Friday, 30 November 2018

Trump v the G-19

Baltic Dry Index. 1281 -49   Brent Crude 59.67

 Meetings are indispensable when you don't want to do anything.

John Kenneth Galbraith

Today and tomorrow it’s all about President Trump v the rest of the G-20. Will President Trump declare victory in his trade war on China and the Rest of the World (ROW,) making peace with China’s President Xi when they meet for dinner after the formal G-20 ends, or will he double down with his punitive tariffs on China due to come in on January 1st?

Will he double down on the EU, imposing tariffs on EU autos, triggering an EU tit for tat tariff response? Will Trump renew his rudeness to Canada’s Prime Minister Trudeau again?

With extensive coverage in mainstream media, I’ll pass on the subject today and cover it probably in the weekend update.

Below, nervous Asian markets await tomorrow’s main event. Goldman’s not optimistic.

The only function of economic forecasting is to make astrology look respectable.

John Kenneth Galbraith

Asian markets subdued but higher ahead of U.S.-China trade talks

Published: Nov 29, 2018 11:24 p.m. ET
Asian stock markets mostly rose in subdued trading early trading Friday, looking to cap a full week of broad gains as investors hope that trade tensions will ease after a weekend meeting between the leaders of U.S. and China.

Japan’s Nikkei NIK, +0.42%   was up 0.3%, on pace for its fifth straight gain, with advances by the mining and pharmaceutical sectors leading the way. Shares of health-care company Sysmex 6869, +7.53%   and drug maker Otsuka 4578, +4.15%  surged.

In Hong Kong, the Hang Seng Index HSI, +0.38%   rose 0.6%, with the energy sector leading gainers as oil rebounded in the U.S.; Cnooc 0883, +2.81%   was up some 4%.

Chinese equities struggled for direction in early trading, bouncing up and down ahead of the weekend Xi-Trump meeting, which was keeping some investors on the sidelines. The Shanghai Composite SHCOMP, -0.01%   was last up 0.2%, while the smaller-cap Shenzhen Composite 399106, -0.29%   was about flat. That came as manufacturing PMI slowed further in November, missing expectations.

South Korea’s Kospi SEU, -0.49%   fell 0.4%, threatening a four-day winning streak, as Samsung 005930, -2.09%   declined 1%. Benchmark indexes in Taiwan Y9999, +0.03%   and Singapore STI, +0.45%   each rose about 0.5%.

Australia’s ASX 200 XJO, -1.58%   fell more than 1%, dragged down by big banks. Westpac WBC, -1.70%   and Commonwealth Bank of Australia CBA, -1.66%   were each down about 1%. New Zealand’s benchmark NZ50GR, +0.33%   rose slightly, on pace for its fourth

Goldman Says Trade War Escalation ‘Most Likely’ Outcome of Trump-Xi Dinner

By Karen Leigh
Goldman Sachs Group Inc. said that a continued escalation of the U.S.-China trade war would be the “most likely” outcome of a highly anticipated meeting between Donald Trump and Xi Jinping at the Group of 20 summit in Argentina.

“The first and in our view most likely is continuing on the current path of ‘escalation’ -- tariff rates rise to 25 percent on all imports currently under tariff, and tariffs are extended to remaining Chinese imports,” Goldman said in a note outlining three basic scenarios it sees for the meeting’s outcome. A close second was a “pause” in which existing tariffs remain in place “but the two sides agree to keep talking with escalation put on hold,” it said.

A deal involving a complete rollback of the current tariffs was “unlikely in the near term,” Goldman said. It added that market participants were “intensely focused on the leaders’ meeting as a potential inflection point in the escalating economic tensions” between the U.S. and China.

Trump and Xi are preparing for their first face-to-face summit in more than a year. The high-stakes encounter could be their last best chance to keep the costly trade dispute from spiraling into a broader cold war amid a global battle for influence. Their officials have been working on the contours of a potential temporary truce, in which Trump would postpone levying further tariffs on Beijing in exchange for concessions.

Read more: Trump-Xi Dinner Offers Chance to Avert Deeper U.S.-China Rift

Failure to reach a deal could see Chinese export growth weaken in the coming months, Goldman said. Chinese growth would also probably slow beginning in early 2019, although renminbi depreciation this year would likely mitigate the impact, it said.

Tariffs are also weighing on Chinese domestic demand, it said, increasing uncertainty and rattling confidence in the short term -- and potentially encouraging relocation of some production in the future.

