Baltic Dry Index. 606 Brent Crude 49.65
Brexit odds checker.
http://www.oddschecker.com/politics/british-politics/eu-referendum/referendum-on-eu-membership-result
Brexit Quote of the Day.
Aw,
you can come up with statistics to prove anything, Cameron. Forty percent of
all British people know that.
With apologies to Homer Simpson.
For an extra treat today scroll down to the end to watch the modern Mozart 10 year old child prodigy from Vilnius, play Albinoni.
We open for dress-up
Tuesday, the last trading day of the month for the Great Vampire Squids in the
Fed’s gambling casinos, with yet more worrying news from the Orient. In suicide
Empire of Japan, nothing ever works as intended. China and a Fed rate hike in
June, have turned Asian stock markets skittish.
Japan's consumer spending drops again
Published: May 30, 2016 7:46 p.m. ET
TOKYO--Japanese consumer spending fell for a second straight month in
April, offering Prime Minister Shinzo Abe yet another reason to delay a sales
tax increase scheduled for next year.
Household spending decreased 0.4% from a year earlier in April, adjusted
for price changes, after dropping 5.3% in the previous month, according to data
released Tuesday by the Ministry of Internal Affairs and Communications.
Economists polled by The Wall Street Journal and the Nikkei expected a
1.3% fall.
Weakness in consumption, which accounts for 60% of Japan's economic
output, added to signs that the economy isn't out of the woods yet despite a
modest rebound in the January-March quarter. Exports fell 10% in April as
U.S.-bound shipments decreased the most in five years. Consumer prices slipped
0.3% in that month. Corporate earnings have also shown signs of losing steam.
More
Fed, China fears force investors to check out of Asia
Having dumped Asian shares on resurgent worries about China's economy,
the specter of more aggressive U.S. interest rate rises is now forcing global
investors to sell the region's bonds and currencies.
A net $3.2 billion left Asian equity markets, excluding Japan, during
the period May 1 to 24, the largest outflow since January, data from HSBC
showed. Indonesia's and South Korea's bond markets, heavy recipients of foreign
investment until March, are now seeing chunks of inflows reverse while Asia's
currencies have also fallen quite sharply.
Some market participants see foreign investment outflows across Asian
asset classes as an overreaction, given the strides policymakers have made in
shoring up capital flight defenses since the "Fed taper tantrum" in
2013.
But for others, the unease around the Fed's policy deliberations twins
increasing concerns around currency volatility with broader worries about the
health of the China's real economy.
"If the Fed hikes rates in June, it might come at a time when the
Chinese economy weakens, and that could also mean that the Chinese currency
starts to weaken again," said Herald van der Linde, head of Asia-Pacific
equity strategy at HSBC in Hong Kong.
"And that could lead to a scenario where everybody's up and down
and markets fall five to 10 percent."
---- "The market is split between those who think it's time to buy emerging markets and those who think the China data is not sustainable and U.S. rates will go up and emerging markets are overvalued," said Sean Taylor, chief investment officer at Deutsche Asset Management. Deutsche had $846 billion of assets under management at the end of December.
Soft Chinese economic data in April has raised doubts about the effectiveness and sustainability of the fiscal stimulus being doled out in the world's second-largest economy.
Chinese stocks .SSEC, the region's worst performers, are down almost 20 percent this year.
More
We close with the wealth and jobs destroying entity
also known as the European Union. Whether Britain stays or leaves the dying
EUSSR, isn’t likely to make much difference, to the EUSSR’s outcome. Just to
add the costs to the people of GB. The problems of Greece have now reached too
big to fail or bail, Italy and France. What is the point in remaining in an
insane asylum run by the inmates like this?
Draghi’s First Good News in a Year Has $267 Billion Cost
May 30, 2016
— 5:00 AM BST Updated on May 30, 2016 — 10:17 AM BST
Mario Draghi may have bought himself a brief respite from the threat of
deflation. The cost? More than a quarter of a trillion dollars.On Thursday, the European Central Bank president should be able to deliver his first snippet of good news for a year on his mandate. Most economists in Bloomberg’s monthly survey predict the central bank’s forecasts for inflation and growth will be left unchanged or increased. Yet respondents see the relief as short-lived, with two thirds predicting more easing will eventually be needed.
The poll results underscore how the Governing Council’s meeting in Vienna, one of the occasional sessions held outside the ECB’s Frankfurt headquarters, is likely to mark a pause for officials after a fresh round of stimulus in March that included a bump of 240 billion euros ($267 billion) to their bond-buying program.
While economists are skeptical the package will be enough to return inflation to the target of just under 2 percent, Vice President Vitor Constancio is more optimistic. He said last week that he believes consumer-price growth will be near that goal in two years time.
