Baltic Dry Index. 1384 Fri. Brent Crude 75.43
Politics is the art of the
possible.
Count Otto von Bismarck
Later today, President Trump will descend
from Mount Olympus and emerge in the White House to announce his decision on
whether to abide by, or reneg on, his predecessor’s International Treaty with
Iran. There’s no suggestion that Iran isn’t abiding by or upholding its end of
the treaty also signed by GB, France, Germany, China and Russia, it’s merely
that President Trump doesn’t like the terms of the treaty freely entered into
by President Obama and the USA.
If President Trump renegs, the USA reverts to
its 19th century policy of signing treaties, mostly with Native Americans,
it had no intention of upholding. Diplomacy as we knew it 1945-2015 comes to an
end. A new, much more chaotic, less Bismarckian era lies directly ahead.
Below, a day marking the start of the era of
perfidy? Iran posses no existential threat to the USA.
All treaties between great
states cease to be binding when they come in conflict with the struggle for
existence.
Count Otto von Bismarck
May 8, 2018 / 2:12 AM
Oil trims gains ahead of Trump Iran announcement, Asia shares up
TOKYO/SHANGHAI (Reuters) - Oil prices
eased slightly on Tuesday, a day after hitting 3-1/2 year highs, as investors
braced for President Donald Trump’s decision on whether to withdraw the United
States from the Iran nuclear deal, a move that could disrupt global oil supply.
Asian shares picked up, helped by technology stocks as generally upbeat
earnings overcame weakness in the global smartphone market and concerns about
more regulation.
U.S. West Texas Intermediate (WTI) crude futures CLc1 on Monday rose
above $70 for the first time since November 2014, putting it more than 18
percent above this year’s low touched in February.
On Tuesday, some of those oil-price gains were pared as traders took
profit after Trump said in a tweet he would announce his decision on the
nuclear deal at 1800 GMT Tuesday.
“The oil market has priced in the high likelihood of Trump withdrawing
from the nuclear deal with Iran. If he is going to impose sanctions similar to
those the U.S. had in 2012, that would likely cause a shortage in oil,” said Tatsufumi
Okoshi, senior commodity economist at Nomura Securities.
Adding to market pressures, falls in Venezuelan oil production due to
problems at the country’s oil company PDVSA also added to the rally.
U.S. crude futures last traded at $69.97 per barrel, down 1.1 percent
from Monday’s settlement price.
Global benchmark Brent crude futures LCOc1 stood at $75.54 per barrel,
down 0.8 percent, having risen as high as $76.34 on Monday.
While caution on Trump’s statement kept investors edgy in early trade,
technology firms helped to generate gains for Asian equities.
More
Here’s what sanctions on Iran could do to global oil supply and prices
Published: May 5, 2018 10:37 a.m. ET
Analyst: oil prices may rise $5 to $10/bbl if sanctions are reintroduced
----The sanctions on Iran were lifted under a 2015 agreement among a group of world powers, including the U.S. and Iran, aimed at curbing Tehran’s nuclear activities.Iran’s current oil production stands at 3.8 million barrels a day—up almost one million barrels since the sanctions were lifted, says Jay Hatfield, portfolio manager of the InfraCap MLP exchange-traded fund AMZA, +0.97% . So if the U.S. decides to reimpose sanctions, the oil market could lose just under 1% of total global production, he says.
That doesn’t sound like much, but with the overall market facing an average deficit of 700,000 barrel per day, Matt Parry, head of long-term research at Energy Aspects, says that “any loss of Iranian supplies would add a significant premium to oil prices.”
James Williams, energy economist at WTRG Economics, believes that the amount of lost oil would be closer to 500,000 barrels a day, or perhaps less, depending on possible increases from other producing countries around the world, if sanctions are reinstated. “Certainly, other countries could make up the difference, but it would not be instantaneous,” he says.
