Baltic Dry Index. 2331 -35 Brent
Crude 60.23 Spot Gold 1498
Never ending Brexit now October 31, maybe. 48 days away.
Trump’s Nuclear China Tariffs Now In Effect.
USA v EU trade war postponed to November, maybe.
“When the music stops, in terms of
liquidity, things will be complicated. But as long as the music is playing,
you’ve got to get up and dance. We’re still dancing,”
Trade War Team Trump, with apologies to Chuck
Prince and Citigroup.
With that “easy to win” US trade war against China
dragging on towards a second anniversary, and another US harvest of unsold US
soybeans underway, the US side has suddenly signaled China that it might be willing
to settle on an interim trade deal, whatever that might mean.
I suspect China will view that as the US side getting
desperate. President Trump faces on iffy re-election campaign next year,
President Xi doesn’t, nor any other year come to that. President Xi has the
luxury of time on his side.
Whether China will make any real concessions in next
month’s high level trade talks, I suspect, will come down to back room negotiations
over Huawei, though with an African Swine Fever epidemic wiping out pig herds
in China and neighbouring countries, forcing up pork prices, China ought to be
ready to start buying up US pork again.
Below, hope and spin that America and China are about to
kiss and make up, in the cause of getting President Trump re-elected and Canada’s
Huawei prisoner set free.
Asian markets gain as trade tensions ease further
By Marketwatch
and Associated
Press Published: Sept 13, 2019 12:10
a.m. ET
Asian markets rose in early trading Friday following signs
of hope for a thaw in the trade war between the U.S. and China.The Wall Street Journal reported Thursday that China was seeking to narrow the scope of upcoming trade negotiations, hoping to resolve some key issues and break the months-long deadlock. Later, President Donald Trump said he would be open to a smaller-scale, interim trade deal. That came a day after Trump put off tariff hikes on $250 billion in Chinese goods for two weeks and China exempted more than a dozen U.S. products from new tariff hikes of its own.
Also Wednesday, the European Central Bank cut interest rates deeper into negative territory, as expected, raising hopes that the Federal Reserve may soon enact its own easy-money policies.
--- Markets in mainland China, Taiwan and
South Korea were closed for holidays.
----
“What’s driving markets today is the potential for an interim trade deal,” said
Tony Roth, chief investment officer at Wilmington Trust on Thursday. “There’s
enough pain to (China’s) domestic economy and there’s enough pain to our
domestic economy that it’s in both presidents’ interests to take a step back
and have a little bit of breathing room right now. That’s what’s changed.”
More
US wants to make 'meaningful progress' in China trade talks
Issued on:
US trade negotiators want to make "meaningful progress" in
upcoming talks with China, Treasury Secretary Steven Mnuchin said Thursday, one
day after conciliatory gestures by both sides boosted hopes of an eventual
resolution.
Mnuchin said on CNBC he is "cautiously optimistic" about
chances for a deal to resolve the conflict, while President Donald Trump hinted
at a watering down of his position with the possibility of an interim deal.
Washington and Beijing will first hold talks at the deputy level to
ensure senior officials who meet later can advance towards an agreement.
"We don't want a trip that's just a series of discussions. We want
to make meaningful progress," Mnuchin said.
However, he again warned that Trump will only accept a good deal, and is
willing to raise tariffs if necessary.
Trump told reporters he preferred to seal a complete deal, but that he
might be willing to consider an interim agreement.
"I'd rather get the whole deal done," he said, but noted
analysts have been discussing the possibility of an interim deal "meaning
we'll do pieces of it, the easy ones first."
"There's no easy or hard, there's a deal or there's not a deal.
It's something we would consider I guess," he said.
---- China added Thursday that it was "making enquiries" about buying American farm products including big-ticket items like pork and soybeans, not on its previous list of spared goods.
"It is expected that China will be buying large amounts of our
agricultural products!" Trump tweeted early Thursday.
