Baltic Dry Index. 649
-08 Brent
Crude 65.94
Car Crash Brexit 18
days away.
This great Nation will endure as it has endured,
will revive and will prosper. So, first of all, let me assert my firm belief
that the only thing we have to fear is fear itself—nameless, unreasoning,
unjustified terror which paralyzes needed efforts to convert retreat into
advance.
Franklin Delano Roosevelt 1932.
GB Brexit 2019.
GB Brexit 2019.
An interesting
morning lies ahead. On Sunday the USA sprang forward to summer time, making New
York now only 4 hours behind London until we alter our clocks forward on Sunday
March 31st. The Monday following the change has often spelt trouble for stocks,
even before we have trouble this morning at Boeing and Deutsche Bank.
Trouble due later in
the week too, as the UK Parliament seems headed for a series of car crash votes
during the week.
But the panic over DB
is the more worrying. Will DB depositors get bailed in like Greece? And just how bad are things at DB and the
rest of European banking, now thanks to Barnier and Juncker, heading for a car
crash Brexit just under three weeks away?
All in all a good time to be risk off.
The
fascination of shooting as a sport depends almost wholly on whether you are at
the right or wrong end of the gun.
P. G. Wodehouse.
Asian shares struggle after U.S. payrolls shock
March 11, 2019 /
1:18 AM
TOKYO
(Reuters) - Asian shares struggled for traction on Monday after U.S. employment
data raised doubts about the strength of the global economy, while investor
jitters ahead of crucial Brexit votes in the UK parliament this week weighed on
the pound.
MSCI’s broadest index of Asia-Pacific shares outside Japan was little
changed from Friday’s three-week low, with broad weakness offset by small gains
in Chinese shares.
China’s blue-chip CSI300 index gained 0.5 percent after Friday’s 4.0
percent fall, which was triggered after CITIC Securities issued a rare “sell”
rating on a major insurer and by a clampdown on grey-market, margin financing.
[.SS]
“Trading volume is surging while foreign investors have been selling
late last week,” said Naoki Tashiro, president of TS China Research, adding that
suggests buying by retail investors is driving Chinese shares.
Japan’s Nikkei gained 0.2 percent after four consecutive sessions in the
red last week.
Wall Street’s main indexes posted their biggest weekly decline since the
market tumbled at the end of 2018 last week, falling for the fifth consecutive
day on Friday on the shocking payrolls data.
The U.S. economy created only 20,000 jobs in February, the weakest
reading since September 2017. As a result, bond yields dropped, with the
10-year Treasuries yield hitting a two-month low of 2.607 percent. It last
stood at 2.638 percent.
The two-year yield also hit a two-month low of 2.438 percent, edging
near the current Fed funds rate around 2.40 percent.
---- While job growth was weak, average hourly earnings rose 11 cents, or 0.4 percent, raising the annual increase to 3.4 percent, the biggest gain since April 2009.
Retail sales figures for January’s due at 1230 GMT is a key focus given
its December reading was surprisingly weak.
Fed Chair Jerome Powell said on Friday that the central bank will be
careful not to shock financial markets as it stabilises its bond portfolio,
saying that it does not see problems in the U.S. economy that warrant an
immediate change in its policy.
He also said the new normal for the Fed’s total liabilities may be in
the ballpark of 16.5 percent of GDP. Many market players now expect the Fed to
unveil a plan to end its balance sheet runoff as early as next week.
More
In other news, is it
panic time in European banking? Deutsche Bank says that it’s “stable,” but is
it? German officials seem to be panicking over something. What do they know that
we don’t? If DB needs a bank bailout, will the depositors and bondholders get
bailed in? If not, why not? Why would Germany be different to Greece?
“A good
politician is quite as unthinkable as an honest burglar.”
H. L.
Mencken.
Berlin backs Deutsche Bank merger despite risk of shortfall - sources
March 10, 2019 /
9:55 PM
FRANKFURT (Reuters) - Berlin is so worried about the health of Deutsche
Bank that it pushed for a merger with rival Commerzbank even though it could
open up a huge financial shortfall, a German official told Reuters.
Deutsche Bank’s management board has agreed to hold talks with
Commerzbank about the feasibility of a merger. The state owns a 15 percent
stake of Commerzbank and is expected to be a shareholder in the new group.
The German official said that any tie-up would likely result in a
multi-billion-euro hole because a switch in bank ownership legally triggers a
revaluation of assets such as government bonds.
