Baltic Dry Index. 695
-14 Brent
Crude 67.81
Car Crash Brexit now reset
19 days away. Day 112 of the
never-ending China trade talks.
England: a good land and a bad people.
French saying.
Asian stock gamblers
are betting big on the latest Brexit “fix” and that President Trump was just
playing to his hardcore base when he suggested that the China tariffs may have
to last for months or possibly years.
I think rallies here
are final exit rallies, as a no deal Brexit becomes a high probability next
week, and the never-ending USA v China trade war talks are about to get
upstaged by a imminent release of the Mueller investigation of the Trump campaign’s
alleged links with Russia.
Below, Asia bets on
black, while I think red is about to turn up in the next three months ahead.
The English have no
exalted sentiments. They can all be bought.
Napoleon
Asian shares hit 6-1/2-month high on tech hopes, U.S. data
March 22, 2019 /
1:17 AM / Updated 3 hours ago
TOKYO
(Reuters) - Asian shares hit 6-1/2-month highs on Friday after upbeat U.S. data
and optimism in the tech sector lifted Wall Street stocks, helping calm some of
the jitters sparked by the Federal Reserve’s cautious outlook on the world’s
biggest economy.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3
percent, led by 0.5 percent gains in the info tech sector, while Japan’s Nikkei
bucked the trend and lost 0.2 percent.
On Wall Street, the S&P 500 gained 1.09 percent while the Nasdaq
Composite rallied 1.42 percent, both hitting five-month highs.[.N]
Apple Inc led the tech sector’s advance, rising 3.7 percent, ahead of
the company’s expected streaming service debut next week.
The Philadelphia SE Semiconductor Index soared 3.5 percent, coming
within a striking distance from its all-time high marked about a year ago.
“I’d think optimism in the tech sector is the biggest driver now. It
reflects expectations that the U.S. and China will eventually reach a trade
deal,” said Soichiro Monji, senior economist at Daiwa SB Investments.
A U.S. trade delegation headed by Trade Representative Robert Lighthizer
and Treasury Secretary Steven Mnuchin will visit China on March 28-29, which
will be followed by a trip by Chinese Vice Premier Liu He to Washington in
early April.
Thursday’s U.S. economic data was also upbeat as initial claims for
jobless benefits fell more than expected and mid-Atlantic factory activity
rebounded sharply.
The figures mollified worries about the U.S. economic outlook after the
Fed on Wednesday surprised investors by adopting a sharp dovish stance,
anticipating no further interest rate hikes this year and ending its balance
sheet rolloffs.
More
EU Gives Theresa May Another Two Weeks to Avoid a No-Deal Brexit
By Ian Wishart and Nikos Chrysoloras
Updated on 22 March 2019, 01:32 GMT
European Union leaders staved off the threat of the U.K. crashing out of
the bloc without a deal next Friday by giving Theresa May an extra two weeks to
work out what to do.
At a summit in Brussels on Thursday, the leaders told May that if U.K.
lawmakers don’t endorse her Brexit deal next week, she’ll have until April 12
to decide whether to leave without agreement or request a much longer
extension. The decision removes the immediate possibility of a no-deal Brexit
in seven days’ time.
It also gives May a powerful threat to issue to pro-Brexit hardliners in
her party: Back the deal or risk being trapped in the EU for much longer. May
said she’ll put the unpopular accord back to parliament next week.
The pound rose 0.2 percent against the dollar in early trading Friday
after falling as much as 1.5 percent during Thursday trading.
More than seven hours of discussion began with May delivering her most
extensive pitch yet to the 27 remaining leaders before she was asked to leave
the room while they thrashed out their response.
"The cliff edge will be delayed," EU President Donald Tusk
said after May accepted the proposal. "I was really sad before our
meeting, now I’m much more optimistic."
But in private, EU leaders weren’t so optimistic that May will be able
to pull it off next week.
