Baltic Dry Index. 2267
+54 Brent
Crude 59.15 Spot Gold $1,543
Never ending Brexit
now October 31st, maybe. 63
days away.
Nuclear Trump
China Tariffs Now In Effect.
USA v EU trade war
postponed to November, maybe.
“When
everybody owns something, nobody owns it, and nobody has a direct interest in
maintaining or improving its condition. That is why buildings in the Soviet
Union—like public housing in the United States—look decrepit within a year or
two of their construction.”
Milton
Friedman.
With month-end just two
days away, a holiday weekend in America, a hurricane headed towards Florida, rising
political tensions in Great Britain, Germany and Italy, China rotating its
troops in Hong Kong ahead of another weekend rally that’s been banned, it’s a
pretty good weekend to sit it out in cash, except where negative interest rates
rule.
Where cash generates
negative interest rates, my preference would be to hold gold. In a negative
interest rate insane world, fully paid up precious metals though they pay no
interest rate, offer a virtual interest rate.
Were the Fed ever
foolish enough to follow Europe and Japan into negative interest rates on the fiat
dollar, effectively the world’s only fully functioning reserve standard, that
reserve standard will quickly be called into question probably setting off the
Great 21st Century Gold Rush.
Below, global markets
limp towards tomorrow’s month-end finishing line. Better put the Fed’s Plunge
Protection Team on overtime.
Asian markets dip as worries weigh in investors
By Marketwatch
and Associated
Press Published: Aug 28, 2019 11:08 p.m. ET
Asian markets retreated in early trading Thursday, as
geopolitical tensions and the inverted U.S. Treasury yield curve weighed on
investors concerned about a global economic slowdown.U.S. Treasury Secretary Steve Mnuchin that he expects Chinese officials to travel to Washington for renewed trade negotiations, but did not give a timeline, Bloomberg News reported. He did not say if a previously scheduled September meeting would take place. Mnuchin also told Bloomberg that the U.S. does not plan in intervening in the U.S. dollar market for the time being, though “situations could change in the future.”
Japan’s Nikkei NIK, -0.07%
fell 0.5% and Hong Kong’s Hang Seng Index HSI, +0.06%
slid 0.6%. The Shanghai Composite SHCOMP, +0.02%
retreated 0.2% while the smaller-cap Shenzhen Composite 399106, +0.14% inched down 0.1%.
South Korea’s Kospi 180721, -0.30% declined 0.2%,
while benchmark indexes in Taiwan Y9999, +0.23% , Singapore STI, +0.28%
and Indonesia JAKIDX, +0.15%
were mixed. Australia’s S&P/ASX 200 XJO, +0.11%
slipped 0.1%.
More
Bonds reign supreme, equities struggle on recession, Brexit fears
August 29, 2019 /
2:17 AM
TOKYO (Reuters) -
Global bond yields flirted with record lows while stocks struggled to recover
on Thursday, as global recession worries from intensifying U.S.-China frictions
and the specter of a no-deal Brexit drove investors to safer harbors.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.38%,
Singapore shares hit eight-month lows, while Japan’s Nikkei shed 0.44%.
On Wall Street, the S&P 500 gained 0.65% on Wednesday due in part to
gains in the energy sector following a rebound in oil prices. But U.S. stock
futures lost 0.4% in Asia.
Bond markets around the world painted a gloomier picture, with yields on
30-year U.S. Treasuries and 10-year German bunds yield both hitting record lows
- 1.905 percent and minus 0.716 percent on Wednesday.
Inversion remains a prominent feature across the U.S. yield curve, where
long-dated yields are below short-dated ones, an unsettling sign as yield curve
inversions have been a reliable leading indicator of future U.S. recessions.
Italy’s 10-year bond yield briefly fell below 1% for the first time
ever. The rush to buy Italian debt, which carries higher yields than the ‘core’
euro zone countries, was in part prompted by growing hopes that a new
government will soon be formed in Rome and a new election averted.
In Asia, the 10-year Japanese government bond yield dipped 1 basis point
to minus 0.285%, just above its record low of minus 0.300% touched in 2016.
“Falls in global bond yields reflect growing concerns that long-term
global growth is slowing down on U.S.-China tensions and worries over
subsequent global supply chain disruptions,” said Tomoo Kinoshita, global
market strategist at Invesco Asset Management in Tokyo.
---- The Trump administration on Wednesday made official its extra 5% tariff on $300 billion in Chinese imports and set collection dates of Sept. 1 and Dec. 15.
That means products such as smartwatches, Bluetooth headphones, flat
panel televisions and many types of footwear will be levied from next month,
raising worries about U.S. consumption, one of the few remaining bright spots
in the world economy.
