Wednesday, 6 June 2018

Is Trump Following Machiavelli?


Baltic Dry Index. 1249 +56     Brent Crude 75.66

Politics have no relation to morals.

Niccolo Machiavelli

Is President Trump playing Machiavelli’s game plan in his Great Global Trump Trade War on the rest of the world? Is the end game, destruction of the WTO, NAFTA, and the global supremacy of America First? 

Or is this all to complex and there isn’t any game plan at all? Merely a president who pulls and pushes randomly on the levers of power, unaware and indifferent to the chaos and uncertainty he generates?  Is the rise of EurAsia the unintended consequence?

Two days before what’s increasingly looking like a G-7 summit disaster, do any of President Trump’s team have any influence or clout? As Churchill famously remarked of Mussolini and Hitler, "Never hold discussions with the monkey when the organ grinder is in the room."

Will any of the G-6 have any influence in Canada on the organ grinder? Will the organ grinder even show up? And if he does, is Germany in his gunsights?

The first method for estimating the intelligence of a ruler is to look at the men he has around him.

Niccolo Machiavelli

June 6, 2018 / 1:42 AM

Asia stocks rise as techs lift Wall St, Italy still a worry

TOKYO (Reuters) - Asian stocks rose on Wednesday after tech sector strength lifted Wall Street shares while concerns about Italy’s debt prompted investors to move into lower-risk government debt elsewhere, pushing U.S. Treasury yields down from recent highs.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.5 percent, as did Japan's Nikkei .N225.

A firmer-than-expected print on first quarter growth lifted Australian stocks by 0.4 percent.

The Nasdaq .IXIC closed at a record high for the second day in a row on Tuesday with help from the technology and consumer discretionary sectors, aided by the upbeat outlook for the U.S. economy. [.N]

But the S&P 500 .SPX dipped, with the financial sector hit by lower Treasury yields, which can reduce banks' profits.

Treasury yields fell as investors moved back into safe-haven government debt after Italy’s new Prime Minister Giuseppe Conte vowed to enact economic policies that could add to the nation’s already-heavy debt load. [US/]

On the other hand, the debt concerns caused Italian government bond yields to rise again after they had declined to one-week lows on Monday. [GVD/EUR]

“The Italian political situation will remain uncertain, and considering its potential impact on European Central Bank policy, market volatility could continue to be relatively high,” said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management.
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Mnuchin reportedly urged Trump to exempt Canada from steel, aluminum tariffs

Published: June 5, 2018 8:22 p.m. ET
Treasury Secretary Steve Mnuchin urged President Donald Trump to exempt Canada from metals tariffs during a trade meeting Tuesday, according to a report by ABC News.

ABC News reported Mnuchin argued that the U.S. already has a $2 billion steel surplus with Canada and a $26 billion services surplus, and that America’s northern neighbor deserves an exemption from the tariffs on steel and aluminum that the Trump administration slapped on Canada, Mexico and the EU last week.

The meeting also included National Economic Council Larry Kudlow, Commerce Secretary Wilbur Ross, trade advisor Peter Navarro, trade representative Robert Lighthizer and chief of staff John Kelly, ABC News said, and some opposed Mnuchin’s recommendation.

“He’s still deciding on what to do about Canada,” one official told ABC News, when asked whether Trump would exempt Canada.

Mnuchin met with G-7 officials in Canada last weekend, and on Sunday the other six members of the G-7 issued a joint statement expressing “unanimous concern and disappointment” with the U.S. tariffs.
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June 5, 2018 / 9:35 AM

Germany unsure whether G7 leaders will agree on communique summit

BERLIN (Reuters) - European states will present a united front on issues from Iran to trade and climate change at a Group of Seven summit starting on Friday but it is unclear if G7 leaders will agree on a communique at the end, a senior German official said on Tuesday.

The June 8-9 meeting in Charlevoix, Canada, will begin with a working session on economic growth and trade - topical issues after U.S. President Donald Trump infuriated Canada and European Union G7 members by imposing tariffs on steel and aluminium.

“At this time, it is extremely important that we have such meetings. Whether there will be a communique or not I don’t know,” the official told reporters at a briefing. It would be rare for the summit not to issue a communique.