French President Emmanuel Macron told his counterparts that he thought
there was a 10 percent chance of the deal passing, then after hearing from May
he decided it was 5 percent, according to a person familiar with the meeting.
Tusk replied: I think that’s a bit optimistic, the person said.
More
Here’s how the Mueller report could roil the stock market
Published: Mar 21, 2019 3:29 p.m. ET
Investors have largely ignored the political drama that has
accompanied the first two years of the Trump administration, but equity
strategists and analysts say markets may soon have to deal with its
ramifications, as Special Counsel Robert Mueller reportedly nears the end of
his investigation into possible ties between the Trump campaign and Russia’s
meddling in the 2016 election. President Trump added to speculation over Mueller’s yet-to-be-submitted final report on the inquiry, when he endorsed the public release of the document on Wednesday.
The report could be a major and immediate driver of stock-market volatility, strategists said, if its conclusions incriminate the president in a direct manner. Trump has repeatedly denied allegations that his campaign aided Russia’s efforts to interfere in the election.
“There’s more downside risk than upside” from the report’s release, Stephen Pavlick, Washington policy analyst at Renaissance Macro Research, told MarketWatch in an interview.
That’s because “most people have priced in that there isn’t a lot of ‘there’ there,” he added, arguing that if there really were damning information, such as proof that Donald Trump coordinated with the Russian government’s effort to boost his election chances, that it likely would have come out already, given the media’s intense focus on the issue.
But if the report does include information so damning that it leads to erosion of support for Trump among the Republican Party’s base, “the market reaction would be bad,” Pavlick said, because it would create a great deal of uncertainty, put the administration’s tax and regulatory agenda at risk, and potentially encourage the president to take actions unfriendly to the market in an attempt to distract the public from the report’s contents.
It’s conceivable that Trump could “raise tariffs on China or impose auto
tariffs on the EU just to change the conversation,” Pavlick said.
Outside of its combative stance on trade issues, the Trump
administration’s policies, including the recent corporate tax cut and efforts
to pare back federal regulations, have largely been seen as supportive of equity
markets.
More
Stock-market analyst who called 2018 rout says if earnings are weak, ‘I don’t think stocks are going to look through it’
Published: Mar 21, 2019 4:04 p.m. ET
Morgan Stanley’s chief equity strategist Michael Wilson
says the Federal
Reserve’s Wednesday decision underlined the central bank’s uber-dovish
stance, which means corporate earnings are going to be paramount for
stock-market investors.Read: Bulls looking for repeat of 2016 stock-market rally will be disappointed: Morgan Stanley
Speaking to CNBC on Thursday morning, the strategist said the Fed statement was “kind of the full capitulation” by the Federal Open Market Committee, after it left rates unchanged, as expected, but also cut its projection for future rate increases this year to zero from two back in December and downgrading its 2019 economic outlook for gross domestic product to 2.1% from 2.3%.
The move comes after policy makers in January said they would pause further increases, suggesting that they feared weakening growth outside of the U.S. have the potential to harm domestic expansion.
Wilson said against that back drop, quarterly results could be a key catalyst this time.
Part of the problem is that corporate tax cuts enacted late 2017 helped to boost results last year but the effects of that stimulus, which resulted increased buybacks, is expected to fade. That could make comparisons to earlier quarters look worse. On top of that, some corporate executives say a slowdown in global growth is already cutting into results.
More
In 737 Max crash news,
after nearly 350 needless terrifying deaths too many, Boeing and the FAA are
being held to international account. But as with the Volkswagen dirty killer
diesel scandal, despite with malice aforethought for financial gain, will
anyone go to jail?
World wants answers from Indonesia and Ethiopia crashes
March 21, 2019 /
6:16 AM
JAKARTA/WASHINGTON
(Reuters) - Indonesian investigators described the panic of pilots grappling
with airspeed and altitude problems in the last moments of their doomed Lion
Air flight, as comparisons mounted to a disaster in Ethiopia and authorities
queued up to question Boeing.