More
Analyst: U.S.-China trade war about to turn against consumers
Tariffs could hurt American families as China loses patience with the Trump administration.
Aug. 28, 2019 /
9:28 PM
NEW YORK, Aug. 28 (UPI) -- U.S. consumers could feel the sting of new
tariffs on Chinese goods before Christmas as a prolonged trade war makes a
recession more likely, U.S. analysts say.
Nicholas Lardy, senior fellow at the Peterson Institute for
International Economics in Washington, told UPI it will be U.S. shoppers, and
not the Chinese government, that will be paying for the tariffs.
The public has so far not paid for extra costs, as retailers have
absorbed the brunt of the impact on the prices of intermediate goods,
industrial parts and components. Households may not be prepared for the
announced tariffs on consumer goods, which could soon equal $1,500 to $2,000
per family annually, Lardy said.
"Families still have to buy shoes for kids to go to school,"
said the analyst. "And 70 percent of shoes sold in the United States are
made in China."
More
U.S. cotton industry quietly faces crisis from China trade war
Aug. 28, 2019 /
3:00 AM
EVANSVILLE, Ind., Aug. 28 (UPI) -- While soybeans have remained front
and center in the United States' trade war with China, American cotton is
quietly facing its own tariff-induced crisis.
Cotton was among the first round of agricultural commodities China hit
with retaliatory tariffs in summer 2018. Its price has been slowly declining
ever since. This summer it dropped below the level most farmers need to make
any money from their 2019 harvest.
In May, the price dropped below 60 cents per bale -- and it has remained there. Industry experts say there is little chance it will rise again until the trade war ends.
"It is tough, very tough out here on the farm," said Jimmy Webb, a fourth-generation Georgia cotton grower. "Prices are in the tank. It is tough to make a living."
But despite the increasingly dire situation, the plight of cotton has been largely eclipsed by other commodities hit with Chinese tariffs. This is partly because the impact on cotton was slower to take hold than some of those other commodities.
Despite having the world's largest textile industry, China over the last few years was not the leading importer of U.S. cotton, said Jody Campiche, vice president of economics and policy analysis at the National Cotton Council of America.
Around 2011, China began buying huge quantities of cotton, mostly from its own farmers, and stockpiling it in government reserves. The country quickly stored many millions more bales than its textile plants needed.
Over the next several years, China's imports slumped while it lived off those reserves.
---By the start of 2018, however, China had used up most of its reserves and was preparing to ramp up imports.
"They suddenly became a big importer again," Campiche said.
The U.S. cotton industry was preparing to meet the anticipated increase in demand when the tariffs hit.
"For the 2018-2019 crop year, we expected to export more than 3 million bales of cotton to China," Campiche said. "We ended up exporting 1.6 million bales."
Instead of exploding, America's sale of cotton to China shrank -- along with the value of U.S. cotton.
Declining direct sales were partly to blame, experts say. But they were not the only factor.
"It is the uncertainty that is really creating the whole situation," Robinson said. "Buyers, they don't know what the next tweet will be, the next tariff, if China will cancel existing sales. There is just this cloud of uncertainty. That's bad for business."
---- The trade war has created other issues, too, Robinson said. Other key cotton importing nations have started to demand lower prices for U.S. cotton, aware that American companies are becoming more desperate to sell.
What's more, because cotton prices were slower to fall, many Southern
farmers who normally plant corn or soybeans switched to cotton this spring.
Morehttps://www.upi.com/Top_News/US/2019/08/28/US-cotton-industry-quietly-faces-crisis-from-China-trade-war/2021566927276/?ls=1
In continental Europe
news, get ready for an earthquake on Sunday, and it’s got nothing to do with
Brexit. Germany appears to be switching to the right. Cue more panic and
fearmongering among the liberal elites and always leftist mass media. If it
happens, will the ECB use the occasion for more competitive devaluation of the
euro?
Far right to deal blow to shaky Merkel coalition in eastern votes
August 28, 2019
/ 2:19 PM
BERLIN (Reuters)
- The far right is set to make strong gains in two regional elections in
eastern German on Sunday, potentially upending 30 years of rule by the two main
parties and hastening the break-up of Chancellor Angela Merkel’s national
coalition.
The Alternative for Germany (AfD) is harnessing voter anger over
refugees and the planned closure of coal mines in the region and cast
themselves as the heirs of the demonstrators who brought about the fall of the
Berlin Wall three decades ago.
Double-digit gains for the AfD threaten Merkel’s conservatives in Saxony
and could mean her Social Democrat (SPD) national partners lose power in
Brandenburg. The parties have led the respective states since reunification in
1990, mostly in coalitions.
