USA v China. The Gloves Come Off.

Baltic Dry Index. 1032 unch.   Brent Crude 72.80

Never ending Brexit now October 31^st, maybe. 

Nuclear Trump Tariffs Now In Effect.

USA v EU trade war postponed to November, maybe.

As we learned after President Herbert Hoover signed the Smoot-Hawley tariff at the outset of the Great Depression, vibrant international trade is a key component to economic recovery; hindering trade is a recipe for disaster.

Asa Hutchinson

China to the USA, no talks scheduled. Don’t come without a change in attitude. And with that, today President Xi seems to have lost all patience with President Trump and Washington. It now likely goes all down hill from here, since neither party can get out of the corner of their own making without losing.

It will probably now take a serious lurch towards global recession before either side will have enough cover for concessions. Only the blind in Washington can’t see where this trade war is headed.

U.S. 'not sincere' about wanting more trade talks with China - media

May 17, 2019 / 5:46 AM

BEIJING (Reuters) - The United States is not sincere about wanting to resume trade talks with China and has damaged the atmosphere for negotiations with its recent moves, a state media social media account said.

U.S. Treasury Secretary Steven Mnuchin said on Wednesday he will likely travel to Beijing soon to continue negotiations with Chinese counterparts as the world’s two biggest economies try to salvage talks aimed at ending their months-long trade war.

But China’s Commerce Ministry said on Thursday it had no information on any plans for a U.S. trade delegation visit. China has also been infuriated by the Trump administration hitting Chinese telecoms giant Huawei Technologies Co Ltd with severe sanctions this week.

Without sincerity there was no point in coming for talks and nothing to talk about, Taoran Notes, a WeChat account run by the Economic Daily, said in a post late on Thursday that was re-posted by the ruling Communist Party’s official People’s Daily.

“The U.S. side has been saying it wants to talk, and at the same time has kept up with its little tricks, damaging the atmosphere for talks,” it said.

“There can’t be seen any substantive negotiating sincerity from the United States. Conversely, methods of extreme pressure are spreading,” the post added.

“If the U.S. side ignores the opinions of the Chinese people, I am afraid that it will no longer receive an effective response from China.”

---- “From my perspective, if there is no new substantive action taken by the United States (to address Chinese concerns), then even if they come to talk it will be fruitless.”

China might as well stop the talks completely and return to “our normal working routine: countering with retaliatory measures while concentrating on taking care of our own business”, it added.

https://uk.reuters.com/article/uk-usa-trade-china-media-talks/u-s-not-sincere-about-wanting-more-trade-talks-with-china-media-idUKKCN1SN0ER?il=0

China evokes patriotism, past wars as trade conflict with U.S. heats up

May 17, 2019 / 3:29 AM

BEIJING (Reuters) - The trade war with the United States will only make China stronger and will never bring the country to its knees, the ruling Communist Party’s People’s Daily wrote in a front-page commentary that evoked the patriotic spirit of past wars.

Beijing has yet to say whether or how it will retaliate to the latest escalation in trade tensions, which saw Washington put telecoms equipment giant Huawei Technologies Co Ltd on a blacklist that will make it extremely difficult for the telecom giant to do business with U.S. companies. 

The world’s two largest economies are locked in an increasingly acrimonious trade dispute that has seen them level escalating tariffs on each other’s imports in the midst of negotiations, adding to fears about risks to global growth and knocking financial markets.

---- China, which reported unexpectedly weak growth in retail sales and industrial output on Wednesday, also said on Friday that the impact of trade frictions on its economy was “controllable”.

“(We will) fully study the impact of the additional tariffs imposed by the United States, and promptly introduce countermeasures as needed to ensure that the economy operates within a reasonable range,” Meng Wei, a spokeswoman for the National Development and Reform Committee (NDRC), told a media briefing on Friday.

In Friday’s commentary, the ruling party’s official newspaper described China’s determination to protect its national interests and dignity as being as “firm as a boulder”.

“The trade war can’t bring China down. It will only harden us to grow stronger,” it said.

