Baltic Dry Index. 1691 -03 Brent Crude 72.61
Turkey is a sovereign state,
just like the U.S. We might go to different directions, in terms of our
impressions and ideas, but we'll always remain friends.
Recep Tayyip Erdogan
This week it will
likely all be about the Turkey crisis. Will the America v Turkey spat be enough
to collapse the Lira sufficiently, to bring about a banking crisis in Europe’s
banks? Specifically, the banks of Spain, Italy and France, although contagion
probably means that it raises new questions about Germany’s Deutsche Bank.
Turkey’s Finance Minister
says that he has an “action plan.” Although for now, like Tesla’s privatisation
financing, no one to know what it is. Turkey’s newly empowered, all powerful,
new strong man President Erdogan, on Sunday was dropping hints about leaving
NATO and forming new alliances. Something more likely to cause alarm in
Washington than garner respect. Will President Nero in Washington, give Turkey
a thumb’s up or down? Go for the kill?
And so as unlikely as
it seems, will the tiny Turkish economy turn into the straw that broke the
camel’s back? Did the erratic, Trump Team Trade War recklessly overreach itself
last week by doubling the tariffs on Turkey’s aluminium and steel? Can the
genie be put back in the bottle? Will anyone even bother to try. Does anyone in
Washington care anymore about its so-called allies?
And so, this week
becomes largely a waiting game. Will President’s Erdogan and Trump, pull back
before Turkey’s economy gets plunged into recession and inflation at the same
time? If not, how far, and how damaging, will contagion spread?
Below, a storm in a
teacup, or the beginning of the end?
August 12, 2018 / 11:29 PM
Asian shares, euro trampled as Turkish rout spreads
SYDNEY
(Reuters) - Asia share markets skidded and the euro hit one-year lows on Monday
as a renewed rout in the Turkish lira infected the South African rand and drove
demand for safe harbours, including the U.S. dollar, Swiss franc and yen.
EMini futures for the S&P 500 ESc1 were off 0.4 percent, while 10-year Treasury yields dipped further to 2.85 percent US10YT=RR.
China's blue chip index .CSI300 shed 1.4 percent, while Hong Kong stocks .HSI lost 1.6 percent as the local dollar fell to the limits of its trading band.
Much of the early action was in currencies with the euro gapping lower as the Turkish lira TRYTOM=D3 took another slide to all-time lows around 7.2400.
The lira found just a sliver of support when Turkish Finance Minister Berat Albayrak said the country had drafted an action plan to ease investor concerns and the banking watchdog said it limited swap transactions.
Yet the dollar was still up almost 10 percent on the day at 7.0000 lira. This time last month it was at 4.8450.
The currency tumbled on worries over Turkish President Tayyip Erdogan’s
increasing control over the economy and deteriorating relations with the United
States.
“The plunge in the lira which began in May now looks certain to push the
Turkish economy into recession and it may well trigger a banking crisis,” said Andrew
Kenningham, chief global economist at Capital Economics.
“This would be another blow for EMs as an asset class, but the wider
economic spillovers should be fairly modest, even for the euro zone,” he added.
----The Turkish equity market was less than 2 percent of the size of the UK market, and only 20 percent was held by non-residents, he added.
“Nonetheless, Turkey’s troubles are a further headwind for the euro and are not good news for EM assets either.”
BANKS EXPOSED
Indeed, the single currency sank to a one-year trough against the Swiss franc EURCHF= around 1.1300 francs, while hitting a 10-week low on the yen around 125.45 EURJPY=.----The Argentine peso and South African rand were also caught in the crossfire, with the dollar adding 5 percent on the rand. Dealers said Japanese retail investors had been squeezed out of long positions in the rand sending the yen steaming higher.
“Contagion risks centre on Spanish, Italian and French banks exposed to
Turkish foreign currency debt, as well as Argentina and South Africa,” warned
analysts at ANZ.
“Turkey’s massive pile of corporate debt denominated in foreign
currencies, but a rapidly sliding currency – and inflation that’s threatening
to go exponential – is a toxic combination.”
More
Turkish lira hits fresh low as Erdogan’s currency crisis echoes through stock markets
Published: Aug 12, 2018 10:12 p.m. ET
Turkey’s plunging currency is stoking anxieties on Wall Street and
throughout global markets.
On Sunday — early Monday in Asia — the Turkish lira put in fresh lows
against the U.S. dollar, down more than 8% in Asian trading hours, after what
had been a plodding descent in the first eight months of 2018 culminated in a
death spiral Friday, wiping out some 14% of the currency’s value against
greenback.
Most recently, one dollar changed hands at 6.9890 lira USDTRY, +4.4154% , compared with 6.4275 lira late Friday in New York, a drop of 8.7%, according to FactSet data. At its lows late Sunday, Eastern time, one dollar bought about 7.1310, an 11% tumble intraday.
