Thursday 31 May 2018

Italy Sorted, Trade War Time. Resurrection Day.

Baltic Dry Index. 1042 -15    Brent Crude 77.31

Jean-Claude Juncker. Failed former Luxembourg P.M., serial liar, president of the European Commission. Scotch connoisseur.

Miraculously Italy was “sorted” yesterday as the official story became “crisis? what crisis?” Politics in Italy is ever in turmoil, Italy’s economy is underpinned by its black economy, and anyway while the ECB is still willing to buy Italy’s (now higher yielding,) bonds, there won’t be any Italian bank bond contagion. Italy, forget about it!

Besides, the panic over, Italy caused capital flight into US Treasuries lowering yields, so the Fedsters might get to hold off raising interest rates for a whole lot longer. Italy saved from itself, everyone else got back to the serious job of dressing up markets for today’s all-important month-end close. Ignore the BDI and oil.

Below, yesterday’s “don’t worry be happy, Italy’s unimportant” fake news. My take, Italy’s problems will grow all summer long, and Italy’s miracle will last just as long as it takes to dress up today’s stock market close.

May 31, 2018 / 1:44 AM

Asian stocks rebound, euro pulls off lows as anxiety over Italy recedes

TOKYO (Reuters) - Asian stocks rebounded from a two-month trough on Thursday and the euro enjoyed a respite after sinking to its lowest in 10 months as the political turmoil in Italy that roiled global financial markets showed signs of easing.

Spreadbetters expected European stocks to open slightly higher, with Britain's FTSE .FTSE edging up 0.05 percent, Germany's DAX .GDAXI adding 0.1 percent and France's CAC .FCHI rising 0.05 percent.

Hong Kong's Hang Seng .HSI rose 0.75 percent and the Shanghai Composite Index .SSEC gained 1.4 percent after news that growth in China's vast manufacturing sector accelerated strongly and well above forecasts in May to an eight-month high.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 0.6 percent after slumping on Wednesday to its weakest since early April.

South Korea's KOSPI .KS11 added 0.5 percent and Japan's Nikkei .N225 advanced 0.8 percent.
Overnight, the Dow .DJI rose 1.25 percent and the S&P 500 .SPX climbed 1.27 percent.

Global stocks were battered, safe-haven government prices rose sharply, and the euro tumbled earlier in the week after Italy’s two anti-establishment parties scrapped plans to form a coalition.

That raised the prospect of a new general election, stoking fears such a vote would effectively be a referendum on Italy’s euro membership.

A degree of calm, however, returned with the two anti-establishment parties renewing efforts to form a coalition government rather than force Italy into holding elections for the second time this year.

“Experience shows that these ‘crises’ tend to settle down for long periods once the initial adjustment of market expectations has been effected,” Carl Weinberg, chief international economist at High Frequency Economics, wrote in a note to clients.

A successful auction of five- and 10-year government bonds also assuaged concerns about Italy’s ability to finance itself after the turbulence in its debt market sparked the biggest one-day spike in two-year bond yields in 26 years. Bond yields rise as prices fall.

It was miracle time in Kiev too, or more accurately “resurrection time,” as yet another Russian murder went disastrously wrong, ala Salisbury England. You have to wonder who is scripting this western campaign against Russia and why?

Below, Radio Free Europe, America’s propaganda version of Russia’s RT, puts out its spin. Still who wants the Ukraine in NATO faking an incident Hitler v Poland style, triggering nuclear war with Russia?

Ukraine Says It Faked Journalist's Death To Thwart Russian Plot

Last Updated: May 30, 2018 16:50 GMT
KYIV -- Ukrainian security officials said they faked the death of a dissident Russian journalist in an effort to catch people it says were involved in a Russian plot to kill him.

Vasyl Hrytsak, the head of Ukraine’s Security Service (SBU), shocked reporters at the SBU headquarters in Kyiv on May 30 when he announced that journalist and Kremlin critic Arkady Babchenko was still alive, a day after Ukrainian authorities announced he had been killed by a gunman outside of his Kyiv apartment.

Hrytsak told reporters that Ukrainian intelligence sources learned that Russia's security services had ordered the killing of Babchenko several months earlier.

Hrytsak also said a suspected organizer of an attempted murder plot against Babchenko, identified as a Ukrainian national, was detained as a result of a "special operation" by the SBU.

