Baltic Dry Index. 1413 +17 Brent Crude 79.85
Oil prices could rise to $100 a barrel by 2019 says Trafigura
September 24, 2018 / 5:52 AM
SINGAPORE (Reuters) - Oil prices could rise to $90 per barrel by
Christmas and to $100 (£76) per barrel by the New Year, Trafigura’s Co-Head of
Oil Trading Ben Luckock told a conference on Monday.
This would be an increase from the current nearly $80 a barrel for Brent
crude oil prices due to robust global oil demand, he added.
Asian shares wobble on fear of long U.S.-China trade war; oil rallies
September 24, 2018 / 1:22 AM
Oil prices jumped after top producers ruled out boosting crude output.
U.S. stock futures were a touch weaker while MSCI’s broadest index of
Asia-Pacific shares outside Japan fell 0.8 percent. Hong Kong was the worst
performer with its Hang Seng index down 1.3 percent.
Most of Monday’s limited action was in currencies, as share markets in
major Asian centers Japan, China and South Korea were closed for a holiday. But
with domestic trading in respective countries shut, even forex trading was
light.
China also canceled mid-level trade talks with the United States, as
well as a proposed visit to Washington by Vice Premier Liu He originally
scheduled for this week, the Wall Street Journal reported.
The United States, meanwhile, does not have a date for further talks.
The intensifying dispute between the world’s two biggest economies has
spooked financial markets worried about the fallout on global growth.
The Japanese yen, which sees fund inflows during times of crisis, held
above a recent two-month trough at 112.6 per dollar while the trade-sensitive
Australian dollar slipped from a 3-1/2 week top to $0.7268.
“Both the U.S. and China are digging in, and increasingly the subtext
seems to be as much about advancing a trade ideology as it is about rescinding
trade tariffs,” said John Bilton, head of global multi-asset strategy at
JPMorgan Asset Management.
Asian firms shuffle production around the region as China tariffs hit
September 23, 2018 / 7:10 AM
The company representatives and other sources spoke on condition of
anonymity because of the sensitivity of the issue.
The quick reactions to the U.S. tariffs are possible because many large
manufacturers have facilities in multiple countries and can move at least small
amounts of production without building new factories. Some governments, notably
in Taiwan and Thailand, are actively encouraging companies to move work from
China.
The United States imposed 25 percent duties covering $50 billion of
Chinese-made goods in July, and a second round of 10 percent tariffs covering
another $200 billion of Chinese exports will come into effect next week. The
latter rate will jump to 25 percent at the end of the year, and Trump has
threatened a third round of tariffs on $267 billion of goods, which would bring
all of China’s exports to the United States into the tariff regime.
The tariffs threaten China’s status as a low-cost production base that,
along with the appeal of the fast-growing China market, drew many companies to
build factories and supply chains in the country over the past several decades.
At SK Hynix, which makes computer memory chips, work is under way to
move production of certain chip modules back to South Korea from China. Like
its U.S. rival Micron Technology, which is also moving some memory-chip work
from China to other Asian locations, SK Hynix does some of its packaging and testing
of chips in China, with the chips themselves mostly made elsewhere.
“There are a few DRAM module products made in China that are exported to
the United States,” said a source with direct knowledge of the situation,
referring to widely used dynamic random-access memory chips. “SK Hynix is
planning on bringing those DRAM module products to South Korea to avoid the
tariff hit.”
Home modems, routers hit by U.S. China tariffs as 'smart' tech goods escape
September 24, 2018 / 6:02 AM
Consumer tech industry officials and the U.S. Customs and Border Protection agency say they expect billions of dollars worth of these products, including those designed for home use, will be subject to the 10 percent tariffs activated on Monday.
The move will effectively create a two-tiered tariff structure for consumer internet, with many products, such as Fitbit (FIT.N) fitness trackers, Apple Inc’s (AAPL.O) watch and Amazon.com Inc’s (AMZN.O) Echo smart speaker being favoured over routers and internet gateways from Arris International (ARRS.O), Netgear (NTGR.O), D-Link (2332.TW) and others.
“We’re operating under the assumption that the tens of millions of devices that deliver high-speed internet into consumers’ homes will be impacted by these tariffs,” said Jim Brennan, Arris’ senior vice president of supply chain, quality and operations.
Trump’s trade war on Chinese goods may hit the toy industry hard
By Alessandra
Malito Published: Sept 23, 2018 9:13
a.m. ET
This holiday season, parents may want to throw a few extra toys in their
carts. The U.S. government’s recently announced tariffs on Chinese goods spell trouble for the toy business — and shoppers. The industry might be prepared for this coming winter, because products are mostly finished and prices are set, but next year could be more expensive for manufacturers, retailers and consumers, toy industry experts told MarketWatch.
