Baltic
Dry Index 643 +04
Brent Crude 66.26
Trump
25 percent tariffs 9 days away. Brexit 39
days away.
It is a far, far better thing to have a firm anchor
in nonsense than to put out on the troubled seas of thought.
John Kenneth Galbraith
Is
President Trump about to declare victory in the Pacific over China? Asian
markets seem to think so and are placing their bets accordingly. There will be
no punitive tariffs on Chinese exports starting in nine days time.
Of
course, with few details released about the “success” of last week’s talks in
Beijing, it’s impossible to separate reality from stock market and political
hype. It’s also quite possible that the new deal will turn out to be very much
like the old deal, as turned out to be the case with Team Trump’s new “NAFTA.”
To
this old dinosaur commodities trader, trade war team Trump have set up stock
markets for a gigantic fall if it all goes wrong later in the week. China could
opt to call their bluff. Do a bad deal for America or no deal at all.
As
a negotiating strategy, it’s a risky strategy to say the least. High risk
traders here will be tempted to buy a few short dated stock index puts and
contracts for difference.
I
have no idea of how close to a meaningful deal either side is. My preferred
play still remains a more cautious going long some synthetic, stock index double
options. A deal should set off a massive relief rally as side-lined cash gets
redeployed. No deal and tariffs bring markets crashing back to earth.
Asian shares near four-month high, buoyed by trade optimism
February 19, 2019 / 12:46 AM
TOKYO/SYDNEY (Reuters) - Asian shares hovered near
four-month highs on Tuesday, supported by hopes that Sino-U.S. trade talks were
making progress and expectations of policy stimulus from central banks.
Investor confidence was bolstered by mild gains in
European stocks as U.S. markets were shut on Monday for a public holiday.
MSCI’s broadest index of Asia-Pacific shares
outside Japan was a shade firmer, while Japan’s Nikkei was almost flat.
Chinese shares were little changed, too, with the
blue-chip index up 0.1 percent after surging in the previous session.
Reports of progress in trade talks between the
United States and China have prompted investors to be mildly optimistic that
the two countries can reach a compromise by March 1 that will de-escalate their
dispute or at least avoid a sharp hike in tariffs, although few details from
the talks have emerged.
---- Reflecting changing sentiment, Chinese shares have risen rapidly so far this month, with MSCI’s China A shares index up 6.5 percent, by far the best performance among major markets despite China’s weakening economy.
Additionally, investors are now seen returning to
riskier asset markets after the U.S. Federal Reserve signalled earlier this
year it could halt rate hikes in light of U.S. economic softness.
“In the last week, it seems like global central
banks have started a possible process of monetary easing,” Bank of
America-Merrill Lynch strategist Ajay Singh Kapur said in a note.
More
New round of U.S.-China trade talks to begin in Washington on Tuesday
February 19, 2019 / 1:56 AM
WASHINGTON (Reuters) - A new round of talks between
the United States and China to resolve their trade war will take place in
Washington on Tuesday, with follow-up sessions at a higher level later in the
week, the White House said on Monday.
The talks follow a round of negotiations that ended
in Beijing last week without a deal but which officials said had generated
progress on contentious issues between the world’s two largest economies.
The talks are aimed at “achieving needed structural
changes in China that affect trade between the United States and China. The two
sides will also discuss China’s pledge to purchase a substantial amount of
goods and services from the United States,” the White House said in a
statement.
The higher-level talks will start on Thursday and
be led by U.S. Trade Representative Robert Lighthizer, a strong proponent of
pressing China to end practices that the United States says include forced
technology transfers from U.S. companies and intellectual property theft.
China, which denies that it engages in such
practices, confirmed that Vice Premier Liu He will visit Washington on Thursday
and Friday for the talks.
The White House said Treasury Secretary Steven
Mnuchin, Commerce Secretary Wilbur Ross, economic adviser Larry Kudlow and
trade adviser Peter Navarro would also take part in the talks.
---- A run of soft European economic data, including Germany’s GDP figures, has weighed on the common currency.
Comments from European Central Bank’s Olli Rehn on
Sunday have fanned speculation the European Central Bank would launch another
round of Targeted Long-Term Refinancing Operations (TLTRO) to support bank
lending.
More
Opinion: Why the stock market might soon careen down a dangerous ‘slope of hope’
By Mark
Hulbert
Published: Feb 18, 2019 10:07 a.m. ET
The prevailing mood has shifted from extreme pessimism to extreme optimism
CHAPEL HILL, N.C. (MarketWatch) — Sentiment conditions on Wall Street are flashing short-term danger signs.That’s because the mood has shifted from the extreme pessimism that prevailed in late December to nearly as extreme optimism today. Some call current conditions a “slope of hope.”
