Thursday 5 April 2018

The End Of The Opening Gambit?


Baltic Dry Index. 977  -39     Brent Crude 68.37

There are few ironclad rules of diplomacy but to one there is no exception. When an official reports that talks were useful, it can safely be concluded that nothing was accomplished.

John Kenneth Galbraith

Today, did we just reach the end of the phony trade war? Does a real trade war start from here? Yesterday we got a relief rally of sorts, as China only responded in kind, in the Great Global Trump Trade War, with both sides seeming to signal a reluctance to go further. But given President Trump’s unpredictability and willingness to U-turn from day to day, is this a truce, a pause, or a mis-reading of President Trump’s intent? 

Alarmingly, the Baltic Dry (shipping) Index is sinking again. Is global trade already reacting to the prospect of a real trade war?

Politics is not the art of the possible. It consists in choosing between the disastrous and the unpalatable.

John Kenneth Galbraith

April 5, 2018 / 1:52 AM / Updated 2 hours ago

Asia shares bounce from two-month lows as U.S.-China trade war fears ease

TOKYO (Reuters) - Asian shares bounced from two-month lows on Thursday as world equities recovered from a selloff triggered by escalating Sino-U.S. trade tensions, with investors hoping a full-blown trade war between the world’s two biggest economies can be averted.

Sentiment was lifted as the United States expressed willingness to negotiate a resolution to the trade fight after the proposed U.S. tariffs on $50 billion in Chinese goods prompted a quick response from Beijing that it would retaliate by targeting key American imports.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2 percent, a day after it hit its lowest level in almost two month. Japan’s Nikkei gained 1.2 percent.

Markets in mainland China, and those in Hong Kong and Taiwan, are closed on Thursday.

On Wall Street on Wednesday, the S&P 500 gained 1.16 percent and the Nasdaq Composite added 1.45 percent, clawing back heavy losses of more than 1.5 percent right from earlier in the U.S. session.

“I think that the substance of trade restrictions and their real impact will be far less than the headlines,” said Jeffery Becker, Chairman and CEO at Jennison Associates in New York. “U.S. and Chinese cross border trade has grown significantly over the last decade and economic inter-dependence runs very deep, deeper than the actual trade numbers. And both countries have a lot to lose by escalating trade war.”

Many investors viewed U.S. President Donald Trump’s latest tariffs plan as a part of his negotiation strategy, rather than his final policy.

Indeed, Trump’s top economic adviser, Larry Kudlow, when asked whether the latest U.S. tariffs plan may never go into effect and may be a negotiating tactic, told reporters: “Yes, it’s possible. It’s part of the process.” He called the announcements by the two countries mere opening proposals.

The trade actions will not be carried out immediately, giving the two countries room for manoeuvrer.
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China Shows No One Wants a Trade War, Really

There's less to these tariffs than meets the eye.
By David Fickling and Shuli Ren
4 April 2018, 12:35 GMT+1
Is the phony trade war over?

With its plans to levy 25 percent tariffs on $50 billion of U.S. products including soybeans, cars and aircraft, China looks to have stepped the simmering trans-Pacific economic battle up a gear.

The initial parries between Washington and Beijing resulted in little more than flesh wounds. There were a series of levies on steel and aluminum exports to the U.S., which largely excluded the countries that export steel and aluminum to the U.S.; an impost on China's infinitesimal imports of U.S. pork, and on a scrap trade that Beijing is already trying to stamp out; and then Tuesday's heftier $50 billion tariff list from Washington, which was nonetheless carefully crafted to be almost invisible to Joe Sixpack.

Pick apart Beijing's latest list of countervailing duties and you'll see that in many areas there's once again less than meets the eye.

To be sure, the list deals a few headline-grabbing blows to select political constituencies. There's a special levy on cranberries, which these days are mainly grown in Wisconsin, the home state of House of Representatives Speaker Paul Ryan. Another hits the whiskey industry associated with Senate Majority Leader Mitch McConnell's base of Kentucky, borrowing a move from the European Union's tit-for-tat trade war game plan. And let's not forget those levies on fresh orange juice, calculated to hit growers in the electorally pivotal state of Florida.

Beneath that, though, many of the details suggest a more moderate approach. The duties on aircraft exclude all planes with an operating empty weight above 45 metric tons, a provision that looks to spare every aircraft that matters to Boeing Co. -- and, in any case, aerospace companies can get around tariffs by deferring orders to China and bringing forward deliveries to lessors elsewhere in the world.

Seven of the trade categories affected relate to beef, which China resumed importing from the U.S. only last year -- in minute quantities -- after a 14-year ban due to fears of mad cow disease. New 25 percent duties on wheat and corn won't do much additional damage to a trade that's minimal given the 65 percent import tariffs that China already charges on those crops.

