Baltic Dry Index. 1364 -21 Brent Crude 60.90
It is
always the best policy to speak the truth, unless, of course, you are an
exceptionally good liar.
Jerome
K. Jerome.
Time to remain in the
bunker. Forget capitalism, which Alan Greenspan famously said 20 years ago “was
broken,” under the Trump government in Washington everything is now politics.
We are all pawns in a game of keeping China down while Making America Great
Again.
While a court in
Canada did the obvious and bailed Huawei’s hostage pawn CFO pending extradition
hearings, China seems to have taken a Canadian pawn hostage of its own.
American hi-tech executive pawns next?
How all this ends is
anyone’s guess, but President Trump seems to think that it ends with China
caving in to an American dictated trade deal, and at home the Fed caving in to
his demand to stop raising interest rates.
While China might, it’s
unlikely, given that the Trump trade war team are widely touting opening up a
new technology trade war on China’s lead in 5G communications, and killing off China’s
attempt to catch up in semiconductor chips by 2025. There’s no meaningful upside
for China.
Below, the game of
chess with real people in Washington. What could possibly go wrong? Well picking
on and patronising the Fed for one.
Trump says would intervene in arrest of Chinese executive
December 12, 2018 / 12:34 AM
WASHINGTON (Reuters) - U.S. President
Donald Trump said on Tuesday he would intervene with the U.S. Justice
Department in the case against a Chinese telecommunications executive if it
would help secure a trade deal with Beijing.
“If I think it’s good for the country, if I think it’s good for what
will be certainly the largest trade deal ever made – which is a very important
thing – what’s good for national security – I would certainly intervene if I
thought it was necessary,” Trump said in a wide-ranging interview with Reuters
in the Oval Office.
Trump expressed optimism that he could strike a trade deal with Chinese
President Xi Jinping as the two countries struggle to resolve a dispute that
has contributed to recent U.S. stock market declines and raised questions about
whether economic turmoil could beset the president in the new year.
At the request of U.S. authorities, Huawei
Technologies Co. executive Meng Wanzhou was arrested earlier this month in
Vancouver on charges of violating U.S. sanctions against Iran.
The arrest came the same day Trump and Xi declared a 90-day truce in
their trade war during summit talks in Buenos Aires.
Trump, who wants China to open up its markets to more American-made
products and stop what Washington calls the theft of intellectual property,
said he had not yet spoken to Xi about the case against Huawei’s executive.
Over the course of the 30-minute interview, Trump also addressed the
controversy surrounding the Oct. 2 killing of journalist Jamal Khashoggi,
saying he stood firmly beside Saudi Crown Prince Mohammed bin Salman despite
accusations that he was the mastermind of it.
----In the wake of his meeting with Xi in Buenos Aires, Trump said during the interview that trade talks with Beijing were under way by telephone, with more meetings likely among U.S. and Chinese officials.
He said the Chinese government was once again buying large quantities of
U.S. soybeans, a reversal after China in July imposed tariffs on U.S. supplies
of the oilseed in retaliation for U.S. duties on Chinese goods.
“I just heard today that they’re buying tremendous amounts of soybeans.
They are starting, just starting now,” Trump said.
Commodity traders in Chicago, however, said they have seen no evidence
of a resumption of soybean purchases by China, which last year bought about 60
percent of U.S. soybean exports in deals valued at more than $12 billion.
More
ICG says no information from China on detention of Canadian employee
December 12, 2018 / 3:41 AM
SHANGHAI (Reuters) - The International
Crisis Group (ICG) said on Wednesday it had received no information from
Chinese officials on the detention of its employee, former Canadian diplomat
Michael Kovrig, and said it was seeking consular access to him.
ICG, a policy forum focussed on conflict
resolution, said in a statement sent to Reuters Kovrig was detained by state
security officials in Beijing on Monday night.
His detention, first reported by Reuters, came after police in Canada
arrested the chief financial officer of China’s Huawei Technologies Co Ltd
[HWT.UL] on Dec. 1 at the request of U.S. authorities, a move that has
infuriated Beijing.
Neither China’s Foreign Ministry nor Ministry of Public Security has
responded to requests for comment. China’s Ministry of State Security has no
publicly available contact details.
The Canadian government said it saw no explicit link to the Huawei case.
