Baltic Dry Index. 1433 +29 Brent Crude 75.89
J. K. Galbraith.
And so it started, as
Russia trashed Saudi Arabia 5 – 0 in the opening game of the World Cup, with much
of the world watching, the Wall Street Journal reported that Trump had approved
50 billion of tariffs on Chinese goods, details next week in the Federal
Register. China said it will retaliate.
And with that the USA
starts its global trade war with all except Bhutan, the Faroe Isles and
Iceland. Nothing good emerges at the end of this global trade war between the
world’s biggest debtor and its biggest creditors.
Below, as Trump
pursues economic madness, Mario Draghi at the ECB, said I’ll have apiece of
that action, and promptly promised to keep the ECB rates low for another year,
sparking a large devaluation of the euro against the dollar, and a new round in
the beggar thy neighbour currency war. Shame about all those
emerging market dollar debts!
Below, de ja vu with summer
1987, and the US Treasury’s fight with Germany. This time round everything is
much bigger and far worse. From gargantuan, unrepayable debt to matching egos,
to massive and rapidly rising political instability, to a long in the tooth
weak global recovery, to the lunatics in Washington this is the perfect time to
kick it all off.
With trade wars,
nothing seems to happen at first, unless Trump starts imposing tariffs on auto
imports when the sky would start to fall almost immediately. In the early stage
of a trade war, firms have largely stockpiled, and work through inventory. But
as the difficulties and costs start to mount, and warm summer turns into
frostier autumn, bad things and bad attitudes will start to appear.
Nothing is so admirable in politics as a short memory.
John Kenneth Galbraith.
Trump OKs around $50 billion in tariffs on Chinese goods
By Bob
Davis and Peter
Nicholas
Published: June 14, 2018 8:16 p.m. E
Trade fight ratchets up; unclear when tariffs will take effect
WASHINGTON — President Donald Trump approved tariffs on about $50
billion of Chinese goods, people familiar with the decision said, as the U.S.
ratchets up its trade fight with Beijing over China’s alleged pressure on U.S.
firms to transfer technology to Chinese partners.
The approval followed a 90-minute meeting on Thursday of senior White
House officials, national-security officials and senior representatives of the
Treasury, Commerce Department, U.S. Trade Representative’s Office.
It wasn’t clear when the tariffs would go into effect. Beijing has said
that it intends to assess tariffs on a corresponding amount of U.S. goods.
USTR expects to announce the goods subject to tariffs on Friday and
publish them in the Federal Register next week, the people familiar with the
matter said. The affected imports would face 25% tariffs; the products are
expected to be similar to those on a preliminary list that USTR released in
early April.
https://www.marketwatch.com/story/trump-oks-around-50-billion-in-tariffs-on-chinese-goods-2018-06-14
June 15, 2018 / 2:37 AM
Asian shares falter as U.S. readies China tariffs, euro at two-week low on ECB
TOKYO
(Reuters) - Asian shares wobbled on Friday as investors braced for U.S. tariffs
against China, while the euro flirted with two-week lows after a cautious
European Central Bank indicated it would not raise interest rates for some
time.
U.S. President Donald Trump has made up his mind to impose “pretty significant” tariffs and will unveil a list targeting $50 billion of Chinese goods on Friday, an administration official said. Beijing has warned that it was ready to respond.[nL1N1TG05L]
While it is not clear when Trump will activate the measures, rising Sino-U.S. trade tensions will put additional pressure on China’s economy, which is starting to show signs of cooling under the weight of a multi-year crackdown on riskier lending.[nL4N1TG2ME]
Analysts said that although the expected announcement would likely not be a total surprise to markets — an initial list was released by Washington a few months ago — it would still make investors concerned that the window for averting a trade war may be closing.
The Asia Pacific MSCI index ex-Japan .MIAPJ0000PUS edged down 0.3 percent, with many regional markets shrugging off a strong close on Wall Street. But Japan's Nikkei average .N225 and Australian shares advanced 0.3 percent and 1.2 percent, respectively.
“The implementation of tariffs on China is one of several fronts that the U.S. is battling on the issue of trade,” said Tai Hui, chief APAC market strategist at JPMorgan Asset Management, referring to the Trump administration’s tough stance toward Canada and Europe.
