Baltic Dry Index. 1788
-24 Brent
Crude 61.17
Never ending Brexit
now October 31st, maybe. 87
days away.
Nuclear Trump
China Tariffs Now In Effect.
USA v EU trade war
postponed to November, maybe.
“Trade
protection accumulates upon a single point the good which it effects, while the
evil inflicted is infused throughout the mass. The one strikes the eye at a
first glance, while the other becomes perceptible only to close investigation.”
The big news this
morning and now likely all summer, is that “easy to win” US trade war against
China. This morning China appears to have given up on an early negotiated end,
and appears to be firing back with a new down leg in the competitive currency
wars. President Trump will be furious.
With another USA crop
harvest getting underway, China seems to be targeting that too, by holding back
on US agriculture purchases. A long economic war of attrition now seems to be
developing. Nothing good for the global economy lies down this road of reduced
trade. The next recession looms.
Asian markets fall amid trade tensions, Hong Kong strife
By MarketWatch
and Associated
Press Published: Aug 4, 2019 11:57
p.m. ET
Asian markets sank in early trading Monday, as worsening
trade tensions between the U.S. and China took hold and fresh protests ground
Hong Kong to a halt.The Wall Street Journal reported Sunday that President Donald Trump overruled his top economic advisers by slapping new tariffs against Chinese goods last week, apparently in response to Chinas inability to commit to increasing purchases of U.S. agricultural products. The Journal reported that last week’s trade talks in Shanghai, the first in months, had been brief and unproductive.
Also Sunday, China’s yuan CNYUSD, -0.0261% weakened below the key seven level with the U.S. dollar, hitting a new all-time low. That could increase tensions with the U.S., which contends that a weak yuan makes China’s exports too cheap, hurting competition.
More
China lets yuan slump past 7 per dollar for first time in over decade as trade war escalates
August 5, 2019 /
3:50 AM
SHANGHAI (Reuters)
- China on Monday let the yuan tumble beyond the key 7-per-dollar level for the
first time in more than a decade, in a sign Beijing might be willing to
tolerate further currency weakness in the face of an escalating trade row with
the United States.
The sharp 1.4% drop in the yuan came after the People's Bank of China (PBOC) set the daily mid-point of the currency's trading band CNY=PBOC at 6.9225 per dollar, its weakest level since December 2018.
“Today’s fixing was the last line in the sand,” said Ken Cheung, senior Asian FX strategist at Mizuho Bank in Hong Kong.
“The PBOC has fully given the green light to yuan depreciation”
The shakeout in the yuan comes days after U.S. President Donald Trump stunned financial markets by vowing to impose 10% tariffs on the remaining $300 billion of Chinese imports from Sept. 1, abruptly breaking a brief month-long ceasefire in the bruising trade war.
---- With the escalating trade war giving Beijing fewer reasons to maintain yuan stability, analysts said they expect the currency to continue to weaken.
“In the short-term, the yuan’s strength would be largely determined by
the domestic economy. If third-quarter economic growth stabilizes, the yuan
could stabilize around 7.2 or 7.3 level,” Zhang Yi, chief economist at Zhonghai
Shengrong Capital Management in Beijing.
Capital Economics senior China economist Julian Evans-Pritchard
said the PBOC had probably been holding back against allowing a weaker yuan to
avoid derailing trade negotiations with the United States.
“The fact that they have now stopped defending 7.00 against the dollar
suggests that they have all but abandoned hopes for a trade deal with the
U.S.,” he said.
More
China Hits Back at Trump With Weaker Yuan, Halt on Crop Imports
Malcolm Scott, Kevin Hamlin and Tian ChenIn a stark escalation of the trade war that has roiled financial markets and weighed on economic growth worldwide, Beijing allowed the yuan to tumble to its weakest level in a decade against the dollar and asked state-owned companies to suspend imports of U.S. agricultural products.
The moves emerged within days of Trump’s threat to impose additional tariffs on China and struck at the heart of two of the U.S. president’s fiercest criticisms -- that Beijing manages its currency unfairly to help exporters and has failed to keep promises to boost purchases of U.S. crops after a trade truce in June. Investors responded by dumping Asian stocks and currencies in favor of haven assets including the Japanese yen, U.S. Treasuries and gold.
"It’s among the worst-case scenarios," said Michael Every, head of Asia financial markets research at Rabobank in Hong Kong. "First markets sell off, then Trump wakes up and this all gets far, far worse."
Trump last week proposed adding 10% tariffs on another $300 billion in Chinese imports from Sept. 1, ramping up the trade war between the world’s largest economies shortly after the two sides restarted talks. Bureaucrats in Beijing were stunned by Trump’s announcement, according to Chinese officials who’ve been involved in the trade talks, and Beijing has pledged to respond if the U.S. insists on adding the extra tariffs.
