Baltic Dry Index. 711
-04 Brent Crude 47.19
“It is one of history's ironies that Communism, advertised as a classless society, tended to breed a privileged class of feudal proportions.”
Henry Kissinger, On China
For more on Beijing’s Seven Percent Solution to recent economic near misses, scroll down to Crooks and Scoundrels Corner. Inspector fix-it will soon fix it, just like the New York’s Fed’s Plunge Protection Team fixes similar “failures to comply” in America’s centrally planned stock markets. What could possibly go wrong?
As China prepares to host Sunday’s G-20 Great leaders’ meeting, we open with a look at China and Asia.
China Caixin manufacturing PMI shows stagnation
Published: Sept 1, 2016 1:00 a.m. ET
BEIJING--The Caixin China manufacturing purchasing managers' index, a
private gauge of nationwide factory activity, fell in August, still showing a
stagnation, Caixin Media Co. and research firm Markit said Thursday.
The index weakened to 50.0 from 50.6 in July, but remained above the 50
watershed for the second straight month.
Before July's surprise jump, the index had shown activity shrinking each
month from February 2015. The slightly lower PMI shows that China's economy is
still struggling to gain momentum after a raft of stimulus measures by the
government to prop up growth.
The 50 mark separates an expansion in manufacturing activity from a
contraction.
Sub-indexes of output, new orders and stocks of purchase all declined
from the previous month, Caixin said.
"The stagnation that follows tentative signs of recovery in July
may have been caused by a temporary tightening of proactive fiscal policies.
Downward pressure on China's economy remains, and government support to
stabilize growth must continue," said Zhengsheng Zhong, director of
macroeconomic analysis at CEBM Group.
Morehttp://www.marketwatch.com/story/china-caixin-manufacturing-pmi-shows-stagnation-2016-09-01
China's official manufacturing PMI rises in August
Published: Aug 31, 2016 10:33 p.m. ET
BEIJING--China's official manufacturing purchasing managers' index, a
gauge of factory activity, rose to 50.4 in August, returning to expansionary
territory, official data showed Thursday.
The rise from July's 49.9 could be a sign of improvement in the world's
second-largest economy. A PMI reading above 50 indicates an expansion in
manufacturing activity, while a reading below 50 points to a contraction.
The August PMI beat the median forecast of 49.9 by 12 economists polled
by The Wall Street Journal.
The subindex measuring new orders climbed to 51.3 from 50.4 in July,
while the production subindex improved to 52.6 from 52.1, the statistics bureau
said.
China's official nonmanufacturing PMI, also released Thursday, edged
down to 53.5 in August from 53.9 in July.
http://www.marketwatch.com/story/chinas-official-manufacturing-pmi-rises-in-august-2016-08-31
China's State Firms Are Bigger Than Germany and That's a Problem
August 31, 2016 — 10:00 PM BST
If China's bloated and inefficient state owned enterprises were a nation,
they'd make up the world's fourth-biggest economy.QuickTake China's Pain Points
And with private investment retreating, they may be growing still, according to fresh research from Bloomberg Intelligence economists Fielding Chen and Tom Orlik. That makes reforming a sector that accounts for about 40 percent of China's industrial assets and 18 percent of total employment key to the nation's economic future. And tough to do.
In 2014, the latest year for which there's solid data, return on assets
for state firms was just 4 percent versus 11 percent for nimbler private firms.
"That’s bad news for growth, as a high proportion of capital is
allocated to a relatively unproductive set of firms," Chen and Orlik
wrote.
It's also bad for financial stability as capital still flows to these
less-efficient firms.
SOE's
are most dominant in industries that require the most capital, like electricity
generation or chemicals.
----So
why does this all matter? Because the performance of SOEs continues to
get worse, and stress from high debt is rising, Bloomberg Intelligence research
finds.
More
Hanjin Shipping files for receivership, as ports turn away its vessels
Banks led by state-run Korea Development Bank (KDB) withdrew backing for the world's seventh-largest container carrier on Tuesday, saying a funding plan by its parent group was inadequate to tackle debt that stood at 5.6 trillion won ($5 billion) at the end of 2015.
Hanjin Shipping, South Korea's biggest shipping firm, announced the filing for receivership and a request to the court to freeze its assets, which the Seoul Central District Court planned to grant, a judge told Reuters, declining to be named.
