Thursday 9 July 2015

Washington, London, Panic.



Baltic Dry Index. 840 +10    Brent Crude 57.72

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

The larger the German body, the smaller the German bathing suit and the louder the German voice issuing German demands and German orders to everybody who doesn't speak German. For this, and several other reasons, Germany is known as 'the land where Israelis learned their manners'.

P. J. O’ Rourke.

On Greece, we can only stand around an await Sunday’s developments. Will the Germans really behead the Greeks ISIS style, and toss them naked out of the EUSSR’s Garden of Eden, to mangle concepts in an awkward metaphor for our awkward age of market rigging? Or will sanity prevail, something in short supply in the EUSSR, and some sort of planned last minute compromise be adopted to ease austerity in nearly dead Greece, and work out how to deal with Greece’s unrepayable mountain of debt? Logic suggests the latter, but this being the incompetent, wealth and job destroying, European Monetary Union, there never was a problem continental Eurocrats couldn’t make incredibly worse!

In an earlier age, a vast Teutonic Army would have appeared to carry off most of the welching Greeks into salt mine slavery in the north. In time there would be a shortage of salt.  German beach towels would cover all of the Greek sun loungers, while the remaining Greeks waited hand and foot on their German benefactors. This being the 21st century in the fantasy land of the United Sates of Europe, that by now was supposed to have trashed the United States of America, my money is on the Eurocrats making things 10 times worse next week.

In other news, in our 28 year old Greenspan stock market rigging age, stocks everywhere aren’t following their central bankster script.  Lately since mid June, they’ve begun acting like swan diving commodities. In America, even president Obama noticed the oddity, interrupting his golf game to call Merkel about somewhere called Greece. In London, panic and in classic British understatement: “Investor sentiment right now is dire, it’s moved from ambivalent to worried,” [said] Rob Clifford, a mining analyst at Deutsche Bank AG in London. Do calm down, have another cup of tea.

If you can keep your head when all about you   
    Are losing theirs and blaming it on you,   
If you can trust yourself when all men doubt you

You’re out of the loop, you idiot! With apologies to Kipling Cakes. 

Europeans told to bring Greece back from the brink and avoid descent into 'uncontrolled' Grexit

White House escalates warnings about geopolitical and financial dangers of letting Greece go as future of 'riots and chaos' face Athens

Europe’s creditor powers have been warned against igniting an “uncontrolled” financial and geopolitical crisis in Greece by letting the country fall out of the eurozone at the end of the week.

US Treasury Secretary Jacob Lew waded into the crisis on Tuesday, as Athens was preparing to make its final attempt to secure its future in the single currency. The Greeks have been told they have three days to prevent a fatal eurozone exit.

Mr Lew said lenders risked making a “mistake for Europe, the European economy and the global economy, to take the risks that are involved with an uncontrolled crisis in Greece”.

Washington has become increasingly exasperated by the mishandling of Greece’s woes, which they fear could destabilise Europe's fragile Mediterranean periphery.

President Barack Obama made his first personal intervention for months on Tuesday, urging German chancellor Angela Merkel to find a solution to Greece’s crippling debts, which are set to reach 180pc of GDP this year.

Mr Lew said it was no longer clear that there will be a solution to Greece’s turmoil. He said both parties were gambling with the stability of the global economy in entertaining the prospect of a “Grexit”.

“Before things broke down and they went to a referendum, they were within a couple of billions of euros of closing the gap,” Mr Lew told the Brookings Institute.

“For anyone who has participated in fiscal policy discussions, you wouldn't usually buy hundreds of billions of dollars of risk for a few billion.”
More
http://www.telegraph.co.uk/finance/economics/11727607/Europes-creditors-told-to-avoid-descent-into-uncontrolled-Grexit.html
Wed Jul 8, 2015 4:50pm EDT

Exclusive: Greek banks face closures, bailout or not - sources

ome large Greek banks may have to be shut and taken over by stronger rivals as part of a restructuring of the sector that would follow any bailout of the country, European officials have told Reuters.

European leaders will gather on Sunday in a last-ditch attempt to salvage agreement with Greece after months of acrimonious negotiations that have taken the country to the brink of leaving the euro.

But regardless of whether or not fresh funds are now unlocked for the government, some Greek banks, damaged by political and economic havoc, may have to be closed and merged with stronger rivals, officials, who asked not to be named, told Reuters.

One official said that Greece's four big banks - National Bank of Greece (NBGr.AT), Eurobank (EURBr.AT), Piraeus (BOPr.AT) and Alpha Bank (ACBr.AT) - could be reduced to just two, a measure that would doubtless encounter fierce resistance in Athens.

A second person said that although mergers of banks were necessary, this could happen over the longer term.

"The Greek economy is in ruins. That means the banks need a restart," said the first person, adding that prompt action was necessary following any bailout between Athens and the euro zone. "Cyprus could be a role model."