“What kind of storms have not been seen, what bumps have not experienced for China, with its more than 5,000 years of civilization? In the face of hurricanes, the nearly 1.4 billion Chinese people have confidence and stamina.”

Huawei’s Hisilicon unit, which purchases U.S. semiconductors for its parent, has been secretly developing back-up products for years in case Huawei was one day unable to obtain the advanced chips and technology it buys from the United States, its president told staff in a letter on Friday.

“Today, the wheel of destiny has turned and we have arrived at this extreme and dark moment, as a super-nation ruthlessly disrupts the world’s technology and industry system,” according to the letter.

Chinese state television has this week invoked a war theme, focussing on the 1950-1953 conflict between the two Koreas that saw Chinese troops back North Korea while the South was supported by the United States.

On Thursday, China Central Television replaced a programme about the ongoing Asian Film and TV Week with a 1964 Chinese movie on the Korean War, “Heroic Sons and Daughters.”

More

https://uk.reuters.com/article/uk-usa-trade-china/china-evokes-patriotism-past-wars-as-trade-conflict-with-u-s-heats-up-idUKKCN1SN08V?il=0

Airbus CEO says all planemakers to suffer from 'lose-lose' trade war

Alistair Smout  May 16, 2019 / 10:04 AM

LONDON (Reuters) - Airbus Chief Executive Guillaume Faury warned on Thursday any further escalation of trade tensions would damage aerospace firms globally, including the European planemaker’s U.S. rival Boeing. 

The United States and the EU have each threatened to impose billions of dollars of tit-for-tat tariffs on planes, tractors and food in the nearly 15-year trans-Atlantic dispute at the World Trade Organization over subsidies to Airbus and Boeing.

“The trade tensions that we see, we believe they are lose-lose tensions,” Faury told reporters on a visit to London.

Boeing on Wednesday urged the U.S. government, which has the first crack at imposing any tariffs since its WTO process is running several months ahead of the EU’s, to restrict reprisals to European aircraft to avoid harming American manufacturers.

But Faury said it would be impossible to isolate the fallout from the deteriorating international trade climate, which has also led to a tariff war between the United States and China.

“These tensions, and the trade situation, are not supportive to any of the players in aerospace,” he said.

“We don’t think we’ll be losing more than the other guys in that situation, but we think it should be resolved in one way or another that enables global businesses like aviation to continue to grow,” Faury said.

The new Airbus CEO, who stepped up from its planemaking division a month ago, repeated warnings over the impact of Britain’s European Union exit, while using softer language than his predecessor Tom Enders who threatened to quit the UK.

More
https://uk.reuters.com/article/uk-airbus-ceo/airbus-ceo-says-all-planemakers-to-suffer-from-lose-lose-trade-war-idUKKCN1SM0TG?il=0

Finally, in agriculture news, bad, good, bad. How global crop production turns out this year will determine whether we get food price inflation on top of a likely global recession.

Are the Grain Markets Waking Up to U.S., China Trade War?

Meanwhiile, 14-day weather not favorable for Midwest planting.

By Ray Grabanski  5/14/2019

Grain markets sometimes react in strange ways. 

Throughout the past year, as we have been negotiating with China to settle our trade dispute, the price of grains dropped pretty much from the first time the word negotiate was mentioned in the same sentence as China. The market apparently knew about the history of negotiating with China. We negotiate, they win!  And once again that was the case, as the past year we negotiated and China was able to buy our soybeans first for a 10% discount, then a 20% discount, and now a 30% discount from what prices were before we started negotiating. And we gave everyone else the same deal.  

Now that we’ve bowed to the Chinese for the past year and it’s gotten us nowhere, we finally said “no more negotiating,” and lo and behold, the market bottoms!  Words are worthless, it seems, against China. Action (in this case more money from your bottom line) matters. 

Last Friday, tariffs effectively doubled against China, and Monday our market bottomed. Maybe 25% more tariffs on $325 billion isn’t enough. Why not 50%? Or 75%? You can effectively tariff a country out of the competition for your citizens’ business.

