Tuesday, 26 March 2019

The Calm Before The Storm.


Baltic Dry Index. 689 -01    Brent Crude 67.33

Car Crash Brexit now reset 17 days away.  Day 116 of the never-ending China trade talks.

“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.”

Chuck Prince, CEO Citigroup, 2007.

Today, yet more unease over a new recession. In what should be a week of relief rally that President Trump was “exonerated,” Monday’s relief rally, and Asia’s Tuesday response is underwhelming to say the least.

Recession fears seem to be trumping Trump. In a global slumping property market, weakness has brought back gazundering to the UK market. In a bull property market prices get gazumped higher. But in a bear market weakness is the order of the day.

Below, the calm before the storm? Have the markets finally run out of greater fool buyers with cash?  Has the music stopped 2008 style again, that did for the hapless Prince?

Asian shares edge up as U.S. bond yields come off late-2017 lows

March 26, 2019 / 1:19 AM
TOKYO (Reuters) - Asian shares bounced back on Tuesday after two days of losses as U.S. 10-year Treasury yields edged higher, but the outlook remained murky as investors weighed the odds of whether the U.S. economy is in danger of slipping into recession.

MSCI’s broadest index of Asia-Pacific shares outside Japan rebounded 0.3 percent after losing 1.4 percent in the previous session.

Australian shares were flat, while Japan’s Nikkei jumped 1.8 percent after recording its biggest drop since late December on Monday.

China’s blue-chip CSI300 and Hong Kong’s Hang Seng Index also rose, by 0.3 percent and 0.5 percent, respectively.

Wall Street shares were little changed on Monday with the S&P 500 ending with a small loss of 0.08 percent.[.N]

U.S. stock futures rose, with E-Minis for the S&P 500 tacking on one-third of a percent.

Investors have been spooked by sharp falls in U.S. bond yields and an inversion of the U.S. Treasury yield curve, which is widely seen as an indicator of an economic recession.

The 10-year U.S. Treasury yield edged up to 2.430 percent, having shed 5 basis points on Monday.

It has fallen about 18 basis points since the Federal Reserve last week ditched projections for raising rates this year and announced the end of its balance sheet reduction, citing signs of an economic slowdown.

“The U.S. yield curve continues to invert,” said Michael Every, Hong Kong-based senior Asia-Pacific strategist at Rabobank.

“This is not a healthy sign, as bond-market watchers should know and equity-market obsessives should rapidly learn,” he said in a note. “How much further will this run before we see markets starting to do the same?”

The 10-year yield fell below the yield for three-month bills on Friday for the first time since 2007, inverting the yield curve.

San Francisco Fed researchers have said that the difference in those two maturities was the most useful for forecasting a recession.
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Oil edges up on supply cuts, but recession fears cap market

March 26, 2019 / 1:17 AM
SINGAPORE (Reuters) - Oil prices edged up on Tuesday, lifted by supply cuts led by producer club OPEC and U.S. sanctions against Iran and Venezuela, but signs of a sharp economic slowdown and potentially even a recession kept markets from rising further.

Brent crude oil futures were at $67.33 per barrel at 0416 GMT, up 12 cents, or 0.2 percent, from their last close.

U.S. West Texas Intermediate (WTI) futures were at $59.26 per barrel, up 44 cents, or 0.8 percent, from their last settlement.

Oil prices have been supported for much of 2019 by efforts by the Organization of the Petroleum Exporting Countries (OPEC) and non-affiliated allies like Russia, who have pledged to withhold around 1.2 million barrels per day (bpd) of supply this year to prop up markets.

Prices have also been driven up by U.S. sanctions on oil exporters and OPEC-members Iran and Venezuela.

Yet analysts said oil prices would likely be higher by now if it wasn’t for a spreading economic slowdown that some say could turn into a recession soon and dent fuel consumption.

“Recession risks have risen to the highest since 2008,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Manufacturing data from Asia, Europe and North America is pointing to a sharp economic slowdown.

“Global factory output growth slowed to a 1 percent rate last quarter, and indicators point to a near stall this quarter,” said JPMorgan Chase Bank.

“Outside China, Asian industry was already contracting as we turned into the New Year,” the U.S. bank added.

