Baltic Dry Index. 1579 +64 Brent Crude 81.44
"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice."Henry Hazlitt
This morning, if it
wasn’t for bad news there would be no news at all. Today we are truly spoilt
for choice. From President Trump blasting China and the Saudis, to China and
the Saudis responding, with the Saudis hinting at using the oil weapon. President Trump has now picked a fight with
the Saudis and Iran at the same time!
It will be
interesting to see how this plays out in the weeks ahead, but already there is
fear of sharply higher oil prices. At best, Saudi Arabia simply doesn’t replace
Iranian oil, 100 dollar crude probably. At worst they play the oil card rather
like the October 1973 oil crisis, what is it about October and crash season? That
probably gets us to $200 oil, a global slump then crashing the price of oil,
but the damage is done.
The other bad news this
morning seems trivial in comparison. The voters in Bavaria thumped Chancellor
Merkel’s coalition parties, leaving her already weak government looking
terminal. Yet another round of Brexit talks at the weekend failed, leaving this
week’s EU “Great Leaders” summit largely irrelevant, but Brexit becomes
largely irrelevant itself, if we bungle ourselves into a world of 200 dollar
oil.
Below, bad news
Monday.
“This
sucker could go down.”
President
George W. Bush. September 2008.
Trump Threatens Another Round of China Tariffs
By Jennifer Epstein
Updated on 15 October 2018, 01:00 GMT+1
President Donald Trump threatened to impose another round of tariffs on
China and warned that Chinese meddling in U.S. politics is a “bigger problem”
than Russian involvement in the 2016 election.
Asked in an interview with CBS’s “60 Minutes” whether he wants to push
China’s economy into a depression, Trump said “no” before comparing the
country’s stock-market losses since the tariffs first launched to those in
1929, the start of the Great Depression in the U.S.
“I want them to negotiate a fair deal with us. I want them to open their
markets like our markets are open,” Trump said in the interview that aired
Sunday, while adding that more tariffs “might” be in the mix. So far, the U.S.
has imposed three rounds of tariffs on Chinese imports totaling $250 billion,
prompting China to retaliate against U.S. products.
The
president previously has threatened to hit virtually all Chinese imports with
duties.
More
China Didn’t Want a U.S. Trade War But Will Respond, Envoy Says
By Ryan Beene and Christopher Condon
Updated on 14 October 2018, 17:56 GMT+1
China’s ambassador to the U.S. said Beijing has no choice but to respond
to what he described as a trade war started by the U.S.
“We never wanted a trade war, but if somebody started a trade war
against us, we have to respond and defend our own interests,” Ambassador Cui
Tiankai said on “Fox News Sunday” in a rare U.S. television appearance.
His
comments come amid rising political and economic tensions between the world’s
two largest economies, and as international bodies and other countries warned
that global growth will suffer if the dispute isn’t resolved.
Pence ramped up the rhetoric in a speech Oct. 4, saying Beijing has created a “a whole-of-government approach” to sway American public opinion, including spies, tariffs, coercive measures and a propaganda campaign.
His comments were some of the most critical about China by a high-ranking U.S. official in recent memory. Secretary of State Michael Pompeo got a lecture when he visited Beijing days later, about U.S. actions that were termed “completely out of line.”
The tough words followed months of increases tit-for-tat tariffs imposed by Washington and Beijing that have ballooned to cover hundreds of billions of dollars in bilateral trade.
More
Asian shares resume descent, oil prices up on Saudi tensions
October 15, 2018 / 1:44 AM
TOKYO (Reuters) - Asian shares slipped on Monday as worries
over Sino-U.S. trade disputes, a possible slowdown in the Chinese economy and
higher U.S. borrowing costs tempered optimism despite a rebound in global
equities late last week.
Not helping the mood, oil prices jumped and Saudi Arabian shares tumbled on rising diplomatic tensions between Riyadh and the West after the monarchy warned against threats to punish it over disappearance of a journalist critical of its policies.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.8 percent while Shanghai shares .SSEC were down 0.4 percent in early trade.