“Our aim is to get a joint communique but we have our positions which we will not give up,” the official added. “It is not easier than in previous years. .. We will see.”

Trump’s disdain for diplomatic niceties and his “America first” policies have created a rift with countries whose alliance with the United States dates to the Cold War with the Soviet Union.

Asked whether Trump would come to the summit, the official added: “We have to expect so.”
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China offered to buy nearly $70 billion of U.S. goods

Published: June 5, 2018 11:58 a.m. ET
China offered to purchase nearly $70 billion of U.S. farm and energy products if the Trump administration abandons threatened tariffs, according to people briefed on the latest negotiations with American trade officials.

In weekend talks in Beijing, Chinese negotiators led by Liu He, President Xi Jinping’s economic envoy, presented a U.S. team headed by Commerce Secretary Wilbur Ross a package that includes Chinese companies buying more U.S. soybeans, corn, natural gas, crude oil and coal, among other agricultural and energy products.

Chinese and U.S. officials estimated the value of the package at nearly $70 billion in the first year.
President Donald Trump has pressed China to commit to reduce the $375 billion U.S. merchandise trade deficit with China by $200 billion. Chinese officials are arguing this could go a long way toward meeting that target.

Mexico details retaliatory tariffs on U.S. products, including cheese, apples, bourbon

Published: June 5, 2018 10:37 p.m. ET
MEXICO CITY — The Mexican government published Tuesday its detailed list of U.S. goods that will face import tariffs in retaliation for the U.S. decision to place duties on Mexican steel and aluminum, including American staples such as cranberries, apples and bourbon.

The Economy Ministry said the tariffs will remain in effect as long as the U.S. continues to charge duties on Mexican steel and aluminum, and that Mexico could at any time modify the list of products targeted. The ministry estimates the value of the tariffs at about $3 billion, representing close to 1.5% of annual trade between the two countries.

The administration of President Donald Trump last week ended the exemptions to the steel tariffs for Mexico, Canada and the European Union, prompting them to threaten tit-for-tat measures while challenging the U.S. tariffs at the World Trade Organization.

Mexico on Tuesday slapped a 25% import tariff on a wide range of steel products from the U.S., matching the U.S. steel duty. The retaliatory measures also include 20% on pork products, 20% and 25% duties on cheeses, and a 25% duty on bourbon. Cranberries made the list, as did U.S. apples, with a 20% duty.

Death knell for the G-7 may be at hand after hostile reaction to Trump tariffs

Published: June 5, 2018 2:36 a.m. ET
The stinging rebuke of Treasury Secretary Steven Mnuchin over the weekend at a Group of Seven finance ministers meeting may mark the beginning of the end of the organization, experts fear.

There is “a growing concern that the entire rules-based international system and the institutions that underlie it are increasingly at risk,” William Reinsch, a senior adviser at the Center for Strategic and International Studies, told reporters on a conference call Monday.

After an unsuccessful charm offensive to try to convince President Donald Trump that a trade war was not in anyone’s interest, the leaders of the other six nations of the G-7 group are going to “try something else” and be more confrontational, added Heather Conley, a former U.S. State Department officials now with the CSIS.

This raises the risk of “an open rupture” of the group, said Roland Paris, an international affairs professor at the University of Ottawa, in a phone interview.

“The leaders are going to defend their interest from what is effectively economic aggression by the U.S.,” Paris said.

Canada and European allies are outraged that the U.S. used national security grounds to put tariffs on their steel and aluminum imports.

In a chairman’s statement, the other G-7 members told Mnuchin to “communicate their unanimous concern and disappointment” to Washington over the tariffs.

Trump travels to Quebec for the G-7 leaders summit on Friday where he may hear that “concern and disappointment.”

Experts said that U.S. leadership was the glue that held the G-7 process together. The informal meeting of the leaders of the U.S, Canada, Italy, Germany, France, Great Britain and Japan was started in 1975 after the oil shock and the collapse of fixed-exchange rates. There is no sense of anything in place that could replace the group.

“That system has been waning for some time. We are in the middle of a transition. The old has not gone away and a new structure has not been built to replace it,” Conley said.
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A prince never lacks legitimate reasons to break his promise.

