Monday, 25 February 2019

Trade War Delayed. Europe Up Next.


Baltic Dry Index. 634 +04    Brent Crude 66.90

Trump 25 percent tariffs Postponed.  Brexit 33 days away.

“If you're not gonna pull the trigger, don't point the gun.”

James Baker. United States Secretary of the Treasury under President Ronald Reagan, and U.S. Secretary of State and White House Chief of Staff under President George H. W. Bush.

On Sunday, President Trump declared a victory of sorts over China in his trade war, and again postponed his threat to impose 25 percent punitive tariffs on Chinese exports. He also invited President Xi  to join him next month in Palm Beach for a final trade deal signing ceremony.

Despite details lacking, Asian stock markets liked what they heard, and got on with the start of a relief rally. The new trade deal, whatever it is, for now stops what could have been a massive global trade blunder in a global economy already seriously slowing, with GDP figures from America due out on Thursday, expected to show that the USA’s growth has joined in the slowing too.

The GDP numbers come following Friday’s USDA planting intentions report which showed a massive decline in intentions for US farmers to plant soybeans. China’s farm retaliation has deeply hit President Trump’s base in the farm states.

As always the devil is in the yet unknown details, but for this week at least we can all, except the Europeans especially car makers, share in that sigh of relief that we are not going to intentionally bring on a new recession in 2019. While that might still happen the odds are greatly reduced and it won’t be by imposing punitive tariffs starting on Friday. The Europeans will take note of the Chinese negotiating tactics that caused President Trump to back down.

Below President Trump declares victory in the Pacific.

China shares surge as Trump offers tariff respite

February 24, 2019 / 11:33 PM
SYDNEY (Reuters) - A surge in Shanghai shares led Asia higher on Monday after U.S. President Donald Trump confirmed he would delay a planned hike in tariffs on Chinese imports as talks between the two sides made “substantial progress”.

Chinese blue chips jumped 3.5 percent to territory last trod in mid-June. That brought gains this year to 20 percent, helped in part by Beijing’s efforts to pump new credit into the financial system.

The Australian dollar, a liquid proxy for China investments, got a mild lift from the news and the dollar touched a fresh seven-month low on the yuan. 

MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.3 percent to the highest since October, and is up 10 percent for the year so far.

Japan’s Nikkei climbed 0.5 percent to levels last seen in mid-December. E-Mini futures for the S&P 500 edged up 0.2 percent, while spreadbetters pointed to opening gains for the major European bourses.

Trump on Sunday tweeted he would push back the March 1 deadline for higher tariffs and looked forward to a meeting with Chinese President Xi Jinping when a deal was sealed.

U.S. and Chinese negotiators were discussing the thorny issue of how to enforce a potential trade deal on Sunday after moving ahead on structural issues, a source said.

Trump tweeted progress had been made on intellectual property, technology transfers, agriculture, services and currencies.

“The high frequency engagement between Beijing and Washington at a senior level implies that both sides are looking for some form of settlement,” said Tai Hui, chief market strategist Asia Pacific at J.P. Morgan Asset Management.
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Farmers plan to plant 7 million fewer acres of soybeans this year

Feb. 22, 2019 / 5:01 PM
EVANSVILLE, Ind., Feb. 22 (UPI) -- American farmers plan to plant fewer soybeans this year, after the trade war with China crashed soy prices in 2018 and left millions of bushels unsold, according to a new federal report.

The U.S. Department of Agriculture's annual outlook for soy and other commodities, released Friday, predicts soy production will fall by about 8 percent. That's more than 7 million acres, or 11,000 square miles.

"This year's outlook represents a dramatic change from prior years because of China's imposition of tariffs on U.S. soybeans," the USDA's report said.

The areas most affected are states like North Dakota, South Dakota, Minnesota and Nebraska. Their geographical location means those states supply the lion's share of U.S. soybeans to China. Trains from that region travel directly to the Pacific Northwest, from which barges move commodities to Asia.

"More than 70 percent of [North Dakota's] soybeans are exported to China," said Nancy Johnson, the executive director of the North Dakota Soybean Growers Association. "We have a fabulous system for getting soybeans on trains to the Pacific Northwest. With [the China] market closed, it's been hard."

The production value of soy exceeded $41 billion in 2017, according to the American Soybean Association -- in large part due to China's demand for beans. China is the world's single largest soy importer, and the country purchased about 30 percent of all the beans grown in the United States, mostly to feed livestock, before the trade war began, according to U.S. government statistics.

After China placed retaliatory tariffs on soybeans over the summer, in response to tariffs levied by the Trump administration on Chinese goods, the nation all but stopped importing from the U.S.

While farmers in states like Iowa and Indiana have been able to sell their beans domestically or to countries other than China, farmers in the Great Plains have had to store large portions of their 2018 crop, and wait for the trade war to end.

Soy production is expected to drop more severely in those states, the report said.

