Tuesday 23 July 2019

Trade War Compromise?


Baltic Dry Index. 2191 +21   Brent Crude 63.37

Never ending Brexit now October 31st, maybe. 
Nuclear Trump China Tariffs Now In Effect.
USA v EU trade war postponed to November, maybe.

“Life is a compromise of what your ego wants to do, what experience tells you to do, and what your nerves let you do.”

Walter Bagehot

With no one “winning” in the Great USA v China trade war, there were signs yesterday that each side might be ready to compromise. But with neither side able to lose face and President Trump needing to claim a scalp for his re-election campaign, it still might turn out just to be yet another false dawn.

If both would come to their senses the global economy might yet avoid a new recession, unless of course, it has already entered that new recession, led by manufacturing and exports.

In the markets, the frenetic gambling cooled slightly in China’s new stock market gambling casino, while other markets cautiously awaited trade war announcements and the coming Fed interest rate cut at the end of July.

In the Iran tit-for-tat tanker war with Britain, both parties started back channel diplomacy, with Iran talking to France and GB trying to assemble a European flotilla of the willing.

Below, just another week in the summer silly season.

Asian markets rise after Wall Street gains, encouraging trade-talk news

By Marketwatch and Associated Press Published: July 22, 2019 11:27 p.m. ET
Asian markets gained slightly in muted early trading Tuesday, after stocks closed higher on Wall Street to kick off a busy earnings week.

Investors were also encouraged by trade developments, after the South China Morning Post reported U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin would travel to Beijing next week for renewed trade negotiations with China. Later Monday, the Wall Street Journal reported President Donald Trump had agreed to make “timely” licensing decisions for U.S. tech companies seeking to renew sales with Huawei Technologies Co.
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China's new Nasdaq-style STAR Market plunges on second day of trading

July 23, 2019 / 2:55 AM
SHANGHAI (Reuters) - China’s STAR Market kicked off its second day of trading on Tuesday with sharp falls in most listed shares a day after they posted average gains of 140%, underscoring the volatility of the country’s new Nasdaq-style board.

In early trade, 22 out of 25 listed companies on the board were trading lower, with some shares trading down as much as 18%. Micro-Tech (Nanjing) Co., a medical device company, bucked the overall trend, rising about 15%. 

The debut of the STAR Market on Monday saw some shares climb as much as 520%, and more than doubled the board’s combined market capitalization.

China-US trade talks could resume soon, but Washington’s tariffs have to go, state media say

·         Commentators say negotiations towards deal could be back on by end of July
·         Welcome for renewal of soybean imports and call to spirit of self-reliance
Catherine Wong  Published: 2:30pm, 22 Jul, 2019

China’s recent purchases of US agricultural products could signal the resumption soon of trade talks, Chinese state media said on Sunday, adding that the removal of all American tariffs on Chinese goods remains Beijing’s top priority.

US President Donald Trump and his Chinese counterpart, Xi Jinping, agreed late last month to restart discussions but since then officials from the world’s two biggest economies have only spoken by phone about “further consultations”.

However, US Treasury Secretary Steven Mnuchin said face-to-face talks could follow.

It suggested that such negotiations could take place before the end of the month and before the August summer holiday period.

But the commentary said that a final deal would not be reached unless the US removed all the tariffs it had imposed since the start of the trade war.

“What started the Sino-US trade conflict was the additional tariffs imposed by the US on Chinese imported goods, so if the two sides are to reach an agreement, all the tariffs must be removed,” it said.

Both countries have recently shown willingness to resume talks. On July 9, Washington announced that it would exempt 110 Chinese products – from medical equipment to key electronic components – from import tariffs.

Several Chinese companies wanted to buy American agricultural products such as soybeans and have applied for exemptions from the tariffs imposed by Beijing.

The applications for exemptions had been filed and would be heard by a panel of experts from the government, the official Xinhua News Agency reported on Sunday. The report did not say how long the review would take.

A separate commentary by Xinhua said that any purchase of US farm products must be made according to domestic demands but not dictated by American pressure.
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Donald Trump says Xi Jinping ‘acted responsibly’ in Hong Kong extradition bill protests

·         US leader says China could stop demonstrations ‘if they wanted’
·         Dozens of protesters left hurt by a mob of attackers in Yuen Long
Published: 2:30am, 23 Jul, 2019 Updated: 6:24am, 23 Jul, 2019After a night of violent unrest in Hong Kong that left dozens of protesters hurt by a mob of attackers, US President Donald Trump said on Monday that Chinese President Xi Jinping had acted “responsibly” in allowing the demonstrations to continue.

