Baltic Dry Index. 2088 +41 Brent Crude 58.64
Spot Gold 1514
Never ending Brexit now October 31,
maybe. 75 days away.
Trump’s Nuclear China Tariffs
Now In Effect.
USA v EU trade war postponed to
November, maybe.
Life is a constant oscillation between the sharp horns of
dilemmas.
H. L. Mencken
This weekend, Trump’s dilemma. No not
whether to invade and occupy Greenland or Iran, Greenland’s not for sale it
turns out, are ice sheets easier to occupy than deserts?
Trump’s dilemma it turns out, is the same
one investors the world over are facing. Is a new global recession starting or
underway, and if there is will it drag in the USA? This old dinosaur, thinks
yes and that new recession is already underway led by a global manufacturing recession.
For investors that’s a matter of profit
or loss. For President Trump it’s a matter of re-election or dropping out early
next year. Of course, if a new recession is underway and it did drag in the US
economy, President Trump could try to stay in the race and try blaming it all
on the hapless, clueless, Federal Reserve, almost run by Chairman Powell, but
that’s a likely losing strategy among US voters.
All of this is allegedly made worse by
President Trump’s supposed conspiratorial” view of life, leading to making him “anxious and apprehensive.” But even if the Fed follows
the ECB and Bank of Japan into the folly of negative US interest rates, why
would they work better in the USA than they have in Europe or Japan?
What to do,
what to do? Answers on a postcard please to President Trump, Washington, D. C.
Below, is there
or isn’t there a recession? We will not wait long for a definitive answer, I
think.
You don't know what you don't know.
Socrates
U.S. markets, Treasury bonds surge after record losses this week
Aug. 16, 2019 / 12:23 PM
Aug. 16 (UPI) -- Significant market signals this week that warned of a possible
recession rebounded from historic lows on Wall Street Friday, as did the
sagging major U.S. indices.Both 10-year and 30-year Treasury bonds, which tumbled to record lows Wednesday, stabilized with gains Friday. Analysts said the bonds' losses often indicate a coming recession.
The Dow Jones Industrial Average, which has also seen tremendous losses this week, kept up momentum in trading Friday, two days after it's worst daily performance of 2019 also concerned experts about a recession.
By noon Friday, the Dow had gained more than 260 points, but still appeared to be headed for a net loss for the week. The S&P 500 had added 37 points and the Nasdaq 116 by mid-Friday.
"Although Treasury yields are climbing away from record lows on Friday as some tranquility returns to markets, the movements in the bond markets are poised to remain on investors radars in the week ahead," Lukman Otunuga, senior research analyst at FXTM, said.
The recent volatility in U.S. markets has also been fueled by uncertainty with the ongoing trade conflict between the United States and China. Beijing vowed to retaliate this week after U.S. President Donald Trump said new tariffs would be placed on a list of Chinese exports. Those new taxes, however, were delayed until mid-December.
Trump, banking on strong economy to win reelection, frets over a possible downturn
BRIDGEWATER,
N.J. - Mounting signs of global economic distress this week have alarmed
President Donald Trump, who is worried that a downturn could imperil his
reelection, even as administration officials acknowledge that they have not
planned for a possible recession.
Trump is
banking on a strong economy to win a second term in 2020, and in recent weeks
has impulsively lashed out at the Federal Reserve, pressured Treasury Secretary
Steven Mnuchin to label China a "currency manipulator," and
unexpectedly delayed tariffs on Chinese imports out of fear they could depress
holiday retail sales.
Yet despite
gyrations in the U.S. stock market and economic slowdowns in other countries,
officials in the White House, at the Treasury Department and throughout the
administration are planning no new steps to attempt to stave off a recession.
Rather, Trump's economic advisers have been delivering the president upbeat
assessments in which they argue the domestic economy is stronger than many
forecasters are making it out to be.
In turn,
Trump has sought to use his Twitter pulpit to drown out negative indicators. On
Thursday he promoted the U.S. economy as "the Biggest, Strongest and Most
Powerful Economy in the World," and, citing growth in the retail sector,
predicted that it would only get stronger. He also accused the news media of
"doing everything they can to crash the economy because they think that
will be bad for me and my re-election."
