Baltic Dry Index. 1378 -17 Brent Crude 56.18
On
October 29, 1975, President Gerald Ford gave a speech denying federal
assistance to spare New York City
from bankruptcy. The front page of the October 30, 1975 Daily News read: “FORD
TO CITY: DROP DEAD.”
Probably because
President Trump tried so publicly and so often to bully the Fed, and especially
its new Chairman Jerome Powell into not raising its key interest rate, that a Fed
rate increase became unavoidable. Though I doubt any newspaper in America will run
with my headline
“Fed to stocks: drop
dead” was also a possibility, which is pretty much what US stocks did,
unsettled by FedEx’s bad news as much as the Fed promising two more increases
to come in 2019.
And so we are set for
a bad ending for stocks in 2018. There will now likely be a rush of investors
wanting to exit hedge and mutual funds, but with so few trading days left in
the year I suspect some fund selling will get held over into the new year.
For what it’s worth,
barring a most unlikely miracle, the slow moving Coppock Indicators are headed
for a massive drop at month-end, discouraging all but the most stubborn
perma-bulls. My own guess is that US stocks are about to repeat 1973-74 with
even US politics about to resemble the hounding of President Nixon.
Below, how a good day
in Washington became a bad day in Gotham.
"Stocks
are cheap at current prices."
Calvin
Coolidge, 30th United States President, spring 1929.
Nikkei leads Asian-market tumble after Fed raises rates
Asian stock markets sank Thursday after the Federal Reserve raised U.S. interest rates and Wall Street dived to a 15-month low.Tokyo’s Nikkei 225 index NIK, -3.06% fell 2.5% as the Bank of Japan left short- and long-term rate targets unchanged, as expected. SoftBank Holdings 9984, -4.30% fell more than 3% a day after its mobile unit made a lackluster public debut.
Hong Kong’s Hang Seng HSI, -1.13% retreated 1% as tech stocks declined, led by losses from Sunny Optical 2382, -3.85% and AAC 2018, -2.81% .
The Shanghai Composite Index SHCOMP, -0.82% lost 0.8% while the smaller-cap Shenzhen Composite 399106, -0.20% fell just 0.2%. Beijing unexpectedly announced a 100 billion yuan ($15 billion) lending program to support entrepreneurs. Financial analysts saw the “targeted easing” as a sign policymakers want to shore up economic growth without reigniting a rise in national debt levels.
Korea’s Kospi SEU, -1.34% lost 0.9% as Samsung 005930, -1.28% slid 1%. Australia’s S&P-ASX 200 XJO, -1.08% shed 0.6% and Taiwan’s Taiex Y9999, -1.26% also declined. New Zealand’s benchmark NZ50GR, +0.11% rose slightly while stocks in Singapore STI, -0.05% and Malaysia FBMKLCI, -0.47% were muted.
Earlier, the Fed raised its key interest rate for a fourth time this year to reflect U.S. economic strength and said it plans more increases next year. The increase lifted the Fed’s benchmark rate to its highest level since the 2008 global financial crisis. The Fed said it expects two rate increases next year instead of three. Investors were disappointed Chairman Jerome Powell failed to go further in indicating a slowdown in the pace of increases.
Stocks gave up a rally and plunged, sending the market to its lowest level since September 2017. The Dow Jones Industrial Average DJIA, -1.49% swung from a gain to close down 1.5% at 23,323.66. The S&P 500 SPX, -1.54% skidded 1.5% to 2,506.96. It has lost 9.2% this month. The Nasdaq composite gave up 2.2% to 6,636.83.
“It feels like we are back to square one again on Asia risk as we try to playbook early 2019 risk sentiment now wedged between a data dependent Fed and a very uncertain outlook from the PBOC on the stimulus front as the 90-day moratorium on tariffs looms ominously,” said Stephen Innes, head of Asia-Pacific trading at Oanda, in a note to clients early Thursday. “And with so much uncertainly dotting the global growth recovery, markets will likely greet the new year on very shaky footings.”
