Baltic Dry Index. 600
+21 Brent Crude 48.45
Brexit odds checker.
http://www.oddschecker.com/politics/british-politics/eu-referendum/referendum-on-eu-membership-result
Brexit Quote of the Day.
“We'll
be EUSSR Friends Forever, won't we, Juncker?' asked Dodgy Dave Cameron.
Even
longer,' Juncker answered ominously.”
David
Cameron, with apologies to A.A. Milne, and Winnie-the-Pooh
We open this morning with yet another flip-flop by
Goldman on crude oil. Forget $20 oil, the oil market has moved back into a
deficit, they think. If they’re right, it couldn’t come at a worse time for
China. But is Goldie right or too early in making the call? If oil production
in Venezuela and Nigeria falters, won’t Iran and America’s frackers just pick
up market share? Or does Goldie know something about Saudi Arabia that we don’t
know yet? How long before higher oil prices start to show up in the inflation
figures? How high can oil go before
triggering the end of NIRP and ZIRP?
Oil prices jump as Goldman Sachs says market flips into deficit
International Brent crude futures LCOc1 were trading at $48.50 per barrel at 0255 GMT, up 67 cents, or 1.4 percent, from their last settlement.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 68 cents, or 1.5 percent, at $46.89 a barrel.
Supply disruptions from Nigeria, Venezuela, the United States and China triggered a U-turn in the oil outlook of Goldman Sachs, which long warned of overflowing storage and another looming crash in prices.
"The oil market has gone from nearing storage saturation to being in deficit much earlier than we expected," Goldman said, adding that the market "likely shifted into deficit in May ... driven by both sustained strong demand as well as sharply declining production."
In Nigeria, oil major Exxon Mobil (XOM.N) suspended exports from the country's biggest crude stream
,
Qua Iboe, and other producers have also suffered disruptions following acts of
sabotage, cutting the country's output to its lowest in decades at around 1.65
million barrels per day (bpd).In the Americas, major oil exporter Venezuela seemed on the brink of meltdown, triggering fears of default by its national oil company PDVSA, which has to make almost $5 billion in bond payments this year.
Venezuela's oil production has already fallen by at least 188,000 bpd since the start of the year as PDVSA struggles to make the investment needed to keep output steady.
In the United States, crude production C-OUT-T-EIA has fallen to 8.8 million bpd, 8.4 percent below 2015 peaks as the sector suffers a wave of bankruptcies.
And in China, output fell 5.6 percent to 4.04 million bpd in April, compared with the same time last year.
More
China’s Economy Grinds Down a Gear as Heavy Industry Drags
May 14, 2016
— 6:41 AM BST Updated on May 14, 2016 — 9:45 AM BST
China’s economy resumed its grind toward slower growth in April, weighed
down by overcapacity industries such as steel and coal.Industrial production climbed 6 percent in April from a year earlier, down from 6.8 percent in March and missing economists’ estimates for 6.5 percent. Retail sales also missed analyst forecasts, rising 10.1 percent, while fixed-asset investment increased 10.5 percent in the January-April period versus economists’ expectation for 11 percent.
After a rocky start to 2016 marked by a sliding yuan, capital outflows and tumbling shares, China’s economy stabilized and even picked up in March, led by a surge in new credit and rebound in the housing market. A pullback in lending and Saturday’s tepid readings dash hopes the economy has turned a corner. Top leaders this week signaled a shift away from debt- and stimulus-fueled growth, stressing the need for deleveraging, upgrading industrial capabilities and cutting excess capacity.
"All the engines suddenly lost momentum," said Zhou Hao, an economist at Commerzbank AG in Singapore. "The policy tightening will be only a short-term phenomenon."
The slower industrial output was due to weak external demand, a sharp drop in mining, high energy-consumption and overcapacity sectors including steel and coal, as well as seasonal effects, the National Bureau of Statistics said in a statement released after the data. It pointed out that the output of the steel and coal industries both fell from a year earlier.
Retail sales were weighed down by a pullback in automobile sales, which
increased 5.1 percent from a year earlier versus a 12.3 percent jump in March,
the NBS said.
Private investment in fixed assets decelerated to the slowest pace since
at least 2012.
"Due to weak market demand, companies’ reluctance to invest and
market entrance barriers, China’s private fixed-asset investment has been
decelerating since the start of this year," the statistics bureau said in
a statement. "This will hurt the steady growth of investment and it
deserves a lot of attention."
