Baltic Dry Index. 1341 -06 Brent Crude 74.25
“When a country (USA) is losing many billions of dollars on
trade with virtually every country it does business with, trade wars are good,
and easy to win.”
President
Trump. March 2018.
As we head into the
month-end, quarter-end, and half year-end, dress up markets week for stocks,
stocks have never faced a more uncertain future since the 1930s. Unsatisfied with his success so far in the
Great Global Trump Trade War, over the weekend Team Trump stepped up their war
on China and NATO.
It’s kind of hard to
play the usual dress up stocks endings, when
the G-1 is not playing by the old rules threatening to collapse everyone’s
house of cards. Worse later this week, the EUSSR is heading for an acrimonious “great
leaders” meeting, and this time the acrimony has nothing to do with John Bull
and Brexit. It’s an entirely made in Germany self-inflicted migrant problem.
Wherever one looks in
Europe, there is nothing but weak governments, dithering, acrimony, and rapidly
rising voter disillusionment and polarisation. Nowhere does President Trump’s trade
war “divide and conquer” tactics look more likely to succeed.
Below, who would want to be a stock market fixer and rigger this June month-end? Today’s genius fix, all too easily can become this Friday’s disaster. And then there’s still another Trumpian tweet weekend to come, plus a July Fourth holiday week to follow in the USA.
Following that, the
Trump’s lightening rod visits to NATO in Brussels and his state visit to GB
including Friday the thirteenth! Following President Trump’s disastrous migrant
policy of separating children from their parents and locking them up in austere
Trump camps, Europe’s communists, anarchists, and usual rent-a-violent-mob
crowd have been mobilising and tooling up for weeks. We are in for a most “interesting”
July.
May you
live in interesting times.
Alleged
Chinese curse.
Stocks in China rise, but other Asian markets mostly lower
By Dow
Jones Newswire Published: June 24,
2018 11:31 p.m. ET
Trading weakened as the morning progressed in Asia, with stock indexes
hitting session lows as trade and other uncertainty continue to keep buyers on
the sidelines. Many benchmarks were off about 0.5%, with Taiwan’s Taiex Y9999, -0.79% the worst at 0.8%.
Chinese equities maintained their early gains, extending a rebound that started Friday. The Shanghai Composite SHCOMP, +0.17% was up 0.2%, while smaller caps saw bigger gains as the Shenzhen Composite 399106, +0.70% rose 0.6%. Perhaps helping sentiment some was the Peoples’s Bank of China’s latest cut to banks’ reserve-requirement ratios. But the move was anticipated, and some were expecting a reduction larger than the half-point one which will become effective next week. Some 80% of the Chinese banking system’s funding will be supported by the cut, Bocom estimates.
Japan’s Nikkei NIK, -0.43% and South Korea’s Kospi SEU, -0.10% were each down around 0.3%. Australia’s S&P/ASX 200 XJO, -0.22% dipped lower, as Commonwealth Bank CBA, -2.41% led the slumping financial sector lower. Energy stocks fared well, though, with Santos STO, +1.68% , Oil Search OSH, +1.98% and Woodside Petroleum WPL, +1.57% posting gains.
Hong Kong’s Hang Seng index HSI, -0.36% fell, and shares of Cathay Pacific 0293, -0.15% were under pressure after traffic data out last week showed weaker May passenger levels.
The Wall Street Journal
Trump seeks curbs on Chinese investment in U.S. tech firms, exports to China
By Bob
Davis Published: June 24, 2018 8:40 p.m. ET
New initiatives set to be announced this week
WASHINGTON — President Donald Trump, already embroiled in a trade battle
with China, plans to ratchet commercial tensions higher by barring many Chinese
companies from investing in U.S. technology firms, and by blocking additional
technology exports to Beijing, said people familiar with administration plans.
The twin initiatives, set to be announced by the end of the week, are
designed to prevent Beijing from moving ahead with plans outlined in its “Made
in China 2025” report to become a global leader in 10 broad areas of technology,
including information technology, aerospace, electric vehicles and
biotechnology.
The Treasury Department is crafting rules that would block firms with at
least 25% Chinese ownership from buying companies involved in what the White
House calls “industrially significant technology.” The ceiling may end up lower
than that, according to people familiar with discussions finalizing the plans.