Read: 3 reasons the selloff in Turkey’s lira matters for markets all over the world
The currency crisis in Ankara took a turn for the worse Friday after President Donald Trump, via Twitter, said that he authorized the doubling of steel and aluminum tariffs against the country. Turkey already is under U.S. sanctions for its detention of U.S. evangelical pastor Andrew Brunson, who is being held on espionage charges.
During a rally over the weekend, Turkey’s outspoken leader President Recep Tayyip Erdogan struck a defiant tone against the U.S. and Trump’s recent tariff threats against what the Turkish leader described as an important ally in the North Atlantic Treaty Organization.
“You cannot tame our people with threats,” Erdogan said Saturday, during
a series of speeches that he emphatically delivered in front of supporters at
coastal cities near the Black Sea. “I call out to those in the United States.
It is a shame. You are trading a strategic NATO ally for a pastor,” he said at
one rally.
The dilemma with Turkey is fraught and is certain to continue to carry
with it added anxieties for markets, not simply because of the crushing decline
in Ankara’s currency, which could result in knock-on effects throughout other
global markets, but because Turkey holds a strategic position on the world
stage.
For one, Turkey, a large mostly Muslim nation of some 80 million people, has been a strategic alley to the U.S. in its fight against Islamic State terrorism in Syria, with which Turkey shares a border. Already that U.S.-Turkey relationship has shown signs of fraying.
In addition, Turkey has stepped up its relationship with Russia at a time when U.S.-Russian relations aren’t on a strong footing. Last year, Turkey agreed to purchase long-range missiles from Moscow.
Turkey has threatened to seek new allies as it attempts to emerge from the “interest rate, inflation spiral they are trying to force it into,” Erdogan has told supporters. Beyond Russia, Turkey has strengthened its ties with Iran, another nation with which the U.S. is at odds.
More
Erdogan Warns Trump That Alliance Is at Risk as Tensions Climb
(Bloomberg) -- Turkey’s President Recep Tayyip Erdogan warned the U.S.
that its decades-long alliance with the country is at risk after rising
political tensions between the two nations erupted and helped stoke a financial
crisis that shook global markets.
Erdogan, in an editorial Friday in the New York Times, cited Turkey’s
cooperation with the U.S. dating back to the Cuban missile crisis and the
Korean War as evidence of a long-standing partnership between the NATO allies.
But he added that more recent disputes over a failed 2016 coup, the conflict in
Syria and sanctions imposed this week against top Turkish officials and the
country’s steel industry were straining that alliance to its breaking point.
“Before it is too late, Washington must give up the misguided notion that our relationship can be asymmetrical and come to terms with the fact that Turkey has alternatives,” Erdogan wrote. “Failure to reverse this trend of unilateralism and disrespect will require us to start looking for new friends and allies.”
Turkey’s economy was already taking a beating -- with the lira plunging as Erdogan urged his citizens in a nationally-televised speech to sell their gold and dollar holdings to help prop up the lira -- when President Donald Trump unexpectedly announced on Twitter that he was doubling tariffs on steel and aluminum from Turkey.
Market Rout
“Our relations with Turkey are not good at this time!” Trump said in a move that accelerated a market rout in Turkey that spread across emerging markets. The lira plunged as much as 17 percent on Friday alone, bringing its loss for the year to 42 percent. Beyond investor fears about measures the U.S. could take, the sell-off represented a vote of no-confidence in a new system of government that earlier this year handed Erdogan unrivaled authority, essentially paralyzing the bureaucracy in Ankara.While Trump’s announcement added fuel to the crisis, many investors say the $900 billion economy was already headed toward a cliff, and only needed a push.
More
Turkish Contagion Infects Rand With Steepest Plunge Since 2008
By Cormac Mullen
Updated on 13 August 2018, 05:04 GMT+1
·
South Africa’s currency falls as much as 9.4% in
Asian trading
·
Analysts see hit to emerging-market investor
sentiment
It is a way to take people's
wealth from them without having to openly raise taxes. Inflation is the most
universal tax of all.
Thomas Sowell
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, Tesla again. Did Tesla just
commit suicide last week? More Pink Sheet than Nasdaq?
August 13, 2018 / 5:03 AM
Tesla's slow disclosure raises governance, social media concerns
WASHINGTON
(Reuters) - Tesla Inc’s (TSLA.O) handling of Chief Executive Elon
Musk’s proposal to take the carmaker private and its failure to promptly file a
formal disclosure has raised governance concerns and sparked questions about
how companies use social media.
Musk stunned investors last Tuesday by announcing on Twitter that he was
considering taking Tesla private in a potential $72 billion transaction and
that “funding” had been “secured.”
Tesla’s shares closed up 11 percent before retrenching after the Wall
Street Journal reported that the U.S. Securities and Exchange Commission (SEC)
had asked Tesla why Musk announced his plans on Twitter and whether his
statement was truthful.
Musk provided no details of his funding and as of Thursday Tesla’s board
had not received a financing plan from Musk, Reuters reported, leaving
investors and the broader market clamoring for more information.