American farmers have borne the brunt of the US-China trade spat,
especially after US soy exports collapsed last year, virtually wiping out
foreign markets farmers had spent years cultivating.
More
U.S.-China trade war risks driving Fed policy, not Trump's carping - economists
September 13, 2019
/ 1:10 AM
(Reuters)
- The U.S.-China trade war will worsen or at best stay the same over the coming
year, according to economists in a Reuters poll who expect the Federal Reserve
to cut interest rates next week for the second meeting in a row.
The median probability of a U.S. recession in the next two years held at
a high of 45% and the chance of one in the next 12 months held at 30%.
But the expected quarter-point rate cut is unlikely to satisfy U.S.
President Donald Trump, who in tweets this week called on Fed policymakers to
slash interest rates into negative territory to boost slowing economic growth.
That was after Fed Chair Jerome Powell - who Trump appointed - said last
week that political factors played no role in the central bank’s
decision-making process.
While over 85% of economists who answered a set of additional questions
said the Fed “should” cut rates next week, nearly 80% said that any decision to
do so would not be influenced by Trump’s criticism of the central bank.
“The political environment is causing risks to the economic outlook, and
that is what the Fed is responding to. I don’t think the Fed is responding to
tweets or criticism that are being levied upon the Fed or Powell in general,”
said James Orlando, senior economist at TD Economics.
“The Fed is actually saying, ‘Hey, some of the trade risks are starting
to play out and are bleeding into the economic data, and the best way to meet
the mandate is to keep the economic engine going. The best way to do that is to
cut interest rates, so that they don’t go into recession.”
While the United States and China made mutual concessions in their trade
dispute, which has now run for over a year and has bruised world economies and
rattled markets, global manufacturing activity and business confidence has
taken a hit.
Nearly 80% of over 60 economists said U.S.-China trade relations would
either worsen or stay the same by the end of next year. These same economists
have been warning for two years now, in responses to questions asked in Reuters
polls, that protectionism was the biggest threat to the world economy.
More
Jeffrey Gundlach Says U.S. on Pre-Election ‘Recession Watch'
Suzy Waite and John GittelsohnThe likelihood of U.S. recession before the 2020 election has grown, based on changes in the Treasury yield curve, according to Jeffrey Gundlach, the billionaire money manager and chief executive officer of DoubleLine Capital.
More
In Brexit news, with UK regional courts all at odds, the
Brexit circus rolls up to the UK Supreme Court next Tuesday for a definitive
ruling. No deal Brexit or not, Champagne will still flow in GB, the world’s
leading buyer of Champagne. Of course, if it doesn’t, there’d be a opportunity
opening for California’s “champagne” producers.
Boris Johnson Wins Belfast Court Ruling on No-Deal Brexit
By Jonathan Browning
September 12, 2019, 11:14 AM GMT+1 Updated on September 12,
2019, 11:25 AM GMT+1
A Northern Irish court ruled that a no-deal Brexit wouldn’t violate the
Good Friday peace accord, handing Prime Minister Boris Johnson a legal victory
in one of a string of cases related to his plans to leave the European Union.
“I consider the characterization of the subject matter of these
proceedings as inherently and unmistakeably political to be beyond plausible
dispute,” Judge Bernard McCloskey said while issuing the ruling Thursday in
Belfast.
-----The ruling adds to a mixture of competing verdicts from England and
Scotland that have been delivered over the past 10 days. An Edinburgh court
ruled that the suspension of Parliament -- already under effect -- stymied
Parliament, while London judges said that the matter didn’t fall under their
oversight.
Brexit won't block our bubbly, say French champagne makers
September 12, 2019
/ 11:06 AM
AVIZE,
France (Reuters) - Whatever hardships a ‘no-deal’ Brexit might inflict on
Britain a champagne drought will not be one of them, according to French
producers.
Makers of the sparkling wine say they have been stockpiling large
numbers of bottles across the Channel in their biggest export market, and are
confident that the British taste for fizz will be unaffected by any
Brexit-related disruption.
