Baltic Dry Index. 773 -18 Brent Crude 65.82 Spot Gold 1554
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.
“War is peace. Freedom is slavery.
Ignorance is strength.”
George Orwell 1984.
Yesterday President Trump appeared to opt for peace.
Today? Well that’s another matter, this is President Trump after all. But was
that good enough to match President “Bomber” Obama’s Nobel Peace Prize?
Still, if neither side does anything else foolish, and if
Iran can control its proxy, militias, what follows next should be an uneasy
lull allowing most stock and commodity markets to get back to something
approaching normality.
But what’s left of ISIS and others, are incentivised to
stir it all up again, desperate to provoke President Trump. I wouldn’t get too complacent yet, and there’s
still the matter of what happened to that Ukrainian 737-800 passenger plane, that
seems to have been filled mostly with unfortunate Canadians.
Below, “normality” returns. Keep ignoring that less than useful sinking
Baltic Dry Index.
Asian shares erase losses as Mideast tensions ease, oil ticks up
January 9, 2020 /
12:55 AM
SINGAPORE
(Reuters) - Asian stocks rebounded on Thursday and oil edged up as the United
States and Iran backed away from the brink of further conflict in the Middle
East and investors unwound safety plays.
U.S. President Donald Trump responded overnight to an Iranian attack on U.S. forces with sanctions, not violence. Iran offered no immediate signal it would retaliate further over a Jan. 3 U.S. strike that killed one of its senior military commanders.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 1%, as did Hong Kong's Hang Seng .HSI and Shanghai blue chips .CSI300, reversing Wednesday's losses.
Japan's Nikkei .N225 rose 1.8%, lifting stocks to their highest for the year so far, while Australian stocks climbed 1% to just below December's record high.
“I think today is a bit of a relief rally,” said Shane Oliver, Chief Economist at AMP Capital in Sydney.
“Yesterday, investors were fearing the worst, that this was the escalation now underway. The news overnight has been more along the lines that Iran pulled its punches and Trump is toning things down,” he said, “which is seen by investors as substantially reducing the risk of a war.”
Investors quit the safe-haven Japanese yen JPY=, sending it sliding from a three-month high to a two-week low of 109.25 yen per dollar.
Oil now sits just about where it was before the killing of the Iranian commander, Qassem Soleimani, in Baghdad, a strike that raised fears of an escalating regional conflict.
More
China's consumer inflation remains steady
By MarketWatch
Published: Jan 8, 2020 9:31 p.m. ET
BEIJING--China's consumer inflation held steady at a near eight-year
high in December, as food inflation eased but non-food inflation strengthened.
The consumer-price index rose 4.5% in December from a year earlier, data
from the National Bureau of Statistics showed Thursday. The key inflation
reading was the same as November's growth and slightly slower than a median
forecast of a 4.6% increase by economists in a Wall Street Journal poll.
Food prices in December grew 17.4% from a year earlier, retreating from
an over 11-year high of 19.1% in November. Pork prices rose 97% on year in
December, after more than doubling in November as an outbreak of African swine
fever continued driving pork prices higher. Pork prices alone lifted headline
CPI by about 2.34 percentage points in December.
Non-food prices climbed 1.3% from a year earlier, picking up from a 1.0%
increase in November.
On a month-to-month basis, CPI was unchanged from December. In November,
the index edged up 0.4% from a month earlier. China pork prices dropped 5.6% in
December from a month earlier. In November, pork prices climbed 3.8% on month.
For 2019, China's consumer inflation rose 2.9% from a year earlier,
inching closer to the government's ceiling of about 3% for 2019. This increase
was the highest since 2011, when the index rose 5.4%.
Meanwhile, China's industrial price deflation continued to ease. The
producer price index, a gauge of factory gate prices, edged down 0.5% on year
in December, compared with a 1.4% decline in November and economists' median
forecast of a 0.3% drop for December.
On month, PPI was unchanged from a month earlier. In November, it edged
down 0.1% from the preceding month.
World Bank trims 2020 growth forecast amid slow recovery for trade, investment
January 8, 2020 /
9:07 PM
WASHINGTON
(Reuters) - The World Bank on Wednesday trimmed its global growth forecasts
slightly for 2019 and 2020 due to a slower-than-expected recovery in trade and
investment despite cooler trade tensions between the United States and China.
