Wednesday, 17 April 2019

China – All’s Well, Honest!


Baltic Dry Index. 749 +11    Brent Crude 71.99

Never ending Brexit now October 31, maybe.  Day 138 of the never-ending China trade talks. Everyone’s still “optimistic.”


Jean-Claude Juncker. Failed former Luxembourg P.M., serial liar, president of the European Commission. Scotch connoisseur.

We open today with China’s scripted economy, where to no one’s surprise China’s economy beat the figure. Honest it did, cross my heart ad all that.  Still with “Chinese banks lent a record 5.8 trillion yuan (£663 billion) in the first quarter, more than the gross domestic product (GDP) of Switzerland” that money had to go somewhere besides Vancouver and Australian real estate.

Below, Reuters on China’s official figures, and a few other things Chinese.

China's first-quarter growth unexpectedly steadies, but too early to call clear recovery

April 17, 2019 / 3:12 AM
BEIJING (Reuters) - China’s economy grew at a steady 6.4 percent pace in the first quarter from a year earlier, defying expectations for a further slowdown, as industrial production jumped sharply and consumer demand showed signs of improvement. 

The upbeat readings, which also showed faster growth in retail sales and investment, are likely to add to optimism that China may be starting to stabilise, relieving some investor anxiety over the sputtering global economy.

But analysts say it is too early to call a sustainable turnaround, and further policy support is likely still needed to keep the momentum going. Many had expected a recovery only in the second half of 2019.

Beijing has ramped up fiscal stimulus this year to bolster growth, announcing billions of dollars in additional tax cuts and infrastructure spending, while Chinese banks lent a record 5.8 trillion yuan (£663 billion) in the first quarter, more than the gross domestic product (GDP) of Switzerland.

“We think we need more evidence to call a full-fledged recovery of the Chinese economy. Our view for the economy is still cautious,” said Jianwei Xu, senior economist, Greater China at Natixis in Hong Kong.

“We think it (the stronger-than-expected data) is somewhat linked to the stimulus, but we can’t attribute it all to it.”

Analysts polled by Reuters had expected gross domestic product (GDP) growth to slow slightly to 6.3 percent in the January-March quarter, the weakest pace in at least 27 years.
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Global steel demand slows as China economy falters and trade war hits

April 16, 2019 / 3:08 PM
LONDON (Reuters) - Growth in global steel demand will weaken over the next two years because of slowing economies, sluggish manufacturing in China and the Sino-U.S. trade war, the World Steel Association (worldsteel) said on Tuesday. 

Demand growth will decline to 1.3 percent in 2019 and 1 percent next year, following 2018’s 2.1 percent, the association said.

China, which consumes about half the world’s steel, has seen its economy decelerate mildly while the government continues to steer the country away from investment-led to consumption-led growth, worldsteel said in a statement.

A damaging and long-standing trade conflict between the United States and China has also hurt investment sentiment.

“In 2019 and 2020, global steel demand is expected to continue to grow, but growth rates will moderate in tandem with a slowing global economy,” said Al Remeithi, chairman of the worldsteel economics committee.

Worldsteel pegged demand this year at 1.735 billion tonnes, followed by 1.752 billion tonnes in 2020.
“Uncertainty over the trade environment and volatility in the financial markets have not yet subsided and could pose downside risks to this forecast,” Remeithi warned.

Demand in 2018 and 2019 was cushioned by mild government stimulus in China, the effects of which will subside next year, worldsteel said.
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China urges U.S. not to make trouble over China-LatAm ties

Source: Xinhua| 2019-04-16 00:12:23
BEIJING, April 15 (Xinhua) -- China on Monday urged U.S. Secretary of State Mike Pompeo to stop stirring up troubles between China and Latin America.

Pompeo has reportedly made unfriendly remarks on China and China-Latin America relations during a visit to Chile and other Latin American countries.

"It's utterly irresponsible and unreasonable for U.S. Secretary of State (Mike) Pompeo to recklessly slander China and wilfully stir up troubles over China-Latin America relations. We are strongly opposed to this," Foreign Ministry Spokesperson Lu Kang told a press briefing.

Cooperation between China and Latin American countries, guided by principles of mutual respect, equality, mutual benefit and win-win outcomes, focuses on common development and has made significant contributions to the economic growth and improvement of people's well-being in Latin American countries, Lu said.

