Baltic Dry Index. 1586 +31 Brent Crude 74.66
“I cannot but conclude that the bulk of
your NATO natives, to be the most pernicious race of little odious vermin that nature
ever suffered to crawl upon the surface of the earth.”
Trump’s Travels at NATO, with
apologies to Jonathan Swift and Gulliver.
We open today with
more on President Trump’s war on NATO. A fitting follow up meeting to the recent
G-7 fiasco in Canada. With friends like this, who needs enemies? Thankfully for Canadian Prime Minister
Trudeau, Germany and Chancellor Merkel have become Trump public enemy number
one, so at the obligatory group photo-op session, Mr. Trudeau was relegated to
the far right last position of the back fourth row.
Having insulted just
about everyone attending, Mr Trump was too polite to point out as Der Spiegel
and the London Times had recently, that in May all six German U-boats were
inoperative due to maintenance issues with lack of spares, and that recently
only 4 of Germany’s Eurofighters were operational out of 128, and those only by
cannibalising other planes for parts. How they must be laughing in Moscow and
Beijing.
Today, the final NATO
war session before Trump’s Travels sees him flying in to London later this
afternoon, to an iffy UK public whipped up by a largely hostile media.
“The
Brexiteers outside looked from May to Merkel, and from Merkel to May and from
May to Merkel again; but already it was impossible to say which was which.”
With
apologies to George Orwell, Animal Farm.
Trump Sowing Divisions at NATO Seen as Helping Only Russia
By Marc Champion
Updated on 12 July 2018, 04:00 GMT+1
NATO summits are designed to be dull demonstrations of unity and purpose.
Mainly thanks to U.S. President Donald Trump, not this time.Before leaders of the alliance’s 29 member states had even filed into the North Atlantic Treaty Organization’s new headquarters, they split over at least three issues: burden sharing, a planned natural gas pipeline between Germany and Russia, and Turkey’s purchase of Russian anti-aircraft missile systems.
Few expected smooth sailing at the Brussels summit. But the vehemence of Trump’s on-camera breakfast attack on Germany for its backing of a second Nord Stream gas pipeline, and for being “captive” to Russia came as a shock. German Chancellor Angela Merkel on Wednesday gave Trump an uncharacteristically personal response, reminding him that she knew what captive means, having grown up in Soviet-controlled East Germany.
“So we’re supposed to protect you against Russia, and they’re paying billions to Russia,’’ Trump told NATO Secretary General Jens Stoltenberg at the start of their breakfast meeting. He went on to suggest that it wasn’t only the projected Nord Stream 2 pipeline that he had in his sights, but German purchases of Russian gas as a whole. “Germany is totally controlled by Russia,’’ he said.
That broadside quickly rifled through the conference, forcing countries to pick sides. Asked if he thought Germany was captive to Russia, French President Emmanuel Macron responded with a short “no.’’
It also drew a rare partisan rebuke for a U.S. president’s actions while still overseas. In a joint statement, Democratic Congressional leaders Nancy Pelosi and Chuck Schumer called Trump’s remarks “another profoundly disturbing signal that the president is more loyal to President Putin than to our NATO allies.”
More
July 11, 2018 / 10:46 PM
Trade and tea with queen for Trump in a Britain in 'turmoil'
LONDON
(Reuters) - U.S. President Donald Trump flies into Britain on Thursday for
talks with the leader of the United States’ closest ally in Europe, and tea
with Queen Elizabeth, set against a backdrop of protests and what he described
as the country’s turmoil over Brexit.
Fresh from a NATO summit where Trump chided Germany and other European
nations for failing to contribute enough to defence spending, British Prime
Minister Theresa May is hoping his trip will boost the close ties between their
two nations and help forge a future free trade deal.
“There is no stronger alliance than that of our special relationship
with the U.S. and there will be no alliance more important in the years ahead,”
May said in a statement.
Trump’s trip coincides with a tumultuous week for May after two senior
ministers resigned in protest at her plans for trade with the European Union
after Britain leaves next March.