Consider the average recommended equity exposure among the Nasdaq-oriented market timers I monitor (as measured by the Hulbert Nasdaq Newsletter Sentiment Index, or HNNSI). In late December, this average was lower — at minus 72.2% — than at almost any other time since I began collecting data in 2000.
That’s why contrarians, in late December, were forecasting a powerful rally.
Today, in contrast, in the wake of a 17%-plus gain in the S&P 500 SPX, +1.09% and a 20%-plus rally in the Nasdaq COMP, +0.61% the HNNSI has risen to plus 73%. That’s higher than 90% of all comparable readings since 2000.
In other words, as you can see from the accompanying chart, in six weeks’ time this group of short-term stock-market timers has increased their average equity exposure by more than 140 percentage points: Away from being aggressively bearish (recommending that clients allocate three-fourths of their trading portfolios to short-selling) to being almost as aggressively bullish (now recommending that three-fourths of clients’ portfolios be long).
To be sure, this does not mean that a decline back to the December lows is imminent. Nevertheless, contrarian analysts are convinced that the sentiment winds are no longer blowing in the direction of higher prices.
The usual qualifications apply, of course. Contrarian analysis doesn’t always work. And, even when it does, the market doesn’t always immediately respond to the contrarian signals. This past summer, for example, as you can see from the chart, the HNNSI hit its high about six weeks prior to the market’s. That’s a longer lead time than usual, but not unprecedented. But when the market finally did succumb to the extreme optimism, the Nasdaq fell by more than 20%.
More
All this
short termism, and uncertainty, and volatility, and posturing, is no way to be
running our highly interdependent global economy.
With
China “defeated,” on to trade war on Europe. Pushing Germany, and with it
Euroland into recession.
‘I like tariffs’: Donald Trump threatens transatlantic trade war
February 19 2019, 12:01am, The Times
President Trump has threatened to reignite a
transatlantic trade war by imposing hefty tariffs on European car imports.
“I like punitive tariffs”, he said ahead of a US
Commerce Department report this week which is expected to recommend that the EU
vehicle industry be classified as a threat to US national security because it
robs the country of an industrial base needed to produce military hardware.
Mr Trump is expected to raise tariffs tenfold from
2.5 per cent to 25 per cent within the next three months.
More
There is something wonderful in seeing a
wrong-headed majority assailed by truth.
John Kenneth Galbraith
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over banksters and politicians.
Today, the fuss and fight over 5G.
Huawei Crackdown Exposes Europe as Laggard in Global 5G Race
By Thomas Seal and Stefan Nicola
18 February 2019, 00:00 GMT
When U.K. Prime Minister Theresa May flew to China last February looking for
business deals to cushion the fallout from Brexit, Huawei
Technologies Co. delivered with a multibillion-dollar commitment to
help keep Britain “at the very forefront of the digital age.”A year later, the U.K. is among European nations weighing restrictions on the Chinese tech giant that phone carriers say could delay the fifth-generation mobile networks needed to connect driverless cars and automated factories.
Their lobbying exposes a weakness: Europe hasn’t been at the forefront on 5G, even before the Trump administration began pushing allies to block Huawei over concerns that the Chinese government could use its equipment for spying, which the company has repeatedly denied.
“The risk is that it puts Europe further behind the curve,” said Neil Campling, an analyst at Mirabaud Securities in London.
Read about how Europe’s been hit by crossfire in the tech war’s key battle
While Europe led the way with earlier mobile technologies, China, South Korea, Japan and -- to a lesser extent -- the U.S., are ahead on the next rollouts.
Despite beating the drum for 5G, which promises gigabit-per-second download speeds -- 10 times faster than 4G and at a lower cost to carriers -- European telecom executives are expected to be relatively slow to invest for fear the spending won’t pay off for a long time.
European carriers are generally less profitable and regulators have blocked mergers that would allow a patchwork of operators to scale up. The spectrum needed for 5G hasn’t all been assigned yet and governments are set to tap them for billions of euros at auctions in the coming year.
Huawei is deeply embedded in Europe’s telecom
networks, so restrictions could be more disruptive than in other places. In the
U.S., the industry has generally avoided Huawei under government pressure. The
Chinese government, far from limiting its telecom vendors facing global
scrutiny, may dictate a faster 5G deployment to back Huawei and ZTE Corp.,
analysts at New Street Research said last month.