Commentary: Risks for world economy, markets if U.S. yields hold above 3 pct

November 29, 2018 / 1:22 PM
LONDON (Reuters) - The outlook for U.S. interest rates has shifted, as investors bet that recent cracks in the economy and financial markets will force the Fed to slow or even halt its projected path of rate increases next year.

All else being equal this should also be playing out in the bond market, pushing down long-term yields and easing financial conditions, thereby helping to limit the fallout from a weakening economy and fragile stock market. 

Yes, yields have come down a bit, but not as much as you would expect, thanks to a steady build up of factors that should push them the other way.

October was the worst month on Wall Street in seven years, the so-called ‘FAANG’ group of top five U.S. tech stocks lost almost $1 trillion in market capitalisation, Apple skidded into a bear market, and some U.S. economic indicators - namely the housing market - began to flash red.

If growth slows at this stage of the economic cycle, the chances of recession rise and the Fed puts the brakes on, or maybe even reverses gear all together. The all-knowing, all-seeing bond market should discount that, and yields should fall.

---- Only one quarter point rate hike next year is fully discounted in money markets, compared with two a couple of months ago. But the 10-year yield remains above 3.00 percent, barely 20 basis points off its peak in early October just before the Wall Street lurch and “tech wreck”.

A growing risk for markets and the economy is that it holds that level and starts trending higher again.

Emerging markets, which are most exposed to U.S. borrowing costs and the dollar, will be vulnerable. The stickiness of Treasury yields and the dollar hovering close its highest since June last year aren’t good signs.

Record supply, high hedging costs, the Fed unwinding its balance sheet and emerging markets potentially selling Treasuries to support their domestic currencies is a potent mix that could easily keep the 10-year yield above 3.00 pct, even if the historically long economic and market cycles roll over.

Finally, stock buybacks, a true American story. How to go bust the American way. Only in America, as they say.

General Motors And General Electric Were Both Victimized By The Same Ponzi Scheme, And They Are Both Telling Us The U.S. Economy Is In HUGE Trouble

America’s twin economic “generals” are both in very deep trouble.  General Electric was founded in 1892, and it was once one of the most powerful corporations on the entire planet.  But now it is drowning in so much debt that it may be forced into bankruptcy.  General Motors was founded in 1908, and at one time it was the largest automaker that the world had ever seen.  But now it is closing a bunch of factories and laying off approximately 14,000 workers as it anticipates disappointing sales and a slowing economy.  If the U.S. economy really was “booming”, both of these companies would probably be thriving.  But as you will see below, both of them have been victimized by the exact same Ponzi scheme, and both firms are sending us very clear signals that the U.S. economy is heading for troubled waters.

Whenever you hear the word “restructuring”, that is always a sign that things are not going well for a company.

And it turns out that GM’s “restructuring” is actually going to cost the firm 3.8 billion dollars

---- Of course GM doesn’t have 3.8 billion dollars just lying around, and so they are actually going to have to borrow money in order to close these plants and lay off these workers.

----- In addition to the elimination of about 6,000 factory jobs, GM will also be cutting about 8,000 “white collar jobs”

---- But if General Motors had been much wiser with their money, they wouldn’t have had to initiate a “restructuring” so quickly.

Over the past four years, General Motors spent a staggering 13.9 billion dollars on stock buybacks.
GM executives were able to prop up the stock price for a while, but at this point the stock is down about 10 percent from where it was four years ago.

---- These stock buybacks are a massive Ponzi scheme, and everyone that was involved in blowing such a giant mountain of cash at GM should be fired.

And now thousands of hard working Americans are going to lose their jobs, but it didn’t have to happen.

General Electric has also been victimized by the exact same Ponzi scheme, and at this point they are in a struggle for survival which they are probably going to lose.

On Monday the stock slid another couple of percent, and so far this year it is down a total of 58 percent

In the end, GE is probably heading for total collapse.

But if GE had not blown 40 billion dollars on stock buybacks in recent years, they would be in far, far better shape. 

In economics, the majority is always wrong.

John Kenneth Galbraith

Crooks and Scoundrels Corner

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

Yes, it’s the banksters again. If it’s not nailed down, is there anything they won’t try to grab? Today, Japan and Germany, but it’s the same alleged bad behaviour on all continents except Antarctica.