They would be revalued at a market price which is typically lower than
the one registered on the accounts. A second source, who is familiar with the
talks, said they also expected a shortfall after the potential merger.
Rating agency Moody’s has said that a takeover could result in a
“downward valuation adjustment for parts of Commerzbank’s asset base”.
A second German official said Deutsche’s future was in question because
high costs left it with little profit. Asked about a merger between the two
banks, a third official said one was urgently needed to reduce the number of
branches in an overcrowded market.
Both said a buoyant jobs market in Germany made it easier to make staff
cuts without prompting large protests because those employees would be easily
able to find other work.
---- “In 2016 ... Deutsche went to the brink,” said the first official. “They haven’t really got out of that hole...It’s legitimate to ask:... how dangerous is that with systematic relevance?”
While having the government of Europe’s largest economy as a shareholder
would give the group some weight, it would also be humbling for Deutsche Bank,
once a symbol of German strength on Wall Street and London.
Its share price has tumbled after a string of scandals and fines
including a $7 billion plus penalty in 2016 for selling U.S. home loans that
unravelled in the financial crash.
---- Berlin has been examining options for Deutsche for many months. Senior German officials even participated in informal, exploratory discussions in recent months with Switzerland’s UBS about a merger with Deutsche, two more sources said.
But there was little appetite in Switzerland for making UBS bigger or
for merging with a weaker Deutsche, so German officials reverted to
Commerzbank, those people said. A UBS spokesman declined to comment.
More
Finally, is there a
problem with Boeing’s new 737, the 737-MAX8? Is the 737- MAX8 safe to fly? Did
Boeing get the new anti-stall software badly wrong?
No survivors on crashed Ethiopian Airlines flight: state TV
ADDIS ABABA, Ethiopia (AP) — An Ethiopian Airlines flight crashed
shortly after takeoff from Ethiopia’s capital on Sunday morning, killing all
157 people thought to be on board, the airline and state broadcaster said.
It was not immediately clear what caused the crash of the Boeing 737-8
MAX plane, which was new and had been delivered to the airline in November,
records show.
The state-owned Ethiopian Airlines, widely considered the best-managed
airline in Africa, calls itself Africa’s largest carrier and has ambitions of
becoming the gateway to the continent.
Its
statement said 149 passengers and eight crew members were thought to be on the
plane that crashed six minutes after departing Addis Ababa on its way to
Kenya’s capital, Nairobi. The crash occurred around Bishoftu, or Debre Zeit,
some 50 kilometers (31 miles) south of Addis Ababa, at 8:44 a.m.
The
plane showed unstable vertical speed after takeoff, air traffic monitor
Flightradar 24 said in a Twitter post. Visibility appeared to be clear.
----Records show that the plane was new. The Planespotters civil aviation database shows that the Boeing 737-8 MAX was delivered to Ethiopian Airlines in mid-November.
In October, another Boeing 737-8 MAX plunged into the Java Sea just minutes
after taking off from Jakarta, Indonesia’s capital, killing all 189 people on
board the plane Lion Air flight. The cockpit data recorder showed that the
jet’s airspeed indicator had malfunctioned on its last four flights, though
Lion Air initially claimed that problems with the aircraft had been fixed.
More
China orders its airlines to suspend use of Boeing 737 MAX 8 aircraft
March 11, 2019 /
12:30 AM
BEIJING/SHANGHAI
(Reuters) - China’s aviation regulator on Monday grounded nearly 100 Boeing Co
737 MAX 8 aircraft operated by its airlines, more than a quarter of the global
fleet of the jets, following a deadly crash of one of the planes in Ethiopia.
An Ethiopian Airlines 737 MAX 8 bound for Nairobi crashed minutes after
take-off on Sunday, killing all 157 people on board.
It was the second crash of the 737 MAX 8, the latest version of Boeing’s
workhorse narrowbody jet that first entered service in 2017.
In October, a 737 MAX 8 operated by Indonesian budget carrier Lion Air
crashed 13 minutes after take-off from Jakarta on a domestic flight, killing
all 189 passengers and crew on board.
The Civil Aviation Administration of China (CAAC) said all Chinese
airlines had to suspend their use of the 737 MAX 8 by 6 p.m. (1000 GMT).
The aircraft is the latest version of Boeing’s workhorse narrowbody that
entered service in 2017.
The CAAC said it would notify airlines as to when they could resume
flying the jets after contacting Boeing and the U.S. Federal Aviation
Administration (FAA) to ensure flight safety.
