Baltic Dry Index. 587 -04 Brent Crude 66.26
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“If
economists [politicians, banksters, EUSSR Kommisars, your nominee here] could
manage to get themselves thought of as humble, competent people on a level with
dentists, that would be splendid.”
With
apologies to Lord Keynes.
We open this Monday, general election week in the for now
still United Kingdom, with the dismal news that Greece is still without a new
deal for new cash, with the Troika. Nothing was settled over the weekend. With
big repayments coming up this month, and capital flight taking place at the
Greek banks, it’s hard to see Greece lasting out the week still in the euro.
Whether pushed out by Germany or jumping into a half way land by starting to
issue internal IOU script, Greece has to
act before it actually totally runs out of cash. With the IMF and ECB playing
hardball, only a change of policy in Berlin can get Greece more cash to stumble
on into June. But why bother?
Greek talks stall over 'red lines' as country fights to remain in eurozone
Greek government says it is confident a deal can be struck, but creditors remain at loggerheads with Athens over labour market reforms
Talks between Greece and its creditors have stalled after the two sides failed to reach an accord on reforms needed to unlock vital financial aid and secure the country’s future in the eurozone.Following days of intensive negotiations, government spokesman Gabriel Sakellaridis told reporters that he was still confident a deal would be struck, even though the International Monetary Fund remains at loggerheads with the leftist government over labour market reforms.
Athens is scrambling to strike a deal with its creditors that will release a €7.2bn (£5.3bn) bail-out tranche and prevent the country from defaulting on its debts.
While there were indications that
Greece was more willing to compromise in the latest round of negotiations,
which are will resume on Monday, officials remain sceptical that an agreement
will be reached before May 6, when the European Central Bank will discuss
emergency liquidity for Greek banks.
Reports claimed the government was prepared to reduce at least three different VAT rates to one, and limit exemptions. Prime minister Alexis Tsipras had opposed the move, claiming that the change would hit poorer people. The country will also press-on with privatisations it had also previously vowed to block, according to reports.
However, Syriza has said that demands by creditors to reverse an increase in the minimum wage and cut pensions remain “red lines” that the leftist leadership is unwilling to cross.
More
There was dismal news from China
too, on Friday. Below, does this sound like an economy ticking over at plus 7
percent GDP.
China April HSBC PMI shows biggest drop in factory activity in a year
BEIJING |
(Reuters) - China's factories
suffered their fastest drop in activity in a year in April as new orders
shrank, a private business survey showed on Monday, hardening the case for
fresh policy stimulus to halt a slowdown in the world's second-largest economy.
The HSBC/Markit Purchasing
Managers' Index (PMI) fell to 48.9 in April - the lowest level since April 2014
- from 49.6 in March, as demand faltered and deflationary pressures persisted.
The number was weaker than a
preliminary reading of 49.2, and below the 50-point level that separates growth
from contraction compared with the previous month.
The overall new orders sub-index
dipped to 48.7 in April, the sharpest contraction in a year, although new
export orders showed tentative signs of improvement.
Both input and output prices
declined for a ninth month in April, while manufacturing employment contracted
for an 18th month, auguring poorly for an economy that grew at its weakest rate
for six years in the first quarter.
More
Capital Goods Deflation Alert: Chinese Shipyard Orders Down 77% Y/Y In Q1
by Bloomberg Business • May 1,
2015
Yangzijiang Shipbuilding Holdings Ltd., China’s biggest privately owned
shipyard, expects the country’s shipbuilding industry to shrink significantly
in the next three years, reversing almost a decade of boom.In three years time, there may be only 30 “active” shipyards in China, from more than 100 now, Chairman Ren Yuanlin said Thursday in a news briefing in Singapore, where the company’s stock is traded.
“There will be mergers and acquisitions as well as closures as the shipbuilding industry undergoes restructuring,” Ren said. The shipping sector doesn’t look “optimistic” at the moment, he said.
