Baltic Dry Index. 1018 +10 Brent Crude 61.91
“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.
According to the
media, Prime Minister May and a whole gaggle of EUSSR functionaries in Brussels,
Brexit has been “fixed” in a lengthy draft deal full of pious nonsense about
the future of the EUSSR and GB. Full of “should” and “could” rather than will,
and a complete surrender by the politically suicidal Tories. But the markets
had other things to worry about.
With Japan on holiday
today, (celebrating arresting the ex-Chairman of Nissan?,) and the US markets
coming back to a shortened trading day following yesterday’s holiday, today’s
action is likely to be thin and irrelevant.
Statistically US
markets rally the day after Thanksgiving before selling off on the following
Monday. Will 2018 be different?
One cause for concern
is the US stepping up its trade war against China again. Another is the fall in
the crude oil price. A third is the disaster underway in the cryptocurrencies.
Taken altogether, our
markets are destroying a whole lot of paper wealth. A reverse wealth affect
comes next. If the Great Christmas Retailing
Season turns into a bust, look for a very bad January 2019 in the markets.
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
China leads Asian shares lower on growth, trade worries
November 23, 2018 / 1:07 AM
SHANGHAI
(Reuters) - Asian shares slipped on Friday as trade tensions continued to hurt
sentiment, while weak corporate earnings in Europe added to worries about
global growth and outweighed hopes for progress in Brexit negotiations.
With U.S. markets closed overnight for Thanksgiving and Japan on holiday on Friday, trading activity was muted. Regional indicators turned lower after China’s markets opened.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.2 percent, giving up early, small gains as Chinese blue-chips .CSI300 dropped 1.4 percent and the Shanghai Composite index .SSEC lost 1.6 percent.
China’s markets have been stuck in a slump as the country’s trade war with the U.S. has exacerbated worries about slowing growth. Few analysts expect sustained improvement for Chinese shares even if U.S. and Chinese leaders make progress in mending ties at a G20 meeting in Argentina at the end of the month.
At this stage, some economists doubt the G20 talks will bring progress.
Prakash Sakpal of ING in Singapore said there “haven’t been any
promising developments” since the trade war started.
---- On Thursday, stock markets in Europe were hit by disappointing earnings on further signs that corporate profit growth is peaking globally.
Those earnings underscored the lingering anxiety among equity investors
as trade tensions, slowing global investment and growth kept stock markets on
the back foot after a torrid October. A draft deal between Britain and the
European Union on future relations reached late Thursday did little to lighten
the mood.
More
U.S. asks allies to shun Huawei equipment, WSJ reports; sector stocks fall
November 22, 2018 / 11:20 PM
(Reuters) - The U.S. government is trying
to persuade wireless and internet providers in allied countries to avoid
telecommunications equipment from China’s Huawei Technologies [HWT.UL], the
Wall Street Journal reported on Thursday.
The move would further pile pressure on the world’s biggest telecom gear
maker, which is under scrutiny from Western intelligence agencies for its
perceived ties to China’s government and the possibility its equipment could be
used for espionage.
U.S. officials have reached out to their government counterparts and
telecom executives in friendly countries where Huawei equipment is already in
wide use about what they see as cybersecurity risks, according to the WSJ
report, which cited unnamed people familiar with the situation.
The United States has already largely barred Huawei from supplying its
government and contractors, while Australia has banned the company from
supplying equipment for a 5G mobile network.
Huawei, which has repeatedly denied engaging in intelligence work for any government, is one of several Chinese tech companies that have come under U.S. government scrutiny as a trade war between the two countries escalates.
On Friday, the Hong Kong shares of rival ZTE Corp (0763.HK) fell as much as 5.6 percent, dragging down the sector. They recouped some losses to trade down 2 percent around midday, while the firm’s Shenzhen shares (000063.SZ) were down 3 percent.
ZTE’s value has nearly halved this year, battered by a three-month U.S. government ban on American firms selling parts to the firm, and a subsequent $1.4 billion settlement.
On Friday, an index tracking major telecoms firms on the mainland .CSI000994 dropped more than 3 percent.
---- One of the government’s concerns is based on the use of Chinese telecom equipment in countries
that host U.S. military bases, such as Germany, Italy and Japan, the report added.
More
China says U.S. accusations of unfair trade practices 'groundless'
November 22, 2018 / 7:33 AM
BEIJING (Reuters) - China rejected fresh
U.S. accusations of perpetuating “unfair” trade practices and urged Washington
on Thursday to stop making provocations, showing little sign of backing down
days ahead a high-stakes meeting between leaders from both countries.
