News Items.
Tuesday, 9 July 2019.
1. In 2008 Chinese authorities received 204,268 patent filings, compared with 428,881 in the US. However, by 2017 China’s State Intellectual Property Office received 1.3 million applications — more than double the number received by the US, according to statistics from the World Intellectual Property Organization, the global forum for policy in the field. WIPO director-general Francis Gurry recently described the numbers coming out of China as “prodigious”, saying they reflected a geographical shift of innovation from west to east.
2. China is narrowing the gap between it and the U.S. in the race for dominance in high-technology markets, according to a recent Nikkei analysis. Chinese companies expanded their market share in nine sectors including mobile infrastructure in 2018, while the U.S. grew in eight, the analysis of data collected by various research companies showed. Of 74 high-tech products and services covered by the survey, an analysis of the top 5 shares in 25 key markets found that Chinese companies expanded their presence in mobile base stations as well as smartphones and tablets.
3. “OPEC might die,” admitted Iranian oil minister Bijan Zanganeh to a pack of reporters at the crude cartel’s meeting in Vienna last week. “It has lost its authority and it is on the verge of collapse.” The oil price barely flinched after the 14-nation group announced a nine-month extension to production cuts propping up prices. OPEC's market-moving power appears to be waning and forecasters expect its share of global production to sink to its lowest level in almost three decades.
4. Forget about OPEC, breaching a “carbon threshold” could lead to mass extinction. "Daniel Rothman, professor of geophysics and co-director of the Lorenz Center in MIT’s Department of Earth, Atmospheric and Planetary Sciences, has found that when the rate at which carbon dioxide enters the oceans pushes past a certain threshold — whether as the result of a sudden burst or a slow, steady influx — the Earth may respond with a runaway cascade of chemical feedbacks, leading to extreme ocean acidification that dramatically amplifies the effects of the original trigger. This global reflex causes huge changes in the amount of carbon contained in the Earth’s oceans, and geologists can see evidence of these changes in layers of sediments preserved over hundreds of millions of years. Rothman looked through these geologic records and observed that over the last 540 million years, the ocean’s store of carbon changed abruptly, then recovered, dozens of times in a fashion similar to the abrupt nature of a neuron spike. This “excitation” of the carbon cycle occurred most dramatically near the time of four of the five great mass extinctions in Earth’s history."
5. Forget about mass extinction, look at the looming Libor disaster: "Corporate treasurers, bankers, accountants and consultants are belatedly realizing the scale of the task finance faces in replacing Libor – the world’s most important interest rate. But the awakening may still have come too late to avoid a chaotic and expensive denouement to the benchmark. The borrowing costs known as the London interbank offered rates are embedded throughout the DNA of finance. Untangling them, after the Financial Conduct Authority’s announcement two years ago that they’ll be phased out by the end of 2021, is proving difficult through a combination of apathy, complexity and a lingering hope that Libor will somehow limp on in some form or other. In the worst-case scenario, the disappearance of Libor could lead to the courts ruling that some existing contracts are deemed to have been frustrated. In legal terms, that happens when an event either makes enforcement of a contract impossible, or completely undermines the contract’s original intentions."
6. Deutsche Bank in one (long) paragraph: "About 74 billion euros of risk-weighted assets (and 288 billion euros of leverage exposure) will go into a new “Capital Release Unit,” more commonly called a “bad bank,” to be wound down. (DB CEO Sewing: “The term ‘bad bank’, which is often used in the media, is in this case misleading. Given the high quality and in many cases short duration of the assets, we expect these to be wound down quickly.”) It is awkward that this is Deutsche Bank’s second bad-bank exercise since the financial crisis; the first was in 2012, and was stuffed with things like “asset-backed securities, commercial real estate loans, derivatives and exposure to bond insurers.” Ideally when you split off a bad bank, the goal is to send a confident message that the rest of the bank is good: You have gotten rid of the non-core stuff, and now you will focus on the core. If you keep bad-banking bits of the remainder, people start doubting the core. “See, starting up a ‘bad bank,’ that’s a rookie error,” tweeted Dan Davies. “What you want to do, Deutsche, is start up a good bank. They're a little bit more difficult but it's worth it in the long run.”
7. The U.S. government could run out of money to pay all of its bills by early September if Congress doesn’t rush to raise the debt ceiling, a think tank said Monday, a time frame that could force lawmakers to act much sooner than planned. The Bipartisan Policy Center said that the Treasury Department could breach the borrowing limit in two months because the government has brought in far less tax revenue this year than was projected.
8. Congress must decide soon on a path to raise the debt ceiling, fund the government and approve a massive North American trade deal -- putting pressure on House Speaker Nancy Pelosi to quickly wrangle a restive Democratic caucus that has an eye on the 2020 election. Lawmakers return today from their July 4 break, facing September deadlines on must-pass fiscal bills with just three weeks before their next recess to come up with a plan. Bipartisan talks this month will aim to set up high-stakes votes in the fall, but first Pelosi has to know where her members stand and to what extent they’ll accept compromise.
9. The Iran nuclear accord is teetering. The IAEA confirmed that the Islamic Republic has breached the uranium enrichment cap set in the 2015 deal and an Iranian official threatened more steps to scale back compliance.
10. France has stepped up European efforts to save the Iran nuclear deal after Tehran confirmed its second breach of the terms of the agreement and threatened more in the growing fallout over the US exit from the accord. Paris is urgently seeking a de-escalation of the crisis and today will send an envoy for talks in Tehran.
