Wednesday 19 September 2018

Damn The Icebergs, Full Speed Ahead!


Baltic Dry Index. 1356 -01   Brent Crude 79.06

“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win."

President Trump.

Well maybe, maybe not, but does anyone on planet earth want or need a 20 year trade war?

But first this, who cares about icebergs ahead, full speed ahead. That this can only end badly is a given, just not when and how badly.

"a company for carrying out an undertaking of great advantage, but nobody to know what it is".

The South Sea Bubble 1720

Asia Stock Rally Extends to Second Day; Yuan Gains: Markets Wrap

By Adam Haigh
Updated on 19 September 2018, 06:01 GMT+1
Asian stocks extended a rally as investors wagered the world’s two-biggest economies have time to iron out trade differences in the wake of the latest salvos on tariffs. Treasuries held losses and the dollar remained steady.

Equities in Japan climbed to a three-month high and shares in Hong Kong and China rose. That built on a rally that began in Asia Tuesday and extended into the U.S. session despite the U.S.-China trade war deepening as Beijing announced retaliatory tariffs on $60 billion of U.S. goods and the Trump administration threatened duties on virtually all Chinese imports. The yuan nudged higher as China’s Premier Li Keqiang said he won’t let the currency devalue to stimulate exports, which also buoyed the Australian dollar.

The threat to global growth remains, though investors have now had months to take a view on the trade war and many assets are already pricing in rising tensions, helping to cushion the impact from the latest blows. The S&P 500 Index registered its biggest gain in almost three weeks, led by technology stocks, which had been hammered in Monday’s session. Treasuries held on to losses that pushed the yield on 10-year U.S. bonds above 3 percent.

“It’s more likely that there will be some negotiated resolution coming through in the near term,” George Schultze, founder and CEO of Schultze Asset Management in New York, told Bloomberg TV. “Cooler heads will eventually prevail because otherwise both sides are shooting themselves in the foot by taking these extreme stances and going back and forth with tit-for-tat tariffs.”
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Alibaba's Ma Warns U.S.-China Trade War Could Last 20 Years

·         Lulu Yilun Chen
Sep 18 2018, 10:12 AM Sep 18 2018, 12:17 PM
(Bloomberg) -- Billionaire Jack Ma sent out a grave warning regarding the trade war between the U.S. and China: It’s going to last longer and have a bigger impact than most people think.

China’s richest man said the dispute could last 20 years and persist beyond the presidency of Donald Trump, as the world’s two strongest economic powers battle for global supremacy. China needs to strengthen its economy to deal with the conflict and shift trade relations from the U.S. to regions like Southeast Asia and Africa, the chairman of Alibaba Group Holding Ltd. said during a speech at the company’s investor day conference in Hangzhou.

“Short term, business communities in China, U.S., Europe will all be in trouble,” Ma said, pacing a stage in an open white dress shirt and punctuating his remarks with forceful jabs. “This thing will last long. If you want a short-term solution, there is no solution.”

His comments came just hours after China vowed to retaliate against U.S. plans to levy tariffs on about $200 billion in Chinese goods. Ma said Alibaba will also be affected by the rising tensions, given its wholesale business allows American merchants to source products from China. But he also said the trauma will offer unprecedented opportunities for companies that can take advantage of them.

“We should not focus on this quarter or next quarter or next year’s profit. This is a huge opportunity,” he said. “If Alibaba cannot sustain and grow, no company in China can grow. I’m 100 percent confident in that.”

Ma’s remarks carry particular weight because he is an icon of Chinese innovation and has been seen as an ambassador to the U.S. Last year, he met with Trump and promised to create 1 million jobs in the U.S. through 2021.

But Ma, a week after he announced plans to hand over the chairman role to Chief Executive Officer Daniel Zhang, left no doubt Tuesday about his support for his own country. If the U.S. insists on levying tariffs on Chinese goods, then China should shift its business to the rest of the world, he said.

“When problems come, learn how to hide, learn how to train,” he said. “I believe Daniel and his team will have the wisdom to fight for the future.”
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China Vows to Retaliate After Trump Levies Fresh Tariff Round

By Enda Curran, Andrew Mayeda, and Jenny Leonard
17 September 2018, 23:39 GMT+1 Updated on 18 September 2018, 10:13 GMT+1
China vowed to retaliate after the U.S. said it will impose a 10 percent tariff on about $200 billion in Chinese goods next week and more than double the rate in 2019.

