Saturday, 13 October 2018

Weekend Update 13/10/2018. Stocks Far From Over. A Saudi Nightmare.


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

Well we reached the weekend without a repeat of the stock market crash of 1987, but there is little comfort in that. According to the latest polls in Germany, Chancellor Merkel’s Bavarian coalition partners are heading for a drubbing, with a high possibility of a new EU German crisis developing next week, as if the EU needs anymore problems.

JP Morgan’s CEO Dimon, says there’s 'geopolitical issues bursting all over the place,' and he’s right.

Meanwhile President Trump has bought himself a new problem with his Saudi best buddy, Crown Prince Mohammad Bin Salman, who seems to have taken extraordinary rendition to its logical conclusion. President Trump says he is going to call up MBS's 82 year old Daddy for a talk.

Facebook carries on being Facebook, not that anyone important really seems to care.

Below, reading for a possible bad weekend.

The stock market’s nightmare may be far from over

Published: Oct 12, 2018 6:08 p.m. ET
After a nail-biting week with the Dow Jones Industrial Average sinking nearly 1,400 points over two sessions, the jury is still out on whether the selloff signals a fundamental shift in the stock market or a brief episodic correction.

But one thing is certain: Investors should brace for more market drama in the coming days as corporate earnings, rising interest rates and economic data all converge to create an angst-ridden trading backdrop.

Stocks bounced back decisively on Friday with major indexes finishing in positive territory even though they were sharply lower for the week. The fact the market closed on a strong note heading into the weekend negates some of the “technical damage” wrought earlier, according to Jeffrey Saut, chief investment strategist at Raymond James.

But the mood on Wall Street was one of caution rather than euphoria.

Tony Dwyer, chief market strategist at Canaccord Genuity, believes the market may not have found its bottom yet.

“When you get this kind of correction in the broad equity market and surge in volatility, there is typically a bit more downside — either right away or on a retest,” he said in a Friday tweet.

It certainly has not been pretty. The S&P 500 SPX, +1.42% fell 5.1% in the first two weeks of October, its worst start to a fourth quarter since 2008. When the large-cap index drops 5% or more during the first 10 trading days of a quarter, it falls 79% of the time for an average quarterly decline of 11.3%, according to the Dow Jones Data Group.
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Dow wipes out a more than 400-point opening gain to briefly turn negative in powerful reversal

Published: Oct 12, 2018 12:59 p.m. ET
The Dow Jones Industrial Average lost steam in midday action Friday, with the blue-chip index shedding much of its intraday gain to turn momentarily negative. The Dow DJIA, +1.15% most recently, was up 70 points, or 0.3% at 25,126. The index had been up by as many as 414 points, or 1.7%, at the start of trading, signaling that a powerful rebound from a two-session rout may be at hand. Meanwhile, the S&P 500 index SPX, +1.42% was trading with a gain of 0.5% at 2,741, while the Nasdaq Composite Index COMP, +2.29% was up 1.1%. All three benchmarks were well off their best levels of the session.

Friday's action comes after the Dow shed roughly 1,400 points between Wednesday and Thursday. That sharp drop prompted by growing fears about rapidly rising interest rates has left the equity gauges in position to post their worst weekly losses since March. For the Dow, shares of Boeing Co. [s; BA], were creating a roughly 20-point headwind for the benchmark on Friday.

Jamie Dimon sounds warning about 'geopolitical issues bursting all over the place'

  • J.P. Morgan Chase CEO Jamie Dimon raises concerns that rising interest rates and geopolitical flareups could derail U.S. economic growth.
  • While rising rates amid a strong economy are good during periods of inflation, they could eventually put a halt to the nearly decade-long economic growth cycle, he says.
|  Published October 12 2018
J.P. Morgan Chase CEO Jamie Dimon raised concerns Friday that rising interest rates and geopolitical flareups could derail U.S. economic growth.

"The economy is still very strong, and that's across wages, job creation, capital expenditure, consumer credit; it's pretty broad-based and it's not going to be diminished immediately," Dimon said in a media conference call following his bank's earnings report. "I was pointing out the probabilities that I thought were higher that rates would go up. I still believe that. I do think you're going to see higher rates."

While rising rates amid a strong economy are good, they could eventually put a halt to the nearly decade-long economic growth cycle, he said. Dimon said later in a conference call with analysts that benchmark rates could reach 4 percent. The 10-year Treasury yield was last at 3.16 percent, up significantly in the last month, a move that sparked the longest decline in the S&P 500 in almost two years.

