FILE - This Sept. 15, 2019 file photo, shows storage tanks at the North Jiddah bulk plant, an Aramco oil facility, in Jiddah, Saudi Arabia. Saudi Arabia's state-owned oil company Aramco on Thursday, Dec. 5, 2019, set a share price for its IPO — expected to be the biggest ever — that puts the value of the company at $1.7 trillion, more than Apple or Microsoft. (AP Photo/Amr Nabil, File)Associated Press
Shares in Aramco, the Saudi-owned oil giant, spiked 10% Wednesday when they hit the market in the world's biggest-ever IPO.
The spike came as shares began trading on Riyadh's Tadawul stock exchange, after years of wrangling over where they would list.
Due to regulations on the Tadawul, a 10% spike was the maximum possible for the debut.
The offering raised $25.6 billion, according to the Financial Times, putting it just ahead of the previous record IPO, which was the $25 billion amassed by Alibaba in 2014 in the New York Stock Exchange.
Commerce Secretary Wilbur Ross discusses the importance of negotiating a good trade deal with China
U.S. and Chinese trade negotiators are laying the groundwork for a delay of a fresh round of tariffs set to kick in on Dec. 15, according to officials on both sides, as they continue to haggle over how to get Beijing to commit to massive purchases of U.S. farm products President Trump is insisting on for a near-term deal.
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In recent days, officials in both Beijing and Washington have signaled that Sunday is not the final date for reaching a so-called phase-one deal -- even though that is the date President Trump has set for tariffs to increase on $165 billion of Chinese goods. That date could be extended, as has happened several times when the two sides thought they were on the verge of a deal. Those prior deals, though, never held and tariffs continued to mount.
Chinese and U.S. officials involved in the talks say they don’t have a hard deadline. On Friday, White House economic adviser Larry Kudlow said on two television appearances that there were “no arbitrary deadlines.” Such remarks from Mr. Kudlow -- especially when they are restated several times -- often reflect the president’s views and have been echoed privately by other U.S. officials.
With both sides hinting that negotiations could be extended beyond Dec. 15, Mr. Trump himself has gone back and forth in his public remarks between threatening a prolonged trade battle and trying to calm jittery investors. White House adviser Jared Kushner, the president’s son-in-law, has recently become involved in trying to help the two sides reach a trade agreement.
At The Wall Street Journal CEO Council meeting on Monday, Mr. Kushner said the talks are “heading in a good direction.” Asked if Trump would follow through with more tariffs on Dec. 15, Mr. Kushner said: “I don’t know what his decision will be.”
President Trump, however, hasn’t yet made his decision, and he has overridden his advisers on trade several times to add tariffs.
The talks are dragging on. Working-level negotiators talk on most days, but as of Friday, lead negotiators on both sides hadn’t spoken for 10 days. U.S. Trade Representative Robert Lighthizer has been tied up trying to get Mexico to agree to terms on the U.S.-Mexico-Canada Agreement.
The biggest holdup in the U.S.-China negotiations is Washington’s demand that China guarantee its pledge to buy more American soybeans, poultry and other agricultural products.
WASHINGTON (Reuters) - After 14 conferences, a couple dozen research papers and presentations and some very dense math, the Federal Reserve’s hunt for a better way to reach its inflation target may boil down to a single word: symmetric.
FILE PHOTO: A screen displays the U.S. Federal Reserve interest rates announcement as traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 18, 2019. REUTERS/Brendan McDermid/File Photo
The word, meant to convey a tolerance for inflation periodically running a bit hot without the Fed rushing to quash it, is emerging as the touchstone of a concerted push to change how an elusive price goal is understood by the public.
The persistent run of U.S. inflation below the central bank’s 2% target for most of the post-financial crisis era has bedeviled Fed officials eager to avoid the anemic growth and even falling prices that plague Japan and Europe.
When they launched a review of the Fed’s monetary policy “framework” a year ago, it was partly to analyze several ambitious but complex ideas for addressing the inflation shortfall. Those ideas involved a formal pledge that interest-rate decisions would be used to “make up” for bouts of weak inflation with fully offsetting periods of higher inflation.
But in recent weeks the four officials steering the review, including Vice Chair Richard Clarida, have downplayed chances for wholesale change when the debate wraps up next year.
