News Items.
Wednesday, 10 July 2019.
1. Attention venture capitalists: "The energy shortage and clean water scarcity are two key challenges for global sustainable development. Near half of the total global water withdrawals is consumed by power generation plants while water desalination consumes lots of electricity. Here, we demonstrate a photovoltaics-membrane distillation (PV-MD) device that can stably produce clean water (>1.64 kg·m−2·h−1) from seawater while simultaneously having uncompromised electricity generation performance (>11%) under one Sun irradiation. Its high clean water production rate is realized by constructing multi stage membrane distillation (MSMD) device at the backside of the solar cell to recycle the latent heat of water vapor condensation in each distillation stage. This composite device can significantly reduce capital investment costs by sharing the same land and the same mounting system and thus represents a potential possibility to transform an electricity power plant from otherwise a water consumer to a fresh water producer."
2. Hospitals in one Indian city are being forced to buy water for surgery amid unprecedented shortages. Almost all of Chennai's hospitals are now dependent on the more than 5,000 privately-owned tankers that service the city. Water's getting tougher to source, as demand and prices continue to surge. Failed rains last year and delays in this year's monsoon have left nearly half of India facing drought-like conditions, according to the South Asia Drought Monitor. The government forecasts that per head availability of water will fall by 35% next year from 2001 levels.
3. Facebook’s plans to create its own cryptocurrency have forced China’s central bank into stepping up research into creating its own digital currency as Libra could potentially pose a challenge to Chinese cross-border payments, monetary policy and even financial sovereignty, a People’s Bank of China official said on Monday. “If [Libra] is widely used for payments, cross-border payments in particular, would it be able to function like money and accordingly have a large influence on monetary policy, financial stability and the international monetary system?” asked Wang Xin, director of the People’s Bank of China (PBOC)’s research bureau during an academic conference hosted by Peking University’s Institute of Digital Finance.
4. Is there a way to fight China and Russia on American terms? Horizontal escalation is a strategic concept that relies on attacking an adversary's weaknesses outside the theater where the fighting started, so as to avoid confronting its strengths within that theater. It is an alluring idea that has won support from some key national security professionals. Unfortunately, it probably won’t work. Read the whole thing.
5. U.S. and Chinese negotiators spoke by phone on Tuesday, continuing discussions to end a trade battle between the world's two largest economies that has upended global supply chains and roiled financial markets. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke with Chinese Vice Premier Liu He and Minister Zhong Shan on Tuesday to continue negotiations to resolve outstanding trade disputes between the countries, a U.S. official said in an emailed statement.
6. President Trump has grown concerned that the strengthening U.S. dollar is a threat to his economic agenda and has asked aides to cast about for ways to weaken the greenback, according to people familiar with the matter. Mr. Trump asked about the dollar in job interviews with both Judy Shelton and Christopher Waller last week, whom he’s selected for seats on the Federal Reserve’s board, the people said. He lamented that the currency’s strength could blunt an economic boom that he expects to carry him to a second term.
7. U.S. Federal Reserve Bank Chairman Jerome Powell will probably leave rate cuts firmly on the table when he appears before a House panel today, even after the jobs report dialed down the urgency. His assessment of risks will be key. The Fed's monetary policy report Friday highlighted weakening global trade and manufacturing since 2017. Bloomberg Economics expects him to try to walk back market calls for quick, aggressive action. (News Items welcomes the addition of the phrase "firmly on the table" to its compendium of inane financial jargon).
8. Chairman Powell said stress tests of the nation’s largest banks must adapt and keep firms on their toes, or the annual exam could fail to prepare the financial system for the next downturn. “If the stress tests do not evolve, they risk becoming a compliance exercise, breeding complacency from both supervisors and banks,” Mr. Powell said Tuesday in prepared remarks for a stress-testing conference at the Federal Reserve Bank of Boston. “When the next episode of financial instability presents itself, it may do so in a messy and unexpected way,” Mr. Powell added. “Banks will need to be ready not just for expected risks, but for unexpected ones.”
9. There is a “real risk” of the United Kingdom breaking up, with all four nations going their own way in the event of a no-deal Brexit, Theresa May’s cabinet has been warned. David Lidington, the prime minister’s de facto deputy, told fellow ministers that the possibility of a disorderly no-deal exit from the EU was “sharpening” the challenge of the UK staying together.
10. Boris Johnson won't rule out the radical step of suspending Parliament to deliver Brexit on time. The Tory leadership front-runner debated rival Jeremy Hunt after the House of Commons backed a plan aimed at preventing the next PM from forcing through a no-deal Brexit.
11. Iran’s military warned it would retaliate in response to the seizure of one of its tankers by British forces in Gibraltar last week, while several European foreign ministers urged Tehran to return immediately to full compliance with the 2015 nuclear deal. “This move will not remain without response,” Maj. Gen. Mohammad Bagheri, the chief of staff of Iran’s armed forces, was quoted as saying by state news agency IRNA on Tuesday.
