Never ending Brexit
now October 31, maybe.Day 137 of the
never-ending China trade talks. Everyone’s still “optimistic.”
In a narrow market, when prices are not getting anywhere to
speak of but move within a narrow range, there is no sense in trying to
anticipate what the next big movement is going to be. The thing to do is to
watch the market, read the tape to determine the limits of the get nowhere
prices, and make up your mind that you will not take an interest until the
prices breaks through the limit in either direction.
Jesse Livermore.
As we approach Easter
our markets appear becalmed. Brexit and the never-ending trade talks between
the USA and China, stalled. In fact trade war team USA seems to be rowing back
on expectations. Even President Trump’s demand that the Powell Fed get on with
taking the Dow to 36,000, seems to have fallen on deaf ears.
In Brexit Britain,
Prime Minister May is on suicide/murder watch.
It’s quiet, too quiet,
as they used to say in the old Hollywood westerns, before Hollywood moved on to
pornography and gratuitously violent movies. What could possibly go wrong?
Below, Asian markets
beached in light trading. Surely there’s one more attempt left to rig stocks higher
in our holiday shortened week? At least one more attempt before Japan heads off
for Golden Week about April 29.
TOKYO — Shares were mixed Tuesday in Asia in mostly narrow
trading in the absence of any major market-driving news.
The Nikkei 225 index NIK, +0.27%
added 0.2%. China’s Shanghai Composite index SHCOMP, +1.11%
was up 0.1% and the Hang Seng index HSI, +0.63%
in Hong Kong was about flat. South Korea’s Kospi SEU, +0.10%
swung between slight gains and losses, and Australia’s S&P/ASX 200 XJO, +0.35%
rose 0.4%. Benchmark indexes in Taiwan Y9999, +0.24%
, Singapore STI, +0.15%
and Indonesia JAKIDX, +0.46%
advanced.
Among individual stocks, telecoms NTT Docomo 9437, +3.58%
and SoftBank Corp. 9434, +3.32%
rose in Tokyo trading, as did Sony 6758, +2.47%
and Fast Retailing 9983, +2.22%
. In Hong Kong, China Life Insurance 2628, +2.36%
and Ping An Insurance 2318, +1.78%
rose, while Apple component-maker Sunny Optical 2382, -3.02%
fell. Asiana Airlines 020560, +16.48%
surged for a second day in South Korea after its largest shareholder
said it would sell its stake. Beach Energy BPT, -1.63%
fell in Australia.
Upbeat talk from the White House on trade negotiations with
the China failed to lift Chinese shares. Meanwhile, China’s central bank, The
People’s Bank of China, said it was adjusting its monetary policy to coordinate
with government spending.
Earlier, Bank of Japan Gov. Haruhiko Kuroda said trade
protectionism is the biggest risk to the global economy, CNBC reported.
“Market moves have become more muted ahead of the Easter
holidays, while liquidity is also expected to be poorer,” Mizuho Bank said in a
commentary. “PBOC stated that some positive changes are seen in structural
adjustments of the economy in the first quarter, but uncertainties remain,” it
said. More
Today the United States sits in the midst of the largest
wealth bubble in post-World War II history, as measured by household net worth
(or wealth) relative to gross domestic product. As I showed in detail recently
in the Journal of Business Economics, only two other postwar
bubbles come close, with peaks in 1999 and 2006, just prior to the tech stock
crash and the Great Recession.
No one should ignore the risk that this bubble will burst,
as did the previous two, with declines in the value of stocks DJIA, -0.10%SPX, -0.06%
, homes, and other assets accompanied by recession, unemployment, and
disruption in the plans and lives of many Americans.
We’re not off the hook, however, should the bubble fail to
burst or should peak valuations decline only gradually.
Either way, rates of returns on assets likely will remain
significantly lower than in the past, creating its own set of risks for pension plans, personal retirement planning, new
homeowners, commercial real estate, and other investments, especially those
dependent upon returns extrapolated naively from the recent past.
If valuations stay at current high levels, the expected
return is closer to today’s 0% to 2% real interest rate on bills and bonds or a
5% earnings rate on corporate stock, but not the 7% or 10% total returns on a
diversified portfolio many people have become used to receiving.
$20 trillion bonus for investors
In addition, even without a sudden crash, there likely
would be a gradual reversal of the extraordinary period of “bonus appreciation”
that, since the mid-1990s, entailed gains of more than $20 trillion in
household net worth over and above what might have been expected had wealth
merely increased at the same rate as income.
Suppose that the wealth-to-income ratio simply returns to
some prior average. Combined with the lack of past appreciation, that could a
represent a negative swing of $40 trillion or more (again, at today’s level of
GDP) relative to projections that recent past growth is prologue.
