Baltic Dry Index 905 -34 Brent
Crude 61.64
Common sense is not so common.
Voltaire
In a rare victory for
common sense in Washington D.C., President Trump caved in to the Democrats and
reopened the partially shut down Federal government for at least three weeks. No one seriously expects him to shut it down
again in the middle of February.
It will take a few
weeks to see how much of a drag it imposed on the US economy, although apart
from agriculture and related industry, the drag is likely to be minimal. Still
a plus, is a plus, is a plus. If it had gone on much longer most economists
were predicting bad consequences starting to appear.
Below Trump’s
surrender on the terms on offer since late December.
“Continuous
improvement is better than delayed perfection.”
Mark
Twain.
Backing down, Trump agrees to end shutdown without border wall money
January
25, 2019 / 7:40 PM
WASHINGTON
(Reuters) - President Donald Trump agreed under mounting pressure on Friday to
end a 35-day-old partial U.S. government shutdown without getting the $5.7
billion he had demanded from Congress for a border wall, handing a political
victory to Democrats.
The
three-week spending deal reached with congressional leaders, quickly passed by
the Republican-led Senate and the Democratic-controlled House of
Representatives without opposition and signed by Trump, paves the way for tough
talks with lawmakers about how to address security along the U.S.-Mexican
border.
The
Republican president’s agreement to end the shuttering of about a quarter of
the federal government without securing wall money - an astonishing retreat -
came three days after he had insisted, “We will not Cave!”
But Trump
vowed that the shutdown would resume on Feb. 15 if he is dissatisfied with the
results of a bipartisan House-Senate conference committee’s border security
negotiations, or he would declare a national emergency in order to get the wall
money without congressional approval.
More
LaGuardia Chaos May Have Helped Push Trump to End Shutdown
By Hailey Waller
·
There certainly have been worse days at LaGuardia, O’Hare and Miami airports. But on Friday some of these busy routes came to a brief but abrupt halt -- and that may have been among the final pushes that led President Donald Trump, already under pressure, to reopen the government.
The White House for weeks had tried to minimize what Americans saw and felt of the historic government shutdown, while also allowing certain pet projects to move ahead.
More
Elsewhere, in the
world, just more gloom and worry.
“Don’t
wait. The time will never be just right.”
Mark
Twain.
German business morale declines in Jan as economy suffers downturn - Ifo
January
25, 2019 / 9:27 AM
BERLIN
(Reuters) - German business morale fell for the fifth consecutive month in
January, a survey showed on Friday, signalling a downturn in Europe’s largest
economy where company executives became pessimistic about future business for
the first time since 2012.
The
Munich-based Ifo economic institute said its business climate index fell to
99.1, the lowest level since February 2016.
“Disquiet is growing among
German businesses,” Ifo President Clemens Fuest said in a statement. “The
German economy is experiencing a downturn.”
The German economy grew at a
slower pace last year than in 2017 as manufacturers faced headwinds from trade
tensions, a slowdown in the euro zone and weaker demand from China and emerging
markets.
The government has slashed its
economic growth forecast for 2019 to 1.0 percent from 1.8 percent due to slower
global economic growth and uncertainty about Britain’s exit from the European
Union, a newspaper reported on Thursday.
“The increasing danger of an
hard Brexit has proved to be a mood-killer,” Bankhaus Lampe economist Alexander
Krueger wrote in a note. “This is mainly a reflection of falling expectations,
which is not surprising given it is also the result of global trade disputes.”
Global economy in real danger if U.S.-China trade war escalates - Reuters poll
January
25, 2019 / 12:22 AM
BENGALURU
(Reuters) - A synchronised global economic slowdown is under way and any
escalation in the U.S.-China trade war would trigger a sharper downturn,
according to Reuters polls of hundreds of economists from around the world.
That is a
major shift in sentiment from just a year ago, when economists were optimistic
about a significant global upturn. But an escalation in trade tensions and
tightening financial conditions have hurt activity in most economies and
dragged China’s growth last year to the weakest in 28 years.
Reuters
surveys over the past two years have repeatedly highlighted trade protectionism
as one of the prominent downside risks for the global economy.
In the
latest Reuters polls of more than 500 economists taken this month, growth this
year was cut for 33 of 46 economies the respondents were asked about and left
unchanged for 10. Predictions for only three smaller economies were marginally
upgraded.
The outlook
for inflation this year was trimmed for most economies too, with lower lows and
lower highs.
Over half of
nearly 270 economists who answered an additional question said a further
escalation in the U.S.-China trade war will likely trigger an even sharper
global economic slowdown this year.
More
In better news, looks
like we’re heading back towards international cooperation again, plus an oil
glut is headed our way. Has common sense returned to planet earth?
“It is
wiser to find out than suppose.”
Mark
Twain.
China and U.S. among 76 WTO members pushing for new e-commerce rules
January
25, 2019 / 1:56 PM
DAVOS,
Switzerland (Reuters) - Impatient with a lack of World Trade Organization rules
on the explosive growth of e-commerce, 76 members - including the United
States, China, the European Union and Japan - agreed on Friday to start
negotiating a new framework.
China, which
is locked in a trade war with the United States, signaled conditional support
for the initiative but said it should also take into account the needs of
developing countries, in comments likely to rile Washington.
