Baltic Dry Index. 586 +05 Brent Crude 63.07
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“It is difficult not to marvel at the imagination which was implicit in this gargantuan insanity. If there must be madness something may be said for having it on a heroic scale."
J. K. Galbraith. The Great Crash: 1929.
We open with more on the Great Disconnect. The Great Central Bankster monster bond and stock market bubbles shows no sign of getting back to reality. We all know how bubbles end just not when.
Asia stocks follow global surge, dollar on defensive
TOKYO |
(Reuters) - Most Asian share markets took cues from a global surge in
equities and rose on Thursday, while weak U.S. economic data sent the dollar
lower.MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS climbed 1 percent. South Korean, Australian, Chinese and Malaysian stocks gained, while Japan's Nikkei .N225 lost 0.5 percent on a stronger yen.
Wall Street shares posted sizable gains overnight on several strong corporate earnings results and the pan-European Eurofirst 300 index of leading shares .FTEU3 climbed to a 14-year high after the European Central Bank affirmed its loose policy stance.
In currencies, the region's big mover was the Aussie, lifted to a three-week high by stronger-than-expected Australian employment numbers.
The Australian dollar was up 1.2 percent at $0.7777 AUD=D4 after a potential sign the labor market was not as weak as many had assumed. ECONAU
---- The U.S. dollar lurched lower against the euro and yen after dropping the previous day on weak U.S. industrial output and New York state manufacturing activity data. The soft indicators fed uncertainty over the timing of the Federal Reserve's interest rate hike.
The euro rose 0.2 percent to $1.0707 EUR=, adding to overnight gains. The dollar extended losses and slipped 0.1 percent to 118.99 yen JPY=.
The market will look to U.S. housing data later in the day for further dollar incentives.
"Even if the actual number is in line with expectations, it will be enough to reinforce the view that the U.S. economic slowdown during winter was a temporary one, and thus support the dollar," said Masafumi Yamamoto, senior strategist at Monex Securities in Tokyo.
More
In reality news,
China’s wobble intensifies and is Greece preparing to exit the euro at the
weekend?
China poised for stimulus as growth slumps to six-year low
Raft of weak data confirms slowdown fears in the world's second largest economy
China's economy grew by just 7pc
in the first quarter of the year, its slowest rate of expansion since the
depths of the financial crisis, raising the prospect of a further round of
monetary stimulus in the world's second largest economy.
GDP growth fell to its lowest
level since 2009 in the first three months of the year, down from 7.3pc growth
at the end of 2014.
The world's second largest
economy has been in the throes of a managed slowdown in the last few years,
with recent data suggesting Beijing may well miss its unofficial annual GDP
target of 7pc.
Industrial production also grew
by a lower than expected 5.6pc in March, registering its slowest rise on record
for the month, while internal demand for goods in China is also weakening.
Retail sales registered their slowest pace of growth in nearly a decade, at
just 10.2pc.
Morehttp://www.telegraph.co.uk/finance/economics/11537128/China-set-for-fresh-injection-of-stimulus-as-growth-slumps-to-six-year-low.html
Germans downbeat on chances of Greek deal next week
NEW YORK/ATHENS |
(Reuters) - Germany's finance minister said on Wednesday there was no
prospect of the euro zone
reaching a deal with Athens next week on economic reforms that would unlock
bailout funds, potentially leaving Greece perilously short of money.Both the Greek government and its creditors have said they need to reach at least an outline agreement at an April 24 meeting of euro zone finance ministers in Latvia's capital Riga.
But Athens, which has signaled it may not have enough cash to keep up payments to international creditors in May, has yet to produce a program of reforms that is deemed acceptable.
German Finance Minister Wolfgang Schaeuble told the Council on Foreign Relations in New York that no one expected a deal at the Riga meeting or in the coming weeks.
"No one has a clue how we can reach agreement on an ambitious program," he said, adding that Greece's new leftist-led government had "destroyed" all the economic improvements achieved by Athens since 2011.
----Standard & Poor's decision to downgrade Greece's credit rating to CCC+ with a negative outlook, citing the prolonged negotiations, suggested it sees default as increasingly likely.
More
Germany says aid payout to Greece in April unrealistic
BERLIN
(Reuters) - The German government said on Wednesday that it was unrealistic
to expect euro zone
countries to be able to pay out a new tranche of aid to Greece this month."We are negotiating with Greece at the moment. If there is a reform list, then the next step is a so-called Staff Level Agreement to make formal changes to the conditions of the aid program. This is a complex process and no one in the Eurogroup expects this to be concluded by April 24," a finance ministry spokeswoman said.
