Baltic
Dry Index 634 -11
Brent Crude 62.78
Trump
25 percent tariffs 22 days away. Brexit 52
days away.
"When a President does it, that means that it is not
illegal."
President Nixon.
With
many Asian markets closed for the Lunar New Year, the Fed firmly in Camp Trump,
and President Trump set to deliver his State of the Union address tonight, it
was time for the bulls to rig most stocks higher.
To
this old dinosaur trader, it’s a time to exit the market(s.) President Blunderbuss
is as likely to announce an invasion of Venezuela tonight as he is to announce
a new trade war victory over defeated Chinese President Xi. Who knows what other
spectaculars he has in store for friend and foe alike? What new fronts he will
open up on House Democrats? What misstatements he might make.
In
the outside real world far from Washington, nearly all economic news recently
has been bad. At some point that reality will hit like a ton of bricks. For now
though, on to tonight’s entertainment. It will likely be more exciting than the
recent Rams v the Patriots low scoring “football” game.
"There's a sucker born every minute."
The Fed, with apologies to P.T. Barnum.
Asian stocks extend gains on firm Wall Street, Fed outlook
February 5, 2019 / 1:03 AM
TOKYO (Reuters) - Asian stocks extended gains on
Tuesday as overnight strength on Wall Street and the Federal Reserve’s cautious
turn underpinned appetite for riskier assets, while the dollar held firm on
last week’s upbeat U.S. data.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.4 percent and hovered near its four-month high marked on Friday.
Japan's Nikkei average .N225 was flat on the day but at its highest level in seven weeks.
Australian shares jumped 2.2 percent, with long-battered financials surging on short-covering after a special government-appointed inquiry excoriated Australia’s financial sector for misconduct but left the structure of the country’s powerful banks in place.
Elsewhere in Asia, trade was light, with markets in greater China, Taiwan, South Korea, Singapore and Indonesia all closed for the Lunar New Year.
On Wall Street, the S&P 500 gained, with technology and industrials the biggest winners as investors braced for another big week of fourth-quarter corporate earnings reports.
More
Trade Hawks Quietly Bristle as Trump’s China Deadline Approaches
By Shawn Donnan and Jenny Leonard
Updated on 5 February 2019, 05:00 GMT
One of Donald Trump’s most persistent economic
promises has been to rewrite the U.S. relationship with China. Yet as he
approaches a potential deal, some of the very hawks who have cheered on the
president’s trade war already fear he may end up falling short.
With less than a month before a March 1 deadline
for either a deal or an increase in U.S. tariffs, hardliners inside and outside
the administration fret Trump is being outplayed by Chinese President Xi
Jinping and seduced by what they see as empty promises.
After Trump hosted Chinese Vice Premier Liu He at
the White House last week, one administration official privately likened the
direction of negotiations to the president’s caving to Democrats in the
shutdown battle over funding for a border wall. Another person close to the
talks said Trump appeared determined to turn a pile of crumbs offered by China
into what at best might turn out to be a slice of bread.
Trump is likely to hail his own trade fight with
China in his State of the Union address on Tuesday. But the concerns are driven
by what some aides and others see as the president’s appetite to strike a deal
to calm financial markets. They are also -- as seems to almost always be the
case with the China trade conflict -- embodied by soybeans.
During his meeting with Liu, Trump hailed a Chinese
offer to buy five million tons of soybeans that was the most tangible outcome
of two days of talks. “That’s going to make our farmers very happy. That’s a
lot of soybeans,’’ Trump said.
Only what Trump saw as an extraordinary mountain of
beans was little more than what once would have been an ordinary foothill. It
also did nothing to remove the underlying cause -- Chinese retaliatory tariffs
-- of last year’s collapse in U.S. soy exports to China.
In a normal year China buys about 35 million tons
of soybeans from the U.S. So far this year China’s purchases have been 20
percent of what they were in the last marketing year, according to John Newton,
chief economist at the American Farm Bureau. So even with the new purchases a
vast gap remains, as does plenty of uncertainty for farmers going into a
planting season with silos around the country holding a record stockpile.
The Chinese soybean offer was reserved for the
meeting with Trump. U.S. Trade Representative Robert Lighthizer told reporters
he learned about it only shortly before the meeting with Liu and U.S. officials
were initially confused about how large the offer was.
