Baltic Dry Index. 677
+23 Brent
Crude 67.25
Car Crash Brexit 14
days away, maybe. Day 105 of the
never-ending China trade talks.
“Let China sleep; when she wakes she will shake the world.”
Napoleon Bonaparte
Tired of the Brexit
farce today, which is well (over covered) in mainstream media, we focus today
on Asia, where China’s rubber stamp parliament just tossed President Trump a
bone. But is it enough for Trump to declare victory in his China trade war, and
sign a new trade deal with President Xi, before the great Asian and European growth slowdown
passes stall speed, tipping the global economy into the next recession?
Below, the news from
Asia this Friday ahead of St Patrick’s Day weekend.
In politics stupidity is not a
handicap.
Napoleon Bonaparte
Asian markets rise, led by Japan’s Nikkei
Published: Mar 15,
2019 2:35 a.m. ET
Asian markets rose in early trading Friday as China took a
step to appease U.S. trade negotiators.Chinese legislators on Friday approved a new law against the forced transfer of technology by foreign companies, which has been a major complaint by the U.S. and other countries. The move was intended to smooth the path to a trade deal, but it’s unclear if it will be enough.
President Donald Trump said Wednesday he was in no hurry to make a deal, and said the U.S. could still walk away from negotiations if terms aren’t to his liking. On Thursday, chief economic adviser Larry Kudlow said a summit between Trump and Chinese President Xi Jinping likely won’t happen until after trade negotiations are settled, adding that Xi is “afraid” to sit down with Trump over fears Trump may walk out at the last minute. Kudlow said Xi wants a signing ceremony, not a negotiating session, the Associated Press reported,.
Meanwhile, investors relaxed slightly as the threat of global financial chaos receded a bit as British lawmakers approved a measure to seek to push the Brexit deadline back to June.
More
Foreign business sceptical as China approves new investment law
March 15, 2019 /
1:23 AM
BEIJING (Reuters)
- China’s parliament approved a new foreign investment law on Friday that
promises to create a transparent environment for foreign firms as China and the
United States work to end a trade war, though there is scepticism about its
enforceability.
The law, to replace existing regulations for joint ventures and wholly
foreign-owned enterprises, is designed to ease concerns among foreign companies
about the difficulties they face operating in the world’s second-largest
economy.
Fast-tracked for approval at this month’s annual session of parliament,
the law comes into effect on Jan. 1, 2020, the state news agency said.
It will ban forced technology transfer and illegal government
“interference” in foreign business practices, according to the latest draft.
The full text has not yet officially been released.
While previous drafts stipulated criminal punishment for officials who
violated the law, a last minute revision detailed by state media this week has
strengthened those clauses.
The changes were widely seen within the U.S. business community as an effort,
in part, by Beijing to address on paper some complaints underlying the bitter
U.S.-China trade dispute.
Washington and Beijing have been locked in a tit-for-tat tariff battle
as U.S. officials press China for an end to practices and policies it argues
have given Chinese firms unfair advantages. These include subsidising of
industry, limits on access for foreign companies and alleged theft of
intellectual property.
Jacob Parker, vice president of China operations at the U.S.-China
Business Council in Beijing, said his group was pleased with the last-minute
changes to further protect foreign firms’ commercial information.
“The addition of language imposing criminal penalties for sharing
sensitive foreign company information adopts a much tougher deterrent against
counterfeiting and IP theft and will offer new avenues for the enforcement of
IP protection,” he said.
However, Parker added that “while the language on criminal liability is
positive, it will be difficult to enforce.”
More
China's residential property market loses momentum
Published: Mar 15, 2019 1:46 a.m. ET
BEIJING--China's property market lost steam in February from the month
before as property controls suppressed demand for homes.
Average prices rose 11.1% in February from a year earlier, according to
calculations by The Wall Street Journal based on data released Friday by the
National Bureau of Statistics. That compares with a 10.8% gain in January.
The average prices in 70 cities increased 0.5% in February from the
previous month, slowing from a 0.6% monthly gain in January. The month-on-month
growth has steadily lost momentum since peaking at 1.5% in August 2018.
Home sales growth had decelerated sharply over the same period, though
developers increased investments in land acquisitions and new construction.
