Baltic Dry Index. 1503 +53 Brent Crude 82.10
Canada
has “no closer friend, ally, and partner than the United States.”
President Trump.
With friends like President Trump, Canada doesn’t need enemies. More on
that below.
They came, they saw, they talked and talked, and then the Fedster’s did
what they said they’d do, they raised their key interest rate, and promised
another for December. No word from President Trump’s White House yet if he’s going
to fire them, after he told them in a tweet to leave rates on hold.
Below, how they all yawned in the markets. Complacency still rules for
just a little longer.
Asian shares weather Fed rate hike, U.S. bond yields fall
September 27, 2018 / 2:30 AM
TOKYO (Reuters) - Asian shares held firm
on Thursday, outperforming sagging Wall Street shares, and U.S. bond yields
fell after the Federal Reserve raised interest rates as expected, sticking to
its script of gradual policy tightening.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3
percent, with South Korea’s Kospi hitting three-month highs.
Japan’s Nikkei briefly touched an eight-month high as automakers rose
after the United States indicated it would not impose further tariffs on
Japanese automotive products for now, though it was down 0.1 percent at midday
in choppy trade.
On the whole, Asia fared batter than Wall Street, where the Dow Jones
Industrial Average fell 0.4 percent and the S&P 500 lost 0.33 percent. The
Nasdaq Composite dropped 0.21 percent.
The 10-year U.S. Treasuries yield fell more than 5 basis points to 3.048
percent as market participants had been braced for a more hawkish stance.
The fall in Treasury yields was good news for Asia and other emerging
markets, which had been pressured by concerns that higher U.S. yields would
encourage investors to move funds out of emerging markets to the United States,
on top of worries over the Sino-U.S. trade feud.
The Fed bumped up its policy target by a quarter of a percentage point
to 2.00-2.25 percent and indicated that it foresees another rate rise in December,
three more next year, and one in 2020.
That was little changed from its June projections.
More
All bull markets come to an end, even the 35-year Great Bond Bull Market.
---- Starting in 2008, the Fed imposed its yield-repression policy on the Treasury market, thus totally manipulating the market. But since December 2015, the Fed has been “gradually” stepping away from those methods of yield repression. So the yield curve is not showing free-market behavior; it’s showing the Fed’s manipulations, and the side-effects of the Fed’s backing away from these manipulations.
There will be another recession. There always is at some point. A
recession is an essential and necessary part of the normal business cycle. The
only question is when – and the yield curve might no longer have a clue.
During the prior rate-hike cycles, the Fed raised much faster, and it
was much more difficult for the 10-year yield to move out of the way of the
soaring and over-shooting 2-year yield.
---- In this rate-hike cycle, the Fed is moving in slow-motion – everything is “gradual,” as the Fed has been ceaselessly pointing out – and the 10-year yield has a chance to keep limping ahead in spurts and starts.
If you squint a little as you look at the chart above, you can see that
the 2-year yield soared 4 percentage points (400 basis points) in the three
years from June 2003 through June 2006. The third year in this rate hike cycle
will be complete in December 2018. And the 2-year yield will have likely risen
from 0.99% in December 2015 to a little over 3% by December 2018, so a touch
over 2 percentage points – or about half the speed of the last rate-hike cycle!
There is another thing to consider. The great bond bull-market started
in October 1981. At the time, the 10-year yield peaked at just under 16%. Then
yields fell (falling bond yields means rising bond prices). This bond bull
market, with all its ups and downs, lasted till July 2016, when the 10-year
yield bottomed out at 1.37%.
During these 35 years, yields dropped during each recession as the Fed
cut rates, but then yields didn’t return to prior highs. Instead they wobbled
from lower lows to lower lows. And after each recession, their peaks remained
lower than their peaks before the recession.
But all bull markets come to an end, even the Great Bond Bull Market.