"Once you have this Staff Level Agreement, then you have to have implementation. Greece would have to agree laws and at some point the institutions would conduct an implementation review and only on this basis could aid be paid out. If people are under the impression that aid could be paid out in April, I think this is wrong."
Slovak finance minister skeptical on Greece deal in Riga next week
BRATISLAVA
(Reuters) - Greece is
moving ever closer to the abyss and there are not big chances of a breakthrough
at a meeting of euro zone finance ministers in Riga next week, Slovak Finance
Minister Peter Kazimir said on Wednesday. "Given the we have lost a lot of time, I am skeptical," Kazimir told reporters after a Slovak cabinet meeting when asked if he believed the Riga meeting could bring a breakthrough.
"Greece is moving ever closer to the abyss."
A meeting of deputy finance ministers last Thursday gave Athens a deadline of six working days to present a revised economic reform plan, before euro zone finance ministers meet on April 24 to decide whether to unlock emergency funding to keep Greece afloat.
Fed’s Bullard says rate hikes are needed for coming ‘boom’
Published: Apr 15, 2015 2:17 p.m. ET
WASHINGTON (MarketWatch) — A leading hawk on the Federal Reserve on
Wednesday made a case for raising interest rates soon, arguing the level needs
to be appropriate for the coming “boom” for the U.S. economy.St. Louis Fed President James Bullard, speaking at the annual Hyman Minsky conference here, acknowledged a boom by current standards might not be the same as the growth in the late 1990s.
He pointed out that even if gross domestic product expanded just 1.5% in the first quarter, the four-quarter growth rate would be about 3.3%.With the current potential growth around 2%, growth in the low 3% range “represents growth well above trend,” he said. The first reading on first-quarter GDP is due April 29.
Also read: Rubin sees ‘realistic possibility’ there are bubbles in U.S. markets
Unlike his colleagues, Bullard expects the unemployment rate to fall below 5% from a current level of 5.5%. Bullard said jobless rates in the 4% range are consistent with a boom.
In his remarks, he notably did not specify a month to lift interest rates, and asked by reporters afterwards, he said, “I’m being deliberately vague.” The June meeting is considered the first in which the Federal Open Market Committee will give serious consideration to lifting interest rates.
More
It’s Not The Weather: Industrial Production Is Rolling Over, Yet The Fed Is Clueless About Its Own Index
by David Stockman •
Another day of “incoming data”
and still more evidence that this isn’t your father’s business
cycle. This time it comes from the Eccles Building itself, but don’t
expect the Keynesian money printers domiciled there to recognize that
the industrial production report they issued today constitutes
yet another rebuke to their entire macro model.
The March index slipped badly
(0.6%) and thereby predictably elicited a “do not be troubled” assurance
from the talking heads. It was just aberrant weather again. Well, that’s
actually right. March was so much warmer than
February that the utility component of the index plunged by 5.9%.
---- In a word, both of these indices are rolling over on a short-term basis and reflect trend lines which implicate the destructive doings of bubble finance, not the Fed’s pretension that it is rejuvenating the main street economy.
In the case of mining, the March
index was down 4% from its December level, yet the decline in actual shale
patch output has not yet even started. The recent rollover in the index is
mainly attributable to the plunge in coal production, which is now
down 20% from it peak three years ago.
In sum, the 30% gain in
mining production since the pre-crisis peak is all in the rearview mirror.
Mining accounts for about one-seventh of the industrial production index, and,
as George W. Bush once said in another context, this sucker is going down.
In fact, buried in the
mining index is the true handiwork of the global convoy of money printing
central banks—-that is, the U.S. crude oil production
subcomponent. The People’s Printing Press of China stimulated the greatest
construction and industrial boom in recorded history, thereby ballooning the demand
for crude oil. At the same time, the Fed drove interest rates to the zero
bound, thereby touching off a massive scramble for yield among institutional
investors and mutual fund chasing homegamers alike.
So taken together——booming global
demand reflected in $115 per barrel oil prices and dirt cheap and
plentiful junk bonds and related forms of subordinated capital—-the central
banks generated a perfect storm of malinvestment. In less than a
decade, the oil rig count went from 200 to 1600 and US oil production
surged from 5 to 9 million barrels per day.
Accordingly,
the Fed’s index of crude oil production soared. At its current
level, which is the highest since 1973, it is up 82% from the pre-crisis peak,
and a stunning 133% from the bottom in September 2008.
Needless to say, the shale
production surge is not a miracle of capitalism; its an aberration of
central bank financial repression. Indeed, cheap and plentiful capital is to
shale output what green grass is to a goose. That is, it goes from one end
to the other in a remarkably short period of time!
More
We end for today with more on the bust in the USA oil patch. The
Frackers go home. The central bankster bubbles are all set to meet their pin.
