Baltic Dry Index. 1422 +37 Brent Crude 77.82
We really can't forecast all
that well, and yet we pretend that we can, but we really can't.
Alan Greenspan
Today, in this holiday affected week, we can’t help
wondering if global stocks are about to follow the cryptocurrencies into the
abyss, led probably by Asia. Certainly, cryptocurrencies have no discernible
value or use, and are a giant con, in my opinion, yet another vehicle for separating
fools from their cash, while stocks in theory, represent collective ownership of
productive corporate assets and profit streams.
But all too often now, stocks represent ownership
of giant unrepayable debt mountains, with stock prices set by front running
computer algo programs, with little regard to underlying fundamentals. Stocks are increasingly trading from day to
day in either boom or bust, euphoria or depression. The logical outcome
perhaps, of the Greenspan Gambling Economy, following the rigged systemic
bailout following the stock market crash of October 1987. A rigged system that
blew up again in 2008. Will it be 2018, 2019, 2020?
What’s different now, is an American President not
prepared to play by the old trade rules of Pax-Americana, 1945-2016. Not only
not playing by the old rules of the game, like them or not, but deliberately
breaking many of those old rules pursuing MAGA and “America First.”
Only a few weeks into a growing trade war, are we
already starting to see global trade slowing?
What happens if Trump triggers mass unemployment in China? The emerging
markets? Europe and Canada? He won’t do
that, will he? We hope not, but simply don’t know. It’s now merely round one of America v The
Rest of the World.
How, where, and when our new trade war ends, is off
in our unpredictable future. But a future far less stable than on the eve of USA
Independence Day, 2017. For now, the Rest of the World is still in denial that
this is happening, merely responding with tat for tit. But for how long? And
how long before America First triggers a populist nationalist backlash in large
parts of the ROW?
Below, the wobble of a spinning top just before it
falls over?
July 3, 2018 / 2:57 AM
China turbulence knocks Asian shares to nine-month low as trade war fears grow
TOKYO
(Reuters) - Chinese stocks went into a tail spin on Tuesday as turbulence
gripped equity markets in Asia, which sank to nine-month lows as investors
feared the Sino-U.S. trade row could derail a rare period of synchronized
global growth.
Speculation was rife the central bank in China was intervening in the
currency market to staunch losses and prevent a potentially destabilising
sell-off in the yuan.
Chinese financial markets have been jittery ahead of a July 6 deadline,
when the U.S. is set to slap tariffs on $34 billion worth of Chinese goods that
Beijing has vowed to match with tariffs on U.S. products.
The trade row between the United States and major economies has rattled
financial markets in the past several weeks, with no sign U.S. President Donald
Trump is about to back down from his ‘America First’ protectionism policies
that many fear will harm the global economy.
The Asia Pacific MSCI index ex-Japan .MIAPJ0000PUS tumbled 1.4 percent to its lowest since September 29, while Japan's Nikkei average .N225 was down 0.86 percent to a near three-month low.
Chinese stocks were hit the most, with Hong Kong's Hang Seng index .HSI diving 3.3 percent to its lowest level in ten months, the Shanghai Composite Index .SSEC shedding 1.9 percent to hit a fresh 28 month low.
“It’s not clear yet if the trade row will derail the global economy as a whole but it’s already clear that it will harm Chinese companies,” said Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank.
More
Asia Stocks Face Pressure of Yuan-Slide Contagion: Markets Wrap
By Adam Haigh
Updated on 3 July 2018, 04:29 GMT+1
Stocks in Asia made an attempt at extending a recovery in American
equities overnight, though ran into the headwind of another slump in the yuan,
which has sparked fears of contagion to emerging markets.
Share indexes in Tokyo and Seoul came off their morning highs after
China’s currency tumbled past 6.7 per dollar, a level that some had thought
would trigger intervention from authorities. The yuan indeed showed a sudden
comeback mid-morning, before dropping again. Hong Kong’s stocks tumbled in a
catch-up after the city was off on holiday Monday. Australian stocks stood out,
as they have repeatedly in recent weeks, as outperformers in the region.
Treasury yields dipped and the dollar steadied.
With
U.S. trading desks thinly staffed ahead of the July 4 holiday, volume in
American stocks was about 20 percent below average when the S&P 500 Index
edged up. An expansion in U.S. manufacturing gave some comfort to concern borne
out of reports in Japan, China and South Korea over the past few days about a
weakening in global economic growth. The Trump administration’s planned
imposition of tariffs against China will start on Friday.
More
July 3, 2018 / 3:54 AM
China's June export growth to U.S. slows sharply - China customs
BEIJING
(Reuters) - China’s exports to the United States in June rose 3.8 percent from
a year earlier in yuan terms, 23.8 percentage points lower than the growth rate
seen a year earlier, the country’s customs agency said late on Monday.
For the first half of this year, customs said China’s exports to the
United States rose 5.4 percent from a year earlier compared with 19.3 percent
for same period in 2017.
The customs agency did not provide exact values for June and
January-June exports or say how exports to the U.S. fared in dollar-denominated
terms.
Beijing and Washington are set to impose imports tariffs against each
other on July 6 amid an escalating trade dispute that has spooked investors and
has driven Chinese stocks and the yuan lower.
China is due to publish preliminary June trade data on July 13.
July 3, 2018 / 4:53 AM
Trump moves to block China Mobile's U.S. entry, citing security concerns
(Reuters)
- The U.S. government moved on Monday to block China Mobile from offering
services to the U.S. telecommunications market, recommending its application be
rejected because the government-owned firm posed national security risks.