"We have prevented an attempted murder of Babchenko by carrying out a special operation," Hrytsak said on May 30. "Thanks to this operation, we were able to foil a cynical plot and document how the Russian security service was planning for this crime."

Babchenko made a dramatic appearance at the live May 30 television briefing after Hrytsak's announcement, saying the fictitious reports of his death were part of an SBU operation that had been prepared for two months.

Now back to real news and the Great Global Trump Trade War on the Rest of the World, due to start shortly after we dress up today’s close of the world’s stock markets. European bourbon drinkers, stock up now.

"We can also do stupid."

Jean-Claude Juncker. Failed Luxembourg Prime Minister and ex-president of the Euro Group of Finance Ministers. Confessed liar. European Commission President. Scotch connoisseur.

May 30, 2018 / 10:36 PM

U.S. to slap tariffs soon on steel, aluminium from EU - sources

WASHINGTON (Reuters) - The United States will announce plans to impose tariffs on steel and aluminium from the European Union as early as Thursday morning, two people briefed on the matter said, confirming a report in the Wall Street Journal.

The decision would land ahead of a Friday expiration deadline for exemptions to the planned metals tariffs amid stalled trade talks with the EU and would likely prompt retaliation from the bloc.

The two sources said an announcement was planned for Thursday morning in Washington but that the timing could still change.

The U.S. Commerce Department and U.S. Trade Representative’s Office did not immediately respond to requests for comment.

President Donald Trump on March 23 imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminium, but granted temporary exemptions to the EU, Canada, Mexico, Brazil, Australia and Argentina.

Trump invoked a 1962 trade law to erect protections for U.S. steel and aluminium producers on national security grounds, amid a worldwide glut of both metals that is largely blamed on excess production in China.

The European Commission, which coordinates trade policy for the 28 EU members, has said the bloc should be permanently exempted from the tariffs since it was not the cause of overcapacity in steel and aluminium.

The Commission has said the EU will set duties on 2.8 billion euros (2.5 billion pounds) of U.S. exports, including peanut butter and denim jeans, if its metals exports to the United States worth 6.4 billion euros are subject to tariffs.

May 29, 2018 / 1:27 PM

China vows to protect its interests from 'reckless' U.S. trade threats

BEIJING (Reuters) - China lashed out on Wednesday at renewed threats from the White House on trade, warning that it was ready to fight back if Washington was looking for a trade war, days ahead of a planned visit by U.S. Commerce Secretary Wilbur Ross.

In an unexpected change in tone, the United States said on Tuesday that it still held the threat of imposing tariffs on $50 billion of imports from China unless it addressed the issue of theft of American intellectual property.

Washington also said it will press ahead with restrictions on investment by Chinese companies in the United States as well as export controls for goods exported to China.

Its tougher stance comes as President Donald Trump prepares for a June 12 summit with North Korean leader Kim Jong Un, whose key diplomatic backer is China, and as Washington steps up efforts to counter what it sees as Beijing’s efforts to limit freedom of navigation in the South China Sea.

The trade escalation came after the two sides had agreed during talks in Washington this month to find steps to narrow China’s $375 billion trade surplus. Ross is expected to try to get China to agree to firm numbers to buy more U.S. goods during a June 2-4 visit to the Chinese capital.

“We urge the United States to keep its promise, and meet China halfway in the spirit of the joint statement,” Chinese Foreign Ministry spokeswoman Hua Chunying told a daily news briefing, adding that China would take “resolute and forceful” measures to protect its interests if Washington insists upon acting in an “arbitrary and reckless manner”.

“When it comes to international relations, every time a country does an about face and contradicts itself, it’s another blow to, and a squandering of, its reputation,” Hua said.

China has said it will respond in kind to threats by Trump to impose tariffs on up to $150 billion of Chinese goods.

---- Trade war fears had receded after the Trump administration said it had reached a deal to put ZTE Corp back in business after banning China’s second-biggest telecoms equipment maker from buying U.S. technology parts for seven years.

The easing in tension had fueled optimism that agreement was imminent for Chinese antitrust clearance for San Diego-based Qualcomm Inc’s $44 billion purchase of Netherlands-based NXP Semiconductors NV, which has been hanging in the balance amid the trade dispute.

A team of Qualcomm lawyers that is expecting to meet with Chinese regulators ahead of Ross’s arrival remained in San Diego as of late Tuesday, a source familiar with the matter said.

