Baltic Dry Index. 936
-49 Brent
Crude 70.19
Never ending Brexit
now October 31st, maybe.
Day 159 of the
never-ending USA v China trade talks. Trump Tariffs
Friday!
USA v EU trade war 7
days away? No one optimistic.
The main purpose of the stock
market is to make fools of as many men as possible.
Bernard Baruch
According
to Chinese connected media, it was President Xi himself who ordered no more
concessions. It now looks likely that Trump’s trade war against China will fail
at one minute past midnight tomorrow.
Is the
erratic Team Trump now ramping up a new hot war with Iran as its replacement.
Is a new “Gulf of Tonkin incident,” what comes next? He wouldn’t do that would
he? With any other US President than President Trump the answer would obviously
be no, but with Trump and his war mongers, the answer just might be yes.
Conditioning the public for war against Iran has now gone into overdrive.
Below, a
dismal start to what looks like being a very dismal week. Getting out early
always beats getting carried out last.
It
is far more difficult... to know when to sell a stock than when to buy.
Bernard Baruch
‘No more concessions’. Why is China playing hardball in trade war talks with the United States?
·
Chinese state media and sources say China will
give no more ground in the face of Trump’s tariff threats
·
Liu He’s US trip confirmed for Thursday, and
will be shorter than expected
Published: 2:34pm, 7 May, 2019 Updated: 7:32pm, 7 May, 2019
Chinese Vice-Premier Liu He will go to the United States on Thursday to
continue trade negotiations, the Ministry of Commerce said on Tuesday.
The trip, scheduled for two days, is shorter than expected. The South
China Morning Post reported on Monday that Liu was preparing for the trip.
The trip comes as uncertainty hangs over the negotiations after US
President Donald Trump’s announcement that he would increase punitive tariffs
on US$200 billion worth of Chinese products from 10 per cent to 25 per cent.
It also comes amid Chinese
state media reports that Beijing will not respond to Trump’s threats with
concessions.
In a commentary published on its WeChat account on Tuesday, People’s
Daily warned the US to “not even think about” concessions.
“When things are unfavourable to us, no matter how you ask, we will not
take any step back. Do not even think about it,” the commentary said.
The article was first published through
Taoran Notes, a social media account used by Beijing to signal the leadership’s
thinking and manage domestic expectations.
It is the first official Chinese opinion
piece since Trump went on Twitter to announce the tariff increases because the
trade talks were going “too slowly” for his liking.
More
Asia Stocks Resume Slide as Tariff Worries Linger: Markets Wrap
By Adam Haigh
Updated on 8 May 2019, 04:34 BST
Asian stocks dropped as the U.S. threat of higher tariffs on imports
from China continued to reverberate through global markets. The New Zealand
dollar fell after the country’s central bank cut rates to a record low.
Shares fell across the region with the brunt of declines seen in Japan.
Hong Kong was also down, while Chinese stocks were little changed. The yen
climbed. Futures on the S&P 500 Index were steady after U.S. stocks had the
broadest day of declines since the Christmas Eve sell-off, despite closing off
the session lows. Investor focus has turned to Washington for the visit of
China’s top trade negotiator later this week as President Donald Trump ratchets
up pressure to clinch a deal that many market participants had expected was all
but done. Treasuries and the dollar were flat.
“The two largest
economic powerhouses, the U.S. and China, either will be at a trade war or a
trade peace and in reality there’s only a couple of people who know the answer
to that and it isn’t those of us on Wall Street,” Larry Robbins, Glenview
Capital Management’s CEO, told Bloomberg TV in New York. “It’s to be expected
that there’s some volatility into this critical week.”
Sentiment remains fragile as traders wait
for the next development in the dispute between the world’s two-biggest
economies. China’s government confirmed Tuesday that Vice Premier Liu He would
visit the the U.S. for trade talks on May 9 and 10. At the same time, the
country was said to be preparing retaliatory tariffs on American
imports should Trump carry out his threat of further duties.
More
Gundlach says stock market still in a bear market, sees high chance of tariff hike
By Sunny
Oh Published: May 7, 2019 2:27 p.m.
