Monday, 22 April 2019

Oil Spike. Recession Ahead.


Baltic Dry Index. 790 +23    Brent Crude 73.82

Never ending Brexit now October 31, maybe.  Day 143 of the never-ending USA v China trade talks. Everyone’s still “optimistic.”

There are three classes of people: those who see, those who see when they are shown, those who do not see.

Leonardo da Vinci

Up first today, crude oil prices jump. Washington is determined to push Asia into the next global recession, or bust. 

From Moscow’s perspective they can hardly believe their luck. Washington makes oil prices soar, seems about to get militarily involved in Iran and Venezuela, annoy China, India, and all of East Asia at the same time, push Turkey even closer towards Russia.

As an added bonus, the CIA’s puppet in the Ukraine, installed by the late Senator McCain and the State Departments Victoria Nuland, just got destroyed and humiliated in yesterday’s presidential election. It doesn’t get any better than this if you’re sitting in the Kremlin, and so far it hasn’t even cost them a penny.

Below, another wheel about to fly off Asia and Europe’s economies. If/when recession hits, Beijing and Brussels will blame Trump and Washington. For now, the question is just how high will the oil price rise? With the US summer driving (and planting) season almost at hand, a crude oil spike in May is unhelpful, to say the least.

U.S. to announce end to Iran sanctions waivers, oil prices spike

April 22, 2019 / 12:38 AM
WASHINGTON/SINGAPORE (Reuters) - The United States is expected to announce on Monday that all buyers of Iranian oil will have to end their imports shortly or face sanctions, a source familiar with the situation told Reuters, triggering about a 3 percent rise in crude prices.

The source confirmed a report by a Washington Post columnist that the administration will terminate the sanctions waivers it granted to some importers of Iranian oil late last year.

Global benchmark Brent crude oil futures rose by as much as 3.2 percent to $74.30 a barrel, the highest since Nov. 1, in early Asian trading on Monday in reaction to expectations of tightening supply. U.S. West Texas Intermediate futures climbed as much as 2.9 percent to $65.87 a barrel, its highest since Oct. 30. [O/R]

U.S. President Donald Trump has been clear to his national security team over the last few weeks that he wants the waivers to end, and National Security Adviser John Bolton has been working the issue within the administration.

In November, the U.S. reimposed sanctions on exports of Iranian oil after President Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers.

Washington, however, granted Iran’s eight main buyers of oil waivers to the sanctions that allowed them limited purchases for six months.

They were China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece.

But on Monday, Secretary of State Mike Pompeo will announce “that, as of May 2, the State Department will no longer grant sanctions waivers to any country that is currently importing Iranian crude or condensate,” the Post’s columnist Josh Rogin said in his report, citing two State Department officials that he did not name.

On April 17, Frank Fannon, U.S. Assistant Secretary of State for Energy Resources, repeated the administration’s position that “our goal is to get to zero Iranian exports as quickly as possible.”

An end to the exemptions would hit Asian buyers the hardest. Iran’s biggest oil customers are China and India, who have both been lobbying for extensions to sanction waivers.

South Korea, a close U.S. ally, is a major buyer of Iranian condensate, an ultra-light form of crude oil which its refining industry relies on to produce petrochemicals.
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Asia stocks firm, oil hits five-month peak on Iran sanctions report

April 22, 2019 / 1:43 AM
TOKYO (Reuters) - Asian shares were steady on Monday as investors took stock of recent data suggesting global growth may be stabilising, while oil prices spiked on a report the U.S. is likely to ask all importers of Iranian oil to end their purchases or face sanctions.

Brent futures rallied to a five-month high, after the Washington Post said U.S. Secretary of State Mike Pompeo will announce “that as of May 2, the State Department will no longer grant sanctions waivers to any country that is currently importing Iranian crude or condensate.” 

The potential disruption to Iranian supplies are expected to add to an already tight oil market.

“The U.S. chief Iran hawks indeed have the President’s ear as (Secretary of State) Pompeo and (National Security Advisor) Bolton are singularly focused on bringing Iran’s economy to its knees,” said Stephen Innes, head of trading at SPI Asset Management.