Xi'an home prices had the fastest year-on-year growth of 24%, followed
by Inner Mongolian city Hohhot, up 23%, and port city Dalian, up 21%.
Of first-tier cities, home prices in southern manufacturing hub
Guangzhou rose 11.3% from the previous year, but were more moderate in the
other three cities. Prices were up 2.9% in Beijing, 1.5% in Shanghai and 0.5%
in Shenzhen.
Prices increased from a month earlier in 57 of 70 cities, compared with
58 in January. Prices rose from a year earlier in 69 of 70 cities, compared
with 68 in January.
More
China industrial output growth falls to 17-year low, more support steps expected
March 14, 2019 /
2:15 AM
BEIJING (Reuters)
- Growth in China’s industrial output fell to a 17-year low in the first two
months of the year and the jobless rate rose, pointing to further weakness in
the world’s second-biggest economy that is likely to trigger more support
measures from Beijing
.
But a mixed bag of major data on Thursday also showed property
investment was picking up, while overall retail sales were sluggish but steady,
suggesting the economy is not in the midst of a sharper slowdown.
China is ramping up assistance for the economy as 2019 growth looks set
to plumb 29-year lows, but support measures are taking time to kick in. Most
analysts believe activity may not convincingly stabilise until the middle of
the year.
Premier Li Keqiang last week announced hundreds of billions of dollars
in additional tax cuts and infrastructure spending, even as officials vowed
they would not resort to massive stimulus like in the past, which produced
swift recoveries in China and strong reflationary pulses worldwide.
“The latest data should partially ease concerns about a sharp slowdown
at the start of the year. But the near-term outlook still looks downbeat,”
Capital Economics said in a note.
In particular, Capital Economics and others noted that infrastructure
investment has not improved as much as hoped after the government began
fast-tracking road and rail projects last year, raising the risk of a
milder-than-expected bounce in construction when work resumes in warmer
weather.
Pressured by weak demand at home and abroad, China’s industrial output
rose 5.3 percent in January-February, less than expected and the slowest pace
since early 2002. Growth had been expected to cool to 5.5 percent from
December’s 5.7 percent.
More
Global gloom forces Japan central bank to temper its outlook
March 14, 2019 /
9:06 PM
TOKYO (Reuters) -
The Bank of Japan kept monetary policy steady on Friday but tempered its
optimism that robust exports and factory output will underpin growth, a nod to
heightened overseas risks that threaten to derail a fragile economic recovery.
Factories across the globe slammed on the brakes last month as demand was
hit by the U.S.-China trade war, slowing global growth and political
uncertainty in Europe ahead of Britain’s departure from the European Union.
In a nod to the increased risks, the BOJ cut its assessment on overseas
economies to say they are showing signs of slowdown. It also revised down its
view on exports and output.
“Exports have shown some weaknesses recently,” the central bank said in
a statement on its policy decision, offering a bleaker view than in January
when it said they were increasing as a trend.
At a two-day rate review ending on Friday, the BOJ maintained a pledge
to guide short-term interest rates at minus 0.1 percent and 10-year government
bond yields around zero percent. The widely expected decision was made by a 7-2
vote.
The central bank also stuck to its view Japan’s economy is expanding
moderately, but added a phrase that “exports and output have been affected by
slowing overseas growth.” In January, it said only that the economy was
expanding moderately.
“The sharp deterioration in exports and industrial production should be
a serious source of concern for the BOJ. I think the BOJ is doing some thought
experiments about what they can do,” said Masayuki Kichikawa, chief macro
strategist at Sumitomo Mitsui Asset Management.
“For now you can still make the argument that current economic weakness
is temporary, but this is becoming an increasingly closer call. The next three
months are critical.”
Japan’s exports posted their biggest decline in more than two years in
January as China-bound shipments tumbled. Factory output also posted the
biggest decline in a year in that month, a sign slowing global demand was
taking a toll on Japan Inc.
More
North Korea may suspend nuclear talks with 'gangster-like' U.S. - diplomat
March 15, 2019 /
3:25 AM
SEOUL (Reuters) -
North Korea is considering suspending talks with the United States and may
rethink a ban on missile and nuclear tests unless Washington makes concessions,
news reports from the North’s capital on Friday quoted a senior diplomat as
saying.