The Oil Industry’s ‘Man Camps’ Are Dying
Drillers spent big to house workers
in the new boomtowns. No more
12:57 AM BST April 16, 2015
At the peak of the fracking boom
a few years ago, Jeff Myers converted his South Texas hunting camp into rental
oilfield housing. Little wonder: The industry had an almost insatiable hunger
for the grunt laborers—the roughnecks—to work the fields, and employers were
happy to spend whatever it took to house and feed them. Today that boomtown
demand—and $100-per-barrel prices—is a bittersweet memory, and occupancy at
Myers’s once-packed Double C Resort has dropped to 10 percent as job cuts
take hold. “There aren’t going to be any winners down here,” he says. “Everybody’s
going to have to adjust.”
America’s oilfield “man camps”—as
the industry calls them—are turning into ghost towns as drillers cut back the
free housing, food, and air travel once used to lure shale boom workers. The
mini-settlements that sprang up throughout drilling regions in Texas, North
Dakota, and Colorado are fading away as energy companies look to slash as much
as $114 billion in spending this year, says a Cowen Group survey, and lay
off tens of thousands of employees.
“The money flies” when the oil
field’s booming, says Milton Allen, who’s built and developed facilities for
the oil industry for the past 15 years and operates a 12-room man camp in the
Eagle Ford Shale in South Texas. “Then when the market starts to trim down, the
money stops.”
During the shale boom, some
companies were paying as much as $40 million a year to house and feed a
group of 1,000 workers, according to worker services company Target
Logistics. The man camps they built ranged from dozens of RVs neatly lined up
on the edge of oil fields to entire communities of mobile homes or manufactured
housing thrown up in the middle of the Texas scrub country or North Dakota
Great Plains.
Competition for well-trained,
specialized employees grew so fierce that extravagant benefits were necessary
to recruit top talent to remote drilling areas. Lodging perks included daily
room cleanings; catered meals such as beef barbecue, shrimp, and lobster; and
flatscreen TVs with hundreds of channels. Many workers even got free air travel
to commute between job sites and home during breaks.
Halliburton President Jeff Miller
recently cited housing expenses as one area ripe for cuts as the industry moves
from a “boomtown mentality” back to “normalcy.” “We have an entirely commuter
workforce that flies to and from an area,” he told investors at a Credit Suisse
energy conference in February. “They live in our company-paid housing. We’re
feeding them 24 hours a day. The cost of all associated services
skyrockets as well.”
With layoffs now the rule, many
workers are grateful just to keep their jobs. So more employers are asking them
to cover their own rent, pay for their own clothing, and find their own
transportation to drill sites.
Christopher Powell, who worked
for Epic Management Resources, a subcontractor to Swift Energy in Tilden,
Texas, saw the writing on the wall in March when Swift started rounding up
leased furniture and unused computers in its offices in drill site communities.
Another sign of trouble: “The food just got worse and worse,” recalls Powell,
who graduated from Texas A&M University in 2010 with a business degree and
went straight to work in the industry. Rib-eye was no longer served at the
company’s safety meetings. “It eventually got as bad as chicken-fried steak,”
says Powell, who lost his job in March.
More
There can be few
fields of human endeavour in which history counts for so little as in the world
of finance. Past experience, to the extent that it is part of memory at all, is
dismissed as the primitive refuge of those who do not have the insight to
appreciate the incredible wonders of the present.
J. K. Galbraith.
At the Comex silver
depositories Wednesday final figures were: Registered 62.97 Moz, Eligible 110.71
Moz, Total 173.68 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, more on the coming energy revolution in the new Carbon Age of the
21st century. For those of you young and entrepreneurial enough to
get in on it, it is today’s equivalent of “go west young man.”
Musk’s Cousins Battle Utilities to Make Solar Rooftops Cheap
Lyndon and Peter Rive are on a
quest to make sun-generated power cheap and easy.
5:01 AM BST April 15,
2015
In September 2013, Hawaiian Electric Co. told thousands of customers they
couldn’t connect their new solar panels to its distribution grid. In some
neighborhoods, HECO said, its system couldn’t absorb any more unused energy
from home solar arrays. The moratorium, which lasted 13 months, made Hawaii a
central battleground in the effort by utilities to control the rapid growth of
independent solar companies across the U.S. And it was a big deal to people
such as Robert Gould, a retired Northwest Airlines pilot living near Honolulu.
He’d just paid $53,000 to have solar panels installed.Gould and other customers protested loudly to state officials. They finally got help from Lyndon Rive, the CEO of SolarCity. The San Mateo, California, company is the biggest installer of rooftop solar panels in the U.S. and has 10,000 Hawaiian customers, Bloomberg Markets magazine reports in its May issue. Rive studied the situation and zeroed in on a key fact: HECO had never directly measured how much solar its grid could handle, relying on computer simulations instead. “Because the technology is brand-new, no one had ever done this in the field before,” says Colton Ching, HECO’s vice president for energy delivery.