“Predictably oil prices are rising,” he said.

Equities markets were subdued as investors awaited the resumption of trading in major centres from the Good Friday holiday, with MSCI’s broadest index of Asia-Pacific shares outside Japan little changed in early deals.
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Comedian Zelenskiy wins Ukrainian presidential race by landslide - exit polls

April 21, 2019 / 4:05 AM
KIEV (Reuters) - Ukraine entered uncharted political waters on Sunday after exit polls showed a comedian with no political experience and few detailed policies had easily won enough votes to become the next president of a country at war.

The apparent landslide victory of Volodymyr Zelenskiy, 41, is a bitter blow for incumbent Petro Poroshenko who tried to rally Ukrainians around the flag by casting himself as a bulwark against Russian aggression and a champion of Ukrainian identity. 

Two national exit polls showed Zelenskiy had won 73 percent of the vote with Poroshenko winning just 25 percent. Early voting data suggested the polls were accurate.

Zelenskiy, who plays a fictitious president in a popular TV series, is now poised to take over the leadership of a country on the frontline of the West’s standoff with Russia following Moscow’s annexation of Crimea and support for a pro-Russian insurgency in eastern Ukraine.

Declaring victory at his campaign headquarters to emotional supporters, Zelenskiy promised he would not let the Ukrainian people down.

“I’m not yet officially the president, but as a citizen of Ukraine, I can say to all countries in the post-Soviet Union look at us. Anything is possible!”

European Council President Donald Tusk congratulated Zelenskiy, as did French President Emmanuel Macron and British foreign minister Jeremy Hunt.

Zelenskiy, whose victory fits a pattern of anti-establishment figures unseating incumbents in Europe and further afield, has promised to end the war in the eastern Donbass region and to root out corruption amid widespread dismay over rising prices and sliding living standards.
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In Boeing news, what on earth is going on?

Safety concerns reportedly raised about another Boeing jet, the 787 Dreamliner

By Mike Murphy  Published: Apr 21, 2019 5:25 p.m. ET
Safety concerns are being raised about a second airplane made by Boeing Co., the 787 Dreamliner, according to a New York Times report Saturday. The jetliner's South Carolina factory "has been plagued by shoddy production and weak oversight that have threatened to compromise safety," the Times said. 

The report cited numerous internal documents, federal records and interviews, and described a workplace culture that often favored increased production over quality and safety, despite complaints from workers. "I've told my wife that I never plan to fly on it," one Dreamliner technician told the Times. "It's just a safety issue." The safety of another Boeing jetliner, the 737 Max, already been questioned after two recent crashes.

Finally, China. Last week to no one’s surprise, China announced its scripted GDP figure of a slightly lower number of 6.4 percent. No one, least of all in Beijing, believe it. Below, the UK’s Telegraph provides an updated reality check. It’s not good news for an already slowing global economy, despite all the recent spin that the worst is over. In reality it’s just the usual northern hemisphere seasonal uplift.

For a  Europe facing a new trade war with President Trump’s trade war hooligans, and Brexit, a summer/autumn recession lies dead ahead. For a banking system, led by Deutsche Bank, that’s all but broken, another European banking crisis will soon reappear.

More on the unstoppable rise of Huawei, despite trade war team Trump.

Maximum vulnerability: China (and the world) are still in big trouble

By Ambrose Evans-Pritchard April 19, 2019
China's majestic and elegantly-stable GDP figures are best seen as an instrument of political combat.
Donald Trump says "trade wars are good and easy to win" if your foes depend on your market and you can break them under pressure.

He proclaimed victory when the Shanghai equity index went into a swoon over the winter. This is Trumpian gamesmanship.

It is in China's urgent interest to puncture such claims as trade talks come to a head. Xi Jinping had to beat expectations with a crowd-pleaser in the first quarter. The number was duly produced: 6.4 per cent. Let us all sing the March of the Volunteers.

"Could it really be true?" asked Caixin magazine. This was a brave question in Uncle Xi's evermore totalitarian regime.