The president has already waded into the debate, saying Britain was “in
somewhat turmoil” and that it was up to the people if she stayed in power.
He also said he might speak to Boris Johnson, who quit as foreign
secretary over May’s plans for a business-friendly Brexit which was only agreed
by her cabinet last Friday after two years of wrangling.
Trump has long been a supporter of Brexit and has expressed enthusiasm
for a wide-ranging trade deal with Britain after it leaves the EU, something
heralded by Brexit supporters as being one of the great benefits of exiting the
bloc.
“Our trade and investment relationship is unrivalled – we are the
largest investors in each other’s economies and every day a million
British people go to work for U.S. companies in the UK and a million
Americans go to work for UK companies in the U.S.,” May said.
“This week we have an opportunity to deepen this unique trading
relationship and begin discussions about how we will forge a strengthened,
ambitious and future-proof trade partnership.”
----On Thursday, Trump will travel to Blenheim Palace, the 18th-century mansion where Britain’s World War Two leader Winston Churchill was born and spent most of his childhood.
May will host a black-tie dinner for Trump at the stately home that will
be attended by senior ministers and about 100 business leaders, including the
likes of Blackstone group, Blackrock, Diageo, McLaren and Arup.
The two leaders will hold talks the following day at Chequers, the
16th-century manor house which is the prime minister’s official country
residence which will focus on Russia, trade, Brexit and Middle East.
Later, Trump will go to Windsor Castle for tea with the 92-year-old
queen. When he leaves Britain on Sunday, after a trip to Scotland where he owns
two golf courses, he heads to Helsinki for a summit with Russian President
Vladimir Putin.
More
In the markets, it’s
back to business as usual, forget about any storm clouds, hurricanes or tidal
waves. It’s back to picking up nickels in front of steam rollers. Since I’m
rather attached to my fingers, I’ll stand aside from all the free wealth on
offer. Besides, volatility seems to have returned to commodities and the Baltic
Dry [shipping] Index. While I’m not sure yet what it means, if it means
anything at all, volatility kills planning and all too often profits.
July 12, 2018 / 1:26 AM
Stocks, commodities consolidate after latest trade war jolt
TOKYO
(Reuters) - Stocks and commodities recovered slightly on Thursday as markets
tried to consolidate from the previous session’s steep losses when fears of an
escalation in the U.S.-China trade war jolted investor sentiment.
MSCI’s broadest index of Asia-Pacific shares outside Japan inched up
0.05 percent.
The index slumped 1 percent on Wednesday along with a slide in global
equities after U.S. President Donald Trump’s threat to imposing tariffs on
another $200 billion of Chinese goods deepened the trade row between the
world’s two largest economies.
Hong Kong’s Hang Seng rose 0.2 percent and the Shanghai Composite Index
bounced 1.1 percent.
Australian stocks rose 0.7 percent, South Korea’s KOSPI added 0.35
percent and Japan’s Nikkei gained 1.1 percent.
Pointing to a moderately higher open for Wall Street shares later in the
day, S&P 500 futures and Dow futures were both up by 0.3 percent.
“The markets had some time to digest the latest trade war developments
and are poised to begin consolidating. It has become a pattern of reacting to
each new development and hoping that trade strains ease in the next few months
through negotiations,” said Masahiro Ichikawa, senior strategist at Sumitomo
Mitsui Asset Management.
Focus turned to the next potential steps in the tit-for-tat trade
conflict. China has accused the United States of bullying and warned it could
hit back, although it was unclear how it would retaliate.
“The retaliatory options available to China include boycotting American
goods, sharply devaluing the yuan, and selling off U.S. Treasury holdings,”
wrote Xiao Minjie, senior economist at SMBC Nikko Securities in Tokyo.
“But we believe none of these moves are realistic or productive. .the
wisest move in our view is for China to accelerate the opening of its market
rather than continue to trade blows with the United States.”
---- In commodities, Brent crude futures rose 1.35 percent to $74.38 a barrel after tanking 6.9 percent overnight, the biggest one-day percentage drop since February 2016 as trade tensions threatened to hurt oil demand and news that Libya would reopen its ports raised expectations of growing supply.