Vice Foreign
Minister Choe Son Hui blamed top U.S. officials for the breakdown of last
month’s summit in Hanoi between U.S. President Donald Trump and North Korean
leader Kim Jong Un, Russia’s TASS news agency and the Associated Press said.
“We have no intention to yield to the U.S. demands (at the Hanoi summit)
in any form, nor are we willing to engage in negotiations of this kind,” TASS quoted
Choe as telling reporters in the North Korean capital.
U.S. Secretary of State Mike Pompeo and national security adviser John
Bolton “created the atmosphere of hostility and mistrust and, therefore,
obstructed the constructive effort for negotiations between the supreme leaders
of North Korea and the United States”, Tass quoted Choe as saying.
Kim is set to make an official announcement soon on his position
regarding the denuclearisation talks with the United States and the North’s
further actions, it added, citing Choe.
Choe said Washington threw away a golden opportunity at the summit and
warned that Kim might rethink a moratorium on missile launches and nuclear
tests, the Associated Press news agency said.
“I want to make it clear that the gangster-like stand of the U.S. will
eventually put the situation in danger,” AP quoted her as saying. But she
added: “Personal relations between the two supreme leaders are still good and
the chemistry is mysteriously wonderful.”
More
Finally, it’s an ill
wind and all that. With Airbus demand already at near full capacity, will China
be the big winner it the Boeing crisis?
Boeing Troubles Could Be an Opportunity for Made-in-China Planes
Bloomberg News Mar
14 2019, 8:00 AM Mar 14 2019, 12:23 PM
(Bloomberg Businessweek) -- Airlines worried about buying from Boeing Co. have another supplier besides Airbus SE to choose from: the Chinese government. The state-owned Commercial Aircraft Corp. of China, or Comac, is building the C919, a narrow body passenger plane with a capacity of about 170 that the company says has more than 800 orders worldwide. It will compete with the Boeing 737 Max 8—as well as the Airbus 320neo—as part of Chinese President Xi Jinping’s ambitious gamble to build an aerospace industry from scratch and break Western companies’ grip on the skies.
(Bloomberg Businessweek) -- Airlines worried about buying from Boeing Co. have another supplier besides Airbus SE to choose from: the Chinese government. The state-owned Commercial Aircraft Corp. of China, or Comac, is building the C919, a narrow body passenger plane with a capacity of about 170 that the company says has more than 800 orders worldwide. It will compete with the Boeing 737 Max 8—as well as the Airbus 320neo—as part of Chinese President Xi Jinping’s ambitious gamble to build an aerospace industry from scratch and break Western companies’ grip on the skies.
China grounded the Max 8 within hours of the
Ethiopian Airlines crash, leading a global wave of suspensions. “These kinds of
events provide an opportunity for Comac to get their foot in the door,” says
Chad Ohlandt, a senior engineer at Rand Corp. in Washington. “If they’re smart,
they’re going knocking on doors of whatever 10 airlines are considering buying
narrowbody aircraft.”
The company, which
started test flights of the C919 in 2017, has received 815 orders from 28
customers, including GE Capital Aviation Services. Comac didn’t respond to
requests for comment.
Beijing’s aspirations extend beyond the C919. Comac is working with Moscow-based United Aircraft Corp. to develop the widebody CR929 that could eventually fly long-haul routes such as Beijing to New York. State-owned enterprises are developing a complete range of aircraft, including widebodies, turboprops, business jets, helicopters, seaplanes, and even zeppelins. “Strategically speaking, aviation manufacturing is a national imperative,” says Yu Zhanfu, a partner at Roland Berger Strategy Consultants in Beijing who focuses on aerospace and defense. “Once you have aviation manufacturing reaching economies of scale, it will lift the entire industrial chain.” Comac said in November that China’s aviation market will take delivery of 9,000 planes, worth $1.3 trillion, over the next two decades. Two-thirds of those will be single-aisle planes like the Boeing 737 and the C919.
Shanghai-based Comac is building a training center for maintenance engineers, flight attendants, and other airline employees who will fly the C919 and CR929. “They are doing four, five, or six things in parallel,” Marc Szepan, a lecturer in international business at Oxford’s Said Business School, says of China’s master plan. “They’re firing on all cylinders.”