More
Boeing faces more scrutiny after deadly Ethiopia plane crash
By Associated Press
Published: Mar 10, 2019 11:03 p.m. ET
Investigators rushed to the scene of a devastating plane crash in
Ethiopia on Sunday, an accident that could renew safety questions about the
newest version of Boeing’s popular 737 airliner.
The Boeing 737 Max 8 operated by Ethiopian Airlines crashed shortly
after taking off from the capital of Addis Ababa, killing all 157 people on
board.
The plane was new. The weather was clear. Yet something was wrong, and
the pilots tried to return to the airport. They never made it.
In those circumstances, the accident is eerily similar to an October
crash in which a 737 Max 8 flown by Indonesia’s Lion Air plunged into the Java
Sea minutes after takeoff, killing all 189 people on the plane.
Safety experts took note of the similarities but cautioned against
quickly drawing too many parallels between the two crashes.
Alan Diehl, a former National Transportation Safety Board investigator,
said the similarities included both crews encountering a problem shortly after
takeoff, and reports of large variations in vertical speed during ascent,
“clearly suggesting a potential controllability problem” with the Ethiopian
jetliner.
But there are many possible explanations, Diehl said, including engine
problems, pilot error, weight load, sabotage or bird strikes. He said Ethiopian
has a good reputation, but investigators will look into the plane’s
maintenance, especially since that may have been an issue in the Lion Air
investigation.
More
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Tax the rich and the rich
move, says high tax New York. Who’d have thought it? Especially if the move is
from wintry New York City to warm winter, low tax Florida.
If
all else fails, immortality can always be assured by spectacular error.
John Kenneth
Galbraith.
Tax collectors chase rich New Yorkers moving to low-tax states. Auditors inspect cell records, even your dog's vet bills
- New York conducted about 3,000 "non-residency" audits a year between 2010 and 2017, collecting around $1 billion, according to a data company.
- New York is looking at cellphone records, social media feeds, and veterinary and dentist records in verifying residency.
- Auditors are even conducting in-home inspections to look inside taxpayers' refrigerators.
Robert Frank | @robtfrank Published March 8 2019.
The cat-and-mouse game between state tax collectors and wealthy New Yorkers who are moving to Florida has reached new levels — and gone high tech.
New federal tax laws limiting the deduction of state and local income taxes have created incentives for wealthy New Yorkers to move to Florida or other lower-tax states. New York Gov. Andrew Cuomo last month blamed wealth flight for the state's $2.3 billion revenue shortfall in December and January.
"Tax the rich, tax the rich, tax the rich," he said. "We did. Now, God forbid, the rich leave."
But the New York State Department of Taxation and Finance is making sure that high earners who try to leave don't escape without an audit and a bill. New York conducted about 3,000 "nonresidency" audits a year between 2010 and 2017, collecting around $1 billion, according to Monaeo, a company that sells an app for tracking and proving tax residency.
More than half of those who were audited lost their cases, and the average collected by New York State between 2015 and 2017 was $144,270 per audit, Monaeo said. In addition to the traditional audit methods the state uses to make sure a taxpayer isn't gaming the system — like checking taxpayer's credit card bills and travel schedules — New York officials are using a whole new set of high-tech tools, including tracking cellphone records, social media feeds, and veterinary and dentist records. Auditors are even conducting in-home inspections to look inside taxpayers' refrigerators.
"If you're a high earner in New York and you move to Florida, your chances of a residency audit are 100 percent," said Barry Horowitz, a partner at the WithumSmith+Brown accounting firm. "New York has always been aggressive. But it's getting worse."
Mark Klein, chairman of Hodgson Russ tax attorneys, said his office is now working on about 200 tax-residency audits and the number is growing as more wealthy New Yorkers head for the exits.
"We're seeing a huge uptick in our practice," Klein said. "I'm seeing dozens of extremely high-income individuals actually leaving New York."
Fake moves
New York's tax department declined to comment on its specific audit strategies or numbers. A spokesman said "ensuring taxpayers pay their fair share is a top priority. Our nonresident audit program continues to be very active."Yet tax advisers and lawyers to the wealthy say the state is going to ever-greater lengths to ensure that tax migrants aren't faking a move to Florida to avoid taxes. The stakes are high: The combined New York City and state taxes now are 12.7 percent, while Florida has no income tax or estate tax. The new federal tax law limits deductions for state and local taxes (known as SALT) to $10,000, making it even more costly for high-earners in high-tax states like New York.