More
In
pro-Brexit news, China sought some UK advice. In or out of the dying EUSSR, GB
will do just fine, but out is the better option. The Donald says that out of
the EUSSR, GB won’t go to the back of the queue for trade deals if he’s
President.
China asks Britain for advice on creating financial super-regulator
China has asked Britain for advice on plans to create a financial
super-regulator, as it looks to improve financial oversight following last
year's stock market crash, sources with knowledge of the talks told Reuters.
The discussions between representatives from China and the UK Foreign
Office and Treasury highlight Britain's burgeoning relationship with Beijing on
financial issues, notwithstanding this week's gaffe by Queen Elizabeth, who was
caught on camera grumbling that Chinese officials accompanying President Xi
Jinping on a visit to the UK last year had been "very rude to the
ambassador".
The talks signal Beijing's growing willingness to seek outside help to
improve regulation of its financial infrastructure, in a bid
to increase transparency, reduce systemic risk, and stop companies exploiting
loopholes.
, in a bid
to increase transparency, reduce systemic risk, and stop companies exploiting
loopholes.
Several Chinese and British sources with direct knowledge of the talks
said Beijing had sent delegations to London to study the UK regulatory framework,
with two sources citing a visit in the first quarter.
UK government representatives also visited Beijing last month to discuss
financial, economic and
regulatory issues, two sources with knowledge of the visit said.
and
regulatory issues, two sources with knowledge of the visit said.
Weaknesses in Chinese regulation were exposed last summer when China's
stock markets lost a third of their value in a month, having soared 150 percent
in the previous 12 months.
Government and regulators rushed out a series of measures to arrest the
crash, including limiting short-selling, stopping new listings and
strong-arming big funds to buy more stocks.
The interventions were widely criticized for over-riding market
mechanisms, poor inter-agency coordination and creating moral hazard by
implying government support.
Reuters reported in November that China was considering consolidating
supervisory powers in one regulator covering banking, mutual funds, insurance
and securities, but two Chinese sources with direct knowledge of the matter
said no decisions had yet been made.
The Chinese sources said any proposals would include a few options for
China's cabinet, the State Council, to choose from, but it was unclear if
a proposal had yet been submitted.
Britain overhauled its regulatory system after the global financial
crisis of 2008-09, handing enormous power to the Bank of England, which is
responsible for averting risks to the financial system as a whole.
More
Trump Says Britain Outside EU Wouldn’t Be Last in Line on Trade
May 15, 2016 — 1:38 PM BST
Donald Trump said that Britain wouldn’t be last in line for a trade
deal with the U.S. if it leaves the European Union and he becomes president.
“You would certainly not be back of the queue, that I can tell you,” the
presumptive Republican presidential nominee told Piers Morgan in an interview
excerpt shown on ITV on Sunday. “I don’t want to say front or anything else.
I’m going to treat everybody fairly.”
Trump said earlier this month that Britain would be “better off” outside
the EU. His comments contrast with the U.S. position presented by President
Barack Obama, who last month urged Britain to remain in the EU and then said
that in the event of an exit, a trade agreement is “not going happen anytime
soon.”
“It wouldn’t make any difference to me whether they were in the EU or
not,” Trump said. “If I were from Britain, I would probably not want it. I’d
want to go back to a different system.”
In UK news,
the Granite City hits the rocks. Had Scotland voted for independence back in
2014, the newly independent nation would have just set the record for the
fastest national move from boom to bust. But is Goldie right about oil? Will
Aberdeen get a “get out of jail” break?
Aberdeen: the Granite City in crisis
14 May 2016
• 6:10pm
"It has got to the point where I run into old friends and ask
them whether they’re in work, almost as a greeting. It’s become the same as
asking ‘how are things?’,” says oilfield safety worker Spencer Owen.
“In Aberdeen just having a job answers a lot of that question.”
After months of dragging oil prices the
capital of North
Sea oil is caught in the grip of a vicious downturn which has wrought
financial pain throughout the local economy. Dips are to be expected of a city
so deeply dependent on the fluctuating price of oil, but the latest downturn is
unlike anything its 195,000 residents have seen before.The oil price rout has run deeper and longer than any oil market downturn in history, and comes at a time when the aging North Sea basin is losing its economic edge against cheaper exploration areas.
As the economic contagion spreads through Aberdeen, so do the anecdotes of its fall from one of the richest cities in the UK to a city in crisis.
Tales of oil executives queuing up for food banks or to sell their Rolexes to overwhelmed pawn brokers are breathlessly repeated by cab drivers. One tells of how financed sports cars are being abandoned in dealership forecourts overnight by those unable to keep up with payments. Another claims to have driven an enterprising young man to snap up a paid-in-full Porsche from a desperate owner to re-sell at a profit in London.