For a long time, the United States has regarded Latin America as its own "backyard" and has frequently pressured, threatened and even overthrown other regimes, he added. "We believe Latin American countries will make the correct judgment about who is a real friend and who is a fake one, and about who disregards rules and spreads disorder."

The spokesperson also pointed out that for a long time, a number of U.S. politicians had maligned China, fanning up flames worldwide and driving a wedge between China and other countries.

Calling such actions "disgraceful," Lu stressed that lies will always be lies and that "Mr. Pompeo should stop making them."

China's largest trade fair opens with strong Belt and Road presence

GUANGZHOU, April 15 (Xinhua) -- The 125th China Import and Export Fair, also known as the Canton Fair, opened Monday in Guangzhou, capital of south China's Guangdong Province, with over half of companies attending its import fair hailing from Belt and Road countries and regions.

The spring session of the biannual fair holds import exhibitions in its first and third phases, with 1,000 booths booked by 650 enterprises from 38 countries and regions.

These include 383 companies from 21 countries and regions along the Belt and Road, including Russia, Poland, the Philippines and Israel, said Xu Bing, spokesperson for the fair.

Large buyers such as Vip, a Chinese online discount retailer, and global retail giants Carrefour and Wal-Mart will attend the import exhibition.

The fair, which will be held from April 15 to May 5, is widely seen as a barometer of China's foreign trade.

In other news back to reality, and don’t mention Brexit or the rising price of crude oil.

US manufacturing flat in March, capping weak Q1

Date created :
American manufacturing was flat in March, which was good news after sharp declines in the prior two months that combined for a dismal first quarter, the Federal Reserve reported Tuesday.

That weak performance has contributed to fears about a slowing US economy, as fuel from the late 2017 tax cuts faded and as the auto industry continues to struggle. It also dragged overall industrial production down slightly in the month.

Manufacturing fell 1.1 percent in the first three months of the year compared to the same period of 2018, the Fed reported. However, output in March was still 1.0 percent higher than a year earlier.

The production of motor parts and vehicles plunged 2.5 percent in the month and collapsed 12.8 percent in the first quarter, according to the data, meaning it is 4.5 percent below the March 2018 output level.

Wood products also fell more than 2 percent compared to February, while only computer and electronic products and primary metals had gains of over 1 percent in the latest month.

Overall industrial output fell 0.3 percent in the first quarter, after a 0.1 percent dip last month, but is up 2.8 percent compared to March 2018.

Economists had been expecting a 0.2 percent gain for the month.

Mining output, including oil, gas and coal production, fell 0.8 percent compared to the prior month, but is 10.5 percent higher year-over-year.

The volatile utilities sector edged up 0.2 percent after a surge in February, and is 3.8 percent higher than the same period a year ago.

Industrial capacity in use in use in March slipped to 78.8 percent due to a decline in utilization for durable manufacturing, most notably in motor vehicles and parts, which fell a stunning two percentage points to 76.3 percent in a single month.
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Germany set to further slash 2019 growth forecast

Date created :
Berlin is set to further lower its economic growth forecast Wednesday as Europe's largest economy cools off, but ministers are unlikely to bend to foreign demands to boost activity with extra government spending.

According to media reports, the German government will unveil figures predicting gross domestic product (GDP) will increase by just 0.5 percent this year.

The downgrade, if confirmed, comes after economy minister Peter Altmaier in January announced expectations of just 1.0 percent expansion in 2019, knocking 0.8 points off an autumn forecast.

Global factors including slowing trade, Brexit and US President Donald Trump's commercial confrontations with Europe and China have hit the eurozone powerhouse particularly hard.

And a string of local one-off factors were blamed by economists for throttling expansion.

In the vital car industry new emissions tests proved a bottleneck for manufacturers, while a harsh drought lowered water levels in the Rhine river, a key waterway for firms in sectors such as chemicals.

But more structural challenges are also present, including an ageing population and a chronic lack of public investment in infrastructure and high-tech innovations.

The International Monetary Fund in its April economic outlook repeated its long-running call for Germany to spend its way out of a downturn.
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Japan exports hit by weak China demand, raising risk of economic contraction

April 17, 2019 / 1:44 AM
TOKYO (Reuters) - Japan’s exports fell for a fourth straight month in March as China-bound shipments slumped again, reinforcing growing anxiety that weak external demand may have knocked the economy into contraction in the first quarter.