----Still,
Hatfield expects that the supply shortfall would be “made up partly by
conservation spurred by higher prices and higher production from the U.S. and
other producers.” There would also “be more incentive for OPEC members to cheat
on,” or consider raising, their production quotas.
Those potential outcomes have helped to recently temper oil’s rise, with
prices posting a loss for the last full week of April. On Thursday, WTI oil
settled at $68.43 a barrel, up 0.5% week to date.
Anas Alhajji, a Dallas-based energy-market expert, believes that “even
if the deal is ended and sanctions reimposed, the impact on the global oil
market is limited.”
Alhajji expects that actual exports will probably decline “only
marginally,” while “legal” exports might decline significantly. Iran might
resort to its old strategy of “selling oil as if it were Iraqi oil, building
massive floating storage, and using more oil in power generation and exporting
oil embedded in electricity.”
More
May 8, 2018 / 1:57 AM
What could Iran do if Trump pulls out of nuclear deal?
BEIRUT (Reuters) - U.S. President Donald
Trump will announce on Tuesday whether he will withdraw from the Iran nuclear
deal.. Tehran signed the Joint Comprehensive Plan of Action, with China,
France, Germany, Russia, Britain and the United States in 2015.
Iran agreed to curbs on its nuclear programme in exchange for the lifting of some sanctions. But the withdrawal of the United States would probably sink the deal. If that happens, Iran could retaliate by undermining the interests of Washington and its allies in the Middle East.
Here are some possible scenarios:
IRAQ
When Islamic State seized much of Iraq in 2014, Iran was quick to support Baghdad. Iran has since helped arm and train thousands of Shi’ite fighters in Iraq. These Popular Mobilization Forces (PMF) are also a significant political force.If the deal falls through, Iran could encourage PMF factions who want the U.S. to leave Iraq to step up rhetorical, and maybe military, attacks against American forces.
These could be rocket, mortar and roadside bomb attacks not directly linked to a specific Shi’ite militia, which would allow Iran to deny it had changed its position of avoiding direct conflict with U.S. forces in Iraq.
More
May 8, 2018 / 4:49 AM
China's trade surplus with U.S. widens to $22.19 billion in April
BEIJING
(Reuters) - China’s trade surplus with the United States widened to $22.19
billion (16.4 billion pounds) in April, from $15.43 billion in March, customs
data showed on Tuesday.
For January-April, China’s trade surplus with the United States was
$80.4 billion.
The world’s two largest economies have threatened each other with tens
of billions of dollars’ worth of tariffs in recent months, leading to worries
that Washington and Beijing may engage in a full-scale trade war that could
damage global growth and roil markets.
The Trump administration has drawn a hard line in trade talks, demanding
a $200 billion cut in the Chinese trade surplus with the United States, sharply
lower tariffs and advanced technology subsidies.
Maybe it’s time to quit negotiating with China
By Peter
Morici Published: May 7, 2018 6:00
a.m. ET
U.S. should require import licenses for Chinese goods
The battle lines are drawn in the trade war with China, and President Donald Trump can expect little support from the high tech and financial sectors or the economics profession. They argue the U.S. is doing quite well.Donald Trump has lifted growth to 2.9% a year but that compares poorly with China, whose superior performance can no longer be written off as that of a developing country playing catch up.
Beneath the modern theory of free trade lurks an assumption that economists are disinclined to discuss — the textbook theorem assumes balanced trade accomplished through a reciprocal reduction of trade barriers and market-determined exchange rates. We haven’t had an overabundance of those with our three biggest competitors — Japan, Germany and most of all China.
Consequently, America’s trade deficit will exceed $675 billion in 2018, and about 60% is with China. This situation creates winners and some big losers—mostly, Middle Americans whose jobs are displaced by imports but are not re-employed to make exports.
