Thursday 9 November 2017

A Short Memory.



Baltic Dry Index. 1486  +09   Brent Crude 63.59

"I had hoped we were hurling a wildcat into the shore, but all we got was a stranded whale"

Winston S Churchill. Anzio.

President Trump arrived in China promising a fire and brimstone trade war if China didn’t immediately end its trade cheating ways, only to deliver an obsequious verbal climbdown in his opening speech with China’s new strongman President Xi.

President Trump now doesn’t blame China at all for the trade cheating, saying the blame is all entirely American.  That probably left his hosts bemused and confused in equal measure, though what it will do for Republican Party supporters back home in America, still reeling from Tuesday’s election results, is anyone’s guess. Prime Minister Churchill’s wartime comment on the Anzio landings in Italy, springs to mind.

Below, Bloomberg and Reuters roll out the news. Veni, vidi, vici, it aint so far.

Nothing is so admirable in politics as a short memory.

John Kenneth Galbraith.

Trump's $250 Billion China Haul Is Big Number, Little Substance

Bloomberg News
The headline number is impressive: A quarter-trillion dollars worth of deals from China that President Donald Trump can use to show he’s creating opportunities for U.S. businesses and jobs for his base.

The reality, however, is that the roughly 15 agreements set to be unveiled on Thursday are mostly non-binding memorandums of understanding and could take years to materialize -- if they do at all. A day earlier, Commerce Secretary Wilbur Ross announced $9 billion of deals, many also MOUs with few details, rather than contracts.

The U.S. is announcing one larger deal on Thursday: a joint development agreement to advance a liquefied natural gas project in Alaska, involving the state-run Alaska Gasline Development Corp., Sinopec, the China Investment Corp and the Bank of China. The project would involve total investment of up to $43 billion.

But one Chinese official said that senior executives of Sinopec weren’t aware of the deal set to be announced on Thursday. A separate Chinese official said the MOUs merely show China’s goodwill toward Trump, and would take years of negotiations to become real contracts.

Alaska officials have been trying to pursue this project for years, but have run into difficulties because of the price-tag of the project and the stiff competition from cheaper and more accessible shale gas in Texas and elsewhere.

The non-committal nature of many of the deals reflects a lack of planning or advance work ahead of Trump’s visit to pin down significant agreements or concessions from China, according to two administration officials who asked not to be identified to speak about private deliberations.

The officials pointed to the fact that there were no agreements on giving U.S. companies more access 
to Chinese markets, or opening up Chinese financial markets -- something investors have been demanding for years.

And the agreements reflect China’s desire to send Trump home with some tweetable "deliverables" from his Asia jaunt, in part to keep him from pressing for more concrete steps that would be harder for China to deliver, such as true changes to its trade policy or to its stance on North Korea, several observers said.
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November 9, 2017 / 5:59 AM

Trump says believes 'things will happen' on North Korea

BEIJING (Reuters) - U.S. President Donald Trump on Thursday said he believed “things will happen” on the ongoing North Korea crisis, following meetings with Chinese President Xi Jinping.

Trump, during a meeting with Chinese Premier Li Keqiang, said he had tremendous meetings earlier on trade, North Korea and opioids and that there were only warm feelings towards China.

November 9, 2017 / 12:56 AM

In Beijing, Trump presses China on North Korea and trade

BEIJING (Reuters) - U.S. President Donald Trump called on China to do more to resolve the North Korean nuclear issue and said bilateral trade had been unfair to the United States, while Chinese President Xi Jinping said his country would be more open to foreign firms.

On North Korea, Trump said “China can fix this problem quickly and easily,” urging Beijing to cut financial links with North Korea and also calling on Russia to help.

Trump was speaking alongside Xi in the Chinese capital to announce the signing of about $250 billion in commercial deals between U.S. and Chinese firms, a display that some in the U.S. business community worry detracts from tackling deep-seated complaints about market access in China.

----Trump made clear that he blamed his predecessors, not China, for the trade imbalance, and repeatedly praised Xi, calling him “a very special man”.

“But we will make it fair and it will be tremendous for both of us,” Trump said.

Trump is pressing China to tighten the screws further on North Korea and its development of nuclear weapons. At least modest progress is hoped for, though there are no immediate signs of a major breakthrough, a U.S. official said earlier.

Referring to Xi, Trump said: “I do believe there’s a solution to that, as do you.”

In a show of the importance China puts on Trump’s first official visit, Thursday’s welcoming ceremony outside Beijing’s Great Hall of the People overlooking Tiananmen Square was broadcast live on state television - unprecedented treatment for a visiting leader.

Earlier on Thursday, Xi said he had a deep exchange of views with Trump and reached consensus on numerous issues of mutual concern.

“For China, cooperation is the only real choice, only win-win can lead to an even better future,” he said.

Xi said China and the United States strengthened high-level dialogue on all fronts over the past year and boosted coordination on major international issues, such as the Korean peninsula and Afghanistan.

