Saturday, 11 January 2020

Weekend Update 11/01/2020 A Dodged Bullet, But Not By All.


Baltic Dry Index. 774 +02  Brent Crude 64.98 Spot Gold 1562

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 the traitors saw that Stephen was a good-humoured, kindly, and easy-going man who inflicted no punishment, then they committed all manner of horrible crimes…For every great man built him castles and held them against the king; and they filled the whole land with these castles. They sorely burdened the unhappy people of the country with forced labour on the castles; and when the castles were built, they filled them up with devils and wicked men. By night and by day they seized those whom they believed to have any wealth, whether they were men or women; and in order to get their gold and silver, they put them into prison and tortured them with unspeakable tortures.
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  • The Laud (Peterborough) Anglo-Saxon Chronicle, annal for 1137.
An assassination, a near new Middle East war narrowly missed, a passenger plane shot down killing all on board, but little reaction from stock and commodity markets, nor from western governments, or populations, jaded by all the never ending, fiat currency funded wars.

Below, what happened in the week just past.

Stocks close lower after Dow briefly tops 29,000 milestone for first time

By Chris Matthews and Clive McKeef  Published: Jan 10, 2020 4:29 p.m. ET
Stocks ended lower Friday, after the Dow briefly topped the 29,000 milestone, with investor euphoria over recent record highs deflated by data showing slower-than-expected U.S. jobs and wage growth in December.

The Dow Jones Industrial Average DJIA, -0.46% lost 133.13 points, or 0.5%, to end at 28,823.77, while the S&P 500 index SPX, -0.29% fell 9.35 points, or 0.3%, to close at 3,265.35. The Nasdaq Composite Index SPX, -0.29% closed down 24.57 points, or 0.3%, at 9,178.86.

All three major benchmarks indexes set new intraday highs Friday and the main indexes all posted gains for the week despite Friday’s weak close. The Dow saw a 0.7% weekly advance, while the S&P 500 rose 0.9% and the Nasdaq gained 1.8%.

On Thursday, the Dow gained 211.81 points, or 0.7%, to close at 28,956.90, while the S&P 500 index rose 21.65 points, or 0.7%, to 3,274.70. The Nasdaq Composite Index added 74.18 points to finish at 9,203.43, a gain of 0.8%.

Read: Dow industrials touches 29,000 intraday after Friday’s jobs report

The U.S. Labor Department said the U.S. economy added 145,000 new jobs in December, below the 165,000 expected by economists and less than the 266,000 gain in the prior month The unemployment rate, meanwhile, held near a 50-year low at 3.5%.

“While disappointing on the headline, today’s payroll miss is unlikely to change the outlook for the U.S. economy as the results are consistent with economic output chugging along at trend pace,” said Charlie Ripley, senior investment strategist for Allianz Investment Management. “Overall, today’s report is a precursor to what we can expect in 2020, an economy extending the current expansion at a moderate pace.”

However, growth in average hourly earnings came in below expectations, rising 0.1% from December, versus a 0.3% expected by economists. Revisions to prior months’ estimates were also negative, with October gains revised down from 156,000 jobs to 152,000 jobs and the November increase from 266,000 to 256,000.

---- Investors were also digesting an announcement by the Trump administration of fresh economic sanctions on Iran, following an attack on U.S. military facilities in Iraq that was in retaliation for the killing of a top Iranian general by U.S. forces last week. The sanctions target eight “senior Iranian regime officials” as well as the nation’s steel, aluminum, copper and iron industries, according to the Treasury Department.

Meanwhile, a Chinese delegation is expected to arrive in Washington on Monday to complete a phase-one trade agreement with the U.S., which has arguably been the most influential driver of stock moves for more than a year. President Donald Trump said he wants a partial trade deal signed by Jan. 15 or shortly thereafter.
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Economy in a Nutshell: Manufacturing in Recession. Services Booming.

Sometimes, the monthly employment numbers seem to come out of left field, and don’t really align with all the other evidence about how the economy is evolving. December is not one of those months.

To the contrary, pretty much everything in the latest numbers released Friday fits the broader story. It’s a mostly benign picture, though not without some challenges.

Job creation was steady, with employers adding 145,000 jobs in December. It’s a far cry from the revised 256,000 jobs added in November. But the lower number is more consistent with recent growth in G.D.P. and an economy that appears closer to full employment than it has in two decades.

Employers have added an average of 184,000 jobs a month over the last three months. If sustained over 2020, the pace would be about the same as in 2016 and 2017 — not an acceleration from recent trends but also perfectly fine.

There is a more complex story in the composition of those jobs, though.

