Baltic Dry Index. 1490 -23 Brent Crude 75.47
An
Immodest Proposal
For
preventing the children of poor people of Honduras, from being a burden on
their parents or the USA, and for making them beneficial to the publick
November
2018
It is a melancholy object to those, who
walk through this great town of Washington, or travel in the country
(Mexico,) when they see the streets, the
roads and cabin-doors crowded with beggars of the female sex, followed by
three, four, or six children, all in rags, and importuning every passenger for
an alms to get to America. These mothers instead of being able to work for
their honest livelihood, are forced to employ all their time in strolling to
beg sustenance for their helpless infants who, as they grow up, either turn
thieves for want of work, or leave their dear native country, to flight for the
Pretender in Washington, or sell themselves to the Barbadoes.
President
Donald Swift with apologies to Jonathan Trump.
With his trade war
with China not going to plan, and increasingly looking like bringing on the
next global recession, did Trump and his trade war team of hooligans, just
blink yesterday? If he did, President Xi of China just won, big time.
But President Trump U-turns
faster than a spinning top. Is this sudden reversal real? Does President Trump’s
top economic advisor really speak for President Trump? Does anyone on Team
Trump really speak for President Trump? Would President Trump really fold just
six days before the mid-term elections?
No new tariffs, and
real negotiations, would be a step in the right direction, but I suspect this
is merely a ploy to try to get President Xi to engage with President Trump at
their coming meeting later this month.
As ploys go,
President Xi is very likely to take it as a sign of US weakness, and anyway,
like everyone else he’ll be waiting to see the outcome of the US elections. It
might be a very humbled President Trump who gets to meet with President Xi,
although I think that’s the first time I’ve used “humble” in a sentence involving
President Trump.
Below, yesterday’s
weak signal from Larry Kudlow. But it might already be too late to prevent a
2019 recession.
Kudlow: ‘It’s possible’ new tariffs won’t be imposed on China
By Mike
Murphy Published: Oct 31, 2018 11:22 p.m. ET
Larry Kudlow, President Donald Trump’s top economic adviser, said Wednesday
that “it’s possible” that new tariffs on Chinese imports can be avoided.“Nothing is set in stone right now,” Kudlow told CNBC. He said any additional tariffs would be the result of “policy talks,” not any “arbitrary timeline.”
On Monday, Bloomberg News reported the Trump administration may impose tariffs on all remaining Chinese imports in December, if November talks between Trump and Chinese President Xi Jinping don’t bring fruitful results. The U.S. has already imposed tariffs on about $250 billion of Chinese imports, with about $257 billion in goods yet to be levied.
But in a Fox News interview that aired late Monday, Trump said he thinks “we will make a great deal with China,” potentially ending the escalating trade war.
“It is possible some good, positive things could — I say could — come out of President Trump-President Xi talks. It’s possible,” Kudlow told CNBC.
One ominous sign that another recession is looming
By Brett
Arends Published: Oct 31, 2018 10:37 p.m. ET
Yes — cash is back.
Once again people who don’t want to take on the risks of the stock
market or the bond market or the gold market or any other market — and just
want a reasonable rate of return on their savings without having to worry — are
starting to feel some love.
Interest rates on two-year certificates of deposit or CDs — not quite
“cash,” but pretty close — have just cracked 3% for the first time since living
memory. And rates on parallel two-year Treasury bonds are not far behind. Just
a couple of years ago they were offering barely half a percent — and this
minuscule rate of interest, of course, was fully taxable too.
These rates are already well ahead of the 2.2% overnight
Federal Funds rate set by the Federal Reserve, as financial markets have
already anticipated further rate hikes by the Fed, expected later this year and
in 2019.
The surge in rates for deposits comes at a time when stocks and bonds are both suddenly looking distinctly rocky. And for the first time in quite a while, those buying CDs can beat inflation, which has averaged about 2.5% this year.
One woman’s trash is another woman’s treasure, so while Wall Street speculators freak out at the prospect of rising interest rates, and President Trump complains that the Federal Reserve is going “crazy” by putting rates back up, let’s not forget all for those whom rising interest rates are a matter of enormous relief. That means, above all, retirees, and those near retirement, as well as all those who are willing to accept lower returns for a lot less risk.
Right now my broker is offering me CDs paying 3% or better from six nationally known banks. Bankrate.com lists one. All of these are insured by the Federal Deposit Insurance Corporation, which means up to $250,000 is covered even if the bank pulls a Lehman. Two-year Treasury Notes — IOUs issued by Uncle Sam, and freely tradable through any broker — are now paying interest rates of 2.84%. The last time we saw rates that high was in 2007 — almost a year before the Lehman collapse.
These two-year notes and equivalent 24-month CDs seem to be in the sweet
spot in terms of length. They effectively lock in the next couple of interest
rate hikes by the Federal Reserve, while taking on very little risk from
inflation. They are paying nearly as much as 10-year Treasury Notes (which are
currently yielding 2.84%).
The gap between the two has rarely been this low. Typically, longer-term bonds have to offer one or more extra percentage points of interest per year to tempt investors into a longer-term fixed rate of interest. The narrowing of this gap is widely seen on Wall Street as an ominous sign of a recession on the horizon.
