David Fuller and Eoin Treacy's Comment of the Day
Category - Technology

    China's Yuan Tumbles Past 7 Per Dollar for First Time Since 2008

    This article by Tian Chen and Sofia Horta e Costa for Bloomberg may be of interest to subscribers. Here is a section:

    The yuan declined 0.9% in mainland trading last week, its biggest loss since mid-May, after President Donald Trump abruptly escalated the trade war with new tariffs on Chinese goods. Beijing pledged to respond if the U.S. goes ahead with a plan to impose a 10% tariff on a further $300 billion in Chinese
    imports.

    “It appears that the tariffs hike suggests the return of tit-for-tat moves and a suspension of trade talks, and the PBOC sees no need to keep the yuan stable in the near term,” said Ken Cheung, a senior currency strategist at Mizuho Bank Ltd. The tumble exacerbated losses in Asia’s financial markets.

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    The Top Miners Are Split on How to Chase the EV Battery Boom

    This article by David Stringer for Bloomberg may be of interest to subscribers. Here is a section:

    “We did a review of all the battery input materials -- nickel, cobalt, lithium,” said Eduard Haegel, asset president at the BHP’s Nickel West unit. “We think that in the medium-to-longer term there will be a margin that will be sticky for nickel -- we think it’s an attractive commodity.”

    BHP, the biggest miner, this year reversed long-term efforts to seek a buyer for the division, opting to retain Nickel West to benefit from forecast growth in lithium-ion batteries and a scarcity of high-quality nickel supply. From the second quarter of 2020, the unit will begin production of bright-turquoise colored nickel sulphate -- a premium raw material for the battery supply chain -- from a nickel refinery south of Perth, with plans to potentially carry out the industry’s largest expansion.

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    JAXA releases footage of Hayabusa 2 spacecraft's second asteroid touchdown

    This article by  Anthony Wood for NewAtlas may be of interest to subscribers. Here is a section:

    The Japanese Aerospace Exploration Agency (JAXA) has released a video showing the climactic moments of the Hayabusa 2 spacecraft's second descent to the surface of asteroid Ryugu. The goal of the risky operation was to capture newly exposed material from the asteroid's interior, which had been forcefully ejected during the creation of an artificial crater on Ryugu's surface in early April.

    The footage of the second dive was captured on July 11, 2019 by Hayabusa 2's publicly-funded onboard small monitor camera (CAM-H). The playback is at 10x actual speed, and shows the spacecraft's final descent to the surface, which occurred between 10:03:54 – 10:11:44 JST.

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    Foreigners Sell Rand Assets at Record Pace as Eskom Woes Mount

    This article by Paul Wallace for Bloomberg may be of interest to subscribers. Here is a section:

    Fitch Ratings Ltd. followed on Friday by cutting its outlook for Africa’s most industrialized economy to negative. JPMorgan Chase & Co. said the same day that a rally in the rand since the start of June was more to do with a supportive global environment than improvements in conditions locally.

    “We now believe levels are stretched enough to enter outright rand shorts,” JPMorgan analysts including London-based Anezka Christovova and Robert Habib in New York said in a note. “South Africa’s fundamental picture remains very challenging with a ballooning fiscal deficit and structurally low growth.”

    Citigroup Inc. recommended to clients on Monday that they short the rand against the Turkish lira. The Wall Street bank’s analysts see the latter strengthening about 7% versus the South African currency over the next three months.

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    RBA Chief Says He's Ready to Ease Again, Sees Rates Staying Low

    This article by Michael Heath for Bloomberg may be of interest to subscribers. Here is a section:

    “But if demand growth is not sufficient, the board is prepared to provide additional support by easing monetary policy further,” he said. “Whether or not further monetary easing is needed, it is reasonable to expect an extended period of low interest rates. On current projections, it will be some time before inflation is comfortably back within the target range.”

    Lowe’s speech, which made the case for maintaining the RBA’s current policy framework despite prolonged low inflation, was his most explicit that further easing remains on the table. The Reserve Bank cut rates in June and July to a record low of 1% and signaled at the time that it would wait to see how the easing filtered through the economy.

    Since then, consumer confidence has actually fallen and the currency has risen -- the latter due to an easing bias among major central banks -- in contrast to RBA’s hopes. Indeed, the Federal Reserve is expected to cut as soon as next week. Westpac Banking Corp. Chief Economist Bill Evans on Wednesday predicted Lowe and co. would cut in October and February to push the cash rate to 0.5%.
     

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    The Hottest Phones for the Next Billion Users Aren't Smartphones

    This article by Newley Purnell for The Wall Street Journal may be of interest to subscribers. Here is a section:

    Millions of first-time internet consumers from the Ivory Coast to India and Indonesia are connecting to the web on a new breed of device that only costs about $25. The gadgets look like the inexpensive NokiaCorp. phones that were big about two decades ago. But these hybrid phones, fueled by inexpensive mobile data, provide some basic apps and internet access in addition to calling and texting.

    Smart feature phones, as they are known, are one of the mobile-phone industry’s fastest-growing and least-known segments, providing a simple way for some of the world’s poorest people to enter the internet economy.

    While global smartphone sales began sliding last year as markets became saturated, smart feature phone shipments tripled to around 75 million from 2017, according to research firm Counterpoint. Some 84 million are likely to be shipped this year.

