Baltic
Dry Index 595 -06
Brent Crude 61.89
Trump
25 percent tariffs 16 days away. Brexit 46
days away.
The very nature of finance is that it cannot be
profitable unless it is significantly leveraged... and as long as there is
debt, there can be failure and contagion.
Alan Greenspan
This
week it’s all about hope and spin. Hope for a trade deal between China and the
USA reached this week averting punitive tariffs on China’s exports to the USA, allowing
for a relief rally in stocks and a lifting of the global economy. Hope for a
deal in Washington averting a closure of the US Federal government at midnight
Friday.
Spin,
aka disinformation and outright lies, as all parties involved try to condition
the public to their point of view that they are “winning.” But if China and the
USA do reach a deal on trade. How long before President Trump abrogates it?
Below,
hope wins for now on yesterday’s spin. For now this old dinosaur commodities
trader will watch the Baltic Dry index and the crude oil price for signs of any
pick up in the real global economy.
Asian markets gain as investors pin hopes on U.S.-China trade talks
Asian stocks rose Tuesday following a listless day on Wall Street as investors looked ahead to U.S.-Chinese trade talks.Tokyo’s Nikkei 225 NIK, +2.62% rose 2.6% and the Shanghai Composite Exchange SHCOMP, +0.34% added 0.7%. Hong Kong’s Hang Seng HSI, -0.02% was 0.2% higher and Seoul’s Kospi SEU, +0.57% gained 0.4%. Sydney’s S&P-ASX 200 XJO, +0.30% advanced 0.4% and New Zealand NZ50GR, +0.77% , Taiwan Y9999, +0.93% and Malaysia FBMKLCI, -0.15% also rose.
----On Wall Street, gains for industrial companies, banks and energy stocks outweighed losses elsewhere. Small-company stocks fared better as investors shifted focus away from the tail end of a strong corporate earnings season to U.S.-Chinese trade talks. The Dow Jones Industrial Average DJIA, -0.21% fell 0.2% to 25,053.11. The S&P 500 index SPX, +0.07% rose 0.1% to 2,709.80. The Nasdaq composite COMP, +0.13% added 0.1% to 7,307.90.
Treasury Secretary Stephen Mnuchin will lead a delegation to Beijing on Thursday for talks aimed at resolving a tariff war over American complaints about Chinese technology ambitions. The dispute threatens to chill global economic growth. The talks are the last scheduled high-level meeting before an agreement by both sides to suspend further punitive action against each other’s goods expires March 1.
Traders were watching negotiations in Washington aimed at averting another government shutdown. Democrats and the GOP said Monday night they had reached an agreement in principle over border security funding, but it was unclear if President Donald Trump would sign it. A Friday midnight deadline is looming to prevent a second partial government shutdown.
----Fears of a global slowdown were given additional fuel from a report showing Britain’s economy had its slowest economic growth since the aftermath of the global financial crisis. Both Europe overall and China are contending with slower growth.
More
U.S. lawmakers reach tentative deal to avoid government shutdown
February 11, 2019 / 2:50 PM
WASHINGTON (Reuters) - U.S. congressional negotiators
on Monday reached a tentative deal to try to avert another partial government
shutdown on Saturday, but congressional aides said it did not contain the $5.7
billion President Donald Trump wants for a border wall.
“We reached an agreement in principle” on funding
border security programs through Sept. 30, Republican Senator Richard Shelby
told reporters.
“Our staffs are going to be working feverishly to
put all the particulars together,” Shelby said. Neither he nor three other
senior lawmakers flanking him provided any details of the tentative pact.
But it was far from clear if the Republican
president would embrace the agreement. His December demand for $5.7 billion
this year to help pay for a wall on the U.S.-Mexico border - rejected by
congressional Democrats - triggered a 35-day partial government shutdown that
ended last month without him getting wall funding.
A congressional aide, who asked not to be
identified, said the outline of the deal included $1.37 billion for erecting
new fencing along the southern border. That is about the same amount Congress
allocated last year and far below what Trump has demanded.
More
U.S., China upbeat on trade talks, but South China Sea tensions weigh
February 11, 2019 / 7:34 AM
BEIJING/WASHINGTON (Reuters) - U.S. and Chinese officials
expressed hopes on Monday that a new round of talks would bring them closer to
easing their seven-month trade war, but a U.S. Navy mission through the
disputed South China Sea cast a shadow over the negotiations in Beijing.
The world’s two largest economies are trying to
hammer out a deal before a March 1 deadline, after which U.S. tariffs on $200
billion worth of Chinese imports are scheduled to increase to 25 percent from
10 percent.