Political turmoil in the United Kingdom has generated uncertainty over
how, when and even whether it will leave the European Union. Its exit date is
scheduled for Oct. 31.
“Champagne is champagne, it’s like the Eiffel Tower,” said
Pierre-Emmanuel Taittinger, president of the eponymous champagne house,
speaking in a vineyard as the grape harvest kicks off in the region. “The
English have loved champagne for 300 years and, Brexit or no Brexit, they will
continue to like it, this is something we have no question about.”
The fall of the pound against the euro due to uncertainty over Brexit
was a bigger concern than Brexit itself, Taittinger added.
Britain is champagne’s largest export market, ahead of the United
States, with a share of 17%. It imported a volume equal to 26.8 million bottles
of champagne in 2018, down from 27.8 million in 2017, data from the Champagne
Houses website showed.
More
Finally, is the
Bahamas about to get hit by another Atlantic storm? Hopefully not.
Tropical storm warning issued in Bahamas as potential storm develops
Sept. 12, 2019 /
8:09 PM
Sept. 12 (UPI) -- Forecasters on Thursday continued to keep a close eye
on Potential Tropical Cyclone Nine, a cluster of showers and thunderstorms
slowly organizing over the Bahamas.
While the tropical disturbance could strengthen and move over the
eastern waters of the Gulf of Mexico, new information suggests it could also
become more organized late this week and perhaps turn northward along the
United States Atlantic coast early next week.
A potential tropical cyclone means that it is expected to bring tropical storm or hurricane conditions to land in the next 48 hours, even though it is not yet a named tropical system.
As of 8 p.m. EDT Thursday, the center of the system was about 235 miles southeast of Great Abaco Island with maximum sustained winds of 30 mph. Tropical storm warnings have been issued for the northwestern Bahamas, including Grand Bahama Island.
At this time, there are several large clusters of thunderstorms from the northern shores of Hispaniola and Cuba to the southern and central Bahamas.
Hurricane hunters began to investigate the disturbance on Thursday afternoon.
"We are encouraging all residents, visitors and interests across the Bahamas, Florida and Cuba to closely monitor the progression of Potential Tropical Cyclone Nine," according to AccuWeather Hurricane Expert Dan Kottlowski.
How fast the disturbance strengthens may help determine its track in the coming days.
"Should the disturbance remain poorly organized, it has a greater chance of drifting along a more westward path across southern Florida and into the Gulf of Mexico," according to AccuWeather Senior Meteorologist Rob Miller.
"On the other hand, should the disturbance ramp up to a tropical depression or strong tropical storm, it has a greater chance of taking a more northern track toward the northern Bahamas and along the southern Atlantic coast of the U.S.," Miller said.
More
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today, President
Trump calls for the Fed to bring in negative interest rates, while Switzerland
explores “funny money.” France vows to block it in Europe.
Trump's call for negative rates threatens savers
September 11, 2019
/ 11:23 PM /
WASHINGTON
(Reuters) - U.S. President Donald Trump’s push for low interest rates reached a
new pitch on Wednesday, when he demanded the Federal Reserve take the
extraordinary step of sending them below zero.
Outside of Washington, D.C., Fed policymakers often face the opposite
complaint. Interest rates are too low already, Americans tell Fed officials
when they speak at Rotary Clubs and chambers of commerce around the country.
Savers, and particularly those near retirement age, are not getting enough
return from their savings accounts or fixed investments.
The negative rates Trump is pushing, already in place in some parts of
Europe and in Japan, would effectively charge people who save their money, and
reward those able and willing to borrow. They were so unpopular in Japan that
they became a hot topic on talk shows and tabloids, which highlighted consumers
buying safes to stash their cash at home instead of with banks.
Fed policymakers have already dismissed such a move as unnecessary,
given the relatively strong economy, as well as too risky and politically
unpopular. U.S. savings rates are almost three times higher than they were
before the Great Recession.