“The U.S. and China are actually in a good place,
because one has never allowed Huawei and one is agnostic to it,” said Guy
Peddy, an analyst at Macquarie.
Huawei has come from almost nowhere in Europe a
decade ago to supply about a third of telecom systems. It’s positioned itself
to be a critical provider of antennas, switches, routers, small cells and
network slicing gear for 5G by conducting trials with carriers. The company has
been helped by security agencies that opened the door while closely monitoring
its equipment.
That cautious acceptance is now in question as
governments realize how hard it will be to police 5G. With 4G networks, data is
usually channeled through a central core, or “brain,” whereas in 5G, it will be
processed and sent between multiple points in a more scattered arrangement that
could make it harder to spot weaknesses and hacks.
More
Britain does not support total Huawei network ban - sources
February 17, 2019 / 6:09 PM
(Reuters) - British security officials do not support
a full ban of Huawei from national telecoms networks despite U.S. allegations
the Chinese firm and its products could be used by Beijing for spying, people
with knowledge of the matter said.
Huawei, the world’s biggest producer of telecoms
equipment, faces intense scrutiny in the West over its relationship with the
Chinese government and allegations of enabling state espionage, with the United
States calling for its allies not to use its technology.
Although no evidence has been produced publicly and
Huawei has denied the claims, the allegations have led several Western
countries to restrict its access to their markets.
“We don’t favour a complete ban. It’s not that
simple,” one of the sources told Reuters on Monday after a Financial Times
report on Sunday said that Britain had decided it could mitigate the risks of
using Huawei equipment in 5G networks.
The FT cited two sources familiar with what it said
was a conclusion by the government’s National Cyber Security Council (NCSC),
which last year said technical and supply-chain issues with Huawei’s equipment
had exposed national telecom networks to new security risks. Huawei had no
immediate comment.
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?
Google is building a solar power project above fishing ponds in Taiwan, its first in Asia
- Google recently signed its first green deal in Asia, a solar project to be built above fishing ponds in Taiwan.
- Building solar projects over water is becoming more common in Asia due to population density and competition for available land.
- Worldwide, the floating solar market could reach 400 gigawatts, according to the World Bank. A recent DOE report said 10 percent of U.S. energy supply could come from floating solar power.
Published 17 February 2019
Google unveiled an ambitious plan eight years ago to build a wind energy project in the Atlantic Ocean running all the way from New York to Virginia. That massive "underwater spine" has been slow to progress, but Google is moving ahead with its first water-based renewable energy project — it is just a little smaller in scale: Solar panels atop a series of fishing ponds in Taiwan. The deal marks Google's entry into the Asian renewable energy market.
Google, a subsidiary of Alphabet, recently became the first company to make a purchase under the 2017 Taiwan Electricity Act, which allows non-utility companies to purchase renewable energy. For the 10-megawatt solar array in Tainan City, Taiwan, Google will install poles, with solar panels at the top of them, above fishing ponds.
The idea of building solar projects sited on water — known as floating photovoltaics, or "flotovoltaics" — is becoming more popular.
Last year China built the world's largest floating solar farm on a lake that used to be a coal mine, one of several flooded mine sites in China used for solar projects. It includes 166,000 solar panels and has a capacity of 40 megawatts, which can power 15,000 homes. The World Economic Forum reported that China is expected to add 40 percent of the world's new solar panels by 2020. Japan is the world leader in floating photovoltaic installations, with more than 60 projects built since its first in 2007.
Google's fishing pond project may differ from many water-based solar efforts that use structures like pontoons to float the solar panels directly on the water. While it is possible to float solar panels directly on the surface of fish farms — it has been done on projects overseas — the Google project development team has not yet decided how the solar panels will be situated above the water, according to a company spokeswoman. She would only share a link to a Taiwanese site which included several examples of water-based designs the project could ultimately take. Google is currently focused on poles that would have solar panels hoisted on top of them, a concept known as a "canopy" system.
Shade has been presented as a key benefit of floating photovoltaics as the panels blocking of sunlight reduces evaporation from key reservoirs. In Google's case, the project design could result in improvement in fishing yields because elevated panels provide optimal room for fish while also providing them with shade. That finding was based on an experiment conducted by the Fisheries Research Institute (COA) unit of the Taiwan Council of Agriculture.
Floating solar projects also have logistical
advantages. They can be placed near existing electricity transmission
infrastructure at hydropower sites, and close to demand centers.
More
The salary of the chief executive of a large
corporation is not a market award for achievement. It is frequently in the
nature of a warm personal gesture by the individual to himself.
John Kenneth Galbraith
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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