However, Guy Saint-Jacques, Canada’s former ambassador to China, was
asked by the Canadian Broadcasting Corp on Tuesday whether the Kovrig detention
was a coincidence. “In China there are no coincidences ... If they want to send
you a message they will send you a message,” he said.
China had threatened severe consequences unless Canada released Huawei
CFO Meng Wanzhou immediately and analysts have said retaliation from Beijing
over the arrest was likely.
The U.S. State Department was considering issuing a travel warning for
its citizens, two sources said on Tuesday. The Canadian government was
considering issuing a similar warning, Canada’s CTV network reported.
Reuters was not able to confirm the report.
Meng was granted bail by a Canadian court late on Tuesday, 10 days after
her arrest in Vancouver on U.S. claims that she misled multinational banks
about Iran-linked transactions sparked a diplomatic dispute.
Exclusive - Trump says Fed shouldn't hike rates, but calls Powell 'a good man'
December 12, 2018 / 12:47 AM
WASHINGTON (Reuters) - President Donald
Trump said on Tuesday it would be a mistake if the Federal Reserve raises
interest rates when it meets next week, as it is expected to do, continuing his
criticism of the U.S. central bank.
“I think that would be foolish, but what
can I say?” Trump told Reuters in an interview.
Trump said he needed the flexibility of lower interest rates to support
the broader U.S. economy as he fights a growing trade battle against China, and
potentially other countries.
“You have to understand, we’re fighting some trade battles and we’re
winning. But I need accommodation too,” he said.
Trump named Jerome Powell as Fed chairman, but has repeatedly railed
against him since he took over as head of the U.S. central bank last February.
Trump in August told Reuters that he was not “thrilled” with Powell’s raising
interest rates.
Trump was more conciliatory in his comments about Powell on Tuesday, but
still criticized the policies of the man he chose for the top Fed job.
“I think he’s a good man. I think he’s trying to do what he thinks is
best. I disagree with him,” Trump said. “I think he’s being too aggressive, far
too aggressive, actually far too aggressive.”
When asked whether he was concerned there might be a recession when he
was running for re-election in 2020, Trump noted that other factors in the
world could affect the economy, including Britain’s plans to leave the European
Union, known as Brexit, and the unrest in France.
“Well, you have problems in the world, like Brexit, like France - a big problem
in France. It’s shocking to see what’s going on in Paris,” Trump said,
referring to anti-government protests that have targeted his French
counterpart, President Emmanuel Macron.
Macron this week made major concessions to try and quell the protests
that have rocked France, announcing wage increases for the poorest workers and
a tax cut for most pensioners.
“Are we heading for a recession?” Trump said. “In my opinion, we are
doing really well. Our companies are doing really well. If the Fed is going to
act reasonably and rationally, I think we’ll go - I think we are a rocket ship
going up.”
Finally, are we in for a year-end short
squeeze in US stocks? With High Frequency Trading thieves front running the
order stream if a short squeeze develops it’s quite likely to be fast, furious
and costly. Yet another reason to stay safely in the bunker, this gabling has
nothing to do with what little remains of capitalism.
A ‘violent’ and ‘crushing’ move higher is taking shape this month, strategist says
By Shawn
Langlois Published: Dec 11, 2018
12:27 p.m. ET
Nomura strategist Charlie McElligott on Monday called for a “violent short
squeeze” in the market,” and nothing about that session’s whipsaw turnaround
and Tuesday’s opening push higher has him changing his mind. In fact, he’s doubling down on his bull call.
We have “kindling for a massive short-squeeze over the next month,” McElligott wrote in a follow-up note highlighted on the Heisenberg Report blog.
No squeeze as of Tuesday afternoon. The Dow Jones Industrial Average DJIA, -0.22% dipped into the red after getting an initial lift from word that the U.S. and China made some headway in trade talks. Regardless, McElligott says “the risk of forcing an equities cover” could deliver a fierce Santa rally.
“The largest near-term catalyst for a crushing equities move higher remains fund positioning, which is creating an enhanced-risk of positioning squeeze, as it builds fodder for a violent bear-market rally which nobody owns”, McElligott wrote.
In other words, funds are heading toward the end of the year heavily on the short side, and, considering the “horrible 2018 performance backdrop,” they don’t have any appetite for further drawdowns.
Nomura strategist Charlie McElligott on Monday called for a “violent short squeeze” in the market,” and nothing about that session’s whipsaw turnaround and Tuesday’s opening push higher has him changing his mind.
In fact, he’s doubling down on his bull call.