Orders at Chinese shipyards, the world’s third-largest, have fallen 77 percent in the first quarter from a year earlier. Builders have sought support from the government as excess vessel capacity drives down shipping rates and prompts some shipowners to cancel contracts. China Huarong Energy Co., once the nation’s largest private yard, ran into financial difficulties in the past two years amid a slump in contracts and competition with state-owned vessel builders.
Yangzijiang is reviewing a proposal made by China Development Bank, Bank of China and others to buy a stake in the shipbuilding and offshore engineering businesses that Huarong, previously called China Rongsheng Heavy Industries Group Holdings Co., is selling, Ren said.
Shares of Yangzijiang rose as much as 1.7 percent to S$1.47 in Singapore. The stock has climbed nearly 22 percent this year, compared with a 3.4 percent increase in the benchmark Straits Times Index.
Ren said the proposal the company received on Huarong’s assets lacked details, and the company needs time to assess it. A decision will be made by June, he said.
Huarong said in March that it’s talking with a Chinese company that’s listed domestically to sell the businesses. It has been searching for funds after the global economic slowdown and massive overcapacity had what it called a “profound impact” on the shipping industry last year. The company is shifting its focus to energy, as reflected in its name change.
---- China’s shipbuilding industry is undergoing a restructuring as global orders for vessels have slumped. The government last year identified 51 shipyards, including Yangzijiang, deemed worthy of policy support.
Utilization of shipbuilding
facilities in China has fallen to 60 percent this year, which is
“substantially” lower than the global average and the optimal level for the
industry, Yangzijiang said. In 2010, the rate was 75 percent.
Yangzijiang won $370 million of
orders in the first quarter, down from $1.07 billion a year ago. Its orderbook
stood at $4.6 billion at the end of March, with deliveries stretching until the
end of 2016. The company is in talks with foreign customers to build four
liquefied petroleum gas carriers, Ren said, without naming the customers.
More
In oil news, is it all change in Saudi Arabia, and what might it mean
for crude oil prices? Are the Saudis
about to replace oil minister Ali al-Naimi? Is this all just getting ready for
the return of Iranian oil later this year, or a sign that the Saudis might be
ready to start acting as swing oil producer again? For now it’s impossible to
say, but my guess is that above $75 a barrel on WTI, America’s reeling frackers
will start completing drilled idled oil wells again. That doesn’t leave the
Saudis much room.
Saudi Arabia splits state oil company
The biggest shake up of the country’s fossil fuel industry for the last 50 years as oil prices remain low
Saudi Arabia has split its state
oil company from its petroleum ministry in the biggest shake up of the
country’s fossil fuel industry for the last 50 years.
The country’s new ruler, King
Salman bin Abdulaziz al-Saud, issued a decree last week splitting Saudi Aramco
from the control of the ministry, which is headed by the country’s long-serving
oil minister Ali al-Naimi.
King Salman also named Khalid
al-Falih, Saudi Aramco’s chief executive, as chairman of the company and health
minister as part of a wider political reshuffle.
He has been replaced by Aramco
senior vice-president Amin al-Nasser.
The move could also signal that
Prince Abdulaziz bin Salman — a long-serving member of Saudi Arabia’s Opec
delegation — is being lined up to replace Mr al-Naimi.
The prince was recently promoted
to the role of deputy oil minister from assistant oil minister.
Saudi Arabia is the world’s
largest oil exporter with the capacity to pump more than 12m barrels per day of
crude if required.
In November, Mr Naimi forced
through a decision by the Organisation of the Petroleum Exporting Countries
(Opec) to keep production levels unchanged, which triggered a dramatic slide in
the price of crude. However, Saudi Arabia is having to consume its foreign cash
reserves at a record rate as it maintains spending in the face of falling oil
revenues.
Crude is trading down around 50pc
from last June at $65 per barrel, which is prompting cutbacks across the
industry.
