Baltic Dry Index. 1061 -37
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"I just want you to know that, when we talk about war,
we're really talking about peace."
President G. W. Bush. Washington, D.C. June 18, 2002.
Today we
open with another glimpse of the future next decade. The trick is to get there
from here without either another fiat casino banking collapse, or America’s war
party forcing us into a third world war. We also note with rising concern, the
continuing slump in the Baltic Dry Index. Something is going wrong in global
trade.
Below an
update on global solar power development since 2010. Solar power and massive
grid scale, battery storage improvements are leading the way to a future
without the need for dangerous heavily subsidised nuclear power. While today’s
record for a solar cell stands at a 31.1 percent efficiency, by 2024 and
incorporating graphene and nano technology, I suspect that this will be
approaching 50 percent. Forget carbon taxes, and great vampire squid driven
carbon trading schemes, just let science and plain old entrepreneurship take
care of our energy needs.
"The problem with the
French is
that they don't have a word for entrepreneur."
President G. W. Bush. Misattributed.
Global solar dominance in sight as science trumps fossil fuels
Solar power will slowly squeeze the revenues of petro-rentier regimes in Russia, Venezuela and Saudi Arabia. They will have to find a new business model, or fade into decline
Solar power has won the global argument. Photovoltaic energy is already so cheap that it competes with oil, diesel and liquefied natural gas in much of Asia without subsidies.Roughly 29pc of electricity capacity added in America last year came from solar, rising to 100pc even in Massachusetts and Vermont. "More solar has been installed in the US in the past 18 months than in 30 years," says the US Solar Energy Industries Association (SEIA). California's subsidy pot is drying up but new solar has hardly missed a beat.
The technology is improving so fast - helped by the US military - that it has achieved a virtous circle. Michael Parker and Flora Chang, at Sanford Bernstein, say we entering a new order of "global energy deflation" that must ineluctably erode the viability of oil, gas and the fossil fuel nexus over time. In the 1980s solar development was stopped in its tracks by the slump in oil prices. By now it has surely crossed the threshold irreversibly.
The ratchet effect of energy deflation may be imperceptible at first since solar makes up just 0.17pc of the world's $5 trillion energy market, or 3pc of its electricity. The trend does not preclude cyclical oil booms along the way. Nor does it obviate the need for shale fracking as a stop-gap, for national security reasons or in Britain's case to curb a shocking current account deficit of 5.4pc of GDP.
But the technology momentum goes only one way. "Eventually solar will become so large that there will be consequences everywhere," they said. This remarkable overthrow of everthing we take for granted in world energy politics may occur within "the better part of a decade".
----Clean Energy Trends says new solar installations overtook wind turbines worldwide last year with an extra 36.5GW. China alone accounted for a third. Wind is still ahead with 2.5 times old capacity but the "solar sorpasso" will be reached in 2021 as photovoltaic (PV) costs keep falling.
The US National Renewable Energy Laboratory says scientists can now capture 31.1pc of the sun's energy with a 111-V Solar Cell, a world record but soon to be beaten again no doubt. This will find its way briskly into routine use.
----It is hard to keep up with the cascade of research papers emerging from brain-trusts in North America, Europe and Japan, so many brimming with optimism. The University of Buffalo has developed a nanoscale microchip able to capture a "rainbow" of wavelengths and absorb far more light. A team at Oxford is pioneering use of perovskite, an abundant material that is cheaper than silicon and produces 40pc more voltage.
One by one, the seemingly intractable obstacles are being conquered. Israel's Ecoppia has just begun using robots to clean the panels of its Ketura Sun park in the Negev desert without the use of water, until now a big constraint. It is beautifully simple. Soft microfibers sweep away 99pc of the dust each night with the help of airflows.
Professor Michael Aziz, at Harvard University, is developing a flow-battery with funding from the US Advanced Research Projects Agency over the next three years that promises to cut the cost of energy storage by two-thirds below the latest vanadium batteries used in Japan.
----Deutsche Bank say there are already 19 regional markets around the world that have achieved "grid parity", meaning that PV solar panels can match or undercut local electricity prices without subsidy: California, Chile, Australia, Turkey, Israel, Germany, Japan, Italy, Spain and Greece, for residential power, as well as Mexico and China for industrial power.