West Coast high-tech executives who get rich shipping manufacturing jobs and technology to China, New York bankers who cut the deals to finance the process, and academic economists tell us lower-priced Chinese goods help us live better by consuming more. They soft peddle the massive foreign borrowing necessary to finance the deficit that will soon leave the country vulnerable to a financial meltdown similar to those that crippled Greece, Spain and many others.
China’s mercantilist tactics are well documented: high tariffs, subsidies and various restrictions on foreign investment including mandatory joint-venture requirements. Those encourage U.S. companies to move factories and transfer technology. Beijing has targeted a succession of U.S. industries — for example, aluminum, autos and solar panels.
Trump plans to levy tariffs on $50 to $150 billion on goods from China. However, China sends the United States more than $500 billion in goods but the United States ships less $150 billion the other way. In a tit-for-tat faceoff, China could virtually wipe out all of U.S. exports while maintaining access for most of its shipments to the United States.
The Chinese have indicated no appetite for real negotiations on U.S. grievances. They are strenuously resisting negotiations to draft a plan to reduce the bilateral imbalance by $200 billion as requested by the Trump administration or to curtail a planned $300 billion in new subsidies to upgrade advanced technology industries.
More
https://www.marketwatch.com/story/maybe-its-time-to-quit-negotiating-with-china-2018-05-07
With a gentleman I am always a
gentleman and a half, and with a fraud I try to be a fraud and a half.
Count Otto von
Bismarck
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, EUSSR news again. The “Brussel’s Peoples”
paradise for bureaucrats. Brexit now before the next recession hits Euroland,
and the whole dying outfit caves.
I have come to the conclusion
that politics are too serious a matter to be left to the politicians.
Charles de Gaulle
May 7, 2018 / 12:35 PM
Italy repeat election looms as parties still far apart
ROME
(Reuters) - The prospect of an election re-run in Italy grew on Monday as
President Sergio Mattarella held a final round of consultations to try to break
two months of political deadlock with party leaders still far apart.
The head of the far-right League, Matteo Salvini, said he had asked
Mattarella to give him a mandate to try to form a government as chief of a
centre-right alliance that won the most seats at the inconclusive March 4
election.
“We trust that the president will give us the chance to find a majority
in parliament,” Salvini said after seeing Mattarella.
However, the centre-right is some 50 seats short of majority and a
source in the president’s office said that without a clear political deal,
Mattarella is more likely to try to form a neutral government acceptable to a
broad range of parties.
But it was far from certain whether such an administration could win a
vote of confidence needed to get off the ground. Both the League and the
anti-establishment 5-Star Movement, Italy’s single largest party, have been
hostile to the idea.
With a mesh of seemingly rigid vetoes still in place, the presidential
source said there was a growing possibility that a repeat election could be
held as early as July, when many Italians will have already left for their
summer holidays.
More
May 7, 2018 / 9:10 AM
French PM meets unions to try to end rail strike
PARIS (Reuters) - France’s prime minister told labour union leaders on
Monday that he expected the debt-ridden SNCF rail company to reach financial
breakeven by 2022 and, according to one union boss, promised to make
announcements on the issue before the end of May.
Seeking to end a strike that has crippled rail services for much of the
past month, Prime Minister Edouard Philippe met the main protagonists one at a
time in a bid to revive discussions the unions halted last month.
SNCF’s 46 billion euros (40.64 billion pounds) of debt is one of the
main flashpoints in a showdown prompted by an SNCF shake-up aimed at ending its
domestic passenger rail monopoly and ending the hiring of rail staff on more
protective contracts than other sectors.
Philippe,
who seemingly stopped short of concrete proposals, promised announcements on
debt management between now and the end of May, said Laurent Berger, head of
the CFDT union.
The union leaders all said industrial action was set to continue, but
Berger said his union was also open to negotiation if the government proved
willing in the weeks ahead, before the law on the SNCF reform goes to the
Senate on May 29.
The reform, the biggest since railway nationalisation in the 1930s, has
turned into a test of President Emmanuel Macron’s determination to pursue a
raft of economic reforms as his first of five years in power comes to an end.
