Baltic Dry Index. 903 -02 Brent Crude 49.16
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“The boom can last only as long as the
credit expansion progresses at an ever-accelerated pace. The boom comes to an
end as soon as additional quantities of fiduciary media are no longer thrown
upon the loan market.”
Ludwig
von Mises.
It is month end and “dress up” Monday. How will US stocks close out the
month? UK stocks have already closed for the month, it’s the last summer bank
holiday here in Merrie Olde England. The early indication from Asian stocks
suggest a weaker close. But the Fedster’s Plunge Protection Team is sure to be
buyers today. Even so, at the Fed’s weekend junket for their favoured cronies,
the word seems to be that the Fed’s rate hike next month is back on. There
ought to be plenty of sellers today needing the Fed’s PPT. Professional money
managers will want to drop all stocks in a correction or worse. No professional
money manager wants to show clients that he held on while his more adroit
competitors sold out. It may not be investing, but it sure is survival in the
world of professional money managing.
Below, Asia wobbles, as rumours spread that China has given up on trying
to rig its stock markets. If true, and if Uncle Scam’s markets swoon today, PPT
or not, my guess is that global stock markets head into an autumn of an
unrelenting reconnect with Main Street reality. Even if the Fed’s PPT manage to
stage a rally today, a hurricane is fast approaching the global economy.
Deflation is the new game in town.
Asian stocks set for worst monthly drop in three years on global rout
Global markets are bracing for Chinese data on Tuesday which is expected to show the world's second-largest economy is continuing to lose momentum.
A Reuters poll showed China's official factory sector activity likely fell to a 3-year low.
U.S. business surveys, factory orders, trade data and non farm payrolls will also be released this week, keeping investors on edge after one of the wildest trading weeks of the year.
MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.8 percent and is set to fall 10 percent this month, its worst monthly drop since May 2012.
Japan's Nikkei .N225 was down more than 1 percent and South Korea's Kospi shed 0.6 percent. Australian shares lost 1.2 percent.
Selling intensified as China markets extended declines. By midmorning, Shanghai stocks .SSEC, the epicenter of this month's whip-saw action, were down 3 percent. They have plunged more than 40 percent since mid-June.
More
China's yuan up on suspected intervention, set for August loss
For August, the currency is set to depreciate 2.7 percent if it closes at the midday level. Most of the losses came after the People's Bank of China (PBOC) surprised markets by devaluing the yuan by nearly 2 percent on Aug. 11.
"Major state-owned banks bought a large amount of yuan this morning," said a trader at an Asian bank in Shanghai.
These banks were suspected of intervening on behalf of the central bank around 6.38 against the dollar, several traders said.
The PBOC set the midpoint rate CNY=SAEC at 6.3893 per dollar prior to market open, 0.15 percent firmer than the previous fix 6.3986.
The spot market CNY=CFXS opened at 6.3890 per dollar and was changing hands at 6.3805 at midday, 0.13 percent stronger than the previous close.
After the abrupt devaluation on Aug. 11, Beijing appears to have been so surprised by the global reaction that it tends to keep the yuan on a tight leash to head off a currency war that could spark a broader financial crisis, policy insiders say.
Premier Li Keqiang reiterated at the weekend earlier remarks that there's no basis for continued depreciation of the yuan following its devaluation.
More
Chinese shares lead Asia bourses lower
August 31, 2015
4:10 am
Monday 03:20 BST. Chinese shares took a dive, weighing on
regional benchmarks, following reports that Beijing has scrapped large-scale share purchases
as a method of propping up markets.
The Shanghai
Composite fell 3 per cent while the Shenzhen Composite slid 2.7 per cent. That
took declines for the month to 14.5 per cent and 14.9 per cent, respectively,
putting both indices on pace for their worst monthly performances since August
2009.
Chinese
authorities are estimated to have spent about $200bn trying to support the crumbling equities market, but with
questionable and short-lived results.
In recent weeks,
the withdrawal of some government support prompted a sharp sell-off, and the
two primary benchmarks had both fallen below the levels of early July at which
the government initially stepped in to shore up confidence. Beijing will now
focus its efforts on punishing those suspected of destabilising the market.
Global
benchmarks roared back after the People’s Bank of China cut benchmark interest
rates last Tuesday — but “if the Thursday/Friday Shanghai rally proves to be a
flash in the pan, we have no doubt so too will the recent rebound in global
stocks”, said Ray Attrill, National Australia Bank global co-head of FX
strategy, “in which case we’ll have greater confidence in our current view that
the Fed will not be moving next month”.
Regional
equities continued their downtrend for August, which has been the worst monthly
performance in years for many benchmarks.
Japan’s Nikkei,
down 1.1 per cent on Monday morning, is off 8.1 per cent for August, its worst
month since January 2014.
Also weighing on
the Japanese market were data showing industrial production contracted 0.6 per
cent in July after expanding 1.1 per cent in June. This fell short of
expectations for a 0.1 per cent increase and points to only post modest overall
economic growth in the September quarter. The yearly pace of production slowed
to 0.2 per cent from 2.3 per cent in June.
In Australia, a
morning drop of 0.9 per cent took declines for the S&P/ASX 200 to 8.5 per
cent for the month, the worst performance since October 2008.
Hong Kong’s Hang
Seng was sporting a monthly fall of 12.6 per cent, its worst since September
2011, with a 0.4 per cent slide.
---- The
price of oil was retreating after strong gains on Thursday and Friday. Brent
crude was down 1.7 per cent at $49.18 a barrel while West Texas Intermediate
was 1.6 per cent lower at $44.47.
