Baltic Dry Index. 597 +04 Brent Crude 64.20
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
If
all else fails, immortality can always be assured by spectacular error.
J. K.
Galbraith.
It is “Greek week,” will Greece survive in the euro, the EUSSR, after the coming shootout in Riga on Friday the 24th? It doesn’t look good, although rumours are flying that Russia will advance Greece some 3 to 5 billion as an advance gas transit payment for Greece signing up to the latest Turkish option of the revised South Stream gas pipeline project to Europe that bypasses Ukraine, but yet to be built.
Below, the latest on Greece.
A Greek default must go the whole way and leave the euro
Greece can only become competitive if it leaves the euro and lets its currency depreciate sharply, says Roger Bootle
An end to the Greek crisis has
been a long time coming. So much so, that it is now easy to believe that it
will never come. The Greeks and their creditors may simply continue to “kick
the can down the road”.
But the can appears to have been
kicked into a cul-de-sac. Greece had evidently hoped that it could persuade the
IMF to allow it to defer payment of the €1bn due in two amounts on May 1 and
May 12. The
IMF has said no. No developed country has ever defaulted to it, or even
been granted a postponement of payment. (Mind you, if things carry on much
longer as they are, perhaps Greece will cease to be classified as a developed
country, thereby allowing a default to the IMF to seem less earth-shattering.)
Greece had also hoped that this
Friday’s meeting of eurozone finance ministers in Latvia would bring, not only
acceptance of the Greek government’s latest draft, (the fourth, by the way), of
its plans for reform, but also the immediate release of funds. Yet the European
Commission’s vice-president has made it clear that funds will only be released
once Greece has demonstrably started
to implement reforms.
Admittedly, we have seemingly
been here before, only for the prisoner to wriggle free. Some observers suggest
that the German finance minister, Mr Schaeuble and his boss, Mrs Merkel, are
deliberately playing a game of bad cop/good cop. But Mr Schaeuble doesn’t look
like the sort of chap who would be a good actor.
Although Mrs Merkel’s instinct
always seems to be towards compromise, her room for manoeuvre has been reduced
by the rise of the eurosceptic party AfD, increasing opposition within her own
ruling coalition, and clear evidence of a majority in favour of Grexit among
the German electorate. Greek politicians’ aggressive language and hectoring
over war reparations have made her position even more difficult.
----For those members of the Syriza movement who have wanted a Greek exit, their objective must have been to get Greece pushed out, against all its best efforts to stay in.
Meanwhile, those in Germany who
have come to the conclusion that Greece must leave, apparently including Mr
Schaeuble, do not want to be seen to be pushing Greece out. With memories of
the war evidently still uncomfortably alive across much of Europe, not least in
Greece, Germany wants to avoid coming across as an overbearing bully.
But not at any price. Syriza has
underestimated the degree to which Greece’s continued maladministration of its
public finances has drained any sympathy in Germany.
It has also miscalculated the
extent to which Greece could rely on support from other members of the
eurozone. It enjoys some sympathy and support from France, but the real
let-down has been the fact that the other peripheral countries, which have
similar problems with heavy indebtedness and a lack of competitiveness, namely
Spain and Portugal, have not been accommodating. Their worry has been that if
Greece were seen to win further concessions then their own pursuit of austerity
would become indefensible to their electorates.
This whole
affair is so messy that, if it comes to it, even a euro exit will probably not
be straightforward. It is possible that Greece will default to the IMF and be
in no position to honour all its other obligations, yet still try to remain in
the eurozone. It has been suggested that if the government finds itself unable to
pay pensions and public sector salaries, it would issue IOUs instead. It has
even been mooted that these could circulate as a form of pseudo-currency.
Morehttp://www.telegraph.co.uk/finance/comment/11548349/A-Greek-default-must-go-the-whole-way-and-leave-the-euro.html
Below, news from the agents of the one percenters who met in Washington Friday Saturday. Someone it seems to them, isn’t going to get its debts repaid.
Caveat creditor as IMF chiefs mull unpayable debts
The Fund's Spring meeting has been dominated by the dangers of a toxic mix of sky-high debt ratios and old-age populations. The message? Something is badly out of kilter in the world
The International Monetary Fund
has sounded the alarm on the exorbitant levels of debt across the world, this
time literally.