This will spread as battery storage costs - often a spin-off from electric car ventures - keep dropping. Sanford Bernstein says it may not be long before home energy storage is cheap enough to lure households away from the grid en masse across the world.
More
In less
aspirational news this morning, China’s economic wobble intensifies. How much
longer will the Great Disconnect continue?
Emerging Currencies Slide With Commodities on China Trade
Apr 10, 2014 7:17 AM GMT
Emerging-market currencies slipped, commodities fell and stocks pared gains
as a surprise drop in China’s trade tempered optimism after the Federal
Reserve eased concern about U.S. rate rises. A Bloomberg index that tracks 20 developing-economy currencies against the greenback dropped 0.1 percent by 7:09 a.m. in London, the first retreat in five days. The MSCI All Country World Index trimmed its advance to 0.1 percent and the S&P GSCI Index of commodities fell 0.3 percent. Futures on the Euro Stoxx 50 Index added 0.4 percent while contracts on the Standard & Poor’s 500 Index were little changed. Turkey’s lira weakened 0.4 percent. Indonesian equities plunged and the rupiah weakened after elections failed to show a clear winner.
Chinese exports fell 6.6 percent in March, extending the steepest drop since 2009 in February and missing the estimate for a 4.8 percent gain from a Bloomberg survey of economists. Fed minutes played down forecasts for rates to increase faster than previously projected. Australia’s unemployment rate unexpectedly dropped after the country added more jobs than estimated in March, while South Korea kept its key rates unchanged and boosted its economic growth outlook.
----China’s imports plunged 11.3 percent last month down from growth of 10.1 percent in February and below the survey forecast for a 3.9 percent expansion. China’s export data have been distorted by inflated numbers in early 2013, when some companies filed fake invoices to disguise capital inflows.
“The data is fueling concerns about the emerging market economies,” said Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui Trust Bank Ltd., which manages the equivalent of $474 billion. “March should be free from distortion from Lunar New Year, and the fact that imports dropped this much implies huge impact on the global economy.”
More
Goldman Says China Junk Debt Not Paying Enough for Default Risk
Apr 10, 2014 5:53 AM GMT
Investors in high-yield bonds from China, the majority
of which come from the real estate industry, aren’t being paid enough for
assuming the risk of economic slowdown and defaults, Goldman Sachs Group Inc.
said. “For China high yield, we do not think there is sufficient premium to compensate for these risks, especially given the potentially high correlation risks in the real estate sector,” analysts at the New York investment bank including Hong Kong-based Kenneth Ho wrote in a report today. “There is better value in investment grade.”
Dollar bonds from issuers in China returned 2.24 percent since Dec. 31, tied with South Korea for third-worst performer in 15 Asian markets tracked by JPMorgan Chase & Co. The country’s policy makers have set a 7.5 percent growth target for this year, which would be the slowest expansion since 1990.
----Concern about non-payment in the real
estate industry is mounting after Zhejiang Xingrun Real Estate Co., a builder
in a city south of Shanghai, collapsed with 3.5 billion yuan ($564 million)
in liabilities last month. The nation’s credit default swaps rose to 87 basis points on April 9 from as low
as 64 in November, after Shanghai Chaori Solar Energy Science & Technology
Co. on March 7 became the first company to default on corporate bonds in its
home market.
We close
with a growing scandal in Singapore. Who did the pumping and dumping? An
outlier for the coming Great Reconnect?
RBC Joins Goldman in Suing Clients After Singapore Crash
Apr 10,
2014 3:54 AM GMT
Royal Bank
of Canada sued three private wealth clients in Singapore, joining companies
including Goldman Sachs Group Inc. seeking money owed by customers after an
October stock rout. Blumont Group Ltd. (BLUM)’s Executive Chairman Neo Kim Hock and Executive Director James Hong and businessman Nelson Fernandez owe the Canadian bank a total of $63.3 million, according to lawsuits filed in the Singapore High Court. The men refused to pay after shares in companies such as Blumont, Asiasons Capital (ACAP) Ltd. and LionGold Corp. (LIGO), held as security, tumbled in the October crash, the bank said in court papers.