Ministry of Finance data out on Wednesday showed exports fell 2.4 percent in March from a year earlier, compared with a 2.7 percent drop predicted by economists in a Reuters poll, and followed a 1.2 percent decline in February.

The data reinforces worries that weak external demand may hurt company profits and in turn curb business expenditures, workers’ wages and consumer spending in a broad hit to growth.

“Slump in exports have caused capital expenditure to drop sharply and private consumption to slow,” said Ryutaro Kono, chief economist at BNP Paribas Securities.

“As such, Japan’s economy likely contracted again in the first quarter.”
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Japan posts first trade deficit in 3 years

By Mayumi Negishi  Published: Apr 16, 2019 11:51 p.m. ET
TOKYO--Japan logged its first trade deficit in three years for the financial year ended in March, amid concerns of a broad slowdown in the global economy which dented its exports.

For the month of March, Japan's trade surplus fell by 33% as exports slumped 2.4% from a year ago on weaker steel and liquid crystal display device exports to China and higher imports of planes, clothes, and liquefied natural gas. That meant a trade deficit of 1.59 trillion yen ($14.2 billion) for the full fiscal year, data released by the Ministry of Finance on Wednesday showed.

Japan and the U.S. opened trade talks earlier this week, to try to address U.S. concerns over its trade deficit with Japan--most of it from cars. Japan's trade surplus with the U.S. was Y6.53 trillion in the April-March financial year, down 6.7% from a year ago.

Japan helped champion the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, signed in Chile in March 2018, which incorporates several provisions of the TPP, an earlier agreement which failed following the withdrawal of the U.S. The resulting tariff cuts, along with a rise in crude oil prices have helped Japan's imports grow, even while weak demand abroad has dented its exports, on which Japan's economy depends.

Analysts said that Japan's export volumes may continue to fall. "A marked rebound in export growth is not on the cards as we expect GDP growth in Japan's main trading partners to slow from 3.2% in the fourth quarter to 2.4% this year," wrote Capital Economics' Senior Japan Economist Marcel Thieliant in a research note, projecting a 0.5% fall in export volumes this year.

Finally, Easter. Why is Easter “late” this year?

Why is Easter so late this year?

Posted by Guy Ottewell in | April 15, 2019
Easter Sunday is April 21, 2019 – a late Easter, but not the latest it can be. In 2011, Easter fell on April 24. In 2030, it will again be on April 21, and in 2038 it will be on April 25, really the latest possible for those of us who use the Gregorian calendar.

Easter is the great movable feast – great, because many other holy days for Christians are set by the date of Easter Sunday, including Shrove Tuesday, Ash Wednesday, Maundy Thursday, Good Friday and Whitsun. The date is movable because it depends on astronomical events that shift.

The rule is that Easter is the Sunday after the full moon that is next after the March equinox. Well. In 2019, the equinox was on March 20 at 21:58 UTC. The full moon crested less than four hours later on March 21 at 1:43 UTC.

That was a Thursday, so Easter should have been the next Sunday, March 24 – one of the earliest Easters!

No.

Those astronomical calculations were the kind we can make our computers do with enormous precision and complexity (there are more than 600 terms in the equations to find the position of the moon). The Easter rule was agreed on in 325 A.D. by the Council of Nicaea, the first ecumenical council of the Christian church. It assumes that the equinox is on March 21 (astronomically it can be on March 19, 20, or 21 in our Gregorian calendar). And the ecclesiastical calculation uses the Metonic cycle, an ancient Greek discovery that phases of the moon repeat on the same dates each 19th year, almost though not quite exactly. Tables of Golden Numbers (orders in the Metonic cycle) and Epacts can be read off to give the Easter date. This process can be translated into a short set of equations to use in a program (such as mine) to give the ecclesiastical Easter date.

It generally agrees remarkably well with the astronomical result. The last time it didn’t was 38 years ago, in 1981. This year is also one of the exceptions. The equinox, being considered to be on March 21, is on the same date as the full moon; so the next full moon is April 19, a Friday – Good Friday – and the Sunday after that is Easter.
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Prime Minister Maybe, with apologies to Jean-Claude Juncker. Failed Luxembourg Prime Minister and ex-president of the Euro Group of Finance Ministers. Confessed liar. European Commission President. Scotch connoisseur.

