Monday 6 August 2018

Trade War. Currency War. Iran War? N. Korea?


Baltic Dry Index. 1773 +17   Brent Crude 73.32

All treaties between great states cease to be binding when they come in conflict with the struggle for existence.

Count Otto von Bismarck

Asian stocks remained nervous ahead of a new Iranian sanctions announcement due from President Trump later today, with America’s new sanctions scheduled to go into effect at 12:01 am Tuesday EDT.  America states it will apply penalties against friend and foe alike against all nation states and entities that don’t conform, reminding all that they have until November to cease purchases of Iranian oil.

The parallel to Washington v Japan over oil and iron 1940 comes to mind, one that forced Japan into a reckless war with America that ended with nuclear bombs in August 1945. President Trump and the American War Party seem to be playing the same cards forcing Iran into an irrational reaction, as a casus belli for a new middle east war. 

Just don’t let on to our complacent stock markets, and HFT front running algo trading theft programs, for whom the prospect on an imminent oil spike 1973-74 is a distant faded memory, if it’s remembered at all.

America’s action in breaking freely entered into treaty commitments for non-Bismarckian existential reasons, incentivises all other nations to do the same in the decades ahead, and will not be lost in Pyongyang, which is already heavily incentivised to cheat. In the decades ahead, treaties will not be as sacrosanct as 1945-2018.

Below, time to leave the casino to the fanatical nickel chasers in front of steamrollers, and get back to the sanity of safety, cash and precious metals. President Trump is now loading a third bullet in the chamber of our insane trade war, currency war, Iran sanctions war, game of mutual assured financial destruction, Russian roulette. What could possibly go wrong?

Anyone who has ever looked into the glazed eyes of a soldier dying on the battlefield will think hard before starting a war.

Count Otto von Bismarck

August 6, 2018 / 2:02 AM

Asian stocks cheer move by China's central bank, but trade war weighs

SYDNEY (Reuters) - Stocks across Asia advanced on Monday as China’s efforts to stop sharp declines in its currency and capital flight supported wider sentiment in the region, although the escalating Sino-U.S. trade conflict has capped gains.

Late on Friday, the People’s Bank of China raised the reserve requirement on some foreign exchange forward positions, making it more expensive to bet against the Chinese currency and helping pull the yuan away from 14-month lows.

The move boosted the Australian dollar AUD=D3, which is often played as a liquid proxy for the yuan. The Aussie came off two-week lows to climb as high as $0.7412 after the announcement, and was last at $0.7403.

“Leaning against bearish CNY sentiment is important because a rapidly weakening currency risks triggering residential outflows and destabilising domestic asset prices,” JPMorgan analysts said in a note.

“Our economists think that PBOC likely will take further action if CNY depreciation continues or capital outflow pressure increases.”

On Monday, MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS leapt 0.9 percent - the biggest jump in a month and its second straight session of gains.

Japan's Nikkei .N225 edged up 0.4 percent, while Australian shares added 0.75 percent. Chinese shares were positive too, with the blue-chip share index .CSI300 up 0.5 percent. Hong Kong's Hang Seng index .HSI gained 1.3 percent.

On Friday, the Dow .DJI climbed 0.54 percent, the S&P 500 .SPX gained 0.46 percent and the Nasdaq Composite .IXIC added 0.12 percent. They were helped by strong corporate earnings, although gains were capped by worries over the escalating trade tensions.

The trade dispute remains a live issue for markets with China proposing tariffs on $60 billion worth of U.S. goods on Friday, while a senior Chinese diplomat cast doubt on prospects of talks with Washington to resolve the bitter trade conflict.
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August 6, 2018 / 1:05 AM

White House to detail implementation of new Iran sanctions Monday: Pompeo

ABOARD A U.S. GOVERNMENT AIRCRAFT (Reuters) - The United States intends to fully enforce sanctions due to be reimposed against Iran early this week on orders from U.S. President Donald Trump, Secretary of State Mike Pompeo said on Sunday.
Washington’s so-called “snapback” sanctions are due to be reinstated against Tehran at 12:01 a.m. 
EDT on Tuesday, a U.S. Treasury official said, speaking on condition anonymity.

Pompeo, speaking with reporters returning with him from an Asian trip, said the White House would detail implementation of the measures on Monday morning.

“It’s an important part of our efforts to push back against Iranian malign activity,” he said. “The United States is going to enforce these sanctions.”

Despite opposition from European allies, Trump in May pulled the United States out of a 2015 deal between world powers and Tehran under which international sanctions were lifted in return for curbs on Iran’s nuclear program.

----Starting this week, Washington will reimpose sanctions on Iran’s purchases of U.S. dollars, its trade in gold and precious metals, and its dealings with metals, coal and industrial-related software.

The United States has told other countries they must halt imports of Iranian oil starting in early November or face U.S. financial measures.

