Baltic Dry Index. 1381
+27 Brent
Crude 65.07
Never ending Brexit
now October 31st, maybe.
Nuclear Trump
China Tariffs Now In Effect.
USA v EU trade war
postponed to November, maybe.
“So obviously you
can’t make a 50-50 deal. It has to be a deal that is somewhat tilted to our
advantage,” Trump said.
Fresh from his meeting
with President Xi in Japan, President Trump seemed to acknowledge yesterday, that
very little was really accomplished and practically begged President Xi to let
him “win.”
Whether President Xi
will let Trump win, or can let Trump win, is an open question, but my guess is
that if President Xi lets President Trump “win” it will come with a very public
price tag of humiliation.
Below, not much of
anything seems to have been agreed in Japan other than yet more talking about
the trade war will now take place, while China awaits to see if President Trump
lives up to his talk about US companies resuming sales to Huawei.
Huawei for its part, will
rapidly stockpile it’s immediate needs and do everything in its power to move
away from a dangerous US supply chain. China is now deeply incentivised to “go Chinese”
on just about everything wherever possible.
After a relief stock
market rally yesterday, in this US Independence Day shortened week, few seem
impressed with the results of the two President’s meeting.
Asian shares cautious as weak manufacturing data stoke growth worries
July 2, 2019 /
2:57 AM
SHANGHAI (Reuters)
- Asian shares were choppy on Tuesday as weak global manufacturing activity
reinforced worries about slowing world growth, while the initial enthusiasm
over a Sino-U.S. trade truce gave way to uncertainty over whether the two
nations can strike a durable deal.
Further dragging on sentiment was the U.S. government’s threat on Monday of tariffs on $4 billion (3.16 billion pounds) of additional European Union goods, in a long-running dispute over aircraft subsidies.
U.S. futures were flat, while MSCI's broadest index of Asia-Pacific shares outside Japan was down in early deals. It last traded up 0.38%, helped by a 1% gain in Hong Kong shares .HSI as investors caught up to Monday's global rally. Markets in Hong Kong had been closed Monday for a public holiday.
Australian shares managed to push up 0.27% on expectations that the Reserve Bank of Australia will cut its benchmark cash rate by 25 basis points to a record low of 1.0% at a meeting later in the day.
Japan's Nikkei .N225 was flat.
Global shares had rallied on Monday after the United States and China agreed on the weekend to restart trade negotiations aimed at resolving their nearly year-long trade war and Washington said it would postpone further tariffs.
U.S. President Donald Trump also offered concessions, including an
easing of restrictions on tech company Huawei.
Yet, with the previous rounds of Sino-U.S. negotiations breaking down in
acrimony, investors were now turning to the prospects of actual progress in
talks to settle the dispute that has dented global trade, business investment
and economic growth.
And the fresh U.S. tariff threats against Europe also point to a
worrisome prospect of a broadening trade dispute, said Michael McCarthy, chief
markets strategist at CMC Markets in Sydney, in a note to clients.
“The problem is the widening of the dispute. Europe, the U.S. and China
account for almost two thirds of global GDP,” he said. “An ongoing disruption
to trade between these three major economies, prosecuted for domestic political
purposes, could sink global growth.”
More
Trump says any China trade deal would need to be somewhat tilted in U.S. favour
July 1, 2019 /
10:22 PM
WASHINGTON
(Reuters) - President Donald Trump said on Monday that trade talks with China
were under way and any deal would need to be somewhat tilted in favour of the
United States.
Trump and Chinese
President Xi Jinping agreed in a meeting on Saturday at a Group of 20 summit in
Japan to restart trade talks after the last major round of negotiations
collapsed in May.
Trump told reporters on Monday that U.S. and Chinese negotiators were
“speaking very much on phone but they are also meeting. It essentially has
already begun.”
“I think we have a good chance of making a deal,” Trump said.
He said he expected China’s negotiating position to move closer to
Washington’s. Talks broke down in May after the United States accused China of
backtracking on reform pledges.
Trump said China has had a “big advantage” over the United States in
trade for “many years.”
“So obviously you can’t make a 50-50 deal. It has to be a deal that is
somewhat tilted to our advantage,” Trump said.
U.S. Proposes More Tariffs on EU Goods in Airbus-Boeing Spat
By Sarah McGregor and Jenny Leonard
The U.S. added more products from the European Union to a list of goods
it could hit with retaliatory tariffs in a long-running trans-Atlantic subsidy
dispute between Boeing Co. and Airbus SE. Stock futures fell after the
announcement.
