10Aug2018 Midday Update: Wall Street Slips, Banks Taking The Biggest Hit Over Turkey’s Economy, Core Inflation Reading Jumps, Oil Steady As Iran Sanctions Balance Impact Of Trade War

Here is the current market situation from CNN Money

North and South American markets are broadly lower today with shares in Brazil off the most. The Bovespa is down 2.75% while Mexico’s IPC is off 1.23% and U.S.’s S&P 500 is lower by 0.51%.

Turkey trouble rattles Wall St., banks worst hit

U.S stocks slid on Friday, with banks taking the biggest hit, as concerns over Turkey’s economy and its deepening rift with the United States roiled stock markets around the world.

Tesla short-sellers back in force as shares remain shaky

The number of Tesla Inc shares sold short has rebounded and are now higher than before CEO Elon Musk proposed on Tuesday taking the electric car maker private, according to data from financial technology and analytics firm S3 Partners.

Packager SIG Combibloc on track to announce listing in September: sources

SIG Combibloc is on track to announce in September its intention to float on the stock market in Zurich, three sources familiar with the matter said, in a listing that could value the Swiss packaging maker at close to 5 billion euros ($5.7 billion).

Turkey turmoil rocks world stock markets, euro falls

A plunge in the Turkish lira rocked global equities and emerging markets on Friday and fear of more turmoil sent investors scurrying for safety in assets like the yen and U.S. government bonds.

Saudi Aramco appoints al-Dabbagh as senior VP of finance

Saudi Aramco appointed Khalid al-Dabbagh as senior vice president of finance, strategy and development, effective Sept. 1, the company said in a statement on its website on Friday.

Federal Reserve fines Citigroup $8.6 million for faulty mortgage document practices

The Federal Reserve said Friday it had fined Citigroup $8.6 million over shoddy mortgage documentation practices at a subsidiary.

U.S. inflation pressures rise in July; Fed on track to lift rates

U.S. consumer prices rose in July and the underlying trend continued to strengthen, pointing to a steady increase in inflation pressures that keeps the Federal Reserve on track to gradually raise interest rates.

Gene-editing startups ignite the next ‘Frankenfood’ fight

In a suburban Minneapolis laboratory, a tiny company that has never turned a profit is poised to beat the world’s biggest agriculture firms to market with the next potential breakthrough in genetic engineering – a crop with “edited” DNA.

Exclusive: Tesla’s board seeking more information on Musk’s financing plan – sources

Tesla Inc’s board has not yet received a detailed financing plan from CEO Elon Musk, and is seeking more information about how he will take the U.S. electric car maker private in a proposed deal worth $72 billion, people familiar with the matter said on Thursday.

The Unforeseen Consequences Of China’s Insatiable Oil Demand

Authored by Tim Daiss via Oilprice.com,

While it’s true that China’s crude oil imports recovered slightly in July, it was still among the lowest so far this year due to a decline in demand from smaller so-called independent “teapot” refineries.

However, for the first seven months of the year, China imported some 8.98 million barrels per day (bpd) of crude oil, up 5.6 percent from a year earlier. Total natural gas imports, including both pipeline gas and liquefied natural gas (LNG), rose to 7.38 million tonnes during the same period, up 28.3 percent from a year ago, according to customs data.

Moreover, amid both economic growth as well as Beijing’s mandate that gas make up at least 10 percent of the country’s energy mix by 2020 to offset the effects of rampant air pollution from dirtier thermal coal power production, the long term trajectory for both China’s natural gas consumption, as well a …

“This Crisis Is Created By America”: Turks Blame Trump For Economic Collapse

Turkey’s economy may be in freefall with soaring inflation, a plunging currency, sliding stocks and a gaping current account deficit, but don’t dare tell the locals that it is president Erdogan’s fault for keeping interest rates low and preventing an even greater crisis: according to Serap, a 23-year-old clerk at a clothes store in central Istanbul, there is only one entity to blame for the precipitous slide in Turkey’s lira currency.

“This crisis is created by America,” she said.

And a crisis it is: prices are soaring as a result of the collapsing currency – which this year has lost more than 35% against the dollar, and has overtaken the Argentine Peso for the worst performing currency of 2018 – with food, rents and fuel prices in Turkey surging, and the country’s pipeline operator raising the price of natural gas for electricity production by 50%.