“I’m not involved in it very much but I think President Xi of China has acted responsibly, very responsibly,” Trump told reporters in the White House when asked about the previous night’s violence. “They’ve been out there protesting for a long time.”

Seven weeks of demonstrations against proposed changes to Hong Kong’s extradition laws have been punctuated by violent clashes between protesters and police, fuelling Hongkongers’ anger at the city government, whose embattled leader continues to resist calls to resign.
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https://www.scmp.com/news/hong-kong/article/3019672/donald-trump-says-xi-jinping-acted-responsibly-hong-kong-extradition

China says U.S. criticism over South China Sea is slander

July 22, 2019 / 10:51 AM
BEIJING (Reuters) - Remarks by U.S. officials on China’s role in the South China Sea are slanderous, its foreign ministry said on Monday, after the United States voiced concern over reports of Chinese interference with oil and gas activities in the disputed waters.

China’s claims in the South China Sea, through which about $5 trillion in shipborne trade passes each year, are contested, all or in part, by Brunei, Malaysia, the Philippines, Taiwan and Vietnam. 

On Saturday, the U.S. State Department said China’s repeated provocative actions aimed at the offshore oil and gas development of other claimant states threatened regional energy security and undermined the free and open Indo-Pacific energy market.

U.S. President Donald Trump’s hawkish national security adviser John Bolton also said on Twitter that China’s coercive behaviour towards its Southeast Asian neighbours was counterproductive and threatened regional peace and stability, echoing earlier comments by Secretary of State Mike Pompeo.

In Beijing, Foreign Ministry spokesman Geng Shuang said such comments by Bolton and Pompeo were baseless, adding that the United States and other “external forces” were stirring up trouble in the South China Sea.

“This is slander against Chinese and Southeast Asian countries’ efforts to uphold peace and stability in the South China Sea and properly manage differences,” Geng told a news briefing on Monday. “Countries and people in the region will not believe their words.”

He added, “We urge the United States to stop such irresponsible behaviour and respect the efforts of China and ASEAN countries to resolve differences through dialogue and work for peace and stability in the South China Sea.”

U.S.-based think tanks have reported that Chinese and Vietnamese vessels have engaged in a standoff for several weeks near an oil block in Vietnam’s exclusive economic zone.

Vietnam, which for years has been embroiled in a dispute with China over the potentially energy-rich region, on Friday accused a Chinese oil survey vessel and its escorts of violating its sovereignty and demanded that China remove the ships from Vietnamese waters.
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Finally, has the USA weaponised the Venezuelan power grid in aits attempt to overthrow President Maduro? If it has, two or more can play at that game, with dire results for all. People in glass houses and all that. Cuba next? China? USA?

Widespread blackout hits Venezuela, government blames 'electromagnetic attack'

July 22, 2019 / 10:52 PM
CARACAS (Reuters) - More than half of Venezuela’s 23 states lost power on Monday, according to Reuters witnesses and reports on social media, a blackout the government blamed on an “electromagnetic attack.”

It was the first blackout to include the capital, Caracas, since March, when the government blamed the opposition and United States for a series of power outages that left millions of people without running water and telecommunications. 

The blackouts exacerbated an economic crisis that has halved the size of the economy.

Venezuelan Information Minister Jorge Rodriguez said the outage on Monday was caused by an “electromagnetic attack,” without providing evidence. He added that authorities were in the process of re-establishing service.

Power returned for about 10 minutes to parts of southeastern Bolivar state, site of the Guri hydroelectric dam - the source of most of Venezuela’s generation - but went out again, according to a Reuters witness. Electricity was still out throughout Caracas.

“It terrifies me to think we are facing a national blackout again,” said Maria Luisa Rivero, a 45-year-old business owner from the city of Valencia, in the central state of Carabobo.

“The first thing I did was run to freeze my food so that it does not go bad like it did like the last time in March. It costs a lot to buy food just to lose it,” she said.

The oil-rich country’s hyperinflationary economic crisis has led to widespread shortages in food and medicine, prompting over 4 million Venezuelans to leave the country.
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An element of exaggeration clings to the popular judgment: great vices are made greater, great virtues greater also; interesting incidents are made more interesting, softer legends more soft.

Walter Bagehot

Crooks and Scoundrels Corner.

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

Today, is solar power and wind power being sold in a crooked way to a gullible public? The Manhattan Institute increasingly thinks it is.

A Reality Check for Solar and Wind

All told, renewables produce a small fraction of recent years’ increased production of oil and gas.

