Baltic Dry Index. 1212 +02 Brent Crude 65.22
The whole history
of civilization is strewn with creeds and institutions which were invaluable at
first, and deadly afterwards.
Walter Bagehot.
Is it still possible
to stop President Trump’s unwise trade war largely directed at NAFTA and NATO?
Probably not. President Trump having
placed himself in a corner with no easy exit, seems to be doubling down. After
NAFTA and NATO comes the trade war with China over the theft of America’s
intellectual property. Run, do not walk, to the lifeboats. In stock mania,
getting out early always trumped getting carried out last. Without a last
minute reversal of an insane return to the 1930s, stock mania is dead, getting
in the elevator and pressing “B” for basement.
If all
else fails, immortality can always be assured by spectacular error.
John Kenneth
Galbraith.
Asian spooked by Gary Cohn’s resignation
Published: Mar 7, 2018 1:38 a.m. ET
Asia-Pacific stocks were broadly lower Wednesday with investors spooked by
news that Gary Cohn would resign as President Donald Trump’s top economic
adviser after he lost a fight over tariffs.There was a lot of confusion in the morning session, said Kay Van-Petersen, global macro strategist at Saxo Bank. He expects further volatility once European traders arrive at their desks.
“I’ve gone from being a little bit relaxed about the trade-war thing to being quite a lot more nervous,” he added. “People are not giving it as much weight as they should be…I don’t think people are really thinking this through.”
Highlighting the back-and-forth in markets, Japan’s Nikkei Stock Average NIK, -0.77% briefly turned positive after an early 1% drop. But Tokyo stocks were recently lower, falling along with many Asian equities benchmarks. The Japanese index was off 0.8% with commodities-related stocks, banks and auto makers sagging.
The commodities-heavy S&P/ASX 200 in Australia XJO, -1.01% closed down 1% with oil futures also under pressure.
S&P 500 futures ESH8, -1.42% were down 1.4% while the ICE Dollar Index DXY, -0.01% eased 0.1%.
More
https://www.marketwatch.com/story/asian-markets-dragged-down-after-gary-cohns-resignation-2018-03-06
Trump Confronted Cohn on Trade Hours Before Resignation, Sources Say
By Jennifer Jacobs
Updated on 7 March 2018, 04:43 GMT
President Donald Trump demanded economic adviser Gary Cohn’s cooperation
on tariffs in a meeting in the Oval Office Tuesday -- asking Cohn directly if
he would support his decision to move forward with the plan.
Cohn would not offer his support, according to two people familiar with
the episode -- and just hours later, the White House announced Cohn’s
resignation.
In a way, Cohn’s resignation as director of National Economic Council
was exactly as Trump had predicted this week, telling associates that he
expected Cohn to quit if Trump went ahead with the tariffs. Trump is expected
to announce the moves -- a 25 percent tariff on steel and 10 percent on
aluminum -- as early as this week.
Cohn is a free-trade advocate who vociferously opposed Trump’s plan, so
his views were well-known. But the moment in the Oval Office brought the two
men -- president and adviser -- into direct conflict.
Trump, during the trade policy meeting in the Oval Office Tuesday, asked
for an update on the legal paperwork that will make the tariffs official and
discussed the timing of the signing of the tariffs order. He then sought
confirmation that everyone -- and especially Cohn -- was willing to stand
behind him.
----This person also said that Cohn even agreed with Trump on the need for a tougher stance on China. but that any metals tariffs that also hit Canada, Mexico and the European Union seemed counterproductive. Still, Cohn is prepared to stay until the end of the month to help Trump pick his new economic adviser, this person said.
Not only that, the person said, Cohn would be willing to come back for
an even larger job, including possibly a cabinet post, the person said. All of
Trump’s cabinet positions are currently filled.
Cohn told the president in February that he was underutilized and should
have a bigger role, the person added, and if there wasn’t a bigger for him,
that he was considering moving on.
More
How a tariff-rattled stock market is reacting to Cohn’s resignation from the Trump White House
Published: Mar 6, 2018 10:29 p.m. ET
Dow futures tumble more than 400 points at lows amid news of the resignation of Trump’s key economic adviser
U.S. stock benchmarks looked set to open sharply lower after Gary Cohn, the head of President Donald Trump’s National Economic Council, resigned late Tuesday.Cohn, a former Goldman Sachs Group Inc. GS, +1.45% executive, has been viewed by Wall Street participants as a level head within an administration that has viewed by some critics as one in turmoil.