The theme trailer to its fiscal
forum on the 'political economy of high debt' plays on our fears with the
haunting tension of a Hitchcock thriller. A quote from Thomas Jefferson flashes
across the screen in blood-red colours: "We must not let our rulers load
us with perpetual debt."
We learn that public debt in the
rich economies fell from 124pc of GDP at the end of Second World War to 29pc in
1973, a dream era that we have left behind.
The debt burden has since climbed at a compound rate of 2pc a year, accelerating into an upward spiral to 105pc of GDP after the Lehman crash. It is as if we had fought another world war.
A baby boom and surging
work-force enabled us to grow out of debt in the 1950s and 1960s without
noticing it. No such outcome looks plausible today.
The IMF's World Economic Outlook
describes a prostrate planet caught in a low-growth trap as the population ages
across the Northern Hemisphere, and productivity splutters. Nor is this malaise
confined to the West. The fertility rate has collapsed across the Far East. China's
work-force is shrinking by three million a year.
The report warned of a
“persistent reduction” in the global growth rate since the Great Recession of
2008-2009, with no sign yet of a return to normal. “Lower potential growth will
make it more difficult to reduce high public and private debt ratios,” it said.
Christine Lagarde, the Fund's
managing-director, calls it the "New Mediocre". The height of
elegance as always, and seemingly inexhaustible as she holds court at IMF
Headquarters, Mrs Lagarde has learned the hard way that something is badly out
of kilter in the world.
The painful ritual of her IMF
tenure has been to admit at each meeting that the previous forecasts were too
hopeful. First it was Europe's debt crisis. Now it is because China, Brazil,
Russia, and a host of mini-BRICS have hit the limits of easy catch-up growth.
This year the curse was finally
broken. There will be no downgrade. The IMF is crossing its fingers that world
growth will still be 3.5pc for 2015.
Yet the Fund's underlying message
is that sky-high debt ratios and old-age populations are a dangerous mix,
leaving the world prone to the "Japanese" diseases of deflation and
atrophy. The monetary and fiscal buffers are largely exhausted. Authorities
have little left in their policy arsenal to fight the next downturn, whenever
it comes.
Morehttp://www.telegraph.co.uk/finance/economics/11548318/Caveat-creditor-as-IMF-chiefs-mull-unpayable-debts.html
In other news, China’s former top spook seems to have come down with a severe case of American Spyitis. All will or won’t be revealed at a coming open/secret trial at an unspecified later date. China is still Communist after all. Old habits die hard.
Former China Security Head Spied on Leaders, Probe Said to Find
11:00 PM BST April 19, 2015
China’s investigation of former security chief Zhou Yongkang found evidence
that he ordered unauthorized spying on top leaders including President Xi
Jinping, according to two people familiar with the probe.The investigation showed that Zhou used phone taps and other methods to gather information on the family assets, private lives and political stances of China’s leaders, according to one of the people, who asked not to be identified because the information is confidential.
Xi’s sweeping anti-graft effort has helped him solidify his grip on power since he became Communist Party chief in late 2012, making him the strongest leader since Deng Xiaoping. He’s frequently warned the campaign is necessary to preserve the legitimacy of the Communist Party. Zhou, who retired from the Politburo Standing Committee -- the top leadership group in the party -- in 2012, is the highest-ranking individual accused of the more than 100,000 officials caught so far.
Zhou leaked party and national secrets, state news agency Xinhua reported in December, citing a party statement announcing his expulsion. No further details of the state secrets charges against him have been announced. The probe into the 72-year-old, who was also charged April 3 with bribery and abuse of power, began with the approval of Xi and retired party leader Jiang Zemin, according to the second person, who asked not to be identified.
Prosecutors and the party’s Central Commission for Discipline Inspection didn’t respond to faxed requests for comment about the case. Zhou was arrested and expelled from the party in December and can’t be reached for comment. No defense lawyer has been announced.
Supreme Court President Zhou Qiang was reported last month by Xinhua as saying that Zhou’s trial will be open “in accordance with the law,” suggesting that areas unrelated to state secrets may be made public. No date has been announced for the trial, which the nation’s top prosecution agency said on its website will be held in the northern port city of Tianjin.
More
We end with an alternative look at the USA oil patch. The sharks are
circling America’s snake bit frackers.