"You have a tiny bit of time ... you would do restructuring straight away."
More
http://www.reuters.com/article/2015/07/08/us-eurozone-greece-bankclosures-idUSKCN0PI2KI20150708

This Is Why So Many Chinese Companies Are Suspended

China's corporations have been big fans of stock-based loans, too
July 8, 2015 — 1:42 PM BST
At least 1,331 companies have halted trading on China's mainland exchanges, freezing $2.6 trillion of shares, or about 40 percent of the country’s market value, Bloomberg reported on Wednesday.

The Shanghai Composite Index fell 5.9 percent on Wednesday. It's now about 32 percent below the peak of 5,166 it reached on June 12. The unwinding of margin loans is adding fuel to the fire. Individual investors in China, as we all know by now, have used generous margin financing terms to enter the stock market and then build up their portfolios. Less-known is that Chinese companies have been doing the same thing by using their own corporate stock to secure loans from banks.

This means that they stand to lose a lot when those share prices start trending dramatically lower.
Says Nick Lawson at Deutsche Bank: "Stocks are being suspended by the companies themselves because many have bank loans backed by shares which the banks themselves may want to liquidate, joining the queues of margin sellers."

Nomura analysts added that: "Some bank loans have been extended with shares of listed companies put up as collateral."

Numbers here are sketchy, but the team at Nomura estimated that the total amount of such loans may be 500 billion yuan to 600 billion yuan ($80 billion to $96 billion). This sounds like a lot but is equivalent to about 1 percent of total loans to Chinese enterprises.

Still, the dynamic at play is reminiscent of the troubles encountered by U.S. energy companies, thanks to the plunging price of oil. Many shale explorers have bank loans tied to the value of their oil and gas reserves. When the price of oil began sinking last year, those credit lines were generally reassessed at a lower value, limiting the amount of credit available to the energy companies and putting further pressure on companies that were already dealing with the fallout from dramatically lower crude prices.

The easiest way to stop a painful cycle by which lower share prices lead to curbed corporate credit, further troubles for Chinese companies, and ever-increasing share price pressures is to halt stock trading altogether.

Speaking of which, the latest move from Chinese regulators announced on Wednesday bans corporate executives from selling stock for six months.
More
http://www.bloomberg.com/news/articles/2015-07-08/this-is-why-so-many-chinese-companies-are-suspended

NYSE Resumes Trading on Two Markets After Hours-Long Halt

July 8, 2015 — 8:01 PM BST Updated on July 8, 2015 — 8:58 PM BST
The New York Stock Exchange reopened equity trading after a 3 1/2-hour halt that it blamed on a computer malfunction.

Shares resumed on the New York Stock Exchange, the biggest of the company’s platforms, and NYSE MKT, the third-largest, just after 3 p.m. New York time, according to data compiled by Bloomberg and an NYSE notice. Because shares were changing hands elsewhere throughout the outage, the NYSE was able to avoid having to reestablish its own prices through auctions.

“I’m not hearing anything out of the ordinary from my trading desks” after the restart, said Kevin Mahn, president of Parsippany, New Jersey-based Hennion & Walsh Asset Management Inc. “After staying closed for four hours, it seems more complicated than a simple computer glitch, but right now everything is OK.”

NYSE’s halt will go down as the biggest interruption to U.S. stock trading in two years. The last of comparable scope occurred in August 2013, when the Nasdaq Stock Market halted trading not only on its own platform, but anywhere stocks that it listed changed hands.

At the same time, the malfunction highlighted the resilience of a market structure where no single venue handles more than 16 percent of overall market volume. Other exchanges such as Nasdaq and Bats kept operating as normal throughout the suspension.
More
http://www.bloomberg.com/news/articles/2015-07-08/nyse-preparing-to-resume-equity-trading-after-hours-long-halt

Why the NYSE trading halt should alarm investors

Published: July 8, 2015 10:07 p.m. ET
SAN FRANCISCO (MarketWatch) — Look out, China. The Big Board on Wednesday suspended trading in all stocks.

OK. Bad jokes aside, the sudden and unexplained halt in trading Wednesday at the New York Stock Exchange should alarm investors. Even if the NYSE is not the victim of cyber terrorism and is simply experiencing a regular technical glitch, if the exchange was forced to hit the “off” switch, it signals a vulnerability of a market that is almost entirely electronic and highly technical.

What’s worse: United Continental Holdings UAL, -2.74%  planes were grounded today after a computer glitch. And the Wall Street Journal’s Web site was down temporarily.

“Anybody who has a computer knows they crash periodically — nothing's perfect,” said Michael Goldstein, a professor of finance at Babson College and former NYSE economist. “Adding all of these together, in the world we live in now — we’re talking about an airline and major stock exchange — having major computer problems should make people nervous.”