11. Buddhists have entered the era of militant tribalism, casting themselves as spiritual warriors who must defend their faith against an outside force. “Buddhist monks will say that they would never condone violence,” said Mikael Gravers, an anthropologist at Aarhus University in Denmark who has studied the intersection of Buddhism and nationalism. “But at the same time, they will also say that Buddhism or Buddhist states have to be defended by any means.”
12. Hong Kong Chief Executive Carrie Lam said legislation that would allow extraditions to China is "dead." She stopped short of saying she would withdraw the bill. "Our work on the extradition bill amendment is a complete failure," she said. Opposition lawmakers and protesters were skeptical. The bill prompted a historic wave of mass protest marches that drew hundreds of thousands of people into the streets and revived a demand that China hates: real elections.
13. A Caixin investigation reveals how mass cover-ups and official inaction have driven China's African swine fever epidemic to crisis levels. Local officials in many parts of the country have refused to acknowledge suspected outbreaks of the disease in order to avoid paying culling subsidies, reporters have learned. Facing massive economic losses, many pig farmers sold their stock at low prices when they showed the first signs of swine fever. The pigs were sent to transfer hubs and slaughterhouses — sometimes in different provinces — further spreading the disease.
14. China’s massive Three Gorges dam has become “distorted”, the authorities said today after failing to quell days of speculation about its structural integrity. The dam’s operator insisted that such distortions, revealed by satellite images, were normal and that safety had not been compromised. “With distortions, the dam body is in an elastic state,” the China Three Gorges Corporation said. “All data are within the design limits ... All structures are operating normally, and the project is operating safely and reliably.”
15. Dutch astronomer and satellite tracker Ralf Vanderberg has spotted something extraordinary and rare: the U.S. Air Force’s top-secret X-37B space plane. Also known as the Orbital Test Vehicle, the military craft looks like a scaled-down version of NASA’s Space Shuttle and measures just 29 feet long with a wingspan of 15 feet. The craft spotted by Vanderberg is the fifth iteration, launched into space atop a SpaceX Falcon 9 in 2017.
16. Amazon has asked for permission to launch 3,236 satellites into orbit as part of Project Kuiper. It says it wants to connect the tens of millions around the globe who don’t have broadband internet access. In its filing application to the FCC, the company states: “Amazon’s mission is to be Earth’s most customer-centric company, and the Kuiper System is one of our ambitious projects to fulfill this mission."
17. Half of all shopping will move online in the next decade, piling more pressure on traditional retailers that are struggling to adapt to the rise of digital commerce. By 2028 the oldest millennials will be approaching 50 years of age, meaning the generations that grew up with the internet will account for half of the adult population, according to Retail Economics.
18. In an epic-size project, physicist Sterling Backus has been working on a life-size, functional and mostly 3D printed Lamborghini Aventador in his own backyard. His goal – described in the dedicated Facebook page – is to show his kid, and kids in general, how cool science and engineering are, demonstrating the power of technology. The car is not entirely 3D printed of course, however, many parts are and the project would certainly not have been possible or even remotely affordable if affordable 3D printing systems had not been available.
19. Eon, one of the “Big Six” UK energy providers, is shifting all of its residential customers to 100 per cent renewable electricity, becoming the largest utility yet to move to green supply. The company, which supplies 3.3 million British homes, said all of its customers would be moved to renewable electricity supplies beginning today.
20. Rome is staggering through a garbage emergency exacerbated by a record-breaking summer for heat. Half the city’s refuse, about 1,000 tonnes of rubbish, will be left on the streets this week, according to AMA, the designated rubbish collector, because two big rubbish plants near Rome have been closed for maintenance. Luisa Melara, the president of AMA, appealed to Romans’ “civic sense” and asked them to “take collective responsibility” to reduce their waste in an “extraordinary” situation.
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Quick Links: Hedge funds post best first half in a decade. Global recession risks are up, and central banks aren't ready. Mohammed El-Erian: Investors in Europe should hunker down for trouble ahead. Turkey's long, painful economic crisis grinds on. Investors are alarmed about the trade skirmish between South Korea and Japan. L’Oréal bucks wider economic slowdown in China. Cold water hits China’s AI industry. Chinese VC spending on US biotech hit by security reviews. US reform plan for patents raises innovation concerns. A life-size, functional and mostly 3D printed Lamborghini Aventador. Toxic caterpillars spark health scare across Germany. The meat-allergy tick also carries a mystery killer virus. Edible coating on fruit could spell end for moldy produce and help solve world's food waste epidemic.
Political Links: US approves $2 billion arms sale to Taiwan. Beijing demands US halt arms sale to Taiwan. Xi Jinping faces his moment of truth in Hong Kong. Why Greece’s new government is likely to stay close to China. The U.K. Labour Party took another step toward formally opposing Brexit. President Trump says U.S. ‘will no longer deal’ with British ambassador. The latest on Jeffrey Epstein. The mystery around Jeffrey Epstein's fortune and how he made it. Elizabeth Warren raised $19 million in the second quarter of this year. Warren takes aim at D.C.'s political consultant industrial complex. How Warren has shaken up the 2020 presidential campaign. Sanders and Ocasio-Cortez move to declare climate crisis official emergency. John Hickenlooper's presidential campaign 'reboot' includes more time in Iowa. Rep. Eric Swalwell (D-CA) quits 2020 presidential race. Iowa, Nevada to launch caucus voting by phone for 2020. Former Kansas Secretary of State Kris Kobach has announced his candidacy for the U.S. Senate seat being vacated by Sen. Pat Roberts (R-KA). Democrats in Congress are spooked by new primary threats. Trump's Wharton degree: "super genius stuff."
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John Ellis (jellis41@protonmail.com)