Tuesday, June 19, 2018

Thoughts from Galicia, Spain: 19.6.18

Spanish life is not always likeable but it is compellingly loveable. 
- Christopher Howse: A Pilgrim in Spain. 

If you've arrived here because of an interest in Galicia or Pontevedra, see my web page here.

Life in Spain
  • I've said many times that the most important thing in Spain is to have fun. And that fiestas play a huge part in achieving this. They also display the Spanish ability to be very hard-working and efficient, something that isn't always quite so obvious. And also inventive. I'm prompted to write this by reading that a town up in our hills - Pontecaldelas – is having its Entroido de Verán this weekend. Entroidos are normally associated with the start of Lent but Pontecaldelas has extended the concept to summer. Their fiesta goes as far back as to last year. So, this is their second go at it. Another chance for various groups of scantily-dressed females aged 5 to 65 to dance through the town's streets.
The World
  • See the first article below on concerns for the global economy, all thanks to you-know-who and his deep ignorance about economics and trade.
  • I listened yesterday to a podcast on the coming of robocare to solve the problem of old folk not being taken care of properly. Right on cue, a Chinese company has launched a robot which tell stories. See here for a general article on this. Can't find the one I read last night.
  • Click here for an article which plausibly answers the questions: Does Fart genuinely believe these ridiculously and demonstrably false assertions? Does he assume that much of the public will believe lies just so long as he repeats them?
  • When one looks back at the USA of the McCarthy era, it's hard to believe it actually happened. I suspect people in 50 years time will view the Fart era in much the same way. Unless, of course, one of his progeny has succeeded to the position of Emperor by then.
  • Meanwhile, you'd never guess that Fart was the grandson of immigrants, would you? Albeit white and Christian - Trump's ancestors originated from the German village of Kallstadt on his father's side, and from the Outer Hebrides in Scotland on his mother's side. All of his grandparents and his mother were born in Europe.
The UK
  • The writer of the second article below believes he knows why Britain's youth are so 'useless'.
  • Ain't this the truth . . . . I have begun to realise that many advocates of a Brexit which involves Britain staying entirely inside the single market either aren’t honest or are in denial about the trade-offs it would involve. They actually believe that, if Britain stays inside the single market, the EU will generously allow our government to continue to have a formal role in shaping its rules and regulations. This is, in fact, a total delusion, naivety bordering on negligence. . . . Any political party or business lobby group that tells its members we can keep shaping the EU’s rules after we leave is dealing in fantasies. And that’s a charge they usually level at Brexiteers.
Nutters Corner
  • Pastor Perry Stone insists that many world leaders are Luciferians who pray to Satan before their meals. No names or dates. But he wants you to know it’s totally true.
  • We have several sets of semi-feral cats in Pontevedra city, fed and watered by their neighbours. Naturally, they breed prolifically and I've occasionally wondered where all the offspring end up. Possibly in a glue factory. Anyway, I see that the council has put up a notice on the one I regularly pass, saying that sterilisation is under way.
  • Our lady judge who was discovered to have a sideline as a Tarot card reader has also been found to engage in a striptease act in Las Canárias. Quite a woman, it seems.
  • I am thinking of establishing an 'authentic' camino that goes through my garden. I have to make money somehow from all those people seeking a 'spiritual' experience. Like having their wallets emptied, for example. Though there's a lot of competition for that . . .
Finally . . .
  • A UK TV advert: Funeral Plans - Do something amazing for your family. Like burying them alive, I guess. Which would be truly amazing. Unlike waiting until they're dead and boringly sticking them in a coffin.
© David Colin Davies, Pontevedra: 19.6.18


1. Just the Fear of a Trade War Is Straining the Global Economy

Only a few months ago, the global economy appeared to be humming, with all major nations growing in unison. Now, the world’s fortunes are imperiled by an unfolding trade war.

As the Trump administration imposes tariffs on allies and rivals alike, provoking broad retaliation, global commerce is suffering disruption, flashing signs of strains that could hamper economic growth. The latest escalation came on Friday, when President Trump announced fresh tariffs on $50 billion in Chinese goods, prompting swift retribution from Beijing.

As the conflict broadens, shipments are slowing at ports and airfreight terminals around the world. Prices for crucial raw materials are rising. At factories from Germany to Mexico, orders are being cut and investments delayed. American farmers are losing sales as trading partners hit back with duties of their own.