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    Evaluating US Nuclear Competitiveness and its Future as a Carbon-Free Clean Energy Source

    Thanks to a Keith Rabin for this interview of Dr.Robert F.Ichord. Here is a section:

    Both Russia and China are strongly committed to domestic nuclear development, international nuclear power exports, and the development of small modular reactors (SMR) and advanced nuclear reactors. Russia is building seven third–generation VVER–1200 reactors domestically and over twenty internationally. China is building domestically about eleven indigenous units, not including the Russia VVERs, the French EPRs or the recently completed US AP–1000s. They have two reactors of the Hualong One design under construction in Pakistan near Karachi and one planned at Chasma, the site of older, smaller Chinese reactors. They are also pursuing deals in the UK, Romania and Argentina as well as Bulgaria and several other countries. These strong state–financed commitments create the domestic and industrial capabilities needed for future innovation as well as to establish long–term political and economic relationships with countries of strategic interest. US historical influence over international standards and regulatory system development is therefore being challenged as well as US overall foreign policy interests in democracy and open markets. South Korean and Japanese companies are also international competitors but remain long–time US collaborators.

    According to the World Nuclear Association about 30 countries are considering, planning or starting nuclear power programs. These range from sophisticated economies to developing nations. Is nuclear a viable option for emerging and frontier economies and how does installation and utilization differ in these locations from developed economies in terms of safety, non–proliferation as well as political stability, environmental and regulatory standards, supporting infrastructure and other factors?

    I believe there is a major shift occurring in the global nuclear industry from the industrial countries to the non–OECD countries. Most of future global electricity growth will be in these countries and they want to diversify and develop cleaner energy systems. Despite the huge upfront costs, countries are deciding to accept attractive Russian and Chinese financing for these large, multi–billion dollar units. There is the national pride involved from joining the “nuclear club' as well as possible corruption in certain cases. Russia also offers military equipment as well as full fuel and operating services in its strategy to expand influence. Although both Russia and China have significant training efforts to develop local capacities, overall governance and transparency in a number of these countries is weak and the commitment to competent Nuclear Regulatory Commission (NRC)–like regulatory institutions is questionable. Although most of the countries have signed the Non–Proliferation Treaty (NPT) and the International Atomic Energy Agency (IAEA) Additional Protocol, the introduction of current nuclear power technologies in countries and regions – in which there are significant tensions and political conflicts, e.g. Middle East – raises serious concerns for US foreign policy.

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    Email of the day on climate change from Dr. David Brown:

    I am impressed by your bravery in questioning much that appears in the media about 'climate change'. I am sure the climate is changing, as it is still warming from the last ice age, but that is a natural cycle. As a dyed-in-the-wool scientist, trained carefully in my PhD studies in the logic, method and philosophy of science, I have been horrified by the apparent abandonment of scientific method by many in research on our climate. 

    I say this for two reasons. The first is that a basic premise of scientific method is that nothing can ever be proven for certain, that all conclusions are subject to change. Adoption of that approach was a key step in development of the scientific method and abandonment of religious-type certainty, yet it appears to have been abandoned as far as climate research in concerned. Second, you may remember that ex-president Obama opined that no grant money should be given to scientists seeking to disprove theories of climate change, yet the whole scientific method IS to generate experiments to disprove a hypothesis. I recommend subscribers read Karl Popper on this matter, as he explains the scientific method very clearly. 

    I do not know whether human activity is particularly relevant to climate change, but I do know that much that passes as 'scientific research and comment' is just the opposite. I am more concerned about pollution that carbon dioxide, and that focus would have been much wiser than the approach adopted by the EU that ignored common sense, led to subsidy of diesel engines, and caused tens of thousands of premature deaths. (Was anyone ever held to account?). I never switched to diesel.

    Well, despite Obama, there are alternative research views being published and this article refers to one quite contrary to the carbon dioxide hypothesis.

    The original research article can be accessed by links in the article and I strongly suggest subscribers do read it to at least loosen their views a little.

    It suggests that human influence is negligible and that any changes are mostly due to increased cloud cover generated by cycles in cosmic radiation. However, I fully expect the response to an alternative view will be as you stated: "Confirming evidence is accepted at face value but non-confirming evidence is dismissed. This practice is justified by the urgency of the problem and the need for action, but it is exactly when a vital decision needs to be made that cool heads need to prevail." 

    Well done Eoin for stating this. You are impressive in your clear thinking and all subscribers benefit from your wisdom if they learn from you while investing.

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    Email of the day on climate change.

    Regarding the Allen Brooks piece on Climate change. I have to say I find the benign conclusions of the report totally unconvincing. Over the years I have read widely on the subject and have been especially impressed by the publications and books of one of the most eminent climate scientists whose work goes back more than 50 years. I refer to Professor James Lovelock. In a recent BBC interview, he suggested that global warming may be entering an acceleration phase. As I write this reply a news story has just announced that a high-pressure dome is due to affect the Eastern states of the US with predicted city temperatures likely to exceed 40 deg C. The simple fact is that you cannot expect hydrocarbons that have been trapped in the Earth’s crust over many millions of years, to be exploited by man over a few decades with the bye products going into the atmosphere, without grave consequences.to follow. Globally we have just experienced the hottest June ever and significantly Siberia has been 7 deg C above normal for the time of year. I mention this in respect of the melting permafrost which is now releasing methane in significant amounts. A gas thirty times more significant than CO2.as a greenhouse gas Of course this topic is an extremely emotional one, simply because the decisions made now on how we collectively proceed could not be more important. On balance I think I would go with the IPCC and James Lovelock. His books on Gaia theory, by the way, are worth reading

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