Baltic Dry Index. 1576 +11 Brent Crude 79.95
Oh,
what a tangled web we weave, when first we practise to deceive.
Sir
Walter Scott.
We are almost out of
crash season, although this year it looks like, thanks to President Trump, Iran,
and a set of Saudi murderers from central casting in Riyadh, it looks like
being extended into November.
We are two weeks away
from Trump’s attempt to force Iranian oil exports from the global market. Two
weeks away from an unpredictable US election, that may or may not have been affected
by the despicable Saudi state murder in Istanbul. Perhaps one day away from
Turkey releasing more details of the Saudi state murder.
Two months away from
Trump’s anti-China tariffs surging to 25 percent on January 1. Six or seven weeks away from another possible
Federal Reserve rate hike. Three weeks
away from the resumption of the all against all currency wars, after the US
elections pass. One day away from the EUSSR having to pounce on Italy’s budget.
Plenty there to fret
over, what could possibly go wrong?
In any great organization it is far, far safer to be wrong with the majority than to be right alone.
John Kenneth Galbraith.
Asia shares pare losses as China rallies on stimulus hope
October 22, 2018 / 1:30 AM / Updated 2
hours ago
SYDNEY
(Reuters) - Asian share markets pared early losses on Monday as Chinese stocks
swung higher for a second session and helped offset geopolitical concerns over
Saudi Arabia, Italy and Brexit.
Blue chips in Shanghai climbed 3.5 percent in early trade there, extending Friday’s bounce on Beijing’s pledge of support for the economy and companies.
That helped E-Mini futures for the S&P 500 halve their initial loss to be down 0.25 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan turned around to edge up 0.2 percent.
Japan’s Nikkei was off 0.2 percent, after being down over 1 percent earlier, as were South Korean stocks.
This week is the peak period of the U.S. earnings season and companies reporting include Amazon, Alphabet, Microsoft and Caterpillar.
Helped
by a strong economy and deep corporate tax cuts, S&P 500 earnings per share
are expected to grow 22 percent in the third quarter, according to I/B/E/S data
from Refinitiv.
“The season on an absolute basis will likely wind up being ‘strong’ and
the vast majority of companies will exceed consensus expectations,” said
analysts at JPMorgan in a note.
“However, headwinds are building at the margin in the form of U.S.
dollar strength, supply chain disruptions owing to all the trade uncertainty,
and rising costs. Even the mere hint of a turn in profit fundamentals would
have severe ramifications.”
The outlook for global growth in 2019 has dimmed for the first time,
according to Reuters polls of economists who cautioned that the U.S.-China
trade war and tightening financial conditions would trigger the next downturn.
---- In Europe, Italy has until Monday to explain to the Commission its breach of rules and faces the rejection of its budget, which may eventually lead to sanctions.
The Italian government expects the European Commission to decide for the
first time ever on Tuesday to ask a member state to revise its draft budget, a
government source said on Sunday.
More
Oil rises on looming Iran sanctions, but U.S.-China trade war caps gains
October 22, 2018 / 2:07 AM / Updated 24
minutes ago
SINGAPORE
(Reuters) - Oil prices rose on Monday as markets were expected to tighten once
U.S. sanctions against Iran’s crude exports are implemented next month.
Front-month Brent crude oil futures LCOc1 were at $79.96 a barrel at
0414 GMT, 18 cents above their last close.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $69.32 a
barrel, 20 cents above their last settlement.
The U.S. sanctions on the oil sector in Iran, the third-largest producer
in the Organization of the Petroleum Exporting Countries (OPEC), are set to
start on Nov. 4. The United States under President Donald Trump is trying to
reduce Iranian oil export to zero to force the country to renegotiate an
agreement on its nuclear programme.
U.S. Treasury Secretary Steven Mnuchin told Reuters on Sunday that it
would be harder for countries to get sanction waivers than it was during the
previous Obama administration, when several countries, especially in Asia,
received them.
OPEC agreed in June to boost supply to make up for the expected disruption
to Iranian exports.