A simpler alternative may have already been put into motion: Pledge to keep rates at the current low level until inflation rises, and make clear in any statements or speeches that the Fed will be in no rush to squelch it when it does.
ENTER ‘SYMMETRIC’
Over the past year Fed Chairman Jerome Powell and policymakers in general have made that point clear, leaning heavily on the word “symmetric” to describe their inflation target.
“Symmetric” was used to describe the inflation target in a January 2017 Fed statement of long-term strategy. At that point it was intended to make clear that 2% was not an upper limit on the pace of price increases, and to counter criticism that the Fed only cared if inflation was too high.
Under Powell, however, the word has become a Fed staple. He used it 31 times in the eight press conferences he has held since last December. It has appeared at least twice in each of the 14 policy statements issued during his chairmanship, save for the first.
By contrast, it never appeared more than once in a statement under former Chair Janet Yellen, and she used the term sparingly in her press conferences.
Presidents of the Fed’s regional banks also use the word frequently and often explain it to mean they would not only tolerate a period of inflation running above 2%, they would see it as a healthy development after years of missing their mark.
Between that shift in language, other public comments, and the minutes of recent meetings, the broad direction of the Fed’s framework review may already be coming into focus: Coax public inflation expectations higher by emphasizing a readiness to let it run above 2% for perhaps an extended period of time.
Fed Governor Lael Brainard has coined another term for it - “opportunistic reflation” - that captures the spirit of some of the more complicated systems debated this year without the same risk, complexity or strict policy commitment. St. Louis Fed President James Bullard has said ideas discussed during the review would be worked into policy “slowly over time” rather than written “in stone.”
NO ‘BOLD INNOVATION’
To some, that spells a lost opportunity after a year of extensive research, detailed discussions with academics and a series of “Fed Listens” sessions with the public.
One motivation for the review is the persistent low level of the Fed’s target policy interest rate, which leaves the central bank little room to cut rates before hitting zero and having to deploy less conventional policies like bond purchases to lift the economy during a downturn.
“I am fearful that they might be on track for only a modest evolution of the current framework,” said David Wilcox, former head of the Fed’s research and statistics division, now at the Peterson Institute for International Economics. “I don’t perceive that they are laying the groundwork for a bold innovation in monetary policy.”
The Fed is not alone in struggling to hit its inflation target, first set publicly in 2012. Japan and Europe have the same problem, and the European Central Bank has the added dilemma that its 2% inflation goal is an explicit ceiling - hardwiring lower expectations into the euro zone economy.
Research suggests there is no easy fix.
Several solutions analyzed this year, which for example would target things like a “price level” or rather than inflation, are considered to hold potential benefits - in theory. [nL2N2371NW] As a practical matter, they are seen as hard to explain and administer, and easy for future central bankers to ignore if conditions change.
Moreover, with rates already so low, any formal “make up” strategy could “necessitate a very extended spell of extreme policy accommodation,” that could raise other risks such as stock market or financial bubbles, Oxford Economics analyst Kathy Bostjancic wrote recently.
What Fed officials perhaps fear most is that households and businesses will become so accustomed to below 2% percent inflation, they will start acting as if it’s the norm.
That’s where all the talking comes in.
Fed officials may be wary of making specific promises, but they have already begun “socializing” the idea that if inflation does rise they may, at least for a while, stand aside.
Reporting by Howard Schneider; Editing by Dan Burns and Cynthia Osterman
The biggest holdup in the U.S.-China negotiations is Washington’s demand that China guarantee its pledge to buy more American soybeans, as well as poultry and other agricultural products.
Photo:
derek r. henkle/Agence France-Presse/Getty Images
U.S. and Chinese trade negotiators are laying the groundwork for a delay of a fresh round of tariffs set to kick in on Dec. 15, according to officials on both sides, as they continue to haggle over how to get Beijing to commit to massive purchases of U.S. farm products President
Trump
is insisting on for a near-term deal.
In recent days, officials in both Beijing and Washington have signaled that Sunday is not the final date for reaching a so-called phase-one deal—even though that is the date President Trump has set for tariffs to increase on $165 billion of Chinese goods. That date could be extended, as has happened several times when the two sides thought they were on the verge of a deal. Those prior deals, though, never held and tariffs continued to mount.