Japan's Nikkei .N225 dropped 1.4 percent, with carmaker shares .ITEQP.T hitting 13-month lows after Washington said it would seek a provision about currency manipulation in future trade deals with Japan.
MSCI’s broadest gauge of the world’s stock markets .MIWD00000PUS was off
0.2 percent after a sizable 3.87 percent decline last week - its biggest since
March - to a one-year nadir.
The market shakeout has been blamed on a series of factors, including
worries about the impact of a U.S.-China trade war, a spike in U.S. bond yields
this week and caution ahead of earnings season.
---- Fujito said the trade war is starting to take a toll on
growth in China, noting that data released later on Friday showed Chinese auto
sales posted the biggest drop in seven years.
Over the weekend, China central bank governor Yi Gang said he still sees
plenty of room for adjustment in interest rates and the reserve requirement
ratio (RRR), as downside risks from trade tensions with the United States
remain significant.
Also starting to attract wider attention, Saudi Arabia doubled down on
pressure from the West on the disappearance of Jamal Khashoggi, a U.S. resident
and Washington Post columnist, after he entered the Saudi consulate in Istanbul
on Oct. 2.
U.S. President Donald Trump has threatened “severe punishment” if it
turns out Khashoggi was killed while many company executives have cancelled
their plans to attend a Saudi investor conference later this month.
Investors suspect the latest development could undermine the leadership
of Crown Prince Mohammed bin Salman and has the risk of eventually
destabilising the oil-rich kingdom.
Saudi Arabia’s shares .TASI plunged as much as 7 percent on Sunday, and
closed down 3.5 percent at their lowest levels since early January.
Shares
in Dubai, a regional economic hub, slid 1.5 percent .DFMGI to a low last seen
in January 2006.
---- “Oil prices could rise to $100 on worries about Saudi Arabia,” said Kazuhiko Fuji, senior fellow at Research Institute of Economy, Trade and Industry, a think tank affiliated with the Japanese government.
“People had thought the Saudis will make up for fall in Iran’s output.
If they are starting to use oil as their weapon, that will be a whole new
chapter,” he said.
Higher oil prices could boost inflation around the world and spark rises
in U.S. borrowing costs, which are also seen hurting weak borrowers, especially
those in emerging markets.
More
Saudi Arabia says will retaliate against any sanctions over Khashoggi case
October 14, 2018 / 1:29 PM
DUBAI/WASHINGTON (Reuters) -
Saudi Arabia on Sunday warned against threats to punish it over last week’s
disappearance of journalist Jamal Khashoggi, as European leaders piled on
pressure and two more U.S. executives scrapped plans to attend a Saudi investor
conference.
Khashoggi, a U.S. resident and Washington Post columnist critical of
Riyadh’s policies, disappeared on Oct. 2 after entering the Saudi consulate in
Istanbul. Turkey believes he was murdered and his body removed. Saudi Arabia
has denied that.
U.S. President Donald Trump has threatened “severe punishment” if it
turns out Khashoggi was killed in the consulate, though he said Washington
would be “punishing” itself if it halted military sales to Riyadh.
“The Kingdom affirms its total rejection of any threats and attempts to
undermine it, whether by threatening to impose economic sanctions, using
political pressures, or repeating false accusations,” the official Saudi Press
Agency (SPA) quoted an unnamed official as saying.
“The Kingdom also affirms that if it receives any action, it will
respond with greater action, and that the Kingdom’s economy has an influential
and vital role in the global economy,” the official added, without elaborating.
The Saudi Embassy in Washington later tweeted what it called a
clarification, thanking countries including the United States “for refraining
from jumping to conclusions” over the case.
---- In a column published just after the SPA statement, Saudi-owned Al Arabiya channel’s General Manager Turki Aldakhil warned that imposing sanctions on the world’s largest oil exporter could spark global economic disaster.
“It would lead to Saudi Arabia’s failure to commit to producing 7.5
million barrels. If the price of oil reaching $80 angered President Trump, no
one should rule out the price jumping to $100, or $200, or even double that
figure,” he wrote.
