Mar 31FT Banks and Archegos, HK director privacy +VE corruption?, US +VE Taiwan, China Property 2 mkts one country?


31 Mar

MARKETs at 3pm HK time. 
Not seeing huge volumes suggest little re-balancing in Asia.
AUSTRALIA
Traded higher in early trades and work to 6,862 around 1pm but then drifted before a slight increase in selling to close +52pts (+0.8%) @ 6,791
Data
Building Permits Feb +21.6% MoM vs -19.4% (F/cast was +2%)
Private Sector Credit Feb +0.2% MoM vs +0.2% Jan (F/cast was +0.1%)
Private Sector Credit Feb +1.6% YoY vs +1.7% Jan (F/cast was +1.6%)
JAPAN 
Pre market data was weaker than expected
Nikkei 225Opened lower and traded sideways with support at 29,200 and resistance 29,350. Was at 29,300 with 20 mins to go but sold down to close -254pts (-0.9%)@ 29,179
Topix traded in a similar pattern support at 1,960 for most of the day. Rallied to test Tuesday’s close in the morning but failed to break above. Sold off in the last 20 minutes to close -24pts (-1.2%) @ 1,954
Data
Industrial Production Feb -2.1% MoM vs +4.3% Jan (F/cast was -0.9%) Industrial Production Feb -2.6% YoY vs -5.2% Jan (F/cast was -1.8%)
Later
Housing Starts Feb -3.7% YoY vs -3.1% Jan (F/cast was -4%)
Construction Orders Feb +2.5% YoY vs +14.1% Jan (F/cast was +3.2%)
S KOREA  
Pre market data was mixed, USD strength hurting sentiment trading volumes moderate. Financials and Telcos firm but tech and auto weak.
Kosdaq opened slightly higher and rallied to 961 which it tested a few times before selling down around10:30am to 954 support and then traded sideways to closed -2pts (-0.2%) @ 956
Kospi similar pattern morning high was 3,094 then sold down to flat and traded sideways before selling down to close -9pts (-0.3%) @ 3,061.
Data
Business Confidence Mar 89 vs 82 Feb (F/cast was 84)
Construction Output Feb -8.7% YoY vs -6.4% Jan (F/cast was -5.5%)
Industrial Production Feb +0.9% YoY vs +7.5% Jan (F/cast was +1.5%)
Industrial Production Feb +4.3% MoM vs -1.6% Jan (F/cast was +0.5%)
Manufacturing Production Feb +1% vs +7.4% Jan (F/cast was +2.5%)
Retail Sales Feb -0.8% MoM vs +1.6% Jan (F/cast was +0.5%)
Retail Sales Feb +8.4% YoY vs 0.0 Jan (F/cast was +1.5%)
TAIWAN 
Opened lower but did test yesterdays close in the first hour but unable to break above. Then sold down to16,450 level and traded sideways to close -124pts (-0.8%) @ 16,431
CHINA
Pre market PMI data better than f/cast
CSI 300 opened lower and sold down to 5,020 in morning before a small bounce into lunch. PM worked slightly better to close -46pts (-0.9%) @ 5,048
Data
Manufacturing PMI for Mar 51.9 vs 50.6 Feb (F/cast was 51.1)
Non Manufacturing PMI for Mar 56.3 vs 51.4 Feb (F/cast was 51.9)
HONG KONG 
Pre market opened @ 28,802 +225pts vs +26pts ADR’s with strength in Tencent & Xiaomi but WH Group tanked after earnings. Helped by good PMI data prompting a short squeeze. But market then sold down through the morning with support at 28,385 before a bounce to test Tuesday’s close but then sold off into lunch. PM opened lower and trading sideways.
Ecommerce mixed, Tencent & Meituan higher BABA weak. Chinese Financials and Property weak
Brilliance trading halt as annual results delayed,
EUROPE 
A mixed open and stock trading slightly lower with Telco up but Banks weak. Pre market data from the UK better than forecast. French inflation in line, PPI slightly better but Household consumption missed f/casts at flat. Caution ahead of German Unemployment and Eurozone inflation data.The mixed handover from Asia despite good China PMI data, which reflects the poor relations concerns.
US Futures 
Opened Dow -12pts, S&P and NDX flat but now Dow -30pts but S&P +0.15% and NDX +0.16%
Data due MBA mortgage Applications and 30 yr Mortgage Rate, ADP Employment Change, Chicago PMI, Pending Home Sales, EIA Oil Change, USDA Prospective Plantings Report.
President Biden to release details of Infrastructure stimulus plan
Earnings: Walgreens Boots Alliance, Micron, Dave & Buster’s, Guess