Workers in a Canadian steel mill scrambled to recall rail cars headed to the United States border after Mr. Trump this month slapped tariffs on imported metals. A Seattle customer soon canceled an order.

“The impact was felt immediately,” said Jon Hobbs president of AltaSteel in Edmonton. “The penny is really dropping now as to what this means to people’s businesses.”

The Trump administration portrays its confrontational stance as a means of forcing multinational companies to bring factory production back to American shores. Mr. Trump has described trade wars as “easy to win” while vowing to rebalance the United States’ trade deficits with major economies like China and Germany.

Mr. Trump’s offensive may yet prove to be a negotiating tactic that threatens economic pain to
force deals, rather than a move to a full-blown trade war. Americans appear to be better insulated than most from the consequences of trade hostilities. As a large economy in relatively strong shape, the United States can find domestic buyers for its goods and services when export opportunities shrink.

Even so, history has proved that trade wars are costly while escalating risks of broader hostilities. Fears are deepening that the current outbreak of antagonism could drag down the rest of the world.
Before most trade measures fully take effect, businesses are already grappling with the consequences — threats to their supplies, uncertainty over the terms of trade and gnawing fear about what comes next.

“Just talking about protectionism is causing trouble,” said Marie Owens Thomsen, global chief economist at Indosuez Wealth Management in Geneva. “It’s an existential risk to the world economy.”

After two years of expansion, airfreight traffic was flat over the first three months of the year, according to the International Air Transport Association. Dips have been especially pronounced in Europe and Asia.

Container ships, the workhorses of global commerce, have seen no growth in freight since last fall in seasonally adjusted terms, according to a key index.

A gauge of world trade tracked by Oxford Economics, a research firm in London, recently registered its weakest showing since early 2017.

“Let us not understate the macroeconomic impact,” the managing director of the International Monetary Fund, Christine Lagarde, warned this past week about trade conflicts. “It would be serious, not only if the United States took action, but especially if other countries were to retaliate, notably those who would be most affected, such as Canada, Europe and Germany.”

Threats to trade are emerging just as the global economy contends with other substantial challenges.
The Trump administration’s decision to reinstate sanctions on Iran has lifted oil prices, adding pressure to importers worldwide. Europe’s economy is weakening, with Germany — the continent’s largest economy — especially vulnerable. Central banks in the United States and Europe are withdrawing the cheap money they sent coursing through the global financial system after the crisis of 2008, lifting borrowing costs.

The Trump administration has embroiled the United States in increasingly acrimonious conflicts with huge trading partners.

The United States last year imported more than $600 billion in goods and services from Canada and Mexico, the two other nations in the North American Free Trade Agreement — a deal Mr. Trump has threatened to blow up. Americans bought more than $500 billion in wares from China, and another $450 billion from the European Union. Collectively, that amounts to nearly two-thirds of all American imports.

“If you seriously disrupt any of these three, you’re going to feel the effects,” said Adam Slater, lead economist at Oxford Economics. “If you disrupt all three at once, you’re going to feel it quite severely.”

In Houston, still recovering from the devastation inflicted by Hurricane Harvey, the steel tariffs loom like another storm on the horizon. The Greater Port of Houston, a network of nearly 200 terminals lining 25 miles of channel, is one of the busiest seaborne cargo hubs on the planet. It is also a major local employer, and the largest importer of steel in North America. Steel imports have been surging, especially pipes used by the energy industry.

Sixteen years ago, when President George W. Bush put tariffs on steel, imports fell substantially. Such memories now stoke modern-day fears. “We’re kind of in a wait-and-see mode,” said Roger Guenther, executive director for the Port of Houston Authority.

For companies that make steel and aluminum, the American tariffs have presented a direct and menacing challenge to their businesses. At Alta, the steel mill in Edmonton, the metals tariffs delivered an immediate crisis. Roughly one-fifth of the company’s business involves shipping steel to American customers. Suddenly, the border separating Canada from the United States was effectively enshrouded in fog. The company redirected rail cars destined for customers in the United States, incurring extra freight charges reaching 100,000 Canadian dollars (about $76,000).
Lawyers for some of Alta’s customers have suggested that certain products might be classified to avoid tripping the American tariffs, which apply only to specific types of steel. Yet for now, the company is waiting for rulings from overwhelmed American customs officials. “We do not know when we will get an answer out of the U.S. government,” Mr. Hobbs said. “Nobody, including the U.S. border protection agency, knows what to do.”

