Monday, 12 August 2019

A Weak Dollar Next?


Baltic Dry Index. 1748 +28  Brent Crude 58.42  Spot Gold $1,498

Never ending Brexit now October 31st, maybe.  80 days away.
Nuclear Trump China Tariffs Now In Effect.
USA v EU trade war postponed to November, maybe.

“As your president, one would think that I would be thrilled with our very strong dollar,” “I am not! …. The Fed’s high interest rate level, in comparison to other countries, is keeping the dollar high, making it more difficult for our great manufacturers like Caterpillar, Boeing… John Deere, our car companies, & others, to compete on a level playing field.”

If the Fed cut rates, he added, “the dollar will make it possible for our companies to win against any competition.

President Trump. August 8, 2019.

With global recession odds rising, the odds of a US recession are also rising. That’s bad news for any US president facing re-election about 15 months away, but especially bad news for President Trump who has tied his re-election to the US economy, and especially the fate of the stock market.

President Trump badly needs the US Fed to get busy with more and larger interest rate cuts. Walls excepted, what President Trump wants he usually gets, so despite what his advisor Larry Kudlow says about a strong dollar policy, I fully expect President Trump to get his way with a weak dollar policy. A competitive, continuing dollar devaluation policy between now and November 2020.

Whether that will be enough to carry over priced stock markets out to November 2020 seems unlikely to me, but if a new recession starts to unfold in the US economy, I expect to see the under heavy pressure Federal Reserve, return to a new bout of quantitative easing and to follow the ECB and Bank of Japan into negative interest rates.

Below, nervous global markets await this week’s political fallout, which includes Pakistan Independence Day on Wednesday followed immediately by India Independence Day on Thursday. Both countries are on the brink of war over Kashmir.

Asian shares inch up on China recovery, yuan fixing

August 12, 2019 / 2:06 AM
SHANGHAI (Reuters) - Gains by Chinese equities and the yuan’s stronger-than-expected daily fixing helped lift a broad gauge of Asian shares above water on Monday, but firm gold prices underscored investor worries over risks from a prolonged Sino-U.S. trade war.

MSCI’s broadest index of Asia-Pacific shares outside Japan shook off early losses to eke out a 0.02% gain. 

The index was aided by Chinese shares, which rallied from the previous week’s losses. Blue-chip shares rose 0.96%, with listed brokerages boosted by a late Friday announcement from China’s securities regulator of relaxed margin financing rules..

Further helping sentiment, the People’s Bank of China (PBOC) set its daily midpoint for yuan trading - which determines the limits for its onshore movement - at 7.0211 per dollar. That was weaker than Friday’s setting but stronger than market expectations.

Ryan Felsman, senior economist at CommSec in Sydney, said there was a “positive reaction” to Monday’s fixing, including a pick-up in the Australian dollar, as it reassured investors that China won’t steadily weaken the yuan.

At the same time, uncertainty over how the U.S.-China trade conflict will be resolved is contributing to market volatility, Felsman said.

---- On Monday, Australian shares dipped 0.17% and Indonesian shares fell 0.3% while the South Korean market reversed early losses to rise 0.39%.

Trading activity was relatively muted with some regional markets, including Japan, Singapore and India, closed for holidays on Monday.
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Fed remains a target as economy falls short of Trump's ambitious goals

August 11, 2019 / 1:10 PM
WASHINGTON (Reuters) - It has become a jarring and frequent contradiction. President Donald Trump blames the Federal Reserve for putting the U.S. economy at risk while data shows an economy in “reasonably good” shape, as the head of the central bank recently said.

But behind that confusing dance between a norm-breaking Republican president and a stick-to-its-knitting Fed lies a dilemma for Trump. 

“Reasonably good” is not what Trump promised to deliver during his 2016 campaign, and at this point he heads into a reelection year short of the key economic goals he set and worried a recession could undermine his bid for a second term.

Growth is ebbing and well below the 3% annual rate he said his administration would hit; the trade deficit has widened and there is no sign of the “easy” victory he said would come in a trade war with China; far from the surge in investment he promised would follow a corporate tax cut, business capital spending of late has been a drag on growth overall.

---- “He is so focused on the Fed because in terms of avoiding a recession that is truly in his eyes his biggest obstacle,” to reelection, said a source in regular communication with the White House, explaining that Trump wants to take no chances, even if the risk of a downturn is low.