"If rates go up because you have inflation, that is not a plus. That is a bad thing," Dimon said. "So far, we still have a strong economy in spite of these increasing overseas geopolitical issues bursting all over the place."

When asked to name these issues, Dimon rattled off a list that included the Trump administration's trade dispute with China, Brexit, the unwinding of bond-purchasing programs by central banks around the world, as well as flareups across Europe, the Middle East and Latin America including in Italy and Turkey.

"It's an extensive list of stuff," Dimon said, adding that most of the times, it's rising rates and not geopolitical issues that ends up derailing economic cycles. "I'm just pointing that out. No one should be surprised if it happens down the road."

Next, a decade and a half after George W. Bush authorised CIA extraordinary rendition to Guantanamo and other secret torture prisons, we have everyone at it.

From botched Russian nerve agent attacks in in a quaint English cathedral city, to the Saudi consulate in Istanbul. What’s good for the goose, apparently, no wonder President Trump daren’t take a stand on Saudi Arabia.

“One of the great things about books is sometimes there are some fantastic pictures.”

George W. Bush

Jamal Khashoggi: Saudi Arabia calls murder claims 'lies'

13 October 2018
Saudi Arabia has called accusations it ordered the killing of journalist Jamal Khashoggi inside its Istanbul consulate "lies and baseless allegations".

Interior Minister Prince Abdulaziz bin Saud bin Naif bin Abdulaziz's denial comes 11 days after Mr Khashoggi was last seen entering the consulate.

Turkish sources allege he was then killed by a team of Saudi agents.

A Turkish security source told the BBC that officials have audio and video evidence proving the killing.

Saudi Arabia has maintained the journalist, a critic of the government, left the building shortly after arriving on 2 October.

The interior minister said on Saturday the kingdom was keen to uncover "the whole truth", according to the official Saudi Press Agency, stressing reports "about orders to kill" are "baseless".

Mr Khashoggi's disappearance and reported death have prompted international outrage.

UN Secretary General Antonio Gutteres told the the BBC's economics editor Kamal Ahmed he was "worried" by Mr Khashoggi's disappearance, especially as incidents like this were becoming the "apparent new normal".

"It's absolutely essential to make sure that the international community says clearly that this is not something that can happen," he said.

Mr Gutteres added it was important to establish "exactly what has happened".

Meanwhile, US President Donald Trump, who has sought to build good relations with Saudi Arabia, also pledged to uncover the truth.

Mr Trump told reporters on Friday that he would call Saudi Arabia's King Salman to discuss "the terrible situation in Turkey", news agency AP reports.

However, his Treasury Secretary Steven Mnuchin says he is still planning to attend a Saudi investment conference later this month, despite a number of other top business leaders pulling out.

Mr Mnuchin's trip is also against the recommendations of the House of Representatives' foreign affairs committee, which wrote to Mr Trump urging him to reconsider the visit.

---- The latest reports suggest an assault and a struggle took place in the consulate.

A Turkish security source has confirmed to BBC Arabic the existence of an audio and a video recording. What is not clear is if anyone other than Turkish officials has seen or heard them.

One source is cited by the Washington Post as saying men can be heard beating Mr Khashoggi; it adds that the recordings show he was killed and dismembered.
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20 Extraordinary Facts about CIA Extraordinary Rendition and Secret Detention

February 5, 2013   Jonathan Horowitz & Stacy Cammarano
After the attacks against the United States of September 11, 2001, the Central Intelligence Agency conspired with dozens of governments to build a secret extraordinary rendition and detention program that spanned the globe. Extraordinary rendition is the transfer—without legal process—of a detainee to the custody of a foreign government for purposes of detention and interrogation.

The program was intended to protect America. But, as described in the Open Society Justice Initiative’s new report, it stripped people of their most basic rights, facilitated gruesome forms of torture, at times captured the wrong people, and debased the United States’ human rights reputation world-wide.