ET
That’s “bond king” Jeffrey Gundlach, chief executive of
investment firm DoubleLine, suggesting the selloff in the stock market could
have more room to run as investors contend with the recent setbacks to a
U.S.-China trade deal. In an interview with CNBC, Gundlach said the Trump administration and Beijing policy makers were unlikely to cede ground in recent trade negotiations, raising the risk that trade tensions could last longer than investors anticipate. The Trump administration has threatened to raise tariffs on $200 billion of Chinese goods to 25% from 10% early Friday. Trump also said the U.S. would place tariffs on the rest of the $325 billion of untaxed Chinese imports at the 25% rate.
Gundlach estimated the chance that the U.S. would follow through at more than 50%.
“The market obviously doesn’t want increased tariffs, so it’s been kind of reacting to that,” said Gundlach.
Equities have retreated over the last two
sessions as investors were blindsided by the possibility of another trade spat.
Before this week, market participants had mostly assumed a deal to resolve
longstanding trade tensions between Washington and Beijing would arrive soon.
More
China April exports unexpectedly fall but imports rebound as trade talks loom
May 8, 2019 / 5:21
AM
BEIJING (Reuters)
- China’s exports unexpectedly shrank in April but imports surprised with their
first increase in five months, painting a mixed picture of the economy as
Beijing and Washington make a last-ditch bid for a trade deal before a hike in
U.S. tariffs.
The latest trade data, which would normally be poured over for clues on
how the world’s second-largest economy is faring, has been totally eclipsed by
worries that the U.S.-China trade war is escalating, rather than nearing a
resolution as many investors had expected.
High-level Chinese and U.S. negotiators will meet in Washington in the
next two days, as Beijing tries to avoid a sharp increase in tariffs on its
goods ordered by President Donald Trump to take effect on Friday.
Investors have been hoping that China’s April trade data would add to
signs that its economy is beginning to steady, easing worries about cooling
global growth.
Exports fell 2.7 percent from a year earlier, customs data showed on
Wednesday. Economists polled by Reuters had expected growth to slow to 2.3
percent after March’s surprising 14.2 percent jump, which some analysts
suspected was inflated by seasonal and one-off factors.
“The outlook for Chinese exports is challenging. If Trump follows
through on his latest tariff threats, we think this would drag down export
growth by two to three percentage points,” Capital Economics said in a research
note.
“Even if a
last-minute deal is struck this week to avoid further tariffs, the downbeat
prospects for global growth will probably mean that export growth remains
subdued.”
More
Pompeo briefs Iraqi leaders on U.S. security concerns over Iran
May 7, 2019 /
9:53 PM
BAGHDAD
(Reuters) - U.S. Secretary of State Mike Pompeo made an unannounced visit to
Baghdad on Tuesday and met with Iraq’s prime minister and other top officials
to discuss the safety of Americans in Iraq and explain U.S. security concerns
amid rising Iranian activity.
The visit came two days after U.S. national security adviser John Bolton
said the United States was deploying the aircraft carrier USS Abraham Lincoln
and a bomber task force to the region because of a “credible threat by Iranian
regime forces.”
The concern about a threat from Iranian forces comes after Washington
has ramped up sanctions on Tehran over its nuclear program in recent months and
designated the Iranian Revolutionary Guard Corps as a terrorist group.
“We talked to them about the importance of Iraq ensuring that it’s able
to adequately protect Americans in their country,” Pompeo told reporters after
meeting with Iraqi Prime Minister Adel Abdul Mahdi.
An Iraqi government source confirmed the meeting with Abdul Mahdi but
did not elaborate on the details.
Pompeo said the purpose of the meeting also was to let Iraqi officials
know more about “the increased threat stream that we had seen” so they could
effectively protect U.S. forces.
Pompeo said he expressed U.S. support for Iraqi sovereignty, noting, “We
don’t want anyone interfering in their country, certainly not by attacking another
nation inside of Iraq.”
