Baltic
Dry Index 601 -09
Brent Crude 61.67
Trump
25 percent tariffs 17 days away. Brexit 47
days away.
“One of the great mistakes is to judge policies and programs by
their intentions rather than their results.”
Today’s
headline pretty much sums up the week ahead. How well or otherwise the US v China
trade talks in Beijing today and tomorrow go, will dominate the start of this
week, while the prospect of yet another US Federal government shutdown at midnight
Friday will prey on the end of the week.
All
in all, a rather iffy week ahead.
Asian shares slip, looming U.S.-China trade talks in focus
February 11, 2019 / 12:19 AM
SYDNEY (Reuters) - Asian shares started the week on
the backfoot as investors were unable to shake off worries about global growth,
U.S. politics and the Sino-U.S. trade war, keeping the safe-haven dollar well
bid near a six-week top against major currencies.
Chinese shares see-sawed on Monday after they
resumed trading following a week-long Lunar New Year holiday. The blue-chip
index was last up 0.4 percent, Australian stocks were down 0.6 percent while
South Korea eased 0.2 percent.
That left MSCI’s broadest index of Asia-Pacific
shares outside Japan off 0.1 percent after it was toppled from a four-month top
on Friday.
Trading volumes are expected to be light with Japan
on public holiday.
Investors are now looking ahead to trade talks this
week with a delegation of U.S. officials travelling to China for the next round
of negotiations.
“After we went home on Friday, Asian equities closed
the week weaker... reflecting an increased level of apprehension on whether or
not the U.S. and China can find an agreement to de-escalate their trade
tensions ahead of the March 1st deadline,” said Rodrigo Catril, senior forex
strategist at National Australia Bank.
---- The collapse in talks between U.S. Democrat and Republican lawmakers over the weekend amid a clash over immigrant detention policy raised fears of another government shutdown.
That development was yet another worry for markets
already under strain from a drumroll of gloomy news on the global economy. Last
week, the European Commission sharply downgraded euro zone growth for this year
and next and U.S. President Donald Trump added to the anxiety with a
declaration that he had no plans to meet with Chinese President Xi Jinping
before the March 1 deadline to achieve a trade deal.
“Growth is probably the big area of risk – the U.S.
is still on a healthy track but China stabilisation is more hope than reality
at the moment while European momentum continues to soften,” JPMorgan analysts
said in a note.
More
Border-security negotiations stall as another shutdown deadline looms
By Associated
Press Published: Feb 10, 2019 4:30
p.m. ET
WASHINGTON — Bargainers clashed Sunday over whether
to limit the number of migrants authorities can detain, tossing a new hurdle
before negotiators hoping to strike a border security compromise for Congress
to pass this coming week. The White House wouldn’t rule out a renewed partial
government shutdown if an agreement isn’t reached.
With the Friday deadline approaching, the two sides
remained separated by hundreds of millions of dollars over how much to spend to
construct President Donald Trump’s promised border wall. But rising to the fore
was a related dispute over curbing Customs and Immigration Enforcement, or ICE,
the federal agency that Republicans see as an emblem of tough immigration
policies and Democrats accuse of often going too far.
Acting White House chief of staff Mick Mulvaney, in
appearances on NBC’s “Meet the Press” and “Fox News Sunday,” said “you
absolutely cannot” eliminate the possibility of another shutdown if a deal is
not reached over the wall and other border matters. The White House had asked
for $5.7 billion, a figure rejected by the Democratic-controlled House of
Representatives, and the mood among bargainers has soured, according to people
familiar with the negotiations not authorized to speak publicly about private
talks.
“You cannot take a shutdown off the table, and you
cannot take $5.7 (billion) off the table,” Mulvaney told NBC, “but if you end
up someplace in the middle, yeah, then what you probably see is the president
say, ‘Yeah, OK, and I’ll go find the money someplace else.’”
