Baltic Dry Index. 1372 +33 Brent Crude 61.99
“The
world is a place that’s gone from being flat to round to crooked.”
Mad
Magazine.
This week the main
story will be the USA v China in a Canadian courtroom. Prime Minister Trudeau
having foolishly put Canada in a no win position in the fight between Presidents
Trump and Xi. That this ends badly for all is a given. Just how badly is still
an open question.
At a minimum I would
expect a Chinese boycott of US and Canadian made goods and products, followed
by a drop in Chinese tourism and students seeking places in US and Canadian
universities.
At its worst, US and
Canadian executives getting seized in China and Hong Kong for a string of tax
and other regulation irregularities. Apple and many other US companies better have
all their taxes and gifts squeaky clean. President Trump playing President Xi for
a fool and dupe is never going to end well, no matter who blinks first.
On the undercard this
week is Brexit, an EUSSR great leaders meeting, and a criminal investigation of
Deutsche Bank money laundering. But taken altogether they don’t have the
potential impact on the markets of the main event.
Sadly all this is
happening as figures from Asia suggest that the global economy is already
suffering from the drag of all the tariff wars. 2019 could be the year that the
massive debt binge since 2010 implodes.
Below, reasons to
stay in last week’s bunker.
Asia stocks fall after Chinese trade data misses expectations
Asian equities were down at least 1% on Monday as data showed China exports weakened ahead of U.S.-China trade talks and tracking last week’s stock-market retreat in the U.S.Japan’s Nikkei NIK, -2.17% paced losses throughout the session, dropping 2.25% amid the dollar’s 0.4% decline versus the yen.
China’s export growth sank in November as global demand weakened, adding to pressure on Beijing ahead of trade talks with Washington.
Exports rose 5.4% over a year ago to $227.4 billion, a marked decline from the previous month’s 12.6% increase, customs data showed Saturday. Imports rose 3% to $182.7 billion, a sharp reversal from October’s 20.3% surge.
That adds to signs a slowdown in the world’s second-largest economy is deepening as Chinese leaders prepare for negotiations with President Donald Trump over Beijing’s technology policy and other irritants.
Financials were weak across the region, helped by ongoing declines in bond yields; 10-year Treasurys were down to 2.83%. Australia’s stock benchmark XJO, -2.27% declined 2%, while Hong Kong equities HSI, -1.56% were down about 1.5%. The Jakarta Composite Index JAKIDX, +0.18% was faring much better than the rest of Asia, easing just 0.2% after being among the few to have risen last week.
More
Japan economy contracts more sharply than forecast
By Megumi
Fujikawa Published: Dec 10, 2018
12:50 a.m. ET
TOKYO--Japan's economy contracted more sharply than initially estimated
in the July-September quarter due to weaker-than-expected capital spending by
companies, government data showed Monday.
The economy decelerated at an annualized pace of 2.5% in the third
quarter, much worse than the initial estimate of a 1.2% contraction. In
non-annualized terms, the economy shrunk 0.6% from the previous quarter,
compared with the preliminary figure for a 0.3% contraction.
The data is a worrying sign for the outlook of the world's third-biggest
economy as it already faces external pressures including the potential impact
from the U.S.-China trade dispute.
"It is necessary to pay close attention to a risk that growing
uncertainties could weigh on companies' sentiment about making
investments," said Kentaro Arita, an economist at Mizuho Research
Institute.
Private sector capital spending fell 2.8% from the previous quarter,
compared with an initial estimate of a 0.2% decline. A recent finance ministry
survey had pointed to weaker capital expenditure in the quarter, leading
economists to expect a downward revision to the overall data.
The revised figures also show that domestic demand subtracted 0.5
percentage point from growth in the July-September quarter. Private consumption
decreased 0.2%, compared with the initial estimate for a 0.1% fall. Meanwhile,
net external demand subtracted 0.1 percentage point from growth.
