Baltic Dry Index. 504 +15 Brent Crude 35.33
Spot Gold 1730
This
is the way things are, and the Game has been so successful that, like
everything, it will get more and more successful until it stops being
successful.
George
Goodman, aka Adam Smith, The Money Game. 1968.
Hong Kong leaders say Trump 'completely wrong' for curbing ties
May 30, 2020 / 2:05 AM
Speaking
hours after Trump said the city no longer warranted economic privileges and
some officials could face sanctions, security minister John Lee told reporters
that Hong Kong’s government could not be threatened and would push ahead with
the new laws.
“I don’t
think they will succeed in using any means to threaten the (Hong Kong)
government, because we believe what we are doing is right,” Lee said.
Justice
minister Teresa Cheng said the basis for Trump’s actions was “completely false
and wrong”, saying the need for national security laws were legal and
necessary.
In some of
his toughest rhetoric yet, Trump said Beijing had broken its word over Hong
Kong’s high degree of autonomy from Beijing, by proposing the national security
legislation and that the territory no longer warranted U.S. economic
privileges.
“We will
take action to revoke Hong Kong’s preferential treatment as a separate customs
and travel territory from the rest of China,” Trump said, adding that
Washington would also impose sanctions on individuals seen as responsible for
“smothering - absolutely smothering - Hong Kong’s freedom.”
Trump told
reporters at the White House that China’s move on Hong Kong was a tragedy for
the world, but he gave no timetable for the moves, leaving Hong Kong residents,
businesses and officials to ponder just how far his administration will go.
The American
Chamber of Commerce in Hong Kong said Saturday marked “a sad day” for China’s
freest city.
“This is an
emotional moment for Americans in Hong Kong and it will take companies and
families a while to digest the ramifications,” AmCham President Tara Joseph
said in a statement.
“Many of us
... have deep ties to this city and with Hong Kong people. We love Hong Kong
and it’s a sad day,” she said, adding the chamber would continue to work with
its members to maintain Hong Kong’s status as a vital business centre.
(For an
explainer on how important Hong Kong is to China as a free finance hub, please
click.)
---- Trump did not name any sanctions targets but said the announcement would “affect the full range of agreements we have with Hong Kong”, including the U.S.-Hong Kong extradition treaty to export controls on dual-use technologies and more “with few exceptions”.
China’s
Global Times, published by the People’s Daily, the official newspaper of
China’s ruling Communist Party, said Trump’s decision was a “recklessly
arbitrary” step.
Will companies flee Hong Kong? New law could imperil business in one of world’s biggest financial hubs
HONG KONG — A national security law proposed by China could imperil Hong Kong’s status as one of the world’s best places to do business.The law, approved Thursday in Beijing, led Secretary of State Mike Pompeo to say Washington will no longer treat Hong Kong, already reeling from anti-government protests and the pandemic, as autonomous from Beijing.
The Chinese government has not given details of the law, which is aimed at suppressing secessionist and subversive activity in the former British colony.
After 11 months of protests, Chinese leaders say it’s needed to combat unspecified threats in the semi-autonomous region of 7 million people. But business groups, lawyers and financial analysts say potential repercussions range from loss of business for Hong Kong’s financial markets and law firms to a loss of professional talent in the city.
Hong Kong is highly regarded for its skilled workforce, business-friendly legal system, Western-style free speech and ease of movement. But global companies already were shifting some operations out of Hong Kong due to rising costs and uncertainty after prolonged, sometimes violent clashes between police and pro-democracy protesters.
Scott Salandy-Defour, founder of clean-tech startup Liquidstar, has been considering moving out of Hong Kong, and the security bill is the “last straw,” he said. “I don’t see how it gets any better from here.”
“When we say we’re a Hong Kong-based company when talking to investors, it’s just not as attractive as it was as a year ago,” said Salandy-Defour, whose company provides sustainable battery rental and charging services for developing countries.
“We’re potentially cutting ourselves off from a lot of different funding avenues, like grants from the U.S. government,” he said.
Trade-war collateral damage: destruction of $1.7 trillion in U.S. companies’ market value
How do you make $1.7 trillion disappear? A trade war is one way, a new report has found.
A study by the Federal Reserve Bank of New York adds to previous findings that, despite pronouncements from the White House, Americans are paying — and paying stiffly — for the U.S.-China trade war.
