Baltic Dry Index. 1428 -29 Brent Crude 72.68
“The
sucker has always tried to get something for nothing, and the appeal in all
booms is always frankly to the gambling instinct aroused by cupidity and
spurred by a pervasive prosperity. People who look for easy money invariably
pay for the privilege of proving conclusively that it cannot be found on this
sordid earth.”
Reminiscences of a Stock
Operator
With Americans voting
today in their midterm elections, the media is having a field day with wild
predictions ranging from a Republican rout, to only marginal change in the
House. From London it’s impossible to gage how recent evets might have affected
voting intentions, if at all, so we will wait patiently for tonight and
tomorrow’s developments.
In normal times, US
markets usually rally after the midterm elections, taking whatever results in
their stride. But these are far from normal times. President Trump has set off an
unwise trade war, whose main effect so far seems to be producing a marked
slowdown in global manufacturing.
Moreover, 25 percent punitive
tariffs against Chinese exports are due to take effect on January 1, so US
consumer price inflation lies directly ahead, since a 25 percent tariff is too
high not to be passed on.
Yesterday the USA
renewed sanctions on Iran designed to stop Iranian oil exports entirely
eventually, bringing Iran’s economy to collapse and bring about regime change.
Most of the rest of the world disagrees, though for now will mostly go along,
provided there isn’t an oil shock or a new middle east war. But how long either
can be prevented is an open question.
Next, there is rising
political uncertainty practically
everywhere, from the USA itself, to the EU and especially Italy, and Brexit, to the emerging market economies, to whether
the House of Saud can survive state sanctioned murder.
Finally, we have
started out on the great interest rate normalisation, which involves higher interest
rates almost everywhere, but especially in the USA and Europe. Higher interest rates have never been good
for most stocks.
Below, a little
merriment and diversion while we await the outcome of the US melodrama later
today.
Germany says legal business relations with Iran should be possible
November 5, 2018 / 11:21 AM
BERLIN (Reuters) - Germany is convinced that it should enable legal
business relations with Iran and is checking how to protect companies affected
by sanctions reimposed on Iran by Washington, a government spokesman said on
Monday.
“We are assessing how we will be able to protect the basis of our
business engagements there,” government spokesman Steffen Seibert said.
Swiss talk with US, Iran about humanitarian payment channel for food, drugs
November 5, 2018 / 10:26 AM
ZURICH (Reuters) - Switzerland is holding
talks with the United States and Iran about launching a humanitarian payment
channel to help ensure food and drugs keep flowing to the Islamic Republic amid
tightened U.S. sanctions, the government said.
Restored U.S. sanctions are part of a
wider effort by U.S. President Donald Trump to force Iran to curb its nuclear
and missile programmes as well as its support for proxy forces in Yemen, Syria,
Lebanon and other parts of the Middle East.
Iran has taken a defiant line. It will sell its oil and break U.S.
sanctions on its vital energy and banking sectors, Iranian President Hassan
Rouhani said.
“Switzerland is committed to safeguarding Swiss economic interests and
closely follows the development of the situation. The authorities are in direct
contact with the competent authorities of the United States, the EU and Iran,”
the State Secretariat for Economic Affairs (SECO) said in an emailed statement
on Monday.
“Particularly in the humanitarian field, the federal government is
committed to ensuring that food and pharmaceutical products can continue to be
supplied from Switzerland,” it said, adding it was in touch with U.S.
authorities, Iran and unnamed Swiss companies on developing a humanitarian
payment channel. A SECO spokesman would not elaborate on the plan.
Switzerland, which represents U.S. diplomatic interests in Iran, was not
involved in separate European Union discussions on setting up a special purpose
vehicle to continue trade with Iran, but was following the talks closely, SECO
said.
The Swiss were also not involved in developing alternative mechanisms to
SWIFT in the area of secure messaging and payment transactions.
More
U.S. reimposes Iran sanctions, Tehran decries 'bullying'
November 5, 2018 / 6:13 AM
WASHINGTON/DUBAI (Reuters) - The United
States on Monday restored sanctions targeting Iran’s oil, banking and
transportation sectors and threatened more action to stop its “outlaw”
policies, steps the Islamic Republic called economic warfare and vowed to defy.
The measures are part of a wider effort by U.S. President Donald Trump
to curb Tehran’s missile and nuclear programs and diminish the Islamic
Republic’s influence in the Middle East, notably its support for proxies in
Syria, Yemen and Lebanon.
Trump’s moves target Iran’s main source of revenue - its oil exports -
as well as its financial sector, essentially making 50 Iranian banks and their
subsidiaries off limits to foreign banks on pain of losing access to the U.S.
financial system.
