Baltic Dry Index. 574 +01 Brent Crude 65.38
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
A
permanent Governor of the Bank of England [ECB] would be one of the greatest
men in England [Europe.] He would be a little 'monarch' in the City; he would
be far greater than the 'Lord Mayor.' He would be the personal embodiment of
the Bank of England [ECB;] he would be constantly clothed with an almost indefinite
prestige. Everybody in business would bow down before him and try to
stand well with him, for he might in a panic be able to save almost anyone he
liked, and to ruin almost anyone he liked. A day might come when his favour
might mean prosperity, and his distrust might mean ruin. A position with so
much real power and so much apparent dignity would be intensely coveted.
With apologies to Walter Bagehot.
We open today with Greece finding out just how right Walter Bagehot was.
Another week, another week of meetings, repayment deadlines, capital flight
from Greek banks, acrimony, and brinkmanship. Is this any way to be running a
dying, wealth destroying currency union? Euros anyone?
Greece Readies for Another Week of Deadlines
6:16 PM BST May 10,
2015
Warnings of an accidental default loom over debt-swamped Greece as Prime
Minister Alexis Tsipras’ anti-austerity government heads for another
confrontation with an increasingly testy German-led bloc of creditors.Greece needs at least a symbolic show of progress at Monday’s meeting of euro-area finance ministers in Brussels to persuade the European Central Bank to keep emergency funds flowing to Greek banks at the current pace. The next hurdle comes just a day later, when Greece has to pay about 750 million euros ($840 million) to the International Monetary Fund.
Tsipras met with top cabinet ministers for several hours on Sunday to brief them on the negotiations. Athens expects the Eurogroup to officially acknowledge important progress, a Greek government official, speaking on the condition of anonymity as the talks were private, said after the meeting. Tsipras and his ministers confirmed the need for a mutually beneficial deal within the framework of the government’s mandate, the official said.
The meeting in Athens took place under mounting pressure to abandon election promises made just months ago for more generous retirement benefits and to recommit to selling government-held stakes in companies to raise cash. No one outside of Athens knows for sure how long the country can stay afloat.
“Experience elsewhere in the world has shown that a country can suddenly become unable to pay its bills,” German Finance Minister Wolfgang Schaeuble said in an interview with Frankfurter Allgemeine Sonntagszeitung published Saturday. Schaeuble said if Greece is forced out of the euro “it won’t be because of us.”
Tsipras’s determination to junk the budget cuts associated with Greece’s 240 billion-euro bailout -- and to tap creditors for more money after that -- has hammered Greek markets since he took power. Greek 10-year bonds now yield 10.67 percent, up from 8.41 percent on the eve of the Jan. 25 election. The yield touched 13.64 percent last month.
----An accord “will surely not be reached at the Eurogroup meeting on Monday,” Dutch Finance Minister Jeroen Dijsselbloem, the meeting’s chairman, told Italy’s Corriere della Sera newspaper. “We will need more time, but I don’t know how much.” The meeting starts at 3 p.m.
----Enthusiasm for Tsipras’s cause has been sapped by Greece’s economic ordeal and the potential choice between a shrunken welfare state inside the euro or an unknown future outside it. Fifty-four percent of Greeks back the government’s negotiating strategy, down from 82 percent in February, a Marc poll for Efimerida Ton Sintakton showed Saturday. Still, Syriza continues to outpoll other parties.
More
Merkel Pressed to Give Up on Greece as Germans Urge Strong Euro
2:05 PM BST May 10, 2015
German Chancellor Angela Merkel
is coming under growing pressure from within the ranks of her own party bloc to
give up on Greece for the sake of the euro.
Members of Merkel’s Christian
Democratic bloc are openly challenging her stance of keeping Europe’s most-indebted
country in the 19-nation currency region. Even some officials in the Finance
Ministry are leaning toward the conclusion that the euro area would be better
off without Greece, two people familiar with the matter said.