A congressional deal seemed to stall even after
Mulvaney convened a bipartisan group of lawmakers at Camp David, the
presidential retreat in northern Maryland. While the two sides seemed close to
clinching a deal late last week, significant gaps remain and momentum appears
to have slowed. Though congressional Democratic aides asserted that the dispute
had caused the talks to break off, it was initially unclear how damaging the
rift was. Both sides are eager to resolve the long-running battle and avert a
fresh closure of dozens of federal agencies that would begin next weekend if
Congress doesn’t act by Friday.
More
All auto tariff options still on table, says Wilbur Ross
US finalising report on whether imported cars represent
threat to national security
More
Germany's foreign trade hit a fresh record in 2018
February 8, 2019 / 8:03 AM
BERLIN (Reuters) - The volume of Germany’s foreign
trade hit a record in 2018, the Federal Statistics Office said, underlining how
exposed Europe’s largest economy is to a global trading system that is under
threat from protectionism and the threat of a trade war.
The annual figures — showing that Germany had
exported 1.3 trillion euros’ worth of goods and imported 1.1 trillion euros —
exceeded the previous record set in 2017. The trade surplus for the year
narrowed slightly.
Germany, the continent’s economic motor, has boomed
for a decade thanks to its role as a supplier of equipment to the world’s
industrial nations. That makes it vulnerable to a possible trade war between
China and the United States, which has taken a more protectionist stance under
President Donald Trump.
But the latest monthly figures, showing unexpected
month-on-month growth in both exports and imports, appeared to snap a long run
of gloomy economic indicators, possibly indicating that the economy’s
long-expected slowdown may yet be postponed.
More
Finally,
in Europe, populism’s flavour of the year. What could possibly go wrong? Brexit
now, before we get the chance to find out!
Germany's SPD restores working-class appeal before regional votes
February 10, 2019 / 6:59 PM
BERLIN (Reuters) - Germany’s centre-left Social Democrats
(SPD) unveiled a position paper on Sunday that calls for more generous state
allowances for the unemployed, children and pensioners, seeking to appeal to
working class voters in four regional elections this year.
The SPD, junior coalition partners of Chancellor
Angela Merkel’s conservatives, have been debating how to regain the confidence
of voters who handed them their worst results since 1949 in a 2017 national
election.
Even though Merkel’s conservatives are likely to
oppose most of the proposals approved by SPD leaders at a meeting in Berlin,
there is little risk the blueprint will ignite a crisis in the government.
The proposals are designed to unite the SPD before
a regional election in May in the northern city-state of Bremen, where the
party has ruled since 1946 and where a loss to the conservatives would
seriously hurt its chances of revival at the national level. Opinion polls
currently show the SPD one percentage point behind the conservatives in Bremen.
---- The proposals call for extending the period people may claim unemployment benefits, especially those who lose their jobs in their 50s, and increasing unemployment benefits for parents. They also include raising the minimum wage from just over 9 euros an hour currently to 12 euros.
Both the SPD and conservatives were punished in the
2017 election by voters angry at Merkel’s decision two years earlier to welcome
almost a million asylum seekers, mainly Muslims from Syria, Afghanistan and
Iraq.
More
Italy's populist leaders pledge to replace central bank's top brass
February 9, 2019 / 3:21 PM
VICENZA, Italy (Reuters) - Italy’s populist leaders on
Saturday promised to replace top officials at the country’s central bank, who
they said must pay for failing to prevent a spate of banking scandals in which
thousands lost their savings.
The first Bank of Italy director in the sights of
the anti-establishment 5-Star Movement and the right-wing League is Luigi
Signorini, a member of its five-member executive board whose renewable six-year
mandate expires this month.
“The management of the Bank of Italy and (market
watchdog) Consob have to be completely cleared out,” League chief Matteo
Salvini told a gathering of former clients of small northern banks wound down
in 2017.
“We are here because those who should have
supervised didn’t supervise.”
A Bank of Italy spokeswoman declined to comment.
In May, two other members of the bank’s board,
including deputy governor Salvatore Rossi, will be up for renewal.
