Baltic Dry Index. 1779 -27 Brent
Crude 60.90 Spot Gold 1493
Never ending Brexit now October 31, maybe. 7 days away?
Trump’s Nuclear China Tariffs Now in effect.
The USA v EU trade war started October 18. Now in effect.
“As government
expands, liberty contracts.”
Ronald Reagan.
Here we go again! All news is good news yet again. We’re
back to the Great Disconnect in stock markets between stock pricing and the
reality of a global economy rotating from recovery back into recession.
Fueled by the Fed monetising again, for a crisis we’re
not being informed of, the ECB pushing deeper into negative interest rates, and
a Bank of Japan blatantly rigging almost everything, this time it’s different
think the punters in the casinos. There will always be a greater fool buyer for
stocks and negative interest rate bonds.
There won’t of course, there never is an unlimited pool
of greater fools, and negative interest rates for long, breaks the banks, the
pension funds, annuities, and eventually the financial system itself.
Long before that though, I think we get swamped in global
social disorder, because the central banksters have foisted a Great Disconnect
on the people, as they now cater only to bailing out the financialised first
economy, ignoring those trapped and doomed in the all the rest economy. I suspect that is
the real cause of all the rising global unrest.
The Great Disconnect is back to the old “deficits don’t
matter” fallacy, until one day out of the blue they did. We are heading for
another such financial crisis, if we’re not already in one given the Feds
sudden panicky rush into a vast monetisation, but certainly into a massive debt
crisis as the next global recession hits.
Below, the bubble’s back.
Markets can stay irrational longer than you
can stay solvent.
John Maynard Keynes.
Asian shares edge up as earnings, geopolitics sway sentiment
October 24, 2019 /
1:57 AM
SYDNEY
(Reuters) - Asian shares pulled ahead on Thursday as corporate earnings and a
ceasefire in northern Syria helped prop up sentiment, though the backdrop of
trade and brexit uncertainties was enough to prevent a decisive shift towards
riskier assets.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.4%
with Japan’s Nikkei rising 0.66% to a one-year high. Australian shares climbed
0.5% while South Korea’s KOSPI eased 0.1%.
South Korea earlier reported third quarter growth slightly below
expectations, while a private survey showed Japanese factory activity shrank at
the fastest pace in over three years in October, hurt by slowing global demand
and trade frictions.
Chinese shares opened higher with the blue-chip index rising 0.37%.
Risk appetite was also aided after U.S. President Donald Trump lifted
sanctions on Turkey saying a ceasefire in northern Syria was now permanent.
“U.S.-China trade friction seems to be entering a truce, a no-deal
Brexit looks increasingly likely to be avoided, and the U.S.’s posture against
Turkey appears to have been softening,” JPMorgan analyst Tohru Sasaki wrote in
a note pointing to reasons for a rally in Nikkei.
JPMorgan expects gains in the Japanese index to extend into year-end led
by share buy-backs.
On Wall Street overnight, the Dow and the Nasdaq added 0.2% each while
the S&P 500 gained 0.3%.
Telsa shares jumped 21% in after-hours trading following a surprise
third quarter profit.
Microsoft also posted forecast-beating profit and revenue numbers after
the closing bell though the outlook was darkened by slower-than-expected
take-up of its Azure cloud services.
Earlier, shares of U.S. industrial bellwethers Boeing Co and Caterpillar
Inc ended about 1% higher each despite big earnings misses.
More
Charles Schwab’s move to sell fractions of shares could be a ‘game-changer’ for investors
By Brett Arends
Published: Oct 23, 2019 9:26 p.m. ET
If you’re still a small-bucks investor and you want to put,
say, $100 every month into the SPDR S&P 500 SPY, +0.29% exchange-traded fund, you’re out of luck.The ETF, the world’s biggest by assets, sells for $298 a share. At most brokerage houses there’s no way to buy less of it at a time than one share.
But that may be about to change.
Online broker Charles Schwab SCHW, +1.10% is planning to launch “fractional stock” ownership in a bid to woo younger investors, the company’s founder and president Charles R. Schwab said in a recent interview with The Wall Street Journal. That could make it possible for individual investors to buy shares in companies, and exchange-traded funds, in smaller, or exact dollar amounts.
Schwab spokesman Michael Cianfrocca declined to comment further. “We’re always evaluating and working on new services to improve how people can invest, but we don’t have anything specific to share on this right now as far as additional details or timing,” he said by email.
Financial advisers say such moves — by Schwab and other big brokers — is long overdue and could be great news for investors. Newer online brokerage houses have already introduced fractional stock ownership as a way to lure younger retail investors.