The multilateral development bank said 2019 marked the weakest economic
expansion since the global financial crisis a decade ago, and 2020, while a
slight improvement, remained vulnerable to uncertainties over trade and
geopolitical tensions.
In its latest Global Economic Prospects report, the World Bank shaved
0.2 percentage point off of growth for both years, with the 2019 global
economic growth forecast at 2.4% and 2020 at 2.5%.
“This modest increase in global growth marks the end of the slowdown
that started in 2018 and took a heavy toll on global activity, trade and
investment, especially last year,” said Ayhan Kose, the World Bank’s lead
economic forecaster. “We do expect an improvement, but overall, we also see a
weaker growth outlook.”
The latest World
Bank forecasts take into account the so-called Phase 1 trade deal announced by
the United States and China, which suspended new U.S. tariffs on Chinese
consumer goods scheduled for Dec. 15 and reduced the tariff rate on some other
goods.
More
Finally, did Twitter stop a war? Unlikely despite the
spin, but it didn’t make anything worse. Was Iran trying not to hit anything? Possibly,
but unlikely and probably not. Still Iran will have gained tremendous useful
feedback to improve their future missiles.
01.08.2020 11:56
AM
Did Twitter Help Stop War With Iran?
Tweets from US president Donald Trump and Iranian
foreign minister Javad Zarif Tuesday offered a fascinating glimpse at how world
leaders can communicate more quickly and directly than ever in times of crisis.
For all the Sturm und Drang about the toxic culture of Twitter, it seems possible that the leaders of both Iran and the United States turned to the social media site Tuesday to help ensure that a tense night in the Middle East didn’t escalate into all-out war.
After a week when Twitter seemed to bring out the worst impulses of President Donald Trump’s bombast—including an ill-conceived (and potentially illegal) threat over the weekend to bomb Iranian cultural sites—both Trump and Iran’s English-speaking foreign minister tweeted out Tuesday night that neither wished to escalate tit-for-tat attacks into a true war. Their exchange, what Middle East expert Ilan Goldenberg called “real time deescalatory twitter,” came in the hours after Iranian rockets targeted Iraqi bases that housed US and allied personnel, apparent retaliation for the US assassination of Iran’s Quds Force leader, General Qasem Soleimani, in a Baghdad airstrike.
The tweets proved a remarkable modern-day answer to the long-running challenge world leaders have faced in struggling to communicate between nations during unfolding crises—communications necessary both to understand adversaries’ intentions and to telegraph their own.
At the height of the Cuban Missile Crisis, leaders sweated as communications moved slowly—ever so slowly—between Washington and Moscow. It took the US Embassy in Moscow nearly 12 hours to encode one 2,750-word message from the Soviet Union, the equivalent of about five typed pages.
In turn, whenever the Soviet Embassy in Washington needed to send a message back to Moscow, they relied on a bicycle messenger from the local DC office of Western Union. “After he pedaled away with my urgent cable, we at the embassy could only pray that he would take it to the Western Union office without delay and not stop to chat on the way with some girl,” Ambassador Anatoly Dobrydin recalled years later in his memoirs.
When Soviet leader Nikita Khrushchev finally offered a deal to bring the crisis to a close, he was deeply worried about the speed of unfolding events. Instead of transmitting through normal channels, he had the letter read out loud over Radio Moscow to speed Washington’s receipt.
More
Top cleric urges supporters not to attack US as Donald Trump says regime has backed down
8 January 2020 •
10:54pm
A senior Iraqi cleric has urged supporters not to attack the United
States, shortly after Donald Trump said Iran appeared to be backing down from
its bellicose threats.
"I call on the Iraqi factions to be deliberate, patient, and not to
start military actions, and to shut down the extremist voices of some rogue
elements until all political, parliamentary and international methods have been
exhausted," said influential Iraqi Shi'ite cleric Moqtada al-Sadr.
It came after Donald Trump urged Britain and others to "recognise
reality" and withdraw from the Iran nuclear deal in response to an Iranian
missile strike on US forces in Iraq earlier on Wednesday.
The US president said Iran appeared to be backing down after it fired
the 22 missiles, but announced fresh sanctions on Iran and he singled out the
United Kingdom as one of the members of the ailing nuclear deal, urging Boris
Johnson to follow America's lead and withdraw from the pact. Mr Trump
pulled out of the nuclear deal in 2018.