The billions in tariffs hurled back and forth between Washington and Beijing have reduced the market value of U.S.-listed companies by $1.7 trillion during the course of the 2-year-old tax offensive. The conflict will continue to weaken the investment growth rate for these businesses up to two percentage points by year’s end, the study said.
The trade war is causing financial loss for several reasons, from the inefficient pricing that taxes can create, to supply disruptions, to companies’ pricey adaptations to the levies, among others. But this particular cause of losses is largely sentiment-based.
From the MarketWatch archives (December 2019):Fed study finds Trump tariffs backfired
The authors found that U.S. and Chinese trade-war policy announcements — usually via press conferences or policy statements — provoked sharp market-price declines, lowering returns on capital and investment rates.
The study model found that policy announcements lowered U.S. equity prices in a 3,000-company sample group by a total of six percentage points. Those outfits together command a $28 trillion market capitalization, so the six-percentage-point fall wiped away $1.7 trillion.
That’s a vanishing of value equivalent to the national GDPs of Russia, Canada or South Korea.
Several findings surprised economists. One was the sustained hit that stocks took from 11 specific policy announcements over the two years. But whether it was Washington, Beijing or even a third-party country announcing its often pugnacious trade intent, U.S. businesses “bore virtually all of the costs,” the report said.
Perhaps the
most striking finding was the protracted nature of the damage — on market
players accustomed to volatility often measured in hours or days or a
presidential tweet’s fleeting life span.
“Reductions
in share prices due to trade war announcements significantly lower firm-level
investment rates four quarters later,” the report found. “Most of the 2019
effect is driven by the impact of tariffs on U.S. firms doing business with
China, but the 2020 effects are driven more by the fact that tariff
announcements drove down returns of firms regardless of their exposure to
China.”
The apocalyptic virus that would make COVID-19 seem irrelevant: Leading scientist warns of the danger of a pandemic triggered by chicken farms that could kill half the world's population
Just when we seem to be easing out
of the crisis, just as the death toll slows and new hospital admissions for coronavirus
head towards zero, just as we begin to allow ourselves the first tentative sigh
of relief, along comes a new book by an American doctor to tell us: this,
folks, is just the dress rehearsal.
The real show, the plague in which
half of us may well die, is yet to come.
And, if we don’t change our ways,
it could be just around the corner. What we are experiencing now may feel bad
enough but is, apparently, small beer.
In the ‘hurricane scale’ of
epidemics, Covid- 19, with a death rate of around half of one per cent, rates a
measly Category Two, possible a Three — a big blow but not catastrophic.
The Big One,
the typhoon to end all typhoons, will be 100 times worse when it comes, a
Category Five producing a fatality rate of one in two — a coin flip between
life and death — as it gouges its way through the earth’s population of nearly
eight billion people. Civilisation as we know it would cease.
What’s more,
he adds ominously, ‘with pandemics explosively spreading a virus from human to
human, it’s never a matter of if, but when’.
This
apocalyptic warning comes from Dr Michael Greger, a scientist, medical guru and
campaigning nutritionist who has long advocated the overwhelming benefits of a
plant-based diet. He’s a self-confessed sweet potatoes, kale and lentils man.
Meat, in all its forms, is his bete noire.
He has also
done a lot of research into infectious diseases — the 3,600 footnotes and
references in his mammoth 500-page book bear witness to that.
More
https://www.dailymail.co.uk/news/article-8370969/The-apocalyptic-killer-virus-coming-home-roost.html
The extra $600 Americans receive in weekly unemployment benefits ends in July — how that could cost the U.S. more jobs
Subsidies will soon end. Americans will then feel the economic pain—and revolt.
By Josh Holmes May 28, 2020 7:00 pm
The
political press is preoccupied with the electoral implications of the virus
crisis, and pundits insist the 2020 election will be about the Trump daily soap
opera. But an emerging cultural and economic time bomb is about to explode.
There has never been a wider gap between average Americans’ perception of their
own economic situation and the reality of it. America could soon have its most
combustible political environment in recent history.
