Baltic Dry Index. 703
Brent Crude 46.22
Brexit odds checker.
http://www.oddschecker.com/politics/british-politics/eu-referendum/referendum-on-eu-membership-result
Brexit Quote of the Day.
Dodgy
Dave: a hypocrite in public life, the
world will be puzzled to decide whether you are an apostate or an impostor,
whether you have abandoned good principles, or whether you ever had any?
With
apologies to Thomas Paine on George Washington.
“How’m
I doin’?” New York City Mayor Ed Koch famously used to ask passers-by on the subways
he rode all the time. Well liked, he usually got a favourable response. Were
Asia to ask that question this morning, the response would not be so
favourable. Asia seems to be in trouble, and rising trouble at that. Below, how
Asia is doin’, as we go deeper into Q2 16. Stay long fully paid up physical gold and
silver. Fiat money isn’t working like it used to. When Asia sneezes….
“The boom can last only as long as the
credit expansion progresses at an ever-accelerated pace. The boom comes to an
end as soon as additional quantities of fiduciary media are no longer thrown
upon the loan market.”
Ludwig
von Mises.
China's Caixin manufacturing PMI slips again
Published: May 2, 2016 10:34 p.m. ET
BEIJING--A private gauge of nationwide factory activity in China fell to
49.4 in April from 49.7 in March, Caixin Media Co. and research firm Markit
said Tuesday.
The reading points to a continued deceleration in China's manufacturing
activity and marks the 14th month in a row that the index has languished in
contractionary territory. A reading below 50 indicates a contraction in
manufacturing activity from the previous month, whereas a reading above that
level indicates an expansion.
China's official manufacturing PMI, a competing gauge, came in at 50.1
in April compared with 50.2 in March, according to data from the National
Bureau of Statistics on Sunday.
"All of the index's categories indicated conditions worsened
month-on-month, with output slipping back below the 50-point neutral
level," said He Fan, chief economist at Caixin Insight Group.
"The fluctuations indicate the economy lacks a solid foundation for
recovery and is still in the process of bottoming out. The government needs to
keep a close watch on the risk of a further economic downturn." Mr. He
said.
The Caixin China Manufacturing PMI is based on data compiled from
monthly replies to questionnaires sent to purchasing executives at more than
400 manufacturing companies.
China new loan surge does not augur massive stimulus: Xinhua commentary
A surge of new loans granted in China over the first quarter does not
mean the country is about to embark upon another massive economic stimulus
program, the official Xinhua news agency said in a commentary on Monday.
China last month posted its slowest economic growth since 2009 but a
surge of new debt appears to be fuelling a recovery in factory activity,
investment and household spending in the world's second largest economy.
Official data
in April
showed China's gross domestic product grew at an annual rate of 6.7 percent in
the first quarter of the year, easing slightly from 6.8 percent in the fourth
quarter as expected. However, other indicators released showed new loans,
retail sales, industrial output and fixed asset investment were all better than
forecast.
in April
showed China's gross domestic product grew at an annual rate of 6.7 percent in
the first quarter of the year, easing slightly from 6.8 percent in the fourth
quarter as expected. However, other indicators released showed new loans,
retail sales, industrial output and fixed asset investment were all better than
forecast.
Chinese banks extended 1,370 billion yuan ($211.23 billion) in net new
yuan loans CNNYL=ECI in March, exceeding analyst expectations and the previous
month's lending of 726.6 billion yuan.
But the sudden rise prompted concerns that Beijing is falling back on
methods it used to get out of the global financial crisis: massive spending on
infrastructure, real estate, and industrial capacity that produced low or no
returns but saddled Chinese banks with non-performing loans.
Local government financing vehicles (LGFVs), which Chinese cities use to
circumvent official spending limits, raised at least 538 billion yuan in bonds
in the first quarter, up 178 percent from a year earlier and the highest
quarterly issuance since June 2014, Everbright Securities said, quoting figures
from privately held financial data provider WIND.
Xinhua, in an English-language piece, said the loans data had
"fanned speculation that the government may turn to a massive stimulus
program, a move that would pose a risk to global financial market".
But adopting an "accommodative policy" to help slowing growth
was normal and China would keep doing it, Xinhua said.
"China will not resort to large stimulus
measures; policymakers are more than aware of the consequences of such a short-sighted
program. Moreover, the country is still addressing the side effects of the
previous stimulus package, such as overcapacity," it added.
stimulus
measures; policymakers are more than aware of the consequences of such a short-sighted
program. Moreover, the country is still addressing the side effects of the
previous stimulus package, such as overcapacity," it added.
