Thursday, 16 August 2018

Trade War - The Last Chance Saloon.


Baltic Dry Index. 1727 +02   Brent Crude 71.02

Every day, I wake up determined to deliver a better life for the people all across this nation that have been neglected, ignored, and abandoned. I have visited the laid-off factory workers and the communities crushed by our horrible and unfair trade deals. These are the forgotten men and women of our country.

Donald Trump

Earlier today China announced that it would hold low level trade talks with America later this month, although the move seemed to catch US officials unaware.  Is this the last chance saloon for both nations and the rest of the world before lasting real trade war damage starts piling up?

From far away London I’m sceptical that much of anything will come from these proposed talks, since both China and Trump have talked themselves into political corners of their own making. President Xi cannot be seen to be kowtowing to President Trump, while President Trump cannot execute yet another U-turn on tariffs similar to the one he made with the EU, especially in the run up to the US mid-term elections. A U-turn now probably sinks a whole lot of Republican seats.

But talking is better than shouting at each other through the media, and with low expectations on the low level talks, perhaps some semblance of sanity might prevail.  With our stock markets teetering on the edge of a calamity, there just might be enough behind the scenes pressure on Xi and Trump, to come up with some face saving compromise allowing both to declare victory. Don’t bet on it though.


August 16, 2018 / 3:06 AM

China, U.S. to hold next round of trade talks in late August

BEIJING (Reuters) - China said on Thursday it will hold a fresh round of trade talks with the United States in Washington later this month, offering a glimmer of hope for progress in resolving a conflict that has set world markets on edge.

A Chinese delegation led by Vice Minister of Commerce Wang Shouwen will meet with U.S. representatives led by Under Secretary of Treasury for International Affairs David Malpass, the Ministry of Commerce said in a statement on its website.

The world’s two largest economies have implemented several rounds of tit-for-tat tariffs on each others goods since the start of the year and have threatened further tariffs on exports worth hundreds of billions of dollars.

The announcement of the forthcoming meeting comes after a lull in talks between the two sides, but it is unclear whether it will take place before or after Aug.23, when Washington is due to activate additional tariffs on $16 billion of Chinese goods. Beijing has said it will retaliate in kind.

The last official round of talks was in early June when U.S. Commerce Secretary Wilbur Ross met Chinese Vice Premier Liu He in Beijing.

There was no immediate response from the U.S. Treasury to the announcement from Beijing.

The upcoming meeting is lower-level compared with four previous rounds of talks that involved Liu, Ross and U.S. Treasury Secretary Steven Mnuchin.

The announcement of the forthcoming meeting comes after a lull in talks between the two sides, but it is unclear whether it will take place before or after Aug.23, when Washington is due to activate additional tariffs on $16 billion of Chinese goods. Beijing has said it will retaliate in kind.

The last official round of talks was in early June when U.S. Commerce Secretary Wilbur Ross met Chinese Vice Premier Liu He in Beijing.

There was no immediate response from the U.S. Treasury to the announcement from Beijing.

The upcoming meeting is lower-level compared with four previous rounds of talks that involved Liu, Ross and U.S. Treasury Secretary Steven Mnuchin.
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Asian markets slip, but recover from steeper early losses

By Dow Jones Newswire  Published: Aug 15, 2018 11:47 p.m. ET
Asian stock markets mostly slipped lower in early trading Thursday, but pared early losses after reports that China has agreed to take part in trade negotiations with the U.S. later this month, easing fears of a trade war.

Korea’s Kospi SEU, -0.95%   was weakest early, down 1% after that market missed Wednesday’s declines because of a holiday. Index heavyweight Samsung 005930, -1.99%   was off 1.5%, while SK Hynix 000660, -1.45%   fell 1.4%.

Japan’s Nikkei NIK, -0.17%   initially fell as much as 1.5%, fueled in part by overnight gains in the yen, but recovered and was last in positive territory. Nintendo 7974, -0.52%   recovered to positive territory after dropping 2.5% lower early in the day, hitting 13-month lows. The latest skid in oil prices also weighed in energy stocks. Oil explorer Inpex 1605, +0.09%   , distributor JXTG 5020, -4.85%   and Sumitomo Metal Mining 5713, -1.88%   were all in negative territory, despite largely making up steep early losses.
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https://www.marketwatch.com/story/asian-markets-slip-but-recover-from-steeper-early-losses-2018-08-15

The Dow just registered its longest stint in correction territory in nearly 60 years

Published: Aug 15, 2018 10:18 p.m. ET
The Dow Jones Industrial Average notched a dubious distinction on Wednesday, as U.S. equity benchmarks fell firmly lower.

The blue-chip benchmark failed to move 10% above the closing low hit earlier in the year, and has now spent the longest period in correction territory — 131 trading sessions — since the 223 sessions in 1961, according to Dow Jones Market Data.

The Dow DJIA, -0.54% stands now about 2.8% short of emerging from correction territory after hitting its 2018 closing low of 23,533.20 on March 23. It needs to close at 25,886.42 or above to achieve that. Some market-technician purists believe that an asset must put in a new high to officially emerge from correction phase. Other technicians say that a 10% gain from an asset’s low is sufficient to exit correction territory, a characterization that MarketWatch adheres to.