FRONT PAGE
BioNTech lifts jab output goal
BioNTech/Pfizer increasing production by 25% and using a new site for prodcution.But Astra-Zeneca facing a bans on concerns about blood clots, with Germany yesterday joining other nations in banning the jab for younger people. Reveals why some people are cautious about signing up for the vaccine. The other issue is, in some countries, that as cases reduce those who haven’t been vaccinated see less incentive to be vaccinated.
Meanwhile, the head of the World Health Organization said a report into the origins of coronavirus in China’s Wuhan was not “extensive enough”.

Banks face regulators’ scrutiny on handling of Archegos fire sale
Regulators in US, Europe and Japan are looking into how the banks acted and whether there was any inappropriate action.
It is now understood that 'Bill Hwang, Archegos founder, gathered Wall Street lenders Goldman Sachs, Morgan Stanley and Wells Fargo, as well as Swiss rivals UBS and Credit Suisse and Japan’s Nomura, in a last-ditch effort last Thursday to unwind billions of dollars of markets bets in an orderly manner.’
It seems they were aiming at trying to sell over 20 days.
But some banks started selling large blocks, which has left Nomura and CreditSuisse badly exposed. Goldman’s the article says listened to the talks but did not commit itself.
It seems once again a bank has acted it's own best interest. It must come close to insider trading; having confidential information, that the rest of the market doesn’t have, and acting on it. But as Jamie Dimon showed when he looked at the books of Lehman and decided not to support the bank but to instead told his traders to get more security, a factor that was crucial in its downfall, the regulator seems unable or unwilling to take tough action. It would also raise questions about the banks assurances that they act in the clients best interest. Having allowed Archegos to amass such positions, because they ignored or failed to follow their own rules, they surely have to take part of the responsibility?

