Baltic Dry Index. 1096
-01 Brent
Crude 61.13
Never ending Brexit
now October 31st, maybe.
Nuclear Trump
Tariffs Now In Effect.
USA v EU trade war postponed
to November, maybe.
Four years ago our nation and
empire stood alone against an overwhelming enemy, with our backs to the
wall…Now once more a supreme test has to be faced. This time the challenge is
not to fight to survive but to fight to win the final victory for the good
cause.
Winston S. Churchill.
As I write this
morning, President Trump is flying to
the UK for a three day state visit to Great Britain, before heading over
to France to commemorate the 75th anniversary of America’s unaided liberation
of EurAsia.
A grossly unpopular
US President to the left, violent anarchists and communists and their fellow travellers
have been planning for months, egged on by hostile UK and European media, to
try to stage disruptive non peaceful events, both in England and France. An
interesting few days lie ahead, sadly disrespecting the achievements of all those
brave men 75 years ago, who helped liberate Europe.
In the markets, after
a major stumble in May, the big question in everyone’s mind if not yet spoken
openly, is was that it for the global recovery? Are we already heading in to a
new global recession, if not actually already in the early stage of a new
recession?
I suspect that the
global economy has already tripped into a new recession, largely brought on
earlier by the drag of all the unnecessary trade wars. If President Trump
actually follows through with his proposed economic warfare on Mexico, I think
the shock to the US economy, alongside tipping Mexico into a deep recession, will
make any arriving recession deep and prolonged.
While there’s never a
good time for a new recession, a recession hitting in our politically polarised
west, on top of a mountain of unrepayable global debt, with interest rates
still in the basement, is about as bleak as it gets for a recession.
Below, the opening
day of summer.
Stocks Remain Under Pressure Amid Trade-War Angst: Markets Wrap
By Adam Haigh
Updated on 3 June 2019, 04:21 BST
Asian stocks began the week largely on the back foot in the
wake of trade-war jitters from U.S. moves against Mexico and India to China’s
retaliation against American measures. The yen held near a six-month high.U.S. and European futures retreated along with equities in Tokyo and Sydney, though losses were more modest in Hong Kong and China, while Korea eked out gains. The yield on 10-year Treasuries was at 2.12% after slumping from 2.50% at the start of May and JPMorgan Chase & Co. analysts said there’s more downside to come. China implemented tariff hikes Saturday and announced it will take action against “unreliable” foreign companies, with a list of violators pending. Oil slid amid global demand worries, trading near $53 a barrel.
May
marked a brutal month for just about every asset class except bonds, with money
managers seeking out the relative safety of Treasuries. As June began, China
said it really doesn’t want a trade war but won’t shy away from one. Also,
China is investigating FedEx because the company failed to deliver items to the
correct addresses, possibly a reaction to reports that packages destined for
Huawei were redirected to the U.S.
“Trade is a tail risk that’s becoming bigger by the day,” Jun Bei Liu, a
portfolio manager at Tribeca Investment Partners, told Bloomberg TV in Sydney.
“Investors right now are looking more at capital preservation before stepping
into buy.”
----Here are some notable events coming up:
- The U.S. ISM manufacturing PMI is released Monday.
- U.S. President Donald Trump meets U.K. Prime Minister Theresa May in London Monday.
- Tuesday sees the Reserve Bank of Australia policy meeting, with many expecting an interest-rate cut.
- China President Xi Jinping begins a two-day visit to Russia on Wednesday.
- Theresa May steps down on Friday as leader of the Conservative Party.
- Friday’s U.S. jobs report is projected to show payrolls rose by 190,000 in May, unemployment held at 3.6%, a 49-year low, and average hourly earnings growth sustained a 3.2% pace.
More
Tariff threat against Mexico confirms a deal's not a deal with Trump: Don Pittis
Don Pittis · CBC News · Posted: Jun 01,
2019 4:00 AM ET | Last Updated: June 1
Everyone knows individual politicians sometimes fail to
keep their word, and like the rest of us, investors seldom count on
those promises until they see the commitments fulfilled.
But when an entire country gives its word, businesses generally assume
they can count on it. Not so in the era of U.S. President Donald Trump.
On Thursday, Trump announced via Twitter that his administration will
impose tariffs on Mexico if it fails to stop migrants from crossing into
the U.S. The next day, he tweeted more conditions that seemed to reopen
NAFTA negotiations that were settled last September.
Critics say it shows that with Trump in charge,
the U.S. is a nation that cannot be trusted. And that makes a
difference.