Cohn is regarded as the chief architect of Wall Street-friendly corporate tax cuts signed into law last year and his decision to leave the role as the president’s top economic adviser underlines a fear that Trump, who last week announced global tariffs on aluminum and steel, is set to soon adopt protectionist stance, which many strategists and traders view as a threat to the economic expansion should they spark a global trade war.
Cohn was increasingly on the outs, according to news reports and viewed as part of a so-called globalist faction in the Trump administration, attempting to moderate efforts to impose protectionist trade policies.
According to The Wall Street Journal, Cohn had lost an intense battle over trade with Peter Navarro, another key presidential adviser seen as an proponent of the tariff plan.
More
March 6, 2018 / 4:45 PM / Updated
3 hours ago
Trade skeptics gain upper hand in White House as Cohn quits
WASHINGTON (Reuters) - Economic nationalists appeared to gain
the upper hand in a White House battle over trade with the resignation of
Donald Trump’s top economic adviser, Gary Cohn, on Tuesday in a move that could
ramp up protectionist measures that risk igniting a global trade war.
----Cohn’s resignation
came after Trump said he was sticking with plans to impose hefty tariffs on
steel and aluminum imports. While the measures on their own are relatively
small, the risk is that an emboldened Trump administration will push ahead with
a full-scale economic confrontation with China.
America’s trade deficit with China hit $375.2 billion in 2017,
equivalent to two-thirds of the country’s total trade deficit of $566 billion.
Trump has said he will remedy what he terms the jobs- and industry-destroying
deficits.
“The economic nationalists now certainly have the upper hand and their
camp is bigger. I think they are going to be very influential in the
administration,” said Monica de Bolle, a senior fellow at the Peterson
Institute for International Economics, a Washington-based think tank.
The Trump administration has launched an investigation into intellectual
property abuses by China, which could dwarf any impact of the steel and
aluminum proposals and trigger a sharp response from Beijing. Trump has said
the fines could be huge.
With Cohn’s departure, the profile of Peter Navarro, an anti-China
economist who favors protectionist measures, appears to have risen within the
White House.
Navarro has written extensively of China’s military and economic threat
to the United States in a series of books, including “Death by China:
Confronting the Dragon — A Global Call to Action.”
Moew
DowDuPont Says Trump Steel Tariffs Hurt Case for New U.S. Plants
By Jack Kaskey
Updated on 6 March 2018, 23:38 GMT
DowDuPont Inc., the world’s largest chemical
company, is considering Canada or Argentina instead of the U.S. Gulf Coast for
its next major investment as President Donald Trump’s proposed steel tariffs
make domestic construction pricier.The tariffs would add hundreds of million of dollars to DowDuPont’s next wave of petrochemical expansion, said Jim Fitterling, chief operating officer of the Dow unit.
“You eventually get yourself to the point where you are saying, ‘Should I really be building that here or somewhere else?’” Fitterling said Tuesday on the sidelines of the CERAWeek by IHS Market energy conference in Houston. “We’ve got opportunities in other places like Canada, like Argentina. All of them right now are on the radar screen.”
DowDupont last year completed construction of $6 billion in new factories along the Texas Gulf Coast to take advantage of abundant, low-cost natural gas from the shale drilling boom. Those plants contained about $1.2 billion worth of steel, Fitterling said Tuesday in an interview. Trump’s proposed 25 percent duty on steel imports would have added about $300 million in costs to the project.
The company, which in May announced another $6 billion of U.S. projects, plans to disclose a big investment before the Dow unit is spun off as a separate company in the first quarter of next year, Fitterling said. But the economics of the development are shifting.
More
https://www.bloomberg.com/news/articles/2018-03-06/dowdupont-says-steel-tariff-hurts-case-for-more-u-s-factories
Goldman Sachs Rips Into Trump’s Tariffs Plan
By Jasmine Ng
Updated on 6 March 2018, 08:13 GMT
Goldman Sachs Group Inc. delivered a comprehensive critique of Donald
Trump’s planned metal tariffs, saying they risk damaging the world’s biggest
economy by raising costs just as price pressures build, hurting allies more
than others, and creating a two-tier global market.“Import tariffs make the U.S. less competitive by raising the prices of raw materials,” the New York-based bank said in a report received on Tuesday. It added: “By imposing across-the-board tariffs to all steel and aluminum imports, the larger economic impact is on Canada, Mexico and the EU, and it ironically eases the economic impact to China and Russia.”