In addition, the National Security Council and the Commerce Department
are putting together plans for “enhanced” export controls, designed to keep
such technologies from being shipped to China, said the people familiar with
the proposals.
Trump’s latest threat to U.S. trade partners: Drop tariffs or face consequences
By Mike
Murphy Published: June 24, 2018 9:27
p.m. ET
President Donald Trump on Sunday issued new threats against America’s trade
partners, calling for them to remove trade barriers and tariffs, or face the
consequences.“The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street!” Trump said in a tweet.
Trump has already warned China that the U.S. will seek additional tit-for-tat tariffs on Chinese exports if China slaps retaliatory tariffs of its own on U.S. exports. Sunday’s message may indicate a similar stance toward the European Union.
On Friday, Trump’s threatened to impose 20% tariffs on European cars in response to the EU’s decision to impose 25% tariffs on more than $3 billion worth of U.S. goods as retaliation for U.S. tariffs on steel and aluminum that the Trump administration put into effect on June 1.
Also see: How Trump’s European auto tariff proposal could backfire
On
Saturday, EU Commission Vice President Jyrki Katainen told the French newspaper
Le Monde that “If they decide to raise their import tariffs, we’ll have no
choice, again, but to react,” according to Reuters. “We don’t want to fight (over trade) in
public via Twitter. We should end the escalation.”
Why a major trade war could mean a ‘full-blown recession’
Published: June 22, 2018 12:53 p.m. ET
So far, the trade war has been more bark than bite, as the U.S. tariffs on
aluminum, steel and Chinese goods are dwarfed in magnitude by threatened
levies.A new research note says that’s a relief, because an all-out trade war risks a recession.
To date, there’s only been escalation, and for good reason. As President Donald Trump has announced and then implemented tariffs on foreign steel and aluminum, as well as an initial $50 billion of Chinese goods, his standings in polls have improved, the economy may record a GDP print north of 4% for the second quarter, and U.S. stocks DJIA, +0.49% have fared far better than Chinese ones SHCOMP, +0.49%
Related: Here are the new tariffs, imposed and threatened
Trump and close White House advisers such as Wilbur Ross and Peter Navarro are confident they can win a trade war if only for the straightforward logic that China exports far more to the U.S. than vice versa. But China as well as Canada, Mexico and the European Union have yet to give in.
Related: China can’t match Trump in a tariff fight, but it does have other weapons
Trump has announced he’s looking at imposing tariffs on another $200 billion of Chinese goods and on Friday said over Twitter that he’s contemplating 20% tariffs on European autos.
With that in mind, economists at Bank of America Merrill Lynch modeled an all-out battle, assuming a global 10% tariff on all goods and services. (Trump has threatened a 10% rate for the $200 billion Chinese goods tariffs.)
Running it through FRB/US — the Fed’s macroeconomic model — the scenario isn’t good but doesn’t appear catastrophic. GDP growth would be shaved by as much as 0.4 percentage point in the first year and as much as 0.6 percentage points in the second. Core inflation would rise slightly, as the spike in import prices would be ameliorated by a rising dollar DXY, -0.36% . The Fed would probably slow its pace of interest rates as the trade war continued.
But the economists, Joseph Song and Stephen Juneau, say FRB/US may understate the impact of a trade war. “There are likely to be microeconomic factors at the firm level through bottlenecks and disruptions in the supply chain and for consumers through confidence shocks that are not captured by our results,” the economists say.
Using what’s called a vector autoregression model that incorporates economic variables such as industrial production and consumer prices as well as the S&P 500 SPX, +0.19% and VIX VIX, -5.94% the trade war looks worse.
What they call a temporary, one-deviation “uncertainty shock” would product a quick but modest drop in industrial production.
But a larger, say, three-standard deviation shock would result in industrial production dropping by nearly 1% in the short term. If that uncertainty is maintained, there could be an abrupt slowdown.
“Combined with a tariff shock, we see a high probability that a major trade war would push the economy towards a full-blown recession,” they say.
https://www.marketwatch.com/story/why-a-major-trade-war-could-mean-a-full-blown-recession-2018-06-22
Europe Vows to Keep Fighting Trump on Trade
By Richard Bravo and Nikos Chrysoloras
EU says in memo the
global trade system is under U.S. assault
“The crisis is set to
deepen further in the coming months”
'I’m
intelligent. Some people would say I’m very, very, very intelligent.”
