Baltic Dry Index. 539 -07 Brent Crude 60.33 Spot Gold 1567
Never ending Brexit now January 31. 3 days away.
Trump’s Nuclear China Tariffs Now in effect.
The USA v EU trade war started October 18. Now in effect.
“When it becomes serious, you have to lie.”
Jean-Claude
Juncker. Failed former Luxembourg P.M., serial liar, ex-president of the
European Commission. Scotch
connoisseur.
With new cases of coronavirus occurring in China and several
other countries, the number of official cases in China now exceeds the total official
cases in China of SARS back in 2002-2003. But no one believes China’s official
figures.
With just under 6,000 official cases reported, most
experts in the field of viruses think this figure is a gross understatement.
China’s own actions, akin to a problem more like Chernobyl or Fukishima, imply a
far bigger problem is occurring than a modest outbreak mostly confined to a
single province in central China.
To this old dinosaur market follower, it’s far too early
to be trying to bottom fish stock markets or commodity markets.
The global economy was already running on fumes before coronavirus
turned up in China last month. It’s simply impossible to know how big a drag to
the global economy, the hit will be.
If the virus can live on many surfaces for weeks or worse
months, how will China’s consumer exports like I-phones and Androids, be
affected?
We already see a massive hit unfolding in tourism,
hospitality, and Asian retailing.
At worst, this virus could be the new black swan that triggers
the next recession. This is a time for
caution, and letting the crisis play out for a few more weeks.
Below the latest developments from Asia.
Asian shares turn red as Hong Kong tumbles on China virus
January 29, 2020 /
1:05 AM
TOKYO
(Reuters) - Asian shares erased earlier gains on Wednesday, swinging into
negative territory as a spike in new Chinese virus cases sent Hong Kong stocks
tumbling and fueled fears about the economic impact of the outbreak.
MSCI’s broadest index of Asia-Pacific shares outside Japan skidded
0.52%. Hong Kong shares fell 2.8% on their first session after a two-and-a-half
trading day break for Lunar New Year, led by declines in financial services,
real estate, and consumer goods companies.
However, Australian shares rose 0.57%, while Japan’s Nikkei stock index
advanced 0.4%, partly because investors in these markets have already had a
chance to react to the virus outbreak, which has claimed more than 100 lives.
Oil futures built on gains in Asia after OPEC sources said the cartel
wants to extend crude output cuts by three months to June, easing concern about
excess supplies.
U.S. Treasury yields remained higher and safe-haven currencies held steady
in a sign of some calm in financial markets, but the focus remained squarely on
the virus and how investors would re-price riskier assets.
“The next three to five days will be maximum selling pressure, because
essentially markets had a benign view of the virus before the Lunar New Year,”
said Sean Darby, global equity strategist at Jefferies in Hong Kong.
“Until the rate of cases starts to peak, markets are not likely to
bounce.”
---- The yield on benchmark 10-year Treasury notes rose to 1.6666% versus a yield of 1.5821% on three-month Treasury bills in another sign that sentiment has stabilized.
The yield curve briefly inverted on Tuesday when 10-year yields fell
below their 3-month counterparts for the first time since October. An inverted
yield curve has historically been an indicator of looming recession.
Markets in Asia are likely to be subdued before the U.S. Federal Reserve
meeting later on Wednesday. The Fed is expected to reiterate its desire to keep
rates unchanged at least through this year.
More
China virus toll passes 130; Japan evacuates citizens
January 28, 2020
/ 10:51 PM
BEIJING (Reuters) - The death toll from a new coronavirus in China rose
sharply to 132 on Wednesday with nearly 1,500 new cases, as Japan said it flew
citizens out of the central city of Wuhan, the epicenter of the outbreak.
Several countries are trying to evacuate their citizens from Wuhan. A
U.S. charter plane departed from Wuhan on Wednesday, said a U.S. official, but
it was unclear who was on board.
U.S. officials said the White House was weighing whether to suspend
flights to the country in a drastic measure to control the spread of the
disease.
“All options for dealing with infectious disease spread have to be on
the table, including travel restrictions,” said U.S. Health Secretary Alex Azar.
The White House is holding daily meetings on the outbreak and monitoring
China-U.S. flights as a likely source of infections, sources briefed on the
matter said, though it had decided against suspending air traffic for the time
being.
A senior Trump administration official said airlines had not been asked
to suspend flights, after CNBC reported that the White House had told airline
executives it was considering such a move.