The March 10 Ethiopian Airlines crash that killed all 157 on board has
set off one of the widest inquiries in aviation history and cast a shadow over
the Boeing 737 MAX model intended to be a standard for decades.
Initial investigations show similarities between the Ethiopian crash and
the Indonesian accident in October that killed all 189 crew and passengers.
“At the end of the flight it seemed the pilot felt he could no longer
recover the flight. Then the panic emerged,” Nurcahyo Utomo, an investigator at
Indonesia’s national transportation committee, told reporters in Jakarta on
Thursday.
Reuters reported on Wednesday that the Lion Air pilots scrambled through
a handbook to understand why the jet was lurching downwards in the final
minutes before it hit the water.
A final report on the Lion Air crash, which has taken on new urgency
since the Ethiopian one, is expected in August.
Boeing, fighting to retain its prestige as the world’s biggest
planemaker and one of the United States’ most important exporters, has said
there was a documented procedure to handle the automated system at the heart of
the problem.
In both flights, crews radioed about control problems shortly after
take-off and sought to turn back.
Investigations of the planemaker’s conduct are starting to pile up, with
several lawsuits already filed on behalf of victims of the Lion Air crash
referring to the Ethiopian accident. Boeing said it did not respond to, or
comment on, questions concerning legal matters.
Veteran consumer advocate and former U.S. presidential candidate Ralph
Nader lost a grand-niece in the Ethiopian crash and urged whistleblowers to
help challenge the aviation industry and get to the bottom of what happened.
More
Doomed jets lacked two key safety features that Boeing sold as extras
By Thu., March 21, 2019
As the pilots of the doomed Boeing jets in Ethiopia and Indonesia fought
to control their planes, they lacked two notable safety features in their
cockpits.
One reason: Boeing charged extra for them.
For Boeing and other aircraft manufacturers, the practice of charging to
upgrade a standard plane can be lucrative. Top airlines around the world must
pay handsomely to have the jets they order fitted with customized add-ons.
Sometimes these optional features involve aesthetics or comfort, like
premium seating, fancy lighting or extra bathrooms. But other features involve
communication, navigation or safety systems, and are more fundamental to the
plane’s operations.
Many airlines, especially low-cost carriers like Indonesia’s Lion Air,
have opted not to buy them — and regulators don’t require them.
Now, in the wake of the two deadly crashes involving the same jet model,
Boeing will make one of those safety features standard as part of a fix to get
the planes in the air again.
It is not yet known what caused the crashes of Ethiopian Airlines Flight
302 on March 10 and Lion Air Flight 610 five months earlier, both after erratic
takeoffs. But investigators are looking at whether a new software system added
to avoid stalls in Boeing’s 737 Max series may have been partly to blame.
Faulty data from sensors on the Lion Air plane may have caused the system,
known as MCAS, to malfunction, authorities investigating that crash suspect.
That software system takes readings from two vanelike devices called
angle of attack sensors that determine how much the plane’s nose is pointing up
or down relative to oncoming air. When MCAS detects that the plane is pointing
up at a dangerous angle, it can automatically push down the nose of the plane
in an effort to prevent the plane from stalling.
Boeing’s optional safety features, in part, could have helped the pilots
detect any erroneous readings. One of the optional upgrades, the angle of
attack indicator, displays the readings of the two sensors. The other, called a
disagree light, is activated if those sensors are at odds with one another.
Boeing will soon update the MCAS software, and will also make the
disagree light standard on all new 737 Max planes, according to a person
familiar with the changes, who spoke on condition of anonymity because they
have not been made public. The angle of attack indicator will remain an option
that airlines can buy.
Neither feature was mandated by the Federal Aviation Administration. All
737 Max jets have been grounded.
“They’re critical, and cost almost nothing for the airlines to install,”
said Bjorn Fehrm, an analyst at the aviation consultancy Leeham. “Boeing
charges for them because it can. But they’re vital for safety.”
