Baltic Dry Index. 645
-04 Brent
Crude 66.71
Car Crash Brexit 17
days away.
In any great organization it is far, far safer to be wrong with the majority than to be right alone.
John Kenneth Galbraith.
An ever more panicky
EUSSR and British government, are desperately spinning today that there’s now
an exit deal on the table that the GB Parliament will vote for. Asian markets liked all the hype and hopium.
Who am I to rain on their parade, even if I think the cosmetic and fake adjustments
to the Brexit deal, are unlikely to fly any better than a lead balloon.
Below, with Brexit “fixed,”
what’s not to like about over priced stocks? Plenty in my opinion, with China
and Europe growth slowing, plus new doubts over the health of the US economy,
and a new budget war commencing between President Trump and the Democrats.
"In
economics, hope and faith coexist with great scientific pretension."
John Kenneth
Galbraith.
Pound soars, Asian shares rally after Brexit deal changes
March 12, 2019 /
12:54 AM
SHANGHAI (Reuters)
- The pound jumped and Asian shares rallied on Tuesday after the European
Commission agreed to changes in a Brexit deal ahead of a vote in the British
parliament on a divorce agreement.
European Commission head Jean-Claude Juncker agreed to additional
assurances in an updated Brexit deal with British Prime Minister Theresa May on
Monday, but warned UK lawmakers would not get a third chance to endorse it.
Sterling, which had risen ahead of the talks between May and Juncker,
extended gains in hopes the changes may be enough to sway rebellious British
lawmakers who have threatened to vote down May’s plan again on Tuesday.
The pound was up 0.5 percent, buying $1.3215 and taking its gains over
two days to more than 1.5 percent.
---- MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 1.08 percent, with early gains reinforced by a rise in Chinese shares and oil companies, which were buoyed by higher oil prices.
Chinese blue chips .CSI300 rose 1.3 percent, extending the previous day's 2 percent gain.
Despite slowing domestic economic growth and uncertainty about the outlook for trade negotiations between China and the United States, Chinese markets have been buoyed this year by investors’ expectations of more stimulus to cushion any downturn.
The CSI300 index has risen more than 25 percent this year.
But Oliver Jones, market economist at Capital Economics cautioned that the Chinese rally is “built on shaky foundations.”
“The surge in China’s mainland equity markets since the start of the year looks excessive, even allowing for renewed optimism about stimulus in China and the possibility of a US-China trade deal,” he said in a note.
“Since we are anticipating more economic weakness in both China and the rest of the world regardless, we suspect that the Shanghai and Shenzhen markets will fall back sharply later in the year.”
Australian shares were up 0.4 percent, while Japan's Nikkei stock index .N225 jumped 1.9 percent, helped by a weaker yen.
More
While
hopium is back in fashion this morning, the reality is that China’s stance
against the USA is hardening. A no deal
USA v China outcome, or a trade deal in name only, plus a no deal Brexit in
just over two weeks’ time, and global stock markets are dangerously exposed to
a market crash.
Beijing backs Huawei in legal fight against ‘groundless provocations’ from US for the first time
·
Foreign Minister Wang Yi calls on Chinese firms
not to be victimised like ‘silent lambs’
·
Analyst says Beijing ‘cannot tolerate’ situation
while pursuing stable ties with US
Published: 11:30am, 8 Mar, 2019 Updated: 12:26am,
9 Mar, 2019
China has for the first time thrown its weight behind tech giant
Huawei’s legal action against the United States, and called upon Chinese
companies not to act like “silent lambs”.
Friday’s statement by Foreign Minister Wang Yi was a departure from
Beijing’s largely conciliatory stance as he stressed the importance of
“cooperation” and a “positive outlook” for China-US relations.
Wang made the remarks as negotiators for the sides closed on a deal to
end a long-running dispute over trade tariffs. But US ambassador to China Terry
Branstad said on Friday that the parties were still discussing the date for a
second Mar-a-Lago summit between China’s President Xi Jinping and US President
Donald Trump, The Wall Street Journal reported.
The meeting was originally expected to take place on March 27 and 28,
following Xi’s trip to Europe.
At his annual press conference on the fringe of the National People’s
Congress on Friday, Wang highlighted the Chinese government’s full backing for
Huawei’s legal action against the US government.
“We support the company and the individual in question in seeking legal
redress to protect their interests,” Wang said, raising his fist, “and refusing
to be victimised like silent lambs”.
More
Next, is the EUSSR
out of its mind? Do they really want a large block of anti-EU British MPs wreaking
havoc in the next EU Parliament? A block that will team up with all the other
anti-EU parties in continental Europe. How will that work for the EU or the
Euro? No Brexit: No Peace in the EU is
likely to follow.
