Baltic Dry Index. 669
+05 Brent
Crude 65.36
There is scarcely anything that
drags a person down like debt.
P. T. Barnum
The never-ending hype
about a US v China trade deal is now losing its effectiveness in global
markets, where stocks are churning away and burning up cash, unable to break through
the top. Increasingly it’s looking like the global economy is rolling over
again from boom towards bust.
Below, today’s pause
in the markets. A mere blip, or the prelude to another major rotation out of
stocks?
Asian Stocks Edge Lower; Dollar Pushes Higher: Markets Wrap
By Andreea Papuc
Updated on 5 March 2019, 04:56 GMT
Asian stocks slipped Tuesday as investors looked for
details of a possible Sino-American trade deal and China lowered its goal for economic
growth. The dollar edged higher and Treasury yields steadied.Equities declined across the region after the S&P 500 Index fell the most in a month, though losses were pared as the session progressed. U.S. futures were little changed. Chinese stocks outperformed and the yuan ticked higher after the government also announced a major tax cut. The yen dipped while the Australian dollar remained near a three-week low after the central bank left its benchmark interest rate unchanged.
After stocks on Monday were buoyed by news
that the world’s two-largest economies were close to a trade deal that could
lift most or all U.S. tariffs, investors are now hungry for concrete details
before they push a global equities rally further. That’s especially more urgent
amid growing evidence that the trade wars are hitting the U.S. economy.
----Here are some key events coming up:
- China’s National People’s Congress opens in Beijing on Tuesday. Premier Li Keqiang will announce an economic growth target. The Chinese People’s Political Consultative Conference runs concurrently. Through March 15.
- Australia’s central bank Governor Philip Lowe will give a speech on the housing market Wednesday.
- Bank of Canada Governor Stephen Poloz is expected to keep rates on hold Wednesday due to lingering uncertainty on housing and investment, while sticking to his message that borrowing costs eventually need to head higher.
- European Central Bank policy makers are expected to leave rates unchanged amid a deteriorating outlook. President Mario Draghi will hold a news conference on Thursday after the decision.
- The U.S. jobs report Friday may show hiring moderated in February. Nonfarm payrolls may have increased by 185,000 while the jobless rate fell to 3.9 percent, according to estimates.
More
China Lowers Growth Target and Cuts Taxes as Economy Slows
Bloomberg News
Updated on 5 March 2019, 02:39 GMT
China lowered its goal for economic growth and announced a
major tax cut, as policymakers seek to pull off a gradual deceleration while
grappling with a debt legacy and the trade standoff with the U.S.The gross domestic product growth target released Tuesday morning in Premier Li Keqiang’s annual work report to the National People’s Congress was set at a range of 6 to 6.5 percent for 2019. The shift to a band from the previous practice of using a point figure gives policy makers room for maneuver and compares with last year’s “about” 6.5 percent goal.
The lower bound of the GDP target would be the slowest pace of economic
growth in almost three decades, a consequence of China’s long deceleration as
policy makers prioritize reining in debt risks, cleaning up the environment and
alleviating poverty. Warning of a “tough economic battle ahead,” Li announced
tax cuts worth 2 trillion yuan ($298 billion) for the year.
“These targets accommodate structural deceleration but not cyclical,
which means that policy makers will need to flex their muscles to stimulate the
economy,” said Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis
SA in Hong Kong. “It’s good news for the market in the short term; bad news for
China in the medium term as more leverage will need to be piled up.”
----“There
are two particularly positive developments in Tuesday’s announcement:
wide-ranging tax cuts, particularly reductions in value added taxes, and a
signal for targeted monetary support for the economy rather than a flood of
liquidity,” wrote David Qu and Chang Shu in a note. "The range signals
the top leadership’s pragmatism in accepting a mild slowdown."
More
In EUSSR news,
rushing towards a no deal Brexit, Spain joined Italy and Germany in heading
towards a new recession. With a no deal Brexit can a new European recession be
avoided? Perhaps, but that’s not the way to bet.