Hong Kong ‘privacy for directors’ move will facilitate corruption, investors fear
Carrie Lam’s latest move is to 'not require companies to reveal home addresses, passport or identification numbers of their directors on public registers. Without this information, directors could use different versions of their name in different languages on documents and entities. Companies can implement the changes immediately and the law will come into full effect by October 2022.’
Obviously it increases the risk of fraud and makes it effectively impossible for banks, estate agents and others to comply with anti money laundering legislation that requires identifying the beneficial owner of any transaction.
It is also likely to severely undermine Hong Kong’s status as a premier financial hub with a strong legal protections for investors.
Carrie Lam says it is to prevent '“doxing”, under which the personal details of individuals are exposed online. Pro-Beijing groups have accused anti-government activists of using such tactics to attack authorities.’
The article cites various bodies and people on the matter, it is best summed up by David Webb “The proposed law will facilitate corruption, fraud and other crimes.”
We saw when Carrie Lam first attempted to introducing an extradition bill a wave of public opposition that resulted in her rescinding the bill. But now the people cannot protest because of the new National Security Law and other legislation. If this legislation goes through it is likely that Hong Kong will lose a lot of its reputation for being a safe city in which to do business and that is likely to be bad news for China in the long term and maybe even in the short-term.
Page 2
WHO chief keeps open possibility virus came from lab leak
He is saying all possible options remain on the table until the source is identified, which makes perfect sense. Whilst the report said it was ‘extremely unlikely’ he has correctly pointed out the conclusions are not definitive. He has also revealed that China co-operation was restricted and not completely open, with some data not being shared.
I would think to most reasonable people that would raise questions as to why is China not prepared to be completely open? Why did it take over a year to allow a team into Wuhan?
WHO chief Tedros said “We have not yet found the source of the virus, and we must continue to follow the science and leave no stone unturned as we do,” I am sure most people would agree with that.
Page 3
US easing of Taiwan curbs likely to antagonise China
Biden decides to maintain many of Trump changes that allow diplomatic meetings. Trump loosened restrictions that had been in place effectively since 1979 and Biden is going to keep then, loose and it seems encourage more contact not less. I hope that it is more in support for Taiwan than it is a hardening of attitude to China. Last week the US raised concerns about China invading Taiwan, hopefully this is going to lead to Taiwan being internationally recognised for the independent country that it is. Seemingly in confirmation of this 'On Monday, in an unusual move, John Hennessey-Niland, US envoy to Palau, visited Taiwan with Surangel Whipps, the president of the western Pacific nation, one of 15 countries that recognises Taipei instead of Beijing. China responded by sending 10 warplanes into Taiwan’s air defence identification zone, its second big intrusion in four days.’
Other supportive actions include 'Joseph Young, acting US ambassador to Japan, recently welcomed his Taiwanese counterpart to his Tokyo residence and announced the visit on Twitter.’
Also 'After Paraguay, which also recognises Taipei, said China had offered to provide Covid-19 vaccines in exchange for changing diplomatic ties, Blinken called the president of the South American nation to stress the importance of working with democratic partners such as Taiwan. One US official said the call, which was made public, was a deliberate effort to provide public support to the countries that still recognised Taiwan.’
The reality is that Taiwan is an independent country, Blinkin described it as such. The fact that a lot of countries are still locked into their 1979 thinking does not mean the facts haven’t changed. To imagine that nothing has change in over 40 years is ridiculous. China and the rest of the world need to grow up and recognise the changes that have occurred. Maybe more importantly the world needs to realise that China doesn’t want Taiwan for the sake of unity but money and technology. If the world lets that happen then China will be able to hold the world to ransom over chips and other tech.

Expect emerging markets debt crisis, IMF head warns. 
Follows the same warning as was made by the Secretary General of the UN earlier this week.It does note that the global recovery is stronger than had been expected, in part due to Biden’s stimulus package. But there are still a lot of unknowns and uncertainties and typically the emerging markets are the most vulnerable.

Page 4
UK trade chief urges tough line on China
Beijing’s self-designation as a developing nation is ‘ludicrous’, warns minister. She feels many in the west are stuck in the 1990’s global trading regime. Which I guess is slightly ahead of diplomats who are stuck in the 1979 thinking that there’s one Chinese nation (China and Taiwan) that it controlled by Beijing.
The UK trade chief was referring to the need to revive and renew the WTO, which over recent years has been marginalised by both the US and China. Her comments echo Trump’s 'who said the WTO gave special treatment to China because of its designation as a developing country.’
Under Biden it is expected that the US will take a more involved stance in the WTO, its support for the new WTO director-general will be crucial.
She was also questioned on relations with the EU post Brexit and said she was pleased they were in talks over vaccine supply. She also hopes to secure a deal with the CPTPP and India. No longer part of the EU the UK now needs to secure its own trade deals to make up for that.

