Baltic Dry Index. 1196 +04 Brent Crude 63.81
John Kenneth Galbraith.
The news today, and
probably all weekend and all next week, will likely be all about President
Trumps import taxes on foreign steel and aluminium. Already Brazil, Canada,
China, the European Union, and Mexico, have all indicated that unless they’re
exempted next week they will retaliate “asymmetrically.” Presumably intending
to hit exports from President Trump’s base in the “red states.”
Conventional wisdom
says that no one wins in a global trade war, and I suspect conventional wisdom
will be proved right yet again, if President Trump goes through with his tariff
plans next week. A trade war sinks all ships, though not necessarily all at the
same time. The biggest loser this time round, is likely to be our vastly over
priced stock markets. In the midst of a trade war and continuing currency war, and
in a rising interest rate environment, few corporations will have the luxury of
corporate stock buybacks. Servicing their debt and getting out of the way of
the unintended consequences of the developing trade war requires a skill set that
few modern managements possess.
Below, the world on
the cusp of a trade war.
If all
else fails, immortality can always be assured by spectacular error.
John Kenneth
Galbraith.
March 2, 2018 / 3:10 AM
Asia fears trade war after Trump plans hefty steel, aluminum tariffs
SEOUL/SYDNEY (Reuters) - U.S. President Donald Trump’s
planned tariffs on steel and aluminum will distort global trade and cost jobs,
Australia’s trade minister said on Friday, highlighting the risk of retaliatory
measures as Asian exporters sought more detail on the plans.
Fears of an escalating trade war hit the share prices of Asian
steelmakers and manufacturers supplying U.S. markets particularly hard on
Friday following a rough night on Wall Street.
Trump said the duties of 25 percent on steel and 10 percent on aluminum
would be formally announced next week, although White House officials later
said some details still needed to be ironed out.
“The imposition of a tariff like this will do nothing other than distort
trade and ultimately, we believe, will lead to a loss of jobs,” Australian
trade minister Steven Ciobo told reporters in Sydney.
“My concern remains that on the back of actions like this we could see
retaliatory measures that are put in place by other major economies. That is in
no-one’s interest.”
Australia, which has championed the free-trade Trans Pacific Partnership
that Trump pulled the United States out of, has sought an exemption for its
steel and aluminum to the United States, Ciobo added.
Steel has become key focus for Trump, who pledged to restore the U.S.
industry and punish what he sees as unfair trade practices, particularly by
China.
Although China only accounts for 2 percent of U.S. steel imports, its
massive industry expansion has helped produce a global glut of steel that has
driven down prices.
More
Here’s why the stock market took the Trump tariff announcement so hard
Published: Mar 1, 2018 6:43 p.m. ET
Add trade tensions and the threat they pose to economic growth to the list
of worries already dogging stock-market investors in 2018.President Donald Trump’s announcement Thursday that he was set to impose tariffs on aluminum and steel imports sent stocks tumbling, with the Dow DJIA, -1.68% ending the day down 420.22 points, or 1.7%, while the S&P 500 SPX, -1.33% plunged 1.3%. Implied volatility, as measured by the Cboe Volatility Index VIX, +13.20% or VIX, jumped Thursday afternoon, ending the day around 13% higher at 22.47, after pushing above 25.
It’s the economy
The broad-based nature of the tariffs — and the broad-based market reaction — indicate that “investors are not only concerned about this particular action, but also how that’s going to affect the economy in the U.S.,” said James Norman, president of QS Investors, in a phone interview.Read: These Dow and S&P 500 stocks took the biggest hits on fears of a Trump trade war
After all, not only did the news hit heavy users of steel and aluminum, like Boeing Co. BA, -3.46% and Ford Motor Co. F, -3.02% , he noted, but other cyclically-sensitive areas, such as tech stocks, health care and consumer cyclicals.
Domestic U.S. steel prices were already up 20% since the beginning of the year in anticipation of possible tariffs, said Andrew Hunter, U.S. economist at Capital Economics, in a note. That’s a big potential drag on steel consumers in the machinery, motor vehicle and construction industries, he said, observing that the tariffs could, ironically, raise the incentive for those manufactures to move production offshore to avoid the tariffs.