The court will now decide whether Hanjin Shipping should remain as a going concern or be dissolved, a process that usually takes one or two months but is expected to be accelerated in Hanjin's case, the judge said.
A bankruptcy for Hanjin Shipping would be the largest ever for a container shipper in terms of capacity, according to consultancy Alphaliner, exceeding the 1986 collapse of United States Lines.
Global shipping firms have been swamped by overcapacity and sluggish demand, with Hanjin booking a net loss of 473 billion won in the first half of the year.
South Korea's ailing shipbuilders and shipping firms, which for decades were engines of its export-driven economy, are in the midst of a wrenching restructuring. The KDB's decision to stop backing Hanjin Shipping shows the government is taking a tougher stance with troubled corporate groups.
"The government will swiftly push forth corporate restructuring following the rule that companies must figure out how to survive and find competitiveness on their own while taking responsibility," Finance Minister Yoo Il-ho said.
----KDB's move to pull the plug was already having an impact on Hanjin's operations.
Ports including those in Shanghai and Xiamen in China, Valencia, Spain,
and Savannah in the U.S. state of Georgia had blocked access to Hanjin ships on
concerns they would not be able to pay fees, a company spokeswoman told
Reuters.
Another vessel, the Hanjin Rome, was seized in Singapore late on Monday
by a creditor, according to court
information.
Morehttp://www.reuters.com/article/us-hanjin-shipping-debt-idUSKCN11603N
Up next Europe. Big trouble from Merkel’s immigration folly in Germany. Spain’s impasse continues. At the coming G-20 meeting, after Brexit, who speaks for Europe?
Who do I call if I want to call Europe?
Henry Kissinger.
Merkel Faces Home-State Defeat Over Immigration
September 1, 2016 — 5:00 AM BST
German Finance Minister Wolfgang Schaeuble’s election rally in the Baltic
Sea town of Rostock was all going according to script until the discussion
turned to refugees.After the elder statesman won praise from the crowd of middle-aged and retired party faithful for his role in the country’s reunification, the goodwill quickly evaporated as he defended Chancellor Angela Merkel’s open-door refugee policy. Then the murmurings from those gathered at the event in the Hanseatic city’s medieval center turned to applause when an audience member stood to challenge Schaeuble.
“I want to clearly contradict you: Islam does not belong to Germany,” the man said. “Long after you and the chancellor have your names written in the pages of the history books, Germany will still have to grapple with these massive social problems from this incredible influx of millions of people from a foreign culture, and I’m holding that against you personally.”
Many others in the northeastern German state where the chancellor has her electoral district are feeling the same way. The anti-immigration Alternative for Germany, or AfD, is running neck-and-neck with Merkel’s Christian Democratic Union in Mecklenburg-Western Pomerania ahead of this Sunday’s vote. The local electorate’s grievances with the CDU run the gamut of the chancellor’s hallmark policies -- from refugees to sanctions on Russia to the country’s energy overhaul -- and the AfD is capitalizing on that discontent.
Rajoy Loses Confidence Vote as Spain’s Political Impasse Endures
August 31, 2016 — 7:56 PM BST
Caretaker Prime Minister Mariano Rajoy failed in his first attempt to
end a political gridlock that has stretched for more than eight months, losing
a confidence vote in the Spanish parliament.
Rajoy was defeated by 180 votes to 170 on Wednesday as his party’s
traditional rivals, the Socialists, joined the anti-establishment group Podemos
to block his candidacy. The acting premier was supported by the liberals of
Ciudadanos and a lone lawmaker from the Canary Islands party. The chamber will
vote again on Friday at about 8 p.m. in Madrid when a simple majority will
suffice.
The 61-year-old candidate is trying to piece together the first administration since Spain’s traditional two-party system broke down with the emergence of Ciudadanos and Podemos at last December’s election. While the PP was the only group to increase its vote at a re-run in June, and has considerable common ground with the Socialists on policy, Rajoy is struggling to clinch enough support because of unresolved corruption allegations against his party.
More
http://www.bloomberg.com/news/articles/2016-08-31/rajoy-loses-confidence-vote-as-spain-s-political-impasse-endures
We end for today, with China starting to overtake the USA in scientific articles. Calling Mr. Trump, calling Mr. Trump. Someone send for Mr. Trump!