Niccolo Machiavelli

In EUSSR news, no need for Russia to try to break up the dying EUSSR. It’s doing just fine by itself. When President Trump slaps tariffs on German made Mercs and beamers, EUSSR reform is probably too late. Will the EIB really ride in to Tehran to provide EU aid? Not in my lifetime, I’d bet.

Below, when a German Ja, is really a French Non. Brexit now, before the EUSSR splits up.

It is better to be feared than loved, if you cannot be both.

Niccolo Machiavelli

June 2, 2018 / 6:24 PM

Merkel rules out relief for Italy, gives nod to Macron

BERLIN/PARIS (Reuters) - German Chancellor Angela Merkel has ruled out debt relief for Italy, saying in a newspaper interview published on Sunday that the principle of solidarity among euro zone member states should not turn the single currency bloc into a debt-sharing union.

In the interview with the Frankfurter Allgemeine Sonntagszeitung Merkel also embraced some of French President Emmanuel Macron’s ideas for more solidarity in the euro zone and the broader European Union.

She said while cohesion among members of the single currency bloc was important, “solidarity among euro partners should never lead to a debt union, rather it must be about helping others to help themselves.”

Merkel made the remarks when asked about a media report that Italy’s anti-establishment 5-Star Movement and far-right League had planned to ask the European Central Bank to forgive 250 billion euros ($296 billion) of Italian debt.

An Italian governing coalition of two parties generally seen as hostile to the euro took power on Friday, calming markets that had been spooked by the possibility of a new election that might have effectively become a referendum on whether to leave the single currency.

“I will approach the new Italian government openly and work with it instead of speculating about its intentions,” Merkel told the paper in an interview published on Sunday.

EUROPEAN MONETARY FUND

Merkel has offered her most detailed response to French President Emmanuel Macron’s ideas for reforming Europe, seeking to avert a damaging rift with Paris at a time of high anxiety over Italy and growing transatlantic tensions.

The French president’s office welcomed Merkel’s comments, saying it was a positive move testifying to the European commitment of the German chancellor.

Merkel supported the idea of turning the euro zone’s ESM rescue fund into a European Monetary Fund (EMF) with powers to give members hit by sovereign debt troubles short-term credit lines.
Macron wants a future EMF to act as a buffer in any future financial crises in the bloc, which was nearly torn apart in a debt crisis in 2009.
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'Lazy Italians' and 'ugly Germans': How the euro sows discord

By Andreas Kluth Published on June 1, 2018 2:08 pm

Italy this week offered Germans and all Europeans a lesson: The euro, which was meant to usher Europeans further along on their road to an “ever-closer union,” is instead increasingly dividing them. Instead of integration, divergence. Instead of harmony, discord. Instead of liberal democracy, populist rancor.

Listen to Matteo Salvini, leader of the right-wing League, one of the two populist parties that will form the next Italian government: “We have a basic principle,” he said. “Only Italians make decisions for Italy, not the Germans… A minister the Germans don’t like is exactly the right minister for us.” A colleague added that it was time “to free the country from the chains that Brussels and Berlin have put on our ankles.”

What, you might ask, did Germany even have to do with the events in Rome this week? Good question. Superficially, nothing. The Italians had run a campaign in which euro-zone politics barely featured. The winners were populists on the left and right, who tried to form an incoherent government with economic policies that would have blown the euro zone apart. When the populists nominated a euro-hater as finance minister, Italy’s president refused. Now the government will be formed with a slightly different cabinet.

Below the surface, however, Germany has a lot to do with Italy’s political crisis. That’s because Germany represents the opposite of the ideas that, more or less, unite the southern euro area, from Greece to France and Italy. Whereas the south demands “solidarity,” Germany fears a “transfer union,” in which northern money permanently subsidizes bad loans and fiscal licentiousness in the south. Where the south clamors for stimulus, Germany demands austerity. Where the south wants fiscal discretion, Germany insists on strict Ordoliberal rules.

These are not philosophies that can be reconciled in the long run, no matter how much Angela Merkel fudges in the short run. Instead, these cultural narratives force Europeans to metamorphose into the worst stereotypes others have of them. Germans become “more German,” Italians “more Italian.”