More
https://www.marketwatch.com/story/nikkei-leads-asian-market-tumble-after-fed-raises-rates-2018-12-19
Powell offers markets an olive branch but gets rejected
By Greg Robb
Published: Dec 19, 2018 5:15 p.m. ET
Federal Reserve Chairman Jerome Powell on Wednesday tried to meet financial
markets halfway but his overture was soundly rejected, economists said.“I think they were trying to calm the markets down...but it didn’t seem to have that effect. They
ignored the olive branch,” said Drew Matus, chief market strategist at MetLife.
Matus said the Fed shifted its dot plot “lower a lot.” The central bank now sees only two rate hikes in 2019 and one more through 2021.
Stocks plunged after the Fed meeting. The Dow Jones Industrial Average DJIA, -1.49% hit a new 52-week low.
“He tried to meet the market halfway and clearly the market is upset he didn’t go further,” Matus said.
----Matus said that the main reason Powell was having trouble assuaging the market is because the recent weakness doesn’t align with the economic data the Fed is watching.
The economic data remains upbeat, all pointing to continued better
growth environment, he said.
“It’s difficult to tell a coherent story when the market is not being
coherent,” Matus said.
Data supporting the notion of a “near-term recession” just isn’t there.
More
Dow transports tumble into first bear market in nearly 3 years
By Tomi Kilgore
Published: Dec 19, 2018 6:24 p.m. ET
The Dow Jones Transportation Average has entered its first bear market in
nearly three years, sending a warning sign to Wall Street that the slowdown in
overseas economies may be spilling over into the U.S.The Dow transports DJT, -3.15% tumbled 297.81 points, or 3.2%, to 9,147.66 on Wednesday, the lowest close since Aug. 25, 2017, with losses accelerating after the Federal Reserve’s decision to raise interest rates. The main culprit was FedEx Corp.’s stock FDX, -12.16% , which plunged 12.2% to account for about half of the index’s loss.
The selloff put the transports tracker 20.9% below its Sept. 14 record close of 11,570.84.
Many on Wall Street define a bear market as a decline of 20% or more on a closing basis from a bull-market peak. The last bear market for the transports started on Dec. 18, 2015 and ended on March 17, 2016.
Many chart watchers keep a close eye on the transportation sector, as they view it has a indicator of global economic growth. The idea being, if transports aren’t delivering what other companies are supplying, weakening demand could trigger a slowdown, even if that weakness is coming from overseas markets.
FedEx’s stock selloff helped support that notion. The package-delivery company said that although the U.S. economy remained “solid,” it cut its full-year profit outlook because global trade has slowed as its Europe business weakened significantly and as China’s economy has slowed due in part to trade disputes.
More
Finally, today, a
look at Britain’s future under Comrade Corbyn and the New Communist Labour Party.
The fallen metropolis: the collapse of Caracas, the jewel of Latin America
Once a thriving, glamorous city, Venezuela’s capital is buckling under hyperinflation, crime and poverty
Tue 18 Dec 2018 07.30 GMT
A portrait of Hugo Chávez and a Bolivarian battle cry greet visitors to the Boyacá viewpoint in the mountains north of Caracas. “It is our duty to find one thousand ways and more to give the people the life that they need!”
But as Venezuela buckles, Chávez’s pledge sounds increasingly hollow. Vandals have splashed paint into the comandante’s face and beneath him Venezuela’s capital is dying.
“A ghost town,” laments Omar Lugo, director of news website El Estímulo, during a night-time driving tour of a once-buzzing metropolis being eviscerated by the country’s collapse. “It pains me so much to see Caracas like this.”
A generation ago, Venezuela’s capital was one of Latin America’s most thriving, glamorous cities; an oil-fuelled, tree-lined cauldron of culture that guidebooks hailed as a mecca for foodies, night owls and art fans.
Its French-built metro
– like its restaurants, galleries and museums – was the envy of the region.
“Caracas was such a vibrant city … You truly felt, as we used to say around
here, in the first world,” says Ana Teresa Torres, a Caraqueña author whose
latest book is a diary of her home’s demise.
----Twenty years after that upbeat address, an economic cataclysm experts blame on ill-conceived socialist policies, staggering corruption and the post-2014 slump in oil prices has given Caracas the air of a sinking ship.