China coastal house prices soar as inland property sales falter
Starts by giving an example of how developers are trying to secure buyers; 'At a half-built residential development a few blocks from Apple’s biggest iPhone plant in the central Chinese city of Zhengzhou, Wang Lina has made an unusual offer to attract business following a 10 per cent price drop over the past 12 months. Instead of requiring a standard 30 per cent deposit, the sales manager has asked for 5 per cent, making up the difference by offering a two-year, interest-free loan funded by the developer.’
They had hoped the Foxconn factory built 10 years ago would attract migrant labour and boost sales but it hasn’t.
However in the much more popular coastal strip developers are seeing a boom and they are able to raise prices and select buyers through lottery. It is not just a property divide but potentially a society one. Many inland areas have seen property over supply for years. The adage that ‘build and they will come’ has not worked. Supply is at dangerous levels ‘According to CRIC, a Shanghai-based consultancy, it will take 15 months, a high level by industry standards, for developers to sell their inventory in Zhengzhou.’ It doesn’t mention if that assumes no new build in the meantime. But the risk is that older developments are surpassed by newer ones, offering better location or facilities.
The current problem finds its origins in 2016 when 'efforts to curb a property bubble in coastal cities, led by purchase limits, prompted investors to flood the business hub where homes could be sold without restrictions.’ But as the market in Zhenzhou boomed it was forced to introduce restrictions (primarily a restriction on reselling in under 3 years), prompting transactions to fall more than 33%. However the developments continued to be built even though demand fell.
The migrant workers are present but cannot afford to buy as most are employed in low paid jobs; with a monthly salary of Rmb5,000 per month
It underlines how a true understanding of the local market is essential. Also worth understanding that in China many owners do not buy to rent out. The reason being that most tenants do not take care of a property as you might expect in the west. So second home purchases are made as a commodity not as a business. I would have thought that having seen the problem, for so many years, that Chinese authorities would have looked at reforming the landlord tenant legislation for residential.
It also underlines how a lot of Chinese employment is still in low paid jobs, although Rmb5,000per month for a rural person is considered good. But the factories tend to provide accommodation for their workers. Last time visited some factories in China that was still the case. These workers are just interested in earning money and doing as much overtime as they can to send money home to their families. To them the west’s insistence on maximum working hours make no sense, they want to work to give their children a better life.
But on the property side it means that certain developers are exposed; they tend to be the smaller local developers rather than the larger listed entities who are able to afford to buy the more expensive coastal land. But that means that it is the rural and provincial banks that are exposed to both the developers and the residential mortgages.

For interest
Russia seizes on Suez blockage to trumpet merits of Arctic route. An alternative route but of questionable use. Also mentions the increase in demand for the Trans-Siberian rail route in recent days.  I would think it more likely that the Suez Canal operator puts in place new rules about mega container vessels needing to use escort tugs at times of high winds. But worth a read.

Page 5
Companies & Markets BioNTech lifts Covid vaccine target to 2.5bn doses this year
Also aims to formulate two alternative versions of the vaccine that can be stored in refrigerators (would make for easier distribution) or freeze-dried.
Freeze drying could help with stock piling but if covid is like the flu then there is going to be limited benefit as the vaccines will be modified over time to meet the newest and most virulent threat.
One concerning comment from the results presentation was "We learned from our Covid-19 experience that product development can be faster,” . Covid has been a; hopefully, unique situation. As we are seeing with the AstraZeneca vaccine there are some side effects. It maybe that overtime more present themselves. Once would hope that the more normal extensive testing procedures remain in place for product development otherwise faith in the pharmaceutical business is going to run thin.

Lights, camera, action Netflix reins in power behind TV throne with emissions crackdown. Aims to remove diesel generators and use more virtual production techniques. Also 'the use of electric batteries and transport, hiring local crews, reducing air travel and introducing more LED lights.’  A good start it will be interesting to see if Disney, Viacom etc follow.  -VE for Diesel generator makers but +VE for battery industry.