Fears of the spreading virus have already pushed airlines around the
world to reduce flights to China and global companies to restrict employee
travel to the country, while sectors from mining to luxury goods have been
shaken by concerns over global growth in the event of a worst-case pandemic.
China’s National Health Commission said the total of deaths from the
flu-like virus rose by 26 on Tuesday to 132, almost all in the province of
Hubei which is under virtual lockdown, while the number of confirmed cases rose
by 1,459 to stand at 5,974.
The number of cases in China now exceeds
its tally of 5,327 infected with the Severe Acute Respiratory Syndrome (SARS)
coronavirus that killed about 800 people around the world in 2002-2003.
More
Person in Japan who has not visited Wuhan contracts coronavirus - ministry
January 28, 2020
/ 8:54 AM
TOKYO (Reuters) - A person in Japan who had not visited the Chinese city
of Wuhan has contracted the new coronavirus, Japan’s health ministry said
Tuesday.
The infected man is a tour bus driver in his 60s in the city of Nara,
who had contact with visitors from Wuhan between Jan. 8-16, the ministry said
on its website. He began showing symptoms on Jan. 14 and was hospitalized on
Jan. 25 before being diagnosed, according to the statement.
Another man in his 40s who lives in Wuhan was also confirmed to have
contracted the virus, the ministry said.
The new infections bring the total number of confirmed Japanese cases to
six.
Experts say China virus outbreak will last months at least
Issued on: 28/01/2020 - 07:32Modified: 28/01/2020 - 07:30
The deadly new coronavirus that has broken out in China, 2019-nCoV, will
afflict a minimum of tens of thousands of people and will last at least several
months, researchers estimate based on the first available data.
"The best case scenario, you would have something... where we go
through the spring into the summer, and then it dies down," David Fisman,
a professor at the University of Toronto who wrote an analysis of the virus for
the International Society for Infectious Diseases, told AFP.
"It's not something that's going to end the next week or the next
month," said Alessandro Vespignani, a professor at Northeastern
University. He is part of a group of researchers that manages an online
dashboard about the outbreak.
Epidemiologists have no crystal ball. They have only piecemeal
information on the new virus, which appeared in December. They use mathematical
models to estimate the actual number of cases, as of the current date, and
compare them to past outbreaks -- but many of their hypotheses remain
uncertain.
Until the past weekend, researchers thought that infected people were
not contagious until they began exhibiting symptoms, such as fever, respiratory
problems, and pneumonia. But Chinese authorities said Sunday they had
established the opposite.
US health authorities said Monday they had not seen evidence that
asymptomatic patients can infect other people. But if they can, this would
definitely change the outbreak's dynamics.
The first estimates for the length of the incubation period -- about two
weeks -- are recent.
----Quarantines and isolation measures, systematic hand washing and masks could help drive down the average number of infected people. If the rate falls below one, the epidemic will die down.
But the effect of the control measures China has implemented won't be
felt for another week or two, researchers say, based on the virus's cycle.
"The more we learn about it, the more it looks like SARS,"
said Fisman. "SARS was controllable; hopefully this will be too. But we
won't know for a few weeks."
"It's going to be many weeks, probably months, and nobody knows
where this will go," he added.
The official number of cases is more than 4,000 in China, with more than
100 deaths, and some 50 confirmed infections outside the country.
But the actual number of Chinese cases, including those not yet
detected, is likely to be more than 25,000, said Vespignani, according to the
analysis of the group coordinated by Northeastern.
More
China virus turns Macau into gambling ghost town
January 29, 2020
/ 4:55 AM
HONG KONG (Reuters) - The Chinese territory of Macau has become a
near-ghost town during what is typically the busiest time of year in the
world’s biggest casino hub, after authorities announced a raft of measures to
keep visitors away and contain the new coronavirus.
The local government late on Tuesday said it would curb its individual
visit scheme through which visitors gain entry from mainland China, days after
it suspended inbound package tours. Since Friday, arrivals have dropped 69%,
latest figures showed.
The steps come as deaths from the coronavirus reached 132 in China on
Wednesday with 1,500 new cases. The flu-like virus emerged late last year in
the eastern city of Wuhan and cases have since been reported worldwide
including seven in Macau.
The virus has added to concerns in the former Portuguese colony over the
impact of a slowing Chinese economy and anti-government protests in
neighbouring Hong Kong.