‘Gazundering’ Seen as Growing Problem for U.K. Housing Market

Press Association
Gazundering, where a buyer lowers their offer for a home at the last minute, is becoming a growing problem, according to a report.

Some 45 percent of people surveyed think gazundering is a serious problem, up from 40 percent when similar research was carried out last year.

Gazundering can happen just before a sale is set to go through, with sellers sometimes feeling under pressure to accept the lower price to stop the deal collapsing.

Some 45 percent of people also think negative equity, when the value of someone’s home is less than the mortgage amount they owe on it, is a problem, the report from campaign group theHomeOwners Alliance , BLP Insurance and Resi.co.uk architects found.

Paula Higgins , chief executive of HomeOwners Alliance , said: “People crave more certainty in the housing market - that the price agreed at point of sale will be the price paid.”

Meanwhile, 63 percent of people are worried about the quality of the country’s housing stock, rising to nearly seven in 10 (69 percent) renters, the survey of 2,000 people across the UK found.
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Finally, do you really know where you are going????

British Airways Plane Bound for Germany Accidentally Lands in Scotland

THE ASSOCIATED PRESS
25 March 2019, 14:37 GMT
London (AP) -- The flight on Monday seemed to go perfectly well, until passengers realized that their plane had landed in both the wrong city and the wrong country.

The British Airways flight from London City Airport was supposed to head to Duesseldorf, Germany, but ended up in Edinburgh, the capital of Scotland.

The airline said Monday the problem started when an incorrect flight plan was filed by WDL Aviation, which operated the flight on behalf of British Airways. Officials say the pilot followed the flight plan for Edinburgh, and that air traffic control officials also were following the same flight plan and saw nothing amiss.

WDL aviation said it was trying to determine the cause of the "obviously unfortunate mix-up."

The flight was refuelled and set off again, this time directly to Duesseldorf.

“It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of those [CDS] transactions.”

Joseph J. Cassano, a former A.I.G. executive, August 2007, on Credit Default Swaps that wiped out A.I.G in 2008.

Crooks and Scoundrels Corner

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

Below, more on God’s work, but I wonder why? How will Goldie spin this? “The devil made me do it?”  Just who set out to frame Trump? Why?

"I'm just a banker doing 'God's Work.'

Lloyd Blankfein, CEO, Goldman Sachs, aka Mr. Goldman Sacks. 

Goldman Sachs UK unit reports gender pay gap of 51 percent

March 25, 2019 / 11:55 AM / Updated 5 hours ago
LONDON (Reuters) - Goldman Sachs’s British business on average paid women 51 percent less than men per hour in 2018, the U.S. investment bank said on Monday, down from 56 percent the year before.

The gap does not reflect the bank paying women at the same level differently from men, the bank said, but rather the fact that fewer women hold the more senior roles that have higher salaries and bonuses. 

The data were released as part of rules requiring British firms to disclose regularly their gender pay gaps, and say what measures they are putting in place to try and close the divide.
If the financial system goes down, our business is going down and, trust me, yours and everyone else's is going down, too.
Lloyd Blankfein’s CEO Goldman Sachs, threat 2008. “Mr. Goldman Sacks.”

Mueller Exposes Spy Chiefs

Did our intel leaders have any evidence when they pushed the Russia collusion line?

By William McGurn
March 25, 2019 7:15 p.m. ET
Now that special counsel Robert Mueller has found that no one in the Trump campaign colluded with Russia to steal the 2016 election, Democrats are busy moving the goal posts. But this is a distraction from the real reckoning that needs to come.

The one we need is for all the intelligence officials—including former Director of National 
Intelligence James Clapper, former Central Intelligence Agency chief John Brennan, and the Federal Bureau of Investigation’s former Director James Comey and former Deputy Director Andrew McCabe—who pushed the Russia conspiracy theory. The special counsel has just made clear they did so with no real evidence.

Mr. Mueller could have said he didn’t have enough evidence to prosecute. Instead he was categorical: “The investigation did not establish that members of the Trump Campaign conspired or coordinated with the Russian government in its election interference activities.”

This wasn’t for lack of trying on Moscow’s part. “Despite multiple offers” from Russia-affiliated individuals to help their campaign, Mr. Mueller reports, the Trump people didn’t take them up on it.