At the same time, New York can't afford to lose many millionaires or billionaires. The top 1 percent of earners pays 46 percent of the state's income taxes, and Cuomo said that "even if a small number of taxpayers leave, it has a dramatic effect on this tax space."
More
New York City is edging toward financial disaster, experts warn
New York City is careening closer to all-out financial bankruptcy for
the first time since Mayor Abraham Beame ran the city more than 40 years ago,
experts say.
As tax-fleeced businesses and individuals flee en masse, and city public
spending surges into the stratosphere, financial analysts say Gotham is
perilously near total fiscal disaster.
Long-term debt is now more than $81,100 per household, and Mayor de
Blasio is ramping up to spend as much as $3 billion more in the new budget than
the current $89.2 billion.
“The city is running a deficit and could be in a real difficult spot if
we had a recession, or a further flight of individuals because of tax reform,”
said Milton Ezrati, chief economist of Vested.
“New York is already in a difficult financial spot, but it would be in
an impossible situation if we had any kind of setback.”
De Blasio has detailed $750 million in savings for the preliminary
fiscal 2020 budget, but that won’t be enough to stave off a bloodbath if New
York’s economy is hit by financial shocks — including a recession, which some
see on the horizon — analysts warn. Gov. Cuomo’s preliminary budget has $600
million in city cuts in the coming year.
More
Nothing is so admirable in politics as a short memory.
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?
1 + 1 does not equal 2 for graphene-like 2D materials
Date:
March 6, 2019
Source:
University of Sheffield
Summary:
Physicists have discovered that when two atomically thin graphene-like
materials are placed on top of each other their properties change, and a
material with novel hybrid properties emerges, paving the way for design of new
materials and nano-devices.
Physicists from the University of Sheffield have discovered that when
two atomically thin graphene-like materials are placed on top of each other
their properties change, and a material with novel hybrid properties emerges,
paving the way for design of new materials and nano-devices.
This happens without physically mixing the two atomic layers, nor
through a chemical reaction, but by attaching the layers to each other via a
weak so called van der Waals interaction -- similar to how a sticky tape
attaches to a flat surface.
In the ground-breaking study published in Nature, scientists have
also found that the properties of the new hybrid material can be precisely
controlled by twisting the two stacked atomic layers, opening the way for the
use of this unique degree of freedom for the nano-scale control of composite
materials and nano-devices in future technologies.
The idea to stack layers of different materials to make so-called
heterostructures goes back to the 1960s, when semiconductor gallium arsenide
was researched for making miniature lasers -- which are now widely used.
Today, heterostructures are common and are used very broadly in
semiconductor industry as a tool to design and control electronic and optical
properties in devices.
More recently in the era of atomically thin two-dimensional (2D)
crystals, such as graphene, new types of heterostructures have emerged, where
atomically thin layers are held together by relatively weak van der Waals
forces.
The new structures nicknamed 'van der Waals heterostructures' open a
huge potential to create numerous 'meta'-materials and novel devices by
stacking together any number of atomically thin layers. Hundreds of
combinations become possible otherwise inaccessible in traditional
three-dimensional materials, potentially giving access to new unexplored
optoelectronic device functionality or unusual material properties.
In the study researchers used van der Waals heterostructures made out of
so-called transition metal dichalcogenides (TMDs), a broad family of layered
materials. In their three-dimensional bulk form they are somewhat similar to
graphite -- the material used in pencil leads -- from where graphene was
extracted as a single 2D atomic layer of carbon.
The researchers found that when two atomically thin semiconducting TMDs
are combined in a single structure their properties hybridise.
Professor Alexander Tartakovskii, from the Department of Physics and
Astronomy at the University of Sheffield, said: "The materials influence
each other and change each other's properties, and have to be considered as a
whole new 'meta'-material with unique properties -- so one plus one doesn't
make two.
"We also find that the degree of such hybridisation is strongly
dependent on the twist between the individual atomic lattices of each layer.
More
Alan Schwartz, CEO Bear Stearns, March 12, 2008.
Bust March 16, 2008.
The monthly Coppock Indicators finished February
DJIA: 25,916 +68 Down. NASDAQ: 7,533 +109 Down.
SP500:
2,784 +62 Down.
Normally this
would suggest more correction still to come, but with President Trump wanting
to be judged by the performance of the stock market and the Fed’s Plunge
Protection Team now officially part of President Trump’s re-election team,
probably the safest action here is fully paid up synthetic double options on
most of the major indexes.
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