Baltic Dry Index. 2088
+41 Brent
Crude 59.28 Spot Gold $1,510
Never ending Brexit
now October 31st, maybe. 73
days away.
Nuclear Trump
China Tariffs Now In Effect.
USA v EU trade war
postponed to November, maybe.
People
of the same trade seldom meet together, even for merriment and diversion, but
the conversation ends in a conspiracy against the public, or in some
contrivance to raise prices.
Adam
Smith. The Wealth of Nations, 1776.
Yes it’s almost the
end of summer and most of the Fedsters, and their invited guests, head off to
Jackson Hole Wyoming, to plot how to get President Trump re-elected via a
bullish stock market, how to make negative interest rates work in the “land
between the shinning seas,” and how to pay for Greenland, once anyone can
figure out what Greenland’s worth.
For what it’s worth,
and that’s not very much, Trump, Kudlow and Navarro, all sang from the same
hymn sheet over the weekend promising no recession in 2020, if ever.
Below, another slow,
edgy week for global markets. Anyone know what Greenland’s worth? Suggestions
please to Donald J. Trump,The White House, Washington, District of Crooks.
Asia stocks gain as China rates tweak lifts investor mood
August 19, 2019 /
1:57 AM
TOKYO (Reuters) -
Asian stocks tracked the Wall Street rally on Monday and found an extra
tailwind from a move by China’s central bank to change the way a key interest
rate benchmark is set, seen by analysts as reducing borrowing costs for
companies.
The People’s Bank of China (PBOC) on Saturday unveiled key interest rate reforms to help steer borrowing costs lower for companies and support a slowing economy caught in the grip of a bruising trade war with the United States.
That move helped Chinese stocks lead regional gains on Monday amid a broadly more upbeat investor mood. Hopes major economies will seek to prop up slowing growth with fresh stimulus have helped ease some of the recessionary fears unleashed in markets last week.
“The decline in loan rates bodes well for China’s credit demand and growth outlook in the second half of 2019 to offset the impact of the ongoing trade disputes,” wrote Zhaopeng Xing and Raymond Yeung, economists at ANZ.
“However, the reform is unlikely to have a stimulative effect on China’s property markets with the authorities still insisting on tight regulations to prevent the crowding-out effect from high home prices.”
In China, the Shanghai Composite Index .SSEC rose 1.5%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 1%.
Over recent weeks, recession worries - triggered by an inversion in the U.S. bond yield curve - have led to a shakeout in financial markets. That has driven speculation of more support from policy makers, including from the U.S. Federal Reserve which last month cut rates for the first time since the financial crisis.
More
https://uk.reuters.com/article/us-global-markets/asia-stocks-gain-as-china-rates-tweak-lifts-investor-mood-idUKKCN1V901Q
G7 summit, Jackson Hole, Italian no-confidence vote
Much of this week will be dominated by the run-up to the Group of Seven summit in the French seaside town of Biarritz, where the heads of the leading global economies will gather this coming weekend.
The Fed will also get a fair slice of attention over the next few days. The minutes of its July meeting — when it cut rates for the first time since 2008 — are out on Wednesday.
The next day the central bank hosts its annual economic symposium in Jackson Hole, Wyoming, where chair Jay Powell is among those scheduled to speak.
The minutes from the last European Central Bank meeting are also due on Thursday.
Tensions are likely to remain high in Hong Kong as pro-democracy protests continue in defiance of Beijing.
Italy has a no-confidence vote to look forward to and events are scheduled across eastern Europe to mark the first breaches in the Soviet Iron Curtain 30 years ago as communism began to crumble.
---- It is a quiet week for economic data and on the companies front earnings season is drawing to a close, but the remaining updates from US retailers should offer more insight on consumer spending, while the travel sector faces holiday disruption with strikes at Ryanair.