The return of the sanctions was triggered by Trump’s May 8 decision to
abandon the 2015 Iran nuclear deal, negotiated with five other world powers
during Democratic President Barack Obama’s administration. That agreement had
removed many U.S. and other economic sanctions from Iran in return for Tehran’s
commitment to curtail its nuclear programme.
Trump denounced the deal because of time limits on some of Iran’s
nuclear activities, as well as for its failure to address other Iranian
activity that the United States does not like.
More
Trump’s Trade War Is Making Russia and China Comrades Again
Facing U.S. sanctions
and tariffs, Moscow and Beijing are finding lots of common ground.
By Marc Champion
Fu Ying recalls vividly how, as a young woman, she’d get woken by sirens
in the middle of the night for drills to practice for a Soviet invasion. It was
the time of China’s traumatic Cultural Revolution and, although the farm she’d
been sent to was more than 200 miles from the border, the threat seemed
imminent—strong enough, it turned out, to throw Maoist China into the arms of
its capitalist nemesis, the U.S.
Today’s world could hardly look more different. The U.S.-China
realignment that began with President Richard Nixon’s 1972 visit to Beijing has
been reversed in the most consequential geopolitical shift since the fall of
the Berlin Wall. China and Russia are now as close as at any time in their 400
years of shared history. The U.S., meanwhile, has targeted both countries with
sanctions and China with a trade war.
She’s less sure about the U.S. In a speech last month, Vice President Mike Pence said the U.S. was responding to “Chinese aggression” with military spending and trade tariffs. Beijing, he said, was expanding at the expense of others and trying to drive the U.S. from the western Pacific. That kind of talk won’t be easy to forget, even if Trump and Xi agree to a trade truce at a scheduled meeting at the end of November. “I just hope that if some people in the U.S. insist on dragging us down the hill into Thucydides’ trap, China will be smart enough not to follow,” Fu says, referring to the ancient historian’s observation that rising and established powers tend to end up at war.
Even without bloodshed, this reconfiguration of the nuclear and economic
superpowers is significant. Chinese investment and energy purchases make it
easier for Russia to resist economic pressure over Ukraine; Russian sales of
oil, missile defense systems, and jets are changing U.S. calculations in the
Pacific by raising the potential cost of any future showdown with China.
Morehttps://www.bloomberg.com/news/articles/2018-11-05/trump-s-trade-war-is-making-russia-and-china-comrades-again
The Origin of China’s Stock Market Disaster? A Private Sector Starved for Credit
The government’s efforts to bail
out businesses have been weak at best.
5
November 2018
Chinese
stocks are among the world’s worst performers this year. An economy that’s
growing at its slowest pace since 2009 and the U.S.-China trade war are
certainly dragging them down, but there’s an
even bigger problem: The private sector—businesses not owned or controlled by
the state—is broke. The government has initiated programs to keep businesses
afloat, but they’re unlikely to be enough.
The
cash crunch is a side effect of Beijing’s recent attempts to curb risky
financial behaviors. What began last year as a crackdown on lending to heavily
acquisitive conglomerates such as HNA Group Co. and Dalian Wanda Group Co. has spilled
over to smaller companies, squeezing their access to funding. Already shunned
by the big banks, these companies were further stung by efforts to regulate peer-to-peer
lenders after Ponzi scandals shook the industry, cutting off a key source of
ready cash.
Still keen to tamp down borrowing, Beijing pushed up interest rates
and slowed approvals of bond sales, while the state banks that are the main
investors in China’s bond market eased up on buying.
As
bond defaults rose, the government attempted to inject more cash into the
economy by easing reserve requirements on banks, promising to fund bond sales
by private companies and reducing some personal income taxes to encourage
consumer spending. Yet, with 11 percent of the Chinese stock market’s
capitalization pledged as collateral on business loans, 2 trillion yuan ($290
billion) of shareholder value is still at risk, according to a Goldman Sachs
estimate.
More
“If you have timed the movement correctly, your first commitment will show you a profit at the start.”
How to Trade In Stocks
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, more on that Saudi murder in Istanbul, Turkey. Murder with malice aforethought, with all
roads leading back to Crown Prince MbS. President Erdogan has yet more to
release, I suspect.
Saudis sent "clean-up" team to Turkey after Khashoggi killing, official says
November 5, 2018 / 8:01 AM
ANKARA
(Reuters) - Saudi Arabia sent a two-man “clean-up team” to erase evidence of
journalist Jamal Khashoggi’s killing a week after he disappeared at the Saudi
consulate in Istanbul, a Turkish official said on Monday, calling it a sign top
Saudi officials knew of the crime.