More
China's factory sector barely grows in October, export orders extend slump: Caixin PMI
November 1, 2018 / 3:11 AM / Updated 2 hours ago
BEIJING (Reuters) - China’s manufacturing sector barely grew
after stalling in September, a private survey showed, while an extended
contraction in export orders highlighted rising pressure on the economy as a
trade war with the United States intensified.
The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) for
October, released on Thursday, edged up to 50.1 from 50.0 in September.
Economists polled by Reuters had forecast a reading of 49.9, just off the
50-mark that divides expansion from contraction.
The rather shallow growth last month was in line with an official PMI
survey released on Wednesday that showed China’s manufacturing sector expanded
at the weakest pace in over two years.
The feeble performance in the vast factory sector, a major domestic and
global driver of growth, backs expectations of further stimulus support from
Beijing as it tries to prevent a sharp downturn for the economy. The Sino-U.S.
trade row, and the risks from the dispute to the Chinese and global economies,
have rattled financial markets recently.
The Caixin survey showed factory output dropped for the second straight
month and was only fractionally above the neutral 50.0 level, amid weaker
demand at home and abroad. That dragged business confidence among manufacturers
to an 11-month low.
“China’s economy has not seen any obvious improvement,” said Zhengsheng
Zhong, director of macroeconomic analysis at CEBM Group, in a note accompanying
the survey.
“The expansion across the manufacturing sector was still weak.
Production and business confidence continued to cool despite stable demand. The
pressure on production costs didn’t ease.”
While new export orders - an indicator of future activity - improved to
48.8 from 47.6 in September, they remained in contraction phase for the seventh
consecutive month as the trade war with the United States deepened.
October was the first full month after the latest U.S. tariffs went into
effect.
More
U.S.-China trade battle shows deepening economic impact across Asia
November 1, 2018 / 3:26 AM /
Updated 12 minutes ago
HONG KONG(Reuters) - The economic impact of the intensifying trade war
between Washington and Beijing appeared to deepen last month with factory
activity and export orders weakening across Asia and analysts expecting a
bigger hit in months to come.
In a sign conditions for exporters and factories were deteriorating,
manufacturing surveys showed marginal growth in China, a slowdown in South
Korea and Indonesia and a contraction in activity in Malaysia and Taiwan.
Those figures follow weaker-than-expected industrial production data
from Japan and South Korea on Wednesday, with output in the latter shrinking
the most in over 1-1/2 years.
By contrast, the U.S. ISM manufacturing survey for October due later on
Thursday was expected to show a much faster growth pace than in Asia, albeit a
tad slower than in September, supporting the outlook for further Federal
Reserve rate hikes.
Worryingly,
the prospects for higher U.S. rates could feed back more market pain for the
region’s externally vulnerable economies — Indonesia, India and the
Philippines, which have already been forced to raise rates to mitigate a
sell-off in currencies, stocks and bonds.
More
With October’s action
feeling like a top in many stock markets, this old dinosaur market watcher,
thinks if this is the top, we won’t see the low until December 2019 – January
2020. It’s anyone’s guess as to what price.
When making
financial predictions, give them a date or a price, never both!
Wall
Street Adage.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, yet another Trump trade war warning. Not
long now for the first of the emerging market economies blow ups.
Standard Chartered signals gloom on trade war prospects despite profit surprise
October 31, 2018 / 4:29 AM
HONG
KONG/LONDON (Reuters) - Standard Chartered’s (STAN.L)
core emerging markets face increasing risks from the escalating Sino-U.S. trade
war, the bank warned on Wednesday after reporting better than expected
quarterly profit.
The downbeat comments on global trade reflect a more pessimistic tone
than the Asia-focused lender’s statement in July, in which CEO Bill Winters
said he saw a “minimal” hit to the bank’s performance from the U.S.-China spat.
The 150-year-old British lender is particularly sensitive to such
tensions, given its focus on financing trade between Asia, Africa and other
parts of the world.
StanChart’s pretax profit for the three months to Sept. 30 jumped 31
percent year on year to $1.1 billion, beating consensus analyst forecasts of
$978 million. The outperformance was helped by a reduction in non-performing
loans, while worse than expected revenue of $3.7 billion demonstrated the
bank’s continuing struggle to boost the top line.
“Escalating trade tension and other macroeconomic factors are affecting
sentiment in emerging markets,” StanChart said in one of the grimmest
predictions on the issue by a global bank.
The world’s top two economies are already waging a tariff war, with U.S.
duties placed on $250 billion worth of Chinese goods and Chinese duties on $110
billion of U.S. goods.
StanChart finance chief Andy Halford said that, as “an indirect effect”
of the trade war on its wealth management and parts of the financial markets
business, the bank had seen some clients transacting less and adopting a
risk-off attitude.
Wealth management income in the quarter dropped 4.7 percent from a year
earlier to $465 million.
“Standard Chartered is a poster child for all the major risks
circulating the sector – global slowdown, trade wars, regulatory overhang,”
said KBW analyst Edward Firth, adding that the bank’s share price has reflected
those risks.