China Summons U.S. Envoy Over Huawei CFO
By Ros Krasny
Updated on 9 December 2018, 16:26 GMT
China’s
Vice Foreign Minister Le Yucheng has summoned the U.S. Ambassador to China,
Terry Branstad, in a protest over the arrest of Huawei Technologies Co. Chief
Financial Officer Meng Wanzhou, and said it will take “further action” if needed.
China’s Vice Foreign Minister Le Yucheng has summoned the U.S. Ambassador to China, Terry Branstad, in a protest over the arrest of Huawei Technologies Co. Chief Financial Officer Meng Wanzhou, and said it will take “further action” if needed.
Meng was arrested in Vancouver on Dec. 1 on the orders of U.S. authorities for allegedly violating American sanctions on selling technology to Iran. Canada’s ambassador to China was summoned to the ministry on Saturday.
The minister said U.S. actions have violated the “legitimate rights and
interests of Chinese citizens and are extremely bad in nature,” according to a
posting on the ministry website. “China will take further action based on the
U.S. actions.”
The move comes after a week in which both China and the U.S. seemed to
struggle with how to react to an arrest with potentially broad reverberations.
The two nations are, at the same time, trying to ratchet back a damaging trade
dispute.
It’s unclear how much the summons, China’s most public display of anger over the arrest, will mark a heightening of tensions over the arrest and Huawei more generally. China regularly calls in foreign diplomats to register complaints.
Calls for comment to the White House and the State Department were not immediately returned.
Meng’s arrest, on allegations that she committed fraud to sidestep sanctions against Iran, has become a flash-point in ties between the U.S. and China that’s rattled investors and sent stock markets tumbling.
More
China urges Canada to free Huawei CFO or face consequences
December 8, 2018 / 1:47 PM
BEIJING/OTTAWA (Reuters) - China warned
Canada on Saturday that there would be severe consequences if it did not
immediately release Huawei Technologies Co Ltd’s chief financial officer,
calling the case “extremely nasty”.
Meng Wanzhou, Huawei’s global chief financial officer, was arrested in
Canada on Dec. 1 and faces extradition to the United States, which alleges that
she covered up her company’s links to a firm that tried to sell equipment to
Iran despite sanctions.
The executive is the daughter of the founder of Huawei.
If extradited to the United States, Meng would face charges of
conspiracy to defraud multiple financial institutions, a Canadian court heard
on Friday, with a maximum sentence of 30 years for each charge.
No decision was reached at the extradition hearing after nearly six
hours of arguments and counter-arguments, and the hearing was adjourned until
Monday.
In a short statement, China’s Foreign Ministry said that Vice Foreign
Minister Le Yucheng had issued the warning to release Meng to Canada’s
ambassador in Beijing, summoning him to lodge a “strong protest”.
Adam Austen, a spokesman for Canadian Foreign Minister Chrystia
Freeland, said Saturday there is “nothing to add beyond what the Minister said
yesterday”.
Freeland told reporters on Friday that relationship with China is
important and valued, and Canada’s ambassador in Beijing has assured Chinese
that consular access will be provided to Meng.
When asked about the possible Chinese backlash after the arrest of
Huawei’s CFO, Prime Minister Justin Trudeau told reporters on Friday that
Canada has a very good relationship with Beijing.
Canada’s arrest of Meng at the request of the United States while she
was changing plane in Vancouver was a serious breach of her lawful rights, Le
said.
The move “ignored the law, was unreasonable” and was in its very nature
“extremely nasty”, he added.
“China strongly urges the Canadian side to
immediately release the detained person, and earnestly protect their lawful,
legitimate rights, otherwise Canada must accept full responsibility for the
serious consequences caused.”
---- On Sunday, the ruling Communist Party’s official People’s Daily said that while China would not “cause trouble”, it also did not fear trouble and that nobody should underestimate China’s determination on this case.
