Baltic Dry Index. 830 +15 Brent Crude 56.62
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"Liquidation sometimes is orderly, but more frequently degenerates into panic as the realization spreads that there is only so much money, not enough to enable everyone to sell out at the top."
Charles P. Kindleberger, author Manias, Panics and Crashes.
I don’t know if the next Lehman has arrived in Greece or China, but this morning we are spoiled for choice of unfolding disaster. We seem to have stumbled into The Towering Inferno, Titanic, and Earthquake, all at once. Greece has been given one, final, final, final, final, last chance to jump through Germany’s austerity hoop. Sunday is now the day that Europe’s “Great Leaders” are apparently ready to slit Greece’s throat.
In China, the Great Stock Market Bubble Bust continues unchecked. All last weekend’s panic measures and Communist Party orders to buy more stocks seems to have failed miserably. With 40% of China’s stocks now suspended from trading, no one has a clue anymore as to who is still solvent, who has gone bust, nor what the size of the damage will turn out to be.
With China the great 1000 lb. gorilla in the commodities room, with stocks suspended and margin calls rising, commodities became the go to thing to sell whatever the actual commodities news. Copper, crude oil and iron ore, led the rout.
Below, the H2 15 bust starts to feed on itself, and in theory we still have the Fedster’s taking chair rate hike to come. We can only hope Mrs Yellen isn’t about to follow Mrs Merkel’s disastrous EU lead, and kick off a US rate hike later this month.
Below, did somebody here call for Armageddon?
"If the EU cannot resolve a small problem the size of Greece, what is the point of Europe?"
Romano Prodi, former chief of the European Commission, former Italy Prime Minister.
EU Tells Tsipras the Party’s Over as Euro Exit Door Swings Open
July 8, 2015 — 1:44 AM BST
After five months of drama, false dawns and unpleasant surprises, Europe’s
leaders are finally ready to show Alexis Tsipras the exit.Behind the doors of the Justus Lipsius building in the heart of the political district in Brussels, the euro-region’s leaders rounded on the Greek prime minister for destabilizing the currency union before Germany’s Angela Merkel emerged to deliver an official ultimatum.
In a tense and at times emotional meeting, Tsipras’s European peers told him he’d failed to appreciate the efforts the continent’s voters and taxpayers had made to help the Greek people and blamed him for escalating tensions across the region. Six officials agreed to share their knowledge of the private talks while asking not to be named because of the sensitivity of the historical moment.
“Party time at the expense of others in Greece has come to an end,” Lithuanian President Dalia Grybauskaite said. “Europe and the euro area are surely unprepared to pay for the irresponsible behavior of the new Greek government.”
Afterward in public comments, the leaders competed to find the harshest language to describe Tsipras’s approach and its likely consequences. Dutch Prime Minister Mark Rutte said a “miracle” would be needed to keep Greece in the euro-region, while Malta’s Joseph Muscat said the 40-year-old had created an “enormous trust-gap” with his European counterparts.
“We have a Grexit scenario prepared in detail,” European Commission President Jean-Claude Juncker said, using the shorthand for expulsion from the now 19-nation currency area.
That bookended a day that began with a meeting of the region’s finance ministers, and a welcome for Greece’s new man in that role, the 55-year-old economist Euclid Tsakalotos. At first Tsakalotos won the acceptance of his colleagues, who’d been riled by his predecessor Yanis Varoufakis’s hectoring style.
But the mood soured quickly.
----Germany’s Wolfgang Schaeuble demanded that officials from the European Central Bank and the European Commission detail their plans to shield the rest of the bloc from the fallout from a Greek exit. A long-held taboo against discussing such plans had been cast aside, officials said.
More
"This is the most critical moment in our history" - five days to save Greece from the abyss warn European leaders
Creditor powers ready plans to deal with humanitarian crisis and a banking collapse in Greece as agreement remains perilously out of reach
The European Union faces "the most critical" moment in its 64-year history, after leaders warned they had five days to prevent Greece from careering out of the euro and into a full blown humanitarian crisis."Our inability to find agreement may lead to the bankruptcy of Greece and the insolvency of its banking system", said Donald Tusk, head of the European Council, after talks between Greece and its partners ended without agreement on Tuesday night.
Brussels has now convened a full emergency summit of all 28 European leaders on Sunday to thrash out an deal to keep Greece in the single currency.
"I have no doubt that this is the most critical moment in the history of the European Union," said Mr Tusk.
He dismissed any notion that letting Greece leave the euro would not have irreparable geopolitical consequences for the continent.
"If someone has any illusion that it will not be so, they are naive."