China Overtakes US in Scientific Articles, Robots, Supercomputers
Anatoly
Karlin • August 29, 2016
Nothing illustrates China’s meteoric rise as some well chosen numbers.By the end of the 1990s, China had come to dominate the mainstays of geopolitical power in the 20th century – coal and steel production. As a consequence, it leapt to the top of the Compositive Index of National Capability, which uses military expenditure, military personnel, energy consumption, iron and steel production, urban population, and total population as a proxy of national power. Still, one could legitimately argue that all of these factors are hardly relevant today. While Germany’s fourfold preponderance in steel production over Russia may have been a critical number in 1914, China’s eightfold advantage in steel production over the US by 2014 is all but meaningless in any relevant comparison of national power. The world has moved on.
By the end of the 2000s, like Victorian Britain in the mid-19th century, China became the workshop of the world, overtaking the US in both manufacturing and coming very close to it in terms of PPP-adjusted GDP. As a consequence, this was when China also overtook the US on a wide range of consumer welfare and ecological impact indicators, such as exports, CO2 emissions, Internet users, energy consumption, car sales, car production, and number of patents issued. Still, its presence in the hi-tech sector was still pretty modest, and innovation was low. This was not yet an economy that could furnish first-class armaments, or inspire far off peoples to carry out color revolutions in its name.
----But as of this year, China is hurtling past yet another set of inflection points – the hi-tech component of its economy, roughly comparable to any of the major European Powers a mere decade ago, is now about to converge and then hurtle past that of the US by the end of the 2010s (even if in per capita terms it remains considerably behind, like South Korea 20 years ago).
This process can be proxied by three indicators: Number of scientific articles published, operational stock of industrial robots, and number of supercomputers.
---- In 1996, China published a mere 29,000 papers, well behind Japan, the UK, Germany, and France (50,000-90,000) not to mention the US with 333,000. As of 2015, however, China had surged to 416,000 published papers, still modestly behind the US with its 567,000 papers but far ahead of everyone else.
--- Nonetheless, in the “hard”/STEM spheres that arguably matter more for technological progress – and which have much less in the way of a replicability crisis – China is already ahead of the US in terms of total publications: 34,000 to 28,000 in mathematics; 67,000 to 52,000 in physics and astronomy; 63,000 to 36,000 in chemistry; 120,000 to 67,000 in engineering; 49,000 to 41,000 in computer science. The only major spheres here in which the US remains considerably ahead are the more biologically orientated sciences, such as: 196,000 to 69,000 in medicine, 83,000 to 59,000 in biochemistry/genetics, 23,000 to 7,000 in neuroscience, and 18,000 to 14,000 in pharmacology.
More
http://www.unz.com/akarlin/sinotriumph/
“The deadlock was broken when we ordered Walter Stoessel, the U.S. ambassador in Warsaw, to approach Chinese diplomats at the next social function and express the desire for a dialogue. The setting for this encounter was a Yugoslav fashion show in the Polish capital. The Chinese diplomats in attendance, who were without instructions, fled the scene. The Chinese attaché’s account of the incident shows how constrained relations had become. Interviewed years later, he recalled seeing two Americans talking and pointing at the Chinese contingent from across the room; this prompted the Chinese to stand up and leave, lest they be drawn into conversation. The Americans, determined to carry out their instructions, followed the Chinese. When the desperate Chinese diplomats speeded up, the Americans started running after them, shouting in Polish (the only mutually intelligible language available), “We are from American embassy. We want to meet your ambassador… President Nixon said he wanted to resume his talk with Chinese.”
Henry Kissinger, On China
At the Comex silver depositories Wednesday final figures were:
Registered 26.97 Moz, Eligible 135.77 Moz, Total 162.74 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, President Xi gets worried. The naughty,
naughty, lazy Mr. Chans’, in the regional and government statistics departments
in the provinces, are failing to meet Beijing’s economic targets. Now legions
of inspectors are fanning out across the provinces from Beijing, to show them
the error of their ways. Beijing’s Seven Percent Solution. What’s the betting
that they hit all their Beijing targets now?
“What you do in this
world is a matter of no consequence. The question is what can you make people
believe you have done.”