“Only if the Canadian side corrects its mistake and immediately stops
infringing upon the lawful, legitimate rights of a Chinese citizen and gives a
proper accounting to the Chinese people can it avoid paying a heavy price for
this,” it said in an editorial.
More
Europe is a molehill. All
great empires and revolutions have been on the Orient; six
hundred millions live there.
Napoleon. French Dictator.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Not the usual suspects today.
Today, Egypt. Is Egypt the next Libya?
Spotlight: Egypt struggles to tackle daunting population explosion
Source: Xinhua| 2018-12-08 20:13:19
CAIRO, Dec. 8 (Xinhua) -- In Egypt, the population boom has attracted as
much public attention as terrorist attacks and the impact of economic reforms
on the poor and the needy.
According to the latest official figures, Egypt's population stands at
almost 100 million, with an annual increase of 2.5 million.
Egypt, the most populous Arab country, has been fighting the problem of
population explosion for the past 50 years.
"Overpopulation makes it more difficult for us to achieve
sustainable development in accordance with Egypt's development Vision
2030," Mohamed Abu-Hamed, deputy chairman of the Social Solidarity
Committee at the Egyptian parliament, told Xinhua.
During the National Youth Conference in July 2017, Egyptian President
Abdel Fattah al-Sisi described overpopulation as one of the "two real
threats" facing Egypt (the other one is terrorism).
In October 2017, the Central Agency for Public Mobilization and
Statistics (CAPMAS) reported that population in Egypt doubled during the last
30 years, increasing from 48 million in 1986 to 95 million in 2016.
With the current birth rate of 3.47 percent, Egypt's population is
expected to grow to 128 million by 2030, according to UN estimates.
"This growth, with 2.6 million babies born in 2016, has become an
unprecedented challenge to the climate, which will cause loss of arable land,
rising sea levels and depletions of scarce water resources," Abu-Hamed
said.
According to the CAPMAS, nearly 24,000 hectares of land is lost per year
as a result of soil erosion and housing construction to meet population needs.
Moreover, Egypt's share of water from the Nile, approximately 55 million
cubic meters per year, has remained unchanged since 1954 despite the increase
of its population.
Problems also exist in the education sector.
Illiteracy in Egypt stands at 18 percent and the school drop-outs
reached 5.7 million in the age group of 10 to 34, according to the 2017 census.
Unemployment is another challenge as Egypt's labor force is projected to
reach 80 million by 2028, according to the International Monetary Fund.
"If the population continues to increase, the state's national
production would be insufficient to meet their demands, thus making the country
depend on imports, which will further burden the economy," Abu-Hamed
pointed out.
The population surge in Egypt requires an annual economic growth rate of
15 percent, a mission impossible for any country to achieve, he noted.
More
Libya's state-run oil company warns against major oil field closure
Source: Xinhua| 2018-12-09 10:41:03
TRIPOLI, Dec. 9 (Xinhua) -- Libya's state-owned National Oil Corporation
(NOC) on Saturday warned against the closure of Sharara oil field forced by
protesters, saying it will harm economy.
"National Oil Corporation (NOC) condemns the actions of the Al-Sharara
oil field Petroleum Facilities Guard (PFG), which this morning facilitated a
protest at the field and threatened employees to shut down production. NOC and
local operator Akakus warn of the devastating consequences of a shutdown, to
both the southern region and the wider Libyan economy," NOC said in a
statement later on Saturday.
The closure of the oil field would cause a decline in Libya's daily oil
output by some 315,000 barrels, while another oil field with a daily output of
73,000 barrels has already been closed. The closure means a daily loss of 32.5
million U.S. dollars, said the statement.
The oil company expressed deep concern about the "behavior of the
PFG at Al-Sharara and those individuals and groups exploiting the suffering of
southern Libyans for personal reward."
"We strongly condemn this illegal act and warn all parties of the
consequence of their actions," said NOC Chairman Mustafa Sanalla.