“This battleground could potentially expand into the auto sector given the U.S. investigation into auto imports. This is likely to weigh on market sentiment over the summer.”
The euro EUR= was headed for its worst weekly loss in 19 months after the ECB signalled on Thursday it will keep interest rates at record lows into at least mid-2019, even as it pledged to end its massive bond purchase scheme by the end of this year.
The common currency shed 1.9 percent to the dollar after the rate comments, in its sharpest daily fall in almost two years since Brexit vote shock in 2016.
More
15 June 2018, 05:01 GMT+1
The EU Is Emerging as the New Sheriff for Global Financial Markets
From its Chicago headquarters, CME Group Inc. offers options, swaps, and futures contracts designed to help investors mitigate the potential fallout from, say, a failed gold mine in Africa, a spike in Mexican interest rates, or an oil spill in the North Sea. Today the company itself faces growing risk from an unexpected quarter: Brussels.European Union regulators are seeking greater influence over the supervision of financial companies, including those based in the U.S., such as CME, and in the U.K. once Britain leaves the bloc. The EU is proposing that clearinghouses—financial middlemen—in the region undergo inspections by European supervisors and be required to respond to the European Central Bank in emergencies.
Those rules present “grave concerns,” says Sunil Cutinho, president of CME Clearing, who on June 6 told industry executives in London that the EU’s growing reach threatens a long-standing practice of deferring to oversight in a company’s home country. “There was a time when regulators trusted each other,” Cutinho said, echoing calls by CME’s main regulator, the Commodity Futures Trading Commission, for the EU to rely on cooperation with U.S. authorities.
As the U.S. rolls back regulations enacted after the 2008 crisis, the EU is emerging as the new sheriff for international markets. Europe is introducing standards for everything from investment research to trading to oversight of client data—rules with repercussions from New York to Hong Kong.
When
the EU introduced its General Data Protection Regulation
last month, Facebook Inc. and Microsoft Corp. said they’ll largely
adhere to the directive everywhere they operate, not just in Europe. Anu
Bradford, a professor at Columbia University’s law school, calls it the
“Brussels effect.” Multinationals complying with European regulations to gain
access to the region’s €15 trillion economy sometimes find it’s cheaper and
easier to implement a blanket global policy. “The EU has become more
self-conscious of its ability to set international standards and is embracing
that opportunity,” Bradford says.
New
EU guidelines give authorities in Brussels greater sway over regulations made
by watchdogs in other countries. For foreign companies to do business in the EU
without setting up a subsidiary in the bloc, they and their home country
typically need a so-called equivalence finding. These rulings from the European
Commission, the EU’s executive arm, assess whether foreign statutes are
sufficiently strong to protect European consumers and corporations. As the
clock ticked down to the January start of the EU’s revised Markets in Financial
Instruments Directive, or MiFID II, brokerages warned of a rupture in global
markets if the EU were to find that other countries’ laws weren’t tough enough.
----The
U.S. Securities and Exchange Commission
had to take emergency action to limit the impact of MiFID II after American
companies warned that a key part of the law would threaten their investment
research business. The U.S. bars Wall Street brokers from accepting payments
for research, but MiFID II requires money managers to pay separately for
research and trading services. The SEC said it would suspend enforcement of its
rule for some investors in Europe while it assesses the impact.
More
Finally, haven’t we
been here before? My advice to missing German Lillevyalli, stay away from door
handles.
It's morally wrong to allow a
sucker to keep his money.
Wall Street Adage, with
apologies to W. C. Fields
Moscow Financier Goes AWOL as Global Clients Hunt for Millions
It
was an unseasonably warm December evening in the Russian capital and spirits
were high inside Sixty, a restaurant atop a skyscraper overlooking the Moscow
River where vintage Krug pops at $1,000 a bottle.
By Ksenia
Galouchko and Hugo Miller
14 June 2018, 09:03 GMT+1
It was an unseasonably warm December evening in the Russian capital and
spirits were high inside Sixty, a restaurant atop a skyscraper overlooking the
Moscow River where vintage Krug pops at $1,000 a bottle.
Employees of the GL network of companies were cheering as their boss,
German Lillevyali, showered them with golden Oscar replicas, 10,000-euro debit
cards to shop in Milan and, for his very best performer, a $70,000 car.
