Impeachment: tell me again what happens when the US House impeaches one of the most respected attorney generals ever. Compare him to Eric Holder, Edwin Meese, Janet Reno, John Ashcroft, John Mitchell, and particularly Edward Bates.
China - US trade talks. Increased tariffs were to go into effect tomorrow morning, Friday, May 10, 2019. The Chinese market has slumped significantly. Premier Xi probably getting an earful.
I haven't watched the market this past week, except for minor exceptions. I'll check in next week if/when the trade talk is "resolved." I checked my brokerage account to see if dividends had improved my overall cash position -- huge buying opportunity this week. See disclaimer below.
Sixteen reasons ("Wall Street" looks for the Fed to cut rates this year):
Sixteen reason. Link here.
Top story last week, the US economy:
- the most under-rated boom, expansion, economy ever; and,
- jobs, unemployment, wages, endless rally; and,
- best numbers ever for US Hispanics, best in decades for women; and,
- US productivity advances at fastest rate since 2010; and,
- private payrolls surge, blowing past estimates, biggest gain since July; and,
- stocks are off their best four-month start in decades; and,
- consumer spending biggest gain since 2009; and,
- supply side of economy showing strength;
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Other News
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MPC in $9 billion deal to merge midstream units. Link here.
Marathon Petroleum Corp. (MPC) has agreed to merge its two midstream businesses, MPLX LP and Andeavor Logistics LP (ANDX), in a deal worth $9 billion, the company announced Wednesday.Mis-match: we were the first to talk about this years ago. Now we have another great article on the same subject (archived) -- the mismatch between light oil and global refineries.
The definitive merger of Marathon’s two master limited partnerships involves MPLX acquiring ANDX in a unit-for-unit transaction at a blended exchange ratio of 1.07x. It would give ANDX public unitholders 1.135x MPLX common units for each ADNX common unit held and MPC would receive 1.0328x MPLX common units for each ANDX common unit held.
This announcement comes after Ohio-based oil refiner MPC agreed it would acquire rival oil refiner Andeavor for $23.3 billion in April 2018.
I don't have an opinion on whether the writer's anxieties will prove to be correct but his argument is sound. In fact, it may be the only reason that WTI has not plummeted to $40/bbl. Again, however, here is another writer that fails to even mention in passing the huge impact on current events when President Obama killed the Keystone XL. I'm an eternal optimist and feel comfortable that free market capitalism will work this all out. Speaking of which, the average price of gasoline has decreased in Los Angeles this past week. Down an average of 2 cents/gallon.
If I were Xi, I would just wait Trump out. There is a reasonable betting chance he is out of office in 2020 and the next President even if not a panda-lover will be less hard-nosed about wanting to win trade talks. So I would send letters, etc. Just play him and keep him on the hook for a little longer.
ReplyDeleteIf I were Trump, would have installed every tarriff threatened immediately after taking office. Than discuss taking them off. Rather than sabre rattling. To give him credit, he did install some. Still, he didn't install them all. Actions speak louder than threats.
Note: I'm actually not interested in "winning" trade negotations. Am a "unilateral free trader". If you read Milton Friedman Free to Choose, countries benefit by trading whatever they can freely, even if the other country does not reciprocate. But if I wanted to be Trump, would have been more hard nosed. Trump is really turning out to be talk loudly and carry a soft stick. We have seen this on immigration and many other areas. People were a little shocked by him at first but have learned since he is a paper tiger.
1. You are correct. President Xi should just wait Trump out. The Chinese stock market can handle two to four years of falling. What little I've read suggests the Chinese market (and particularly) the Chinese banks are having great difficulty with this.
Delete2. China's biggest problem is millions of unemployed young men. Waiting Trump out for two to four years will only exacerbate the problem but it's their problem not ours.
3. The interesting thing is that like so much else in life, this is nothing about "trade" per se but intellectual piracy, but that's too complicated to discuss.
2.
The intellectual property has been a problem for at least 20 years. I remember talking to other consultants about building chemical plants in China and then seeing duplicate plants springing up next door. A lot of companies even accelerated this because they "had to be in China". I talked one high end specialty company out of doing this and they have benefited immensely by swimming against the herd.
ReplyDeleteOf course, even if you don't put up your own plant, the Chinese can still steal IP and duplicate. But at least don't be stupid and help the process. Stay away...
"Chemical plants" are the tip of the iceberg. What concerns the NSA, CIA, FBI, NSI, DFI, and about a dozen other US spy agencies -- to say nothing of non-spy US agencies -- is the high tech issues, such as putting Trojan horses and viruses, into chips, etc.
DeleteBut if it's been going on for 20 years, that raises a good question: why worry about it now and cause all this angst among investors.
Yeah cause NSA would never put backdoors into programs or spy on us. That's just crazy talk like that movie Enemy of the State. ;-)
ReplyDeleteReminds me of Mad Magazine when I was growing up: Spy Vs Spy.
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