However, the outbreak also coincides with the Lunar New Year holiday during which Macau seasonally enjoys record visitation, prompting analysts to forecast a decline in gaming revenue of at least 30% for as long as visiting restrictions are in place.
Casino operators’ share prices plunged on Wednesday, by as much as 6% for MGM China Holdings Ltd (2282.HK), 5.7% for Sands China Ltd (1928.HK), 4.8% for Wynn Macau Ltd (1128.HK) and 4.7% for Galaxy Entertainment Group Ltd (0027.HK).
More
Coronavirus: China has quarantined 50 million people. Experts worry that might backfire
The race to curb the spread of the new strain of coronavirus that has
killed more than 100 people worldwide has triggered a massive public health
experiment in China that is being closely watched by health experts around the
globe.
Chinese authorities have indefinitely barred 50 million people from
traveling and advised them to stay home to contain the rapidly spreading virus,
known as 2019-nCoV.
A quarantine of this scope is "absolutely unprecedented," said
Lauren Sauer, an emergency medicine professor at Johns Hopkins University.
"I can't think of anything that comes even remotely close."
On Tuesday, as case counts rose, Chinese authorities agreed to allow the World Health Organization to send international experts to China to assist with research and containment of the virus. It is unclear whether or how that will affect the standing quarantine orders.
The virus has so far infected nearly 5,000 people on four continents after it was first detected late last year in Wuhan, China. Five cases have been reported in the United States, including two in Southern California.
China's containment measures could theoretically prevent infected people from introducing the virus elsewhere in the country or world, experts say. The virus is believed to be spreading from person to person through coughing and sneezing, though information evolves daily.
But the lockdown orders were likely put into effect too late and could lead to food and medicine shortages that worsen the outbreak, said Lawrence Gostin, director of the World Health Organization Collaborating Center on National and Global Health Law.
Many experts also worry that the measures, which some consider inhumane, could stoke panic and mistrust in the government and ultimately impede prevention efforts.
"There's reason to believe that this could backfire," Gostin said.
More
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today, a warning on the global economy from the highly respected Stephen
Roach, and we still have the drag from coronavirus to come.
Opinion: With global trade barely growing, there’s no cushion for the world economy
Published: Jan 27, 2020 12:04 p.m. ET
NEW HAVEN, Conn. (Project Syndicate) — With the benefit of full-year data, only
now are we becoming aware of the danger the global economy narrowly avoided in
2019. According to the International Monetary Fund’s latest estimates, world
gross domestic product grew by just 2.9% last year — the weakest performance
since the outright contraction in the depths of the global financial crisis in
2009 and far short of the 3.8% pace of post-crisis recovery over the 2010-18
period.On the surface, 2.9% global growth doesn’t appear too shabby.
But 40 years of perspective says otherwise. Since 1980, trend world GDP growth has averaged 3.5%. For any economy, including the world as a whole, the key to assessing growth implications can be found in deviations from the trend —a proxy for the so-called output gap.
Uncomfortably close
Last year’s shortfall from trend (0.6 percentage points) brought growth uncomfortably close to the widely accepted global recession threshold of approximately 2.5%.Unlike individual economies, which normally contract in an outright recession, that is rarely the case for the world as a whole. We know from the IMF’s extensive coverage of the world economy, which consists of a broad cross-section of some 194 countries, that in a global recession about half of the world’s economies are typically contracting, while the other half are still expanding — albeit at a subdued pace.
The global recession of a decade ago was a notable exception: by early 2009, fully three-quarters of the world’s economies were actually shrinking. That tipped the scales to a rare outright contraction in world GDP, the first such downturn in the overall global economy since the 1930s.
For global business-cycle analysts, the 2.5%-3.5% growth band is considered the danger zone.
When world output growth slips to the lower
half of that range — as it did in 2019 — the risks of global recession need to
be taken seriously. As is typically the case for official, or institutional,
forecasts, the IMF is projecting a modest acceleration of annual world GDP
growth to 3.3% in 2020 and 3.4% in 2021.
---- No cushion
Downside risks are especially worrisome, because a 2.9% growth outcome for the world economy underscores the lack of a comfortable cushion in the event of a shock.As I noted recently, predicting shocks is a fool’s game. Yet the draconian measures that China is now taking to contain the lethal Wuhan coronavirus only serve to remind us that shocks are far more frequent than we care to think.
