Baltic Dry Index. 1734
-40 Brent
Crude 58.90 Spot Gold $1,483
Never ending Brexit
now October 31st, maybe. 85
days away.
Nuclear Trump
China Tariffs Now In Effect.
USA v EU trade war
postponed to November, maybe.
“‘I
don’t feel very much like Pooh today,’ said Pooh.
‘There, there,’ said Piglet. ‘I’ll bring you tea and honey until you do.'”
‘There, there,’ said Piglet. ‘I’ll bring you tea and honey until you do.'”
Winnie-the-Pooh
For more on what’s
not “quite right,” scroll down to the last part of this section.
Having made their
point on their potential to unleash a full on currency devaluation war, China
stabilised the Yuan slightly, allowing global stock markets and President Trump
a tiny amount of relief. Any more tariff tantrums from President Trump and
China can put in that boot again.
President Trump has
foolishly tied his re-election prospects to the fate of the fickle US stock
market in the midst of a trade war between the world’s number one and number
two national economies. A trade war between the world’s largest debtor and the
world’s largest creditor. It’s a big ask from President Trump for the Fed to
keep the everything bubble alive and growing through November 2020.
But the world is
slowly coming face to face with the prospect of a lunatic far left President if
President Trump loses in 2020. Gold is rocketing partly on the prospect of
another Jimmy Carter presidency but this time on steroids.
While President Trump
is still far from a lame duck President,
President Xi faces no re-election and now has a free hand to rattle the US
stock market at will.
Below, global markets
nervously await the next developments.
Asian markets mixed after China moves to stabilize yuan
By Marketwatch
and Associated
Press Published: Aug 6, 2019 11:18 p.m. ET
Asian markets were mixed in early trading Wednesday, after
China’s central bank moved to ease fears of a full-blown currency war.The People’s Bank of China early Wednesday set the daily reference point for the yuan at 6.9996 per dollar, a bit weaker than expected. The currency typically trades up to 2% higher or lower than that point. Trade tensions escalated Monday when the yuan passed 7 per U.S. dollar, crossing a “line in the sand” that sparked a global stock selloff and spurred the U.S. Treasury Department to label China a currency manipulator.
Stocks on Wall Street recovered Tuesday after suffering their worst day of the year on Monday. Market movements in Asia on Wednesday were significantly more muted than the previous two trading days.
Japan’s Nikkei NIK, -0.41%
fell 0.8%, and Hong Kong’s Hang Seng Index HSI, -0.37%
retreated 0.7%. The Shanghai Composite SHCOMP, -0.01%
was down 0.2 while the smaller-cap Shenzhen Composite 399106, +0.11% gave up modest
early gains and retreated 0.2%. South Korea’s Kospi 180721, -0.09% slipped 0.7%,
while benchmark indexes in Taiwan Y9999, +0.26% , Singapore STI, +0.14%
and Indonesia JAKIDX, +1.41%
were mixed. Australia’s S&P/ASX 200 XJO, +0.70%
gained 0.3%, and New Zealand’s NZX 50 NZ50GR, +1.50%
rose 0.9% after New Zealand’s central bank cut its benchmark interest
rate by a half-percentage point to an all-time low of 1% as it forecast tougher
economic conditions ahead.
More
Fragile calm returns to stock markets as yuan steadies
August 7, 2019 /
2:04 AM
TOKYO (Reuters) -
Asian shares steadied slightly on Wednesday as investors caught their breath
from a searing week-long selloff, with steps taken by Chinese authorities to
contain a sliding yuan helping calm fears of a full-blown Sino-U.S. trade and
currency war.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.05% in early trade after tumbling 8.26% in the previous eight sessions. Japan's Nikkei .N225 bucked the trend to slip 0.26%.
On Wall Street on Tuesday, the S&P 500 .SPX gained 1.30% and MSCI's broad gauge of stocks across the world .MIWD00000PUS rose 0.50%, its first gain in seven sessions.
The rebound came as the People’s Bank of China took steps on Tuesday to stabilise the yuan with a firmer-than-expected fixing and a bond sale to signal that the authorities wished to stem the rout.
Comments from Larry Kudlow, director of the White House National Economic Council, also soothed sentiment. Kudlow said on Tuesday the Trump administration wants to continue trade talks with China and is still planning to host a Chinese delegation for talks in September.
---- Many
investors believe Trump cannot afford prolonged instability in financial
markets since his reputation was staked so closely on economic growth and the
success of the U.S. stock market.
---- Overall, however, market sentiment remained fragile and with no clear end in the trade standoff in sight, some investors expect a rocky session ahead.