---- British rival
HSBC (HSBA.L)
this week posted a surprise 28 percent rise in third-quarter earnings and said
the impact of the trade war was “not yet manifesting itself”.
More
Japan October industrial output falls as trade friction weighs
October 31, 2018 / 12:25 AM
TOKYO
(Reuters) - Japan’s industrial output fell more than expected in September as a
series of typhoons and earthquakes disrupted production and a trade war between
the United States and China weighed on exports, clouding the country’s economic
outlook.
The
1.1 percent decline in output was more than the median estimate for a 0.3
percent decline and follows a 0.2 percent increase in the previous month.
Japan
exports a large volumes of electronic parts and equipment to China, which are
used to make goods destined for the United States, so Japan’s economic growth
could weaken if Washington and Beijing remain at loggerheads over trade.
Output
fell in September due to a 2.5 percent decline in production of cars and car
parts, data from the trade ministry showed on Wednesday. Production of robots
and machines used to make flat panel displays also fell 1.4 percent.
Inventories of electronic parts, which are used in smart phones, jumped
9.6 percent in September, the fastest increase in six months.
Economists have expressed concern that high inventories of electronic
parts are a sign of weak demand, which could cause manufacturers of such goods
to cut future production.
China, Japan factory output weakens in face of trade threat
Manufacturers surveyed by the trade ministry expect output to rise 6.0
percent in October but decline 0.8 percent in November.
These
forecasts are in doubt after exports fell in September for the first time since
2016 as shipments to the United States and China declined, likely impeding
third quarter economic growth and adding to concerns about the broadening
impact of an escalating Sino-U.S. trade war.
More
Turkey central bank sharply raises inflation forecasts
October 31, 2018 / 7:55 AM
ISTANBUL
(Reuters) - Turkey’s central bank on Wednesday sharply raised its inflation
forecasts for this year and next, predicting a rate of 23.5 percent by the end
of 2018 and acknowledging the deep impact of a lira selloff that has shaken
confidence in the economy.
The Turkish currency TRYTOM=D3 has fallen by nearly a third against the dollar this year, driving up the cost of food and fuel and deepening investor concern about the eventual fallout for the real economy and the banking sector.
The central bank, which has come under pressure from President Tayyip Erdogan to lower borrowing costs, this month kept interest rates on hold at 24 percent, just a touch above its revised end-2018 inflation forecast.
That move was expected after a mammoth hike in September that has helped
the lira recoup some losses.
The bank, which previously expected 2018 inflation of 13.4 percent, also
raised the forecast for the end of 2019 to 15.2 percent from 9.3 percent,
governor Murat Cetinkaya said on Wednesday.
“Under the assumption of a tight monetary policy stance and enhanced
policy coordination focussed on bringing inflation down, inflation is projected
to converge gradually to the target,” Cetinkaya said at a presentation of the
bank’s quarterly inflation report.
More
If all
else fails, immortality can always be assured by spectacular error.
John Kenneth
Galbraith
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?
Europe's Largest Industrial Energy Storage Facility Unveiled
October 29, 2018
Europe's largest industrial energy
storage facility has been inaugurated in Belgium.The facility is a pilot project comprising energy storage and solar PV integrated with a microgrid. It is operated by CMI Energy at the company’s international headquarters in Seraing.
CMI makes industrial boilers, steam generators and HRSGs for concentrated solar power with thermal storage and the MiRIS (Micro Réseau Intégré Seraing) storage facility will help power the company’s headquarters, which currently consumes 1.3 GW a year.
CMI said that the plant is also intended “to demonstrate advanced integration of intermittent renewable energy resources with battery-based energy storage to produce a fully dispatchable renewable energy resource”.
CMI Energy president Jean-Michel Gheeraerdts said: “We now have ways to use green energy sources that eradicate their major flaw: intermittent production. Energy storage and management can be applied in a number of fields as an alternative to diesel generators for unconnected regions, as a way of deferring investment in parts of the network, as a means of optimizing existing photovoltaic or wind systems, and as an enabler of participation in the primary or secondary reserve markets.”
MiRIS consists of a 2 MW photovoltaic system with 6500 rooftop and carport panels, plus 4.2 MW of energy storage comprising a lithium-ion battery system and two different flow battery systems.
The technology showcase interconnects with the building’s electrical network and its DSO 15kV distribution service connection.
Gheeraerdts said that MiRIS “will facilitate investigation of the interoperability of renewables and different energy storage technologies for a variety of user energy profiles, particularly with respect to renewable energy time shifting and energy resale to the grid. MiRIS will also enable evaluation of microgrid ‘islanding’ operation, potential grid ancillary service opportunities, and the influence of user demand response.”
Energy storage will be debated in detail at European Utility Week in Vienna next week, where there is also a major focus on commercial and industrial energy users.
The monthly Coppock Indicators finished October.
DJIA: 25,116 +176 Down. NASDAQ:
7,306 +232 Down. SP500: 2,712 +146 Down. All three slow indexes went sharply down in
October, suggesting there’s more of the correction to come.
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