Baltic Dry Index. 1513 -44 Brent Crude 77.95
“The
Brexiteers outside looked from May to Merkel, and from Merkel to May and from May to Merkel again; but
already it was impossible to say which was which.”
With
apologies to George Orwell, Animal Farm.
Today, yet more sign
that the global economy is already rolling over, from the early negative effects
of Trump’s friend and foe alike, baby trade war. With another round of 200
billion punitive tariffs about to hit China possibly as early as tomorrow, and
China promising tit for tat retaliation, things will get “exciting” quite fast
from here on out. All the more so if Trump renews his trade war on NATO, Canada
and Europe.
And don’t forget
Trump’s insane attempt to force oil prices sharply higher, by banning Iranian
oil from the global marketplace. An old fashioned shooting war looks likely for
the Persian Gulf come November.
Below, stocks start to
notice that Goldilocks died quite some time ago.
"We
finished the year, and we reported that we had $17 billion of cash sitting at
the bank's parent company as a liquidity cushion. As the year has gone on, that
liquidity cushion has been virtually unchanged."
Alan Schwartz, CEO Bear Stearns, March 12, 2008.
Bust March 16, 2008.
September 5, 2018 / 1:41 AM
Stocks fall, dollar supported as trade woes in spotlight
TOKYO
(Reuters) - Stock markets in Asia tracked their global peers lower while the
safe-haven dollar hovered near a two-week high on Wednesday as heightened
worries over international trade conflicts curbed investor appetite for riskier
assets.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.5 percent.
The Shanghai Composite Index .SSEC retreated 0.4 percent.
Australian stocks lost 0.75 percent, South Korea's KOSPI .KS11 dropped 0.1 percent and Japan's Nikkei .N225 shed 0.35 percent.
U.S. stocks had slipped on Tuesday as a drop in heavyweights Facebook (FB.O) and Nike (NKE.N) added to worries over trade negotiations between the United States and other major economies.
MSCI’s gauge of stocks across the globe .MIWD00000PUS shed about 0.5 percent the previous day.
“The U.S.-Canada talks are due to resume today and this keeps trade issues at the forefront, with a
wait-and-see mood prevailing in the equity markets,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
----“Then there is the U.S.-China trade issue, in addition to turbulence in the emerging market currencies that the markets have to worry about,” Ichikawa at Sumitomo Mitsui Asset Management said.
Keeping investors nervous is the threat of fresh U.S tariffs on another $200 billion worth of Chinese goods that could take effect after a public comment period ends on Thursday.
Emerging markets stocks and currencies faced their latest round of pressure with news that South Africa had slipped into recession and concerns brewing about inflation in Turkey.
Argentina's peso ARS=RASL finished the day down over 2 percent on Tuesday. The peso fell although U.S. President Donald Trump voiced support for Argentine President Mauricio Macri and his efforts to win IMF financing in the wake of a deepening economic crisis.
More
Emerging-Market Contagion Fears Rotate From Currencies to Stocks
Bloomberg News
Updated on 5 September 2018, 04:47 GMT+1
Pressure on emerging markets shifted from currencies to stocks in Asian
trading Wednesday, as prospects for higher funding costs threaten to diminish
the appeal of companies benefiting from faster economic growth than in the
developed world.
The MSCI Asia Pacific Index of shares was down 1 percent as of 11:46
a.m. in Hong Kong, with benchmarks in Jakarta sliding 3.1 percent and Manila
1.7 percent. Indonesia’s rupiah -- one of the region’s more vulnerable thanks
to the country’s external financing needs, was little changed after hitting its
weakest since the Asian financial crisis Tuesday.
Underlying the moves: continuing strength in the dollar that’s making offshore debt servicing more costly for borrowers from Brazil to Malaysia to South Africa. A negative tone was set Tuesday on the one hand by strong U.S. manufacturing data that boosted the odds of further Federal Reserve tightening, and on the other by news that South Africa’s economy had slumped into recession.
“There seems to be no sign of halting the downtrend” for emerging-market assets, said Koji Fukaya, chief executive officer at FPG Securities Co. in Tokyo. “Investors have become more selective, and countries with negative news such as weak economic growth, weak external balances and high inflation face stronger sell-offs.”