Goldstein said you have to ask yourself: “What would a cyber attack look like?”

----For the NYSE, the glitch is especially troubling given the lumbering investigation into the 2010 “flash crash” in which stocks tumbled, according to regulators, due to the work of a single trader in Britain who was “spoofing.” The alleged perpetrator wasn’t named until five years and more than 1,000 trading days later.

To be sure, there is a big difference between a potential cyber attack, a computer glitch and a trader breaking the rules. On the flip side, it’s fair to ask if exchanges, whether it be the NYSE, a unit of the Intercontinental Exchange Inc. ICE, -2.36% the CME Group Inc., which owns the Chicago Mercantile Exchange CME, -0.24%  and the Nasdaq are truly the safe and secure marketplaces they claim to be.

Poll after poll shows market trust is in the dumps. Last summer, Better Markets found that 64% of voters don’t trust the markets and 60% support more regulation. A poll by CNBC in March 2014 found 75% of respondents felt the market was “rigged.”
More
http://www.marketwatch.com/story/why-nyse-halt-should-alarm-investors-2015-07-08

Mining’s $143 Billion Stock Rout Signals Escalating China Fears

July 8, 2015 — 6:01 PM BST
Fears of faltering Chinese growth ignited a $143 billion meltdown in global mining stocks as investors confront sputtering demand in the world’s biggest consumer of commodities.

The Bloomberg World Mining Index of 79 producers dropped 17 percent in the past 10 days as prices for industrial metals such as copper, nickel and aluminum sank to six-year lows. The price of iron ore, a key profit driver for top-ranked BHP Billiton Ltd. and Rio Tinto Group, slumped 10 percent Wednesday to its lowest since at least 2009 as new supply floods the market.

China is set to grow at its slowest pace in a quarter of a century, sapping the country’s demand for commodities and crimping mining companies’ profits. Chinese authorities are struggling to contain a $3.5 trillion stock rout with a slew of market-boosting measures, rattling investors.

“It’s pretty bleak at the moment, there’s no getting away from that,” James Sutton, a portfolio manager at JPMorgan Chase & Co.’s $2 billion Natural Resources Fund in London, said in an interview. “Overwhelmingly it’s technical factors that are driving the severity of the move. Amazing moves to happen, just whipsawing around like this.”

Chinese demand for commodities is falling, with imports of iron ore in May contracting 12 percent to 70.87 million metric tons from the previous month. Imports of coal plunged 28 percent in the month to their lowest in more than four years.

Prices of industrial commodities are also volatile. Copper sank as much as 5.9 percent on the London Metal Exchange on Tuesday before rebounding up to 3.9 percent the next day. Nickel tumbled 9 percent on Tuesday and then gained 3.8 percent.

“Investor sentiment right now is dire, it’s moved from ambivalent to worried,” Rob Clifford, a mining analyst at Deutsche Bank AG in London, said by phone.

----BHP, the world’s biggest mining company, has fallen 8.3 in London this year, dipping to a six-year low on Wednesday. Rio has dropped 17 percent, reaching the lowest in just under six years. Swiss miner and commodities trader Glencore Plc plunged to its weakest since a $10 billion initial public offering in 2011, declining 20 percent this year.
More
http://www.bloomberg.com/news/articles/2015-07-08/mining-s-143-billion-stock-rout-signals-escalating-china-fears

If you can make one heap of all your winnings
    And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings

You’re not a too big to fail or jail gambling bankster, with apologies to
Kipling Cakes.

At the Comex silver depositories Wednesday final figures were: Registered 60.15 Moz, Eligible 120.82 Moz, Total 180.97 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, a digression. No crooks today, just a daft Jersey politician on a wild goose chase. Well at least he didn’t declare war on the wrong country and at least he stayed in Europe.  Ever wonder where most of the uranium came from to make the atom bombs dropped on Japan by America? Six letter Canada? Try five letter Congo. But in the world of spooks, cover ups, and mystery, what is real and what is deliberately planted disinformation?

Booking blunder sends sports minister to wrong country

Jersey’s sports minister has apologised for wasting around £1,000 of taxpayers’ money after he mistakenly flew to Budapest instead of Bucharest and missed a global event

Constable Steve Pallett was scheduled to visit Bucharest, Romania, to attend the official handover of the Dance World Cup. Jersey is due to host the annual event next year and he was supposed to receive a flag from his Romanian counterpart at the event.

But he flew instead to Budapest, the Hungarian capital, leaving him some 500 miles short of his intended destination and unable to reach the ceremony in time.

A spokesman for Jersey’s Education, Sport and Culture department said “human error” was to blame.
"It is really disappointing, I have to apologise for wasting taxpayers' money and for letting down the Dance World Cup,” Pallett told the BBC. "I don't know the exact cost as I've still got some figures to come back, but it won't be less than £1,000 and the department should have been more careful when it was booked.