---- The Global Times, an influential tabloid run by the ruling Communist Party’s official People’s Daily, said the United States was suffering from a “delusion” and warned that the “trade renege could leave Washington dancing with itself”.

State news agency Xinhua said China hoped that the United States would not act impulsively but stood ready to fight to protect its own interests.

“China will continue to hold pragmatic consultations with the United States’ delegation and hope that the United States will act in accordance with the spirit of the joint statement.”

May 29, 2018 / 1:27 PM

China says U.S. trade move contrary to bilateral consensuses

Source: Xinhua| 2018-05-30 01:49:24|Editor: Mu Xuequan
BEIJING, May 29 (Xinhua) -- China's Ministry of Commerce (MOC) said Tuesday that the U.S. statement is contrary to the consensuses the two sides have previously reached in Washington.

The ministry said the White House tactical statement is both unexpected and within expectation.

"Whatever measures the United States takes, China has the confidence, capability and experience to defend the interests of Chinese people and the core interests of the country," the MOC said on its website.

China urged the United States to act in accordance with the spirit of recent bilateral joint statement, the MOC said.

Fantasy to link Ivanka trademark with ZTE

Source:Global Times Published: 2018/5/29 22:48:40
US President Donald Trump's daughter Ivanka received approval from the Chinese government for her trademark applications this month. But US media immediately connected this to Donald Trump's U-turn on Chinese telecom company ZTE.

In addition, 60 lawmakers wrote a letter Sunday demanding an investigation into the alleged connections between Chinese investments in a Trump organization project in Indonesia and the president's decision to allow ZTE to recover its business.

Apparently those who dislike Trump are finding fault with him. These accusations may exert little effect on Trump, but have jeopardized China's reputation. ZTE is the direct victim. The firm may have to see more twists and turns before being allowed to import parts from the US.

Ivanka Trump's trademark application, Washington's lifting of sanctions on ZTE and Chinese investment in a theme park in Indonesia are all entirely unrelated. The US is so imaginative to connect these separate issues together.

China often suffers losses interacting with the US. For China, it's nearly impossible to guard against all the traps the US sets. The deals China has reached with the US government may be wrecked by other US forces. In many cases, the country behaves like a hoodlum under the name of democracy.

Washington decided to sanction ZTE amid disputes over the firm's handling of bonuses for its 35 employees. All observers believe that the ZTE is a bargaining chip in the trade war. More precisely, the company is a hostage to the US.

Now that China and the US have agreed on a framework for stopping their trade war, it is reasonable for Washington to release the hostage, ZTE.

Putting the trade war on hold has gained widespread popularity in China. But things are much more complicated in the US. While US industries welcome the move, there are many voices against it among US political circles and media.

The Sino-US relationship is mutually beneficial. It is hard for Beijing to live without Washington and vice-versa. The US is witnessing an internal divide over its trade ties with China. This is no more than a game of US politicians.

“I sometimes get the impression that many U.S. media outlets work according to a principle which was common in the Soviet Union. Back then, people used to joke that the newspaper Pravda [Truth] had no truth in it, and the Izvestia [News] paper has no news in it. I get the impression that many U.S. media operate in the same way.”

Russian Foreign Minister Lavrov. May 2017.

Crooks and Scoundrels Corner

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

Another day, and yes, another report of a Tesla autopilot crash. After taking out a CA fire truck back in January, this time it was time to take out a CA police car. Next up, a CA ambulance I suppose.

Tesla hits parked Calif. police vehicle; driver blames Autopilot

May 29, 2018 @ 9:36 pm  
WASHINGTON -- The driver of a Tesla Inc. Model S crashed into an unoccupied, parked police vehicle in Laguna Beach, Calif., on Tuesday and the driver told investigators the Tesla was in "Autopilot" mode at the time, police said.

The driver suffered minor injuries, Laguna Beach Sergeant Jim Cota said, who posted photos of the crash scene showing extensive damage to the front end of the Tesla and the rear side of the police vehicle.

Autopilot is a semi-autonomous technology that the company says is a form of advanced cruise control.

"Tesla has always been clear that Autopilot doesn’t make the car impervious to all accidents," the company said in a statement after the accident and could not immediately confirm the driver's report that the vehicle was in Autopilot mode.

Several crashes and fire incidents involving Tesla vehicles this year has been a near constant challenge for CEO Elon Musk, who boasts that the company's vehicles are among the safest in the industry.