Arthur Conan Doyle,
Sherlock Holmes. A Study in Scarlet.
Lazy officials criticized as China launches inspection to ensure growth on track: Xinhua
China's cabinet has launched a nationwide inspection to make sure this
year's economic growth target will be met,
even as it presses ahead with structural reforms, Xinhua news agency said on
Sunday.
Some regions and government departments are not coordinating their
policies well and some officials are lazy in their work, Xinhua said.
Inspectors have been sent to the provinces, focusing on areas of
maintaining steady economic growth, implementing major policy measures and
"supply-side structural reforms", as well as supporting investment
projects and innovations, Xinhua said.
The inspection, the third of its kind in recent years, aims to
"keep economic growth within a
reasonable range and ensure the main objectives and tasks of this year's
economic and social development will be completed" it said.
The government has set an annual economic growth of between 6.5 percent
and 7 percent this year.
The country's top economic planning agency has pledged to quicken
capacity cuts in its bloated steel and coal sectors, putting pressure on local
officials to meet targets despite some worries that the steps could hurt
economic growth.
http://www.reuters.com/article/us-china-economy-inspection-idUSKCN1130I0
“Is
there any point to which you would wish to draw my attention?'
'To the curious incident of the statistician in the night-time.'
'The statistician did nothing in the night-time.'
'That was the curious incident,' remarked President Xi.”
'To the curious incident of the statistician in the night-time.'
'The statistician did nothing in the night-time.'
'That was the curious incident,' remarked President Xi.”
With
apologies to Arthur Conan Doyle, Sherlock Holmes, Silver Blaze
Solar & Related Update.
With events
happening fast in the development of solar power and graphene, I’ve added this
section. Updates as they get reported. Is converting sunlight to usable cheap
AC or DC energy mankind’s future from the 21st century onwards? DC?
A quantum computer next?
Chemists develop promising cheap, sustainable battery for grid energy storage
Date:
August 26, 2016
Source:
University of Waterloo
Summary:
Chemists have developed a long-lasting zinc-ion battery that costs half the
price of current lithium-ion batteries and could help enable communities to
shift away from traditional power plants and into renewable solar and wind
energy production.
Chemists at the University of Waterloo have developed a long-lasting
zinc-ion battery that costs half the price of current lithium-ion batteries and
could help enable communities to shift away from traditional power plants and
into renewable solar and wind energy production.
Professor Linda Nazar and her colleagues from the Faculty of Science at
Waterloo made the important discovery, which appears in the journal, Nature
Energy.
The battery uses safe, non-flammable, non-toxic materials and a
pH-neutral, water-based salt. It consists of a water-based electrolyte, a
pillared vanadium oxide positive electrode and an inexpensive metallic zinc
negative electrode. The battery generates electricity through a reversible
process called intercalation, where positively-charged zinc ions are oxidized
from the zinc metal negative electrode, travel through the electrolyte and
insert between the layers of vanadium oxide nanosheets in the positive
electrode. This drives the flow of electrons in the external circuit, creating
an electrical current. The reverse process occurs on charge.
The cell represents the first demonstration of zinc ion intercalation in
a solid state material that satisfies four vital criteria: high reversibility,
rate and capacity and no zinc dendrite formation. It provides more than 1,000
cycles with 80 per cent capacity retention and an estimated energy density of
450 watt-hours per litre. Lithium-ion batteries also operate by intercalation--of
lithium ions--but they typically use expensive, flammable, organic
electrolytes.
"The worldwide demand for sustainable energy has triggered a search
for a reliable, low-cost way to store it," said Nazar, a Canada Research
Chair in Solid State Energy Materials and a University Research Professor in
the Department of Chemistry. "The aqueous zinc-ion battery we've developed
is ideal for this type of application because it's relatively inexpensive and
it's inherently safe."
The global market for energy storage is expected to grow to $25 billion
in the next 10 years. The bonus for manufacturers is they can produce this zinc
battery at low cost because its fabrication does not require special
conditions, such as ultra-low humidity or the handling of flammable materials
needed for lithium ion batteries.
More
The monthly Coppock Indicators finished August
DJIA: 18401
+18 Up NASDAQ: 5213 +16 Up. SP500: 2171 +18 Up.
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