More
https://www.ft.com/content/838f1dc4-bf47-11e9-b350-db00d509634e
‘I don’t think we’re having a recession,’ Trump says, touting economy
By Associated Press
Published: Aug 18, 2019 8:10 p.m. ET
BERKELEY HEIGHTS, N.J. — President Donald Trump dismissed concerns of
recession on Sunday and offered an optimistic outlook for the economy after
last week’s steep drop in the financial markets.
“I don’t think we’re having a recession,” Trump told reporters as he
returned to Washington from his New Jersey golf club. “We’re doing tremendously
well. Our consumers are rich. I gave a tremendous tax cut and they’re loaded up
with money.”
A strong economy is key to Trump’s re-election prospects. Consumer
confidence has dropped 6.4% since July. The president has spent most of the
week at his golf club in New Jersey with much of his tweeting focused on
talking up the economy.
Aides sought to reinforce that message during a series of appearances on
the Sunday talk shows.
Larry Kudlow, Trump’s top economic adviser, dismissed fears of a looming
recession and predicted the economy will perform well in the second half of
2019. He said that consumers are seeing higher wages and are able to spend and
save more.
“We’re doing pretty darn well in my judgment. Let’s not be afraid of
optimism,” Kudlow said.
Kudlow acknowledged a slowing energy sector, but said low interest rates
will help housing, construction and auto sales.
Morehttps://www.marketwatch.com/story/i-dont-see-a-recession-says-trumps-top-economic-adviser-2019-08-18?mod=mw_latestnews
White House trade adviser says it’s a ‘certainty’ bull market lasts through 2020
By Shawn
Langlois Published: Aug 18, 2019 11:51 p.m. ET
That’s White House trade adviser Peter Navarro expressing
some serious optimism in an interview with ABC
News on Sunday.Why so bullish? It’s all about the stimulus.
“The Fed will be lowering rates. The ECB will be engaging in monetary stimulus. China will be engaging in fiscal stimulus,” he forecast.
Navarro also said “the largest trade deal ever in history” will provide a boost.
“By early October, if Congress rises above partisan politics, we should have passage of the U.S.-Mexico-Canada trade agreement,” Navarro predicted, adding that it will “give us hundreds of thousands of more jobs, more growth points... ”
He then went on to slam the Wall Street Journal after ABC host Martha Raddatz brought up the paper’s using the “Navarro Recession” label.
“Why hasn’t the Wall Street Journal been editorializing over the last 10 years about China’s hacking our computers to steal trade secrets, about stealing our intellectual property, about forcing the technology transfer from our companies, about the currency manipulation that occurred for over a decade?” he said. “The Wall Street Journal never saw an American job it didn’t want to offshore.”
More
https://www.marketwatch.com/story/a-bull-market-through-2020-its-a-certainty-says-white-house-trade-adviser-2019-08-18?mod=mw_latestnews
Japan exports drop for 8th straight month in July
By Megumi
Fujikawa Published: Aug 18, 2019 8:46 p.m. ET
TOKYO-- Japan's exports dropped for an eighth straight
month in July as shipments of chip-making machines and automobile parts
declined, reflecting the slowdown in China and other Asian economies.Japan's exports fell 1.6% last month from a year earlier, data released by the Ministry of Finance showed Monday. The drop was shallower than the 2.3 % forecast in a FactSet poll of economists.
The country logged a 249.6 billion yen ($2.35 billion) trade deficit in July compared with a Y589.6 billion trade surplus in the previous month.
While the pace of export decline was slower in July than in recent months, economists say uncertainty will likely remain high in the near future as the trade conflict between Japan's two biggest trade partners continues.
Japan's exports to China fell 9.3% on year due to weakness in demand for semiconductor-making equipment, electronic components and car parts. Meanwhile, exports to the U.S. rose 8.4% thanks to increases in shipments of Japanese chip-making and construction machines.
https://www.marketwatch.com/story/japan-exports-drop-for-8th-straight-month-in-july-2019-08-18?mod=mw_latestnews
Africa development bank says risks to growth 'increasing by the day'
August 18, 2019 /
11:18 AM
DAR ES SALAAM
(Reuters) - The U.S.-China trade war and uncertainty over Brexit pose risks to
Africa’s economic prospects that are “increasing by the day,” the head of the
African Development Bank (AfDB) told Reuters.