“The euro would be strengthened
if Greece left,” Alexander Radwan, a Merkel-affiliated lawmaker who voted for
granting Greece a temporary extension of its bailout in February, said in an
interview. “The other countries could then move closer together and apply the
rules more strictly.”
With European finance ministers
due to resume talks on Greece on Monday, hardening sentiment in Germany risks
sending mixed signals to investors as Prime Minister Alexis Tsipras’s
government attempts to reach a deal with creditors.
More
Greece's 'war cabinet' prepares to battle EU creditors as anger mounts
The country's radical-Left leaders have concluded that there is little be gained from any further concessions to EMU creditors
Greece's
"war cabinet" has resolved to defy the European creditor powers
after a nine-hour meeting on Sunday, ensuring a crescendo of brinkmanship as
the increasingly bitter fight comes to a head this month.
Premier Alexis Tsipras and the leading figures of his Syriza movement agreed to defend their "red lines" on pensions and collective bargaining and prepare for battle whatever the consequences, deeming the olive-branch policy of recent weeks to have reached a dead end.
"We have agreed on a tougher strategy to stop making compromises. We were unified and we have a spring our step once again," said one participant.
The Syriza government knows that this an extremely high-risk strategy. The Greek treasury is already empty and emergency funds seized from local authorities and state entities will soon run out.
Greece's mayors warned over the weekend that they would not release any more funds to the central government. The Greek finance ministry must pay the International Monetary Fund €750m (£544m) on Tuesday, the first of an escalating set of deadlines running into August.
"We
have enough money to pay the IMF this week but not enough to get through to the
end of the month. We all know that," said one minister, speaking to The Telegraph
immediately after the emotional conclave.
More
Elsewhere in the EUSSR, the best laid plans and all that. Yet another
European country pays the price for America’s War Party’s botched coup last
year in Kiev. For the privilege of imposing A Quisling puppet president in the
Ukraine, backed up by fascist, anti-Semite militias, Washington’s War Party is
willing to pay any European price. Not for nothing did America’s Vicky Nuland
say “f**k the Europeans.” More fool the Europeans for not standing up for their
own best interests.
Shock Result Sets Up Tight Runoff in Polish Presidential Contest
11:22 PM BST May 10, 2015
Poland is headed to a tight
runoff election, with Bronislaw Komorowski facing an uphill battle to save his
presidency after a shock defeat in the first round.
Komorowski’s support has melted
from more than 60 percent three months ago to 32.6 percent in Sunday’s vote,
slipping behind opposition candidate Andrzej Duda, who got 34.5 percent,
according to the latest Ipsos exit poll. They will face each other in a May 24
run-off.
That gives Komorowski two weeks
to recapture the momentum and turn around a campaign that’s transformed into a
referendum on the Civic Platform party’s eight-year rule. He’ll have to find a
way to counter Duda’s criticism that economic growth is leaving swaths of
society behind. The vote could also pressure the zloty and the country’s bonds
as it ushers in a period of political uncertainty with general election in the
fall and turnover in the central bank’s leadership over the next year.
----Civic
Platform has dominated Polish politics since surging to defeat Law &
Justice in the 2007 general election. The party now finds itself looking for
direction, its former leader Donald Tusk having departed to become the EU’s
president in December and Komorowski finding it difficult to hold off his
upstart rival.
----Even
as the European Union’s largest eastern economy is set to grow more than 3
percent for a second year, unemployment remaining above 11 percent fuels
sentiment that the poorer and less educated are missing out on the benefits.
Between one and two million mostly younger Poles have left the country in
recent years for better-paying jobs in Ireland and the U.K.
----Voters also flocked to Pawel Kukiz, a former punk rocker running as an independent, who’s relied on voluntary donations to fund his campaign. He has appealed to Poles’ sense of national pride, calling emigration “an extermination spread over time.”
Kukiz was third with 20.5
percent, according to the exit poll conducted by the Warsaw-based polling
company Ipsos for Polish television stations.