The Dow and the S&P 500 index SPX, -0.76% fell into correction territory, usually defined as a drop of at least 10% from a recent peak, on Feb. 8.

The S&P 500 exited its lengthiest run in correction in about 34 years late last month.

MarketWatch’s Ryan Vlastelica has noted that such protracted stock-market corrections are extremely unusual. According to Dow Jones data, the average correction for the Dow has lasted a little over 50 trading sessions since the inception of the 122-year-old equity gauge. The past five corrections, on average, have lasted fewer than 40 trading days. (It’s worth noting that the averages don’t also include drops that pushed the Dow into bear-market territory, defined as a drop of at least 20% from a recent peak.)
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Trade war raises the spectre of a ‘China collapse’, and Beijing should worry

Deng Yuwen warns that the impact on China’s economy could destabilise a country already dealing with the twin problems of low public trust and unresponsive government bureaucracy. But although change is inevitable, an eruption of public anger is not
PUBLISHED : Wednesday, 15 August, 2018, 5:00am UPDATED : Wednesday, 15 August, 2018, 7:56am

The “China collapse theory” was popular in the international community 10 years ago. However, with China becoming the world’s second-largest economy and exerting a growing international influence, despite the chorus of doom, such talk has died down.

Yet, taking the long view, 2018 is shaping up to be a turning point for China. Today the country faces serious internal and external challenges, and is in the midst of a social transformation.

Given the Chinese government’s ability to maintain stability, the transformation is unlikely to be a radical, dramatic rupture. Rather, the change may be cumulative. Like the proverbial frog in a pot of water that’s gradually brought to a boil, by the time people realise a transformation has happened, it will already be in place.

Looking at the changes that have quietly taken place in Chinese society this year, it is obvious that a transformation is gestating.

Firstly, people’s trust in the authorities has fallen to freezing point, whatever their political leaning. The recent Changsheng vaccine scandal illustrates this development.

-----Thirdly, the economic impact of the trade war with the United States is likely to exacerbate the crisis in Chinese society.

So far, the tariffs imposed on Chinese goods have caused China’s stock and currency markets to fluctuate and public pessimism to spread. Even after the initial shock wears off, the tariffs’ impact on China’s employment, prices and financial system will be very real.

Depending on how the conflict develops, we may see large-scale business closures, a rise in unemployment and serious inflation. If the economy sinks into a recession, living standards may fall sharply.

Since reforms began, there have been highs and lows in the Chinese growth story. Western sanctions imposed after China’s crackdown on the pro-democracy protests of June 1989 led to some hardships, but people tolerated them. The difficult days of the Cultural Revolution were not so far behind then, and living standards weren’t high to begin with.

Things are different now. Many of those born in the 1970s and after have not gone through the poverty their forefathers experienced. If living standards fall sharply for them and their family because of the trade war, how will they adapt and will there be a chain reaction? Some scholars have warned that the trade war might trigger an eruption of public anger.

Chinese society is poised for change. For the authorities, 2018 will be a big test of their ability to govern. Whether they pass or fail, one thing is clear: an overall restlessness is appearing in society and people are crying out for changes to the system.
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No nation was ever ruined by trade.

Benjamin Franklin

Crooks and Scoundrels Corner

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

Yes, Tesla again.  Racing a model 3 around in a minefield, so far so good.

August 14, 2018 / 1:50 PM

Musk bid for Tesla: no formal offer, no firm deals with advisers

(Reuters) - Tesla Inc’s board named a special committee of three directors on Tuesday to decide what to do about Chief Executive Elon Musk’s potential offer to take the electric carmaker private, although Musk has yet to make a formal offer and is still negotiating to hire advisers needed to do a deal.

The board announced the move in Tesla’s first filing with regulators since Musk tweeted a week ago that he was considering taking the company private and had already secured funding for a $420-per-share offer, valuing Tesla at $72 billion.

Since that unorthodox announcement on Aug. 7, which has triggered investor lawsuits and an investigation by the U.S. Securities and Exchange Commission, Musk and Tesla have scrambled to bring order to the process of negotiating a deal.

Musk tweeted on Monday he was working with Goldman Sachs Group Inc and private equity firm Silver Lake as financial advisers. However, as of Tuesday, Goldman Sachs was still negotiating its terms of engagement with Musk, according to a person familiar with the matter.

Silver Lake was also not signed up officially as a financial adviser, as it is helping Musk explore how to take Tesla private with no compensation, Reuters reported on Monday.

Goldman Sachs and Silver lake declined to comment.

Musk’s effort to associate his potential bid with some of Wall Street’s most venerable institutions, even at the risk of misrepresenting their involvement, comes as pressure has been building on him to justify his pronouncement last week that funding for a deal had been “secured.”

Musk said on Monday he had held talks with a Saudi sovereign fund on a buyout that would take Tesla off the Nasdaq exchange - an extraordinary move for what is now the United States’ most valuable automaker. Tesla has a market value of $60 billion, bigger than Detroit rivals General Motors Co or Ford Motor Co, which produce far more cars.