The manufacturing recession underway shows up in the employment numbers: The nation’s factories shed 12,000 jobs in December, with the steepest loss in the making of fabricated metal products. A further 8,000 jobs were lost in the mining sector, reflecting a slump in spending on energy exploration. Transportation and warehousing employment fell by 10,400, another potential knock-on effect of the manufacturing slump.

This story is not too complicated: The sectors that bear the brunt of the global economic slowdown and the trade wars are cutting jobs, or at least they were in December.

Last week’s report from the Institute of Supply Management adds some color. Its manufacturing index fell sharply in December, the fastest rate of contraction since June 2009, when the economy was struggling to emerge from a deep recession.

A respondent in the report said: “Anticipated large export orders did not materialize” in the fabricated metal industry. “As a result, U.S. production has decreased.”
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In other news, the Obama lifestyle beckons for the Sussexes. If all else fails, top greeters at some of the Vegas hotels?

‘She found out she would be a civil servant in a tiara.’ How #Megxit will make Meghan and Harry rich beyond their wildest dreams

By Quentin Fottrell  Published: Jan 10, 2020 9:17 p.m. ET
It’s been said that behind every great man is a great woman. In Prince Harry’s case, it’s three wealthy and media-savvy women. 

The Sussexes announced Wednesday they will “step back” from royal life, “work to become financially independent” and split their time between the U.K. and North America. Free from the ribbon-cutting duties of royal life, Prince Harry and Meghan Markle are on the brink of becoming a new kind of global-media power couple. Their Instagram FB, -0.11% account already has 10.5 million followers, adding 300,000 followers in less than a week.

Prince Harry receives an income from his father Prince Charles, and he is expected to hash out with his father exactly how long that income will last. Prince Harry, who is already worth several million dollars, owes his fortune to three famous women: his mother, the late Princess Diana; his grandmother, Queen Elizabeth II, and his wife, Meghan Markle, an American-born self-made former actress.

Markle flew back to Canada Thursday to be with her son Archie. Prince Harry has stayed behind for crisis talks with Prince Charles, and grandmother, Queen Elizabeth. Multiple newspapers, including the Daily Telegraph in the U.K., have reported that the queen was “disappointed” with the surprise announcement, and had asked the Sussexes to hold off on issuing a statement.

Questions linger over whether they will qualify for armed security if they live in Canada, a member of the British Commonwealth, and/or the U.S. Markle has lived in Toronto, where she still has a home, and Los Angeles. Whether they keep their HRH titles is also not a given, especially given that royal titles would certainly burnish their own personal brands and commercial appeal.

Prince Harry is friends with former U.S. president Barack Obama, and will consider adopting the Obamas’ post-White House career model, some royal observers say. Barack and Michelle Obama reportedly signed an eight-figure deal with Netflix NFLX, -1.97%  to produce high-brow historical, biographical and social-justice programming with their company, Higher Ground Productions.

Don’t miss: ‘Real Housewives’ TV mogul on Meghan and Harry’s bid for financial freedom: ‘They’re a branding machine’

Netflix would give the Sussexes a platform of 158 million paid subscribers and certainly be a coup for the streaming service, which won critical praise for its series, “The Crown,” chronicling the life of Queen Elizabeth. (Netflix was not immediately available for comment.) Oprah Winfrey is another powerful friend of the couple and attended their May 2018 wedding.

The media mogul felt moved to speak this week in response to reports that she had been helping the royal couple navigate and negotiate their #Megxit, as the royal scandal has been described in the U.K. press. “Meg and Harry do not need my help figuring out what is best for them,” Oprah said in a statement, according to The New York Post.

Ashley Pearson, an American-born writer based in London who has been a royal commentator for two decades, said their powerful political and media connections will serve them well. She sees them leveraging their circle of boldfaced names: “Their kind of lifestyle costs a fortune. However, one of the reasons they broke off from the royals is, in part, because they want to build their own brand.”

Pearson alleges that Markle is behind their strategy to strike out on their own. “She would rather be a celebrity than a royal,” Pearson said. “She had no idea how un-glamorous it really is to be a royal and, when she found out she would be a civil servant in a tiara she was, like, ‘No way.’” The couple unveiled a sleek, new website, which is not so different from the pitch and tone of Obama.org.
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Finally, Trump v virtually the entire Middle East excluding Israel? How assassinating an Iranian general in a third country, led to the killing of 176 innocent passengers on a Ukrainian Boeing jet. And apparently nobody cares. Everywhere else it’s just business as usual.  I suspect that soon we will all be made to care.

Iran says its forces shot down passenger plane due to human error

January 11, 2020 / 4:32 AM
DUBAI (Reuters) - Iran said on Saturday it unintentionally shot down a Ukrainian passenger plane killing 176 people on board due to human error, after initially denying it brought down the plane in the tense aftermath of Iranian missile strikes on U.S. targets in Iraq.