Public services are collapsing, businesses closing and residents evacuating on buses or one of a dwindling number of flights still connecting their fallen metropolis to the rest of the world.
“It’s a feeling of historic frustration,” sighs Lugo as he steers through shadowy streets counting the apartments where the lights are still on. “A country that performed a miracle in reverse – it’s just impossible to believe.”
Caracas’s crash has left no community unscarred, from its vast redbrick shantytowns to leafy middle- and upper-class areas such as La Florida.
Luis Saavedra, a former oil industry security consultant, said his 13-storey apartment block had lost more than half of its residents since Venezuela entered an economic and political tailspin after Nicolás Maduro took power following Chávez’s death in 2013.
Fourteen of its 26 flats are now empty, their owners exiled to Spain, Portugal, Germany, Argentina and the US. The price of an 180 sq m home has plunged from $320,000 (£253,000) to $100,000 yet buyers are hard to find. In November, the building went 16 days without electricity.
“This populism – this so-called socialism – has finished off our country,” Saavedra, 65, complained as he showed the Guardian around one of five empty homes he now cares for. “It isn’t finishing the country off. It has finished it off.”
----Soaring crime and the breakdown of a city where even those regarded as well-off now often live without water or power meant he saw few alternatives. “It’s astonishing. By 6 or 7pm you don’t see any more cars on the streets and by 8pm it’s completely deserted. This is a capital city that used to have a night life. Not anymore. Everyone’s holed up at home.”
Saavedra recalled returning from a recent trip to Miami to find Caracas’s international airport – once linked to Paris by six-hour Concorde flights – cloaked in darkness due to a power cut. “The people at customs couldn’t even inspect us because there was no light!” he scoffed. “We’ve stopped [in time], gone back 40 years and are heading back to the dark ages.”
----When he took power in 1998 Chávez declared war on the “immense poverty” that blighted his homeland despite its vast oil wealth. But Caracas’ slum dwellers are now fleeing too, forced overseas by a lack of food, medicine and work, a collapsing public transport system and hyperinflation the International Monetary Fund fears will hit 10,000,000% in 2019.
Solangel Jaspe, the deputy head of a Catholic school in the deprived and notoriously violent Cota 905 neighbourhood, said she had begun the year with 909 students. “Today it is 829 and falling.”
Only that morning, the parents of nine children said they were dropping out: six because they were leaving the country – for Colombia, Chile and Peru – and the other three because they could no longer afford the fees or find transport.
More
“Socialism
only works in two places: Heaven where they don’t need it and hell where they
already have it.”
Ronald
Reagan.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over
banksters and politicians.
No crooks today, they’re
around every day, all day. Today the Yamal peninsula, another LNG milestone for
Russia and western Europe. But what will it do to the arctic environment?
Gazprom says nothing, they’ve got it all covered.
Yamal LNG project reaches full production capacity
Source: Xinhua| 2018-12-16 16:36:48
SABETTA,
Russia, Dec. 11 (Xinhua) -- Yamal liquefied natural gas (LNG) project in Arctic
Russia officially commissioned the third or last production line here Tuesday
and thus reached its full capacity.
Russian Prime
Minister Dmitry Medvedev gave an order through a video conference to load a
cargo ship with LNG produced in the third line at Sabetta port on Yamal
Peninsula.
The project,
a success for all participants, is significant to Russia's energy industry and
its global cooperation, Medvedev said, adding that it is also conducive to
better international transport infrastructure, including the Arctic shipping
route.
Russia had
fruitful cooperation with European partners in the past and it now eyes the
Asian market, he said.
The project
contributes to China's energy security, said Qin Weizhong, deputy general
manager of China National Petroleum Corporation (CNPC).
The plant
also boosted investment in Russia, increased its tax revenue and created local
jobs, Qin said.
The Yamal LNG
project is owned by Russia's Novatek (50.1 percent), France's Total (20
percent), CNPC (20 percent) and China's Silk Road Fund (9.9 percent).
