Baltic Dry Index. 1082
+16 Brent
Crude 69.58
Never ending Brexit
now October 31st, maybe.
Nuclear Trump
Tariffs Now In Effect.
USA v EU trade war postponed
to November, maybe.
“Recession
is when your neighbor loses his job. Depression is when you lose yours. And
recovery is when Jimmy Carter loses his.”
Trade wars and Brexit
aside, is the next recession already underway? No one will know the official
answer for many months, for those officially determining recessions always use
a rear-view mirror, but US bonds and the global auto industry are signalling it
has. Well might have.
With Trump’s 25
percent tariffs just kicking in and China’s new tariffs starting on June one,
those of us looking out of the front windscreen, seem to be looking at a new
recession. The EUSSR attempt to impose punitive Brexit, will only make any new
recession much deeper and longer across Europe.
Below, the new
reality is finally sinking in to stock pedlars. China fires back on who reneged
on whom. The EU goes all out for recession.
“The most terrifying words in the English language are: I'm from
the government and I'm here to help.”
Asian shares falter, bonds rally on global risk aversion
May 29, 2019 /
1:59 AM
SYDNEY (Reuters) -
Asian shares sank on Wednesday and bonds rallied as investor sentiment soured
over growing worries about world growth with trade tensions between Washington
and Beijing showing no signs of easing.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.5%
after three straight days of gains. Chinese shares started on the back foot
with the blue-chip CSI300 off 0.5%. Australian shares were 0.8% lower while
Japan’s Nikkei faltered 1.4%.
In an indication U.S. markets will fall again on Wednesday, E-Minis for
the S&P 500 were 0.4% lower.
Risk aversion has increased globally in recent days as fears of world
recession resurfaced amid disappointing macro data in major economies. Wins for
eurosceptic parties in EU elections as well as a snap poll in Greece and
political turmoil in Austria have added to the gloomy outlook.
Italy’s dispute with the European Commission over its budget is also a
major overhang for world markets.
In Asia, focus remains on the ongoing Sino-U.S. trade war. U.S.
President Donald Trump said on Monday that Washington was not ready to make a
deal with China yet. At the same time, he pressed Japan to reduce its trade
imbalance with the United States.
Such concerns have led U.S. 10-year yields to fall about 10 basis points
below the 3-month rates, an inversion typically seen as a leading indicator of
a recession. German Bund yields are also on a slippery slope.
“What I see as more consistent is that typically when the yield curve
inverts you get central bank easings. So the question about recession would be
would the U.S. Fed ease enough to avoid a recession?” said Chris Rands,
Sydney-based fixed income portfolio manager at Nikko Asset Management.
More
Was this the moment US-China trade talks fell apart?
·
Five days before hopes of a deal receded
dramatically, a private chat between China’s Liu He and the US’ Robert
Lighthizer and Steven Mnuchin changed the mood
·
Claim that US side had kept adding extra demands
before accusing Beijing of reneging on what was agreed
Published: 5:00pm, 28 May, 2019
On April 30, Chinese Vice-Premier Liu He made an unusual request of his
American guests Robert Lighthizer and Steven Mnuchin, who were in Beijing for
pivotal talks to end the costly trade war between the world’s two largest economies.
Liu, President Xi Jinping’s trusted economic lieutenant, wanted to have
a quiet word with the two senior American officials in private. The three broke
away from the rest of the negotiation teams. Accompanied only by a Chinese
interpreter, they entered a small room at the meeting venue and stayed inside
for nearly an hour.
When they emerged, they did not give any briefings or instructions to
their aides. But their expressions were stern and gloomy, according to a person
who was present. A sense of foreboding permeated the meeting hall, but nobody
dared to ask why.
Five days later, the once hopeful negotiations took a sudden turn. US
President Donald Trump announced
on Twitter on May 5 that the United States would increase tariffs from 10
per cent to 25 per cent on US$200 billion of Chinese goods.
Chinese official media hit back at the announcement,
saying that the additional tariffs would make it even harder to strike an
agreement. At a meeting on May 13, Xi canvassed the other 24 Politburo members
for their views on the latest US demands. The Politburo overwhelmingly decided
that the Americans had gone too far and that China should put its foot down,
according to a source.
What
exactly had caused this costly impasse in the trade talks and sent global
markets into a tailspin remained unclear. The US side accused Beijing of “reneging” on its earlier promises.