Wednesday’s crash heightened international pressure on Iran after months of friction with the United States and tit-for-tat military strikes. Washington killed an Iranian general last week in Iraq, prompting Tehran to fire at U.S. targets.

The United States and Canada, which had 57 citizens on board, had blamed an Iranian action for bringing down the aircraft. Ottawa had told Iran that “the world is watching.”

On Twitter, Iranian Foreign Minister Mohammad Javad Zarif said the armed forces investigation showed the downing of the Boeing 737-800 was the result of “human error at time of crisis caused by U.S. adventurism (that) led to disaster.”

An Iranian military statement, announcing that a missile had struck the plane and expressing condolences to the victims, said the plane had flown close to a sensitive military site belonging to the elite Revolutionary Guards.

It said responsible parties would be referred to a judicial department within the military and held accountable.

Mobile phone footage posted and circulated by ordinary Iranians on Twitter after the crash has indicated that it came down in a ball of flames.

Iran had said on Thursday it would download the information from voice and flight data recorders, known as black boxes, to determine what had happened, although it had said that the process could take one to two months.

Tehran said it could ask Russia, Canada, France or Ukraine for help in an effort that it said could take one or two years.
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Iraqi PM tells U.S. prepare a troop withdrawal plan

By Associated Press  Published: Jan 10, 2020 9:53 a.m. ET
BAGHDAD (AP) — Iraq’s caretaker prime minister asked Washington to start working out a road map for an American troop withdrawal, his office said Friday, signaling his insistence on ending the U.S. military presence despite recent moves to de-escalate tensions between Iran and the U.S.

The request came in a telephone call Thursday night between Secretary of State Mike Pompeo and Prime Minister Adel Abdul-Mahdi, a statement from his office said. He also told Pompeo that recent U.S. strikes in Iraq were an unacceptable breach of Iraqi sovereignty and a violation of the two countries’ security agreements.

He asked Pompeo to “send delegates to Iraq to prepare a mechanism to carry out the parliament’s resolution regarding the withdrawal of foreign troops from Iraq,” according to the statement.

“The prime minister said American forces had entered Iraq and drones are flying in its airspace 
without permission from Iraqi authorities, and this was a violation of the bilateral agreements,” the statement added.

Iraqi lawmakers passed a resolution Sunday to oust U.S. troops, following the Jan. 3 U.S. drone strike that killed top Iranian Gen. Qassem Soleimani and senior Iraqi militia commander Abu Mahdi al-Muhandis at Baghdad’s airport. The nonbinding vote put the responsibility on the government to formally request a withdrawal. Abdul-Mahdi, addressing lawmakers at the time, called for “urgent measures” to ensure the removal of the troops.

Speaking to Pompeo, Abdul-Mahdi stopped short of requesting an immediate withdrawal and appeared to give the U.S. time to draw up a strategy and timeline for departure. Still, the comments suggested he was standing by the push for the American forces to go despite recent signals toward de-escalation between Tehran and Washington after Iran retaliated for Soleimani’s death with a barrage of missiles that hit two Iraqi bases where U.S. troops are based but caused no casualties.

There are some 5,200 U.S. troops in Iraq assisting and providing training to Iraqi security counter-parts to fight the Islamic State group. An American pullout could deeply set back efforts to crush remnants of the group amid concerns of a resurgence amid the political turmoil.

The State Department acknowledged that Pompeo had called Abdul-Mahdi but made no mention of U.S. troops in a readout of the call released late Thursday.

Spokesperson Morgan Ortagus said Pompeo reiterated the U.S. condemnation of the Iranian missile strikes on the two bases and underscored that President Donald Trump “has said the United States will do whatever it takes to protect the American and Iraqi people and defend our collective interests.”

Top American military officials including Gen. Mark Milley, chairman of the Joint Chiefs of Staff, and Defense Secretary Mark Esper, have said there were no plans for the U.S. to withdraw.

The push to remove the U.S. forces comes amid widespread Iraqi anger over being caught in the middle of fighting between Baghdad’s two closest allies. Abdul-Mahdi has said he rejects all violations of Iraqi sovereignty, including both the Iranian and U.S. strikes.
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Washington turns down Iraqi call to remove troops

January 9, 2020 / 7:29 AM
BAGHDAD/WASHINGTON (Reuters) - Washington on Friday spurned an Iraqi request to prepare to pull out its troops, amid heightened U.S.-Iranian tensions after the U.S. killing of an Iranian commander in Baghdad, and said it was exploring a possible expansion of NATO’s presence there.

Seeking to tighten pressure on its foe, the United States meanwhile imposed more sanctions on Iran, responding to an attack on U.S. troops in Iraq launched by Tehran in retaliation for the death of General Qassem Soleimani. 