----It came as US officials speculated that Iran
'aimed to miss' when it fired missiles at US forces, it emerged there were
no casualties in the rocket barrage.
According to Bloomberg, a US official said that no Americans were killed
in the strike, leading the Pentagon to believe that the Iranian regime was
"aiming to miss."
However, experts said the type of missile Iran used was notoriously
unreliable, and that the regime may well have missed targets by accident.
----The rockets from Iran struck US targets last night, hitting two Iraqi airbases where American and coalition forces are based.
Iran launched surface-to-surface missiles in attacks on the Ain al-Assad and Erbil bases as revenge for the killing of Gen Qassim Soleimani and Abu Mahdi al-Muhandis in Baghdad last week.
There are so far no reports of casualties, but it was Iran's most direct assault on America since the 1979 seizing of the US Embassy in Tehran. The operation was codenamed "Martyr Soleimani".
More
Satellite photos show damage to air base in Iraq hit by Iranian missiles
January 8, 2020
/ 9:17 PM / Updated 2 hours ago
(Reuters) - Iranian missiles damaged or destroyed seven
buildings in the part of Ain al-Asad air base in Iraq that houses U.S. military
personnel, satellite photographs appear to show. Two images provided by commercial satellite company Planet Labs Inc., and reviewed by Reuters, show five missile impact points in that part of the base. tmsnrt.rs/39PJrzZ
The extent of the damage can be gauged by comparing the photographs, taken after Wednesday’s attack, with images from Dec. 25 last year.
At least three of the structures appear to be aircraft maintenance hangers. Some of the buildings or structures have completely disappeared. Only parts of the others remain.
“They targeted the American portion of the base. They meant to hit it and they did hit it,” said Jeffrey Lewis of the Middlebury Institute of International Studies in Monterey, California.
More
Republican senator calls White House’s Iran briefing ‘insulting and demeaning’
By
Mike
Murphy Published: Jan 8, 2020 6:50
p.m. ET
The
Trump administration briefed lawmakers on Capitol Hill on Wednesday on the
justifications for launching an airstrike that killed one of Iran’s top
generals, Qassem Soleimani, last week. But many legislators came away
unsatisfied.
Sen. Mike Lee, a Utah Republican , told reporters Wednesday that the classified briefing was “insulting and demeaning,” so bad in fact, that he would now vote for a Democratic plan to limit President Donald Trump’s war powers against Iran. “That briefing changed my mind,” he said.
House Speaker Nancy Pelosi said the House will vote Thursday on a measure to rein in Trump’s ability to launch military attacks against Iran. Sen. Tim Kaine, D-Va., is introducing a similar measure in the Senate.
Trump administration officials apparently warned lawmakers against debating Trump’s war powers, and said that doing so would embolden Iran.
“It is not acceptable for officials within the executive branch of government ... to come in and tell us that we can’t debate and discuss the appropriateness of military intervention against Iran. It’s un-American, it’s unconstitutional, and it’s wrong,” Lee said. “I find that absolutely insane. I think that’s unacceptable.”
Fellow Republican Sen. Rand Paul of Kentucky agreed, dismissing the
Trump administration’s attempt to use the 2002 war authorization against Iraq
to justify the airstrike, which raised fears of a new war in the Middle East.
Paul called that argument “absurd.”
“Let’s have the debate, and let’s have some senators stand up,” Paul
said. “We are not abdicating our duty.”
They were joined by skeptical Democratic lawmakers.
---- Sen. Chris Murphy, D-Conn., tweeted: “The bottom line is this: I did not hear evidence of a specific imminent threat that would allow an attack without congressional authorization. With consequences as serious as these, that is unacceptable. Congress needs to act.”
Most Republicans, however, appeared satisfied with the administration’s case.
More
“You are a slow learner, Winston."
"How can I help it? How can I help but see what is in front of my eyes? Two and two are four."
"Sometimes, Winston. Sometimes they are five. Sometimes they are three. Sometimes they are all of them at once. You must try harder.
"How can I help it? How can I help but see what is in front of my eyes? Two and two are four."
"Sometimes, Winston. Sometimes they are five. Sometimes they are three. Sometimes they are all of them at once. You must try harder.
