Baltic Dry Index. 1113 +46 Brent Crude 56.53
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
What we anticipate seldom occurs, what we least expected generally happens.
Benjamin Disraeli.
The European Union has begun pressing Germany on Greek debt relief, i.e. some form of bond write-off. In reality, its France leading a gaggle of Club Med debtors piling on the pressure, well aware that they are coming up next and may well need a similar debt relief solution within the next five years. Worse, with America and Britain already talking about ending ZIRP and raising interest rates as early as later this year, Club Med hasn’t a moment to lose in getting a Greek debt write-off precedent established. Were sovereign interest rates to get even close to normalising in the next five years, all of Club Med becomes Greece. Not for them 5 to 10 years of bone breaking austerity. Not when the bone breaking can be foisted on the bond holders.
Below, the EUSSR’s Moscovici cracks on with the job of getting Germany onside for Club Med, err Greek debt relief. Greece, you might say, is a sort of Trojan horse. At the weekend it was French President, Love Rat Hollande, proposing a United States of Europe incorporating the German treasury, with Germany reduced to a sort of French department status within the USE. A Germany plus allies v France plus allies, seems to be the real outcome of the nasty all night EUSSR negotiating session of July 13. Continental Europe is splitting apart. Bring on Brexit.
It is hard to believe a man is telling the truth when you know that you would lie if you were in his place.
H. L. Mencken.
Moscovici Pushes Merkel With Pledge for Greek Debt Relief
July 21, 2015 — 9:44 AM BST Updated on July 21, 2015 — 3:12 PM BST
European Union economy chief Pierre Moscovici said Greece’s European
creditors have agreed to provide debt relief so long as the country’s
government can deliver on the terms of its third bailout package.
The remarks contradict the German position that an easing in the
repayment terms on Greece’s debt is up for discussion further down the track.
Chancellor Angela Merkel said over the weekend that debt relief is merely an
“option” to be considered in the future.
“The Eurogroup has already discussed this,” Moscovici, the EU’s economy commissioner, said Tuesday on RMC radio in reference to the euro-area finance ministers’ group. “We have agreed to lighten the interest burden, lengthen the maturity of the debt. It’s something that can be done when the time comes, after the negotiation of a good program of development and assistance.”
The International Monetary Fund has repeatedly called on euro-area governments to reduce Greece’s debt burden in order to boost the country’s chances of reviving its economy. Without debt relief, economists doubt the latest bailout agreement will succeed and expect Greece’s euro exit to be back on the agenda next year.
There’s still a danger that Greece will be forced out of the euro region
by the end of 2016, according to 71 percent of respondents in a Bloomberg
survey of 34 economists. Seventy percent said they reckon Greece should be safe
for the rest of 2015, though almost half said they thought the 86 billion-euro
($93 billion) bailout package Prime Minister Alexis Tsipras is targeting will
prove to be too small.
Merkel told German broadcaster ARD on Sunday that she’s prepared to
discuss debt relief once Greece completes the first round of a new bailout.
Morehttp://www.bloomberg.com/news/articles/2015-07-21/moscovici-pushes-merkel-with-pledge-greece-can-earn-debt-relief
The rift between France and Germany can’t be papered over any longer
Published: July 21, 2015 10:33 a.m. ET
A “temporary” Greek exit from economic and monetary union, proposed by
Germany, supported by many German-leaning euro members, yet hotly opposed by
France and Italy, was narrowly averted in the marathon negotiations that ended
on July 13. But the suggestion may still eventually decide Greece’s fate in the
euro.
The divergence between the two countries traditionally seen as the motor
of the European Union demonstrates new fragility in Franco-German relations
that looks likely to cast a shadow over European cooperation for some time to
come.
Wolfgang Schaeuble, the German finance minister, whose hard line on Greece ended up determining Chancellor Angela Merkel’s negotiating stance, has made clear in the week since the ill-tempered European summit on Greece that he still favors a Greek exit from the euro EURUSD, +0.0549% .
Once it would have feared European isolation, but Germany now puts forward views opposed by France with demonstrative self-confidence. This reflects not only manifest German economic strength but also EMU membership by several smaller nations from central and eastern Europe that take an even more robust attitude than Germany on the Greek economy.
From the Baltic to former Yugoslavia, small euro states that were previously part of the Eastern bloc have been converted to German allies and steadfast proponents of monetary orthodoxy. European changes since German reunification 25 years ago represent a double blow for France. The Germans used to be France’s buffer zone against the Soviet Union. Yet as the new round of EMU antagonism shows, a cluster of small ex-communist countries now play a similar role — but now as buffer states to protect Germany against France.
