Baltic Dry Index. 664
+01 Brent
Crude 66.14
Brexit 22 days away.
“I’m older than you and must know better.”
President Trump, with apologies to Lewis Carroll.
Can a US v China
trade deal even save the sinking global economy, or have all the trade and currency
wars already pushed the global economy into the next recession? The jury’s
still out, but to this old dinosaur juror on active service in the markets
since 1968, it seems to me a miracle is now needed to prevent a new global
recession. And a trade war deal between Trump’s America and Xi’s China isn’t anywhere
close to that miracle.
Lookout below, if
that trade deal, assuming there is one, underwhelms.
Asian Stocks Drop on Growth Woes; Yen Edges Higher: Markets Wrap
By Adam Haigh
Updated on 7 March 2019, 05:56 GMT
Asian stocks were mostly lower Thursday as global growth
concerns resurfaced and U.S. equities dropped. The dollar steadied after six
days of gains and the yen edged higher.Shares fell in Japan, China, Hong Kong and Korea with Australian equities bucking the trend. U.S. futures slipped after a three-day drop for American stocks as reports showed the country’s trade deficit widened to a 10-year high and private companies added fewer employees than analysts forecast last month. Contracts in Europe also declined ahead of Thursday’s European Central Bank meeting. Treasury yields ticked lower.
Trade
remains high on investors’ agenda as they wait for details of a possible
accord, with President Donald Trump said to be pressuring U.S. negotiators to cut a
deal with China soon in hope of fueling a market rally. The Organization for
Economic Cooperation and Development on Wednesday said it downgraded almost
every growth forecast for Group of 20 nations and ECB officials are poised to cut their inflation and
economic estimates. Next up for traders will be any more policy clues emanating
from the ECB and the monthly U.S. jobs report on Friday.
“We’re
seeing a slowdown in the economy, we’re seeing a slowdown in corporate
earnings,” Oliver Pursche, chief market strategist at Bruderman Asset
Management, told Bloomberg TV in New York. “The market is waiting to see if
things are going to turn out better or worse than they expect, and we just
don’t know.”
More
Deal or No Deal, Trump Trade War With China Scars Global Economy
By Andrew MayedaEconomists predicted that eye-for-an-eye tariffs by the U.S. and China could eat into world growth, and there’s evidence that’s happening. Export orders in China slumped last month to the lowest level in a decade amid signs of a deepening factory downturn in the world’s second biggest economy. In the euro area, a key gauge of manufacturing activity has dropped to a level consistent with contraction.
“A deal is going to be a huge sigh of relief,” said Ethan Harris, head of global economics research at Bank of America Merrill Lynch. “In the last year, you’ve had this general chipping away of global confidence, and the trade war is a big part of that. But there’s probably been some permanent damage here, so the recovery won’t be as substantial as the damage."
The
darkening economic picture raises the stakes for a push by the U.S. and China
to end their eight-month trade war, or at least reach a lasting truce that
avoids any further escalation. The two sides are closing the gap on issues such as
Chinese purchases of U.S. goods, buoying hopes that President Donald Trump
could hold a deal-clinching summit with his Chinese counterpart Xi Jinping as
early as the middle of this month.
But Trump’s trade war isn’t having the effect he hoped on one measure: the U.S. trade deficit, which widened last year to a 10-year-high of $621 billion. For December, U.S. exports fell 1.9 percent from the previous month, the biggest decline since early 2016, while imports rose 2.1 percent.
Trade tensions started weighing on business sentiment last year, and there’s evidence since then that companies are pulling back on capital spending, said J.P. Morgan chief economist Bruce Kasman. “This is not primarily about the tariffs themselves,” he said. “The bigger channel is the way companies around the world are reacting.”
----Over the same period, the yuan has weakened just about 1 percent, though it was down about 5 percent at the end of October. A weaker Chinese currency made the exports of other countries less attractive, said Dumas. The combined effect of a stronger dollar and softer yuan has contributed to growth slowing outside the U.S. and China, he said.
“The fascinating thing to me is the degree of damage being done outside the two main principals, the U.S. and China,” said Dumas. Other countries “were kind of being squeezed on both ends.”’
The trade war with China has shaved 0.1 to 0.2 percentage point off the annual growth rate of the U.S. economy, said Greg Daco, head of U.S. macroeconomics at Oxford Economics. If Washington and Beijing roll back all their tariffs, it will be roughly equivalent to one rate cut by the Federal Reserve, in terms of the economic boost, Daco said.
More
Global economic growth forecasts cut again by OECD
March 6, 2019 /
10:08 AM
PARIS
(Reuters) - The OECD cut forecasts again for the global economy in 2019 and
2020, following on from previous downgrades in November, as it warned that
trade disputes and uncertainty over Brexit would hit world commerce and
businesses.
The
Organization for Economic Co-Operation & Development forecast in its
interim outlook report that the world economy would grow 3.3 percent in 2019
and 3.4 percent in 2020.