Trump’s plan has ignited a firestorm of opposition, with criticism from around the globe, senior members of his own party, and top manufacturers including Ford Motor Co. As Goldman weighed in, BHP Billiton Ltd. delivered its own assessment, with the world’s biggest miner describing Trump’s move as a “black day for the world.” Goldman’s report came as White House economic adviser Gary Cohn is summoning executives from U.S. metals users to meet with the president on Thursday to fight the curbs.
“The president has likely created a two-tier metal market,” analysts led by Jeff Currie wrote. “Economically, a two-tier market is ultimately damaging to U.S. downstream industries that consume these metals, as it creates an uneven playing field for U.S. industries that face higher metal prices.”
In a sign that Trump’s plan risks unleashing a tit-for-tat response from top trading partners, the European Commission has proposed retaliatory tariffs on imports of U.S. steel, apparel, textile and footwear, as well as selected industrial goods, according to a draft seen by Bloomberg News. That list includes motorbikes, t-shirts, jeans, corn and bourbon.
More
https://www.bloomberg.com/news/articles/2018-03-06/goldman-says-trump-tariffs-ultimately-damaging-to-u-s-buyers
U.S. Considers Broad Curbs on Chinese Imports, Takeovers
By Andrew Mayeda and Jennifer Jacobs
Updated on 7 March 2018, 05:41 GMT
The Trump administration is considering clamping down on Chinese investments
in the U.S. and imposing tariffs on a broad range of its imports to punish
Beijing for its alleged theft of intellectual property, according to people
familiar with the matter.An announcement following an investigation by the U.S. Trade Representative’s office into China’s IP practices is expected in the coming weeks, potentially handing President Donald Trump further cause to impose trade restrictions. His announcement last week of tariffs on steel and aluminum imports has already ratcheted up global trade tensions -- and led to the resignation Tuesday of his chief economic adviser Gary Cohn, who opposes such measures.
Trump tweeted he’ll be making a decision on a
replacement soon and that there are “many people wanting the job.” The dollar
fell and the yen -- often a haven in turmoil -- jumped as much as 0.6 percent
to 105.46 per dollar, approaching a 16-month high set last week.
The president is now fighting trade offensives on multiple fronts, from targeting strategic rival China to angering allies like Canada and the European Union with threats to erect fresh barriers. While his counterparts have threatened retaliation, concrete action that would herald the start of an all-out trade war has yet to come.
Read more about how the EU is readying measures against GOP heartland
Under the most severe scenario being weighed, the U.S. could impose tariffs on a wide range of Chinese imports, from shoes and clothing to consumer electronics, according to two people familiar with the matter who spoke on condition of anonymity because the discussions aren’t public.
The Trump administration could combine the tariffs with restrictions on Chinese investments in the U.S., which are reviewed for national-security risks by Treasury’s Committee on Foreign Investment in the U.S., the people said. The new measures being considered by the administration could go beyond even domestic security considerations.
More
https://www.bloomberg.com/news/articles/2018-03-06/u-s-said-to-consider-broad-curbs-on-chinese-imports-takeovers
“It is hard for us, without being flippant, to even see a scenario
within any kind of realm of reason that would see us losing one dollar in any
of those [Credit Default Swap] transactions.”
Joseph J. Cassano, former head
of A.I.G. Financial Products, London, August 2007. AIG was bailed out with 85
billion September 2008, after Cassano’s riskless CDS blew up.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today the totally doubled over. When did the last honest man leave
corporate Japan? Below, a story that like Germany’s dirty killer diesel engines,
is going to run, and run, and run.
March 5, 2018 / 6:00 PM / Updated
11 minutes ago
Kobe Steel admits data fraud went on nearly five decades, CEO to quit
TOKYO (Reuters) - Kobe Steel Ltd admitted
on Tuesday its data fraud has been going on nearly five decades and also
revealed new cases of cheating, highlighting the challenges facing the
112-year-old company mired in compliance failures and malfeasance.
Japan’s third-biggest steelmaker said its CEO will step down to take
responsibility for the widespread data fraud scandal that came to light last
year, although doubts remain over its corporate culture and the possibility of
future fines.
Kobe Steel, which supplies steel parts to manufacturers of cars, planes
and trains around the world, admitted last year to supplying products with
falsified specifications to about 500 customers, throwing global supply chains
into turmoil.
The company, in announcing the results from a four-month-long
investigation by an external committee, said it had also found new cases of
impropriety, widening the total of affected clients to 605, including 222
customers overseas.
“I feel heavy responsibility as our data falsification has caused
trouble to so many customers,” the resigning CEO and chairman, Hiroya Kawasaki,
told a news conference.