12. Carlos Urzúa has quit as Mexico’s finance minister, a stinging blow to the country’s leftist president who had hoped the US-trained economist would bring credibility to his reform agenda with international investors. Mr Urzúa wrote to President Andrés Manuel López Obrador on Tuesday to announce his resignation, citing their “many” disputes and the “imposition of officials who don’t know about public finances” as the reasons for his departure.
13. President Recep Tayyip Erdogan risks pushing Turkey's economy into an economic collapse similar to those seen in Latin America under populist regimes, according to Ashmore Group. Despite Ankara's assertions to the contrary, the nation is lurching toward capital controls and nationalization, head of research Jan Dehn said. "Politicians who go down the heterodox route rarely change tack and they almost always end in crisis.”
14. Germany has sold new Bunds that do not provide investors with regular interest payments for the first time since the aftermath of the 2016 Brexit vote, highlighting the scale of the rally in Europe’s fixed income market.
15. Deutsche Bank is coming under fire for the lavish golden parachutes it has paid out to top executives who left during a chaotic period of management turmoil over the past year. Germany’s biggest bank has spent more than €52 million on severance pay for senior executives who were fired or left voluntarily over the past 14 months, almost matching the lender’s annual pay for the entire management board.
16. The suits get fitted: "On the morning that Deutsche Bank began making thousands of job cuts as part of a sweeping overhaul at the ailing German lender, some managing directors at the company were being fitted for suits costing at least £1,500. Being fitted for a new suit on the day many of your colleagues and/or underlings are being fired isn't just indicative of a risk culture at Deutsche Bank. It's indicative of something else entirely."
17. IBM closed its roughly $34 billion acquisition of open-source software company Red Hat, a deal that will help define IBM CEO Ginni Rometty’s legacy. The acquisition of Red Hat is the most expensive deal in IBM’s history. The company hopes to gain on competitors in cloud and computing—where users store information remotely instead of on their own machines. IBM has been courting companies that want to use the cloud but keep their most sensitive data locked down on internal computers—a model dubbed the “hybrid cloud.” Red Hat, which counts thousands of companies among its customers, fits into that strategy.
18. The global grounding of Boeing's 737 Max is taking its toll. Second-quarter jet deliveries slid 54% from a year earlier to 90 aircraft. Heightened trade tensions and economic uncertainty didn't help, with sales in the first six months of the year at negative 119. The results trailed archrival Airbus, which signed contracts for 145 planes last month, putting its first-half total into positive territory at 88.
19. Music-streaming services including Apple Music and Spotify are counting on live events to set themselves apart from one another, further connect fans with artists and keep their subscription payments flowing. They have been experimenting with concerts based on popular playlists, album-listening parties and Q&A sessions with hard-core fans, identified via their streaming habits.
20. Ross Perot has died. The cause was leukemia, a family spokesman said.The New York Times obituary is here. Here's his famous quote on General Motors from a 1988 interview with Fortune: "Why haven't we unleashed their potential? The answer is: the General Motors system. It's like a blanket of fog that keeps these people from doing what they know needs to be done. I come from an environment where, if you see a snake, you kill it. At GM, if you see a snake, the first thing you do is go hire a consultant on snakes. Then you get a committee on snakes, and then you discuss it for a couple of years. The most likely course of action is -- nothing. You figure, the snake hasn't bitten anybody yet, so you just let him crawl around on the factory floor. We need to build an environment where the first guy who sees the snake kills it."
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Quick Links: Trial Balloon: Is Mark Carney the next head of the IMF? The French finance ministry says "non." Markets are calm, then suddenly go crazy. Investors see a ‘gamma trap' at work. China's Goldman Sachs is not Goldman Sachs. Danske Bank issues third profit warning in less than a year. Signs of impending doom: (1) SPACs are back! (2) Last week, some Italian 2-year bonds briefly dipped to a negative yield. (3) Greek bond yields dip even lower than US Treasuries. (4) New Finance Minister: the Greek economy "contains bombs with lighted fuses." Meanwhile, second Turkish drillship arrives off Cyprus amid 'grave concern.' Chevron's playing a long game in Venezuela. China VC investment in south-east Asia surges fourfold. Deflation stalks Chinese industry again. AI analyzed 3.3 million scientific abstracts and discovered possible new materials.
Political Links: President Trump risks undoing decades of nuclear arms control. Nationalism has its virtues, but it can't underwrite a world order. Populism and the people. The global crisis in conservatism. Big Tech is a likely target at White House social media "summit." President Trump has no plans to fire Fed Chair Powell ‘at the present time,’ Larry Kudlow says. Mr. Trump softened stance on Hong Kong protests to revive China trade talks. US announces significant relaxation of Huawei ban. Joe Biden's income has surgedsince leaving office. Mitch McConnell faces a tough re-election campaign. Not The Onion: Trump Doral resort to host golf tourney run by strip club, dancers auctioned off as 'caddy girls.' President Trump's selective amnesia: "‘I barely know the guy.' He knows the British ambassador; calls him a ‘very stupid guy’ and a ‘pompous fool.’ Why the debate about equal pay for U.S. women’s soccer isn’t that clear cut.
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