"Because of our crop rotation, we can't just quit altogether," said Ron Van Bruggen, a farmer in Litchville, N.D. "But our plan is to grow less. We're going to cut back by about 25 percent."

Like other farmers in the region, Van Bruggen plans to replace that crop by planting corn and wheat, instead.

Overall, corn and wheat production is expected to increase this year, according to the report.
https://www.upi.com/Top_News/US/2019/02/22/Farmers-plan-to-plant-7-million-fewer-acres-of-soybeans-this-year/6031550870599/?ts_=6

Braking economy hasn’t come to a halt, but GDP to show it’s lost plenty of steam

By Jeffry Bartash  Published: Feb 23, 2019 12:01 p.m. ET

U.S. off to slow start — again — early in new year.

Will the U.S. finally show 3% annual growth for the first time since 2005? Maybe, but don’t bet the house on it.

The economy sped forward like a bullet train last spring and summer, but the main engines of growth faltered in the waning months of 2018. That might be enough to keep the U.S. from achieving 3% growth for the first time since President George W. Bush was early in his second term.

Economists polled by MarketWatch predict gross domestic product will slip to a 2% annual pace in the fourth quarter from 3.4% and 4.2% in the prior two quarters.

If they’re right, the U.S. will just fall short of 3% annual growth.

Although the 3% figure is largely symbolic, the Trump White House would love to top that mark to offer proof that its pro-business tilt is working. Administration officials have repeatedly vowed to generate 3% or even 4% GDP growth.

The government will unveil its latest report card on the economy on Thursday, nearly a month later than usual owing to the recently ended partial federal shutdown. A slew of other reports that were also delayed are on tap.

The backlog is likely to show a drop-off in consumer spending, especially retail sales. Business investment also softened. Consumers and businesses represent the two biggest pegs in the U.S. economy.
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Kudlow Says He's Working to End Tariffs as Canada Balks

By Greg Quinn
Updated on 24 February 2019, 20:37 GMT
·        


Canada minister says metals duties threaten deal ratification
·         Kudlow calls trade pact a ‘template’ for other potential deals
https://www.bloomberg.com/news/articles/2019-02-24/kudlow-working-to-end-tariffs-as-canada-balks-at-approving-usmca

Unless you are willing to compromise, society cannot live together.

Alan Greenspan

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
While President Trump “wins” one trade war, the deep state civil war is about to go up a few gears. The Mueller report is due next month.

The Greatest Constitutional Crisis Since the Civil War

By Conrad Black| February 21st, 2019
The most immense and dangerous public scandal in American history is finally cracking open like a ripe pomegranate. The broad swath of the Trump-hating media that has participated in what has amounted to an unconstitutional attempt to overthrow the government are reduced to reporting the events and revelations of the scandal in which they have been complicit, in a po-faced ho-hum manner to impart to the misinformed public that this is as routine as stock market fluctuations or the burning of an American flag in Tehran.

For more than two years, the United States and the world have had two competing narratives: that an elected president of the United States was a Russian agent whom the Kremlin helped elect; and its rival narrative that senior officials of the Justice Department, FBI, CIA, and other national intelligence organizations had repeatedly lied under oath, misinformed federal officials, and meddled in partisan political matters illegally and unconstitutionally and had effectively tried to influence the outcome of a presidential election, and then undo its result by falsely propagating the first narrative. It is now obvious and indisputable that the second narrative is the correct one.

The authors, accomplices, and dupes of this attempted overthrow of constitutional government are now well along in reciting their misconduct without embarrassment or remorse because—in fired FBI Director James Comey’s formulation—a “higher duty” than the oath they swore to uphold the Constitution compelled them. Or—in fired FBI Deputy Director Andrew McCabe’s words—“the threat” was too great. Nevermind that the nature of “the threat” was that the people might elect someone he and Comey disapproved of as president, and that that person might actually serve his term, as elected.

A Long List of Offenders—and Offenses

The extent of the criminal misconduct of the former law enforcement and intelligence chiefs is now notorious, but to make the right point here, it has to be summarized. The fact that the officially preferred candidate lied to federal officials about her emails and acted in outright contempt of Congress and the legal process in the destruction of evidence, was simply ignored by the FBI director, who announced that she would not be prosecuted, though he had no authority to make that determination.

The dossier of salacious gossip and defamatory falsehoods amassed by a retired British spy from the lowest grade of intelligence sources in Russia, commissioned and paid for by the Clinton campaign and Democratic National Committee, was circulated to the media by high public officials and cited in illegal and dishonest applications to authorize surveillance of the campaign of the other presidential candidate. A special counsel was empowered on the false pretext of the necessity to get to the bottom of Trump-Russian collusion in the election, of which there was and remains no evidence, because it did not occur and was a complete partisan fabrication.

The special counsel then packed his staff with militant Clinton partisans, and acted very late and only when his hand was forced by the media to remove two officials who referred in texts to each other to the Bureau’s ability to smear and provoke the impeachment of the winning candidate as “an insurance policy” against his filling the office to which he was elected.