Iraq could bear the brunt of any further violence between its neighbour Iran and the United States, its leaders caught in a bind as Washington and Tehran are also the Iraqi government’s main allies and vie for influence there.

President Donald Trump said Iran had probably planned to attack the U.S. embassy in Baghdad and was aiming to strike four U.S. embassies when Soleimani was killed in a U.S. drone strike.

“We will tell you probably it was going to be the embassy in Baghdad,” Trump said in a clip of an interview with Fox News. “I can reveal that I believe it would have been four embassies.”

Iraqi Prime Minister Adel Abdul Mahdi made his request for preparations for a U.S. troop withdrawal in a phone call with U.S. Secretary of State Mike Pompeo on Thursday in line with a vote in Iraq’s parliament last week, his office said.

Abdul Mahdi asked Pompeo to “send delegates to put in place the tools to carry out the parliament’s decision,” his office said in a statement, adding that the forces used in the killing had entered Iraq or used its airspace without permission.

The State Department said any U.S. delegation would not discuss the withdrawal of U.S. troops as their presence in Iraq was “appropriate.”

“There does, however, need to be a conversation between the U.S. and Iraqi governments not just regarding security, but about our financial, economic, and diplomatic partnership,” spokeswoman Morgan Ortagus said in a statement.

Trump said in the Fox News interview that if Iraq wanted the United States to leave, he would tell them: “You have to pay us for the money we put in.”

He said the United States has $35 billion of Iraq’s money “sitting in an account.”

“I think they’ll agree to pay. Otherwise we’ll stay there,” Trump said.
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01.08.2020 04:34 PM

How the US Knew Iranian Missiles Were Coming Before They Hit

The US has operated an extensive network of missile warning systems for over half a century, but next-generation missiles will put it to the test.

On Tuesday, Iran launched more than a dozen missiles targeting two Iraqi military bases housing American soldiers. The attack was retaliation for the US drone strike that killed Qasem Soleimani, a top-ranking Iranian military general. In a televised speech on Wednesday, President Donald Trump said “minimal damage was sustained” during the attack and that no American or Iraqi lives were lost. 

Considering that Iran has developed missiles that are accurate to within a few tens of meters, it’s remarkable that all personnel at the base emerged unscathed.

According to Trump, this had nothing to do with luck or bad aim. Instead, he attributed it to “an early warning system that worked very well.” The US has a vast network of radars and satellites dedicated to tracking missile launches around the globe, which allowed troops stationed at the Iraqi bases to take cover before the missiles struck their targets. The system worked as intended, but as the missile technology of America’s adversaries continues to improve, some experts wonder if the country’s first line of defense will be able to keep up.

America’s missile warning system harkens back to the early days of the Cold War, when the threat of a Soviet nuclear attack kept the world on edge. By the early 1960s, the US had a network of a dozen ground-based radars concentrated around the Arctic and several infrared satellites capable of detecting the launches of Russian intercontinental ballistic missiles that could deliver a nuclear warhead to the US mainland. The ground-based radars would constantly send pulses of high-frequency radio waves toward the horizon; if a missile was launched, the radio waves would be reflected off the missile back to the radar antenna, while the satellites would search for heat signatures from the missiles.

Although the fundamental methods for detecting a missile launch haven’t changed all that much in the past 50 years, today’s missile warning systems are vastly more accurate and responsive. One of the biggest improvements in early warning technology has been seen in space systems, which keep a constant watch for missile launches across the entire globe. At present, the US has four missile-tracking infrared satellites in geosynchronous orbits—meaning they never change position relative to the surface of the Earth—and two additional infrared missile detection systems likely hosted on classified National Reconnaissance Office satellites. In the case of the Iranian attack, it was almost certainly one of these satellites that gave the military a heads-up that missiles were on their way.

---- Once a satellite detects a possible missile launch, it triggers an alert at the Missile Warning Center, run by the US Space Command out of the Cheyenne Mountain Air Force Station in Colorado. 

There, military analysts work to confirm that the detection is legit and process the trajectory of the missile to determine where it will strike. With this information in hand, Space Command can determine whether a missile intercept is possible or necessary. How long the whole process takes, from detection to direction, depends on the launch location and target. In the case of the Iranian attack, US officials say troops had hours of advance warning of an impending attack from communication and signals intelligence, but the warning after the missile launch was likely only a few minutes. No attempt was made to intercept the missile; instead, troops at the targeted bases were ordered to disperse.
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This weekend’s musical diversion. The mostly nowadays unheard of Evaristo Felice Dall'Abaco.

E. F. Dall'Abaco: Op. 5 n. 2 - Concerto grosso à più istrumenti / Il Tempio Armonico

Evaristo Felice Dall'Abaco
  • And men said openly that Christ and His saints slept.
  • The Laud (Peterborough) Chronicle, annal for 1137.

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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