Earlier this month, the National Highway Traffic Safety Administration said it was sending a team to investigate the crash of a Tesla vehicle in South Jordan, Utah. The driver was traveling at 60 miles (97 km) per hour when the Model S smashed into a fire truck stopped at a red light, according to police.

Police in Utah said data from Tesla showed that the driver enabled Autopilot about 1 minute and 22 seconds before the crash. The report said she took her hands off the steering wheel “within two seconds” of engaging the system and then did not touch the steering wheel for the next 80 seconds, until the crash happened.

NHTSA is also investigating a fatal crash in March that involved a Tesla Model X using Autopilot that struck a highway divider. The agency is also probing the January crash of a Tesla vehicle apparently traveling in Autopilot that struck a parked fire truck. Both of those incidents were also in California.

The National Transportation Safety Board is also probing four Tesla crashes that have occurred since last year, including three under review by NHTSA.

Tesla's Model S owner's manual warns some Autopilot functions "cannot detect all objects and may not brake/decelerate for stationary vehicles or objects especially when traveling over 50 mph (80 kph)" and when a vehicle ahead of the driver "moves out of your driving path and a stationary vehicle or object is in front of you."
Milton Friedman once put it, if you’re spending your own money on yourself, you care about price and quality. If you’re spending someone else’s money on yourself, you only care about quality. If you’re spending your own money on someone else, you care only about price. And if you’re spending someone else’s money on someone else, you don’t care about either.
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?

Germany Faces Gigawatt-Scale Loss of Onshore Wind Power

Feed-in tariffs will soon expire for many of Germany’s 28,000 onshore wind turbines. How many will be retired or replaced?
Justin Gerdes

Germany could be facing a gigawatt-scale “decommissioning wave” in its onshore wind sector.
Writing earlier this month for the German-language magazine Top Agrar, Hinrich Neumann reported that many of Germany’s 28,000 onshore wind turbines could be decommissioned beginning in 2020.

Under Germany’s Renewable Energy Act (EEG), which took effect in 2000, renewable energy sources, including onshore wind turbines, secured priority grid access and guaranteed above-market payment for each kilowatt-hour delivered to the grid. These feed-in tariff (FIT) payments lasted for 20 years.

In 2020, the first of those feed-in tariff contracts expire. The Institute for Integrated Production Hannover (IPH), a nonprofit industrial engineering company, estimates that 2.4 gigawatts of installed onshore wind capacity will lose eligibility for guaranteed payments each year. In 2020, up to 4,500 turbines could come down because they will have been rendered uneconomical without the guaranteed payments, IPH project engineer Martin Westbomke told Neumann.

Asked about the chances Germany will see gigawatt-scale onshore wind capacity go offline after 2020 and not be replaced, Andrea Scassola, Europe wind market analyst at MAKE Consulting, said they're “high, given the ownership structure, which is typically very fragmented across a broad range of individuals (farmers, cooperatives, etc.).”

Citizen ownership of renewable energy projects is one of the pillars of Germany’s energy transition, or Energiewende, with households and farms accounting for more than 40 percent of renewables investment.
"We finished the year, and we reported that we had $17 billion of cash sitting at the bank's parent company as a liquidity cushion. As the year has gone on, that liquidity cushion has been virtually unchanged."
Alan Schwartz, CEO Bear Stearns, March 12, 2008. Bust March 16, 2008.

The monthly Coppock Indicators finished April.

DJIA: 24,163 +255 Down. NASDAQ: 7,066 +282 Down. SP500: 2,648 +188 Down.
All three slow indicators moved down in March and continued down in April. For some a new bear signal, for others a take profits and get back to cash signal. 

Wednesday 30 May 2018

Quitaly Looms Over Markets!

Baltic Dry Index. 1057 -20    Brent Crude 75.18

The euro is going to be a big source of problems, not a source of help.

Milton Friedman

This morning, all roads lead to Rome. With Italian bond yields exploding, can Italy remain in the euro even if it wanted to?  We are about to find out, probably this week or next. It’s magic money tree time for the ECB’s “whatever it takes” Draghi. But “whatever it takes” means a blank cheque from Germany, and even that might not be sufficient, assuming that the Germans would even agree. 

