Let’s hope I was wrong

Thursday, 28 February 2019
Adelaide, Australia
By Bernd Struben

  • Advantage EVs
  • ‘Cohen Has Every Reason to Lie About Trump’

20 years ago, I penned a short story called ‘The Duke’s Dish’. It entails a group of high school kids waiting out the aftermath of a nuclear holocaust in a bomb shelter.

You may not know that atop a keen interest in finance and geopolitics, your editor also dips his toe into the realms of science fiction.

That story was eventually — 10 years later — published in an anthology called Visions. If you’re not one of the handful of lucky readers who got their hands on a hardcopy back in 2009, don’t fret. Digital copies are still available on Amazon.

But brazen…and highly belated…self-promotion aside, I bring this up for a reason.

Donald Trump and Kim Jong-un are meeting in Hanoi right now. The goal is to end the nuclear threat hanging over the region. Indeed, if you believe Kim, that threat extends across most of the world.

But even as one threat is diminishing, another potentially more ominous threat is flaring up.

And this is where I hope ‘The Duke’s Dish’ was not prescient. Here’s an excerpt from the story:

I was eighteen when the first bombs lifted from their silos, nineteen before the crimson glow from the last big one faded from the sky. The civilization that took man five thousand years to build was wiped clean in months.

And the really crazy thing is no one can say exactly what went wrong. No one can agree why the nuclear powers reacted like mindless dominos, getting sucked into a conflict that essentially meant nothing to them, unleashing their vast arsenals one after the other just so they could have a role to play in Armageddon.

It started over Kashmir, that much is clear. When India launched a ground invasion of the disputed region, Pakistan’s outnumbered conventional forces turned to a nuclear solution, to which India responded in kind. Somehow Israel and Iran got wrapped up in the conflict, and then China and Britain were drawn into opposite sides, and the rest of the nuclear powers followed.

How a dispute over some rugged stretch of no-man’s land in south Asia led the Russians to bomb New York, or the Americans to target Moscow, is beyond me. But that’s what happened; go figure. When all was said and done, only North Korea’s missiles remained in their silos. Who would have thought?

Now I don’t often hope I’m wrong. But if you’ve been following along with the events unfolding over Kashmir, you’ll understand why I do this time.

Both India and Pakistan claim Kashmir as their own, though they each rule only part of the region. And both countries have sizeable nuclear arsenals.

Over the past few days, simmering tensions between the countries have boiled over. Indian and Pakistani war planes have now both crossed into each other’s airspace and dropped bombs.

The two sides, as you’d expect, are giving different accounts. But it appears two Indian fighter planes were shot down along with one Pakistani plane so far. And ground forces are exchanging fire.

We can only hope that calmer heads prevail.

If things heat up, you can expect greater volatility in global markets. Needless to say, the Indian and Pakistani stock markets — already taking a battering this week — stand to lose the most.

If you own stocks in either country — or stocks highly dependent on either country — you might want to consider lightening your exposure.

At least until we’re sure that ‘The Duke’s Dish’ was nothing more than idle fiction.

(By the way, if you know of an effective way for Aussie investors to short the Indian or Pakistani markets we’d love to hear from you. Just drop us a letter at letters@portphillipinsider.com.au. If your idea’s a good one, we’ll share it with our readers here.)

Now a look at the markets.

Markets

Overnight, the Dow Jones Industrial Average closed down 72.82 points, or 0.28%.

The S&P 500 lost 1.52 points, or 0.05%.

In Europe, the Euro Stoxx 50 index finished down 6.55 points, or 0.20%. Meanwhile, the FTSE 100 dropped 0.61%, and Germany’s DAX closed down 53.46 points, or 0.46%.

In Asian markets, Japan’s Nikkei 225 is down 74.85 points, or 0.35%. China’s CSI 300 is down 0.18%.

In Australia, the S&P/ASX 200 is bucking the global losing trend and currently up 10.73 points, or 0.17%.

