Baltic Dry Index. 2213
+45 Brent
Crude 59.94 Spot Gold $1,536
Never ending Brexit
now October 31st, maybe. 64
days away.
Nuclear Trump
China Tariffs Now In Effect.
USA v EU trade war
postponed to November, maybe.
“I did
not attend his funeral, but I sent a nice letter saying I approved of it.”
With the month-end
fast approaching it’s a highly nervous time for global stock markets. Commodities
led by “Dr. Copper and Tin are signalling that a manufacturing recession is
already underway. The US yield curve is signalling
recession ahead. Gold is signalling that the central banksters will respond
with yet more negative interest rate insanity.
Nomura
is suggesting that the next Lehman could hit this week, if “panic-selling by
fundamentals-oriented investors and systematic selling by trend-following
technical investors,” takes hold ahead of America’s Labor Day long weekend holiday.
I think that improbable, though I do think all the trade and currency wars will
have us in a global recession by year end.
Below, a dismal end to
the month of August 2019 shapes up. It’s getting harder and harder to see
President Trump and the Fed manipulating US stocks higher through to November
2020.
Asian stocks post modest gains on Wall Street futures, oil
August 28, 2019 /
2:07 AM
TOKYO (Reuters) -
Asian shares eked out cautious gains on Wednesday, as higher Wall Street
futures provided some relief after an overnight U.S. selloff, though deeper
worries about the global economy and trade have kept a lid on sentiment.
Oil prices rose in Asia for a second day of gains after an industry report showed U.S. stockpiles fell more than expected.
Gold prices fell in a tentative sign of easing risk aversion, but a deep inversion in the U.S. Treasury yield curve served as a reminder that some investors are still concerned about economic growth.
A trade dispute between the United States and China is now in its second year and is placing increasing strain on the global economy, forcing policy makers to respond with interest rate cuts and stimulus measures to bolster growth.
---- Spot gold XAU= fell 0.5% to $1,538.00 per ounce, pulling back from a six-year high. [GOL/]
South Korea stocks .KS11 rose 0.5%, on course for their biggest daily increase in a week as investors hunted for bargains after shares were sold due to worries about weighting changes in the MSCI index.
China unveiled measures late on Tuesday to help boost consumption, including the possible removal of restrictions on auto purchases, as growth in the world’s second-biggest economy falters
Chinese shares .CSI300 initially opened higher on Wednesday but then reversed course to trade 0.56% lower, showing there are still some concerns about economic growth.
Shares in Hong Kong .HSI swung between gains and losses as increasingly violent protests against China's "one country, two system" rule of the former British colony hurt sentiment.
More
A ‘Lehman-like’ market disaster could happen this week, analyst warns
By
Shawn
Langlois Published: Aug 27, 2019
1:25 p.m. ET
Nomura
analyst Masanari Takada earlier this month warned of a
“Lehman-like” plunge in the stock market. On Monday, he gave some urgency
to that warning.
Bearish sentiment currently correlates well with sentiment before the collapse of investment bank Lehman Brothers in 2008, Takada argues. So investors should prepare for carnage in the stock market due to “panic-selling by fundamentals-oriented investors and systematic selling by trend-following technical investors.”
Takada told investors in a Monday note on that stock market sentiment hasn’t improved from when he first issued his bearish macro take, which CNBC cites as the most pessimistic on Wall Street.
“The correlation between sentiment then and now remains quite high,” Takada said, referring to the Lehman collapse. “Even the passing risk-on phase after the initial shock of the yield curve inversion (this month)... and the risk-off mood that struck on 23 August neatly track the pattern recorded in 2008.”
Also of note, the week before the U.S. Labor Day holiday weekend tends
to have low trading volume, which can lead to wider swings in the market.
“The continued liquidation of long positions in equities by
trend-chasing investors could convince one global macro hedge fund after
another that now is the time to start paring longs,” Takada wrote.
More
2-year/10-year U.S. Treasury yield curve inversion deepens, flashing ‘red’
By Sunny
Oh Published: Aug 27, 2019 3:56 p.m.
ET
A widely-watched gauge of the Treasury yield curve inverted
further on Tuesday as the 10-year note yield plunged to its lowest level since
July 2016. Bond market participants said they were increasingly worried about the economic outlook in the face of an escalating U.S.-China trade war.
