Baltic Dry Index. 2118
+57 Brent
Crude 60.02 Spot Gold $1,495
Never ending Brexit
now October 31st, maybe. 69
days away.
Nuclear Trump
China Tariffs Now In Effect.
USA v EU trade war
postponed to November, maybe.
In central banking as in diplomacy, style, conservative
tailoring, and an easy association with the affluent count greatly and results
far much less.
John Kenneth Galbraith
Today it is all about
Chairman Powell’s big speech and how much it pleases or displeases his boss,
President Trump. If it displeases, I doubt we will have to wait long for
President Trump’s response.
Our global markets
will also be expressing a view too, though not necessarily the same view as
President Trump.
After that, it all
comes down to what happens or doesn’t happen at the G-7 junket in Biarritz,
hosted by President Maron of France, a committed global warmingist, the
complete opposite of President Trump. Will sparks fly?
Below, markets
largely drift awaiting today’s developments.
Asian markets up slightly ahead of Fed’s Jackson Hole conference
By Marketwatch
and Associated
Press Published: Aug 22, 2019 11:30
p.m. ET
Asian markets mostly gained in early trading Friday as U.S.
Federal Reserve officials prepare to meet in Jackson Hole, Wyoming.Fed Chairman Jerome Powell is scheduled to speak Friday morning to kick off the annual conference, and investors will be looking for the central bank’s thoughts about the chances of recession following an inversion of the yield curve last week. But as MarketWatch has reported, economists believe the Fed is likely to keep its policy thoughts to itself.
Meanwhile, tensions between Japan and South Korea rose, as an intelligence-sharing deal became the latest casualty of a bitter trade dispute. South Korea said Thursday it would stop sharing intelligence about North Korea with its Asian neighbor. Last month, Japan revoked South Korea’s preferential trade status. South Korea accuses Japan of weaponizing trade to punish it over a separate dispute linked to Japan’s brutal colonial rule of the Korean Peninsula from 1910 to 1945.
Japan’s Nikkei NIK, +0.30% rose 0.2% while South Korea’s Kospi 180721, -0.04% inched up 0.1%. Hong Kong’s Hang Seng Index HSI, +0.48% gained 0.6% and the Shanghai Composite SHCOMP, +0.48% advanced 0.5%. Benchmark indexes in Taiwan Y9999, -0.04% , Singapore STI, -0.35% and Indonesia JAKIDX, -0.07% were down slightly. Australia’s S&P/ASX 200 XJO, +0.12% rose 0.2%.
Among individual stocks, convenience-store chain FamilyMart 8028, +6.01% rose in Tokyo trading, as did Nippon Steel 5401, +2.29% , while Japan Post 6178, -0.93% fell amid a continuing investigation into its sales practices. In Hong Kong, insurers AIA Group 1299, +1.57% and China Life Insurance 2628, +3.97% gained, while property stocks such as Country Garden 2007, -2.53% fell. SK Hynix 000660, +1.08% advanced in South Korea, and Foxconn 2354, +1.58% gained in Taiwan. In Australia, Wesfarmers WES, +1.23% and Fortescue Metals FMG, +3.46% rose.
China’s onshore yuan last traded at 7.0909, its weakest level since 2008. The People’s Bank of China may be “sending a message” to U.S. trade hawks that it “will let the yuan gradually weaken as a policy weapon to neutralize the effect of increased tariffs,” Stephen Innes, managing partner of Valour Markets, said in a note.
“While the markets are currently sitting in a state of currency-war detente, with the PBoC possibly putting one of their trade wars cards on the table, it’s not the cheeriest of signals for risk assets in my views,” he said.
https://www.marketwatch.com/story/asian-markets-up-slightly-ahead-of-feds-jackson-hole-conference-2019-08-22
China says it hopes U.S. stops wrong tariff action, vows to retaliate
August 22, 2019
/ 8:21 AM
BEIJING (Reuters) - China hopes the United States will stop its wrong
tariff action, the commerce ministry said on Thursday, adding that any new
tariffs would lead to escalation, despite delays in implementing the levies.
China will have to retaliate if the U.S. persists in its current course,
ministry spokesman Gao Feng told a news briefing.
EU hopes to ease trade tension with U.S. at G7 summit, official says
August 22, 2019 /
5:52 PM
BRUSSELS (Reuters)
- The European Union hopes to ease trade tensions with U.S. President Donald
Trump when the leaders of the world’s seven major advanced economies meet in
France over the weekend, a senior EU official said on Thursday.
Transatlantic rifts are set to feature prominently when Trump arrives at
the G7 summit in France to discuss differences over trade, Iran and climate
change.
The EU said last month it would retaliate with extra duties on 35
billion euros’ worth of U.S. goods if Washington imposes punitive tariffs on EU
cars.
The Sino-U.S. trade war has also spurred fears of a broader global
economic slump.
“We see trade tensions as the single most important risk factor to the
growth of the global economy,” the senior EU official said. The bloc would be
seeking to defuse them and to concentrate on a “positive” EU-U.S. trade agenda.
