Today is a day to refrain from trading. I was wrong to set Tuesday as waiting day. In fact, the UK Supreme Court probe into whether Prime Minister Boris Johnson's prorogation of Parliament was legal will take several days to settle. This is only the second ruling to ever be made by the British Supremes, put at the top of the system to work out differences by high courts in England, Wales, Scotland, and Northern Ireland, the United Kingdom. Scotland's high court ruled that Boris's move was unlawful. England's called it a matter of politics.

In Israel, the results of yesterday's polling are too close to call. But that means incumbent Bibi Netanyahu already lost. He called for a new election after his Likud party and allies in April lost its Knesset (Congress) majority for forming a government. He needs to remain Premier to avoid charges of fraud over his expense accounts while in office. If not PM, he can be indicted.

Symbolically important was Bibi's announcement today that he will not be attending the United Nations General Assembly meeting in New York next week. His work as a diplomat, both to Washington and to the UN, is the base-line of his entire political career. The US-educated son of an Israeli professor with a business degree and a background in business advise, he rose to the top because he could do politicking in English at the UN and in the USA. Iran is probably also skipping the session because of new sanctions ordered by Pres. Trump.

The big news yesterday and this morning was the huge demand from banks for funding, a ricochet from the oil price rise. The New York Fed Tuesday offered $75 billion of funding at its overnight auction and banks bought $63 bn. Today the Fed offered another $75 bn and banks tried to buy over $5 bn more than that sum, pushing interest rates to 2.8% (annualized). By releasing as much as banks were seeking the NY Fed brought the rate down to 2.6% mid-morning and 2.25% by noon.

This scenario is the result of banks fearing that pressure from Pres. Trump for cheaper money and higher oil prices will lead the Federal Reserve to cut interest rates by 0.5% rather than by the anticipated 0.25% today and make other dovish moves like again buying bonds in the market (quantitative easing.)

Macro-economics matters. Now foreign buyers (both banks and central banks) are scant and scarce because they can deposit money into the Fed's “repo” program which pays the overnight rate. The higher rate lures more of them in. It also leads to inversion, a symbolic increase in overnight and short-term rates to levels higher than those for longer-term US borrowing, supposedly a harbinger of recession. And it also boosts the interest rates that corporate borrowers have to pay for commercial paper rollovers—which really does sap the US economy. One reason they are borrowing now is to pay corporate quarterly taxes.

Setting interest rates is like the British Supreme Court, an arcane niche in the system which has huge hidden impact. What really is at stake is Fed policy, now in a state of confusion. One of my readers here in NYC, LM, an expert in this matter is welcome to add his input on Fed policy tomorrow should he so choose. Any intervention by Pres. Trump, who has no insight into these matters, is likely to worsen the confusion. So today we are waiting again, for the Federal Reserve Board which cut interest rates by a quarter at 2 pm EST. The main show was Jerome Powell explaining the Fed's move was “for insurance” amidst evidence that the Fed board is badly split with far more hawks than doves. Jeffrey Grundlach (CEO of DoubleLine Capital) predicted that there would be quantitative easing but no further rate cuts as the Fed increased its balance sheet as it did earlier this week.

More from around the globe, with markets in the red in Asia and the USA, but modestly up in Europe. After falling at the opening because Saudi Arabia claims to be able to restore half the drone-attacked facilities by the end of Sept. and high levels of US oil inventory last week, skepticism over the untried royal masters of Aramco set in and oil prices rose. Today, a non-trading day in my view, we look into some of the nooks and crannies of the market where things are hard to work out. I wrote up the significance of the Fed moves to comfort my readers for no stock advice.

Energy

*Azure Power Global Ltd (AZRE) which installs solar power plants in India will issue $350 mn in 5-yr green bonds with interest at 5.65%. It is incorporated in Mauritius and will use the money to refinance existing debt. There is a tremendous market for green bonds building up among funds.

*Cosan of Brazil typified the rollback of energy companies today, down 2.7%. It makes ethylene from sugar cane waste and sells through a chain of Shell stations in Latin America. It also is doing a buyback. It is up 65% in the last 12 mos and has a p/e ratio of more than 26x.