Japan central banker mum on alleged involvement in Ghosn transaction

November 29, 2018 / 6:36 AM
FUKUOKA, Japan (Reuters) - A Bank of Japan board member declined on Thursday to comment on a media report that she was involved in an alleged attempt by former Nissan chairman Carlos Ghosn to shift personal investment losses to the automaker during her time at a commercial bank.

Japanese tabloid Shukan Bunshun reported on Thursday that as an executive at Shinsei Bank Ltd (8303.T), Takako Masai was involved in an alleged attempt by Ghosn to pass on 1.7 billion yen (11.7 million pounds) in personal derivatives-trading losses incurred during the 2008 financial crisis to Nissan. The suspected transaction was first reported by the Asahi newspaper on Tuesday.

“I’d like to refrain from commenting about individual transactions due to my duty of confidentiality,” Masai told a news conference after meeting with business executives in Fukuoka, southern Japan.

“I also cannot comment on individual transactions made by Shinsei Bank.” The bank also declined to comment on the Shukan Bunshun report.

Quoting an unnamed former Shinsei Bank official, the tabloid said a team of the bank’s officials including Masai sought to have Ghosn’s investment losses passed on to the automaker on condition that he get approval from Nissan’s board.

The attempt was later aborted after securities regulators inspected Shinsei Bank and Nissan, and disapproved of the idea, the tabloid said.

Masai joined the BOJ in 2016 after serving as an executive at Shinsei Bank from 2007.

Deutsche Bank raided over money-laundering probe

By Max Bernhard  Published: Nov 29, 2018 5:35 a.m. ET
German prosecutors and police searched Deutsche Bank AG (DBK.XE) premises in and around Frankfurt on Thursday in relation to suspicions that the bank helped clients set up offshore entities in tax havens and failed to alert authorities to possible money laundering.

The investigation focuses on two Deutsche Bank employees, as well as other unidentified company officials, the Frankfurt public prosecutors' office said.

Deutsche Bank said it is fully cooperating with authorities and will comment further when more details become available.

The prosecutors' office said that after federal police analyzed the so-called "Offshore Leaks" and "Panama Papers" reports of the International Consortium of Investigative Journalists, "the suspicion arose that Deutsche Bank helped clients with the establishment of so-called offshore entities in tax havens." Deutsche Bank is also suspected of helping clients transfer funds from illegal activities to German accounts, and failed to notify authorities of the suspected money laundering, the prosecutors' office said.

The salary of the chief executive of a large corporation is not a market award for achievement. It is frequently in the nature of a warm personal gesture by the individual to himself.

John Kenneth Galbraith

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?

Exxon Will Use Wind, Solar Power to Produce Crude Oil in Texas

By Chris Martin and Kevin Crowley
28 November 2018, 20:11 GMT Updated on 29 November 2018, 11:00 GMT

Exxon Mobil Corp. will use renewable energy to produce oil in West Texas. 

Under 12-year agreements with Denmark’s Orsted A/S, Exxon will buy 500 megawatts of wind and solar power in the Permian Basin, the fastest growing U.S. oil field. It is the largest ever renewable power contract signed by an oil company, according to Bloomberg NEF. Terms weren’t disclosed.

“It will be interesting to see how the other oil majors respond,” Kyle Harrison, a BNEF analyst, said. “A purchase like this has historically been unprecedented.”

Exxon, which was sued by investors who alleged the company downplayed risks of global warming, is turning to clean energy as it becomes cheap enough to compete with fossil fuels. The wind and solar farms are being built in a region where electricity demand is soaring as oil production grows.

“We frequently evaluate opportunities to diversify our power supply and ensure competitive costs,” Julie King, a spokeswoman for the Irving, Texas-based oil producer, said in an email. The company denies misleading investors about climate change.

Booming production in the Permian Basin is helping Exxon offset declining output elsewhere in the world. But output in the region has grown so fast that infrastructure including pipelines and power plants have struggled to keep up.

One area of the Permian, called the Delaware Basin, consumed the equivalent of 350 megawatts this summer, tripling its load from 2015. That’s enough to power about 280,000 U.S. homes. Providers say demand is likely to triple again by 2022.

Half the power Exxon will buy will come from the Sage Draw wind farm, which Orsted plans to finish building in 2020, according to a slide from an investor presentation Wednesday. The rest will be from the Permian Solar farm, scheduled to be finished in 2021.