The AfD is expected to take votes from both parties in the elections
held two months before Germany marks 30 years since the fall of the Cold War’s
most potent symbol, the Berlin Wall.
AfD election posters tell voters to “Complete the change started in
1989”. With the word “Wende”, used to describe the fall of East German
Communism, the posters say: “1989 2019. Wende 2.0. Be there when history is
made!”
“There is a very broad disillusionment in much of the east with all the
established parties and the AfD is dominant as it makes people feel they are being
listened to,” said Hans Vorlaender, director of a political research centre in
Dresden.
The next few months will be crucial if the already rocky national
coalition is to survive until a federal election in 2021, with attention on the
eastern votes, including a third in Thuringia in October, and on policy.
More
Finally, about those
Chinese telephone trade calls to President Trump, did someone in China hoax
President Trump? Did President Trump just try to spoof the US stock market? He
wouldn’t do that, would he?
After 24 Hours, China Still Unaware of Calls Mentioned by Trump
Bloomberg News August 27, 2019, 9:10 AM GMT+1
China declined to
confirm phone calls with
the U.S. that President Donald Trump claimed happened over the weekend, during
which Trump said China indicated it wanted to work toward a trade deal.
"I’m not aware of that," Chinese Foreign Ministry spokesman
Geng Shuang said at a regular briefing in Beijing on Tuesday. "Regretfully
the U.S. has announced its decision to add new tariffs on Chinese products.
Such maximum pressure will hurt both sides and is not constructive at
all."
On Monday, Trump said the prospects for a deal with China are better now
than at any time since negotiations began last year, even as a top state-media
editor in Beijing questioned his version of events. Tensions between the
world’s two biggest economies have escalated in recent days after both sides
announced new tariffs on each other’s goods and Trump called for American
companies to leave China.
Hu Xijin, editor-in-chief of China’s
Global Times, said in a tweet that top trade negotiators hadn’t spoken by phone
in recent days and that Trump was exaggerating the significance of the trade
contacts. U.S. Treasury Secretary Steven Mnuchin said “there were discussions
that went back and forth and let’s just leave it at that.”
Geng repeated China’s stance on the trade talks at Tuesday’s briefing. "We hope the U.S. can exercise restraint, come back to reason and create conditions for our consultation based on mutual respect equality and mutual benefit," he said.
China’s top trade negotiator, Vice Premier Liu He, said Monday China is "willing to solve the problem through consultation and cooperation with a calm attitude," which Trump cited as a positive signal. Still, the Communist Party’s flagship newspaper People’s Daily said in a commentary on Tuesday that the U.S. "shouldn’t misjudge" China’s determination to firmly retaliate if America follows through with higher tariffs.
“Governments never learn. Only
people learn.”
Milton
Friedman.
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today, that magic carbon free, brave new world again.
Mining Rare Materials for Clean Energy
Scientists have been trying to draw attention to the fact that the world is traveling on the path of climate change, to which the destination can only be destruction, but it’s not too late to change course. Right now, we are becoming wise to the damage that has already been done, and making choices to not only avoid future damage but also to reverse the negative effects that we’ve already caused, creating sustainability for future generations. Better late than never.The current goal of the energy sector is to make the switch from using fossil fuels to clean energy alternatives. We need to implement these new technologies to reduce emissions and protect the planet, however, clean tech relies heavily on access to rare minerals and metals, and this presents the industry with two main challenges.
Main Challenges
The powerful magnets required by electric cars require an abundance of neodymium, boron, and iron. Wind turbines and solar powers also rely on neodymium, as well as dysprosium, praseodymium, terbium, and indium. The rate at which we need to grow renewable energy, as well as the fact that it is competing for these resources against other technology makers (modern phones and televisions also require rare metals and minerals) means that our production of them needs to grow twelvefold by 2050. However, resources are being depleted, China is where most of the world’s production of rare materials takes place but in recent years it's capacity to export enough resource is falling under uncertainty. Its mines are becoming stripped of resources, and the country is requiring larger quantities for domestic use. This poses the first challenge to using rare materials in clean energy, a growing demand facing depleting resources.
Secondly, mining for rare minerals has a detrimental impact on the
environment, counteracting the emission-reducing-effect of using renewables
over fossil fuels. We know that the process of mining for rare materials has a
toxic impact. The ores of the materials often contain uranium and thorium, which
are radioactive elements. The extraction process often results in contamination
to the water table, poses health risks to the workers, and has further negative
implications for the environment.
