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Archive for 25. September 2018

U.S. Reliance on Obscure Imports From China Points to Strategic Vulnerability

Posted by hkarner - 25. September 2018

Date: 24-09-2018
Source: The Wall Street Journal

Corporations gained tariff waivers for raw materials and parts by arguing that China had become an indispensable supplier

The U.S. quietly exempted China’s rare earth minerals from their original inclusion in the tariff hit-list.

Forget Apple Inc.’s smartwatch. When it comes to goods the Trump administration exempted from its latest blitz of tariffs on Chinese imports, the cases of fluorine salts and carbonate esters say more about where the U.S. is vulnerable in its reliance on Chinese supply.

The chemicals, used to make electrolytes for electric-car batteries, are among 297 dispensations sparing importers the new 10% levy. The mineral barite, which helps energy companies drill for oil and gas, and the painkiller ibuprofen—90% of which comes from China—were also beneficiaries, along with Apple’s far-better-known products, including its smartwatches and AirPods. Den Rest des Beitrags lesen »

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Do Spectacular Earnings Justify Spectacular US Stock Prices?

Posted by hkarner - 25. September 2018

Robert J. Shiller, a 2013 Nobel laureate in economics, is Professor of Economics at Yale University and the co-creator of the Case-Shiller Index of US house prices. He is the author of Irrational Exuberance, the third edition of which was published in January 2015, and, most recently, Phishing for Phools: The Economics of Manipulation and Deception, co-authored with George Akerlof.

With share prices and corporate earnings moving together on a nearly one-for-one basis, one might conclude that the US stock market is behaving sensibly, simply reflecting the US economy’s growing strength. But the stock market has not always been so dismissive of the volatility of earnings.

NEW HAVEN – The US stock market, as measured by the monthly real (inflation-adjusted) S&P Composite Index, or S&P 500, has increased 3.3-fold since its bottom in March 2009. This makes the US stock market the most expensive in the world, according to the cyclically adjusted price-to-earnings (CAPE) ratio that I have long advocated. Is the price increase justified, or are we witnessing a bubble?

One might think the increase is justified, given that real quarterly S&P 500 reported earnings per share rose 3.8-fold over essentially the same period, from the first quarter of 2009 to the second quarter of 2018. In fact, the price increase was a little less than equal to earnings.

Of course, 2008 was an unusual year. What if we measure earnings growth not from 2008, but from the beginning of the Trump administration, in January 2017? Den Rest des Beitrags lesen »

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Relegation: German banks

Posted by hkarner - 25. September 2018

Date: 24-09-2018

It’s as if Bayern Munich no longer qualified for the Champions League, or Borussia Dortmund dropped out of the Bundesliga. Today Deutsche Bank is due to be ejected from the Euro Stoxx 50, a blue-chip share index. Meanwhile Commerzbank, the second-biggest, faces relegation from the DAX 30, the domestic top flight.

Since mid-2007 Deutsche’s market value has fallen by two-thirds, to €22bn ($26bn); Germany’s top bank looks up at three each from France and Spain, two from Italy and the Netherlands, and one from Belgium. Den Rest des Beitrags lesen »

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How China is fighting back in the trade war

Posted by hkarner - 25. September 2018

Date: 24-09-2018
Source: BBC

From Monday, US tariffs of 10% on $200bn (£152.9bn) worth of Chinese goods come into effect on almost 6,000 products, ranging from handbags to textiles.

That means almost half of what China sells to the US is now subject to tariffs.

But China is fighting back.

It will retaliate by placing tariffs of 5% to 10% on $60bn worth of American goods.

I saw that steely resolve on display when I visited a pipe factory on the outskirts of Beijing.

Hebei Huayang Steel Pipe (HHSP) is one of the largest steel pipe producers in the province.

As I walked into the sprawling factory, the first thing that hit me was an overwhelming stench of burned steel. Den Rest des Beitrags lesen »

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