Renesas diversifies to steer course through chip sector troubles
Notes that despite the fire it will progress with its purchase of Apple supplier Dialog for Euro 4.9bn and continue its diversification.
Currently 23% of sales come from China putting it in a precarious position in the light of US/China relations. There is also the threat from Intel as it moves back into production and China as it seeks to develop its domestic semiconductor industry.
Hence the diversification; acquiring US rival Integrated Device Technology for $7.2bn in 2019, after the $3.2bn purchase of US chipmaker Intersil in 2017. Now Dialog, the Anglo-German semiconductor specialist, to broaden its footprint outside automotive chips, (currently 50% of its revenue), and increase its presence in internet-connected devices.
Finally the hope for change in fortunes is happening.
The article looks at the troubled history but the key for investors is not the past but the future which under the guidance of Shibata CEO since July 2019 seems to be working. The fact that he has furthered the diversification that was started by INCJ (where he worked prior to joining Renesas) is encouraging.
It concludes 'Renesas is the second-largest supplier of microcontroller chips used in vehicles to power functions from steering to wipers. As boundaries between the tech and car industries start to disappear in the era of electric vehicles, Renesas’s acquisition strategy will be tested by whether the company is successful in supplying chips to both worlds.
Shibata says the first critical step will be integration of the acquired companies with its domestic units, a challenge that has crippled many overseas deals by Japanese businesses. “It’s going to take a very long time to unify a fragmented culture. We’re only at the start of a climb,” he says.’
The share price peaked in 2018 and then trended lower until May 2019, when it started to recover, it was hit last year with the rest of the sector but has steadily worked higher to a recent peak at the end of January 2021 and since then drifted slightly. The fire had little impact on the share price because the impact was seen as temporary. The integration of Dialog will be important as a new driver.

Xiaomi joins dash for electric vehicles
Smartphone maker plans $10bn investment to launch marque in China.Follows the move by Baidu (with Geely) and Apple. At this stage details are scarce. Great Wall denied rumours of a deal for third party production’ so whether it goes it alone remains to be seen.
Xiaomi it notes 'is one of the world’s largest phonemakers and works with partners to produce a wide range of internet-connected devices, from rice cookers to scooters. But the push into electric cars will be its most ambitious project yet.’
Also '“Traditional automakers don’t have the same legacy advantages in making electric cars so it makes sense for highly efficient internet companies who can push software updates to come in and give it a try,” said Yale Zhang, founder of the consultancy Automotive Foresight in Shanghai.
An interesting read but I think the key is that the smartphone business is limited and so smartphone companies have to decided how to spend their cash in what is becoming an increasingly saturated business. After phones the next key item for most people is a car and electric car makes quite a good fit for the phone makers. The article concludes 'Tu noted that Baidu brought its AI and autonomous driving capabilities to its EV project, but Xiaomi lacked the same competitive edge. “They’re going to be pouring billions of dollars into this to enter the most competitive auto market in the world,” he said.’
I think that whist the market is competitive, it is also new and even the established auto makers have only a limited advantage and in some cases a legacy disadvantage. But for the phone maker there are limited other options. Apple is diversifying, Samsung and LG already had other businesses for Xiaomi I think it makes sense. The news saw the shares rally. Over the past year its presence and share price have worked higher in part because Huawei has been crippled by US sanctions. This year growth is likely to be harder. I would expect it to link up with a third party maybe someone left field like Evergrande New Energy Vehicle who are strapped for cash would make a potential partner?

Foxconn warns components shortage to last until 2022
I think that is quite likely especially after the comments from TSMC yesterday that 'While actual chip capacity outweighs demand, uncertainties wrought by rising China-US trade tensions have led to double booking and exacerbated the chip shortage’
Samsung has also warned about the imbalance and its human nature to over order having been caught short.
The statement was made as part of its earnings announcement. Earnings were slightly below most forecasts but the company said it was cautiously optimistic; with the proviso of no renewed disruption from covid and no severe hit from component shortages. Part of its optimism was because it was early in moving production out of China, a trend that will continue as other countries come to terms with the virus.
The stock saw a massive move higher in January and has largely traded sideways since it really needs a new driver to make a difference.
Lex Foxconn/electric cars: wheel see.  Diversification comes at a cost but it seems worth it. Concludes 'Expect further profit squeezes in the meantime. A global shortage of high-end chips means delays to Apple sales and potential hits to Foxconn revenues.Capital spending will remain high as Foxconn shifts to electric car production and considers building its first factory in the US via a subsidiary.
Shares are up 35 per cent this year, trading at a 14 per cent premium to local peer Pegatron. This price level fairly balances the costs of an electric vehicle venture with its possibilities.'