“Relations between China and the United States are now on a new historical starting point,” Xi said

----And while Xi is riding high after consolidating power at a twice-a-decade Communist Party Congress last month, Trump comes to China saddled with low public approval ratings and dogged by investigations into Russian links to his election campaign.

‘HORRIBLE’ TRADE SURPLUS

Trump has ratcheted up his criticism of China’s massive trade surplus with the United States - calling it “embarrassing” and “horrible” last week - and has accused Beijing of unfair trade practices.

----Several corporate chief executives were in Beijing as part of a delegation led by U.S. Commerce Secretary Wilbur Ross, with General Electric and semiconductor maker Qualcomm Inc among those announcing billions of dollars in sales to China.

But Qualcomm’s agreement to sell $12-billion worth of components to three Chinese mobile phone makers over three years is non-binding, and critics say such public announcements are sometimes more show than substance.
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In market news, underwhelming is the view so far. President Trump seems to be declaring victory, and moving on, for the APEC meeting in Vietnam. Presumably to get his instructions from President Putin, according to the Obamaite-Clintonistas. President Putin is probably wondering why he’s bothering.

Asia Stocks Retreat From Record High; Dollar Falls: Markets Wrap

By Andreea Papuc and Abhishek Vishnoi
Updated on November 9, 2017, 5:56 AM GMT
Stocks in Asia took a sudden turn lower, led by Japan, as some traders ascribed technically-driven trading after indexes hit historic highs earlier in the day. The yen and gold climbed as investors kept an eye on U.S. President Donald Trump’s visit to China.

The MSCI Asia Pacific Index, which passed its 2007 peak earlier in the day, fell as Japan’s equities relinquished advances of at least 1 percent. While it wasn’t immediately clear what propelled the mid-afternoon reversal, Kabu.com Securities Co. said the rally in the Nikkei 225 Stock Average and Topix index, which had propelled them to quarter-century highs, was too fast. Trump said in an appearance in Beijing that the power exists to liberate the world from the North Korea "menace."

Worries over North Korean tensions have periodically spurred bouts of risk-aversion trades this year.
Stocks in Tokyo earlier touched their highest in about 25 years, supported by earnings, a weak yen -- the currency is still near its lowest since March -- the global equity rally and Prime Minister Shinzo Abe’s landslide re-election. Stocks were up in Hong Kong and Sydney.

The exuberance is of some concern to Oaktree Capital Group LLC’s Howard Marks, who pointed to the divergence between a bond market pricing in lackluster economic growth and a booming stock market in a Bloomberg TV interview in Hong Kong. Ten-year Treasury yields have declined after reaching the highest since March in late October, even as the U.S. stocks have been clocking record highs.

----The progress of tax-reform talks continues to be a backdrop for the markets. Among the latest developments, the tax proposal released on Thursday will be a “conceptual mark,” instead of detailed legislative text, according to the Senate Finance Committee. The House tax-writing committee entered its third day of work Wednesday to hammer out the details of the Republican tax-cut plan.
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November 8, 2017 / 10:07 AM

Kremlin says Putin meeting with Trump at APEC 'highly likely'

MOSCOW (Reuters) - A meeting between Russian President Vladimir Putin and U.S. counterpart Donald Trump at the Asia-Pacific Economic Cooperation (APEC) summit in Vietnam this week is “highly likely,” Kremlin spokesman Dmitry Peskov said on Wednesday.

Peskov added that the two sides were still trying to agree on the best time and format for the meeting.

In central banking as in diplomacy, style, conservative tailoring, and an easy association with the affluent count greatly and results far much less.

John Kenneth Galbraith

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

Today, ZeroHedge debunks Europe’s Fake News that it’s booming. Brexit now, before this continental wide Ponzi Scheme collapses.

Europe Is Booming, Except It's Not

Nov 8, 2017 5:00 AM
European GDP rose 0.6% quarter-over-quarter in Q3 2017, the eighteenth consecutive increase for the Continental (EA 19) economy. That latter result is being heralded as some sort of achievement, though the 0.6% is also to a lesser degree. The truth is that neither is meaningful, and that Europe’s economy continues toward instead the abyss.

At 0.6%, that doesn’t even equal the average growth rate exhibited from either the late 1990’s or middle 2000’s. Straight away one of the so-called better quarters is already below average by historical comparison. That would suggest Europe’s economy is still struggling.

Because even these positive quarters are never all that positive, there can never be enough momentum let alone growth to make up for when there was clear, linear contraction. The economy shrinks and though GDP turns positive afterward, even for eighteen straight quarters, the shrinking isn’t actually concluded.

The gap to Europe’s pre-crisis baseline is actually substantially larger now after four and a half years of steady “growth” than at the bottom of the re-recession trough reached in Q1 2013.

From the perspective of steady growth and successful monetary policy, ECB officials might expect that inflation would start to behave according to the central bank’s target. It hasn’t, and the latest results for October 2017 suggest even more problems along these lines.