---- “If they lured this man into that consulate, they went medieval on him, and he was killed and he was chopped up and they sent a death crew down there to kill him and do all of this, that would be an outrage,” Florida Senator Marco Rubio told CNN’s State of the Union.
“Just because they are an ally in an important mission, which is
containing Iranian expansion in the region, cannot allow us to overlook or walk
away from that.”
---- Senators have triggered a provision of the Global Magnitsky Human Rights Accountability Act requiring the president to determine whether a foreign person is responsible for a gross human rights violation. The act has in the past imposed visa bans and asset freezes on Russian officials.
Anti-Saudi sentiment in the U.S. Congress could conceivably raise
pressure to pass the No Oil Producing and Exporting Cartels Act, which would
end sovereign immunity shielding OPEC members from U.S. legal action.
More
Bavaria election humbles Merkel allies, raising tensions in Berlin
October 14, 2018 / 12:07 AM / Updated 6
hours ago
BERLIN/MUNICH (Reuters) - Chancellor
Angela Merkel’s Bavarian allies suffered their worst election result since 1950
on Sunday, bleeding votes to the far-right and the ecologist Greens in a
setback that raised tensions within Germany’s crisis-prone national government.
More
Brexit talks stall before midweek EU summit
October 14, 2018 / 12:53 PM / Updated 6
hours ago
BRUSSELS/LONDON (Reuters) - The stubborn
problem of Britain’s land border with Ireland thwarted a drive to clinch a
Brexit deal before a European Union summit this week, as negotiators admitted
defeat after marathon talks and pressed pause for the coming days.
More
Remember
that there is nothing stable in human affairs; therefore avoid undue elation in
prosperity, or undue depression in adversity.
Socrates
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, the New York Times no friend of President
Trump, gets its readers hopes up about impeaching President Trump after the
midterm elections. I would take the other side of that bet as it’s hard to see
any impeachment attempt getting sufficient votes in the US Senate.
"The world urgently needs to create a
diversified currency and financial system and fair and just financial order
that is not dependent on the United States."
Shi
Jianxun. China People’s Daily. September 16, 2008
Is Trump on a Collision Course With Impeachment?
Democrats are largely ducking the topic on the campaign trail,
but few people in Washington doubt that it will be on the table if they win the
House.
Oct. 13, 2018
COUNCIL BLUFFS, Iowa — President Trump was energized.
Fresh from the fight to confirm Brett Kavanaugh, he was firing up thousands of
supporters at a rally by complaining about how Democrats had treated his
nominee and how they may yet try to remove Justice Kavanaugh from the bench.
“They’re saying, ‘We’ll impeach him!’” Mr. Trump practically bellowed into the microphone here last
week, his voice brimming with incredulity and righteous outrage. “Impeach him
for what? For what?” The crowd booed on cue.
“Besides that,” Mr. Trump then added slyly, “I have to go first, right?”
The crowd laughed.
Perhaps only in the Trump era would the prospect of being impeached
become a punch line for the president of the United States. But after almost
two years of living under the cloud of a possible impeachment, it may soon
cease to be a laughing matter. While Democrats are largely ducking the topic on
the campaign trail, few in Washington doubt that impeachment will be on the
table if they win the House on Nov. 6.
If that happens, anyone who thought the battle over Justice Kavanaugh’s
confirmation was ugly and divisive should buckle up, because history suggests
it would provide only a small taste of what lies ahead. The impeachment drives
against Andrew Johnson, Richard Nixon and Bill Clinton tore at the nation’s
fabric, but an effort to remove Mr. Trump could lead to an even more incendiary
conflict, thanks to the advent of social media and Mr. Trump’s brand of
blowtorch politics.
----Rather than being
apprehensive about the threat, Mr. Trump, who loves a good brawl, seems almost
eager for Democrats to bring it on. He has begun making his case in recent
months without waiting for the election. In August, he warned that if he is
impeached, “the market would crash” and “everybody would be very poor.” In
September, he told supporters it would be their fault if he is impeached
because it would mean “you didn’t go out to vote.”
