Baltic Dry Index. 1445 +12 Brent Crude 73.02
We have entered the
summer silly season early, with President Trump declaring Trade War on the Rest
of the World, but especially China, Mexico, and the allied “courtiers” that
make up NATO. A slip of the tongue or a fitting description?
NATO member Canada
was singled out for extra special harsh treatment, allegedly for burning down
the White House in 1814, with Prime Minister Trudeau guaranteed an extra
special place in Hell for stabbing President Trump in the back and bursting his
vastly over inflated ego, hurting his feelings.
Who knew that places
in Hell were within the discretionary powers of US Presidents, though large
agitated crowds in many cities on planet earth have often suggested that they
go there.
And so an unnecessary
trade war is now starting in late June, although unless President Trump
escalates against European cars, we are unlikely to see much effect in global
employment, for several months. Put tariffs on EU autos, and Germany and Italy
will be laying off workers before autumn.
Corporations will react
faster, readjusting import patterns where possible, reducing production if
sales fall due to higher tariffs, trying to divert exports where possible, to
other countries without tariffs. Ultimately, since high tariffs have to be paid
by someone, somewhere, it’s usually the consumer that pays. Our new trade war will bring forwards the
arrival of the next recession.
Below, Reuters sums
up the onset of the trade wars.
June 18, 2018 / 1:49 AM
Asian shares fall as U.S.-China trade spat escalates
TOKYO/SYDNEY
(Reuters) - Asian shares fell on Monday after U.S. President Donald Trump
cranked up trade tensions by going ahead with tariffs on Chinese imports,
prompting Beijing to immediately respond in kind.
Fears of a global trade war added to pressure on oil prices, which
extended Friday’s big fall, while the dollar retreated from near 3-week highs
against the safe haven yen.
MSCI’s broadest index of Asia-Pacific shares outside Japan skidded 0.4
percent to its lowest level since May 31.
Financial markets in China and Hong Kong were closed for Dragon Boat
festival holiday. South Korea’s Kospi index slipped 0.5 percent while
Australian shares eased 0.1 percent.
Japan’s Nikkei sank 0.9 percent as worries over growing protectionism
overshadowed stronger-than-expected export data.
U.S. E-mini S&P futures were down 0.5 percent in early trade,
suggesting a weaker start on Wall Street.
“The on-again off-again possible global trade war is looking to be back
on again as the U.S. and China announced tariffs on each other’s imports,” said
Nick Twidale, Sydney-based analyst at Rakuten Securities Australia.
----Trump announced hefty tariffs on $50 billion of Chinese imports on Friday, laying out a list of more than 800 strategically important imports from China that would be subject to a 25 percent tariff starting on July 6, including cars.
China said it would respond with tariffs “of the same scale and
strength” and that any previous trade deals with Trump were “invalid.” The
official Xinhua news agency said China would impose 25 percent tariffs on 659
U.S. products, ranging from soybeans and autos to seafood.
China’s retaliation list was increased more than six-fold from a version
released in April, but the value was kept at $50 billion, as some high-value
items such as commercial aircraft were deleted.
----Analysts say the direct impact of the tariffs may be limited, especially for the U.S. economy, which is in strong shape.
But Asia’s other trade-reliant economies and companies plugged into
China’s supply chains are worried they will suffer collateral damage if world
trade slows down, hurting global growth and dampening business confidence.
Shares of Japanese construction equipment makers Komatsu Ltd and Hitachi
Construction Machinery tumbled 3.7 percent and 3.4 percent, respectively. Both
are vulnerable to any downturns in Chinese and global capital spending.
“There are trade frictions not only between the U.S. and China but also between the U.S. and its allies. Trump could put more pressure on other countries like Japan and NATO courtiers,” said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management in Tokyo.
“So far investors have been escaping to high-tech shares and small cap
shares. After all, money is still abundant. But investors should be cautious.”
In the currency market, the dollar was supported for now as the euro has
lost steam after the European Central Bank had suggested on Thursday it would
hold off raising interest rates through the summer of next year.
More
June 18, 2018 / 2:09 AM
U.S. oil slumps as China threatens duty on U.S. crude imports
SINGAPORE (Reuters) - U.S. oil prices slumped on Monday after
China threatened duties on American crude imports in an escalating trade
dispute with Washington.