The trade dispute between the world’s two largest economies has roiled
global markets and unnerved investors as it stretches into its second year with
no end in sight.
Britain, meanwhile, appears to be on course to leave the European Union
on Oct. 31 without a transition deal, which economists fear could severely
disrupt trade flows.
Akinwumi Adesina, president of the AfDB, said the bank could review its
economic growth projection for Africa - of 4% in 2019 and 4.1% in 2020 - if
global external shocks accelerate.
“We normally revise this depending on global external shocks that could
slowdown global growth and these issues are increasing by the day,” Adesina
told Reuters late on Saturday on the sidelines of the Southern African
Development Community meeting in Tanzania’s commercial capital Dar es Salaam.
“You have Brexit, you also have the recent challenges between Pakistan
and India that have flared off there, plus you have the trade war between the
United States and China. All these things can combine to slow global growth,
with implications for African countries.”
The bank chief said African nations need to boost trade with each other
and add value to agricultural produce to cushion the impact of external shocks.
“I think the trade war has significantly impacted economic growth
prospects in China and therefore import demand from China has fallen
significantly and so demand for products and raw materials from Africa will
only fall even further,” he said.
“It will also have another effect with regard to China’s own
outward-bound investments on the continent,” he added, saying these could also
affect official development assistance.
More
Finally, French wine
seems to have replaced Germany’s Mercs and Beamers as President Trump’s
impending trade war with Europe. American French wine connoisseurs better stock up for Thanksgiving and
Christmas now.
Trump Mused About 100% French Wine Tariff at Hamptons Fundraiser
By Jennifer Jacobs and Jenny Leonard
August 17, 2019, 10:31 PM GMT+1
·
President has been irked by Macron’s technology
tax plan
·
Comment made to well-heeled donors at
Ross-hosted fundraiser
President Donald Trump suggested he might impose a 100% tariff on French wine to retaliate for President Emmanuel Macron’s tax on multinational technology companies, according to two people with knowledge of his comments made at a recent Long Island fundraiser.
It’s unclear if Trump, at a roundtable portion of an event in the Hamptons on Aug. 9 hosted by billionaire businessman Steven Ross with about a dozen well-heeled donors, was being totally serious.
The U.S. Trade Representative’s office is holding a public hearing on Monday with U.S. industry representatives affected by France’s move. After a comment period ends Aug. 26, trade chief Robert Lighthizer could recommend that tariffs on French products would be a sufficient response to offset the technology tax. The USTR opened its investigation in July.
The White House and the U.S. Trade Representative’s office didn’t immediately respond to requests for comment on Trump’s plans.
Trump on July 26 raised the possibility of “substantial” retaliation against France over the proposed tax. “It might be on wine, it might be on something else,” he told reporters, adding that he may make a move before the Group of Seven leaders’ meeting in Biarritz, France, which starts Aug. 24.
Frequent Critic
The law signed by Macron imposes a 3% tax on the revenue of technology giants such as Facebook Inc. and Amazon.com Inc. Trump is a frequent critic of those companies, but bristled at the idea of a foreign government setting their terms of trade. “We tax our companies, they don’t tax our companies,” Trump said at the time.“I’ve always liked American wines better than French wines, even though I don’t drink wine,” the president said in the Oval Office on July 26. The president is a teetotaler, but one of his family businesses is a vineyard in Charlottesville, Virginia.
More
https://www.bloomberg.com/news/articles/2019-08-17/trump-mused-about-100-french-wine-tariff-at-hamptons-fundraiser?srnd=premium-europe
But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies, much less to render them necessary.