Goldman Sachs said it no longer expects a trade deal to be struck before
the November 2020 U.S. presidential election, while Morgan Stanley warned that
more tit-for-tat tariffs could tip the world economy into recession by the
middle of next year.
That rather grim backdrop supported safe-haven assets, with gold hitting
a six-year high of $1,477 per ounce XAU= in early Wednesday trade. It last
stood at $1.474.7.
U.S. bonds have also retained much of their gains made in the past week.
The 10-year Treasuries notes yielded 1.695 percent US10YT=RR, compared to above
2 percent just a week ago, as investors bet on another rate cut by the Federal
Reserve in September.
More
Elsewhere, has Hong
Kong already passed the tipping point for Beijing? If Beijing intervenes how
will President Trump respond? How will stocks respond? How high will gold go?
Hong Kong facing worst crisis since handover - senior China official
August 7, 2019 /
3:58 AM
HONG KONG
(Reuters) - Hong Kong is facing its worst crisis since it returned from British
to Chinese rule in 1997, the head of China’s Hong Kong and Macau Affairs office
said on Wednesday, as more protests were set to rock the Asian financial hub.
The city has faced months of sometimes violent protests that began with
opposition to a now-suspended extradition law and which have evolved into a
direct challenge to the government of embattled leader Carrie Lam.
“Hong Kong’s crisis ... has continued for 60 days, and is getting worse
and worse,” Zhang Xiaoming, one of the most senior Chinese officials overseeing
Hong Kong affairs, said during a meeting in the southern Chinese city of
Shenzhen.
“Violent activities are intensifying and the impact on society is
spreading wider. It can be said that Hong Kong is now facing the most severe
situation since its handover,” he said.
Zhang was holding a forum that included Hong Kong delegates to China’s
parliament, the National People’s Congress and China’s main consultative body,
the CPPCC, to discuss the political crisis in the territory. No opposition
democratic figures or protest representatives attended.
The protests, during which millions of people have taken to the streets,
began in opposition to an extradition law that would have allowed suspects to
be tried in mainland courts controlled by the Communist Party.
The protests, fuelled by many residents’ fears of eroding freedoms under
the tightening Communist Party control, now pose the biggest popular challenge
to Chinese President Xi Jinping since he took power in 2012.
Hong Kong lawyers dressed in black are set to march in silence later on
Wednesday to call on the government to safeguard the independence of the city’s
justice department.
Protesters also plan to surround Hong Kong’s Revenue Tower on Wednesday.
Police fired tear gas to disperse protesters in Sham Shui Po, one of the city’s
poorest districts, late on Tuesday.
More
Finally, after 3
decades of largely shunning gold, UK investors and others, seem to want some
gold insurance again. Given all the
covert currency war competitive devaluations underway, with President Trump
wanting to devalue the fiat dollar, this rush for gold protection could turn
into a global stampede if President Trump gets his way with the dollar.
With massive British
understatement, Ross Norman, CEO of London
bullion dealer Sharps Pixley, dryly said “Generally it’s a feeling that something isn’t quite right.”
Fiat currency devaluation, Trump, Brexit, USA v China, Japan v South
Korea, Iran, and now India v Pakistan over Kashmir. Yes, I suppose something
isn’t quite right. Have another cup of tea and a Sticky Bun!
Brexit and flight to safety propel sterling-priced gold to record high
August 5, 2019 /
5:54 PM
LONDON (Reuters) -
Gold priced in sterling soared to a record high on Monday, spurred by fear of a
disorderly British exit from the European Union and a generalised flight to
safe-haven assets that intensified with rising U.S.-China trade tensions.
Gold priced in the British currency has rocketed 25% since early May to
a peak of 1,209.55 pounds an ounce, beating its previous record of 1,204.63
pounds set in 2011.
Gold’s value has surged broadly this year as concerns over trade wars
and a global economic slowdown rippled through financial markets.
Those fears pushed investors towards assets they think could weather
market shocks and forced central banks to freeze or cut interest rates,
lowering bond yields and making non-yielding gold more attractive.
Prices in benchmark U.S. dollars have rallied 15% since May to 6-year
peaks above $1,450 an ounce and are at record highs in currencies including the
Canadian and Australian dollars and India’s rupee.
In Britain,
10-year bond yields sank to record lows — a fall that could continue if, as
investors expect, the Bank of England cuts rates in the coming months.
The pound has also
fallen its the lowest since early 2017 against the dollar, helping to account
for the faster rise in sterling-priced gold.
The rising possibility of a turbulent British break from the EU, which
has hammered the pound, has also triggered a wave of gold buying that helped
push prices higher everywhere.