Six months on, there’s nothing left to celebrate.
Lillevyali, a serial entrepreneur who’s dabbled in everything from vodka
to health care, has left Russia , the money-raising hub of his GL Financial
Group, a Swiss- and U.K.-licensed asset manager with affiliates in Moscow,
Zurich, Geneva, London, Cyprus and Belize.
The financier, who was managing at least $250 million of assets at the
end of last year according to two former subordinates, seems to be in Cyprus. A
Facebook message seeking to calm investors was posted under his name on April 20,
purportedly from the island nation.
“I promise you the money is safe,” it said. “I will return it personally, there is nothing to worry about.”
That might have reassured European, U.S. and Asian clients trying to get their money back as GL workers quit, offices closed and phone lines went dead. Except Lillevyali says the Facebook post from Cyprus was fake, deepening the mystery of their missing millions. Disgruntled clients include an executive who works for billionaire Oleg Deripaska, top managers at Swiss drugmaker Novartis AG and San Francisco-based Levi Strauss & Co., and even a professional soccer goalie.
This story
of GL Financial’s unraveling, which is being scrutinized
by regulators in Britain and Switzerland, has been pieced together from
interviews with eight clients and former employees. They requested anonymity
either because they don’t want to jeopardize efforts to retrieve their savings
or because they fear for their physical safety.
Calls and messages to the numbers listed for GL Financial and related
companies weren’t returned or went to voicemail. When Bloomberg reached
Lillevyali himself via WhatsApp on Wednesday and Thursday, he declined to
identify his current location three times, saying he’s not ready to play “the
anti-hero.”
Lillevyali rejected any suggestion that he lost or is withholding client
funds. He said the most he ever had under management was about $140 million and
that about $35 million belonging to about 30 people is now frozen, mainly due
to “compliance issues” related to sanctions. U.S. and European sanctions only
apply to a few dozen Russians, none of whom are known clients. He said “a large
number” of customers are getting repaid, though he didn’t name any.
“It’s like a bad movie,” said one customer angry at what he described as
being stonewalled for months.
In an online interview last year, Lillevyali said he’d developed a “radically new approach” to investing that’s based on artificial intelligence, “complex algorithms” and “integrated processing.” The Swiss website of GL Asset Management, which expounded on this strategy, was taken down this month.
In his last confirmed Twitter post, on Feb. 9, Lillevyali urged investors to study chess. He’s repeatedly boasted of having beaten former world chess champion Anatoly Karpov, one of the highest-rated grandmasters ever. Karpov’s assistant in Moscow said she couldn’t confirm or deny that claim.
More
Never give a sucker an even
break.
Wall Street Adage, with
apologies to W. C. Fields
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today food for thought. Do America and Russia really need 7,000 nuclear
bombs each?
Only 100 nuclear bombs needed to cause catastrophe around the world
Henry Bodkin, The Telegraph•June
13, 2018
Nations with huge nuclear
arsenals are wasting their money because just 100 missiles would be
enough to destabilise the globe and kill their own citizens, scientists have
said.
Britain currently possesses approximately 215 warheads of
around 15,000 worldwide, the vast majority of which are American or Russian.
But researchers have determined that no nation could fire
more than 100 without causing a chain of events so catastrophic the impacts are
felt at home.
In the first such exercise of its kind, scientists
analysed the “environmental blow-back” of a one-way but massive nuclear strike.
Based on models including those of burnable materials in
cities, they calculated the amount of soot and dust that would be thrown into
the air by the blasts, the consequent blotting of the sun and damage to the
atmosphere.
They found that the “nuclear autumn” of such destruction
would damage agricultural output by up to 20 per cent, enough to affect
widespread food shortages even on the other side of the world.
The concept of nuclear deterrence has traditionally
included the doctrine that the bigger the arsenal, the less likely an
adversary is to attack.
However, the authors at Michigan Technological University
and Tennessee State University say there is no “pragmatic” reason for any
nation to maintain more than 100.
Published in the journal Safety, the study follows the
historic Singapore summit between President Trump and Kim Jong Un, where both leaders pledged the
“complete denucliarisation” of the Korean peninsula.
There are nine official nuclear weaponised nations: the
U.S., Russia, the UK, France, China, India, Pakistan, Israel and North Korea.