China pretended to put tariffs on the U.S. products as well, including soybeans. But that was just a show. They apparently put a ban on purchasing from the U.S., and all but 2% of the buyers got the memo.  

So once the market realized the U.S. woke up, then the short-position selling gig was over. But the next question is, "Now what?"

---- Weather is not quite as favorable in the 14-day forecast, today, compared with yesterday. The forecast looks wetter in the Corn Belt the next seven days (above-normal precip), as well as the western U.S. The southeast U.S. still has below-normal precip forecast, so that area will at least get some planting done. 

Temps are forecast below normal in the northern third of the Corn Belt and the west the next seven days, but the rest of the U.S. (the southern two thirds) will enjoy above-normal temps.  Overall, some planting will get done in May, but Northern areas look to struggle much more than Southern areas. This is nothing at all like 2018, when everything got perfect in May (just in time to allow optimal planting in warm soils).  

Planting progress is anemic, with corn only 30% planted (36% behind normal) and 10% emerged vs. 29% normally. Soybeans are only 9% planted vs. 29% normally, with cotton 26% planted vs. 32% normally. Sorghum is 24% planted (9% behind normal), sugar beets 63% planted (17% behind), and oats 62% planted (21% behind).  

HRS wheat is 45% planted (22% behind normal) and barley 59% planted (13% behind normal), so it’s been horrible planting almost everything this spring.  

More

https://www.agriculture.com/markets/analysis/are-the-grain-markets-waking-up-to-us-china-trade-war

Robots Take the Wheel as Autonomous Farm Machines Hit the Field

Ashley Robinson, Lydia Mulvany and David Stringer Bloomberg May 16, 2019

(Bloomberg) -- Robots are taking over farms faster than anyone saw coming.

The first fully autonomous farm equipment is becoming commercially available, which means machines will be able to completely take over a multitude of tasks. Tractors will drive with no farmer in the cab, and specialized equipment will be able to spray, plant, plow and weed cropland. And it’s all happening well before many analysts had predicted thanks to small startups in Canada and Australia.

While industry leaders Deere & Co. and CNH Industrial NV haven’t said when they’ll release similar offerings, Saskatchewan’s Dot Technology Corp. has already sold some so-called power platforms for fully mechanized spring planting. In Australia, SwarmFarm Robotics is leasing weed-killing robots that can also do tasks like mow and spread. The companies say their machines are smaller and smarter than the gigantic machinery they aim to replace.

Sam Bradford, a farm manager at Arcturus Downs in Australia’s Queensland state, was an early adopter as part of a pilot program for SwarmFarm last year. He used four robots, each about the size of a truck, to kill weeds.

In years past, Bradford had used a 120-foot wide, 16-ton spraying machine that “looks like a massive praying mantis.” It would blanket the field in chemicals, he said.

But the robots were more precise. They distinguished the dull brown color of the farm’s paddock from green foliage, and targeted chemicals directly at the weeds. It’s a task the farm does two to three times a year over 20,000 acres. With the robots, Bradford said he can save 80% of his chemical costs.

“The savings on chemicals is huge, but there’s also savings for the environment from using less chemicals and you’re also getting a better result in the end,” said Bradford, who’s run the farm for about 10 years. Surrounding rivers run out to the Great Barrier Reef off Australia’s eastern cost, making the farm particularly sensitive over its use of chemicals, he said.

Costs savings have become especially crucial as a multi-year rout for prices depresses farm incomes and tightens margins. The Bloomberg Grains Spot Index is down more than 50% since its peak in 2012. Meanwhile, advances in seed technology, fertilizers and other crop inputs has led to soaring yields and oversupply. Producers are eager to find any edge possible at a time when the U.S.-China trade war is disrupting the usual flow of agriculture exports.

Farmers need to get to the next level of profitability and efficiency in farming, and “we’ve lost sight of that with engineering that doesn’t match the agronomy,” said SwarmFarm’s Chief Executive Officer Andrew Bate. “Robots flip that on its head. What’s driving adoption in agriculture is better farming systems and better ways to grow crops.”