Thus Germans imagine southerners as dissolute and unreliable deadbeats. Der Spiegel ran a story titled “The moochers of Rome” this week. Southerners, meanwhile, resent the finger-pointing, rules-obsessed Germans who presume to lecture them. They pounce on any hint of hypocrisy, which Germany often provides by breaching EU rules.
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June 5, 2018 / 1:35 PM

Exclusive - Under U.S. pressure, EIB balks at EU plan to work in Iran

BRUSSELS (Reuters) - The European Investment Bank has balked at an EU proposal to do business in Iran to help offset U.S. sanctions and save the 2015 nuclear deal, EU sources told Reuters, under pressure from the United States - where the bank raises much of its funds.

The resistance from the European Union’s lending arm underscores the limits of the bloc’s ability to shield trade with Iran from the reimposition of U.S. sanctions after President Donald Trump abandoned the nuclear accord last month.

European Commissioners are expected on Wednesday to endorse the EU executive’s plan to encourage the EIB to support investments by European businesses in Iran, where the bank has never before done business.

The move has symbolic value as EU officials see it as one of the easiest to deliver on in response to 
Iran’s demands that it show proof of its commitment to the nuclear deal.

A total of six EU diplomats, EU officials and sources at the bank said that within the EIB there are growing concerns that the Commission’s plan would imperil its multi-billion-dollar funding programme.

“The bank is unhappy with the Commission proposal because the bank raises funds on U.S. markets,” said one EU diplomat.

As one of the world’s largest borrowers, the EIB raised 56.4 billion euros (£49.3 billion) last year on international capital markets. The bank fears that the threat of U.S. sanctions over Iran could scare off bond buyers.

While Iran was added in March to a list of potentially eligible countries for EIB activity, any plan to upgrade that status needs the approval of EU governments and the European Parliament. The bloc wants the measure in place before Aug. 6, when U.S. sanctions begin to take effect.

Even then, it would be up to the bank’s governors, made up of the finance ministers of the EU’s 28 member states, to decide whether to seek an agreement with Tehran to engage there.
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Finally, is this perfidious President Trump’s evil masterplan? Is the EUSSR playing out of its league?

I'm not interested in preserving the status quo; I want to overthrow it.

Niccolo Machiavelli

Trump’s beggar-thy-neighbour trade strategy is anything but foolish

Christian Leuprecht and Roger Bradbury Contributed to The Globe and Mail
Published June 4, 2018

Christian Leuprecht is a class of 1965 professor in leadership at the Royal Military College of Canada and a Munk Senior Fellow at the Macdonald-Laurier Institute, currently on leave at the Flinders University of South Australia. Roger Bradbury is a professor of complex-systems science at the National Security College at the Australian National University.

“We will continue to make arguments based on logic and common sense and hope that eventually they will prevail against an administration that doesn’t always align itself around those principles,” Prime Minister Justin Trudeau said in response to recent tariffs imposed by the United States.

Canadians are left with the impression that President Donald Trump is an irrational buffoon who is shooting himself in the foot with his trade policies. In fact, contrary to common (and, apparently, Canadian political executive) sense, the U.S. administration’s tariffs are actually perfectly rational – from Mr. Trump’s perspective.

The extent of the punitive tariffs Mr. Trump is imposing is unprecedented. They threaten to bring down the system of global trade – by design. The United States has been the guarantor of the free global economy, which dates from July, 1944, when 44 states laid its foundations in the New Hampshire town of Bretton Woods. The United States was the driving force behind a series of long-winded world trade negotiations – beginning in 1947 and continuing through the current Doha round initiated in 2001, but never concluded – that lowered tariffs and barriers to trade. Spreading the free-market gospel across the world would secure the United States’ political and economic hegemony. Today, this meticulously calibrated, multilateral system of rules has 164 member-states and comprises tens of thousands of products

World Trade Organization (WTO) tribunals – which are about to grind to a halt because the United States has not named a judge to the seven-member Appellate Body – were meant to ensure that everyone sticks to the rules. But instead of being bound by WTO rulings, Mr. Trump’s trade czar Robert Lighthizer would prefer to default to the pre-WTO practice of directly negotiating the outcome of trade disputes.