This brings the total banks and brokers are seeking to recover from the crash to at least $210 million. Singapore’s central bank and white-collar crime agency last week widened their probe into suspected stock-trading irregularities around the plunge of the three commodity companies that erased $6.9 billion in market value. Investigators are seeking electronic data from Neo, Hong and executives from six other companies.
“There seems to have been a coordinated effort to bring about the rout that wiped out that much market value in such a short period of time,” said Desmond Chua, a Singapore-based strategist at CMC Markets. Investigations have still not explained the crash, he said.
----The sudden slump after Asiasons, Blumont
and LionGold reached record highs in the past year triggered trading curbs and
proposals for tighter rules. The average value of shares traded in Southeast Asia’s
largest equities market fell 20 percent in the three months ended Dec. 31 from
a year earlier.
----As part of their wider probe, Singapore investigators asked Annica Holdings Ltd., Magnus Energy Group (MAGE) Ltd., Innopac Holdings Ltd., ISR Capital (ISR) Ltd., ITE Electric Co. and Ipco International (IPCO) Ltd. or their units to assist in the investigations.
Interactive Brokers, a Connecticut-based online broker, has accused Neo, Ipco Chief Executive Officer Quah Su Ling and six others of a “pump and dump” plan to rig shares of the three companies, according to a lawsuit seeking to freeze S$79 million of their assets. At least two of the eight have claimed the brokerage was involved in a “commission-generating scheme,” which it denies. The eight haven’t otherwise commented on the accusations.
---Goldman Sachs has denied claims by Blumont’s Hong and Ipco’s Quah in London that it dumped shares of Blumont, Asiasons and LionGold held as collateral after they couldn’t meet repayment demands. It countersued in December to recover $26.8 million.
About two dozen lawsuits have been filed by companies including Julius Baer Group Ltd. (BAER), Bank of East Asia Ltd., Malayan Banking Bhd. and AMInvestment Bank Group’s AMFraser Securities Pte. over the October crash.
"You work three jobs? ... Uniquely American, isn't it? I
mean, that is fantastic that you're doing that."
President G. W. Bush, to a divorced mother of three, Omaha,
Nebraska, Feb. 4, 2005
At the Comex
silver depositories Wednesday
final figures were: Registered 53.43 Moz, Eligible 123.79 Moz, Total 177.22 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, no crooks or scoundrels or bent politicians. Just the good old
days before “change we can believe in.”
"Let
me start off by saying that in 2000 I said, 'Vote for me. I'm an agent of
change.' In 2004, I said, 'I'm not interested in change --I want to continue as
president.' Every candidate has got to say 'change.' That's what the American
people expect."
President
George W. Bush, Washington, D.C., March 5, 2008
"I
remember meeting a mother of a child who was abducted by the North Koreans
right here in the Oval Office."
President
George W. Bush, Washington, D.C., June 26, 2008
"A
lot of times in politics you have people look you in the eye and tell you
what's not on their mind."
President
George W. Bush, Sochi, Russia, April 6, 2008
"Oftentimes
people ask me, 'Why is it that you're so focused on helping the hungry and
diseased in strange parts of the world?'"
President
George W. Bush, Washington, D.C., April 18, 2008
"Thank
you, your Holiness. Awesome speech."
President
George W. Bush, to Pope Benedict, Washington, D.C., April 15, 2008
"Your
eminence, you're looking good."
President
George W. Bush to Pope Benedict XVI, using the title for Catholic cardinals,
rather than "your holiness,"
Rome, June 13, 2008
"Wait
a minute. What did you just say? You're predicting $4-a-gallon gas? ... That's
interesting. I hadn't heard that."
President
George W. Bush, Washington, D.C., Feb. 28, 2008
"I'll
be long gone before some smart person ever figures out what happened inside
this Oval Office."
President
George W. Bush, Washington, D.C., May 12, 2008
The monthly Coppock Indicators finished March
DJIA: +197 Down. NASDAQ: +357 Up. SP500: +254 Down.
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