The Americans painted a vivid picture of how the
Chinese had taken out the most crucial agreements from a 130-page document that
both sides had “agreed” earlier. The document returned to Washington had been
reduced to 103 pages, according to American sources.
Beijing was livid at the accusation, calling it
“untruthful and deliberately confusing”. Yet the Chinese government never
offered its side of the story to the public.
Two separate Chinese sources told the South China
Morning Post that the talks hit a snag because the US side “kept adding
new demands in the late stages of the negotiations”. They said “some of these
would directly affect China’s political and social stability”. Beijing was
particularly angered by the additional tariffs and what it saw as the US’
attempt to shift the blame to China.
“The real reason is that the US side keep changing
their demands,” one source said. “There were so many changes that we can’t
[keep giving in]. And then they turned around and accused us of backtracking.”
He also revealed some of the key areas that the
two sides could not agree on.
More
Opinion: America is in denial about the trade deficit — it’s not China, it’s us
By Stephen
S. Roach Published: May 28, 2019
4:06 p.m. ET
NEW HAVEN, Conn. (Project Syndicate)
— “When governments permit counterfeiting or copying of American products,
it is stealing our future, and it is no longer free trade.” So said
President Ronald Reagan, commenting on Japan after the Plaza Accord was
concluded in September 1985. Today resembles, in many respects, a remake of this 1980s movie, but with a reality-television star replacing a Hollywood film star in the presidential leading role — and with a new villain in place of Japan.
Back in the 1980s, Japan was portrayed as America’s greatest economic threat — not only because of allegations of intellectual-property theft, but also because of concerns about currency manipulation, state-sponsored industrial policy, a hollowing out of U.S. manufacturing, and an outsize bilateral trade deficit.
In its standoff with the U.S., Japan ultimately blinked, but it paid a
steep price for doing so — nearly three “lost” decades of economic stagnation
and deflation. Today, the same plot features China.
Notwithstanding both countries’ objectionable mercantilism, Japan and
China had something else in common: They became victims of America’s
unfortunate habit of making others the scapegoat for its own economic problems.
Like Japan bashing in the 1980s, China bashing today is an outgrowth of
America’s increasingly insidious macroeconomic imbalances. In both cases, a
dramatic shortfall in U.S. domestic saving spawned large current-account and
trade deficits, setting the stage for battles, 30 years apart, with Asia’s two
economic giants.
---- Data from the OECD and the World Trade Organization suggest that about 35%-40% of the bilateral U.S.-China trade deficit reflects inputs made outside of China but assembled and shipped to the U.S. from China. That means the made-in-China portion of today’s U.S. trade deficit is actually smaller than Japan’s share of the 1980s.
Like the Japan bashing of the 1980s, today’s outbreak of China bashing has been conveniently excised from America’s broader macroeconomic context. That is a serious mistake. Without raising national saving — highly unlikely under the current U.S. budget trajectory — trade will simply be shifted away from China to America’s other trading partners.
With this trade diversion likely to migrate to higher-cost platforms around the world, American consumers will be hit with the functional equivalent of a tax hike.
More
EU tells Britain: There will be no renegotiation of Brexit deal
May 28, 2019 /
7:42 AM
LONDON/BRUSSELS (Reuters) - The European
Union will not renegotiate the Brexit deal that Prime Minister Theresa May
agreed, Commission President Jean-Claude Juncker said on Tuesday, as concerns
grew that a successor to May could trigger a confrontation with the bloc.
Brexit is up in the air after May announced plans to step down,
triggering a leadership contest in the ruling Conservative Party that could
bring a new prime minister to power who wants a much more decisive break with
the EU.
One of the candidates, Foreign Secretary Jeremy Hunt, said it would be
“political suicide” to pursue a no-deal Brexit, a reprimand to frontrunner
Boris Johnson who said last week that Britain should leave with or without a
deal by the end of October.
Hunt, who voted to stay in the EU in the 2016 referendum but now accepts
Brexit, said he would try for a new agreement that would take Britain out of
the EU customs union while “respecting legitimate concerns” around the Irish
border.
The EU, though, said there would be no renegotiation.
“I will have a short meeting with Theresa May, but I was crystal clear:
There will be no renegotiation,” Juncker said before a meeting of EU leaders in
Brussels.
----
Under laws now in effect, Britain will automatically leave the
EU on Oct. 31 without an agreement unless parliament approves one first, the EU
grants an extension, or the government revokes its decision to leave.