“This could potentially be a ‘game-changer,’” says Peter Palion, a certified financial planner at Master Plan Advisory, Inc. in East Meadow, N.Y. “It would be a game changer if you could specify the dollar amount and say, ‘I want to buy, say, $100 of the Gold SPDR,” GLD, +0.24% he says.
That would be a win for investors who are handling small amounts of money, and for those who want to invest a certain amount of money each month into retirement accounts, he says. It would allow some investors to buy $25 or $50 at a time of individual stocks or ETFs, he says. It could also allow investors to invest, say, exactly $500 a month in one or more ETFs as part of a regular investment plan.
“I think it’s a great idea,” agrees Dennis Nolte, a financial adviser at Seacoast Bank in Oviedo, Fla.
“Why wouldn’t you want to buy the S&P 500 ETF when you could buy $25 worth?”
Currently, stocks and exchange-traded funds can only be bought in whole units through most brokers. That means the minimum investment in, say, Amazon AMZN, -0.20% is the price of a single share, currently more than $1,700. Dow Jones Industrial Average DJIA, +0.17% component Boeing BA, +1.04% trades for around $350 a share. Apple AAPL, +1.34% is more than $230 per share. Tesla TSLA, -0.35% is more than $250.
Fractional ownership of ETFs could be a big advantage for investors
But the bigger advantage for most investors, say financial planners, is likely to come from fractional ownership of ETFs, which are open-ended mutual funds that are bought and sold much like stocks.Such funds have allowed investors to hold diversified portfolios much more easily. They typically charge far lower costs than traditional actively managed mutual funds.
The Investment Company Institute, which represents the mutual fund and ETF industries, says that although it has already been theoretically possible for ETFs to be traded in fractional amounts, it is not common. Brokers have to set up structures so that ownership can be pooled, and fractional shares can be credited to different customers. Currently the main way fractional shares of ETFs are owned are through dividend reinvestment plans, where investors effectively take an ETF’s dividends in the form of extra partial shares in the fund.
Trouble for traditional mutual funds?
A move to make fractional ownership more widely available could spell further trouble for traditional mutual funds, advisers say. It’s “definitely a threat to mutual funds,” says Nolte. Allowing fractional ownership of ETFs would take away one of those funds’ last remaining advantages over ETFs, which is the ability to invest a specific amount — say $1,000 — at a time.That is a big reason such funds remain the staple of most 401(k) plans, many experts believe.
Exchange-traded funds, which you buy and sell on the stock market, remain in total much smaller than traditional mutual funds, which you buy or sell directly from the fund manager. According to the Investment Company Institute, traditional funds have about $16.6 trillion in net assets, not including money-market funds. The figure for ETFs is less than $4 trillion.
Exchange-traded funds have seen their net assets quadruple since 2009 as investor money has flowed in. Meanwhile, traditional funds have seen heavy outflows. Equity-focused funds are on track for their fifth year in a row of net redemptions.
ETFs have been taking market share from traditional open-ended funds for many years, the industry reports. That’s meant big savings for ordinary investors, who have swapped funds with average fees of around 1% or more a year for low-cost ETFs whose fees are typically a fraction of that. That has been bad news for money managers, who have seen revenues and profit margins squeezed.
Opinion: Tesla is profitable again. How long will it last this time?
By Therese
Poletti Published: Oct 23, 2019 9:03 p.m. ET
Tesla Inc. reported a surprise profit in the third quarter, and promises
that it will sustain that position through a series of tough tests in the
months ahead.
This should sound familiar to observers of the battleground stock,
because it is exactly what happened in the third quarter a year ago. After
producing more than $300 million in profits in that quarter, Tesla earnings
fell to $100 million in the next quarter before diving to a loss of more than
$1 billion in the first half of this year.
Chief Executive Elon Musk blamed that quick decline on logistical
issues, growing pains and more, but now promises (again) that Tesla will be
profitable moving forward, even as he heads into yet another frantic ramp. The
question Tesla investors are left with is if the company will be able to
sustain the current profitability — which was mostly derived from cost-cutting
and emissions credits— at the same time it is building out the new Model Y and
a brand-new gigafactory in China.
Tesla’s
TSLA, -0.35%
shares soared more than 20% in after-hours trading Wednesday, approaching the
$300 level that Tesla stock has not touched since February. Musk said Tesla is
ahead of schedule on the Model Y crossover SUV and that the company’s Shanghai
gigafactory was completed in 10 months and has started trial production of the
Model Y.
“We have moved the launch timeline from full 2020 to summer 2020,” Musk said. “There may be some room for improvement there, but we’re confident about summer 2020.”
