Baltic Dry Index. 1112 +35 Brent Crude 62.92
Trump 25 percent
tariffs 39 days away. Brexit 68 days
away.
"We
decide on something, leave it lying around, and wait and see what happens. If
no one kicks up a fuss, because most people don't understand what has been
decided, we continue step by step until there is no turning back."
Jean-Claude
Juncker. Failed Luxembourg Prime Minister and ex-president of the Euro Group of
Finance Ministers. Confessed liar. European Commission President. Scotch
connoisseur.
With American markets
closed for a holiday today, and America’s A list politicians staying away from
this week’s junket in Davos, plus Macron and May unable to attend due to
domestic political crises, China’s economy and the continuing trade war will be
the main focus of the week.
That China’s economy
is slowing has been obvious for some time, but just how much is it slowing and
why? In theory the trade war so far, shouldn’t be having a large impact on
China’s or America’s economy, so it’s likely that China’s slowdown has a
domestic cause.
My guess is big trouble in the Chinese real estate market, leading
to a slowdown in the velocity of money and a rising credit crisis. But then
again what do I know?
Below China’s
official figures which no one, especially not Beijing, believes.
China's 2018 growth slows to 28-year low, more stimulus seen
January 21, 2019 / 5:33 AM / Updated 4
minutes ago
BEIJING
(Reuters) - China’s economy cooled in the fourth quarter under pressure from
faltering domestic demand and bruising U.S. tariffs, dragging 2018 growth to
the lowest in nearly three decades and pressuring Beijing to roll out more
stimulus to avert a sharper slowdown.
Growing signs of weakness in China — which has generated nearly a third of global growth in recent years — are fuelling anxiety about risks to the world economy and are weighing on profits for firms ranging from Apple to big carmakers.
Policymakers have pledged more support this year to reduce the risk of massive job losses, but have ruled out a “flood” of stimulus like that which Beijing has relied on in the past, which quickly juiced growth rates but left a mountain of debt.
“The government has means to support the economy. They can expand infrastructure spending and they can cut banks’ reserve requirement ratio. So we don’t need to worry about capital spending,” said Naoto Saito, chief researcher at Daiwa Institute of Research in Tokyo.
“But the problem lies in consumption. As the U.S. and China clash on many fronts, consumer sentiment appears to have been hurt. Until now, solid wage growth has been supporting consumption but now there appears to be a sense of vague anxiety about the future.”
Fourth-quarter gross domestic product (GDP) grew at the slowest pace since the global financial crisis, easing to 6.4 percent on-year as expected from 6.5 percent in the third quarter, the National Bureau of Statistics said on Monday.
That pulled full-year growth down to 6.6 percent, also as expected and the slowest annual pace since 1990. GDP last year grew a revised 6.8 percent.
With support measures expected to take some time to kick in, most analysts believe conditions are likely to get worse before they get better, and see a further slowing to 6.3 percent this year.
Some China watchers believe actual growth is already weaker than official data suggest.
More
Asian markets rise despite slower economic growth in China
Shares in Asia rose Monday, extending gains on Wall Street last week. Buying enthusiasm has been spurred by renewed hopes for progress on resolving the trade standoff between the U.S. and China. Shares rose in Shanghai and Hong Kong early Monday despite news that China’s economy grew at its lowest pace in three decades last year.The Shanghai Composite Index SHCOMP, +0.44% surged 0.7% and Hong Kong’s Hang Seng index HSI, +0.37% climbed 0.3%. Japan’s Nikkei 225 index NIK, +0.30% rose 0.3%. South Korea’s Kospi SEU, +0.11% was almost flat and the S&P ASX 200 XJO, +0.18% in Australia added 0.3%. Shares rose in Southeast Asia and Taiwan Y9999, +0.68% .
---- Stock benchmarks in the U.S. and Europe jumped Friday after Bloomberg News reported that Chinese officials offered to buy more goods and services from the U.S., potentially eliminating its trade deficit by 2024. On Wednesday the Chinese government said the top trade envoys from both countries will meet at the end of January. The U.S. trade deficit with China grew to a record $323.3 billion in 2018. The two countries have raised taxes on billions of dollars of each other’s goods in the spat over the trade deficit, Beijing’s manufacturing plans, and U.S. complaints that China steals technology from foreign companies.
“The scrutiny remains on U.S.-China trade even as no scheduled announcements or meetings are expected. After seeing Wall Street enthused by reports of the U.S. considering lifting tariffs on Friday, the weekend delivered another dose of positivity for markets. This came in the form of reports suggesting that China had offered a path to eliminate trade imbalances with the U.S. in their early January talk in China,” Jingyi Pan of IG said in a commentary.
