Baltic Dry Index. 1194
+15 Brent
Crude 64.38
Never ending Brexit
now October 31st, maybe.
Nuclear Trump
China Tariffs Now In Effect.
USA v EU trade war
postponed to November, maybe.
The art of war is
simple enough. Find out where your enemy is. Get at him as soon as you can.
Strike him as hard as you can, and keep moving on.
Ulysses S. Grant
This morning the USA
and Iran stand eyeball to eyeball on the brink of war. America has ordered its
civilian commercial airplanes out of Iranian controlled airspace. The rest of
the world is likely to follow, making flights to India and SE Asia longer and
more expensive.
According to the The
New York Times, President Trump had ordered airstrikes against Iran but called
them off at the last minute, for unknown reasons.
Given it’s President
Trump, that could be anything from fearing a civilian airliner might get shot
down by Iran by accident, to the US stock market might get shot down as
collateral damage in any new middle east war. President Trump has made the surging
US stock market his key platform in his re-election campaign.
The price of oil
surged while spot gold sped over 1400 dollars a troy ounce. As little as a
month ago gold was trading around 1,270.
Below, our new
unstable world this morning. A weekend to await developments in the safety of
cash. With US civilian aircraft safely out of harms way, President Trump may
yet order Iran airstrikes over the weekend, his comments merely a feint. We
could be just a few days off from a 1973 style oil shock.
Asian markets mixed as investors eye Persian Gulf tensions
By Marketwatch
and Associated
Press
Published: June 20,
2019 11:50 p.m. ET
Asian markets were mixed in early trading Friday, as
investors refocused on geopolitical tensions.Late Thursday, the New York Times reported President Donald Trump had approved, then canceled at the last minute, airstrikes against a handful of targets in Iran. It was unclear why the attack was called of, or whether they would be carried out at a later time.
Earlier, Iran said it had shot down a U.S. military drone, an act that Trump said may have been an accident on Iran’s part, as tensions in the Persian Gulf region continued to simmer. When asked Thursday afternoon if the U.S. would retaliate, Trump said “You’ll soon find out.”
Also late Thursday, the Federal Aviation Administration prohibited U.S. carriers from flying over Iranian-controlled parts of the Persian Gulf and Gulf of Oman, over fears of a jetliner accidentally being shot down.
Meanwhile, North Korea’s Kim Jong Un suggested a willingness to compromise and return to denuclearization talks after a summit with China’s President Xi Jinping, according to the Wall Street Journal. In return, Xi reportedly pledged Chinese security and development support.
Japan’s Nikkei NIK, -0.93% retreated 0.2% and South Korea’s Kospi 180721, -0.30% slipped 0.2%. Hong Kong’s Hang Seng Index HSI, -0.26% gave up a 1% gain and was last down 0.3% as protesters again gathered in front of government offices. The Shanghai Composite SHCOMP, +0.61% rose 0.6% and the smaller-cap Shenzhen Composite 399106, +1.52% surged 1.5%. Benchmark indexes in Taiwan Y9999, +0.03% , Singapore STI, -0.19% and Indonesia JAKIDX, -0.71% were mixed. Australia’s S&P/ASX 200 XJO, -0.60% fell 0.4%.
More
U.S. regulator bars airlines from flying over some Iran-controlled airspace
June 21, 2019 /
2:38 AM
(Reuters) - The
U.S. Federal Aviation Administration on Thursday issued an emergency order
prohibiting U.S. operators from flying in an overwater area of
Tehran-controlled airspace over the Strait of Hormuz and Gulf of Oman due to
heightened tensions.
The order came hours after United Airlines suspended flights between New
Jersey’s Newark airport and the Indian financial capital of Mumbai, which fly
through Iranian airspace, following a safety review after Iran shot down a
high-altitude U.S. surveillance drone.
The downing of the unarmed Global Hawk aircraft, which can fly at up to
60,000 ft (18,300 m), was the latest of a series of incidents in the Gulf
region, a critical artery for global oil supplies, that included explosive
strikes on six oil tankers.
FAA said according to flight tracking applications, the nearest civil
aircraft was operating within around 45 nautical miles of a U.S. Global Hawk
drone when it was shot down by an Iranian surface-to-air missile.
“There were numerous civil aviation aircraft operating in the area at
the time of the intercept,” FAA said.
The agency said it remained concerned about the escalation of tension
and military activity within close proximity to high volume civil aircraft
routes as well as Iran’s willingness to use long-range missiles in
international airspace with little or no warning.
----
The U.S. prohibition does not apply to airlines from other
countries, but OPSGROUP, which provides guidance to operators, said it would be
taken into consideration by carriers globally.
More
Trump says hard to believe Iranian shooting down of U.S. drone was intentional
June 20, 2019 /
4:44 AM
WASHINGTON/DUBAI
(Reuters) - U.S. President Donald Trump played down Iran’s downing of a U.S.
military surveillance drone on Thursday, saying he suspected it was shot by
mistake and “it would have made a big difference” to him had the remotely
controlled aircraft been piloted.