“Unless and until we’ve got a degree of clarity on Brexit, the only way
is up,” said INTL FCStone analyst Rhona O’Connell.
The rise to power of Boris Johnson, a leader of the 2016 Brexit campaign
who has become steadily more hardline in his negotiating stance with the EU and
now promises a “do or die” exit by Oct. 31, has been accompanied by massive
gold purchases by institutional UK investors.
Over the first half of the year, UK-listed exchange-traded funds (ETFs)
added 63 tonnes of gold worth nearly $3 billion to their holdings, data from
the World Gold Council (WGC) showed.
That accounted for
almost 60% of total increases in ETF gold holdings worldwide, the data showed.
In the second quarter, UK funds accounted for an even greater proportion of
global purchases at 78%.
---- Ross Norman, CEO of London bullion dealer Sharps Pixley, said his business had seen turnover triple this year, adding that not only Brexit but a wider sense of economic insecurity was motivating buyers.
“Generally it’s a feeling that something isn’t quite right,” he said.
“‘When
you wake up in the morning, Pooh,’ said Piglet at last, ‘What’s the first thing
you say to yourself?’
‘What’s for breakfast?’ said Pooh. ‘What do you say, Piglet?’
‘I say, I wonder what’s going to happen exciting today?’ said Piglet.
Pooh nodded thoughtfully. ‘It’s the same thing,’ he said.”
‘What’s for breakfast?’ said Pooh. ‘What do you say, Piglet?’
‘I say, I wonder what’s going to happen exciting today?’ said Piglet.
Pooh nodded thoughtfully. ‘It’s the same thing,’ he said.”
Winnie-the-Pooh
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today, who’s “winning” the USA v China trade war? Answer: no one yet, if
ever.
Opinion: Who has the upper hand in the U.S.-China trade war?
By Charles
Hankla Published: Aug 5, 2019 3:15
p.m. ET
President Donald Trump recently escalated his trade war
with China, threatening to impose a 10% tariff on the remaining $300
billion of untaxed Chinese imports.If the new tariff goes into effect in September as promised, virtually all Chinese exports to the U.S. would be subject to levies ranging from 10% to 25%. China retaliated by letting the value of its currency fall to the lowest level in more than a decade and halting all crop imports.
Many Americans like me are now wondering: Is there any end in sight?
----Still, from the perspective of a single country, starting a trade war could potentially be justified if the end result ultimately shifts the terms of trade in its favor.
Such a victory can only be achieved when the country has more bargaining leverage than its opponent — in other words when it can impose more pain on its adversary than it experiences itself.
And the longer the trade war continues, the more concessions that country will have to win in order to compensate for the damage caused.
So, after nearly 18 months of escalating disputes between the U.S. and China, where are we? Is either side winning, and can any concessions justify the economic harm that both sides have already experienced?
China’s pain
First and foremost, it has become increasingly clear that the trade war is hurting the economies of both countries. Neither will emerge from this conflict unscathed.Unfortunately, however, the last 18 months have done little to clarify who is winning — that is, who is hurting less and can credibly hold out for longer.
Take China. Before the trade war, it was already facing a number of significant challenges, first among them how to effect a transition from its current reliance on cheap manufacturing to the production of higher value-added goods. China’s political stability is also somewhat precarious, as evidenced by recent events in Hong Kong and Xianjing, as well as Chinese leader Xi Jinping’s authoritarian crackdown.
Moreover, China’s economic growth has slowed to a 27-year low of 6.2%. And perhaps more ominously for the country, there are growing signs that foreign companies from America and elsewhere are looking outside China as they expand their sourcing, production and distribution activities.
Of course, China’s growth rate still makes it among the fastest-expanding economies in the world, so the recent slowdown can hardly be termed a crisis. And the shift away from China, limited as it is, began before the trade war, spurred on by rising prices, intellectual property theft and other issues.
Not necessarily America’s gain
The problem for the U.S. is that Americans are also increasingly feeling the pinch.Perhaps most notably, farmers, many of whom continue to support Trump, are beginning to tire of the sacrifices they are making for his uncompromising positions. With the Chinese government threatening to retaliate if Trump follows through on the new tariffs, their willingness to go along may be even more sorely tested.
To keep agriculture on side, the Trump administration has channeled billions of dollars in subsidies to those hurt by his trade policy. But this approach also has its political costs, with more fiscally conservative backers of the president balking at the price tag.