Copper on the London Metal Exchange rose 0.5 percent to $6,175.00 a ton.
The industrial metal sank nearly 3 percent on Wednesday, plumbing a one-year
low of $6,081.00.
More
Finally, in follow up news to an item we covered last year, only in the
EUSSR! Who did he think he was? Juncker? Tusk? Barnier?
Spanish civil servant fired after skipping work unnoticed for more than a decade
The Telegraph
Hannah Strange July 11, 2018 12:58 AM EDT
MADRID — A public servant has been handed a
nine-year ban from public posts after it emerged he had been absent from his
$75,000-a-year job for more than a decade.
Every morning, Carles Recio, an archives director
in Valencia’s provincial government, would turn up at his office, clock in and
head out again, before coming back at 4 p.m. to clock out.
It was a routine he managed to maintain for 10
years until last summer, when, after colleagues began to raise suspicions, he
was fired. A tribunal in Valencia has now delivered the nine-year suspension
over what it said was a “flagrant neglect of the essential duties inherent to
the work post.”
Recio repeatedly claimed that he was not to blame
for his absence. “I do documentation work out of the office, the work of a
slave,” he told a television channel. “Working like a slave means that I work
so that others get the fruit of my labour.”
The tribunal said investigations had failed to
turn up any record of work he claimed to have done over the decade.
“And he
gave it for his opinion, "that whoever could make two ears of corn, or two
blades of grass, to grow upon a spot of ground where only one grew before,
would deserve better of mankind, and do more essential service to his country,
than the whole race of politicians put together.”
Jonathan
Swift, Gulliver's Travels
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
With trade wars, be careful what you wish for.
Opinion: If Trump’s tariffs sink China, be on high alert for the U.S. to follow suit
By Ivan
Martchev Published: July 9, 2018 2:33 p.m. ET
Heavy tariffs on China’s goods could lead to a credit implosion, followed by a recession. That would imperil the U.S.
As I watch the Shanghai Composite melt like spring snow, courtesy of the overdue trade tensions with the United States, I am beginning to see headlines about how President Trump’s policies could cause a global recessionHere’s a chart. If this turns out to be an ugly trade war, in the style of the 1930 Smoot-Hawley Tariff Act, those headlines may very well turn out to be warranted. But in the case of China, I don’t believe Trump’s tariffs will be the cause of China’s recession. Instead, it will be its epic credit bubble that has now popped and is deflating, as evidenced by the $1 trillion of foreign-exchange outflows since 2014.
Read: This reliable indicator of a bear market in stocks — and a recession — just flashed a warning
Trump’s tariffs as catalyst
To China, Trump’s tariffs are what Lehman Brothers’ failure was to the Wall Street Crash of 2008 — the catalyst to the crash. It has been rather amusing to hear many times that “if Lehman had been bailed out” (a course of action I was in favor of), “Wall Street would have not crashed.” While the sell-off would not have been as quick or as sharp with such a bailout, the sell-off in the U.S. stock market would have happened, and it likely would have had a similar magnitude, but over a couple of years instead of one.In 2008, Lehman Brothers was a gigantic band-aid on the side of the U.S. financial system that then-Treasury Secretary Hank Paulson had the fortitude to pull off rather abruptly. In other words, Lehman Brothers’ failure was a catalyst, not a cause, of the humongous losses in the U.S. stock market, along with the worst financial crisis in 70 years. However, it was the real estate bubble, inflated by the mortgage finance bubble, that caused the recession, specifically AAA-rated subprime mortgage collateralized debt obligations (CDOs), some of which went to zero!
It takes a rare talent to construct a security that gets AAA ratings and ends up evaporating. As these CDOs and other mortgage securities went under water, the dominoes began to fall in the U.S. financial system. Lehman Brothers simply made them fall faster. It very well may turn out that the Trump tariffs are the same band-aid whose expeditious removal will cause the air of the epic Chinese credit bubble to start going out faster. We should find out soon enough, by the end of 2018.