Since the EU’s chief executive, Jean-Claude Juncker traveled to Washington for trade talks with Trump a year ago, the bloc’s imports of U.S. liquefied natural gas have tripled, while those of soybeans have doubled, according to the official.
“We can continue on that pathway where we also have an opportunity for both the U.S. and the EU to reach a deal on the elimination of industrial tariffs,” the official said. If such an agreement is reached, the EU estimates that each side will generate an additional 26 billion dollars or euros in exports.
The EU would also prefer to resolve a dispute between aircraft manufacturers Boeing(BA.N) and Airbus (AIR.PA) without resorting to tariffs, the official said.
Separately, a Trump administration official told Reuters that Washington
could agree a trade declaration in the French resort town of Biarritz with new
British prime minister Boris Johnson, who will also be there and is making
overtures to the U.S. president as Brexit looms.
“It wouldn’t be an agreement on any trade issues. But it would be a
statement about how to proceed, what the roadmap might be, what they were
looking for from the trade negotiators and economic ministers,” the senior
White House official said.
More
In other news, the Japan v South Korea “war” heats up. Hong Kong readies for more
protests. Will Beijing finally intervene? The Canada v China spat heats up. Our world is
fast becoming a nastier place.
South Korea decision to terminate GSOMIA rocks Seoul, Tokyo
Aug. 22, 2019 /
10:20 AM
Aug. 22 (UPI) -- The South Korean government's decision to terminate a
military intelligence-sharing agreement with Japan is being met with mixed
reactions in Seoul.
In Tokyo, local television suspended regular programming to bring the
breaking news of the South Korean decision.
In its statement made public Thursday afternoon, South Korea's
presidential Blue House said maintaining the agreement, known as Japan-Korea
GSOMIA, is not in the national interest.
"The Government of the Republic of Korea has decided to terminate
the agreement between the government of the Republic of Korea and the
Government of Japan on the Protection of Classified Military Information
[GSOMIA], and in accordance with its provisions, will notify the government of
Japan through diplomatic channels before the extension deadline," the Blue
House said Thursday.
South Korea said in the statement Japan's decision to remove Korea from
its "white list" of preferred trading partners and initiate trade
restrictions were reasons for the decision to suspend cooperation on security.
"The rationale was that a national security problem had arisen due
to a breach of trust, yet no concrete evidence to support those allegations was
presented," by Japan, Seoul said.
"Under these circumstances, the Government of the Republic of Korea
decided that maintaining this Agreement, which was signed to facilitate the
exchange of sensitive military information, does not serve our national
interest."
---- The news of the cancellation may have taken Japan by surprise, according to South Korean television network MBC.
Local television channels in Japan suspended regular programming to break the news of the agreement's termination, the report said.
Intelligence South Korea shared with Japan likely included screening and video information collected by reconnaissance aircraft, and information obtained by intercepting wireless communication originating from North Korean military facilities.
Hong Kong braces for fresh protests, Canada stops staff travel to mainland China
August 23, 2019
/ 1:49 AM
HONG KONG (Reuters) - Hong Kong is bracing for more anti-government
demonstrations and a “stress test” of its international airport this weekend,
as protests in the Asian financial hub show no signs of abating and diplomatic
tensions between China and some Western nations rise.
The Canadian Consulate in Hong Kong said on Friday it has suspended
travel to mainland China for local staff, just days after an employee of the
city’s British Consulate was confirmed to have been detained in China.
China’s foreign ministry confirmed on Wednesday that Simon Cheng, an
employee of the British mission, had been detained in the border city of
Shenzhen neighbouring Hong Kong.
Beijing has accused Britain and other Western countries of meddling in
its affairs in Hong Kong.
Canada’s latest travel advisory on Thursday warned that increased
screening of travellers’ digital devices had been reported at border crossings
between mainland China and Hong Kong.
Multiple protests are planned for Hong Kong on Friday, including a march
by accountants to government headquarters and a “Baltic Chain” event where
protesters will join hands across different districts in the Chinese territory.
More
China blames Canada for difficulties in relationship, demands Huawei executive be freed
August 22, 2019
/ 3:16 PM
OTTAWA (Reuters) - China’s embassy in Canada said on Thursday that
bilateral ties were suffering “gross difficulties,” and demanded Ottawa free
Huawei Technologies Co Ltd Chief Financial Officer Meng Wanzhou.
Relations have been icy since Meng was detained in Vancouver last
December on a U.S. warrant. China has since charged two Canadians with spying
and halted imports of canola seed and meat products from Canada.
Canadian Prime Minister Justin Trudeau on Wednesday said his government
had no intention of backing down in the dispute and would defend Canada’s
interests.
In a response to Trudeau’s speech, the embassy told Reuters that China
would also always defend its interests.
“China adheres to the principle of equality between all countries, no
matter big or small. ... China-Canada relations now suffer gross difficulties
and the Canadian side knows very well the root cause,” the embassy said in an
email.
“Canada should release Ms. Meng Wanzhou immediately and ensure her safe
return to China, and bring bilateral relations back onto the right track,” the
embassy said.