Relatively low interest rates have helped homebuyers and businesses
invest in new equipment, for instance, but they curb returns on many bank
accounts and even certificates of deposit, sapping households of their savings
when adjusted for inflation.
“What happens when you get to retirement and you have your pile and you
are trying to live off your pile?” says Alicia Munnell, Boston College’s
Carroll School of Management professor. “At that point you want rates to be
higher. People in the drawdown stages would unequivocally benefit from higher
rates.”
Wealthier investors can make up for low rates on savings by investing in
stocks or other higher-risk, higher-yielding assets. Some savvy Americans have
been so eager for a decent rate on their savings that they’ve been bidding
directly for Treasury bills at government auctions in record numbers as rates
rose along with Fed interest-rate increases.
Investors with a small nest egg or less financial know-how may see few
savings options beyond a standard savings account or a low-yield Treasury bond.
It is impossible for them to save their way to wealth in a low-interest-rate
environment.
“Low rates are destructive of economic equality,” said Karen Petrou, who
runs the policy analysis firm Federal Financial Analytics.
More
Swiss welcome scrutiny in handling Libra cyrptocurrency: watchdog
September 12, 2019
/ 7:50 AM
ZURICH
(Reuters) - Switzerland welcomes international scrutiny of the way it oversees
the Facebook-led Libra cryptocurrency project and is ready to work with other
countries to ensure seamless supervision, the top Swiss financial watchdog
said.
Facebook (FB.O), the world’s largest social media network, announced plans in June to launch the new digital currency, but Geneva-based Libra has come under fire from regulators who fear it could destabilize the global financial system.
The Libra Association said on Wednesday it planned to apply to become a Swiss-licensed payments system, casting the spotlight on how the Swiss Financial market Supervisory Authority (FINMA) handles the matter.
FINMA head Mark Branson told the Neue Zuercher Zeitung paper he was
ready for the challenge.
“If a financial center has ambitions, it must be able to live with
attention,” he said in an interview published on Thursday, noting the Swiss
embrace of fintech put it in a good place to handle such innovative and
ambitious projects.
It was ready to work with other countries taking a keen interest in
Libra, as visits from top-level U.S. officials and warnings from the Group of
Seven advanced economies have shown.
“A project of such a global dimension can be addressed only via international coordination and consultation with other supervisors and regulators,” Branson said. “It is illusory to believe a single country can regulate and oversee a project like Libra on its own. The supervision of (big Swiss banks) UBS (UBSG.S) or Credit Suisse (CSGN.S) also does not take place in complete isolation.”
Much concern about Libra and other cryptocurrencies centers on the potential of abuse for laundering money or financing crime.
“Our approach aims to regulate the crypto world in terms of money laundering the same as the conventional financial world. Our requirements here are among the strictest worldwide,” Branson said.
“At the same time, new technologies can also bring benefits in the fight against money laundering, for example if traceability of transactions becomes fully available. So there are risks and opportunities.”
More
France Slams Facebook’s Libra, Calls for Public Digital Currency
By William Horobin
September 12, 2019, 1:25 PM GMT+1
·
Libra threatens monetary sovereignty, Fin Min Le
Maire says
·
Le Maire spoke with Draghi, Lagarde on public
digital currency
More
https://www.bloomberg.com/news/articles/2019-09-12/france-slams-facebook-s-libra-calls-for-public-digital-currency?srnd=premium-europe
Interest
rates are the most important prices in the economy, according to Nobel laureate
F.A. Hayek, because they reflect the collective time preference of individuals
to consume either now or later. Accordingly, interest rates co-ordinate
allocation of capital across the economy by signalling to businesses whether
they should invest. Distortions in interest rates can cause “clusters of
errors” in which large swathes of businesses unwittingly miscalculate at the
same time.