Across Europe, steel makers fret about an indirect consequence of Mr. Trump’s tariffs — cheap Chinese steel previously destined for the United States, now redirected to their continent.
“We have seen increases,” said Mathias Ternell, international affairs director at Jernkontoret, a Swedish steel industry association in Stockholm. “This is what Swedish companies and European companies worry about the most.”
Mr. Trump portrays trade hostilities as a necessary corrective to the United States’ trade deficits with other nations. But economists and business leaders note that many imports are components that are used to manufacture goods at American factories. For buyers of steel and aluminum inside the United States, the tariffs have increased prices, discouraging investment. Electrolux, the Swedish manufacturer of household appliances, recently postponed plans to upgrade a stove factory in Tennessee, citing uncertainties created by the tariffs. In the suburbs of Austin, Tex., Matt Bush, vice president of a small company that makes structures used in office buildings and retail spaces, said steel tariffs would force his company to pay as much as $50,000 a month extra for metal. “You have to imagine all the people who are purchasing raw steel and aluminum for input into their business are in the same predicament,” he said. “And it’s probably staggering how far that reaches.”

Spain has emerged from a depression to become one of the fastest growing economies in Europe. Trade conflict is directly challenging that trajectory. In the Spanish city of Toledo, Extol, a company that makes parts for the automobile and railroad industries, has recently seen customers demand supply contracts lasting no more than three months, rather than the usual one-year duration. With the price of aluminum rising, buyers are reluctant to commit, said the company’s chief executive, Fernando Busto.“We are watching events with enormous worry,” Mr. Busto said. “The political decisions of Donald Trump are resulting in turbulence and volatility.”

Far beyond the realm of metal, the impact of trade skirmishes are rippling out, hitting small businesses and consumers.

In Mexico, anxiety about trade has persisted ever since Mr. Trump took office, given his threats to tear up the North American Free Trade Agreement, and his designs on constructing a wall along the border. Ordinary Mexicans have absorbed the hit as the peso has plunged in value, raising the cost of everyday goods from the United States. “That president is driving us to bankruptcy,” said Gustavo Ferreyra Olivares, a fruit seller who has operated a stall at a covered market in Mexico City for 35 years. “Trump is the one who has raised the prices.” Most of the fresh fruit at his stall was grown in Mexico. But Granny Smith apples nestled in molded cardboard bore the USA label. So did a pile of glistening Gala apples, and neat lines of Red Delicious. Under Nafta, Mexico has grown into the world’s largest importer of American apples. But sales are down because the price has gone up by nearly one-fifth in the past week alone. The Mexican government recently imposed 20 percent tariffs on American apples in response to Mr. Trump’s duties on steel. That will make it harder for Mr. Ferreyra to sell his American produce. He envisions farmers hurting on the other side of the border, too. “Mexico is a big importer of apples,” he said. “If we decide to boycott them, they will all have to stay up there.”

Global commodities markets are wrestling with the impacts of trade conflict, especially as China seeks alternatives to American suppliers. In recent years, as the ranks of China’s middle class have grown, so has the national appetite for pork. Raising growing numbers of pigs has forced China to import increasing volumes of American soybeans. But China has taken direct aim at American farms in retaliation for Mr. Trump’s metals tariffs, threatening duties on soybeans from the United States. Chinese pork producers have turned their sights to Brazil and Argentina, the only countries that now produce enough soybeans to offer a potential alternative to the American supply.

On the other side of the Atlantic, Jesper Pagh sat in his office in Copenhagen and watched the result — rising prices for soybeans on world markets. Mr. Pagh oversees the livestock feed business at the DLG Group, an agribusiness conglomerate that supplies customers in Sweden, Germany and Denmark. His company has traditionally tapped South America for soybeans. Now, Chinese competition was increasing the cost. American soybeans were suddenly available, but they presented a mismatch. Europe imports soybean meal, not the beans. In the United States, the crushing plants that make meal were already tied up by domestic customers. A veteran of the commodity world, Mr. Pagh is accustomed to prices that fluctuate. His company relies on long-term supply contracts, limiting its vulnerability to price shifts. Still, here was a new variable.
“It’s another factor that’s affecting the volatility and the level of nervousness in the market,” Mr. Pagh said. “It’s not something that really keeps me awake at night, but, of course, it can escalate.”
Ian Austen reported from Ottawa and Elizabeth Malkin from Mexico City.