The Federal Communications Commission (FCC) should deny China Mobile’s
2011 application to offer telecommunication services between the United States
and other countries, the National Telecommunications and Information
Administration (NTIA) said in a statement posted on its website.
“After significant engagement with China Mobile, concerns about
increased risks to U.S. law enforcement and national security interests were
unable to be resolved,” said the statement, which quoted David Redl, assistant
secretary for communications and information at the U.S. Department of
Commerce, which NTIA is part of.
China Mobile, the world’s largest telecom carrier with 899 million
subscribers, did not immediately respond to Reuters’ request for comment.
The move by U.S. President Donald Trump’s administration on China Mobile
comes amid growing trade frictions between Washington and Beijing. The United
States is set to impose tariffs on $34 billion (25.90 billion pounds) worth of
goods from China on July 6, which Beijing is expected to respond to with
tariffs of its own.
----China
Mobile Communications Corp, a state-controlled firm, owned almost 73 percent of
China Mobile as of December, according to Thomson Reuters data.
China Mobile’s shares fell 2.6 percent on Tuesday morning to their
lowest in more than four years.
But Ramakrishna Maruvada, a Singapore-based analyst with Daiwa
Securities, said the impact of the ruling on China Mobile’s business is “very
tiny” since it derives most of its income from the domestic market.
More
July 2, 2018 / 8:32 PM
Trump makes veiled WTO threat after EU warning on car tariffs
WASHINGTON/BRUSSELS
(Reuters) - U.S. President Donald Trump warned the World Trade Organization on
Monday that “we’ll be doing something” if the United States is not treated
properly, just hours after the European Union said that U.S. automotive tariffs
would hurt its own vehicle industry and prompt retaliation.
Trump, speaking to reporters during a meeting with Dutch Prime Minister
Mark Rutte at the White House, said, “The WTO has treated the United States
very, very badly and I hope they change their ways.”
His comments came after the Axios news website reported that Trump’s
administration has drafted proposed legislation that would allow Trump to raise
tariffs at will and negotiate special tariff rates with specific countries —
two basic violations of WTO rules.
The United States has “a big disadvantage with the WTO. And we’re not
planning anything now, but if they don’t treat us properly, we’ll be doing
something,” Trump said, without elaborating.
Last week, a source familiar with Trump’s thinking told Reuters that the
president has privately expressed a desire to quit the WTO, but that it was not
a serious proposal.
More
Over 800 cryptocurrencies are now dead as bitcoin is 70 percent off its record high
- Over 800 cryptocurrencies are now dead and worth less than one cent.
- New digital tokens are created through initial coin offerings but some of these projects have been scams and many have not materialized into real products.
- Bitcoin has fallen roughly 70 percent since its record high near $20,000 last year, adding to bearish sentiment around cryptocurrencies.
Published 19 Hours Ago
Cryptocurrency projects have been popping up left, right and center in
the past 18 months, but over 800 of those are now dead, adding to comparisons
between the current digital coin market and the dotcom bubble in 2000.
New digital tokens are created via a process known as an initial coin
offering (ICO) where a start-up can issue a new coin which investors can buy.
The investor doesn't get an equity stake in the company, but the cryptocurrency
that they buy can be used on the company's product. People usually buy into an
ICO because the coins are cheap and could offer big returns in the future.
There has been an explosion in ICOs. Companies raised $3.8 billion via
ICOs in 2017, but in 2018 so far, this number has already shot up to $11.9
billion, according to CoinSchedule, a website that tracks the market.
More
It is very difficult to
predict when a bond crisis could happen.
Alan Greenspan
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, Bloomberg on the all too obvious. I hope no one is paying for
journalism like this.
The United States can pay any
debt it has because we can always print money to do that. So there is zero
probability of default.
Alan Greenspan
Trade War Impact Could Be Exacerbated by a Market Slump
By Tom Orlik, Jamie Murray, and Qian Wan
2
July 2018, 08:48 GMT+1
Should
a trade war be accompanied by a market slump, the impact on the U.S. could be
worse than on China as the latter is relatively insulated from world equity
shocks, according to Bloomberg
Economics, which mapped out four scenarios on how the economy could
be affected.
In
its final scenario, the U.S. imposes 10 percent tariffs on all imports, the
rest of the world retaliates and financial markets slump. In that stylized
example, layering on a tightening of financial conditions raises the peak GDP
growth impact to 0.8 percentage points in the U.S. and 0.4 percentage points
for the world. China suffers from tariffs but escapes the additional burden of
tighter global financial conditions, reflecting its still relatively closed
capital markets. Of course, based on the current evidence -- it might face its
own domestic market shock.
Trump's EU trade war costing manufacturers in US and eurozone
Tariffs are slowing productivity and driving up costs, new figures show
Mon 2 Jul 2018 18.06 BST
Donald Trump’s trade tariffs are driving up costs for US manufacturers and
exacerbating a slowdown for eurozone factories, new figures showed on
Monday, as the EU and the US edge closer towards a full-scale trade war with
potentially damaging consequences for the global economy. According to the latest survey of American factories by IHS Markit – closely watched for any early warning signals for the world’s largest economy – the president’s tariffs added to the cost of raw materials and components in June. It also contributed to the lengthiest delays for supplies reaching factory production lines since the poll was started in 2007.
Against the backdrop of an increasingly bitter dispute between the EU and the US, a parallel survey of eurozone manufacturers found economic activity dropped to the lowest level for 18 months in June, with the worst of the slowdown coming in Germany, France and Greece.
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