However, an internal document reviewed by Reuters suggested OPEC is
struggling to add barrels as an increase in Saudi supply was offset by declines
elsewhere.
Fatih Birol, executive director of the International Energy Agency (IEA),
said on Monday that other producers may struggle to fully make up for the
expected Iran disruption, and that oil prices could rise further.
Traders said oil consumers were stockpiling in anticipation of more
disruptions.
More
In Saudi murder news,
the sky has fallen in on all official attempts at a cover up, despite President
Trump’s apparent best efforts to lend his prestige to the effort. With an unintended
irony, Saudi Foreign Minister Adel al-Jubeir labelled the murder
a “grave mistake.” No one has yet been able to find the missing, possibly
dismembered body.
In a speech
yesterday, Turkish President Erdogan hinted at more details to follow on
Tuesday. With the US midterm elections now just two weeks away, US politicians
are scrambling for cover, lest the Saudi murder suddenly become a motivating issue
with the voters.
Congressional Leaders Reject Saudi's Story on Writer's Death
By Mark Niquette
Updated on 21 October 2018, 17:32 GMT+1
Congressional leaders said they don’t believe the explanation from Saudi
Arabia that a fistfight led to the death of journalist Jamal Khashoggi, and
that if Saudi Crown Prince Mohammed bin Salman was behind the killing, the U.S.
must impose sanctions.
The comments set up a possible clash between Congress and President
Donald Trump, who’s also cast doubt about the Saudi version of events but so
far is standing behind the crown prince and emphasizing the economic ties
between the two countries.
The comments set up a possible clash between Congress and President Donald Trump, who’s also cast doubt about the Saudi version of events but so far is standing behind the crown prince and emphasizing the economic ties between the two countries.
“If he directed it, we need to put the same types of sanctions in place that we’ve done with other people who’ve done the same thing,” Senator Bob Corker of Tennessee, chairman of the Foreign Relations Committee, said on CNN’s “State of the Union” on Sunday. “Collectively, we’ve got to deal with this in an appropriate way.’’
Reversing earlier denials of involvement in Khashoggi’s disappearance on Oct. 2, Saudi authorities said Saturday that an initial probe showed that the Washington Post contributor was killed after “discussions” at the Saudi consulate in Istanbul turned violent.
The Saudi account conflicts with reports by Turkish officials that a Saudi “hit team” flew in specifically to kill and then dismember Khashoggi, and a New York Times report that some members of the group had close ties to the crown prince. Turkey’s president plans to speak about the case on Tuesday, and the Saudi foreign minister in an interview on Sunday acknowledged a “cover up.”
---- Bipartisan members of Congress took to the Sunday morning political shows to say the Saudi story lacks credibility, and that they think the crown prince was likely behind Khashoggi’s death.
“I find it impossible to believe that the crown prince wasn’t involved,”
Republican Senator Lindsay Graham of South Carolina, a Trump ally, said on
Fox’s “Sunday Morning Futures.” “I’m not going to look the other way.”
More
Saudi Arabia calls Khashoggi killing 'grave mistake,' says prince not aware
October 21, 2018 / 1:27 PM / Updated 3
hours ago
WASHINGTON/LONDON
(Reuters) - Saudi Arabia on Sunday called the killing of journalist Jamal
Khashoggi at its Istanbul consulate a “huge and grave mistake,” but sought to
shield its powerful crown prince from the widening crisis, saying Mohammed bin
Salman had not been aware.
The comments from Foreign Minister Adel al-Jubeir were some of the most
direct yet from Riyadh, which has given multiple and conflicting accounts about
Khashoggi’s killing on Oct. 2, first denying his death and later admitting it
amid an international outcry.
“This was an operation that was a rogue operation. This was an operation
where individuals ended up exceeding the authorities and responsibilities they
had,” Jubeir said on the U.S. broadcaster Fox.
“They made the mistake when they killed Jamal Khashoggi in the consulate
and they tried to cover up for it,” he said.
The weeks of denial and lack of credible evidence in the face of
allegations from Turkish officials that Khashoggi had been killed have shaken
global confidence in ties with the world’s top oil exporter.