Salvini and 5-Star Leader Luigi Di Maio told the
audience in Vicenza, home of one of the failed banks, that those who lost money
would be compensated.
The two politicians, who serve as joint deputy
prime ministers and are on the campaign trail for European parliament elections
in May, have a wary relationship with Bank of Italy Governor Ignazio Visco.
More
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over banksters and politicians.
Today, US steel tariffs. Curiouser and
curiouser.
“Nothing is so permanent as a temporary government program.”
U.S. steel tariff 'boondoggle' offers more exclusions to China than Canada
40 per cent of Chinese steel imports - and just 2 per cent of Canadian imports - excluded from U.S. tariff
· CBC News · Posted: Feb 09,
2019 4:00 AM ET
If the Trump administration's tariff policy is
meant to target unfair Chinese trade, it sure has a funny way of going about
it.
So far, the U.S. Department of Commerce has
excluded about 40 per cent of imports of Chinese steel from facing its 25
per cent tariff. But to date, only two per cent of the total volume of Canadian
steel imports to the U.S. has been cleared to dodge the tariff.
The head-scratching discrepancy gets even stranger
with the United States' 10 per cent tariff on aluminum imports.
About 86 per cent of Chinese aluminum imports now
enter the U.S. tariff-free, while less than one per cent of Canadian
aluminum shipments do.
"If the whole point was to do this for China
in the first place, then why are the approval rates for China so much higher
than other countries?" said Christine McDaniel, a former White House
economic adviser, now a senior research fellow with the Mercatus Center at
George Mason University.
"It just doesn't make sense."
The recent U.S. government shutdown gave McDaniel and her research colleague Danielle Parks an opening to comb through all the exclusion applications submitted last year and group the results by country of origin. Exclusion applications are filed by importers — manufacturers, retailers or construction companies, for example — who want to import tariff-free. McDaniel said the results of their research were so surprising, they ran the numbers a second time just to make sure.
"It does correspond with what we're hearing anecdotally from steelmakers in Canada — that they're not getting anything through," McDaniel said.
Catherine Cobden, the new president of the Canadian Steel Producers Association, said the analysis tells a pretty troubling story.
"Canada's getting hurt more than others through the tariffs," she said. "Are these tariffs doing what they were intended to do?"
The tariffs aren't giving North American suppliers a boost, she said. Quite the opposite.
"Whatever process they're using, it's unfairly tilted towards China, which is crazy," she said. Her association's members suspected the tariffs were distorting markets, she said, but this work "demonstrates with real data what that picture looks like."
U.S. steelmakers objecting to exclusions
While the results for China conflict with the Trump administration's rhetoric, the large exporting country that's been most successful in the exclusion process so far is Japan: 62 per cent of its steel imports to the U.S. no longer face the tariff.The Japanese manufacture specialty metals; comparable U.S. substitutes tend not to be available for them. It's possible that what Canadian mills produce is more easily swapped with American product.
Exclusion applications are considered according to specific criteria, such as whether the same product is available in the U.S. Domestic steel companies can monitor these applications and file objections, according to their own business interests. The complicated process also allows for a rebuttal from the company trying to get its shipments excluded.
In some cases, the arguments have sought to interfere in companies' right to make their own business decisions, McDaniel said. One company, she said, was told it shouldn't be able to import pipe of a certain length tariff-free when it could buy American pipe and weld pieces together to make up the right length — notwithstanding the extra labour and environmental effects involved.
"The vast majority of objections are filed by
a small handful of U.S. steelmakers," McDaniel said.
And some aren't even
realistic. "These steelmakers are objecting to way more
than they could produce themselves," based on their annual production
capacity, she said.
Those objections are influencing results.
Nearly every denied application McDaniel examined resulted from an
objection.
The process the U.S. Commerce bureaucrats are using
is quite antiquated, she said, and is not tracking cumulative amounts to
test what's realistic, or whether certain countries are emerging as
winners or losers: each case is considered in isolation, with no unified
strategy driving the results.
