Monday 18 March 2019

Fed Week. More Brexit. Flooding. FAA Investigation.


Baltic Dry Index. 730 +53    Brent Crude 67.04

Car Crash Brexit 11 days away, maybe.  Day 108 of the never-ending China trade talks.

Corruption, embezzlement, fraud, these are all characteristics which exist everywhere. It is regrettably the way human nature functions, whether we like it or not. What successful economies do is keep it to a minimum. No one has ever eliminated any of that stuff.

Alan Greenspan

Today, more uncertainty over the USA v China trade talks. While everyone say the talks are going well, the President Trump, President Xi signing meeting now seems to have been pushed back into June.

Later in the week, the Federal Reserve meets, and will presumably shed more light on how they intend to boost stock prices to assist with President Trump’s re-election campaign. The hapless GB Prime Minister May tries for a third and probably final time to get her hated non Brexit surrender “Withdrawal Agreement,” passed by a hopelessly divided and fractious House of Crooks.

Below, Asia yawns and tentatively buys more stocks.

Asian markets rise despite uncertainty over U.S.-China trade talks

By Marketwatch  Published: Mar 18, 2019 12:03 a.m. ET
Asian markets rose in early trading Monday as investors awaited an update on the state of ongoing trade negotiations between the U.S. and China.

A report over the weekend said the proposed summit between President Donald Trump and China’s President Xi Jinping to sign a agreement ending the trade war may be pushed back to June as the deal is taking longer than originally hoped to finalize.

Japan’s Nikkei NIK, +0.60%   advanced 0.6% and Hong Kong’s Hang Seng Index HSI, +0.81%   rose 0.9%. In mainland China, the Shanghai Composite SHCOMP, +1.26%   gained 1.1%, about the same as the smaller-cap Shenzhen Composite 399106, +1.33%  . South Korea’s Kospi SEU, +0.01%   was about flat, while benchmark indexes in Taiwan Y9999, +0.70%  , Singapore STI, +0.37%   and Indonesia JAKIDX, +0.75%   rose slightly. Australia’s S&P/ASX 200 XJO, +0.25%   rose slightly.
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Proposed Trump-Xi summit to end trade war may be pushed back to June: report

By Mike Murphy  Published: Mar 17, 2019 11:34 p.m. ET
A proposed summit between President Donald Trump and China's Xi Jinping to end the trade war may be pushed back to June, the South China Morning News reported Saturday. The proposed meeting to sign a trade agreement at Trump's Mar-a-Lago club had originally been targeted for March, then pushed back to April amid slow-going in trade negotiations. The SCMN reported the April target was now looking less likely.

A source told the Hong Kong-based newspaper that the latest sticking point is a split among White House officials over whether to include enforcement mechanisms over Chinese trade reforms, or declare success at an agreement in principle. Both the U.S. and China cited progress in the trade talks last week, but Trump pointedly left open the option of walking out if terms were not to his liking. It was unclear where a possible June summit may be held, but both Trump and Xi are expected to attend the G-20 meeting in Osaka, Japan, in late June.

In other news, historic flooding hits parts of America’s grain belt. While it’s far to early to asses what, if any, affect it will have on US agriculture, this flooding and its aftermath wants close watching.

Historic floods hit Nebraska after 'bomb cyclone' storm

March 17, 2019 / 1:27 AM
(Reuters) - Large parts of Nebraska and the U.S. Central Plains were underwater on Saturday after a late-winter “bomb cyclone” storm triggered historic flooding along the Missouri and Platte rivers, causing two deaths, tearing apart homes and swallowing roadways.

The National Weather Service predicted dangerous flooding would continue through the weekend in Nebraska and in south and west central Iowa, particularly along the Missouri River.

“We’re still in a very widely dispersed and intense flooding situation in the eastern third of Nebraska,” said Mike Wight, a spokesman for the Nebraska Emergency Management Agency, in a phone interview.

---- The Missouri River was still rising on Saturday evening, local TV station KMTV reported, with a record crest of more than 47 feet expected early on Tuesday in Brownville, Nebraska, about 70 miles south of Omaha in the eastern corner of the state.

“We’re looking at 4, 5, 6, 7 feet above the highest it’s ever been,” Wight said.