Top Glove shares slide after US claims of forced labour
Shares dropped 6% Tuesday and are down 6% today after the US ordered the seizure of its products over allegations that it used forced labour. The Us accounts for nearly 25% of sales. The US CBP commissioner said “Today’s forced labour finding is the result of a months-long CBP investigation aimed at preventing goods made by modern slavery from entering US commerce,”
The company has submitted a report by Impactt, an independent consultant, to US customs this month and had taken measures to address “all concerns”. 'Impactt, in a statement in early March, said there was no “systemic forced labour” at Top Glove. Excessive overtime and withholding of wages “were no longer present among the group’s direct employees” while “further progress” had been made on issues including debt bondage, physical and sexual violence and intimidation.’
Whist improving labour conditions is paramount I think once again there it the luxury of imposing restrictions on things such as overtime in countries that are poor and where the people want to want. Make no mistake I am against forced overtime, withholding wages, debt bondage, physical and sexual violence and intimidation. But in countries where people want to work and are free to make a decision about for how long they should given that freedom. As the Goldman Sachs junior bankers have shown we make no restrictions on how long junior bankers should work; the fact they get bonuses not overtime seems to be the only difference. Maybe Asian companies should make that part of the pay deal?

Benchmark Treasury yields reach highest level since early in pandemic
Looks at yesterday’s moves. Key is the dilemma about whether the move is because of inflation fears or economic recovery/growth expectations.
A key point from Antoine Bouvet, senior rates strategist at ING “No matter how much warning we get from the Fed, at some point they will have to raise rates,”.
Many think that will be sooner rather than later but I still think because of the speed of the recovery and having the experience of the GFC they are now focused on wage inflation as the key for when to raise rates. Whether that is the right benchmark to adopt time will tell but they know that headline inflation wasn’t in the case of the GFC. To me the issue remains, this isn’t a re-run of the GFC and many of the circumstances are different. But they are trying their best with the data they have. No one actually knows. For investors then the key is to remain diversified and vigilant.
Read also Markets Insight. Powell’s inflation bet is based on flawed reasoning By Andrew Parlin  founder and chief investment officer of Washington Peak Investment Advisors.
Thinks there are four flaws
First, the risk-reward of his experiment is wholly asymmetrical, skewed hugely to the downside.
Second, the level of inflation vigilance on the part of a Fed chair is a critical component in keeping inflation expectations firmly anchored. An old Wall Street adage states that, when the Fed chair starts to panic, investors can relax. Here we have the reverse.
Third, Powell has repeatedly stated that inflation has surprised on the downside since the 2008 collapse. This is, of course, true, but perhaps not so relevant. How does one incorporate into forecasts the impact of the biggest peacetime fiscal stimulus in American (world) history?
Fourth Powell should be especially distrustful of himself and his own judgments, for he has first-hand experience in applying the wrong policy prescription. It’s worth reviewing his late 2018 policy blunder for insight into the current situation.
He concludes 'The point is not to rub the 2018 policy error in Powell’s face. Misreadings of the economy are routine, which circles back to my main point. With so little known about the dynamics of consumer price changes, there is no need for the Fed to make multiyear promises to hold rates at zero. It’s time to start the conversation about monetary tightening.’
As I say, no one knows, there is no prior experience or road map.