Earlier this week, Dennis A. Muilenburg, Boeing’s chief executive, said
the company was working to make the 737 Max safer.
“As part of our standard practice following any accident, we examine our
aircraft design and operation, and when appropriate, institute product updates
to further improve safety,” he said in a statement.
Add-on features can be big money-makers for plane manufacturers.
More
Indonesia's Garuda asks to cancel $6 billion 737 MAX order, considers other Boeing jets - CFO
March 22, 2019 / 4:11
AM
JAKARTA
(Reuters) - National carrier Garuda Indonesia has sent a letter to Boeing Co
asking to cancel an order for 49 737 MAX 8 narrow body jets, Garuda Chief
Financial Officer Fuad Rizal said on Friday.
The
airline could switch the order, valued at $6 billion (£4.57 billion) at list
prices, to other Boeing models, Rizal told Reuters. He said negotiations with
Boeing were ongoing and Airbus SE jets were not under consideration.
Garuda is the first airline to publicly confirm plans to cancel an order
for the troubled jets after the second crash of a 737 MAX 8, which killed 157
people in Ethiopia last week.
Indonesian rival Lion Air has been reconsidering its orders since one of
its 737 MAX jets crashed in October.
Garuda CEO Ari Askhara told Reuters on Friday that customers had lost
trust in the 737 MAX 8.
The airline has only one in its fleet at present.
More
Interest rates are the most important prices
in the economy, according to Nobel laureate F.A. Hayek, because they reflect
the collective time preference of individuals to consume either now or later.
Accordingly, interest rates co-ordinate allocation of capital across the
economy by signalling to businesses whether they should invest. Distortions in
interest rates can cause “clusters of errors” in which large swathes of
businesses unwittingly miscalculate at the same time.
Hayek observed that interest rate stimulus
interfered with economic calculations, causing managers to invest in projects
that would not otherwise have appeared profitable. Losses can subsequently
materialise as customer demand fails to meet forecasts that were, in
retrospect, optimistic. Long-term projects are highly sensitive to interest
rates and are therefore more susceptible to such distortions. Pension
obligations and long-term, capital-intensive projects are at high risk of
miscalculation based on artificially low rates.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
No crooks or
scoundrels today, they’ll be working overtime as usual. Today, is North America’s
bread basket at risk, and if it is, what does that mean for global food
security in the rest of the century?
Great Lakes are rapidly warming, likely to trigger more flooding and extreme weather
Report also predicts more severe algae blooms will increase water treatment costs
The Associated Press ·
The Great Lakes region is warming faster than the rest of the U.S., a
trend that is likely to bring more extreme storms while also degrading water
quality, worsening erosion and posing tougher challenges for farming,
scientists report.
In a report commissioned by the Chicago-based Environmental Law &
Policy Center, the annual mean air temperature in the region increased 0.89
C in the periods 1901-60 and 1985-2016 — compared to 0.67 C for
the rest of U.S.
The region includes portions of the U.S. Midwest, Northeast and southern
Canada.
Warming is expected to continue this century, with rates depending on
how much heat-trapping gases — like carbon dioxide and methane — are pumped
into the atmosphere.
As the air warms, it will hold more moisture, which will likely mean
heavier winter snowstorms and spring rains. There could also be more flooding
in vulnerable areas.
Not only that, summers will be hotter and drier.
"Over the last two centuries, the Great Lakes have been significantly impacted by human activity, and climate change is now adding more challenges and another layer of stress," said Don Weubbles, an atmospheric scientist at the University of Illinois and former assistant director of the Office of Science and Technology Policy in the Obama administration.
"This report paints a stark picture of changes in store for the lake as a result of our changing climate."
There were 18 scientists who produced the report, most from midwestern universities and the National Oceanic and Atmospheric Administration.