European Commission president Jean-Claude Juncker, who has grown
increasingy frustrated with the Greek government admitted: “We have a Grexit
scenario, prepared in detail.”
The comments are the starkest warning that any political miscalculation
from creditor powers will now result in Greece's ejection from the single
currency. It would result in a fatal breach of the sanctity of monetary union
only 15 years after the euro was introduced.
Without any fresh injection of emergency funds, Greece is set to default
on a €4.2bn payment to the European Central Bank in 12 days time, putting it on
the inexorable path of issuing an alternative currency and a chaotic eurozone
exit.
Morehttp://www.telegraph.co.uk/finance/economics/11725041/Five-days-to-save-the-eurozone-from-disaster.html
China companies rush to suspend their shares; 40% of all stocks now in halt
Published: July 8, 2015 12:19 a.m. ET
HONG KONG (MarketWatch) — As Chinese stocks took another sharp turn lower
Wednesday, more listed companies rushed to halt trading in their shares, with
more than 40% of the country’s stocks suspended by the time the session
started, according to various media reports.More than 1,200 listed Chinese companies had their stocks in trading halt by Wednesday, accounting for well above 40% of the entire pool of 2,808 issues, the Southern Metropolis Daily reported, citing data as of midnight Tuesday from cninfo.com, the market information site sanctioned by China’s securities regulator.
It marked the largest wave of trading halts in the history of China’s equity markets, the report said.
Many of the companies didn’t disclose the reasons behind their trading suspensions, though some cited the consideration of unspecified significant events, asset restructuring, or private share placements, according to various recent reports.
The Southern Metropolis report, as well as other recent commentary, said many of the halts were likely meant to protect the shares from the ongoing selloff in Chinese markets, although a previous Reuters report said that the companies would face fines if they were discovered to have requested trading suspensions without good reason.
In some cases, large shareholders who had pledged stocks as collateral may have also requested stock suspensions for the relevant names to prevent the risk of an account liquidation, the Southern Metropolis Daily said.
But with an ever-larger number of companies seeking to pull their stocks from active trade, the exchanges may begin refusing some requests, if only because they are “too busy to attend to all” of them, the newspaper quoted an unnamed source close to the Shenzhen Stock Exchange as saying.
By the midday break Wednesday, the Shanghai Composite Index SHCOMP, -3.88% had fallen 3.9%, moving off of an 8.2% loss earlier in the morning. For the week to date, it was down 2.8%, with a month-to-date loss of more than 16%. The plunge also dragged down the Hong Kong market, where many of the same Chinese companies also list, with the Hang Seng Index HSI, -4.20% down 4.3% late in the morning session.
The heavy losses came despite a rare pledge early Wednesday by the People’s Bank of China that it would closely monitor stock movements and continue to use various means to support the state-backed margin-finance entity — China Securities Finance Corp. (CSF) — in order to protect market stability.
The central bank’s statement marked the latest in a slate of measures in recent days to support the equity market, including the purchase of shares and the easing of margin-lending rules.
More
China’s stock-market collapse is not over yet
Published: July 7, 2015 4:19 p.m. ET
The collapse in China’s stock market is far from over despite the Shanghai
Composite Index having fallen nearly 30% in about a month and experts are
urging investors to bail out while there is time. “We continue to advise investors to consider not holding individual positions in Chinese stocks but advocate for fully diversified exposure to emerging-market equities,” Peter Donisanu global research analyst at Wells Fargo Investment Institute said in a report to investors.
The Shanghai Composite SHCOMP, -4.00% closed at 3,727.12 on Tuesday, slumping from its seven-year high close of 5,166.35 on June 12.
----Further undermining confidence is a consensus that the runup in China’s stock market over the past several months was not driven by economic fundamentals but speculation.
Marc Chandler, global head of currency strategy at Brown Brothers
Harriman, blamed “government cheerleading” and easy money via loose monetary
policy as the two main culprits behind the stock-market bubble.
With the Shanghai benchmark having crashed below 4,099, which J.P.
Morgan had earlier pegged as a short-term support level, analysts now believe
there is very little to halt a further decline in the index.
----Stephen Roach, former chairman of Morgan Stanley Asia, concurred with the grim outlook.
“The bubble is bursting. Who knows where it’s going in terms of the downside,” he said during an interview with CNBC.
More
China iron ore futures fall 8% to record low
3 hours ago
Turmoil in Chinese markets is extending beyond equities as China-traded iron
ore futures fall to a record-low.Iron ore, the key ingredient in making steel, is Australia's largest export. China imports more than any other country to build everything from railroads to houses and skyscrapers.