President Xi Jinping is due to hold talks
with U.S President Donald Trump during a G20 summit in Argentina at the end of
the month, with the rest of the world hoping they can find a way to de-escalate
a trade war that is threatening the global economy.
China’s commerce ministry said it is deeply concerned by a report issued
by the U.S. administration this week, which said China had failed to alter its
“unfair” practices.
“The U.S side made new groundless accusations against the Chinese side,
and China finds it totally unacceptable,” Commerce Ministry spokesman Gao Feng
told reporters at a news conference in Beijing.
The findings were issued in an update of the U.S. Trade Representative’s
“Section 301” investigation, which looks into China’s intellectual property and
technology transfer policies and has sparked U.S. tariffs on $50 billion worth
of Chinese goods that later ballooned to $250 billion.
Gao said the report reflects U.S. unilateralism in violation of World Trade
Organisation rules.
“We hope the United States will drop the words and behaviours that
damage bilateral economic and trade relations and adopt a constructive
attitude,” Gao said.
The ministry is also evaluating the potential impact from a separate U.S.
proposal this week to increase control over technology exports, and said it
would take the necessary steps to uphold Chinese firms’ legitimate interests.
Citing security concerns, the U.S. government on Monday proposed
stepping up scrutiny over technology exports in 14 key high-tech areas
including artificial intelligence and microprocessor technology, a move that
many analysts view as directly targeting China.
A 30-day public consultation period on the proposal to include those
sectors in its broader export control regime is underway and will end on Dec.
19, according to a document published on the U.S. government’s Federal Register
on Monday.
“We are evaluating the measures that the
United States may take,” Gao said, stressing that Washington’s generalisation
of the concept on national security would only result in unnecessary barriers
and damage trade.
More
In cryptocurrency news, is bitcoin
about to make an infamous round trip? Was Jamie Dimon (and the LIR) right?
Crypto Losses Near $700 Billion in Worst Week Since Bubble Burst
By Eric Lam
The great cryptocurrency crash of 2018 is heading for its worst week
yet.
Bitcoin sank toward $4,000 and most of its peers tumbled on Friday,
extending the Bloomberg Galaxy Crypto Index’s weekly decline to 25 percent.
That’s the worst five-day stretch since crypto-mania peaked in early January.
After an epic rally last year that
exceeded many of history’s most notorious bubbles, cryptocurrencies have
become mired in a nearly $700 billion rout that shows few signs of abating.
Many of the concerns that sparked the 2018 slump -- including increased
regulatory scrutiny, community infighting and exchange snafus -- have only intensified this
week. Even after losses exceeding 70 percent for most virtual currencies, Oanda
Corp.’s Stephen Innes has yet to see strong evidence of a capitulation that
might signal a market bottom.
“There’s still a lot of people in this game,” Innes, head of trading for
Asia Pacific at Oanda, said by phone from Singapore. If Bitcoin “collapses, if
we start to see a run down toward $3,000, this thing is going to be a monster.
People will be running for the exits.”
Innes said his base case forecast is for Bitcoin to trade between $3,500
and $6,500 in the short term, with the potential to fall to $2,500 by January.
The largest cryptocurrency retreated 4.4 percent to $4,237 at 11:31 a.m.
in Hong Kong, according to Bloomberg composite pricing. Rivals Ether, Ripple
and Litecoin all declined at least 4.8 percent. The market value of all
cryptocurrencies tracked by CoinMarketCap.com sank to $138 billion, down from
about $835 billion at the market peak in January.
Finally, in under
reported news, Russia is about to complete its new gas pipeline to China.
Gazprom to soon complete bulk of pipeline work to ship gas to China
Updated Nov. 21, 2018 at 3:13 PM
Nov. 21 (UPI) -- Russia's Gazprom told China's
biggest oil and gas company CNPC that "the bulk of the work" on a
pipeline that will transport Russian gas to China, one of the most ambitious
projects ever undertaken by Russia, will be completed next month.Gazprom said that it held talks with China National Petroleum Company (CNPC) on Tuesday regarding advances stemming from a 2014 accord, when Gazprom agreed to sell 38 billion cubic meters per year of gas to CNCP via the new Power of Siberia gas pipeline.