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

Today EVs, a reality check from China. So you really want to drive from Denver to Chicago in mid-winter?

The uphill road - battery limitations to test China's electric vehicle ambitions

April 16, 2019 / 3:53 AM
BEIJING/DETROIT (Reuters) - It took one 330 kilometre trip from Chongqing to Chengdu in his Nio ES8, a seven-seater all-electric SUV, for its owner Wang Haichun to be consumed with buyer’s remorse.

Despite being billed as capable of going 335 km on a single full charge, the ES8 didn’t get anywhere near that when driving on freeways at speeds above 100 km per hour (60mph), he said, adding that after 180 km, there was only 50 km of range left.

“We had to recharge the car once and drove with a high level of anxiety throughout, constantly having to keep an eye on the range meter,” the 44-year-old manager of a property firm said. Towards the end of the trip, he shut off the air conditioner and audio system to preserve power.

“I wouldn’t want to do that kind of trip again – ever.”

So unhappy was Wang, who paid 481,000 yuan (£54,800 pounds) for the vehicle, he sold it. He and his wife have since bought a Lexus NX300h gasoline-electric SUV.

Asked to comment on Wang’s experience, Nio Inc said in an e-mailed statement the ES8 can travel more than 200 km when constantly driven at a 100 km per hour and that battery swap stations are available for quick recharging. The statement did not address Nio’s advertising of 335 km on a single full charge.

In real world conditions, all-electric cars can sometimes fall far short of advertised ranges, car engineers say. That’s particularly so when driving at length on freeways or hilly terrain and in hot or cold weather.

The problem adds to drawbacks which have hindered wider acceptance - EVs have shorter driving ranges than gasoline vehicles anyway, are more expensive and take a long time to recharge.

China, Europe and the U.S. state of California have set ambitious requirements for automakers to dramatically increase EV sales over the next 5-10 years, but those goals are at risk unless EVs can come close to matching gasoline engine cars in cost and ease of use.
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Jean-Claude Juncker. Failed Luxembourg Prime Minister and ex-president of the Euro Group of Finance Ministers. Confessed liar. European Commission President. Scotch connoisseur.

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?

Light from exotic particle states

Date: April 15, 2019

Source: Vienna University of Technology

Summary: In ultra thin materials, exotic bound states of particles can be created which are then converted into light. Scientists at TU Wien (Vienna) have now succeeded in using this effect to create a novel kind of light-emitting diode.

Researchers at TU Wien have now managed to utilise this: so-called "multi-particle exciton complexes" have been produced by applying electrical pulses to extremely thin layers of material made from tungsten and selenium or sulphur. These exciton clusters are bonding states made up of electrons and "holes" in the material and can be converted into light. The result is an innovative form of light-emitting diode in which the wavelength of the desired light can be controlled with high precision. These findings have now been published in the journal Nature Communications.

----In most solids, such bonding states are only possible at extremely low temperatures. However the situation is different with so-called "two-dimensional materials," which consist only of atom-thin layers. The team at TU Wien, whose members also included Matthias Paur and Aday Molina-Mendoza, has created a cleverly designed sandwich structure in which a thin layer of tungsten diselenide or tungsten disulphide is locked in between two boron nitride layers. An electrical charge can be applied to this ultra-thin layer system with the help of graphene electrodes.

"The excitons have a much higher bonding energy in two-dimensional layered systems than in conventional solids and are therefore considerably more stable. Simple bonding states consisting of electrons and holes can be demonstrated even at room temperature. Large, exciton complexes can be detected at low temperatures," reports Thomas Mueller. Different excitons complexes can be produced depending on how the system is supplied with electrical energy using short voltage pulses. When these complexes decay, they release energy in the form of light which is how the newly developed layer system works as a light-emitting diode.

"Our luminous layer system not only represents a great opportunity to study excitons, but is also an innovative light source," says Matthias Paur, lead author of the study. "We therefore now have a light-emitting diode whose wavelength can be specifically influenced -- and very easily too, simply via changing the shape of the electrical pulse applied."
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Jean-Claude Juncker. Failed Luxembourg Prime Minister and ex-president of the Euro Group of Finance Ministers. Confessed liar. European Commission President. Scotch connoisseur.

The monthly Coppock Indicators finished March

DJIA: 25,929 +54 Down. NASDAQ: 7,729 +94 Down. SP500: 2,834 +53 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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