So why do 44% of Americans—according to a Fox News poll released Sunday—believe otherwise? Part of the answer has to be that the collusion tale was egged on by leading members and former members of the American intelligence community.

Intelligence professionals are trained to sift through the noise and distractions in pursuit of the truth. In this case, however, they went all in for a tale that the Russian government had somehow compromised Mr. Trump or his close associates. In peddling this line, their authority rested on the idea they had access to alarming and conclusive evidence the rest of America couldn’t see. Now it appears they never had much more than an unverified opposition-research dossier commissioned by Fusion GPS’s Glenn Simpson on behalf of Hillary Clinton.

Nevertheless, they persisted. Start with the FBI’s Mr. McCabe, who boasts that he is the man who opened the counterintelligence probe into Russia and President Trump. Today the question has to be: On what evidence was this extraordinary step predicated, apart from Mr. Trump’s saying things the G-man didn’t like?

As recently as three weeks ago, Mr. McCabe—sacked by the bureau for a “lack of candor”—told CNN that he still thought it “possible” President Trump was a “Russian asset.” Again, on what evidence?

Ditto for Mr. Clapper, who said he agreed “completely” with Mr. McCabe that Mr. Trump could be a Russian asset. He added only that he couldn’t be certain whether it was “witting or unwitting.” Coming from a former director of national intelligence, this is a grave accusation. But on what evidence?

Or consider Mr. Brennan. After a presidential press conference in Helsinki with Vladimir Putin in which Mr. Trump refused to acknowledge Russian meddling in the 2016 election, Mr. Brennan tweeted that the president’s behavior was “nothing short of treasonous.” Not “wrong,” not “outrageous,” but “treasonous.”
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Russian Foreign Minister Lavrov. May 2017.



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?

New computational tool could change how we study pathogens

Date: March 25, 2019

Source: Florida State University

Summary: A sophisticated new analysis too incorporating advanced mathematical strategies could help revolutionize the way researchers investigate the spread and distribution of dangerous, fast-evolving disease vectors. 

A sophisticated new analysis tool developed by Florida State University scientists may signal a new era in the study of population genetics.

Their model, which incorporates advanced mathematical strategies, could help revolutionize the way researchers investigate the spread and distribution of dangerous, fast-evolving disease vectors.

The breakthrough research was an interdisciplinary collaboration between postdoctoral mathematician Somayeh Mashayekhi and computational biologist Peter Beerli, both in FSU's Department of Scientific Computing. Their findings were published in the journal Proceedings of the National Academy of Sciences.

"Ours is the first application of fractional calculus to population genetics," Beerli said. "This will help us to give better estimates of quantities that may be important to combat pathogens."

The team's model, called the f-coalescent for its novel use of fractional calculus, follows in the lineage of a similar but more limited model called the n-coalescent. Proposed by the British mathematician John Kingman in 1982, the n-coalescent allowed scientists to make statistical statements about a population's past using data collected in the present.

"The n-coalescent introduced a retrospective view of relationships among individuals," Beerli said.

---- But for all its groundbreaking theoretical advantages, the n-coalescent had one major hindrance: The model operated under the assumption that populations are homogeneous. That is, it assumed each individual shared identical experiences, with the same adversities that threaten their survival and the same benefits that give them a competitive leg up.

This is where the FSU team's new f-coalescent advances on its predecessor. Their model allows for increased environmental heterogeneity, specifically in location and time intervals. These allowances help yield clearer pictures of when different genetic variations emerge -- information that is critical in the analysis of pathogens that evolve rapidly in response to different environments.

In their study, Beerli and Mashayekhi applied the f-coalescent to three real datasets: mitochondria sequence data of humpback whales, mitochondrial data of a malaria parasite and the complete genome data of an H1N1 influenza virus strain.

They found that while environmental heterogeneity seemed to have little effect in the humpback whale dataset, the influenza and malaria data suggested that heterogeneity should be considered when evaluating pathogens that evolve quickly due to changing selection pressures.

"Heterogeneity has effects on the timing in the genealogy," Mashayekhi said. "The f-coalescent will result in better estimates of this timing, which will lead to important changes in the analysis of pathogens."
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Englishmen never will be slaves; they are free to do whatever the government and public opinion allow them.
George Bernard Shaw, Man and Superman, 1903.

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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