Friday, 19 October 2018

The Calm Before Next Week’s Storm?


Baltic Dry Index. 1565  +11  Brent Crude 79.44

Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof.

John Kenneth Galbraith

We open today with China’s largely scripted GDP figures. Officially, though slightly below target, they were pretty much on script. Unofficially, regular China watchers think the real GDP number is closer to 4 to 5 percent. With most trade war tariffs only taking effect in September, the current quarter’s figure will be of more interest, even if still scripted.

China’s growth slows to weakest pace since financial crisis

Published: Oct 18, 2018 11:08 p.m. ET
BEIJING — China’s economic expansion slowed to its weakest pace since the financial crisis, as top financial regulators launched an extraordinary coordinated effort to calm jittery investors.

The rate of growth in the third quarter dropped to 6.5%, falling short of market expectations, official statistics released Friday showed. Growth in industrial output and consumption weakened in the quarter, while exports held up despite the country’s bruising trade fight with the U.S.

Read: Chinese stocks bounce back despite disappointing GDP numbers

Shortly before the data was released, People’s Bank of China Gov. Yi Gang, banking and insurance regulatory chief Guo Shuqing and top securities cop Liu Shiyu all issued statements urging investors to remain calm. Guo said recent “abnormal fluctuations” in Chinese stock markets don’t reflect the country’s economic fundamentals and “stable financial system.” The Shanghai Composite Index — the worst performer among global benchmarks — has declined 25% so far this year. It closed nearly 3% lower on Thursday and opened down on Friday.

The 6.5% quarterly growth is the lowest since the first quarter of 2009 and is mixed news for Chinese leaders as they brace for a prolonged trade conflict with Washington. While the economy remains on track to meet Beijing’s full-year growth target of about 6.5%, the third-quarter performance showed more signs of weakness — a scaleback of industrial production, slowing retail sales, anemic big-ticket investments and rising corporate defaults. That could limit Beijing’s room to maneuver when negotiating with the U.S., whose economy is growing robustly.
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Housing sales in China growing slower

Published: Oct 18, 2018 11:02 p.m. ET
BEIJING--Housing sales growth momentum slowed in the first nine months of the year, as limits on buying homes in many cities damped demand.

Housing sales by value for the January-September period rose 15.6% from a year earlier, according to data released Friday by the National Bureau of Statistics. That compared with a 16.4% gain in the first eight months of the year.

In September, housing sales rose 11%, compared with a 17.8% gain in August.

Property investment, including commercial and residential real estate, rose 9.9% from a year earlier to 8.9 trillion yuan ($1.282 trillion) in the first nine months of the year, compared with a 10.1% increase in the January-August period.

Construction starts increased 16.4% from a year earlier in the January-September period, compared with 15.9% growth in the first eight months of the year.

Asia shares slide further as weak China growth adds to woes

October 19, 2018 / 2:12 AM
SHANGHAI (Reuters) - Asian stocks slipped further on Friday as China posted its weakest economic growth since the global financial crisis, adding to market concerns about trade disputes, rising U.S. interest rates and Italy’s free-spending budget.

The MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was 0.2 percent weaker following China's latest GDP reading. Australian shares fell 0.3 percent and Japan's Nikkei average .N225 was 1.1 percent lower.

A weak Wall Street on Thursday set the tone for Asian trade. The Dow Jones Industrial Average .DJI fell 1.27 percent, the S&P 500 .SPX lost 1.44 percent and the Nasdaq Composite .IXIC dropped 2.06 percent.

“Markets continue to digest the combination of higher U.S. rates, ongoing trade tension and Chinese growth concerns,” analysts at ANZ said in a note.

---- Shares in China, which initially extended losses after the figures were released, rallied as investors digested statements from senior regulators pledging support for private firms and companies facing liquidity problems.

The benchmark Shanghai Composite index .SSEC was 0.5 percent higher at around 0300 GMT, after hitting near four-year lows on Thursday, in part hurt by widespread concern that plunging share prices could lead to a spike in margin calls.

Analysts cautioned that China’s economy would continue to face difficulties.

“Looking ahead, economic outlook is not optimistic with exports facing further headwinds as U.S. tariffs kick in and demand from emerging countries ebbs,” said Nie Wen, an analyst at Hwabao Trust in Shanghai.

China’s premier said this week that the economy faces increased downward pressure, but that government will take measures to stabilise growth.
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Lastly, as President Trump finally seems to get up to speed on the Saudi murder in Istanbul, the hunt is on for the victim’s body parts. Even so, President Trump and his Secretary of State, still seem to be in denial that the Saudi Kingdom authorised a murder in their Istanbul consulate and both give out the impression the de facto ruler Crown Prince Mohammad has them over a barrel. Contrast and compare with the treatment of Russia and China.

