Baltic Dry Index. 1937
-10 Brent
Crude 63.23
Never ending Brexit
now October 31st, maybe. 94 days away.
Nuclear Trump
China Tariffs Now In Effect.
USA v EU trade war
postponed to November, maybe.
“The
only function of economic forecasting is to make astrology look respectable.”
John
Kenneth Galbraith.
This week, it’s all
about the Trump cowed Fed rolling over and cutting their key interest rate as
ordered, plus a nice follow up statement of more interest rates to come. The
resumption of USA v China trade war talks in Shanghai is of very much lesser importance,
unless they can surprise everyone and pull a white rabbit out of a very empty
top hat.
Below, more on the
exit rally.
Asian shares drift into trade talks, Fed test
July 29, 2019 /
1:42 AM
SYDNEY (Reuters) -
Asian shares drifted lower on Monday as markets anxiously counted down to a
likely cut in U.S. interest rates this week with much riding on whether or not
the Federal Reserve signals yet more are in the pipeline.
U.S. and Chinese trade negotiators also meet in Shanghai
this week for their first in-person talks since a G20 truce last month, but
expectations are low for a breakthrough. Data on the weekend showed profits earned by China’s industrial firms contracted in June, fuelling concerns that the bruising trade war will drag on economic growth.
“We remain cautiously optimistic that both sides can agree on a narrow agreement that addresses important trade-related issues, such as U.S. demands to increase exports,” said analysts at Barclays in a note.
“That said, we are sceptical about the prospects of a broader agreement that includes the more challenging security-related issues.”
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS eased 0.4% in slow trade. Japan's Nikkei .N225 dipped 0.5% and Shanghai blue chips .CSI300 0.2%.
E-Mini futures for the S&P 500 lost 0.1%.
Interest rate futures are fully priced for a quarter-point rate cut from the Fed on Wednesday, with only a small chance of a half-point move FEDWATCH.
More important will be what the central bank flags for the future, given the market implies 100 basis points of easing over the next year or so.
More
Modest expectations as U.S., China set to resume trade talks
By Josh
Zumbrun and Chao
Deng Published: July 28, 2019 10:38
p.m. ET
Negotiators for the U.S. and China will face off in Shanghai this coming
week in yet another attempt to piece together a trade accord, amid considerably
lowered expectations for the kind of sweeping deal that appeared within reach
this spring. Modest wins might be obtainable, however.
People close to the talks say a major breakthrough is unlikely on points that led to negotiations breaking down in early May. That includes the U.S. insistence that China commit to legal changes to protect intellectual property and abandon state subsidies to business, and Beijing’s demands that the U.S. drop all tariffs as a condition for a deal.
Even President Donald Trump played down the odds of a significant
breakthrough. “I don’t know if they’re going to make a deal,” Trump said
Friday. “Maybe they will, maybe they won’t.”
Among the possible smaller achievements that might be obtainable, close observers say, would be a commitment by China to purchase more agricultural products and action by the U.S. to relax its ban on U.S. companies selling to telecommunications equipment giant Huawei Technologies Co., which Trump has already agreed to do in general terms. Progress toward a small agreement on Huawei and agricultural purchases could set the stage for negotiators to tackle bigger issues in a follow-up meeting in Washington, the people following the talks say.
In other news, the British government finally gets serious about leaving the wealth and jobs destroying EUSSR. But already it may be to little too late if the EU has already dropped back into recession. Worse, a global manufacturing slowdown is already underway with Asian exports falling. Add in falling real estate prices in many key upscale parts of the world, and the next global recession may already be upon us. We should have left the sinking EUSSR back in March.
Assuming EU will not budge, Britain ramps up preparations for no-deal Brexit
July 28, 2019 /
9:40 AM
LONDON (Reuters) -
The British government is working on the assumption that the European Union
will not renegotiate its Brexit deal and is ramping up preparations to leave
the bloc on Oct. 31 without an agreement, senior ministers said on Sunday.