Asked before the meetings if there was a threat to the Baghdad
government from Iran that raised U.S. concerns about Iraqi sovereignty, Pompeo
said, “No, no, generally this has been our position since the national security
strategy came out in the beginning of the Trump administration.”
Asked about the decision to move the aircraft carrier and bomber task
force to the region, Pompeo said Washington wanted to defend its interests from
the Iranian threat and ensure it had the forces necessary to accomplish that
goal.
More
Gulf of Tonkin incident
The Gulf of
Tonkin incident (Vietnamese: Sự kiện Vịnh Bắc Bộ), also known as the USS Maddox
incident, was an international confrontation that led to the United
States engaging more directly in the Vietnam
War. It involved either one or two separate confrontations involving North
Vietnam and the United States in the waters of the Gulf
of Tonkin. The original American report blamed North Vietnam for both
incidents, but eventually became very controversial with widespread belief that
at least one, and possibly both incidents were false, and possibly deliberately
so.
More
In
European news, more of the same old story. Even powerhouse Germany is dropping
below stall speed, with Brexit and an autos trade war with trade war team Trump
still to come.
German manufacturing orders miss forecasts
By Nina
Adam Published: May 7, 2019 2:57 a.m. ET
FRANKFURT--German manufacturing orders picked up slightly in March, but
not enough to compensate February's steep fall and held by weak domestic demand
for capital goods, data from the Federal Statistical Office showed Tuesday.
"The slight order increase in March is not least due to bulk
orders," the German economics ministry said. Stripping out volatile demand
for big ticket items, manufacturing orders would have registered another
monthly decline, the ministry added.
Total orders for the key sector rose 0.6% month-on-month, whereas
economists polled by The Wall Street Journal last week had expected a 1.2%
rise.
Compared with March 2018, order volumes dropped 6.0%, taking account of
calendar effects.
Industrial activity in Europe's largest economy turned down in the
second half of last year amid weaker foreign demand and partly reflecting
temporary disruptions to production in the key automobile and chemical
industries.
Tuesday's data indicate that the sector remains in the doldrums.
"On the whole, the order situation in the manufacturing sector indicates
that industrial activity will remain subdued in the coming months," the
economics ministry said.
Germany's Infineon says inventory pile-up to keep pressure on margins
May 7, 2019 / 6:49
AM
FRANKFURT
(Reuters) - German chipmaker Infineon Technologies AG said on Tuesday that a
slump in demand had led to an inventory pile-up that would only plateau this
summer, keeping pressure on profit margins.
Infineon, which makes high-performance power chips used in everything
from cars to server farms and smartphones, has been forced by a China-led
slowdown to lower its revenue guidance twice already this year.
While declaring an industry boom over, CEO Reinhard Ploss stood by his
view that sales would rise 5 percent to 8 billion euros ($8.96 billion) in the
year to Sept. 30, as Infineon reported flat sequential sales in the second
quarter and said margins had held up better than expected.
Ploss said he expected inventories to peak in the summer. “But at the
end of the year, we still assume a high level of inventories compared to our
target inventory level,” he told analysts on a conference call.
Automotive accounts for more than two-fifths of Infineon’s top line and
here, weakness in China - the world’s largest car market - continued through
the three months to March even if the pace of its contraction slowed.
More
Finally, when it comes to extra-terrirtorial sanctions, Uncle Scam expects others to play by the rules while Uncle Scam makes up the rules at will. But what’s good for the goose should be good enough for India’s gander.
Could this be the same Uncle Scam that’s been deliberately undermining the WTO for months, by not submitting new arbitration judges, forcing no arbitration panels before the end of this year?
U.S. warns India against retaliatory duties over scrapping of trade privileges
May 7, 2019 /
11:55 AM
NEW DELHI
(Reuters) - Any retaliatory tariff by India in response to the United States’
planned withdrawal of trade privileges will not be “appropriate” under WTO
rules, U.S. Commerce Secretary Wilbur Ross warned on Tuesday.
India’s new e-commerce rules could hurt future investments by the U.S in
the South Asian country, Ross said, even as he said he was hopeful that U.S
firms would win defense deals from India in future.