Texas already has the most wind power of any state, with more than 23 gigawatts. That’s triple the next biggest market, Oklahoma. Texas is the fifth largest solar market, with about 2.6 gigawatts. That’s forecast to double next year, according to Morningstar Inc. 
Another weekend and the final day of the G-20 weekend in Argentina. Now who wants to line up with whom for the photo? Good guys on the right, so so in the middle, baddies on the left. May the best man (or woman) win.  Have a great weekend everyone.
"Get a good night's sleep and don't bug anybody without asking me."

Richard M. Nixon, 37th US  President. To re-election campaign manager Clark MacGregor.

The monthly Coppock Indicators finished October.

DJIA: 25,116 +176 Down. NASDAQ: 7,306 +232 Down. SP500: 2,712 +146 Down. All three slow indexes went sharply down in October, suggesting there’s more of the correction to come.

Thursday, 29 November 2018

Did The Fed Just Cave In To Trump?

Baltic Dry Index. 1330 -09   Brent Crude 59.03

“Those who don't know history are destined to repeat it.”

Edmund Burke.

Yesterday the Dow soared as Fed Chairman Powell’s speech was taken by the market as the Fed caving in to President Trump. If that really is the case and the Fed will now pass on its widely trailed interest rate hike next month, a belated Santa Claus rally looks likely in an attempt to undo all the damage from October and November in stocks.  Is it enough to have President Trump declare victory and settle his trade war on China at the weekend?

But having a political Fed under the control of the President, any President, but especially one as erratic as President Trump, is very bad news. It’s a giant leap on the way for America to becoming a banana republic. That would have nothing but bad implications for the rest of the world. It would accelerate central banks quiet hoarding of gold

So did the Fed Chairman really just kowtow to President Trump? We’ll know the answer after the next Fed meeting. No interest rate hike and the answer is yes. An interest rate hike and the answer is no.

But to this old dinosaur commodities trader any Santa Claus rally is an exit rally. The trade wars are already slowing the global economy with more pain still to come.  Next month the ECB starts cutting back on its bond market support programs.  Next year the Fed will resume tightening again if only to gain firepower against the next recession. The benefits of the Trump tax cuts are already in the markets.

From January onwards, a Democratic controlled House start out on the warpath for Trump’s scalp. 2019 still looks very ugly to me. I would use any year-end rally to liquidate any underwater stocks getting back to breakeven.  Cash will likely be king in 2019.

Seemingly dovish, Powell says interest rates are ‘just below’ level where they won’t stimulate economy

By Steve Goldstein  Published: Nov 28, 2018 4:02 p.m. ET
Federal Reserve Chairman Jerome Powell on Wednesday used a softer tone to describe where interest-rate policy presently is, in what could be construed as implying fewer interest-rate hikes to come.

“Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy -- that is, neither speeding up nor slowing down growth,” Powell told the Economic Club of New York.

His comments on their face appear more dovish than in early October, when Powell said, in reference to the Fed’s interest rates, “we may go past neutral, but we’re a long way from neutral at this point, probably.”

Stocks extended gains after Powell’s remarks, with the Dow Jones Industrial Average DJIA, +2.50%   rallying more than 600 points. The dollar DXY, -0.17%   declined.

There were some observers who said Powell wasn’t trying to shift expectations.

“If there has been one certainty of late it is the market’s ability to misinterpret Fed Chairman Powell," said Tom Porcelli, chief U.S. economist at RBC Capital Markets. “Powell is not suggesting that since they are just below the range they may stop soon. All he is doing is pointing out an obvious idea.”

Related: Why economists insist Powell wasn’t as dovish as market thinks

The Fed’s summary of economic projections has a range of neutral interest-rate estimates between 2.5% and 3.5% — so a likely December hike brings the upper end of the Fed’s target to 2.5%.

Did Fed’s Powell ‘light the fuse’ for a year-end stock-market rally?

By William Watts  Published: Nov 28, 2018 6:40 p.m. ET
One down, two to go?

Stock market bulls rejoiced Wednesday, with the S&P 500 SPX, +2.30%  and Dow Jones Industrial Average DJIA, +2.50%  erasing November losses and posting their biggest one-day percentage gains since March after Federal Reserve Chairman Jerome Powell soothed worries about the pace of future interest-rate increases.