Unions have programmed strikes two days out of every five up to the end
of June, and disruption since rolling strikes began on April 3 remains
significant even if it has waned somewhat since the early days.
The CFDT and the UNSA unions both said they were keeping an open mind
after Monday’s meetings, suggesting the government may be able to break the
united union front in the coming weeks.
The more hardline unions, chiefly the CGT and also Sud Rail, showed no
sign of changing tune.
CGT leader Philippe Martinez and other representatives of that union,
which opposes the principle of liberalisation, said after meeting Philippe that
the strike would go on and that nothing had changed as far as they saw it.
May 7, 2018 / 8:26 AM
Air France-KLM plunges as CEO to quit, government says will not help
PARIS
(Reuters) - Air France-KLM (AIRF.PA) shares suffered
their biggest one-day fall in a decade on Monday after its chief executive said
he would resign following the rejection of a pay deal by the airline’s staff.
CEO
Jean-Marc Janaillac’s attempt to cut costs at the carrier to keep up with
competition from budget airlines and Gulf rivals ran into strong union
resistance, as had his predecessor’s efforts, raising questions over its
ability to reform.
Air France-KLM’s board will decide on a management transition plan on
May 15. The government over the weekend said the French state, the largest
shareholder with a 14 percent stake, would not ride to the airline’s rescue.
Air
France-KLM shares fell as much as 14.3 percent to an intraday low of 6.93 euros
in early trading, around at their lowest level since April 2017. The stock was
down 13.3 percent at 7.02 euros by 0810 GMT.
Janaillac’s looming departure after his high-stakes gamble to put the
pay offer to a vote by all employees backfired was the worst possible outcome,
analysts at brokerage Bernstein said.
“This leaves the company with no CEO, no labour contract, an ongoing
dispute, and likely emboldened unions which will be even less likely to concede
on their demands, now,” Bernstein analysts said in a note.
Air France said 15 percent of its flights would be cancelled on Monday as pilots and cabin crew went on strike over the pay dispute for a 14th day since February.
Air France-KLM shares are down almost 50 percent since the start of 2018, versus a 3.7 percent gain on the broader Paris SBF-120 .SBF120 index and a 4 percent fall on the pan-European STOXX 600 Travel & Leisure index .SXTP.
More
The better I get to know men,
the more I find myself loving dogs.
Charles de Gaulle
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?
California set to become first US state requiring solar panels on new homes
State 'is about to take a quantum leap in energy standards'
May 5 2018
The state’s Energy Commission is due to vote next week on new energy standards that would require virtually all new homes to be constructed with solar panels from 2020.
Currently around 20 per cent of single-family homes are constructed with solar capacity built in, but if the new standards are approved as expected this proportion will rise sharply.
“California is about to take a quantum leap in energy standards,” Bob
Raymer, technical director for the California Building Industry Association,
told The Mercury News.
“No other state in the nation mandates solar, and we are about to take
that leap.”
The new requirement would apply to all homes over three stories tall.
Besides the wider implementation of solar power, the new guidelines
would also call for increased reliance on electricity over natural gas and
increased battery storage.
The new mandate dates back over a decade to a goal by the energy
commission to improve the efficiency of homebuilding so that “newly constructed
buildings can be net zero energy by 2020 for residences and by 2030 for
commercial buildings”.
“Net zero” would mean that all homes produce enough solar power to
offset all electricity and gas they use.
CR Herro, vice president of environmental affairs at real estate
development company Meritage Homes, said the new energy standard would add
up to $30,000 (£22,164) to the cost of home construction.
However, he noted that over the 25-year lifespan of the home’s solar
system, the owner’s reduced operating costs would save them up to $60,000.
Despite this, the added costs were criticised by homebuilder and design
consultant Bill Watt, who said they would push house prices further out of
reach for many.
More
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.
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