And this dynamic of interest rates being lower after the recession than they’d
been before it, in line with rates having fallen overall for 35 years, has
likely fizzled, and rates overall won’t keep going lower. And those folks who
expect that during the next recession, yields will fall below the low points in
the past cycle will likely be disappointed.
More
In Trump Trade War news, “step up, step up, everyone’s a winner,” at
least in Asia outside of China. It’s not looking so good for Canada though, nor
Europe.
Trump Announces Japan Trade Talks With Focus on Cars, Farm Goods
By Jenny Leonard, Isabel Reynolds, Jennifer Jacobs, and Jennifer Epstein
26 September 2018, 14:46 GMT+1 Updated on 27 September 2018, 02:55 GMT+1
U.S. President Donald Trump reached an agreement with Japanese Prime
Minister Shinzo Abe to open trade talks between the two nations.
Abe resisted for almost two years the push to start bilateral trade
talks with its second-largest trading partner, but Trump’s threatened auto
tariffs forced him to reconsider. The two countries have agreed that sanctions
on auto exports won’t be applied while the talks take place, Abe told
reporters.
U.S. President Donald Trump reached an agreement with Japanese Prime Minister Shinzo Abe to open trade talks between the two nations.
The U.S. wants to expand access for its automobile exports to encourage more production and jobs in America. In agricultural goods, Japan won’t offer better conditions than already exist in its other trade agreements, according to a joint statement by the two nations. More access to Japan’s market could help U.S. farmers at risk from China’s tit-for-tat sanctions.
Trump said he expected the talks will come to a “satisfactory conclusion” as he spoke to reporters at the beginning of a meeting with Abe in New York. “It can only be better for the United States, because it couldn’t get any worse than what has happened over the years,” Trump added. Both leaders are attending meetings this week at the United Nations.
Shares of Japanese automakers rose in Tokyo. Subaru Corp., which is the most dependent on the U.S. market, jumped more than 4 percent in morning trading while Mazda Motor Corp. advanced above 3 percent. Heavyweights Toyota Motor Corp. and Nissan Motor Co. made more modest gains.
"I think this is close to about the best result possible for Japan," said Junichi Sugawara, a senior research officer at Mizuho Research Institute, citing the reprieve on auto tariffs and limits to U.S. demands on agriculture. "It’s hard to think this will become an agreement that reduces the U.S. trade deficit with Japan."
---- The talks, which Abe characterizes as different to negotiations for a full free trade agreement, follow a revamped pact between the U.S. and South Korea. Trade analysts said changes to the Korea agreement were largely cosmetic. It will double to 50,000 the number of cars each U.S. automaker can sell in the Asian nation without meeting local safety standards, but no American company sells much more than 10,000 cars a year in Korea.
---- The U.S. and Japan also said they are working together with the European Union to fight “non-market oriented policies and practices by third countries” and advance reforms at the World Trade Organization, according to Wednesday’s statement.
The Commerce Department has until February to determine whether auto imports represent a U.S. security risk, which could lead Trump to impose tariffs and quotas.
In Washington on Wednesday, the Senate Finance Committee held a hearing with general agreement among senators from both parties and industry witnesses that auto tariffs –- on top of metal import duties -- would only raise costs that hurt suppliers, manufacturers, dealers and consumers.
More
Trudeau Presses for ‘Right Deal for Canada’ on Trade
As deadline approaches, prime minister and chief envoy emphasize that any new Nafta accord must limit U.S. use of tariffs on national-security grounds
OTTAWA—Canada publicly declared that any changes to the North American Free Trade Agreement have to incorporate limits on the U.S. use of tariffs on national-security grounds.
Comments from Prime Minister Justin Trudeau and
Canada’s chief envoy in Washington on Wednesday underscore the stark
disagreements between Canada and the U.S. on what a revised version of the
24-year-old continental trade pact should look like, and cast doubt on an
agreement coming together quickly. U.S. Trade Representative Robert Lighthizer
warned Tuesday the Trump administration is ready to move at the end of the
month with a bilateral trade pact with
Mexico, citing a lack of progress in talks with Canada.