We shall see reinforced efforts in coming months by French President François Hollande and Italian Prime Minister Matteo Renzi to build a European coalition opposing German-style austerity — an alliance that could find support (depending on economic and political developments) in Madrid and Lisbon.
More
http://www.marketwatch.com/story/the-rift-between-france-and-germany-cant-be-papered-over-any-longer-2015-07-21?dist=tcountdown
Greece hopes bailout talks conclude by Aug. 20: Reuters
Published: July 21, 2015 9:27 a.m. ET
Athens hopes Greece's bailout discussions with international lenders will be
wrapped up by Aug. 20, a government spokeswoman said on Tuesday, according to
Reuters. The formal negotiations over the cash-for-reform package are expected
to start once the Greek parliament has voted to approve a second set of
austerity measures demanded by international lenders. That vote is scheduled
for Wednesday. Officials from the lender institutions -- the European
Commission, the European Central Bank and the International Monetary Fund -- formerly
known as the "Troika" -- will be in Athens on Friday to meet with the
government. If the 86-billion-euro ($93.6 billion) three-year aid package gets
full lender approval, it will be Greece's third bailout in five years. The
country has already been granted about €240 billion in financial assistance.http://www.marketwatch.com/story/greece-hopes-bailout-talks-conclude-by-aug-20-reuters-2015-07-21?dist=tcountdown
Euro zone's have-nots ask: why should Greece get more than us?
Bozena Vargova, a retired physiotherapist from Slovakia, cannot
understand why her country should bail out Greeks who often earn twice as much
as Slovaks and run up debts.
"I don't feel like we should give anything to Greece," said
Vargova, who lives on a pension of 370 euros a month, while the average Greek
pension is 833 euros.
In the bitter wrangling over whether the euro zone should bail out
Greece, some people sympathetic to Athens framed the debate as a stand-off
between Europe's rich and poor: wealthy Germany humiliating poverty-stricken
Greece.
But in the case of Slovakia - and other ex-Communist countries now in
the euro zone - the dividing line is not about wealth levels but about
attitudes to indebtedness and sacrifice.
That perceived gulf in values could be the biggest threat to the already
shaky unity of the euro zone, and it is starkly exposed in Nitra, a city off
85,000 people in south-western Slovakia.
Sixty-year-old Vargova, and her husband, who works as a masseur, have
sold their four-room apartment in Nitra and moved to a cheaper house in a
nearby village to eke out their limited funds.
Vargova, who retired after working for 40 years, believes it is time
Greeks felt some of the hardship Slovaks went through when their country transformed
itself from a Communist economy.
"They lived beyond their means, now they have to tighten their
belts," she said of the Greek people.
---- Prime Minister Robert Fico said it would be "immoral" to write off any Greek debt and he would call for Greece's exit from the euro zone if Athens fails to meet agreed conditions.
"Greeks must pay a tax for how they behaved in the past," Fico
said on Tuesday.
"We have gone through our own tough path in Slovakia. If we could
do it, as a country with substantially weaker economy (at the time), another
country must do it as well."
---- After a sharp slump in the Greek economy in recent years, Slovakia has now edged ahead of Greece in economic output per capita. Slovak output now stands at 76 percent of the EU average, while Greece is at 72 percent, according to 2014 data by Eurostat, the EU's statistics service.
But figures on household incomes still put Slovaks behind. Minimum wages
are 380 euros in Slovakia and 684 euros in Greece. Slovakia's average pension
is 408 euros.
Even adjusted for the lower cost of living in Slovakia, average Greek
wages are still 25 percent higher than in Slovakia, according to the
Organisation for Economic Cooperation and Development.
Morehttp://www.reuters.com/article/2015/07/21/us-eurozone-greece-slovakia-idUSKCN0PV16X20150721?mod=related&channelName=ousivMolt
We close for today with big change coming to Uncle Scam’s oil patch. The good times of crude oil hedges in the 80s and 90s are all coming to an end. America’s frackers are about to have to live with oil revenues of WTI about 50. Wall Street’s banksters are already edgy. Q4 15 threatens a tidal wave of bankruptcies if oil is still trading near 50 come this fall. Only the very brave or very foolish will stay invested in frackers down to the fall.