In Saskatchewan, the first commercially sold autonomous tractors made by Dot are hitting fields this spring.

More

https://finance.yahoo.com/news/robots-wheel-autonomous-farm-machines-210000476.html

New crop-destroying pest enters China amid devastating swine fever epidemic

May 16, 2019 / 12:34 PM

May 16 (UPI) -- A new pest that threatens key agricultural commodities is spreading through China as the nation is reeling from an African swine fever epidemic that may wipe out hundreds of millions of hogs.

The new pest is called the fall armyworm, a moth native to Central America that feeds voraciously on many commodity crops while in its caterpillar phase

.

The pest "has no natural predators in China and its presence may result in lower production and crop quality," the U.S. Department of Agriculture's Foreign Agricultural Service said in an advisory. 

"Experts report that there is a high probability that the pest will spread across all of China's grain production area within the next 12 months."

The moth has arrived as China is losing a large percentage of its food supply to the rapid spread of African swine fever, which has spread to hogs throughout the country.

At the same time, a trade war with the United States limits China's ability to import food to fill the gap. And China had planned to increase production of the very commodities the fall armyworm feeds on.

Impact uncertain

The combined impact of all these factors is difficult to predict, experts say.

"Certainly, the simultaneous occurrence of these two elements are very unfortunate," said Keith Cressman, a forecasting officer with the United Nations Food and Agricultural Organization.

Unchecked, the pest has been shown to reduce corn yields elsewhere in the world up to 20 percent. It is unclear how China's yields will be affected.

"It is a bit too early to say with any precision what could happen," Cressman said. "We're waiting to see what kind of impact it will have on crop production."
More
https://www.upi.com/Top_News/World-News/2019/05/16/New-crop-destroying-pest-enters-China-amid-devastating-swine-fever-epidemic/4431557952780/?ls=1

Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs. Protection will lead to great prosperity and strength.

Donald Trump

Crooks and Scoundrels Corner

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

Today, that dirty Russian oil problem. Who’s going to pay, when and how? But what to do with the dirty oil sitting in 34 hundred miles of contaminated closed pipeline?

In limbo: the dirty Russian oil no one wants to pay for

May 15, 2019 / 2:42 PM

LONDON/MOSCOW (Reuters) - The bills are due for millions of barrels of contaminated Russian oil that have been stuck for weeks in pipelines from Belarus to Germany - but no one wants to pay.

Western oil companies and European refiners that bought the oil a month ago, before discovering it was unusable, have so far refrained from freezing payments as they are keen to maintain good long-term relations with the world’s second biggest oil exporter and avoid protracted legal battles in Russian courts.

Instead, several Western buyers have asked Russian producers if they can postpone payments for the tainted crude while buyers and sellers agree how to resolve the mess - and how to share the costs, four traders involved in Russian oil trading said.

For the buyers of an estimated 19 million barrels of contaminated crude stuck in the pipeline and loaded on tankers, it’s a $1.2 billion question.

The buyers want Russian producers to give guarantees in the form of bank deposits that they will contribute to the clean-up, or delay payments due this week until the crisis is resolved, said a source at European refiner, who declined to be named.

“There’s around 0.8-0.9 million tonnes of dirty oil sitting in the pipelines between Belarus and Germany that no refiner wants to take,” he said. “This oil needs to be evacuated somewhere to restart the pipeline. But it would be wrong for Russia to assume European refiners will bear all costs.”

The refiner said Russian oil producers had yet to respond to the proposals made by major European buyers.

“We are ready to help sort out the problem and find solutions for the dirty oil. But we want Russian producers to come up with financial guarantees that they will help cover the costs,” said a second buyer of Russian oil in Europe.

---- It has been three weeks since Belarus told oil refiners and pipeline operators in Europe that the crude heading towards them down the 5,500 km (3,400 mile) Druzhba pipeline network was heavily contaminated with organic chloride.

Russian oil flows via Druzhba were halted, sending crude to a six-month high above $75 a barrel and tarnishing Russia’s reputation as an exporter at a time of rising competition with U.S. and Middle Eastern oil sales.

