Poor Greece.

Baltic Dry Index. 620 -10       Brent Crude 64.32

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

A Greek, an Irishman and a Portuguese go into a bar and order a drink. Who picks up the bill?

A German.

We open with wretched Greece yet again, yesterday getting set a timetable for unconditional surrender by Merkel and love rat Hollande. With France heading for the same rocks that smashed up Greece, love rat Hollande ought to think twice before tossing around rocks in a glasshouse. But will the ECB pull the trigger on Greece later today? My money is on them kicking the can once again to humour Mrs. Merkel and her new timetable. But will Mr Tsipras trump her timetable this coming Whitsun? By now even the doziest Greek knows that unrepayable debt is unrepayable. Staying in the dying wealth and jobs destroying Euro requires a price not worth paying. Default, devalue, and reform, and get back on a path to eventual prosperity.

Greece, Creditors Said to Disagree on Sales Tax Proposals

7:11 PM BST May 19, 2015

Greece’s proposed tax overhaul isn’t passing muster with the nation’s creditors because it wouldn’t do enough to help the country’s budget, people familiar with the matter said.

Greek Prime Minister Alexis Tsipras told lawmakers the plan won’t gain approval from creditors and that Greece will submit a new offer in coming days, according to another person. The people asked not to be identified speaking on confidential matters.

Spokeswomen for the European Union and the International Monetary Fund declined to comment and Greek officials didn’t immediately return calls. A Commission spokesman said earlier Tuesday that more time is needed to bridge the gap between the two sides. Greece offered to have a sales tax of 15 percent on most goods and a 6.5 percent rate for basic one, with an additional surplus of up to 3 percent for cash payments, Finance Minister Yanis Varoufakis said Tuesday.

German Chancellor Angela Merkel Monday gave Greece until the end of the month to reach a deal on its aid program, urging faster talks to end the standoff over the country’s financing. Tsipras yesterday said that his government has proven that it is ready to offer concessions and that talks are in the “final stretch.”

http://www.bloomberg.com/news/articles/2015-05-19/greece-creditors-said-to-disagree-on-proposals-for-sales-tax

Greek Conundrum Puts ECB in Tight Spot as Bailout Talks Progress

12:01 AM BST May 20, 2015
European Central Bank policy makers will discuss Greek bank aid on Wednesday in a chore that is getting more uncomfortable every week.

The Governing Council will meet in Frankfurt to debate whether to tighten rules on Greek access to Emergency Liquidity Assistance as the country veers toward default. At the same time, officials are well aware their decision could worsen the political crisis just as bailout talks show signs of progress.
ECB President Mario Draghi has repeatedly said politicians rather than unelected central bankers must decide Greece’s future, and council decisions will be based on rules such as the solvency of Greek banks and a prohibition on state financing. Even so, the wider implications of action are becoming harder to ignore, meaning officials might hold off for now.

“It’s very simple: the ECB doesn’t want to be the one that pulls the plug on Greece when political negotiations are still ongoing,” said Marco Valli, an economist at UniCredit SpA in Milan. “As long as there is the chance that Greece will remain solvent, that it might receive further European Union aid, then ELA can be given. Should this possibility disappear, then it will have to stop.”

ELA is provided by the Bank of Greece to replace deposit outflows at the country’s lenders, which have mounted as the government’s reluctance to commit to economic reforms blocks international aid payments.

Without bailout cash, Greece risks defaulting on its debt. At the same time, the solvency of Greece’s government and the country’s banks is linked by the roughly 9 billion euros ($10 billion) of treasury bills that Greek lenders hold and regularly roll over.

The Governing Council, which reviews ELA weekly and can curb it with a two-thirds majority in a vote, has allowed it to rise roughly in line with the deposit outflow. The cap on the emergency cash available now stands at 80 billion euros.
More
http://www.bloomberg.com/news/articles/2015-05-19/greek-conundrum-puts-ecb-in-tight-spot-as-bailout-talks-progress

Below, the reality of the continuing Greek tragedy.

This may be Greece’s biggest brain drain since the death of Socrates

Published: May 17, 2015 11:03 a.m. ET

Ancient Greece was once a magnet for the world’s intellectual elite. Scholarly work out of Athens contributed to everything from logic and philosophy to the politics that formed the basis of modern civilization.

But as the Hellenic Republic struggles to strike an agreement to repay more than €300 billion it owes international creditors, it is also facing the depletion of its most important asset: human capital.