More uncertainty means…
The threat of retaliation by trade partners is also a concern, potentially creating a spiral that could undercut global economic growth, widely seen as a key ingredient in the stock market’s 2017 rally.See: Trump steel tariffs to hit these 8 countries the hardest (China is not one of them)
That was part of the “Goldilocks” backdrop for equities, along with subdued inflation pressures and confidence in the monetary policy outlook.
Over the past month, that’s been eroded by worries over a potential pickup in inflation and uncertainty over monetary policy.
…more volatility
“If you throw into that uncertainty about trade policy and how that might impact economic growth, then that increases uncertainty. And that’s why I think you’re seeing this volatility uptick,” Norman said.Read: Here’s how stock market investors lost their ‘security blanket’
More
Three Unanswered Questions About Trump's Metals Tariffs
By Joe Deaux1. Exemptions
Trump said he plans to sign the measure some time next week. If the confusion in the hours before today’s announcement is anything to go by, a week is a long time in U.S. policy making. While Trump didn’t say any country would be excluded from a 25 percent duty on steel imports and 10 percent on aluminum, Canadian producers “have to keep hoping” for an exemption, according to Jean Simard, who heads the country’s aluminum association.2. Products
Those tariff levels “are the intent,” White House press secretary Sarah Sanders said after Trump’s announcement, with details of the action still to be written. That begs the question: will all types of steel and aluminum products be included?3. Implementation
Will changes be made after the tariffs are implemented, in a similar way as the Bush administration did after passing its steel 201 petition in 2002?Those tariffs, which were found to be illegal by the World Trade Organization, were originally scheduled to run until March 2005. They were imposed after the International Trade Commission found that surging steel imports were a substantial cause of serious injury or threat of serious injury to the U.S. industry. Revocation of the tariffs allowed the U.S. to avoid some $2.2 billion in retaliation threatened by the European Union.
More
Elsewhere, will Italy’s
voters finally finish off the the unreformable, dying EUSSR on Sunday? Europe couldn’t
be that lucky, could it? Polls suggest
that the lucky Italians are headed for a hung Parliament, how we Brits envy
them, we would love to hang ours.
March 1, 2018 / 12:24 PM
In Italian election campaign, Facebook, Twitter replace posters, piazzas
ROME (Reuters) - The Italian election campaign is different
from those of years past when the streets were lined with political posters and
leaders rallied voters up and down the country.
Italian parties are harnessing social media to speak to voters,
especially young ones, in part because they are strapped for cash. For the
first time there will be no public refund to parties for their campaign
spending and social media offers affordable ways to reach voters in a largely
unregulated forum.
The placards are few and far between and the only large rallies were
held during the final week of the campaign for the March 4 vote. But in the
virtual world, Facebook and other social media are full of political content.
“The balance sheets of the parties range from disastrous to terrifying,”
said Vincenzo Smaldore, the chief content editor for Openpolis, an online group
whose mission is to provide transparency in politics and public affairs.
In terms of regulation“social media are virgin territory for political
campaigns,” he said.
Five years ago, when the 5-Star Movement stormed into parliament for the
first time with almost a quarter of the vote, it was the only party to leverage
social media. Not any more.
“In this election campaign, there’s been an almost total shift to social
media,” said Pietro Raffa, who runs online content for politicians and parties
as a partner with communications consultancy MR & Associati in Milan.
The Internet has surpassed radio as a source of information, Italy’s
media watchdog Agcom said in a report last month.
While TV remains the top source of information and candidates make daily
appearances on talk shows, almost 42 percent of Italians consult the Internet
every day, with social media and search engines their main focus.
The rapid increase in Internet usage has outpaced lawmakers and
regulators and begun to polarise political discourse.
“There’s an echo chamber effect, which is problematic when the objective
is to ensure citizens have media pluralism,” said Antonio Nicita, a
commissioner at Agcom.
The far-right League, which has one of the strongest social media
presences of the parties, tweets or posts media reports of crimes committed by
foreigners daily.
