Baltic
Dry Index 628 +20
Brent Crude 64.77
Trump
25 percent tariffs 13 days away. Brexit 43
days away.
“Dreams do come true, if only we wish hard enough. You can have
anything in life if you will sacrifice everything else for it.”
Peter Pan
Up
down, up down, up down, global stock markets are churning away, burning through
cash on a fast road to nowhere, or worse, recession and disaster. From day to day spin
miesters churn out rubbish that the America v China trade war is all but won,
or that it isn’t. Now an increasingly desperate President Trump is practically
begging for a urgent meeting with President Xi.
With
just 13 days left to punitive tariffs and the possible onset of a new global
recession, President Xi doesn’t seem in any great hurry to meet with President
Trump. Probably because he and his advisors think that China can weather any
new global recession far better than the deeply indebted USA, and anyway
President Xi won’t get the blame and isn’t facing re-election in 2020.
Below,
another down day on the fast road to nowhere and hopefully not disaster.
The state can be and has often been in the course
of history the main source of mischief and disaster.
Ludwig von Mises
Asia Stocks Drop on Trade Pessimism; Bonds Steady: Markets Wrap
By Adam Haigh
Updated on 15 February 2019, 05:12 GMT
Decline in American retail sales fuels concern on
economy
Treasuries hold gains after 10-year yield touches
2.65%
Shares in Hong Kong and Korea bore the brunt of the losses as Japanese stocks declined and futures on the S&P 500 Index fell. Chinese equities slid as weak factory prices highlighted the tough environment for industrial profitability. The worst drop in U.S. retail sales in nine years weighed on Wall Street overnight, and sent the 10-year Treasury yield down to 2.65 percent.
Trade tensions between the U.S. and China continue to weigh on sentiment, with the two sides reported to be far apart on reform demands as high-level talks continue in Beijing. The lack of progress comes as Trump reportedly considers delaying the March 1 tariff by 60 days, and it may put pressure on him and China President Xi Jinping to seal the deal at a yet-to-be scheduled summit.
“Markets have taken a very optimistic view of these negotiations and there’s room for disappointment in the short term,” Nader Naeimi, head of dynamic markets at AMP Capital Investors Ltd., told Bloomberg TV in Sydney. “You can kick the can down the road but the uncertainty remains.”
Growth concerns have also plagued investors after China’s factory inflation decelerated for the seventh month in a row on softening demand. That comes after data showed Germany, the euro region’s biggest economy, stagnated in the fourth quarter, while dodging a textbook recession. In Washington, Congress sent President Donald Trump legislation he said he’ll sign to avoid another government shutdown, as a new dispute looms over his decision to declare a national emergency to get more federal money for a border wall.
More
U.S.-China Trade Teams Far Apart on Reform Demands, Sources Say
Bloomberg News
The U.S. and China have made little progress so far
during trade talks in Beijing, leaving much work to be done before President
Donald Trump and his counterpart Xi Jinping look to seal a deal at a yet-to-be
scheduled summit, according to people familiar with discussions.
In closed-door sessions, the sides have failed to
narrow the gap around structural reforms to China’s economy that the U.S. has
requested, even as both seek to avoid an increase in tariffs after March 1,
according to three U.S. and Chinese officials who asked not to be identified
because the talks were private.
U.S. stocks declined on news of scant progress, with the S&P 500 Index down 0.3 percent at 10:47 a.m. in New York.
On Thursday, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin met with counterparts including Chinese Vice Premier Liu He for the first of two days of high-level talks.
The U.S. has not relented on demands for China to dial back government subsidies for state-owned enterprises and improve corporate governance, one of the people said, an extremely sensitive issue that is seen as a non-starter for Chinese leaders.
The hurdles raise questions about whether negotiators can meet Trump’s criteria for pushing back the March 1 deadline for more than doubling tariffs on $200 billion of Chinese goods. On Tuesday he said he was open to doing so if the two countries were close to a deal that addresses deep structural changes to China’s economic and trade policies.
The lack of progress so far signaled to China that it would take a meeting between Trump and Xi to get a deal done, the people said.
White House adviser Kellyanne Conway said on Tuesday that Trump wants to meet Xi “very soon.”