----Outside the Asian region, worries remain that Turkey’s central bank may not do enough at its policy meeting next week to shore up confidence. And Argentina’s economic outlook has deteriorated even as its officials negotiate with the IMF for accelerated aid.
MSCI Inc.’s index of developing-nation currencies slipped, heading for the lowest close in more than a year. The greenback is hovering near its highest level in over a year after a gauge of American manufacturing jumped to a 14-year high Tuesday.
As U.S. rates rise, investor fears over idiosyncratic risks in emerging markets have climbed, from Argentina’s fiscal woes and Turkey’s twin deficits to Brazil’s contentious elections and a land-reform bill in South Africa. President Donald Trump’s threats to ramp up a trade spat with China with an announcement of tariffs on as much as $200 billion in additional Chinese products as soon as Thursday also hasn’t helped.
Fixed income has also been hit, with the Bloomberg Barclays emerging-market index for dollar bonds down almost 4 percent so far this year. That leaves it heading for its first negative annual performance since 2013, the year of the taper tantrum.
More
US Treasury says China is not manipulating the yuan. Trump says it is, and he may win
Neal Kimberley says China is not a currency manipulator by the US Treasury’s own criteria, but politics may dictate that the US formally classifies Beijing as one. Such a move would exacerbate the already tense China-US relationship
PUBLISHED
: Tuesday, 04 September, 2018, 2:01pm
UPDATED
: Tuesday, 04 September, 2018, 3:06pm
US President Donald Trump might regularly assert that China is a currency manipulator but the US Treasury has yet to make that categorisation in its key semi-annual report to Congress, on the “Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States”. But with the next report due next month, there’s a material risk that the US Treasury will now take that step.
Such a categorisation would only add to the tension in an
already strained
China-US economic relationship, as Washington would then be obliged
to seek bilateral negotiations with Beijing over the issue, and although Trump
could ultimately deploy a waiver, if no solution was agreed within one year,
the US administration would be required to adopt measures that would result in
“remedial action”.
It’s definitely not a step Washington should take lightly but if the Trump administration does want to categorise China as a currency manipulator, then the occasion of the report’s publication, due at the earliest on October 15, would be the opportune moment to do so, just ahead of critical US congressional midterm elections in November.
“I think China’s manipulating its currency, absolutely,” Trump said on August 20.
Trump’s view is unchanged even though, on August 24, the People’s Bank of China reintroduced the counter-cyclical factor, which in current circumstances lends itself to the calculation of a slightly stronger daily value for the renminbi.
More
In other news, Japan begins counting the cost of Typhoon Jebi.
September 5, 2018 / 3:19 AM / Updated 11 minutes ago
Typhoon kills 10 in Japan, boats move stranded passengers from airport
TOKYO (Reuters) - A powerful typhoon killed 10 people in
western Japan and an airport company started to transfer some 3,000 stranded
passengers by boats from a flooded airport, the government said on Wednesday,
as more than a million homes were without power.
Jebi, or “swallow” in Korean, was briefly a super typhoon and is the most powerful storm to hit Japan in 25 years. It follows heavy rains, landslides, floods and record-breaking heat that killed hundreds of people this summer.
About 3,000 tourists stayed overnight at Kansai Airport in western
Japan, an important hub for Japanese companies to export semiconductors.
Television footage showing people lining up to buy food and drinks at a
convenience store in the airport.
Airport officials began transferring the stranded passengers to nearby Kobe airport by high-speed boats and buses on Wednesday morning, the government said.
Chief Cabinet Secretary Yoshihide Suga said about 300 people were injured. It was uncertain when the airport would reopen and some roads and train lines in the affected areas were still closed, he said. About 1.2 million homes were without power.
“The government will continue to do everything possible to tackle these issues with utmost urgency,” Suga told a news conference.
Japan’s JXTG Nippon Oil & Energy Corp (5020.T) shut at least one of the refining units at its 135,000 barrels-per-day Sakai refinery in Osaka in western Japan due to typhoon damage to part of the cooling tower, the trade ministry said. [nL3N1VR00U]
Many chip plants operate in the Kansai region. Toshiba Memory, the world’s second-largest maker of flash memory chips, was monitoring developments closely and may need to ship products from other airports if Kansai remains closed, a spokeswoman said.
