Posts belonging to Category USA

Sanctions against China for the “theft” of US intellectual property

Threats of retaliatory measures

President Donald Trump is poised on Thursday to unveil sanctions against China for the “theft” of US intellectual property, a White House official said, teeing up a second potential confrontation in as many months. Spokesman Raj Shah told AFP that Trump will announce actions following an “investigation into China’s state-led, market-distorting efforts to force, pressure, and steal US technologies and intellectual property.”

Beijing has already warned the Trump administration against the move, urging him not act “emotionally.” It is just weeks since Trump short-circuited White House deliberations and announced a raft of sanctions on foreign-produced steel and aluminum off the cuff.

That move prompted the resignation of top economic advisor Gary Cohn, a global stock market selloff, legal disputes and threats of retaliatory measures.

On Wednesday Federal Reserve Chairman Jerome Powell warned that the prospect of a trade war was a growing threat to the world’s largest economy. But the impulsive president is showing no sign of backing down.

Machines have replaced human stock market traders

Impact on the next financial crisis could be devastating

The February sell-off in stocks demonstrated the impact of automated trading on markets, according to Charles Himmelberg, Goldman Sachs’ cohead of global markets research.
“In this new market structure, machines have replaced humans, and speed has replaced capital,” Himmelberg said in a note.
This new ecosystem dominated by machines has dried up the sources of liquidity that would be needed in the next major wave of selling, he said.

Trump’s election consultants filmed saying they use bribes and sex workers to entrap politicians

Dirty tricks to swing elections

Cambridge Analytica, a  company at the centre of the Facebook data breach (harvesting of more than 50 million profiles), boasted of using honey traps, fake news campaigns and operations with ex-spies to swing election campaigns around the world, a new investigation reveals.

Executives from Cambridge Analytica spoke to undercover reporters from Channel 4 News about the dark arts used by the company to help clients, which included entrapping rival candidates in fake bribery stings and hiring prostitutes to seduce them.

In one exchange, the company chief executive, Alexander Nix, is recorded telling reporters: “It sounds a dreadful thing to say, but these are things that don’t necessarily need to be true as long as they’re believed.”…  March 20, 2018

The Probability Of A U.S. Recession

Identifying and discussing two U.S. recession probability models

There are a variety of economic models that are supposed to predict the probabilities of recession. While I don’t agree with the methodologies employed or probabilities of impending economic weakness as depicted by the following two models, I think the results of these models should be monitored. Please note that each of these models is updated regularly, and the results of these – as well as other recession models – can fluctuate significantly.

The first is the “Yield Curve as a Leading Indicator” from the New York Federal Reserve. I wrote a post concerning this measure on March 1, 2010,titled “The Yield Curve as a Leading Indicator.” Currently (last updated March 6, 2018, using data through February) this “Yield Curve” model shows a 9.1421% probability of a recession in the United States twelve months ahead. For comparison purposes, it showed a 10.4146% probability through January, and a chart going back to 1960 is seen at the “Probability Of U.S. Recession Predicted by Treasury Spread.” (pdf)

The second model is from Marcelle Chauvet and Jeremy Piger. This model is described on the St. Louis Federal Reserve site (FRED) as follows:…  March 19, 2018

Soros: Only the EU can break Facebook and Google’s dominance

Social media giants have left the US government impotent – Europe must lead the way

The current moment in world history is a painful one. Open societies are in crisis, and forms of dictatorships and mafia states, exemplified by Vladimir Putin’s Russia, are on the rise. In the United States, President Donald Trump would like to establish his own mafia-style state but cannot, because the constitution, other institutions, and a vibrant civil society won’t allow it.

Not only is the survival of open society in question; the survival of our entire civilisation is at stake. The rise of leaders such as Kim Jong-un in North Korea and Trump in the US have much to do with this. Both seem willing to risk a nuclear war in order to keep themselves in power. But the root cause goes even deeper. Mankind’s ability to harness the forces of nature, both for constructive and destructive purposes, continues to grow, while our ability to govern ourselves properly fluctuates, and is now at a low ebb.

Facebook and Google effectively control over half of all digital advertising revenue. To maintain their dominance, they need to expand their networks and increase their share of users’ attention. Currently they do this by providing users with a convenient platform. The more time users spend on the platform, the more valuable they become to the companies.…  March 16, 2018

Walmart will start delivering groceries to shoppers across the US

Direct assault against Amazon

Walmart is expanding its grocery delivery service across the US this year, the company announced Wednesday.

The service, which offers same-day delivery in as little as three hours, will be expanded from six metro areas to more than 100, ultimately reaching more than 40% of US households by the end of the year.

Walmart will charge a flat fee of $9.95 for delivery and require a minimum order of $30 to access the service.…  March 14, 2018

Huge Chinese Demand for Natural Gas

United States is well-positioned

China’s push for cleaner air and fuel is driving an unprecedented demand for natural gas, and the United States is well-positioned to seize this opportunity and export even more of its growing gas production to the thirsty nation.

U.S. companies have plans for even more liquefied natural gas (LNG) export trains and facilities to come online in the coming years, and this winter’s surge in Chinese LNG demand and imports underpins a second wave of LNG investment in the United States, analysts and company executives believe.…  March 13, 2018

VCs planting seeds in the cannabis industry

 Increasing number of US states to legalize marijuana

The startup world has seen a growing number of cannabis-related companies crop up over the past several years, a development that’s likely driven by the increasing number of US states to legalize marijuana in some capacity. The industry is ripe for technological innovation—and several companies and venture investors are taking advantage.

In fact, after already setting a new high last year, VCs are on pace to make a record number of new deals in the cannabis industry during 2017. Here’s a chart showing recent venture investor activity in US-based cannabis companies:…  March 12, 2018

U.S. jobless claims back off 48-year low

The labor market to be near full employment

The number of Americans filing for unemployment benefits rebounded last week from a more than 48-year low, but the trend continued to point to robust labor market conditions.

That was underscored by other data on Thursday showing job cuts announced by U.S.-based employers fell 20 percent in February. Federal Reserve officials consider the labor market to be near or a little beyond full employment. The tight jobs market is seen boosting wage growth and spurring inflation.

“The well looks increasingly dry to many companies seeking skilled workers, and time will tell whether the lack of labor will slow the overall economy in future months,” said Chris Rupkey, chief economist at MUFG in New York.…  March 09, 2018

China February exports surge most in three years

Global trade war fears build

China’s exports unexpectedly surged at the fastest pace in three years in February, suggesting both its economy and global growth remain resilient even as trade relations with the United States rapidly deteriorate.

Trade tensions have jumped to the top of the list of risks facing China this year, with planned U.S. tariffs on steel and aluminum signaling more measures may be on the way, Zhou Hao, senior emerging markets economist at Commerzbank, told the Reuters Global Markets Forum this week.

China’s February exports rose 44.5 percent from a year earlier, far more than analysts’ median forecast for a 13.6 percent increase and January’s 11.1 percent gain, official data showed on Thursday.

Imports grew 6.3 percent, missing forecasts for 9.7 percent growth and down from a sharper-than-expected 36.9 percent jump in January.…  March 08, 2018