Wall Street Lenders Growing Impatient With U.S. Shale Revolution
July 21, 2015 — 12:01 AM BST Updated on July 21, 2015 — 8:18 PM BST
Halcon Resources Corp. almost ran into trouble with its banks in June 2013.
And again in March 2014. And in February 2015.Each time, the shale driller came close to violating debt limits set by its lenders, endangering a credit line that provided as much as $1.05 billion in much-needed cash. Each time, Halcon’s banks, led by JPMorgan Chase & Co. and Wells Fargo & Co., loosened their restrictions, allowing Halcon to keep borrowing.
That kind of patience may be coming to an end. Bank regulators have issued warnings on the risks involved in lending to U.S. drillers, threatening a cash crunch in an industry that’s more dependent than ever on other people’s money. Wall Street has been one of the biggest allies of the shale revolution, bankrolling thousands of wells from Texas to North Dakota. The question is how that will change with oil prices down by half since last year to $50.36 a barrel.
“Lenders in general are increasing pressure on oil companies either to raise more equity or do some sort of transaction to pay down their credit lines and free up extra cash,” said Jimmy Vallee, a partner in the energy mergers and acquisitions practice at law firm Paul Hastings LLP in Houston.
----Banks are already preparing for the next re-evaluation of oil and gas credit lines, reviews which typically take place twice a year in April and October. The loans are based on the value of drillers’ producing reserves, which has shrunk as oil prices fell. Many companies are also losing protection as hedges that locked in prices as high as $90 a barrel begin to expire.
“There’s another redetermination cycle in the fall,” Marianne Lake, chief financial officer at JPMorgan in New York, said July 14 during a conference call to discuss the company’s earnings. “And I’m not going to say likely but it’s possible we’ll be selectively downgrading some clients.”
Banks so far have been willing to keep the money flowing because drillers that come close to maxing out their credit lines have paid them off by tapping public markets. U.S. producers have raised about $44 billion through bonds and share sales in the first half of this year, the most since 2007, according to data compiled by Bloomberg and UBS Group AG.
Now the appetite for that debt is dwindling. Bonds have become more expensive and are laden with more onerous terms, including liens against drillers’ oil and gas assets.
----Some of the bonds issued this year are already trading at levels indicating financial distress, including $1.25 billion issued last month by SandRidge Energy Inc. More than $22 billion out of the $235 billion in debt owed by the 62 companies in the Bloomberg North America Independent Explorers and Producers index is trading at distressed levels. Their yields are more than 10 percentage points above U.S. Treasuries, as investors demand higher rates to compensate for the risk they won’t be repaid.
More
http://www.bloomberg.com/news/articles/2015-07-20/wall-street-lenders-growing-impatient-with-u-s-shale-revolution
Creditors are a superstitious sect, great observers of set days and times.
Benjamin Franklin.
At the Comex silver depositories
Tuesday final figures were: Registered 58.76 Moz, Eligible 119.77 Moz, Total
178.53 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
What part of honest accounting don’t the Japanese
understand? Olympus, and now Toshiba.
How many more dodgy corporations in Japan?
There are four things that hold back
human progress; ignorance, stupidity, committees and accountants.
Anon.
Toshiba CEO quits over accounting scandal
Tanaka will be temporarily replaced by Chairman Masashi Muromachi after an independent inquiry found the CEO had been aware the company had inflated its profits by $1.2 billion over a period of several years.
"I see this as the most damaging event for our brand in the company's 140-year history," Tanaka told a news conference after making a ritual deep bow of contrition to a flurry of camera shutters and flashes.
"I don't think these problems can be overcome overnight."
Muromachi is considered a safe pair of hands to lead Toshiba through its current turmoil before handing the reins to a successor. The company plans to announce next month the delayed business results for the financial year ended in March.
Tanaka's predecessors as presidents of the laptops-to-nuclear conglomerate, Vice Chairman Norio Sasaki and adviser Atsutoshi Nishida, will also step down after the third-party report showed they played a part in the overstatement of profits going back to the 2008 financial year.
A total of eight officials resigned on Tuesday and Tanaka said that the company is now considering appointing outside directors to over half of its board seats.
Monday's report by an outside panel of accountants and lawyers said Toshiba had overstated its operating profit by 151.8 billion yen ($1.22 billion), roughly triple Toshiba's initial estimate.
Tanaka and Sasaki pressured business divisions to meet difficult targets and knew they were overstating profits and delaying the reporting of losses, amid a culture of not going against the wishes of superiors, the report said.