Indian officials have raised the prospect of higher import duties on
more than 20 U.S. goods if President Donald Trump presses ahead with a plan
announced in March to end the Generalized System of Preferences (GSP) for
India.
India is the biggest beneficiary of the GSP, which allows preferential
duty-free imports of up to $5.6 billion from the South Asian nation.
“Any time a government makes a decision adverse to another one, you will
have to anticipate there could be consequences,” Ross said. “We don’t believe
under the WTO rules that retaliation by India would be appropriate.”
He said the decision on GSP could be reversed in future if India deals
with the issues raised by the U.S.
He added that India’s new rules on e-commerce, which bar companies from
selling products via firms in which they have an equity interest, and data
localization have been discriminatory for U.S. firms such as Walmart Inc and
Mastercard Inc.
“So the American companies are showing very good will and a very
cooperative attitude towards ‘Make in India’ and the other programs,” Ross
said, referring to a manufacturing push by Indian Prime Minister Narendra Modi.
“But there’s a limit to how far the discriminatory behavior can go. And
our job is to try to get a level, more level playing field.”
“The tragic part of it is not that Walmart won’t be able to function.
They will, but it will cost them money. But we will never know how many new
investments that also will cost India,” Ross said.
More
US bullying on trade deals undermines global rule book
Washington’s push to use discretionary
sanctions to enforce China deal sets precedent
----When
it was created in 1995, the World Trade Organization was given a binding
dispute settlement system — ironically enough after pressure from the US — with
three-member panels of independent arbiters and an appellate body to review
decisions.
----The US,
however, has grown weary. Successive administrations have argued the WTO
dispute settlement body has over-reached and ruled against the US by making up
law out of thin air. This, US officials say, disadvantages American industries,
not incidentally including Mr Lighthizer’s former clients — the beleaguered US
steel industry. Mr Trump’s administration is strangling the WTO dispute
settlement system by refusing to appoint new judges to its appellate body.
The
US approach is forcing the WTO into a dilemma. Last year, the country imposed
tariffs on steel and aluminium imports from many trading partners, including
allies such as the EU, Canada and Japan, on the contentious grounds that they
contravened national security. Several of those partners, including the EU,
China and Canada, have brought a case to the WTO, saying that national security
is an excuse for protectionist actions.
The
US defence will rely on a rarely-tested provision in the WTO rule book allowing
trade restrictions on national security grounds. The WTO dispute panel will
then face an extremely difficult decision. Either it rules that the US has the
inalienable right to decide how it sets trade policy to protect its own
citizens, creating a loophole for any member country to follow suit. Or it can
declare the tariffs illegal and risk blowing up the system by prompting the US
to pull out of the WTO altogether.
More
If
a speculator is correct half of the time, he is hitting a good average. Even
being right 3 or 4 times out of 10 should yield a person a fortune if he has
the sense to cut his losses quickly on the ventures where he is wrong.
Bernard
Baruch.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Boeing again. This time firmly in the WSJ’s sights.
Boeing Max Failed to Apply Safety Lesson From Deadly 2009 Crash
By Anita Sharpe and Ryan Beene
7 May 2019, 05:01 BST
A fatal airplane crash a decade ago prompted a life-saving
fix across thousands of Boeing 737 cockpits. So why wasn’t the same lesson
applied to the design of the 737 Max, an upgraded version on which 346 people
died in recent disasters?Investigators of the 2009 crash of a Turkish Airlines jet identified a faulty altitude sensor that thought the plane was closer to the ground than it was and triggered the engines to idle. The plane’s second radio altimeter displayed the correct elevation, but it didn’t matter: the automatic throttle was tied to the first gauge. The Amsterdam-bound plane crashed into a field, killing nine people and injuring 120.
Boeing ended up changing that throttle system to prevent one erroneous altitude reading from cascading into tragedy, changes the U.S. Federal Aviation Administration subsequently made mandatory.