The headline HICP decelerated to just 1.4% last month, while more ominously the “core” rate dropped to less than 1% again. The former keeps moving further away from the target when it was expected to do so only for a few months in the middle of this year. Once the oil price base effects were digested around April and May, the ECB’s models predicted gently accelerating inflation reaching (in sustained fashion) their 2% goal by early next year.

The core rate at just 0.9% indicates more so the opposite possibility, continuing the global “conundrum.” Despite ongoing massive ECB intervention supposedly in euro “money”, these operations bear no correlation at all with inflation and therefore effective monetary conditions in the real economy. The lack of inflation continues to advise the non-linear contraction scenario described above with regard to the GDP gap.

The issue is, as always, monetary definitions, which in Europe, as everywhere else, is more than an academic matter. The ECB through its various LSAP’s through the years created bank reserves as a byproduct and nothing more. These are but one form of bank liability and a mostly useless and inert one at that. It is little wonder that the real economy fails to respond to what in the mainstream is wrongly characterized as “money printing”; and therefore why there continues to be expectations consistent with money printing but widespread results contrary to that process.

From a more direct monetary view, such as German 2s, there is no inconsistency at all. Even though the ECB will be tapering its bond purchases, and therefore bund purchases, too, German federal yields are trading in the “wrong” direction from what QE tapering is supposed to reflect.

In fact, more negative 2s is instead indicative of higher liquidity preferences, which, for the terms of this discussion, is consistent with a struggling economy unable to generate momentum (and therefore core inflation). That’s why the “yield” moves contrary to fewer ECB purchases because that factor doesn’t matter nearly as much as the other. It’s actually been this way for several months now, going all the way back to the end of June.

You don’t find any of this in mainstream discussion about Europe, only the brief mention of this inflation mystery, and the related confusion over the political situation there, all dismissed easily in the context of the future economy that (always)looks to be so bright (but never is).

Because the ECB is tapering QE, that’s all that matters to set the conventional narrative. Europe is booming because Europe has to be booming. Except that it isn’t; not even close.


J. K. Galbraith.


Technology 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?

Two-dimensional materials unlock the path to ultra-low-power transistors

Date: November 7, 2017

Source: University of York

Summary: An international team of scientists has discovered a new route to ultra-low-power transistors using a graphene-based composite material.

An international team of scientists has discovered a new route to ultra-low-power transistors using a graphene-based composite material.

As transistors are squeezed into ever smaller areas within computer chips, the semiconductor industry struggles to contain overheating in devices.

Now researchers from the University of York and Roma Tre University believe the solution lies in composite materials built from monolayers of graphene and the transition metal dichalcogenide (TMDC).They discovered these materials could be used to achieve a fine electrical control over the electron's spin -- its tiny compass needle.

The new research, published in the journal Physical Review Letters, could lead the way to much needed low-energy consumption electronics.

Lead researcher Dr Aires Ferreira, of the University of York's Department of Physics, said: "For many years, we have been searching for good conductors allowing efficient electrical control over the electron's spin.

"We found this can be achieved with little effort when two-dimensional graphene is paired with certain semiconducting layered materials. Our calculations show that the application of small voltages across the graphene layer induces a net polarization of conduction spins.

"We believe that our predictions will attract substantial interest from the spintronics community. The flexible, atomically thin nature of the graphene-based structure is a major advantage for applications. Also, the presence of a semiconducting component opens up the possibility for integration with optical communication networks."

The electron's spin is like a tiny, point-like magnet which can point only in two directions, up or down. In materials where a major fraction of electrons' spins is aligned, a magnetic response is produced, which can be used to encode information.

'Spin currents' -- built from 'up' and 'down' spins flowing in opposite directions -- carry no net charge, and therefore in theory, produce no heating. The control of spin information would therefore open the path towards ultra-energy-efficient computer chips. The team of researchers showed that when a small current is passed through the graphene layer, the electrons' spin polarize in plane due to 'spin-orbital' forces brought about by the proximity to the TMDC base. They also showed that the efficiency of charge-to-spin conversion can be quite high even at room temperature.

Manuel Offidani, a PhD student with York's Department of Physics, carried out most of the complex calculations in this study. He said: "The current-induced polarization of the electron's spin is an elegant relativistic phenomenon that arises at the interface between different materials.

"We chose graphene mainly because of its superb structural and electronic properties. In order to enhance the relativistic effects experienced by charge carriers in graphene, we investigated the possibility of matching it with recently discovered layered semiconductors."

Professor Roberto Raimondi, who leads the spintronics group at Roma Tre University, said: "The possibility of orienting the electron spin with electrical currents is attracting a lot of attention in the spintronics community and arises generally as a consequence of specific symmetry conditions.

"As such this phenomenon represents a perfect example where fundamental and applied research go happily together. In this respect, our calculations demonstrate that graphene combined with the transition metal dichalcogenides is an ideal platform where abstract theoretical principles may find immediate application in showing the way to experimental and technological development."
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The monthly Coppock Indicators finished October

DJIA: 23,277 +233 Up. NASDAQ:  6,728 +284 Up. SP500: 2,575 +183 Up.

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