---- Global trade stalls
The same message comes through loud and clear in gauging the risks to the global trade cycle — long the major engine of global growth in an increasingly integrated, supply-chain-linked world economy.The IMF’s latest assessment put global trade growth at just 1% in 2019 — its seventh consecutive downward revision. Indeed, last year was the weakest trade performance since the historic 10.4% plunge in 2009, which was the worst contraction since the early 1930s.
Compared to the 5% average over the 2010-18 period, the slowdown of world trade growth to just 1% in 2019 is all the more alarming. In fact, it was the fourth-weakest year since 1980, and the three worse years — 1982, 2001, and 2009 — were all associated with global recessions.
Global trade growth has never recovered to its pre-crisis pace, a shortfall that has been the subject of intense debate in recent years.
Initially thought to be a consequence of unusual weakness in business capital spending, there can be no ignoring the impact of protectionism following the start of the U.S.-China trade conflict. Now that the two sides have agreed to a truce in the form of a “phase one” trade deal, there is hope that the trade prognosis will improve.
---- Reflecting that hope, the IMF’s January update calls for a modest rebound to 3.3% average growth in world trade over the 2020-21 period. But with the average U.S. tariff rate on Chinese imports likely to remain at about 19% after the accord is signed — more than six times the pre-trade-war rate of 3% — and with worrisome signs of escalating U.S.-Europe trade tensions, this forecast, like those of the past several years, may turn out be wishful thinking.
All this bears critically on the precarious state of the global business cycle.
More
If the financial system goes down, our business is going down and, trust me, yours and everyone else's is going down, too.
Lloyd
Blankfein’s ex-CEO Goldman Sachs, threat 2008. “Mr. Goldman Sacks.”
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?
High-value "flash graphene" can be made from cheap trash
Nick Lavars January 27, 2020
Graphene’s potential as a game-changing material is well
understood, but the search
is very much on for new and improved ways to produce it. Scientists at Rice
University are reporting a big breakthrough in this area, demonstrating a new
processing technique that can convert a wide range of trash products into
“flash graphene” in a cheap and efficient manner.With high thermal and electrical conductivity, an ultra-thin profile and incredible strength, graphene is already opening up some exciting possibilities in the world of material science. One of the main ways of producing the one-atom-thick sheets is through chemical vapor deposition, a process whereby a carbon source (typically methane) is pumped into a chamber to force a chemical reaction and leave a thin layer of graphene on the surface of a thin substrate.
This can be a laborious and expensive process, with the current commercial price of graphene ranging from US$67,000 to $200,000 per ton, according to Rice University chemist James Tour. He led a team of researchers in developing a new way of putting the wonder material together, which can use all manner of things as the carbon source to tackle environmental waste at the same time.
The process leverages what is known as flash Joule heating, in which an electrical current is passed through a conductive material to generate heat. Using this technology to heat any carbon-containing materials to around 3,000 Kelvin (around 4,940° F or 2,730° C) turns trash into graphene flakes in around 10 milliseconds, while all the non-carbon elements that are left over are turned into useful gases.
“When this process is industrialized, elements like oxygen and nitrogen that exit the flash reactor can all be trapped as small molecules because they have value,” Tour says.
The
most promising aspect of this new technology is the vast range of materials
that can be used to generate the graphene flakes. The team says everything from
banana peels, to coal, to other food waste and even plastics can act as the source
of carbon and used to create bulk graphene at a fraction of the cost of current
methods.
“This is a big deal,” Tour says. “The world throws out 30 to 40 percent
of all food, because it goes bad, and plastic waste is of worldwide concern.
We’ve already proven that any solid carbon-based matter, including mixed
plastic waste and rubber tires, can be turned into graphene.”
Another exciting outcome of the research are the possibilities that a
far cheaper form of graphene could open up. The team has tested composites of
plastics and concrete that are enhanced with its flash graphene, with the
latter proving particularly promising. Tour says that cement with a
concentration of just 0.1 percent of flash graphene could reduce the immense
environmental impact of concrete production by a third.
More
George Orwell.
The monthly Coppock Indicators finished December
DJIA: 28,538 +91 Up. NASDAQ: 8,973 +125 Up.
SP500: 3,231 +114 Up.
All higher again, but it’s
not a buy signal I would take. The rally is all down to the Fed monetizing at a
rate of about 100 billion a month. I continue to look on the Fed’s latest stock
bubble as an exit rally.
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