Iranian President Hassan Rouhani said last week that Trump’s repudiation of the deal was illegal and Iran would not yield to Washington’s renewed campaign to strangle Iran’s vital oil exports.

Iran will ease foreign exchange rules, state TV reported on Sunday, in a bid to halt a collapse of the rial currency, which has lost half its value since April due to fears about the return of U.S. sanctions.

----Pompeo said it would require “enormous change” by Iran to get out from under renewed U.S. sanctions. “They have got to behave like a normal country,” he said, describing Iranian leaders as “bad actors.”

He alluded to Trump’s suggestion last week of the potential for future negotiations with Tehran, a notion that senior Iranian officials quickly rejected.
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August 6, 2018 / 5:33 AM

North Korea state media urges U.S. to drop sanctions

SEOUL (Reuters) - North Korean state media called on Monday for the United States to drop 
sanctions, saying Pyongyang had demonstrated good faith by ending its nuclear weapons testing and handing over the remains of U.S. troops killed in the Korean War.

The statements came just days after a confidential United Nations report concluded North Korea has not stopped its nuclear and missile programmes, in breach of U.N. resolutions.

North Korea and the United States vowed to work to end Pyongyang’s weapons programmes at a landmark summit in June in Singapore, but have struggled to reach an agreement to accomplish that goal.

The North’s state media accused Washington of “acting opposite” to its plan to improve ties, despite Pyongyang making goodwill gestures, including a moratorium on nuclear and missile tests, the dismantling of a nuclear site, and the return of the remains of U.S. soldiers killed in the 1950-53 Korean War.

Such “practical measures” had already deprived U.N. Security Council resolutions of their reason for being, said the Rodong Sinmun, a ruling Workers’ Party mouthpiece.

“There have been outrageous arguments coming out of the U.S. State Department that it won’t ease sanctions until a denuclearisation is completed, and reinforcing sanctions is a way to raise its negotiating power,” the newspaper said in an editorial.

“How could the sanctions, which were a stick the U.S. administration had brandished as part of its hostile policy against us, promote the two countries’ amity?”

The editorial, which was run along with front page articles and photos of leader Kim Jong Un’s visit to a catfish farm in a display of his shift in focus to the economy, was a fresh sign of Pyongyang’s frustration over the slow-moving nuclear negotiations.
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China Prepared for Long Trade War With U.S., State Media Says

Bloomberg News
Updated on 6 August 2018, 05:58 GMT+1
After a weekend of claims by U.S. President Donald Trump that he has the upper hand in the trade war with China, Beijing responded through state media by saying the nation is ready to endure the economic fallout.

China is prepared for a “protracted war” and doesn’t fear sacrificing short-term economic interests, according to an editorial in the nationalist Global Times on Sunday evening. “Considering the unreasonable U.S. demands, a trade war is an act that aims to crush China’s economic sovereignty, trying to force China to be a U.S. economic vassal.”

The exchange of barbs between the two sides follows the release late Friday in Beijing of a tariff list designed to retaliate against the U.S. threat to impose new duties on $200 billion of Chinese imports. The worsening of the tension comes amid a slowing of China’s economy, declines in the currency and a bear market in stocks.

Trump told an audience of diehard supporters on Saturday that playing hardball on trade is “my thing.”

Trump continued his focus on tariffs Sunday morning, tweeting that the duties are working “big time” and that imported goods should be taxed or made in the U.S. He also suggested duties will allow paying down “large amounts of the $21 trillion in debt that has been accumulated” while reducing taxes for Americans.

“Every country on earth wants to take wealth out of the U.S., always to our detriment,” Trump tweeted, “I say, as they come, Tax them.”
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People never lie so much as after a hunt, during a war or before an election.

Count Otto von Bismarck

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

Not the usual bent politicians and doubled over banksters today. Today, who had a motive for copying USA-Israel’s hacking attack on Iran’s nuke program, and attacked Taiwan chipmaker TSMC? Russia, China, USA, Israel, North Korea, South Korea, commercial competitors? All of the above?  But it wasn’t a hack, says TSMC. So what was it if not a hack, and how many more corporations are also vulnerable to whatever it was?

Computer Virus Cripples IPhone Chipmaker TSMC Plants

5 August 2018, 11:43 AM 4 August 2018, 8:54 AM
(Bloomberg) -- A computer virus halted several Taiwan Semiconductor Manufacturing Co. factories Friday night, dealing the company one of its most severe disruptions as it ramps up chipmaking for Apple Inc.’s next iPhones.

The sole maker of the iPhone’s main processor said a number of its fabrication tools had been infected, and while it had contained the problem and resumed some production, several of its factories won’t restart till at least Sunday. The virus wasn’t introduced by a hacker, the company added in a statement.