A devastating brain drain is luring away the best and brightest of Greece’s workforce, several reports showed, with estimates varying between 180,000 and 200,000 well-educated citizens leaving the cash-strapped nation.

At that rate, the exodus translates to about 10% of the country’s total university-educated workforce, said Lois Lambrinidis, a professor of economic geography at the University of Macedonia.

On a macro level, this movement is a clear brain drain, said Nicholas Alexiou, a sociology professor at CUNY’s Queens College who studies Greek immigration patterns.

What differentiates a brain drain from other types of migrant waves is the high percentage of skilled and educated people who leave the country, Alexiou said.

In other words, Greece is losing its “youngest, best and brightest,” as a European University Institute study dated March 2014 noted.

According to the study, of those who have left 88% hold a university degree, and of those, over 60% have a master's degree, while 11% hold a Ph.D.

According to the EUI report, 79% of those who left Greece during the crisis were actually employed but felt that there was “no future” in the country (50%) or no professional opportunities (25%).

----Things could get even worse, as around 35,000 young Greeks are currently studying abroad and could decide to seek employment outside the country, the report noted.

----So, where do these highly educated Greeks go?

Overall, the most popular destination is the U.K., followed by Germany and the Netherlands, according to the EUI study.
More
http://www.marketwatch.com/story/greeces-scariest-deficit-has-nothing-to-do-with-money-2015-05-07?page=2

In Brexit news, it would benefit the UK, says a man very well placed to know. But by going off message, he can expect to be attacked by the banksters, and much of the media led by the loony left BBC, who still haven’t managed to come to terms with the fact that their man lost the UK election. Below a brave man takes on the UK financial mafia.

JCB Billionaire Bamford Says EU Exit Could Benefit UK

7:44 AM BST May 18, 2015
Anthony Bamford, chairman of construction equipment maker JCB Service, said the U.K. could survive “peacefully and sensibly” outside the European Union and would benefit from being able to negotiate as a single country.

The comments from one of the country’s most senior industrialists are at odds with the general campaign of support for continued EU membership from the country’s business lobby, including the Confederation of British Industry. Closely-held JCB, founded by Bamford’s father, is the biggest digger-maker in Europe with sales of 2.51 billion pounds ($3.9 billion) last year.

In an interview with the BBC on Sunday, Bamford said some of the warnings about an exit were overdone. “We are the fifth-or sixth-largest economy in the world. We could exist on our own -- peacefully and sensibly,” he said.

Leaving the bloc would allow the U.K. to “negotiate as our country rather than being one of 28 nations,” he said.

Prime Minister David Cameron has promised an “in-out” referendum on EU membership by the end of 2017, although some business leaders want one sooner to avoid uncertainty. Bank of England governor Mark Carney called last week for the government to act with “appropriate speed” on the vote.

The CBI has asked its members to campaign for Britain to remain within a “reformed EU,” with Cameron preparing for tough negotiations with European partners over issues such as migrant worker rights.

More
http://www.bloomberg.com/news/articles/2015-05-18/jcb-billionaire-bamford-says-eu-exit-could-benefit-u-k-

We end for the day with shock news about stocks. Beware the US stock market think the savvy investors who ought to know. What do they know that we don’t? Soon only the Fedsters will be on the other side of the front running High Frequency Trading algos.

Tue May 19, 2015 9:29am EDT

Investors cut U.S. equity exposure to lowest since January '08: survey

International investors slashed their exposure to U.S. equities in May to its lowest in over seven years, while maintaining the euro zone as their leading stock market destination, a closely watched survey said on Tuesday.

Driven by worries about a string of disappointing U.S. economic indicators and the strength of the dollar, global investors cut their allocation to U.S. stocks to 19 percent underweight from 12 percent underweight the month before.

That's according to the monthly Bank of America Merrill Lynch survey of 169 fund managers who run $479 billion of funds, which was conducted May 8-15, and comes just as the S&P 500 .SPX hits record highs.

"Relative positioning of the U.S. vs the rest of the world is now at the most extreme since November 2007," BAML said in its report. "Contrarians would go long U.S. equities relative to the broader market."

While 70 percent of respondents expect global growth to strengthen and the rise in oil has pushed inflation expectations to a 10-month high, expectations for the first U.S. interest rate increase have been pushed back.