Opinion Profit or principle is the hard choice for foreign companies in China by George Magnus, author of ‘Red Flags: Why Xi’s China is in Jeopardy’, is a research associate at the University of Oxford China Centre
Looks at the fall out from the Xinjiang alleged human rights situation. Of course if there is no issue, as China says, then allowing the UN unfettered access can clear up the matter in a few weeks. The reality is that probably things are not as China says and certainty not up to international standards.
It notes 'Xinjiang accounts for over 80 per cent of China’s cotton output and for about a fifth of world consumption. It is rich in gas, coal, oil and mineral deposits. It is a manufacturing and assembly hub for sectors such as automobiles, electronics and technology. It is also a corridor for land- and rail-based trade into central Asia, the Middle East and Europe, as well as for oil and gas pipelines.’
It lists China’s past actions on corporate coercion;
Norwegian salmon exports because of the Nobel Peace Prize award to dissident Liu Xiaobo,
Beijing encouraged protests against Japanese companies as tensions rose over the disputed Senkaku Islands
Targeted Marriott International, the hotel group, and other companies for using “illegal content” — that is, a failure to identify Taiwan as part of China.
Cathay Pacific came under pressure to fire employees who supported Hong Kong’s pro-democracy movement.
Now 'H&M, the Swedish clothing firm that announced it would stop sourcing cotton in Xinjiang, was removed from leading Chinese ecommerce, ride-hailing, mapping and other apps. It became the target of protests, boycott demands and social media abuse. The row has spilled over to include other brands, such as Adidas and Nike, with supply chain operations centred on China.’
It mentions how under ESG goals instances like this are increasingly of concern to investors.
Concludes ‘For foreign companies in China, the options seem delicately balanced. If they stand up for principles, they may put revenues at risk and will incur extra costs as they develop new supply chains. Yet if they prioritise their China profits, they could do irretrievable damage to their brands at home and in other markets, falling foul of shareholders and changing governance requirements. It is an invidious choice but the latter is likely to be far more damaging to longer term performance and earnings, and corrosive of trust in the brand.’
It is strange to think that we refer to China as communist which the dictionary defines as 'a theory or system of social organization in which all property is owned by the community and each person contributes and receives according to their ability and needs.’
Clearly China is not communist by the dictionary definition and we ought to find a new definition for China or for communism. This is about the party and remaining in power. It may well be the ESG, if investors embrace it fully will do more to undermine investment in China than even Trump could have imagined. In the meantime companies and countries will increasingly be pressurised by China for not adopting or accepting its methods.
For investors it will be a matter of principles or profit. There are still a huge number of businesses in China that are not tarred with concerns about human rights but there will always be that nagging concern.

Opinion The US cannot be choosy about its allies By Janan Ganesh
An interesting read sets out that in the choice of allies one may have to compromise on some of ones own principles or morales. Effectively it asks does the final result justify the means? Worth a read.

For interest Start-ups get into gear for self-driving trucks
Volvo and Aurora link up in further sign of change in the road haulage sector.
A lot of progress being made, I particularly like the concept of the on-ramp, highway, off-ramp portion of the long-haul interstate driving where detailed mapping is less important. Driverless on the interstate and then local man vehicles for the last mile portion.

For Interest Brussels squares up to UK in fight over euro swaps clearing
EU is increasingly worried about London’s dominance over the €81tn industry
An interesting read. Key quotes for me'“The EU wants to do this for commercial reasons but is trying to find a way to do it through non-commercial reasons,” said a senior executive at an investment bank based in London.’
Also 'Many market participants also see the UK legal system that underpins the contracts as flexible and commercially favourable. Claims by the EU that it is too risky to allow UK authorities such influence over another currency are treated sceptically because US authorities defer primary regulation of dollar derivatives clearing to London.’
The EU has held closed door meetings with banks and asset managers about 'how to move thousands of open contracts without creating market instability. The sessions are part of the work of an expert group that will report its findings to McGuinness by this summer. The meetings have mainly revealed familiar faultlines. “The banks and asset managers were of the same view that you can’t force it to move from the UK to Europe,” said one person who took part in the meetings. “The [European] Commission has realised how difficult it is to do this,” said another.
’'Investment banks argue that clearing is a global market and it is its clients’ choice to use London. By keeping the business in one place, they argue, banks and asset managers can consolidate all of their positions and save large sums on the amount they need to post as insurance on their trades.’
One has to ask again whether Brussels is acting in the best interests of the businesses of Europe in this case the banks and asset managers or itself?

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