The 10-year Treasury note yield TMUBMUSD10Y, +0.96% slipped 5.2 basis points to 1.493%, its lowest since July 2016. The benchmark maturity is around 17 basis points away from its all-time low of 1.32%.
The 2-year note rate TMUBMUSD02Y, -0.53% was down 2.5 basis points to 1.533%, while the 30-year bond yield TMUBMUSD30Y, +0.17% slumped 6.6 basis points to 1.975%, an all-time low.
The spread between the 2-year note and the 10-year note stood at negative 4 basis points, Tradeweb data show.
The yield curve’s slope is usually positive as investors demand more compensation to own long-term debt against inflationary pressures or monetary policy uncertainty. An inversion of the yield curve, or a negative yield spread, thus points to growing worries about the health of the economy and is seen as a usually reliable indicator of a coming recession.
On the international trade front, President Donald Trump said on Monday that Beijing had called U.S. trade negotiators in a plea to restart talks, but Chinese foreign ministry spokesperson Geng Shuang said he was not aware of high-level phone calls made to U.S. officials. Higher import tariffs on both U.S. and Chinese goods are due to go into effect from September 1 with some delayed until later this year.
Trump’s about-turn Monday from his harsh trade rhetoric against China last week helped soothe investor sentiment this week, buoying risk assets and pulling bond yields higher briefly.
---- In economic data Tuesday, the U.S. Case-Shiller home price index showed home prices rising nationally at 2.1% in June, down from a 2.4% gain the previous month, while consumer confidence remained elevated.
More evidence of a global economic slowdown was also seen in German data showing its economy shrank in the second quarter as weaker exports dragged on growth.
See: Why the global economy may be just one more round of tariffs away from recession
“This yield curve inversion is ‘flashing red’ and would be really surprised if we do not get a recession in 12 months’ time,” Tom di Galoma, managing director of Treasurys trading at Seaport Global Securities, said in emailed comments.
More
https://www.marketwatch.com/story/treasury-yields-retreat-ahead-of-key-debt-auction-2019-08-27?mod=mw_theo_homepage&mod=mw_theo_homepage&mod=mw_theo_homepage&mod=mw_theo_homepage&mod=mw_theo_homepage
China picks up baton of world growth driver from US
By
Hu Weijia Source:Global Times Published: 2019/8/26 22:06:22
The
Chinese edition of the Nikkei Asian Review on Monday published an article
highlighting what it calls the first global economic recession in history that
originated from China. This represents the popular view that a slowdown in the
Chinese economy is a big threat to the world economy.
This is just a new variation of the "China threat" theory, which has long been used by some Western scholars to contain China.
China's economic slowdown is a fact, but the nation is still the largest market for many well-known companies such as US automaker General Motors. The rise of "China threat" arguments around the world also can be taken as evidence that the Chinese market is now an important factor for transnational corporations and one that can determine their destiny.
The Chinese economy is changing faster than expected amid the trade war with the US.
The era of cheap labor in China is over, so the nation is striving to transform itself from being the world's factory to an advanced industrialized nation. The trade war has accelerated the process as US tariffs push some labor-intensive manufacturers to relocate production to Southeast Asia.
It is normal to see a reduction in China's imports of some raw materials. Australia, a major producer and exporter of bulk commodities such as iron ore, is likely to be among the first countries to feel the pressure, but this is just a normal part of the adjustment of the global industrial chain.
China is undergoing a transition as domestic consumption surpasses the export-oriented sector to become the chief driving force of the economy. Instead of worrying about a slowdown in the exports of certain raw materials to China, foreign companies need to work harder to win China's middle-class consumers.
Sadly, some well-known Western companies are so arrogant that they have a limited understanding of the Chinese market and consumers, as they move slowly in terms of localization. Some companies even have no understanding of Chinese territory and list China's Taiwan as a country on their websites.
Vice Premier Liu He, who is also the top Chinese trade negotiator with the US, said on Monday that China has vibrant micro fundamentals and that the nation's economic growth is shifting gears. Great efforts have been made by China to adjust its economy amid global uncertainty.
The US has lost the ability to lead global economic growth. If Western companies want to seize opportunities in China, they must follow China's development and adjust.