More
Finally, more on that
great USA flood in the US grain belt. Will farmers now have to switch from corn
to soybeans? But will anyone want US soybeans if they do? How much of a drag on
the US economy over summer, will 2019’s too wet or too hot weather impact be?
Evacuations remain in effect as swollen Arkansas River threatens communities in Oklahoma, Arkansas
May 27, 2019 /
10:11 PM
Record-breaking
floods continue to inundate riverside communities in the central United States
on Monday. Evacuations are underway in several locations, and flood watches and
warnings have been issued across Oklahoma, Kansas, Arkansas, Missouri, Illinois
and parts of Nebraska and Iowa.
Flooded
areas of Central states like Oklahoma and Arkansas are forecast to receive more
rain in the coming days, increasing flooding risks along the already swollen
rivers in the central United States.
"The
very wet spring pattern in the Plains and Midwest will continue through at
least midweek as two low pressure systems move across the area," said
AccuWeather meteorologist Ryan Adamson.
As of midday on Monday, the low pressure was located in north-central
Iowa, and it will continue to move northeastward. As it does, moderate to heavy
rain will continue to fall to north of the low in northern Iowa, central and
southern Minnesota, and much of Wisconsin. To the south of the low, strong to
severe thunderstorms will be possible from eastern Iowa through northern
Illinois and northern Indiana.
The second low pressure will move into Kansas on Tuesday, again
unleashing heavy rain to the north of the Iowa, as well as in central and
southern Iowa and northern Missouri Tuesday night.
"Severe weather will be possible from eastern Nebraska down through central Oklahoma. Some of these areas have been the wettest this month, with the second-wettest May on record in Wichita and third-wettest in Oklahoma City," Adamson said. "A much-needed break in the rain should occur after Wednesday."
Arkansas Gov. Asa Hutchinson declared a state of emergency on Friday. The U.S. Army Corps of Engineers is warning Arkansans about the possibility of historic flooding along the Arkansas River.
Oklahoma Gov. Kevin Stitt has also addressed the historic flooding in the state. On Friday, Stitt amended an executive order to declare a state of emergency for all 77 Oklahoma counties impacted by flooding and severe storms.
Stitt first signed the executive order earlier in the month on May 1 for 52 counties, and he later amended it on May 8 to include 14 more counties. The most recent amendment stretches farther across the state, as severe weather and heavy rainfall has continue.
More
https://www.upi.com/Top_News/US/2019/05/27/Evacuations-remain-in-effect-as-swollen-Arkansas-River-threatens-communities-in-Oklahoma-Arkansas/9621559009057/
“We don't have a trillion-dollar debt because we haven't taxed enough; we have a trillion-dollar debt because we spend too much.”
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Today, with friends like America’s National “Security” Agency, who needs
enemies? Besides, we’re still waiting on proof of all those Huawei backdoor security
threats no one can seem to find.
"The Most Destructive Breach In History": Hackers Use NSA Code To Grind Baltimore To A Halt
The
United States is no longer supplying its enemies only with conventional weapons
– that list now also includes cyberweapons. While Baltimore has been struggling
with an aggressive cyber-attack over the last three weeks, previously profiled here , it
has now been revealed that a key component of the malware used by
cyber-criminals was actually developed just a short drive from
Baltimore - at the NSA, according to the New York Times.
The
tool used - called EternalBlue – has been used by hackers in North Korea,
Russia and China to "cut a path of destruction around the world", and
resulted in billions of dollars in damages.
Now, it has come full circle and is back in the US, wreaking havoc just miles from Washington. In fact, security experts say that attacks using EternalBlue have soared and cyber-criminals are honing in on vulnerable towns and cities, using it to paralyze governments. The NSA's connection to the attacks had previously not been reported and the NSA hasn’t commented about it since an unidentified group leaked the weapon online in April 2017.
The NSA and the FBI still don’t know whether or not it was leaked by foreign spies or US insiders.
The leak has been referred to as “the most destructive and costly N.S.A.
breach in history,” by Thomas Rid, a cybersecurity expert at Johns Hopkins
University. He continued: “The government has refused to take
responsibility, or even to answer the most basic questions. Congressional
oversight appears to be failing. The American people deserve an answer.”
An answer that we're sure they won't get.
Commenting on the leak in April 2017, Edward Snowden said that the
"NSA just lost control of its Top Secret arsenal of digital weapons;
hackers leaked it."
