Equity futures sink, gold rises after Trump imposes tariffs

• Gold gains ground on safe-haven flows
• Treasury yields fall while U.S. dollar loses ground
• Trading choppy after Trump tariff announcements
• 
  

Equity futures fell on Wednesday after the U.S. market close while safe-haven gold and bond prices rose as investors worried about U.S. President Donald Trump's announcement of 10% tariffs on all imports, with much higher rates for some trading partners.

S&P 500 E-minis stock futures initially rose after Wall Street indexes closed the regular session higher, but then lost ground as Trump went into detail about his tariff plans in a White House Rose Garden event.

S&P 500 futures ES1! fell 1.6% as Trump spoke while Nasdaq futures NQ1! fell 2.4%.

Trump, who has referred to Wednesday as "Liberation Day", outlined a range of levies for different countries including

What Will #China’s Relations with the Rest of the World Be Like After the #Coronacrisis?

China After the Pandemic, is the subject of the latest issue of Strategika  (https://www.hoover.org/publications/strategika ), the Hoover Institution's International Security focused publication. It provides some excellent analysis on the future of China's relationships with the rest of the world in the wake of its actions during the coronavirus pandemic. 

Here is the first thought piece from the latest issue. 

The Coronacrisis Will Simply Exacerbate The Geo-Strategic Competition Between Beijing And Washington

by Michael R. Auslin

Poster CC 194, Poster collection, Hoover Institution Archives.

Even before the outbreak of the novel coronavirus in Wuhan, China late last year, the Sino-U.S. relationship had been in a period of flux. Since coming to office in 2017, President Trump made rebalancing ties with China the centerpiece of his foreign policy. Claiming that it would no longer be business as usual with Beijing, Trump began to respond more forcefully to what he had long claimed were unfair Chinese trade practices, cyberespionage, military intimidation, and global propaganda campaigns. Yet the COVID-19 pandemic raised even more fundamental questions about the state of U.S.-China relations and how the two appear to be locked into a more antagonistic dynamic for the foreseeable future.

Unlike in the early months of the pandemic, it is now increasingly accepted that the Chinese Communist Party (CCP) and its local officials ordered a cover-up of what was happening in Wuhan. From intimidating whistleblowing doctors to a silencing of social media, and from destroying laboratory samples to buying up billions of pieces of personal protective equipment such as masks and gloves from around the world, the common wisdom now sees that the CCP prioritized protecting its own reputation and forestalling any domestic or international criticism of the kind that damaged it during the 2003 SARS cover-up. Most egregiously, Beijing lied to the World Health Organization about the nature of the virus in Wuhan, falsely claiming that there was no evidence of human-to-human transmission. This, and the decision not to restrict Chinese travel abroad during the Lunar New Year, destroyed any meaningful attempts to contain the virus inside China, and instead allowed it to ravage the globe.

As the scale of the catastrophe became clear, the party-state orchestrated a worldwide propaganda campaign to portray Beijing as successful in its battle against the coronavirus and as having selflessly helped the rest of the world, from "donating" medical supplies to sharing scientific information. Indeed, Chinese officials went so far as to claim that the United States created the disease and planted it in China.

Beijing's propaganda campaign, while designed to divert any criticism of the regime, has poisoned relations with Washington, not to mention other countries, and is likely to result in an intensified bout of counter-campaigning from the United States. As Beijing steadfastly refuses to acknowledge any shortcomings in its response to the coronacrisis, voices across the globe are understandably questioning how it can be trusted as an international actor. The new dynamic in China's relations with the world will be a deep-seated distrust of Beijing's statements.

Moreover, Beijing is slowly reaping the fruits of its decision to denude the world of needed medical supplies and then sell defective masks and virus tests to numerous countries. Across Europe and Asia, governments are returning shoddy equipment and useless tests, sometimes after having paid tens of millions of dollars for them, as in the case of Spain, which bought $497 million dollars-worth of items that it declared were unusable. In the case of Great Britain, all 3.5 million antibody test kits the government ordered failed to work properly, and were returned. The ill-will that Beijing has engendered by selling back items that were sometimes donated by countries, as in the case of Italy, or providing defective equipment will further drive a wedge between China and those countries that now see it as an untrusty partner with whom a buyer must beware when doing business.