Individual toys are not on the list of products affected by the tariffs President Trump announced Monday, but some raw materials and chemicals are — including lithium batteries and the chemicals that make Silly Putty. As a result, toy prices next holiday season will be higher, said Jackie Breyer, editor-in-chief of the Toy Insider, a toy review site.
On Sept. 24, $200 billion in Chinese imports will face a 10% tariff, and on Jan. 1, 2019, the rate will jump to 25%. President Donald Trump said he will issue a third round of tariffs, which would affect $267 billion of additional imports, if China takes “retaliatory action against our farmers or other industries,” according to a White House statement. The threats are the latest move in an escalating trade war between the U.S. and China.
Another round of tariffs would probably include finished toys, said Richard Gottlieb, chief executive officer of Global Toy Experts, a consultancy for the toy industry.
Other items sold in children’s stores, including furniture and bicycles, are already on the list, said Rebecca Mond, vice president of federal government affairs at the Toy Association. “Overall, these actions have been very harmful for the toy industry,” she said. And even though prices are set for this holiday season, higher costs could get passed onto consumers, Mond added. “It will depend on the company and how they can absorb these costs,” she said. “We are playing the wait and see game.”
High chairs, booster seats, bouncers, infant walkers, cradles and play yards were on an earlier list of items affected by tariffs, but most of those items were exempted from tariffs after manufacturers lobbied the U.S. Trade Representative. “With China supplying the vast majority of these juvenile products and with no alternative manufacturing capacity readily available elsewhere, tariffs on these juvenile products will result in higher prices and fewer choices for U.S. consumers,” wrote Corinne Murat, director of government affairs at toy manufacturer Mattel MAT, -0.48% in a public letter to the Office of the United States Trade Representative (USTR) in late August.
Shadow Banker in India Misses Three Debt Payments Due Friday
By Saloni Shukla
22 September 2018, 02:36 GMT+1
Infrastructure
Leasing & Financial Services Ltd., an Indian shadow banker that
defaulted on its commercial paper obligation earlier this year, missed payments
again on Friday.The company, which helped fund India’s longest tunnel, defaulted on three non-convertible notes series, it said in a filing to the stock exchange, without disclosing the value of the debt. It was also unable to meet an obligation for a letter of credit payable to IDBI Bank Ltd., the company said in a separate filing.
IL&FS’s outstanding debentures and commercial paper accounted for 1 percent and 2 percent, respectively, of India’s domestic corporate debt market as of March 31, according to Moody’s Investor Services. Its bank loans made up about 0.5 percent to 0.7 percent of banking system loans, Moody’s said.
Read more about why IL&FS’ defaults are worrying investors
The beleaguered company first defaulted on commercial paper, then on short-term borrowings known as inter-corporate deposits. It has also failed to pay 4.5 billion rupees ($62 million) in ICDs to government-backed lender Small Industries Development Bank of India, people familiar with the matter said earlier this month.
Separately, the company’s unit IL&FS Financial Services Ltd. Managing Director Ramesh Bawa resigned, it said in a filing, without giving details.
I may say, the answer I'm
giving is not my answer, it was the answer that was given by Adam Smith...in
1776 in “The Wealth of Nations.” From that time to this, hardly any
professional economist has believed in tariffs or protection or anything but
free trade. But the answer is very straightforward.
Let us suppose for a moment
that the Japanese flood us with steel – that will reduce employment in the
American steel industry, no doubt. However, it will increase employment
elsewhere in America. We will pay for that steel with dollars. What will the
Japanese do with the dollars they get for the steel?
...they're gonna use those
dollars to buy goods and services. They're gonna spend it. In the process of
spending them, they may spend them directly in the United States, and that
directly provides employment in the United States. They may spend them in
Brazil or in Germany or in China or anywhere else – but whoever gets them, in
turn, is gonna spend them. So the dollars that we spend for the steel will find
their way back to the U.S. as demand for U.S. goods and services.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Yes those bent central
banksters again. How they became trapped in funding US profligacy.
Commentary: Central banks straightjacketed by sheer scale of U.S. bond holdings
September 21, 2018 / 12:47 PM
LONDON
(Reuters) - Few have flexed their muscles in the U.S. bond market over the last
15 years quite like foreign central banks, who have played a major part in the
bull run by recycling their trade surpluses and building up trillions of
dollars of currency reserves.
But that was when bonds were rising. They may be powerless to fully
protect their vast holdings of U.S. Treasuries when the market turns and prices
start falling, a long process that many observers say we are in the early
stages of right now.
A fall in the price of U.S. bonds will wipe tens or even hundreds of
billions off the value of central banks’ holdings, but trying to get out and sell
early is dangerous because that would almost certainly accelerate the decline.