More
July 12, 2018 / 4:51 AM
U.S. firms doing business in China mostly oppose tariffs, survey shows
SHANGHAI (Reuters) - Most U.S. businesses operating in China
oppose the use of tariffs in retaliation for the challenges they face, from an
uneven playing field to poor protection of intellectual property rights, a
survey showed on Thursday.
Almost 69 percent of the 434 respondents to the annual China Business
Climate Survey of the American Chamber of Commerce in Shanghai opposed tariffs,
while just 8.5 percent backed them, the body said.
“Resolving these challenges in an equitable manner is essential for the
United States and China to have a healthy long-term commercial relationship
that brings benefits to both our peoples,” it said in a statement on the survey
results.
The survey, conducted between April 10 and May 10, reflects the mix of
key concerns and realities for American businesses in China at a time of
heightened uncertainty as the Trump administration raises the ante in its trade
war with Beijing.
U.S. President Donald Trump has accused China of unfair trade practices
that give its firms an advantage, while hobbling American companies and
creating an outsized trade deficit for the United States.
On Tuesday, the office of the U.S. Trade Representative said it would impose
10 percent tariffs on an extra $200 billion worth of Chinese imports, from food
products to tobacco, chemicals, coal, steel and aluminum.
The survey showed that while U.S. companies continue to face challenges
in China, 34 percent of respondents felt Chinese government policies toward
foreign companies had improved, up from 28 percent last year.
More
Here’s when Americans will start feeling the pain from escalating Trump-imposed tariffs
Published: July 11, 2018 2:16 p.m. ET
Tariffs won’t hurt right away, but the pain will come soon enough
Very few Americans have paid a price from escalating U.S. tariffs, but
if trade fights get worse, the first big bill will come due shortly after the
school year starts.
An initial blast of tariffs, mostly targeting $50 billion in Chinese
goods, was tailored by the Trump administration to minimize the damage to the
U.S. economy. Consumers or businesses could more easily find substitutes for
goods whose prices would rise due to higher U.S. tariffs.
Retaliatory tariffs by China and other countries have been more limited in scope and largely designed to raise political heat in the U.S. to get Trump to relent. Kentucky bourbon, Harley-Davidson HOG, -1.69% motorcycles, Midwestern crops and maple syrup were some of the American goods to first feel the hurt.
“Chinese tariff measures are targeting U.S. agricultural imports due to the expected political backlash among U.S. farm lobbies ahead of the midterm elections in November,” said Rajiv Biswas, the chief Asia Pacific economist at IHS Markit.
The White House is upping the ante, however, with fresh sanctions. The U.S. has launched a sped-up regulatory process to sanction another $200 billion in Chinese imports before the end of September and it’s threatened to bring the total to $450 billion.
“Such an escalation pushes the situation from a trade skirmish to a
trade war,” economists at UBS wrote to investors.
For now most consumers don’t have to worry much. The economy accelerated
rapidly in the spring and is expected to remain strong through the summer
months.
Come fall, though, and the price of many imported consumer goods in the
crosshairs of the White House could begin to rise.
China exported about $500 billion in products to the U.S. in 2017. They
encompass a vast range of goods such as fabrics, clothing, vacuum cleaners,
refrigerators, computers, lighting and so forth — the kind of goods that are no
longer made in America or are only made in small quantities.
Absent another source of supply, prices on these goods are sure to rise.
On a bigger stage, a round of tit-for-tat tariffs on steel and autos could substantially raise the price for new cars and trucks. The auto-buying service AutoWise estimates the cost of top-selling vehicles such as a Toyota Corolla, Honda CR-V or Ford F, -1.60% F150 could rise by up to $1,000 each.
The tariffs could also hurt consumers more generally by raising inflation. Prices in the U.S. have already surged to the highest level since 2012. More tariffs would raise prices even further.
The side effects would be twofold. Higher inflation would eat away at what workers earn, offsetting the benefits of annual pay increases. And rising prices would put pressure on the Federal Reserve to raise interest rates more aggressively, potentially narrowing the arteries of the U.S. economy.