Panama’s economy: A Singapore for Central America? The Economist

Panama's economy

A Singapore for Central America?

Latin America's fastest-growing country has set its sights high. First it needs a government as impressive as its economy

PANAMA CITY

ON A humid stretch of Pacific coast in one of the poorest parts of the Americas, somebody seems to have misplaced a chunk of Manhattan. The 50-storey skyscrapers of Panama City jut out of the jungle like nowhere else in low-rise Central America. Panama's smart banks, open economy and long queues of boats at its ports have caused many to compare it to Singapore, another steamy success story. Panama's president, Ricardo Martinelli, made his country's first state visit there in 2010 and later said, "We copy a lot from Singapore and we need to copy more."

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Bernanke on CBS’s ‘60 Minutes’ - Real Time Economics - WSJ

• December 5, 2010, 7:01 PM ET

Bernanke on CBS’s ‘60 Minutes’

Federal Reserve Chairman Ben Bernanke appeared Sunday evening on CBS’s “60 Minutes” to discuss the state of the economy, the central bank’s controversial $600 billion bond-buying plan and the financial crisis. Following are excerpts from the interview with CBS’s Scott Pelley, as released by the network:
Q: The major banks are racking up profits in the billions. Wall Street bonuses are climbing back up to where they were. And yet, lending to small businesses actually declined in the third quarter. Why is that?

A: A lot of small businesses are not seeking credit, because, you know, because their business is not doing well, because the economy is slow. Others are not qualifying for credit, maybe because the value of their property has gone down. But some also can’t meet the terms and conditions that banks are setting.
Q: Is this a case of banks that were eager to take risks that ruin the economy being now unwilling to take risks to support the recovery?

A: We want them to take risks, but not excessive risks. we want to go for a happy medium. And I think banks are back in the business of lending. But they have not yet come back to the level of confidence that –or overconfidence –that they had prior to the crisis. We want to have an appropriate balance.
Q: What did you see that caused you to pull the trigger on the $600 billion, at this point?

A: It has to do with two aspects. the first is unemployment The other concern I should mention is that inflation is very, very low, which you think is a good thing and normally is a good thing. But we’re getting awfully close to the range where prices would actually start falling.
Q: Falling prices lead to falling wages. It lets the steam out of the economy. And you start spiraling downward. … How great a danger is that now?

A: I would say, at this point, because the Fed is acting, I would say the risk is pretty low. But if the Fed did not act, then given how much inflation has come down since the beginning of the recession, I think it would be a more serious concern.
Q: Some people think the $600 billion is a terrible idea.
A: Well. I know some people think that but what they are doing is they’re looking at some of the risks and uncertainties with doing this policy action but what I think they’re not doing is looking at the risk of not acting.
Q: Many people believe that could be highly inflationary. That it’s a dangerous thing to try

A: Well, this fear of inflation, I think is way overstated. we’ve looked at it very, very carefully. We’ve analyzed it every which way. One myth that’s out there is that what we’re doing is printing money. We’re not printing money. The amount of currency in circulation is not changing. The money supply is not changing in any significant way. What we’re doing is lowering interest rates by buying treasury securities. And by lowering interest rates, we hope to stimulate the economy to grow faster. So, the trick is to find the appropriate moment when to begin to unwind this policy. And that’s what we’re going to do.
Q: Is keeping inflation in check less of a priority for the Federal Reserve now?

A: No, absolutely not. What we’re trying to do is achieve a balance. We’ve been very, very clear that we will not allow inflation to rise above two percent or less.
Q: Can you act quickly enough to prevent inflation from getting out of control?

A: We could raise interest rates in 15 minutes if we have to. So, there really is no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation, at the appropriate time. Now, that time is not now.
Q: You have what degree of confidence in your ability to control this?

A: One hundred percent.
Q: Do you anticipate a scenario in which you would commit to more than 600 billion?

A: Oh, it’s certainly possible. And again, it depends on the efficacy of the program. It depends, on inflation. And finally it depends on how the economy looks.
Q: How would you rate the likelihood of dipping into recession again?