Italian bond contagion threatens the banks in Italy, France and Germany,  including Germany’s top bank, the already struggling Deutsche Bank. Are Europe’s bank depositors now about to get robbed Greece and Cyprus style? But if Deutsche Bank blows, and Draghi’s magic money tree is put into action, the Euro becomes just another version of the old Italian lira, or Greek Drachma.

Below, Euroland’s quickening train wreck. Even the magic money tree can get trumped by the wrong election result when Italy votes again, now likely to be in July. Is it to be Quitaly in July at the latest?  Euros anyone? Make mine dollars or gold. Yuan? Brexit now, before Deutsche Bank blows up.

The government solution to a problem is usually as bad as the problem.

Milton Friedman

May 30, 2018 / 1:07 AM

Stocks take battering as Italian crisis roils financial markets

TOKYO (Reuters) - Asian stocks extended a global sell-off on Wednesday as Italy’s political crisis rippled across financial markets, toppling the euro to a 10-month low, pushing up Italian borrowing costs and sending investors rushing to safe-haven assets such as U.S. Treasuries.

MSCI’s broadest index of Asia-Pacific shares outside Japan tumbled 1.5 percent, while Japan’s Nikkei average sold off as much 1.9 percent to hit a six-week low. Chinese shares also headed south, with the Shanghai Composite index down 1.8 percent, South Korea’s KOSPI and Australia’s S&P/ASX 200 slipped 2.0 percent and 0.6 percent, respectively.

The sharp downturn followed from an equally harsh session on Wall Street on Tuesday, where the Dow Jones Industrial Average fell 1.6 percent, the S&P 500 lost 1.2 percent and the Nasdaq Composite dropped 0.5 percent. The financial sector took a hard hit.

Investors fear that repeat elections in the euro zone’s third-largest economy - which could come as soon as July - may become a de-facto referendum on Italian membership of the currency bloc and the country’s role in the European Union.

“The way Italy’s short-term debt yields are spiking makes you think default risk is on radar in the market. It tells how grave the situation is,” said Makoto Noji, senior strategist at SMBC Nikko Securities.

“What the markets are starting to factor-in is not a default per se but an early election leading to a victory of eurosceptics and an exit from the euro.”

Short-dated Italian bond yields - a sensitive gauge of political risk - soared 1.5 percentage points from Monday to their highest since 2013 in their biggest move in nearly 26 years.

May 29, 2018 / 10:58 AM

Italy may return to polls in July, sources say, amid market rout

ROME (Reuters) - Italy may hold repeat elections as early as July after the man asked to be prime minister failed to secure support from major political parties for even a stop-gap government, sources said on Tuesday, as markets tumbled on the growing political turmoil.

Italy has searched for a new government since inconclusive elections in March, with the president finally designating former International Monetary Fund official Carlo Cottarelli as interim prime minister until a new vote is held between September and early 2019.

But sources close to some of Italy’s main parties said there was now a chance that President Sergio Mattarella could dissolve parliament in the coming days and send Italians back to the polls as early as July 29.

That prospect emerged immediately after Cottarelli met the president on Tuesday afternoon and left without making any statement. Cottarelli had been expected to announce his stopgap government’s cabinet after those talks.

A source close to the president said Cottarelli had made no mention in the meeting of an intention to give up his mandate and that he was simply finalising his cabinet lineup.

Major parties, though, sensed Cottarelli’s mission was all but dead and called for parliament to be dissolved immediately.

“It would be best to go to elections as quickly as possible, as early as July,” said Andrea Marcucci, senate leader for the centre-left Democratic Party.

Italy suffered its biggest market selloff in years amid investor fears the election would deliver an even stronger mandate for anti-establishment, eurosceptic politicians, casting doubt on Italy’s future in the euro zone.

May 29, 2018 / 6:38 PM

Investors ask if ECB has will and means to save euro from Italian turmoil

LONDON (Reuters) - Investors are again speculating what the European Central Bank could do to solve the problem of a surge in Italy’s debt yields that is causing stress for Italian banks and reviving questions about a euro break up.

The stakes will be huge if a repeat election in the euro zone’s third-largest economy become a de facto referendum on Italy’s membership of the euro and its role in the European Union.

Italy’s economy is at least 10 times bigger than that of Greece, which needed 250 billion euros ($289 billion) of euro zone and IMF money to bail it out. If Italy needed a similar level of support, the numbers involved would be eyewatering.

