Steve Bull's Blog, page 1243
November 30, 2017
Stock Market Lazes Happily on a Powerful Time Bomb, and the Fed Begins to Worry
Pointing at “excesses,” “distortions,” and “imbalances.”
Margin debt in the stock market hit another record, $561 billion at the end of October, up 16% from a year ago, the New York Stock Exchange reported on Tuesday. Margin debt and the stock market move together. And even on an inflation-adjusted basis, the surge has been breath-taking.
This chart shows margin debt (red line, left scale) and the S&P 500 (blue line, right scale), both adjusted for inflation to tune out the effects of the dwindling value of the dollar over the decades (chart by Advisor Perspectives):
Stock market leverage is the big accelerator on the way up. Leverage supplies liquidity that has been freshly created by the lender. This isn’t money moving from one asset to another. This is money that is being created to be plowed into stocks. And when stocks sink, leverage becomes the big accelerator on the way down. When stocks are dumped to pay down margin debt, the money from those stock sales doesn’t go into another asset and doesn’t sit around as cash ready to be deployed and it doesn’t go into gold bars either. It just disappears.
Even the Fed is now worried about margin debt and a slew of other factors not related to consumer price inflation but to assets, asset prices, and debt.
The latest was Dallas Fed President Robert Kaplan on Monday who, in discussing financial and economic imbalances, specifically addressed the “record-high levels” of margin debt.
His premise is that “there are costs to accommodation in the form of distortions and imbalances,” and when “excesses ultimately need to be unwound, this can result in a sudden downward shift in demand for investment and consumer-related durable goods.” Kaplan:
…click on the above link to read the rest of the article…
Has Trump Made It Easier to Spy on Journalists? Lawsuit Demands Answers.
Photo: Brendan Smialowski/AFP/Getty Images
HAS TRUMP MADE IT EASIER TO SPY ON JOURNALISTS? LAWSUIT DEMANDS ANSWERS.
PRESS FREEDOM GROUPS filed suit today to force the government to disclose more about how and when it obtains journalists’ communications, amid reports that the Department of Justice under Attorney General Jeff Sessions is pursuing a record number of leak investigations.
The question the groups hope to answer is whether the Trump administration — openly hostile toward news media — has jettisoned or modified rules that limit the government’s ability to spy on journalists while they do their jobs.
Those rules were made more stringent by former President Barack Obama’s attorney general Eric Holder in 2014, after outcry when it was revealed that the administration had secretly obtained call records from the Associated Press and surveilled a Fox News reporter, naming him a co-conspirator in a national security leak case. Holder pledged that his department would go after journalists’ records in criminal cases only as a “last resort.”
Carrie DeCell, a staff attorney with Knight First Amendment Institute, which is bringing the suit along with the Freedom of the Press Foundation, said that “we have seen the DOJ media guidelines that Obama released, but we understand that Sessions is reconsidering those guidelines, and the way the government uses subpoenas against journalists.”
In August, Sessions announced that his department was reviewing the guidelines as part of a crackdown on leaks but did not specify what changes might be made. Sessions also told Congress this month that he has 27 investigations open into leaks of classified information to reporters – compared to just three last year. (Not all leaks are illegal, and many of the disclosures that Trump has publicly complained about would likely not be considered criminal.)
…click on the above link to read the rest of the article…
Sweden’s New Government Censorship
In the report, placing the word “refugees” in quotation marks, as well as “unaccompanied children,” is supposedly an expression of “hate”. (Many, if not most, migrants classified as “unaccompanied children” have turned out to be grown men).
Government agencies are going out of their way to protect the “integrity” of possible jihadists out of concern for a “democratic society” — the society that these jihadists want to subvert and destroy — and are using their government platform to smear non-mainstream media for matters as small as the use of quotation marks. What about the “integrity” of Swedish citizens and their right to not be blown up?
Why is a municipality sponsoring an organization that supports terrorists and even awarding it prizes? It appears that glorifying terrorism is acceptable in Sweden, so long as its victims are the Israeli children. Far from countering “hate”, Sweden appears to be doing all it can to strengthen Muslim extremism.
The Swedish government is now officially questioning free speech. A government agency has declared so-called Swedish “new media” — news outlets that refuse to subscribe to the politically correct orthodoxies of the mainstream media — a possible threat to democracy. In a government report, tellingly called “The White Hatred” written by Totalförsvarets forskningsinstitut (Total Defense Research Institute), a government agency under the Swedish Ministry of Defense, Swedish new media such as Samhällsnytt (formerly known as Avpixlat), Nyheter Idag and Nya Tider are lumped together with neo-Nazi media such as Nordfront.
“Hate” is defined broadly to include violent extremism, “hateful expressions”, jokes, internet trolling and even the use of certain quotation marks. For instance, in the report, placing the word “refugees” in quotation marks, as well as “unaccompanied children,” is supposedly an expression of “hate”. (Many, if not most, migrants classified as “unaccompanied children” have turned out to be grown men).