A: It doesn’t seem likely that we’ll have a double dip recession. And that’s because, among other things, some of the most cyclical parts of the economy, like housing, for example, are already very weak. And they can’t get much weaker. And so another decline is relatively unlikely. Now, that being said, I think a very high unemployment rate for a protracted period of time, which makes consumers, households less confident, more worried about the future, I think that’s the primary source of risk that we might have another slowdown in the economy.
Q: You seem to be saying that the recovery that we’re experiencing now is not self-sustaining.

A: It may not be. It’s very close to the border. — it takes about two and a half percent growth just to keep unemployment stable. And that’s about what we’re getting. We’re not very far from the level where the economy is not self-sustaining.
Q: [On calls to cut the deficit]

A: We need to play close attention to the fact that we are recovering now. We don’t want to take actions this year that will affect this year’s spending and this year’s taxes in a way that will hurt the recovery. That’s important. But that doesn’t stop us from thinking now about the long term structural budget deficit. We’re looking at ten, 15, 20 years from now, a situation where almost the entire federal budget will be spent on Medicare, Medicaid, Social Security, and interest on the debt. There won’t be any money left for the military or for any other services the government provides. We can only address those issues if we think about them now.
Q: How concerned are you about the calls that you’re beginning to hear on Capitol Hill that would curb the Fed’s independence?
A: Well, the Fed’s independence is critical. The central bank needs to be able to make policy without short term political concerns. In order to do what’s best for the economy. We do all of our analysis, we do all of our policy decisions based on what we think the economy needs. Not based on when the election is or what political conditions are.
Q: Is there anything that you wish you’d done differently over these last two and a half years or so?

A: Well, I wish I’d been omniscient and seen the crisis coming, the way you asked me about, I didn’t, But it was a very, very difficult situation. And– the Federal Reserve responded very aggressively, very proactively
Q: How did the Fed miss the looming financial crisis?
A: there were large portions of the financial system that were not adequately covered by the regulatory oversight. So, for example, AIG was not overseen by the Fed. … The insurance company that required the bailout, was not overseen by the Fed. It didn’t really have any real oversight at that time. Neither did Lehman Brothers the company that failed Now, I’m not saying the Fed should not have seen some of these things. One of things that I most regret is that we weren’t strong enough in in putting in consumer protections to try to cut down on the subprime lending problem. That was an area where I think we could have done more.
Q: The gap between rich and poor in this country has never been greater. In fact, we have the biggest income disparity gap of any industrialized country in the world. And I wonder where you think that’s taking America.

A: Well, it’s a very bad development. It’s creating two societies. And it’s based very much, I think, on– on educational differences The unemployment rate we’ve been talking about. If you’re a college graduate, unemployment is five percent. If you’re a high school graduate, it’s ten percent or more. It’s a very big difference. It leads to an unequal society and a society– which doesn’t have the cohesion that– that we’d like to see.
Q: We have talked about how the next several years are going be tough years in this country. But I wonder what you think about the ten year time horizon. Fifteen years. How do things look to you long term?

A: Long term, I have a lot of confidence in the United States. We have an excellent record in terms of innovation. We have great universities that are involved in technological change and progress. We have an entrepreneurial culture, much more than almost any other country. So, I think that in the longer term the United States will retain its leading position in the world. But again, we gotta get there. And we have some very difficult challenges over the next few years.

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Bernanke on CBS’s ‘60 Minutes’ - Real Time Economics - WSJ

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List of companies involved in the rescue of the 33 Chilean miners

List of companies involved in the rescue of the 33 Chilean miners

But this happened because the Chilean people, government and President were more interested in doing whatever it took, and accepted whatever would help from sources around their country and around the world.  They did not allow false nationalism nor internal politics nor special interests to stand in the way of their heartfelt national effort to retrieve their trapped brothers.  The Chileans organized the worldwide effort and made it work.

This displays true compassion, maturity and unity of purpose by the Chilean people and is what made the rescue successful.