Putting aside whether Musk misled anyone, the unorthodox manner in which
he announced the news and Tesla’s failure to promptly clarify the situation
with a regulatory filing is a corporate governance lapse that raises questions
about how companies use social media to release market-moving news, securities
lawyers said.
“Management buyouts or other take-private transactions already suffer
from serious information asymmetry between management and public shareholders,”
said Gabriel Rauterberg, a University of Michigan law professor.
SEC rules typically require companies to file an 8-K form within four
business days of a significant corporate event.
While several securities lawyers said Musk’s tweets alone did not
trigger this obligation, such a filing would be prudent given the unusual
circumstances, David Axelrod, a partner at law firm Ballard Spahr LLP, said.
“An 8-K would provide some more details, it would say what stage
negotiations are in, and provide more information than 53 characters in a
tweet,” he added.
SEC guidelines published in 2013 allow companies and their executives to
use social media to distribute material information, provided investors have
been alerted that this is a possibility. Tesla did this in a 2013 filing.
But such disclosures have to be full and fair, meaning the information
is complete and accessible by all investors at the same time, a bar that Musk’s
tweets may not have met.
“Twitter is not designed to provide full and fair disclosure. That doesn’t
mean that you couldn’t, but in a series of 20 to 30 characters I’m not sure
you’re getting full disclosure,” said Zachary Fallon, a former SEC attorney and
principal at law firm Blakemore Fallon.
Tesla and the SEC did not reply to requests for comment on Sunday.
Securities lawyers said there was also a question mark over whether Musk
selectively disclosed information on the possible terms of the deal when he
subsequently replied to followers, two of whom claim in their handles to be
investors.
Those tweets were not immediately visible to all followers of Musk’s
main feed until he retweeted them.
The 47-year-old billionaire’ s history of joking about Tesla and using
twitter to bait his critics, also appears to have undermined trust in Musk’s
feed as a reliable source of company information, with many investors initially
believing Tuesday’s tweet was a prank.
“Musk’s irreverence and showmanship is part of the Tesla brand, I get
that, but I don’t think the securities laws do,” said Fallon.
There are only three ways to
meet the unpaid bills of a nation. The first is taxation. The second is
repudiation. The third is inflation.
Herbert Hoover
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?
For UW
physicists, the 2-D form of tungsten ditelluride is full of surprises
Date:
August 9, 2018
Source:
University of Washington
Summary:
Researchers report that the 2-D form of tungsten ditelluride can undergo
'ferroelectric switching.' Materials with ferroelectric properties can have
applications in memory storage, capacitors, RFID card technologies and even medical
sensors -- and tungsten ditelluride is the first exfoliated 2-D material known
to undergo ferroelectric switching.
The general public might think of the 21st century as an era of
revolutionary technological platforms, such as smartphones or social media. But
for many scientists, this century is the era of another type of platform:
two-dimensional materials, and their unexpected secrets.
These 2-D materials can be prepared in crystalline sheets as thin as a
single monolayer, only one or a few atoms thick. Within a monolayer, electrons
are restricted in how they can move: Like pieces on a board game, they can move
front to back, side to side or diagonally -- but not up or down. This
constraint makes monolayers functionally two-dimensional.
The 2-D realm exposes properties predicted by quantum mechanics -- the
probability-wave-based rules that underlie the behavior of all matter. Since
graphene -- the first monolayer -- debuted in 2004, scientists have isolated
many other 2-D materials and shown that they harbor unique physical and
chemical properties that could revolutionize computing and telecommunications,
among other fields.
For a team led by scientists at the University of Washington, the 2-D
form of one metallic compound -- tungsten ditelluride, or WTe2 -- is
a bevy of quantum revelations. In a paper published online July 23 in the
journal Nature, researchers report their latest discovery about WTe2:
Its 2-D form can undergo "ferroelectric switching." They found that
when two monolayers are combined, the resulting "bilayer" develops a
spontaneous electrical polarization. This polarization can be flipped between
two opposite states by an applied electric field.
"Finding ferroelectric switching in this 2-D material was a
complete surprise," said senior author David Cobden, a UW professor of
physics. "We weren't looking for it, but we saw odd behavior, and after
making a hypothesis about its nature we designed some experiments that
confirmed it nicely."
Materials with ferroelectric properties can have applications in memory
storage, capacitors, RFID card technologies and even medical sensors.
"Think of ferroelectrics as nature's switch," said Cobden.
"The polarized state of the ferroelectric material means that you have an
uneven distribution of charges within the material -- and when the
ferroelectric switching occurs, the charges move collectively, rather as they
would in an artificial electronic switch based on transistors."
More
Inflation is the one form of
taxation that can be imposed without legislation.
Milton Friedman
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.
Trading is not about being right.Trading is ba game of math.It is about finding setups that offer you a good risk/reward and pulling the trigger.
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