criminal plot” against
Pyongyang, after Washington abruptly canceled a visit by Secretary of State
Mike Pompeo.
Negotiations have been all but deadlocked since U.S.
President Donald Trump’s summit with North Korean leader Kim Jong Un in
Singapore in June.
Pompeo has pressed for tangible steps toward North Korea’s abandonment
of its nuclear arsenal while Pyongyang is demanding that Washington first make
concessions of its own.
North Korea’s Rodong Sinmun newspaper said U.S. special units based in
Japan were staging an air drill aimed at “the infiltration into Pyongyang”,
citing a South Korean media outlet.
“Such acts prove that the U.S. is hatching a criminal plot to unleash a
war against the DPRK and commit a crime which deserves merciless divine
punishment in case the U.S. fails in the scenario of the DPRK’s unjust and
brigandish denuclearisation first,” the paper said.
“We cannot but take a serious note of the double-dealing attitudes of
the U.S. as it is busy staging secret drills involving man-killing special
units while having a dialogue with a smile on its face,” it noted.
A spokesman at the U.S. Embassy in Seoul said he had no information on
the drill alleged in the newspaper. The U.S. military spokesman in South Korea
was not immediately available to comment.
The editorial, which did not mention the Pompeo
visit, urged Washington to give up the “pointless military gamble” and
implement the Singapore agreement, in which the leaders pledged to work towards
a complete denuclearization of the Korean Peninsula.
Since the summit, the two sides have struggled to narrow differences
over the North’s nuclear weapons program.
Pyongyang is calling for a declaration of peace as part of security
guarantees designed to encourage it to abandon its nuclear weapons and
ballistic missiles, while the Trump administration says a peace deal and other
concessions will only come after more progress on denuclearization.
In part to reassure North Korea, Trump canceled or delayed joint
military drills with South Korea, but smaller exercises continue.
More
Finally, in commodities
news, will it be up or down for what’s left of Noble Group? With commodities, it’s
all too often boom or bust.
August 27, 2018 / 2:26 AM
Battling for life, Noble Group bets on $3.5 billion debt restructuring
SINGAPORE
(Reuters) - Noble Group Ltd faces a key shareholder meeting on Monday as the
shrivelled commodity trader attempts to clinch a last-ditch $3.5 billion debt
restructuring deal to stay afloat and put a three-year crisis behind it.
Shareholders are being asked to support a debt-for-equity swap that will
leave them with ownership of just 20 percent of the business. Multiple sources
familiar with the matter say the proposal is expected to succeed.
The meeting is due to start at 2:30 p.m. (0630 GMT).
Noble, founded in 1986 by Richard Elman, who took advantage of a
commodities bull run to build it into one of the world’s biggest traders, has
had its market value all but wiped out from $6 billion in February 2015.
The crisis started that month after Arnaud Vagner, a former employee,
published reports anonymously under the name of Iceberg Research that accused
Noble of inflating its assets. The upheaval triggered a share price collapse,
credit downgrades, writedowns and asset sales.
Singapore-listed Noble has always stood by its accounts.
Under a debt-for-equity swap agreed with a group of creditors comprised
mainly of hedge funds, the company’s debt will be halved and it will get access
to trade finance and hedging facilities, vital in a sector where profit margins
are in the low single digits.
In return, Noble will hand over 70 percent of its restructured business
to creditors, while existing shareholders’ equity will be reduced to 20 percent
and its management will get 10 percent.
More
"Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium."
Murray N. Rothbard
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Yes it’s Tesla again. The car
crash that never seems to end. An interesting day ahead for Tesla’s stock.
Musk's Brazen Gambit Collapsed as Investor Support Withered
By Dana Hull, Ruth David, and Alex Barinka
Updated on 27 August 2018, 06:21 GMT+1
Elon Musk’s stunning tweet that he wanted to take Tesla Inc. private and had funding secured was a classic Musk
moonshot -- given credibility only by the sense that if anyone could possibly
pull such a brazen feat, he was the guy.The initial scoffing after that Aug. 7 post gave way to hiring of bankers to a board meeting where, just maybe, it was ready to take shape. Then Musk aborted his own mission, when hastily assembled bankers and advisers had barely started work, according to people familiar with the matter. Musk was perhaps spooked by blowback from investors he was sure would support him, including key backers from Saudi Arabia, according to other people.