Boris Johnson, who took over as British prime minister on Wednesday with a promise to deliver Brexit by the end of October “no ifs or buts”, plans to seek a new exit deal with the EU. The EU has said repeatedly that the deal cannot be reopened.
Leading Brexit supporter Michael Gove, who Johnson has put in charge of
‘no deal’ preparations, wrote in the Sunday Times newspaper that the government
would undertake “intensive efforts” to secure a better deal from the EU.
“We still hope they will change their minds, but we must operate on the assumption that they will not ... No deal is now a very real prospect and we must make sure that we are ready,” Gove wrote.
“Planning for no deal is now this government’s no. 1 priority,” he said, adding “every penny needed” for no deal preparations would be made available.
Gove said the government would be launching “one of the biggest peacetime public information campaigns this country has seen” to get people and businesses ready for a ‘no deal’ exit.
The Sunday Times reported that Dominic Cummings, the mastermind behind the 2016 referendum campaign to leave the EU and now a senior aide to Johnson, told a meeting of the prime minister’s advisers that he had been tasked with delivering Brexit “by any means necessary”.
Johnson has set up a “war cabinet” of six senior ministers to make decisions on Brexit and is preparing for a no-deal emergency budget in the week of Oct. 7, the newspaper added.
Writing in the Sunday Telegraph, new Chancellor of the Exchequer Sajid Javid said: “In my first day in office ... I tasked officials to urgently identify where more money needs to be invested to get Britain fully ready to leave on October 31 – deal or no deal. And next week I will be announcing significant extra funding to do just that.”
More
Manufacturing Recessions vs Real Recessions: How Much Lead Time Do You Expect?
27/7/2019
More
Finally, more on that unwinnable USA v China trade war.
China approves wheat, soy imports from Russia
July 26, 2019 /
5:34 PM
BEIJING (Reuters) - China has approved wheat imports from the Russian
region of Kurgan, the Chinese customs office said on Friday, bringing Russia a
step closer to its goal of dramatically increasing grain exports.
It also approved soybean imports from all parts of Russia, the General
Administration of Customs said in a separate statement on its website, having
all but halted U.S. soy imports as the trade dispute between Beijing and
Washington deepened.
China was the top buyer of U.S. soybeans until Beijing slapped a 25% tariff on shipments last year in response to U.S. tariffs on a range of Chinese products.
Russia, already the world’s top wheat exporter, plans to invest billions of dollars in grain infrastructure and logistics with the aim of raising its exports of the commodity to at least 55.9 million tonnes by 2035.
The figure, outlined in a 2035 strategy published by Russia’s agriculture ministry earlier this month, could be as high as 63.6 million tonnes, its “optimistic scenario” forecasts showed.
This year, Russia is expected to export 41.9 million tonnes of grain, including 31.4 million tonnes of wheat, according to SovEcon, one of Russia’s leading agriculture consultancies.
Russian grain supplies could play a key role in President Vladimir Putin’s plan, announced a year ago, to increase the country’s exports of agricultural products to $45 billion by 2024. The agriculture ministry is in charge of that initiative.
China is already importing wheat from six other Russian regions.
Our sovereign lord the King chargeth and commandeth all persons, being assembled, immediately to disperse themselves, and peaceably to depart to their habitations, or to their lawful business, upon the pains contained in the act made in the first year of King George, for preventing tumults and riotous assemblies. God save the King.
The Riot Act 1714, effective August 1st, 1715.
If the group failed to disperse within one hour, then anyone remaining gathered was guilty of a felony without benefit of clergy, punishable by death.
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today, US tax avoidance billionaire style. Blown your reputation forever?
No problem, for the right fee almost anything’s fixable in America.