That type of bravado is similar to Musk’s pronouncements about the production and delivery of the Model 3, which took much longer than expected and then ran into logistical concerns on deliveries that marred the first half of this year. The same happened with the U.S. gigafactory, which has faced issues with ramping production and Tesla’s partner in the effort, Panasonic 6752, +1.05% , and left Tesla battery-constrained for a time while it was trying to make more Model 3s.
There is also the question of sustainability in general, given that tax credits for electric vehicles will be going away in the U.S. next year, and that the company already cut its costs to get to this point. Tesla cut 7% of its full-time workforce earlier this year, closing most of its retail locations and cutting prices to help make up for the loss of tax credits. If Tesla runs into trouble during this ramp, it might have to hire up to fix the issues, again causing the same issues it has already suffered.
More
Next more on WeWork. While this is just one location in
Manhattan, does this look like a workable business plan likely to become
profitable, or a passing fad, fleecing the gullible?
Why is a renter middleman
business worth anything in the billions?
WeWork Reportedly Abandons Plan To Move Headquarters Into Lord & Taylor Building
by Tyler Durden Wed, 10/23/2019 - 05:41
The We Company's rapid unraveling reached another milestone this week as
the office-space leasing company with the "transcendental" bent
agreed to hand over the reins to SoftBank, its biggest backer, in a deal that
valued the unicorn at just $8 billion, a fraction of the $47 billion valuation
the company had maintained from a few weeks ago.
The
massive bailout (SoftBank
reportedly forked over $6.5 billion and a new executive chairman as part of
the deal) arrived at a critical juncture. Because as it turns out, WeWork's
need for cash is even more desperate than investors had initially believed,
even after the publication of its pre-IPO prospectus.
The IPO was called off, of course, and just like that, $9 billion of badly needed financing ($3 billion to be raised in the IPO and a contingent $6 billion loan) evaporated.
Now, the company is reportedly in such dire straits that even after the buyout (money that mostly went to investors, including nearly $2 billion for Adam Neumann, the co-founder who was recently ousted from his position as CEO and is now severing all ties with the company, including stepping down from his position as executive chairman), it reportedly can't afford to move ahead with plans to move its headquarters to the former Lord & Taylor building off Bryant Park, according to the New York Post and Crain's New York Business.
That's hardly a surprise; earlier this month, anonymously sourced reports claimed that the lease had become "an albatross" for the company. Along with a group of investors that included its own then-CEO Adam Neumann, WeWork participated in the $850 million purchase of the Lord & Taylor building (right at what looks to be the top of NYC's commercial real-estate market).
Then, in a deal that reeked of self-dealing on behalf of the company's then-CEO, WeWork earlier this year signed a long-term lease to become the building's sole tenant, renting 660,000 square feet at the exorbitant rate of $105 a square foot (nearby buildings typically top out at around $80, according to the NYP).
Now, sources within WeWork’s real estate leasing business say they are
ditching plans to make the former department store their headquarters. Instead,
the company is rushing to lease the space as quickly as possible.
One source told the NYP that the company has accepted that trying to
consolidate its headquarters at the Lord & Taylor building simply isn't
practical.
More
511 W 25th St
Coworking Space at 511 West 25th Street
At the heart of Chelsea’s thriving arts scene, our
coworking space at 511 West 25th Street is a refreshing home for your business.
Eight floors in this nine-story building are dedicated to WeWork, boasting
private offices, unique conference rooms, and artful lounges built for
connection.
Commuting is a breeze with C, E, 1, 2, and 7 trains within walking
distance and Penn Station only a few blocks away. Amid countless art galleries,
the High Line, and Chelsea Piers, it’s easy to mix work with play at this
vibrant location. Ready to start your next chapter in Chelsea? Join WeWork today.
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Finally, China again. Forget the USA v China trade war,
President Trump, or someone, is taking US – China relations back to the cold
war era? That won’t help keep either out
of the next recession.
Trade, human rights and the unravelling of the China-US relationship
·
While Beijing and Washington were inching closer
on tariffs, they were swiftly moving apart over Xinjiang and Hong Kong
·
The developments suggest the two countries are
entering a dangerous period, with some moves reminiscent of the cold war,
observers say
Shi
Jiangtao Published: 1:30am, 20 Oct, 2019
For a moment the focus was on progress. Top Chinese and US trade officials ended their
meetings in Washington just over a week ago with an interim agreement to
postpone increases in US tariffs on Chinese goods.
But despite the progress on trade war negotiations, US-China relations
are rapidly unravelling and entering an intense and dangerous period, with
escalating disputes in relation to human rights concerns over Hong Kong and
Muslims in Xinjiang.
