Baltic Dry Index. 1723 +03 Brent Crude 71.60
A shortened update
today. Last night my Border Collie due to be put down, was unexpectedly offered
an operation for her breast cancer, after months of it being “inoperable.” Now I must visit London and raise the costs.
“Government
has three primary functions. It should provide for military defense of the
nation. It should enforce contracts between individuals. It should protect
citizens from crimes against themselves or their property. When government-- in
pursuit of good intentions tries to rearrange the economy, legislate morality,
or help special interests, the cost comes in inefficiency, lack of motivation,
and loss of freedom. Government should be a referee, not an active player.”
Milton
Friedman
It was Trump open
season on just about everything and everyone yesterday. From China, to the EU,
to the Fedsters, about to gather with their friends at Jackson Hole Wyoming. Unable to drain the Washington swamp so far,
President Trump now seems determined to shake up the forest to see who and what
comes crashing out of the trees.
China, Turkey, NATO,
and the EUSSR seem the likeliest candidates, although the US Federal Reserve
seems another. Despite the Fed’s fine words about independence, their next
interest rate hike just got likely postponed.
Below Trump’s “Tesla”
tantrum moment. Getting ready for the trade and currency wars kill. To this old dinosaur market watcher, the skill
comes lies in knowing which trade war party gets killed.
It was
a confusion of ideas between him and one of the lions he was hunting in Kenya
that had caused A. B. Spottsworth to make the obituary column. He thought the
lion was dead, and the lion thought it wasn't
P. G. Wodehouse.
August 20, 2018 / 9:38 PM
Exclusive - Trump does not anticipate much from China trade talks this week
WASHINGTON
(Reuters) - U.S. President Donald Trump does not expect much progress from
trade talks with China this week in Washington, he told Reuters on Monday.
Trump said in an interview that he had “no time frame” for ending the
trade dispute with China. “I’m like them, I have a long horizon,” he added.
The talks this week come as new U.S. tariffs on $16 billion (£12.5
billion) of Chinese goods take effect, along with retaliatory tariffs from
Beijing on an equal amount of U.S. goods. The U.S. Trade Representative’s
Office also is holding hearings this week on proposals for tariffs on a further
$200 billion of Chinese goods.
Trump said Chinese negotiators would be arriving shortly, adding he did
not “anticipate much” from the mid-level discussions.
Trump Accuses China, EU of Currency Manipulation
By Saleha Mohsin
Updated on 20 August 2018, 22:55 GMT+1
President Donald Trump accused China and the European Union of
manipulating their currencies as he tries to wrestle concessions from two of
the U.S.’s largest trade partners.
“I think China’s manipulating their currency, absolutely. And I think
the euro is being manipulated also,” Trump said in an interview with Reuters
published Monday.
The president’s accusation, presented without explanation or substantiation in the Reuters report, conflicts with the findings of his own administration. The Treasury Department stopped short of naming China, the EU or any other country as a currency manipulator in April, in a semi-annual report on foreign-exchange policy. The U.S. hasn’t officially accused another country of currency manipulation since 1994.
The dollar extended its drop to trade at the day’s low as measured by the Bloomberg Dollar Spot Index while the euro rose to its highest level in more than a week at $1.1481. The dollar was already under pressure after Bloomberg News reported earlier that Trump complained about interest rate hikes under Federal Reserve Chairman Jerome Powell.
In
the April report, Treasury dialed up its criticism of China, citing lack of
progress in rectifying its trade imbalance. The department said that China’s “disproportionate
share of the overall U.S. trade deficit” required “enhanced analysis” of
whether it’s a manipulator, along with five other countries. A designation
requires the U.S. to engage in expedited negotiations with the country.
----“There is little evidence of more than scant Chinese foreign exchange market intervention,” Mark Sobel, a former U.S. Treasury official who worked at the department for nearly four decades, wrote in a column published Monday by a London-based think tank, the Official Monetary and Financial Institutions Forum. He cited a lack of evidence in China’s foreign reserve holdings data and other measures.