Adam
Smith. The Wealth of Nations, 1776.
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today, some real common sense from A Canadian economist who called the
2007 – 2009 Great Recession. Not that it did his then firm Old Mother Merrill
much good, they didn’t listen to him and old Mother Merrill got hammered into
Bank of America.
David Rosenberg: What's happening to yields matters more than the curve, but the news still isn't good
Everyone should know that you don’t need an inversion to move into recession
August 16, 2019 2:14 PM EDT
I wish folks would stop asking why the market is going down and instead ponder what it was that took the major averages up so sharply from January to July — especially since we know for a fact that earnings and earnings forecasts have been going down all year long. A multiple-led market rally built on a set of assumptions that proved mistaken actually fully deserves to unwind. So when the bulls say that, “Hey, we’re still up 13 per cent for the year,” the bears will respond, “Exactly.” There is still a tremendous amount of air under this thing.People ask me whether this downdraft will end soon and bounce just as we experienced last December. It is so incredible when you think about it. A 19 per cent plunge in last year’s fourth quarter that bottoms out and quickly surges. And then lulls the unsuspecting souls back into the market as the major averages hit new all-time highs. How cruel. But this time — what will the rabbit out of the hat be? There is no more Fed tightening to price out. There is no more government shutdown to end. There is no Chinese stimulus coming, at least not soon. And no chance of a trade deal before the 2020 election despite the ongoing charade of trade talks.
The bulls say this is a repeat of 1998 because the comparison they used to make was 2016 and that no longer holds water. Just as the bulls loved to cling to the view that nobody should worry because the 2-year/10-year yield curve hadn’t inverted yet. Now that it has (briefly), they have shifted their focus to 10-year/30-year and are also saying that yield curves aren’t infallible after all, or are leaning on Janet Yellen who incredibly asserted that it is different this time. Or, of course, all the pundits who say “don’t worry, be happy” because of the classic lags between the curve inversion and the recession and peak of the market cycle. Little mention that segments of the Treasury curve actually began to invert last November.
The message from the long-bond yield is unmistakable that a recession is coming — slipping below two per cent this past week for the first time ever. It isn’t about the yield curve. Japan has had multiple recessions without an inversion and the euro did this cycle as well. It’s a complete ruse. These economists and strategists would be wiser to instead assess the message that these market signals are sending.
As everyone debates the veracity of the yield curve yet again, everyone should know that you don’t need an inversion to move into recession. That said, its 85 per cent track record in predicting recessions and expansions is pretty darn good. And even Janet Yellen and others like her who feel the yield curve is a “less good” barometer today, should know that we heard much the same thing from many pundits in 2000 and 2007. The thing is about the yield curve, and maybe it’s just pure luck, but every recession in the post-Second World War era was preceded by an inversion. Go figure.
At the very least, flat or inverted yield curves impair banking sector profitability and curtail the incentive to extend credit — so right here, through this channel alone, the pace of economic activity slows down. That’s the major point, with or without an actual NBER-defined recession — it’s still going to feel like one!
So guess what? We have another classic savings glut on our hands, of a similar nature that Ben Bernanke was lamenting back in 2006. For those folks that want to know why global interest rates are melting, I can tell you that it is not rocket science. We have a deficiency of investment and a surplus of savings. Interest rates will always be moving down when global savings exceed global investment. And that’s what is happening and the differential between the S-curve and the I-curve is expanding. This gap is creating the conditions for this ongoing decline in yields.
Then we must consider what a recession will do to Donald Trump’s re-election prospects next year and what the landscape would look like with a Democratic sweep, especially seeing how far left the party has turned. I have no doubt that we will see an attempt at fiscal reflation through Modern Monetary Theory, higher top marginal rates of taxation on the upper class, dividends, capital gains and a rollback of the corporate tax relief measures.