These institutions aren’t short-term traders, they’re long-term
investors who don’t react in a knee-jerk fashion to market moves. When it comes
to their FX reserves, stability and capital preservation are paramount.
Yet the list of reasons why they might want to loosen their ties to the
U.S. dollar, bonds and financial ecosystem in general is growing. Especially if
the current Treasuries sell-off proves to be the start of a proper reversal.
The focus is on China, which holds $1.2 trillion of U.S. Treasuries. But
there are smaller holders - “free riders”, as economist Nouriel Roubini once
dubbed them - who collectively pack a powerful punch.
Algeria
and Turkey, for example, each hold around $100 bln of FX reserves, and Iran has
over $130 bln. Many smaller holders will have their Treasuries in custody
centres such as London or Luxembourg.
China selling, or just not buying more U.S. bonds, would be a
significant development, pushing up U.S. borrowing costs and potentially
denting U.S. growth. Similar behaviour from Roubini’s free riders could have a
similar impact too.
You can see why they might consider it. Many could join China and get
sucked into trade disputes with Washington, some may want to reduce their
dependency on the dollar, and others might want to distance themselves from an
increasingly hostile and unpredictable U.S. administration.
But they will be mindful of the damage that could do to their stash of
Treasuries, borrowing costs, and GDP growth.
“They are limited in that any damage they do to the U.S. will rebound
both on themselves and on other countries. So a bit of an own goal,” said
Steven Englander at Standard Chartered.
The stakes are huge. Global foreign exchange reserves total $11.59
trillion. Most of that is held by emerging markets, including oil producers.
The U.S. Treasury market is a $15.7 trillion market and foreign central
banks hold $4 trillion of Treasury securities, $3.67 trillion of them bonds.
The true figure is probably even higher once sovereign wealth funds are
factored in.
More
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 new way to launch rockets without fuel?
Conventional rockets – with their onboard fuel – are expensive and dangerous. A new “quantized inertia” concept might make rocket launches cheaper and safer. The concept has just received $1.3 million in new funding.Rockets are powerful machines that can launch satellites into orbit and send spacecraft to the outer reaches of the solar system. They do have their limits, however; conventional chemical rockets are expensive to use because of the propellant they need. But what if rockets no longer needed fuel for propulsion? The amazing theory of quantized inertia (QI) proposes just that scenario. The concept is relatively simple. You just need to convert Unruh radiation – a theorized form of quantum particles – into thrust. This week (September 17, 2018), the University of Plymouth in the U.K. announced that one of its researchers has received U.S. government funding to explore this idea.
The controversial but fascinating proposal comes from physicist Mike McCulloch. He first proposed the idea way back in 2007, but now the Defense Advanced Research Projects Agency (DARPA) – an agency of the U.S. Department of Defense – is getting involved, granting $1.3 million towards a four-year study into the concept. The research is being funded through DARPA’s Nascent Light-Matter Interactions program, whose stated purpose is to improve fundamental understanding of how to control the interaction of light and engineered materials.
McCulloch’s statement from University of Plymouth said that, if a new kind of thruster could be developed that only required electrical power, it could make rockets both cheaper and safer to use.
For this work, McCulloch will collaborate with experimental scientists
from the Technische Universität Dresden in Germany and the University of Alcala
in Spain.
The first major step is to develop a fully predictive theoretical
model of how matter interacts with Unruh radiation using the quantized
inertia model. This will provide scientists with a new predictive tool for
light-matter interactions. According to McCulloch:
Ultimately, what this could mean is you would need no propellant to
launch a satellite. But it would also mean you only need a source of electrical
power, for example solar power, to move any craft once it is in space. It has
the potential to make interplanetary travel much easier, and interstellar
travel possible.
So just what is QI? Basically, it predicts that objects can be pushed forward by differences in the intensity of Unruh radiation in space, similar to how a ship can be pushed towards a dock because there are more waves hitting it from the seaward side. If an object was accelerated enough – like a spinning disk or even light bouncing between mirrors – then the Unruh waves it encounters could be affected by a shield. This means that if a damper were to be placed above the object, then it should, in theory, produce upward thrust. McColluch thinks this could revolutionize many different kinds of transportation and propulsion on Earth, not just rockets:
I believe QI could be a real game changer for space science. I have always thought it could be used to convert light into thrust, but it also suggests ways to enhance that thrust. It is hugely exciting to now have the opportunity to test it.
By the way, QI has applications in pure science, too. It’s been used to predict galaxy rotation without the involvement of dark matter.
More
http://earthsky.org/space/rocket-thrust-quantized-inertia-qi-darpa-funding?utm_source=EarthSky+News&utm_campaign=5630b3027e-EMAIL_CAMPAIGN_2018_02_02_COPY_01&utm_medium=email&utm_term=0_c643945d79-5630b3027e-394244537
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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