The flooding came in the wake of what meteorologists call a “bomb cyclone,” a winter hurricane that forms when the barometric pressure drops 24 millibars in 24 hours. The storm blew from the western Rockies to the Central Plains last week.

---- The flooding has all but blocked access to some small communities along the river, where potable drinking water has become scarce as the flood has contaminated wells, Wight said.

Ricketts visited several flooded communities on Saturday and wrote on Twitter that he witnessed “unbelievable devastation.”

Flood disaster continues in Iowa and eastern Nebraska with more rain on the horizon for Tuesday

March 17, 2019
By Kristina Pydynowski, AccuWeather senior meteorologist  By Kevin Byrne, AccuWeather staff writer
 The flood disaster rages on in eastern Nebraska and western Iowa as rivers remain at historic levels. The return of rain on Tuesday threatens to aggravate the situation in some areas.

While flooding is ongoing in many areas of the north-central United States, communities around eastern Nebraska and western Iowa have been hit the hardest since the 'bomb cyclone' struck last week.

Hundreds of people have been forced to evacuate as rivers have overflowed their banks and multiple levees have failed. Sunday afternoon marked the latest evacuation order when concerns over unusable water and sewer systems prompted residents of North Bend, Nebraska, to leave their homes. North Bend is located along the Platte River, northwest of Omaha.

At least two fatalities have been reported due to the flooding, according to the Associated Press.

---- Incidents of damage to other roads and bridges have left communities such as Waterloo and Fremont, Nebraska, surrounded by flood waters with residents stranded.

The Elkhorn River at Waterloo peaked at a record stage of 24.63 feet on Saturday. That shattered the previous record crest from late March 1962 by more than 5 feet.

---- Rain will spread back across the central Plains on Tuesday and may be mixed with wet snow along its northern fringe.

"While this storm will pale in comparison to last week's storm, there is the potential for 0.50 of an inch to 1 inch of rainfall in a narrow swath in the central Plains," according to AccuWeather Meteorologist Jim Andrews. "That could trigger new or aggravate problems if that rain targets the areas hit hardest by the flooding."

Larger rivers may rise slightly more than latest projections or their expected crests can be delayed.

---- A state of emergency has also been declared in Kansas and Wisconsin. Iowa Gov. Kim Reynolds has also issued a disaster proclamation in response to the flooding.

Major river flooding is expected to be a problem for the north-central United States not just this week but through at least April.
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Finally, Boeing. What went wrong with the USA’s FAA certification system? Why were these planes flying at all?

Ethiopia says crashed jet's black boxes show similarities to Lion Air disaster

March 18, 2019 / 2:15 AM
ADDIS ABABA/WASHINGTON (Reuters) - The crash of an Ethiopian Airlines plane that killed 157 people had “clear similarities” with October’s Lion Air crash, Ethiopia said on Sunday, shown by initial analysis of the black boxes recovered from the wreckage of the March 10 disaster.

The crash has generated one of the most widely watched and high-stakes inquiries for years, with the latest version of Boeing’s profitable 737 workhorse depending on the outcome.

Both planes were MAX 8s, and both crashed minutes post take-off after pilots reported flight control problems. Concern over the plane’s safety led aviation authorities to ground the model, wiping billions of dollars off Boeing’s market value.

“It was the same case with the Indonesian (Lion Air) one. There were clear similarities between the two crashes so far,” Ethiopian transport ministry spokesman Muse Yiheyis said.

“The data was successfully recovered. Both the American team and our (Ethiopian) team validated it,” he told Reuters, adding that the ministry would provide more information after three or four days.

In Washington, however, U.S. officials told Reuters the FAA and U.S. National Transportation Safety Board (NTSB) had not yet validated the data.

Boeing’s safety analysis of a new flight control system known as MCAS on MAX jets had several crucial flaws, one of which was that it understated the power of the system, the Seattle Times said on Sunday.

The FAA also did not delve in detailed inquiries and followed a standard certification process on the MAX, the paper said, citing an FAA spokesman.

The FAA declined to comment on the report but referred to previous statements about the certification process. It has said the process followed FAA’s standard process.