The case is being made to foster a fundamental change in the clean
technologies sector to sourcing minerals using responsible methods. Current
production has been proven to threaten the environment and often infringes
human rights. To ensure that our new clean energy technology is sustainable, we
must make sure that it is truly is clean, and to do this we have to evolve our
current mining processes. Take Norway for example, there is a current battle
happening between those who want to protect the nature of the famous fjords and
those who want to sacrifice it to mine on the land. The stance that genuinely
sustainable energy would take is that the environment should not be harmed as a
result of any process throughout the supply chain, as it is counterintuitive.
More
But,…
The “New Energy Economy”: An Exercise in Magical Thinking
Mark
P. Mills is a senior fellow at the Manhattan Institute.
A
movement has been growing for decades to replace hydrocarbons, which
collectively supply 84% of the world’s energy. It began with the fear that we
were running out of oil. That fear has since migrated to the belief that,
because of climate change and other environmental concerns, society can no
longer tolerate burning oil, natural gas, and coal—all of which have turned out
to be abundant.
So
far, wind, solar, and batteries—the favored alternatives to
hydrocarbons—provide about 2% of the world’s energy and 3% of America’s.
Nonetheless, a bold new claim has gained popularity: that we’re on the cusp of
a tech-driven energy revolution that not only can, but inevitably will, rapidly
replace all hydrocarbons.
This
“new energy economy” rests on the belief—a centerpiece of the Green New Deal
and other similar proposals both here and in Europe—that the technologies of
wind and solar power and battery storage are undergoing the kind of disruption
experienced in computing and communications, dramatically lowering costs and
increasing efficiency. But this core analogy glosses over profound differences,
grounded in physics, between systems that produce energy and those that produce
information.
In
the world of people, cars, planes, and factories, increases in consumption,
speed, or carrying capacity cause hardware to expand, not shrink. The energy
needed to move a ton of people, heat a ton of steel or silicon, or grow a ton
of food is determined by properties of nature whose boundaries are set by laws
of gravity, inertia, friction, mass, and thermodynamics—not clever software.
More
“If
all we want are jobs, we can create any number—for example, have people dig
holes and then fill them up again, or perform other useless tasks. Work is
sometimes its own reward. Mostly, however, it is the price we pay to get the
things we want. Our real objective is not just jobs but productive jobs—jobs
that will mean more goods and services to consume.”
Milton
Friedman.
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?
Energy-efficient power electronics: Gallium oxide power transistors with record values
Date:
August 27, 2019
Source:
Forschungsverbund Berlin
Summary:
Engineers have now achieved a breakthrough with transistors based on gallium
oxide (beta-Ga2O3). The newly developed beta-Ga2O3-MOSFETs (metal-oxide-semiconductor
field-effect transistor) provide a high breakdown voltage combined with high
current conductivity. With a breakdown voltage of 1.8 kilovolts and a record
power figure of merit of 155 megawatts per square centimeter, they achieve unique
performance figures close to the theoretical material limit of gallium oxide.
Powerful electronic components are indispensable for future
communications, for the digital transformation of society and for artificial
intelligence applications. On a footprint as small as possible, they should
offer low energy consumption and achieve ever higher power densities, thus
working more efficiently. This is where conventional devices reach their
limits. Scientists all over the world are therefore investigating new materials
and components that can meet these requirements.
The Ferdinand-Braun-Institut
(FBH) has now achieved a breakthrough with transistors based on gallium oxide
(beta-Ga2O3).
The newly developed beta-Ga2O3-MOSFETs (metal-oxide-semiconductor field-effect
transistor) provide a high breakdown voltage combined with high current
conductivity. With a breakdown voltage of 1.8 kilovolts and a record power
figure of merit of 155 megawatts per square centimeter, they achieve unique
performance figures close to the theoretical material limit of gallium oxide.
At the same time, the breakdown field strengths achieved are significantly
higher than those of established wide bandgap semiconductors such as silicon
carbide or gallium nitride.
In
order to achieve these improvements, the FBH team tackled the layer structure
and gate topology. The basis was provided by substrates from the Leibniz
Institute for Crystal Growth with an optimized epitaxial layer structure. As a
result, the defect density could be reduced and electrical properties improved.
This leads to lower on-state resistances. The gate is the central 'switching
point' of field effect transistors, controlled by the gate-source voltage. Its
topology has been further optimized, allowing to reduce high field strengths at
the gate edge. This, in turn, leads to higher breakdown voltages. The detailed
results were published online on August 26, 2019 in the IEEE Electron
Device Letters September issue.
“The most important single central fact
about a free market is that no exchange takes place unless both parties
benefit.”
Milton
Friedman.
The monthly Coppock Indicators finished July
DJIA: 26,864 +53 Up. NASDAQ: 8,175 +65 Down.
SP500: 2,980 +53 Up.
The S&P and Dow remain up, but in very unconvincing fashion. The NASDAQ remains down. Like the Fed, I would await a better data
driven signal.
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