Baltic Dry Index. 1090 Brent Crude 66.24
Spot Gold 1520
Never ending Brexit now January 31.
Trump’s Nuclear China Tariffs Now in effect.
The USA v EU trade war started October 18. Now in effect.
“When life itself seems lunatic, who knows
where madness lies? Perhaps to be too practical is madness. To surrender dreams
— this may be madness. Too much sanity may be madness — and maddest of all: to
see life as it is, and not as it should be!”
Don Quixote
It’s a new year and it’s party on as before, and on the
same old news and hopium.
There’s a USA
v China trade deal “lite” phase one, to be signed in Washington on Jan 15,
though no one to know what’s in it, apparently. Meanwhile the Trump Fed is to
continue to monetise by about one hundred billon dollars a month on out into
the second quarter, though no one to know why, or what’s gone wrong in the US
financial system.
Just don’t call it quantitative easing, let alone
monetisation, but it is.
Below, Asian markets, minus a Japan still in shock, open
like it’s business as usual in our new roaring 20s. But given the bond change
in China and the coming trade deal “lite,” is it still business as usual?
Will WeWork, Softbank, Deutsche Bank, and Italy survive?
How will the German auto industry survive the switch to
EVs, and loss of the UK market?
After a no deal Brexit, who is going to eat all those unsold
French and Italian cheeses, Spanish and Dutch tomatoes, and drink all those
continental wines that used to be sold in GB?
And let’s not get started Greta’s Climate Crusade to take
us all back to life in the Middle Ages.
Asian shares rise on China's policy easing, trade deal hopes
January 2, 2020 /
2:20 AM
SHANGHAI
(Reuters) - Asian shares kicked off the new decade higher on Thursday, after
global stocks ended the previous one at record highs, and buoyed by Chinese
markets after Beijing eased monetary policy to support slowing growth.
Investors also cheered news that the United States and China will sign a
trade pact soon after a year of volatile negotiations between the world’s two
largest economies.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS
was up 0.35% in morning trade after rising 5.6% in December.
U.S. President Donald Trump said on Tuesday that Phase 1 of trade deal
with China would be signed on Jan. 15 at the White House, though uncertainty
surrounds details about the agreement.
Rising hopes for a resolution to the U.S.-China trade war helped propel
global equities to record highs late last year and depress the value of the
U.S. dollar.
---- In China, the blue-chip CSI300 index .CSI300, one of the world's best-performing indexes last year, was 1.34% higher in early trade.
China’s central bank on Wednesday that it would cut the amount of cash that banks must hold as reserves, releasing around 800 billion yuan in funds effective Jan. 6.
“I think the monetary angle in terms of what it means for the companies, is not that important,” said Jim McCafferty, head of Asia ex-Japan equity research at Nomura in Hong Kong.
“However for what it means for the consumer point of view, then clearly if there’s easy money and ... individuals can borrow cheaply, repay debt quickly, then that of course is going to help the economy and the companies.”
---- Markets in Japan are closed for a national holiday.
The gains in Asia follow a bullish end to the year on Wall Street on Tuesday. The Dow Jones Industrial Average .DJI rose 0.27% to 28,538.44 and the S&P 500 .SPX gained 0.29% to 3,230.78. The Nasdaq Composite .IXIC added 0.3% to 8,972.60.
More
China’s Government Is Letting a Wave of Bond Defaults Just Happen
Investors have long assumed the state would step in and help many companies, but that’s no longer a safe bet.December 26, 2019, 10:00 PM GM
China’s had another record year of corporate bond defaults. That’s not a
crisis. It’s a plan.
A decade ago, defaults almost never happened, but that wasn’t because
companies in China were always healthy. It was a reflection of the tightly
controlled financial system, where companies were often linked to the
government and bonds were largely bought by state-owned lenders. Authorities
have often stepped in to ensure that financially troubled enterprises didn’t
crash into default, out of concern over social unrest in the event of job
losses or missed payroll payments.
This system imposed little discipline on borrowers. Now global investors are coming into China’s bond market. Though many companies are still state-backed, policymakers are getting more comfortable with defaults. Without them, bond buyers would have little incentive to make a careful assessment of a company’s creditworthiness.
But rising defaults also mean that global investors have to abandon some assumptions about which borrowers are safe. There are some nasty surprises on the long list of companies that have either defaulted or have seen their bond prices plunge. Among them: a would-be Wall Street-style investment bank endorsed by China’s premier and two technology companies connected to top universities. In December, a commodities company called Tewoo Group Corp. delivered the biggest dollar-bond default in two decades by a state-owned enterprise. That event “could prove a turning point,” says Todd Schubert, a managing director for fixed income at Bank of Singapore. It’s getting more dangerous to count on some companies being, in essence, too connected to fail.
Tewoo’s businesses include mining, logistics, and infrastructure. Based
in the industrial city of Tianjin, southeast of Beijing, the company defaulted
when its debt had to be restructured, with bondholders being offered as little
as 37 cents on the dollar. After news of Tewoo’s debt restructuring plan,
Moody’s Investors Service warned investors that state-owned enterprises that
aren’t “strategically important” to the government would be less likely to get
bailouts.