U.S. West Texas Intermediate (WTI) crude futures CLc1 touched their
lowest level since April, falling to $63.59 per barrel before edging back to
$63.83 a barrel by 0426 GMT.
That was still down $1.23, or 1.9 percent, from their last settlement.
“Crude oil prices crashed as U.S.-China trade tensions escalated last
Friday,” wrote Benjamin Lu of Singapore-based futures brokerage Phillip
Futures.
In an escalating spat over the American trade deficit with most of its
major trading partners, including China, U.S. President Donald Trump last week
pushed ahead with hefty tariffs on $50 billion of Chinese imports, starting on
July 6.
China on Friday said it would retaliate by slapping duties on American
export products, including crude oil.
“Beijing has retaliated ... with its position as a top importer from the
U.S.,” Lu said.
“These punitive measures on bilateral trade have unnerved investors as
it hurts global economic growth.”
International oil prices also fell, with Brent crude futures LCOc1 down
76 cents, or 1.1 percent, at $72.67 per barrel.
This was in response to reports that top suppliers Saudi Arabia and
Russia would likely increase production.
More
In other news:
S.Korea aims to make war-ending declaration in 2018, to closely cooperate with China: FM |
SEOUL, June 18 (Xinhua) -- South Korea aimed to make a war-ending
declaration by the end of this year although the exact schedule and format can
be dealt with flexibly, the South Korean foreign minister said Monday.
Kang Kyung-wha told a press briefing that though the schedule and format
can be addressed flexibly, the government aimed to push for the declaration of
an end to the 1950-53 Korean War by the end of this year.
South Korean President Moon Jae-in and top leader of the Democratic
People's Republic of Korea (DPRK) Kim Jong Un agreed to turn the current
armistice agreement into a peace treaty by the end of 2018 after holding the
third inter-Korean summit on April 27.
Kim and U.S. President Donald Trump agreed to build a lasting peace
regime on the Korean Peninsula and establish new bilateral relations at their
first summit in Singapore on June 12.
The peninsula remains technically at war as the Korean War ended with
armistice, not a peace treaty.
Kang said South Korea has been closely cooperating with the U.S. side
for the war-ending declaration, noting that China can play a "very
significant role" in building a peace regime on the peninsula.
She said South Korea will closely cooperate with China on the issue
More
18 June 2018 - 07H00
France air traffic responsible for third of Europe delays: report
PARIS (AFP) -
Hindered by strikes and outdated equipment, French air traffic control
is responsible for a third of aviation delays in Europe, Le Parisien said
Monday, citing a senate finance committee report.
Between 2004 and 2016, French air traffic controllers were on strike 254
days, while second-placed Greece only had 46 days of stoppages, Italy 37 and
Germany four, according to the report seen by the daily.
"Every day of a strike in France has a much bigger impact on
European traffic than (strikes) in other European countries", the report's
author, senator Vincent Capo-Canellas, noted after six months of work including
numerous field visits.
In addition to frequent industrial action France is also the champion for
delays, linked to obsolescent equipment, the report said.
"Our country is responsible for 33 percent of delays due to air
traffic control in Europe," Capo-Canellas said, representing 300 million
euros in annual losses for airlines.
"In France, the control equipment is outdated," and
maintenance costs are high at 136 million euros a year, added Capo-Canellas.
"We are way behind our neighbours," the senator complained,
despite France having spent more than two billion euros to modernise air
traffic control since 2011.
The report also noted that the 4,000 French air traffic controllers have
to cope with a sharp increase in traffic each year.
They controlled more than 3.1 million flights in 2017, up four percent
from 2016 and 8.6 percent from 2015.
18 June 2018 - 06H54
Property crisis looms due to sea level rise, experts warn
SARASOTA (UNITED STATES) (AFP) -
Along Florida's sun-splashed shorelines, home prices are on the rise,
developers are busy building new complexes, and listings just blocks from the
beach describe homes that are "not in a flood zone," meaning no flood
insurance is required.
But experts warn that ignoring sea level rise won't prevent a looming
economic crisis caused by water-logged homes that will someday become unsafe,
uninhabitable and too costly to insure.