The President is now intent on destroying co-operation within the WTO by driving wedges between the world’s trading blocs and countries. The United States would be in a much stronger position if it could negotiate with each trade bloc directly. The painful NAFTA negotiations are but one example, and Mr. Trump’s recent musings about replacing NAFTA with two separate trade agreements with Canada and Mexico are further evidence to that effect. Canada risks selling out the WTO by making concessions to the United States.

----Indeed, for decades the United States played by the rules; everyone grew richer and the United States grew richer faster than everyone else. In the postwar world, the United States’ support of free trade was a key – perhaps the key – to its rise to global economic leader. Nowadays, however, the game has changed. Where once the goal of the United States was to rise to global hegemony, today its goal is to maintain that dominance.

So, that same rules-based system is now causing competitors – Mr. Trump’s national-security strategy makes no qualms about calling them that – to grow richer faster than the United States. Under these conditions, it is no longer in the interest of the United States to co-operate; as the global political and economic hegemon, the United States can win a strategic competition for wealth and power. 
Everyone ends up poorer, but the United States remains top dog because everyone else grows poorer faster than the United States. Beggar thy neighbour. Literally.
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The promise given was a necessity of the past: the word broken is a necessity of the present.

Niccolo Machiavelli

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
After almost a year, finally GB mainstream media start to hold the London Fire Brigade to account for their reckless and murderously wrong advice to residents of the Grenfell Tower disaster. Still no apology from Mayor Khan head of the LFB, or from his LFB Fire Commissioner, Ms Dany Cotton, for the LFB’s disastrously wrong policy. Will anyone at the LFB be held responsible, or will it be cover-up and whitewash?

Twenty-seven minutes and Grenfell Tower fire had taken hold: so why weren't residents told to get out?

Robert MendickJack MaidmentJulian Ingle
5 June 2018 • 2:06am
Grenfell Tower victims had more than half an hour to escape the high-rise block before the stairs filled with toxic smoke, but were told to stay put by the fire service, the official inquiry was told on Monday.

The failure to evacuate the building immediately by the London Fire Brigade (LFB) may have “made all the difference between life and death”.

An official report revealed that the controversial “stay put” strategy had “substantially failed” by 1.26am when flames could be seen to have reached the top of the 23-storey tower block.

It said the building remained “tenable for escape” while the stairwells stayed smoke-free, which was until at least 1.30am. But it would take the fire service until 2.47am – 41 minutes after it had declared the disaster a “major incident” – to abandon the advice and instead encourage residents to evacuate.

The inferno on June 14 last year claimed the lives of 72 people in the single-greatest loss of life to a fire in a residential building in Britain since the war. No one who lived below the 11th floor died.

A report by Dr Barbara Lane, a leading fire engineer, questioned LFB’s continuation of the “stay put” advice when it should have been clear that the blaze, which broke out in flat 16 on the fourth floor, had not been contained and was spreading rapidly up and across the block.

She uncovered serious safety breaches relating to the £10 million refurbishment of the building that included the installation of flammable cladding and more than 100 “non-compliant” fire doors.

Dr Lane said there was “an early need for a total evacuation of Grenfell Tower”. Instead, the fire service, which first arrived at the scene at 12.59am, only withdrew the “stay put” policy almost two hours after the first emergency call.

She suggested the “culture of non-compliance” on basic fire safety coupled with “stay put” guidance that exposed Grenfell victims to thick toxic smoke in the stairwell had led to “a disproportionately high loss of life”.

But Dr Lane noted: “From 00.55 to 01.30 the stairs appear to have been free of smoke and therefore tenable for escape.”

She went on: “The ‘stay-put’ strategy had substantially failed by 01.26.

“At present, I am unclear about the basis for delaying the formal end of the strategy between 1.40am and 2.47am. I am particularly concerned by the delay from 2.06am, when a major incident was declared, to 2.47am.”

She concluded: “There was therefore an early need for a total evacuation of Grenfell Tower ... I do not wish to imply this was an easy decision to make during the unfolding and complex events that occurred.”