The recent three bubbles share characteristics and causes
unique to a modern period since about 1990.
Exclusive: U.S. waters down
demand China ax subsidies in push for trade deal - sources
April 15, 2019 /
2:33 AM
WASHINGTON/BEIJING
(Reuters) - U.S. negotiators have tempered demands that China curb industrial
subsidies as a condition for a trade deal after strong resistance from Beijing,
according to two sources briefed on discussions, marking a retreat on a core
U.S. objective for the trade talks.
The world’s two biggest economies are nine months into a trade war that
has cost billions of dollars, roiled financial markets and upended supply
chains.
U.S. President Donald Trump’s administration has slapped tariffs on $250
billion worth of imports of Chinese goods to press demands for an end to
policies - including industrial subsidies - that Washington says hurt U.S.
companies competing with Chinese firms. China responded with its own
tit-for-tat tariffs on U.S. goods.
The issue of industrial subsidies is thorny because they are intertwined
with the Chinese government’s industrial policy. Beijing grants subsidies and
tax breaks to state-owned firms and to sectors seen as strategic for long-term
development. Chinese President Xi Jinping has strengthened the state’s role in
parts of the economy.
In the push to
secure a deal in the next month or so, U.S. negotiators have become resigned to
securing less than they would like on curbing those subsidies and are focused
instead on other areas where they consider demands are more achievable, the
sources said.
In other news, the EUSSR readies itself for never-ending
trade talks with Uncle Scam. Volkswagen places its faith in China. It’s all
about China now, thinks Wall Street.
EU countries back starting trade
talks with United States
April 15, 2019 /
9:44 AM
BRUSSELS (Reuters)
- European Union countries gave final clearance on Monday to start formal trade
talks with the United States after months of delay due to French resistance.
In the end, the EU governments voted by a clear majority to approve the
negotiating mandates proposed by the European Commission, with France voting
against and Belgium abstaining.
The Commission, which coordinates trade policy for the 28-member
European Union, wants to start negotiations on two tracks — one to cut tariffs
on industrial goods, the other to make it easier for companies to show products
meet EU or U.S. standards.
It needed backing from the EU member states to do so.
The European Union and the United States reached a detente last July
when U.S. President Donald Trump agreed to hold off imposing punitive tariffs
on EU cars as the two sides sought to improve economic ties.
That including removing tariffs on “non-auto industrial goods”.
The Commission has repeatedly said it will not discuss tariffs or
barriers to trade in farm products, but is willing to discuss cars, setting it
on a possible collision course with Washington.
The Trump administration has a wide-ranging wish list, including
comprehensive agricultural market access.
Diplomats say Germany, whose exports of cars and parts to the United
States are more than half the EU total, wants to press ahead with talks to ward
off tariffs on carmakers Volkswagen, Mercedes maker Daimler and BMW.
France, with very few U.S. car exports, had been seeking to push the
issue beyond the European Parliament election in May, convinced that dealing
with Trump is not a vote winner.
VW says China to become global
software development hub to autonomous tech
April 15, 2019 /
1:13 PM
SHANGHAI (Reuters)
- Volkswagen will use Chinese software developers to help design a global
autonomous vehicle architecture thanks to the prevalence of qualified
programmers which carmakers are struggling to hire elsewhere, senior executives
said on Monday.
As carmakers scramble to develop advanced driver assistance systems and
autonomous driving functions, carmakers are struggling to find qualified
engineers to build the software algorithms needed to teach cars the right
reflexes.
Volkswagen has 4,000 engineers in China, with an average age of 29,
spread over five research and development sites and a rapidly growing number of
software engineers.
“In a short period from now they will be able to do 15 to 20 million
lines of programming code on an annual basis,” Volkswagen China’s passenger
cars chief Stephan Woellenstein said in Shanghai on Monday.
The prevalence of software engineers, combined with the country’s
willingness to roll out the infrastructure for connected and self-driving cars,
will make China one of the first markets in which autonomous cars gain
widespread acceptance, VW managers said.
As a result, Chinese suppliers will help Volkswagen Group to design a
global autonomous vehicle architecture, he said.
“Part of the software development work can be done for instance in
Chinese facilities out of Volkswagen Group China,” Woellenstein said.
Following the markets on both sides of the Atlantic since 1968. A dinosaur, who evolved with the financial system as it was perverted from capitalism to banksterism after the great Nixonian error of abandoning the dollar's link to gold instead of simply revaluing gold. Our money is too important to be left to probity challenged central banksters and crooked politicians.
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