Market Turmoil
The MSCI Asia Pacific Index headed for its biggest decline since March on Monday, with shares slumping more than 2% in markets from Tokyo to Hong Kong and Seoul. Equities in Shanghai saw a more modest drop ami
More
Things are heating up rapidly too, in that other active trade war between Japan and South Korea, and we still have a no-deal Brexit and a USA v EU trade war to come.
Bunker Time! Return of capital beats a rising risky return on capital for the foreseeable future. How long do over priced stocks have?
Japan car sales slump in South Korea as trade row escalates
·
10 minutes ago
Industry data showed Toyota sales plunged 32% from a year
earlier, while Honda's sales slid 34%. South Koreans have been boycotting Japanese goods after Tokyo tightened export curbs on the country in July.
The dispute escalated last week when Japan said it would drop South Korea from its trusted trade partner list.
The move to strike South Korea from the so-called "white list" was met with anger and threats of retaliation.
Tokyo had already tightened controls on key exports to South Korea, sparking fears over risks to the global electronics sector.
On Monday, the South Korean government outlined plans to invest around $6.5bn (£5.3bn) to try to develop products and materials which it currently buys from Japan.
"We want to turn the crisis into an opportunity for the materials, parts and equipment industry," South Korea's industry minister Sung Yun-mo told reporters.
However the moves - which Tokyo has said are based on national security concerns - have prompted South Koreans to boycott Japanese products and services including cars, beer and tourist trips.
"Showroom visits are declining while consumers are holding off on signing contracts," a Honda Korea official told Reuters, after the release of the July sales data from the Korea Automobile Importers & Distributors Association.
How did the trade row begin?
The trade spat has been fuelled by diplomatic tensions over compensation for wartime labour.Last year, South Korean court rulings ordering Japanese firms to pay compensation to Koreans over forced wartime labour inflamed long-running tensions.
The decisions drew condemnation from Japan, which argues the dispute was settled in 1965 when diplomatic ties were normalised between the neighbouring countries.
US-China and Japan-South Korea trade wars undermine world's economy
Everything that can go wrong in global system
is going wrong
August 05, 2019 03:00 JST
Murphy's Law -- which states that anything that can go wrong will go
wrong -- is now the official
economic doctrine of our times. Indeed, just about
everything that could go wrong from Washington to Tokyo is going awry, and at the
worst possible moment for the global financial system.
Last week gave renewed life to this adage. First, Donald Trump upped the
ante on his 18-month trade war with China: atop his 25% taxes on $250 billion
of Chinese goods, the U.S. President plans an additional 10% on $300 billion
worth.
Then it was Japan's turn. Prime Minister Shinzo Abe is formally removing
South Korea from its "white list" of 27 countries with preferred
trade status. In Seoul, President Moon Jae-in's government is devising ways to
retaliate, ensuring an escalating tit-for-tat sure to roil markets near and
far.
The specter of the world's three biggest economies and South Korea
exchanging trade-policy blows is the last thing the global economy needs, and
investors and consumers alike should be afraid in case the geopolitical
wrangling unnerves markets.
This year was billed as one of grand bargains: Trump's much-advertised
trade deal with China would soothe markets; a deal with Japan would increase
global prosperity; the U.K. would bring the Brexit saga to a close.
Instead, Trump is brawling with his Federal Reserve chief at home,
redoubling efforts to tackle Asia's biggest economy and most likely plotting
his next targets. Abe is venturing down his own populism-inspired path too.
Last week's events portend a sharp escalation of the trade clashes observers
hoped world leaders had got out of their systems.
More
The one thing that people overlook is that the sort of
dependence that results from exchange, i.e., from commercial transactions, is a
reciprocal dependence. We cannot be dependent upon a foreigner without
his being dependent upon us. Now, this is what constitutes the very
essence of society. To
sever natural interrelations is not to make oneself independent, but to isolate
oneself completely.
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today, Hong Kong descends towards anarchy. Is this the beginning of the
end for Hong Kong as an international financial centre? How long will Beijing’s
patience last?
Strike grips Hong Kong as leader warns protests challenge China's sovereignty
August 5, 2019 /
1:50 AM
Beijing-backed leader Carrie Lam addressed the media for the first time
in two weeks and warned again that the protests gripping the city are a
challenge to China’s sovereignty and pushing it to the verge of an “extremely
dangerous situation”.
Embattled Lam remained defiant as she rejected calls from protesters for
her to resign and said the government would be resolute in maintaining law and
order.
She warned the protests were putting the Asian financial centre on a
path of no return and had hurt the city’s economy.