The statement from the Ministry of Commerce didn’t note specific actions, though China has previously said it would respond with levies on $60 billion worth of U.S. goods. Such a move risks deepening the standoff even further, with President Donald Trump saying in a statement on Monday the U.S. will immediately pursue additional tariffs on about $267 billion of Chinese imports if Beijing hits back.

"The U.S. side insisted on imposing tariffs, which has brought new uncertainty to the bilateral negotiations," the commerce ministry statement said. "We hope that the U.S. side will recognize the negative consequences of such acts and take convincing measures to correct them in a timely manner."

The foreign ministry said in a separate briefing that it would announce countermeasures at an appropriate time without elaborating.

----On a panel at meetings of the World Economic Forum in Tianjin, Fang Xinghai, vice chairman of China’s Securities Regulatory Commission, said China won’t be pressured by Trump’s trade tactics and talked up the economy’s strength. While he estimated a negative hit to China’s GDP growth of about 0.7 percentage points if the U.S. goes ahead with tariffs on all China exports to the U.S., Fang also said he’s confident that relations between both countries can normalize and said he hopes both sides can negotiate on an equal basis.

“It is good for the U.S. economy to have good relations with China and good for the rest of the world,” he said.

----The U.S. Chamber of Commerce, retailers, agricultural groups and some members of Trump’s own Republican party have spoken out against his tariff campaign. It’s also divided his advisers between China hawks like U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, a former Wall Street banker who is seeking a trade deal.

“It appears that the administration responded to some industry concerns, but for many American businesses and consumers this still represents a rapid acceleration of costs and much higher uncertainty,” said Rufus Yerxa, president of the National Foreign Trade Council. “Business hates uncertainty. They’d rather have an imperfect trading relationship than this much chaos.”
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September 18, 2018 / 5:26 PM

Commentary: As trade war escalates, China's US Treasury holdings back in focus

LONDON (Reuters) - One of the foundations upon which the economic and financial relationship between the United States and China over the past 15 years has been built is the assumption that Beijing won’t sell its vast holdings of U.S. Treasuries.

The financial damage to both countries, and the potential fallout beyond the monetary effect, would be so profound that it simply wouldn’t happen, so the theory goes. Disregarding this would be the economic superpower equivalent of the Cold War’s ‘mutually assured destruction’ doctrine.

But with trade tensions between the two countries escalating dramatically, it may no longer be a total long shot.

It’s a scenario being contemplated now more than at any point in recent years, certainly since August 2015, when fears of a Chinese downturn spooked global markets and prompted a mini currency devaluation from Beijing of around 2.5 percent. 

Google news searches in the United States for “China Treasuries” and Google web searches in the United States for “China selling Treasuries” are now both at the highest since August 2015.

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China's Grip on Rare Earths May Have Proven Too Strong for Trump

By Martin Ritchie
The U.S. appears to have shelved its plan to levy tariffs on a critical collection of minerals used in everything from hybrid vehicles to electronic gadgets and military hardware.

Rare earths including scandium and yttrium are absent from the latest list of about $200 billion of Chinese goods on which the Trump administration plans to impost duties from next week. They were among a number of items scrubbed from the preliminary target list released in July along with car seats and Bluetooth devices.

Their inclusion in the first place was odd. China produced more than 80 percent of the world’s rare-earth metals and compounds in 2017, according to the U.S. Geological Survey. It has about 37 percent of global reserves and supplied 78 percent of America’s imports.

Other niche but important materials were also missing from the revised list. These included graphite flakes, as well as some forms of silicon and magnesium.

It’s not just the Trump administration that seems to be having second thoughts about making imports of strategically critical commodities more expensive. Beijing dropped its plan to impose levies on imports of U.S. crude oil, an increasingly important source of supply to the Asian nation.

China’s grip on rare-earths supply is so strong that the U.S. joined with other nations earlier this decade in a World Trade Organization case to force the nation to export more of the materials, not less, after prices spiked amid a global shortage. The WTO ruled in favor of the America, while prices eventually slumped as manufacturers turned to alternatives.
https://www.bloomberg.com/news/articles/2018-09-18/china-s-grip-on-rare-earths-may-have-proven-too-strong-for-trump

In other news, Tesla is now attracting the wrong kind of official attention. With massive debts to roll over, a gigantic cash burn, law suits, and now this, has Tesla long for continued existence?