President Trump.
Finally, as Germany’s
Migrant Mad Merkel failed over the weekend to get migrant relief from the
EUSSR, the EUSSR head into it’s “Great Leaders” summit later this week, with
more on its plate than Brexit, and an escalating nasty USA trade war.
Illegal immigrantion
caused by Merkel is back on the agenda, as more and more European voters vote
enough is enough with Merkel’s stupidity. Will Brussels toss more German money
into spending on keeping economic migrants in Turkey and Libya? They can try
but it’s not likely to work.
Trump tariffs on
German motors, causing a big wobble in the German economy, taking away migrant
jobs might just do the job, although that’s not what President Trump had in
mind.
“That
some countries refuse to accept any refugees is not on. That contradicts the
spirit of Europe. We’ll overcome that. It will take time and patience but
we will succeed.”
Chancellor
Merkel. 2017.
June 24, 2018 / 12:25 AM
Merkel presses over migration as 'European solution' fails
BRUSSELS
(Reuters) - German Chancellor Angela Merkel said on Sunday she would seek
direct deals with separate European Union states on migration, conceding the
bloc had failed to find a joint solution to the issue threatening her
government.
Since Mediterranean arrivals spiked in 2015, when more than a million refugees
and migrants reached the bloc, EU leaders have been at odds over how to handle
them. The feud has weakened their unity and undermined Europe’s Schengen
free-travel area.
Sixteen EU leaders met for emergency talks in Brussels on Sunday hoping
to get a deal for the full summit of all 28 states on June 28-29.
They will endorse further tightening of their external borders and
giving more money to foreign countries to prevent people from setting sail for
Europe. But they cannot agree on how to share out those asylum seekers who make
it.
Wealthy Germany is where the newly-arrived mostly end up and Merkel is
under pressure to curb the numbers. Her coalition partner is pushing for firmer
action that could break her government.
“There will be bilateral and trilateral agreements, how can we help each
other, not always wait for all 28 members,” she said.
----United Nations data shows only about 41,000 people have made it to the EU across the sea this year. But opinion polls show migration is the top concern of the EU’s 500 million citizens.
Since 2015, migration has decided elections across the bloc from Italy to Hungary, with voters favouring a tougher stance.
In response, the EU has turned increasingly restrictive on asylum and pushed to curb arrivals, a strategy denounced by rights groups.
ITALIAN GOVERNMENT
Italy has long struggled to cope with arrivals and its new populist government rejects any idea that would see it handle more people.Rome has started turning away ships with migrants rescued at sea, saying it should not be the sole EU entry point. Malta could accept some in the coming days, sources said.
Italian Prime Minister Giuseppe Conte, who said he was leaving Brussels “decidedly satisfied”, also wants to drop the rules stipulating that the first EU country of arrival is responsible for any given person.
He said those who refuse to take in some of the new arrivals should get less money from EU coffers, an idea that is anathema to the four ex-communist states in the east who do not want to host anyone.
EU states will agree later this week to spend more money on Syrian refugees in Turkey and provide more cash for Africa projects.
More
“We are
entering an era where trade war is starting to show its teeth. And we think
that’s not good news. American politics today — unilaterally putting in
place a regime of additional tariffs on steel and aluminum — comes on the heels
of a policy which aims to gut the dispute settlement system of the World Trade
Organization.”
French
Trade Secretary Jean-Baptiste Lemoyne. 19 March 2018.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Not the usual suspects today, Today, the Middle East’s “Trump.” Is NATO
about to lose Turkey?
June 24, 2018 / 12:20 AM
Turkey's Erdogan wins presidential election, opposition yet to concede
ANKARA
(Reuters) - Tayyip Erdogan won Turkey’s presidential election on Sunday, the
head of the country’s electoral body said, overcoming the biggest electoral
challenge to his rule in a decade and a half.
Electoral board Chairman Sadi Guven said that with more than 97 percent
of votes counted, Erdogan had an absolute majority. Unofficial results
broadcast on Turkish television also gave his ruling party and its alliance
partner a majority in parliament.
