Baltic Dry Index. 1118 +05 Brent Crude 56.11
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
There cannot be a crisis next week. My schedule is already full.
Obama, Merkel, Yellen, Draghi. With apologies to Henry Kissinger.
Other than the soaring Baltic Dry (shipping) Index which has recently turned upwards above 1000, everywhere else the signs suggest a new global downturn is arriving if not actually arrived. Despite all the central bankster QE and ZIRP since 2008, and all their rosy spin, far from entering a new era of expanding global prosperity, we seem to have stumbled into a new era of gross commodity over supply and declining prices. The commodity sector is signalling far more bad times to come, and we haven’t even started raising interest rates in the USA and Britain, though bond vigilantes have reappeared in the wealth and jobs destroying, dying European Monetary Union. Grexit still looks on for about the end of next month!
Below, some reasons to fear H2 2015.
Crisis? What Crisis?
“Sunny” Jim Callaghan. 1979.
This Measure of Copper Is Another Bad Omen for the Commodities Meltdown
July 22, 2015 — 4:53 PM BST Updated on July 22, 2015 — 10:43 PM BST
A measure of demand for copper, the metal used in everything from power
lines to electronics, is at the weakest in more than two years, signalling the
meltdown that’s sweeping through commodity markets could get even worse.The number of requests to withdraw copper from London Metal Exchange warehouses relative to the level of global inventories tracked by the bourse dropped this week to the lowest since March 2013.
That shows consumption has almost dried up for the stockpiles that have doubled over the past year.
Slower economic growth in China, the world’s biggest metals user, helps to explain the drop in demand. For commodity investors, it’s a bad omen because copper has historically been used as an indicator for what’s to come in raw materials and as a gauge of global expansion.
“Copper is ubiquitous in its uses across industry,” Nic Brown, the head of commodity research at Natixis SA in London, said in a telephone interview. “Concerns about copper prices and Chinese demand for copper, that’s a good reason to be worried more generally about demand for industrial metals and a wide variety of other commodities as well.”
Copper futures for September delivery declined 1.9 percent to settle at $2.428 a pound Wednesday on the Comex in New York, the biggest loss in two weeks.
“On a fundamental basis, at the moment, the market is still extremely well supplied with material,” Matthew Wonnacott, a senior consultant at CRU Group in London, said in a telephone interview. “There’s really no reason why anybody should need to withdraw material from an exchange for consumption. Demand in the market is just disappointing this year. It’s not just China, in general demand is poor.”
The Bloomberg Commodity Index fell as much as 1.1 percent to 95.2578, the lowest since 2002. Prices have fallen as the U.S. moves closer to raising interest rates, which has driven gains for the dollar and cut the appeal of raw materials as alternatives.
Goldman Sachs Group Inc. slashed its forecasts for copper prices on Wednesday, saying that demand in China will increase at the weakest pace in almost two decades.
Iron Ore Declines as Rising Output Reinforces Forecasts for Glut
July 22, 2015 — 1:28 PM BST
Iron ore fell by the most in two weeks after BHP Billiton Ltd. reported
quarterly production that topped expectations and reiterated plans for a
further increase, adding to a global surplus.
Ore with 62 percent content delivered to Qingdao dropped 0.7 percent to
$51.76 a dry ton on Wednesday, according to Metal Bulletin Ltd. The price,
which fell to $44.59 on July 8, the lowest since May 2009, is 27 percent lower
this year after losing 47 percent in 2014. Today’s decline was preceded in Asia
by losses to futures on the Dalian Commodity Exchange.
Rising seaborne supplies over the next two quarters will probably
overwhelm weak demand from mills in China, according to Goldman Sachs Group
Inc., which said in a report on Monday that the glut was entering its second
year. BHP, Rio Tinto Group and Vale SA are increasing low-cost supply to expand
market share and simultaneously cut costs per ton. BHP said on Wednesday that
it expects productivity improvements to lift its output.
----The world’s biggest mining company said output rose 6 percent to 60 million tons in the final quarter of fiscal 2015, according to a statement. That compares with the 58.9 million ton median estimate of six analysts surveyed by Bloomberg.
In 2016, output will rise 6 percent to 247 million tons, from 233
million tons last year, the Melbourne-based company said. Supply from BHP’s
Western Australian mines, including third-party tons, will jump to 270 million
tons.
BHP’s production costs for iron ore are forecast to drop this fiscal
year to $16 a ton, excluding freight and royalties, at the mines in Australia’s
Pilbara, the producer said.
More
Europe Faces Deluge of Diesel as Tankers Steam Up From Red Sea
July 22, 2015 — 3:03 PM BST
Europe’s refiners, already contending with the weakest diesel market
since January, face a new challenge: a surge in tankers bringing supplies of
the road fuel from Saudi Arabian plants on the Red Sea.
Traders booked 440,000 tons of refined fuels for delivery to Europe from
Red Sea ports for loading in the four weeks ended Aug. 7, data compiled by
Bloomberg show. That’s 2.8 percent more than the previous period and the most
since at least early 2013. At least half of Saudi refinery output is diesel,
according to IHS Inc.