The weight of the retaliation comes down to six categories: Cars, soybeans, plastics, tobacco, sorghum and chemicals. There's a canny political strategy buried in that list: The first three sectors are heavily concentrated in Midwestern states stretching from Ohio to Wisconsin that flipped from supporting Obama in the 2012 election to Trump in 2016. Tobacco and sorghum farms, too, tend to be in traditionally conservative areas of the South -- Texas, Virginia and North Carolina -- where Democrats have been making increasing inroads.

That politics-first approach makes more sense. For all the big talk, each side knows that it has more to lose than gain if the situation spirals out of control. Turning Trump's base into advocates for de-escalation and offering a few concessions on issues like technology transfer, automotive joint ventures and finance that Beijing had already been mooting seems like the perfect way to back off from these tensions.

With the latest skirmish imposing duties on roughly a third of Chinese imports from the U.S. and a tenth of the trade in the opposite direction, each side now has its hands on some real weapons -- but for that very reason, conditions are ripe for a ceasefire.
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Kudlow, China Push Time-to-Talk Message as Trade Tensions Rise

By Andrew Mayeda and Jennifer Jacobs
The U.S. and China indicated they’re willing to negotiate on escalating frictions, helping to ease fears among investors that a tit-for-tat trade dispute could derail the strongest global expansion in years.
The White House’s National Economic Council Director Larry Kudlow spent much of the day Wednesday trying to calm markets after the two countries announced tariffs, and said they still have time work out their differences.

“Remember, none of the tariffs have been put in place yet. These are all proposals,” he said in a brief interview, without specifying if talks are planned or how they’d take place. “We’re putting it out for comment. There’s at least two months before any actions are taken. China by the way did not enact the tariffs.”

China’s ambassador to the U.S., Cui Tiankai, also said his first choice would be to consult the U.S. over trade. “Negotiations would still be our preference, but it takes two to tango,” he said. “We’ll always stand for consultation and negotiation, but if others do things in the wrong direction, we’ll have to respond.”
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Trump Softens Key Nafta Demand on Regional Car Content

By Eric Martin and Josh Wingrove
Updated on 5 April 2018, 03:46 GMT+1
The Trump administration has softened a key Nafta demand for more North American content in car manufacturing -- a potential olive branch on arguably the biggest sticking point as the U.S. pushes to reach a stopgap deal this month, according to three people familiar with the talks.

The U.S. proposal would distinguish between different Nafta car parts by grouping them into five categories, some of which would have a lower requirement for North American content or none at all, said the people, who spoke on condition of anonymity because they’re not authorized to discuss the negotiations publicly.

While the U.S. had been pushing for 85 percent of a vehicle’s content to be sourced from the three Nafta countries to be traded tariff-free, its latest proposal would apply that threshold to major components such as transmissions and engines but not to the simplest inputs like nuts and bolts, the people said.

Although it’s less arduous than the original demand, automakers would still be hard-pressed to hit the 85 percent threshold on critical parts, and no agreement has been reached. Nafta currently requires a typical vehicle to have 62.5 percent North American content in order to benefit from tariff exemptions.

The new U.S. proposal comes as President Donald Trump -- facing a mounting tariff spat with China -- takes a sunnier approach to Nafta talks and pushes to announce a deal in principle next week.

The Mexican peso and Canadian dollar both appreciated as the news boosted expectations for a Nafta agreement.
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The only function of President Trump is to make President G. W. Bush look respectable.

With apologies to John Kenneth Galbraith

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, Facebook again. 2 billion lawsuits coming?

Facebook Says Data on Most of Its 2 Billion Users Vulnerable

By Sarah Frier
Updated on 4 April 2018, 22:52 GMT+1
Facebook Inc. said data on most of its 2 billion users could have been accessed improperly, giving fresh evidence of the ways the social-media giant failed to protect people’s privacy while generating billions of dollars in revenue from the information.

The company said it removed a feature that let users enter phone numbers or email addresses into Facebook’s search tool to find other people. That was being used by malicious actors to scrape public profile information, it said.

“Given the scale and sophistication of the activity we’ve seen, we believe most people on Facebook could have had their public profile scraped in this way,” the company said. “So we have now disabled this feature.”

Facebook also said data on as many as 87 million people, most of them in the U.S., may have been improperly shared with research firm Cambridge Analytica. This is Facebook’s first official confirmation of the possible scope of the data leak, which was previously estimated at roughly 50 million. It has resulted in calls from legislators and policymakers for greater regulation of social media, helping to shave billion of dollars from the company’s market value.