The U.S. Trade Representative’s office on Monday published a list of $4
billion worth of EU goods the U.S. could hit with duties as retaliation for
European aircraft subsides. The products range from cherries to meat, cheese,
olives and pasta, along with some types of whiskey and cast-iron tubes and
pipes. It adds to a list of EU products valued at $21 billion that the USTR published
in April, according to the release.
The USTR estimates the EU subsidies to Airbus cause approximately $11 billion in economic harm to the U.S. annually. The World Trade Organization has found the EU subsidies violate international trade rules and it’s expected to decide this summer on the amount of countermeasures the U.S. can impose.
----While senior EU officials expect the U.S. to move forward with retaliation once the WTO authorizes it, the imposition of the proposed tariffs would threaten to further strain ties as the U.S. and EU try to sit down to negotiate a trade deal.
U.S. industry groups were quick to oppose the tariffs. “U.S. companies
-- from farmers, to suppliers to retailers -- are already being negatively
impacted by the imposition of retaliatory tariffs by key trading partners on
certain U.S. distilled spirits resulting from other trade disputes,” the
Distilled Spirits Council of the United States said in a statement after USTR’s
announcement.
The EU has its own pending WTO case against Boeing. The EU in April
published its preliminary list of U.S. goods being targeted in a $12 billion plan
for retaliatory tariffs over subsidies to Boeing, with a focus on farm products
from areas that help form President Donald Trump’s political base. Other items
in the wide-ranging target list included ketchup, nuts, video game consoles and
bicycle pedals.
Asia's factory activity shrinks, U.S.-China trade truce fails to brighten outlook
July 1, 2019 /
4:36 AM
TOKYO (Reuters) -
Factory activity shrank in most Asian countries in June as the simmering
U.S.-China trade conflict put further strains on the region’s manufacturing
sector, keeping policymakers under pressure to deploy stronger steps to avert a
global recession.
The raft of manufacturing surveys followed the Group of 20 summit in
Osaka, Japan, where leaders on Saturday warned of slowing global growth and
intensifying geopolitical and trade tensions.
The United States and China agreed at the summit to restart trade talks
after President Donald Trump offered concessions including no new tariffs and
an easing of restrictions on tech company Huawei, providing some relief to
businesses and financial markets.
But analysts doubt the truce will lead to a sustained easing of tensions
while lingering uncertainty could dampen corporate spending appetite and global
growth.
----In China, Asia’s economic engine, the Caixin/Markit Manufacturing Purchasing
Managers’ Index (PMI) came in at 49.4, falling short of market expectations and
the worst reading since January.
It was the first time in four months that the keenly-watched index has
fallen below the neutral 50-mark dividing expansion from contraction on a
monthly basis.
Japan also saw manufacturing activity contract in June to hit a
three-month low, offering fresh evidence of an economy under the pump as global
demand weakens.
Separately, a Bank of Japan (BOJ) survey showed big manufacturers’ confidence
hit a near three-year low, keeping its central bank under pressure to maintain
or even ramp up a massive stimulus program.
In South Korea, factory activity shrank at the fastest pace in four
months in June as the global trade slowdown deepened, prompting companies to
cut production and shed more jobs.
Manufacturing activity also fell in Malaysia and Taiwan in a sign the
U.S.-China trade conflict’s impact on the rest of Asia was broadening.
More
China says only small number of firms moving supply chains out of the country
July 2, 2019 /
3:53 AM
BEIJING (Reuters) - Only a small number of companies are moving supply
chains out of China, a commerce ministry official said on Tuesday, amid signs
that some firms are shifting production to other countries as the U.S-China
trade war drags on.
The problem shouldn’t be overstated, Chu Shijia, a department director
at the ministry, said at a media briefing.
In recent years, some Chinese manufacturers had already started to
relocate capacity to countries such as Vietnam and Cambodia, due to high
operating costs at home. The Sino-U.S. dispute is now pushing more to follow
suit, especially makers of low-tech and low-value goods.
Some Chinese companies had concerns initially when the trade frictions
started, but now they have found some ways to cut costs and to minimize the
impact, Chu said.
Behind the plunge in China auto sales: chaotic implementation of new emission rules
July 1, 2019 /
5:10 PM
SHANGHAI/BEIJING
(Reuters) - Shanghai-based Buick dealer Ron Li in late April found himself in
an unfamiliar quandary: how to sell off almost 80 sedans and sport-utility
vehicles crowding up his dealership lot.