Analysts have been debating whether a collapse in Chinese equities would spread to the real economy. If these figures are a guide, more people are becoming fearful it will.
Dalian iron ore futures fell 8 per cent to Rmb349 ($56) a tonne early Wednesday, a ninth straight fall. An 8 per cent fall would be the sharpest sell-off in records going back to September.
The Dalian Commodity Exchange is a futures exchange confined to traders and companies registered in China.
Overnight, spot iron ore prices compiled by The Steel Index fell below $50 a tonne, the lowest since April.
In Australia, the metals and mining sector is down 2.2 per cent in early trading. Fortesecue Metals Group shares were down nearly 4 per cent.
Demand is only one side of the equation, of course. A broader reason why iron ore prices have been in decline this year is record output.
Major producers have been trying to make up for lower prices by cutting costs and exporting more — exacerbating the decline. The Pilbara Ports Authority said last week that June shipments were up 14 per cent from a year ago at 38.3m tonnes, a record.
More
China trading halt as iron ore price falls below $US50
The Australian share market rollercoaster is heading down again after
fresh fears over the destruction of wealth taking place in China.
The All Ordinaries, which put on $32 billion yesterday, is looking at
losing more than $20 billion half way through today’s trading session.
It has been spooked by events in China where the key Shanghai composite
equities market opened today more than 8 per cent lower.
At 10.10am it had recovered slightly but was still 6 per cent down on
its opening.
----The continuing volatility follows a fresh fall in the price of iron ore, which hit $US49.60 overnight, its lowest point since April.
Prices for the commodity have now fallen by more than 12 per cent in
Australian dollar terms over the past fortnight.
The situation would be much worse if not for the easing Australian dollar
which hit a fresh six-year low of US73.98 cents before it rallied to reach the
middle of the day around US74.4 cents.
The dollar also fell against the euro, the Kiwi dollar and the Japanese
yen while it moved up a little against the British pound.
The price for iron ore is now down around where both the Federal and WA
Treasuries forecast it would be through 2015-16. There had been some hope
entering the new financial year the price would be substantially higher, giving
a boost to the budget bottom lines of both Joe Hockey and Mike Nahan.
It’s not just iron ore and the Australian-American dollar taking a hit.
Prices for gold, silver, palladium, copper, zinc and nickel all fell.
Nickel itself lost 7.5 per cent overnight.
Even soft commodities such as wheat, soybeans, cotton and sugar edged
down.
ANZ economists said in a note to clients not to expect any rally on iron
ore markets any time soon.
“ Commodity sentiment is expected to remain weak on Greek uncertainty
and falling steel markets in China,” they said.
More
Oil prices fall as China share crisis worsens, traders hedge for further drops
Oil futures fell again on Wednesday as worries over the Greek debt
crisis and China's stock market turmoil outweighed an expected U.S. inventory
drop, with traders anticipating further drops.
China's stocks tanked further on Wednesday in a deepening crisis in
which China's Securities Finance Corp said it would provide liquidity to ease
"panic" as over 500 Chinese-listed firms suspended trading.
Front-month Brent crude futures were 38 cents lower at $56.47 a barrel
at 0452 GMT, and are down over 6 percent so far this week to levels last seen
in April.
U.S. crude was down 35 cents at $51.98, down more than 8 percent for the
week.
"A perfect storm of events has hit oil markets," Morgan
Stanley said.
The bank said "turmoil in China and Greece may put recent robust
demand growth at risk," although adding that moves so far had been largely
on sentiment rather than new oil fundamentals.
Yet trade data showed that the market is preparing for further falls.
Open interest in options to sell U.S. crude at $50 per barrel has fallen
almost 15 percent since the beginning of July, while those to sell at $45 a
barrel have risen 12.5 percent.
"Funds are contributing to the sell-off, with (U.S.) speculators
reducing net-long position in WTI oil by 8 percent in the latest week,"
ANZ said.
More
“The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”
“Adam Smith” aka George Goodman.
At the Comex silver depositories
Tuesday final figures were: Registered 60.15 Moz, Eligible 121.99 Moz, Total
182.14 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, Greece. An American view of Europe’s
madness.