Washington is expected to keep pressing Beijing on
long-standing demands that it make sweeping structural reforms to protect
American companies’ intellectual property, or IP, end policies aimed at forcing
the transfer of technology to Chinese companies, and curb industrial subsidies.
White House economic adviser Kevin Hassett said the
Trump administration was pleased that the talks were moving forward but cautioned
that March 1 is a “real deadline” for reaching a deal.
The talks kicked off in Beijing with discussions
among deputy-level officials on Monday before minister-level meetings later in
the week. A round of talks at the end of January ended with some progress
reported - but no deal and U.S. declarations that much more work was needed.
“You know, the juniors are working on something now
that they’re going to present to the seniors later in the week,” Hassett told
Fox Business Network. “And, absolutely, you know, we’ve put everything on the
table, including IP theft and forced technology transfer and so on.”
Hassett, who chairs the Council of Economic
Advisers, added that the White House is “very much looking forward to what the
senior people come up with this week.”
Chinese Foreign Ministry spokeswoman Hua Chunying
also struck an upbeat tone about the talks, telling a news briefing: “We, of
course, hope, and the people of the world want to see, a good result.”
However, Hua expressed anger about two U.S. warships
sailing on Monday near islands claimed by China in the South China
Sea, saying this was creating tensions in the area.
Asked if the ships’ passage would impact trade talks,
Hua said that “a series of U.S. tricks” showed what Washington was thinking.
But Hua added that China believed resolving trade frictions through dialogue
was in the interests of both countries’ people and of global economic growth.
More
Dollar jumps on worries over U.S.-China trade talks
February 11, 2019 / 1:15 AM
NEW YORK (Reuters) - The dollar jumped on Monday as concerns
grew that the latest round of U.S.-China talks may not yield a deal between the
world’s largest economies before the March deadline.
The greenback is headed for an eighth consecutive
day of gains, lifted by its safe-haven appeal as investors, worried about the
economic fallout from an ongoing trade war and a global economic slowdown, pile
into the world’s most liquid currency.
High-level talks in Beijing this week are a leading
focus for investors, many of whom see little prospect for a trade deal and
instead expect an extension of the March 1 deadline for deciding whether to
increase tariffs.
On “the trade process, and the hope that
China will buy more U.S. goods, we might see some headlines supportive of a
warming in trade talks. But there are also the intellectual property and tech
transfer issues and we have not seen any progress on that front and I’m not
sure we will this week,” said Juan Prada, currency strategist at Barclays in
New York.
More
Former Fed Chair Paul Volcker takes Trump to task on taxes, trade
February 12, 2019 / 5:07 AM
(Reuters) - Former Federal Reserve
Chairman Paul Volcker warned the Trump administration’s handling of
domestic issues as well as trade talks with China is hurting the United States’
long-term prosperity.
“We have not been on a constructive track,” Volcker told
Bridgewater co-chief investment officer Ray Dalio, in a podcast video released
on Tuesday. “I think that’s fair to say.”
Volcker, widely credited with ending the high
levels of inflation seen in the United States during the 1970s and early 1980s,
said Trump’s big tax cuts and spending increases underscore the lack of transparency
of the president’s administration.
“We rammed through a massive tax bill. Whatever you
think about that tax bill, it shouldn’t have been rammed through Congress
without any debates at midnight on Dec. 31,” Volcker said.
On Dec. 22, 2017, President Donald Trump signed the
Tax Cuts and Jobs Act, shrinking the corporate tax rate from 35 percent to 21
percent and cutting taxes on private businesses by about 20 percent. It was
passed without a single public hearing.
Volcker cites Alexander Hamilton, his hero and
first secretary of the Treasury, as saying “the true test of good government is
its ability to administer” which Volcker said “we lapse in.”
Trump has had a strained relationship with the
Federal Reserve. As Fed rate increases continued through last year, Trump
called the central bank “crazy,” out of touch with markets, and according to
reports, explored whether he could remove current Fed Chair Jerome Powell.
Volcker said the China trade negotiations have been
particularly worrisome for the United States’ future over the next 10 years.
“It sounds terrible but I respond more favorably to
what the president of China is saying than the president of the United States,”
Volcker said. “The president of China, at least, says he’s looking forward to a
harmonious relationship over time...But looking for peaceable outcomes, where
we are all threats and demands, so it’s a different story being told.”
More
In the absence of the gold standard, there is no
way to protect savings from confiscation through inflation. There is no safe
store of value.
Alan Greenspan
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over banksters and politicians.
Today, truth or US disinformation and propaganda? A
bullying Empire, Kaiser Bill Germany pre-WW1 style, to thwart the “yellow
Peril?” Or an honest attempt by Uncle Sam to protect its allies? Who knows?