Trump also said the Federal Reserve should help him in his trade disputes with China, the EU and other nations, asserting that other central banks are assisting their countries. Trump complained to Republican donors on Friday that Fed Chairman Jerome Powell hasn’t kept interest rates as low as he expected.
More
Trump launches steady stream of criticism of Fed chief Powell’s interest-rate policy
By Greg Robb
Published: Aug 20, 2018 4:17 p.m. ET
President Donald Trump escalated his criticism of the Federal Reserve into a
personal attack of Fed Chairman Jerome Powell, including during an interview on
Monday.In the interview with Reuters, Trump said he was “not thrilled” with Powell and said he expected “more help” from the central bank. The president said he would continue to criticize the Fed if the central bank continued to raise short-term interest rates.
Stocks SPX, +0.24% pulled back a bit after Trump’s remarks on the Fed but still closed higher.
Over the weekend, at a fundraiser in the Hamptons, Trump said he expected Powell to be a cheap-money Fed chairman and lamented the Fed instead had raised interest rates, Bloomberg reported.The story cited three people present as having described Trump’s private remarks. The Wall Street Journal also reported that Trump questioned the need for rate hikes at the event.
----In the remarks to donors, Trump said he was told by advisers that Powell liked “cheap money” and yet quickly started raising rates, according to the Journal. “This can only happen to Trump,” the president reportedly joked.
The Fed had no comment on the reports.
Powell was asked in July about criticism from the White House. “Let me just say I’m not concerned about it, and I’ll tell you why,” Powell told NPR. “We have a long tradition here of conducting policy in a particular way, and that way is independent of all political concerns.”
The Fed has raised interest rates twice this year and has penciled in two more quarter-point interest-rate hikes this year and three more in 2019.
The Fed is concerned about rising prices — the 12-month rate of core inflation in July rose to 2.4%, the highest level since September 2008.
More
Trump Vows No Concessions to Erdogan for U.S. Pastor's Release
By Justin SinkThe president also said in an interview with Reuters he wasn’t concerned that higher steel and aluminum tariffs he imposed on Turkey earlier this month would have a broader impact on the European economy.
“I’m
not concerned at all. I’m not concerned. This is the proper thing to do,” Trump
said.
The president on Friday said Turkey had made up espionage charges
against Andrew Brunson, a U.S. clergyman that Turkish President Recep Tayyip
Erdogan’s government accuses of being involved in an attempted coup in 2016.
Trump has demanded Brunson’s release, sanctioned Turkish officials and
increased metals tariffs. Erdogan has in turn slapped sanctions on U.S. goods.
Earlier last week, Treasury Secretary Steven Mnuchin said the U.S. is
ready to impose more sanctions if Turkey doesn’t move quickly to release the
pastor.
Speaking Monday, Trump again reiterated his frustration that the Turkish
government wasn’t reciprocating after the U.S. helped gain the release of Ebru
Ozkan, a Turkish citizen arrested in Israel on accusations of abetting Hamas,
the militant group that controls the Gaza Strip.
Trump said Erdogan violated an agreement struck at the NATO summit last
month.
“I got that person out for him. I expect him to let this very innocent
and wonderful man and great father and great Christian out of Turkey,” Trump
said in the Reuters interview.
Trump went on to say that while he had had a good relationship with
Erdogan "until now," that the U.S.-Turkey relationship is "no
longer a one-way street."
S&P Global Ratings and Moody’s Investors Service cut
Turkey’s rating on Friday on worries the volatile currency and wide
current-account deficit may undermine the economy.
In other news, as US
influence wanes, the rise and rise of China.
August 21, 2018 / 2:47 AM
Taiwan says China 'out of control' as it loses El Salvador to Beijing
TAIPEI/BEIJING
(Reuters) - Taiwan vowed on Tuesday to fight China’s “increasingly out of
control” behaviour after Taipei lost another ally to Beijing when El Salvador
became the third country to switch allegiances to China this year.
Taiwan now has formal relations with just 17 countries worldwide, many
of them smaller, less developed nations in Central America and the Pacific like
Belize and Nauru.