On Friday, markets demonstrated how destabilizing that failure of trust
can be. It has become a cliche of economic analysis to say that business hates
uncertainty. Oil plunged, currencies gyrated, and the Dow Jones index fell more
than 350 points.
But such an abrupt and unforeseen change of course could
signal much more than just a one-time market shock.
"How do you plan for anything in this environment, whether in the
U.S. or abroad?" Derek Holt, vice-president at Scotiabank Economics,
said in a Friday morning note as markets began to tumble.
While Trump's trustworthiness was worrying markets, the Chinese government was announcing — with unintended irony, one presumes — a plan to designate certain foreign institutions and individuals as "non-reliable entities."
In a counterblow to U.S. attacks on telecommunications giant Huawei and other Chinese tech companies, Beijing announced what analysts are describing as China's own corporate blacklist.
According to the state-controlled Global Times, the "non-reliable entity list" would include "foreign entities, individuals and companies that block and shut the supply chain, or take discriminatory measures over non-commercial reasons."
It would be fair to wonder whether Beijing was implying one of those entities is in the White House.
If it went into effect, an across-the-board tariff on Mexican imports
would raise prices for consumers and businesses across the United States.
Canadians would not be off the hook, because in theory, goods and parts
imported tax-free from Mexico and incorporated into Canadian exports would also
face partial tariffs once sold to U.S. customers.
Of course, such details can only be guessed at when a politician like
Trump seems to be making up policy on the fly.
More
Can Trump’s trade tussle sink a chance at the longest economic expansion in history?
By Mark
DeCambre Published: June 1, 2019
8:30 a.m. ET
So close, but so far away.The longest economic expansion in U.S. history is within striking distance but a period of escalating tariff animus between the U.S. and some of its closest global trade partners is producing headwinds to etching a record span of growth, exceeding 120 months.
According to the official arbiter of U.S. economic health, the National Bureau of Economic Research, at the end of this month, the current expansion that began in June of 2009 will match the longest on record, March 1991 to March 2001.
However, recent action in May has laid bare the fragility of the current state of play in global markets if not economies.
President Donald Trump, late Thursday, threatened tariffs on all Mexican imports starting June 10, unless Mexico stems the flow of undocumented migrants to the U.S.
The threat represents just another front in a tariff tango that had been recently centered primarily on U.S.-China aggressions over trade duties that became resurgent on May 5.
Trump’s surprise tariff proposal on Mexico, one of the U.S.’s closest trade partners, goes well beyond a tax on avocados and other produce and spills over into larger areas, including commodities, automobiles and auto parts.
“Imports from Mexico in 2018 totaled $346 billion, with the most
significant category being autos and auto parts. This would be a tax on the
supply chain for autos that would ultimately be borne by U.S. automakers and
consumers, adding to inflation and sapping growth,” wrote Tony Roth, chief
investment officer at Wilmington Trust.
Although it seems unlikely that the U.S. president will follow through
with tariffs on Mexico (or that Congress will allow it), the latest move on
trade raises fresh uncertainty about the president’s strategy, and the degree
to which market’s and the economy can withstand the tension.
“The narrative all along has been that tariffs are a means to an end,
but when they become the end itself, then it’s time to be concerned,” Chris
Zaccarelli, chief investment officer at Independent Advisor Alliance, told
MarketWatch.
More
U.S. stock market forgoes $5 trillion in returns thanks to trade war, estimates Deutsche Bank
By William
Watts Published: May 31, 2019 4:50
p.m. ET
The U.S. stock market has left $5 trillion on the table as trade
tensions over the past 17 months contributed to an effectively sideways trade,
Deutsche Bank estimated on Friday.
“While other factors also arguably played a role, the trade war has been
key in preventing a recovery in global growth and keeping U.S. equities range
bound. Foregone U.S. equity returns from price appreciation for 17 months are
worth $5 trillion,” wrote Binky Chadha, the bank’s chief strategist, in a
Friday note, based on an price appreciation at an annual rate 12.5% (see chart
below).
The S&P 500 SPX, -1.32% in the first four months of 2019 bounced back sharply from a steep fourth-quarter selloff nudging to an all-time closing high in April. But the index has retreated more than 6% in May, posting its first monthly decline since December and its worst May performance since 2010. The Dow Jones Industrial Average DJIA, -1.41% which failed to return to record territory before the May swoon, also fell more than 6% for the month.