U.S. Treasury Secretary Stephen Mnuchin said Saudi Arabia’s admission
that the Washington Post columnist was killed in a fistfight was a “good first
step but not enough,” though he added it was premature to discuss sanctions
against Riyadh.
---- After two weeks denying any involvement in the 59-year-old’s disappearance, Saudi Arabia on Saturday said Khashoggi, a critic of the crown prince, died during a fight in the building. An hour later, another Saudi official attributed the death to a chokehold.
“Nothing can justify this killing and we condemn it in the strongest
possible terms,” Germany, Britain and France said in their joint statement.
“There remains an urgent need for clarification of exactly what happened
... beyond the hypotheses that have been raised so far in the Saudi
investigation, which need to be backed by facts to be considered credible.”
---- In a speech on Sunday, Turkish President Recep Tayyip Erdogan appeared to suggest he was getting ready to release some information about the Turkish investigation, and would do so at his weekly speech on Tuesday to members of his ruling AK Party.
Erdogan has remained largely silent on the case, although Turkey’s
pro-government newspapers have released information about events at the
consulate.
Turkey’s Anadolu agency said early on Monday that Erdogan and Trump had
spoken on the telephone and agreed that “all aspects” of the case needed to be
cleared up.
More
Finally, we end the
start of the week with some really good news from France. UK consumers might
want to stock up before Brexit on March 29th.
Bordeaux Heading for `Great, Classic' Vintage After Dry Summer
By Guy Collins
21 October 2018, 11:26 GMT+1
Bordeaux wine-makers are heading for a “great, classic” vintage this year
after an unusually warm growing season and exceptionally dry summer and
harvest, according to Olivier Bernard, whose family owns Domaine de Chevalier in Pessac-Leognan
south of the city.“2018 was a vintage with two periods,” he said at a tasting of wines from the 2016 vintage organized in London on Oct. 16 by the Union des Grands Crus de Bordeaux. “A very wet period until the end of June, and very dry after July. We can already tell you we have a great vintage.”
Bordeaux, which remains the reference point for the fine wine market due
to its combination of high-quality vineyards and relatively large production,
is susceptible to swings in the weather, unlike New World wine-making areas
such as California, South Africa and Australia that tend to have a more
reliable climate. Bordeaux accounted for 60 percent of trading on the
London-based Liv-ex wine market by value in the week to Oct. 18, with Champagne
a distant second at 13 percent, according to Liv-ex’s Talking Trade report.
Over the past decade Bordeaux has had exceptionally high quality
vintages in 2009, 2010, 2015 and 2016, and a run of notably more difficult
years between 2011 and 2013, with 2013 being remembered particularly for being
cold and wet. Wine-makers interviewed at the London tasting drew comparisons
between the 2018 harvest and recent standout vintages.
“2016
is better than ’15, and ’18 will be better than ’16,” according to Bernard
Audoy of Chateau Cos Labory, an estate in the
Saint Estephe region of the northern Medoc. “We’re at the level of ’09 and ’10,
more ’10 than ’09.” He described the vintage as excellent following a
“beautiful end to the season.”
More
I can certainly see that you
know your wine. Most of the guests who stay here wouldn’t know the difference
between Bordeaux and Claret.
Basil
Fawlty.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, no bent cooks and
scoundrels today. Today, yet another red flag warning of a possible global
recession ahead, in 2019 rather than in what’s left of 2018.
Ned Davis Research’s, Global Recession Probability
Model is now in the 80s. A reading above 70 gives a probability of a recession
ahead in 2019, with a probability of about
92+ percent.
Given that the Trump China tariffs jump to 25
percent on Jan 1, and if the Iran sanctions starting November 4, are successful
in forcing Iran’s oil exports sharply lower, pushing prices higher as winter
starts, the likelihood is for an earlier onset of recession, rather than later.
All the more so as the Fed continues tightening interest rates, with another
hike expected in December, and at least another two expected in 2019.