Citing people familiar with the inquiry, the Wall Street Journal said Department of Transportation officials are scrutinizing the FAA’s approval of MAX jets and a Washington, D.C. grand jury issued a subpoena to at least one person involved in the MAX’s development.
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Prosecutors, Transportation Department Scrutinize Development of Boeing’s 737 MAX

A grand jury’s subpoena seeks broad documents related to the jetliner

By Andrew Tangel, Andy Pasztor and Robert Wall

Federal prosecutors and Department of Transportation officials are scrutinizing the development of Boeing Co.’s BA 1.52% 737 MAX jetliners, according to people familiar with the matter, unusual inquiries that come amid probes of regulators’ safety approvals of the new plane.

A grand jury in Washington, D.C., issued a broad subpoena dated March 11 to at least one person involved in the 737 MAX’s development, seeking related documents, including correspondence, emails and other messages, one of these people said. The subpoena, with a prosecutor from the Justice Department’s criminal division listed as a contact, sought documents to be handed over later this month.

It wasn’t immediately clear whether the Justice Department’s probe is related to scrutiny of the Federal Aviation Administration by the DOT inspector general’s office, reported earlier Sunday by The Wall Street Journal and that focuses on a safety system that has been implicated in the Oct. 29 Lion Air crash that killed 189 people, according to a government official briefed on its status. Aviation authorities are looking into whether the anti-stall system may have played a role in last week’s Ethiopian Airlines crash, which killed all 157 people on board.

---- The Justice Department probe involves a prosecutor in the fraud section of the department’s criminal division, a unit that has brought cases against well-known manufacturers over safety issues, including Takata Corp.

In the U.S., it is highly unusual for federal prosecutors to investigate details of regulatory approval of commercial aircraft designs, or to use a criminal probe to delve into dealings between the FAA and the largest aircraft manufacturer the agency oversees. Probes of airliner programs or alleged lapses in federal safety oversight typically are handled as civil cases, often by the DOT inspector general. The inspector general, however, does have authority to make criminal referrals to federal prosecutors and has its own special agents.
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https://www.wsj.com/articles/faas-737-max-approval-is-probed-11552868400

Boeing Had Too Much Influence on Vetting Own Jets, FAA Was Told

By Peter Robison and Alan Levin
Updated on 18 March 2019, 05:55 GMT
·        

Company engineers cleared equipment at center of crash probe
·         Transportation agency said to examine certification of 737 Max
https://www.bloomberg.com/news/articles/2019-03-18/boeing-had-too-much-sway-checking-own-planes-faa-workers-warned?srnd=premium-europe

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.

Alan Greenspan


Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

Today, how President Trump’s National Security Advisor’s reckless blank cheque to India last month, almost led to all-out war on the Indian sub-continent. Why is the reckless warmonger still in place?

From the Feb 16th LIR:

In the first 6 months of 1914, no one saw catastrophe and tragedy  coming. While not expecting war, though the USA yesterday just gave India a blank cheque, (the price of oil and gold surged,) no one yet sees the coming catastrophe of dollar debt.

India, Pakistan threatened to unleash missiles at each other - sources

March 17, 2019 / 3:59 AM
NEW DELHI/ISLAMABAD (Reuters) - The sparring between India and Pakistan last month threatened to spiral out of control and only interventions by U.S. officials, including National Security Advisor John Bolton, headed off a bigger conflict, five sources familiar with the events said.
At one stage, India threatened to fire at least six missiles at Pakistan, and Islamabad said it would respond with its own missile strikes “three times over”, according to Western diplomats and government sources in New Delhi, Islamabad and Washington. 

The way in which tensions suddenly worsened and threatened to trigger a war between the nuclear-armed nations shows how the Kashmir region, which both claim and is at the core of their enmity, remains one of the world’s most dangerous flashpoints.

The exchanges did not get beyond threats, and there was no suggestion that the missiles involved were anything more than conventional weapons, but they created consternation in official circles in Washington, Beijing and London.

Reuters has pieced together the events that led to the most serious military crisis in South Asia since 2008, as well as the concerted diplomatic efforts to get both sides to back down.

The simmering dispute erupted into conflict late last month when Indian and Pakistani warplanes engaged in a dogfight over Kashmir on Feb 27, a day after a raid by Indian jet fighters on what it said was a militant camp in Pakistan. Islamabad denied any militant camp exists in the area and said the Indian bombs exploded on an empty hillside.