It’s in that context that Trump scorns a central bank whose longer-term approach to policy has clashed with his more immediate interests - the same tension apparent in other battles between the president and government agencies with their own institutional powers or culture.

In the Fed’s case, while its chairman and Washington-based governors are appointed by the president, its responsibility is to a “mandate” established by Congress.
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Trade war is raising the risk of U.S. recession, Goldman Sachs warns

By Mike Murphy Published: Aug 11, 2019 7:32 p.m. ET
The trade war with China is having a greater effect on the U.S. economy than expected, and the risk of recession is rising, Goldman Sachs Group Inc. said Sunday.

In a note to clients, Goldman analysts led by chief U.S. economist Jan Hatzius said a trade deal between the U.S. and China is no longer expected before the 2020 presidential election.

Goldman GS, -0.05%   said it now expects a 0.6% drag on the U.S. economy due to trade-war developments, up from earlier estimates of 0.2%. “Fears that the trade war will trigger a recession are growing,” Hatzius said in the note.

Goldman also lowered its fourth-quarter U.S. growth forecast by 20 basis points to 1.8%, saying the trade war is weighing down the economy.

“Overall, we have increased our estimate of the growth impact of the trade war,” Hatzius wrote. “The drivers of this modest change are that we now include an estimate of the sentiment and uncertainty effects and that financial markets have responded notably to recent trade news.”

Uncertainty caused by the trade war could cause businesses to lower spending until tensions are resolved, the report said. “Relatedly, the business sentiment effect of increased pessimism about the outlook from trade war news may lead firms to invest, hire, or produce less,” wrote Hatzius.

The Goldman analysts said they expect President Donald Trump to carry out his threat to impose 10% tariffs on an additional $300 billion in Chinese exports starting Sept. 1.

Global bond yields have fallen to 120-year low

By Steve Goldstein   Published: Aug 9, 2019 11:19 a.m. ET
It’s been 120 years since bond yields around the world were this low.

That’s according to a calculation by Bank of America Merrill Lynch, which uses average yields from a host of countries — the U.K, Australia, Japan, Switzerland, France and the U.S. — to arrive at the data.

These low yields are the talk of the market as strategists wonder whether the bond rally will ever run out of stream. Prices and yields move inversely.

“With a substantial amount of central bank easing already priced, in our view, a marked deterioration in economic data would be required for the rally to continue. We believe the risk of a reversal has risen, and [we] turn neutral on duration,” strategists at Goldman Sachs said this week.

J.P. Morgan strategist Marko Kolanovic pointed out that the S&P SPX, -0.66%   earnings yield is 5.9% while the global 10-year bond yield is at 0.59% — with that wide spread being in the 95th percentile in data going back to 1985.
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When monetary policy destroys the currency, it always destroys the middle class.

Ron Paul

Crooks and Scoundrels Corner.

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

Today, alleged technology spy, Huawei. President Trump forces Huawei to go it alone. For now Huawei’s problem, but in a couple of years or so, everyone elses.

Below, America’s Wired puts in America’s knife.

Huawei's HarmonyOS Is No Android Replacement

08.09.19 01:34 pm
For months, rumors have circulated that Chinese tech giant Huawei was hard at work on a homegrown operating system, an increasingly necessary step toward independence after US sanctions prompted Google to sever ties. It’s now here: HarmonyOS, or Hongmeng in China. By all appearances, it’s an interesting, innovative take on what a modern-day operating system should be. Just don’t call it an Android replacement.

HarmonyOS made its debut at Huawei’s developer conference in Dongguan, China, where Richard Yu, CEO of the company’s Consumer Business Group, talked up its wide-ranging potential. “We needed an OS that supports all scenarios, that can be used across a broad range of devices and platforms, and that can meet consumer demand for low latency and strong security,” Yu said.

It’s true that HarmonyOS has been built with that breadth of applications in mind. The open-source platform is destined for smart TVs, smartwatches, and a bevy of Internet of Things doodads. Its microkernel architecture is lightweight and, more important, free of any legacy baggage from the Linux kernel that underpins Android. (The kernel is the core of an operating system, the hands that make the marionette dance. A microkernel is just a stripped-down version, tugging one or two strings instead of 10.) Huawei touts HarmonyOS as having a “Deterministic Latency Engine,” a fancy way of saying that it can better prioritize resources when apps and functions compete over them than Android can.