“They claim they want a revolution and to restore Hong Kong, these
actions have far exceeded their original political demands,” said a stern-faced
Lam, who was flanked by senior members of her administration.
“These illegal acts that challenge our country’s sovereignty, and
jeopardize ‘one country two systems’, will destroy the stability and prosperity
of Hong Kong,” she said, referring to Hong Kong’s administrative system since
1997 when the former British colony was handed back to China.
In her first news conference since July 22, Lam said the protests are
“pushing our city, the city we all love and many of us helped to build, to the
verge of a very dangerous situation”.
Some protesters accused Lam of again fuelling the crisis by ignoring public sentiment, and they pledged to continue with their movement.
“It is totally a waste of time to hear” her speak, said Jay Leung, 20, a
university student.
“I don’t think the government is doing anything to heal society,” he
added. “They provide no solution to solve the political problem brought on by
themselves. Why doesn’t the government reflect its performance?”
The Chinese-controlled city has been rocked by months of protests that
began against an extradition bill that would have allowed people to be sent to
mainland China for trial and have since evolved into a broader backlash against
the government.
Commuters struggled to get to work in the Monday morning rush hour
before Lam spoke, with many rail and bus services suspended, while some
activists blocked trains from leaving stations, some by sitting between train
doors, in the latest anti-government campaign.
Long lines of traffic could be seen across Hong Kong island leading into
the heart of the business centre and hundreds of people were stranded at the
airport. Roads into the main arteries of Hong Kong were paralysed.
The Airport Express train service was temporarily suspended.
“(The government) are making police the scapegoat and creating a
situation that is becoming unbearable for everyone who lives here. So that’s
one of the reasons we have joined the strike,” said Mark Schmidt, 49, who
closed his business on Monday.
“Losing a bit of money now is not such a problem,(compared) with losing
everything that the freedom of Hong Kong used to stand for,” he added.
More
Under
a system of perfectly free commerce, each country naturally devotes its capital
and labour to such employments as are most beneficial to each. This
pursuit of individual advantage is admirably connected with the universal good
of the whole.
David
Ricardo.
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?
Synthesizing single-crystalline hexagonal graphene quantum dots
Date:
August 2, 2019
Source:
The Korea Advanced Institute of Science and Technology (KAIST)
Summary:
Engineers have designed a novel strategy for synthesizing single-crystalline
graphene quantum dots, which emit stable blue light. The research team
confirmed that a display made of their synthesized graphene quantum dots
successfully emitted blue light with stable electric pressure, reportedly
resolving the long-standing challenges of blue light emission in manufactured
displays.
The study, led by Professor O Ok Park in the Department of Chemical and
Biological Engineering, was featured online in Nano Letters on July 5.
Graphene has gained increased attention as a next-generation material
for its heat and electrical conductivity as well as its transparency. However,
single and multi-layered graphene have characteristics of a conductor so that
it is difficult to apply into semiconductor. Only when downsized to the
nanoscale, semiconductor's distinct feature of bandgap will be exhibited to
emit the light in the graphene. This illuminating featuring of dot is referred
to as a graphene quantum dot.
Conventionally, single-crystalline graphene has been fabricated by
chemical vapor deposition (CVD) on copper or nickel thin films, or by peeling
graphite physically and chemically. However, graphene made via chemical vapor
deposition is mainly used for large-surface transparent electrodes.
Meanwhile,
graphene made by chemical and physical peeling carries uneven size defects.
The research team explained that their graphene quantum dots exhibited a
very stable single-phase reaction when they mixed amine and acetic acid with an
aqueous solution of glucose. Then, they synthesized single-crystalline graphene
quantum dots from the self-assembly of the reaction intermediate. In the course
of fabrication, the team developed a new separation method at a low-temperature
precipitation, which led to successfully creating a homogeneous nucleation of
graphene quantum dots via a single-phase reaction.
Professor Park and his colleagues have developed solution phase
synthesis technology that allows for the creation of the desired crystal size
for single nanocrystals down to 100 nano meters. It is reportedly the first
synthesis of the homogeneous nucleation of graphene through a single-phase
reaction.
Professor Park said, "This solution method will significantly
contribute to the grafting of graphene in various fields. The application of
this new graphene will expand the scope of its applications such as for
flexible displays and varistors."
This research was a joint project with a team from Korea University
under Professor Sang Hyuk Im from the Department of Chemical and Biological
Engineering, and was supported by the National Research Foundation of Korea,
the Nano-Material Technology Development Program from the Electronics and
Telecommunications Research Institute (ETRI), KAIST EEWS, and the BK21+ project
from the Korean government.
“Man is an animal that makes
bargains: no other animal does this - no dog exchanges bones with another.”
The
Wealth of Nation
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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