Yet when the Max debuted in 2017 with a new flight-control feature to help pilots avoid a stall, it was designed to react to only one of the plane’s two “angle of attack” sensors that measure the jet’s incline. That proved deadly when malfunctioning sensors on jets operated by Lion Air and Ethiopian Airlines automatically commanded the noses of the planes down over and over, even though the other sensor showed it wasn’t necessary.
“When I read that the planes had two angle-of-attack sensors, I couldn’t think of a reason why they wouldn’t use both,” said Robert Canfield, an aeronautical engineering professor and technical director of the Virginia Tech Airworthiness Center.
A
software fix for the 737 Max that is now in testing will do just that, and
multiple investigations of two crashes, the first in October and the second in
March, are probing why it wasn’t incorporated into the original design.
---- The crash of Turkish Airlines Flight 1951 foreshadowed the risks of an automated flight-control system relying on data from a single sensor, said Jeffrey Guzzetti, the former director of the U.S. Federal Aviation Administration’s Accident Investigation Division.
“Several parallels can be drawn,” Guzzetti said, including that each of
the accidents involved a single-sensor failure and subsequent technical changes
by Boeing that were eventually mandated by the FAA, he said.
And while the crashes have significant differences, the single-sensor
lesson is one that Guzzetti says Boeing should have applied to the 737 MAX.
“The short answer is yes,’’ he said, “but with the huge caveat that hindsight
is 20/20.’’
More
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?
Quantum computing with graphene plasmons
Date:
May 6, 2019
Source:
University of Vienna
Summary:
A novel material that consists of a single sheet of carbon atoms could lead to
new designs for optical quantum computers. Physicists have shown that tailored
graphene structures enable single photons to interact with each other.
A novel material that consists of a single sheet of carbon atoms could
lead to new designs for optical quantum computers. Physicists from the
University of Vienna and the Institute of Photonic Sciences in Barcelona have
shown that tailored graphene structures enable single photons to interact with
each other. The proposed new architecture for quantum computer is published in
the recent issue of npj Quantum Information.
Photons barely interact with the environment, making them a leading
candidate for storing and transmitting quantum information. This same feature
makes it especially difficult to manipulate information that is encoded in
photons. In order to build a photonic quantum computer, one photon must change
the state of a second. Such a device is called a quantum logic gate, and
millions of logic gates will be needed to build a quantum computer. One way to
achieve this is to use a so-called 'nonlinear material' wherein two photons
interact within the material. Unfortunately, standard nonlinear materials are
far too inefficient to build a quantum logic gate.
It was recently realized that nonlinear interactions can be greatly
enhanced by using plasmons. In a plasmon, light is bound to electrons on the
surface of the material. These electrons can then help the photons to interact
much more strongly. However, plasmons in standard materials decay before the
needed quantum effects can take place.
In their new work, the team of scientists led by Prof. Philip Walther at
the University of Vienna propose to create plasmons in graphene. This 2D
material discovered barely a decade ago consists of a single layer of carbon
atoms arranged in a honeycomb structure, and, since its discovery, it has not
stopped surprising us. For this particular purpose, the peculiar configuration
of the electrons in graphene leads to both an extremely strong nonlinear
interaction and plasmons that live for an exceptionally long time.
In their proposed graphene quantum logic gate, the scientists show that
if single plasmons are created in nanoribbons made out of graphene, two
plasmons in different nanoribbons can interact through their electric fields.
Provided that each plasmon stays in its ribbon multiple gates can be applied to
the plasmons which is required for quantum computation. "We have shown
that the strong nonlinear interaction in graphene makes it impossible for two
plasmons to hop into the same ribbon" confirms Irati Alonso Calafell,
first-author of this work.
Their proposed scheme makes use of several unique properties of graphene,
each of which has been observed individually. The team in Vienna is currently
performing experimental measurements on a similar graphene-based system to
confirm the feasibility of their gate with current technology. Since the gate
is naturally small, and operates at room temperature it should readily lend
itself to being scaled up, as is required for many quantum technologies.
Don't
try to buy at the bottom and sell at the top. It can't be done except by liars.
Bernard
Baruch.
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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