Of course it is not true. Japan's manufacturing exports to China fell by 9.4 per cent in March (year on year). Singapore's shipments dropped by 8.7 per cent to China, 22 per cent to Indonesia, and 27 per cent to Taiwan. Korea's exports are down 8.2 per cent.

The greater China sphere of east Asia is in the midst of an industrial recession. Nomura's forward-looking index still points to a deepening downturn. "Those expecting a strong rebound in Asian export growth in coming months could be in for disappointment," said the bank.

China's rebound is hard to square with its own internal data. Simon Ward from Janus Henderson said nominal GDP growth - trickier to manipulate - is still falling. It dropped to 7.4 per cent from 8.1 per cent in the last quarter on 2018.

Household demand deposits fell by 1.1 per cent last month. This means that the growth rate of "true" M1 money is still at slump levels. It has ticked up a fraction but this is nothing like previous episodes of Chinese stimulus. It points towards stagnation into late 2019. "Hold the champagne," he said. A paper last month by Wei Chen and Chang-Tai Tsieh for the Brookings Institution - "A Forensic Examination of China's National Accounts" - concluded that GDP growth has been overstated by 1.7 per cent a year on average since 2006.

---- Liaoning - a Spain-sized province in the north - recently corrected its figures after an anti-corruption crackdown exposed grotesque abuses. Estimated GDP was cut by 22 per cent. You get the picture.
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Huawei first-quarter revenue grows 39 percent to $27 billion amid heightened U.S. pressure

April 22, 2019 / 4:48 AM
HONG KONG (Reuters) - Huawei Technologies said on Monday its first-quarter revenue jumped 39 percent to 179.7 billion yuan ($26.81 billion), in the Chinese technology firm’s first-ever quarterly results.

The Shenzhen-based firm, the world’s biggest telecoms equipment maker, also said its net profit margin was around 8 percent for the quarter, which it added was slightly higher than the same period last year. Huawei did not disclose its actual net profit. 

The limited results announcement comes at a time when Washington has intensified a campaign against unlisted Huawei, alleging its equipment could be used for espionage and urging U.S. allies to ban it from building next-generation 5G mobile networks.

Huawei has repeatedly denied the allegations and launched an unprecedented media blitz by opening up its campus to journalists and making its typically low-key founder, Ren Zhengfei, available for media interviews.

The Chinese firm, which is also the world’s No. 3 smartphone maker, said last week the number of contracts it has won to provide 5G telecoms gear increased further despite the U.S. campaign.

By the end of March, Huawei said it had signed 40 commercial 5G contracts with carriers, shipped more than 70,000 5G base stations to markets around the world and expects to have shipped 100,000 by May.
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Where there is shouting, there is no true knowledge.

Leonardo da Vinci

Crooks and Scoundrels Corner

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

Today, US planting season. Cause for concern, but not yet a problem.

Abnormally wet spring delays Midwest planting

April 19, 2019
EVANSVILLE, Ind., April 19 (UPI) -- An abnormally wet spring, that includes extensive flooding in some areas, has pushed planting season across the Midwest behind schedule. But farmers aren't panicking yet.

Planting generally begins in mid-April. That means it would have been underway in most areas now. 
But, as of mid-week, no corn had been planted in Iowa, Nebraska, or North and South Dakota, according to the U.S. Department of Agriculture's National Agricultural Statistics Service. Other key Midwest growing states also were behind.

From a calendar standpoint, now is about the time our part of the state -- central Illinois -- will plant," said Rod Weinzierl, the executive director of the Illinois Corn Growers Association. "We do have a past board member down in southern Illinois who does have corn in the ground. But most people do not -- like 99 percent of people."

Farmers still have about three weeks to get their crops in the ground before any impact on their fall harvest, agriculture experts say. But this delay has farmers across the region anxiously monitoring forecasts, hoping that a dry spell will enable planting within that time frame.

In central Illinois, forecasts indicate that dry spell might arrive next week, Weinzierl said. But neighboring states, like Indiana, and the flood-ravaged states of Iowa, Nebraska and South Dakota are looking at longer waits.