Britain must leave EU by May 23 or hold own EU vote
March 11, 2019 /
11:11 PM
STRASBOURG (Reuters) - Britain must leave the European Union by the time
EU voters elect a new European Parliament on May 23-26 or will have to elect
its own EU lawmakers, European Commission President Jean-Claude Juncker said on
Monday.
Writing to EU summit chair Donald Tusk after agreeing a deal to break
Brexit deadlock with British Prime Minister Theresa May, Juncker wrote: “The
United Kingdom’s withdrawal should be complete before the European elections
that will take place between May 23-26 this year.”
“If the United Kingdom has not left the European Union by then, it will
be legally required to hold these elections.”
Juncker Warns ‘It Is This Deal, or Brexit May Not Happen at All’
By Rita Devlin
In
other news, Boeing has a growing problem. When things go wrong in the 737 Max,
why can’t the pilots keep or regain control?
China, Indonesia, Singapore ground 737 Max 8 planes after Ethiopia crash
March 11, 2019 /
7:25 AM
U.S. airlines moved to reassure flyers Monday the Max 8 planes are safe.
By Darryl Coote, Clyde Hughes and Danielle
Haynes
March 11 (UPI) -- China, Indonesia and Singapore on Monday said they're grounding their fleets of the Boeing 737 Max 8 after a crash in Ethiopia killed nearly 160 people.
The Civil Aviation Authority of China said Monday all 96 of its Boeing 737 Max 8s would be taken out of service temporarily under "the management principle of zero tolerance for safety hazards and strict control."
Indonesia's transportation ministry said it grounded 11 planes operated by Indonesian carriers pending airworthiness inspections.
The Civil Aviation Authority of Singapore said that as of 2 p.m. local time Tuesday it would be suspending the operation of "all variants of the Boeing 737 MAc aircraft in and out of Singapore."
---- The Federal Aviation Administration, meanwhile, said Boeing 737 Max 8s are still airworthy amid its investigation into the crash.
The plane's "black boxes" were found Monday near Bishoftu, 40 miles south of Addis Ababa, the airline said. The boxes contain the flight data recorder and cockpit voice recorder, which typically offer valuable clues to the crash.
---- Ethiopian Airlines and Cayman Airways also suspended the use of the 737 models until further notice.
In a tweet Monday, Ethiopian Airlines said it decided to ground the 737
fleet as an "extra safety precaution." Cayman Airways said it would
suspend both of its 737 Max 8s.
---- More than 300 Boeing 737 Max 8 jets are in operation worldwide and 5,000 more have been ordered since 2017.
Southwest Airlines has a fleet of 34 Boeing 737 MAX 8 aircraft and has no plans to ground them.
"We remain confident in the safety and airworthiness of our fleet of more than 750 Boeing aircraft. Our focus on the safety of our operation remains constant and unwavering," Southwest said in a tweet.
---- The Association of Professional Flight Attendants, which represents more than 27,000 flight attendants at American Airlines, said its members will not be forced to work flights on the Boeing Max 8 aircraft.
"It is important for you to know that if you feel it is unsafe to work the 737 Max, you will not be forced to fly it," said Lori Bassani, president of the union.
In November, unions representing pilots who fly the Max 8s accusing Boeing of not telling them about a new automatic safety feature that pulls down the plane's nose repeatedly, USA Today reported.
More
Finally, better news
for Scotland, GB, and even the rump-EUSSR.
North Sea production reaches seven-year high
Written by Allister Thomas - 11/03/2019 7:50 am
A report from the Oil and Gas Authority (OGA) showed more than 25
million extra barrels of oil and gas were produced last year compared to 2017.
An average of 1.7m barrels of oil equivalent (boe) were produced per
day, an increase of more than 4% from 2017, and the highest level since 2011,
when a rate of 1.81m boe per day was achieved.
Production is expected to decline by 5% per year after 2024.
Meanwhile the industry regulator has also predicted that 11.9 billion
barrels of oil equivalent will be produced between 2016 and 2050 – up by 3.9bn
barrels from the 8bn forecast in 2015.
The OGA said the increase was due to more than 30 new fields coming on
stream since 2015, along with enhanced production techniques.
However, capital expenditure levels in the North Sea dropped for a
fourth consecutive year to £5.01b, a “significant” decrease of nearly £700m
from £5.7bn in 2017.
The “downwards trend” is expected to halt in 2019 with a 4% increase
projected, before resuming its descent in 2020 and beyond.
Investment levels have been slashed in the last four years, down from
£12.45bn in 2015.
Spending on decommissioning oil and gas assets increased by 9% to
£1.45bn in 2018, compared to the previous year, reflecting an increased level
of activity.
The OGA said the extra 3.9bn barrels forecast to 2050 showcases the work
of 2018, but the basin could benefit even further with new investment.
Loraine Pace, head of performance, planning and reporting at the OGA,
said: “The 3.9bn barrels identified is great news with 2018 being a productive
year.