"The bulk of work on the Power of Siberia gas pipeline's linear
part stretching from the Chayandinskoye field to the Russian-Chinese border
would be completed before the end of 2018," Gazprom said in a Tuesday
afternoon statement.
The Power of Siberia is a gas pipeline to deliver natural gas from
Irkutsk and Yakutia production centers to the Russian Far East and China.
Vladimir President Putin said in May 2014, as he announced the project that represented a $55-billion investment, that it was "the largest in the gas sphere during the era of the USSR and Russia," as reported by The Guardian at the time. Operations were projected at that time to start in 2018.
According to a Financial Times report from April, 8,500 workers were on site to build the 1,864-miles long pipeline from Siberia to the Chinese border. The report estimated that the pipeline connection between the world's largest gas exporter and the biggest energy importer would take place in December 2019.
To put the 38-billion-cubic-meters-annually Russia-China contract in context, Financial Times said that in all of 2017 Gazprom supplied about 200 billion cubic meters of gas to Europe, equivalent to nearly 40 percent of all of the continent's demand.
China is working separately to build a pipeline connecting its border with Russia with Shanghai. The project involves construction of two underwater tunnels.
The two companies also discussed in the Tuesday meeting in Guangzhou advances in plans to build underground natural gas storage in China. Such storage normally taps depleted fields, aquifers or salt caverns.
More
In any great organization it is far, far safer to be wrong with the majority than to be right alone.
John Kenneth Galbraith.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Is President Erdogan toying with President Trump like a cat plays with a
mouse? What do the Saudis have on President Trump that makes him grovel so
publicly?
Of the
possibility Prince Mohammed had a hand in the murder, Trump said: “Maybe he
did, maybe he didn’t”.
Turkish paper says CIA had recording of Saudi prince demanding Khashoggi be 'silenced'
November 22, 2018 / 10:49 AM
ISTANBUL (Reuters) - A Turkish newspaper reported on Thursday CIA
director Gina Haspel signalled to Turkish officials last month that the agency
had a recording of a call in which Saudi Arabia’s crown prince gave
instructions to “silence” Saudi journalist Jamal Khashoggi.
Asked about the report, a Turkish official told Reuters he had no
information about such a recording. Saudi Arabia has said Crown Prince Mohammed
bin Salman had no prior knowledge of Khashoggi’s killing at the Saudi consulate
in Istanbul six weeks ago.
“There is talk of another recording,” Hurriyet newspaper journalist
Abdulkadir Selvi wrote in a column, saying the purported call took place
between Prince Mohammed and his brother, Saudi Arabia’s ambassador to
Washington.
“It is being said that CIA chief Gina Haspel indicated this during her
visit to Turkey,” he wrote, adding that they had discussed Khashoggi, a critic
of the kingdom’s de facto ruler.
“It is being said the crown prince gave orders to ‘silence Jamal
Khashoggi as soon as possible’,” in a call which was monitored by the U.S.
agency, he said.
Khashoggi was killed at the Saudi consulate in Istanbul on Oct. 2 in an
operation that Turkey’s President Tayyip Erdogan has said was ordered by the
highest level of Saudi leadership.
After offering numerous contradictory explanations, Riyadh said last
week Khashoggi had been killed and his body dismembered when negotiations to
persuade him to return to Saudi Arabia failed.
Trump Says CIA Didn't Conclude Saudi Prince Had Role in Murder of Khashoggi
By Toluse Olorunnipa and Laura Davison
Updated on 22 November 2018, 18:26 GMT
President Donald Trump disputed that U.S. intelligence officials have
definitively concluded that Saudi’s crown prince ordered the murder of
U.S.-based columnist Jamal Khashoggi, while continuing to tout the importance
of maintaining economic ties with the kingdom.
A confidential Central Intelligence Agency report on Khashoggi’s death
says Crown Prince Mohammed bin Salman “might have done it,” Trump said
Thursday, referring to a demand that the journalist be killed. But the CIA
“didn’t conclude” that the prince made the demand, the president told reporters
during a press conference at his Mar-a-Lago resort in Florida.
"You can conclude maybe he did or maybe he didn’t," Trump said
about the CIA report. "Whether he did or whether he didn’t, he denies it
vehemently.”
Several news organizations including the Washington Post and New York
Times have reported that the CIA concluded the crown prince ordered Khashoggi’s
assassination in Istanbul last month, contradicting the Saudi government’s
claim he wasn’t involved. CIA officials have high confidence in their
conclusion, which is based on multiple sources of intelligence, the Post
reported Nov. 16.