Large sections of the media colluded with the Democratic campaign and produced the doctrine that anything was justifiable, no matter how dishonest, to destroy the incoming president’s reputation and damage him in public opinion polls to legitimize attempts to remove him from office. Large sections of the media deliberately deluged the public with stories they knew to be false about the new president and referred to him in terms of unprecedented vituperation in what purported to be reportage and not comment.

This unorganized but widespread campaign of defamation was taken up by a great number of ordinarily newsworthy celebrities and was accompanied by false, unresearched stories denigrating President Trump’s supporters, such as the false claims about Catholic school students’ treatment of an elderly native American and the false claim that actor Jussie Smollett had been beaten up and reviled by Trump supporters. The former intelligence chiefs of the nation under President Obama repeatedly have accused this president of treason, the most heinous of all crimes, and have asserted with the authority of their former positions that the Russians determined the result of the 2016 presidential election. They knew this to be entirely false.
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Ex-Trump lawyer Cohen gave prosecutors information on Trump family business - NYT

February 22, 2019 / 11:20 PM
(Reuters) - U.S. President Donald Trump’s former personal lawyer Michael Cohen met last month with federal prosecutors in Manhattan and provided information about potential irregularities in the Trump family business, the New York Times reported on Friday.

The newspaper, citing people familiar with the matter, said prosecutors in the Southern District of New York also asked Cohen questions about Imaad Zuberi, a venture capitalist and donor to the president’s inaugural committee.

Cohen, a former employee at the Trump Organization, provided the prosecutors with information about insurance claims filed by the company over the years, the New York Times reported. There was no indication that Cohen implicated Trump in the possible irregularities, the newspaper said.

James Margolin, a spokesman for the U.S. Attorney in Manhattan, declined comment. Amanda Miller, a spokeswoman for the Trump Organization, did not immediately respond to requests for comment. Cohen did not reply to a request for comment.
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What a sound money system does is to stabilize all the elements in it, and reduces the uncertainty that people confront. And the one thing all human beings do when they are confronted with uncertainty is pull back, withdraw, disengage, and that means economic activity, which is really dealing with people, just goes straight down.

Alan Greenspan
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?

Expanding the use of silicon in batteries, by preventing electrodes from expanding

An injection of MXene ink fortifies silicon anodes to absorb charge without terminal swelling

Date: February 21, 2019

Source: Drexel University

Summary: Silicon anodes are generally viewed as the next development in lithium-ion battery technology. Silicon's ability to absorb more charge translates to longer battery life and smaller batteries, if researchers can check the physical expansion of the silicon that comes with charging. Research suggests that adding MXene ink to the silicon electrode-making process would do just that.

The latest lithium-ion batteries on the market are likely to extend the charge-to-charge life of phones and electric cars by as much as 40 percent. This leap forward, which comes after more than a decade of incremental improvements, is happening because developers replaced the battery's graphite anode with one made from silicon. Research from Drexel University and Trinity College in Ireland now suggests that an even greater improvement could be in line if the silicon is fortified with a special type of material called MXene.

This adjustment could extend the life of Li-ion batteries as much as five times, the group recently reported in Nature Communications. It's possible because of the two-dimensional MXene material's ability to prevent the silicon anode from expanding to its breaking point during charging -- a problem that's prevented its use for some time.

"Silicon anodes are projected to replace graphite anodes in Li-ion batteries with a huge impact on the amount of energy stored," said Yury Gogotsi, PhD, Distinguished University and Bach Professor in Drexel's College of Engineering and director of the A.J. Drexel Nanomaterials Institute in the Department of Materials Science and Engineering, who was a co-author of the research. "We've discovered adding MXene materials to the silicon anodes can stabilize them enough to actually be used in batteries."

In batteries, charge is held in electrodes -- the cathode and anode -- and delivered to our devices as ions travel from anode to cathode. The ions return to the anode when the battery is recharged. Battery life has steadily been increased by finding ways to improve the electrodes' ability to send and receive more ions. Substituting silicon for graphite as the primary material in the Li-ion anode would improve its capacity for taking in ions because each silicon atom can accept up to four lithium ions, while in graphite anodes, six carbon atoms take in just one lithium. But as it charges, silicon also expands -- as much as 300 percent -- which can cause it to break and the battery to malfunction.

Most solutions to this problem have involved adding carbon materials and polymer binders to create a framework to contain the silicon. The process for doing it, according to Gogotsi, is complex and carbon contributes little to charge storage by the battery.

By contrast, the Drexel and Trinity group's method mixes silicon powder into a MXene solution to create a hybrid silicon-MXene anode. MXene nanosheets distribute randomly and form a continuous network while wrapping around the silicon particles, thus acting as conductive additive and binder at the same time. It's the MXene framework that also imposes order on ions as they arrive and prevents the anode from expanding.
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"On the whole human beings want to be good, but not too good, and not quite all the time.”

George Orwell.

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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