The party, part of a centre-right coalition that opinion polls show
leading but falling short of an absolute majority, uses“Italians First” as its
slogan, seeking to capitalise on fears tied to the arrival of more than 600,000
boat migrants over the past four years.
More
Finally, ooops. There
are experts and there are man made global warming “experts.”
…. Britain’s winter ends tomorrow
with further indications of a striking environmental change: snow is starting to disappear
from our lives. Sledges, snowmen, snowballs and the excitement of waking to find
that the stuff has settled outside are all a rapidly diminishing part of
Britain’s culture, as warmer winters - which scientists are attributing to
global climate change - produce not only fewer white Christmases, but fewer
white Januaries and Februaries...According to Dr David Viner, a
senior research scientist at the climatic research unit (CRU) of the University
of East Anglia ,within a few years winter
snowfall will become “a very rare and exciting event”. “Children just aren’t
going to know what snow is,” he said.
David Parker, at the Hadley Centre for Climate Prediction and Research in Berkshire, says ultimately, British children could have only virtual experience of snow. Via the internet, they might wonder at polar scenes - or eventually “feel” virtual cold. Heavy snow will return occasionally, says Dr Viner, but when it does we will be unprepared. “We’re really going to get caught out. Snow will probably cause chaos in 20 years time,” he said. The chances are certainly now stacked against the sort of heavy snowfall in cities that inspired Impressionist painters, such as Sisley, and the 19th century poet laureate Robert Bridges, who wrote in “London Snow” of it, “stealthily and perpetually settling and loosely lying”.
David Parker, at the Hadley Centre for Climate Prediction and Research in Berkshire, says ultimately, British children could have only virtual experience of snow. Via the internet, they might wonder at polar scenes - or eventually “feel” virtual cold. Heavy snow will return occasionally, says Dr Viner, but when it does we will be unprepared. “We’re really going to get caught out. Snow will probably cause chaos in 20 years time,” he said. The chances are certainly now stacked against the sort of heavy snowfall in cities that inspired Impressionist painters, such as Sisley, and the 19th century poet laureate Robert Bridges, who wrote in “London Snow” of it, “stealthily and perpetually settling and loosely lying”.
The Independent, March
20, 2000.
‘Snowfalls are now just a thing of the past’ – ‘Children just aren’t going to know what snow is’ – UK Independent
“Peace,
commerce, and honest friendship with all nations...entangling alliances with
none”
Thomas
Jefferson
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Yes it’s the cryptocurrency scams again, how to
separate fools from their money.
Is Bitcoin a Waste of Electricity, or Something Worse?
WASHINGTON — A manufacturing start-up recently announced plans to move
into a shuttered aluminum factory in upstate New York, taking advantage of
abundant cheap electricity from the St. Lawrence River.
Instead of smelting aluminum, however, the company plans to turn that
power into Bitcoins.
Money is supposed to be a means of buying things. Now, the nation’s
hottest investment is buying money. And the investment rush is raising
questions about whether one reason for the slow pace of economic growth in
recent years is that the nation is busy distracting itself. While Bitcoin mining
may not be labor intensive, it diverts time, energy and capital from other,
more productive activities that economists say could fuel faster growth.
“It appears that much of our evolving digital infrastructure is devoted
to activities, like the proliferation of cybercoins, that are worse than
frivolous,” said James McAndrews, the former head of research at the Federal
Reserve Bank of New York.
----Some economists see evidence that people
are playing
video games instead of going to work, logging on
instead of getting it on, and plowing a growing share of their time,
capital and natural resources into virtual products like social media, games
and the latest fad: virtual currencies.
Bitcoin, the largest virtual currency, is a
particularly voracious consumer of resources because new Bitcoins are
distributed in a kind of lottery where each ticket is purchased with
electricity.
Bitcoin miners compete for the coins by submitting
answers to difficult math problems. Instead of solving the problems, miners use
computers to submit a flood of guesses. This can be lucrative: Each Bitcoin is
currently valued at about $10,550.