More
U.S. chipmakers may give clues on China hazard
January 18, 2019 / 5:10 PM
SAN FRANCISCO (Reuters) - Intel Corp (INTC.O)
operates mostly outside the Apple-sphere, and that is exactly why whatever it
says next week about business in its vital Chinese market matters so much for
investors.
Apple (AAPL.O) rattled global markets this month when the iPhone maker cut its revenue outlook for the first time in 15 years, blaming factors like the U.S.-China trade dispute and a slowdown in the Chinese economy.
Upcoming quarterly scorecards from Intel, Texas Instruments (TXN.O) and other chipmakers, as well as Ford Motor Co (F.N), will shed light on whether Apple made a convenient excuse for its own troubles or revealed a strengthening headwind faced by global companies that rely on China for a big chunk of their sales.
“They should give us a good gauge of what is happening in China beyond smartphones because Texas Instruments is mostly industrials and autos, and Intel is PCs and servers, and they’re not being driven by the Apple smartphone situation,” said Daniel Morgan, a portfolio manager at Synovus Trust Company in Atlanta.
---- U.S. stock markets will be closed on Monday for the Martin Luther King Jr. holiday.
China accounts for almost a quarter of Intel’s revenue, while modem
chips for iPhones, the focus of recent concerns about Apple, account for just a
tiny part of Intel’s business.
While most Intel processors sold in China are used to build laptops and
servers for export, Chinese consumers and companies also purchase many of those
devices.
With the tariff war already taking a toll on China’s trade sector and
increasing the risk of a sharper slowdown in the world’s second largest
economy, U.S. multinationals will face pressure to be cautious about their
outlooks for 2019.
More
Japan recession risk rises on U.S.-China trade war, global slowdown: Reuters poll
January 21, 2019 / 4:19 AM
TOKYO (Reuters) - Chances that
Japan will slide into a recession this coming fiscal year have grown over the
past three months, a Reuters poll of economists found, pressured by a global
economic slowdown and U.S.-China trade friction.
That bodes poorly for Prime Minister Shinzo Abe’s plans to raise the sales tax to 10 percent from 8 percent in October to cope with swelling welfare costs as the country’s population ages.
Japan has felt the indirect impact of the U.S.-China trade war because it makes equipment and supplies used by Chinese manufacturers of semiconductors, mobile phones and other products.
The latest data showed Japan’s export growth slowed to a crawl in November as shipments to the United States and China weakened sharply.
“The U.S.-China trade conflict discourages China’s capital spending, which is casting a shadow over Japan’s economy via a slowdown in exports of capital goods,” said Shigeto Nagai, head of Japan economics at Oxford Economics.
More
Finally, interesting
and worrying at the same time. Does history repeat? Is buying over priced
stocks near the highs a mugs game? David Rosenberg was one of the few
economists who saw the great recession coming. Too bad his bosses at Old Mother
Merrill didn’t believe him and slammed into the Wall and went bust.
David Rosenberg: Best leading indicator of a recession? Try Broadway ticket prices
Last time ticket prices fell like this was in 2007, right before the recession almost nobody saw coming
January 18, 2019 1:40 PM EST
It is a fascinating anomaly that as the S&P 500, along with its
global counterparts, has been off to the races this year, the one thing that
hasn’t changed is the high (and rising) risk of a recession.
Among the most reliable leading indicators of this risk are Broadway
ticket prices. The Beige Book this week was notable in this regard as it
flagged a five per cent decline in average ticket prices. This is an extremely
rare condition and I recall all too well when this happened back in October and
November of 2007.
“Broadway theaters report that attendance and revenues were at high
levels in October and early November but down a bit from a year ago,” The Beige
Book reported on Nov. 28, 2007. (The recession started in December 2007.)
On
Jan. 16, 2019, it said: “Average ticket prices for Broadway shows rose less
than usual this past December and were down more than five per cent from a year
earlier.”
Let’s
compare and contrast the environment in those two instances.
In October-November 2007, the stock market was trading near its
highest-ever level. Few were talking about a household deleveraging cycle then,
as practically nobody today is discussing the debt-laden corporate sector.
The U.S. Federal Reserve had stopped tightening for more than a year
back then and there was some brief jubilation when the central bank began to
cut rates in September.
As for the stock market, it took nine months in the 2007-08 bear phase
to drop 20 per cent. It took about six months to do that in 2000-01, and less
than two months in the most recent fall of that magnitude.