Trudeau and Canadian Foreign Minister Chrystia Freeland met U.S.
Secretary of State Mike Pompeo in Ottawa for talks on Thursday.
Pompeo assured Trudeau that American officials were working to free the
two Canadian men.
More
There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.
John Kenneth Galbraith
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today, coffee. Not the usual suspects but coffee production. How many
readers have noticed a big coffee price decline where they purchase coffee? Not
many, I suspect.
How Brazil and Vietnam are tightening their grip on the world's coffee
August 22, 2019 /
4:12 AM
SAO
JOAO DA BOA VISTA, Brazil (Reuters) - A towering machine rumbles through the
fields of Julio Rinco’s farm in the Brazilian state of Sao Paulo, engulfing
whole coffee trees and shaking free beans that are collected by conveyor belts
in its depths.
This automatic harvester is one of several innovations that have cut
Rinco’s production costs to a level that few who use traditional,
labour-intensive methods can match.
With increasing use of mechanization and other new technologies, the
world’s top two coffee producers, Brazil and Vietnam, are achieving
productivity growth that outstrips rivals in places such as Colombia, Central
America and Africa.
They are set to tighten their grip.
A plunge in global coffee prices in recent months, to their lowest levels
in 13 years, has begun to trigger a massive shake-out in the market in which
only the most efficient producers will thrive, according to coffee traders and
analysts.
Rival producers elsewhere in the world are increasingly likely to be
driven to the margins, unable to make money from a crop they have grown for
generations. Some are already turning to alternative crops while others are
abandoning their farms completely.
Such shifts are almost irreversible for perennial crops like coffee, as
the decision to abandon or cut down trees can hit production for several years.
“Brazil and Vietnam have had consistent increases in productivity, other
countries have not,” said Jeffrey Sachs, director of the Center for Sustainable
Development at Columbia University, citing advances in mechanization, selective
crop breeding techniques and irrigation technology.
In
Colombia and Central America, coffee is typically grown on hillsides where
mechanization is more difficult, and hand-picking cherries has kept production
costs relatively high. The African sector, meanwhile, is dominated by
small-scale farmers often unable to raise the capital needed for new
techniques.
Rinco bought his harvesting machine for around 600,000 reais (122,891.16
pounds) and is paying the agricultural supplies company with coffee, delivering
400 bags a year over four years. This kind of bartering is common in Brazilian
farming.
One such machine in Brazil replaces dozens of people in the field. Even
with financing and fuel bills, farmers and machine manufacturers say there is a
reduction of 40% to 60% on harvesting costs.
“Beyond the lower costs, it made my life less complicated,” said Rinco,
relieved at no longer having the gruelling task of hiring suitable pickers
every year for the harvest at his farm in the Sao Joao da Boa Vista area.
“People don’t want to pick coffee anymore, they go to town to find
something else to do.”
Brazil
and Vietnam now produce more than half the world’s coffee, up from less than a
third 20 years ago, and the proportion is rising, U.S. Department of
Agriculture estimates show.
More
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?
Ultra-thin layers of rust generate electricity from flowing water
Date:
July 30, 2019
Source:
California Institute of Technology
Summary:
Researchers have shown that iron oxide layers can convert kinetic energy of
saltwater into electrical power.
There are many ways to generate electricity -- batteries, solar panels,
wind turbines, and hydroelectric dams, to name a few examples. .... And now
there's rust.
New research conducted by scientists at Caltech and Northwestern
University shows that thin films of rust -- iron oxide -- can generate
electricity when saltwater flows over them. These films represent an entirely
new way of generating electricity and could be used to develop new forms of
sustainable power production.
Interactions between metal compounds and saltwater often generate
electricity, but this is usually the result of a chemical reaction in which one
or more compounds are converted to new compounds. Reactions like these are what
is at work inside batteries.
In contrast, the phenomenon discovered by Tom Miller, Caltech professor
of chemistry, and Franz Geiger, Dow Professor of Chemistry at Northwestern,
does not involve chemical reactions, but rather converts the kinetic energy of
flowing saltwater into electricity.
The phenomenon, the electrokinetic effect, has been observed before in
thin films of graphene -- sheets of carbon atoms arranged in a hexagonal
lattice -- and it is remarkably efficient. The effect is around 30 percent
efficient at converting kinetic energy into electricity. For reference, the
best solar panels are only about 20 percent efficient.
"A similar effect has been seen in some other materials. You can
take a drop of saltwater and drag it across graphene and see some electricity
generated," Miller says.
However, it is difficult to fabricate graphene films and scale them up
to usable sizes. The iron oxide films discovered by Miller and Geiger are
relatively easy to produce and scalable to larger sizes, Miller says.
More
Another weekend and a
bank holiday weekend here in England, Wales and Northern Ireland. Just about
the end of summer, what lies ahead in the autumn? Well Brexit for one thing,
and the start of the next global recession? Hopefully not, but time to plan
ahead, just in case. Have a great weekend everyone.
If
economists could manage to get themselves thought of as humble, competent
people on a level with dentists, that would be splendid.
John
Maynard Keynes
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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