This is just a new variation of the "China threat" theory, which has long been used by some Western scholars to contain China.
China's economic slowdown is a fact, but the nation is still the largest market for many well-known companies such as US automaker General Motors. The rise of "China threat" arguments around the world also can be taken as evidence that the Chinese market is now an important factor for transnational corporations and one that can determine their destiny.
The Chinese economy is changing faster than expected amid the trade war with the US.
The era of cheap labor in China is over, so the nation is striving to transform itself from being the world's factory to an advanced industrialized nation. The trade war has accelerated the process as US tariffs push some labor-intensive manufacturers to relocate production to Southeast Asia.
It is normal to see a reduction in China's imports of some raw materials. Australia, a major producer and exporter of bulk commodities such as iron ore, is likely to be among the first countries to feel the pressure, but this is just a normal part of the adjustment of the global industrial chain.
China is undergoing a transition as domestic consumption surpasses the export-oriented sector to become the chief driving force of the economy. Instead of worrying about a slowdown in the exports of certain raw materials to China, foreign companies need to work harder to win China's middle-class consumers.
Sadly, some well-known Western companies are so arrogant that they have a limited understanding of the Chinese market and consumers, as they move slowly in terms of localization. Some companies even have no understanding of Chinese territory and list China's Taiwan as a country on their websites.
Vice Premier Liu He, who is also the top Chinese trade negotiator with the US, said on Monday that China has vibrant micro fundamentals and that the nation's economic growth is shifting gears. Great efforts have been made by China to adjust its economy amid global uncertainty.
The US has lost the ability to lead global economic growth. If Western companies want to seize opportunities in China, they must follow China's development and adjust.
Japan’s downgrade of South Korea’s trade status takes effect
By Associated Press
Published: Aug 27, 2019 10:22 p.m. ET
TOKYO — Japan’s downgrading of South Korea’s trade status has taken
effect, a decision that already set off reaction and hurt bilateral relations.
As of 12:01 a.m. Wednesday, Japanese manufacturers must apply for
approval for each technology-related contract for South Korean exports, such as
fluorinated polyimides used for displays. South Korea’s previous status as a
preferential trade partner meant simpler checks on exports.
Since Japan announced the decision, South Korea decided to similarly
downgrade Tokyo’s trade status, which will take effect next month. Seoul has
also canceled a deal to share military intelligence with Japan.
South Korea has accused Japan of weaponizing trade because of a separate
dispute linked to Japan’s colonial rule of the Korean Peninsula from 1910 to
1945.
Japan denies retaliating and says wartime compensation issues were
already settled.
For every complex problem there is an
answer that is clear, simple, and wrong.
H. L. Mencken.
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
No crooks today, they’ll be back in spades tomorrow. Today, how to move
a capital city that’s sinking, gridlocked and overcrowded. I don’t know either,
but we’re all about to find out as Indonesia is going to try to do it over the
next 10 years.
Indonesia to move capital to Borneo from overcrowded and sinking Jakarta
By Associated Press Published: Aug 26, 2019 11:24 p.m. ET
AKARTA, Indonesia — Indonesia’s president says the country’s capital
will move from overcrowded, sinking and polluted Jakarta to a site in sparsely
populated East Kalimantan province on Borneo island, known for rainforests and
orangutans.
President Joko Widodo said Monday intense studies over the past three
years had resulted in the choice of the location on the eastern side of Borneo
island.
The new capital city, which has not yet been named, will be in the
middle of the vast archipelago nation and already has relatively complete
infrastructure because it is near the cities of Balikpapan and Samarinda,
Widodo said.
He said the burden has been become too heavy on Jakarta on Java island
as the center of government, finance, business, trade and services as well as
the location of the country’s largest airport and seaport.
Widodo said the decision was made not to move the capital elsewhere on
Java because the country’s wealth and people are highly concentrated there and
should be spread out.
Currently 54% of the country’s nearly 270 million people live on Java,
the country’s most densely populated area.
“We couldn’t continue to allow the burden on Jakarta and Java island to
increase in terms of population density,” Widodo said at a news conference in
the presidential palace. “Economic disparities between Java and elsewhere would
also increase.”