Those forecasts represented cuts of 0.2 percentage points for 2019 and
0.1 percentage points for 2020, compared to the OECD’s last set of forecasts in
November.
“High policy uncertainty, ongoing trade tensions, and a further erosion
of business and consumer confidence are all contributing to the slowdown,” said
the OECD in its report.
“Substantial policy uncertainty remains in Europe, including over
Brexit. A disorderly exit would raise the costs for European economies
substantially,” added the OECD.
Europe remains impacted by uncertainty over Britain’s plans to exit the
European Union, the U.S. - China trade spat and other weak spots, such as signs
of a recession in Italy.
For Germany, Europe’s largest economy, the OECD more than halved its
2019 GDP growth forecast to 0.7 percent from 1.6 percent previously. It
predicted a light recovery to 1.1 percent growth in 2020. Germany’s
export-reliant economy is particularly affected by weaker global demand and
rising trade barriers.
Meanwhile,
data earlier this month showed that U.S. personal income had fallen for the
first time in more than three years in January while consumer spending dropped
by the most since 2009 in December, putting the world’s biggest economy on a
relatively weak growth trajectory early in the first quarter.
More
Tariff war cost US companies and consumers US$4.4 billion a month in 2018, report says
- Economists find those who were exposed to the duties overseas ‘paid none of the bill’ – which was passed on to American importers and consumers
- They say the US economy has been damaged by the dispute that has seen tariffs applied on about US$283 billion of imports
Updated: Tuesday, 5 Mar, 2019 10:51am
Washington’s tariff war against its trading partners, particularly
China, cost American companies and consumers US$4.4 billion a month last year,
according to researchers.
Economists from the New York Federal Reserve and Princeton and Columbia
universities assessed the impact of the duties on prices and welfare in the
United States, concluding that those who were exposed to the duties overseas
“paid none of the bill”.
The research paper was released as the US and China, the world’s two
largest economies, are reportedly close to a trade agreement that could see
most or all of the tariffs lifted. Chinese President Xi Jinping and his
American counterpart Donald Trump are
expected
to meet in Florida in late
March to seal the deal.
It also comes after US Federal Reserve chairman
Jerome Powell last week warned of a slowing US economy this year and other
risks, including a global slowdown, volatile financial markets and uncertainty
over American trade policy.
In the paper, titled “The impact of the 2018 trade
war on US prices and welfare”, Mary Amiti, Stephen Redding and David Weinstein
said fallout from the dispute – which has seen tariffs applied on about US$283
billion of American imports – had damaged the economy.
They said it had cost US
consumers and the firms that import foreign goods an extra US$3 billion per
month in added tax costs and another US$1.4 billion a month in deadweight
losses – overall welfare costs to society.
The tit-for-tat exchange of duties had plunged the
US into its “first episode of large-scale competitive tariff protection since
the Great Depression of the 1930s”, according to the paper.
Based on conventional trade models, the
researchers found that “the deleterious impacts of the tariffs have been
largely in line with what one might have predicted based on a simple supply and
demand framework”.
They
said the US economy had experienced “substantial increases in the prices of
intermediates and final goods, large changes to its supply chain network,
reductions in availability of imported varieties, and complete pass-through of
the tariffs into domestic prices of imported goods”.
“The entire incidence of the tariffs fell on
domestic consumers and importers up to now, with no impact so far on the prices
received by foreign exporters,” the economists said.
More
“Would you tell
me, please, which way I ought to go from here?”
“That depends a good deal on where you want to get to,” said President Xi.
“I don’t much care where—” said President Trump.
“Then it doesn’t matter which way you go,” said Xi.
“—so long as I get somewhere,” Trump added as an explanation.
“Oh, you’re sure to do that,” said Xi, “if you only talk long enough.”
“That depends a good deal on where you want to get to,” said President Xi.
“I don’t much care where—” said President Trump.
“Then it doesn’t matter which way you go,” said Xi.
“—so long as I get somewhere,” Trump added as an explanation.
“Oh, you’re sure to do that,” said Xi, “if you only talk long enough.”
With
apologies to Lewis Carroll and Alice.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Today, Amazon. A Great River
of disinformation, conspiracies and lies. Does anyone at Amazon have any
ethics? Does anyone at Amazon care?
How Amazon's Algorithms Curated a Dystopian Bookstore
3.05.19
Among
the best-selling books in Amazon’s Epidemiology category are several
anti-vaccine tomes. One has a confident-looking doctor on the cover, but the author
doesn’t have an MD—a quick Google search reveals that he’s a medical journalist
with the “ThinkTwice Global Vaccine Institute.” Scrolling through a simple
keyword search for “vaccine” in Amazon’s top-level Books section reveals
anti-vax literature prominently marked as “#1 Best Seller” in categories
ranging from Emergency Pediatrics to History of Medicine to Chemistry. The
first pro-vaccine book appears 12th in the list. Bluntly named “Vaccines Did
Not Cause Rachel’s Autism,” it’s the only pro-vaccine book on the first page of
search results. Its author, the pediatrician Peter Hotez, a professor in the
Departments of Pediatrics and Molecular Virology & Microbiology at the
Baylor College of Medicine , has tweeted
numerous
times
about the amount of abuse and Amazon review brigading that he’s had to fight
since it was released.