Things happened far too fast here, even for my cautious view, and the
market has since been correcting this dramatic oversold condition in equities
and all the risk asset classes that are correlated to the stock market.
For sure, some of the looming risks associated with a stubborn Fed and
trade wars have been reduced, which will surely help cushion the blow. Chinese
stimulus will help, too.
But,
as is the case everywhere, the policy bullets in the chamber are pretty limited
this time around: China and the U.S. do not have the firepower they had
entering prior economic downturns and that is the overriding point.
More
“The
old grey donkey, May stood by herself in a thistly corner of the Forest, her
feet well apart, her head on one side, and thought about things. Sometimes she
thought sadly to herself, "Why?" and sometimes she thought,
"Wherefore?" and sometimes she thought, "Inasmuch as
which?" and sometimes she didn't quite know what she was thinking about.”
British
Prime Minister May, with apologies to A.A. Milne, and Winnie-the-Pooh
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over
banksters and politicians.
Yes, the bent, seriously bent, and doubled over banksters and
politicians at Davos. With most “A” listers staying away, the “B” and “C”
listers take to the floor. But with the US government shutdown in its fifth
week, meaning a whole lot of US statistics are becoming suspect, Brexit less
than 70 days away, turmoil in France, and a slowdown in the German economy even
before President Trump’s trade war hooligans put tariffs on German made cars,
the “B” and “C” listers have a lot on the very expensive plate.
In GB 1984 finally arrives for peons who drive.
Gloomy forecast for Davos: crises aplenty, but few world leaders
January 17, 2019 / 11:41 AM
MILAN (Reuters) - An array of crises will
keep several world leaders away from the annual World Economic Forum in Davos
next week, which takes place against a backdrop of deepening gloom over the
global economic and political outlook.
Anxieties over trade disputes, fractious international relations, Brexit
and a growth slowdown that some fear could tip the world economy into recession
are set to dominate the Jan. 22-25 Alpine meeting.
The WEF’s own Global Risks Report set the tone this week with a stark
warning of looming economic headwinds, in part because of geopolitical tensions
among major powers.
Some 3,000 business, government and civil society figures are due to
gather in the snow-blanketed ski resort, but among them are only three leaders
of the Group of Seven most industrialized countries: Japanese Prime Minister
Shinzo Abe, German Chancellor Angela Merkel and Italian Premier Giuseppe Conte.
Donald Trump, who stole the Davos limelight last year with a rare appearance
by a sitting U.S. president, pulled out of this year’s event as he grapples
with a partial U.S. government shutdown.
On Thursday, the White House said Trump had also canceled his
delegation’s trip to Davos because of the shutdown, now in its 27th day.
Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo had been
expected to lead the U.S. team, according to two senior administration
officials.
French President Emmanuel Macron is also skipping the meeting as he
seeks to respond to the “yellow vest” protests, while British Prime Minister
Theresa May battles to find a consensus on Brexit.
Outside the G7, the leaders of Russia and India are shunning Davos,
while China - whose president, Xi Jinping, was the first Chinese leader to attend
the elite gathering in 2017 to offer a vigorous defense of free trade - is
sending his deputy instead.
That will leave the likes of British Finance Minister Philip Hammond,
Chinese Vice President Wang Qishan and a host of central bankers with the task of
trying to reassure business chiefs.
“Davos will be dominated by a high level of anxiety about stock markets,
a slowdown in growth and international politics,” said Nariman Behravesh, chief
economist at IHS Markit.
“The leadership presence is lower than last year but those who are going
... will be seeking to impart a sense of confidence and calm business and
investors’ nerves.”
More
Next generation speed cameras now spot distracted driving
“Always eyes watching you and the voice enveloping you” – one of the
lesser-known quotes from the George Orwell novel Nineteen Eighty-Four, in which
‘Big Brother’ is always watching. Despite being seventy years old this year,
the whole “Big Brother is watching you” has never been apter, with the number
of speed cameras dotted around.
A raft of new speed cameras introduced in the south-west has the ability
to monitor your speed, check your seatbelt, detect mobile phone usage or see
whether you’re eating, smoking or drinking, and it could lead to prosecution.
These new cameras have been nicknamed ‘The Yellow Vultures’.
While we’re used to seeing average speed check cameras throughout
various locations, these new cameras are the next generation, they use infrared
tech and high-definition, which means that day or night, they have the ability
to catch you unawares.
While smoking, eating or drinking while driving isn’t actually illegal (currently), there is an argument for distracted driving; a study by Leeds University found that motorists consuming food while driving were on average, 44% slower than usual. But if you were found to be speeding while distracted, you could face a charge of careless driving, along with the speeding conviction.