Mr. Lighthizer said Canada is “not making concessions” in essential areas.
Mr. Trudeau said Canada will take as “long as it takes to get the right
deal” for the country, in another sign that an end-of-September deadline set by
the Trump administration won’t be met.
Mr. Lighthizer also said any discussions about lifting national-security
tariffs on Canadian-made steel and aluminum, and removing the threat of such
levies on Canadian automobiles, wouldn’t be contemplated until a new Nafta is
completed.
---- David MacNaughton, Canada’s ambassador in the U.S., was more direct. In Toronto at an event hosted by American news outlet Politico, Mr. MacNaughton said an unwillingness to include in any renegotiated Nafta a “curb on the arbitrary use” of tariffs under the guise of national security could render the agreement “meaningless.”
On Tuesday in New York, Mr. Lighthizer said Nafta talks initially
focused on trying to have some agreement that would lift the national-security
tariffs on imported steel and aluminum. “I think our view now is that we’ll
turn to that as a next stage, when we get Nafta done,” Mr. Lighthizer said.
---- Besides the disagreement over the treatment of national-security tariffs, the U.S. and Canada remain apart on Canada’s insistence the pact continues to have independent panels to resolve disputes about tariffs. The U.S. wants this arbitration system weakened or scrapped. Further, the two sides are at odds over increased access to Canada’s dairy market, and maintaining a cultural exemption Canada enjoys in the current Nafta.
Of the three countries in Nafta, Canada stands to lose the most from its
potential demise, some economists say. The Bank for International Settlements
said in a report in August that a complete revocation of Nafta would cause a
2.2% decline in Canada’s GDP, while Mexico’s GDP would fall by 1.8%. U.S. GDP,
in contrast, would sustain a relatively meager 0.22% hit.
Trump Disses Trudeau on the World Stage
The U.S. president complains about Canada:
“We’re not getting along at all with their negotiators.”
Sep
26, 2018
In what may have been the frostiest moment for U.S.-Canada relations in
months, President Trump said Wednesday that he’d rejected a request to meet
with Canadian Prime Minister Justin Trudeau at the United Nations. Earlier,
Trudeau also reportedly got a chilly reception from Trump when he approached
the leader for a handshake.
Speaking at a press conference on the sidelines of the General Assembly,
Trump said he’d passed on the chance to meet with Trudeau because “his tariffs
are too high and he doesn’t seem to want to move.” The two leaders have been
locked in a rancorous effort to renegotiate NAFTA. Trump also suggested he
wasn’t happy with Chrystia Freeland, who is leading Canada’s trade
negotiations. “We’re not getting along at all with their negotiators.”
The statement, which may be Trump’s most direct hit against Trudeau since the G7 summit this summer, represented a possible new low in the deterioration of the U.S.-Canada relationship.
Relations between the two leaders wasn’t always so cold. In fact, early on in Trump’s presidency, some observers spoke of a bromance blossoming between them. Trudeau was quick to congratulate Trump when he assumed office, and warmly noted that Canada has “no closer friend, ally, and partner than the United States.”
But then, this summer, the U.S. announced it would impose steep tariffs on steel and aluminum imports from Canada. Trudeau quickly hit back, saying Canada would impose tariffs of its own on steel and aluminum imports from the U.S. “We are imposing dollar for dollar tariffs for every dollar levied against Canadians by the U.S.,” Trudeau said.
By June, in the wake of a tense G7 summit in Quebec, Trump was calling Trudeau “meek and mild,” “dishonest & weak.” Although the U.S. president had just endorsed a joint communique at the summit, after hearing that Trudeau had spoken to the press about Canadian tariffs against the U.S., Trump took back his endorsement. He also threatened more tariffs against U.S. allies.