On the commodities markets, West Texas Intermediate crude oil is US$56.95 per barrel. Brent crude is US$66.39 per barrel.

Turning to gold, the yellow metal is trading for US$1,320.84 (AU$1,844.75) per troy ounce. Silver is US$15.76 (AU$22.01) per troy ounce.

One bitcoin is worth US$3,796.22.

The Aussie dollar is worth 71.60 US cents.

Advantage EVs

Moving away from the spectre of nuclear holocaust and into the world of cars, if there’s one thing I don’t miss about living in Melbourne, it’s the traffic.

Peak hour there has expanded to some six hours. First there’s the 6:30–9:30 am crunch as bleary eyed drivers chugg coffee. Then the 4:00-7:00 pm evening grind, where the stop-and-go traffic is more stop than go.

And god help you if you’re in the wrong lane and need to merge. Because your fellow motorists certainly won’t lend a hand…or tap the brake.

But as bad as Melbourne’s traffic is, it doesn’t hold a candle to the major Chinese cities.

Eight of those cities even hold lotteries for their residents to decide who is allowed to buy a new car.

From Bloomberg:

Traffic congestion and air pollution are such headaches in the capital [Beijing] that the government since 2011 has used a lottery to restrict the number of cars registered each year… The municipal government will issue 38,000 of those plates to individual buyers of gasoline-powered cars and 54,000 for EVs.

We looked at the Chinese car market earlier this week. While new car sales are down this year for the first time in two decades, China is still the largest car market in the world.

With a focus on improving their cities’ abominable pollution levels, the Communist Party is prioritising electric vehicles (EVs). Hence Beijing is allowing 54,000 new EVs into the city and only 38,000 petrol cars.

But don’t get the wrong idea with the lottery system. China is not looking at cutting its overall car market. As Bloomberg reports:

China’s national government has identified the automotive sector as one of the strategic industries it needs to help develop its economy, so it still wants people to buy more cars, especially electric vehicles. But that’s not the case in the most populous cities.

So millions, if not tens of millions, of EVs are destined to hit the streets in China’s more rural locations. That means they’re going to need a lot more range than the cars greenlighted to operate in mega-cities like Beijing and Shanghai.

And range, unfortunately, remains EVs’ biggest Achilles heel. Well that, and their lack of a throaty V8 rumble. But I digress…

But the EV range limitation may be coming to an end.

That’s the hope of one pioneering Aussie company, anyhow.

As our in-house stock picking guru Ryan Dinse explains in his new research report, ‘The Forever Battery Breakthrough’, this tiny ASX company owns the exclusive patent that could make it happen.

If all goes to plan, Ryan expects its share could rapidly gain 319%, or potentially as much as 1,148%.

Those are big numbers, I know. And gunning for those kinds of gains doesn’t come without significant risks.

But Ryan wouldn’t make this recommendation if he didn’t believe in this company.

He went public with his new report on Tuesday.

If you haven’t already, you can read that in full right here.

That’s all from me this week.

You’ll hear from your regular Friday editor, Sam Volkering, tomorrow. And a special guest editor on Monday.

I’ll be back with you Tuesday, 5 March.

Finally, here’s the latest in politics from The Australian Tribune:

‘Cohen Has Every Reason to Lie About Trump’

US President Donald Trump’s former lawyer, Michael Cohen’s testimony before the US House has devolved into a political farce.

That’s no surprise.

Yesterday, Trump himself accused Cohen of lying to get a reduced prison sentence. Cohen certainly wouldn’t be the first person looking at a lengthy spell behind bars who stretched the truth to…’

If you’re fed up with sanitised, politically correct dogma cut and pasted from one mainstream source to another then The Australian Tribune is for you.

And it’s absolutely free.

Sign up here to get The Australian Tribune delivered free to your inbox five days per week.

You can visit our website at https://www.theaustraliantribune.com.au/ to read the complete article above now.

Cheers,
Bernd