But figuring out which companies still qualify as strategically
important won’t be easy.
Morehttps://www.bloomberg.com/news/articles/2019-12-26/china-s-government-is-letting-a-wave-of-bond-defaults-just-happen?srnd=premium-europe
Finally, Japan’s
Keystone Kops rush to shut the stable door long after their horse has bolted.
Tokyo prosecutors raid residence of former Nissan boss Ghosn - NHK
January 2, 2020
/ 5:13 AM
TOKYO (Reuters) - Tokyo prosecutors on Thursday raided the
residence of former Nissan Motor Co Ltd (7201.T) chairman Carlos
Ghosn, Japanese public broadcaster NHK said. The raid follows Ghosn’s surprise escape days ago from Japan, where he was awaiting trial on four charges of financial wrongdoing, to Lebanon.
Ghosn has repeatedly said he is innocent of all charges against him.
Nissan ex-boss Carlos Ghosn to hold press conference on January 8 -lawyer
January 1, 2020
/ 5:15 PM
BEIRUT (Reuters) - Nissan ex-boss Carlos Ghosn will hold a news conference
in Beirut on Jan. 8, a lawyer for Ghosn said on Wednesday, two days after
abruptly arriving from Japan, where he was under house arrest and accused of
financial misconduct.
The circumstances surrounding Ghosn’s escape from Tokyo remain mysterious.
Ghosn met Lebanese president after fleeing Japan - sources
January 1, 2020
/ 3:44 PM
BEIRUT (Reuters)
- Fugitive former Nissan chairman Carlos Ghosn met Lebanon’s president after
fleeing from Japan, where he was smuggled out of house arrest by a private
security company, two sources close to Ghosn said on Wednesday.
One of the sources said Ghosn was greeted warmly by President Michel
Aoun on Monday after flying into Beirut via Istanbul and was now in a buoyant
and combative mood and felt secure.
The plan to slip Ghosn out of Japan, which marked the latest twist in a
year-old saga that has shaken the global auto industry, was crafted over three
months, the two sources said.
“It was a very professional operation from start to finish,” one of them
said.
In his meeting at the presidency, Ghosn thanked Aoun for the support he
had given him and his wife Carole while he was in detention, the sources said.
He now needs the protection and security of his government after fleeing Japan,
the sources added.
The meeting between Aoun and Ghosn has not been made public and a media
adviser to the president’s office denied the two men had met. The two sources
said specifics of the meeting were described to them by Ghosn.
Ghosn could not be reached for comment on the meeting and has been
silent publicly other than to issue a written statement shortly after his
arrival saying he had “escaped injustice and political persecution.”
Lebanese officials have said there would be no need to take legal
measures against Ghosn because he entered the country legally on a French
passport, although Ghosn’s French, Lebanese and Brazilian passports are with
lawyers in Japan.
The French and Lebanese foreign ministries have said they were unaware
of the circumstances of his journey.
Lebanon has no extradition agreement with Japan.
More
“Thou
hast seen nothing yet.”
Don Quixote
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today, as new rules for shipping came into effect yesterday, trouble at
sea. What’s the likelihood that shipping is now going to cost more?
Tests raise alarms over fuel blends coming for ocean-going vessels
December 31, 2019
/ 10:20 PM
HOUSTON
(Reuters) - As a global clean-fuel mandate takes effect Jan. 1, testing
companies examining newer, low-sulfur marine blends acquired in Antwerp,
Belgium; Houston and Singapore have found sediment at levels that could damage
the engines of ocean-going vessels.
Routine tests by AmSpec Services and a unit of Lloyd’s Register have
raised alarms about safety and compliance just ahead of the new International
Maritime Organization (IMO) 2020 standard. Such tests, paid for by suppliers of
bunker fuel, have been conducted more frequently this year due to the shift.
The standard prompted an industry wide shift to cleaner burning marine
fuel in an effort to reduce coastal air pollution. It requires fuel with less
than 0.5% sulfur in ocean-going ships not equipped with emission scrubbers.
The potential hazards were demonstrated in 2018 when some ship operators
were forced to pay for costly repairs after buying bunker fuel contaminated by
a chemical used in epoxy. That incident affected about 200 vessels, according
to an attorney for one operator.
Some 60% of the recipes for making low-sulfur fuel proposed by bunker
suppliers near the top U.S. oil port of Houston failed to meet sediment
specifications when tested by AmSpec, said Shannon Boudreaux, a fuel blending
specialist at AmSpec, in an interview on Tuesday.
Marine fuel suppliers “are struggling with sediments,” Boudreaux said.
Producers have continued to tweak their recipes to get the fuels on spec, he
said, adding he did not expect a widespread problem for shippers.
AmSpec’s tests for sediment levels increased earlier this year, though
some testing had begun in 2018.
Fobas, a fuel testing company owned by Lloyd’s Register, said this month
it also found high sediment levels in bunker fuel samples in Singapore, Antwerp
and other European ports. The levels exceeded international residue standards.