Truth is the first casualty in war, and we now seem to be in an economic war
with China.
Pompeo warns allies Huawei presence complicates partnership with U.S.
February 11, 2019 / 8:45 AM
BUDAPEST (Reuters) - Secretary of State Mike Pompeo
warned U.S. allies on Monday against deploying equipment from Chinese telecoms
gear manufacturer Huawei on their soil, saying it would make it more difficult
for Washington to “partner alongside them”.
“We want to make sure we identify (to) them the
opportunities and the risks of using that equipment,” Pompeo told reporters
during a visit to the Hungarian capital, Budapest.
Hungary is the first stop in Pompeo’s trip to
central Europe that also includes Slovakia and Poland, part of an effort to
make up for a lack of U.S. engagement in the region that opened the door to
more Chinese and Russian influence, administration officials say.
Washington is concerned about China’s growing
presence, in particular the expansion of Huawei Technologies, the world’s
biggest maker of telecoms equipment, in Hungary and Poland.
The United States and its
Western allies believe Huawei’s gear could be used for espionage, and see its
expansion into central Europe as a way to gain a foothold in the EU market.
Huawei denies engaging in
intelligence work for any government. It says its technologies serve 70 percent
of Hungarians and that it cooperates with most telecoms providers in Hungary,
including state-owned enterprises.
Pompeo’s tour includes a conference on the Middle
East, hosted by Poland, where Washington hopes to build a coalition against
Iran.
He is also expected to voice concerns about energy
ties with Moscow, and urge Hungary not to support the TurkStream pipeline, part
of the Kremlin’s plans to bypass Ukraine, the main transit route for Russian
gas to Europe.
Hungary gets most of its gas from Russia and its
main domestic source of electricity is the Paks nuclear power plant where
Russia’s Rosatom is involved in a 12.5 billion-euro ($14 billion) expansion. It
is also one of the EU states that benefit most from Chinese investment.
Corruption, embezzlement, fraud, these are all
characteristics which exist everywhere. It is regrettably the way human nature
functions, whether we like it or not. What successful economies do is keep it
to a minimum. No one has ever eliminated any of that stuff.
Alan Greenspan
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?
New materials for high-voltage supercapacitors
The new material has an energy density 2.7 times higher than conventional materials
Date: February 7, 2019
Source: Tohoku University
Summary: A research team has developed new materials
for supercapacitors with higher voltage and better stability than other
materials.
A research team led by Tohoku University in Japan
has developed new materials for supercapacitors with higher voltage and better
stability than other materials. Their research was recently published in the
journal Energy and Environmental Science.
Supercapacitors are rechargeable energy storage
devices with a broad range of applications, from machinery to smart meters.
They offer many advantages over batteries, including faster charging and longer
lifespans, but they are not so good at storing lots of energy.
Scientists have long been looking for
high-performance materials for supercapacitors that can meet the requirements
for energy-intensive applications such as cars. "It is very challenging to
find materials which can both operate at high-voltage and remain stable under
harsh conditions," says Hirotomo Nishihara, materials scientist at Tohoku
University and co-author of the paper.
Nishihara and his colleagues collaborated with the
supercapacitor production company TOC Capacitor Co. to develop a new material
that exhibits extraordinarily high stability under conditions of high voltage
and high temperature.
Conventionally, activated carbons are used for the
electrodes in capacitors, but these are limited by low voltage in single cells,
the building blocks that make up capacitors. This means that a large number of
cells must be stacked together to achieve the required voltage. Crucially, the
new material has higher single-cell voltage, reducing the stacking number and
allowing devices to be more compact.
The new material is a sheet made from a continuous
three-dimensional framework of graphene mesosponge, a carbon-based material
containing nanoscale pores. A key feature of the materials is that it is
seamless -- it contains a very small amount of carbon edges, the sites where
corrosion reactions originate, and this makes it extremely stable.
The researchers investigated the physical
properties of their new material using electron microscopy and a range of
physical tests, including X-ray diffraction and vibrational spectroscopy
techniques.
They also tested commercial graphene-based materials, including
single-walled carbon nanotubes, reduced graphene oxides, and 3D graphene, using
activated carbons as a benchmark for comparison.
More.
Unless you are willing to compromise, society
cannot live together.
Alan Greenspan
The monthly Coppock Indicators finished January.
DJIA: 24,999 +76 Down. NASDAQ: 7,282 +124 Down.
SP500: 2,704 +71
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 the Fed’s Plunge
Protection Team now officially part of President Trump’s re-election team, probably
the safest action here is fully paid up synthetic double options on most of the
major indexes.
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