Chinese and U.S. officials involved in the talks say they don’t have a hard deadline. On Friday, White House economic adviser
Larry Kudlow
said on two television appearances that there were “no arbitrary deadlines.” Such remarks from Mr. Kudlow—especially when they are restated several times—often reflect the president’s views and have been echoed privately by other U.S. officials.
With both sides hinting that negotiations could be extended beyond Dec. 15, Mr. Trump himself has gone back and forth in his public remarks between threatening a prolonged trade battle and trying to calm jittery investors. White House adviser
Jared Kushner,
the president’s son-in-law, has recently become involved in trying to help the two sides reach a trade agreement.
At The Wall Street Journal CEO Council meeting on Monday, Mr. Kushner said the talks are “heading in a good direction.” Asked if President Trump would follow through with more tariffs on Dec. 15, Mr. Kushner said: “I don’t know what his decision will be.”
U.S. Trade Representative Robert Lighthizer, left, with Chinese Vice Premier Liu, the lead negotiators for each side.
Photo:
mark schiefelbein/Agence France-Presse/Getty Images
President Trump, however, hasn’t yet made his decision, and he has overridden his advisers on trade several times to add tariffs.
The talks are dragging on. Working-level negotiators talk on most days, but as of Friday, lead negotiators on both sides hadn’t spoken for 10 days. U.S. Trade Representative
Robert Lighthizer
has been tied up trying to get Mexico to agree to terms on the U.S.-Mexico-Canada Agreement.
The biggest holdup in the U.S.-China negotiations is Washington’s demand that China guarantee its pledge to buy more American soybeans, poultry and other agricultural products.
For the Americans, purchases are the centerpiece of the limited deal. Mr. Trump has made clear that more farm buys from China are his top priority for a near-term deal with Beijing. The American farmers who would benefit are Mr. Trump’s key supporters in his re-election bid next year. A recent study by
Chad Bown
of the Peterson Institute for International Economics and
Emily Blanchard
and
Davin Chor
of Dartmouth argues that Republicans lost five seats in the 2018 Congressional elections because of the tariff war. Privately, administration officials generally agree with the assessment and are looking for a China deal they can claim as a victory.
Other issues at the heart of the trade war include Chinese subsidies to domestic companies and pressure on U.S. firms to hand over technology. They are largely being pushed back for future negotiation.
Specifically, U.S. negotiators, led by Mr. Lighthizer, have asked their Chinese counterparts to commit to some agricultural purchases up front, according to people briefed on the talks. The Chinese side wants to tie the size of the upfront commitment to how much tariff relief the U.S. would be willing to extend immediately. It is unclear how much the U.S. is pressing for, though Treasury Secretary
Steven Mnuchin
has said that China had committed to annual purchases of between $40 billion and $50 billion a year within the second year of a deal.
President Trump, left, met with China's President Xi Jinping, right, at the G-20 leaders’ summit in Osaka, Japan, on June 29.
Photo:
kevin lamarque/Reuters
In addition, the people said, the U.S. side is pressing China to specify in the text of the deal that there would be a quarterly review of promised purchases and that the purchase amount wouldn’t drop by 10% in any quarter. Chinese negotiators, led by Vice Premier Liu He, have been pushing back against the demand while arguing that any guaranteed purchases would violate the rules of the World Trade Organization and cause friction between China and its other trading partners.
Mr. Liu’s team has also been trying hard to get the U.S. not just to eliminate the December levies but also to relax portions of the existing tariffs on the $360 billion of Chinese imports. But Mr. Lighthizer has so far held firm on not rolling back tariffs—a point of leverage seen as key to keeping the Chinese side engaged in negotiations over knottier issues such as subsidies and forced technology transfers. Other senior officials have indicated they are willing to eliminate the last round of tariffs, on $110 billion of Chinese goods.
“Neither side wants to blink first,” said Myron Brilliant, the U.S. Chamber of Commerce’s executive vice president, who consults with officials in both capitals. “But both governments realize they need to bank the progress being made and finalize a deal before tensions could rise further.”
The U.S. is scheduled to add 15% tariffs on roughly $165 billion of Chinese products on Sunday—unless the two sides cut a deal, or Mr. Trump decides to suspend the tariffs to allow negotiations to continue. Neither the Chinese nor many on the American side want those tariffs to go into effect. They would hit mobile phones, laptops, toys and clothing with 15% tariffs.