“With new refineries in Saudi Arabia and the United Arab Emirates, we
will see increased exports from the Middle East” to Europe, Victor Shum, vice
president at IHS in Singapore, said Wednesday by phone. “Diesel refining
margins will be under pressure.”
Saudi Arabian Oil Co. has added about 380,000 barrels a day of diesel
production capacity at two refineries that reached full output this year and
last: one at Yanbu on the Red Sea and the other at Jubail on the Persian Gulf.
Abu Dhabi National Oil Co. has doubled processing capacity at its Ruwais plant
and can now produce 226,000 barrels of diesel a day there.
The increased refining capacity in the Middle East is pushing products
to other markets. Cargoes heading to Europe are likely to be mostly jet fuel and
ultra-low-sulfur diesel, according to Robert Campbell, the head of oil-products
research at consultant Energy Aspects Ltd.
----The
expanding fuel glut was evident last week when independent inventories for
products in the Amsterdam, Rotterdam, Antwerp oil-trading hub jumped to a
20-year high of more than 6 million tons, according to PJK International. The
surge was led by diesel and gasoil.
----Saudi
exports of refined fuels jumped to the highest in more than 13 years in May.
Diesel shipments climbed to 566,000 barrels a day from 280,000 barrels the
previous month, according to JODI, an organization that collects data on oil
production and exports.
More
European Banks Face Capital Hit From Second-Quarter Bond Sellof
July 22, 2015 — 8:56 AM BST
The bond market selloff in the second quarter probably dented the capital
defenses of many European banks, with lenders in Italy and Spain hit hardest.
The extent of the damage will be disclosed when banks report earnings
starting this week. It probably won’t be so much as to force lenders to sell
shares, analysts at brokerages including Nomura Holdings Inc., Deutsche Bank AG
and Citigroup Inc. agreed.
----The upheaval in the bond market was a setback for southern European
banks. Their earnings are already under pressure from low interest rates, and
investors are punishing lenders with lower capital levels. Margins on loans at
Italian and Spanish banks narrowed the most among European countries in the
second quarter, according to the European Central Bank.
The securities hit most by the rout are probably longer-term European
government bonds that are available for sale, as opposed to assets that have to
be held to maturity. Price declines for these assets don’t hurt earnings but
they do squeeze capital under tougher post-crisis rules to ensure bank losses
don’t threaten the wider economy.
Italy’s two biggest banks, Intesa Sanpaolo SpA and UniCredit SpA, both
incurred unrealized losses of more than 1 billion euros ($1.1 billion) on these
assets, as did Banca Monte dei Paschi di Siena SpA, JPMorgan Chase & Co.
analysts led by Kian Abouhossein estimated in a July 2 note. That would leave
Monte Paschi with a common equity Tier 1 ratio, a measure of lost-absorbing ability,
of 8.5 percent, closer to the regulatory minimum of 8 percent -- this after a
cash call in April. It began the quarter with a CET1 ratio of 10.2 percent.
Italian
banks stepped up purchases of the country’s government bonds in the first
quarter, riding a rally sparked by the advent of the ECB’s huge bond-buying
program in March. Italian lenders were holding a near record-high 415.5 billion
euros of their country’s sovereign debt at the end of April.
More
In other news, China calls Japan’s kettle black.
China says Japan's East China Sea pictures provoke confrontation
Japan's release of pictures of Chinese construction activity in the East
China Sea will only provoke confrontation between the two countries and do
nothing for efforts to promote dialogue, China's Foreign Ministry said.
In a defense review this week, Japan urged Beijing to stop building oil
and gas exploration platforms close to disputed waters in the East China Sea
and expressed concern that Chinese drills could tap reservoirs that extend into
Japan's waters.
In a statement late on Wednesday, China's Foreign Ministry said it had
every right to develop oil and gas resources in waters not in dispute that fall
under its jurisdiction.
"What Japan did provokes confrontation between the two countries,
and is not constructive at all to the management of the East China Sea
situation and the improvement of bilateral relations," it said.
In 2012, Japan's government angered Beijing by purchasing a disputed,
uninhabited island chain in the East China Sea.
Until then, Beijing had curtailed activities under a pact with Japan to
jointly develop undersea resources in disputed areas.
China's position on the pact remained unchanged and it was willing to
maintain communication with Japan on related issues, the Foreign Ministry
added.
"The key is for Japan to create favorable environment and
conditions to implement this consensus," it said, referring to the pact.
"Japan's hyping up of the oil and gas issue in the East China Sea
will do nothing good to carry out dialogue and cooperation between China and
Japan on the East China Sea-related issues."
More
I don’t want yes men around me. I want everybody to
tell me the truth even if it costs them their jobs.
Ebenezer Squid, with apologies to Samuel Goldwyn.
At the Comex silver depositories
Wednesday final figures were: Registered 58.11 Moz, Eligible 119.79 Moz, Total
177.90 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Below France, well on its way to becoming Greece.
France picked one fine time to sign up to American War Party sanctions against
Russia, following Vicky Nuland’s botched American coup in Kiev. Not to worry
though, no American farmers have suffered any distress from the misguided
sanctions.