NDR just won an award this month as best global
research firm, so they probably know a little about what they write. Do I
bet on the 92+ percent chance of a recession or the 7+ percent chance that this
is an erroneous signal? Tough one, but it usually pays to take the edge rather
than lay it.
If the signal is right, how much longer do we have
and how much higher does the model rise? There’s no way of knowing, of course,
but it’s probably weeks rather than months, given that after the November 6th
US elections, everyone goes off best behaviour again in the trade and currency
wars.
Below, the link to the websites that cover it.
Disclosure: I have no relationship to Ned Davis Research, though I have enjoyed
their research for many years.
Recession is when a neighbor
loses his job. Depression is when you lose yours.
Ronald Reagan.
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?
Producing defectless metal crystals of unprecedented size
Date:
October 18, 2018
Source:
Institute for Basic Science
Summary:
Researchers have developed a new method to convert inexpensive polycrystalline
metal foils to single crystals with superior properties. It is expected that
these materials will find many uses in science and technology.
A research group at the Center for Multidimensional Carbon Materials,
within the Institute for Basic Science (IBS), have published in Science
about a new method to convert inexpensive polycrystalline metal foils to single
crystals with superior properties. It is expected that these materials will
find many uses in science and technology.
The structure of most metal materials can be thought of as a patchwork
of different tiny crystals, bearing some defects on the borders between each
patch. These defects, known as grain boundaries (GBs), worsen the electrical
and sometimes mechanical properties of the metal. Single crystal metals,
instead, have no GBs and show higher electrical conductivity and other enhanced
qualities that can play a major role in multiple fields, such as electronics,
plasmonics, and catalysis, among others.
Single crystal metal foils have
attracted great attention also because certain single crystal metals, such as
copper, nickel, and cobalt, are suitable for the growth of defectless graphene,
boron nitride, and diamond on top of them.
Single crystals are normally fabricated beginning with a 'crystal seed'.
Conventional approaches, such as the Czochralski or Bridgman methods, or others
based on the deposition of thin metal films on single crystal inorganic
substrates, achieve small single crystals at high processing costs.
To unlock the full potential of such metal structures, the IBS team led
by Rodney Ruoff at Ulsan National Institute of Science and Technology (UNIST),
along with JIN Sunghwan and SHIN Hyung-Joon, invented the "contact-free
annealing" (CFA) technique. CFA involves heating the polycrystalline metal
foils to a temperature slightly below the melting point of each metal. This new
method does not need single crystal seeds or templates, which limit the maximum
crystal size, and was tested with five different types of metal foils: copper,
nickel, cobalt, platinum, and palladium. It resulted in a 'colossal grain
growth', reaching up to 32 square centimeters for copper.
The details of the experiment varied according to the metal used. In the
case of copper, quartz holders and a rod were used to hang the metal foil, like
clothes suspended on clothes lines. Then, the foil was heated in a tube-shaped
furnace to approximately 1050 degrees Celsius (1323 degrees Kelvin), a
temperature close to copper's melting point (1358 K) for several hours in an
atmosphere with hydrogen and argon, and then cooled down.
The scientists also achieved single crystals from nickel and cobalt
foils, each about 11 cm2. The achieved sizes are limited by the size of the
furnace, so that one could expect production of larger foils with 'industrial'
processing methods.
----"Now
that we have explored these five metals and invented a straightforward scalable
method to make such large single crystals, there's the exciting question of
whether other types of polycrystalline metal films, such as iron, can also be
converted to single crystals," note first author of the study, JIN
Sunghwan, and his supervisor Ruoff. Ruoff enthusiastically concludes "Now
that these cheap single crystal metal foils are available, it will be
tremendously exciting to see how they are used by the scientific and
engineering communities!"
The monthly Coppock Indicators finished September.
DJIA: 26,458 +199 Down. NASDAQ:
8,046 +261 Down. SP500: 2,914 +166 Down.
All
three slow indicators moved down in March, but the S&P and NASDAQ turned up in August. September will be critical for confirmation
of this change. All 3 slow indicators failed to confirm August’s positive
change making October very vulnerable to a sell-off.
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