Total International Monetary Fund firepower would only add up to around 500 billion euros and even with the 400 billion euros that the European Stability Mechanism could conceivably get together, it still wouldn’t completely cover Italy.

Perhaps it’s no wonder then that Italy’s bond markets saw their worst sell-off in 26 years on Tuesday and investors are starting to look inquisitively at the ECB.

“If this continues for another couple of sessions, I think you will have to see some official (European) response,” said Saxo Bank’s head of foreign exchange strategy John Hardy.

“It becomes a ‘whatever it takes’ kind of moment,” he added, recalling the promise made in 2012 by ECB President Mario Draghi to keep the euro intact.

----So what can the ECB do? After all it’s almost impossible to imagine it would stand by and allow a domestic political crisis in Italy, Draghi’s homeland, descend into another existential crisis for the euro zone.

It is still buying Italian debt as part of its 30 billion euro-a-month quantitative easing (QE) program but it doesn’t seem to have limited the damage.

Italy needs to refinance about 200 billion euros a year, analysts estimate, and the ECB’s QE plan had been tipped to end in December.

That could be delayed of course, but it looks like it is the tool that evolved from the 2012 “whatever it takes” pledge - the yet-unused Outright Monetary Transactions (OMT) program - that is being brandished again.

OMT’s benefit is that it is technically unlimited and can be targeted directly at the heat in Rome.

The drawback though is that it would be politically toxic.

Italy’s leading 5-Star Movement and the far-right League parties have shown a dislike for the euro, and in Germany there has long been concerns that use of OMT would be akin to propping up a government which goes well beyond its mandate.

“It raises a lot of issues again, but if we get into a situation where Italy starts to slipping into a crisis this is potentially a very big deal,” said one European-based monetary official, who requested anonymity due to the issue’s sensitivity.

“The size of the problem is bigger than anything we have had to deal with,” he added.

----“Italy knows the rules.” Vitor Constancio, the ECB’s soon-to-retire Vice President said in a Spiegel magazine on Tuesday about the conditionality for the ECB using its OMT tool. “They might want to read them again.”

For nervous financial markets, it looks like another game of euro zone chicken where they wait to see who swerves first.

The risk of a euro break-up forced the ECB’s hand six years ago and its OMT and the cheap LTRO funding programs before that shows it can be creative when the politics gets ugly.

But the difference today is whether Italy wants that help or will instead choose scrap the euro or quit the European Union, or “Quitaly”, which is a different proposition for the ECB and euro policymakers entirely.

The Euro: Monetary Unity To Political Disunity?

SAN FRANCISCO - A common currency is an excellent monetary arrangement under some circumstances, a poor monetary arrangement under others. Whether it is good or bad depends primarily on the adjustment mechanisms that are available to absorb the economic shocks and dislocations that impinge on the various entities that are considering a common currency. Flexible exchange rates are a powerful adjustment mechanism for shocks that affect the entities differently. It is worth dispensing with this mechanism to gain the advantage of lower transaction costs and external discipline only if there are adequate alternative adjustment mechanisms.

The United States is an example of a situation that is favorable to a common currency. Though composed of fifty states, its residents overwhelmingly speak the same language, listen to the same television programs, see the same movies, can and do move freely from one part of the country to another; goods and capital move freely from state to state; wages and prices are moderately flexible; and the national government raises in taxes and spends roughly twice as much as state and local governments. Fiscal policies differ from state to state, but the differences are minor compared to the common national policy.

----By contrast, Europe’s common market exemplifies a situation that is unfavorable to a common currency. It is composed of separate nations, whose residents speak different languages, have different customs, and have far greater loyalty and attachment to their own country than to the common market or to the idea of "Europe." Despite being a free trade area, goods move less freely than in the United States, and so does capital.

Only government can take perfectly good paper, cover it with perfectly good ink and make the combination worthless.

Milton Friedman

Finally, China. Did President Trump just wake up China, again? I suspect that China, like elephants, has a long memory.

“Let her [China] sleep, for when she wakes she will shake the world.”


Xi Jinping urges China to go all in on scientific self-reliance after ZTE case exposes hi-tech gaps

Chinese president says innovation is central to the country’s standing on the world stage

PUBLISHED : Monday, 28 May, 2018, 11:01pm UPDATED : Tuesday, 29 May, 2018, 1:43am
China will double down to make breakthroughs in core technologies, Chinese President Xi Jinping said on Monday as he urged the country’s top scientists and engineers to build China into a global hi-tech lead.