The plant
consists of three production lines with each having a capacity of 5.5 million
tons per year. The first production line started operation in December 2017 and
the second one was launched in August 2018.
CNPC received
the first ship of Yamal LNG supplied to China in July 2018 and it will import 3
million tons of Yamal LNG every year from 2019.
Yamal Gazprom
A new
gas production center is actively evolving in the Yamal Peninsula.
The center will eventually become a major contributor to the Russian
gas industry development. Yamal will produce up to 360 billion cubic
meters of gas per year.
Yamal LNG project
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?
Graphene's magic is in the defects
Date:
December 18, 2018
Source:
NYU Tandon School of Engineering
Summary:
A team of researchers has solved a longstanding puzzle of how to build
ultra-sensitive, ultra-small electrochemical sensors with homogenous and
predictable properties by discovering how to engineer graphene structure on an
atomic level.
Finely tuned electrochemical sensors (also referred to as electrodes)
that are as small as biological cells are prized for medical diagnostics and
environmental monitoring systems. Demand has spurred efforts to develop
nanoengineered carbon-based electrodes, which offer unmatched electronic,
thermal, and mechanical properties. Yet these efforts have long been stymied by
the lack of quantitative principles to guide the precise engineering of the
electrode sensitivity to biochemical molecules.
Davood Shahrjerdi, an assistant professor of electrical and computer
engineering at NYU Tandon, and Roozbeh Kiani, an assistant professor of neural
science and psychology at the Center for Neural Science, Faculty of Arts and
Science, have revealed the relationship between various structural defects in
graphene and the sensitivity of the electrodes made of it. This discovery opens
the door for the precise engineering and industrial-scale production of
homogeneous arrays of graphene electrodes. The researchers detail their study
in a paper published today in the journal Advanced Materials.
Graphene is a single, atom-thin sheet of carbon. There is a traditional
consensus that structural defects in graphene can generally enhance the
sensitivity of electrodes constructed from it. However, a firm understanding of
the relationship between various structural defects and the sensitivity has
long eluded researchers. This information is particularly vital for tuning the
density of different defects in graphene in order to achieve a desired level of
sensitivity.
"Until now, achieving a desired sensitivity effect was akin to
voodoo or alchemy -- oftentimes, we weren't sure why a certain approach yielded
a more or less sensitive electrode," Shahrjerdi said. "By systematically
studying the influence of various types and densities of material defects on
the electrode's sensitivity, we created a physics-based microscopic model that
replaces superstition with scientific insight."
In a surprise finding, the researchers discovered that only one group of
defects in graphene's structure -- point defects -- significantly impacts
electrode sensitivity, which increases linearly with the average density of
these defects, within a certain range. "If we optimize these point defects
in number and density, we can create an electrode that is up to 20 times more
sensitive than conventional electrodes," Kiani explained.
More
"Liquidation sometimes is orderly, but
more frequently degenerates into panic as the realization spreads that there is
only so much money, not enough to enable everyone to sell out at the top."
Charles P. Kindleberger, author Manias, Panics
and Crashes.
Once again, another year draws to a close and it’s
time for my annual appeal. If you are one of the regular LIR readers of this
usually six days a week update, that helps support my efforts with the
occasional donation via the Paypal button, once again I sincerely thank you. A
special thanks this year to the very kind reader that so generously helped me
with my vet bills for the operation on my late border collie Rosie. After 12
years, Christmas won’t be the same without Rosie.
If you are a regular reader who finds the LIR
informative, interesting, occasionally amusing or entertaining, please consider
making a small donation via the Paypal button on the right of the LIR website.
For obvious reasons in our new age of mainstream media fake news, I want to
keep the LIR advertising free. But in any event thank you for reading and
sending along helpful articles and suggestions.
The monthly Coppock Indicators finished November.
DJIA: 25,538 +157 Down. NASDAQ:
7,331 +205 Down. SP500: 2,760 +129 Down.
All three slow indicators are
signalling more correction to come, although not necessarily ahead of the
year-end. However, if a tidal wave of stock fund redemptions hits in December,
2018 could end in a great rising wave of panic selling into a generally thin
markets trading year-end.
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