We have “kindling for a massive short-squeeze over the next month,” McElligott wrote in a follow-up note highlighted on the Heisenberg Report blog.
No squeeze as of Tuesday afternoon. The Dow Jones Industrial Average DJIA, -0.22% dipped into the red after getting an initial lift from word that the U.S. and China made some headway in trade talks. Regardless, McElligott says “the risk of forcing an equities cover” could deliver a fierce Santa rally.
“The largest near-term catalyst for a crushing equities move higher remains fund positioning, which is creating an enhanced-risk of positioning squeeze, as it builds fodder for a violent bear-market rally which nobody owns”, McElligott wrote.
In other words, funds are heading toward the end of the year heavily on the short side, and, considering the “horrible 2018 performance backdrop,” they don’t have any appetite for further drawdowns.
He pointed to CFTC data that showed leveraged funds added to their S&P shorts by $5.8 billion to a net short position to -$15.1 billion.
McElligot says that, after the recent spike higher for the market, “buy triggers” are now within reach and could lead to forced deleveraging.
Other tailwinds for the S&P 500 SPX, -0.04% he mentioned include overwrought “end-of-cycle” fears, a “dovish pivot” from the Fed, and a bullish tipping over of the crowded “long dollar DXY, -0.09% ” trade.
Read: Who nailed it and who bombed with their 2018 forecasts
“The nature of the game as it is played is such that the public
should realize that the truth cannot be told by the few who know.”
Reminiscences
of a Stock Operator
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
According to the New York Times, the USA is about to open up a
technology war to add to its trade war on China. I wonder how well that will play out in
Beijing?
You can get much further with a kind word and a gun
than you can with a kind word alone.
Al Capone.
Marriott Data Breach Is Traced to Chinese Hackers as U.S. Readies Crackdown on Beijing
Dec. 11, 2018
WASHINGTON — The cyberattack on the Marriott hotel chain that collected
personal details of roughly 500 million guests was part of a Chinese
intelligence-gathering effort that also hacked health insurers and the security
clearance files of millions more Americans, according to two people briefed on
the investigation.
The hackers, they said, are suspected of working on behalf of the
Ministry of State Security, the country’s Communist-controlled civilian spy
agency. The discovery comes as the Trump administration is planning actions
targeting China’s trade, cyber and economic policies, perhaps within days.
Those moves include indictments against Chinese hackers working for the
intelligence services and the military, according to four government officials
who spoke on the condition of anonymity. The Trump administration also plans to
declassify intelligence reports to reveal Chinese efforts dating to at least
2014 to build a database containing names of executives and American government
officials with security clearances.
Other options include an executive order intended to make it harder for
Chinese companies to obtain critical components for telecommunications
equipment, a senior American official with knowledge of the plans said.
The moves stem from a growing concern within the
administration that the 90-day trade truce negotiated two weeks ago by
President Trump and President Xi Jinping in Buenos Aires might do little to
change China’s behavior — including the coercion of American companies to hand
over valuable technology if they seek to enter the Chinese market, as well as
the theft of industrial secrets on behalf of state-owned companies.
The hacking of Marriott’s Starwood chain, which was
discovered only in September and revealed
late last month, is not expected to be part of the coming indictments. But
two of the government officials said that it has added urgency to the
administration’s crackdown, given that Marriott is the top hotel provider for
American government and military personnel.
It also is a prime example of what has vexed the Trump
administration as China
has reverted over the past 18 months to the kind of intrusions into
American companies and government agencies that President Barack Obama thought
he had ended in 2015 in an agreement with Mr. Xi.
Geng Shuang, a spokesman for China’s Ministry of Foreign
Affairs, denied any knowledge of the Marriott hacking. “China firmly opposes
all forms of cyberattack and cracks down on it in accordance with the law,” he
said. “If offered evidence, the relevant Chinese departments will carry out
investigations according to the law.”
Trade negotiators on both sides of the Pacific have been
working on an agreement under which China would commit to purchasing $1.2
trillion more of American goods and services over the next several years, and
would address intellectual property concerns.
More
This is What The "Trade" War With China Is Really All About
Tue, 12/11/2018 - 05:11
Forget soybeans, auto imports, iPhones, crude oil, and cheap Chinese
gadgets. Also forget tariffs, duties, and subsidies. Even forget weapons.The real reason behind the US-China "trade" war has little to do with actual trade, and everything to do with what China's president, Xi Jinping, said when he visited a memory chip plant in the city of Wuhan earlier this year. In a white lab coat, he made an unexpectedly sentimental remark, comparing a computer chip to a human heart: “No matter how big a person is, he or she can never be strong without a sound and strong heart”.