More
“I
replied that England (the dear place of my nativity) was computed to produce
three times the quantity of food, more than its inhabitants are able to
consume, ... But, in order to feed the luxury and intemperance of the males,
and the vanity of the females, we sent away the greatest part of our necessary
things to other countries, from whence in return we brought the materials of
diseases, folly, and vice, to spend among ourselves. Hence it follows of
necessity that vast numbers of our people are compelled to seek their
livelihood by begging, robbing, stealing, cheating, pimping, forswearing,
flattering, suborning, forging, gaming, lying, fawning, hectoring, voting, scribbling,
freethinking,”
Jonathan
Swift, Gulliver's Travels
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?
Conductive property of graphene, advancing promise of solar technology
Date:
July 10, 2018
Source:
University of Kansas
Summary:
Researchers have connected a graphene layer with two other atomic layers
(molybdenum diselenide and tungsten disulfide) thereby extending the lifetime
of excited electrons in graphene by several hundred times. The work may speed
development of ultrathin and flexible solar cells with high efficiency.
In 2010, the Nobel Prize in Physics went to the discoverers of graphene.
A single layer of carbon atoms, graphene possesses properties that are ideal
for a host of applications. Among researchers, graphene has been the hottest
material for a decade. In 2017 alone, more than 30,000 research papers on
graphene were published worldwide.
Now, two researchers from the University of Kansas, Professor Hui Zhao
and graduate student Samuel Lane, both of the Department of Physics & Astronomy,
have connected a graphene layer with two other atomic layers (molybdenum
diselenide and tungsten disulfide) thereby extending the lifetime of excited
electrons in graphene by several hundred times. The finding will be published
on Nano Futures, a newly launched and highly selective journal.
The work at KU may speed development of ultrathin and flexible solar
cells with high efficiency.
For electronic and optoelectronic applications, graphene has excellent
charge transport property. According to the researchers, electrons move in
graphene at a speed of 1/30 of the speed of light -- much faster than other
materials. This might suggest that graphene can be used for solar cells, which
convert energy from sunlight to electricity. But graphene has a major drawback
that hinders such applications -- its ultrashort lifetime of excited electrons
(that is, the time an electron stays mobile) of only about one picosecond
(one-millionth of one-millionth of a second, or 10-12 second).
"These excited electrons are like students who stand up from their
seats -- after an energy drink, for example, which activates students like
sunlight activates electrons," Zhao said. "The energized students
move freely in the classroom -- like human electric current."
The KU researcher said one of the biggest challenges to achieving high
efficiency in solar cells with graphene as the working material is that
liberated electrons -- or, the standing students -- have a strong tendency to
losing their energy and become immobile, like students sitting back down.
"The number of electrons, or students from our example, who can
contribute to the current is determined by the average time they can stay
mobile after they are liberated by light," Zhao said. "In graphene,
an electron stays free for only one picosecond. This is too short for
accumulating a large number of mobile electrons. This is an intrinsic property
of graphene and has been a big limiting factor for applying this material in
photovoltaic or photo-sensing devices. In other words, although electrons in
graphene can become mobile by light excitation and can move quickly, they only
stay mobile too short a time to contribute to electricity."
In their new paper, Zhao and Lane report this issue could be solved by
using the so-called van der Waals materials. The principle of their approach is
rather simple to understand.
"We basically took the chairs away from the standing students so
that they have nowhere to sit," Zhao said. "This forces the electrons
to stay mobile for a time that is several hundred times longer than
before."
More
“It is
a maxim among these lawyers, that whatever hath been done before may legally be
done again: and therefore they take special care to record all the decisions
formerly made against common justice and the general reason of mankind. These,
under the name of precedents, they produce as authorities, to justify the most
iniquitous opinions; and the judges never fail of decreeing accordingly.”
Jonathan
Swift, Gulliver's Travels
The monthly Coppock Indicators finished June.
DJIA: 24,271 +221 Down. NASDAQ:
7,510 +267 Down. SP500: 2,718 +169 Down.
All
three slow indicators moved down in March and have continued down in April. May
and June. For some a new bear signal, for others a take profits and get back to
cash signal.
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