And in Iowa, he laid out what would undoubtedly be his public argument.
“You get impeached for having created the greatest economy in the history of
our country,” he said. “The best job numbers in the history of our country,
just about, right? The greatest trade deals, which we’ve just finished, in the
history of our country.”
Putting aside the hyperbole about the economy and jobs numbers, which
are both strong but hardly the best ever, Mr. Trump has a certain advantage
going into any impeachment fight. The history of presidential impeachments
shows that they are started by the opposition party but are never successful
unless the president’s party buys into the effort.
More
Russia
will not soon become, if it ever becomes, a second copy of the United States or
England - where liberal values have deep historic roots.
Vladimir
Putin.
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?
Researchers quickly harvest 2-D materials, bringing them closer to commercialization
Efficient method for making single-atom-thick, wafer-scale materials opens up opportunities in flexible electronics
Date:
October 12, 2018
Source:
Massachusetts Institute of Technology
Summary:
Researchers have developed a technique to harvest 2-inch diameter wafers of 2-D
material within just a few minutes. They can then be stacked together to form
an electronic device within an hour.
Since the 2003 discovery of the single-atom-thick carbon material known
as graphene, there has been significant interest in other types of 2-D
materials as well.
These materials could be stacked together like Lego bricks to form a
range of devices with different functions, including operating as
semiconductors. In this way, they could be used to create ultra-thin, flexible,
transparent and wearable electronic devices.
However, separating a bulk crystal material into 2-D flakes for use in
electronics has proven difficult to do on a commercial scale.
The existing process, in which individual flakes are split off from the
bulk crystals by repeatedly stamping the crystals onto an adhesive tape, is
unreliable and time-consuming, requiring many hours to harvest enough material
and form a device.
Now researchers in the Department of Mechanical Engineering at MIT have
developed a technique to harvest 2-inch diameter wafers of 2-D material within
just a few minutes. They can then be stacked together to form an electronic
device within an hour.
The technique, which they describe in a paper published in the journal Science,
could open up the possibility of commercializing electronic devices based on a
variety of 2-D materials, according to Jeehwan Kim, an associate professor in
the Department of Mechanical Engineering, who led the research.
The paper's co-first authors were Sanghoon Bae, who was involved in
flexible device fabrication, and Jaewoo Shim, who worked on the stacking of the
2-D material monolayers. Both are postdocs in Kim's group.
The paper's co-authors also included students and postdocs from within
Kim's group, as well as collaborators at Georgia Tech, the University of Texas,
Yonsei University in South Korea, and the University of Virginia. Sang-Hoon
Bae, Jaewoo Shim, Wei Kong, and Doyoon Lee in Kim's research group equally
contributed to this work.
"We have shown that we can do monolayer-by-monolayer isolation of
2-D materials at the wafer scale," Kim says. "Secondly, we have
demonstrated a way to easily stack up these wafer-scale monolayers of 2-D
material."
----The researchers have also demonstrated the technique by successfully fabricating arrays of field-effect transistors at the wafer scale, with a thickness of just a few atoms.
"The work has a lot of potential to bring 2-D materials and their
heterostructures towards real-world applications," says Philip Kim, a
professor of physics at Harvard University, who was not involved in the
research.
The researchers are now planning to apply the technique to develop a
range of electronic devices, including a nonvolatile memory array and flexible
devices that can be worn on the skin.
They are also interested in applying the technique to develop devices
for use in the "internet of things," Kim says.
More
The monthly Coppock Indicators finished September.
DJIA: 26,458 +199 Down. NASDAQ:
8,046 +261 Down. SP500: 2,914 +166 Down.
All
three slow indicators moved down in March, but the S&P and NASDAQ turned up in August. September will be critical for confirmation
of this change. All 3 slow indicators failed to confirm August’s positive
change making October very vulnerable to a sell-off.
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