Duda immediately started courting
Kukiz’s voters, in his post-election speech pledging to consider making some of
his rival’s proposals part of his policy agenda.
More
Up next China. Does this sound
like a country officially growing at 7 percent? How about 3 percent? Is it even
growing at all?
China Adds Stimulus With Third Interest-Rate Cut in 6 Months
10:30 AM BST May 10, 2015
China’s central bank cut interest rates for the third time in six months as
it ratchets up support for an economy grappling with a debt overhang and
property slump.The People’s Bank of China reduced the one-year lending rate 0.25 percentage point to 5.1 percent and cut the one-year deposit rate by the same amount to 2.25 percent, effective Monday. In another step to free up interest rates, the central bank will also raise the limit on what banks can pay savers.
Inflation remained subdued and exports and imports both slid in April -- underscoring the economy’s struggle to match Premier Li Keqiang’s 2015 growth target of about 7 percent. With capital flowing abroad and local governments embroiled in a complex debt cleanup, economists anticipate further easing.
“The economy requires substantial stimulus to get back on its feet,” said Frederic Neumann, co-head of Asian economics research in Hong Kong at HSBC Holdings Plc. “But monetary easing on its own may not do the trick: China also requires a fiscal kick to steady demand.”
Chinese shares climbed along with equities across the region, interest-rate swaps fell to the lowest level in almost three years and the offshore yuan declined.
More
Any
sudden event which creates a great demand for actual cash may cause, and will
tend to cause, a panic in a country where cash is much economised, and where
debts payable on demand are large. In such a country an immense credit rests on
a small cash reserve, and an unexpected and large diminution of that reserve
may easily break up and shatter very much, if not the whole, of that credit.
Walter Bagehot.
Lombard Street, 1873.
At the Comex silver
depositories Friday final figures were: Registered 59.64 Moz, Eligible 115.27
Moz, Total 174.91 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today my take on last week’s UK general election.
Trouble lies ahead, in my opinion.
The whole aim of
practical politics is to keep the populace alarmed (and hence clamorous to be
led to safety) by menacing it with an endless series of hobgoblins, all of them
imaginary.
H. L. Mencken.
"It was the
SNP wot won it" for Cameron, to adjust the Sun's headline from 1979 and
Maggie Thatcher. While the polls were hopelessly wrong in England they
were nearly 100% right in Scotland. Anticipating getting 50+ seats out of
Scotland's 59, the Scottish harridan running the SNP, started bragging on TV about
putting in Milliband, and forcing his agenda hard left. Meanwhile, the ex-SNP leader
Comrade Salmond, confident at winning a seat in Westminster and leading the SNP
rabble army there, was boasting that he was going to write Labour and
Milliband's first budget. Labour would pay homage to the SNP for putting Labour
in office. But most UK voters live and vote in England. They were horrified at
this prospect. Every time the SNP boasted in the last two weeks, they drove
thousands of English voters back to the Tories. They might have held their nose
while they voted, but they voted against Scotland and against a vassal Labour
government in England.
In England south of Sheffield, the Lib Dem vote when it switches supposedly splits roughly 70:30 back to the Tories. North of Sheffield pretty much the reverse. But the Libs held far more seats in the south rather than the north. Hence the near wipeout of the Libs from 55 to 8, with nearly all going to the Tories, and 10 to the SNP in Scotland. The Libs have round tripped back to the late 70s when all their MPs could fit in a taxi, except for the alleged paedophile Cyril Smith who was too fat.
But the election also showed just how inadequate the UK system is in an age of multi parties. “Capitalism’s broken,” wailed fallen former guru “Bubbles” Greenspan, back in the mid 90s. UK democracy is broken in our new age of multi parties. “First past the post” has passed its sell by date. It was designed in the 19th century for voters qualified by owning rateable property, in an age of just two parties, male suffrage, and at a time when the House of Lords was far more prominent. In reality since about 1990 it's been an accident waiting to happen. Starting with Blair tinkering with the system from 1997 onwards but not reforming it, we got to Thursday's multiple car crash.