The remarks were seen “possibly” setting aside one of the “trio of tribulations” — rate increases, trade tensions and a peak in corporate earnings growth — blamed for the stock market’s fall swoon, said Sam Stovall, chief investment strategist at CFRA, in a note.

Read: Here are the stocks that powered the Dow after the Fed’s Powell soothed investors

“Investor optimism over a near-term end to the rate-tightening cycle has likely lit the fuse for an end-of-year celebration, with the addition of a booster to be supplied by a possible resumption of trade talks,” he said, with talks this weekend between President Donald Trump and Chinese leader Xi Jinping at the Group of 20 summit in Buenos Aires now in the spotlight.
Technical outlook
Stovall, however, said the technical bias for the market “remains bearish” with the probability of more downside movement elevated as long as the S&P 500, which closed at 2,743.79, remains below the top end of a resistance zone on the chart at 2,746. A close above that level, however, would open the door to a move toward the 2,796-2,815 area, he said.

Why the bloodletting in FAANG stocks is just getting started: Canaccord

By Barbara Kollmeyer  Published: Nov 28, 2018 7:27 a.m. ET
Hide behind defensives? That doesn’t seem like such a crazy strategy lately as investors wait to see if worries about the U.S. economy turn into real problems in the coming year.

Tuesday’s session offered the most recent evidence of that as health care, consumer staples and utilities drove the gains for the S&P 500. Compare these numbers—the Utilities Select Sector SPDR XLU, +0.75% is up 4% for the quarter, while the Technology Select Sector SPDR XLK, +0.20% has slumped over 12%.

Another burning question for investors is whether the bloodletting has stopped for shooting-star growth names—Facebook FB, +1.04%  , AAPL, +1.27% Amazon AMZN, +1.81% Netflix NFLX, +1.83% and Google-parent Alphabet GOOGL, +0.63% —which have been shoved into bear territory after helping to drive a nearly decadelong bull market.

Our call of the day from analysts at Canaccord says stay hunkered down. They see the outperformance for defensives as just getting started, because FAANG underperformance is also in its early innings.

Defense stocks were supposed to be the story for 2019 but have stepped up to the plate early because big value sectors—financials and energy—didn’t, say Canaccord’s Martin Roberge and Guillaume Arseneau.

Portfolio managers haven’t seen any big hurt when it comes to that group of growthy stocks because year-to-date, some of those tech-focused names are still outperforming the market, they note. Beaten-down Apple is still up nearly 3% year-to-date, against a 0.3% rise for the S&P.

“We expect the real pain will come when a clear rotation occurs. This rotation should get under way when it becomes clear that earnings growth for FAANGs and other technology names in 2019 do not live up to expectations,” said the Canaccord analysts. And that second wave of selling should start in January when fourth-quarter results start rolling out, they say.

Last word goes to hedge-fund manager Mark Yusko, who likens this year’s stock pullback to a “melting ice cube.”

“I think next year, with the economic slowdown, it gets worse—probably double-digit drawdown. The big year is 2020, when the credit bubble starts to blow up,” as companies that have been binging on cheap debt will have to pay the piper,the founder and CEO of Morgan Creek Capital told CNBC.

Construction machine makers brace for weaker China sales as economy slows

November 29, 2018 / 4:58 AM
SHANGHAI (Reuters) - China’s construction equipment industry is bracing for a decline in sales in 2019 after two years of rapid growth, as work slows on new projects and firms replace fewer old diggers and cranes, executives at an industry event in Shanghai said this week.

China is likely to see sales of excavators, loaders and dump trucks — proxies for the country’s infrastructure and building sectors — fall 7-8 percent next year, down from 30 percent growth in 2018, data from consultancy Off-Highway Research show. 

The expected downturn in demand underscores a major challenge facing Beijing even as it looks to fast-track infrastructure projects to support economic growth, which has cooled to its slowest pace since the global financial crisis and is facing mounting pressure from U.S. tariffs.

Many economists believe business conditions in China will get worse before they get better, noting recent government stimulus measures will take some time to be felt.

“There are a number of uncertainties (in 2019), be it in relation to the global economy or world trade,” Lu Chuan, president of XCMG Construction Machinery Co Ltd (000425.SZ), said on the sidelines of the biennial Bauma China fair.

Industry executives said there were signs that growth had peaked and that customers were turning more cautious, a concern for firms from Caterpillar Inc (CAT.N) to local rival Zoomlion (000157.SZ) and Japan’s Komatsu Ltd (6301.T) in the world’s largest market for construction equipment by unit sales.