The crux of the problem: a June 30 deadline for cars built to so-called
China-5 emissions standards to be sold. After that only vehicles meeting new
standards could be put up for sale.
People were still coming in but weren’t buying the stage-5 cars, Li said.
“Customers didn’t know how long they could drive China-5 cars or whether
they would be able to resell them in the future. And to be honest, we didn’t
know either.”
To cope, his dealership in May slashed stage-5 vehicle prices by as much
as 30%, participating in what dealers and industry executives have called
unprecedented widespread discounting as China’s auto sales headed for their
worst ever monthly drop.
Encouraged by a central government eager to combat smog, Shanghai is one
of 15 cities and provinces to implement new stage-6 standards ahead of the
original July 1, 2020 deadline.
Checks by Reuters with employees at about 20 dealerships in Shanghai,
Beijing and the provinces of Jiangsu and Zhejiang, which have also brought
forward the implementation of new standards, found that stage-5 cars had been a
tough sell.
---- While a slowing economy and the trade war with the United States were initially held responsible for slides in sales since April, most of the blame is now being laid on the poorly managed fast-tracking of new rules by the 15 cities and provinces, which account for more than 60% of sales in the world’s largest auto market.
The sales crisis, which saw May sales plunge 16% from a year earlier, is
prompting downward revisions to forecasts for China’s 2019 auto sales that most
analysts had thought would be flat or show mild growth.
Now, most expectations are for an annual decline in sales of around 5%,
which would follow a 2.8% decline in 2018 when sales contracted for the first
time since the 1990s. But Yale Zhang, an analyst at Shanghai-based Automotive
Foresight, believes the fall could be closer to 10%.
“Those unsold China-5 vehicles in key areas will be sold to other
regions and sales in those areas will be hit as well,” he said.
More
Finally, nuts. More on that easy to win trade war again. California’s
nut growers are going nuts as well as growing nuts, and it’s all down to that
not so easy to win trade war. Still California never votes Republican so it’s
probably acceptable collateral damage to Trade War Team Trump.
India tariffs leave California almond, walnut growers uncertain where to sell crop
July 1 (UPI) -- Retaliatory tariffs imposed by India against the United
State are causing deep concern among California nut growers, who worry where
they will sell a significant portion of this year's harvest.
The United States is the largest producer of almonds -- and the second
largest producer of walnuts -- in the world. Both markets depend highly on
exports, but over the last year, they have lost major trading partners to
tariff escalations.
"There are a lot of effects happening simultaneously," said
Goekce Soydemir, a professor of business economics at the University of
California. "Everyone thought it would be resolved by now But it's not.
It's escalating."
Before India joined the fray, the greatest blow to California nuts came
from China. That country imposed high retaliatory tariffs on both nuts -- along
with many other agricultural products --- last spring in response to similar
taxes levied by the Trump administration.
"With China, we were basically out of the market last year,"
said Dave Phippen, an owner of Travaille & Phippen, an almond orchard and
processing company in California.
With that market gone, almond exporters turned to India, which began
buying U.S. almonds almost immediately, and in amounts that essentially
counteracted the loss of China, Phippen said.
"India stepped up," he said. "This year is going to be
really challenging with Indian and China, and who knows who else is going to
jump into the disagreement."
India announced June 15 it would impose a 20 percent tariff on U.S.
almonds and walnuts -- along with 26 other products including apples and
lentils.
The move came in retaliation for the Trump administration revoking
India's preferential trade privileges. But India had been threatening to impose
the tariffs since August, when the United States began taxing imports of steel
and aluminum from that nation -- and others.
India had delayed implementing the retaliatory tariffs several times as
negotiations continued.
The almond tariff amounts to about 20 cents a pound for shelled almonds
and 4 cents a pound for unshelled almonds.
California produces 80 percent of the almonds in the world, and 70
percent of the almonds grown in California are exported.
That number is even higher for Phippen's company, which exports more
than 90 percent of its crop.
"We are highly dependent on foreign markets," Phippen said.
"It's a big deal."
Phippen quickly added he doesn't think the United States will lose
complete access to the India market because, while the tariff on unshelled
almonds is high, the tax on the shelled almonds is much lower.
"We don't ship many kernels [unshelled almonds]," Phippen
said. "India demands in-shell almonds to allow their people to have work
shelling. So, yes, it is very, very serious if we were to lose the India
market, but I'm not sure 4 cents will make the difference."
American walnuts, on the other hand, will likely be completely shut out
of the India market under the tariff.
India already had a 100 percent tariff on imported walnuts from all
countries.