In an interview with The Associated Press last month, Widodo said he
wants to separate the center of government from the country’s business and
economic center in Jakarta.
Jakarta is an archetypical Asian mega-city with 10 million people, or 30
million including those in its greater metropolitan area. It is prone to
earthquakes and flooding and is rapidly sinking due to uncontrolled extraction
of ground water. The ground water and rivers are highly contaminated.
Congestion is estimated to cost the economy $6.5 billion a year.
Mineral-rich East Kalimantan was once almost completely covered by
rainforests, but illegal logging has removed many of its original growth. It is
home to only 3.5 million people and is surrounded by Kutai National Park, known
for orangutans and other primates and mammals.
Widodo said the relocation of the capital to a 180,000-hectare
(444,780-acre) site will take up a decade and cost as much as 466 trillion
rupiah ($32.5 billion), of which 19% will come from the state budget and the
rest will be funded by cooperation between the government and business entities
and by direct investment by state-run companies and the private sector.
He said the studies determined that the best site is between two
districts, North Penajam Paser and Kutai Kertanegara, an area that has minimal
risk of disasters such as floods, earthquakes, tsunamis, forest fires, volcanic
eruptions or landslides in the seismically active nation.
More
Democracy is the theory that the common
people know what they want, and deserve to get it good and hard.
H. L. Mencken.
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?
Mosquito incognito: Could graphene-lined clothing help prevent mosquito bites?
Date:
August 26, 2019
Source:
Brown University
Summary:
A new study shows that graphene sheets can block the signals mosquitoes use to
identify a blood meal, potentially enabling a new chemical-free approach to
mosquito bite prevention.
The nanomaterial graphene has received significant attention for its
potential uses in everything from solar cells to tennis rackets. But a new
study by Brown University researchers finds a surprising new use for the
material: preventing mosquito bites.
In a paper published in Proceedings of the National Academy of
Sciences, researchers showed that multilayer graphene can provide a
two-fold defense against mosquito bites. The ultra-thin yet strong material
acts as a barrier that mosquitoes are unable to bite through. At the same time,
experiments showed that graphene also blocks chemical signals mosquitoes use to
sense that a blood meal is near, blunting their urge to bite in the first
place. The findings suggest that clothing with a graphene lining could be an
effective mosquito barrier, the researchers say.
"Mosquitoes are important vectors for disease all over the world,
and there's a lot of interest in non-chemical mosquito bite protection,"
said Robert Hurt, a professor in Brown's School of Engineering and senior
author of the paper. "We had been working on fabrics that incorporate
graphene as a barrier against toxic chemicals, and we started thinking about
what else the approach might be good for. We thought maybe graphene could
provide mosquito bite protection as well."
To find out if it would work, the researchers recruited some brave
participants willing to get a few mosquito bites in the name of science. The
participants placed their arms in a mosquito-filled enclosure so that only a
small patch of their skin was available to the mosquitoes for biting. The
mosquitoes were bred in the lab so they could be confirmed to be disease-free.
The researchers compared the number of bites participants received on
their bare skin, on skin covered in cheesecloth and on skin covered by a
graphene oxide (GO) films sheathed in cheesecloth. GO is a graphene derivative
that can be made into films large enough for macro-scale applications.
It was readily apparent that graphene was a bite deterrent, the
researchers found. When skin was covered by dry GO films, participants didn't
get a single bite, while bare and cheesecloth-covered skin was readily feasted
upon. What was surprising, the researchers said, was that the mosquitoes
completely changed their behavior in the presence of the graphene-covered arm.
"With the graphene, the mosquitoes weren't even landing on the skin
patch -- they just didn't seem to care," said Cintia Castilho, a Ph.D.
student at Brown and the study's lead author. "We had assumed that
graphene would be a physical barrier to biting, through puncture resistance,
but when we saw these experiments we started to think that it was also a
chemical barrier that prevents mosquitoes from sensing that someone is
there."
To confirm the chemical barrier idea, the researchers dabbed some human
sweat onto the outside of a graphene barrier. With the chemical ques on the
other side of the graphene, the mosquitoes flocked to the patch in much the
same way they flocked to bare skin.
More
But does it work better than
Deet? Cheaper?
“Some cause happiness wherever they go;
others whenever they go.”
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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