*Schlumberger Ltd of the Dutch Antilles is tendering to repay early senior notes due in 2020 and 2022. It is a truly global large cap in oil and gas exploration and probably already borrowed the money it needs at a cheap rate.

*BP plc was upgraded to buy by JP Morgan Chase with a GBX 625 target price. Its ADRs equal 6 UK shares so that is $54 and change.

Tech

*SAP (sold) is among the Euroland specialists in technology being challenged by our new spin-off from Naspers, Prosus. One of our reporters, who is with Fidelity, got his PROSY shares today.

*Now the Frankfurter Allgemeine Zeitung today revealed that German, Swiss, and Austrian users of SAP are leaving in droves because it is not providing digitalization under secure conditions with good functionality. The newspaper interviewed members of the SAP users' association, only about a quarter of which were happy with its functionality, scalability, and hacking risks that IT officials in their ranks face by remaining with SAP rather than jumping ship. Our Prosus is in the process but not trading yet and up 25% today in Amsterdam.

*It never occurred to me that there was a political risk from the US sales of BAE Systems, BAESY, sold. But these have come to the fore as the UK government is blocking the £4 bn takeover of Cobham, a British defense firm which makes systems for refueling fighter jets in the air, by Advent, a US private equity group, on national security grounds. I always assumed the rules were to stop Chinese buys.

*Vodafone issued $1.5 billion in 4.25% notes due 2025 and the underwriters are exercising their greenshoe option, to buy another 15% of the bonds.

Drugs

*Roche sub Genentech won FDA breakthrough therapy designation for Gazyva (obinutuzumab) to treat adults with lupus. This enables RHHBY to get close guidance from the FDA which will regularly review its application. It was too late for Anne Barry, my college classmate with lupus. It is also gaining from newer drugs coming on in the cancer field to replace Herceptin, Avastin, and Rituxan which will face biosimilar competition, especially in Europe.

*Google and GlaxoSmithKline created a JV in Mexico which plans to determine zones where flu risk is highest there with 97% accuracy. This was reported in Sentidocomun.co.mex by Eduardo Garcia.

*Novo Nordisk of Denmark beat rival drugs (including its own Victoza) in phase III trials of Ozempic to treat diabetes and obesity by cutting blood sugar levels more and with users losing an average of 5.3 kilograms or 11.66 lbs. Ozempic promises to become a blockbuster after these results beating Johnson & Johnson's Invokana handily.

*I got exercised in my buy of Teva straight bonds (Cusip 88163VAD1), the 6.15% on 2/1/2036. It paid $785.17 for the principal plus $7.004 in accrued interest. It is now $795 for the principal. Teva common is limping unhealthily again, down another 1.4% after falling 1.5% yesterday. It is volatile in part because it is the easiest way to exit Israel if the wrong lot win the Knesset.

*Easy come, easy go. The Australian shares of Benitec Biopharma lost 20% today after they sprung up 51% yesterday on news of trials in dogs to develop a DNA directed RNA silencing drug for the genetic disease which killed Aristotle Onasis. The main reason was Oz negativism. They closed yesterday at 92 cents and today fell to 74¢. The warrants which rose by a third Tuesday did not move further and remain at 2.7¢. It faces delisting because the common shares are too low for Q.

Food and Drink

*Anheuser-Busch InBev of Belgium (BUD) is probably going to cut its huge debt with an IPO of its Asian holdings in Hong Kong. This has frightened insiders at challenger brewery Boston Beer (SAM) where C. James Koch, a major shareholder, has just sold $2.72 mn worth of SAM stock.

*Brazilian insiders have been buying Kraft Heinz shares from the controlling shareholder which wants out. They are probably selling BUD to raise the cash.

*Irish Greencore short-sellers have given up and its ADR is steadily up. US funds are heavy buyers of GNCGF which makes ready-meals sold in British and Irish supermarket chains.