“I’ve offered my resignation ... as I think preventive measures should
be done under a new management,” he said.
Kawasaki will leave his post on April 1, with his successor to be
decided soon by the board, the company said.
Inappropriate actions were widespread, and were carried out with the
knowledge and involvement of many, including management, the company said.
Kobe Steel also announced the resignation of Executive Vice President
Akira Kaneko and temporary pay cuts for up to 80 percent of all internal
directors and executive officers.
The case was one of the country’s biggest industrial scandals in recent
memory, which set off a rash of malfeasance revelations by other Japanese
heavyweights, hitting the country’s reputation for manufacturing excellence.
In
the past several months, Mitsubishi Materials Corp, Toray Industries and Ube
Industries have also admitted to product data fabrication while automakers
Nissan Motor and Subaru Corp have revealed incorrect final inspection
procedures.
Kobe Steel said the
data cheating started at least as early as the 1970s, based on testimony from
multiple sources interviewed by the external investigation team.
---- Kobe Steel
has had a series of scandals in the last dozen years, including taking part in
bid-rigging for a bridge project in 2005, failing to report income to tax
authorities in 2008, 2011 and 2013, and falsifying emissions data in 2006.
Illegal political funding to candidates in local elections in 2009 also
prompted the resignations of the then CEO and chairman.
More
March 6, 2018 / 7:51 PM
Kobe Steel, Toyota hit with U.S. lawsuit over vehicle metal quality
NEW YORK/TOKYO (Reuters) - U.S. consumers
have filed a lawsuit against Kobe Steel Ltd and Toyota Motor Corp accusing the
companies of violating consumer protection laws and engaging in fraud by
concealing the use of substandard metal components in vehicles.
The proposed class-action lawsuit represents the first U.S. consumer
complaint filed against Kobe Steel over data fraud, and highlights the legal
risks the company faces even after Chief Executive Officer Hiroya Kawasaki
announced on Tuesday he would quit to draw a line under the scandal.
The 112-year-old company, which supplies steel and aluminium parts to
manufacturers of cars, planes and trains around the world, admitted last year
to supplying products with falsified specifications to around 500 customers,
throwing global supply chains into turmoil.
----The U.S. lawsuit, filed on Monday in federal court in San Francisco,
was brought by two California residents who seek to represent a nationwide
class of consumers who bought allegedly defective Toyota vehicles.
According to the complaint, Toyota’s Prius, Camry, Land Cruiser and
Lexus vehicles have all been manufactured with “sub-standard” steel, aluminium
and copper.
More
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?
Insulator or superconductor? Physicists find graphene is both
Date: March 5, 2018
Source:
Massachusetts Institute of Technology
Summary:
Insulator or superconductor? Physicists find graphene is both, at a 'magic
angle.'
It's hard to believe that a single material can be described by as many
superlatives as graphene can. Since its discovery in 2004, scientists have
found that the lacy, honeycomb-like sheet of carbon atoms -- essentially the
most microscopic shaving of pencil lead you can imagine -- is not just the
thinnest material known in the world, but also incredibly light and flexible,
hundreds of times stronger than steel, and more electrically conductive than
copper.
Now physicists at MIT and Harvard University have found the wonder
material can exhibit even more curious electronic properties. In two papers
published today in Nature, the team reports it can tune graphene to
behave at two electrical extremes: as an insulator, in which electrons are
completely blocked from flowing; and as a superconductor, in which electrical
current can stream through without resistance.
Researchers in the past, including this team, have been able to
synthesize graphene superconductors by placing the material in contact with
other superconducting metals -- an arrangement that allows graphene to inherit
some superconducting behaviors. This time around, the team found a way to make graphene
superconduct on its own, demonstrating that superconductivity can be an
intrinsic quality in the purely carbon-based material.
The physicists accomplished this by creating a "superlattice"
of two graphene sheets stacked together -- not precisely on top of each other,
but rotated ever so slightly, at a "magic angle" of 1.1 degrees. As a
result, the overlaying, hexagonal honeycomb pattern is offset slightly,
creating a precise moiré configuration that is predicted to induce strange,
"strongly correlated interactions" between the electrons in the
graphene sheets. In any other stacked configuration, graphene prefers to remain
distinct, interacting very little, electronically or otherwise, with its
neighboring layers.
----
"We can now use graphene as a new platform for investigating
unconventional superconductivity," Jarillo-Herrero says. "One can
also imagine making a superconducting transistor out of graphene, which you can
switch on and off, from superconducting
More
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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