A meeting date between Trump and Xi has not been set and it is unlikely the pair can meet before the March 1 deadline. Trump is considering pushing back the deadline for imposition of higher tariffs on Chinese imports by 60 days, Bloomberg News reported late Wednesday.
When asked if the administration was considering delaying the deadline, White House economic adviser Larry Kudlow said no decision has been made. Xi is due to meet with Mnuchin and Lighthizer on Friday, he said.
More
U.S., China Have Some Explaining to Do as March 1 Deadline Looms
By Michelle Jamrisko
Updated on 15 February 2019, 05:53 GMT
We promise we’ve turned to a fresh week, even as we’re yet again left with little to go on in U.S.-China talks and are staring down another U.S. shutdown deadline.
And more disappointments in economic data, alongside softening inflation, are keeping central banks on a dovish path.
Here’s our weekly wrap of what’s going on in the world economy.
We got a few more nuggets this week that helped, but didn’t resolve, the guessing games around U.S.-China talks. The high-level gatherings in Beijing have made little progress so far, leaving much work to be done before President Donald Trump and his counterpart Xi Jinping look to seal a deal at a yet-to-be scheduled summit. Still, Trump said he’s willing to punt on further tariff increases that would’ve been triggered March 1, so long as there’s movement toward a “real deal.” That helped soothe those who were rattled this week by his offhand remark that he didn’t see a leaders’ meeting happening ahead of the deadline, while the U.S. side is eager for it. Adding to all the confusion, Trump’s strategy is quite socialist, when you look at it.
More
In
other news, there was gloom aplenty also. It seems to be amateur hour for politicians
on both sides of the Atlantic.
War prosperity is like the prosperity that an
earthquake or a plague brings.
Ludwig von Mises
Cuba charges U.S. moving special forces, preparing Venezuelan intervention
February 14, 2019 / 1:10 PM
HAVANA (Reuters) - Cuba charged on Thursday that the
United States was secretly moving special forces closer to Venezuela as part of
a plan to intervene in the South American country using the pretext of a
humanitarian crisis.
A “Declaration of the Revolutionary Government” charged
recent events in the country amounted to an attempted coup that had so far
failed.
U.S. President Donald Trump’s administration has
been trying to pressure Venezuelan President Nicolas Maduro to step down and
hand over power to Juan Guaido, the head of Venezuela’s National Assembly.
Guaido invoked a constitutional provision to assume
the presidency three weeks ago, arguing that Maduro’s re-election last year was
a sham.
These events, the declaration said, had led the
United States to impose drastic sanctions causing damage “1000 times greater”
than the aid it is trying to force on the country.
“Between February 6 and 10 military transport
aircraft have flown to the Rafael Miranda Airport of Puerto Rico, the San
Isidro Air Base, in the Dominican Republic and to other strategically located
Caribbean islands, probably without knowledge of the governments of those
nations,” the declaration said.
“These flights originated in American military
installations from which units of Special Operations and Marine Corps operate,
which are used for covert actions,” it said.
Venezuela, a major oil producer, is in the throes
of a severe economic crisis with a dramatic drop in output and six-digit
inflation wreaking havoc on the livelihoods of residents and sending an estimated
three million of them searching for sustenance in neighboring countries.
Cuba has been a key backer of the Venezuelan
government since what is called the Bolivarian Revolution began under former
leader Hugo Chavez in 1998.
Most Western and Latin American countries,
including the United States, quickly recognized Guaido as Venezuela’s
legitimate head of state and pledged millions of dollars in humanitarian aid in
support.
The aid has begun arriving along the border with Colombia and Brazil.
Maduro’s socialist government retains the backing
of Russia, China and many other nations, as well as control of state
institutions including the military.
Guaido said on Tuesday the aid would roll across
the border on February 23 despite the Maduro government’s objections, setting
up a possible confrontation.
Cuba said on Thursday it was clear the United
States wanted to “forcibly establish a humanitarian corridor under
international protection, invoking the obligation to protect civilians and
applying all necessary measures.”
China cancels trade talks with UK in protest over defence secretary's speech - The Sun
February 14, 2019 / 9:15 AM
LONDON (Reuters) - Chinese Vice Premier Hu Chunhua
has cancelled trade talks with Britain’s finance minister Philip Hammond after
defence secretary Gavin Williamson threatened to deploy a warship in the
Pacific, The Sun newspaper reported on Thursday.