“They did not come to a conclusion,” Trump said Thursday. “They have
feelings certain ways.”
---- Trump’s comments come after days of affirming his support for Saudi Arabia. Trump reiterated his backing Thursday, praising the country for being a strong ally, purchasing military equipment from U.S. companies, and keeping oil prices low.
"Do people really want me to give up hundreds of thousands of
jobs?" Trump said. "Frankly if we went by this standard, we wouldn’t
be able to have anybody as an ally, because look at what happens all over the
world."
More
“Operator!
Give me the number for 911!”
President Trump, with
apologies to Homer Simpson.
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?
New 'smart' material with potential biomedical, environmental uses
Date:
November 21, 2018
Source:
Brown University
Summary:
By combining seaweed-derived alginate with the nanomaterial graphene oxide,
researchers have developed a new material that's durable and can respond
dynamically to its environment.
Brown University researchers have shown a way to use graphene oxide (GO)
to add some backbone to hydrogel materials made from alginate, a natural
material derived from seaweed that's currently used in a variety of biomedical
applications. In a paper published in the journal Carbon, the
researchers describe a 3-D printing method for making intricate and durable
alginate-GO structures that are far stiffer and more fracture resistant that
alginate alone.
"One limiting factor in the use of alginate hydrogels is that
they're very fragile -- they tend to fall apart under mechanical load or in low
salt solutions," said Thomas Valentin, a Ph.D. student in Brown's School
of Engineering who led the work. "What we showed is by including graphene
oxide nanosheets, we can make these structures much more robust."
The material is also capable of becoming stiffer or softer in response
to different chemical treatments, meaning it could be used to make "smart"
materials that are able to react to their surroundings in real time, the
research shows. In addition, alginate-GO retains alginate's ability to repel
oils, giving the new material potential as a sturdy antifouling coating.
The 3-D printing method used to make the materials is known as
stereolithography. The technique uses an ultraviolet laser controlled by a
computer-aided design system to trace patterns across the surface of a
photoactive polymer solution. The light causes the polymers to link together,
forming solid 3-D structures from the solution. The tracing process is repeated
until an entire object is built layer-by-layer from the bottom up. In this case
the polymer solution was made using sodium alginate mixed with sheets of
graphene oxide, a carbon-based material that forms one-atom-thick nanosheets
that are stronger pound-for-pound than steel.
One advantage to the technique is that the sodium alginate polymers link
through ionic bonds. The bonds are strong enough to hold the material together,
but they can be broken by certain chemical treatments. That gives the material
the ability to respond dynamically to external stimuli. Previously, the Brown
researchers showed that this "ionic crosslinking" can be used to
create alginate materials that degrade on demand, rapidly dissolving when
treated with a chemical that sweeps away ions from the material's internal
structure.
---- "The addition of graphene oxide stabilizes the alginate hydrogel with hydrogen bonding," said Ian Y. Wong, an assistant professor of engineering at Brown and the paper's senior author. "We think the fracture resistance is due to cracks having to detour around the interspersed graphene sheets rather than being able to break right though homogeneous alginate."
The extra stiffness enabled the researchers to print structures that had
overhanging parts, which would have been impossible using alginate alone.
Moreover, the increased stiffness didn't prevent alginate-GO also from
responding to external stimuli like alginate alone can. The researchers showed
that by bathing the materials in a chemical that removes its ions, the
materials swelled up and became much softer. The materials regained their
stiffness when ions were restored through bathing in ionic salts. Experiments
showed that the materials' stiffness could be tuned over a factor of 500 by
varying their external ionic environment.
That ability to change its stiffness could make alginate-GO useful in a
variety of applications, the researchers say, including dynamic cell cultures.
More
Another weekend and the start of the final stage of
the Great Christmas Retail Season. Not
being a retailer, I don’t much care how it all turns out. Some will win, some
will lose, all will have to adapt to online internet sales.
At the end of next week, the end of the month for
stock funds. Will a bad month trigger a great tidal wave of fund redemptions?
At the end of next week too, the much touted meeting between Presidents Xi and
Trump. Will it signal the end of the trade war or only the end of the
beginning? Will President Trump meet with Crown Prince Mohammad bin Salman?
Have a great weekend everyone
For your weekend enjoyment, when Sir Walter Raleigh
discovered turkeys, tobacco and trouble, Bob Newhart style.
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.
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