Baltic Dry Index. 1575 -24 Brent
Crude 63.13 Spot Gold 1475
Never ending Brexit now January 31, or maybe sooner.
Trump’s Nuclear China Tariffs Now in effect.
The USA v EU trade war started October 18. Now in effect.
In the absence of the gold standard, there is no way to protect
savings from confiscation through inflation. There is no safe store of value.
Alan Greenspan
Another weekend approaches, so it’s time to talk up that
USA v China trade deal again, and with it talk up US stock markets. How long
this tactic can remain effective is an open question, but for now it still
works, but less effectively.
With each passing week the advantage in delay adds
strength to China, and saps the bargaining position of trade war team Trump, a
self-made hostage to the fate of US
stocks.
With each passing week, President Trump, facing
impeachment and a US election , now less that a year away, desperately needs some
sort of a trade deal that can be hyped to his core supporters as a “victory.”
He also needs some large agricultural purchases by China, and doesn’t China
know it.
Below, more of the same old trade hype, from two
different perspectives. Yet more reason to treat stocks as in an exit rally.
Asian shares gain as Trump fuels trade deal optimism, oil firm on OPEC+ output cut
December 6, 2019 /
12:41 AM
SYDNEY/TOKYO
(Reuters) - Asian stocks gained on Friday as investors took heart from U.S.
President Donald Trump saying trade talks with China were “moving right along”,
and U.S. oil prices sat near 2-1/2-month highs after OPEC and other producers
agreed to cut output.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.5% and Japan's Nikkei .N225 added 0.3%.
Australian shares rose 0.2% and South Korea's Kospi .KS11 climbed 0.8%, while China's Shanghai Composite .SSEC and Hong Kong's Hang Seng .HSI indexes gaining 0.1% and 0.9%, respectively.
Trump’s upbeat tone in comments on Thursday was enough to spark buying, despite a lack of agreement between Washington and Beijing over whether existing tariffs should be dropped as part of a preliminary deal to end their trade war.
“Many players have taken a wait-and-see attitude given a lack of fresh trading cues ahead of U.S. paryolls data and the Federal Reserve’s policy meeting. But clearly, the mood is quite positive,” said Yasuo Sakuma, chief investment officer at Libra Investments.
Investors were hoping that the two sides will reach a compromise to at least avoid their worst fears - that the United States will go ahead with its final batch of tariffs on about $156 billion of Chinese exports.
Uncertainties over a deal have pushed some investors to the sidelines in recent sessions, while nervousness before the release of U.S. non-farm payrolls data later in the day could also curb market liquidity.
Investors were also looking ahead to a Fed policy meeting on Dec. 1-11. A Reuters poll of economists and analysts showed the Fed would keep rates on hold at 1.50-1.75%.
More
China says U.S. must cut tariffs in trade deal
By Associated Press Published: Dec 5, 2019 5:22 a.m. ET
BEIJING (AP) — Washington must roll back punitive tariffs on Chinese
imports if the two sides reach a trade deal, China said Thursday, indicating
Beijing is sticking to its position ahead of another possible Dec. 15 duty
increase.
The two sides are negotiating details of a “Phase 1” agreement announced
by President Donald Trump in October. Beijing said last month the U.S. side
agreed to roll back some tariffs, but Trump dismissed that.
“China believes that if the two parties reach a ‘Phase 1’ agreement,
tariffs should be reduced accordingly,” said a Commerce Ministry spokesman, Gao
Feng.
Gao said negotiators are in “close communication” but he had no other
details.
The two sides have raised tariffs on billions of dollars of each other’s
imports in the fight over Beijing’s technology ambitions and trade surplus.
That has disrupted global trade and threatens to chill economic growth.
Washington is due to raise tariffs on an additional $160 billion of
Chinese imports on Dec. 15, including smartphones and toys. That will extend
penalties to almost everything the United States buys from China.
Global financial markets tumbled this week after Trump cast doubt on
whether an agreement can be reached this year.