“We need the supply side to fully contribute to a smooth changeover so
that we do not have any incidents due to incompatible fuels,” said Guy Platten,
secretary general of the trade association International Chamber of Shipping,
in a statement.
Ship operators will have to manage IMO 2020 suppliers with more care,
said AmSpec’s Boudreaux. Mixing two or more low-sulfur bunker fuels can raise
the sediment levels, producing a residue that could clog and damage an engine.
There was no residue problem from mixing high-sulfur fuels from
different suppliers, he said.
“The industry is concerned about these different types of very
low-sulfur fuel oil concoctions, that when blended meet specifications, but
when mixed together may all of a sudden be off specification,” said Andy Lipow,
president of Lipow Oil Associates in Houston.
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?
More power came from renewable energy than fossil fuels in UK in 2019
Renewable energy delivered 48.5% of Britain's electricity in 2019, compared with the 43% generated by fossil fuels.
Wednesday 1 January 2020 06:14, UK
For the first time ever, more power came from renewable sources than
from fossil fuels for a full 12 months during 2019.
Figures released by the National Grid show wind farms, hydro plants,
solar and nuclear energy - alongside clean power imported by sub-sea cables -
delivered 48.5% of Britain's electricity in 2019.
That compares to 43% generated by fossil fuels.
The remaining 8.5% was generated by biomass, which is renewable but
produces carbon emissions when the wood pellets used to make the power are
burned.
National Grid CEO John Pettigrew told Sky News: "2019 is a
massively historic milestone in that it's the first time ever in the UK that
we've had more electricity produced from zero carbon fuels than from fossil
fuels.
"Over the last 10 years, we've seen a gradual shift away from
fossil fuels. So in 2009, about 30% of electricity in the UK was produced by
coal but what's been happening over the last decade is a move towards wind and
solar as well as zero carbon electricity from Europe being important into the
UK as well."
There are more projects in the pipeline including a cable under the
North Sea to connect the UK with Norway in order to harness hydro power being
generated there. It is one of six so-called "interconnectors" -
cables between European countries and Britain - either in operation or under
construction.
But while progress is being made, Mr Pettigrew says there are still
challenges if the UK is to achieve its target of net zero carbon emissions by
2050.
He added: "If you're going to achieve net zero you've got to
decarbonise energy which is something the National Grid is really focused on,
but also you've got to decarbonise transport.
"If you think about decarbonising transport it's really about moving
from traditional petrol and diesel for cars to electric vehicles.
"If we're going to achieve net zero you're probably going to see
something like 36 to 40 million electric vehicles by 2050 and all those cars
need to be charged so the National Grid is thinking very carefully about how we
actually make sure that we've got the infrastructure that we need."
More
But, will it, can it,
happen at all, let alone by 2050?
The "New Energy Economy": An Exercise in Magical Thinking
Mark P. Mills March 26, 2019
Executive Summary
A movement has been growing for decades to replace hydrocarbons, which collectively supply 84% of the world’s energy. It began with the fear that we were running out of oil. That fear has since migrated to the belief that, because of climate change and other environmental concerns, society can no longer tolerate burning oil, natural gas, and coal—all of which have turned out to be abundant.So far, wind, solar, and batteries—the favored alternatives to hydrocarbons—provide about 2% of the world’s energy and 3% of America’s. Nonetheless, a bold new claim has gained popularity: that we’re on the cusp of a tech-driven energy revolution that not only can, but inevitably will, rapidly replace all hydrocarbons.
This “new energy economy” rests on the belief—a centerpiece of the Green New Deal and other similar proposals both here and in Europe—that the technologies of wind and solar power and battery storage are undergoing the kind of disruption experienced in computing and communications, dramatically lowering costs and increasing efficiency. But this core analogy glosses over profound differences, grounded in physics, between systems that produce energy and those that produce information.
In the world of people, cars, planes, and factories, increases in consumption, speed, or carrying capacity cause hardware to expand, not shrink. The energy needed to move a ton of people, heat a ton of steel or silicon, or grow a ton of food is determined by properties of nature whose boundaries are set by laws of gravity, inertia, friction, mass, and thermodynamics—not clever software.
This paper highlights the physics of energy to illustrate why there is no possibility that the world is undergoing—or can undergo—a near-term transition to a “new energy economy.”
Among the reasons:
More
"What
giants?" Asked Sancho Panza.
"The ones you can see over there," answered his
master, "with the huge arms, some of which are very nearly two leagues
long."
"Now look, your grace," said Sancho, "what you
see over there aren't giants, but windmills, and what seems to be arms are just
their sails, that go around in the wind and turn the millstone."
"Obviously," replied Don Quixote, "you don't know
much about adventures.”
Don Quixote
The monthly Coppock Indicators finished December
DJIA: 28,538 +91 Up. NASDAQ: 8,973 +125 Up.
SP500: 3,231 +114 Up.
All
higher again, but it’s not a buy signal I would take. The rally is all down to
the Fed monetizing at a rate of about 100 billion a month. I continue to look
on the Fed’s latest stock bubble as an exit rally.
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