Tesla Is Facing U.S. Criminal Probe Over Elon Musk Statements

By Tom Schoenberg and Matt Robinson
Updated on 18 September 2018, 18:15 GMT+1
Tesla Inc. is under investigation by the Justice Department over public statements made by the company and Chief Executive Officer Elon Musk, according to two people familiar with the matter.

The criminal probe is running alongside a previously reported civil inquiry by securities regulators.
Federal prosecutors opened a fraud investigation after Musk tweeted last month that he was
contemplating taking Tesla private and had “funding secured” for the deal, said the people, who were granted anonymity to discuss a confidential criminal probe. The tweet initially sent the company’s shares higher.

Tesla confirmed it has been contacted by the Justice Department.

“Last month, following Elon’s announcement that he was considering taking the company private, Tesla received a voluntary request for documents from the DOJ and has been cooperative in responding to it,” the company said in a statement released Tuesday following Bloomberg’s report of the investigation. “We have not received a subpoena, a request for testimony, or any other formal process. We respect the DOJ’s desire to get information about this and believe that the matter should be quickly resolved as they review the information they have received.”

The investigation by the U.S. attorney’s office in the Northern District of California follows a subpoena issued by the Securities and Exchange Commission seeking information from the electric-car maker about Musk’s plans to go private, which he has since abandoned.

The criminal inquiry is in its early stages, one of the people familiar with the matter said. Justice Department probes, like the civil inquiries undertaken by the SEC, can take months. They sometimes end with prosecutors deciding against bringing any charges.

Tesla shares reversed gains and dropped as much as 4.4 percent to $282. The stock dropped 2.5 percent to $287.60 as of 11:45 a.m. in New York and are down about 7.7 percent this year.
https://www.bloomberg.com/news/articles/2018-09-18/tesla-is-said-to-face-u-s-criminal-probe-over-musk-statements

"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."

William F. Rickenbacker

Crooks and Scoundrels Corner

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

Today, unicorn ranching again. Guess what, unicorns are vulnerable to manipulation, no kidding. The banksters and dodgy futures exchanges, (what used to be called terminal exchanges in GB when GB was still proud to be GB,) will be right along to investigate and get involved.

Cryptocurrency Exchanges Are Vulnerable to Manipulation, Report Finds

New York attorney general’s office concludes many cryptocurrency exchanges lack safeguards to ensure ‘fairness, integrity and security’

A number of cryptocurrency exchanges lack basic consumer protections and are vulnerable to exploitation by market manipulators, the New York attorney general’s office said in a report Tuesday.

The report, the result of a monthslong investigation, found that many exchanges lack appropriate safeguards, putting consumers at risk. Additionally, the attorney general’s office referred three exchanges to the New York Department of Financial Services for possibly operating unlawfully in New York.

“Many virtual currency platforms lack the necessary policies and procedures to ensure the fairness, integrity, and security of their exchanges,” state Attorney General Barbara Underwood said in a statement.

Former New York Attorney General Eric Schneiderman started the Virtual Markets Integrity Initiative program in April and requested information from a number of exchanges specializing in bitcoin and other cryptocurrencies. Ten exchanges complied with requests for information and four did not, arguing they didn’t operate in the state. The attorney general’s office, however, concluded that three of those exchanges—Kraken, Binance, and Gate.io—allow trading from New York customers.

Those three exchanges couldn’t immediately be reached for comment.

The cryptocurrency bitcoin has a problem as old as money itself​—theft​. And that's giving rise to a new profession: bitcoin detectives like Kim Nilsson, a victim of the massive Mt. Gox exchange hack.

“The attorney general’s report underscores the value of strong state regulation and consumer protections,” said Maria Vullo, the superintendent of the state Department of Financial Services. “We look forward to reviewing the information and referrals provided by the attorney general.”

Bitcoin was launched in 2009 as a form of electronic cash that could be exchanged without government or banking oversight. In the years since, a global market has grown up around it and the hundreds of other cryptocurrencies that have launched in its wake.

The question of market integrity has become one of the key issues surrounding the development of cryptocurrencies. The U.S. Commodity Futures Trading Commission is investigating potential market manipulation, as is the U.S. Justice Department. The Securities and Exchange Commission has consistently rejected applications for bitcoin-based exchange-traded funds, concluding there isn’t enough transparency to be confident that prices aren’t being manipulated.