The main opposition party did not immediately concede defeat. But after
initially saying Erdogan would fall well short of a first-round victory, it
said simply it would continue its democratic struggle “whatever the result”.
“Starting tomorrow, we will start working to realise the promises we
made our people,” Erdogan told flag-waving supporters in a victory speech
delivered from the balcony of his ruling AK Party’s headquarters in Ankara
shortly after 3 a.m.
He also pledged that authorities, who have waged a nationwide crackdown
since a failed military coup two years ago, would act more decisively against
terrorist organisations.
Erdogan, 64, the most popular but also the most divisive politician in
modern Turkey, added that Turkish forces would continue to “liberate Syrian
lands” so that the 3.5 million Syrian refugees in Turkey could return home
safely.
Electoral board Chairman Sadi Guven said that with more than 97 percent
of votes counted, Erdogan had an absolute majority. Unofficial results
broadcast on Turkish television also gave his ruling party and its alliance
partner a majority in parliament.
The main opposition party did not immediately concede defeat. But after
initially saying Erdogan would fall well short of a first-round victory, it
said simply it would continue its democratic struggle “whatever the result”.
“Starting tomorrow, we will start working to realise the promises we
made our people,” Erdogan told flag-waving supporters in a victory speech
delivered from the balcony of his ruling AK Party’s headquarters in Ankara
shortly after 3 a.m.
He also pledged that authorities, who have waged a nationwide crackdown
since a failed military coup two years ago, would act more decisively against
terrorist organisations.
Erdogan, 64, the most popular but also the most divisive politician in
modern Turkey, added that Turkish forces would continue to “liberate Syrian
lands” so that the 3.5 million Syrian refugees in Turkey could return home
safely.
More
'I had
some beautiful pictures taken in which I had a big smile on my face. I looked
happy, I looked content, I looked like a very nice person, which in theory I
am.'
President
Trump.
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?
UK's First Energy-Positive Buildings Generate More Energy Than They Consume
Published on June 21, 2018 at 10:11 AM
The first energy-positive classroom in the UK, designed with Swansea University’s research expertise, produced over one and a half times the energy it consumed. This is according to the data collected from its first year of operation, say researchers.
These findings were reported simultaneously as the researchers set off
the next phase of their study, which involved collecting proof and data on an
office building that was built using similar techniques.
At present, buildings are responsible for about 40% of UK energy
consumption. This innovative building, called the Active Office, shows how a
new generation of low-carbon offices can be designed and such buildings are
capable of producing their own supply of clean energy.
SPECIFIC, a UK Innovation and Knowledge Center headed by Swansea
University, designed the building.
Professor Dave Worsley, Research Director for SPECIFIC as well as
Swansea University College of Engineering, clarified how SPECIFIC’s work
involves a two-way connection between research and real-world application:
"SPECIFIC's research focuses on developing solar technologies
and the processing techniques that take them from the lab to full-scale
buildings.
With our building demonstration programme we are testing and proving the
'buildings as power stations' concept in real buildings, which are used every
day. The data obtained from these buildings is then fed back into our
fundamental research into solar energy technologies and used to accelerate and
steer their development."
Several innovative technologies are used by the Active Office that will
allow it to produce, store, and discharge solar energy in a single integrated
system, including:
- A Photovoltaic Thermal
system located on the south facing wall can generate heat as well as
electricity from the sun in a single system
- A curved roof with
built-in solar cells shows the versatile nature of the laminated photovoltaic
panel
- Lithium-ion batteries for storing the generated electricity, and a 2,000-liter water tank for storing solar heat
It has already been demonstrated that the 'buildings as power stations'
concept indeed works. The Active Classroom, the first energy-positive classroom
in the UK, is right beside the Active Office. This was also constructed by
SPECIFI, and the RICS Wales had recently named it the Project of the Year. The
Active Classroom, in its first year of operation, produced over one and half
times the energy it consumed.
The
Active Classroom and the Active Office will be connected together and both
would be able to share energy with one another and electric vehicles. This
shows how the concept can possibly be applied to a community that is solar-powered
and energy-resilient. In addition to providing office spaces and functional
teaching, the Active Office and Classroom will also provide SPECIFIC and its
industry partners building-scale development facilities.
More
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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