A reality check may come sooner than many may think, according to a
report out Monday by the Union of Concerned Scientists, which finds as many as
64,000 coastal residences worth $26 billion in Florida are at risk of chronic
flooding in the next 30 years, the life of a typical mortgage.
Across the United States, 311,000 coastal homes with a collective market
value of about $120 billion in today's dollars are at risk of chronic flooding
by 2045, it said.
By century's end, if current trends continue, more than $1 trillion in
commercial and private US property may be at risk, "with Florida's coastal
real estate among the most exposed," said the report.
And it's not because of the increased risk of hurricanes or storm surge.
Rather, the danger comes from flooding due to hide tides -- sometimes
called sunny day floods, or nuisance flooding -- when water pools into streets,
sidewalks, storefronts and homes.
"This risk is relatively near term, well before places go
underwater completely, and even in the absence of storms," said Rachel
Cleetus, lead economist and policy director with the Climate and Energy program
at the UCS.
Coastal real estate markets are not currently factoring in these risks,
she told AFP.
"But market perceptions can shift and they can shift quickly in
some places," she added, describing a market correction as
"inevitable."
More
“It is difficult not to marvel at the imagination which was implicit in this gargantuan insanity. If there must be madness something may be said for having it on a heroic scale."
John Kenneth Galbraith. The Great Crash: 1929.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
After first talking tough through the phony trade war, the “Grain Mafia”
and America’s “chippies” are starting to wobble. Where are they going to sell
all that Yankee grain? As for the chippies, their supply chain is a ZTE type
disaster waiting to happen, and President Trump may just have made it happen.
Without some sort of tariff relief, US consumers face paying a whole lot more
for their gadgets next Christmas.
June 15, 2018 / 10:01 PM
U.S., China trade fight 'will lead to serious consequences' - Cargill
CHICAGO
(Reuters) - The current trade conflict between the United States and China
“will lead to serious consequences for economic growth and job creation,”
global commodities trader Cargill Inc [CARG.UL] said on Friday.
“The impact of trade conflict between the world’s two largest economies
will lead to serious consequences for economic growth and job creation and hurt
those that are most vulnerable across the globe,” the company said in a
statement.
On Friday, China said it will impose additional 25 percent tariffs on
659 U.S. goods worth $50 billion (£37.6 billion) - including on U.S. soybean
imports, the single most valuable U.S. agricultural export to its Asian rival.
Beijing’s move came in response to the U.S. announcement that it will levy
tariffs on Chinese imports.
U.S. President Donald Trump earlier in the day imposed tariffs on $50
billion of Chinese imports as he demanded better terms of trade from Beijing to
close a $335 billion annual deficit.
In the past, rival global grain merchants Archer Daniels Midland Co and
Bunge Ltd have said they can withstand agricultural trade disruptions arising
from U.S.-China tensions and potentially profit from them.
But on Friday, ADM said it too hoped the tensions would ease soon.
“China continues to be an important export market for American food and
agriculture,” ADM spokeswoman Jackie Anderson said in a statement. “We are
hopeful that both governments continue to pursue a bilateral dialogue in
support of a strong U.S.-China trade relationship.”
Bunge declined to comment Friday.
Cargill warned that tit-for-tat retaliatory measures will not solve the
trade concerns raised by both China and the United States.
“It
is in the interest of both countries to come to the table around a negotiated
solution such as a responsible trade agreement,” Cargill said. “Only through a
rules-based system can everyone compete on an even playing field.”
Chip Makers: We’ll End Up Paying Tariffs on Our Own Goods
Semiconductor trade group says complex supply chain means Trump’s levies will hit U.S. businesses
Jay GreeneUpdated
June 15, 2018 6:48 p.m. ET
The U.S. semiconductor industry bristled at President Donald Trump’s plan to
impose tariffs on about $50 billion of
Chinese goods, arguing they will hurt American
business and make the country less competitive.The rules, which take effect July 6, will place 25% tariffs on a variety of goods including semiconductors and related product imports, products brought into the U.S. that amounted to $2.5 billion in 2017, according to the Semiconductor Industry Association, a U.S. trade group.