In England south of Sheffield, the Lib Dem vote when it switches supposedly splits roughly 70:30 back to the Tories. North of Sheffield pretty much the reverse. But the Libs held far more seats in the south rather than the north. Hence the near wipeout of the Libs from 55 to 8, with nearly all going to the Tories, and 10 to the SNP in Scotland. The Libs have round tripped back to the late 70s when all their MPs could fit in a taxi, except for the alleged paedophile Cyril Smith who was too fat.
But the election also showed just how inadequate the UK system is in an age of multi parties. “Capitalism’s broken,” wailed fallen former guru “Bubbles” Greenspan, back in the mid 90s. UK democracy is broken in our new age of multi parties. “First past the post” has passed its sell by date. It was designed in the 19th century for voters qualified by owning rateable property, in an age of just two parties, male suffrage, and at a time when the House of Lords was far more prominent. In reality since about 1990 it's been an accident waiting to happen. Starting with Blair tinkering with the system from 1997 onwards but not reforming it, we got to Thursday's multiple car crash.
The SNP got only
half the vote in Scotland, 1.4 million, but got 56 out of 59 seats. The other 1.4 million voters got just 3 seats.
The Lib Dems got 2.41 million votes,
more than the SNP, but got only 8 seats. UKIP got almost 3.9 million votes,
more than the SNP and LibDems combined, but got only 1 seat. The Greens got
1.16 million votes not that far off the SNP, but got only 1 seat. In Wales the
Nationalists got 3 seats on only 182,000 votes. In Northern Ireland the DUP got
8 seats on only 184,000 votes. There are now far too many disenchanted
and disenfranchised voters, but neither the Conservatives nor Labour will
change the system since first past the post suits them.
In fact, the Tories
are more likely to use their new power to reorder the constituencies to make
them closer to a universal size by voter. Something Labour and the Libs had
blocked since they gained an advantage of about 20 seats for Labour and 5 for
the Libs over the Tories, from smaller constituencies. My guess is that the growing disenfranchised
will begin seriously agitating for electoral reform. Without it, social
instability, and civil disobedience lies ahead. And the UK still has reform of
the Lords to tackle, plus manage some sort of reform of the EUSSR, or UK voters
will likely vote to leave in 2017.
So
all UK polls nonsense. Also bloody nose
for BBC.
Rupert
Murdoch.
Solar & Related Update.
With events
happening fast in the development of solar power, I’ve added this new section.
Updates as they get reported.
Dutch solar road makes enough energy to power household
Engineers in the Netherlands say energy-generating road surface is more successful than expected, six months into trial.
Engineers in the Netherlands say
a novel solar road surface that generates electricity and can be driven over
has proved more successful than expected.
Last year they built a 70-metre
test track along a bike path near the Dutch town of Krommenie on the outskirts
of Amsterdam.
In the first six months since it
was installed, the panels beneath the road have generated over 3,000kwh. This
is enough to provide a single-person household with electricity for a year.
"If we translate this to an
annual yield, we expect more than the 70kwh per square metre per year,"
says Sten de Wit, spokesman for SolaRoad, which has been
developed by a public-private partnership.
"We predicted [this] as an
upper limit in the laboratory stage. We can therefore conclude that it was a
successful first half year."
The project took cheap
mass-produced solar panels and sandwiched them between layers of glass, silicon
rubber and concrete.
"This version can have a
fire brigade truck of 12 tonnes without any damage," said Arian de Bondt,
a director at Ooms Civiel, one of consortium of companies working together on
the pilot project.
"We were working on panels
for big buses and large vehicles in the long run."
The solar panels are connected to
smart metres, which optimise their output and feed the electricity to street
lighting or into the grid.
More
The monthly Coppock Indicators finished April
DJIA: +112 Down. NASDAQ: +198 Down. SP500: +150 Down.
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