For the Chinese, fresh tariffs would deepen the country’s economic problems. The latest official data show China’s exports to the U.S. plunged 23% in November from a year earlier, continuing a trend of double-digit percentage declines that is exacerbating a slowdown in the Chinese economy. For the Americans, the tariffs could prompt a consumer reaction in the U.S., Messrs. Lighthizer, Mnuchin and Kudlow worry, undermining political support for the trade battle.
In recent weeks, the relationship between the U.S. and China has been strained further in the wake of two bills in the U.S. Congress supporting human rights in Hong Kong and in the northwestern Chinese region of Xinjiang. Beijing vehemently denounced both actions.
Even though both sides are keeping the trade talks separate from geopolitical issues, the increased tensions are emboldening hardline voices in both capitals advocating a harsher stance toward the other side.
Analysts at Eurasia Group, a New York-based consultancy, estimate that there is a 65% chance that the phase-one agreement will be reached early next year. “The key risk at this point is not re-escalation, but drift,” the firm wrote in a Dec. 6 report to clients.
In China, after several months of official propaganda aimed at Washington, the leadership under President Xi Jinping appears to be showing concern about losing control of the fast-deteriorating bilateral relationship. In a notable shift, a People’s Daily editorial on Monday called for coolheadedness in dealing with the U.S. And some Chinese officials are saying privately that trade, the issue over which bilateral relations first began to crumble, could now help to put a floor under worsening ties.
For the U.S., insisting on a guaranteed purchase is a big change from past administrations, which have tried to encourage China to rely more on market forces, not government fiat, to manage its economy. But such managed-trade requirements are necessary, some experts argue, because China is far from a free-market economy.
“The United States has to deal with China as it is, not as we would like it to be,” said
Stephen Vaughn,
a former general counsel at the USTR’s office during the Trump administration who now works for law firm King & Spalding LLP.
Others say that the Trump administration is treating China in much the same way that the U.S. sought to deal with Japan in the 1980s and early 1990s. The U.S. figured that Tokyo had so much control over the Japanese economy that the U.S. had to insist on guarantees—in particular, that Japan would purchase a set amount of U.S. semiconductors.
“That’s the way we’re acting with China,” said
Douglas Irwin,
a trade historian at Dartmouth College. “We don’t trust it will be a market economy, so we have to guarantee outcomes, not just negotiate rules.”
Robert O'Brien, President Trump's new national security adviser, has dire warnings for U.S. allies considering Huawei as a partner for 5G networks.
Saul Loeb/AFP via Getty Images
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Saul Loeb/AFP via Getty Images
President Trump's new national security adviser is warning of a information security doomsday scenario for U.S. allies that allow Chinese telecommunications company Huawei to build their next generation 5G networks.
Ambassador Robert O'Brien said countries that allow Huawei in could give China's communist government backdoor access to their citizens' most sensitive data.
"So every medical record, every social media post, every e-mail, every financial transaction, and every citizen of the country with cloud computing and artificial intelligence can be sucked up out of Huawei into massive servers in China," O'Brien told NPR in an interview.
"This isn't a theoretical threat," O'Brien said before speaking at the Reagan National Defense Forum, an annual gathering of defense industry and military officials.
The Trump administration has taken measures to keep Huawei and other companies with ties to the Chinese government out of U.S. telecommunications systems. It's working hard to convince allies to do the same.
Australia, New Zealand and Japan block Huawei, but other allies such as Canada and Britain have said they are open to allowing the company build some less sensitive 5G networks.
O'Brien warned it would be difficult to have full intelligence sharing information with a partner whose network was tied to Beijing.
He described how China has assigned a "social credit score" to its own citizens based on information it gathers — information used to determine whether people can get on an airplane, buy a train ticket or get a particular job.
"But what if China had a social credit score for every single person in the world?" O'Brien said. "What if, for democracies, China knew every single personal, private piece of information about any of us and then could use that to micro-target people to influence elections?"
O'Brien's concerns underscore the complexity of current relations between the United States and China.
The Trump administration is in the throes of a bitter trade war with Beijing, has imposed visa restrictions on Chinese officials believed to be involved in human rights abuses and has proposed a $2 billion U.S. weapons sale to Taipei, which Beijing objects to, claiming Taiwan is part of greater China.