“We didn’t take a broad enough view of what our responsibility was and that was a huge mistake. It was my mistake," Facebook Chief Executive Officer Mark Zuckerberg said on a conference call with reporters. "We’re broadening our view of our responsibility."

He defended the company’s advertising business model, confirmed he wants to stay in charge and disclosed no "meaningful impact" from an online campaign by some users to delete their Facebook accounts. Facebook stock rose almost 3 percent in extended trading, after closing at $155.10 in New York.

About 270,000 people downloaded a personality quiz app and shared information about themselves and their friends with a researcher, who then passed along the information to Cambridge Analytica, in a move that Facebook says was against its rules. Facebook reached the 87 million figure by adding up all the unique people that those 270,000 users were friends with at the time they gave the app permission. Facebook made the new disclosure in an online posting Wednesday.

Cambridge Analytica, which worked for Donald Trump’s 2016 presidential campaign, said it licensed data on 30 million people, countering Facebook’s 87 million estimate. Cambridge Analytica said in a tweet that it “immediately deleted the raw data from our file server, and began the process of searching for and removing any of its derivatives in our system” after Facebook contacted them to let them know data had been improperly obtained.

Facebook says it will tell people, in a notice at the top of their news feeds starting April 9, if their information may have been improperly shared with Cambridge Analytica. But it still hasn’t independently confirmed if the firm currently has the data. The revelation, and the subsequent media questions, hint at the grilling Zuckerberg will likely face when he testifies on the matter before Congress next week: How many other Cambridge Analytica-scale leaks of data are out there?

Zuckerberg, in Wednesday’s call, said he couldn’t be sure. “We’re not going to be able to go out and find every single bad use of data, but what we can do is make it a lot harder for folks to do that going forward,” he said. “I think we will be able to uncover a large amount of bad activity that exists.”
The company has been embroiled in controversy for weeks over the revelation that data was shared and then not deleted. It raised questions over the information Facebook compiles on users, makes available to third parties, and what happens to it afterward. Facebook made the announcement along with an update on its plans to restrict data access through its platform.
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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?

Shining Cities 2018: How Smart Local Policies Are Expanding Solar Power in America

Released by: Environment Maryland
Release date: Wednesday, April 4, 2018

Executive Summary

Solar power is expanding rapidly. The United States now has over 53 gigawatts (GW) of solar photovoltaic (PV) capacity installed – enough to power 10.1 million homes and 26 times as much capacity as was installed at the end of 2010.[1] Hundreds of thousands of Americans have invested in solar energy and millions more are ready to join them.
America’s major cities have played a key role in the clean energy revolution and stand to reap tremendous benefits from solar energy. As population centers, they are major sources of electricity demand and, with millions of rooftops suitable for solar panels, they have the potential to be major sources of clean energy as well.
Solar power can allow cities to curb emissions that contribute to global warming, become more resilient to severe weather, help residents stabilize their energy bills, and improve public health through reduced air pollution.
As of the end of 2017, 20 cities—representing just 0.1 percent of U.S. land area—accounted for over 4 percent of U.S. solar PV capacity. These 20 cities have over 2 GW of solar PV capacity—more solar power than the entire country had installed by the end of 2010.[2]
Los Angeles leads the nation in total installed solar PV capacity among the 69 cities surveyed in this report, as it did between 2013 and 2015 before being temporarily overtaken by San Diego in 2016. (See Table ES-1.)

-----The cities with the most solar PV installed per capita are the “Solar Stars” – cities with 50 or more watts of solar PV capacity installed per person. Honolulu has nearly three times as much solar PV per capita as the next leading city, San Diego. All of the “Solar Stars” have experienced dramatic growth in solar energy and are setting the pace nationally for solar energy development. In 2013, only eight of the cities surveyed for this report had enough solar PV per capita to be ranked as “Solar Stars,” but now 18 cities have earned the title. (See Figure ES-2 and Table ES-2.)

Leaders in per capita solar capacity by census region include Honolulu in the Pacific region, Las Vegas in the Mountain region, Indianapolis in the North Central region, San Antonio in the South Central region, Washington, D.C., in the South Atlantic region and Burlington, Vermont, in the Northeast region.
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https://environmentmaryland.org/reports/mde/shining-cities-2018-how-smart-local-policies-are-expanding-solar-power-america

The monthly Coppock Indicators finished March.

DJIA: 24,103 +272 Down 10. NASDAQ: 7,063 +300 Down 13. SP500: 2,641 +202 Down 10.
All three slow indicators moved down in March. For some a new bear signal, for others a take profits and get back to cash signal. 

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