"I'm guessing planting might start at the very end of April," said Kent Thiesse, the senior agriculture loan officer at Minnstar Bank in Minnesota. "In some places, it will probably be pushed back into May."

Farmers need dry weather to plant for more than one reason, said Thiesse, a former University of Minnesota Extension educator. To start, the fields must be dry enough to drive their tractors through without getting stuck. In addition, corn and soybeans need sufficiently dry soil to germinate properly.
Though planting is behind schedule, farmers still have time to get their crops in the ground without the delay affecting fall harvest yields.

"University data says that if you get it in the ground by about May 10, there won't be an impact," Weinzierl said. "Now, if we're not planting in two weeks, that's when we'll start to get more stirred up."

It's the same story across much of the Midwest, apart from the areas hardest hit by historic the mid-March floods that swept through Nebraska and parts of South Dakota and Iowa. Fields in many of those areas still are flooded, making it increasingly unlikely that farmers will be able to plant at all this season.
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Nature never breaks her own laws.

Leonardo da Vinci


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?

Need more energy storage? Just hit 'print'

Researchers produce conductive MXene ink to print micro-supercapacitors

Date: April 17, 2019

Source: Drexel University

Summary: Researchers have developed a conductive ink made from a special type of material they discovered, called MXene, that was used by the researchers to print components for electronic devices. The ink is additive-free, which means it can print the finished devices in one step without any special finishing treatments. 

Researchers from Drexel University and Trinity College in Ireland, have created ink for an inkjet printer from a highly conductive type of two-dimensional material called MXene. Recent findings, published in Nature Communications, suggest that the ink can be used to print flexible energy storage components, such as supercapacitors, in any size or shape.

Conductive inks have been around for nearly a decade and they represent a multi-hundred million-dollar market that is expected to grow rapidly into the next decade. It's already being used to make the radiofrequency identification tags used in highway toll transponders, circuit boards in portable electronics and it lines car windows as embedded radio antennas and to aid defrosting. But for the technology to see broader use, conductive inks need to become more conductive and more easily applied to a range of surfaces.

Yury Gogotsi, PhD, Distinguished University and Bach professor in Drexel's College of Engineering, Department of Materials Science and Engineering, who studies the applications of new materials in technology, suggests that the ink created in Drexel's Nanomaterials Institute is a significant advancement on both of these fronts.

"So far only limited success has been achieved with conductive inks in both fine-resolution printing and high charge storage devices," Gogotsi said. "But our findings show that all-MXene printed micro-supercapacitors, made with an advanced inkjet printer, are an order of magnitude greater than existing energy storage devices made from other conductive inks."

While researchers are steadily figuring out ways to make inks from new, more conductive materials, like nanoparticle silver, graphene and gallium, the challenge remains incorporating them seamlessly into manufacturing processes. Most of these inks can't be used in a one-step process, according to Babak Anasori, PhD, a research assistant professor in Drexel's department of Materials Science and Engineering and co-author of the MXene ink research.

"For most other nano inks, an additive is required to hold the particles together and allow for high-quality printing. Because of this, after printing, an additional step is required -- usually a thermal or chemical treatment -- to remove that additive," Anasori said. "For MXene printing, we only use MXene in water or MXene in an organic solution to make the ink. This means it can dry without any additional steps."

MXenes are a type of carbon-based, two-dimensional layered materials, created at Drexel in 2011, that have the unique ability to mix with liquids, like water and other organic solvents, while retaining their conductive properties. Because of this, Drexel researchers have produced and tested it in a variety of forms, from conductive clay to a coating for electromagnetic interference shielding to a near-invisible wireless antenna.

Adjusting the concentration to create ink for use in a commercial printer was a matter of time and iteration. The solvent and MXene concentration in the ink can be adjusted to suit different kinds of printers.

"If we really want to take advantage of any technology at a large scale and have it ready for public use, it has to become very simple and done in one step," Anasori said. "An inkjet printer can be found in just about every house, so we knew if we could make the proper ink, it would be feasible that anyone could make future electronics and devices."
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Simplicity is the ultimate sophistication.

Leonardo da Vinci

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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