Trump says Saudi journalist likely dead; Turkey searches for remains

October 17, 2018 / 6:27 AM
WASHINGTON/ANKARA (Reuters) - President Donald Trump said on Thursday he presumes missing Saudi journalist Jamal Khashoggi is dead and that the U.S. response to Saudi Arabia will likely be “very severe” but that he still wanted to get to the bottom of what exactly happened.

---- Trump, who has forged closer ties with Saudi Arabia and the 33-year-old Crown Prince Mohammed bin Salman, acknowledged for the first time on Thursday that Khashoggi, a U.S. resident and Washington Post columnist, had likely been killed. 

“It certainly looks that way to me. It’s very sad,” Trump told reporters before boarding Air Force One on a political trip. In an interview with the New York Times on Thursday, Trump based his acknowledgment that Khashoggi was dead on intelligence reports.

Turkish officials have said they believe Khashoggi was murdered at the consulate and his body chopped up and removed. Riyadh strongly denies the allegations and said it is investigating the disappearance of the journalist, who was critical of Saudi rulers, calling for reforms.

---- Trump spoke hours after receiving an update from Secretary of State Mike Pompeo on the results of Pompeo’s emergency talks in Saudi Arabia and Turkey this week.

In the New York Times interview, Trump also expressed confidence in intelligence reports that suggest a high-level Saudi role in the suspected killing of Khashoggi. Trump said, however, it was still “a little bit early” to draw definitive conclusions about who may have been behind it.

Pompeo told reporters that he advised Trump that Saudi Arabia should be given a few more days to complete its investigation into the disappearance of Khashoggi, which has caused an international outcry and strained Saudi relations with western countries and corporations.

---- Asked what would be the consequences for Saudi Arabia, Trump said: “Well, it’ll have to be very severe. I mean, it’s bad, bad stuff. But we’ll see what happens.”

The United States considers Riyadh a linchpin in efforts to contain Iran’s regional influence and a key global oil source, and Trump has shown no inclination to mete out harsh punishment to the Saudis. The United States and other Western nations are in a dilemma of how to respond because of lucrative business ties, including weapons sales to Riyadh.

Referring to the Saudis, Pompeo said he told Trump that when the Saudi investigation was completed “we can make decisions about how - or if - the United States should respond to the incident surrounding Mr. Khashoggi.”

By casting doubt on whether the United States will respond at all, Pompeo reflected the internal struggle among Trump and his national security advisers on what to do should the Saudi leadership be blamed for what happened to Khashoggi.

“I think it’s important for us all to remember, too - we have a long, since 1932, a long strategic relationship with the Kingdom of Saudi Arabia,” Pompeo told reporters, also calling Saudi Arabia “an important counterterrorism partner.”
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Turkish police search forest, coastal city for journalist's remains - sources

October 18, 2018 / 10:24 PM
ANKARA (Reuters) - Turkish police are searching a forest on the outskirts of Istanbul and a city near the Sea of Marmara for remains of a Saudi dissident journalist who disappeared two weeks ago after entering the Saudi consulate, two Turkish officials said.

Investigators have also recovered “many samples” from their searches of the consulate and the consul’s residence, the senior officials told Reuters, and will attempt to analyse those for traces of the DNA of journalist Jamal Khashoggi. 

Saudi Arabia has denied allegations by Turkish officials who have said Khashoggi was killed inside the building and his body removed. His disappearance and likely death has caused an international outcry and strained relations between Saudi Arabia and the United States and European countries.

Authorities widened the geographic focus of the search after tracking the routes and stops of cars that left the Saudi consulate and the consul’s residence on Oct. 2, the day Khashoggi was last seen, the senior officials said.

Khashoggi’s killers may have dumped his remains in Belgrad Forest adjacent to Istanbul, and at a rural location near the city of Yalova, a 90-kilometre (55 mile) drive south of Istanbul, the officials said.

“The investigations led to some suspicion that his remains may be in the city of Yalova and the Belgrad forest, police have been searching these areas,” one of the officials said. A “farm house or villa” may have been used for the disposal of remains, the official said.

Turkish investigators on Thursday for a second time searched the Saudi consulate where Khashoggi, a U.S. resident and Washington Post columnist who was a strong critic of Crown Prince Mohammed bin Salman, vanished.

They have also searched the consul’s residence.

Many samples were taken from the consulate and the residence, the official said, including soil and water. All of the samples will be taken to analyse for traces of Khashoggi’s DNA.

Khashoggi went to the consulate seeking documents for his planned marriage and has not been seen since.

There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.