The attorney general’s report draws three main conclusions that validate those concerns. The report concluded that many cryptocurrency platforms haven’t taken serious steps to monitor and stop manipulative trading, and few monitor or restrict the use of trading bots.

“Most platforms seem to cater to professional, automated traders, with many venues offering special pricing and other features to such traders, leaving retail customers at a disadvantage,” the report said.

The report also said there are “pervasive” conflicts of interest among the exchanges. “Virtual asset trading platforms often engage in several lines of business that would be restricted or carefully monitored in a traditional trading environment,” the report said.

Some platforms, it said, operate as exchanges, broker-dealers, money transmitters, proprietary traders buying and selling for their own accounts, owners of large cryptocurrency holdings and even in some cases as issuers of cryptocurrencies. Some exchanges also allow their own employees to hold and trade on their own or competing platforms.

Lastly, protections for consumer funds, the report said, “are often limited or illusory.” There are no standard methods for auditing virtual assets, and platforms lack consistent and transparent approaches to doing so, the report said. “That makes it difficult or impossible to confirm whether platforms are responsibly holding their customers’ assets.”
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"Gold bears the confidence of the world's millions, who value it far above the promises of politicians, far above the unbacked paper issued by governments as money substitutes. It has been that way through all recorded history. There is no reason to believe it will lose the confidence of people in the future."

Oakley R. Bramble

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?

Graphene helps protect photocathodes for physics experiments

Date: September 17, 2018

Source: DOE/Argonne National Laboratory

Summary: Researchers have used thin sheets of graphene to prevent photocathode materials from interacting with air, which increases their lifetimes. Photocathodes are used to convert light to electricity in accelerators and other physics experiments.

Transforming light into electricity is no mean feat. Some devices, like solar cells, use a closed circuit to generate an electric current from incoming light. But another class of materials, called photocathodes, generate large quantities of free electrons that can be used for state-of-the-art science.
Photocathodes have one significant limitation, which is that they degrade when exposed to air. To prevent this, scientists at the U.S. Department of Energy's (DOE) Argonne, Brookhaven, and Los Alamos national laboratories have developed a way to wrap photocathodes up in a protective coat of atomically thin graphene, extending their lifetimes.

"The thin layer [of graphene] we use provides insulation from air without hampering charge mobility or quantum efficiency." -- Junqi Xie, Argonne physicist

Photocathodes work by converting photons of light into electrons through a process known as the photoelectric effect -- which essentially involves the ejection of electrons from the surface of a material hit with light of a sufficient frequency. The large quantities of electrons generated by photocathodes can be used in accelerator systems that produce intense electron beams, or in photodetector systems for high-energy physics experiments that operate in low-light environments in which every photon counts.

The relative success of a photocathode material hinges on two distinct qualities: its quantum efficiency and its longevity. "Quantum efficiency refers to the ratio of emitted electrons to incoming photons," said Argonne physicist Junqi Xie.

The higher the quantum efficiency of a given material, the more electrons it can generate.

In the study, Xie and his colleagues looked at a material called potassium cesium antimonide, which has one of the highest quantum efficiencies of any known photocathode in the visible range of the spectrum. But even though the quantum efficiency of the material is high, potassium cesium antimonide photocathodes are susceptible to breaking down when exposed to even very small amounts of air.

According to Xie, there are two ways of making sure the photocathode doesn't interact with air. The first is to operate it in a vacuum, which isn't always feasible. The second is to encapsulate the photocathode with a thin film of material.

To successfully insulate a photocathode, the researchers needed to identify a material that could form layers only a few atoms thick and that was electrically conductive. Graphene, a two-dimensional material made of carbon, satisfied both of these requirements.

"For graphene, you can just use two or three atomic layers; plus, it's optically transparent and has high charge mobility," Xie said. "The thin layer we use provides insulation from air without hampering charge mobility or quantum efficiency."
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"The paper standard is self-destructive."

Hans F. Sennholz (and that was before President Trump.)

The monthly Coppock Indicators finished August.

DJIA: 25,965 +207 Down. NASDAQ: 8,110 +265 Up. SP500: 2,902 +168 Up.
All three slow indicators moved down in March, but the S&P and  NASDAQ have now turned up.  September will be critical for confirmation of this change.

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