George Orwell 1984.
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today, another warning from the outgoing, anti-Brexit, climate-crisis, Governor
of the Bank of England.
Carney warns that central banks may struggle to fend off deep economic downturn
Published January 7, 2020
Bank of England Governor Mark Carney said central banks might not be
able to fight off a sharp economic downturn because their monetary policy
arsenals are still depleted from the global financial crisis a decade ago, the
Financial Times reported. “It’s generally true that there’s much less
ammunition for all the major central banks than they previously had and I’m of
the opinion that this situation will persist for some time,” Carney told the
newspaper in an interview published on Tuesday.
“If there were to be a deeper downturn, (that requires) more stimulus
than a conventional recession, then it’s not clear that monetary policy would
have sufficient space.”
The BoE has raised interest rates to just 0.75 per cent, a fraction
above their emergency financial crisis levels. The U.S. Federal Reserve, which
unlike most other central banks raised borrowing costs in recent years, cut
them three times in 2019.
Carney has previously raised concerns about the risk of a global
liquidity trap, in which central banks lose their ability to influence the
economy because demand is too weak.
The FT quoted Carney as saying the BoE was looking into the issue of its
reduced monetary policy options.
However, U.S. and euro zone interest rate cuts last year were
encouraging borrowing and spending and “we’re starting to see that stimulus
flow to the global economy,” he told the newspaper.
Carney repeated his suggestion that governments could do more to boost
growth via their spending and tax policies.
He also reiterated his view that Britain should not agree to accept
European Union rules for the financial services sector after Brexit, given the
scale of the country’s banking and finance industry.
For a deeper perspective on what he might have on his
mind, I thoroughly recommend reading the following blog. Frightening!
The Stealth Nationalization of America's Banks....
Before we get into the end game of today's
post, let's take a look at where we are. Jim Bianco @BiancoResearch produces some
very nice, compact work. The chart below describes that the US
Banking/Financial System, to date, since the middle of September, has
surprisingly required $350 Billion more Repo/Liquidity than it did just a few
months ago. Jim is also forecasting that during the peak of "Window
Dressing Season" the US Financial system will need roughly a half-Trillion
dollars more than it did just three short months ago.
Abstract of Today's Post
Thesis, to be tested over time:
Given:
1. USD
Liquidity is leaving the US Banking system at a much greater, accelerating rate
than the FED understands or will be able to effectively backstop.
2. The
"Four Horsemen of the Apocalypse" (JPM, C, WFC, BAC) have been
operating on a "zero cash" basis throughout 2019. We must
analyze them as one, quasi-criminal, State-Owned-Enterprise (SOE), operating
with impunity, fully supported by FED Too Big To Fail policy.
3. Per
the BIS, US Dollar off-shore deposits (outside the US Banking system) are
greater than $15 Trillion now.
4. Bank
Deposits within the US Banking System controlled by foreign entities are now
more than $5 Trillion.
5. Of
the $30.1 Trillion USD Bank Deposits/Liabilities in existence, currently only
$9.6 Trillion (32%) are available to the US Domestic Economy. The
remaining 68% are controlled by foreign, anonymous entities/ShellCos/Investors.
Based on the current need for emergency cash, we must assume foreign demand for
off-shore US Dollars is accelerating.
6. Off-Balance
Sheet Assets (Swaps/Forwards) creation is accelerating as well. Per most
recent BIS data USD FOREX Contracts have increased 16% to $87 Trillion and US
Dollar Interest Rate Contracts have increased 28% to $199 Trillion in the last
year and a half.
7. In
aggregate, we estimate that the Chinese Communist Party currently controls more
than $30 Trillion in Western Financial Assets scattered around the globe
outside of mainland China.
8. Choke
point #1 DTCC/FICC, a relatively tiny, non-descript, industry-sponsored
business, dedicated to supporting bank and hedge fund day trading, is expected
to clear (and front-run) $2.2 Quadrillion in transactions in 2019, nearly
double what they had done five years ago, prior to making their services
available to "sponsored" i.e.) Chinese Communist Institutional
Day-trading.
9. Choke
Point #2 - Citadel Securities LLC - Just one example (there are many) of a
DTCC/FICC sponsored trading/market-making entity with skyrocketing volume, of
unknown origin, presumably provided by Chinese Communist "boomerang
dollars" and capital markets.