Spain Manufacturing PMI
The IHS Markit Spain Manufacturing PMI fell to 49.9 in February 2019 from 52.4 in the previous month and below market expectations of 51.7. The reading pointed to the first contraction in the factory activity since November 2013, as new orders fell for the first time since July 2016, mainly due to weak demand in European countries and a decline in sales to China. Also, output advanced marginally and at a softer pace; backlogs of work declined for a second month in the past three and employment was unchanged amid worries over the downward trend in new work. Additionally, manufacturers reduce their inventories of finished goods markedly due to the decrease in demand. On the price front, input and output prices slowed driven by lower cost of oil-based products. Finally, business confidence dropped to a three-month low amid worries regarding new export orders. Manufacturing PMI in Spain is reported by Markit Economics.
Finally, the
international game of political prisoner hostages turns uglier. Anything Uncle
Scam can do, China’s Panda can do too. Where it all ends is anyone’s guess, but
historically it usually ends in war.
China says Canadian stole secrets; Huawei to sue U.S.
March 3, 2019 /
11:14 PM
BEIJING/OTTAWA
(Reuters) - China’s government and its leading smartphone maker, Huawei
Technologies Ltd, stepped up pressure on Monday on the U.S. and Canadian
governments in a dispute over trade and telecoms technology that has ensnared
Huawei’s CFO, who faces U.S. criminal charges.
China on Monday accused detained Canadian citizen Michael Kovrig of
stealing state secrets passed on to him from another detained Canadian,
businessman Michael Spavor, in a move likely to increase tension between Ottawa
and Beijing.
The telecom gear maker is also preparing a lawsuit against the U.S.
government over a law that restricts its market access.
It was the latest escalation of an unprecedented crisis for Huawei, the
world’s largest telecommunications equipment maker and No. 2 manufacturer of
smartphones, as Washington calls on governments around the world to stop using
its gear, particularly in the next generation of telecommunication networks,
known as 5G.
Spavor, a business consultant with deep ties to Pyongyang, had been
trying to drum up international interest in investing in North Korean economic
projects. He and Kovrig, a former diplomat, were picked up in December, shortly
after Canada arrested Huawei Chief Financial Officer Meng Wanzhou, who faces
extradition to the United States.
The Communist Party’s Central Political and Legal Affairs Commission
said Kovrig had often entered China using an ordinary passport and business
visas, “stealing and spying on sensitive Chinese information and intelligence
via a contact in China.”
“We are obviously very concerned with this position that China has
taken,” Canadian Prime Minister Justin Trudeau said about the accusations on
Monday. “We’ve been engaging and standing up for the two Canadians who have
been arbitrarily detained by China from the very beginning.”
Lawyers for Meng are suing the Canadian government, its border agency
and federal police, alleging their client was detained, searched and
interrogated for three hours in violation of her constitutional rights.
Canada arrested Meng in Vancouver on Dec. 1 at the request of the United
States, which has charged her with bank and wire fraud to violate American
sanctions against Iran by doing business through a subsidiary it tried to hide.
More
“A good
politician is quite as unthinkable as an honest burglar.”
H. L.
Mencken.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Yes, Unicorn ranching again.
Cryptocurrency, but is it a currency or just another scam? Fools and their
money and all that.
“There's
a sucker born every minute.”
Quadriga Crypto Mystery Deepens With ‘Cold Wallets’ Found Empty
By Doug Alexander
1 March 2019, 22:46 GMT
When Quadriga
Fintech Solutions Corp. founder Gerald Cotten died, account holders
feared the encrypted access keys needed to recover C$190 million ($143 million)
of cryptocurrencies held by the exchange in offline storage could be lost
forever.It looks now like the storage Quadriga is known to have used -- dubbed cold wallets -- has been empty since April.
This marks the latest twist for a Vancouver-based digital exchange that
shuttered operations at the end of January, leaving 115,000 customers
out-of-pocket for about C$260 million in cash and cryptocurrencies. The firm
has been under court-approved creditor protection since Feb. 5 and Ernst &
Young has been sorting through Quadriga’s dealings as a monitor under the
process. The monitor’s latest report, released Friday, shows troublesome news.