---- The industry’s recent sharp growth came on the back of a five-year-long downturn that began with a collapse in commodity prices in 2011. Unit sales rose 81 percent in 2017 and are set to grow almost a third this year, Off-Highway Research said.

However, China’s multi-year clampdown on debt and pollution has seen fixed-asset investment growth — a key gauge of future activity — fall to record lows this year, a trend that policymakers are now scrambling to reverse.

While more road, rail and airport projects are getting the greenlight to proceed, analysts note their backers will still need to secure funding before construction can begin.

Trump Renews Auto Tariff Threat as Trade Czar Aims at China

By Ryan Beene and Shawn Donnan
Updated on 29 November 2018, 02:30 GMT
President Donald Trump raised the prospect of slapping a 25 percent tariff on imported cars and ordered a review of China’s retaliatory auto tariffs against the U.S. as his administration continued to scramble to respond to General Motors Co.’s announcement of plant closures this week.

In a pair of Twitter posts on Wednesday, Trump pointed to a longstanding U.S. tariff on imported pickup trucks that has helped U.S.-based automakers dominate that market. He argued that a similar import tax on cars would have prevented GM’s move to close plants in the U.S.

“The reason that the small truck business in the U.S. is such a go-to favorite is that, for many years, tariffs of 25% have been put on small trucks coming into our country. It is called the ‘chicken tax,”’ Trump said on Twitter Wednesday.

A 25 percent duty on imported light trucks was applied in the 1960s by President Lyndon Johnson in retaliation to West German tariffs on U.S. poultry. Other products were included in those American levies initially but have since been eliminated. The pickup tariff, which also applies to work vans, has remained and has been a major contributor to U.S.-automaker dominance in the domestic pickup market.

More cars would be assembled in the U.S. if the same tariff were applied on imported autos, Trump said, adding in a second tweet that “G.M. would not be closing their plants in Ohio, Michigan & Maryland.”

"Any nation which gives up its freedom in pursuit of economic advantage deserves to lose both."

Thomas Jefferson, US President 1801-1809.

Crooks and Scoundrels Corner

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

With a new weak El Nino forming in the Pacific, will it be enough or in time to make for a mild UK and western European winter? Where will get drought and where excess rains?

Brace Yourselves for El Niño Likely in 2019

There is a 75-80 percent chance of an El Niño developing by February, the United Nations' World Meteorological Organization (WMO) announced Tuesday. So what exactly does that entail?

Well, the last time we had an El Niño was in 2015-2016, which caused extreme weather-related events (droughts, fires, floods and coral bleaching) around the world, pushed atmospheric concentrations of CO2 to 400 parts per million for the first time, and drove 2016 to be the hottest year in recorded history.

Although this year's forecasted El Niño is not expected to be as powerful as the one in 2015-2016, it's not to be overlooked, weather experts warned

"It can still significantly affect rainfall and temperature patterns in many regions, with important consequences to agricultural and food security sectors, and for management of water resources and public health, and it may combine with long-term climate change to boost 2019 global temperatures," Maxx Dilley, director of WMO's Climate Prediction and Adaptation branch, said in a news release.

El Niños are naturally occurring phenomenons that happen every two to seven years. They have a major effect on global weather patterns, including spikes in temperatures.

----The WMO said the chance of a full-fledged El Niño event between December 2018 and February 2019 is estimated to be about 75-80 percent, and about 60 percent for it to continue through February to April 2019.

U.S. weather forecasters also said there's a high chance of a El Niño forming. "Sea surface temperatures in the tropical Pacific were comfortably above the threshold for El Niño in October 2018, but the atmospheric response is lagging. A deep pool of warm water is available below the surface to renew and sustain the surface anomaly, however, and forecasters estimate an 80 percent chance of a weak El Niño during Northern Hemisphere winter 2018-19," according to

El Niño

----ENSO conditions have occurred at two- to seven-year intervals for at least the past 300 years, but most of them have been weak. Evidence is also strong for El Niño events during the early Holocene epoch 10,000 years ago.[28]

El Niño may have led to the demise of the Moche and other pre-Columbian Peruvian cultures.[29] A recent study suggests a strong El-Niño effect between 1789 and 1793 caused poor crop yields in Europe, which in turn helped touch off the French Revolution.[30] The extreme weather produced by El Niño in 1876–77 gave rise to the most deadly famines of the 19th century.[31] The 1876 famine alone in northern China killed up to 13 million people.[32]

An early recorded mention of the term "El Niño" to refer to climate occurred in 1892, when Captain Camilo Carrillo told the geographical society congress in Lima that Peruvian sailors named the warm north-flowing current "El Niño" because it was most noticeable around Christmas.[33] The phenomenon had long been of interest because of its effects on the guano industry and other enterprises that depend on biological productivity of the sea.