E-commerce,
or online trade in goods and services, has become a huge component of the
global economy. A WTO report put the total value of e-commerce in 2016 at $27.7
trillion, of which nearly $24 trillion was business-to-business transactions.
On the
sidelines of the World Economic Forum in Davos, negotiators from the 76 countries
and regions agreed on Friday to hammer out an agenda for negotiations they hope
to kick off this year on setting new e-commerce rules.
“I’ve said
for quite some time it was unacceptable that by 2018 ... the WTO won’t have a
deeper, more effective conversation about a phenomenon that is driving the
global economy today,” said WTO Director-General Roberto Azevedo.
“China was
not an original signatory but now they are. They have reaffirmed their
intention to start negotiations on electronic commerce. I think this is a
welcome development,” he told a briefing in Davos.
More
US Oil Production Will Eclipse Russia and Saudi Arabia Combined by 2025, Report Says
The United States is on track
to produce more crude oil and liquids than Russia and Saudi Arabia combined by
2025, according to a report from the independent energy research and consulting
firm Rystad Energy.
Liquids output is expected to
rise above 24 million barrels per day over the next six years, assuming U.S.
crude prices average $58 a barrel during the period, Rystad said in the Jan. 24
report.
The growth in U.S. liquids
production will be driven by major shale basins such as the Permian Basin in
parts of Texas and New Mexico, according to the report.
“U.S. growth potential could be slowed if oil prices slide below our base
case for extended periods but, as long as average prices stay above $50,
positive U.S. production tendencies will persist,” Rystad analyst Artem Abramov
said in a statement.The United States edged out Russia and Saudi Arabia to become the largest crude oil producer last year, as growth was driven by a shale boom centered on parts of the Permian.
“Some market participants have voiced concerns about a possible depletion in resources from core parts of major liquids basins in the U.S. But there are no indications that such a development will occur any time soon,” Abramov said.
The country’s oil output is expected to rise to a new record of more than 12 million barrels per day in 2019, according to the Energy Information Administration.
The United States, Russia, and
Saudi Arabia have constantly shifted places atop the list of the world’s
biggest oil producers.
President Donald Trump has
loosened regulation on the oil industry and pushed for drilling projects on federally
owned lands in Arctic Alaska. After decades of prohibition, the Trump
administration won approval to drill in the Arctic National Wildlife
Refuge. The Bureau of Land Management isn’t pushing to lease land in the area.
Finally, when it
comes to hi-tech spying, everyone does it according to Snowy and The Intercept.
“Never
argue with stupid people, they will drag you down to their level and then beat
you with experience.”
Mark
Twain.
Everybody Does It: The Messy Truth About Infiltrating Computer Supply Chains
In October, Bloomberg Businessweek published an
alarming story:
Operatives working for China’s People’s Liberation Army had secretly implanted
microchips into motherboards made in China and sold by U.S.-based Supermicro.
This allegedly gave Chinese spies clandestine access to servers belonging
to over 30 American companies, including Apple, Amazon, and various government
suppliers, in an operation known as a “supply chain attack,” in which malicious
hardware or software is inserted into products before they are shipped to
surveillance targets.
Bloomberg’s report, based on 17 anonymous sources, including
“six current and former senior national security officials,” began to crumble
soon after publication as key parties issued swift and unequivocal
denials. Apple said
that “there is no truth” to the claim that it discovered malicious chips
in its servers. Amazon said
the Bloomberg report had “so many inaccuracies … as it relates to Amazon that
they’re hard to count.” Supermicro stated
it never heard from customers about any malicious chips or found any, including
in an audit it hired
another company to conduct.
Spokespeople for the Department of Homeland
Security and the U.K.’s National Cyber Security Centre said
they saw no reason to doubt the companies’ denials. Two named sources in the
story have publicly stated that they’re skeptical of its conclusions.
But while Bloomberg’s story may well be completely (or partly) wrong, the danger of China compromising hardware supply chains is very real, judging from classified intelligence documents. U.S. spy agencies were warned about the threat in stark terms nearly a decade ago and even assessed that China was adept at corrupting the software bundled closest to a computer’s hardware at the factory, threatening some of the U.S. government’s most sensitive machines, according to documents provided by National Security Agency whistleblower Edward Snowden. The documents also detail how the U.S. and its allies have themselves systematically targeted and subverted tech supply chains, with the NSA conducting its own such operations, including in China, in partnership with the CIA and other intelligence agencies. The documents also disclose supply chain operations by German and French intelligence.
What’s clear is that supply chain attacks are a well-established, if underappreciated, method of surveillance — and much work remains to be done to secure computing devices from this type of compromise.
“An increasing number of actors are seeking the capability to target … supply chains and other components of the U.S. information infrastructure,” the intelligence community stated in a secret 2009 report. “Intelligence reporting provides only limited information on efforts to compromise supply chains, in large part because we do not have the access or technology in place necessary for reliable detection of such operations.”
Nicholas Weaver, a security researcher of the International Computer Science Institute, affiliated with the University of California, Berkeley, told The Intercept, “The Bloomberg/SuperMicro story was so disturbing because an attack as described would have worked, even if at this point we can safely conclude that the Bloomberg story itself is bovine excrement. And now if I’m China, I’d be thinking, ‘I’m doing the time, might as well do the crime!’”
More
It is common sense to take a
method and try it. If it fails, admit it frankly and try another. But above
all, try something.
Franklin D. Roosevelt
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.
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