Read: Stock market suffers ‘key’ monthly reversal that ‘presages deeper declines,’ technician says
The May retreat was blamed by analysts in large part on an escalation in the U.S.-China trade fight that shows little likelihood of near-term resolution. The battle between the world’s two largest economies has contributed to jitters over the global and U.S. economic growth outlook. Those worries were amplified after President Donald Trump late Thursday announced he would place escalating tariffs on all Mexican imports in an attempt to pressure the country to stem the flow of migrants to the U.S. southern border.
More
How Mexico tariffs could hurt $600 billion in cross-border trade — and the U.S. economy
By Jeffry
Bartash Published: May 31, 2019 2:12
p.m. ET
Prolonged tariffs could raise prices, cost jobs, harm auto makers
The U.S. economy could suffer a wrenching blow, business leaders and economists say, if President Trump follows through on his threat to slap tariffs on all imports from Mexico in a dispute over immigration controls.The president on Thursday said he would apply a 5% tariff on $350 billion in imports from Mexico unless the country reduces the flow of immigrants seeking to enter the United States.
The surprise move slammed the stock market and prompted an immediate backlash from business.
“These proposed tariffs would have devastating consequences,” said Jay Timmons, president of the National Association of Manufacturers. “Workers should not be forced to suffer because of the failure to fix our immigration system.”
Households could face higher prices for groceries and other key consumer staples, economists say. And businesses would have to pay more for key parts and materials, especially in the auto industry.
“The duties represent a significant risk to business activity both north and south of the border,” said chief economist Gregory Daco of Oxford Economics. He said Mexico could be thrown into recession while U.S. growth could fall to 1% or less by 2020.
Symbiotic relationship
The economies of the U.S. and Mexico have become inextricably intertwined in the quarter of a century since the North American Free Trade Agreement deal was signed in 1994.The two countries exchanged a whopping $612 billion in goods last year, making Mexico the third largest trading partner after Canada and China. More than $1.5 billion in products cross the border between the two countries every day.
Although Mexico is popularly known as the main U.S. source for avocados and tequila, the huge amount of products it sends to its northern neighbor each year touch almost every major segment of America’s economy.
The U.S. imports enormous quantities of autos and parts, computer equipment, oil and gas, appliances and plastic and rubber products — not to mention fruits and vegetables such as tomatoes, berries and melons. Mexican imports in 2018 hit a record $347 billion.
“The auto industry would face serious disruption. About one-third of imported auto parts come from Mexico,” said Sal Guatieri, director of economist research at BMO Capital Markets. “A lot of fruits and vegetables are also imported from Mexico. Prices would likely skyrocket.”
Mexico is also the second largest market for American exports. The U.S. shipped a record $265 billion in goods to its southern neighbor last year, feeding its large and growing appetite for computers, semiconductors, oil, chemicals, paper, meat and corn.
More
USDA predicts agricultural exports will fall $6.3B this year amid trade disputes
May 31, 2019 /
4:08 PM
EVANSVILLE, Ind., May 31 (UPI) -- America's agricultural exports this year are predicted to fall some
$6.3 billion from last year, according to a new report by the U.S. Department of Agriculture.Most of that decline is in soybeans, corn, wheat and pork -- the commodities most impacted by the United States' various trade conflicts with China and Mexico.
The USDA released its report Thursday, the same day President Donald Trump threatened to impose a new 5 percent tariff on all Mexican imports, reigniting fears among the agricultural community of another escalating tit-for-tat tariff dispute that would further reduce agricultural exports.
"American pork producers cannot afford retaliatory tariffs from its largest export market, tariffs which Mexico will surely implement," David Herring, president of the National Pork Producers Council, said Friday in a statement. "Over the last year, trade disputes with Mexico and China have cost hard-working U.S. pork producers and their families approximately $2.5 billion."
The pork council was one of many farm groups up in arms over the
president's threat. By Friday afternoon, groups across the country had come out
with strongly worded statements urging Trump not to impose tariffs.
"With the loss of China, our largest trading partner, Iowa farmers
continue to bear the brunt of tariff-initiated trade reform," the Iowa
Soybean Association's statement said.
"The last thing farmers need right
now is a secondary dispute that once again rests on the backs of rural
Americans. Mexico is now Iowa's top trading partner."
Also on Friday, China's latest round of retaliatory tariffs on $60
billion of American exports went into effect -- further prolonging that tariff
standoff.
"Trade
-- particularly exports -- is critical to American agriculture," said
Michael Nepveux, an economist with the American Farm Bureau Federation.
"About a quarter of U.S. farm products by value are exported."