The Greek Vote and the EU Miscalculation
In a result that should surprise no one, the Greeks voted to reject European demands for additional austerity measures as the price for providing funds to allow Greek banks to operate. There are three reasons this should have been no surprise. First, the ruling Coalition of the Radical Left, or Syriza party, is ruling because it has an understanding of the Greek mood. Second, the constant scorn and contempt that the European leadership heaped on the prime minister and finance minister convinced the Greeks not only that the scorn was meant for them as well but also that anyone so despised by the European leadership wasn't all bad. Finally, and most important, the European leadership put the Greek voters in a position in which they had nothing to lose. The Greeks were left to choose between two forms of devastation — one that was immediate but possible to recover from, and one that was a longer-term strangulation with no exit.The Europeans' Mistaken Reasoning
As the International Monetary Fund noted (while maintaining a very hard line on Greece), the Greeks cannot repay their loans or escape from their economic nightmare without a substantial restructuring of the Greek debt, including significant debt forgiveness and a willingness to create a multidecade solution. The IMF also made clear that increased austerity, apart from posing an impossible burden for the Greeks, will actually retard either a Greek recovery or debt repayment.The Greeks knew this as well. What was obvious is that austerity without radical restructuring would inevitably lead to default, if not now, then somewhere not too far down the line. Focusing on pensions made the Europeans appear tough but was actually quite foolish. All of the austerity measures demanded would not have provided nearly enough money to repay debts without restructuring. In due course, Greece would default, or the debt would be restructured.
Since Europe's leaders are not stupid, it is important to understand the game they were playing. They knew perfectly well the austerity measures were between irrelevant and damaging to debt repayment. They insisted on this battle at this time because they thought they would win it, and it was important for them to get Greece to capitulate for broader reasons.
No other EU country is in a condition as bad as Greece's. However, a number of EU countries, particularly in Southern Europe, carry a debt burden they would like to renegotiate. They are doing better than Greece this year, but with persistent high unemployment — for example, 22.5 percent in Spain as of May — two things are not clear: first, what shape these countries will be in next year or the year after that, and second, what governments would come into office, and what the new governments' positions would be. Greece accounts for less than 2 percent of the European Union's gross domestic product. Italy and Spain are far more important. The problem of restructuring debt is once it is done for one country, others will want to restructure as well. The European Union did not want to set any precedents for future crises or anti-EU governments.
----The European leaders miscalculated. They thought Greece could be more flexible, and they wanted to demonstrate to any other country or party that might consider a similar maneuver in the future just what the cost would be. The Europeans feared the moral risk of compromising with the Greeks. They created a more dangerous situation for themselves.
More
"There can be no other criterion, no other standard
than gold. Yes, gold which never changes, which can be shaped into ingots,
bars, coins, which has no nationality and which is eternally and universally
accepted as the unalterable fiduciary value par excellence."
Charles De Gaulle
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?
GKN Hybrid Power
GKN Hybrid Power is at the forefront of hybrid flywheel technology within motorsports, providing systems Audi for the R18 e-tron Quattro that has won three consecutive years at Le Mans 24 hour endurance race.The technology is now available to applications such as hybrid buses and other passenger and commercial vehicles to increase deliver improved fuel economy and reduce emissions.
Technology & Innovation
The system has a number of unique features. The core of
the hybrid system is the Magnetically Loaded Composite rota, which
provides a highly efficient electrical energy storage capability which is both
cheaper and lighter than batteries. Through motorsport
development, Hybrid Power has developed a system that can deliver
high, continuously cycling power output over an extended operating life, which
far exceeds that of current, battery based hybrid applications.
Technical overview
Compared to a battery, the electric flywheel has a much higher specific
power density. This means that for applications that require relatively short
bursts of energy at a higher power, the flywheel system is a fraction of the
weight, volume and cost (by as much as a third) of a battery.
- It can continuously deep cycle at high power without the longevity concerns for batteries when operated similarly. A flywheel can be right-sized and will happily deep cycle for the lifetime of the vehicle.
- It can operate at full charge/discharge capacity through a broader range of operating temperature (-20°C to 45°C) compared to battery alternatives.
- Full cycle life costs are lower. The recycling process is also relatively less expensive and lower risk compared to batteries.
- Storage and handling at zero charge state is intrinsically safer than for a typically partial or fully charged high voltage battery.
Features
- Composite flywheel energy store through magnetically loaded composite
- Spins up to 45,000 rpm in a vacuum
- Integrated electric motor “mechanical battery”
- Suits continuous high power cycling with minimal losses
- Safety through design
- Validated in test & operational environments
- High cycle life (over 1 million cycles)
- High duty cycle at high power
- Lightweight & flexible compact package ability
- Low manufacturing cost
- Recyclable & durable
- Attractive cost of ownership compared to other energy stores
http://www.gkn.com/landsystems/brands/hybrid-power/technology-and-innovation/Pages/default.aspx
The monthly Coppock Indicators finished June
DJIA: +98 Down. NASDAQ:
+192 Down. SP500: +127 Down.
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