Confirming a report in Turkey’s pro-government Sabah newspaper, the
official said the chemist and toxicologist were tasked with erasing evidence
before Turkish investigators were given access to the Saudi consulate and
consul’s residence.
Sabah identified the two men as Ahmed Abdulaziz al-Jonabi and Khaled
Yahya al-Zahrani, saying they arrived in Turkey as part of an 11-person team
sent to carry out the inspections with Turkish officials.
Khashoggi, a Washington Post columnist critical of the Saudi government
and its de facto ruler Crown Prince Mohammed bin Salman, disappeared at the
consulate on Oct. 2.
Saudi officials initially insisted Khashoggi had left the consulate,
then said he died in an unplanned “rogue operation”. The kingdom’s public
prosecutor Saud al-Mojeb later said he was killed in a premeditated attack.
Turkish and Saudi officials have carried out joint inspections of the
consulate and consul’s residence in Istanbul, but President Tayyip Erdogan says
some Saudi officials are still trying to cover up the crime. Ankara has also
demanded Riyadh cooperate in finding Khashoggi’s body, which Istanbul’s chief
prosecutor said had been dismembered.
A senior Turkish official confirmed the names of the men identified on
Monday by Sabah. “We believe that the two individuals came to Turkey for the
sole purpose of covering up evidence of Jamal Khashoggi’s murder before the
Turkish police were allowed to search the premises,” the official said.
The two individuals carried out clean-up operations at the consulate and
the consul’s residence in Istanbul until October 17 and left the country three
days later, he said.
“The fact that a clean-up team was dispatched from Saudi Arabia nine
days after the murder suggests that Khashoggi’s slaying was within the
knowledge of top Saudi officials,” the official said.
---- Saudi Arabia’s conflicting accounts of Khashoggi’s killing have prompted international outcry against the world’s top oil exporter, upending the young crown prince’s international image as a reformer.
Turkey has released a stream of evidence challenging the initial Saudi
denials of involvement, and continues to press Riyadh for details.
On Monday Vice President Fuat Oktay called for an investigation into
newspaper reports last week that Khashoggi’s body was disposed of by dissolving
it in acid.
More
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?
Wrightbus debuts world’s first fuel-cell double-deck bus
Wrightbus
has debuted the world’s first fuel-cell-powered double-deck bus at this year’s
Euro Bus Expo 2018. The StreetDeck FCEV uses a Ballard FCVelocity fuel cell, a
Siemens drivetrain and 48kW traction battery pack. The system delivers a
200-mile (322km) operating range, and a 265-mile (426km) extended storage
option is also available. Refueling the bus takes approximately seven minutes.
The vehicle’s electric drive axle is packaged to provide a flat floor
throughout the bus, and features a zero-emission heating and cooling system.
Remote diagnostics are also available. Lightweight hydrogen storage tanks are
included, and an automatic BMS continuously monitors and balances the stored
power while the vehicle is in use.
The modular platform developed by Wrightbus means that the StreetDeck
FCEV shares the same chassis as the manufacturer’s full-electric models – the
rear module contains equipment for overnight charging, opportunity charging or
fuel cell components depending on the vehicle’s specification. The chassis also
serves as the platform for both single- and double-deck models.
Hyundai and Kia unveil new solar roof to charge batteries in vehicles, launching next year
Fred Lambert - Oct. 31st 2018 2:06 pm ET
Electric vehicles enable owners to have more choices for the sources of
energy to power their vehicles. EV owners have been known to
adopt solar power at a higher rate than the rest of the popular.
Some of them even want solar directly on their vehicles – even though
it’s not the most efficient place for it.
Hyundai and Kia have now unveiled a new solar roof for vehicles to
launch next year.
The problem with solar panels on vehicles is that they don’t generate
enough electricity to do much of anything. Toyota already had an option for a
solar roof on the previous PHEV Prius, but it was only generating 50 W and
powering the fans for the AC.
Fisker had a similar option for the Karma, but it also had only a little
impact.
But now several automakers are moving forward with new systems that
would be able to add some energy to batteries to power the vehicle and even add
some range.
Hyundai and Kia are the latest ones to jump on board and they are
developing three different solar cells for all vehicles from ICE to all-electric:
“The first-generation system is for hybrid vehicles, while the
second-generation technology brings a semi-transparent solar roof system to ICE
vehicles. The third generation of the technology will see the introduction of a
lightweight solar roof for battery electric vehicles.”
The solar cells are semi-transparent and would enable a glass roof:
More
“It has
always been my experience that I never benefited much from a move if I did not
get in at somewhere near the beginning of that move.”
How to Trade In Stocks
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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