John Kenneth Galbraith

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

While Canada became only the second country to legalise dopeheads driving around 24/7, Ford UK wants to make GB driving really interesting by removing all the traffic lights, replaced by their new vehicle-to-vehicle technology whizz (V2V.) I wonder what UK car insurers think. It certainly should liven up the school runs.

Presumably, Ford intends all pedestrians and cyclists to have to carry around the V2V technology, probably dogs and horses too. Car repair shops will love it, hospitals hate it. Still it might get GB’s OAP numbers down. Wait a minute, I’m an OAP now.

Traffic lights could be removed from UK roads says Ford

Vehicle-to-vehicle (V2V) technology is being developed by Ford, and it could see the end of traffic lights, a reduction in congestion and reduced accident rates.

All too often, a car manufacturer makes a statement which could amount to a step toward a motoring utopia, only to then clarify that ‘this is our future goal’, or words to that effect.

Ford Motor Company have recently made such a statement – that the use of their technology could see the end of traffic lights, it may well reduce congestion, which in turn will see pollution levels diminish, and of course, a reduction in accident rates. Only this was more than a statement.

UK Autodrive

As part of the government-backed UK Autodrive programme, Ford has been demonstrating their new ‘Intersection Priority Management’ (IPM) system in Milton Keynes.

Essentially, the system allows connected cars to send and transmit data such as location, speed and the direction they’re travelling in to similarly equipped cars in the same vicinity, which then advises the driver of the optimum speed to navigate other vehicles or junctions without stopping, of course, the ultimate goal is to use this software as part of a suite of full-autonomy functions.

Ford says that it’s based on how humans negotiate crowded areas instinctively – it just happens, with no sudden stops or emergency avoidance action, and more importantly, little congestion.

Christian Ress, supervisor with the Driver Assist Technologies at the Ford Research & Advanced Engineering says: “With the connected car technology we have been demonstrating in Milton Keynes this week, Ford envisage a world where vehicles are more aware of each other and the environment they’re in, which will enable intelligent cooperation and collaboration on the road networks”.

Traffic lights

Research shows that on average, a motorist will spend two years of their life waiting at traffic lights, so any reduction in that time would not only be welcome but could be beneficial to the environment.
It’s thought that reducing the time spent waiting at traffic lights would have a demonstrable effect on congestion, which in turn would, of course, help to lower city pollution levels. Maybe this could be part of the solution to end the spread of congestion charging?

Ford’s own research also says that road junctions cause up to 60% of Road Traffic Collisions (RTCs), so vehicles fitted with the Intersection Priority Management system will be inherently safer, with the software analysing the trajectory and speed of any vehicle around it.
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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?

3D-printed lithium-ion batteries

Date: October 17, 2018

Source: American Chemical Society

Summary: Electric vehicles and most electronic devices, such as cell phones and laptop computers, are powered by lithium-ion batteries. Until now, manufacturers have had to design their devices around the size and shape of commercially available batteries. But researchers have developed a new method to 3D print lithium-ion batteries in virtually any shape.

They report their results in ACS Applied Energy Materials.

Most lithium-ion batteries on the market come in cylindrical or rectangular shapes. Therefore, when a manufacturer is designing a product -- such as a cell phone -- they must dedicate a certain size and shape to the battery, which could waste space and limit design options. Theoretically, 3D-printing technologies can fabricate an entire device, including the battery and structural and electronic components, in almost any shape. However, the polymers used for 3D printing, such as poly(lactic acid) (PLA), are not ionic conductors, creating a major hurdle for printing batteries. Christopher Reyes, Benjamin Wiley and colleagues wanted to develop a process to print complete lithium-ion batteries with an inexpensive 3D printer.

The researchers increased the ionic conductivity of PLA by infusing it with an electrolyte solution. In addition, they boosted the battery's electrical conductivity by incorporating graphene or multi-walled carbon nanotubes into the anode or cathode, respectively. To demonstrate the battery's potential, the team 3D printed an LED bangle bracelet with an integrated lithium-ion battery. The bangle battery could power a green LED for about 60 seconds. According to the researchers, the capacity of the first-generation 3D-printed battery is about two orders of magnitude lower than that of commercial batteries, which is too low for practical use. However, they say that they have several ideas for increasing the capacity, such as replacing the PLA-based materials with 3D-printable pastes.

Story Source:
Materials provided by American Chemical Society

Another weekend and the calm before next week’s storm?  Will the Turks find the missing body parts? Will President Trump and his team finally be forced to act on the Saudi murder? Will the Saudis dare play the oil card ahead of the US elections? My guesses are yes, no and no. The Saudis have America over a barrel. Have a great weekend everyone. Winter comes next in the northern hemisphere.

"Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights."

Alan Greenspan

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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