But when one asks the local population who is responsible for this economic inferno, the answer is surprising.

Serap’s sentiments about the causes of the crisis are shared by many Turks and hint at why support for President Tayyip Erdogan, who after surviving a fake military coup in the summer of 2016, won re-election in June with super-charged presidential powers, looks untouched, at least for now. Erdogan’s loyal supporters see the currency sell-off as a U.S. attempt to undermine their country and president according to Reuters.

That’s also known as the Maduro defense: blame all domestic problems on “shady” foreign actors, usually involving the US. But while the US certainly has its history of intervening in foreign events, this time the crisis is entirely home grown, although predictably, Erdogan would be the last to admit it.

“If they have their dollar …

Jim Kunstler Rages At America’s “Anything-Goes-And-Nothing-Matters” Society

Authored by James Howard Kunstler via Kunstler.com,

Fever Pitch

Those in the USA who have not been driven plumb insane by President Donald Trump are probably scratching their heads down to the subdural cavity this week with his imposition of more severe sanctions on Russia only a month after he went to Helsinki to repair tattered relations with Russia’s president, Mr. Putin. The official reason: payback for the poisoning in Wiltshire, UK, of Sergei Skripal, retired UK/Russia double agent, and his daughter Yulia.

Really? For that? For a botched assassination with one of the world’s most potent military nerve agents which, by the way, failed to kill its victims. (Somebody please go inform the Russian military that they may have batch problems over at the nerve agent lab.) Oh, also, by the way, there’s less evidence that whatever-it-was on the Skripal’s doorknob, or in the bubble-and-squeak they ordered at that restaurant, came from Russia than from the UK’s own military poisons lab at nearby Porton Down.

This new mystifying chapter in US foreign relations raises some beguiling questions. For instance: why exactly do we give a fuck about a Russian spy who sold out to the UK at the same moment in history that we (that is, the American public and their news media) hardly heaved a sigh over the joint US – Saudi bombing of a school bus in Yemen that killed 43 people, mostly children, this week?

Want to see the dishonesty of The New York Times in action? Read this story from Thursday’s (Aug 9) paper about the school bus bombing. The lede says: “An airstrike from the Saudi-led coalition struck a school bus in northern Yeme …

Why Turkey Is Doomed In Two Charts

While one can point to Turkey’s soaring inflation, plunging currency, surging interest rates or slumping stock market, the biggest threat facing Turkey is a structural one: its desperate need for foreign funding to cover its current account deficit.

That is the point made by Goldman’s Caesar Maasry this morning, who notes the biggest vulnerability staring both Emerging and Frontier Markets, namely their external funding needs, and notes that while EM funding needs are completely covered by reserves (meaning the likelihood of USD debt crises is extremely limited), “Turkey’s funding needs are more like Frontier Markets, and in the same ballpark as the needs of Latin America economies in the 1980s and Asia in the 1990s.”

He then notes that floating vs. fixed exchange rates are an important difference compared with the EM crises of yesteryear, but adds that the starting point for Turkey’s recent volatility is that these USD funding needs are extremely significant, much more so than other EMs, and are also the reason for why the market has finally started paying attention to Turkey as a result of foreign bank exposure to Turkey, because should these foreign inflows stop, the entire Turkish economy is in danger of a sudden freeze.

And, as the chart below shows, while Turkey is technically considered an emerging market, where it makes a sharp break with convention is that its external funding need is greater than the average Frontier Market. Should these inflows stop, as a result of a loss of confidence in the country, all bets are off.

New Investor Guessing Game: What Is ‘New Fox’ Worth

Once Fox’s deal with Disney closes, the next question will be how to value what is left behind: Fox News and Fox Sports.

NewsWatch: Stocks fall as Turkey’s currency crisis spotlights global risks

U.S. stocks fall early Friday, with Wall Street tracking a global equity retreat fueled by the mounting currency crisis in Turkey, which raised the alarm for possible contagion into other markets.

The Moneyist: My mother gave my sister $20,000 for her anemia stem cell treatments, and I want it deducted from her inheritance

‘Responding to my sister’s hysterical call, my mother mailed my sister a check for the full amount.’

How much of the emerging-market carnage can be blamed on the Fed and the dollar

Last year, then Fed Governor Powell acknowledged there would be outflows from emerging markets as the Fed lifted interest rates. Did he imagine this?