A second set of tariffs, which would take effect at a later date, includes additional semiconductors and related products—and that impact is more extensive, including a wider collection of components in chips than the original list, the group said. The trade group said it was still determining the financial impact.
China, in a retaliatory move, said it would impose tariffs of 25% on U.S. products including autos, agriculture and seafood.
Chip makers feel as if they are in the middle of a “game of chicken,” said Robert Maire, president of the consulting firm Semiconductor Advisors. They have viewed the escalating trade battle warily so far, and today’s news likely hasn’t changed that position, he said.
Many chip makers are loath to wade into the debate for fear of stoking tensions, which could hurt their stocks or rile the Trump administration, Mr. Maire said, but there is a built-in assumption the U.S. and China will work it out.
On Wall Street, the stocks of semiconductor companies saw only muted impact on the news, tracking the broader market. Shares of Intel Corp. finished down less than a percent, while Qualcomm Inc. closed marginally higher.
The U.S. orders cut across an array of goods, trade-group representatives said, such as hard drives used in servers and storage devices, as well as monitoring and testing equipment used to develop new products.
In its order, the U.S. said its list “does not include goods commonly purchased by American consumers such as cellular telephones or televisions.”
The Information Technology Industry Council, though, cautioned that the tariffs going into effect July 6 include items such as light-emitting diodes and hard drives. That could end up boosting consumer prices for things like computers and mobile phones, the trade group said.
The U.S. order said companies can still seek exclusions for some products from the duties. Hearings for the second group of tariffs are expected to take place July 24.
While the U.S. tariffs may impair Chinese companies that use semiconductors, among others, the fallout also will extend to U.S. businesses that participate in the complex supply chain of chip manufacturing, the Semiconductor Industry Association said.
More
In any
great organization it is far, far safer to be wrong with the majority than to
be right alone.John Kenneth Galbraith.
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?
Sculpting with graphene foam
Date:
June 14, 2018
Source:
Rice University
Summary:
Scientists have developed a simple way to produce conductive, three-dimensional
objects made of graphene foam. The material can be a building block for energy
storage or flexible sensing
applications.
Rice University scientists have developed a simple way to produce
conductive, three-dimensional objects made of graphene foam.
The squishy solids look and feel something like a child's toy but offer
new possibilities for energy storage and flexible electronic sensor
applications, according to Rice chemist James Tour.
The technique detailed in Advanced Materials is an extension of groundbreaking
work by the Tour lab that produced the first laser-induced graphene (LIG) in
2014 by heating inexpensive polyimide plastic sheets with a laser.
The laser burns halfway through the plastic and turns the top into
interconnected flakes of 2D carbon that remain attached to the bottom half. LIG
can be made in macroscale patterns at room temperature.
The lab extended its technique to create LIG on wood and even food, but
3D objects of pure graphene were less practical until now, Tour said.
"Now we have built a prototype machine that lets us make graphene
foam into 3D objects through automated successive layering and laser
exposure," Tour said. "This truly brings graphene into the third
dimension without furnaces or the need for metal catalysts, and our process is
easily scaled."
The new method is based on laminated object manufacturing, in which
layers of a material are assembled and then cut to shape. In this case, the
bottom LIG layer remains attached to its polyimide base. A second layer is
coated with ethylene glycol and placed facedown on the first, like a jelly
sandwich. Its polyimide top is then burned into graphene; the process is
repeated until the block is complete.
The ethylene glycol binder is evaporated away on a hot plate, and any
remaining polyimide can be removed in a furnace. That leaves a pristine, spongy
carbon block, said Duy Xuan Luong, a Rice graduate student and co-lead author
of the paper. The Rice lab stacked up to five layers of foam and then used a
custom-built fiber lasing system on a modified 3D printer to mill the block
into complex shapes.
The lab assembled proof-of-concept lithium-ion capacitors that used 3D LIG as both anodes and cathodes. The anode's gravimetric capacity of 354 milliamp hours per gram neared the theoretical limit of graphite, while the cathode's capacity exceeded the average capacity of other carbon materials. Full test cells retained about 70 percent of their capacity after 970 charge-discharge cycles.
"This is excellent performance in these new-generation lithium-ion
capacitors, which capture the best properties of lithium-ion batteries and
capacitor hybrids," Tour said.
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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