One further point is that these new breed of cameras are much more accurate, which in theory, means that when we reported back in August that Chief Constable Anthony Bangham, Britain’s Road Policing Chief wanted to fine motorists for breaching the speed limit by just 1mph, he may just get his way.
Currently, the National Police Chiefs Council guidelines recommend a 10+2 limit, that is 10% over, plus 2mph – 35mph in a thirty limit, 57mph in a fifty and so on, but that really is only a courtesy, set in the days where speedo accuracy wasn’t top of the list for the manufacturer; most speedometers were set from the factory to under-read by around 5% purely for this reason.
It’s also worth pointing out that the old ‘lane change’ trick won’t work either – gone are the days that you could confuse an average speed check camera by swapping lanes, or by riding a motorcycle with only a rear-facing number plate. The yellow vultures are capable of spotting every indiscretion, committed by any vehicle.
At the moment, the new breed of super-camera only has limited geography – based in the south-west on the Gdynia Way heading into Plymouth and the A38 at Haldon Hill, but if proven successful you can almost guarantee that they’ll be rolled out nationwide.
More
“People
say nothing is impossible, but I do nothing every day.”
British
Prime Minister May, with apologies to A.A. Milne, and Winnie-the-Pooh
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?
Using bacteria to create a water filter that kills bacteria
New technology can clean water twice as fast as commercially available ultrafiltration membranes
Date:
January 18, 2019
Source:
Washington University in St. Louis
Summary:
Engineers have created a bacteria-filtering membrane using graphene oxide and
bacterial nanocellulose. It's highly efficient, long-lasting and
environmentally friendly -- and could provide clean water for those in need.
More than one in 10 people in the world lack basic drinking water
access, and by 2025, half of the world's population will be living in water-stressed
areas, which is why access to clean water is one of the National Academy of
Engineering's Grand Challenges. Engineers at Washington University in St. Louis
have designed a novel membrane technology that purifies water while preventing
biofouling, or buildup of bacteria and other harmful microorganisms that reduce
the flow of water.
And they used bacteria to build such filtering membranes.
Srikanth Singamaneni, professor of mechanical engineering &
materials science, and Young-Shin Jun, professor of energy, environmental &
chemical engineering, and their teams blended their expertise to develop an
ultrafiltration membrane using graphene oxide and bacterial nanocellulose that
they found to be highly efficient, long-lasting and environmentally friendly.
If their technique were to be scaled up to a large size, it could benefit many
developing countries where clean water is scarce.
The results of their work were published as the cover story in the Jan.
2 issue of Environmental Science & Technology.
Biofouling accounts for nearly half of all membrane fouling and is
highly challenging to eradicate completely. Singamaneni and Jun have been
tackling this challenge together for nearly five years. They previously
developed other membranes using gold nanostars, but wanted to design one that
used less expensive materials.
Their new membrane begins with feeding Gluconacetobacter hansenii
bacteria a sugary substance so that they form cellulose nanofibers when in
water. The team then incorporated graphene oxide (GO) flakes into the bacterial
nanocellulose while it was growing, essentially trapping GO in the membrane to
make it stable and durable.
After GO is incorporated, the membrane is treated with base solution to
kill Gluconacetobacter. During this process, the oxygen groups of GO are
eliminated, making it reduced GO. When the team shone sunlight onto the
membrane, the reduced GO flakes immediately generated heat, which is dissipated
into the surrounding water and bacteria nanocellulose.
Ironically, the membrane created from bacteria also can kill bacteria.
More
...for,
as long as but a hundred of us remain alive, never will we on any conditions
remain under EUSSR rule. It is in truth not for glory, nor riches, nor honours
that we are fighting, but for freedom – for that alone, which no honest man
gives up but with life itself.
Declaration
of Westminster June 24th 2016, with apologies to the Declaration of
Arbroath April 6th 1320.
The monthly Coppock Indicators finished December.
DJIA: 23,327 +115 Down. NASDAQ:
6,635 +152 Down. SP500: 2,507 +90 Down.
Normally this would suggest more
correction still to come, but with President Trump wanting to be judged by the
performance of the stock market and his Treasury Secretary activating the
Plunge Protection Team after the Christmas Eve Crash, will a politicised PPT
cover the President’s back? [Yes] Probably the safest action here is fully paid
up synthetic double options on most of the major indexes.
Hopefully a USA – China trade deal reinvigorates
the markets, but failure and 25 percent tariffs, is a market killer.
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