Xi issued the rallying cry amid continued pressure from Washington over Beijing’s “Made in China 2025” programme, a strategy to advance China up the industrial technology chain.

“The situation is pressing. The challenges are pressing. The mission upon us is pressing,” Xi said in Beijing at the opening of the joint annual conference of the Chinese Academy of Sciences and Chinese Academy of Engineering.

The United States has taken aim at Made in China 2025 with threats to impose tariffs on Chinese imports. Despite an easing in trade tensions, the White House appears determined to contain China’s ambitions to be a leading power in various technologies, including aerospace, industrial robots, software, high-speed trains and semiconductors.

Xi’s address also came after ZTE, China’s second-biggest maker of telecom network equipment, was offered the option to pay a US$1.3 billion fine to avoid a US ban on use of American components.

The decision could end a month-long wrangle between the Chinese tech giant and the US Department of Commerce, which imposed the ban on ZTE over breaches of trade sanctions on Iran and North Korea.

ZTE is heavily reliant on US chips and the ban exposed China’s broader dependence on the technology despite claims of advances in recent years.

In his address to China’s scientific and engineering elite, Xi said technological self-reliance was central to China’s firm standing on the world stage.

“Self-determination and innovation is the unavoidable path ... to climb to the world’s top as a leading player in technology,” he said.

“We [should] hold innovative development tightly in our own hands.

“[We have to] put much effort in key areas where we are facing bottlenecks ... and make breakthroughs as soon as we can.”

ZTE sidelines two more senior executives amid US-China negotiations on export ban

Shenzhen-based ZTE had failed to comply with the terms of a 2017 settlement with the US government. The subsequent export ban has threatened ZTE’s survival and become a flashpoint in US-China trade talks
PUBLISHED : Tuesday, 29 May, 2018, 6:03pm UPDATED : Tuesday, 29 May, 2018, 6:40pm

ZTE Corp has sidelined two senior executives amid ongoing negotiations between the US and China over an export ban that has threatened the survival of the Chinese telecommunications equipment supplier, according to people familiar with the matter.

Xu Huijun, an executive vice-president and ZTE’s chief technology officer, and Huang Dabin, who oversees corporate operations, are no longer performing their usual duties at the company, said the people, who asked not to be named as the information is private.

They join Cheng Gang, who was replaced in March as chief compliance and legal officer, among executives that have been removed or reassigned in the wake of the US Commerce Department’s seven-year ban on American companies doing business with ZTE.

The company declined to comment on the executives, who could not be reached through the main line of the company.

Shenzhen-based ZTE had breached the terms of a 2017 settlement with the US government by paying full bonuses to employees who engaged in the illegal sales of equipment to Iran, failing to issue letters of reprimand to those employees, and then lying about it to US authorities.

The US Commerce Department responded by activating a seven-year ban that barred ZTE from doing business with American companies, cutting off the firm’s access to important components that go into everything from smartphones to network equipment.

The ban plunged ZTE into disarray, forcing Chairman Yin Yimin to admit that the company was in a “state of shock”. Because almost all parts of the company’s business had some dealings with the US, compliance with the order has meant a shutdown of a majority of its operations.

ZTE derived 59 per cent of its revenue last year from its carrier network business, which includes switching and access systems, optical and data communications and wireless communication systems, while another 32 per cent came from its consumer business and 9 per cent from governments and companies.

Jean-Claude Juncker. Failed Luxembourg Prime Minister and ex-president of the Euro Group of Finance Ministers. Confessed liar. European Commission President. Scotch connoisseur.

Crooks and Scoundrels Corner

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

The EUSSR is falling apart because an elite few pass diktats on millions of hapless continentals trapped in the German straitjacket of the euro, and the continetals have started voting the elite out. So billionaire George Soros, thinks doing more of the same by the elite’s will solve Europe’s growing problem.

For every complex problem there is an answer that is clear, simple, and wrong.

H. L. Mencken

Billionaire George Soros: ‘The European Union is in an existential crisis’

By Victor Reklaitis  Published: May 29, 2018 7:35 a.m. ET

‘Everything that could go wrong has gone wrong,’ says storied investor

As worries about Italy and Spain’s governance whack European markets on Tuesday, George Soros is adding to the downbeat mood.