List of American companies who contributed to the rescue of the Chilean miners. Organizations from other lands were likewise involved. The Chilean President was most gracious in recognizing all those who helped create the Chilean miracle.  · Schramm Inc. Of West Chester, Pennsylvania built the drills and equipment used to reach the trapped miners.  · Center Rock Company, also from Pennsylvania , built the drill bits used to reach the miners.  · UPS, the US shipping company, delivered the 13-ton drilling equipment from Pennsylvania to Chile in less than 48 hours.  · Crews from Layne Christensen Company of Wichita Kansas and its subsidiary Geotec Boyles Bros. Worked the drills and machinery to locate and reach the miners and then enlarge the holes to ultimately rescue them.  · Jeff Hart of Denver Colorado was called off his job drilling water wells for the U.S. Army's forward operating bases in Afghanistan to lead the drilling crew that reached the miners. · Atlas Copco Construction Mining Company of Milwaukee, Wisconsin provided consulting on how to make drilling equipment from different sources work together under differing pressure specifications. · Aries Central California Video of Fresno California designed the special cameras that were lowered nearly a mile into the ground sending back video of the miners. · Zephyr Technologies of Annapolis Maryland, made the remote monitors of vital signs that miners will wear during their ascent. · NASA Engineers designed the " Phoenix " capsule that miners would be brought to the surface in, and provided medical consulting, special diets and spandex suits to maintain miners' blood pressure as they're brought back to the surface. · Drilling Supply Co., Houston also involved. Canadian-based Precision Drilling Corp. And South-African company Murray & Roberts, drilled  backup rescue shafts in case the American rig failed. Which fortunately did not happen.

Dispatch: China's GDP and Questions of Strength | STRATFOR

China’s gross domestic product (GDP) has surpassed Japan’s to become the second largest in the world. Analyst Rodger Baker explains the multiple fundamental weaknesses in China’s economic system and why GDP is not the only indicator of a state’s economic strength.

Dispatch: China's GDP and Questions of Strength | STRATFOR (subscription required)

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Colombian Exports Could Reach $40 Billion In 2010

charging ahead!!!

Colombian Exports Could Reach $40 Billion In 2010 

First Published Monday, 12 July 2010 11:29 pm - © 2010 Dow Jones 

(Updates with comments from Trade Minister; adds details and background) 

By Darcy Crowe 

Of DOW JONES NEWSWIRES 

BOGOTA -(Dow Jones)- Colombian exports are on pace to reach a record-breaking $40 billion this year as companies offset a decline in exports to neighboring Venezuela by finding new 

markets in Central America and the Caribbean, Trade Minister Guillermo Plata said Monday. 

The government expects exports to climb 22% in 2010 and break the $37.2 billion mark from 2008, despite a diplomatic dispute with Venezuela that has led to a 70% plunge in sales to that 

country, Plata said. 

"Colombia is diversifying its exports, and in the last three months, firms have started to offset the losses to Venezuela," he said. Venezuela has traditionally been Colombia's second-largest 

trading partner, surpassed only by the U.S. 

Venezuelan President Hugo Chavez essentially shut the border to Colombian products last year in a heated diplomatic spat with Bogota. President-elect Juan Manuel Santos has said that 

fixing diplomatic and trade relations with Venezuela will be one of his priorities. Chavez is slated to attend Santos' inauguration on Aug. 7. 

Plata said that even if the new administration is able to reopen the Venezuelan border to Colombian goods, the main goal should be diversifying exports. "Putting all our eggs in one basket 

is very risky," he said. 

Exports to Venezuela could also suffer even if relations are restored due an economic recession and strict currency controls. 

As a result of the problems with Venezuela, China is now Colombia's second-largest trading partner. Plata, however, highlighted that the products Colombia used to sell to Venezuela, such 

as manufactured and agricultural goods, are being redirected to markets in Central America and the Caribbean. 

This year's export boom, however, has been driven by sales of commodities like oil, coal, coffee and ferronickel. Manufactured and agricultural goods, among others, are down 4.5%, a 

figure that Plata says is the result of the problems with Venezuela, which was a key market for these types of items. 

"It's actually a very good number if you consider that sales to Venezuela are down 70% and shows that other markets are compensating for the decline," he said. 

Foreign direct investment, meanwhile, could reach $10 billion this year, as money continues to pour into Colombia's booming oil and mining industries, Plata said. Foreign direct 

investment in the country so far this year was $4.4 billion, 8.5% higher than in the same period in 2009. 

-By Darcy Crowe, Dow Jones Newswires; (57) 1 703 8953; darcy.crowe@dowjones.com 

Copyright © Automated Trader Ltd 2010