Charles Todd, in 1888, suggested droughts in India and Australia tended to occur at the same time;[34] Norman Lockyer noted the same in 1904.[35] An El Niño connection with flooding was reported in 1894 by Víctor Eguiguren [es] (1852–1919) and in 1895 by Federico Alfonso Pezet (1859–1929).[36][37] In 1924, Gilbert Walker (for whom the Walker circulation is named) coined the term "Southern Oscillation".[38] He and others (including Norwegian-American meteorologist Jacob Bjerknes) are generally credited with identifying the El Niño effect.[39]

The major 1982–83 El Niño led to an upsurge of interest from the scientific community. The period 1991–1995 was unusual in that El Niños have rarely occurred in such rapid succession.[40] An especially intense El Niño event in 1998 caused an estimated 16% of the world's reef systems to die. The event temporarily warmed air temperature by 1.5 °C, compared to the usual increase of 0.25 °C associated with El Niño events.[41] Since then, mass coral bleaching has become common worldwide, with all regions having suffered "severe bleaching".[42]

“Europe exemplifies a situation unfavourable to a common currency. It is composed of separate nations, speaking different languages, with different customs, and having citizens feeling far greater loyalty and attachment to their own country than to a common market or to the idea of Europe".

Professor Milton Friedman, The Times 19 November 1997.

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?

Artificial Intelligence Is Giving Rise to Fake Fingerprints. Here's Why You Should Be Worried

28 November 2018

Fake digital fingerprints created by artificial intelligence can fool fingerprint scanners on smartphones, according to new research, raising the risk of hackers using the vulnerability to steal from victims’ online bank accounts.

A recent paper by New York University and Michigan State University researchers detailed how deep learning technologies could be used to weaken biometric security systems. The research, supported by a United States National Science Foundation grant, won a best paper award at a conference on biometrics and cybersecurity in October.

Smartphone makers like Apple and Samsung typically use biometric technology in their phones so that people can use fingerprints to easily unlock their devices instead of entering a passcode. Hoping to add some of that convenience, major banks like Wells Fargo are increasingly letting customers access their checking accounts using their fingerprints.

But while fingerprint scanners may be convenient, researchers have found that the software that runs these systems can be fooled. The discovery is important because it underscores how criminals can potentially use cutting-edge AI technologies to do an end run around conventional cybersecurity.

The latest paper about the problem builds on previous research published last year by some of the same NYU and Michigan State researchers. The authors of that paper discovered that they could fool some fingerprint security systems by using either digitally modified or partial images of real fingerprints. These so-called MasterPrints could trick biometric security systems that only rely on verifying certain portions of a fingerprint image rather than the entire print.

One irony is that humans who inspect MasterPrints could immediately likely tell they were fake because they contained only partial fingerprints. Software, if turns out, could not.

Julian Togelius, one of the paper’s authors and an NYU associate computer science professor, said the team created the fake fingerprints, dubbed DeepMasterPrints, using a variant of neural network technology called “generative adversarial networks (GANs),” which he said “have taken the AI world by storm for the last two years.”

Researchers have used GANs to create convincing-looking but fabricated photos and videos known as “deep fakes,” which some lawmakers worry could be used to create fake videos and propaganda that the general public would think was true. For example, several researchers have described how they could use AI techniques to create fabricated videos of former President Barack Obama giving speeches that never took place, among other things.

"[European Monetary Union is] a German racket designed to take over the whole of Europe ... [if you are prepared to give up Sovereignty to the EU] you might just as well give it to Adolf Hitler, frankly."

Nicholas Ridley (1929 - 1993) Secretary of State for Trade and Industry.  Spectator magazine, July 1990.

The monthly Coppock Indicators finished October.

DJIA: 25,116 +176 Down. NASDAQ: 7,306 +232 Down. SP500: 2,712 +146 Down. All three slow indexes went sharply down in October, suggesting there’s more of the correction to come.