“The combined economics departments of the Eurosystem central banks must be sighing in relief over this round of forecasts,” said Anatoli Annenkov, an economist at Societe Generale in London. “They have a rare opportunity to forecast higher inflation.”
The gathering in Austria takes place against a backdrop of growing concern among investors that central banks have run out of ways to bolster feeble prices. Before the meeting, fresh data should give officials more insight into how well the existing stimulus is working.
Eurostat will probably say on Tuesday that the inflation rate rose to minus 0.1 percent in May from minus 0.2 percent the previous month, and unemployment was unchanged at 10.2 percent in April, according to separate Bloomberg surveys. Brent crude, up more than 75 percent since January, is being closely watched for its impact on consumer prices.
A gauge of euro-area economic confidence rose for a second month in May to a four-month high, data from the European Commission in Brussels showed on Monday.
That could all help lift the ECB’s previous projections, published in March, which foresaw inflation averaging 0.1 percent in 2016, 1.3 percent in 2017 and 1.6 percent in 2018.
Still, achieving the inflation goal any time soon remains a tall order. Core inflation, which the ECB says is a gauge for future price developments, slowed to 0.7 percent in April and is seen barely picking up to 0.8 percent in May. Euro-area negotiated wages rose a nominal 1.4 percent in the first quarter, the slowest pace since the inception of the single currency a decade and a half ago.
More
France and Italy could be the next European economies to crash
Denied
the option of devaluation, both countries have relied on debt-funded
public spending to maintain economic activity and living standards. The
people and their representatives refuse to face reality
May
29, 2016
Certain diseases attack the peripheries before vectoring in on vital organs. Following a similar trajectory is the European debt crisis, moving ever closer to the core. Italy and France are now especially vulnerable.
Defenders argue that Italy and France are large modern nations, with enviable economic pedigree. They are, respectively, the 13th and 9th largest economies in the world; gross domestic product per capita in 2014 is estimated at $34,500 (£23,590) and $40,400 (£27,624).
They have large populations, an educated and productive workforce, well developed infrastructure and considerable economic and social capital. Both countries are major agricultural and industrial powers, strong in advanced technical products, luxury goods, food processing, pharmaceuticals and fashion. Both are major exporters and significant tourist destinations
France even has a favourable demographic outlook, with a birth rate just
above replacement level mainly among its immigrant population. They are simply
too large to fail.
But Italy and France share problems of slow growth, unemployment, poor
public finances and structural problems. They have found it difficult to reform
and face an increasingly tough political environment.
Italian total real economy debt (that is, government, household and
business) is around 259 per cent of GDP, up 55 per cent since 2007. France’s
equivalent debt is around 280 per cent of GDP, up 66 per cent since 2007. This
ignores unfunded pension and healthcare obligations as well as contingent
commitments to Eurozone bailouts. Debt will increase in critical levels
quickly without corrective action.
France and Italy cannot avoid a financial crisis in an environment of
low growth and low inflation. Real GDP growth would need to be around twice the
current projected rates to stabilise and then reduce government debt-to-GDP
ratios.
The required fiscal adjustment to start reducing government debt is
around 2 per cent of GDP, which would reduce the growth needed to reduce
leverage.
A combination of weak economic activity and low inflation is causing
Italy’s debt trajectory to spiral upwards, despite austerity and a primary
surplus of 2 per cent of GDP. In France, there is no sign that the budget is
likely to be in surplus in the near future.
The real problem is the lack of competitiveness, and underlying many of
these problems is the single currency.
Before the 2015 fall in the euro, after the European Central Bank
introduced negative interest rates and quantitative easing, Italy and France
were faced with a 15-25 per cent overvalued currency. This was compounded by
the high leverage to the exchange rate for export competitiveness.
Italy has a gearing of over 60 per cent to the exchange rate, due to the
nature of its exports, compared to around 40 per cent for Germany. Denied the
option of devaluation to maintain international competitiveness, both countries
have relied on debt-funded public spending to maintain economic activity
and living standards.
More
France braces for further strikes in half-term travel chaos
David Chazan29 May 2016 • 5:11pm
Half-term holidaymakers in France may
be stranded by further strikes that will disrupt
flights and rail services as fuel shortages persist in the worst labour
unrest for decades.Days before the Euro 2016 football tournament kicks off, President François Hollande, already under pressure over terrorism fears, is frantically seeking a face-saving way to end the crisis over bitterly disputed labour reforms.
Mr Hollande, who is nicknamed ‘Flanby’ after a wobbly caramel dessert partly because of his reputation for caving in when challenged, is reportedly ready to offer the unions a compromise. If they drop their opposition to an employment bill to make hiring and firing easier, he will grant concessions in separate negotiations on working conditions and pay.