SolarCity joined with HECO to run the tests, with help from the U.S. National Renewable Energy Laboratory in Golden, Colorado. They found that high-traffic circuits could absorb twice as much solar energy as the utility thought. After asking solar installers to reprogram equipment that connected them to the grid, HECO lifted its ban on new hookups late last year. Gould flipped the switch and connected his new panels to the grid in January.
Rive, 38, says the experiment in Hawaii was a step forward for him and his brother Peter, 41, and their famous cousin, Elon Musk, who helped found SolarCity in 2006. The trio is on a quest to reduce the world’s dependence on fossil fuels—Musk with his Tesla electric cars, the Rive brothers by replacing coal- and natural gas-generated electric power with solar. What was groundbreaking in Hawaii was that regulators pressured HECO to join with SolarCity in redesigning the state’s electricity grid, moving solar to the mainstream of the industry, Peter Rive says. The Rives, like their cousin Musk, approach the fight against climate change as a moral crusade. Lyndon regards the replacement of fossil fuels with clean energy as an urgent necessity. “We have to accept that what is happening today is impossible,” he says. “It will be suicide to continue that process.”
----Controversy aside, SolarCity is at the leading edge of a transition from centralized power plants and one-way transmission lines to a much more complex system, says Ben Paulos, an analyst at GTM Research in Boston. In the future, Paulos says, homeowners, regulated utilities, and independent companies such as SolarCity will all be capable of not only generating but storing power. They’ll all possess sophisticated sensing equipment to manage both supply and demand across the grid in response to real-time fluctuations in price. “Ten years ago, the controls you needed to monetize this, to make sure everybody gets paid for each of these services, didn’t exist,” says Paulos. “Now they do. It’s the Internet of electricity.”
The Rive brothers’ goal for
SolarCity is to provide a comprehensive service that includes the sale or lease
of solar panels, plus installation, financing, and servicing. “We want to make
sure it’s as easy to go solar as it is to get DirecTV,” Lyndon says. “No
capital investment, no upfront money, nothing.” SolarCity says it has targeted
states where it knows its panels can beat the price of conventional electricity
generation. Within a year or two, it expects to greatly expand its ability to
store sun-generated power for future use, utilizing batteries produced by
Musk’s Gigafactory, now under construction in Nevada. In mid-March, SolarCity
announced it will go into the business of producing microgrids—clusters of
solar panels and batteries that will allow customers in remote locations to
consume power 24 hours a day.
SolarCity also has something to
offer the finance community. The company is bundling future cash flows from
loans and leases and selling them to investors. The Rives are also bundling the
30 percent federal investment tax credit that SolarCity gets for each
installation. As an unprofitable startup, it doesn’t need the credits to defer
taxes, so it sells them to other companies. In February, Google invested $300
million in a so-called tax-equity fund Rive created for this purpose.
More
Graphene pushes the speed limit of light-to-electricity conversion
April 14, 2015
ICFO-The Institute of Photonic Sciences
Researchers have developed a graphene-based
photodetector capable of converting absorbed light into an electrical voltage
at ultrafast timescales.
More
But remember, solar time can get confusing.
Sundial noon and clock noon agree in middle April
Every year around the middle of
April, time by the sun and time by the clock agree. For instance, when the midday
sun climbs highest in the sky in mid-April, the sundial reads 12 o’clock noon
and your local clock time says 12 o’clock noon.
Your local clock time is the same
as standard clock time, as long as you live on the meridian that governs your
time zone. If you live east of the time zone line, then your local time
runs ahead of standard time. If you live west of the time zone
line, local time lags behind standard time.
For simplicity, let’s refer to
places that sit right on the time zone meridian, like Denver or Philadelphia.
Midday – noon by the sun – reads 12 o’clock noon standard clock time or 1 p.m.
daylight saving time
At present, the length of the day
as measured by successive returns of the midday sun is slightly less
than 24 hours long. This slight daily discrepancy between the clock and the sun
will accumulate until mid-May. In mid-May, midday – noon by the sundial – will
come four minutes earlier by the clock than it does today.
After mid-May, day length as
measured by successive middays (sundial noons) will become slightly more
than 24 hours long. By around mid-June, noon by the sun and noon by the clock
will agree once again.
See graphics.
The
whole history of civilization is strewn with creeds and institutions which were
invaluable at first, and deadly afterwards.
Walter
Bagehot.
The monthly Coppock Indicators finished March
DJIA: +118 Down. NASDAQ: +209 Down. SP500: +161 Down.
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