Beijing’s aspirations extend beyond the C919. Comac is working with Moscow-based United Aircraft Corp. to develop the widebody CR929 that could eventually fly long-haul routes such as Beijing to New York. State-owned enterprises are developing a complete range of aircraft, including widebodies, turboprops, business jets, helicopters, seaplanes, and even zeppelins. “Strategically speaking, aviation manufacturing is a national imperative,” says Yu Zhanfu, a partner at Roland Berger Strategy Consultants in Beijing who focuses on aerospace and defense. “Once you have aviation manufacturing reaching economies of scale, it will lift the entire industrial chain.” Comac said in November that China’s aviation market will take delivery of 9,000 planes, worth $1.3 trillion, over the next two decades. Two-thirds of those will be single-aisle planes like the Boeing 737 and the C919.
Shanghai-based Comac is building a training center for maintenance engineers, flight attendants, and other airline employees who will fly the C919 and CR929. “They are doing four, five, or six things in parallel,” Marc Szepan, a lecturer in international business at Oxford’s Said Business School, says of China’s master plan. “They’re firing on all cylinders.”
More
French investigators set to examine black box data from Ethiopia crash
March 15, 2019 /
5:17 AM
WASHINGTON/PARIS/ADDIS
ABABA (Reuters) - French investigators on Friday will begin analysing data from
the black boxes of the Boeing 737 Max plane that crashed after takeoff from
Addis Ababa killing 157 people, the second such calamity involving the aircraft
since October.
Experts will be
looking for any links between Sunday’s Ethiopian Airlines crash and the October
crash of a 737 Max operated by Lion Air in Indonesia that killed 189 people.
The U.S. Federal Aviation Administration grounded all Boeing MAX jets in
service because of similarities between the two crashes.
Boeing said it had paused deliveries of its fastest-selling 737 MAX
aircraft built at its factory near Seattle, but continues to produce the
single-aisle version of the jet at full speed while dealing with the worldwide
fleet’s grounding.
Possible links between the accidents have rocked the aviation industry,
scared passengers, and left the world’s biggest planemaker scrambling to prove
the safety of a money-spinning model intended to be the standard for decades.
The flight data and cockpit voice recorders were handed over to France’s
Bureau of Enquiry and Analysis for Civil Aviation Safety (BEA) on Thursday.
Technical analysis would begin on Friday and the first conclusions could take
several days.
U.S. lawmakers said on Thursday the 737 Max fleet would be grounded for
weeks if not longer until a software upgrade could be tested and installed.
Boeing has said it would roll out the software improvement “across the
737 MAX fleet in the coming weeks.”
The captain of Ethiopian Airlines Flight 302 requested permission to
return to Addis Ababa airport three minutes after takeoff as it accelerated to
abnormal speed, the New York Times reported.
More
You must not fight too often with
one enemy, or you will teach him all your art of war.
Napoleon Bonaparte
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Today,
as US crop planting intentions form, does China still have Trump trapped over a
soybean barrel. What if the erratic Trump walks on Xi?
Why U.S. growers are betting the farm on soybeans amid China trade war
March 14, 2019 /
4:35 AM
CHICAGO (Reuters)
- U.S. farmers are gearing up to plant what could be their third-largest
soybean crop ever despite failing to sell a mountain of beans from their last
harvest due to a U.S.-China trade war that remains unresolved.
Soybeans were the single most valuable U.S. agricultural export crop and
until the trade war, China bought $12 billion (£9 billion)-worth a year from
American farmers.
But Chinese tariffs have almost halted the trade, taking the biggest
buyer out of the market and leaving farmers with crops they cannot sell. The
U.S. government estimates farmers will have 900 million bushels, or
approximately $8 billion, of last year’s soybeans in storage silos around the
country when they start harvesting the next crop.
The U.S. government rolled out a $12 billion farm aid package last year
to soften the impact of falling revenue on farmers, an important source of
votes for U.S. President Donald Trump.