Since the April 2017 leak, foreign intelligence agencies and hackers
have used the software to paralyze places like hospitals, airports, rail and shipping
operators, ATMs and factories. In the United States, hackers are using the
software to hit local governments with outdated infrastructure and
few resources to defend themselves.
The software used to be one of the most useful exploits in the
NSA's arsenal. Former NSA analysts spent almost a year finding a flaw in
Microsoft's software and writing the code to target it. The tool was initially
called "EternalBlueScreen" because it had a penchant for crashing
computers. In fact, it was so valuable that the agency never even alerted
Microsoft to the security flaw and instead, held onto the tool for
five years before the breach in 2017 forced them to talk about it.
The May 7 Baltimore attack saw city workers' screens suddenly lock up
and a message in broken English demanding $100,000 in Bitcoin ransom. And, as
Baltimore has not yet paid the ransom, the city's computers remain handicapped.
Without the former NSA tool, the damage wouldn’t of been as bad.
North Korea was the first to allegedly use the tool in 2017 when they
attacked the British healthcare system, German railroads and 200,000 additional
organizations around the world. Then, Russia reportedly used the tool on
Ukraine and companies that did business in the country. The assault cost FedEx
more than $400 million and Merck $670 million. Over the past year, Russian
hackers have also used it to compromise hotel Wi-Fi networks, while Iranian
hackers have used it to hack airlines in the Middle East. Of course, there is
no evidence that any of these actors were behind the reported hacks.
Vikram Thakur, Symantec’s director of security response said: “It’s
incredible that a tool which was used by intelligence services is now publicly
available and so widely used.”
More
“We
must reject the idea that every time a law's broken, society is guilty rather
than the lawbreaker. It is time to restore the American precept that each individual
is accountable for his actions.”
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?
Plumbene, graphene's latest cousin, realized on the 'nano water cube'
Date:
May 23, 2019
Source:
Nagoya University
Summary:
Researchers have created 'plumbene,' a 2D-honeycomb sheet of lead atoms. As a
surprising by-product, the research group also observed a nanoscale palladium-lead
Weaire-Phelan-like bubble structure in the palladium substrate -- like the
'Water Cube' of the 2008 Olympics in Beijing.
Two-dimensional materials made of Group 14 elements, graphene's cousins,
have attracted enormous interest in recent years because of their unique
potential as useful topological insulators.
In particular, the up-to-now purely theoretical possibility of a
lead-based 2D honeycomb material, called plumbene, has generated much attention
because it has the largest spin-orbit interaction, due to lead's orbital electron
structure and therefore the largest energy band gap, potentially making it a
robust 2D topological insulator in which the Quantum Spin Hall Effect might
occur even above room temperature.
For this reason finding a reliable and cheap method of synthesizing
plumbene has been considered to be an important goal of materials science
research.
Now, Nagoya University-led researchers have created plumbene by
annealing an ultrathin lead (Pb) film on palladium Pd(111). The resulting
surface material has the signature honeycomb structure of a 2D monolayer, as
revealed by scanning tunneling microscopy.
Surprisingly, beneath the plumbene, a palladium-lead (Pd-Pb) alloy thin
film forms with a bubble structure reminiscent of a Weaire-Phelan structure
(which partitions space into cells of equal volume with the least total surface
area of the walls between them, solving the "Kelvin Problem"). The
Weaire-Phelan structure was the inspiration for the design of the Beijing
National Aquatics Centre ("Water Cube") of the 2008 Olympics in
Beijing.
---- According to Professor Yuhara, "Both plumbene and the 'nano water cube' are a beautiful addition to the Nano Nature World. The buildings of the 2020 Tokyo Olympics, the 2024 Paris Olympics, Expo 2020 Dubai, Expo 2023 Buenos Aires, Expo 2025 Osaka, and so on may also be placed in the spotlight again as future new materials," he says.
"The advent of plumbene," remarks Professor Yuhara, "has
been long awaited, and comes after the creation of silicene in 2012, germanene
in 2014 and stanene in 2015. It will certainly launch a rush for
applications."
“As government expands, liberty contracts.”
The monthly Coppock Indicators finished April
DJIA: 26,593 +51 Down. NASDAQ: 8,095 +89 Down.
SP500: 2,946
+55 Up.
The S&P has
reversed to up largely as a result of the Fed falling into line with President
Trump’s demands, 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 still fully paid up synthetic double options on most of the
major indexes. This could all go very wrong very fast.
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