Finally, so you think
it’s been hot in the southeast USA? Try India where the monsoon is at least a
week late, and there’s been a widespread run of record and near record
temperatures amid water shortages.
India heatwave temperatures pass 50 Celsius
AFP•June 1, 2019
Temperatures passed 50 degrees Celsius (122 Fahrenheit) in northern
India as an unrelenting heatwave triggered warnings of water shortages and
heatstroke.
The thermometer hit 50.6 degrees Celsius (123 Fahrenheit) in the
Rajasthan desert city of Churu on Saturday, the weather department said.
All of Rajasthan suffered in severe heat with several cities hitting
maximum temperatures above 47 Celsius.
In May 2016, Phalodi in Rajasthan recorded India's highest-ever
temperature of 51 Celsius (123.8 Fahrenheit).
The Indian Meteorological Department said severe heat could stay for up
to a week across Rajasthan, Maharashtra, Madhya Pradesh, Punjab, Haryana and
Uttar Pradesh states.
Several deaths from heatstroke have already been recorded.
A red alert severe heat warning has been issued in the capital New Delhi
as temperatures passed 46 Celsius, and residents were advised not to go out
during the hottest hours of the day.
Even in the hill state of Himachal Pradesh, where many wealthy Indians
go to escape the summer heat, temperatures reached 44.9 Celsius in Una.
Several major cities, led by Chennai, have reported fears of water
shortages as lakes and rivers start to dry up.
In the western state of Maharashtra, farmers struggled to find water for
thirsty animals and crops.
"We have to source water tankers from nearby villages as water
reserves, lakes and rivers have dried up," said Rajesh Chandrakant, a
resident of Beed, one of the worst-hit districts.
"Farmers only get water every three days for their livestock."
Raghunath Tonde, a farmer with a family of seven, said the area has
suffered worsening shortages for five years.
"There is no drinking water available for days on end and we get
one tanker every three days for the entire village," Tonde told AFP.
"We are scared for our lives and livelihood," he added.
More than 40 percent of India faces drought this year, experts from
Gandhinagar city's Indian Institute of Technology, warned last month.
The annual monsoon -- which normally brings much needed rain to South
Asia -- is running a week behind schedule and is only expected to hit India's
southern tip on June 6, the weather department said.
And private forecaster Skymet has said there will be less rain than average
this year.
The Indian peninsula has seen a drastic change in rainfall patterns over
the past decade, marked by frequent droughts, floods and sudden storms.
But this is the year 1944. Much
has happened since the Nazi triumphs of 1940-41. The United Nations have
inflicted upon the Germans great defeats, in open battle, man-to-man. Our air
offensive has seriously reduced their strength in the air and their capacity to
wage war on the ground. Our Home Fronts have given us an overwhelming
superiority in weapons and munitions of war, and placed at our disposal great
reserves of trained fighting men. The tide has turned. The free men of the
world are marching together to victory.
I have full confidence in your courage,
devotion to duty, and skill in battle. We will accept nothing less than full
victory. Good Luck! And let us all beseech the blessing of Almighty God upon
this great and noble undertaking.
General
Dwight D. Eisenhower,
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Today, China’s unmistakable war warning to the USA. The trade war and
economic warfare against Huawei and ZTE have led some in China to contemplate
and warn of actual war between America and China. Even President Trump wouldn’t
attack China, would he? Apparently some in China think he might.
China says war with U.S. would be a disaster as tensions mount
June 2, 2019 /
2:29 AM
SINGAPORE
(Reuters) - China’s Defence Minister Wei Fenghe said on Sunday that a war with
the United States would be a disaster for the world while issuing a warning to
Washington not to meddle in security disputes over Taiwan and the South China
Sea.
China has been incensed by recent moves by U.S. President Donald Trump’s
administration to increase support for self-ruled and democratic Taiwan,
including U.S. Navy sailings through the Taiwan Strait that separates the
island from mainland China.
Speaking at the Shangri-La Dialogue in Singapore, Asia’s premier defence
summit, Wei said China would “fight to the end” if anyone tried to interfere in
its relationship with Taiwan, which Beijing considers a sacred territory to be
taken by force if necessary.
Wei, the first Chinese defence minister to speak at the Shangri-La
Dialogue since 2011, said Beijing’s military operations in Asia were purely
aimed at self-defence, but it would not hesitate to counter an attack on its
interests.
“China will not attack unless we are attacked,” Wei said, cautioning
that there would be dire consequences to any clash between China and the United
States.