The 87-year-old Hungarian-American, known as the investor who broke the Bank of England, has offered the following bleak assessment in a speech in Paris to the European Council on Foreign Relations:

The EU seems to have “lost its way” since the global financial crisis of 2008, he added. Officials in Brussels adopted a program of fiscal retrenchment that led to the euro crisis, and this transformed the eurozone into a relationship between creditors and debtors “that is neither voluntary nor equal,” Soros said, according to his prepared remarks.

The trade bloc also has been buffeted by a 2015 refugee crisis that authorities failed to handle, as well as U.S. President Donald Trump’s recent withdrawal from a nuclear deal with Iran, Soros said. European populist politicians have exploited resentments, and Italy is “now facing elections in the midst of political chaos,” he said.

The controversial billionaire investor, known for his big donations to progressive causes, also offered possible solutions.

“Europe needs to do something drastic to escape it. It needs to reinvent itself,” Soros said, as he expressed some approval for French leader Emmanuel Macron.

“That is what President Macron sought to initiate by proposing what he calls citizens’ consultations. This initiative needs to be a genuinely grassroots effort.”

Soros emphasized that many regular folks are fed up: “Ordinary people feel excluded and ignored.
Now we need a collaborative effort that combines the top-down approach of the European institutions with the bottom-up initiatives that are necessary to engage the electorate.”

U.S. stock futures ESM8, -0.70% pointed to a sizable drop at the open Tuesday, as traders getting back to work after a three-day weekend were greeted by fresh Italian political drama.

Jean-Claude Juncker. Failed Luxembourg Prime Minister and ex-president of the Euro Group of Finance Ministers. Confessed liar. European Commission President. Scotch connoisseur.
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?

Self-assembling 3D battery would charge in seconds

Date: May 17, 2018

Source: Cornell University

Summary: The world is a big place, but it's gotten smaller with the advent of technologies that put people from across the globe in the palm of one's hand. And as the world has shrunk, it has also demanded that things happen ever faster -- including the time it takes to charge an electronic device.

A cross-campus collaboration led by Ulrich Wiesner, professor of engineering in the at Cornell University, addresses this demand with a novel energy storage device architecture that has the potential for lightning-quick charges.

The group's idea: Instead of having the batteries' anode and cathode on either side of a nonconducting separator, intertwine the components in a self-assembling, 3D gyroidal structure, with thousands of nanoscale pores filled with the elements necessary for energy storage and delivery.

"This is truly a revolutionary battery architecture," said Wiesner, whose group's paper, "Block Copolymer Derived 3-D Interpenetrating Multifunctional Gyroidal Nanohybrid for Electrical Energy Storage," was published May 16 in Energy and Environmental Science, a publication of the Royal Society of Chemistry.

"This three-dimensional architecture basically eliminates all losses from dead volume in your device," Wiesner said. "More importantly, shrinking the dimensions of these interpenetrated domains down to the nanoscale, as we did, gives you orders of magnitude higher power density. In other words, you can access the energy in much shorter times than what's usually done with conventional battery architectures." How fast is that? Wiesner said that, due to the dimensions of the battery's elements being shrunk down to the nanoscale, "by the time you put your cable into the socket, in seconds, perhaps even faster, the battery would be charged."

The architecture for this concept is based on block copolymer self-assembly, which the Wiesner group has employed for years in other devices, including a gyroidal solar cell and a gyroidal superconductor. Joerg Werner, Ph.D. '15, lead author on this work, had experimented with self-assembling photonic devices, and wondered if the same principles could be applied to carbon materials for energy storage.

The gyroidal thin films of carbon -- the battery's anode, generated by block copolymer self-assembly -- featured thousands of periodic pores on the order of 40 nanometers wide. These pores were then coated with a 10 nm-thick, electronically insulating but ion-conducting separator through electropolymerization, which by the very nature of the process produced a pinhole-free separation layer.

That's vital, since defects like holes in the separator are what can lead to catastrophic failure giving rise to fires in mobile devices such as cellphones and laptops.

Insanity is Doing the Same Thing Over and Over Again and Expecting Different Results

Mario Draghi, with apologies to Albert Einstein.

The monthly Coppock Indicators finished April.

DJIA: 24,163 +255 Down. NASDAQ: 7,066 +282 Down. SP500: 2,648 +188 Down.
All three slow indicators moved down in March and continued down in April. For some a new bear signal, for others a take profits and get back to cash signal.