Privately,
however, the president has sounded anxious and apprehensive. From his golf club
in New Jersey where he is vacationing this week, Trump has called a number of
business leaders and financial executives to sound them out - and they have
provided him a decidedly mixed analysis, according to two people familiar with
the discussions who spoke on the condition of anonymity because the conversations
were confidential.
Trump has a
somewhat conspiratorial view, telling some confidants that he distrusts
statistics he sees reported in the news media and that he suspects many
economists and other forecasters are presenting biased data to thwart his
reelection, according to one Republican close to the administration who was
briefed on some of the conversations.
"He's
rattled," this Republican said. "He thinks that all the people that
do this economic forecasting are a bunch of establishment weenies - elites who
don't know anything about the real economy and they're against Trump."
Trump has
relentlessly bludgeoned Fed Chair Jerome Powell over interest rates and has
told aides and allies that he would be a scapegoat if the economy goes south.
The
stock market has slumped in recent weeks because of a number of factors. The
U.S.-China trade war has become increasingly acrimonious and is impacting both
economies. Germany and the United Kingdom appear to be nearing a recession.
Argentina's stock market has crashed. Meanwhile, a key predictor of future
recessions in the bond market - an inverted "yield curve" - was
triggered this week, which spooked investors even more.
More
These 10 ‘grey swan’ events could conspire to imperil global economy and markets
By Chris
Matthews Published: Aug 17, 2019 10:51 a.m. ET
U.S. equity investors have had plenty to
worry about in August, with an escalating U.S.-China trade spat and a brief
inversion of a
key yield spread helping to send stocks to their worst performance in the
first half of a month in 2019.
---- But even as high-probability risks —
like the U.S.-China trade conflict — capture the minds of investors, there is a
growing combination of lower-probability risks, so-called grey swan events,
that could individually or in combination create even more heartburn for
investors as the third quarter draws to a close.
1.
No-deal Brexit: The
Oct. 31 deadline for Britain to reach a deal to exit the European Union in an
orderly fashion is fast approaching, and newly elected Prime Minister Boris
Johnson has signaled that he is willing to face the consequences of a no-deal
Brexit, “come
what may, do or die.” One conservative lawmaker has even suggested that
Johnson could take Britain out of the EU unilaterally by Aug. 24.
---- 2. Automobile tariffs:
An even greater threat to the European and global economies could be a
significant increase in U.S.-EU trade tensions. On May 17, the Trump
administration announced its determination that U.S. imports of automobiles and
automobile parts pose a national-security risk, setting the stage for tariffs
on up to $128 billion in automotive tariffs from the EU and Japan, which would
be the main targets of new levies
---- 3. EU-U.S. trade dispute:
Aside from automobile tariffs, the threat of a broader European-U.S. trade
conflict looms. Europe was hit by 25% steel and 10% aluminum tariffs imposed in
2018, against which the EU retaliated with a 25% steel tariff of its own.
---- 10. All the other trade spats: Other major economies have followed Trump’s lead in using trade barriers as tools to force policy changes abroad. South Korea and Japan have been mired in a trade battle with roots in a decades-long conflict over reparations for atrocities committed by Japan during its colonization of South Korea in the first half of the 20th century.
The U.S. and India, the world’s fifth largest economy, are also sliding closer to a trade war, after India retaliated in June against U.S. tariffs on steel and aluminum, raising duties on $1.4 billion in U.S. imports. Trump responded with attacks on the Indian government, writing in a tweet that “India has long had a field day putting Tariffs on American products. No longer acceptable!”
More
Greenland tells Trump it is open for business but not for sale
August 16, 2019 / 6:02 AM
COPENHAGEN (Reuters) - Greenland on Friday
dismissed the notion that it might be up for sale after reports that U.S.
President Donald Trump had privately discussed with his advisers the idea of
buying the world’s biggest island.
“We are open
for business, but we’re not for sale,” Greenland’s foreign minister Ane Lone
Bagger told Reuters.
Trump is due
to visit Copenhagen in September and the Arctic will be on the agenda during
meetings with the prime ministers of Denmark and Greenland, an autonomous
Danish territory.