…click on the above link to read the rest of the article…
November 29, 2017
Water Saving Irrigation Practices
Saving water in the soil is without a doubt the easiest and most effective way to manage the water flowing through your land. If you need extra irrigation, however, the water stored up in your soil isn´t easy to access. For irrigation needs, you´ll want to use water that you store in cisterns or tanks. This water can be harvested either from the sky in the form of rain or through capturing water from a spring, river or another source of fresh water.
Irrigation, unfortunately, is one of the most wasteful practices in modern day agriculture. From traditional sprinkler systems to large-scale irrigation by airplane and helicopter, millions of gallons of water are lost each year by irrigating pieces of land where nothing is growing.
For a plant to grow properly, it obviously needs water. That water resource, especially when limited, should be focused on the root area. While sprinkler systems, to name just one example, indiscriminately spray water over entire fields of plants, drip irrigation systems can focus water directly to the root zone of the plant where water is needed.
Drip irrigation systems have been reported to use 80% less water than traditional irrigation practices. Furthermore, since these systems direct water only underneath the plant, fungal diseases caused by excess water accumulating on the leaves can also be avoided. We will briefly look at two easy to set up drip irrigation methods below.
BAMBOO DRIP IRRIGATION
If you have the money, you can purchase drip irrigation systems that include everything from primary lines to secondary lines to emitters. These complete sets are usually pretty reliable though costly, and if treated correctly will last for several years. If you want the easy approach to drip irrigation, you can search the web for any number of drip irrigation systems.
…click on the above link to read the rest of the article…
Non-OPEC Mid-size Oil Producers
This post covers recent C&C production and future prospects, with a bit on gas, for several mid-size non-OPEC producers. A few have been omitted (e.g. Canada, Kazakhstan, Egypt, UK) for no particular reasons other than lack of time or anything much to say, but may be covered in the future. Many of the countries here have held a bumpy plateau over the last twelve to eighteen months. For most this has come after a period of decline, and some are showing signs that decline might be starting again. Brazil has been on a plateau after a period of increase, and may be about to renew that growth. There is a general theme that oil discoveries and developments are drying up and most of the countries are looking more to gas, but with the current gas glut looking like it might end up worse than the 2014/15 oil glut that strategy may prove difficult in the near term.
Brazil
Brazil production peaked in March and has been on a plateau since (data below is through July, there should have been an August update but ANP aren’t very consistent in release dates). They have had several large FPSOs offline for maintenance (generally their FPSOs don’t have the best availability and they have had recent common mode failure issues with the high pressure gas risers, though I don’t know if this is a direct cause of the recent turnarounds). The Campos fields’ average water cut seems to be accelerating, which might also be contributing to a plateau rather than allowing a new peak.
…click on the above link to read the rest of the article…
The International Road to Serfdom
The International Road to Serfdom
When a global governing body is the ultimate authority, rather than multiple sovereign nations serving as checks and balances to each other the opportunity for abuse is ripe.
In the previous chapter of The Road to Serfdom, F.A. Hayek spelled out his concerns for the problems facing America in the aftermath of WWII. Moving away from discussing domestic policy, in chapter 15, “The Prospects of International Order” Hayek discusses the grave problems associated with global governance.
Making no effort to downplay the topic of foreign policy, Hayek says:
In no other field has the world yet paid so dearly for the abandonment of nineteenth-century liberalism as in the field where the retreat began: in international relations.”
Hayek has dedicated the majority of his book to explaining why planned economies on a national scale are bound to fail. You can understand his frustration then, when in the wake of World War II there was a bigger push for international governance.
Global Governance Is Not the Answer
As is understandable, there was an overwhelming desire to make sure the atrocities of WWII were never allowed to happen again. Since Germany’s nationalist sentiment had isolated it from the rest of the world prior to WWII, there was a sense that forced globalization would provide the necessary safeguard.
Hayek writes:
That there is little hope of international order or lasting peace so long as every country is free to employ whatever measures it thinks desirable in its own immediate interest, however damaging they may be to others, needs little emphasis now.”
It was easy, after all, for the Third Reich to take full control of the Germany’s economy when all outside influences were cut off.
…click on the above link to read the rest of the article…
Malaise Traps
Remembrance Day for Lost Species, held on the 30th November each year, is an occasion to honour and mourn the countless thousands of species driven to extinction by human activity. To mark this year’s theme – Lost & Disappearing Pollinators – author and beekeeper Helen Jukes writes of this year’s devastating news of insect decline, of the wonder of honeybee hives, and of the need to widen our vision by paying closer attention to small things.
Type honeybee into Google, and a drop-down menu appears with a list of suggested search terms. I add a ‘c’ and it throws up honeybee collection or collapse; add a ‘d’, and it’s declines or decorations for your home. I work my way through the alphabet; ‘l’ is unequivocal. Honeybee losses 2017, 2016, 2015, 2014.
Some days I can’t tell if honeybees are coming or going. In a sense, they’re everywhere – collecting on our shelves, decorating our homes. In the supermarket this week I passed bee-themed mugs, place mats, bath towels and lunchboxes – not to mention the honey (I LOVE bees, the girl at the checkout told me, when I told her I was a beekeeper. She showed me her bee earrings and a bee-shaped pendant. I really love them, she said, tucking the necklace back inside her shirt collar). And yet, elsewhere, out there, where the real bees live, we’re told there are losses and declines and last month I heard a new word, insectageddon.