“I’ve been driving people from the Aberdeen airport into town for almost
twenty years so I’ve seen downturns before. This one is different,” says one
driver.
“Aberdeen keeps emptying out. My takings are down easily 50pc and it’s
the same for everyone. Hotels, restaurants, shop keepers. At peak traffic times
it would take me over an hour to get across the length of Aberdeen but I can
manage it in half an hour now. There’s just no-one here,” he says.
Official city statistics show the estimated population of Aberdeen City
is now 15pc smaller than before the oil market crash. And visitors through the
airport were 17pc lower in January meaning far fewer people on the rain swept
streets.
The signs of $100 a barrel oil remain: designer stores including Michael
Kors and Hugo Boss gleam alongside Apple in the glass-fronted Union Square
shopping centre. But further up Union Street the empty office space and
shuttered stores are a bleak reminder of the sub-$30 a barrel lows hit in
January this year.
After almost a decade of steadily rising oil prices the change in
fortunes seems to have caught the credit-generation off guard.
----According to
rating agency Moody’s mortgage arrears in Aberdeen have spiralled to double the
national level and could rise further as volatility in the UK's oil industry
increases unemployment and dampens house sales.
----Within a year of oil prices beginning
to slide, UK oil jobs dropped by 65,000. Now, almost two years after the start
of the oil price rout the oil industry is estimated to be hemorrhaging around
150 jobs every day which by the end of the year could lead to a decline of at
least a quarter from 440,000 before the crash.
High profile job culls have been carried out by all majors oil explorers
and services companies, across their global operations. But Ms Horne suspects
there have been far more jobs cut than are reported in the press. Companies are
quietly sacking one or two people at a time, week by week, to avoid criticism
in the media, she says.
“It’s quick and brutal. People with decades of experience are arriving
at work to find a box on their desk and then you’re gone,” she says.
Wood Group, which provides services to platforms across the North Sea,
axed 1,000 UK jobs last year as part of a 10pc cull of its 45,000 global
workforce. Since then the company has slashed rates for its remaining
contractors three times in a bid to control costs and plans to make 300
office-based workers redundant in the coming months.
More
True, governments can reduce the
rate of interest in the short run, issue additional paper currency, open the
way to credit expansion by the banks. They can thus create an artificial boom
and the appearance of prosperity. But such a boom is bound to collapse soon or
late and to bring about a depression.
Ludwig
von Mises.
At
the Comex silver depositories Friday final figures were: Registered 30.28 Moz, Eligible 122.82 Moz, Total 153.10 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
On the hundredth anniversary today of the Anglo-French
Sykes-Picot agreement that divided the falling Ottoman Empire in the Middle
East into the now failing new nations we know today, The Telegraph takes
another look at how it all came about. Revisionism or truth, it’s hard to know.
But it doesn’t matter. What happened happened, and we all now deal with its
legacy. Though the Bush-Blair regime change criminal blunder in Iraq is
inexcusable.
A century on, don't blame Sykes-Picot for the Middle East's troubles
David Blair14 May 2016 • 5:00pm
Exactly a century ago, an Englishman and a Frenchman unrolled a map of
the Middle East and drew an improbably straight line across the desert. With
one pen-stroke, Sir Mark Sykes and François Georges-Picot created the modern
states of the region and carelessly lit the fuse of a thousand conflicts that
blaze even today.
By drawing a line from contemporary Iraq to the Mediterranean, they
ignored explosive ethnic and religious divides. In this way, Britain and France
carved up the Middle East after the First World War, jointly committing the
original sin that lurks behind today’s tragedies.
So runs the folklore version of the Sykes-Picot agreement, whose
centenary falls on Monday. This critique has gained such power that
it has entered popular culture, largely because of David Lean’s epic Lawrence
of Arabia.
But even the most impassioned condemnation can be mistaken. In
truth, the popular version of Sykes-Picot misunderstands almost every aspect of
the agreement. After the passage of 100 years, the Middle East’s bloodshed can
no longer be blamed on a map drawn by the Conservative MP for Hull Central
(Sykes) and a relatively junior French diplomat (Picot).
True enough, their line sliced through
ethnic and religious communities. But how could it have done otherwise? No
borders, however ingenious, were going to create homogeneous countries out
of a singularly diverse region of the Middle East.