"The law firms love this because the more
complicated this is, the better for them," she said. All the separate
applications, objections and rebuttals — "they're billing all of
that.
"It's a big boondoggle."
----Canada is the top international supplier of both steel and aluminum to the U.S. by a significant margin.
Even though data are only available for the first
four months after the steel tariffs took effect last Canada Day, there's
already evidence that Canadian shipments to the U.S. have dropped.
"It's almost like steel tariffs are just
diverting our sources of product. What would normally be from Canada and Brazil
and Mexico ... now we see the approval rates are much higher for Japan,
Thailand, the Netherlands, Poland ..." McDaniel said.
For some smaller exporting countries, the U.S.
Department of Commerce has approved exclusion requests in volumes
far exceeding historical trade volumes. Polish steel, for
example, has been approved for exclusions covering nearly nine times
the volume of its exports to the U.S. in 2017.
More
“Many people want the government to protect the consumer. A much
more urgent problem is to protect the consumer from the government.”
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?
Green water-purification system works without heavy metals or corrosive chemicals
Date: February 7,
2019
Source: Cell Press
Summary:
Scientists have developed an effective and energy-efficient technique for
purifying water by using graphitic carbon nitride sheets. Their prototype
purified pathogen-rich water in 30 minutes, killing over 99.9999 percent of
bacteria, such as E. coli, meeting China's requirements for clean drinking
water.
Scientists at the Institute of Process Engineering
(IPE) at the Chinese Academy of Sciences in Beijing and Yangzhou University
(YZU) in Jiangsu have developed an effective and energy-efficient technique for
purifying water by using graphitic carbon nitride sheets.
Their prototype, presented February 7 in the
journal Chem, purified pathogen-rich water in 30 min, killing over
99.9999% of bacteria, such as E. coli, meeting China's requirements for
clean drinking water. Unlike metal-based photocatalytic disinfectants, it
achieved this standard without leaving behind secondary pollution or
heavy-metal-ion residues, offering a promising alternative to less eco-friendly
technologies.
"The future application of photocatalytic
disinfection technology can significantly relieve clean-water scarcity and
global energy shortage," says Dan Wang, a professor at the Institute of
Process Engineering and a senior author on the paper.
Unlike traditional water-purification processes
using ultraviolet light, chlorination, or ozone disinfection, photocatalytic
methods offer environmentally safe water treatment -- as long as they use the
right catalyst. But unfortunately, these greener catalysts tend to be less
efficient than metal-based varieties. Widely studied carbon-based catalysts,
such as carbon nanotubes and graphene oxide, aren't quite effective enough for
practical water-treatment purposes because they fail to produce enough reactive
oxygen to overcome pathogens.
The team from IPE and YZU manages to bypass these
failings with a unique catalytic design. They utilize nanosheets of graphitic
carbon nitride, an ultra-thin two-dimensional material with the right
electronic properties to absorb the light and generate reactive oxygen. This
configuration helped to facilitate the reaction by generating plenty of
hydrogen peroxide, which efficiently kills bacteria by oxidizing their cell
walls and wreaking havoc on their chemical structures.
Ultimately, Wang believes that these results, as
well as the simplicity of the design and inexpensive materials, mean the
technology should be relatively easy to develop on a larger scale. "The
scale-up for both the catalysts and the device is not difficult," he says.
"The construction of this material is completely metal-free, and one of
the key components, the plastic bag, is commercialized, which makes it easy to
obtain."
The team intends to hone the technique before it is
ready for commercial use. As the next steps, they plan to improve efficiency by
expanding the edge of the material's ability to absorb photons, develop
antibacterial fibers, and refine the nanosheet preparation process.
However, he acknowledges that this bacteria-killing
system is not intended to single-handedly purify water. "Purification
needs other devices for removing heavy-metal ions, adjusting pH, and removing
residue," he says. "We need to combine our system with others to meet
water-purification requirements."
“I am favor of cutting taxes under any circumstances and for any
excuse, for any reason, whenever it's possible.”
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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