Juggling Dynamite

When visiting Spain it is obvious that fresh locally-grown food there is remarkably diverse and affordable, while junk food is rare and expensive in comparison.  Not surprisingly, the population has a body mass normalacy reminiscent of North America 40 years ago.  Other governments must take note and tax junk and processed foods while helping to make fresh and locally-grown foods readily available.  Our present system is subsidizing junk producers by forcing unsustainable sick care costs and waste management on to taxpayers.

According to the 2019 edition of the Bloomberg Healthiest Country Index, which ranks 169 economies according to factors that contribute to overall health. Spain is now the world’s healthiest country.  Here is a direct video link.

As markets jolt about on talk of US-China trade concessions, the broader imbalances and conflicts between the two nations will not be easily resolved.

China’s slowing economy and President Trump facing re-election in 2020 seem to point toward the two largest economies making a modest compromise on trade. But the trade deal itself is just a part of the larger geopolitical tug of war between the United States and China’s Xi Jinping.  Here is a direct video link.

Trade deal or no deal, the U.S. and China are still fighting for global power from CNBC.

Late in this economic cycle, both countries now face slowing growth while heavily indebted with aging domestic populations.  Economist and Asia expert Stephen Roach, argues that China’s domestic savings rate being twice that of the US gives it more ability to drive its economy with capital investment, whereas countries like the US have largely hit their limits on fiscal and monetary stimulus options.  See Misreading China’s strength.

I agree that two decades of under-saving, over-spending on debt and funnelling capital into destructive financial speculation have weakened the US and many other economies.  But China has asset bubbles too and having floated the US trillions in vendor-financing for non-productive consumption over the last 20 years, both countries are co-dependent in the financial imbalances and repayment risks now at hand.

A.P. Moller-Maersk A/S, the world’s biggest shipping line, is a trade bellwether because it carries nearly one-fifth of the world’s shipping containers. Last week it lowered its 2019 profit forecast and cited a dimming outlook for world economic growth. CEO Skou said trade tensions last year led to front-loading of shipments and stockpiling in 2018. Drawing that inventory down will mean reduced trade and shipping demand in 2019.

Soren Skou, chief executive officer at A.P. Moller-Maersk, discusses their EBITDA forecast for 2019, his outlook for oil prices and how trade tensions have impacted his business. Here is a direct video link.