Over in Amazon’s Oncology category, a book with a Best Seller label
suggests juice as an alternative to chemotherapy. For the term “cancer”
overall, coordinated review brigading appears to have ensured that “The Truth
About Cancer,” a hodgepodge of claims about, among other things, government
conspiracies, enjoys 1,684 reviews and front-page placement. A whopping 96
percent of the reviews are 5 stars—a measure that many Amazon customers use as
a proxy for quality. However, a glance at Reviewmeta, a site that aims to help
customers assess whether reviews are legitimate, suggests that over 1,000 may
be suspicious in terms of time frame, language, and reviewer behavior.
Once relegated to tabloids and web forums, health misinformation and
conspiracies have found a new megaphone in the curation engines that power
massive platforms like Amazon, Facebook, and Google. Search, trending, and
recommendation algorithms can be gamed to make fringe ideas appear mainstream.
This is compounded by an asymmetry of passion that leads truther communities to
create prolific amounts of content, resulting in a greater amount available for
algorithms to serve up … and, it seems, resulting in real-world consequences.
A recent resurgence of measles outbreaks has the World Health Organization,
the Centers for Disease Control and Prevention, and the US Congress questioning
the impact of anti-vaccine misinformation on public health. Investigative
journalists and academics have been examining one facet of this problem: what
curation algorithms are doing to tamp down—or spread— health misinformation
online. What they’re finding isn’t encouraging.
----Amazon shapes many of our consumption habits. It influences what millions of people buy, watch, read, and listen to each day. It’s the internet’s de facto product search engine—and because of the hundreds of millions of dollars that flow through the site daily, the incentive to game that search engine is high. Making it to the first page of results for a given product can be incredibly lucrative.
Unfortunately, many curation algorithms can be gamed in predictable ways, particularly when popularity is a key input. On Amazon, this often takes the form of dubious accounts coordinating to leave convincing positive (or negative) reviews. Sometimes sellers outright buy or otherwise incentivize review fraud; that's a violation of Amazon’s terms of service, but enforcement is lax. Sometimes, as with the anti-vax movement and some alternative-health communities, large groups of true believers coordinate to catapult their preferred content into the first page of search results.
More
“Tut, tut,
child!” said the Duchess. “Everything’s got a moral, if only you can find it.”
Alice
in Wonderland. Not available at Amazon.
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?
I’m sceptical of
hydrogen power for safety reasons, but this looks more promising if the
hydrogen leakage issue can be overcome.
Record-breaking device uses sunlight to produce hydrogen at 15% efficiency
7 March 2019.
Scientists
at KU Leuven in Belgium have developed a device that combines incoming solar
energy and water vapor from the surrounding air to produce a record-breaking
daily average of 250 liters (66 gal) of hydrogen throughout the year. According
to the researchers' estimations, an array of 20 such panels paired with an
underground pressurized tank could provide the totality of a household's entire
electricity and heating needs for a modest price.
Going solar comes with a couple of significant drawbacks, particularly when it comes to managing your reserves. First, storing an energy buffer for a rainy day is all but cheap: a home battery pack will run you up thousands of dollars, and its charge will keep you off the grid for a few extra days at most. Secondly, lithium-ion batteries lose capacity with use, and slowly self-discharge with disuse.
Professor Johan Martens and his team have turned to hydrogen for a cheaper, year-round green energy alternative. Their device has been under development for a decade, and can currently reach a energy conversion of 15 percent.
Commercial solar panels can easily surpass that figure, often reaching 18 or 20 percent, but the advantage of this approach is that large amounts of hydrogen can be stored in an underground pressurized tank (at a pressure of approximately 400 bar) without the inevitable losses in capacity that come with battery technology. Using fuel cells, the reserves from the tank can then be converted at will into heating, electricity, or fuel for a hydrogen-powered car with a 90 percent conversion efficiency.
Hydrogen is often produced from non-green sources such as gas and oil,
and it's also expensive to produce and store. This project aims to buck the
trend thanks to a combination of high conversion efficiency and the use of
small-scale systems designed to work at the local scale.
"We wanted to design something sustainable that is affordable and
can be used practically anywhere," says Martens. "We're using cheap
raw materials and don't need precious metals or other expensive
components."
The researchers estimate that an array of 20 panels and four cubic
meters of pressurized storage would meet the energy and heating needs (in
Belgium) of a household throughout the year, with the assumption that the
reserves will build up during the summer months and last through the winter.
A prototype of this setup will soon begin field testing on a property in
the rural Belgian town of Oud-Heverlee. Over the next two years, the
researchers are will be focusing on testing the panels for household,
agriculture and retail applications, with the eventual goal to mass produce and
commercialize the system.
You
will find that the State is the kind of organization which, though it does big
things badly, does small things badly, too.
John Kenneth
Galbraith.
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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