--- The findings are expected to lead to the restatement of earnings and potentially hefty fines in Japan's worst boardroom scandal since Olympus Corp was found to have covered up $1.7 billion in losses.
Japanese Finance Minister Taro Aso said earlier on Tuesday that the
accounting irregularities at Toshiba were "very regrettable", coming
at a time when Prime Minister Shinzo Abe is trying to regain global investors'
confidence with better corporate governance guidelines.
Aso declined to comment when asked if Toshiba would face any kind of
financial penalty. Sources have said regulators were beginning their own review
of Toshiba's book-keeping, based on Monday's report.
Olympus scandal
Honesty is for the most part less
profitable than dishonesty.
Plato.
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?
A little more on
Gyrodrive or the Mk4 eFES to engineers. One year on from this announcement, I
wonder how far it’s advanced.
I
have no use for a motor car that has more spark plugs than a cow has teats.
Henry
Ford.
F1 Tech Is About to Make Buses Way More Efficient
07.31.14. 07.31.14
----The GKN Hybrid Power Gyrodrive is an electric flywheel that captures
energy as the car brakes, then uses it to drive an electric motor that boosts
power and cuts fuel consumption. It was developed by Williams Hybrid Power, a
division of the company that owns the Williams Formula 1 team.Williams first used it on its F1 cars and supplied it to other manufacturers. It has been used in the Audi R18 and Porsche 911 GT3 R Hybrid, for example.
In April, Williams sold the technology (and the team that developed it) to British automotive and aerospace conglomerate GKN for about $13.5 million and a cut of sales. Now it’s up to the 55-man team at GKN Hybrid Power to get the system onto the mass market and let English bus drivers enjoy the added performance racing drivers have been enjoying for years.
Gyrodrive, known officially by the thoroughly boring name Mk4 eFES, is a kinetic energy recovery system. Such systems capture energy usually lost as heat during braking and use it to power an electric motor.
In many cases, that energy is stored in a battery. GKN’s approach is a bit different. When the driver hits the brakes, a traction motor on the axle generates electricity while slowing the vehicle, augmenting the brakes. That energy is stored in a carbon-fiber flywheel, a spinning mechanical device that stores energy as momentum. The wheel operates in a vacuum to reduce friction, and can rotate up to 36,000 times a minute. When the driver gets on the gas, the system taps that spinning flywheel to send as much as 120 kilowatts back to the traction motor, helping acceleration.
As
well as it works
on race cars,
the Gyrodrive really gets useful when installed on city buses. The heavy
vehicles that spend all their time in traffic, stopping and starting, making
for lots of opportunities to gather and then deploy energy. That’s why GKN is
working with the Go-Ahead Group, a public transit provider in the U.K. The
collaboration started with trials on several buses about a year ago.
----The system, which weighs 130
pounds and is roughly the size of a passenger car wheel, can be retrofitted
onto a bus in a few days.
Day would not reveal how much GKN is charging for the system, but says
the fuel savings will make up for the cost in three years. Given that buses
tend to stay in service for at least a decade, the investment seems well worth
it.
Buses are just the beginning. Gyrodrive can be installed on other big
vehicles, such as garbage trucks, which are well-suited to the technology
because they make frequent stops. Day says GKN is also looking at rail
vehicles, possibly using bigger or multiple flywheels to account for the jump
in size.
More
Porsche 911 GT3 R Hybrid.
Is Apple planning an iCar? Tim Cook hires Chrysler executive Doug Betts as it eyes Tesla, Google and Uber over electric cars
21 July 2015 9:50am
Not content with taking over our ears (Apple Music) and wrists (Apple Watch)
this year, Apple may now have
its sights set on taking over our roads.Tim Cook has hired the an executive from Chrysler, fueling speculation that there may be an iCar coming down the road.
Doug Betts, a former senior vice president at the American carmaker who led global operations for quality, has joined Apple in an operations capacity, the Wall Street Journal first reported, citing a change on his LinkedIn profile.
While
it's not clear if Betts is bringing his auto expertise to Apple, and, of
course, the California-based company had no comment on the hire, he brings a
long career in the industry to the new job, including stints at Nissan and
Toyota.
More
Nothing
is permanent but change.
Heraclitus.
And small change at
that in Graeme’s pockets.
The monthly Coppock Indicators finished June
DJIA: +98 Down. NASDAQ:
+192 Down. SP500: +127 Down.
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