To date, the United States and the vast majority of the other governments involved—more than 50 in all—have refused to acknowledge their participation, compensate the victims, or hold accountable those most responsible for the program and its abuses. Here are 20 additional facts from the new report that expose just how brutal and mistaken the program was:
  1. At least 136 individuals were reportedly extraordinarily rendered or secretly detained by the CIA and at least 54 governments reportedly participated in the CIA’s secret detention and extraordinary rendition program; classified government documents may reveal many more.
  2.  A series of Department of Justice memoranda authorized torture methods that the CIA applied on detainees. The Bush Administration referred to these methods as “enhanced interrogation techniques.” “Enhanced interrogation techniques” included “walling” (quickly pulling the detainee forward and then thrusting him against a flexible false wall), “water dousing,” “waterboarding,” “stress positions” (forcing the detainee to remain in body positions designed to induce physical discomfort), “wall standing” (forcing the detainee to remain standing with his arms outstretched in front of him so that his fingers touch a wall five four to five feet away and support his entire body weight), “cramped confinement” in a box, “insult slaps,” (slapping the detainee on the face with fingers spread), “facial hold” (holding a detainee’s head temporarily immobile during interrogation with palms on either side of the face), “attention grasp” (grasping the detainee with both hands, one hand on each side of the collar opening, and quickly drawing him toward the interrogator), forced nudity, sleep deprivation while being vertically shackled, and dietary manipulation.
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Finally, is anyone’s data safe anywhere online? Facebook loses clients data again.

Facebook now says data breach affected 29 million users, details impact

October 12, 2018 / 5:52 PM / Updated 5 hours ago
(Reuters) - Cyber attackers stole data from 29 million Facebook accounts using an automated program that moved from one friend to the next, Facebook Inc (FB.O) announced on Friday, as the social media company said its largest-ever data theft hit fewer than the 50 million profiles it initially reported.

The company said it would message affected users over the coming days to tell them what type of information had been accessed in the attack. 

The breach has left users more vulnerable to targeted phishing attacks and could deepen unease about posting to a service whose privacy, moderation and security practices have been called into question by a series of scandals, cybersecurity experts and financial analysts said.

The attackers took profile details such as birth dates, employers, education history, religious preference, types of devices used, pages followed and recent searches and location check-ins from 14 million users.

For the other 15 million users, the breach was restricted to name and contact details. In addition, attackers could see the posts and lists of friends and groups of about 400,000 users.

Lawmakers and investors have grown more concerned that Facebook is not doing enough to safeguard data.

---- Facebook cut the number of affected users from its original estimate after investigators reviewed activity on accounts that may have been affected. Still, cyber security experts warned that attackers could use stolen information in targeted phishing scams.

“The bottom line is that all this data is still out there,” said Corey Milligan, a senior researcher with cyber-security firm Armor Inc.
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Facebook Says Russian Firms ‘Scraped’ Data, Some for Facial Recognition

By Jack Nicas Oct. 12, 2018
  SAN FRANCISCO — On the same day Facebook announced that it had carried out its biggest purge yet of American accounts peddling disinformation, the company quietly made another revelation: It had removed 66 accounts, pages and apps linked to Russian firms that build facial recognition software for the Russian government.

Facebook said Thursday that it had removed any accounts associated with SocialDataHub and its sister firm, Fubutech, because the companies violated its policies by scraping data from the social network.

“Facebook has reason to believe your work for the government has included matching photos from individuals’ personal social media accounts in order to identify them,” the company said in a cease-and-desist letter to SocialDataHub that was dated Tuesday and viewed by The New York Times.

Facebook gave the companies until Friday to detail what data they had taken and then delete it all.

The case illustrates a new reality for Facebook. SocialDataHub and Fubutech have been around for at least four years, relying in part on Facebook data to build products that might alarm some civil-liberty advocates.

As Facebook is taking a closer look at its own products amid increasing scrutiny and public outcry, it is finding more examples of companies that have been exploiting its global social network for questionable ends.

SocialDataHub and Fubutech also present another challenge because, Facebook said, at least some of their data collection occurred through web scraping.

Scraping is a rudimentary technique in which computer programmers can pull information off a website. It is difficult to detect and prevent, Facebook said. Scraping can pull any data that’s left public on a Facebook profile — and, theoretically, more private data about the user’s Facebook friends.

Artur Khachuyan, the 26-year-old chief executive of SocialDataHub and Fubutech, said in an interview Friday that Facebook had deleted his companies’ accounts unfairly.

Fubutech does build facial-recognition software for the Russian government and uses Facebook data, but it scrapes Google search results for that information — not Facebook, he said. And SocialDataHub’s main product — a system that assigns scores to Russian citizens based on their social-media profiles for insurers and banks — required permission from the users it rates, he said.

---- Mr. Khachuyan said the letter from Facebook had surprised him, particularly because his companies have been operating the same way for years.
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“Our enemies are innovative and resourceful, and so are we. They never stop thinking about new ways to harm our country and our people, and neither do we.”

George W. Bush

The monthly Coppock Indicators finished September.

DJIA: 26,458 +199 Down. NASDAQ: 8,046 +261 Down. SP500: 2,914 +166 Dow in August.
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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