O'Brien and Defense Secretary Mark Esper, both of whom have only been in their positions a few months, have already spent considerable time traversing the globe warning of the Chinese threat.
During his own speech at the Reagan National Defense Forum on Saturday, Esper also warned of the spread of Huawei. And he said the United States needs to reallocate military forces and resources from Afghanistan and the Middle East to Asia.
Esper pointed to the National Defense Strategy, released last year, which cites China's "predatory economics," and calls for building up military operations in the Pacific to counter China's global ambitions and military expansion.
"China's economic rise has allowed it to triple its annual military spending since 2002, with estimates reaching close to $250 billion last year," Esper said in his speech. "Beijing continues to violate the sovereignty of Indo-Pacific nations and expand its control abroad under the pretense of 'belt-and-road' infrastructure investments."
President Trump has also raised concerns with allies about Huawei and 5G, but said there are limits to his powers of persuasion.
"Everybody I've spoken to is not going forward," Trump said last week at a summit with NATO leaders. "But how many countries can I speak to? Am I going to call up and speak to the whole world? It is a security risk, in my opinion, in our opinion. We're building it and we've started. But we're not using Huawei."
China has been willing to provide cash, resources and equipment to foreign governments in ways the United States is not. Foreign diplomats say it's difficult to turn down China when they desperately need cash for infrastructure and job-creating projects like new roads, telecommunications equipment and energy systems.
O'Brien said the Chinese government has made Huawei very attractive through subsidies. Western competitors like Qualcomm, Nokia, Ericsson or Cisco can't compete at the same price and still make a profit.
But O'Brien said foreign governments lured by the cheaper prices are missing the big picture.
"It's great to get a discount," O'Brien said. "It's great to get something for free. But at the end of the day, it really isn't free. There's no free lunch. And folks, our allies, need to consider the long term consequences of taking the cheap Huawei equipment now and what that's going to mean for them and their country in the long term."
Video of Cybertruck driving on California highway reveals more questions
A video just surfaced showing the Tesla Cybertruck driving around LA. Elon Musk is purportedly driving, but it’s not confirmed that he was behind the wheel while this video was filmed. However the video reveals several things.
According to US regulations, passenger vehicles need to have a mirror inside and one on the driver’s side of the vehicle. The Cybertruck in this video does not have a driver’s side mirror.
When Musk unveiled the Cybertruck, he stated that the vehicle used a video camera for the rear-view camera, which is something other automakers are trying as well. Cadillac has done this for years. It works.
The lack mirror on the driver’s side is a bigger question. The vehicle used in the unveiling was missing exterior mirrors and the one in this video also lacks them. It’s possible it uses a camera for the side mirrors though it’s yet to be announced. Other automakers including Audi have turned to cameras for European-spec’d vehicles as US-based vehicles must have a physical mirror.
Two, there’s a lot of body roll.
The video shows the driver taking a wide turn onto the street. In doing so, the Cybertruck appears to experience a large amount of body roll. A surprising amount, too.
The Cybertruck, like every other Tesla vehicle, has a bank of batteries on the bottom. Supposedly. If that’s the case, the bulk of the weight should be at the bottom, dropping the center of gravity and giving the vehicle a stable driving experience. In the Model X, this results in amazing protection from rolling over when impacted on the side.
The Cybertruck experienced a large amount of body roll with a wider wheel base than what’s allowed. During the unveiling, it was clear the Cybertruck’s tires were wider than the fenders. This is also not allowed by US standards as tires must be covered by fenders. I assumed Tesla would correct this in the final version and did this for stage presence and to improve stability in testing. The latest video shows a Cybertruck with tires also sticking out from the fenders. It’s not clear how far the tires protrude but so much so that the driver hits a traffic cone when turning into traffic. If the Cybertruck’s stance is narrowed, will the body roll be worse?
Also, the driver runs a red light because clearly the Cybertruck is living in a post-traffic light world.
FILE - This Sept. 15, 2019 file photo, shows storage tanks at the North Jiddah bulk plant, an Aramco oil facility, in Jiddah, Saudi Arabia. Saudi Arabia's state-owned oil company Aramco on Thursday, Dec. 5, 2019, set a share price for its IPO — expected to be the biggest ever — that puts the value of the company at $1.7 trillion, more than Apple or Microsoft. (AP Photo/Amr Nabil, File)Associated Press