Warming climate
The Great Lakes hold about one-fifth of the world's surface fresh water. They are so large that they influence regional weather.The lakes keep nearby regions cooler in the summer and warmer in the winter, when compared regions farther inland. The humidity of the lakes also fuels the "lake-effect" snowfall and summer rains.
Not only do the lakes provide drinking water for millions of people, they are the backbone of an economy built on manufacturing, agriculture and tourism.
---- While annual U.S. precipitation increased four per cent between 1901 and 2015, it jumped nearly 10 per cent in the Great Lakes region. Much of that increase was due to unusually large storms, the report says.
Future precipitation is likely to happen less evenly, decreasing five to
15 per cent in the summer by 2100.
---- The region could have longer growing seasons, said Brad Cardinale at the University of Michigan's Cooperative Institute for Great Lakes Research.
However, the report suggests that the benefit could be offset by wetter
springs that make it harder to plant crops.
Not only that, increasing drought and heat in the summer could hit the
agriculture industry hard.
The report predicts that corn and soybean crop yields will go down by 10
to 30 per cent by the end of this century.
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?
Research set to shake up space missions
Date:
March 15, 2019
Source:
Australian National University
Summary:
A new study has found a number of 2D materials can not only withstand being
sent into space, but potentially thrive in the harsh conditions.
A new study from The Australian National University (ANU) has found a
number of 2D materials can not only withstand being sent into space, but potentially
thrive in the harsh conditions.
It could influence the type of materials used to build everything from
satellite electronics to solar cells and batteries -- making future space
missions more accessible, and cheaper to launch.
PhD candidate and lead author Tobias Vogl was particularly interested in
whether the 2D materials could withstand intense radiation.
"The space environment is obviously very different to what we have
here on Earth. So we exposed a variety of 2D materials to radiation levels comparable
to what we expect in space," Mr Vogl said.
"We found most of these devices coped really well. We were looking
at electrical and optical properties and basically didn't see much difference
at all."
During a satellite's orbit around the earth, it is subject to heating,
cooling, and radiation. While there's been plenty of work done demonstrating
the robustness of 2D materials when it comes to temperature fluctuations, the
impact of radiation has largely been unknown -- until now.
The ANU team carried out a number of simulations to model space
environments for potential orbits. This was used to expose 2D materials to the
expected radiation levels. They found one material actually improved when
subjected to intense gamma radiation.
"A material getting stronger after irradiation with gamma rays --
it reminds me of the hulk," Mr Vogl said.
"We're talking about radiation levels above what we would see in
space -- but we actually saw the material become better, or brighter."
Mr Vogl says this specific material could potentially be used to detect
radiation levels in other harsh environments, like near nuclear reactor sites.
"The applications of these 2D materials will be quite versatile,
from satellite structures reinforced with graphene -- which is five-times
stiffer than steel -- to lighter and more efficient solar cells, which will
help when it comes to actually getting the experiment into space."
Among the tested devices were atomically thin transistors. Transistors
are a crucial component for every electronic circuit. The study also tested
quantum light sources, which could be used to form what Mr Vogl describes as
the "backbone" of the future quantum internet.
"They could be used for satellite-based long-distance quantum
cryptography networks. This quantum internet would be hacking proof, which is
more important than ever in this age of rising cyberattacks and data
breaches."
"Australia is already a world leader in the field of quantum
technology," senior author Professor Ping Koy Lam said.
More
Another weekend and a troublesome political weekend on
either side of the Atlantic. At least
for those of us in the northern hemisphere, longer and warmer days lie ahead. More
blossoms and flowers appear, the butterflies and dragon flies soon reappear. Rescue
dog Lucky gets a follow up vets visit one month after his operation on his
front paw. If all is well, his other paw
will be operated on in late May or June. Have a great weekend everyone.
FAY: The British police force used to be run by men
of integrity.
TRUSCOTT: That is a mistake which has been
rectified.
Joe Orton, Loot, 1966.
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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