The Jeffrey Epstein Guide to Cutting Your Tax Bill by 90%
By Tom Metcalf, Greg Farrell, and David Kocieniewski
July 27, 2019, 12:13 PM GMT+1
There are a lot of theories about the sources of Jeffrey
Epstein’s wealth and how he earned his one-time reputation as a brilliant money
manager. One thing that isn’t disputed is that he knew how to cut his tax bills
by setting up shop in the U.S. Virgin Islands.That didn’t require any particular skill on Epstein’s part. The rules set by the Economic Development Commission in St. Thomas allow some businesses in the U.S territory to, after meeting certain conditions, significantly lower their exposure to federal corporate and personal income taxes. By, possibly, 90%.
The rules have tightened since Epstein made his first major investment
in Virgin Islands in the late 1990s. But the question remains: Since one of his
self-professed specialties was helping the ultra-rich reduce their tax income,
what role did the Virgin Islands play in enriching Epstein and his clients?
Six years passed between Epstein’s buying a private island in the territory and 2004, when authorities began enforcing stricter rules on tax-break eligibility. By then Epstein was a veteran player -- and perhaps wizened adviser -- who has incorporated multiple dozens of businesses.
Even now, what’s legally on offer there “is a huge gift” for people of means, said Tim Richards, a lawyer specializing in international tax at Richards & Partners in Miami.
The rules could allow businesses like Epstein’s to avoid paying regular U.S. taxes, for example, by counting the company’s income where its computer servers are located.
The tax systems of U.S. territories like the Virgin Islands mirror those of the mainland except that the recipient is not the U.S. Treasury but the local government. For non-U.S. income, they have the authority to reduce taxes in some cases, such as to bolster economic development.
Epstein started benefiting around two decades back, when he moved his firm, originally called J Epstein & Co., from New York to St. Thomas. Mystery still surrounds the operations of the business, renamed Financial Trust Co., though a few investments have come to light, including an $80 million invested into hedge fund DB Zwirn & Co. between 2002 and 2005.
He made another tax play in 2012, securing approval for his Southern Trust Co. to join the tax-incentive program as a designated service business, documents show. His 50-50 partnership in a local marina with New York real estate developer Andrew Farkas is also a beneficiary of the program.
Read more: Epstein’s Port in Storm Was Co-Owning Marina With Tycoon Farkas
Southern Trust received a 90% exemption on its US VI income taxes and a 100% exemption on gross receipts and excise taxes for a decade starting in February 2013, according to its filing with the island.
The economic development tax breaks can go even further for Virgin Islands residents, with a 90% reduction in personal income tax also available.
“The USVI is unique in that it has congressionally approved tax benefits found in the Internal Revenue code, but at the same time, the American flag flies, there’s a U.S. federal court, appeals go to the U.S. Third Circuit, you’re not outside the U.S. banking system and you even have a U.S. area code,” said Joseph DiRuzzo, a long-time USVI tax attorney.
More
Jeffrey Epstein’s sinister PR strategy was a ‘classic tactic of spamming the internet’
By Meera Jagannathan Published: July 28, 2019 7:34 a.m. ET
Jeffrey Epstein wielded upper-crust cachet and an online PR
storm to rehabilitate his image after registering as a sex offender more than a
decade ago, according to a recent profile by The New York Times. But the latter tactic
would be far less effective if he were to employ it today,
reputation-management experts told MarketWatch.The wealthy financier, who pleaded not guilty this month to sex-trafficking charges, reportedly “surrounded himself with prestige and counted on others to look past what he had done” after serving 13 months in a Florida county jail. Epstein, 66, had cut a controversial plea deal in 2008 after having been accused of sexually abusing underage girls.
He went on to launch a handful of websites highlighting his contributions to society — among them JeffreyEpsteinEducation.com and JeffreyEpsteinScience.com — as well as flood the internet with positive Epstein press releases and faux news stories. He also played up his benefactor connections to Harvard University, which he never attended, according to the Times.
“Jeffrey Epstein appears to be a natural at social engineering amongst high society. Thus, he was able to steadily re-ingratiate himself with the rich and famous, many of whom appear to be willing to simply look the other way about each other’s transgressions,” Jonathan Bernstein, a crisis-management consultant, told MarketWatch.