More
"Until government administrators can so identify the interests of government with those of the people and refrain from defrauding the masses through the device of currency depreciation for the sake of remaining in office, the wiser ones will prefer to keep as much of their wealth in the most stable and marketable forms possible - forms which only the precious metals provide."
Elgin Groseclose
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Yes, it’s the
banksters again, This time, the seriously bent and totally doubled over
banksters from Denmark. The Vikings of modern banksterism? Are there any honest
banks in the EUSSR?
Below, a growing
scandal that threatens to spiral right into London, the financial heart of the
EUSSR.
Why did I take up stealing? To live better, to own things I couldn't afford, to acquire this good taste that you now enjoy and which I should be very reluctant to give up.
Cary Grant. To Catch A Thief.
A Danish Bank’s Evolution Into a Funnel for Suspicious Cash
Danske, the country’s biggest lender, has revealed that it ignored red flags of potential money laundering.
September 26, 2018, 12:01 AM EDT
Danske Bank A/S, founded in Copenhagen in the
1870s, has rarely made waves outside Denmark. That changed when the bank
revealed the scale of what may prove to be one of Europe’s biggest and most
brazen cases of money laundering.
Some €200 billion ($235 billion) flowed through its
tiny Estonian unit over a nine-year period, a large portion of the funds
suspicious, the company said. Concerns about Danske had been brewing for more
than a year, but an internal report published on Sept. 19 showed that the bank
allowed the potentially illicit activity, and profited from it, even after
regulators and a whistleblower raised red flags. “The scandal is huge,” says
Martin Lidegaard, Denmark’s former foreign minister and a member of the
opposition Social Liberal Party. “One of the worst consequences is the loss of
faith in the Danish financial industry, and in Denmark.”
Chief Executive Officer Thomas Borgen, once a darling of investors, is leaving, and board members may not be far behind, although the internal report found that neither Borgen nor any of the board members broke the law. Prosecutors in Denmark and Estonia are pursuing criminal probes of the bank. The Danish government has threatened a $630 million fine, and U.S. and U.K. authorities are studying aspects of the case. The stock’s plunge of about 30 percent since the beginning of the year has erased almost $12 billion from Danske Bank’s market value.
Denmark consistently ranks in surveys as one of the
world’s least corrupt and most transparent nations. Now, S&P Global Ratings
says the scale of the scandal could put even the country’s AAA credit rating at
risk. Lawmakers across the political spectrum are expressing dismay and rushing
to toughen anti-money-laundering rules. With Denmark’s banks under scrutiny
from foreign authorities, it’s even more important to avoid “the impression
that we’re not coming down severely on this,” said Danish Business Minister
Rasmus Jarlov in an interview last week.
“The bank has clearly
failed to live up to its responsibility in this matter”
The Danske revelations are just the latest example of
how much needs to be done to stop bad actors from funneling ill-gotten gains
into the European Union, cleansing the money in the process so it can be spent
without raising alarms. Seven months ago it was Latvia, Estonia’s neighbor,
caught in the media and regulatory glare after the U.S.
Department of the Treasury accused the country’s third-largest lender of acting
as a laundromat for cash. That bank denied wrongdoing and has gone into
liquidation. Earlier in September, Dutch giant ING Groep NV agreed to pay €775 million to
settle a probe by the Netherlands prosecutor into misdeeds including money
laundering.
On Sept. 24, the German market watchdog ordered Deutsche Bank AG to improve controls against money laundering and terrorism financing and assigned audit firm KPMG to oversee its efforts. That’s after Germany’s largest bank paid more than $600 million in fines to U.S. and U.K. regulators last year for helping Russian clients take as much as $10 billion out of their country. The string of cases gives a whack-a-mole quality to Europe’s enforcement efforts.
With no centralized European authority tasked with
rooting out money laundering, it’s usually left to national regulators and
local police to do the job. The crackdown in Latvia was led by the U.S., while
the investigation in Estonia was spurred by reporting in Danish newspaper Berlingske—rather than by national or EU officials.