Britain’s nuclear deterrent consists of at least one of
four nuclear-armed submarines being at sea and ready to launch at any time.
Although both the Conservative and Labour Parties are
officially committed to renewing Trident, Jeremy Corbyn has expressed a
preference to scrap it.
Under the disarmament proposed in the new study, the total number of warheads
globally would drop to 900 or fewer.
Professor Joshua Pearce, one of the authors, said: “With
100 nuclear weapons, you still get nuclear deterrence, but avoid the probable
blowback from nuclear autumn that kills your own people."
"No country should have more nuclear weapons than the
number necessary for unacceptable levels of environmental blow-back on the
nuclear power's own country if they were used."
Professor Pearce said modeling showed that if the US were
to fire 1,000 nuclear warheads, 50-times more Americans would die than did on
9/11, even if no missiles were fired back.
More
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?
Physicists discover how to create the thinnest liquid films ever
Date:
June 12, 2018
Source:
University of Vermont
Summary:
Physicists have discovered a fundamentally new way surfaces can get wet. Their
study may allow scientists to create the thinnest films of liquid ever made --
and engineer a new class of surface coatings and lubricants just a few atoms
thick.
A team of physicists at the University of Vermont have discovered a
fundamentally new way surfaces can get wet. Their study may allow scientists to
create the thinnest films of liquid ever made -- and engineer a new class of
surface coatings and lubricants just a few atoms thick.
"We've learned what controls the thickness of ultra-thin films
grown on graphene," says Sanghita Sengupta, a doctoral student at UVM and
the lead author on the new study. "And we have a good sense now of what
conditions -- like knobs you can turn -- will change how many layers of atoms
will form in different liquids."
The results were published June 8 in the journal Physical Review
Letters.
A THIRD WAY
To understand the new physics, imagine what happens when rain falls on
your new iPhone: it forms beads on the screen. They're easy to shake off. Now
imagine your bathroom after a long shower: the whole mirror may be covered with
a thin layer of water. "These are two extreme examples of the physics of
wetting," says UVM physicist Adrian Del Maestro, a co-author on the new
study. "If interactions inside the liquid are stronger than those between
the liquid and surface, the liquid atoms stick together, forming separate
droplets. In the opposite case, the strong pull of the surface causes the
liquid to spread, forming a thin film."
More than 50 years ago, physicists speculated about a third possibility
-- a strange phenomena called "critical wetting" where atoms of
liquid would start to form a film on a surface, but then would stop building up
when they were just a few atoms thick. These scientists in the 1950s, including
the famed Soviet physicist Evgeny Lifshitz, weren't sure if critical wetting
was real, and they certainly didn't think it would ever be able to be seen in
the laboratory.
Then, in 2010, the Nobel Prize in physics was awarded to two Russian
scientists for their creation of a bizarre form of carbon called graphene. It's
a honeycombed sheet of carbon just one atom thick. It's the strongest material
in the world and has many quirky qualities that materials scientists have been
exploring ever since.
Graphene turns out to be the "ideal surface to test for critical
wetting," says Del Maestro -- and with it the Vermont team has now
demonstrated mathematically that critical wetting is real.
----Much
of the initial promise of graphene as an industrial product has not yet been
realized. Part of the reason why is that many of its special properties -- like
being a remarkably efficient conductor -- go away when thick layers of other
materials are stuck to it. But with the control of critical wetting, engineers
might be able to customize nanoscale coatings which wouldn't blot out the
desired properties of graphene, but could, says Adrian Del Maestro, offer
lubrication and protection of "next-generation wearable electronics and
displays."
More
Another weekend and the
first of the World Cup weekends in Russia. For those with long memories, the
CIA has a way of using such events to stir up trouble, and wars. From colour
revolutions to wars. Georgia attacking Russian peacekeepers in South Ossetia
during the China Olympics in 2008. The botched Kiev coup in the winter Olympics
in Russia in 2014. And now, another Novichok door handle attack, or another
unverified gas attack in Syria? With a month still to go in the world cup, stay
tuned. Of course, it could just be
coincidence. Have a great weekend everyone.
"Get
a good night's sleep and don't bug anybody without asking me."
Richard
M. Nixon, 37th President, to John Mitchell, 1972, head of CreeP, the Committee to Re-elect the President.
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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