In their first such clash since the last war between the two nations in 1971, Pakistan downed an Indian plane and captured its pilot after he ejected in Pakistan-controlled Kashmir.

---- That evening, Indian National Security Adviser Ajit Doval spoke over a secure line to the head of Pakistan’s Inter Services Intelligence (ISI), Asim Munir, to tell him India was not going to back off its new campaign of “counter terrorism” even after the pilot’s capture, an Indian government source and a Western diplomat with knowledge of the conversations told Reuters in New Delhi.

Doval told Munir that India’s fight was with the militant groups that freely operated from Pakistani soil and it was prepared to escalate, said the government source.

---- Pakistan said it would counter any Indian missile attacks with many more launches of its own, the minister told Reuters, speaking on condition of anonymity.

“We said if you will fire one missile, we will fire three. Whatever India will do, we will respond three times to that,” the Pakistani minister said.

Doval’s office did not respond to a request for comment. India was not aware of any missile threat issued to Pakistan, a government official said in reply to a Reuters request for comment.
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U.S. backs India's right to self-defence over Kashmir attack - Indian government

February 16, 2019 / 5:45 AM
NEW DELHI (Reuters) - The United States supports India’s right to self-defence against cross-border attacks, India’s foreign ministry said on Saturday after a deadly car bombing in disputed Kashmir raised tensions with rival neighbour Pakistan.

---- U.S. National Security Adviser John Bolton spoke to his Indian counterpart Ajit Doval on Friday night, promising to help bring those behind the attack to justice, the foreign ministry said in a readout of the phone call.

“The two NSAs vowed to work together to ensure that Pakistan cease to be a safe haven for JeM and terrorist groups that target India, the U.S. and others in the region,” the foreign ministry said.

“They resolved to hold Pakistan to account for its obligations under U.N. resolutions,” it added.
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The 'Blank Check'


Markets do very weird things because it reacts to how people behave, and sometimes people are a little screwy.

Alan Greenspan

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?

Exotic 'second sound' phenomenon observed in pencil 'lead'

At relatively balmy temperatures, heat behaves like sound when moving through graphite, study reports

Date: March 14, 2019

Source: Massachusetts Institute of Technology

Summary: At relatively balmy temperatures, heat behaves like sound when moving through graphite, study reports. 

The next time you set a kettle to boil, consider this scenario: After turning the burner off, instead of staying hot and slowly warming the surrounding kitchen and stove, the kettle quickly cools to room temperature and its heat hurtles away in the form of a boiling-hot wave.

We know heat doesn't behave this way in our day-to-day surroundings. But now MIT researchers have observed this seemingly implausible mode of heat transport, known as "second sound," in a rather commonplace material: graphite -- the stuff of pencil lead.

At temperatures of 120 kelvin, or -240 degrees Fahrenheit, they saw clear signs that heat can travel through graphite in a wavelike motion. Points that were originally warm are left instantly cold, as the heat moves across the material at close to the speed of sound. The behavior resembles the wavelike way in which sound travels through air, so scientists have dubbed this exotic mode of heat transport "second sound."

The new results represent the highest temperature at which scientists have observed second sound. What's more, graphite is a commercially available material, in contrast to more pure, hard-to-control materials that have exhibited second sound at 20 K, (-420 F) -- temperatures that would be far too cold to run any practical applications.

The discovery, published in Science, suggests that graphite, and perhaps its high-performance relative, graphene, may efficiently remove heat in microelectronic devices in a way that was previously unrecognized.

"There's a huge push to make things smaller and denser for devices like our computers and electronics, and thermal management becomes more difficult at these scales," says Keith Nelson, the Haslam and Dewey Professor of Chemistry at MIT. "There's good reason to believe that second sound might be more pronounced in graphene, even at room temperature. If it turns out graphene can efficiently remove heat as waves, that would certainly be wonderful."
The result came out of a long-running interdisciplinary collaboration between Nelson's research group and that of Gang Chen, the Carl Richard Soderberg Professor of Mechanical Engineering and Power Engineering. MIT co-authors on the paper are lead authors Sam Huberman and Ryan Duncan, Ke Chen, Bai Song, Vazrik Chiloyan, Zhiwei Ding, and Alexei Maznev.
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An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense... that gold and economic freedom are inseparable.

Alan Greenspan


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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