“New discoveries such as Glendronach and Glengorm highlight the future
potential of the basin which could be boosted further with new investment,
exploration successes and resource progression.
More
https://www.energyvoice.com/oilandgas/north-sea/194471/north-sea-production-reaches-seven-year-high/
Fracking could cut Britain's gas imports to zero by early 2030s
March 11, 2019 /
12:57 PM
LONDON (Reuters) - Fracking Britain’s shale gas reserves could cut the
country’s imports of gas to zero by the early 2030s, an industry group said on
Monday.
Britain currently imports more than half of its gas via pipelines from
continental Europe and Norway and through shipments of liquefied natural gas
from countries such as Russia, the United States and Qatar.
Environmental groups strongly oppose the practice of hydraulic
fracturing, or fracking, which involves extracting gas from rocks by breaking
them up with water and chemicals at high pressure.
But the British government, keen to cut Britain’s reliance on imports as
North Sea gas supplies dry up, last year gave Cuadrilla permission to frack two
wells at its Preston New Road site in Lancashire.
Industry group United Kingdom Onshore Oil and Gas on Monday published
updated forecasts for the county’s shale gas potential in the wake of recent
data from Cuadrilla’s sites.
The forecasts for well productivity were increased by 72 percent to 5.5
billion cubic feet (bcf) per lateral well, compared with estimates made in 2013
by Britain’s Institute of Directors.
One hundred fracking well pad sites, each with 40 lateral wells could
produce almost 1,400 bcf a year by the early 2030s, equivalent to the gas use
of 35 million homes, the industry association report said. This would be more
than the country needs as it has around 27 million households.
But fracking companies say the industry is unlikely to take off in
Britain under current regulations, which halt fracking activity if a seismic
event of magnitude 0.5 or above is detected.
Cuadrilla, currently the only company to have fracked for gas in
Britain, had to halt operations several times last year due to seismic events
which exceeded the limit.
British chemical manufacturer Ineos, which has the largest shale gas
licence acreage in Britain, has called the current rules unworkable.
More
Every
generation imagines itself to be more intelligent than the one that went before
it,
and wiser than the one that comes after it.
George
Orwell.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Today, the EUSSR again. Deutschland Dodgy Diesels, continues to drag
down Europe’s top economy, and we haven’t even started car crash Brexit or
President Trump’s punitive auto tariffs. As Germany swerves off road, what does
it mean for Europe Minor?
Auto woes drive dip in German industrial output
March 11, 2019 /
7:18 AM
BERLIN (Reuters) -
Plunging car production drove an unexpected drop in German industrial output in
January, as the engine room of Europe’s largest economy stuttered on trade
tensions and unease about Brexit.
A global slowdown, tariff disputes sparked by U.S. President Donald
Trump’s ‘America First’ policies and a potentially chaotic British departure
from the European Union threaten to bring a decade-long expansion in
export-reliant Germany to an end. Its economy only narrowly avoided recession
last year.
The same factors are impacting the rest of the EU, and Monday’s data
added weight to a dovish policy shift by the European Central Bank last week as
safe-haven bonds rose.
“Industrial production is hard data and it is really cementing the
impression that the European economy is slowing down,” said Mizuho rates
strategist Antoine Bouvet.
“It is lending credibility to the view that the slowdown is not
temporary.”
German business daily Handelsblatt said on Monday the federal government
had cut its in-house GDP growth outlook to 0.8 percent for 2019, the second
reduction in less than two months.
Industrial output dropped 0.8 percent, well below market expectations
for a rise of 0.5 percent, Germany’s Statistics Office said.
The figure for December was sharply revised up, however, to a 0.8
percent increase from a previously reported 0.4 percent drop, and the euro
recovered ground after a brief dip.
Automobile production fell by 9.2 percent on the month in January,
separate data from the Economy Ministry showed.
It blamed special factors such as strikes at suppliers and a switch to
new brands for the weak performance, though German carmakers are also at the
sharp end of a sectoral dip driven by a slowdown in China, a plunge in demand
for diesel vehicles and costly investments in electric as well as self-driving
cars.
“The headwinds from abroad are hitting the German economy particularly
hard,” Sophia Krietenbrink from the DIHK Chambers of Industry and Commerce
said.
---- The unexpectedly weak data suggests the German economy is likely to post only meager growth in the first quarter after it barely avoided a recession - defined as two consecutive quarters of contraction - in the second half of last year.
Citing a finance ministry document, Handelsblatt said Berlin had cut its
growth forecast internally due to a weakening world economy, risks from
escalating global trade conflicts, and political factors including Brexit and
Italy’s stretched finances.
The German government had already cut 2019 growth expectations in
January to 1.0 percent from 1.8 percent.