Details of the Oct. 12 agreement have yet to be released. But it doesn’t
address basic disputes about trade, Chinese industrial subsidies and technology
policy.
Economists say a final settlement is unlikely this year. Some express
skepticism the two sides can complete the “Phase 1” deal.
In EUSSR news, France gets set for day two of national
chaos. GB enters the final week of next Thursday’s unusual winter general
election.
France braced for second day of stoppages as strike bites
Issued on: 06/12/2019 - 04:30Modified: 06/12/2019 - 04:28
France was on Friday preparing for a second day of travel cancellations
and school closures as unions warned there would be no let-up in the strike
called to protest planned pension reforms.
The first day of a strike, seen as a major test for President Emmanuel
Macron's ambitious vision of reforming France, saw giant rallies across the
country coupled with walkouts that paralysed transport and closed schools.
Friday was set to follow a similar pattern, with almost all high-speed
train services cancelled, most of the Paris metro system shut down and hundreds
of flights set to be axed.
Yves Veyrier, head of the hardline FO union, warned the strike could
last at least until Monday if the government did not take the right action.
"The strike is not going to stop tonight," added Philippe
Martinez, secretary general of the CGT union, late on Thursday.
But it remains far from certain the protests will match the magnitude of
the 1995 strikes when France was paralysed for three weeks from November to
December in an action that forced the then government into concessions.
- Possible fuel shortages -
As on Thursday, national train operator SNCF has axed 90 percent of the
high-speed TGVs on Friday and just 30 percent of regional trains will run.
On the Paris metro, 10 lines will remain totally shut, four will work at
a much reduced capacity and only two -- the driverless 1 and 14 -- will work
normally.
Flag carrier Air France is again axing 30 percent of domestic flights.
There will also be severe disruptions on the Eurostar, with some two dozen
trains cancelled on the cross-Channel route.
A weekend of travel misery is also expected.
National newspapers were unable to publish their print editions, and the
CGT union said workers had blocked seven of the country's eight oil refineries,
raising the prospect of fuel shortages if the strike continues.
Bike paths were packed as commuters turned to bicycles and electric
scooters while ride-hailing companies were offering special strike promotions.
Macron's government has yet to set out its plans in full but is pushing
for a single pension scheme which critics say would require everyone to work
longer.
A pre-school teacher demonstrating in the eastern city of Belfort, Anne
Audier-L'Epingle, said she was striking because "I don't know what I will
be able to offer two-year-old children when I'm 65."
The minimum pension age in France is 62, one of the lowest among
developed countries.
But railway workers, opera employees and a host of other workers have
more advantageous schemes, with train drivers for example generally retiring in
their early fifties.
More
Billionaire Brexit donor gives £1 million to UK Conservatives
December 5, 2019
/ 3:10 PM
LONDON (Reuters) - Peter Hargreaves, one of
Britain’s wealthiest men and the second-biggest donor to the 2016 campaign to
leave the European Union, has donated 1 million pounds ($1.28 million) to Prime
Minister Boris Johnson’s party ahead of next week’s election.
Hargreaves, who amassed his fortune from co-founding fund supermarket
Hargreaves Lansdown, said he was worried that the project he championed could
be abandoned, leaving the United Kingdom stuck in the European Union.
“The electorate voted to be out, out, out, out, totally out,”
Hargreaves, 73, told Reuters. “The referendum (ballot) paper didn’t say
anything about a halfway house. It asked people whether they wanted to stay, or
whether they wanted to leave, and the electorate voted to leave.”
Hargreaves, who is known for his outspoken views, made the donation
despite calling Johnson a “buffoon” last year.
Johnson, 55, hopes to win a majority on Dec. 12 to push through the
Brexit deal he struck with the EU after the bloc granted a third delay to a
divorce that was originally supposed to have taken place at the end of March.
Hargreaves’ donation is the joint highest amount given to the Conservatives
in this election. John Gore, a developer, producer and distributor of Broadway
theatre, gave the same amount to the party last month.