Observers from both countries have warned that bilateral ties are set on
a collision course over a variety of conflicted fronts that go far beyond trade
frictions.
Over the past two weeks, the US government and lawmakers have repeatedly
used human rights issues to take aim at China.
On October 8, the US State and Commerce departments imposed visa
restrictions on Chinese officials, a day after they blacklisted eight
technology giants over their involvement in Beijing’s “brutal suppression” of
Muslim minorities in Xinjiang.
Then on Tuesday, as mass anti-government protests in Hong Kong stretch
into a fifth month, the US House of Representatives threw its weight behind the
protesters, approving unanimously the landmark Hong Kong Human Rights and
Democracy Act.
And while US President Donald Trump and Beijing have hailed progress in
the on-and-off negotiations that had been held for more than a year, the US
State Department took another unusual step on Wednesday, requiring US-based
Chinese diplomats to give advance notice of meetings with American government
officials and academics and think tanks.
Beijing-based international affairs expert Pang Zhongying said the
manoeuvring was significant and similar to a previous era of hostility.
“The spiralling tensions and many measures recently adopted by both
sides, such as the latest move on Chinese diplomats, are reminiscent in some
ways of the cold war era,” Pang said.
“Whether you like it or not, decoupling is already under way and Beijing
is clearly aware of it. Top Chinese leaders and diplomats have often reiterated
that the changes we are encountering in the world are unseen in a century,
which apparently refers to the worst downturn spiral in the US-China relations
in decades.”
Orville Schell, Arthur Ross director of the Centre on US-China Relations
at the New York-based Asia Society, also said bilateral ties were at a tipping
point, with disagreements making the leap from trade and investment to
infecting almost every aspect of the relationship.
“The Trump administration seems to be seeking to work with China on
trade, but to oppose it on other questions where it sees inequities and a lack
or reciprocity,” Schell said.
“There is little doubt that Beijing views such a posture as duplicitous,
but in fact the logic of the current relationship is that we will have to agree
on some issues, compete on others, and be adversaries on still others. This is
our new bilateral state of grace.”
The timing of the visa ban and the trade blacklist also raised questions
over whether it was part of a deliberate bid by the White House to pile
pressure on and exact greater concessions from Beijing in the trade talks.
More
"a company for carrying out an
undertaking of great advantage, but nobody to know what it is"
The 1720 South Sea Bubble.
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today, IBM v Google. IBM accuses Google of test rigging and fooling the
public. Did that make a false market in Google aka Alphabet? Is the SEC
investigating? If not, why not?
10.21.2019 08:01
PM
IBM Says Google’s Quantum Leap Was a Quantum Flop
A paper from Google leaked last month claimed its
researchers had achieved “quantum supremacy.” Now IBM says Google rigged the
test.
Technical quarrels between quantum computing experts rarely escape the field’s rarified community. Late Monday, though, IBM’s quantum team picked a highly public fight with Google.
In a technical paper and blog post, IBM took aim at potentially history-making scientific results accidentally leaked from a collaboration between Google and NASA last month. That draft paper claimed Google had reached a milestone dubbed “quantum supremacy”—a kind of drag race in which a quantum computer proves able to do something a conventional computer can’t.
Monday, Big Blue’s quantum PhDs said Google’s claim of quantum supremacy was flawed. IBM said Google had essentially rigged the race by not tapping the full power of modern supercomputers. “This threshold has not been met,” IBM’s blog post says. Google declined to comment.
It will take time for the quantum research community to dig through IBM’s claim and any responses from Google. For now, Jonathan Dowling, a professor at Louisiana State University, says IBM appears to have some merit. “Google picked a problem they thought to be really hard on a classical machine, but IBM now has demonstrated that the problem is not as hard as Google thought it was,” he says.
Whoever is proved right in the end, claims of quantum supremacy are largely academic for now. The problem crunched to show supremacy doesn’t need to have immediate practical applications. It's a milestone suggestive of the field’s long-term dream: That quantum computers will unlock new power and profits by enabling progress in tricky areas such as battery chemistry or health care. IBM has promoted its own quantum research program differently, highlighting partnerships with quantum-curious companies playing with its prototype hardware, such as JP Morgan, which this summer claimed to have figured out how to run financial risk calculations on IBM quantum hardware.
The IBM-Google quantretemps illustrates the paradoxical state of quantum computing. There has been a burst of progress in recent years, leading companies such as IBM, Google, Intel, and Microsoft to build large research teams. Google has claimed for years to be close to demonstrating quantum supremacy, a useful talking point as it competed with rivals to hire top experts and line up putative customers. Yet while quantum computers appear closer than ever, they remain far from practical use, and just how far isn’t easily determined.