A group of protesters, who called themselves "Anger of Fezzan
(southern Libyan region)," earlier on Saturday forced the closure of
Sharara oil field in southern Libya, demanding better conditions, including
rebuilding towns affected by armed conflicts and providing liquidity for local
banks in the south that lack funds, local media reported.
The Sharara oil field, some 750 km southwest of the capital Tripoli, is
the largest oil field in Libya. It boasts a daily output of 270,000 barrels of
crude oil, more than a quarter of Libya's daily oil production.
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?
'Sun in a box' would store renewable energy for the grid
Design for system that provides solar- or wind-generated power on demand should be cheaper than other leading options
Date:
December 5, 2018
Source:
Massachusetts Institute of Technology
Summary:
Engineers have come up with a conceptual design for a system to store renewable
energy, such as solar and wind power, and deliver that energy back into an electric
grid on demand. The system may be designed to power a small city not just when
the sun is up or the wind is high, but around the clock.
The new design stores heat generated by excess electricity from solar or
wind power in large tanks of white-hot molten silicon, and then converts the
light from the glowing metal back into electricity when it's needed. The
researchers estimate that such a system would be vastly more affordable than
lithium-ion batteries, which have been proposed as a viable, though expensive,
method to store renewable energy. They also estimate that the system would cost
about half as much as pumped hydroelectric storage -- the cheapest form of
grid-scale energy storage to date.
"Even if we wanted to run the grid on renewables right now we
couldn't, because you'd need fossil-fueled turbines to make up for the fact
that the renewable supply cannot be dispatched on demand," says Asegun
Henry, the Robert N. Noyce Career Development Associate Professor in the
Department of Mechanical Engineering. "We're developing a new technology
that, if successful, would solve this most important and critical problem in
energy and climate change, namely, the storage problem."
Henry and his colleagues have published their design today in the
journal Energy and Environmental Science.
Record temps
The new storage system stems from a project in which the researchers
looked for ways to increase the efficiency of a form of renewable energy known
as concentrated solar power. Unlike conventional solar plants that use solar
panels to convert light directly into electricity, concentrated solar power
requires vast fields of huge mirrors that concentrate sunlight onto a central
tower, where the light is converted into heat that is eventually turned into
electricity.
"The reason that technology is interesting is, once you do this
process of focusing the light to get heat, you can store heat much more cheaply
than you can store electricity," Henry notes.
Concentrated solar plants store solar heat in large tanks filled with
molten salt, which is heated to high temperatures of about 1,000 degrees
Fahrenheit. When electricity is needed, the hot salt is pumped through a heat
exchanger, which transfers the salt's heat into steam. A turbine then turns
that steam into electricity.
"This technology has been around for a while, but the thinking has
been that its cost will never get low enough to compete with natural gas,"
Henry says. "So there was a push to operate at much higher temperatures,
so you could use a more efficient heat engine and get the cost down."
However, if operators were to heat the salt much beyond current
temperatures, the salt would corrode the stainless steel tanks in which it's
stored. So Henry's team looked for a medium other than salt that might store
heat at much higher temperatures. They initially proposed a liquid metal and
eventually settled on silicon -- the most abundant metal on Earth, which can
withstand incredibly high temperatures of over 4,000 degrees Fahrenheit.
Last year, the team developed a pump that could withstand such
blistering heat, and could conceivably pump liquid silicon through a renewable
storage system. The pump has the highest heat tolerance on record -- a feat
that is noted in "The Guiness Book of World Records." Since that
development, the team has been designing an energy storage system that could
incorporate such a high-temperature pump.
More
The monthly Coppock Indicators finished November.
DJIA: 25,538 +157 Down. NASDAQ:
7,331 +205 Down. SP500: 2,760 +129 Down.
All three slow indicators are
signalling more correction to come, although not necessarily ahead of the
year-end. However, if a tidal wave of stock fund redemptions hits in December,
2018 could end in a great rising wave of panic selling into a generally thin
markets trading year-end.
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