The main opposition Labour Party, led by veteran socialist Jeremy
Corbyn, has accused the Conservatives of being the party of billionaires and
has promised a radical redistribution of wealth if it wins power.
The Conservatives have raised over 12 million pounds since Nov. 6 while
Labour have raised just over 4 million pounds ahead of the Dec. 12 vote, the
Electoral Commission said.
Opinion polls put the Conservatives well ahead of Labour although large
numbers of voters are still undecided.
Hargreaves, who donated 3.2 million pounds to the Leave campaign in
2016, said he was still worried that Brexit could be overturned.
More
Finally, more on that Fed monetisation, that you mustn’t
call monetisation nor quantitative easing. The banks would rather lend to the
Fed than to each other, which suggests that the major US banks are sitting
on/hiding major losses, waiting for the next shoe to drop.
The repo market is ‘broken’ and Fed injections are not a lasting solution, market pros warn
By Joy
Wiltermuth Published: Dec 4, 2019
2:09 p.m. ET
The Federal Reserve’s ongoing efforts to shore up the
short-term “repo” lending markets have begun to rattle some market experts. The New York Federal Reserve has spent hundreds of billions of dollars to keep credit flowing through short term money markets since mid-September when a shortage of liquidity caused a spike in overnight borrowing rates.
But as the Fed’s interventions have entered a third month, concerns about the market’s dependence on its daily doses of liquidity have grown.
“The big picture answer is that the repo market is broken,” said James Bianco, founder of Bianco Research in Chicago, in an interview with MarketWatch. “They are essentially medicating the market into submission,” he said. “But this is not a long-term solution.”
This chart shows the more than $320 billion of total repo market support from the Fed since Sept. 17, when for the central bank began pumping in daily liquidity after overnight lending rates jumped to almost 10% from nearly 2%.
Initially, the central bank rolled out roughly $75 billion in daily lending facilities to arm Wall Street’s core set of primary dealers with low-cost overnight loans to keep the roughly $1 trillion daily U.S. Treasury repo market running.
The facilities allow banks to snap up loans by pledging safe-haven U.S. Treasurys or agency mortgage-backed securities with the New York Fed, but crucially without the typical risk-based pricing that lenders regularly charge when funding each other.
Check out: Here are 5 things to know about the recent repo market operations
The goal was to keep banks flush as they deal with month-end funding issues, corporate tax payments, and the deluge of Treasury debt being sold by the federal government to fund its deficit.
Shortly thereafter, former New York Fed markets group head Brian Sack, now director of global economics at hedge fund D.E. Shaw Group, coauthored an article saying that the Fed could get a better control of overnight rates if it were to boost banking system reserves by purchasing $250 billion of Treasury debt.
But the Fed’s total support already has eclipsed that threshold with the expansion of daily operations, the introduction of longer-term loans, and its balance sheet expansion through monthly T-bill purchases.
“This is now far bigger than anyone thought this was going to be,” Bianco said. “I think they’re hoping the market will magically fix itself. I don’t see why it would.”
Amid sustained clamor for Fed funding, the central bank in the last two weeks said it would increase two longer-term facilities to help carry borrowers through any year-end turbulence.
The changes came as U.S. stocks fell from November’s all-time records with the Dow Jones Industrial Average ( DJIA, +0.53%, S&P 500 index SPX, +0.63% and Nasdaq Composite Index COMP, +0.54% retreating on fading hopes for a U.S. - China trade dea.
“The Fed really hasn’t figured out the problem,” said Bryce Doty, a senior portfolio manager at Sit Fixed Income in Minneapolis. “But they kind of have created their own problem.”
By that, Doty meant the Fed’s rescue operations have worked in terms of supplying banks with quick and cheap funding, but less so when it comes to luring them back to funding each other.
“The big banks are just hoarding cash,” he said. “They told the Fed they have more than enough cash in excess reserves to meet regulatory issues, but they prefer having money at the Fed where they can still earn 1.55%, rather than in the repo market.”