More
Fed at Jackson Hole: Gearing Up to Hike Amidst Rocky Terrain
August 30, 2015 — 8:53 PM BST
Central bankers aren’t a group that’s easily spooked.Whether looking through low inflation or brushing aside financial market turmoil, U.S. policy makers at the Kansas City Federal Reserve’s annual retreat in Jackson Hole, Wyoming, had a largely consistent message: We’re staying the course.
Federal Reserve Vice Chairman Stanley Fischer, in the most anticipated remarks of the two-day event, proclaimed his faith that inflation is poised to move upward.
“There is good reason to believe that inflation will move higher as the forces holding down inflation dissipate further,” he said Saturday on a panel on inflation dynamics with other top central bankers from Europe and India that wrapped up the conference.
While Fischer was careful to announce that he wasn’t signaling an impending rate increase, the remarks suggested a move wasn’t ruled out when the Federal Open Market Committee gathers in Washington September 16-17.
More
Ludwig
von Mises.
At the Comex silver depositories Friday
final figures were: Registered 54.77 Moz, Eligible 116.39 Moz, Total 171.16
Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, more fallout from China’s slowdown. When
China sneezes we all catch flu. Atishoo,
atishoo, we all fall down.
Brazil tumbles into recession
August 29
2015
Rio de Janeiro (AFP) - Brazil has slipped into recession, the government
said Friday, deepening the gloom in the world's seventh largest economy already
battered by falling commodity prices, political crisis and a corruption
scandal.In the second quarter of this year, gross domestic product fell 1.9 percent, according to official figures.
GDP had already been down 0.7 percent in the first quarter, the
government statistics agency IBGE said, revising that figure down further from
the earlier estimate of minus 0.2 percent.
Year-on-year, the second quarter growth was down 2.6 percent.
Brazil is now in its biggest contraction for six years and with the 2015
slump forecast to extend in milder form through 2016, economists believe the
country is headed for the longest recession since 1931.
Brazil's economy
has been tailing off for four years, ever since the end of a boom fueled by
commodity exports, principally to China. Falling prices for oil and other
commodities have punched huge holes in the budget.
Adding to the economic malaise is a growing political crisis in which
President Dilma Rousseff faces calls for her impeachment and discontent -- even
among many of her own supporters -- over attempts to push through austerity
measures.
Rousseff dismissed talk of a growing financial crisis
----“The GDP points to what Brazil has
been experiencing recently: a strong recession, a pretty turbulent political
situation, with inflation rising, with rates rising," said Alex Agostini,
chief economist at Austin Rating.
"This has impacted on the confidence of investors, or businesses
and consumers."
- No quick fix -
A quick recovery is not expected, with unemployment now at 7.5 percent
and rising and the national currency, the real, down about 25 percent this year
against the US dollar. Inflation is forecast at 9.56 percent this year.
----Friday's figures showed the steepest
second quarter shrinkage in the industrial sector, which includes the troubled
oil industry centered on Petrobras, at 4.3 percent.
Agriculture, where Brazil is one of the world's main producers of
commodities like soybeans, sugar and poultry, slipped 2.7 percent.
Family spending fell 2.1 percent, the second consecutive quarterly drop.
Moody's has cut Brazil's credit rating to near junk status, reflecting
growing struggles with debt and investor caution in a country that as part of
the BRICS nations was once considered a lucrative bet.
More
“But it [the boom] could not last forever
even if inflation and credit expansion were to go on endlessly. It would then
encounter the barriers which prevent the boundless expansion of circulation
credit. It would lead to the crack-up boom and the breakdown of the whole
monetary system.”
Ludwig
von Mises.
Solar & Related Update.
With events
happening fast in the development of solar power and graphene, 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? DC?
A quantum computer next?
'Super batteries' to be 3D printed from graphene ink
Manchester Metropolitan University is embarking
on a project to 3D print "super batteries" from graphene ink.
Wonder material graphene has been widely talked
about in terms of its
suitability for use in batteries, due to its impressive conductivity, but
scientists have struggled with the fact it also has a relatively small surface
area, which affects capacity.
3D printing, where layers of graphene are
assembled on top of one another, maximising surface area in the process,
offers a solution. Now researchers at MMU are analysing techniques for printing
with conductive graphene ink, in order to try and create batteries,
supercapacitors and other energy storage devices with the help of a grant from
the Engineering and Physical Sciences Research Council.
"We're trying to achieve a conductive ink that blends the fantastic properties of graphene with the ease of use of 3D printing to be manipulated into a structure that's beneficial for batteries and supercapacitors," explains Craig Banks, a professor of electrochemical and nanotechnology and leader of the three and a half-year project. The batteries and supercapacitors would be used to power phones and tablets, or for solar, wind and wave power storage.
"Energy storage systems (ESS) are critical to address climate change and, as clean energy is generated through a variety of ways, an efficient way to store this energy is required," says Banks, whose work on graphene's conductivity has been cited over 9,000 times, making him one the world's most-cited scientists. "Lithium and sodium ion batteries and super/ultracapacitors are promising approaches to achieve this. This project will be utilising the reported benefits of graphene -- it is more conductive than metal -- and applying these into ESS."
The combination of the conductivity from the graphene and the 3D nature of the structures, which have "high surface areas, good electrical properties and hierarchical pore structures/porous channels", should increase the storage capabilities of batteries to meet future demands.
http://www.wired.co.uk/news/archive/2015-08/10/graphene-3d-printed-super-batteries
The monthly Coppock Indicators finished July
DJIA: +88 Down. NASDAQ:
+189 Down. SP500: +116 Down.