More
We end for today with the UK headed for a hung Parliament. And not a
moment too soon for their hanging say I. While the UK possibly heads into a real
constitutional existential crisis, in the Great Central Bankster fuelled bond global
bubble, investors in Gilts really don’t care. Marry in haste repent at leisure,
they say. I suspect bond buyers are in for a crushing lifetime of repentance when
the bond bubble bursts.
Foreign investors snap up UK debt at record pace
Overseas purchases of UK gilts hit a record £28.2bn in March, as investors ignore general election uncertainty in search for higher yields
Foreign investors snapped up UK
debt at a record pace in March, allaying fears of a pre-election gilts strike
as the European Central Bank (ECB) embarked on its massive bond-buying
programme.
Overseas purchases of UK gilts
hit £28.2bn in March, according to Bank of England data. This represented
the biggest monthly inflow since records began in 1982, reversing total net
outflows of £13.6bn in January and February.
The data will allay fears that
uncertainty surrounding this week's general election - which is likely to
result in a hung parliament - had sparked a sustained sell-off among foreign investors of UK
debt.
Analysts have warned that
Britain's twin budget and current account deficits, which each measure around
5pc of gross domestic product (GDP), could pose a threat to the economy.
The Bank of England has warned
that the current account deficit, which measures the gap between money flowing
out of the UK and money brought in, was "large" and could "trigger a deterioration in market sentiment
towards the United Kingdom" if the economy deteriorated.
However, the ECB's €60bn-a-month quantitative easing programme is
expected to lead to higher inflows into the UK, as investors look for
alternative sources of yield.
Oliver Harvey, a macro strategist
at Deutsche Bank, said the UK was an "obvious beneficiary" of the
ECB's bond-buying programme, which has pushed up bond prices and lowered yields
across the eurozone. "The spread between 10-year UK and German yields is
currently the widest on record," he said.
While analysts have described the
differences between the fiscal plans of the Tories and Labour as the biggest
for a generation, Mr Harvey said the UK remained a safe haven for investment.
More
“The
whole history of civilization is strewn with creeds and institutions which were
invaluable at first, and deadly afterwards.”
Walter
Bagehot.
At the Comex silver
depositories Friday final figures were: Registered 62.17 Moz, Eligible 112.51
Moz, Total 174.68 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
For those who still think we have anything left of
an equal playing field, Uncle Scam’s Commodity Futures Trading Commission just
helped Deutsche Bank get a walk. After all, the Commissioner’s and their
flunkey’s need some place to hang their hats when they leave feeding at the
public trough at the CFTC. Why are these too big to fail banks still holding
banking licences at all?
CFTC Helps Deutsche Bank Avoid "Bad Actor" Tag
Last week, Deutsche Bank agreed to pay $2.5 billion (or around $25,000 per employee) in connection with its role in manipulating LIBOR, EURIBOR, and a few other -BORs. Incidentally, the settlement also gave the world a window into just what star prop trader Christian Bittar (to whom we introduced readers in 2012) said to colleagues on the way to ‘fixing’ the fixings so to speak. Here are some highlights:“My cash desk will be against us so we’ll have to do some lobbying,”
“LETS TAKE THEM ON !!”
“THEY’RE DOIN IT ON PURPOSE BECAUSE THEY HAVE THE EXACT OPPOSITE POSITION.”
As we noted when the news first broke, no one will go to jail for this of course, but theoretically, the settlement (which included payments to the NYDFS, the DOJ, the UK’s FCA, and the CFTC) should have landed Deutsche Bank on the SEC’s “bad actors” list, which is kind of like the Dodd-Frank equivalent of ‘time out’ and restricts the offender from participating in exempt securities offerings. Well as you might imagine, that’s no fun if you’re a Wall Street bank and it could end up costing you quite a bit of money in lost underwriting fees, but fortunately, there’s a way around it — you simply convince the regulator you settle with to exempt you from the SEC “bad actor” ban. Here’s WSJ with more:
Deutsche Bank AG last week was able to avoid the threat of a ban on selling stakes in hedge funds by tucking specific language into an $800 million agreement it reached with a different regulator—the Commodity Futures Trading Commission—to resolve an interest-rate-rigging probe.