By Robert Bryce  July 21, 2019 4:31 pm ET
Nearly all the Democrats running for the White House share two common talking points on energy: They loathe hydrocarbons and they love renewables. “We can and must build an economy free from fossil fuels,” Washington Gov. Jay Inslee has said. He also asserts the need to “break America’s oil addiction” and “invest in deploying renewable energy.”

Occidental Petroleum recently agreed to buy Anadarko Petroleum for $38 billion largely because it coveted Anadarko’s acreage in the Permian Basin, which covers about 75,000 square miles of West Texas and eastern New Mexico. The first commercial well in the Permian, the Santa Rita No. 1, blew in near Big Lake, Texas, in 1923. Despite its long history, the Permian is now the world’s hottest energy play.

The latest Energy Information Administration data show that since early 2014 oil production in the Permian has grown to more than four million barrels a day from about 1.5 million. Gas production in the Permian has nearly tripled in the same period to about 14 billion cubic feet a day from about five billion. In terms of energy, nine billion cubic feet of gas is equivalent to 1.5 million barrels of oil. 
Add the oil and gas increases and since 2014 the Permian’s output has jumped by roughly four million barrels of oil equivalent a day.

Now look at solar and wind. In 2018, according to BP, all U.S. solar projects produced about 441,000 barrels of oil equivalent a day. The increase in oil and gas production from 2014 to today in the Permian alone is equal to about nine times the output of every solar project in the U.S. In 2018 domestic wind production totaled about 1.3 million barrels of oil equivalent a day. The increase in Permian oil and gas production since 2014 is equal to three times the annual output of every wind turbine in the country.

Those numbers are instructive, but that’s only the Permian. Add production from all the other shale plays—including the Haynesville, Utica and Marcellus—and total U.S. oil and gas production since 2014 has jumped by about 5.7 million barrels of oil equivalent a day. That means that over the past half-decade alone U.S. oil and gas production has increased by roughly 13 times the total output of all domestic solar projects and more than four times the total output of every wind turbine in the country.

Renewable-energy promoters never tire of touting the growing output and declining cost of solar and wind. Those claims may be true. But simple math shows that oil and gas are leaving solar and wind in the shade.
Mr. Bryce is a senior fellow at the Manhattan Institute and author of “A Question of Power: Electricity and the Wealth of Nations,” to be published in 2020.

The “New Energy Economy”: An Exercise in Magical Thinking

We must not let daylight in upon the magic.

Walter Bagehot

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?

Limitation exposed in promising quantum computing material

Metallic surfaces no longer protected as topological insulators become thinner

Date: July 16, 2019

Source: University of Utah

Summary: Physicists have theorized that a new type of material, called a three-dimensional (3-D) topological insulator (TI), could be a candidate to create qubits for quantum computing due to its special properties. A study found that when the TI's insulating layers are as thin as 16 quintuple atomic layers across, the top and bottom metallic surfaces begin to destroy their metallic properties.

Quantum computers promise to perform operations of great importance believed to be impossible for our technology today. Current computers process information via transistors carrying one of two units of information, either a 1 or a 0. Quantum computing is based on the quantum mechanical behavior of the logic unit. Each quantum unit, or "qubit," can exist in a quantum superposition rather than taking discrete values. The biggest hurdles to quantum computing are the qubits themselves -- it is an ongoing scientific challenge to create logic units robust enough to carry instructions without being impacted by the surrounding environment and resulting errors.

Physicists have theorized that a new type of material, called a three-dimensional (3-D) topological insulator (TI), could be a good candidate from which to create qubits that will be resilient from these errors and protected from losing their quantum information. This material has both an insulating interior and metallic top and bottom surfaces that conduct electricity. The most important property of 3-D topological insulators is that the conductive surfaces are predicted to be protected from the influence of the surroundings. Few studies exist that have experimentally tested how TIs behave in real life.

A new study from the University of Utah found that in fact, when the insulating layers are as thin as 16 quintuple atomic layers across, the top and bottom metallic surfaces begin to influence each other and destroy their metallic properties. The experiment demonstrates that the opposite surfaces begin influencing each other at a much thicker insulating interior than previous studies had shown, possibly approaching a rare theoretical phenomenon in which the metallic surfaces also become insulating as the interior thins out.

"Topological insulators could be an important material in future quantum computing. Our findings have uncovered a new limitation in this system," said Vikram Deshpande, assistant professor of physics at the University of Utah and corresponding author of the study. "People working with topological insulators need to know what their limits are. It turns out that as you approach that limit, when these surfaces start "talking" to each other, new physics shows up, which is also pretty cool by itself."

The new study published on July 16, 2019 in the journal Physics Review Letters.
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“The greatest pleasure in life is doing what people say you cannot do.”

Walter Bagehot

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.

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