Talk of a
Greenland purchase was first reported by the Wall Street Journal. Two sources
familiar with the situation told Reuters that the notion had been laughed off
by some advisers as a joke but was taken more seriously by others in the White
House.
Danish
politicians on Friday poured scorn on the idea.
“It has to
be an April Fool’s joke. Totally out of season,” former prime minister Lars
Lokke Rasmussen said on Twitter.
“If he is
truly contemplating this, then this is final proof, that he has gone mad,”
foreign affairs spokesman for the Danish People’s Party, Soren Espersen, told
broadcaster DR.
“The thought
of Denmark selling 50,000 citizens to the United States is completely
ridiculous,” he said.
Greenland, a
self-ruling part of Denmark located between the North Atlantic and Arctic
oceans, is dependant on Danish economic support. It handles its own domestic
affairs while Copenhagen looks after defense and foreign policy.
“I am sure a
majority in Greenland believes it is better to have a relation to Denmark than
the United States, in the long term,” Aaja Chemnitz Larsen, Danish MP from
Greenland’s second-largest party Inuit Ataqatigiit (IA), told Reuters.
More
Finally, more on those Boring 737-Max
crashes. What was Boeing thinking?
The Four-Second Catastrophe: How Boeing Doomed the 737 MAX
At the root of the company’s miscalculation was a flawed assumption that pilots could handle any malfunction
By
Andrew Tangel, Andy Pasztor and Mark Maremont Aug. 16, 2019 10:43 am ET
Almost as soon as the wheels of Ethiopian Airlines Flight 302 spun free from the runway March 10, the instruments in front of Capt. Yared Getachew went haywire.
The digital displays for altitude,
airspeed and other basic information showed dramatically different readings
from those in front of his co-pilot. The controls in Capt. Getachew’s hands
started shaking to warn him the plane was climbing too steeply and was in
imminent danger of falling from the sky.
Soon, a cascade of warning tones and
colored lights and mechanical voices filled the cockpit. The pilots spoke in
clipped bursts.
“Command!” Capt. Getachew called out
twice, trying to activate the autopilot. Twice he got a warning horn.
Another powerful automated
flight-control system called MCAS abruptly pushed down the jet’s nose.
A
computerized voice blared: “Don’t sink! Don’t sink!”
The pilots wrestled with the
controls, desperate to raise the nose of their Boeing 737 MAX.
Three times Capt. Getachew instructed co-pilot Ahmed Nur Mohammed, “Pull up!”
At the same time, a loud clacking
warned the preoccupied pilots that the plane was flying too fast.
Four minutes into the flight, the
pilots finally touched on the source of their problems, simultaneously calling
out “Left alpha vane!”
A jumble of loud and contradictory warnings
confronted the captain and his co-pilot of Ethiopian Airlines Flight 302
shortly after takeoff on March 10.
----Erroneous signals from that malfunctioning sensor tricked the onboard computers into believing the jetliner’s nose was angled too high, causing MCAS to push it down again and again.
It was too late. Flight 302 nose-dived at
nearly the speed of sound, hitting the ground with such force that
an airliner with 157 people aboard was largely reduced to fragments no bigger
than a man’s arm.
----Regulators have focused since the crashes on MCAS, its reliance on a single sensor and Boeing BA 0.46% ’s decision not to tell pilots about the new system. At the root of the miscalculations, though, were Boeing’s overly optimistic assumptions about pilot behavior.
In designing the flight controls for
the 737 MAX, Boeing assumed that pilots trained on existing safety procedures
should be able to sift through the jumble of contradictory warnings and take
the proper action 100% of the time within four seconds.
That is about the amount of time
that it took you to read this sentence.
More
You can't resolve a dilemma with all the very same mind that
made it
Albert Einstein
New: This weekend’s musical diversion. This
weekend, time for a different “Spanish” Boccherini.
Boccherini-Quintetto n. 4 G 448 - Fandango (III-parte II)
Luigi Boccherini
Science is important, but so is ethics, so is balancing life. To
destroy life to save life - it's one of the real ethical dilemmas that we face.
George W. Bush
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.
No comments:
Post a Comment