While the comments appeared to suggest Trump was not eager to escalate
the latest in a series of incidents with Iran, he also warned: “This country
will not stand for it.”
Tehran said the unarmed Global Hawk surveillance drone was on a spy
mission over its territory, but Washington said it was shot down over
international airspace.
“I think probably Iran made a mistake. I would imagine it was a general
or somebody that made a mistake in shooting that drone down,” Trump told
reporters at the White House.
“We had nobody in the drone. It would have made a big difference, let me
tell you, it would have made a big, big difference” if the aircraft had been
piloted, Trump said as he met Canadian Prime Minister Justin Trudeau in the
Oval Office.
“It’s hard to believe it was intentional, if you want to know the
truth,” he added, saying it could have been carried out by someone who was
acting “loose and stupid,” and minimizing the incident as “a new wrinkle ... a
new fly in the ointment.”
The United States, which called the event an “unprovoked attack” in
international airspace, is using economic sanctions to pressure Iran to contain
its nuclear and ballistic missile programs and to limit its role in regional
wars.
It was the latest in an escalating series of incidents in the Gulf
region, a critical artery for global oil supplies, since mid-May, including
explosive strikes on six oil tankers.
It was unclear how the United States might respond and U.S. House of
Representatives Speaker Nancy Pelosi, the top Democrat in Congress, said
Washington had no appetite for war with Iran and should “do everything in our
power to de-escalate.”
After a White House briefing for lawmakers, Democratic Senate Minority
Leader Chuck Schumer, told reporters he was worried Trump “may bumble into a
war” and said he and his fellow Democrats believed congressional approval was
needed to fund any conflict with Iran.
But Trump’s fellow Republican, Senate Majority Leader Mitch McConnell,
told reporters: “The administration is engaged in what I called measured
responses.”
Iran has denied involvement in the tanker attacks, but global jitters
about a new Middle East conflagration disrupting oil exports have triggered a
jump in crude prices.
More
Trump Approves Strikes on Iran, but Then Abruptly Pulls Back
By Michael D. Shear,
Eric Schmitt, Michael
Crowley and Maggie
Haberman
June 20, 2019
WASHINGTON — President Trump approved military strikes against Iran in
retaliation for downing an American surveillance drone, but pulled back from
launching them on Thursday night after a day of escalating tensions.
As late as 7 p.m., military and diplomatic officials were expecting a
strike, after intense discussions and debate at the White House among the
president’s top national security officials and congressional leaders,
according to multiple senior administration officials involved in or briefed on
the deliberations.
Officials said the president had initially approved attacks on a handful
of Iranian targets, like radar and missile batteries.
The operation was underway in its early stages when it was called off, a
senior administration official said. Planes were in the air and ships were in
position, but no missiles had been fired when word came to stand down, the
official said.
The abrupt reversal put a halt to what would have been the president’s
third military action against targets in the Middle East. Mr. Trump had struck
twice at targets in Syria, in 2017 and 2018.
It was not clear whether Mr. Trump simply changed his mind on the
strikes or whether the administration altered course because of logistics or
strategy. It was also not clear whether the attacks might still go forward.
Asked about the plans for a strike and the decision to hold back, the
White House declined to comment, as did Pentagon officials. No government
officials asked The New York Times to withhold the article.
The retaliation plan was intended as a response to the shooting down of
the unmanned, $130 million surveillance drone, which was struck Thursday
morning by an Iranian surface-to-air missile, according to a senior
administration official who was briefed on the military planning and spoke on
the condition of anonymity to discuss confidential plans.
The strike was set to take place just before dawn Friday in Iran to
minimize risk to the Iranian military and civilians.
More
Victorious warriors
win first and then go to war, while defeated warriors go to war first and then
seek to win.
Sun Tzu
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Today, China and that not so easy to win trade war. Ahead of “the two
Presidents” meeting at the end of next week, China sends out a clear message to
President Trump.
China, U.S. to resume trade talks but China says demands must be met
June 20, 2019 /
1:23 AM
BEIJING (Reuters) - Top Chinese and U.S. officials will resume trade
talks in accordance with the wishes of their leaders, but China hopes the
United States will create the necessary conditions for dialogue, the Chinese
commerce ministry said on Thursday.
Negotiations to reach a broad trade deal broke down last month after
U.S. officials accused China of backing away from previously agreed
commitments.
But hopes for a revival of negotiations have been rekindled by a
telephone call on Wednesday between U.S. President Donald Trump and his Chinese
counterpart, Xi Jinping, and confirmation they will meet next week in Japan at
a G20 summit.
U.S. Trade Representative Robert Lighthizer said on Wednesday he would
speak by telephone to Liu He, China’s vice premier and chief negotiator in the
trade talks, “in the next day and a half”.
“The heads of the two trade teams will communicate, according to
instructions passed down from the two presidents,” Chinese commerce ministry
spokesman Gao Feng told reporters, without elaborating.
“We hope (the United States) will create the necessary conditions and
atmosphere for solving problems through dialogue as equals.”
The two countries have imposed increasingly severe tariffs on each
other’s imports. China has vowed to not give in on issues of principle or under
U.S. pressure.