The more moderate CFDT union backs the labour reforms, which have already been watered down, to the disgust of many employers, but the hardline CGT refuses to compromise.
“The CGT knows it will not obtain the withdrawal of the law but it will
be necessary for them to win concessions in other areas,” a source close to the
president told the Journal du Dimanche newspaper. Negotiations are already in
progress with the national rail company, SNCF, the state-owned Paris transport
corporation, RATP, and Air France.
Air controllers plan to strike from Friday to Sunday, which will affect
airports across France and is likely to force French and international airlines
to postpone and cancel flights.
Rail workers are also planning stoppages that will lead to severe cuts
in national train services from Wednesday. In Paris, Métro and suburban train
services will be reduced from Thursday, when CGT members are to begin a strike.
Another leftist union, SUD, has called a strike from June 10, when the month-long
football tournament starts.
Many of the strikers voted for the Socialist president who came to power
promising to curb the “excesses” of international finance. Now that he has
adopted a more pragmatic, business-friendly stance in a bid to cut unemployment,
at a record of more than 10 per cent, they accuse him of betrayal.
More
Air France Pilot Strike Threatens to Disrupt Soccer Tournament
May 30, 2016 — 4:29 PM BST
Air France’s pilots are escalating a long-running contract dispute by
threatening to disrupt travel with an extended strike just as France prepares
to host the European soccer championship that starts in mid-June.
The French airline’s main pilot union, the SNPL, said 68 percent of
those participating in a work-stoppage ballot voted Monday in favor of a
walkout exceeding six days to protest the airline’s plans to cut pay. Of the
carrier’s 3,600 pilots, 2,500 belong to the SNPL.
The SNPL didn’t specify any dates for a strike, and talks in the dispute
continue. The UEFA European Championship is scheduled to take place in France
from June 10 through July 10. The conflict is reminiscent of a dispute in 1998,
when pilots at the airline halted work for eight days just ahead of the World
Cup soccer tournament in France. The carrier declined to comment on Monday’s
vote, beyond estimating that 1,360 pilots might take part in a walkout.
more
“When it becomes serious, you have to lie.”
Jean-Claude Juncker. Failed former Luxembourg P.M.,
serial liar, president of the European Commission.
At
the Comex silver depositories Friday final figures were: Registered 30.12 Moz, Eligible 123.52 Moz, Total 153.64 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, what really happened when the Great Nixonian
error of fiat money, communist money, went bust for the first time in 1974.
“Every victory is only
the price of admission to a more difficult problem”
Henry Kissinger.
The Untold Story Behind Saudi Arabia’s 41-Year U.S. Debt Secret
How a legendary bond trader from Salomon Brothers brokered a do-or-die deal that reshaped U.S.-Saudi relations for generations.
May 31, 2016
Failure was not an option.
It was July 1974. A steady predawn drizzle had given way to overcast
skies when William Simon, newly appointed U.S. Treasury secretary, and his
deputy, Gerry Parsky, stepped onto an 8 a.m. flight from Andrews Air Force
Base. On board, the mood was tense. That year, the oil crisis had hit home. An
embargo by OPEC’s Arab nations—payback for U.S. military aid to the Israelis
during the Yom Kippur War—quadrupled oil prices. Inflation soared, the stock
market crashed, and the U.S. economy was in a tailspin.
Officially, Simon’s two-week trip was billed as a tour of economic
diplomacy across Europe and the Middle East, full of the customary
meet-and-greets and evening banquets. But the real mission, kept in strict
confidence within President Richard Nixon’s inner circle, would take place
during a four-day layover in the coastal city of Jeddah, Saudi Arabia.
The goal: neutralize crude oil as an economic weapon and find a way to
persuade a hostile kingdom to finance America’s widening deficit with its
newfound petrodollar wealth. And according to Parsky, Nixon made clear there
was simply no coming back empty-handed. Failure would not only jeopardize
America’s financial health but could also give the Soviet Union an opening to
make further inroads into the Arab world.
It “wasn’t a question of whether it could be done or it couldn’t be
done,” said Parsky, 73, one of the few officials with Simon during the Saudi
talks.
At first blush, Simon, who had just done a stint as Nixon’s energy czar,
seemed ill-suited for such delicate diplomacy. Before being tapped by Nixon,
the chain-smoking New Jersey native ran the vaunted Treasuries desk at Salomon
Brothers. To career bureaucrats, the brash Wall Street bond trader—who once
compared himself to Genghis Khan—had a temper and an outsize ego that was
painfully out of step in Washington. Just a week before setting foot in Saudi
Arabia, Simon publicly lambasted the Shah of Iran, a close regional ally at the
time, calling him a “nut.”