“The two sides realise that conflict, or a war between them, would bring
disaster to both countries and the world.”
The United States, like most countries, has no formal ties with Taiwan,
but is its strongest backer and main source of weapons.
On Saturday, acting U.S. Defence Secretary Patrick Shanahan told the
Shangri-La meeting that the United States would no longer “tiptoe” around
Chinese behaviour in Asia.
While Shanahan’s speech was critical of China, his tone was often
conciliatory. Wei took a more combative approach.
“No attempts to split China will succeed. Any interference in the Taiwan
question is doomed to failure,” said Wei, dressed in his uniform of a general
in the People’s Liberation Army.
“If anyone dares to split Taiwan from China, the Chinese military has no choice but to fight at all costs ... The U.S. is indivisible, and so is China. China must be, and will be, reunified.”
China-U.S. ties have become increasingly strained due to a bitter trade war, U.S. support for Taiwan and China’s muscular military posture in the South China Sea, where the United States also conducts freedom-of-navigation patrols.
In May, Taiwan’s national security chief David Lee met White House national security adviser John Bolton, marking the first meeting in more than four decades between senior U.S. and Taiwanese security officials.
Taiwan is gearing up for presidential elections in January, and Taiwan President Tsai Ing-wen has repeatedly accused Beijing of seeking to undermine Taiwan’s democracy and has vowed to defend the island and its freedoms.
Wei, in a clear reference to the United States, also said: “Some countries from outside the region come to the South China Sea to flex muscles in the name of freedom of navigation.”
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?
Laser technique could unlock use of tough material for next-generation electronics
Researchers make graphene tunable, opening up its band gap to a record 2.1 electronvolts
Date:
May 30, 2019
Source:
Purdue University
Summary:
Researchers used a laser technique to permanently stress graphene into a
structure that allows the flow of electric current, which is necessary for the
material to be useful for next-generation electronics.
In 2004, researchers discovered a super thin material that is at least a
100 times stronger than steel and the best known conductor of heat and
electricity.
This means that the material, graphene, could bring faster electronics
than is possible today with silicon.
But to truly be useful, graphene would need to carry an electric current
that switches on and off, like what silicon does in the form of billions of
transistors on a computer chip.
This switching creates strings of 0s and 1s
that a computer uses for processing information.
Purdue University researchers, in collaboration with the University of
Michigan and the Huazhong University of Science and Technology, show how a
laser technique could permanently stress graphene into having a structure that
allows the flow of electric current.
This structure is a so-called "band gap." Electrons need to
jump across this gap in order to become conduction electrons, which makes them
capable of carrying electric current.
But graphene doesn't naturally have a
band gap.
Purdue researchers created and widened the band gap in graphene to a record
2.1 electronvolts. To function as a semiconductor such as silicon, the band gap
would need to be at least the previous record of 0.5 electronvolts.
"This is the first time that an effort has achieved such high band
gaps without affecting graphene itself, such as through chemical doping. We
have purely strained the material," said Gary Cheng, professor of
industrial engineering at Purdue, whose lab has investigated various ways to
make graphene more useful for commercial applications.
---- Cheng and his collaborators not only kept the band gap open in graphene, but also made it to where the gap width could be tuned from zero to 2.1 electronvolts, giving scientists and manufacturers the option to just use certain properties of graphene depending on what they want the material to do.
The researchers made the band gap structure permanent in graphene using
a technique called laser shock imprinting, which Cheng developed in 2014 along
with scientists at Harvard University, the Madrid Institute for Advanced Studies
and the University of California, San Diego.
For this study, the researchers used a laser to create shockwave
impulses that penetrated an underlying sheet of graphene. The laser shock
strains graphene onto a trench-like mold -- permanently shaping it. Adjusting
the laser power adjusts the band gap.
While still far from putting graphene into semiconducting devices, the
technique grants more flexibility in taking advantage of the material's
optical, magnetic and thermal properties, Cheng said.
Well,
is it or isn’t it the invasion?
Adolf Hitler to Field Marshal
Wilhelm Keitel on the afternoon of 6 June.
The monthly Coppock Indicators finished May
DJIA: 24,815 +49 Down. NASDAQ: 7,453 +71 Down.
SP500: 2,752 +46 Down.
The S&P has reversed again to down after only one month. What
happens next to stocks largely depends on whether President Trump goes through
with his insane attack on Mexico’s economy. The US and Mexican economies are so
inter-dependent, President Trump is proposing to attack a sizable section of
the US economy itself. Not just economic madness, MADNESS!
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