Trump has threatened to put tariffs on another $325 billion worth of
goods, covering nearly all remaining Chinese imports into the United States,
including consumer products such as cellphones, computers and clothing.
The prospect of a de-escalation in the dispute has helped cheer
financial markets weighed by threats of more tariff measures and
countermeasures and strident rhetoric from both countries.
But three main differences remain, including the removal of all additional
tariffs, China says. Both sides have disagreed over trade purchases and a
“balanced” text for any trade deal.
Those three “matters of principle” cannot be compromised, China has
said.
Asked if China’s demands for a trade deal were still tied to the three
issues being met, Gao said: “China’s principles and basic stance on Sino-U.S.
economic and trade consultations have always been clear and consistent, and
China’s core concerns must be properly resolved.”
---- The official China Daily said in an editorial both parties were “in the mood for serious dialogue” as a full-blown trade war was “lose-lose”, but one single meeting was unlikely to wrap everything up.
“The two parties’ expectations are too divergent to allow that,” it
said.
“More likely than not, the one-on-one meeting will end up being the
start of a new phase in the negotiations with the two leaders personally
setting out their country’s respective bottom lines.”
Another influential Chinese newspaper, the Global Times, said China had
sent a clear signal to the United States that “China can never be daunted.”
China has managed to get the United States back to the table with its
determination and ability to “prepare for war”, Taoran Notes, a widely read and
influential WeChat account run by the Economic Daily, wrote late on Wednesday.
“Only by being able to fight, daring to fight and being good at fighting
can you stop a war,” it wrote.
China would take the “necessary measures” if the United States imposes
additional tariffs on the $300 billion of Chinese goods, Gao said, without
elaborating.
More
Impact of further U.S. tariffs on Chinese economy likely limited: regulator in People's Daily
June 21, 2019 /
1:29 AM
SHANGHAI (Reuters) - The impact of additional U.S. tariffs on the
Chinese economy will be very limited, the head of the banking and insurance
regulator, Guo Shuqing, wrote in an article in the People’s Daily newspaper on
Friday.
Guo, also the top Communist Party official at the People’s Bank of
China, said fluctuations in the yuan exchange rate were normal in the short
term but over a longer horizon the currency would not continue to lose value
given China’s economic fundamentals.
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?
Developing a new type of refrigeration via force-driven liquid gas transition
Date:
June 19, 2019
Source:
Tohoku University
Summary:
A research team has made a groundbreaking discovery in the quest to replace
hydrofluorocarbons in refrigeration systems with natural refrigerants such as
water and alcohol. Their study involved carrying-out a liquid-to-gas phase
transition via a nanosponge, a soft, elastic material equipped with small
nanopores less than 10 nanometers. Their findings could lead to more efficient
refrigerants with a smaller carbon footprint.
Refrigeration systems are widely used in air conditioners and
refrigerators. Conventional systems use hydrofluorocarbons as a refrigerant.
However, hydrofluorocarbons are super pollutants. Their Global Warming
Potential is about 1300 times higher than that of CO2.
The team of researchers successfully carried out a force-driven
liquid-to-gas phase transition using a nanosponge. When a normal, wet sponge is
squeezed, naturally, water is expected to come out.
However, when using a
nanosponge with a pore size of under 10 nanometers, a different phenomenon
occurs. Even under low pressure, the sponge retains its liquid.
When applying force, however, the expelled liquid immediately evaporates
into gas. Furthermore, as the sponge returns to its natural shape, it adsorbs
the gas as a liquid into the nanopores again.
Until now, researchers have not carried out the squeezing process of
nanoporous materials because conventional materials are too hard to be
deformed. Nevertheless, the team circumvented this by creating their own soft,
elastic, nanoporous materials, consisting of a single-layer of graphene walls.
They measured their results using a home-made equipment designed to monitor
liquid-gas phase transition when mechanical force is applied.
The team thought about the squeezing method after developing soft
nanoporous materials. But even they could not anticipate their prediction
becoming reality at the first attempt.
To date, there have been only two methods
of converting trapped liquid into gas: i. heating or ii. decreasing the
gas-phase pressure. The squeezing method provides a third way, generating a new
theme in the field of physical chemistry and paving the path for more
environmentally friendly refrigeration systems. Cool stuff!
Another weekend and a nervous
weekend at that. Will President Trump order airstrikes against Iran, or has
Iran called President Trump’s bluff? If the USA strikes back at Iran how will
Iran respond? How high will the price of oil and gold go? Will an oil shock
kill off the USA summer driving season and with it much of the US economy?
While that’s probably unlikely for now, it
still a possibility if President Trump strikes back. But how much credibility
will he lose to President Xi if he doesn’t, with a meeting with President Xi
coming up on June 28th or 29th? Have a great weekend
everyone.
The art of war
teaches us to rely not on the likelihood of the enemy's not coming, but on our
own readiness to receive him; not on the chance of his not attacking, but
rather on the fact that we have made our position unassailable.
Sun Tzu
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. Time for
the Fed to step in again to buy stocks.
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