---- Danske is Denmark’s biggest bank and, until recently, was perhaps best known for its cozy ties to the country’s staid corporate establishment. Its largest shareholder, with a 20 percent stake, is A.P. Møller Holding A/S, the investment arm of the foundation that controls A.P. Møller-Maersk A/S, the world’s largest container shipping line.
So how did the bank entangle itself with suspicious
transactions in Estonia? In the 87-page internal report, Danske traces the
lapses to the purchase of Finland’s Sampo Bank in 2007. As part of that deal,
completed on the cusp of the global financial crisis, Danske acquired the unit
in Estonia, a nation of 1.3 million people abutting Russia. While the tiny
Baltic state broke away from the Soviet Union in 1991 and joined the EU in
2004, a quarter of the population is ethnically Russian. Cultural and economic
ties to its former overlord remain.
Among a series of missed opportunities, according to
the report, Danske Bank ignored warnings as far back as 2007 from Estonia’s
regulator and the Russian central bank that the unit was being used for tax
evasion and money laundering. The bank also failed to properly investigate a
whistleblower report from 2013. By the end of that year, the nonresident
portfolio at Danske’s unit—those accounts held by customers outside the
country—amounted to 44 percent of all such deposits at Estonia’s banks, up from
27 percent in 2007.
More
“The
world is a place that’s gone from being flat to round to crooked.”
Mad
Magazine
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?
MIT's lithium-carbon dioxide battery generates power and solidifies carbon
Michael Irving September 24th, 201As the world warms up, it's becoming increasingly obvious that we can't just keep belching all our carbon dioxide out into the atmosphere. Scientists are searching for ways to pluck it out of the air and stash it underground, store it in concrete, turn it into carbon nanofibers or even make fuel out of it. Now researchers at MIT have found another way to reuse this unwanted element – build lithium-carbon dioxide batteries.
Carbon dioxide may sound versatile given that list of possible uses, but the problem is that converting it into different forms often requires high voltages and plenty of energy. That can cancel out the benefits of removing it from the atmosphere in the first place.
So the MIT team set out to see if CO2 could be captured and used in a battery. Because CO2 isn't very reactive, previous attempts at lithium-carbon dioxide batteries have needed to use metal catalysts, but the researchers here found a way to do so using a carbon electrode instead.
First, the carbon dioxide is preactivated by incorporating it into an amine solution. This watery solution is then combined with another liquid electrolyte, and used in the battery with a carbon cathode and a lithium anode.
"What we've shown for the first time is that this technique activates the carbon dioxide for more facile electrochemistry," says Betar Gallant, an author of the study. "These two chemistries — aqueous amines and nonaqueous battery electrolytes — are not normally used together, but we found that their combination imparts new and interesting behaviors that can increase the discharge voltage and allow for sustained conversion of carbon dioxide."
Not only does the battery provide power on a level comparable to existing lithium-gas batteries, but as it discharges it converts the carbon dioxide in the electrolyte into a solid mineral carbonate form. That's a much more efficient way to convert CO2 from a gas to a solid than most other techniques, and that solid form can then be used for other purposes – including making the carbon cathode for future batteries.
The current version is a proof-of-concept however, and the researchers say that commercial lithium-carbon dioxide batteries are still years away. In the meantime, several other problems need to be sorted out, such as rechargeability – for now, the battery can only run for about 10 cycles.
In future, the team says the system could also be adapted into a continuous-operation version. That means that rather than using up the preloaded supply of CO2, a steady stream of the stuff could be funneled through the system, converting the gas into a usable solid form and generating power in the process.
https://newatlas.com/lithium-carbon-dioxide-capture-battery/56465/
The monthly Coppock Indicators finished August.
DJIA: 25,965 +207 Down. NASDAQ:
8,110 +265 Up. SP500: 2,902 +168 Up.
All
three slow indicators moved down in March, but the S&P and NASDAQ have now turned
up. September will be critical for
confirmation of this change.
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