More than half of those polled now expect the first Federal Reserve rate hike since June 2006 to come in the fourth quarter of this year or later.

Meanwhile, a net 49 percent of those surveyed were overweight euro zone stocks in May, up from 45 percent in April. Only one in 10 managers polled was underweight euro zone stocks.
More
http://www.reuters.com/article/2015/05/19/us-investmentfunds-baml-idUSKBN0O41GU20150519

Some years ago a small rural town in Spain twinned with a similar town in Greece.  The mayor of the Greek town visited the Spanish town. When he saw the palatial mansion belonging to the Spanish mayor, he wondered aloud how on earth he could afford such a house.

The Spaniard replied: ‘You see that bridge over there? The EU gave us a grant to construct a two-lane bridge, but by building a single lane bridge with traffic lights at either end, I could build this place.’

At the Comex silver depositories Tuesday final figures were: Registered 60.71 Moz, Eligible 117.42 Moz, Total 178.13 Moz.  

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

The 'Shocking' Cost of Letting Companies Pollute for Free

A new report offers a big-picture look at energy subsidies

3:22 PM BST  May 19, 2015

"Energy subsidy," as the phrase is tossed around Washington, typically refers to any financial help the government gives to producers of oil, wind, or other sectors of the energy industry.

But there's another way to consider energy subsidies that takes a bigger picture and conceives of all manner of help—financial or otherwise—as a subsidy. In that context, letting companies pollute for free, when that pollution carries a real social cost, can be thought of as a subsidy.

That's how researchers at the International Monetary Fund describe energy subsidies in a sobering new paper that puts a comprehensive price tag on global aid to the energy industry. The price tag, which IMF officials describe as "shocking," is a big one: This year, the report estimates, fossil fuels are being subsidized to the tune of $5.3 trillion, or 6.5 percent of global gross domestic product.

The report breaks energy subsidies into two main classes. The first kind, which the IMF has called “pre-tax subsidies,” includes the discounts that allow consumers worldwide to buy energy below what it costs to supply. These subsidies amounted to about 0.7 percent of world GDP in 2013. They're projected to fall to 0.4 percent of GDP this year, or $333 billion, mostly because of lower energy prices.

The second category is called “post-tax subsidies." Why "post-tax"? (Presumably not just to be opaque.) This sum is driven by a hypothetical energy tax that includes several factors—global warming potential, air pollution, traffic accidents, and the other side effects of carbon civilization.
The authors translated the environmental harm of fuels into this dollar figure and folded it into energy prices. The IMF researchers see a steady rise in such subsidies, from $4.2 trillion in 2011, to $4.9 trillion in 2013, and on to a projected $5.3 trillion this year.

Far and away, the heaviest contributor to each energy source's "post-tax subsidies" is its environmental impact, according to the study. This chart breaks down, by fuel, the components of the post-tax subsidies in 2013 data. They include the entire first category (pre-tax subsidies), and the environmental impacts such as not paying for global warming, air pollution, and smaller factors. Coal's outsized pollution makes its combined financial and environmental subsidies the costliest of all the energy sources.

The elimination of all this direct and tacit support to the industry would free up resources that could be used productively elsewhere in the economy. Killing subsidies in 2013 would have yielded $3 trillion in global revenue in 2013, the authors found. That's more than governments collect from corporate income tax. Killing them this year would increase governments' revenue by $2.9 trillion and cut CO2 pollution by 20 percent.

----The biggest subsidizers are the usual suspects: China, $2.3 trillion; the U.S., $699 billion; Russia, $335 billion; and India, $277 billion.

The study isn't a policy road map as much as an elucidation of a problem at the heart of resource economics. Energy prices aren't particularly efficient if the air we breathe and the climate we live in mean anything. 

More

http://www.bloomberg.com/news/articles/2015-05-19/here-s-how-much-cheap-energy-really-costs

The following year the Spaniard visited the Greek town. He was simply amazed at the Greek mayor's house: gold taps, marble floors, diamond doorknobs, it was marvellous.

When he asked how he’d raised the money to build this incredible house, the Greek mayor said: ‘You see that bridge over there?’

The Spaniard replied: ‘No.’

Solar  & Related Update.

With events happening fast in the development of solar power, I’ve added this new section. Updates as they get reported.  

No update today.

The monthly Coppock Indicators finished April

DJIA: +112 Down. NASDAQ: +198 Down. SP500: +150 Down.