“Second, his online blitz of allegedly positive information was a classic tactic of spamming the internet for SEO benefits,” he added. “That was easier to do 10 years ago than it is now, because Google GOOG, +10.45% GOOGL, +9.62% has tightened its algorithms.”
Indeed, a common strategy is to push negative stories beneath the first page of search results. Michael Frantz, the director of Jail Time Consulting and a former white-collar offender who served federal prison time, says his firm offers a reputation-restoration service that creates content, including social-media pages and positive exact-match domains (domain names that match specific keywords) for clients. A website for the service says its goal is “to bury as many of the negative articles as possible so no one sees them.”
“We’re creating all this backlinking, blogs, sites and then articles over and over … we can do videos,” Frantz told MarketWatch. Cost for the basic service starts with a $1,500 down payment and he charges a monthly fee for six months, he said, typically totaling $10,200. The price tag can increase, depending on the nature of the client’s case, he said.
The consultancy also offers a criminal-records removal service that promises to “remove everything about anyone” from 33 criminal background-check websites, including Intelius, BeenVerified and LexisNexis Peoplewise. That work involves filing documentation containing the person’s personal details with each individual company to have the information removed, Frantz said, and costs a client $865.
More
“Wealth, in even the most improbable cases, manages to convey the aspect of intelligence.”
John Kenneth Galbraith.
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?
Next-gen membranes for carbon capture
Date:
July 26, 2019
Source: Ecole Polytechnique Fédérale de Lausanne
Summary: Chemical engineers have developed a new class of high-performance membranes for carbon capture that greatly exceed current targets.
A major greenhouse gas, CO2 produced from burning fossil
fuels is still mostly released into the atmosphere, adding to the burden of
global warming. One way to cut down on it is through a carbon capture: a
chemical technique that removes CO2 out of emissions
("postcombustion"), preventing it from entering the atmosphere. The
captured CO2 can then be either recycled or stored away in in gas or
liquid form, a process known as sequestration.
Carbon capture can be done using so-called "high-performance membranes," which are polymer filters that can specifically pick out CO2 from a mix of gases, such as those coming out of a factory's flue. These membranes are environmentally-friendly, they don't generate waste, they can intensify chemical processes, and can be used in a decentralized fashion. In fact, they are now considered as one of the most energy-efficient routes for reducing CO2 emissions.
Scientists led by Kumar Varoon Agrawal at EPFL Valais Wallis have now developed a new class of high-performance membranes that exceeds post-combustion capture targets by a significant margin.
The membranes are based on single-layer-graphene with a selective layer thinner than 20 nm and are highly tunable in terms of chemistry, meaning that that can pave the way for next-generation high-performance membranes for several critical separations.
Current membranes are required to exceed 1000 gas permeation units (GPUs), and have a "CO2/N2 separation factor" above 20 -- a measure of their carbon-capturing specificity. The membranes that the EPFL scientists developed show six-fold higher CO2 permeance at 6,180 GPUs with a separation factor of 22.5. The GPUs shot up to 11,790 when the scientists combined optimized graphene porosity, pore size, and functional groups (the chemical groups that actually react with CO2), while other membranes they made showed separation factors up to 57.2.
"Functionalizing CO2-selective polymeric chains on nanoporous graphene allows us to fabricate nanometer-thick yet CO2-selective membranes," says Agrawal. "This two-dimensional nature of the membrane drastically increases the CO2 permeance, making membranes even more attractive for carbon capture. The concept is highly generic, and a number of high-performance gas separations are possible in this way."
“It is a far, far better thing to have a firm anchor in nonsense than to put out on the troubled sea of thought.”
John Kenneth Galbraith.
The monthly Coppock Indicators finished June
DJIA: 26,600 +51 Up. NASDAQ: 8,006 +70 Down.
SP500: 2,942 +50 Up.
The S&P has reversed again to up after only one month. The Dow has reversed to up, while the NASDAQ remains down. On to next month’s numbers for clarification.