"All I can do is apologise for what is a schoolboy error, the last thing I needed was a day trip to Budapest after a long week supporting the Island Games."

It was by no means the first time someone has mixed up a pair of similar-sounding cities and ended up a long way from their intended destination.

Earlier this year a medical student was left red-faced after he attempted to fly to Guyana to begin a scholarship but ended up nearly 2,000 miles from his intended destination, in the Brazilian city of Goiania.

In 2013 Lamenda Kingdon, a British woman, had hoped to explore the beautiful Alhambra Palace in Granada, Spain. Instead she mistakenly caught a flight across the Atlantic to the tropical Caribbean island of Grenada.
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Shinkolobwe

Shinkolobwe is the name of a town and a mine in the Katanga province of the Democratic Republic of the Congo (DRC), located near the larger town of Likasi and about 120 miles northwest of Lubumbashi. Around 15,000 people live in the town.[citation needed]

The mine produced uranium ore for the Manhattan Project. It was officially closed in 2004.
The mineral deposit was discovered in 1915 by Robert Rich Sharp (1881-1958).[1][2] The mine was worked from 1921 onwards. Uranium-bearing ore was initially exported to Belgium for the extraction of radium.[3]
The United States used Shinkolobwe's uranium resources to supply the Manhattan Project to construct the atomic bomb in World War II. Edgar Sengier, then director of Union Minière du Haut Katanga, had stockpiled 1,200 tonnes of uranium ore in a warehouse on Staten Island, New York.
This ore and an additional 3,000 tonnes of ore stored above-ground at the mine was purchased by Colonel Ken Nichols for use in the project. Nichols wrote:[4]

Our best source, the Shinkolobwe mine, represented a freak occurrence in nature. It contained a tremendously rich lode of uranium pitchblende. Nothing like it has ever again been found. The ore already in the United States contained 65 percent U3O8, while the pitchblende aboveground in the Congo amounted to a thousand tons of 65 percent ore, and the waste piles of ore contained two thousand tons of 20 percent U3O8. To illustrate the uniqueness of Sengier’s stockpile, after the war the MED and the AEC considered ore containing three-tenths of 1 percent as a good find. Without Sengier’s foresight in stockpiling ore in the United States and aboveground in Africa, we simply would not have had the amounts of uranium needed to justify building the large separation plants and the plutonium reactors.

The mine was closed in 1939 and flooded. The US Army sent a squad from its Corps of Engineers to reopen the mine, expand the aerodromes in Léopoldville (now Kinshasa and Elizabethville (now Lubumbashi), and extend the port at Matadi, on the Congo River. Between 1942 and 1944, about 30,000 tons of uranium ore were sold to the US Army.[citation needed]

American interest in the Shinkolobwe mine for the purpose of developing of nuclear weapons led to the implementation of extensive security measures. Shinkolobwe's location was removed from maps and journalists were denied access to the mine and official information.
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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?

New energy cell can store up solar energy for release at night

By Dario Borghino - July 7, 2015
A photoelectrochemical cell (PEC) is a special type of solar cell that gathers the Sun's energy and transforms it into either electricity or chemical energy used to split water and produce hydrogen for use in fuel cells. In an advance that could help this clean energy source play a stronger role within the smart grid, researchers at the University of Texas, Arlington have found a way to store the electricity generated by a PEC cell for extended periods of time and allow electricity to be delivered around the clock.

Currently, the electricity generated by a PEC cell could not be stored effectively, as the electrons would quickly "disappear" into a lower-energy state. This meant that these cells were not a viable solution for a clean-energy grid, as the electricity had to be used very shortly after being produced. That is, on sunny days, at a time when standard PV panels would already be producing energy at full tilt.

Now, researchers Fuqiang Liu and colleagues have created a PEC cell that includes a specially designed photoelectrode (the component that converts incoming photons into electrons). Unlike previous designs, their hybrid tungsten trioxide/titanium dioxide (WO3/TiO2) photoelectrode can store electrons effectively for long periods of time, paving the way for PEC cells to play a bigger role within a smart energy grid.

The system also includes a vanadium redox-flow battery (VRB). This is an already established type of energy storage cell that is very well-suited for the needs of the electrical grid as it can stay idle for very long times without losing charge, is much safer than a lithium-ion cell (though less energy-dense), is nearly immune to temperature extremes, and can be scaled up very easily, simply by increasing the size of its electrolyte tanks.

According to the researchers, the vanadium flow battery works especially well with their hybrid electrode, allowing them to boost the electric current, offering great reversibility (with 95 percent Faradaic efficiency) and allowing for high-capacity energy storage.

----A paper describing the advance appears in the latest edition of the journal ACS Catalysis.
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The monthly Coppock Indicators finished June

DJIA: +98 Down. NASDAQ: +192 Down. SP500: +127 Down. 

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