Buy when there’s blood in the streets, even if the
blood is your own.
Baron N. M. Rothschild.
Investors Who See ‘Froth’ in Market Go All In for Oil
1:09 AM BST April 20,
2015
Joseph Gladbach and his fellow bankers at Jefferies Group field three to
five calls a day from investors eager to park their millions in energy stocks
or bonds in the worst down cycle in 30 years.They’re no dummies, Gladbach says. One of the biggest mysteries of the oil market crash is why the money hasn’t dried up. The collapse in crude prices was supposed to devastate companies and spook investors after wiping more than $200 billion off the balance sheets of U.S. and Canadian producers. It didn’t.
As industry luminaries gather at the IHS CeraWeek Energy Conference in Houston this week to ponder the implications of $50-a-barrel crude, the money keeps piling into oil, with hedge funds, buyout firms and asset managers rushing to claim a spot at the table.
“There is just so much money,” said Gladbach, who noted that more than $100 billion has been raised and set aside for energy investments by the likes of Blackstone Group LP and Carlyle Group LP.
Many of the investors are newcomers to the industry, drawn by the hope of turning a quick profit on market fluctuations. Some are seeking a haven from inflated assets in other industries, or positioning themselves to take over distressed companies, according to interviews with more than a dozen investors and bankers that have helped energy companies raise money this year.
The structure of many debt offerings has put new investors near the front of the line should any of the companies fail. These new investors may be able to take over assets that could increase significantly in value in a recovery. And in the meantime, the loan pays off on higher-than-average interest.
Private equity and hedge fund groups with long experience in energy see the downturn as an ideal time to buy in cheap to strong assets and management teams.
More
"In
economics, hope and faith coexist with great scientific pretension."
J. K.
Galbraith.
At the Comex silver
depositories Friday final figures were: Registered 62.97 Moz, Eligible 112.97
Moz, Total 175.94 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
While we Brits think we have a bad choice at next
month’s general election that no one seems to want to win due to all the
trouble directly ahead, just look at what’s happening in America. Over there,
in a real life remake of Groundhog Day, two dysfunctional yesterday’s clans
seem to have hijacked all the money that goes to buying the best government
poor American’s can get.
Scam Of The Week: Hillary Clinton’s Fake Populism
by Matt Taibbi •
Hillary Clinton ran onto the playing field this week, Rock and Roll Part 2
blaring in the background, and started lying within minutes of announcing her
entry into the presidential election campaign.“There’s something wrong,” she told a crowd of Iowans, “when hedge fund managers pay lower taxes than nurses or the truckers I saw on I-80 when I was driving here over the last two days.”
Oh, right, that. The infamous carried interest tax break, the one that allows private equity vampires like Mitt Romney and Stephen Schwartzman to pay a top tax rate of 15 percent while all of the rest of us (including the truckers Hillary “saw” – note she didn’t say “hung out with Bill and me over chilled shrimp at the Water Club”) pay income taxes.
The carried interest loophole is an absurd, completely unjustifiable handout to the not merely well-off but filthy rich, and it’s been law in this country for about three decades.
Raise your hand if you really think that Hillary Clinton is going to repeal the carried interest tax break.
We’ll come back to that in a minute. In the meantime, the reaction to Hillary’s campaign announcement went exactly according to script. Newspapers and news sites ever-so-slightly raised figurative eyebrows at the tone of Hillary’s announcement, remarking upon its “populist” flair.
This is no plutocrat who plans to ride to the White House upon a historically massive assload of corporate money, the papers declared, this is a candidate of the people!
“Hillary’s Return: Her Folksy, Populist Re-Entry,” proclaimed Politico. “Populist Theme, Convivial In Tone!” headlined the Los Angeles Times. “Hillary Lifts Populist Spirits,” commented The Hill, hook visibly protruding from its reportorial fish-mouth.
Having watched this campaign-reporting process from both the inside and the outside for a long time now, I knew what was coming after the initial wave of “Hillary the Populist!” stories.
In presidential politics, every time a candidate on either the left or the right veers in a populist direction – usually with immediate success, since the American populace is ready to run through a wall for anyone who makes the obvious observation that they’re being screwed by someone up above – it takes about two or three days before the “Let’s let cooler heads prevail!” editorials start trickling in.