More
Finally, was Trump just trumped by India and China on Iranian oil? Time will tell shortly. But what bribe can Trump offer India at next week’s meeting? Idia, like China’s too big to threaten or occupy.
Exclusive: India allows state refiners to use Iran tankers, insurance for oil imports
ReutersSeptember 3,
2018
NEW DELHI (Reuters) - India is allowing state refiners to import Iranian
oil with Tehran arranging tankers and insurance after firms including the
country's top shipper Shipping Corp of India (SCI) halted voyages to Iran due
to U.S. sanctions, sources said.
New Delhi's attempt to keep Iranian oil flowing mirrors a step by China, where buyers are shifting nearly all their Iranian oil imports to vessels owned by National Iranian Tanker Co (NITC).
The moves by the two top buyers of Iranian crude indicate that the Islamic Republic may not be fully cut off from global oil markets from November, when U.S. sanctions against Tehran's petroleum sector are due to start.
President Donald Trump ordered the reimposition of economic curbs after withdrawing the United States from a 2015 nuclear deal between Iran and six world powers. No one trading with Iran will do business with America, he said.
"We have the same situation (as most Western shippers) because there is no cover, so we cannot go (to Iran)," an SCI official told Reuters.
New Delhi turned to the NITC fleet after most insurers and reinsurers had begun winding down services for Iran, wanting to avoid falling foul of the sanctions given their large exposure to the United States.
SCI had a contract until August to import Iranian oil for Mangalore Refinery and Petrochemicals Ltd (MRPL), two sources familiar with the matter said.
Eurotankers, which had a deal with MRPL to import two Iranian oil cargoes every month, has also said it cannot undertake Iranian voyages from September, the sources said.
The sources spoke on condition of anonymity as they were not allowed to talk to the media about commercial deals.
"The shipping ministry has given refiners permission to buy Iranian oil on a CIF (cost, insurance and freight) basis," a government source said.
Under a CIF arrangement, Iran would provide shipping and insurance, enabling Indian refiners to continue purchases of the country's oil despite the non-availability of cover from Western insurers due to the restrictions imposed by Washington.
The move would benefit Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and MRPL, which plan to lift Iranian cargoes during the rest of the fiscal year ending on March 31.
India wants to continue buying oil from OPEC member Iran as Tehran is offering almost free shipping and an extended credit period.
State refiners, which drove India's July imports of Iranian oil to a record 768,000 barrels per day, had planned to nearly double oil imports from Iran in 2018/19.
Unlike their private peers, India's state-run refiners need government permission to import oil on a delivered, or CIF, basis. Federal policy requires them to favour Indian insurers and shippers by buying only on a free on board (FOB) basis.
The permission for CIF purchases applies only to existing annual contracts with Iran, the government source said.
India, Iran's top oil client after China, will finalise its strategy on crude purchases from Tehran after a meeting with top U.S. officials this week, a senior government official told Reuters last week.
More
“I sometimes get the impression that many U.S. media outlets work according to a principle which was common in the Soviet Union. Back then, people used to joke that the newspaper Pravda [Truth] had no truth in it, and the Izvestia [News] paper has no news in it. I get the impression that many U.S. media operate in the same way.”
Russian Foreign Minister Lavrov. May 2017.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, the banksters again. Banksterism, scandal after admitted scandal, after interest rate rigging. Country after country after country. Why do these banksters still have banking licences? In what sense are these “”fit and proper people or organisations?” Too big to fail or jail. Why is the international banking Mafia protected, and by whom?
September 4, 2018 / 10:44 AM
Danske Bank shares fall as Estonia crisis deepens
COPENHAGEN
(Reuters) - Shares in Danske Bank (DANSKE.CO)
fell more than 6 percent on Tuesday after a media report suggested a money
laundering scandal centred on its Estonian branch could be bigger than
previously thought.
The
Danish bank handled up to $30 billion of Russian and ex-Soviet money through
non-resident accounts via its Estonian branch in 2013 alone, according to an
independent investigation, the Financial Times reported late on Monday.
The non-resident portfolio at the Estonian branch has been at the centre of allegations that the bank had flawed money laundering controls from 2007 to 2015, which has led to criminal investigations in both Denmark and Estonia.
A Danish newspaper report in July said that Danske laundered up to $8.3 billion in Estonia in 2007-2015.