But Simon, better than anyone else, understood the appeal of U.S.
government debt and how to sell the Saudis on the idea that America was the
safest place to park their petrodollars. With that knowledge, the
administration hatched an unprecedented do-or-die plan that would come to
influence just about every aspect of U.S.-Saudi relations over the next four
decades (Simon died in 2000 at the age of 72).
The basic framework was strikingly simple. The U.S. would buy oil from
Saudi Arabia and provide the kingdom military aid and equipment. In return, the
Saudis would plow billions of their petrodollar revenue back into Treasuries
and finance America’s spending.
It took several discreet follow-up meetings to iron out all the details,
Parsky said. But at the end of months of negotiations, there remained one
small, yet crucial, catch: King Faisal bin Abdulaziz Al Saud demanded the
country’s Treasury purchases stay “strictly secret,” according to a diplomatic
cable obtained by Bloomberg from the National Archives database.
With a handful of Treasury and Federal Reserve officials, the secret was
kept for more than four decades—until now. In response to a
Freedom-of-Information-Act request submitted by Bloomberg News, the Treasury
broke out Saudi Arabia’s holdings for the first time this month after
“concluding that it was consistent with transparency and the law to disclose
the data,” according to spokeswoman Whitney Smith. The $117 billion trove makes
the kingdom one of America’s largest foreign creditors.
Yet in many ways, the information has raised more questions than it has
answered. A former Treasury official, who specialized in central bank reserves
and asked not to be identified, says the official figure vastly understates
Saudi Arabia’s investments in U.S. government debt, which may be double or
more.
More
"The history of paper money is an account of abuse, mismanagement, and financial disaster."
Richard M. Ebeling
Brexit The Animated Movie.
Brexit
Quote of the week.
Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, tell any lie, to assure the survival and the success of the EUSSR.
Dodgy Dave Cameron, with apologies to J. F. Kennedy.
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?
And the future is,
tethered drones. Coming soon to a police force near you, probably.
Tethered drone provides a hovering watchtower to troops on the ground
From
Gengis Khan and his Mongol commanders to jihadis hiding in the Afghan
mountains, fighters have always gravitated towards elevated vantage points to
better prepare for incoming enemies. Technology has changed the face of warfare
but the benefits of holding the higher ground remain the same, even if it's a
flying robot doing the legwork for you. Looking to further boost to its
surveillance capabilities, the US military has begun testing a tethered drone
system that hovers in the air and streams continuous aerial views to troops on
the ground.
Dubbed Tether Eye, the wired aircraft was developed by AeroVironment as
a way of offering the military a 24-hours-a-day surveillance tool. It can be
launched from fixed locations or while on the move from a portable
self-contained base station, which constantly shuttles power to the craft
through a ruggedized tether.
Equipped with electro-optical and infrared cameras, it can fly to an
altitude of 150 ft (45 m) and capture night and day 360-degree video, which is
streamed back to the base station to give troops an all-seeing eye in the sky.
---- "Having the ability to deploy a
'virtual observation tower' at a moment's notice above buildings and vehicles
represents a game-changing capability for intelligence, surveillance,
reconnaissance and security operations that has the potential to save
lives," says Amanda Toman, Program Manager at the US Combatting Terrorism
Technical Support Office. "We look forward to continuing our evaluation of
Tether Eye's capabilities with AeroVironment as a possible deployable
capability across government facilities."
You can see the Tether Eye in action in the video below.
Fotokite keeps drone photography on a tight leash
Learning
the intricacies of drone photography can involve a steep learning curve, but
flying a kite is a much simpler proposition. For Russian roboticist Sergei
Lupashin, blending these old and new forms of flight could be a key to
unlocking the potential of aerial photography. By putting his Fotokite
quadcopters on a leash, he hopes to get airborne cameras into the hands of more
journalists, enabling them to tell stories from exciting new angles.
The huge potential of drone photography, a field that amasses more breathtaking captures every day, is not lost on those in the news gathering business. For the last couple of years, media companies around the world have come to embrace the technology, with outlets from the BBC to CNN turning to drones to bring new perspectives to their journalism. In the case of the BBC, this has turned up captivating aerial footage of everything from Auschwitz, to New Year's Eve fireworks, to a ravaged Gaza strip following a 50 day conflict with Israel.
But in addition to considerable technical ability, getting these drones in the air requires a lot of time spent training up certified pilots. It is Lupashin's thinking that tethering the aircraft to someone with their feet firmly on the ground can make the technology a whole lot more accessible, while actually serving to improve certain capabilities at the same time.
He claims that somebody can be taught to fly a Fotokite within just five minutes.
More
Finally, something
too good not to share. A child prodigy from Vilnius, Lithuania. Almost worth
staying in the EUSSR, if he can be persuaded to play London occasionally. The
performance starts about 1.20. Almost worth staying, but only almost.