It’s unclear who targeted TSMC, the world’s biggest contract manufacturer of chips for companies including Apple and Qualcomm Inc. It’s the first time a virus had ever brought down a TSMC facility, recalling the WannaCry cyberattacks of 2017 that forced corporations around the world to suspend operations as they rooted out the ransomware. TSMC is working on solutions now but said the degree of infection varied from factory to factory, and that it will provide more information Monday after it’s assessed the situation.

“TSMC has been attacked by viruses before, but this is the first time a virus attack has affected our production lines,” Chief Financial Officer Lora Ho told Bloomberg News by phone. She wouldn’t talk about how much revenue it would lose as a result of the disruption, or whether the facilities affected were involved in making iPhone chips.

It’s unclear how the lost days of output would affect the Taiwanese firm, the latest to fall prey to a growing scourge. Globally, cyber crime could cost businesses as much as $8 trillion in damage over the next five years, according to the World Economic Forum. Mark Li, an analyst at Sanford C. Bernstein, said he thinks the impact will be limited and that probably only a small amount of chips would be affected.

The implications are also unclear for Apple. The iPhone maker last week surpassed a market value of $1 trillion, largely on the strength of sales for its pioneering smartphone. The U.S. company has employed in the past foundries owned by Samsung Electronics Co., its rival in global mobile devices.

The incident comes weeks after TSMC cheered investors with a rosy outlook for smartphone demand in the latter half of the year. That helped the market look past a reduced revenue outlook. A bellwether for the chip industry as well as an early indicator of iPhone demand, it heads into its busiest quarters grappling with waning enthusiasm for the high-powered chips used to mine digital currencies. Chief Executive Officer C. C. Wei had said TSMC’s sales will rise this year by a high single-digit percentage in U.S. dollar terms, down from an already reduced projection of about 10 percent.

“Certain factories returned to normal in a short period of time, and we expect the others will return to normal in one day,” the company said in its Saturday statement.

The secret of politics? Make a good treaty with Russia.

Count Otto von Bismarck

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?
Nanotube 'rebar' makes graphene twice as tough

Scientists test material that shows promise for flexible electronics

Date: August 3, 2018

Source: Rice University

Summary: Researchers have found that reinforcing graphene with embedded carbon nanotubes makes the 2D nanomaterial more than twice as tough as pristine graphene.

Rice University researchers have found that fracture-resistant "rebar graphene" is more than twice as tough as pristine graphene.

Graphene is a one-atom-thick sheet of carbon. On the two-dimensional scale, the material is stronger than steel, but because graphene is so thin, it is still subject to ripping and tearing.

Rebar graphene is the nanoscale analog of rebar (reinforcement bars) in concrete, in which embedded steel bars enhance the material's strength and durability. Rebar graphene, developed by the Rice lab of chemist James Tour in 2014, uses carbon nanotubes for reinforcement.

In a new study in the American Chemical Society journal ACS Nano, Rice materials scientist Jun Lou, graduate student and lead author Emily Hacopian and collaborators, including Tour, stress-tested rebar graphene and found that nanotube rebar diverted and bridged cracks that would otherwise propagate in unreinforced graphene.

The experiments showed that nanotubes help graphene stay stretchy and also reduce the effects of cracks. That could be useful not only for flexible electronics but also electrically active wearables or other devices where stress tolerance, flexibility, transparency and mechanical stability are desired, Lou said.

Both the lab's mechanical tests and molecular dynamics simulations by collaborators at Brown University revealed the material's toughness.

Graphene's excellent conductivity makes it a strong candidate for devices, but its brittle nature is a downside, Lou said. His lab reported two years ago that graphene is only as strong as its weakest link. Those tests showed the strength of pristine graphene to be "substantially lower" than its reported intrinsic strength. In a later study, the lab found molybdenum diselenide, another two-dimensional material of interest to researchers, is also brittle.

Tour approached Lou and his group to carry out similar tests on rebar graphene, made by spin-coating single-walled nanotubes onto a copper substrate and growing graphene atop them via chemical vapor deposition.

To stress-test rebar graphene, Hacopian, Yang and colleagues had to pull it to pieces and measure the force that was applied. Through trial and error, the lab developed a way to cut microscopic pieces of the material and mount it on a testbed for use with scanning electron and transmission electron microscopes.

"We couldn't use glue, so we had to understand the intermolecular forces between the material and our testing devices," Hacopian said. "With materials this fragile, it's really difficult."

Rebar didn't keep graphene from ultimate failure, but the nanotubes slowed the process by forcing cracks to zig and zag as they propagated. When the force was too weak to completely break the graphene, nanotubes effectively bridged cracks and in some cases preserved the material's conductivity.
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Whoever speaks of Europe is wrong: it is a geographical expression.

Count Otto von Bismarck

The monthly Coppock Indicators finished July.

DJIA: 25,415 +213 Down. NASDAQ: 7,672 +259 Down. SP500: 2,816 +166 Down.
All three slow indicators moved down in March and have continued down ever since. For some a new bear signal, for others a take profits and get back to cash signal 

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