More
Japan final April manufacturing PMI hits lowest since Jan 2013 after Kumamoto earthquake
Japanese manufacturing activity contracted in April at the fastest pace
in more than three years and output fell the most in two years, a final survey
showed on Monday, after earthquakes halted production in the southern
manufacturing hub of Kumamoto.
The Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI)
fell to a seasonally adjusted 48.2 in April, which was above the preliminary
reading of 48.0 but still below a final 49.1 in March.
The index remained below the 50 threshold that separates contraction
from expansion for the second consecutive month and showed activity contracted the
most since January 2013.
The output component of the PMI index also fell to 47.8, versus a flash
reading of 47.9 a final 49.8 in the previous month to show the fastest
contraction since April 2014.
On April 14, the first of several earthquakes struck Kumamoto, which
damaged houses, caused landslides and halted production at electronics and car
parts factories in the area.
Many companies have resumed production in Kumamoto, and economists say
if this trend continues then Japan should be able to quickly shake off the
impact on factory output.
Foundering Hanjin Shipping seeks debt relief
Published: May 2, 2016 11:13 p.m. ET
SEOUL-- Hanjin Shipping Co., South Korea's largest container operator by
capacity, reached out to owners of its chartered fleet and terminal operators
to say it can't survive unless they help with its debt-restructuring efforts.
In a letter to foreign owners, Chief Executive Suk TaeSHY-soo said the
debt-saddled operator faces serious challenges as the global shipping industry
is in the doldrums.
"Upon careful analysis of the business outlook and financial
projections with the assistance of outside experts, our management has come to
the conclusion that our own efforts alone may fall short of fully resolving the
liquidity issues that we are facing," the letter said, according to Hanjin
spokeswoman Min Park.
Hanjin, a unit of Hanjin Group, which also controls Korean Air Lines
Co., last week submitted a formal request to state-run Korea Development Bank,
its main creditor, to restructure its debt and provide an aid package in return
for asset sales and charter rate cuts.
KDB said it would review the proposal with other creditors and decide by
Wednesday whether to offer assistance to Hanjin. Options include a debt
rollover. If creditors reject the proposal, the company would be put under
court receivership.
Hanjin and its smaller rival, Hyundai Merchant Marine Co., which handle
the bulk of South Korea's exports, have been unprofitable for several years,
amassing debts as the global shipping market has been faced with excess
capacity and plummeting prices.
More
Sluggish factory activity sets global tone for second quarter
Asian factories barely grew in April and those in the euro zone did
little better despite heavy discounting, setting a sluggish tone on Monday for
the global economy in the second quarter.
Japanese manufacturing activity shrank last month at the fastest pace in
more than three years as major earthquakes disrupted production, while the
former bright spot of India sank to a four-month trough and growth in China was
all but flat.
The euro zone reading edged up only marginally, painting a more subdued
picture of an economy that grew an encouraging 0.6 percent between January and
March.
With manufacturing dogged by insufficient demand and excess supply, the
regional readings are likely to reinforce the view that a recent pick-up in
economic momentum will be difficult to sustain and further policy stimulus is
needed.
"The backdrop remains one of sub-trend growth, inflation that is
below target, difficulty in increasing revenue as margins are sacrificed to win
modest volume gains, slow wage growth cramping spending and central banks that
have used up much of their policy ammunition," said Alan Oster, chief
economist at National Australia Bank.
That has been a factor in foot-dragging by the Federal Reserve over a
follow-up to its December rate hike, leaving the markets in a sweat in case
U.S. policymakers move in June.
---- So far, the massive ECB stimulus and
weaker euro has yet to feed through to euro zone factories which operated only
marginally faster in April.
Markit's Manufacturing Purchasing Managers Index (PMI) rose to 51.7 from
March's 51.6, a marginal improvement from an earlier flash estimate of 51.5.
"The economy is growing but the pace is still very moderate.
There's no reason to the ECB to change its policy stance," said Christoph
Weil, economist at Commerzbank in Frankfurt.
Manufacturing growth was strong in Italy and, buoyed by rising demand at
home and abroad, hit a three-month high in Germany. But in France activity
contracted at the steepest rate in a year.
What will probably make particularly grim reading for ECB policymakers
is the deep price cuts factories were again forced in to in order to drum up
new business.
The survey's output price index was 47.4, higher than March's 47.1 but
the second-lowest since early 2010.
More
In other news the Transatlantic Trade and Investment Partnership talks are not going well. TTIP, heavily opposed by organised Labour, US threats to German, French, and Italian auto manufacturers is only likely to stiffen resistance. At the weekend, someone leaked some of the negotiating documents to Greenpeace.
U.S. threatens to block easing of EU car exports in TTIP talks, media report
The United States is threatening to prevent the easing of export
controls on European cars in order to force Europe to buy more U.S.
agricultural products, Germany's Sueddeutsche Zeitung newspaper and ARD public
broadcaster reported on Sunday.