As winter ends and farmers begin planting, they will continue to plant soy despite uncertainty over whether they will be able to sell beans to China later this year. There are simply no better options, farmers say. (Graphic: tmsnrt.rs/2TkUDjk)
“It is tough to rotate out of soybeans because what else are you going to plant?” said Darin Anderson, a 41-year-old farmer from Valley City, North Dakota.
One alternative, sorghum, was also dragged into the trade war. Farmers also could increase their corn acreage but the corn-based ethanol industry is struggling. Additionally, farmers who plant corn on the same fields two years in a row need to buy extra fertilizer and fuel.
Alternative niche crops such as hemp are expensive to start growing and have limited markets.
“Farmers have made long-term investments whether it is equipment or
storage,” said Josh Gackle, a 44-year-old farmer from Kulm, North Dakota.
“All that is very specialised and the transition to something else takes
a new set of investments.”
That means farmers will plant soybeans in the hope that the trade war
ends, or that they will be compensated by another bailout or crop insurance
schemes.
The U.S. Department of Agriculture (USDA) forecasts farmers will sow 85
million acres of the oilseed this spring. That is down just 4.6 percent from
last year and would be the third largest U.S. area planted with soybeans.
More
One should never forbid what one
lacks the power to prevent.
Napoleon Bonaparte
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?
Large-scale solar power set for double-digit growth - Goldman Sachs
March 14, 2019 /
5:50 AM
SINGAPORE
(Reuters) - Utility-scale solar power capacity is expected to grow by double
digits globally in 2019 and 2020, driven by expansions in the United States,
Europe, Middle East and China, U.S. bank Goldman Sachs said on Thursday.
Solar power is the fastest growing source of electricity generation,
taking market share from fossil fuels like thermal coal and natural gas as
governments and companies increasingly introduce clean energy targets.
“We expect the combination of lower costs for solar and favourable
policy support providing a multi-year runway for utility-scale to drive
meaningful upside to the market,” the U.S. investment bank said in a research
note.
Goldman said it expected utility-scale solar installations globally to
reach to 108 gigawatts (GW) in 2019, up 12 percent on the previous year, and
then grow by another 10 percent in 2020 to 119 GW.
For 2021 and 2022 the bank expected capacity to reach 129 GW and 135 GW.
Utility-scale
solar is defined as an installation that is designed solely to feed electricity
into a grid, unlike smaller scale residential solar units.
Including residential installations, most analysts expect global solar
power capacity to soon hit 600 GW.
“We anticipate some of the strongest growth to materialise in key
regions such as the U.S., Europe, and the Middle East while we see some
potential upside emerging in China where demand appears to have stabilized in
recent months following a collapse through the latter part of 2018,” it added.
More
Another weekend, and more
Brexit and Boeing madness expected. In the never-ending farce of Brexit, the UK
deep state and EU bankster interests are going all out to block the result of
the 2016 referendum, aided by a universally pro-EUSSR left wing media. But
thwarting democracy will likely come at a very high price in the month and
years ahead when the voters strike back.
With Boeing, what did
Boeing know and when did they know it? Was the 737 Max, so design flaw, stall unstable
that Boeing was forced to install the automatic anti-stall software suspected
of causing the two fatal crashes? On take-offs does it fail to recognise that
the angle of attack needs to be high, and mistakenly forces down the planes
nose causing a crash? More will be revealed as the black boxes are examined.
“When you put tariffs on goods that people in the
United States consume every day, it's a consumption tax. So all the tariffs did
is they made products that Americans were going to buy more expensive. And in
fact we got the final trade data numbers ... And lo and behold [in 2018], we
hit an all-time record-high trade deficit globally, and with China."
"Tariffs don't work. If anything, they hurt
the economy because if you're a typical American worker, you have a finite
amount of income to spend. If you have to spend more on the necessity products
that you need to live, you have less to spend on the services that you want to
buy. And you definitely don't have anything left over to save.”
"So
we should try and make the goods as cheap as possible. And we don't produce the
goods in the United States; we import the goods from other countries. And if we
could produce the goods as cheaply as other countries do, we would produce them
in the United States."
Gary Cohn. President Trump's former
director of the National Economic Council.
The monthly Coppock Indicators finished February
DJIA: 25,916 +68 Down. NASDAQ: 7,533 +109 Down.
SP500:
2,784 +62 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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