Danske Bank has admitted to flaws in its anti-money laundering controls in Estonia and has launched its own inquiry, the results of which are expected this month. It was not able to verify the FT report.
“The matter is very complex, and no conclusion as to the number of suspicious customers or transactions - or indeed the extent of potential money laundering - can be drawn from any individual pieces of information taken out of context,” the bank said in a statement.
Shares fell 6.3 percent to 177.30 Danish crowns at 0925 GMT, near the lowest level since July 2016. Shares traded as low as 173.30 crowns on July 18, when the bank said it would forego profits made from transactions in Estonia that are subject to money laundering investigations.
The latest report could add to the pressure on Chief Executive Thomas Borgen, who was in charge of international banking, including Estonia, from 2009 to 2012. He got the top job at Danske in 2013.
In another money laundering case, Dutch bank ING (INGA.AS) said Tuesday it will pay 775 million euros ($900 million) in a settlement with prosecutors.
Gross profits from its non-resident portfolio in Estonia between 2007 and 2015 amounted to 1.5 billion Danish crowns ($233 million), but it was not clear how much of that amount Danske would waive, it said in July.
The FT said the findings on the non-resident portfolio were contained in a draft report by consultancy Promontory Financial commissioned by Danske Bank.
Promotory Financial was not immediately available for comment when contacted by phone.
A Danske spokesman highlighted the need to distinguish between gross flows in Estonia, potentially suspicious flows, and transactions with a clear illegal purpose.
He said Danske remains on track to publish the findings of its investigation this month and that the FT report would not prompt the bank to speed up release of the investigations.
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?
Cambridge University scientists develop breakthrough in solar power using photosynthesis
Scientists successfully split water into hydrogen and oxygen in new, more efficient process
Scientists at the University of Cambridge have made what they claim is a significant step forward in developing new ways to harness solar power.The breakthrough was made by successfully splitting water into hydrogen and oxygen using 'semi-artificial photosynthesis', a process done by altering the photosynthetic machinery in plants.
The new research, led by academics at the University's St John's College, used semi-artificial photosynthesis to explore new ways to produce and store solar energy. They used natural sunlight to convert water into hydrogen and oxygen using a mixture of biological components and man-made technologies.
Photosynthesis is the process by which plants convert sunlight into energy, and oxygen is produced as a by-product of this photosynthesis when the water absorbed by plants is "split".
Scientists deem this to be one of the most important reactions on the planet because it is the source of nearly all of the world's oxygen and, with this new research, the researchers found that hydrogen, which is produced when the water is split, could potentially be a green and unlimited source of renewable energy.
Their findings could, therefore, be used to revolutionise the systems used for renewable energy production, the researchers claim.
Detailing their research in a new paper, published in Nature Energy, the scientists outline how their platform can achieve unassisted solar-driven water-splitting, while also managing to absorb more solar light than natural photosynthesis.
Katarzyna Sokól, the first author of the paper and a PhD student at St John's College, said:
"Natural photosynthesis is not efficient because it has evolved merely to survive so it makes the bare minimum amount of energy needed - around one-to-two per cent of what it could potentially convert and store."
Artificial photosynthesis has been around for decades but has not yet been successfully used to create renewable energy because it relies on the use of catalysts, which are often expensive and toxic. This means it can't yet be used to scale up findings to an industrial level.
However, Sokól and the team of researchers improved on the amount of energy produced and stored, and also managed to reactivate a process in the algae that had been dormant for millennia.
"Hydrogenase is an enzyme present in algae that is capable of reducing protons into hydrogen," she explained.
"During evolution this process has been deactivated because it wasn't necessary for survival, but we successfully managed to bypass the inactivity to achieve the reaction we wanted - splitting water into hydrogen and oxygen."
Sokól hopes the findings will enable the development of new innovative model systems for solar energy conversion.
https://www.v3.co.uk/v3-uk/news/3062053/cambridge-university-scientists-develop-breakthrough-in-solar-power-using-photosynthesis
Milton
Friedman once put it, if you’re spending your own money on yourself, you care
about price and quality. If you’re spending someone else’s money on yourself,
you only care about quality. If you’re spending your own money on someone else,
you care only about price. And if you’re spending someone else’s money on
someone else, you don’t care about either.
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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