10. Choke
Point #3 - I've long opined that US Regulatory bodies are being infiltrated and
run by folks who are at best, sympathetic to the whims of, controlled by and
beholding to, foreign financial interests, and at worst, dedicated to the cause
of "globalization at any cost" as long as they are handsomely compensated.
Let's talk about Jay, Mitch, Ben, Peng, Steve, Ray, Dorothy and a likely cast
of thousands.
11. This
post closes with a discussion of a 2017 "Bubble" article by Neel
Kashkari and how our current data driven Fed Policy/Philosophy is woefully ineffective
when dealing with a home invasion.
Thesis: The US Dollar has been weaponized by foreign interests. FED Policy today is the greatest strategic financial mistake in history and will result in the eventual collapse of the US Dollar, Banking System and Western Democracy. We must not continue on this accommodative path. We must immediately develop and deploy targeted, effective capital controls to prevent the Chinese Communist Party from cornering the market on US Dollars, destroying the US Financial System and accomplishing the greatest "Pump & Dump" of financial assets in history.
More, much, much more!
“Orthodoxy means not thinking–not needing
to think. Orthodoxy is unconsciousness.”
George Orwell 1984.
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?
Largest US Solar Power Plant Will Be Built On Public Land. Is That A Problem?
The
Los Angeles Times
reports that the Bureau of Land Management, which is in charge of all federal
lands, has signed off on a plan to build the largest solar power plant in the
US — 690 megawatts covering 7,100 acres along Interstate 15, about 30 miles
northeast of Las Vegas, Nevada. There are two other large solar farms already
operating in the area. All that remains before the project moves ahead is a
final 90-day public comment period. It is expected that the Gemini solar farm
will be fully operational in December of 2023.
The $1 billion Gemini project is being developed by Quinbrook
Infrastructure Partners and Arevia Power, and will include large scale
storage batteries, although few specs about the storage component of the
project have been released at this point. It will supply power to NV Energy,
Nevada’s largest public utility. NV Energy has signed a 25-year power purchase
agreement with the developers and has agreed to pay $38.44 per megawatt-hour
for electricity during that period.David Scaysbrook, co-founder and managing partner of Quinbrook, says, “Gemini plans to showcase at scale what we believe to be one of the most promising technological advances in renewable power. The project will demonstrate the ability to couple solar PV technology with battery storage to capture and use Nevada’s abundant renewable solar resource to deliver low cost power to NV Energy’s customers and keep the lights on long after the sun has set.”
The addition of Gemini and two other solar plus storage projects “allows us to extend the benefits of renewable energy to times when the sun is not shining,” Doug Cannon, NV Energy’s president and chief executive, said in December. “Today’s decision brings the environmental and price benefits of low-cost solar energy to our customers. We are proud to be delivering a renewable energy vision to our customers that also supports Nevada’s economic and sustainability goals.”
Recently, Nevada enacted legislation requiring utilities operating within the state to obtain 50% of their electricity from renewable sources by 2030 and 100% by 2050. NV Energy derived 24% of its electricity from renewables in 2018.
----Environmentalists are upset that the Gemini project could endanger hundreds of desert tortoises, a species that is fighting back from near extinction. Defenders of Wildlife, the National Parks Conservation Association, and the Sierra Club sent comment letters to the Bureau of Land Management decrying the danger to the animals.
“There is no justification for this project that outweighs the
importance of the desert tortoise, its habitat and BLM’s obligations to use its
full authority to take actions that will contribute to the recovery of this
threatened species,” Jeff Aardahl, a biologist with Defenders of Wildlife,
wrote in September. The environmental groups would prefer to see rooftop solar
systems spread across Las Vegas and solar power plants on degraded lands
instead of the Nevada desert.
The conflict between renewable energy and endangered species is a thorny
one. Renewable energy advocates must always be sensitive to the needs of the
environment instead of running roughshod over the land the way fossil fuel and
pipeline companies have always done. We need to be better than the forces of
darkness embodied by Koch Industries and the rest of the fossil fuel
cabal.
More
“Doublethink
means the power of holding two contradictory beliefs in one’s mind
simultaneously, and accepting both of them.”
George Orwell 1984.
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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