That came from an article about a study in Germany, among the first of its kind. Between 1989 and 2016, 1,500 insect samples were collected across 63 sites – a total haul of over 50kg, and several million flying creatures. The results are disturbing: a 76% drop in numbers, over 27 years.
…click on the above link to read the rest of the article…
The Carbon Brief Interview: Dr Katharine Hayhoe
Dr Katharine Hayhoe is a professor in the department of political science at Texas Tech University and director of its Climate Science Center. She was a lead author on the Climate Science Special Report, part of the fourth US National Climate Assessment, which was published in early November 2017. Hayhoe is also a science advisor on the US documentary series Years of Living Dangerouslyand was named as one of Time magazine’s 100 Most Influential People in 2014.
Together with her husband, Hayhoe wrote A Climate for Change: Global Warming Facts for Faith-Based Decisions. She also writes and produces an animated series on YouTube called “Global Weirding”.
Hayhoe on her early research career: “I was looking around for an extra course that might be interesting and I saw a class on climate modelling over in the geography department.”
On regional climate information: “I evaluate the downscaling methods we use to take the relatively coarse information from the big global models and downscale it to much higher spatial and sometimes even high temporal resolution at the local to regional scale.”
On improving climate models: “The smaller the spatial grids and the smaller the time step we use in the model, the better we’re able to actually explicitly resolve the physical processes in the climate.”
On the biggest unknowns of future climate change:“There are long-term processes in the climate system that we’re not yet incorporating in our models and when we do, the final outcome of this inadvertent experiment that we’ve been conducting with our planet is likely to be worse, not better, than we thought.”
On Donald Trump’s presidency: “I know this sounds very strange – but I really believe that his election galvanised people into personal action in a way that never would have happened if Clinton had been elected.”
…click on the above link to read the rest of the article…
U.S. Oil Has One Fatal Weakness
U.S. crude oil production is again on the rise, and exports of American crude are smashing records.
But most of the U.S. oil production is light tight oil, and American exports—especially those of very light sweet crude—may hit a demand constraint next year, Bill Barnes, director of energy consultancy Pisgah Partners, writes in Petroleum Economist.
Oil production in the U.S. is currently expected to reach an all-time high at an average 9.9 million bpd next year. In recent weeks, U.S. crude oil exports beat records, and surpassed the 2-million-bpd mark for the first time ever in the week to October 27.
Last year, 51 percent of the 8.4 million bpd of crude oil produced in the Lower 48 States was light oil, or less dense oil with an API gravity of 40.1 or above, EIA data shows. The higher the API gravity, the lighter the oil. So far this year, much of the lower 48 states’ crude oil production had 30.1 or higher API gravity.
Due to the wide discount of the U.S. benchmark WTI to Brent in recent months, American exports have seen record-high levels.
Yet, according to Pisgah Partners’ Barnes, there are several demand and supply factors that may limit the buyers’ willingness to import extra light U.S. oil.
One is that Libya and Nigeria—the two members exempt from OPEC’s production cuts—have started to gradually recover their production that had been plagued by militant and civil strife last year. And they are exporting light sweet crude oil varieties to refiners.
Also, consumption of various oil products outside the U.S. “argue for processing middle-gravity crudes such as Arab Light, Iranian Light and Russian Urals, rather than extra-light barrels such as 48°API gravity Eagle Ford,” Barnes said.
…click on the above link to read the rest of the article…
Did Anyone Do Even a Minimal Check on the Sensationalist Bitcoin Electrical Consumption Story?
Check the context before uncritically accepting sensationalist conclusions.
Let’s start with a primer on how to write a sensationalist story that can be passed off as “journalism:”
1. Locate credible-sounding data that can be de-contextualized, i.e. sensationalized.
2. Present the data as “fact” rather than data that requires verification by disinterested researchers.
3. Exaggerate the data as much as possible and set the tone and context with emotionally laden words: “shocking,” etc.
4. Select a context that sensationalizes the conclusion.
Now let’s take a look at a story that has been swallowed whole, with little to no fact-checking or disinterested inquiry: bitcoin’s electrical consumption, i.e. the electricity consumed by mining/maintaining bitcoin’s blockchain.
One Bitcoin Transaction Now Uses as Much Energy as Your House in a Week
Let’s start by stipulating that energy consumption is a consequential matter worthy of serious inquiry. It’s important to measure the energy consumption of all the systems that operate within the current status quo, and compare the consumption levels of these systems.
With that in mind, let’s take a look at the story.
Right off the bat, the context we’re offered to grasp the enormity of bitcoin’s mining consumption is the electrical consumption of Nigeria, a nation, we’re breathlessly informed, with 186 million residents. Wow! That’s a crazy amount of electrical consumption, right?
Let’s do some very basic fact-checking before we accept sensationalist conclusions, shall we?
Nigeria consumes about 24 billion kWh annually, while the U.S. consumes 3,913 billion kWh annually.
So Nigeria uses 3/5th of 1% (0.6%) of the electricity the U.S. consumes.
…click on the above link to read the rest of the article…