While smartphones weren’t the primary focus of Huawei’s announcement, they’re clearly top of mind. At a press conference following the event, Yu said that Huawei was “waiting on an update” to see what products it might be able to use Android in, given the slight thawing of geopolitical tensions in recent months. In the event that it’s still blocked, Yu said, Huawei is prepared. “If we cannot use [Android] in the future, we can immediately switch to HarmonyOS,” he said.

----“I think Huawei is under-communicating the work it will take to make this successful,” says Patrick Moorhead, president of Moor Insights & Strategy, a technology analyst firm. “Most every Android app writes to specific Android APIs, so any code that touches cameras, fingerprint readers, AR cameras, microphones, proximity sensors, and even privacy and security standards must be altered.”

That potentially makes HarmonyOS a tough sell, especially given that smartphones aren’t its initial focus. The exception is in Huawei’s home market of China, where the company has enough clout to attract developers. But this is a global company with global ambitions. Internationally, HarmonyOS will face the same problems that felled Windows Phone and Tizen and other aspiring Android and iOS alternatives: Without apps, no one buys the devices. If no one owns the devices, developers don’t bother tailoring apps.
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He who tampers with the currency robs labor of its bread.

Daniel Webster

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?

HET electric motor massively boosts power, torque and efficiency, reduces weight and complexity

Loz Blain  August 9th, 2019
A Texas-based startup has raised US$4.5 million in seed funding to develop and commercialize a remarkable electric motor technology. The father/son team claims the design can massively reduce the size and complexity of electric powertrains while also significantly boosting efficiency and doubling the torque output.

Electric cars are stunning performers off the line. In sprint tests they routinely humble high-performance combustion-engined cars many times more expensive than them. But in order to achieve this massive startup torque out of small-diameter, easily packaged motors, most of them use gearboxes. Not multi-speed gearboxes like you'd use with a combustion engine, but single-speed reduction boxes designed to let electric motors spin at high, efficient RPM while the wheels spin slower. 

These gearboxes are heavy, complex and expensive – and potentially unnecessary, according to a Texan father-and-son team that claim they've invented a new type of electric motor that can radically simplify the electric powertrain while delivering big efficiency, torque, power and range bonuses.

Linear Labs completed a seed round of financing in April this year, bringing in US$4.5 million to develop its key IP: the Hunstable Electric Turbine (HET), Hunstable being the surname of its two founders, CEO Brad and his father and CTO Fred.

The HET is a three-dimensional, circumferential flux, exterior permanent magnet electric motor with some interesting characteristics. For starters, it runs four rotors where other motors typically run one or two. The stator is fully encapsulated in a four-sided "magnetic torque tunnel," each side having the same polarity, ensuring that all magnetic fields are in the direction of motion, and there are no unused ends on the copper coils wasting energy. All magnetism the system creates is thus used to create motion, and all four sides of the stator contribute torque to the output.

It also achieves field weakening in a unique way. Field weakening is used to increase motor RPM when it's already running at full voltage, by reducing the field flux – which is usually achieved by injecting extra current in an opposing direction. This current injection trades additional speed for motor torque, and reduces the efficiency of the motor. The HET achieves field weakening by rotating one or both of its magnetic end plates out of alignment, meaning that this motor can build extra speed with no efficiency loss. Indeed, overall efficiency climbs at higher speeds.

----The result, says Linear Labs, is a truly remarkable motor that produces two to five times the torque density, at least three times the power density and at least twice the total output of any permanent magnet motor of the same size.

It also eliminates the need for DC/DC converters and the aforementioned gearboxes, reducing total vehicle cost and weight significantly, and the company says the motor's inherent efficiencies across different speeds, as well as the weight savings it achieves through component reduction, can draw some 10-20 percent more range out of a given battery pack.

It doesn't cost any more to manufacture than a traditional motor design, or require any specialized tooling – and it can be built without using rare earth metals if necessary. It's easy to cool, at least the stator is, because you can run liquid cooling inside the copper coils.

These are, of course, enormous claims. And while Linear Labs quickly backs them up with quotes from independent experts, there's a long path between disruptive idea and world-changing commercialization. The company says it's looking to implement the motor in a scooter prototype next year, and a car prototype in 2021. The company sees further potential for the motors in multirotors, flying cars, wind power generation and HVAC.
More plus video.
https://newatlas.com/linear-labs-hunstable-electric-motor/60974/

https://www.linearlabsinc.com/

Money is the worst currency that ever grew among mankind. This sacks cities, this drives men from their homes, this teaches and corrupts the worthiest minds to turn base deeds.

Sophocles

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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