I’m living so far beyond my income
that we may almost be said to be living apart.
France, with apologies to ee cummings.
France offers angry farmers emergency aid
22 July 2015
The French government has proposed a €600m (£420m; $655m) package of
urgent aid for farmers, who have blocked roads for days in protest at falling
prices.
Most of the money will help farmers deal with a cash crisis by
cancelling or deferring tax payments. But some of the money will help
restructure debts.
Farmers said they would assess the plan but several routes remain
blocked.
They accuse supermarkets and the food industry of keeping prices low,
forcing many of them into bankruptcy.
One farmers' union leader in Normandy called for the blockade around
Caen to be suspended. But key road bridges in the region remained closed to
traffic on Wednesday evening and elsewhere the government's intervention
appeared to fall on deaf ears.
In the Loire Valley, some 100 protesters lifted their blockade near
Chambord castle, but a union official said it was not because they were happy
with the government's offer.
Farmers said they would blockade access to France's second city, Lyon,
from Wednesday evening. More action was expected further south around
Clermont-Ferrand on Thursday.
Traffic on the A1 motorway outside Lille in northern France was hit by
protests from early on Wednesday.
In Brittany, some 200 farmers attacked a supermarket in Lannion late on
Tuesday night, dumping manure at the entrance and setting alight to tyres.
Xavier Beulin of the FNSEA union said ministers were at least moving in
the right direction.
"We've just accepted measures for Greece; I reckon we can do
something for French farmers," Mr Beulin said, equating his members'
struggle with the eurozone debt crisis.
Mr Beulin had earlier accused the government of adopting only
"trivial measures", warning there was "a sort of exasperation
and anger that's been escalating for weeks. This hasn't come out of
nowhere".
The Socialist government estimates that 10% of French farms could be
facing bankruptcy.
Last month, ministers pushed the food industry to raise the prices paid
to farms but Mr Foll said last week that pork producers were still being paid
below the target price of €1.40 (£1) per kilo.
Dairy farmers say they are being paid €300 per tonne of milk and need at
least €340 to break even.
----Supermarkets and suppliers are being blamed for not passing on the
recent price rises on meat and dairy products. But prices have been pushed down
by foreign competition and reduced meat consumption.
A Russian ban on EU food imports and reduced Chinese demand have added
to the problems.
http://www.bbc.co.uk/news/world-europe-33621278
Solar & Related Update.
With events
happening fast in the development of solar power, I’ve added this new section.
Updates as they get reported. Is converting sunlight to usable cheap AC energy
mankind’s future from the 21st century onwards? A quantum computer next?
Massless particle discovery could radically accelerate electronics
An exotic particle theorized more than 85 years ago has finally been discovered. Dubbed the "Weyl fermion", it is a strange but stable particle that has no mass, behaves as both matter and anti-matter inside a crystal, and is claimed to be able to create completely massless electrons. Scientists believe that this new particle may result in super-fast electronics and significant inroads into novel areas of quantum computing.There are two types of particles that make up the universe and everything in it: fermions and bosons. In simple terms, fermions are all the particles that make up matter (for example, electrons), and bosons are all the particles that carry force (for example, photons). Ordinarily, fermions such as electrons can collide with each other, losing energy, and no two fermions can share the same state at the same position at the same time. Weyl fermions being massless, however, have no such restrictions.
Weyl fermions were first mooted in 1929 by physicist and mathematician Hermann Weyl, who theorized that massless fermions able to carry an electric charge could exist. Without mass, he believed, electrons created from Weyl fermions would be able to move electric charge in a circuit much more quickly than ordinary electrons. In fact, according to this latest research, electric current carried by Weyl electrons in a test medium is able to move at least twice as fast as that carried by electrons in graphene and at least 1,000 times faster than in ordinary semiconductors.
---- “It's like they have their own GPS and steer themselves without scattering," said Princeton University physicist Zahid Hasan."They will move and move only in one direction since they are either right-handed or left-handed and never come to an end because they just tunnel through. These are very fast electrons that behave like unidirectional light beams and can be used for new types of quantum computing."
Weyl originally posited his fermion as part of an alternate model to the theory of relativity proposed by his associate Albert Einstein. And, though Weyl's hypothesis lost out to Einstein’s, the idea of his theoretical particle continued to tantalize physicists for many years afterward. However, as a merely "theoretical" particle, even when inklings of the Weyl fermion were uncovered over the decades, they were mistakenly thought to be evidence of neutrinos. In hindsight, the evidence was actually for Weyl fermions, for in 1998 neutrinos were actually discovered to have a small amount of mass.
"People figured that although Weyl's theory was not applicable to relativity or neutrinos, it is the most basic form of fermion and had all other kinds of weird and beautiful properties that could be useful," said Hasan. "After more than 80 years, we found that this fermion was already there, waiting. It is the most basic building block of all electrons. It is exciting that we could finally make it come out following Weyl's 1929 theoretical recipe."
More
The monthly Coppock Indicators finished June
DJIA: +98 Down. NASDAQ:
+192 Down. SP500: +127 Down.
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