Speaking in Taipei, President Tsai Ing-wen said Taiwan will not bow to
pressure, describing the El Salvador move as further evidence of China’s
efforts to squeeze the island, which have included regular Chinese bomber
patrols around Taiwan.
“We will turn to countries with similar values to fight together against
China’s increasingly out-of-control international behaviour,” Tsai said.
Taiwan Foreign Minister Joseph Wu told reporters earlier that Taipei was
not willing to engage in “money competition” with its giant neighbour.
He said El Salvador had been continuously asking for “massive funding
support” since last year for a port development, but Taiwan was unable to
assist with the “unsuitable project” after assessment.
“Pressure from China would only make Taiwan more determined to continue
our path of democracy and freedom,” he said.
“China’s rude and unreasonable behaviour will certainly have negative impact
to cross-strait relations. This is also not how a responsible country should
behave.”
In Beijing, the Chinese government’s top diplomat State Councillor Wang
Yi said El Salvador had made the right decision.
More
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, be careful what you wish for. Trump’s tariffs, too little to late
for some, US business killers for others. Barring yet another Trumpian U-turn
in the China – USA low level trade talks this week, things rapidly start going
downhill from here once the new US anti-China tariffs kick in next month.
August 20, 2018 / 6:17 AM
U.S. firms warn next China tariffs to cost Americans from cradle to grave
WASHINGTON
(Reuters) - A broad cross-section of U.S. businesses has a message for the
Trump administration: new tariffs on $200 billion of Chinese imports will force
Americans to pay more for items they use throughout their daily lives, from
cradles to coffins.
Unlike previous rounds of U.S. tariffs, which sought to shield consumers by targeting Chinese industrial machinery, electronic components and other intermediate goods, thousands of consumer products could be directly hit with tariffs by late September.
The $200 billion list targets Chinese seafood, furniture and lighting products, tires, chemicals, plastics, bicycles and car seats for babies. (See the complete list here
“USTR’s proposed tariffs on an additional $200 billion of Chinese imports dramatically expands the harm to American consumers, workers, businesses, and the economy,” the U.S. Chamber of Commerce said in written testimony for the hearing.
The top U.S. business lobbying group said the Trump administration lacks
a “coherent strategy” to address China’s theft of intellectual property and
other harmful trade practices and called for “serious discussions” with
Beijing.
Mid-level Trump administration officials and their Chinese counterparts
are expected to meet later this week in Washington to discuss their trade
dispute. But it is unclear whether the talks will have any effect on the
implementation of U.S. tariffs and retaliation by China.
In more than 1,400 written comments submitted to USTR that will be
echoed in the hearings, most businesses argued that the tariffs will cause harm
and higher costs for products ranging from Halloween costumes and Christmas
lights to nuclear fuel inputs, while a small number praised them or asked that
they be extended to other products.
Graco Children’s Products Inc, a unit of Newell Brands Inc, said tariffs
“will have a direct negative impact on our company, American parents and most importantly
the safety of American children.”
The company said higher prices may prompt more parents to buy car seats,
swings and portable play yards on the second-hand market.
----Westinghouse Electric Co LLC, the
leading U.S. nuclear fuel producer, said it relies on China for zirconium and
zirconium powders - key inputs for tubes used in nuclear fuel assemblies that it
uses at plants in Utah, Pennsylvania and South Carolina.
There is no U.S. source of zirconium so the tariff would “raise the cost
for Westinghouse to manufacture nuclear fuel for U.S. commercial nuclear power
plants” and it ultimately “would increase the cost of electricity to a
significant percentage of U.S. electricity consumers,” the company said in a
filing.
----Huffy Corp, the largest U.S. bicycle brand, with 4 million Chinese-made bikes sold annually, said a 25 percent tariff poses a “serious threat to the company.”
Huffy CEO Bill Smith wrote that the tariffs should have been put in
place 20 years ago when Huffy and other U.S. bicycle makers sought to increase
the 11 percent U.S. bicycle tariff because of aggressive Chinese imports. When
this effort failed, Huffy closed three U.S. plants in 1998 and 1999,
terminating 2,000 employees and shifting to Chinese bikes.