Something
that should alarm everyone: Neither the stock market nor the political
preferences of those who have been hit hardest by this Covid-induced economic
crisis have fundamentally changed since the crisis began. The American economy
has shed more than 30 million jobs in the past eight weeks, and poll numbers
haven’t moved an inch. According to Gallup, President Trump’s approval rating
was 49% on Feb. 16, with 48% disapproving. Three months and the largest job
loss in American history later, those numbers are exactly the same: 49% to 48%.
How is that
possible? Is the political climate so partisan that the loss of your livelihood
can’t change your political perspective? To some extent that could be true. But
most of America is living in an illusion that masks the inevitable pain of this
pandemic.
----Much of economically vulnerable America has been insulated from economic reality. A recent Washington Post poll shows that 77% of those who lost their jobs believe they will be heading back to the same jobs following the health crisis. Pew Research reports that 68% of Americans who lost their jobs are concerned about reopening the economy too early, rather than too late.
In short, if
your family hasn’t lost a loved one to Covid-19, your bank account probably
looks basically the same, and you believe your job is awaiting your return, the
past 10 weeks have been an extended inconvenience. Your political views are
still informed by the same economic inputs that formed them in February.
That won’t
hold for long. The direct payments won’t go on forever. The jobs may not come
back soon. Businesses aren’t guaranteed to reopen, and the political bubble
formed by this alternate reality could portend large political realignments.
More
Marxist Economic Policy—as in Groucho
The unemployment bonus is straight out of ‘Animal Crackers.’
By Gregg Opelka May 27, 2020 6:25 pm ET
We’re all
Marxists now. Not Karl, Groucho. There’s a famous sketch in “Animal Crackers”
(1930) in which Groucho (as Captain Spaulding) quizzes Chico (Signor Emanuel
Ravelli) on how much money the band gets paid. “What do you fellas get an
hour?” Groucho asks. “For playing we get $10 an hour,” Chico replies.
Groucho
presses: “I see. What do you get for not playing?” “For not playing we get $12
an hour. . . . Now for rehearsing, we make special rate. That’s $15
an hour.” Groucho: “That’s for rehearsing? And what do you get for not
rehearsing?” Chico: “You couldn’t afford it. You see, if we don’t rehearse, we
don’t play. And if we don’t play, that runs into money.”
----I have a musician friend, Jim. He plays the bass. Jim is a talented man, and his gigging takes many forms—studio recording as well as live performance. As has happened to so many, his entire livelihood dried up overnight in mid-March. After filing for unemployment relief, he was grateful to receive the bulk of his lost weekly income but equally surprised by the unexpected $600-a-week bonus.
Without
auditioning for it, Jim has become an unofficial member of Signor Ravelli’s
Animal Crackers orchestra. He recently complained, only half ironically, that
he doesn’t know how he’ll make ends meet once he can work again. Suddenly, he’s
singing the economic equivalent of St. Augustine’s famous prayer for
redemption: “Please let me work again, Lord—just not yet.”
In the 1980s
economist Arthur Laffer popularized the notion of an ideal, lower tax rate. If
you tax something too much, the Laffer curve posits, you get less of it. In the
government’s recent fiscal and monetary response to the pandemic, we have the
inverse corollary, the Sloth curve. If you create incentives for unemployment,
you get more of it.
If politicians continue to dole out
largess at the current rate, my friend Jim will have his best year in a long
time and, like Signor Ravelli’s band, he’ll have no incentive to go back to
playing.
https://www.wsj.com/articles/marxist-economic-policyas-in-groucho-11590618298?mod=opinion_lead_pos10
"Sugar Foot Stomp" ~ Two versions, 1925 & 1930's ~ Vince Giordano's Nighthawks @ Decatur, Illinois
"Putt'in On The Ritz" - Vince Giordano and the Nighthawks
Vince Giordano - There's a Future in the Past - Trailer MANIFF2016
“Beyond this, the problem is universal. It is that governments
are now held responsible for the welfare of the people. The aspirations of the
people can outrun their ability to pay for them, and nobody has yet found a way
to create answers to the aspirations out of thin air.”
George Goodman, aka Adam Smith, The Money Game. 1968.
The Monthly Coppock Indicators finished May.
DJIA: 25,383 +12 Down. NASDAQ: 9,490 +178
Up. SP500: 3,044 +83 Down.
The NASDAQ has rebounded to up. The S&P and the DJIA remain down. But
the game is now totally rigged by the Fed.