Richard Millett QC, the lead counsel to the inquiry, said in his opening statement: “It may well be that the withdrawal of the formal ‘stay-put’ guidance at that stage was just that – mere formality in light of the number of occupants that had escaped safely before that time. On the other hand, it may be that the formal maintenance of that advice until 2.47am made all the difference between life and death.”

By 1.18am, 34 residents had escaped, whether by ignoring the advice or being rescued by firefighters. Between 1.19am and 1.38am, a further 110 had fled. But evacuation rates then slowed, with 20 people escaping in the next 19 minutes to 1.58am. In the next two hours, a further 48 people got out.
Firefighters got no higher than the 20th floor, and Dr Lane said in her report: “I am not aware that those people [at level 22 and level 23] were provided with any assistance from LFB during the fire.”
Just two people who made their own way down from the 23rd floor survived.

----The inquiry also raised concerns on Monday about the use of police helicopters on the night of the fire. Their deployment made some residents think they could be rescued from upper floors to which they fled to escape the smoke.
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There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.

Niccolo Machiavelli
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?

New mechanisms discovered to separate molecules of air

Date: June 4, 2018

Source: Shinshu University

Summary: Unlike the window screens of your house, nanoscale holes in graphene (named as 'nanowindows') can selectively choose which type of air molecules can pass through. Scientists theoretically proved concerted motion of the nanowindow-rim to selectively allow molecules to pass, in an energy-efficiently and fast way. This brings up new possibilities to create an advanced molecular separation membrane technology.

Scientists from Shinshu University and PSL University, France, theoretically proved concerted motion of the nanowindow-rim to selectively allow molecules to pass, in an energy-efficiently and fast way. This brings up new possibilities to create an advanced molecular separation membrane technology.

The mechanism of separation by nanowindows is that the atomic vibration of the nanowindow-rim changes the effective nanowidow size. When the rim of one side is deviated and the other is deviated to the opposite direction, the effective nanowindow size becomes larger than when the rim does not move. This effect is very predominant for molecules of oxygen, nitrogen, and argon, inducing an efficient separation of oxygen from air.

The study considered separation of the main components of air: oxygen, nitrogen and argon. They have high industrial needs; innovative air separation technology has been highly demanded. The molecular sizes of oxygen, nitrogen, and argon are 0.299, 0.305, and 0.363 nanometers (nm). The researchers compare the permeation of these molecules on 6 differently-sized nanowindows (of 0.257 nm, 0.273 nm, 0.297 nm, 0.330 nm, 0.370 nm, and 0.378 nm).

Nanowindows were prepared by oxidation treatment. Thus their rims are passivated with hydrogen and oxygen atoms, which have essential role for selective permeation.

Surprisingly, the molecules permeate through nanowindows even when the rigid nanowindow size is smaller than the target molecular size. For example, O2 permeates faster through 0.29nm nanowindows than 0.33nm nanowindows. The difference in permeation rate is associated with the interaction of the molecule with the nanowidow rim and graphene. The mechanism is explained using interaction energy and vibrational motion of the oxygen and hydrogen at the nanowindow rim.

----This study evaluated mixed gas permeation to measure selectivities. Separation efficiencies exceeded 50 and 1500 for O2/N2 and O2/Ar at room temperature, respectively. The current membranes have obtained permeation rate selectivities 6 for O2/N2 but at the same time they lack high permeation rate. This shows promising possibility of the dynamic nanowindows in the graphene.

Air separation in current industry uses distillation, which consumes large amount of energy. Gases used in this study are widely employed in various industries such as medical, food, steal, etc. Development of the dynamic nanowindows-embedded graphenes will save large amount of energy and provide safer and high efficient process. This study shows the future direction of air separation.

If an injury has to be done to a man it should be so severe that his vengeance need not be feared.

Niccolo Machiavelli

The monthly Coppock Indicators finished May.

DJIA: 24,416 +201 Down. NASDAQ: 7,442 +276 Down. SP500: 2,705 +180 Down.
All three slow indicators moved down in March and have continued down in April and May. For some a new bear signal, for others a take profits and get back to cash signal. 

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