Hu was due to hold trade talks with Hammond this
weekend, it said. The newspaper said Hu cancelled the talks in protest at
Williamson’s speech on Monday.
Finally,
does BP see recession ahead?
As renewables soar, BP sees China hitting brakes on energy growth
February 14, 2019 / 4:03 PM
LONDON (Reuters) - Global demand for renewable power
will soar at an unprecedented pace over the coming decades, BP said in a
benchmark report on Thursday, while China’s energy growth is seen sharply decelerating
as its economic expansion slows.
Still, China is set to remain the largest energy
consumer by a long stretch into 2040 although India should overtake it in terms
of demand growth beginning in the next decade, the British oil and gas giant
said in its 2019 Energy Outlook.
China’s energy demand rose by 5.9 percent over the
past 20 years, but is set to grow by only 1 percent by 2040 as its economy
shifts from energy-intensive industries to services and as Beijing introduces
stricter rules on air pollution.
BP revised down its forecast of China’s energy
demand by 7 percent from last year’s report, “reflecting the pace at which
China is adjusting to a more sustainable pattern of economic growth”.
Under BP’s base-case Evolving Transition scenario,
global energy demand will increase by around one third by 2040, driven by
rapidly expanding middle classes in Asia.
Renewables are expected to be the fastest-growing
energy source with an annual gain of 7.1 percent, accounting for half the
growth in global energy. Their share in primary energy is seen rising from 4
percent today to around 15 percent by 2040.
Compared with the level in last year’s report, BP
raised by 9 percent its 2040 forecast of demand for renewable power such as
solar and wind.
Renewables and natural gas, the least-polluting
fossil fuel, will account for 85 percent of the growth in energy demand.
“Renewables will penetrate the energy system
quicker than any other fuel ever,” BP Chief Economist Spencer Dale told
reporters before the release of the report.
Solar power will increase by a factor of 10 by 2040
and wind by a factor of five under BP’s basic scenario.
While the share of oil in world energy demand rose
from 1 percent to 10 over 45 years in the early 20th century, renewables are set
to reach the same share over 25 years, Dale said.
More
Manufacturing and commercial monopolies owe their
origin not to a tendency imminent in a capitalist economy but to governmental
interventionist policy directed against free trade and laissez faire.
Ludwig von Mises
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over banksters and politicians.
Today, America at war with itself, because in the
eyes of the Clintonistas and deep state,the wrong person won the US
Presidential election. Why bother voting if the FBI fifth columnists get to
pick the winner? Below, a house divided and all that. Nothing good comes from civil
war.
Ex-acting FBI chief says probe of Trump began after Comey firing - CBS
February 14, 2019 / 4:10 PM
WASHINGTON (Reuters) - Former top FBI official Andrew
McCabe said he began an obstruction of justice and counterintelligence
investigation involving U.S. President Donald Trump and his ties to Russia
after Trump fired bureau Director James Comey in May 2017, CBS News reported on
Thursday.
McCabe, who became acting director after Comey’s
firing, said he was disturbed by his conversation with Trump following Comedy’s
dismissal and got the investigations started the following day, according to
excerpts from an interview with “60 Minutes” to be broadcast on Sunday.
“I was speaking to the man who had just run for the
presidency and won the election for the presidency and who might have done so
with the aid of the government of Russia, our most formidable adversary on the
world stage. And that was something that troubled me greatly,” said McCabe.
In the first public confirmation of the
investigation by an official who was involved, McCabe described events that
occurred in the eight days between Comedy’s firing and the appointment of
Special Counsel Robert Mueller to take over the investigations of Russian
interference in the 2016 U.S. election, CBS said.
“I was very concerned that I was able to put the
Russia case on absolutely solid ground in an indelible fashion that were I
removed quickly and reassigned or fired that the case could not be closed or
vanish in the night without a trace,” said McCabe, who is promoting a book to
be released next week, “The Threat: How the FBI Protects America in the Age of
Terror and Trump.”