What is really at the basis of the ongoing civilizational conflict between the US and China, a feud which many say has gradually devolved into a new cold war if few top politicians are willing to call it for what it is, are China’s ambitions to be a leader in next-generation technology, such as artificial intelligence, which rest on whether or not it can design and manufacture cutting-edge chips, and is why Xi has pledged at least $150 billion to build up the sector.
But, as the FT notes, China’s plan has alarmed the US, and chips, or semiconductors, have become the central battlefield in the trade war between the two countries. And it is a battle in which China has a very visible Achilles heel.
Even with the so-called truce between the two sides signed last weekend,
and which promptly unraveled after the Huawei CFO's arrest was unveiled last
week, Washington plans to ramp up export controls next year on so-called
foundational technologies — those that can enable development in a broad range
of sectors — and the equipment for manufacturing chips is one of the key target
areas under discussion.
This is a concern for China as the $412 billion global semiconductor
industry rests on the shoulders of just six equipment companies, with three of
them based in the US. Together, these companies make nearly all of the crucial
hardware and software tools needed to manufacture chips, meaning an American
export ban would choke off China’s access to the basic tools needed to make
their latest chip designs.
"You cannot build a semiconductor facility without using the big
major equipment companies, none of which are Chinese,” said Brett Simpson, the
founder of Arete Research, an equity research group. "If you fight a war
with no guns you’re going to lose. And they don’t have the guns."
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?
Could machines using artificial intelligence make doctors obsolete?
Date:
November 7, 2018
Source:
BMJ
Summary:
The technology of these tools is evolving rapidly. Standalone machines can now
perform limited tasks raising the question of whether machines will ever
completely replace doctors?
Artificial intelligence systems simulate human intelligence by learning,
reasoning, and self correction. This technology has the potential to be more
accurate than doctors at making diagnoses and performing surgical
interventions, says Jörg Goldhahn, MD, MAS, deputy head of the Institute for
Translational Medicine at ETH Zurich, Switzerland.
It has a "near unlimited capacity" for data processing and
subsequent learning, and can do this at a speed that humans cannot match.
Increasing amounts of health data, from apps, personal monitoring
devices, electronic medical records, and social media platforms are being
brought together to give machines as much information as possible about people
and their diseases. At the same time machines are "reading" and
taking account of the rapidly expanding scientific literature.
"The notion that today's physicians could approximate this
knowledge by keeping abreast of current medical research while maintaining
close contacts with their patients is an illusion not least because of the
sheer volume of data," says Goldhahn.
Machine learning is also not subject to the same level of potential bias
seen in human learning that reflects cultural influences and links with
particular institutions, for example.
While the ability to form relationships with patients is often presented
as an argument in favour of human doctors, this may also be their
"Achilles heel," Goldhahn points out. Trust is important to patients
but machines and systems can be more trustworthy than humans if they can be
regarded as unbiased and without conflicts of interest.
Furthermore, some patients, particularly younger ones and those with
minor conditions, may rate correct diagnosis higher than empathy or continuity
of care, he says. "In some very personal situations the services of a
robot could help patients avoid feeling shame.
The key challenges for today's healthcare systems are rising costs and
insufficient numbers of doctors. "Introducing AI-driven systems could be
cheaper than hiring and training new staff, Goldhahn says. "They are also
universally available, and can even monitor patients remotely."Doctors as
we now know them will become obsolete eventually."
But Vanessa Rampton at the McGill Institute for Health and Social Policy
in Montréal, Canada and Professor Giatgen Spinas at University Hospital in
Zürich, Switzerland, maintain that machines will never replace doctors entirely
because the interrelational quality of the doctor-patient relationship is vital
and cannot be replicated.
They agree that machines will increasingly be able to perform tasks that
human doctors do today, such as diagnosis and treatment, but say doctors will
remain because they are better at dealing with the patient as a whole person.
More
A man
may beat a stock or a group at a certain time, but no man living can beat the
stock market! A man may make money out of individual deals in cotton or grain,
but no man can beat the cotton market or the grain market. It's like the track.
A man may beat a horse race, but he cannot beat horse racing.”
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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