A Federal Judge Breyer ruled against Wyoming and in favor of Volkswagen (VW)(VLKAY) dismissing the claim that because of VW’s manipulation of diesel emissions, they caused environmental damage and should pay damages to the State in addition to individual car owners. Judge Breyer stated that despite the fact that VW was indeed responsible for manipulation. However, since these were carried out during the production of the diesel cars, the Congress had decided that the EPA, rather than the individual federal states, was in the best position to deal with damage regulations. VW had agreed with Wyoming and most other states in the controversy ...
Ok, so as tipped earlier in the live feed… … the PBoC set the yuan fix weaker-than-expected after the offshore yuan extended its record winning streak to 14 days on Monday. You’ll want to watch and see how this develops as the session progresses, but the thing about these fixes is that you need to understand them in the context of expectations. So although the reference rate was strengthened by 0.45% to 6.5370, that wasn’t as strong as the consensus from 17 traders and banks, who collectively guesstimated 6.5291. Hence the offshore yuan snapping its win streak (although again, that could change): As we’ve said repeatedly, with Chin...
EURUSD moved sideways above the support level at 1.1823. As long as this level holds, the fall from 1.2070 could be treated as consolidation of the short term uptrend from 1.1662, and further rise towards 1.2165 is still possible after the consolidation. On the downside, a breakdown below 1.1823 support will confirm that the uptrend had completed at 1.2070 already, then the pair would find next support at 1.1662....
Crude oil prices marked time on a quiet day made tame by the absence of top-tier news flow and Labor Day market closures in North America, as expected. The docket remains relatively tame as liquidity rebuilds, with nothing of unmistakable significance on tap until API inventory flow statistics cross the wires on Wednesday. That might make for continued consolidation in the near term. Gold prices managed to hold on to gains scored in the wake of North Korea’s nuclear weapon test – again, as was expected – but made no further progress. Fed-speak enters the spotlight tin the day ahead, with comments from the FOMC committee’s lea...
Asian stock indices are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off 0.06%, while the Hang Seng is down 0.19%. The Nikkei 225 is trading lower by 0.47%. US markets were shut overnight on account of Labor Day. Back home, share markets in India have opened the day on a flat note with positive bias. The BSE Sensex is trading higher by 25 points while the NSE Nifty is trading higher by 13 points. The BSE Mid Cap and BSE Small Cap index both opened the day up by 0.5%. All sectoral indices have opened the day in green with stocks from energy sector and realty sector leading the gainers. The rupe...
The trouble with inflating asset bubbles is that you have to keep inflating them or they pop. Unfortunately for the bubble-blowing central banks, asset bubbles are a double-bind: you cannot inflate assets forever. At some unpredictable point, the risk and moral hazard that are part and parcel of all asset bubbles trigger an avalanche of selling that pops the bubble. This is another facet of The Fed’s Double-Bind: if you stop pumping asset bubbles, they pop as participants realize the music has stopped, and if you keep pumping them, they expand to super-nova criticality and implode. There are several dynamics at play in this double-bind...
The Great Artificial Intelligence bubble and Scam has made inroads into all facets of American life. The scam of the self checker at your local grocery store is a prime example, and certainly the same arguments can be made about self driving cars, and other artificial intelligence. These all seem to be an attempt to sell unproven and overhyped technology to business and individuals to make money, whether the general concept itself is valid or not! Before we look into the economic ramifications of this scam, turned bubble, we can review some weaknesses already made evident. Because of Amazon’s (AMZN) interest in artificial intelligence...
Stock markets were spooked by North Korea’s sixth nuclear test over the weekend which had the usual effect of rallying safe-haven such as gold and treasuries. The US dollar also found a bid with the Japanese yen benefiting as money scattered from the risk. The Nikkei ended the day around 1% lower with exporters being hit but the currency appreciation was responsible for much of this move. Hong Kong’s Hang Seng was also around 1% weaker but interesting to see that mainland market closed higher (+0.4%). A few markets were closed today (Malaysia and Vietnam) but the obvious one was the US closed for Labour Day. All this weekend news came aft...
The market has apparently taken a dim view of the Administration’s ability to manage the debt ceiling issue. From Deutsche Bank (not online): Truth be told, I am unsurprised....
United Technologies (UTX) and Rockwell Collins (COL) has announced that they have reached a definitive agreement under which United Technologies will acquire Rockwell Collins for $140 per share, in cash and stock. Under the terms of the agreement, each Rockwell Collins share owner will receive $93.33 per share in cash and $46.67 in shares of United Technologies common stock, subject to a 7.5% collar centered on United Technologies’ August 22, 2017 closing share price of $115.69. United Technologies expects to fund the cash portion of the transaction consideration through debt issuances and cash on hand, and the company is committed to t...