Tesla shares closed down 2.5 percent at $347.64 on Tuesday. They are still above $341.99, their closing price the day before Musk tweeted his plan to take Tesla private, which pushed the shares up 11 percent to an 11-month high.

Tesla said in its statement on Tuesday the special committee had the authority to take any action on behalf of the board to evaluate and negotiate a potential transaction and alternatives to any transaction proposed by Musk.

That means three members of Tesla’s board will now weigh whether it is advisable - or even feasible - to pursue what could be the biggest-ever go-private deal, and they are doing so before receiving a formal proposal from the CEO.
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August 15, 2018 / 4:07 PM

SEC scrutiny of Tesla grows as Goldman hints at adviser role

WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission has sent subpoenas to Tesla Inc (TSLA.O) regarding Chief Executive Elon Musk’s plan to take the company private and his statement that funding was “secured,” Fox Business Network reported on Wednesday, citing sources.

The electric carmaker’s shares fell as much as 4 percent but cut their losses after Goldman Sachs Group Inc (GS.N) said it was dropping equity coverage of Tesla because it is acting as a financial adviser on a matter related to the automaker.

Investors viewed the Goldman statement as confirming a tweet from Elon Musk on Monday about working with Goldman, even as the reported subpoenas indicated the SEC has opened a formal investigation into a matter.

The latest news extended the roller-coaster ride for Tesla investors in recent days, adding to uncertainty about the future course of the company and whether a deal can be done amid growing regulatory complications.

Tesla and the SEC declined to comment.

Musk stunned investors and sent Tesla’s shares soaring 11 percent when he tweeted early last week that he was considering taking Tesla private at $420 per share and that he had secured funding for the potential deal.

The shares fell 2.6 percent to $338.69 on Wednesday, below $341.99, their closing price the day before Musk tweeted his plan to take Tesla private.

The Tesla CEO provided no details of his funding until Monday, when he said in a blog on Tesla’s website that he was in discussions with Saudi Arabia’s sovereign wealth fund and other potential backers but that financing was not yet nailed down.
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We are all born ignorant, but one must work hard to remain stupid.

Benjamin Franklin

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?

Long-sought carbon structure joins graphene, fullerene family

Carbon cage molecule formed inside pores of zeolites is a negatively curved schwarzite

Date: August 13, 2018

Source: University of California - Berkeley

Summary: Scientists have been playing with pure carbon compounds for centuries, starting with diamond and graphite and now with fullerenes, nanotubes and graphene. One type of 3D geometry has been missing, however: a negatively curved carbon-cage surface called schwarzite. Chemists have now shown that serendipitously produced materials called zeolite-templated carbons are in fact the long-sought schwarzites. Their recipe for making schwarzites could make them practical in electronics and gas storage.

The discovery of buckyballs surprised and delighted chemists in the 1980s, nanotubes jazzed physicists in the 1990s, and graphene charged up materials scientists in the 2000s, but one nanoscale carbon structure -- a negatively curved surface called a schwarzite -- has eluded everyone. Until now.
University of California, Berkeley, chemists have proved that three carbon structures recently created by scientists in South Korea and Japan are in fact the long-sought schwarzites, which researchers predict will have unique electrical and storage properties like those now being discovered in buckminsterfullerenes (buckyballs or fullerenes for short), nanotubes and graphene.

The new structures were built inside the pores of zeolites, crystalline forms of silicon dioxide -- sand -- more commonly used as water softeners in laundry detergents and to catalytically crack petroleum into gasoline. Called zeolite-templated carbons (ZTC), the structures were being investigated for possible interesting properties, though the creators were unaware of their identity as schwarzites, which theoretical chemists have worked on for decades.

Based on this theoretical work, chemists predict that schwarzites will have unique electronic, magnetic and optical properties that would make them useful as supercapacitors, battery electrodes and catalysts, and with large internal spaces ideal for gas storage and separation.
UC Berkeley postdoctoral fellow Efrem Braun and his colleagues identified these ZTC materials as schwarzites based of their negative curvature, and developed a way to predict which zeolites can be used to make schwarzites and which can't.

"We now have the recipe for how to make these structures, which is important because, if we can make them, we can explore their behavior, which we are working hard to do now," said Berend Smit, an adjunct professor of chemical and biomolecular engineering at UC Berkeley and an expert on porous materials such as zeolites and metal-organic frameworks.

----Braun modeled ZTC structures computationally using the known structures of zeolites, and worked with topological mathematician Senja Barthel of the École Polytechnique Fédérale de Lausanne in Sion, Switzerland, to determine which of the minimal surfaces the structures resembled.

The team determined that, of the approximately 200 zeolites created to date, only 15 can be used as a template to make schwarzites, and only three of them have been used to date to produce schwarzite ZTCs. Over a million zeolite structures have been predicted, however, so there could be many more possible schwarzite carbon structures made using the zeolite-templating method.
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Wine is constant proof that God loves us and loves to see us happy.

Benjamin Franklin

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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