These chin-scratching op-eds arrive on time every time, like clockwork. They declare that populism is all well and good, and of course a necessary strategy for getting elected, but the “reality” is that once in office, one has to govern.
And since the people are a stupid, angry mob, these op-eds say, and don’t know how to govern themselves, the politician will have to abandon the populism sooner or later.
Then there’s another kind of “cooler heads” editorial. This one makes note of the candidate’s populist rhetoric, and maybe even applauds it as good solid political strategy.
But then the editorialist quietly reassures us that these speeches are all a pose, and that once in office, the candidate will revert back to being the shamelessly bought-off creature of billionaire interests he or she always has been.
So it was with Hillary this week. Just days after she came out shaking a fist to an announcement routine that transparently read like a medley of Elizabeth Warren’s greatest stump hits, the press started with their “cooler heads prevail” pieces.
“How Hillary Clinton Found Her Populist Side (And Why She’ll Have to Lose It)” declared James Kirchick of the Spectator.
Kirchick’s amusing thesis is that Hillary’s decision to harp on the income inequality thing is misplaced not only because Hillary and her husband have made more than the CEOs she’s blasting in her speeches, but because Americans actually like rich people:
Americans, unlike Europeans, do not hate the rich. We want to be them, not soak them. Perhaps the winning strategy for Hillary, then, is to quit the unconvincing pose of being one of the little guys and stop apologizing for and explaining away her wealth. That, after all, would be the American way.
Then there were the “Don’t worry, she doesn’t mean it!” pieces.
“Hillary Clinton’s Wall Street Backers: We Get It,” announced Politico, which polled Democrat-leaning Wall Streeters about the anti-wealthy rhetoric and reassured us that none of them took her seriously.
It’s “just politics,” said one major Democratic donor on Wall Street, explaining that some of her Wall Street supporters doubt she would push hard for closing the carried interest loophole as president, a policy she promoted when she last ran in 2008.
more
http://davidstockmanscontracorner.com/scam-of-the-week-hillary-clintons-fake-populism/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+Sunday+10+AM
"When paper money systems begin to crack at the seams, the run to gold could beexplosive."
Harry Browne
Solar Update.
With events
happening fast in the development of solar power, I’ve decided to create a new
section. Updates as they get reported.
“Getting
below $1 [per watt] has exceeded my expectations,” Green says. “But now, I
think it can get even lower.”
Solar power will soon be as cheap as coal
April 18, 2015
Inside a sprawling single-story
office building in Bedford, Massachusetts, in a secret room known as the Growth
Hall, the future of solar power is cooking at more than 2,500 °F. Behind closed
doors and downturned blinds, custom-built ovens with ambitious names like
“Fearless” and “Intrepid” are helping to perfect a new technique of making
silicon wafers, the workhorse of today’s solar panels. If all goes well, the
new method could cut the cost of solar power by more than 20% in the next few
years.
“This humble wafer will allow
solar to be as cheap as coal and will drastically change the way we consume
energy,” says Frank van Mierlo, CEO of 1366 Technologies, the company behind the new
method of wafer fabrication.
Secret rooms or not, these are exciting
times in the world of renewable energy. Thanks to technological advances and a
ramp-up in production over the decade, grid parity—the point at which sources
of renewable energy such as solar and wind cost the same as electricity derived
from burning fossil fuels—is quickly approaching. In some cases it has already
been achieved, and additional innovations waiting in the wings hold huge
promise for driving costs even lower, ushering in an entirely new era for
renewables.
In Jan. 2015, Saudi Arabian company ACWA Power surprised
industry analysts when it won a bid to build a 200-megawatt solar power plant
in Dubai that will be able to produce electricity for 6
cents per kilowatt-hour. The price was less than the cost of electricity
from natural gas or coal power plants, a first for a solar installation. Electricity
from new natural gas and coal plants would cost an estimated 6.4 cents and 9.6
cents per kilowatt-hour, respectively, according to the US Energy Information
Agency.
Technological advances, including
photovoltaics that can convert higher percentages of sunlight into energy, have
made solar panels more efficient. At the same time economies of scale have
driven down their costs.
More
The monthly Coppock Indicators finished March
DJIA: +118 Down. NASDAQ: +209 Down. SP500: +161 Down.
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