Hayek
observed that interest rate stimulus interfered with economic calculations,
causing managers to invest in projects that would not otherwise have appeared
profitable. Losses can subsequently materialise as customer demand fails to
meet forecasts that were, in retrospect, optimistic. Long-term projects are
highly sensitive to interest rates and are therefore more susceptible to such
distortions. Pension obligations and long-term, capital-intensive projects are
at high risk of miscalculation based on artificially low rates.
Caitlin
Long is head of Corporate Strategy, Capital Markets at Morgan Stanley.
https://www.ft.com/content/2838c142-a560-11df-a5b7-00144feabdc0
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?
Flexible solar cells a step closer to reality
Scientists challenges accepted rule of organic solar cell design
Date:
September 11, 2019
Source:
University of Warwick
Summary:
Solar cells that use mixtures of organic molecules to absorb sunlight and
convert it to electricity, that can be applied to curved surfaces such as the
body of a car, could be a step closer thanks to a discovery that challenges
conventional thinking about one of the key components of these devices.
A basic organic solar cell consists of a thin film of organic semiconductors
sandwiched between two electrodes which extract charges generated in the
organic semiconductor layer to the external circuit. It has long been assumed
that 100% of the surface of each electrode should be electrically conductive to
maximise the efficiency of charge extraction.
Scientists at the University of Warwick have discovered that the
electrodes in organic solar cells actually only need ?1% of their surface area
to be electrically conductive to be fully effective, which opens the door to using
a range of composite materials at the interface between the electrodes and the
light harvesting organic semiconductor layers to improve device performance and
reduce cost. The discovery, published today (11 September), is reported in Advanced
Functional Materials.
The academic lead, Dr Ross Hatton from the University's Department of
Chemistry, said: "It's widely assumed that if you want to optimise the
performance of organic solar cells you need to maximize the area of the
interface between the electrodes and the organic semiconductors. We asked
whether that was really true."
The researchers developed a model electrode that they could
systematically change the surface area of, and found that when as much as 99%
of its surface was electrically insulating the electrode still performs as well
as if 100% of the surface was conducting, provided the conducting regions
aren't too far apart.
High performance organic solar cells have additional transparent layers
at the interfaces between the electrodes and the light harvesting organic
semiconductor layer that are essential for optimising the light distribution in
the device and improving its stability, but must also be able to conduct
charges to the electrodes. This is a tall order and not many materials meet all
of these requirements.
Dr Dinesha Dabera, the post-doctoral researcher on this Leverhulme Trust
funded project, explains:"This new finding means composites of insulators
and conducting nano-particles such as carbon nanotubes, graphene fragments or
metal nanoparticles, could have great potential for this purpose, offering
enhanced device performance or lower cost.
---- Dr Hatton explains: "There is a fast growing need for solar cells that can be supported on flexible substrates that are lightweight and colour-tuneable. Conventional silicon solar cells are fantastic for large scale electricity generation in solar farms and on the roofs of buildings, but they are poorly matched to the needs of electric vehicles and for integration into windows on buildings, which are no longer niche applications. Organic solar cells can sit on curved surfaces, and are very lightweight and low profile.
"This discovery may help enable these new types of flexible solar
cells to become a commercial reality sooner because it will give the designers
of this class of solar cells more choice in the materials they can use."
Another
weekend and what will the Atlantic hurricane season bring? What will President
Trump tweet? What more confusion will
Brexit Project fearmongering sow? Have a
great weekend everyone. More Brexit clowning next week.
A large Bank is exactly the place where a
vain and shallow person in authority, if he be a man of gravity and method, as
such men often are, may do infinite evil in no long time, and before he is
detected. If he is lucky enough to begin at a time of expansion in trade, he is
nearly sure not to be found out till the time of contraction has arrived, and then
very large figures will be required to reckon the evil he has done.
Walter Bagehot. Lombard Street. 1873
Walter Bagehot. Lombard Street. 1873
The monthly Coppock Indicators finished August
DJIA: 26,403 +52 Down. NASDAQ: 7,963 +59 Down.
SP500: 2,926 +53 unchanged.
An inconclusive month, but all three shows signs of weakening.
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