Quadriga was primarily run by Cotten, using his laptop, and his widow
has described his normal procedures for transactions as moving “the majority of
the coins to cold storage as a way to protect the coins from hacking or virtual
theft,” according to the March 1 report.
Ernst & Young identified six cold wallet addresses used by Quadriga
to store Bitcoin in the past. Five of those wallets haven’t had any balances
since April 2018, and a sixth “appears to have been used to receive Bitcoin
from another cryptocurrency exchange account and subsequently transfer Bitcoin
to the Quadriga hot wallet” on Dec. 3. The only activity since was an
inadvertent transfer of Bitcoin into that sixth wallet last month, which was
disclosed earlier.
Crypto investors and exchanges often keep their holdings in cold wallets
-- typically, physical devices disconnected from the web that can be plugged
into a computer when needed since internet-connected hot wallets can be
vulnerable to hackers.
A preliminary review of transactions of the six wallets using public
blockchain records showed that from April 2014 to approximately April 2018,
aggregate Bitcoin month end balances in the identified cold wallets ranged from
zero to a peak of 2,776 Bitcoin. The average aggregate month end balance over
the four-year period was approximately 124 Bitcoin. Some Bitcoin in the wallets
appear to have been transferred to accounts at other crypto exchanges.
Ernst & Young identified another three cold wallet addresses
potentially used by Quadriga and started doing a similar analysis -- though
even those ones contain no cryptocurrency.
Another 14 user accounts created outside the normal process were also
identified, with deposits artificially created and used for trading. The
monitor has reached out to 14 exchanges and received responses so far from
four. It didn’t name the exchanges.
Quadriga’s platform data is stored on the cloud with Amazon.com’s Amazon
Web Services, or AWS. While Jennifer Robertson, Cotten’s widow, has asked for
access to the data, she has been denied because it was in his name rather than
registered under the company. Ernst & Young has requested the court grant
an order authorizing access.
As a general thing, I have not
'duped the world' nor attempted to do so... I have generally given people the
worth of their money twice told.
P. T. Barnum
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?
Geneva Motor Show: Why it will be electrifying
4 March 2019
The Geneva International Motor Show, which gets under way in Switzerland
this week, is one of the biggest events on the global auto industry calendar.
At a time when many traditional motor shows seem to be in decline, with
manufacturers increasingly wary of spending cash on big set-piece events,
Geneva still looks healthy.
Unlike the other major European events, in Frankfurt and Paris, it isn't
dominated by one nation's manufacturers. Held on neutral ground, it also
attracts many smaller businesses, such as tuning houses and niche sportscar
makers.
There's a much greater emphasis on speed and style than you might see
elsewhere, and as befits a show that once welcomed concepts for nuclear-powered
vehicles, there's a strong focus on innovation.
The glitzy car launches, with their deafening sound and light shows, and
the acres of shiny bodywork on display will present a confident image to the
world.
Electric showcase
But there's no escaping the fact that this is an industry in transition, with many manufacturers struggling to make profits, and apprehensive about the future.Electrification is likely to be the dominant theme at Geneva this year, and for good reason.
New European emissions regulations, which are being phased in from next
year, will force manufacturers to reduce drastically the amount of carbon
dioxide emitted by their cars, or face steep fines.
Those targets will apply to average emissions across each carmaker's
model range. Having low or zero-emissions cars, such as fully electric and
plug-in hybrids, in their fleets will help to bring down the average.
"Not only do they have to make electric cars, the way the rules
work they actually have to sell them as well," explains James Attwood,
deputy editor of Autocar magazine.
Small wonder then that carmakers are scrambling to develop new electric
vehicles. What we'll see at Geneva, however, is a large number of plug-in
hybrids - and an array of fully electric concepts.
These are prototypes designed to show what manufacturers are thinking and
gauge the response of consumers, rather than road-ready vehicles.
According to Mr Attwood, "What you're going to see is cars that are
designed to get people looking and thinking of electric cars in a different
way.
"Lots of manufacturers are now trying to showcase just what you can
do with electric cars."
Mercedes and Audi, which are in the process of developing whole new
electric ranges, will both have new ideas on show. For Audi, it will be a new
compact SUV, while Mercedes is bringing an electric people-carrier.
More
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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