McCabe confirmed a New York Times report in
September that there were meetings at the Justice Department about whether the
vice president and Cabinet members could be gathered to remove Trump under the
Constitution’s 25th Amendment, which outlines how a sitting president can be
removed.
McCabe also confirmed the newspaper’s account that
Deputy Attorney General Rod Rosenstein considered wearing a wire in meetings
with Trump, CBS reported.
Rosenstein denied the report at the time and a
Justice Department spokeswoman said on Thursday that Rosenstein again rejects
McCabe’s account as “inaccurate and factually incorrect.”
Mueller’s office is examining possible coordination
between Moscow and the Trump campaign. Moscow has denied interfering and Trump
says there was no collusion with his campaign.
Trump, who has frequently criticized
Comey, McCabe and the Russia inquiry, on Thursday attacked McCabe on Twitter as
a leaker and a “disgrace to the FBI.”
More
Economically considered, war and revolution are
always bad business.
Ludwig von Mises
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?
First transport measurements reveal intriguing properties of germanene
Date: February 7, 2019
Source: University of Groningen
Summary: Germanene is a 2D material that derives from
germanium and is related to graphene. As it is not stable outside the vacuum
chambers in which is it produced, no real measurements of its electronic
properties have been made. Scientists have now managed to produce devices with
stable germanene. The material is an insulator, and it becomes a semiconductor
after moderate heating and a very good metallic conductor after stronger
heating.
Germanene is a 2D material that derives from
germanium and is related to graphene. As it is not stable outside the vacuum
chambers in which is it produced, no real measurements of its electronic
properties have been made. Scientists led by Prof. Justin Ye of the University
of Groningen have now managed to produce devices with stable germanene. The
material is an insulator, and it becomes a semiconductor after moderate heating
and a very good metallic conductor after stronger heating. The results were
published in the journal Nano Letters.
Materials of just one atomic layer are of interest
in the construction of new types of microelectronics. The best known of these,
graphene, is an excellent conductor. Materials like silicon and germanium could
be interesting as well, as they are fully compatible with well-established
protocols for device fabrication, and could be seamlessly integrated into the
present semiconductor technology.
Unstable
'But the 2D version of germanium, germanene, is
very unstable', explains University of Groningen Associate Professor of Device
Physics Justin Ye. Germanene is made from germanium by adding calcium. The
calcium ions create 2D layers from a 3D crystal and are then replaced by
hydrogen.
These 2D layers of germanium and hydrogen are called germanane. But
once the hydrogen is removed to form germanene, the material becomes unstable.
Ye and his colleagues solved this in a remarkably
simple way. They made devices with the stable germanane, and then heated the
material to remove the hydrogen. This resulted in stable devices with
germanene, which allowed the scientists to study its electronic properties.
----Germanene can, therefore, be an insulator, a semiconductor or a metallic conductor, depending on the heat treatment with which it is processed. It remains stable after being cooled to room temperature. The heating causes multilayer flakes of germanene to become thinner -- confirmation that the change in conductivity is most likely caused by the disappearance of hydrogen.
Spintronic device
Germanene could be of interest in the construction
of spintronic devices. These devices use a current of electron spins. This is a
quantum mechanical property of electrons, which can best be imagined as
electrons spinning around their own axis, causing them to behave like small compass
needles. Graphene is an excellent conductor of electron spins, but it is hard
to control spins in this material because of their weak interaction with the
carbon atoms (spin-orbit coupling).
'The germanium atoms are heavier, which means there
is a stronger spin-orbit coupling', says Ye. This would provide better control
of spins. Being able to construct metallic germanene with both excellent
conductivity and strong spin-orbit coupling should therefore pave the way to
spintronic devices.
Another
weekend, and a toss up as to whether we are getting a trade deal between
America and China, or getting the trigger pulled on the next global recession. If
punitive tariffs start on March 1, and a no deal Brexit kicks off on March 29,
the rest of 2019 will make 2008 – 2009 look like a time of prosperity. We are
immensely deeper in debt and folly than we were entering 2008. Have a great
weekend everyone. Let’s hope for a miracle ending.
So come with me where dreams are born and time is never planned. Just think of happy things and your heart will fly on wings forever in never never land.
President Trump, with apologies to Peter Pan.
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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