The slowing economy means tax revenues are likely to be lower than
expected this year, which could increase tensions in Chancellor Angela Merkel’s
governing coalition over spending priorities.
More
The perfect storm engulfing the world’s top car manufacturers
By Rupert
Steiner Published: Mar 8, 2019 3:52
p.m. ET
A bit of wax and polish is all it usually takes to give
Europe’s automobile makers a sparkling shine as they gather at the Geneva Motor
Show.It is one of the most important events for the industry — a platform for top bosses to evangelize about what they have developed.
Not this year.
Car makers are facing a perfect storm of trade tariffs, slumping demand in the crucial Chinese market, and a backlash against diesel, which are together having a seismic effect on businesses.
A shift toward electric and autonomous vehicles has not helped. They require vast investment and a different way of thinking, which means the corporate grins have been replaced with a collective grimace.
“The industry is going through a one-in-a-hundred-years change,” Johan van Zyl, president and chief executive of Toyota Motor Europe TM, +0.40% , told MarketWatch. “We are facing many, many changes from a vehicle point of view, from a customer change point of view and from a broader environmental point of view.”
---- The automotive industry is crucial to Europe’s economic prosperity. The sector provides jobs for 12 million people and accounts for 4% of the EU’s GDP.
But on Tuesday the Society of Motor Manufacturers and Traders (SMMT)
reported that February saw a continued decline in diesel sales in the U.K.
There was a 14.3% year-on-year drop, taking the share of cars powered by diesel
in the U.K. market down to less than a third at 29.6%.
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?
Inside the High-Stakes Race to Make Quantum Computers Work
3.08.19
Deep beneath the Franco-Swiss border, the Large Hadron Collider is
sleeping. But it won’t be quiet for long. Over the coming years, the world’s
largest particle accelerator will be supercharged, increasing the number of
proton collisions per second by a factor of two and a half. Once the work is
complete in 2026, researchers hope to unlock some of the most fundamental
questions in the universe. But with the increased power will come a deluge of
data the likes of which high-energy physics has never seen before. And, right
now, humanity has no way of knowing what the collider might find.
To understand the scale of the problem, consider this: When it shut down
in December 2018, the LHC generated about 300 gigabytes of data every second,
adding up to 25 petabytes (PB) annually. For comparison, you’d have to spend
50,000 years listening to music to go through 25 PB of MP3 songs, while the
human brain can store memories equivalent to just 2.5 PB of binary data. To
make sense of all that information, the LHC data was pumped out to 170
computing centers in 42 countries. It was this global collaboration that helped
discover the elusive Higgs boson, part of the Higgs field believed to give mass
to elementary particles of matter.
To process the looming data torrent, scientists at the European
Organization for Nuclear Research, or CERN, will need 50 to 100 times more
computing power than they have at their disposal today. A proposed Future
Circular Collider, four times the size of the LHC and 10 times as powerful,
would create an impossibly large quantity of data, at least twice as much as
the LHC.
In a bid to make sense of the impending data deluge, some at CERN are
turning to the emerging field of quantum computing. Powered by the very laws of
nature the LHC is probing, such a machine could potentially crunch the expected
volume of data in no time at all. What’s more, it would speak the same language
as the LHC. While numerous labs around the world are trying to harness the
power of quantum computing, it is the future work at CERN that makes it
particularly exciting research. There’s just one problem: Right now, there are
only prototypes; nobody knows whether it’s actually possible to build a
reliable quantum device.
Traditional computers—be it an Apple Watch or the most powerful
supercomputer—rely on tiny silicon transistors that work like on-off switches
to encode bits of data. Each circuit can have one of two values—either one (on)
or zero (off) in binary code; the computer turns the voltage in a circuit on or
off to make it work.
A quantum computer is not limited to this “either/or” way of thinking.
Its memory is made up of quantum bits, or qubits—tiny particles of matter like
atoms or electrons. And qubits can do “both/and,” meaning that they can be in a
superposition of all possible combinations of zeros and ones; they can be all
of those states simultaneously.
For CERN, the quantum promise could, for instance, help its scientists
find evidence of supersymmetry, or SUSY, which so far has proven elusive. At
the moment, researchers spend weeks and months sifting through the debris from
proton-proton collisions in the LCH, trying to find exotic, heavy
sister-particles to all our known particles of matter. The quest has now lasted
decades, and a number of physicists are questioning if the theory behind SUSY
is really valid. A quantum computer would greatly speed up analysis of the
collisions, hopefully finding evidence of supersymmetry much sooner—or at least
allowing us to ditch the theory and move on.
More, Much, much, more.
Prime
Minister Maybe, with apologies to Jean-Claude Juncker. Failed Luxembourg Prime
Minister and ex-president of the Euro Group of Finance Ministers. Confessed
liar. European Commission President. Scotch connoisseur.
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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