More
The very nature of finance is that it cannot be profitable
unless it is significantly leveraged... and as long as there is debt, there can
be failure and contagion.
Alan Greenspan
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today, how the far left infiltrates and uses the “climate crisis,” to
advance its communist aims. A reality check on that magic new energy economy.
Terence Corcoran: Why the left loves a climate crisis
Terence Corcoran December 4, 2019 9:00 AM EST
We had major breaking news Tuesday out of the United
Nations’ 25th Conference of the Parties (COP 25) climate change summit in
Madrid: Greta, the self-described “angry kid,” had landed. Her boat docked in
Lisbon, just as the World Meteorological Organization reported that 2019 had
been a cold year for Canadians.The Greta news drowned out the WMO report, which also found 2019 produced record levels of frigidity in many parts of North America, including “the coldest February on record for several regions in Western Canada, including the city of Vancouver. It was also a rather cold first half of the year in parts of Eastern Canada. There were further outbreaks of unseasonable cold and early-season snowfall in the western and central interior of North America in late September and late October.”
But forget about Canada. Who cares? The WMO reports that 2019 was hotter on average in other parts of the world, which is why Greta Thunberg and an army of young and not-so-young leftists with radical agendas are mounting a global campaign to bulldoze market capitalism and build a new socialist democratic paradise.
Since nobody wants to overthrow capitalism for the usual trumped-up reasons — inequality, worker oppression, racism, fascism, rising corporate control, globalization, middle-class decline, greedy bankers, private property —the scientific claim of a climate crisis offers a new justification.
From Greta’s Extinction Rebellion to Green New Deal advocates in the United States to the champions of socialism in Europe, the left is using climate change to push an another agenda. In a recent commentary, Greta and two other young global activists — Luisa Neubauer from Germany and Angela Valenzuela from Chile — made it clear their objectives transcend climate change. They want climate action that is “powerful and wide-ranging.” After all, they say, “the climate crisis is not just about the environment. It is a crisis of human rights, of justice, and of political will. Colonial, racist, and patriarchal systems of oppression have created and fuelled it. We need to dismantle them all.”
In their reading of the economic world, carbon emissions are the product of market capitalism that needs to be replaced by a government-controlled system that will forcibly eliminate fossil fuels.
In the United States, Green New Deal advocates talk about a green economy, but what they have in mind is a state-directed economic system whose primary official objective is to achieve “net-zero carbon emissions.” The same objectives dominate the Green New Deal advocates in Europe.
One of those net-zero eurogreens is Yanis Varoufakis, the former Greek finance minister who is in Toronto this week to participate in a Munk Debate on the future of capitalism. In case you are wondering, his aim is to tear down market systems.
---- According to Varoufakis, a key part of the new socialist plan for Europe “will require recreating European institutions and a political economy that includes a massive Green New Deal or similar strategy.” Varoufakis said in a recent interview that he aims to “create a vision of a liberal, socialist society that is not based on private property but does use money as a vehicle for exchange and markets as co-ordinating devices.”
Well, at least we get to keep a system based on money.
How far the left will be able to ride climate change as a sort of
autonomous electric vehicle on the road to socialism will depend on how soon a
broader population of workers and middle-class voters realize they are being
taken for a ride.
More
The "New Energy Economy": An Exercise in Magical Thinking
Mark P. Mills March 26, 2019
A movement has been growing for decades to replace hydrocarbons, which
collectively supply 84% of the world’s energy. It began with the fear that we
were running out of oil. That fear has since migrated to the belief that,
because of climate change and other environmental concerns, society can no
longer tolerate burning oil, natural gas, and coal—all of which have turned out
to be abundant.
So far, wind, solar, and batteries—the favored alternatives to
hydrocarbons—provide about 2% of the world’s energy and 3% of America’s.
Nonetheless, a bold new claim has gained popularity: that we’re on the cusp of
a tech-driven energy revolution that not only can, but inevitably will, rapidly
replace all hydrocarbons.