More
Staying
with America today, is America slowly turning socialist? Has decades of left
wing TV and relentless media fake news, finally extinguished the lamp on a
hill? And what does it hold for the
world if it has?
Below,
the Democrats flirt with the failed populism of Latin America, Africa and
Europe. Stay long fully paid up, locally held, precious metals. The free lunch
never turns out to be free for the masses who pay for it with poverty.
"The leaders of the French Revolution excited the poor
against the rich; this made the rich poor, but it never made the poor
rich."
Fisher Ames.
Soak the rich? Americans say go for it
Surveys are showing overwhelming support for raising taxes on
top earners.
The prospect of 70 percent tax rates for
multimillionaires and special levies on the super-rich draw howls about
creeping socialism and warnings of economic disaster in much of Washington.
But polling suggests that when it comes to soaking
the rich, the American public is increasingly on board.
Surveys are showing overwhelming support for
raising taxes on top earners, including a new POLITICO/Morning Consult poll
released Monday that found 76 percent of registered voters believe the
wealthiest Americans should pay more in taxes. A recent Fox News survey showed
that 70 percent of Americans favor raising taxes on those earning over $10
million — including 54 percent of Republicans.
The numbers suggest the political ground upon which
the 2020 presidential campaign will be fought is shifting in dramatic ways,
reflecting the rise in inequality in the United States and growing concerns in
the electorate about the fairness of the American system.
“There is a deep wellspring in terms of perception
of unfairness in the economy that’s been tapped into here that either didn’t
exist five years ago or existed and had not had a chance to be expressed,” said
Michael Cembalest, chairman of market and investment strategy at JPMorgan Asset
Management who has studied the latest tax proposals. “This is quite a moment in
American economic history where all of a sudden in a matter of months this
thing has kind of exploded like this.”
Even proposals that sound radical poll well.
A plan from first-term Rep. Alexandria
Ocasio-Cortez (D-N.Y.) to slap a 70 percent marginal rate on income earned over
$10 million clocked in at 59 percent support in a recent Hill/HarrisX poll.
The new POLITICO/Morning Consult poll, conducted
Feb. 1-2, found that 61 percent favor a proposal like the “wealth tax” recently
laid out by Sen. Elizabeth Warren (D-Mass.) that would levy a 2 percent tax on
those with a net worth over $50 million and 3 percent on those worth over $1
billion. Just 20 percent opposed the idea. The poll surveyed 1,993 registered
voters and carries a margin of error of plus or minus 2 percent.
It showed 45 percent favored a plan like that laid
out by Ocasio-Cortez while 32 percent opposed it.
More
Finally,
confirmation that the Fed has joined team Trump’s re-election campaign? What
does the deep state and team Trump have on the team at the Fed?
Fed’s Powell and Clarida have dinner with Trump, Mnuchin at White House
By Nick
Timiraos Published: Feb 4, 2019 9:12
p.m. ET
Federal Reserve Chairman Jerome Powell dined Monday
night with President Donald Trump and Treasury Secretary Steven Mnuchin at the
White House, the central bank said in a statement.
Powell has been a frequent target of criticism by
Trump after the central bank raised interest rates four times last year,
prompting the president to vent to his advisers about whether he could dismiss
the Fed chairman. Trump hadn’t met with Powell since he tapped him to lead the
Fed in November 2017. Powell became Fed chairman a year ago.
Powell’s No. 2, Fed Vice Chairman Richard Clarida,
also attended the dinner. The Fed said both men joined Trump and Mnuchin at the
invitation of the president to discuss the economy.
The Fed said of the dinner that Powell’s “comments
in this setting were consistent with his remarks at his press conference of
last week. He did not discuss his expectations for monetary policy, except to
stress that the path of policy will depend entirely on incoming economic
information and what that means for the outlook.”
"Drawing on my fine command of language, I said
nothing."
Robert Benchley.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over banksters and politicians.
Today, Italy! Italy is, well Italy. How do you
solve a problem like Italy. Something tells me we are all about to find out.
Why Italy’s Debts Are Europe’s Big Problem
4 February 2019
From the trading floors of London to the gatherings of European
leaders in Brussels, there’s one issue that can induce a shudder of financial
fear like no other: Italian debt.