"Now, we have a 120 percent tariff, whereas everyone else is just
100 percent," said Brock Middleton, a manager at Alpine Pacific Nut
Company, a California walnut processor. "India is a huge market, it has a
massive population, and they like walnuts. So, that one hurts."
More
“If a
country consumes more than it produces, it must import more than it exports.
That's not a rip-off that's arithmetic.
If we manage to negotiate a reduction in the Chinese trade surplus with the United States, we will have increased trade deficits with some other country.
Federal deficit spending, a massive and continuing act of dissavings, is the culprit. Control that spending and you will control the trade deficit.”
If we manage to negotiate a reduction in the Chinese trade surplus with the United States, we will have increased trade deficits with some other country.
Federal deficit spending, a massive and continuing act of dissavings, is the culprit. Control that spending and you will control the trade deficit.”
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Today, some common, and uncommon sense on Brexit. With a huge GB annual
goods trade deficit of almost 100 billion Pounds with the rump-EU, the EU acting
irresponsibly risks pushing the rump-EU into the next recession.
June 30, 2019
Here’s how the next Prime Minister can ensure we leave the European Union by 31st October
Written by Professor David Blake
Professor David Blake is Professor of Economics at Cass
Business School and a member of Economists for Free Trade.
Only a credible non-cooperative strategy that cannot
be blocked by either the EU or Parliament will get us out of the EU by 31st
October 2019. And that strategy needs to be executed with ruthless conviction
and commitment by the new Prime Minister. To demonstrate
his support for Global Britain, his first trip abroad should be to the US to
kick-start the UK-US Free Trade Agreement.
As the largest ever list of candidates to offer
themselves as the next British Prime Minister has been whittled down to the
final two, it is clear that we are in grave danger of validating Einstein’s
definition of insanity – doing the same thing over and over and expecting a
different result.
Between them, Boris Johnson and Jeremy Hunt have said
that they will: renegotiate the Withdrawal Agreement (WA) and the backstop;
leave the EU with a ‘deal’ on 31st October; and get parliamentary approval for
their new improved deal. They both claim to be skilled negotiators, implying
that this makes them ideally suited for the most important job in their career.
There are differences, however: Johnson recognises that the WA as a whole is
dead and just wants to lift some of its acceptable features, such as on
citizens’ rights; while Hunt is prepared to delay leaving the EU for ‘a short
while’ to achieve a ‘better deal’.
The naivety of the candidates’ positions is breath
taking. Have they not observed how easily the EU has run rings around our
current ‘skilled negotiators’? Are they like the Bourbons and learned nothing
and forgotten nothing?
The new Prime Minister needs a credible negotiation strategy
It is going to be déjà vu all over again, unless the new PM has a clear strategy to leave the EU on the basis of what game theorists call a non-cooperative solution. That is one that the EU cannot block if it is not willing to cooperate in producing a solution that makes both sides better off.
This means that the starting point for any negotiations with the EU cannot be the WA. The EU says that it will not renegotiate this and it remains completely unacceptable to the vast majority of the British people. As Chairman of Lawyers for Britain, Martin Howe QC, says:
‘I can’t think of any clause in the WA end-to-end which is actually in the interests of the UK. The only neutral part of the agreement is the reciprocal rights of UK and EU citizens, in which the clauses on substantive rights are acceptable. However, even those are surrounded by completely unacceptable requirements that the treaty must perpetually have direct effect and must (as interpreted by the courts) override future UK Acts of Parliament in our own courts, and must be “interpreted” by the European Court of Justice for about 10 years by direct references and thereafter via a back-door mechanism in an international arbitration clause’.
His devastating criticism of the WA is here: Avoiding the Trap – How to Move on from the Withdrawal Agreement. How a British Prime Minister could collaborate with the EU to produce this document and how so many MPs could subsequently vote for it is beyond me. The WA is nothing less than a venus flytrap. It therefore needs to be avoided at all costs.
In any case, the WA does not offer a ‘deal’ about a future relationship in any meaningful sense. For example, there is nothing on services which account for 80% of UK GDP. Trade in services will be negotiated after the UK leaves the EU. It is completely bizarre for MPs to object to leaving the EU without a deal, when the WA itself involves leaving the EU without a deal.
A non-cooperative solution requires the UK to specify both the terms under which it will leave the EU and the terms under which it will trade with the EU in the future. And to do so in a way that the EU cannot block.
---- The non-cooperative solution involves three steps. And each one has to be credible to the EU
The first step is for the new PM to restate that the
clean Brexit set out in the Lancaster House speech will be implemented by 31st
October 2019. This is credible and does not require EU consent.