In talks on the Transatlantic Trade and Investment Partnership (TTIP), a
sweeping U.S.-European free trade deal, the United States has also blocked a
European call to replace private arbitration tribunals, responsible for
corporative lawsuits, with a public state model, the reports said.
The media outlets said they obtained 240 pages of internal negotiations
documents from the environment group Greenpeace. Several people familiar with
the negotiations confirmed that the documents were current, the media said.
The documents suggest the United States is putting more pressure on the
European Union in ongoing negotiations for a transatlantic free trade deal than
previously thought, the media outlets said.
The top negotiators trying to reach agreement on the trade deal avoided
agriculture, public procurement and other thorny issues in talks last week.
Instead, Assistant U.S. Trade Representative Daniel Mullaney and
European Commission lead negotiator Ignacio Garcia Bercera said on Friday, they
concentrated on less controversial areas such as small and medium enterprises
and technical language.
More
"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."
Antony C. Sutton
At
the Comex silver depositories Monday final figures were: Registered 27.98 Moz, Eligible 123.74 Moz, Total 151.72 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
When the next financial crisis hits, says the
Fedster’s Big Dud, we need the power to bail-out more than just the usual
suspect banksters. I guess that some in the Fed aren’t thinking of a bail-in of
bond holders and depositors, any more. More to the point, after all the QE,
ZIRP and NIRP, and all the central bankster cheerleading that the Great
Recession is over and done with, what does the Fed’s Big Dud know that we
don’t? Stay long fully paid up physical gold and silver held outside of the
rickety financial system. Someone in main stream media needs to ask the panicky
Federal Reserver, exactly what has got him so spooked.
Fed may need more powers to support securities firms during crises: Dudley
The U.S. Federal Reserve may need more powers to provide emergency
funding to securities firms in times of extreme stress in order to deal with a
liquidity crunch, New York Federal Reserve President William Dudley said on
Sunday.
"Providing these firms with access to the discount window might be
worth exploring," Dudley said in prepared remarks at a financial markets
conference in Amelia Island, Florida organized by the Atlanta Fed.
The discount window is a credit facility through which banks borrow
directly from the U.S. central bank in order to cope with liquidity shortages.
The Fed currently has limited ability to provide funding to securities
firms in such situations, with the discount window only available to depository
institutions.
But the transformation of securities firms since the financial crisis,
Dudley said, with the major ones now part of bank holding companies and subject
to capital and liquidity stress tests, meant the environment has now changed.
"To me, this is a more reasonable proposition now than it was prior
to the crisis when the major dealers weren't subject to those safeguards,"
he said.
Dudley did not mention monetary policy or the U.S. economic outlook in
his remarks.
Other "significant gaps" remain in the lender-of-last-resort
function, Dudley added.
On this, he cited work being done on a global level by the Bank of
International Settlements, known as the central banks' central bank, which is
studying deficiencies with respect to systemically important firms that operate
across countries.
Dudley called for greater attention in order to determine which country
would be the lender-of-last-resort for such companies during another crisis.
"Expectations about who will be the lender-of-last-resort need to
be well understood in both the home and host
countries," he said.
and host
countries," he said.
Brexit
Quote of the week.
Dodgy Dave Cameron: leader of the nattering
nabobs of Brexit negativism.
With apologies to Spiro Agnew
Solar & Related Update.
With events
happening fast in the development of solar power and graphene, I’ve added this
new section. Updates as they get reported. Is converting sunlight to usable
cheap AC or DC energy mankind’s future from the 21st century
onwards? DC? A quantum computer next?
Dubai's DEWA Gets 5 Bids to Expand Solar-Power Complex in Desert
May 1, 2016
— 1:27 PM BST
Dubai Electricity & Water Authority, the Persian Gulf emirate’s
utility, said it received five bids to build 800 megawatts of solar-power
generation capacity.
Developers are bidding to construct the third phase of a DEWA solar park
in the sheikhdom’s desert, according to an e-mailed statement from the company.
The lowest-cost bid would provide power for 2.99 cents a kilowatt-hour, it
said.
Dubai is boosting solar generating capacity to diversify its energy mix
and help meet growing demand for electricity. The emirate aims to get 7 percent
of its power from clean energy sources by 2020. Dubai currently has 13
megawatts in operation at the solar park and a further 200 megawatts under
construction.
DEWA will now review technical and commercial aspects of the bids, it
said. Chief Executive Officer Saeed Mohammed Al Tayer said in March
that the company planned to award construction contracts in May.
The monthly Coppock Indicators finished April
DJIA: 17773.64-19 Down. NASDAQ: 4775.36 +11 Down. SP500: 2065.30 -21 Down.
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