The crescent stretching from the Tigris to the Mediterranean - then and
now - is intermingled with Arabs and Kurds, Sunnis and Shias, Christians, Druze
and Alawites.The new countries that would emerge from the Ottoman Empire after the First World War were always going to be multi-ethnic and multi-confessional. That much was preordained.
The critique of Sykes-Picot implicitly assumes that there was an answer to the problem of how to govern a post-Ottoman Middle East. The truth may be worse: perhaps there was no solution and conflict was inevitable.
As it happens, today’s map of the region differs substantially from what Sykes and Picot envisaged. Large sections of their agreement were quickly abandoned. Under their formula, Mosul – today the second city of Iraq – would never have been in Iraq at all. They were going to place Mosul in Syria, thereby excluding a large number of Sunni Arabs and Kurds from Iraq and, as it happens, making the country more homogeneous - and the task of a Baghdad government slightly less onerous - than it is today.
When the Islamic
State of Iraq and the Levant (Isil) destroyed a border post near Mosul in
2014, they claimed credit for obliterating the Sykes-Picot boundary. In
fact, Sykes had died of Spanish flu by the time that section of the frontier
between Iraq and Syria was fixed at the Paris Peace Conference in 1919.
-----But even this aspect of the
indictment is less powerful than you might think. Was Sykes-Picot kept secret?
Yes, but only for a year. Historians often write that Russia
disclosed the agreement after the Bolshevik revolution in October 1917.
In fact, Sykes and Picot travelled to Jeddah five months
earlier, in May 1917, to meet Hussein, the Sharif of Mecca and leader of the
Arab revolt, and brief him on their accord.
Perhaps
surprisingly, Hussein raised no particular objections. His secretary, Fuad
al-Khatib, later recalled that “Hussein had on that occasion been quite content
with the terms of the agreement".
More
Brexit The Animated
Movie.
Brexit
Quote of the week.
BBC "the propaganda arm
of the EU."
Martin
Durkin. Brexit Filmmaker.
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?
'Nanocavity' may improve ultrathin solar panels, video cameras and more
Date:
May 13, 2016
Source:
University at Buffalo
Summary:
Recently, engineers placed a single layer of MoS2 molecules on top of a
photonic structure called an optical nanocavity made of aluminum oxide and
aluminum. The results are promising. The MoS2 nanocavity can increase the
amount of light that ultrathin semiconducting materials absorb. In turn, this
could help industry to continue manufacturing more powerful, efficient and flexible
electronic devices.
One of the latest advancements in these fields centers on molybdenum
disulfide (MoS2), a two-dimensional semiconductor that, while commonly used in
lubricants and steel alloys, is still being explored in optoelectronics.
Recently, engineers placed a single layer of MoS2 molecules on top of a
photonic structure called an optical nanocavity made of aluminum oxide and
aluminum. (A nanocavity is an arrangement of mirrors that allows beams of light
to circulate in closed paths. These cavities help us build things like lasers
and optical fibers used for communications.)
The results, described in the paper "MoS2 monolayers on
nanocavities: enhancement in light-matter interaction" published in April
by the journal 2D Materials, are promising. The MoS2 nanocavity can
increase the amount of light that ultrathin semiconducting materials absorb. In
turn, this could help industry to continue manufacturing more powerful,
efficient and flexible electronic devices.
"The nanocavity we have developed has many potential
applications," says Qiaoqiang Gan, PhD, assistant professor of electrical
engineering in the University at Buffalo's School of Engineering and Applied
Sciences. "It could potentially be used to create more efficient and flexible
solar panels, and faster photodetectors for video cameras and other devices. It
may even be used to produce hydrogen fuel through water splitting more
efficiently."
A single layer of MoS2 is advantageous because unlike another promising
two-dimensional material, graphene, its bandgap structure is similar to
semiconductors used in LEDs, lasers and solar cells.
"In experiments, the nanocavity was able to absorb nearly 70
percent of the laser we projected on it. Its ability to absorb light and
convert that light into available energy could ultimately help industry
continue to more energy-efficient electronic devices," said Haomin Song, a
PhD candidate in Gan's lab and a co-lead researcher on the paper.
Industry has kept pace with the demand for smaller, thinner and more
powerful optoelectronic devices, in part, by shrinking the size of the
semiconductors used in these devices.
A problem for energy-harvesting optoelectronic devices, however, is that
these ultrathin semiconductors do not absorb light as well as conventional bulk
semiconductors. Therefore, there is an intrinsic tradeoff between the ultrathin
semiconductors' optical absorption capacity and their thickness.
The nanocavity, described above, is a potential solution to this issue.
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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