In parallel with this, the new PM should immediately
inform the US President that the UK will enthusiastically take up his
long-standing offer to negotiate rapidly a US-UK Free Trade Agreement (FTA).
This also is credible and does not require EU consent once we leave. During the
few weeks that remain before 31st October, the UK can make much progress in
setting the stage for post-Brexit negotiations – a task that the International
Trade Secretary, Liam Fox, has consistently dragged his feet in doing. This
will send an electric shock to the EU that will tilt every aspect of subsequent
negotiations with the EU in our favour. The prospect of us concluding an FTA
with the US when the EU has been struggling for years to achieve this will
motivate the EU to conclude an FTA with us. They will fear the fact that the UK
would be able to import virtually all of its requirements from the US and at
lower world market prices. This would signal to the EU that we can leave them
behind if necessary.
Morehttps://brexitcentral.com/heres-how-the-next-prime-minister-can-ensure-we-leave-the-european-union-by-31st-october/
“The Brexiteers outside
looked from May to Merkel, and from Merkel to May and from May to Merkel again;
but already it was impossible to say which was which.”
With apologies to George Orwell, Animal
Farm.
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?
Researchers teleport information within a diamond
Date:
June 28, 2019
Source:
Yokohama National University
Summary:
Researchers have teleported quantum information securely within the confines of
a diamond. The study has big implications for quantum information technology --
the future of how sensitive information is shared and stored.
Researchers from the Yokohama National University have teleported
quantum information securely within the confines of a diamond. The study has
big implications for quantum information technology -- the future of how
sensitive information is shared and stored.
The researchers published their results on June 28, 2019 in Communications
Physics.
"Quantum teleportation permits the transfer of quantum information
into an otherwise inaccessible space," said Hideo Kosaka, a professor of
engineering at Yokohama National University and an author on the study.
"It also permits the transfer of information into a quantum memory without
revealing or destroying the stored quantum information."
The inaccessible space, in this case, consisted of carbon atoms in
diamond. Made of linked, yet individually contained, carbon atoms, a diamond
holds the perfect ingredients for quantum teleportation.
A carbon atom holds six protons and six neutrons in its nucleus,
surrounded by six spinning electrons. As the atoms bond into a diamond, they
form a notoriously strong lattice. Diamonds can have complex defects, though,
when a nitrogen atom exists in one of two adjacent vacancies where carbon atoms
should be. This defect is called a nitrogen-vacancy center.
Surrounded by carbon atoms, the nucleus structure of the nitrogen atom
creates what Kosaka calls a nanomagnet.
To manipulate an electron and a carbon isotope in the vacancy, Kosaka
and the team attached a wire about a quarter the width of a human hair to the
surface of a diamond. They applied a microwave and a radio wave to the wire to
build an oscillating magnetic field around the diamond. They shaped the
microwave to create the optimal, controlled conditions for the transfer of
quantum information within the diamond.
Kosaka then used the nitrogen nanomagnet to anchor an electron. Using
the microwave and radio waves, Kosaka forced the electron spin to entangle with
a carbon nuclear spin -- the angular momentum of the electron and the nucleus
of a carbon atom. The electron spin breaks down under a magnetic field created
by the nanomagnet, allowing it to become susceptible to entanglement. Once the
two pieces are entangled, meaning their physical characteristics are so
intertwined they cannot be described individually, a photon which holds quantum
information is applied and the electron absorbs the photon. The absorption
allows the polarization state of the photon to be transferred into the carbon,
which is mediated by the entangled electron, demonstrating a teleportation of
information at the quantum level.
"The success of the photon storage in the other node establishes
the entanglement between two adjacent nodes," Kosaka said. Called quantum
repeaters, the process can take individual chunks of information from node to
node, across the quantum field.
"Our ultimate goal is to realize scalable quantum repeaters for
long-haul quantum communications and distributed quantum computers for
large-scale quantum computation and metrology," Kosaka said.
I've
done some brave things in my time. I played Nottingham Labour Club. I was the
one who shouted 'Three cheers for Mrs Thatcher'. And it was during the bingo.
The late comedian Ken Dodd.
The late comedian Ken Dodd.
The monthly Coppock Indicators finished June
DJIA: 26,600 +51 Up. NASDAQ: 8,006 +70 Down.
SP500: 2,942 +50 Up.
The S&P has reversed again to up after only one month. The Dow has
reversed to up, while the NASDAQ remains down. On to next
month’s numbers for clarification.
No comments:
Post a Comment