Mining

*One result of the rush into Fed lending by banks and central banks is to cut inflows into emerging markets. Merrill Lynch-BofA published a report on Chile today in which it warned that further rate cuts to stimulate the economy are coming. The impact of a fall below 2% will be to lower the valuation of local companies while boosting those earning in US dollars. This is good for Antofagasta, ANFGF and SoQuiMich, SQM, both of which earn bucks by mining copper, and phosphates and lithium resp.

*Barrick Gold, sold, gained 5.3% yesterday after reporting at a gold conference about a new discovery in Nevada near the Fourmile project. This is a jv with Newmont Goldcorp and makes GOLD more American than Canadian.

Banksters

*From the 30.9743¢ per ADR to be issued to shareholders of Sampo Oyj of Finland for the spin-off of Nordea, Bank of New York Mellon will import a withholding tax of 9.4391¢ per share plus a depositary fee of 2.5842¢ per share reducing the amount to be received to 18.951¢. Note that the ADR is only worth half a Finnish share of SAXPF, so we got 1 share for every ten ordinaries which I owned in my bank account with HSBC which charged nothing for the new Nordea stock (also no tax!)

Funds

*If there still was a Chile Fund from Aberdeen I would be selling it, but now we are in its successor Aberdeen Emerging Markets Equity Income Fund, AEF, which is much broader. There are still risks with emerging markets funds run from the USA but they are higher with funds run abroad.

*City of London Investment Group which trades on the pink sheets as CLIUF and in London as CTY was recommended by Steven Chen on seekingalpha.com today quoting heavily from an interview with Zeus Capital's Robin Savage in Director's Talk published last week. The fund manager specializes in emerging markets. It uses mostly British closed-end funds (investment trusts) trading at a discount to net asset value to invest. It is taking its expertise in Britain into wider fields by offering funds in the US and Asia for institutional investors. It pays UK taxes on its eps which cannot be recuperated by US individual shareholders.

It is a closed-end fund itself, trading at a discount to net asset value and yielding 4.5%. Its founder- a manager, Barry Olliff, retiring at the start of next year, already stepped down from management of the fund in favor of Tom Griffith as its CEO with effect in Jan. 2019. It is legal for US investors to buy foreign closed-end funds in most cases (unless they intervene in the market like the US Gabelli Funds do to shift the discounts onto others.)

Olliff, whom I know and respect from my years covering Europe, founded a partnership in 1987 to gain from the hefty discounts in UK-listed CEFs and created CLIUF in 1991.

The City of London is currently aiming to use funds incorporated outside Britain for buying, where it has less expertise, because of Brexit uncertainty. Last week it reported that its net earnings for FY 2017-8 (to June 30) had fallen to £11.4 mn from prior year's £12.6 mn, or 34.9 pence/sh vs. 39.5 pence the year before.

Your editor, who is extremely familiar with this group, is wary of investing in it given the current uncertainties over sterling, emerging markets, and UK taxation, to say nothing of the new broom management. This is a period of extreme volatility and while members of my family who are British continue to hold CTY I think it is not a good idea now for people eating in dollars.

*We exited Standard Life Aberdeen, manager of our FAX and FCO closed-end funds, in good time. I worry about UK risks, but if Boris is forced to run an election before Brexit day, I may reconsider. Today both CEFs are down.

*Once again the smart money is investing in physical gold today. As interest rates are falling, the loss of return from holding gold rather than stocks and bonds is lower for owners of SPDR Gold, GLD, and iShares Gold Trust, IAU.

*Both Symphony International, SYNNF, a heavily discounted closed-end fund, and its largest holding, Minor International of Thailand, which owns hotels and restaurants around the world, are up today. One reason is that South Korea and Japan are creating tariff barriers between their countries, and Hong Kong is terrifying investors. I figure that the principals of both firms are good at gambling around the world, notably US-born Ellwood Heinecke who runs MNILY.

I share a birthday with Aung San Suu Kyi, who won a Nobel Prize, who now backs the regime's moves against Muslim Rohingya, and I wish she wouldn't. But MNILY is up 2.7% today regardless of politics and SYNNF topped the 66¢ we paid. While MNILY has some risk in Thailand, it is mainly global. In any event, the best ranked UK funds YTD were the ones invested in Asia outside China and Japan, which covers this one.