This “new energy economy” rests on the belief—a centerpiece of the Green
New Deal and other similar proposals both here and in Europe—that the
technologies of wind and solar power and battery storage are undergoing the
kind of disruption experienced in computing and communications, dramatically
lowering costs and increasing efficiency. But this core analogy glosses over
profound differences, grounded in physics, between systems that produce energy
and those that produce information.
In the world of people, cars, planes, and factories, increases in
consumption, speed, or carrying capacity cause hardware to expand, not shrink.
The energy needed to move a ton of people, heat a ton of steel or silicon, or
grow a ton of food is determined by properties of nature whose boundaries are
set by laws of gravity, inertia, friction, mass, and thermodynamics—not clever
software.
This paper highlights the physics of energy to illustrate why there is
no possibility that the world is undergoing—or can undergo—a near-term
transition to a “new energy economy.”
More
People don't realize that we cannot forecast the future. What we
can do is have probabilities of what causes what, but that's as far as we go.
And I've had a very successful career as a forecaster, starting in 1948
forward. The number of mistakes I have made are just awesome. There is no
number large enough to account for that.
Alan Greenspan
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?
Bending an organic semiconductor can boost electrical flow
Date:
December 3, 2019
Source:
Rutgers University
Summary:
Slightly bending semiconductors made of organic materials can roughly double
the speed of electricity flowing through them and could benefit next-generation
electronics such as sensors and solar cells, according to new research.
Slightly bending semiconductors made of organic materials can roughly
double the speed of electricity flowing through them and could benefit
next-generation electronics such as sensors and solar cells, according to
Rutgers-led research.
The study is published in the journal Advanced Science.
"If implemented in electrical circuits, such an enhancement --
achieved by very slight bending -- would mean a major leap toward realizing
next-generation, high-performance organic electronics," said senior author
Vitaly Podzorov, a professor in the Department of Physics and Astronomy in the
School of Arts and Sciences at Rutgers University-New Brunswick.
Semiconductors include materials that conduct electricity and their
conductivity can be tuned by different external stimuli, making them essential
for all electronics. Organic semiconductors are made of organic molecules
(mainly consisting of carbon and hydrogen atoms) that form light, flexible
crystals called van der Waals molecular crystals. These novel materials are
quite promising for applications in optoelectronics, which harness light and
include flexible and printed electronics, sensors and solar cells. Traditional
semiconductors made of silicon or germanium have limitations, including cost
and rigidity.
One of the most important characteristics of organic and inorganic
semiconductors is how fast electricity can flow through electronic devices.
Thanks to progress over the last decade, organic semiconductors can perform
roughly 10 times better than traditional amorphous silicon transistors. Tuning
semiconductors by bending them is called "strain engineering," which
would open a new avenue of development in the semiconductor industry if
implemented successfully. But until now, there were no conclusive experimental
results on how bending organic semiconductors, including those in transistors,
may affect the speed of electricity flowing in them.
The Rutgers-led study reports the first such measurement, and a 1
percent bend in an organic transistor can roughly double the speed of electrons
flowing through it.
The lead author is Hyun Ho Choi, a former post-doctoral researcher in
the Podzorov Group who is now at Gyeongsang National University in Korea. Hee
Taek Yi, another former post-doctoral researcher, is a coauthor. Scientists at
the University of Tokyo; University of Massachusetts Amherst; and Pohang
University of Science and Technology in Korea contributed to the study.
Another weekend and a
weekend of tweets, impeachment hype, unfunded UK general election promises, French
strikes, and another large Pacific storm headed into Canada and the USA. All in all an interesting
winter weekend. Have a great weekend everyone.
Protectionism will do little to create jobs and if foreigners
retaliate, we will surely lose jobs.
Alan Greenspan
The monthly Coppock Indicators finished November
DJIA: 28,051 +76 Up. NASDAQ: 8,665 +94 Up. SP500: 3,141 +90 Up. All higher again, but it’s
not a buy signal I would follow. I would wait for the next sell signal.
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