Europe’s most dangerous stock of public borrowing—some 1.5
trillion euros ($1.7 trillion)—is concentrated on the balance sheets of banks
in Rome and Milan. But a rout could quickly sweep in lenders in Frankfurt,
Paris and Madrid—the main banks in the rest of Europe are holding more than 425
billion euros of sovereign and private Italian debt, based on a Bloomberg
analysis of European Banking Authority data.
Although Italy’s economy slipped into recession in the fourth
quarter, markets are calm for now. But a budget standoff in the fall showed how
swiftly sentiment can turn. And if markets should turn south, no one knows
exactly where the tipping point will come.
----French banks are the most
exposed if a sell-off in Italy starts to affect the economy and spread through
Europe’s financial system. The country’s two largest banks, BNP Paribas SA and
Credit Agricole SA own retail units in Italy.
----A
populist government prone to infighting and at constant odds with the European
Union is what makes the current situation so dicey. It needs to sell more than
400 billion euros a year to keep the show on the road, a situation that forces
domestic banks to buy even more debt.
The connection between a weak economy and weak
banks, many of which are still vulnerable despite three years of declines in
bad loans, has a name: the doom loop.
----A government crisis could
drag down the banking system or a banking crisis could suck in the government.
Already seven lenders have required bailouts in the past three years, and they
may not be the last.
----Europe’s
existing rescue mechanisms were bolted together on the fly during the last debt
crisis with German Chancellor Angela Merkel keeping fiscal hawks in line while
European Central Bank President Mario Draghi flooded the market with liquidity.
But Draghi will be gone this year and Merkel’s
power is on the wane. What’s worse, Italy’s financing requirements would exhaust
the existing capacity of the European Stability Mechanism’s bailout funds, or
410 billion euros, in just a year.
That would leave the next generation of European
leaders once again weighing the cost of holding their monetary union together.
Charts.
"We hang the petty thieves and appoint the great ones to
public office."
Aesop.
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?
Advances in stretchable semiconductors, integrated electronics
Date: February 1, 2019
Source: University of Houston
Summary: Researchers have reported significant
advances in stretchable electronics, moving the field closer to
commercialization.
In a paper published Friday, Feb. 1, in Science
Advances, they outlined advances in creating stretchable rubbery
semiconductors, including rubbery integrated electronics, logic circuits and
arrayed sensory skins fully based on rubber materials.
Cunjiang Yu, Bill D. Cook Assistant Professor of
mechanical engineering at the University of Houston and corresponding author on
the paper, said the work could lead to important advances in smart devices such
as robotic skins, implantable bioelectronics and human-machine interfaces.
Yu previously reported a breakthrough in
semiconductors with instilled mechanical stretchability, much like a rubber
band, in 2017.
This work, he said, takes the concept further with
improved carrier mobility and integrated electronics.
"We report fully rubbery integrated
electronics from a rubbery semiconductor with a high effective mobility ...
obtained by introducing metallic carbon nanotubes into a rubbery semiconductor
with organic semiconductor nanofibrils percolated," the researchers wrote.
"This enhancement in carrier mobility is enabled by providing fast paths
and, therefore, a shortened carrier transport distance."
Carrier mobility, or the speed at which electrons
can move through a material, is critical for an electronic device to work
successfully, because it governs the ability of the semiconductor transistors to
amplify the current.
Previous stretchable semiconductors have been
hampered by low carrier mobility, along with complex fabrication requirements.
For this work, the researchers discovered that adding minute amounts of
metallic carbon nanotubes to the rubbery semiconductor of P3HT --
polydimethylsiloxane composite -- leads to improved carrier mobility by
providing what Yu described as "a highway" to speed up the carrier
transport across the semiconductor.
In addition to Yu, the paper's researchers include
first author Kyoseung Sim, and co-authors Zhoulyu Rao, Anish Thukral and
Hyunseok Shim, all of UH, and Hae-Jin Kim, a former postdoctoral researcher at
UH who is now with Gyeongsang National University in Jinju, Korea.
Future work, Yu said, will involve further raising
the carrier mobility and building more complex, hierarchy and high level
integrated digital circuits to meet the requirements for integrated circuits,
biomedical and other applications.
"Get a good night's sleep and don't bug anybody without
asking me."
President Nixon.
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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