“This proposed tariff is too little, too late,” Smith wrote, adding that
now, a higher tariff would “only create problems” and cost jobs at independent
U.S. bicycle dealers.
More
“The
key insight of Adam Smith's Wealth of Nations is misleadingly simple: if an
exchange between two parties is voluntary, it will not take place unless both
believe they will benefit from it. Most economic fallacies derive from the
neglect of this simple insight, from the tendency to assume that there is a
fixed pie, that one party can gain only at the expense of another.”
Milton
Friedman
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?
A graphene breakthrough hints at the future of battery power
From laptops that charge in 15 minutes to electric scooters, the
first round of graphene-based products could finally deliver on the promise of
the much-hyped wonder material
16 August 2018.
Catch the 1E bus from central Belgrade, Serbia, and you’ll be
riding the future.
The five Chariot e-buses that operate on this route are some of
the first in the world to run solely on supercapacitors, a fast-charging
alternative to batteries that could revolutionise how we store energy.
Instead of holding electricity as chemical potential, like a
battery, supercapacitors (also known as ultracapacitors) store it in an
electrical field, like static collecting on a balloon. Because there’s no
chemical reaction going on, they don’t degrade like lithium-ion batteries,
which rely on rare-earth metals and can end up in landfill after two years.
This means that you can charge them much more quickly – a five minute charge
for one of Belgrade’s buses can carry it up to 18 kilometres.
There are two reasons supercapacitors haven’t yet replaced
batteries in our electric cars and electronics: they hold less energy in the
same amount of space, and they can’t hold it for as long. A fully charged
supercapacitor can leak down to empty in hours, rather than days.
That’s fine for a bus that can be charged at every stop, but less
useful for a car that needs to run all day. But now, a host of researchers and
start-ups are trying to make supercapacitors better. To do it, they’ve turned
to one of the most hyped materials in history: graphene.
Discovered at the University of Manchester in 2004, graphene -
which consists of thin flakes of carbon atoms arranged in a hexagonal structure
- was quickly hailed as a wonder material. It is strong and light, with a high
surface area, and it’s an excellent conductor of both heat and electricity.
But, the promised graphene revolution is yet to materialise. “It is still in
its teenage years,” says James Baker, the CEO of Graphene@Manchester.
Belgrade’s buses use supercapacitors made from layers of
activated carbon, which is coated onto conductive plates immersed in an
electrolyte solution. Graphene is also a form of carbon, but because of its
huge surface area (which determines the performance of a supercapacitor) it has
the potential to radically improve the performance of supercapacitors to a
level where they become practical for electric cars and consumer devices. It
could create smartphones that charge in seconds, and cars that can refuel while
they’re stopped at a set of traffic lights.
The market for graphene batteries is predicted to reach $115
million by 2022, but it has huge potential beyond that as the technology
improves, and a number of companies have attracted significant interest in their
work.
These include Chinese company Dongxu
Optoelectronics, which announced a graphene supercapacitor with the
capacity of a typical laptop battery that could charge up in 15 minutes,
instead of a few hours. Barcelona-based startup Earthdas has used graphene to create
supercapacitors for electric bicycles and motorcycles, which can be charged 12
times faster than lithium-ion batteries. It plans to start selling them later
this year.
Many of this new breed of supercapacitors aren’t strictly
graphene, a term which technically refers only to the two dimensional sheets of
carbon. Although it already has a huge surface area, efforts are ongoing to
increase that by adapting graphene in different ways – poking tiny holes and
channels into it, or texturing it at the nanoscale level.
Estonian company SkeletonTech offer a range of
products that incorporate curved graphene, while Oxfordshire-based ZapGo use a
mixture of graphene and carbon nanotubes that resembles peaks and valleys
rather than just flat layers. Their first products – an electric scooter, and
jump-starting kit for cars – will hit the market later this year.
More
“.'Deserves' is an
impossible thing to decide. No one deserves anything. Thank God we don't get
what we deserve.”
Milton Friedman
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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