Russia has since said the oil was contaminated deliberately by an unnamed local producer while Belarus said it would take months to restore clean oil supplies to Europe via Druzhba.

Organic chloride is used to clean oil wells and accelerate the flow of crude but it should be removed before the oil enters the supply chain as the compounds can damage refining equipment.

To get the pipeline working again, the tainted oil needs to be removed and stored somewhere so it can be diluted with clean oil - in some cases in proportions of one to 30 - to bring the organic chloride down to safe levels.

Traders estimate the process for all the contaminated oil in Druzhba would cost tens of millions of dollars.

In the meantime, the question of who should pay for the contaminated oil when the bills come due this week remains.

---- With payment deadlines looming, none of the Western oil buyers has yet instructed their banks to withhold funds as that could have significant repercussions, according to traders.

“You can of course say that I won’t pay because I didn’t get the right quality oil,” said an executive at a major commodities trading house. “But no one wants this nuclear option. We prefer responsible dialogue.”

Another source with a major buyer said the money it owes for Ust-Luga cargoes will be paid on time but it will be accompanied by claims for damages against the sellers for poor quality.

Further complicating talks between buyers and sellers is the fact that the various oil contracts in question fall under different legal systems.

More

https://uk.reuters.com/article/us-russia-oil-insight/in-limbo-the-dirty-russian-oil-no-one-wants-to-pay-for-idUKKCN1SL1JG

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 21^st century onwards?

Nawa's carbon nanotube ultra-capacitors are going into mass production

Loz Blain  May 15th, 2019
Charging almost instantly and offering massive power density, Nawa's innovative ultracapacitors are ready to make a mark across industries from automotive to power tools and aviation. And after raising more than US$10 million, this French company is going into mass production.

Nawa's ultracapacitors offer an interesting alternative (or augmentation) to lithium battery systems. When it comes to fast charging or discharging, there's simply no contest – they can pick up or pump out power at rates that absolutely demolish lithium cells, meaning that charging is next to instantaneous – we're talking sub-20 seconds for a full charge – and they're unparalleled for quick bursts of huge power.

Their energy density isn't great compared to batteries, storing maybe a quarter of the power lithium units can for a given volume, but compared to other ultracapacitors their carbon nanotube structure crams up to five times more energy in. They're useless for longer-term storage, leaking somewhere between 10-20 percent of their energy per day, but on the other hand, they last up to a million cycles and are exceptionally durable across a range of temperatures and environments that might test the limits of standard batteries, such as space, high-temp drilling or undersea.

---- Thanks to €9 million (US$10 million) worth of funding raised from both new and existing investors, Nawa will be putting an ultracapacitor production line into its facility in Aix-en-Provence, France, which will go into action by the end of the year and is expected to ramp up to a capacity of 100,000 cells per month. The company says the global ultracapacitor market is sitting at around €500 million (US$560 million) right now, but is projected to grow between 400-600 percent in the next five years.

Nawa will first target the manufacturing segment, where ultracapacitor-powered hand tools and automatic guided vehicles for warehouses could more or less eliminate charging downtime and offer decades of usage with no power or energy fade. There also seem to be some IoT applications ready to roll.

But we're looking forward to seeing what these things can do in transport. Supercapacitor buses are already on the road, but these compact ultracapacitors could lead to some interesting hybrid energy storage systems in which lithium batteries provide long-term and long-range energy at moderate power draws, but with ultracapacitors delivering massive power and acceleration when needed, while also capturing more energy out of regenerative braking.
https://newatlas.com/nawa-nanotube-ultracapacitor-production/59684/

Another weekend and the last weekend before Europe heads off to vote for the new European Parliament. Unless the polls are hopelessly wrong, a new anti-Brussels, activist Parliament will commence sitting starting in late June. It will also contain 50+ UK MEPs who really shouldn’t be in the European Parliament at all. Interesting, if deeply concerning, times. Have a great weekend everyone.

There is no friendship in trade.

Cornelius Vanderbilt

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.