Believers insist it is a worthwhile endeavor. They
describe Bitcoin as a superior currency that will eventually come into wide
use, and they predict even broader applications for blockchains,
the digital
bookkeeping method used to record ownership of Bitcoins and to verify
transactions.
But Bitcoin remains so hard to use that a major
Bitcoin conference in January had
to stop accepting Bitcoin. It is, in practice, a speculative investment,
like gold. And Tyler Cowen, an economist at George Mason University, said
mining gold was a better use of resources, because even if it lost value, it
could be used to fill teeth.
“Once the Bitcoin power is burned, it is never coming
back,” he said.
Colin L. Read, the mayor of Plattsburgh, N.Y., also
sees it as a public nuisance. The city was guaranteed a fixed supply of cheap
electricity as part of the construction of power-generating dams on the St.
Lawrence in the 1950s. Bitcoin mining companies are plugging into that power
supply like a swarm of hungry mosquitoes.
Mr. Read said that Bitcoin mining now consumes about
10 percent of the city’s power, and that is forcing Plattsburgh to buy a
growing amount of extra electricity on the open market, at rates up to 100
times higher than its base cost.
More
“Every man lives by
exchanging.”
Adam Smith
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?
Aqueous storage device needs only 20 seconds to go
Date:
February 28, 2018
Source:
The Korea Advanced Institute of Science and Technology (KAIST)
Summary:
A research team developed a new hybrid energy storage device that can be
charged in less than half a minute. It employs aqueous electrolytes instead of
flammable organic solvents, so it is both environmentally friendly and safe. It
also facilitates a boosting charge with high energy density, which makes it
suitable for portable electronic devices.
Professor Jeung Ku Kang and his team from the Graduate School of Energy,
Environment, Water, and Sustainability developed this hybrid energy storage
with high energy and power densities along over a long cycle life by assembling
fibre-like polymer chain anodes and sub-nanoscale metal oxide cathodes on
graphene.
Conventional aqueous electrolyte-based energy storage devices have a
limitation for boosting charges and high energy density due to low driving
voltage and a shortage of anode materials.
Energy storage device capacity is determined by the two electrodes, and
the balance between cathode and anode leads to high stability. In general, two
electrodes show differences in electrical properties and differ in ion storage
mechanism processes, resulting in poor storage and stability from the
imbalance.
The research team came up with new structures and materials to
facilitate rapid speed in energy exchange on the surfaces of the electrodes and
minimize the energy loss between the two electrodes.
The team made anodes with graphene-based polymer chain materials. The
web-like structure of graphene leads to a high surface area, thereby allowing
higher capacitance.
For cathode materials, the team used metal oxide in sub-nanoscale
structures to elevate atom-by-ion redox reactions. This method realized higher
energy density and faster energy exchange while minimizing energy loss.
The developed device can be charged within 20 to 30 seconds using a
low-power charging system, such as a USB switching charger or a flexible
photovoltaic cell. The developed aqueous hybrid energy device shows more than
100-fold higher power density compared to conventional aqueous batteries and
can be rapidly recharged. Further, the device showed high stability with its
capacity maintained at 100% at a high charge/discharge current.
Professor Kang said, "This eco-friendly technology can be easily
manufactured and is highly applicable. In particular, its high capacity and
high stability, compared to existing technologies, could contribute to the
commercialization of aqueous capacitors. The device can be rapidly charged
using a low-power charging system, and thus can be applied to portable
electronic device."
Another weekend and which
unlucky party will be unfortunate enough to “win” the Italian election? If you
thought sorting out a bankrupt Greece was difficult, just wait until Italy
defaults on Germany. Have a great weekend everyone.
Every decision on trade, on
taxes, on immigration, on foreign affairs, will be made to benefit American
workers and American families. We must protect our borders from the ravages of
other countries making our products, stealing our companies, and destroying our
jobs. Protection will lead to great prosperity and strength.
Donald Trump
The monthly Coppock Indicators finished February
DJIA: 25,029 +283 Up 01. NASDAQ: 7,273 +313 Up 03. SP500: 2,714 +212 Flat.
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