Five other banks had similar provisions included in CFTC agreements resolving allegations of currency manipulation in November.
The language allows the banks to avoid asking the SEC for a waiver—a process that has become fraught with uncertainty amid commissioner disagreements over whether to allow financial firms to avoid a “bad actor” ban…
The 2010 Dodd-Frank law imposed certain restrictions on financial firms when they face securities-related criminal convictions or regulatory orders that involve fraud or manipulation charges.
Companies are restricted from selling private offerings for five years unless they get a waiver from the SEC to bypass the ban.
Institutions raised $903 billion in capital in 2012 through the type of offerings the bad-actor bar would impact, according to an SEC study.
But the SEC’s own rule governing the bad-actor ban allows language waiving the disqualification to be included in a regulatory settlement.
Here’s the specific passage in Deutsche Bank’s CFTC settlement which makes the “bad actor” designation null and void:
More
“Enforcement,
you tried your best and you failed miserably. The lesson is, never try.”
CFTC,
with apologies to Homer Simpson.
Solar & Related Update.
With events
happening fast in the development of solar power, I’ve added this new section.
Updates as they get reported.
Today, what Tesla
did on Friday.
Tesla unveils battery storage system for home, business and utility use
By John Anderson May 1, 2015The Tesla home battery system hinted at by CEO Elon Musk several months ago has finally been unveiled by Musk himself at the company’s design studio in Hawthorne, California. Dubbed the Powerwall, the stationary home battery offers 10 kWh of storage capacity for the relatively modest price of US$3,500. A smaller unit is also available at 7 kWh for $3,000, and homeowners can stack multiple units if needed.
The facility and event where the
announcement was made were powered by the new Tesla batteries, which were
charged during the day by rooftop solar panels. Consisting of a DC to DC
converter, the battery works with solar systems right out of the box (though
installation is extra), to store energy during the day for powering the home at
night or during outages due to storms or natural disasters.
With that in mind, Musk said the
units can work in cold climates, operating within a temperature range of -20° C
(-4° F) to 43° C (110° F). Non-solar homes can also benefit by storing energy
from the grid during low rate periods and using it during expensive peak hours.
The lithium-ion battery also consists of a liquid thermal control system and
software that receives dispatch commands from a solar inverter.
"The fact that it’s
wall-mounted is vital," said Musk, pointing out that no special battery
room is needed, and that the flat, roughly 4-ft by 3-ft (0.9 x 1.2 m) unit can
be mounted indoors on a garage wall or the outdoor wall of a home.
Musk also envisioned the battery
for use in remote areas of the world that lack an energy infrastructure, and
likened their hopeful adoption to that of cell phones, which leapfrogged
landlines in places previously without phone service.
Even more ambitious was the
introduction of a 100 kWh power pack battery block designed for utility
applications, which can be grouped and scaled from 500 kWh to more than 10 MWh.
The systems would be able to produce 2 or 4 hour continuous net discharge power
using bi-directional inverters tied to the grid.
“It’s designed to scale
infinitely, to a gigawatt class or higher,” said Musk. He added that a 250 kWh
system is already installed and being used by an unnamed utility.
Musk went even further, saying a gigawatt power pack could power a small city, such as Boulder, Colorado. Doing the math, he added that 160 million of Tesla’s power packs could power the US, and that 2 billion power packs could supply energy to the entire world, transportation included.
More
http://www.gizmag.com/tesla-battery-powerwall/37283/?utm_source=Gizmag+Subscribers&utm_campaign=4978605199-UA-2235360-4&utm_medium=email&utm_term=0_65b67362bd-4978605199-90625829
The monthly Coppock Indicators finished April
DJIA: +112 Down. NASDAQ: +198 Down. SP500: +150 Down.
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