From a broader perspective, recent studies have undercut Trump’s claim that Chinese companies are bearing the brunt of the tariff payments, showing that the bulk of costs are passed to U.S. companies and consumers. And the stock market DJIA, -2.90% is reacting very negatively to the latest Trump threats.
----But because the tariffs are so associated with Trump’s personality, the Chinese government can afford to wait for a new president. If a Democrat wins in 2020, he or she will likely maintain a harder line on China than we saw before Trump, but will probably repudiate the current president’s penchant for punitive and precipitous tariffs.
In a sense, then, America’s negotiating credibility has become yet another casualty of its polarized politics.
In other words: No end in sight
In the final analysis, then, China may have the most to lose from the ongoing dispute. But the U.S. bargaining position is more politically vulnerable.And the Chinese can credibly claim that buckling under American pressure would be unacceptable to their domestic audience.
More
“Hello, Trump,” Juncker said, “Is that
you?”
“Let’s pretend it isn’t,” said Trump, “And see what happens.”
“Let’s pretend it isn’t,” said Trump, “And see what happens.”
With apologies to Winnie-the-Pooh
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?
If You Want ‘Renewable Energy,’ Get Ready to Dig
Building one wind turbine requires 900 tons of steel, 2,500 tons of concrete and 45 tons of plastic.
By Mark P. Mills Aug. 5, 2019 6:48 pm ET
“Renewable energy” is a misnomer. Wind and solar machines and batteries
are built from nonrenewable materials. And they wear out. Old equipment must be
decommissioned, generating millions of tons of waste. The International
Renewable Energy Agency calculates that solar goals for 2050 consistent with
the Paris Accords will result in old-panel disposal constituting more than
double the tonnage of all today’s global plastic waste. Consider some other
sobering numbers:
A single electric-car battery weighs about 1,000 pounds. Fabricating one
requires digging up, moving and processing more than 500,000 pounds of raw
materials somewhere on the planet. The alternative? Use gasoline and extract
one-tenth as much total tonnage to deliver the same number of vehicle-miles
over the battery’s seven-year life.
When electricity comes from wind or solar machines, every unit of energy
produced, or mile traveled, requires far more materials and land than fossil
fuels. That physical reality is literally visible: A wind or solar farm
stretching to the horizon can be replaced by a handful of gas-fired turbines,
each no bigger than a tractor-trailer.
Building one wind turbine requires 900 tons of steel, 2,500 tons of
concrete and 45 tons of nonrecyclable plastic. Solar power requires even more
cement, steel and glass—not to mention other metals. Global silver and indium
mining will jump 250% and 1,200% respectively over the next couple of decades
to provide the materials necessary to build the number of solar panels, the
International Energy Agency forecasts. World demand for rare-earth
elements—which aren’t rare but are rarely mined in America—will rise 300% to
1,000% by 2050 to meet the Paris green goals. If electric vehicles replace
conventional cars, demand for cobalt and lithium, will rise more than 20-fold.
That doesn’t count batteries to back up wind and solar grids.
---- The demand for minerals likely won’t be met by mines in Europe or the U.S. Instead, much of the mining will take place in nations with oppressive labor practices. The Democratic Republic of the Congo produces 70% of the world’s raw cobalt, and China controls 90% of cobalt refining. The Sydney-based Institute for a Sustainable Future cautions that a global “gold” rush for minerals could take miners into “some remote wilderness areas [that] have maintained high biodiversity because they haven’t yet been disturbed.”
What’s more, mining and fabrication require the consumption of
hydrocarbons. Building enough wind turbines to supply half the world’s
electricity would require nearly two billion tons of coal to produce the
concrete and steel, along with two billion barrels of oil to make the composite
blades.
More than 90% of the world’s solar panels are built in Asia on
coal-heavy electric grids.
Engineers joke about discovering “unobtanium,” a magical
energy-producing element that appears out of nowhere, requires no land, weighs
nothing, and emits nothing. Absent the realization of that impossible dream,
hydrocarbons remain a far better alternative than today’s green dreams.
Mr. Mills is a senior fellow at the Manhattan Institute
and a partner in Cottonwood Venture Partners, an energy-tech venture fund, and
author of the recent report, “The ‘New Energy Economy’: An Exercise in Magical
Thinking.”
“The ‘New Energy
Economy’: An Exercise in Magical Thinking.”
“POwl,” said Trump shortly, “You and I have brains. The others have fluff. If there is any thinking to be done in this Town—and when I say thinking, I mean thinking—you and I must do it.”
“POwl looked at him, and wondered whether to push him off the tree; but, feeling that he could always do it afterwards, he tried once more to find out what they were talking about.”
With apologies to The House at Pooh Corner
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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