Most shareholders wanted Tesla to remain public, the billionaire chief executive officer conceded in a Friday night blog. Large institutional shareholders had limits on how much they could invest in a private company, and there was no proven path for most retail investors, who are among his most ardent and adoring fans. “The sentiment, in a nutshell, was ‘please don’t do this,’" wrote Musk.
Investors now must brace for another potential wild ride when U.S. trading opens Monday morning, while regulators and lawyers autopsy what happened to a deal potentially valued at $82 billion and Tesla’s board is left with a brilliant but exhausted and erratic CEO. The shares, always volatile, have traded as high as $387 and as low as $288 since Aug. 7, far short of the $420 a share cash-out price Musk pitched. They closed at $322.82 on Aug. 24.
“We have no idea how the shares will react on Monday, as the market seemed to conclude last week that the deal would not get done, for whatever reason,” Cathie Wood, chief investment officer of ARK Investment Management, wrote in an email on Sunday.
Plan’s Downfall
The unfolding story suggests Musk was sorely mistaken when he tweeted “funding secured” and later told the world “investor support is confirmed,” based on his belief that Saudi Arabia’s Public Investment Fund was eager to back his venture. The U.S. Securities and Exchange Commission is now investigating his tweets and blog posts, which triggered the stock gyrations throughout August.
Musk’s
vocal ambitions stirred unease among Saudi officials about the publicity
surrounding their potential role, according to people familiar with the matter
who asked not to be identified. The Saudis were unhappy about Musk detailing
his talks with the Kingdom’s sovereign wealth fund in an Aug. 13 blog post, where
the CEO justified his earlier tweet about “funding secured” on their interest,
the people said. On top of that, there were concerns about potential fallout
from shareholder lawsuits and the SEC investigation, the people said.
More
“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.
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?
Novel process to 3-D print interconnected layers of 2-D graphene
Date:
August 23, 2018
Source:
Virginia Tech
Summary:
Previously, researchers could only print this material, known as graphene, in
2D sheets or basic structures. But engineers have now 3-D printed graphene
objects at a resolution an order of magnitude greater than ever before printed,
which unlocks the ability to theoretically create any size or shape of
graphene.
Researchers from Virginia Tech and Lawrence Livermore National
Laboratory have developed a novel way to 3D print complex objects of one of the
highest-performing materials used in the battery and aerospace industries.
Previously, researchers could only print this material, known as
graphene, in 2D sheets or basic structures. But Virginia Tech engineers have
now collaborated on a project that allows them to 3D print graphene objects at
a resolution an order of magnitude greater than ever before printed, which
unlocks the ability to theoretically create any size or shape of graphene.
Because of its strength -- graphene is one of the strongest materials
ever tested on Earth -- and its high thermal and electricity conductivity, 3D
printed graphene objects would be highly coveted in certain industries,
including batteries, aerospace, separation, heat management, sensors, and
catalysis.
Graphene is a single layer of carbon atoms organized in a hexagonal
lattice. When graphene sheets are neatly stacked on top of each other and
formed into a three-dimensional shape, it becomes graphite, commonly known as
the "lead" in pencils.
Because graphite is simply packed-together graphene, it has fairly poor
mechanical properties. But if the graphene sheets are separated with air-filled
pores, the three-dimensional structure can maintain its properties. This porous
graphene structure is called a graphene aerogel.
"Now a designer can design three-dimensional topology comprised of
interconnected graphene sheets," said Xiaoyu "Rayne" Zheng,
assistant professor with the Department of Mechanical Engineering in the
College of Engineering and director of the Advanced Manufacturing and
Metamaterials Lab. "This new design and manufacturing freedom will lead to
optimization of strength, conductivity, mass transport, strength, and weight
density that are not achievable in graphene aerogels."
----Previously, researchers could print graphene using an extrusion process, sort of like squeezing toothpaste, but that technique could only create simple objects that stacked on top of itself.
"With that technique, there's very limited structures you can
create because there's no support and the resolution is quite limited, so you
can't get freeform factors," Zheng said. "What we did was to get
these graphene layers to be architected into any shape that you want with high
resolution."
More
The monthly Coppock Indicators finished July.
DJIA: 25,415 +213 Down. NASDAQ:
7,672 +259 Down. SP500: 2,816 +166 Down.
All
three slow indicators moved down in March and have continued down ever since.
For some a new bear signal, for others a take profits and get back to cash
signal.
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