Reporting was contributed by David Montgomery in Austin, Tex.; Rachel Chaundler in Zaragoza, Spain; Christina Anderson in Stockholm; Gaia Pianigiani in Rome; and Cao Li in Hong Kong.

2. Young people think they own the future because no one has ever told them they're useless: Tom Harris

Ever eager to draw parallels with, and lessons for, contemporary geopolitics, historians have repeatedly and constantly studied the decline and fall of the Roman Empire. The rise of Christianity, the weakening of central rule from Rome, the calamitous decision to split the empire into two distinct regions – it all contributed to the dark day when the Visigoths appeared outside the walls of the former capital of the civilised world and set about sacking it.

But perhaps a new generation of academics will focus on the elephant in the room: no, not the Alps-traversing pachyderms so successfully exploited by Hannibal, but the crucial, fatal fault line running through Roman society throughout its history: the fact that there was a lower age limit for those aspiring to be members of the Senate.

America has unwisely emulated this ageist example by insisting that its own senators must be at least 30, whereas a member of the House of Representatives must be at least 25 years old when they stand for election.

This goes against everything we have learned about modern politics, for surely, if political discussions on social media are anything to go by, young people – especially those under 30 – are the wisest of us all.

I was reminded of this fact (and it is a fact, #endof, as they say on Twitter) on Saturday while amusedly scrolling through tweets from the Labour Live event, where teenagers from right across Tottenham congregated to celebrate politics and share ideas about how to spend other people’s taxes. There had been a demonstration by young people (naturally) against Labour’s policy of supporting Brexit. They had even dared to unfurl a banner telling the Great Leader to “Stop Backing Brexit” just as Jeremy Corbyn started delivering his standard “inspirational” speech.

The demonstrators were swiftly ushered from the scene, no doubt to be “re-educated” by the Unite trade union. But the incident reminded me of an oft-claimed consequence of Britain leaving the EU: namely, that the opportunities of the younger generation have been pole-axed.

We hear this a lot these days, and we heard it in the wake of the 2014 independence referendum in Scotland too: it’s not fair that oldies get the same say as youngsters, to whom, let us never forget, the future belongs. Let’s face it: if you’re over 40 you’re well past it anyway so why aren’t you on a cruise ship somewhere in the company of similarly reactionary and racist people waiting for the dude with the scythe to pay a visit?

How did the current generation of under-35s get their remarkable self-assurance and unquenchable confidence that they and they alone know all the answers? Partly it’s down to the extension of the teenage years; through no fault of their own, more young people stay in the family home during and after university than was the case a generation ago. And it’s also down to university itself: encouraging half of all school leavers to go to college or university means not only putting off the day when you have to face up to reality and earn a living for yourself, but also the inculcation of a whole new type of smart-alex-ness.

But it’s also their parents’ fault. An examination of fridges across the land will reveal on their surfaces, optimistically fastened by an array of colourful and whimsical magnets, the biggest collection of talentless, skill-free tat that has ever found its way into a school bag and back out again. “Oh my, how amazing! Well done, Tiffany!” “Is that me? What a brilliant likeness! You’re such a talented artist, Rupert!” No, they’re really not.

Self-confidence is everything. Go to any school awards night and you’ll hear the head teacher orgasmically exclaim about how confident “these amazing young people” are. Just don’t ask them what the justification for that self-confidence is. We have raised a generation of people that believes (wrongly) that being able to dance and mime (badly) to a Beyoncé song or who can achieve perfect attendance throughout the school year or be acclaimed as showing “good effort” in religious studies is a sign that they own the future.

Not all of this is new. Mark Twain may or may not have said that when he was six, his dad knew everything; when he was 16, his dad knew nothing, and when he was 26, he was amazed at how much the old man had learned in ten years. What is new, and worrying, is this unchallengeable belief that youth itself lends a wisdom that older people simply cannot grasp, and that such an unwillingness to relinquish their wrong opinions makes older people unworthy of the same democratic say in the future of our country.

Naturally, neither age nor youth guarantees wisdom: that’s why we have democracy. After the argument, we can make a decision by casting a majority vote for one or other policy. And neither age nor youth has the right to overturn that decision, however strongly you feel about it.

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