Inflation hedges, once again, gold, silver, TIPS and even real estate, will be in vogue. But, such a political swing will be anathema to the equity market, which may yet endure a 1966-1982 secular bear phase. Let me assure you that the majority of the folks running for the top job in the Democratic Party are no fans of Mr. Dow and Mrs. Jones.
By
means of glasses, hotbeds, and hotwalls, very good grapes can be raised in
Scotland, and very good wine too can be made of them at about thirty times the
expense for which at least equally good can be brought from foreign countries.
Would it be a reasonable law to prohibit the importation of all foreign wines,
merely to encourage the making of claret and burgundy in Scotland?
Adam
Smith. The Wealth of Nations, 1776.
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?
Organic dye in zinc oxide interlayer stabilizes and boosts the performance of organic solar cells
Date:
August 16, 2019
Source:
Wiley
Summary:
Organic solar cells are made of cheap and abundant materials, but their
efficiency and stability still lag behind those of silicon-based solar cells. A
team of scientists has found a way to enhance the electric conductivity of
organic solar cells, which increases their performances. Doping the metal oxide
interlayer, which connected the electrode and active layer, with a modified
organic dye boosted both the efficiency and stability, the study revealed.
Organic solar cells are made of cheap and abundant materials, but their
efficiency and stability still lag behind those of silicon-based solar cells. A
Chinese-German team of scientists has found a way to enhance the electric
conductivity of organic solar cells, which increases their performances. Doping
the metal oxide interlayer, which connected the electrode and active layer,
with a modified organic dye boosted both the efficiency and stability, the
study published in the journal Angewandte Chemie revealed.
Organic solar cells convert light into electric current. The heart of
the cells is the active organic layer made of specially designed organic
molecules. Here, electrons and holes, the positive counterparts of the
electrons, are generated by light and travel to the electrodes to form the
electric current. A recurrent problem in organic solar cell design is the
matching of the material types. The electrodes are made of inorganic materials,
but the active layer is organic. To join the two materials, metal oxide
interlayers are introduced in many organic cell types. But in most designs, the
resulting conductivities are not optimal.
Frank Würthner at the University of Würzburg, Germany, and Zengqi Xie at
the South China University of Technology (SCUT), Guangzhou, China, investigated
the idea of making a zinc oxide interlayer slightly more organic and
photoconductive to reduce the contact resistance when irradiated with sunlight.
The scientists prepared an organic dye in such a way that it formed stable
complexes with the zinc ions present in the zinc oxide layer. Under sunlight,
this modified dye called hydroxy-PBI would then inject electrons into the zinc
oxide interlayer, which would increase its conductivity.
The scientists then assembled the organic solar cell, which consisted of
an indium tin oxide glass (ITO) electrode, the zinc oxide layer doped with the
hydroxy-PBI dye, the active layer made of a polymer as the electron donor and
an organic molecule as the acceptor, another metal oxide interlayer, and an
aluminum electrode as the positive electrode. This architecture, which is
called an inverted bulk heterojunction cell, is that of a state-of-the-art
organic solar cell, which achieves a maximum 15 percent power conversion
efficiency.
The interlayer doping was beneficial in several ways. Depending on the
dye -- the scientists checked the performance of several dyes with slightly
different structures -- conversion efficiencies of almost 16 percent were
achieved. And the dye-doped zinc oxide interlayer also appeared to be more
stable than one without the doping. The authors said that it was important that
the PBI dye was modified to its hydroxy-PBI form, which gave rise to tight
complexes with the zinc ions. Only then could an inorganic-organic hybrid
structure evolve to form a good contact with the active materials.
The statesman who should attempt to direct private people in
what manner they ought to employ their capitals, would not only load himself
with a most unnecessary attention, but assume an authority which could safely
be trusted, not only to no single person, but to no council or senate whatever,
and which would nowhere be so dangerous as in the hands of a man who had folly
and presumption enough to fancy himself fit to exercise it.
Adam
Smith. The Wealth of Nations, 1776.
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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