The draft Google paper that appeared online last month described posing a statistical math problem to both the company’s prototype quantum processor, Sycamore, and the world’s fastest supercomputer, Summit, at Oak Ridge National Lab. The paper used the results to estimate that a top supercomputer would need approximately 10,000 years to match what Sycamore did in 200 seconds.
IBM, which developed Summit, says the supercomputer could have done that work in 2 ½ days, not millennia—and potentially even faster, given more time to finesse its implementation. That would still be slower than the time posted by Google’s Sycamore quantum chip, but the concept of quantum supremacy as originally conceived by Caltech professor John Preskill required the quantum challenger to do something that a classical computer could not do at all.
This is not the first time that Google’s rivals have questioned its quantum supremacy plans. In 2017, after the company said it was closing in on the milestone, IBM researchers published results that appeared to move the goalposts. Early in 2018, Google unveiled a new quantum chip called Bristlecone said to be ready to demonstrate supremacy. Soon, researchers from Chinese ecommerce company Alibaba, which has its own quantum computing program, released analysis claiming that the device could not do what Google said.
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?
How liquid air could help keep the lights on
22 October 2019
It sounds like magic but it is real - a plan to store cheap night-time
wind energy in the form of liquid air.
Here is how: you use the off-peak electricity to compress and cool air
in a tank, so it becomes a freezing liquid.
When demand peaks, you warm the liquid back into a gas, and as that
expands it drives a turbine to create more electricity.
The technology, created by a backyard inventor, is about to hit the big
time.
It has been tried at small scale but now the firm behind it, Highview,
has announced that a grid-scale 50MW plant will be built in the north of
England on the site of a former conventional power plant.
The technology has been supported by the UK government. One attractive
feature is that it uses existing simple technology developed for storing and
compressing liquefied natural gas (LNG), so unlike battery storage it does not
require mining for rare minerals.
The key innovation is to store the excess heat given out when the air is
compressed and use it to re-heat the liquified air when it is needed.
The idea was promoted by self-taught engineer Peter Dearman from his
garage in Bishop's Stortford, Hertfordshire.
He had been developing a car run on similar principles with liquid
hydrogen and saw the potential for applying the technology to electricity
storage.
He is now a passive shareholder in Highview, which is hoping to play in
the big league of storage.
He told BBC News: "It’s great news - very exciting. There’s such a
lot of potential in these technologies."
The proposed grid-scale project will supply electricity to around 25,000
homes for a day, although realistically it will only be used for short periods
to cover sudden peaks in demand.
The firm's boss, Javier Cavada, said the plant will be built on the site
of a former disused power plant.
He said: "This plant will provide the critical services needed to
help maintain a stable and reliable grid. Giga-scale energy storage will be key
to a 100% carbon-free future."
Professor John Loughhead, Chief Scientific Adviser at the government’s
business and energy department, has previously praised the technology.
The Electricity System Operator, which manages supply and demand in
Britain, said they expected the Highview plant to bid for contracts in the
market for flexible electricity.
With
our Stock Markets and central banksters believing in fantasy, how about this
from October 24, 1593
1593 transported soldier legend
----On October 24, 1593, the soldier was doing his job guarding the Governor's palace in Manila in the Captaincy General of the Philippines. The night before, Governor Gómez Pérez Dasmariñas was assassinated by Chinese pirates, but the guards still guarded the palace and awaited the appointment of a new governor. The soldier began to feel dizzy and exhausted. He leaned against the wall and rested for a moment with his eyes closed.When he opened his eyes a few seconds later, he found himself in Mexico City, in the Viceroyalty of Mexico, thousands of kilometres across the Ocean. Some guards found him in the wrong uniform and began to question him on who he was. The news of the assassination of the Governor of the Philippines was still unknown to the people in Mexico City. The transported soldier was reportedly wearing the palace guards' uniform in Manila and knew of his death. (In fact, Pérez Dasmariñas was killed at sea some distance from Manila.)
The authorities placed him in jail for being a deserter and with charges of being a servant of the devil. Months later, news of the governor's death came to Mexico on a galleon from the Philippines. One of the passengers recognized the imprisoned soldier and said that he had seen him in the Philippines a day after the death of the Governor. He was eventually released from jail by the authorities and allowed to go back home.
More
The monthly Coppock Indicators finished September
DJIA: 26,917 +57 Up. NASDAQ: 7,999 +62 Up. SP500: 2,977 +61 Up.
Another inconclusive month,
but all three moved up weakly. I would not rely on nor take such a weak buy
signal.
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